2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
PT Telekomunikasi Indonesia, Tbk.
Investor Relations
Grha Merah Putih 5th floor
Jl. Jend. Gatot Subroto Kav. 52
Jakarta 12710, Indonesia
T +62 21 521 5109
F +62 21 522 0500
email : investor@telkom.co.id
IDX : TLKM
NYSE : TLK
LSE : TKID
www.telkom.co.id
Creating Global Talents
and Opportunities
2
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• Telkom’s Solid
Profitability
Increasing in Net
Income
Rp 14.2 trillion
10.5%
Increasing number of
cellular subscribers
131.5 million
• Increasing
number of
customers above
Industry
5.1%
Increasing number of
broadband subscribers
27.8 million
Increasing number of
Fixedline subscribers
9.3 million
45.4%
4.5%
25.9%
• Network
Strengthening
Number of BTS
75,579 BTS
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
• Telkom’s Solid
Profitability
Increasing in Net
Income
Rp 14.2 trillion
10.5%
• Increasing
number of
customers above
Industry
Increasing number of
cellular subscribers
131.5 million
5.1%
Increasing number of
broadband subscribers
27.8 million
45.4%
Increasing number of
Fixedline subscribers
9.3 million
4.5%
PT Telekomunikasi Indonesia, Tbk.
Investor Relations
Grha Merah Putih 5th floor
Jl. Jend. Gatot Subroto Kav. 52
Jakarta 12710, Indonesia
T +62 21 521 5109
F +62 21 522 0500
email : investor@telkom.co.id
IDX : TLKM
NYSE : TLK
LSE : TKID
www.telkom.co.id
Creating Global Talents
and Opportunities
• Network
Strengthening
Number of BTS
75,579 BTS
25.9%
2
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S
T
N
E
T
N
O
C
Highlights
Business Overview
Management’s Discussion
Corporate Governance
Social And Environmental
Company Profile
and Analysis
Responsibility
Additional Information
(For Adr Shareholders)
Financial Highlights
Industry in Indonesia
Discussion and Analysis
Telecommunication 42
Management’s 100
Concept and Foundation 136
CSR Strategy 201
A Brief History of Telkom 224
Summary of Significant 254
Legal Basis and 262
Distribution and 54
Financial Overview 107
Preface
14
16
Operational Highlights
Corporate Strategy 43
Common Stock and
18
Business Outlook 45
Bond Highlights
Events Highlights 22
Business Portfolio 46
Awards 24
Marketing Strategy
Certifications 26
Telecommunication 56
Management Report
Report from the 28
President Commissioner
Report from the 34
President Director
Services Tariffs
Customer Services 58
Consumer Protection 61
Billing, Payment 62
and Collection
Risk Factors 64
Network Infrastructure 82
Network Development 86
Human Capital 88
of the Company’s
Performance
Operational Review 102
by Segment
Comprehensive Income 109
Comparison
Net Cash Flows
118
Obligation and Commitment 119
Receivable Collectibility 121
Capital Structure 122
Capital Expenditures 122
Material Commitment 123
For Capital Investment
Changes In Accounting 124
Telkom’s GCG 137
Framework and
Performance
Corporate Governance 141
Structure
Board of Commissioners 145
Board of Directors 149
Committees Under 158
the Board of
Commissioners
Board of Director
Corporate Secretary/ 175
Investor Relations (“IR”)
Internal Audit Unit 178
Internal Control System 180
Independent Auditor
181
Liquidity 120
Committees Under 172
Exchange Controls 124
Legal Proceeding 183
Quantitative And 125
Qualitative Disclosures
and Lawsuits Involving
the Company
About Market Risks
Administrative Sanctions 185
Related Party 130
Transactions
Public Access 185
to Information
Property, Plant &
131
Code of Ethics and 186
Equipment
Corporate Culture
Insurance 132
Whistleblowing System 189
GCG Implementation 192
Consistency
GCG Evaluation 197
Environment 202
Preservation
Employment, Health 206
and Work Safety (“K3”)
Social and Community 212
Development
Responsibility 220
to Consumer
Line of Business 225
Organizational Structure 225
Subsidiaries and 230
Associated Companies
Differences between
Indonesian Corporate
Governance Practices
and the NYSE’S
Corporate Governance
Standards
Telkom’s Subsidiaries 236
Articles of Association 256
Regulation
Competition 268
Licensing 272
Trademarks, Copyrights, 276
Industrial Designs
and Patens
Chart
Profile of The Board 238
of Commissioners
Profile of The Board 240
of Directors
Stock Overview 242
Addresses 249
Relationship with the 256
Government and
Government Agencies
Capital Market Trading 258
Mechanism and
Telkom ADS
Taxation 260
Research and 262
Development
Appendices
Definitions 278
Cross Reference 284
to Bapepam-LK
Regulation No.X.K.6
PT Telekomunikasi Indonesia, Tbk, or “Telkom”, “The Company”, and “we”, is proud
in the economic, social and political environments in Indonesia. This Annual Report
to present Annual Report for the year ended December 31, 2013. Our Annual Report
discloses, under “Risk Factors” and elsewhere, important factors that could cause
is furnished according to the decree of the Indonesian Financial Services Authority,
actual results to differ materially from our expectations.
the successor of Bapepam-LK (“OJK”) No.X.K.6. Certain information in this Annual
Report is also contained in the Form 20-F, with the United States Securities and
To obtain further information on Telkom, please contact Investor Relations, Grha
Exchange Commission. However, no part of this document has been incorporated
Merah Putih, 5th floor, Jl. Jend. Gatot Subroto Kav. 52 Jakarta 12710, Indonesia.
by reference into the Form 20-F. The information and data presented in this Annual
Tel.: (62-21) 521 5109, Fax: (62-21) 522 0500 or e-mail: investor@telkom.co.id. You
Report draws upon the consolidated financial data of the Company and our
can download this document from our online site http://www.telkom.co.id.
subsidiaries.
This Annual Report contains “forward-looking statements”, including statements
Indonesia while the word “Government” refers to the Government of Indonesia
regarding our expectations and projections for our future operating performance
and “United States of America” or “US” is the United States. The currency “Rupiah”
and business prospects. The words “believe”, “expect”, “anticipate”, “estimate”,
or “Rp” refers to the Indonesian Rupiah while “US Dollar” or “US$” refers to the
“project” and other similar words identify forward-looking statements. In addition,
US currency. Certain figures (including percentages) have been rounded up. Save
all statements other than statements of historical facts included in this Annual
as otherwise noted, all financial information is presented in Indonesian Rupiah
Report are forward-looking statements. Although we believe that the expectations
according to Indonesian Financial Accounting Standard (“IFAS”).
reflected in the forward-looking statements herein are reasonable, we can give no
We use the word “Indonesia” in this Annual Report to refer to the Republic of
Policies
Risk Management 182
ABOUT OUR ANNUAL REPORT
assurance that such expectations will prove to be correct. These forward-looking
statements are subject to a number of risks and uncertainties, including changes
S
T
N
E
T
N
O
C
Highlights
Business Overview
Management’s Discussion
and Analysis
Corporate Governance
Social And Environmental
Company Profile
Additional Information
(For Adr Shareholders)
Management’s 100
Concept and Foundation 136
CSR Strategy 201
A Brief History of Telkom 224
Summary of Significant 254
Legal Basis and 262
Preface
Financial Highlights
Operational Highlights
Common Stock and
Bond Highlights
14
16
18
Events Highlights 22
Telecommunication 42
Industry in Indonesia
Corporate Strategy 43
Business Outlook 45
Business Portfolio 46
Discussion and Analysis
of the Company’s
Performance
Operational Review 102
by Segment
Distribution and 54
Financial Overview 107
Telkom’s GCG 137
Framework and
Performance
Corporate Governance 141
Structure
Board of Commissioners 145
Board of Directors 149
Committees Under 158
the Board of
Commissioners
Comprehensive Income 109
Comparison
Net Cash Flows
118
Obligation and Commitment 119
Awards 24
Marketing Strategy
Certifications 26
Management Report
Report from the 28
President Commissioner
Report from the 34
President Director
Telecommunication 56
Services Tariffs
Customer Services 58
Consumer Protection 61
Billing, Payment 62
and Collection
Risk Factors 64
Network Infrastructure 82
Network Development 86
Human Capital 88
Responsibility
Environment 202
Preservation
Employment, Health 206
and Work Safety (“K3”)
Social and Community 212
Development
Responsibility 220
to Consumer
Line of Business 225
Organizational Structure 225
Subsidiaries and 230
Associated Companies
Differences between
Indonesian Corporate
Governance Practices
and the NYSE’S
Corporate Governance
Standards
Telkom’s Subsidiaries 236
Articles of Association 256
Regulation
Competition 268
Licensing 272
Trademarks, Copyrights, 276
Industrial Designs
and Patens
Chart
Profile of The Board 238
of Commissioners
Profile of The Board 240
of Directors
Stock Overview 242
Addresses 249
Relationship with the 256
Government and
Government Agencies
Capital Market Trading 258
Mechanism and
Telkom ADS
Taxation 260
Research and 262
Development
Appendices
Definitions 278
Cross Reference 284
to Bapepam-LK
Regulation No.X.K.6
assurance that such expectations will prove to be correct. These forward-looking
statements are subject to a number of risks and uncertainties, including changes
PT Telekomunikasi Indonesia, Tbk, or “Telkom”, “The Company”, and “we”, is proud
in the economic, social and political environments in Indonesia. This Annual Report
to present Annual Report for the year ended December 31, 2013. Our Annual Report
discloses, under “Risk Factors” and elsewhere, important factors that could cause
is furnished according to the decree of the Indonesian Financial Services Authority,
actual results to differ materially from our expectations.
the successor of Bapepam-LK (“OJK”) No.X.K.6. Certain information in this Annual
Report is also contained in the Form 20-F, with the United States Securities and
To obtain further information on Telkom, please contact Investor Relations, Grha
Exchange Commission. However, no part of this document has been incorporated
Merah Putih, 5th floor, Jl. Jend. Gatot Subroto Kav. 52 Jakarta 12710, Indonesia.
by reference into the Form 20-F. The information and data presented in this Annual
Tel.: (62-21) 521 5109, Fax: (62-21) 522 0500 or e-mail: investor@telkom.co.id. You
Report draws upon the consolidated financial data of the Company and our
can download this document from our online site http://www.telkom.co.id.
subsidiaries.
This Annual Report contains “forward-looking statements”, including statements
Indonesia while the word “Government” refers to the Government of Indonesia
regarding our expectations and projections for our future operating performance
and “United States of America” or “US” is the United States. The currency “Rupiah”
and business prospects. The words “believe”, “expect”, “anticipate”, “estimate”,
or “Rp” refers to the Indonesian Rupiah while “US Dollar” or “US$” refers to the
“project” and other similar words identify forward-looking statements. In addition,
US currency. Certain figures (including percentages) have been rounded up. Save
all statements other than statements of historical facts included in this Annual
as otherwise noted, all financial information is presented in Indonesian Rupiah
Report are forward-looking statements. Although we believe that the expectations
according to Indonesian Financial Accounting Standard (“IFAS”).
reflected in the forward-looking statements herein are reasonable, we can give no
We use the word “Indonesia” in this Annual Report to refer to the Republic of
Liquidity 120
Committees Under 172
Receivable Collectibility 121
Capital Structure 122
Capital Expenditures 122
Material Commitment 123
For Capital Investment
Changes In Accounting 124
Board of Director
Corporate Secretary/ 175
Investor Relations (“IR”)
Internal Audit Unit 178
Internal Control System 180
Independent Auditor
181
Policies
Risk Management 182
ABOUT OUR ANNUAL REPORT
Exchange Controls 124
Legal Proceeding 183
Quantitative And 125
Qualitative Disclosures
About Market Risks
and Lawsuits Involving
the Company
Administrative Sanctions 185
Related Party 130
Transactions
Public Access 185
to Information
Property, Plant &
Equipment
131
Code of Ethics and 186
Corporate Culture
Insurance 132
Whistleblowing System 189
GCG Implementation 192
Consistency
GCG Evaluation 197
S
T
N
E
T
N
O
C
Financial Highlights
Industry in Indonesia
Discussion and Analysis
Preface
14
16
Operational Highlights
Corporate Strategy 43
Common Stock and
18
Business Outlook 45
Bond Highlights
Events Highlights 22
Business Portfolio 46
Awards 24
Marketing Strategy
Certifications 26
Telecommunication 56
Distribution and 54
Financial Overview 107
Management Report
Report from the 28
President Commissioner
Report from the 34
President Director
Services Tariffs
Customer Services 58
Consumer Protection 61
Billing, Payment 62
and Collection
Risk Factors 64
Network Infrastructure 82
Network Development 86
Human Capital 88
of the Company’s
Performance
Operational Review 102
by Segment
Comprehensive Income 109
Comparison
Net Cash Flows
118
Obligation and Commitment 119
Receivable Collectibility 121
Capital Structure 122
Capital Expenditures 122
Material Commitment 123
For Capital Investment
Changes In Accounting 124
Telkom’s GCG 137
Framework and
Performance
Corporate Governance 141
Structure
Board of Commissioners 145
Board of Directors 149
Committees Under 158
the Board of
Commissioners
Board of Director
Corporate Secretary/ 175
Investor Relations (“IR”)
Internal Audit Unit 178
Internal Control System 180
Independent Auditor
181
Liquidity 120
Committees Under 172
Exchange Controls 124
Legal Proceeding 183
Quantitative And 125
Qualitative Disclosures
and Lawsuits Involving
the Company
About Market Risks
Administrative Sanctions 185
Related Party 130
Transactions
Public Access 185
to Information
Property, Plant &
131
Code of Ethics and 186
Equipment
Corporate Culture
Insurance 132
Whistleblowing System 189
GCG Implementation 192
Consistency
GCG Evaluation 197
Highlights
Business Overview
Management’s Discussion
Corporate Governance
Social And Environmental
Company Profile
and Analysis
Responsibility
Telecommunication 42
Management’s 100
Concept and Foundation 136
CSR Strategy 201
A Brief History of Telkom 224
Environment 202
Preservation
Employment, Health 206
and Work Safety (“K3”)
Social and Community 212
Development
Responsibility 220
to Consumer
Line of Business 225
Organizational Structure 225
Subsidiaries and 230
Associated Companies
Telkom’s Subsidiaries 236
Chart
Profile of The Board 238
of Commissioners
Profile of The Board 240
of Directors
Stock Overview 242
Addresses 249
Additional Information
(For Adr Shareholders)
Summary of Significant 254
Differences between
Indonesian Corporate
Governance Practices
and the NYSE’S
Corporate Governance
Standards
Articles of Association 256
Relationship with the 256
Government and
Government Agencies
Capital Market Trading 258
Mechanism and
Telkom ADS
Taxation 260
Research and 262
Development
Legal Basis and 262
Regulation
Competition 268
Licensing 272
Trademarks, Copyrights, 276
Industrial Designs
and Patens
Appendices
Definitions 278
Cross Reference 284
to Bapepam-LK
Regulation No.X.K.6
Policies
Risk Management 182
ABOUT OUR ANNUAL REPORT
assurance that such expectations will prove to be correct. These forward-looking
statements are subject to a number of risks and uncertainties, including changes
PT Telekomunikasi Indonesia, Tbk, or “Telkom”, “The Company”, and “we”, is proud
in the economic, social and political environments in Indonesia. This Annual Report
to present Annual Report for the year ended December 31, 2013. Our Annual Report
discloses, under “Risk Factors” and elsewhere, important factors that could cause
is furnished according to the decree of the Indonesian Financial Services Authority,
actual results to differ materially from our expectations.
the successor of Bapepam-LK (“OJK”) No.X.K.6. Certain information in this Annual
Report is also contained in the Form 20-F, with the United States Securities and
Exchange Commission. However, no part of this document has been incorporated
by reference into the Form 20-F. The information and data presented in this Annual
To obtain further information on Telkom, please contact Investor Relations, Grha
Merah Putih, 5th floor, Jl. Jend. Gatot Subroto Kav. 52 Jakarta 12710, Indonesia.
Tel.: (62-21) 521 5109, Fax: (62-21) 522 0500 or e-mail: investor@telkom.co.id. You
Report draws upon the consolidated financial data of the Company and our
can download this document from our online site http://www.telkom.co.id.
subsidiaries.
This Annual Report contains “forward-looking statements”, including statements
Indonesia while the word “Government” refers to the Government of Indonesia
regarding our expectations and projections for our future operating performance
and “United States of America” or “US” is the United States. The currency “Rupiah”
and business prospects. The words “believe”, “expect”, “anticipate”, “estimate”,
or “Rp” refers to the Indonesian Rupiah while “US Dollar” or “US$” refers to the
“project” and other similar words identify forward-looking statements. In addition,
US currency. Certain figures (including percentages) have been rounded up. Save
all statements other than statements of historical facts included in this Annual
as otherwise noted, all financial information is presented in Indonesian Rupiah
Report are forward-looking statements. Although we believe that the expectations
reflected in the forward-looking statements herein are reasonable, we can give no
according to Indonesian Financial Accounting Standard (“IFAS”).
We use the word “Indonesia” in this Annual Report to refer to the Republic of
Creating Global Talents
and Opportunities
International expansion has become a
necessity for Telkom in order to sustain
a high rate of business growth. This
complements our growth strategy,
consistently applied over the last couple of
years, by which we strive to maintain our
market leadership in the cellular business
while building our broadband capabilities
as the mainstay of the telecommunication
business in the future.
In 2013, these initiatives have resulted in
double-digit growth for us, paving the
way for us to become the dominant TIMES
service provider in Indonesia and a leading
presence in the region.
2
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Strength Born of a
Long History of Telkom
1856-1882
On October 23, 1856, the Dutch
colonial government deployed the
first electromagnetic telegraph
in Indonesia, connecting Batavia
(Jakarta) with Buitenzorg (Bogor).
1906-1965
The Dutch colonial government
established a government
agency to operate post and
telecommunications services in
Indonesia. In 1965, the post and
telecommunications services were
separated and brought under the
control of two state companies,
PN Pos and Giro and
PN Telekomunikasi.
1974
PN Telekomunikasi was split into two
1991
Perumtel became PT Telekomunikasi
divisions, PT Industri Telekomunikasi
Indonesia or Telkom, and operations
Indonesia (“PT INTI”), which
were organized into twelve regional
manufactured telecommunications
units (“Witel”). These were later
equipment, and Perusahaan Umum
reorganized into seven regional
Telekomunikasi (“Perumtel”), which
divisions: Division I Sumatra, Division
supplied domestic and international
II Jakarta and Surrounding Area,
telecommunication services.
Division III West Java, Division IV
1980
The international telecommunication
business was taken over by Indosat
Central Java and DI Yogyakarta,
Division V East Java, Division VI
Kalimantan and Division VII Eastern
Indonesia
1995
We held our Initial Public Offering
on November 14, 1995 on the Jakarta
Stock Exchange and the Surabaya
Stock Exchange. On May 26, 1995,
we established Telkomsel, our cellular
business subsidiary.
1999
The Telecommunications Law
(Law No. 36/1999), which went
into effect in September 2000,
facilitated the entry of new players,
intensifying the competition in the
telecommunications industry.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
3
2001
We acquired Indosat’s 35%
2009
We underwent a transformation from
2012
We sought to achieve widespread
shareholdings in Telkomsel, making
an infocom to a TIME company. The
broadband penetration
us the majority shareholder with a
new Telkom was introduced to the
throughout Indonesia through the
stake of 77.7%. Indosat then took over
public with the new corporate logo
implementation of the Indonesia
our 22.5% shareholding in Satelindo
and tagline, “the world in your hand”.
Wi-Fi program towards the
and 37.7% share in PT Aplikanusa
Lintasarta. At the same time, we
lost our exclusive right to be the
sole fixed line telephone operator in
Indonesia.
2002
We divested 12.7% of our shares in
Telkomsel to Singapore Telecom
Mobile Pte Ltd. (“SingTel Mobile”).
2004
We launched our international direct
dial fixed line service.
2005
The Telkom-2 Satellite was launched
to replace all satellite transmission
services previously provided by the
Palapa B-4 satellite. This brought our
total number of satellites launched
to eight, including the Palapa A-1
satellite.
2010
The JaKaLaDeMa submarine and
fiber optic cable project linking Java,
Kalimantan, Sulawesi, Denpasar and
Mataram was successfully completed
in April 2010.
2011
We commenced the reform of our
telecommunications infrastructure
through the Telkom Nusantara Super
Highway project, which unites the
Indonesian archipelago from Sumatra
to Papua, and the True Broadband
Access project, which will enable
customers all over Indonesia to have
broadband access to the internet.
development of Indonesia Digital
Network.
We sought to improve business
value creation by reconfiguring
our business portfolios from TIME
to TIMES (Telecommunications,
Information, Media, Edutainment &
Services).
Establishment of Telkom Corporate
University to develop a globally
competitive human capital (from
competence to commerce).
2013
We began
operating in seven
countries, namely
Hong Kong-Macau,
Timor Leste,
Australia, Myanmar,
Malaysia, Taiwan
and United States
of America.
4
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Telkomsel Double Digit
Telkomsel is one of the major
revenue contributors at Telkom
Group. We believe that Telkomsel
will continue to grow faster than
industry average, maintaining its
leading position in the legacy
business while posting strong
growth in digital services.
Telkomsel Double Digit
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
5
Financial
performance
10.1%
– Revenues Rp60.0 trilllion
– EBITDA Rp33.9 trillion
– Net Income Rp17.3 trillion
Cellular
subscriber base
5.1%
– Cellular subscriber base
131.5 million
– Mobile broadband (“Flash”)
subscribers 17.3 million
– Blackberry subscribers
7.6 million
BTS
28.7%
- 69,864 units
– 27,034 units BTS 3G
6
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Indonesia Digital
Network (IDN) 2015
Strengthen Broadband
Based Infrastructure
Indonesia
Digital Society
10 Ha
Data Center
30 nodes
Tera Router
75,000 km
FO
20,000,000
Homepass
1,000,000
AP Wi-Fi
Internet Cloud
IP & Optical Transport
Fixed
Broadband
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
7
IDN implementation targets across all of our
network infrastructures by the year 2015.
Business Information, Media,
Edutainment & Services
Telkom Cloud
Convergence
Digital
Innovation
Nationwide
Broadband
Backbone
True
Broadband
Access
Mobile
Broadband
IP & Optical Transport
8
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Sustaining Growth
through International Expansion
Myanmar
PT Telekomunikasi
Indonesia
International
International Network
August 16, 2013
Macau
Hong Kong
Telkom Macau
Limited
(Subsidiary Telin
Hong Kong)
Mobile Virtual Network
Operator
May 13, 2013
Telekomunikasi
Indonesia
International
(Hongkong) Limited
Mobile Virtual Network
Operator
Desember 8, 2010
Malaysia
Telekomunikasi
Indonesia
International
(Malaysia) Sdn. Bhd.
Mobile Virtual Network
Operator
July 2, 2013
Timor Leste
Telekomunikasi
Indonesia
International (TL)
S.A.
Mobile Network Operator
September 17, 2012
Australia
Telekomunikasi
Indonesia
International
Australia Pty. Ltd.
IT-Business Process
Outsourcing & Solution
January 14, 2013
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
9
Initiatives in international expansion are essential if we are to
maintain our growth momentum, providing us with new room
for growth as domestic opportunities become more constricted.
International expansion is also a strategy to diversify our business
risks, in view of the rapid developments and convergence of the
TIMES industry that is also becoming increasingly borderless.
United States of
America
Telekomunikasi
Indonesia
International (USA)
Inc.
International Network
December 11, 2013
Taiwan
Telkom Taiwan
Limited (Subsidiary
Telin Hong Kong)
Mobile Virtual Network
Operator (“MVNO”)
June 3, 2013
Singapore
Telekomunikasi
Indonesia
International Pte.
Ltd. Singapore
Content Delivery Network
(“CDN”) & Data Center
December 6, 2007
10
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Global Talent Program
(GTP)
“
It is the people that makes the difference between one
country and another, between one company and another,
and between one family and another. And the difference
between people of different companies lies in their character
and their competence.
”
~Arief Yahya~
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
11
Global Talent Program (“GTP”) is an initiative
intended to provide our employees/talents with
practical experiences in international businesses
through job assignments at host companies
overseas. GTP graduates have greater prospect
of future placement at critical positions in
centers of business growth. Talent assignment
through GTP is also intended to support our
program of international expansion to
10 countries in 2013.
participating in GTP
1,010 talents
GTP talent assignments at
25 countries
N. America
1 Country
16 Employees
Europe
3 Countries
41 Employees
Asia
19 Countries
668 Employees
Africa
S. America
Australia
2 Countries
105 Employees
Jakarta
72 Various Countries
180 Employees
12
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
With Our Vision,
Mission and Values
Vision
To become a leading
Telecommunication, Information, Media,
Edutainment and Services (“TIMES”)
player in the Region.
Mission
• To provide “more for less” TIMES
services.
• To be the role model as the best
managed corporation in Indonesia.
Corporate Culture
The New Telkom Way
Philosophy to be
the best
Always The Best
Principle to be the
star
Solid, Speed, Smart
Practice to be the
winner
Imagine, Focus, Action
The vision and mission are set forth in the long-term corporate plans as approved by the Board of Commissioners on
May 30, 2013 by Decision Letter of the Board of Commissioners No.06/KEP/DK/2013/RHS.
Corporate
Governance
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Responsibility
Company
Profile
Additional
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Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
13
..and Strategic
Initiatives...
1
Center of excellence.
2
3
4
5
6
7
8
9
Focus on high growth or high value portfolio.
Accelerate international expansion.
Cost transformation.
IDN (id-Access, id-Ring, id-Con) development.
Indonesia Digital Solution (“IDS”) – convergent services
in digital ecosystem solution.
Indonesia Digital Platform (“IDP”) – platform enabler for
ecosystem development.
Execution of the best subsidiary management system.
Managing portfolio through BoE and CRO.
10
Increasing synergy within Telkom Group.
We affirmed our strategic initiatives on the basis of the decision of the Board of Commissioners of
PT Telekomunikasi Indonesia, Tbk as set forth in the Decision Letter of the Board of Commissioners
No.06/KEP/DK/2013/RHS dated May 30, 2013.
14
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Financial Highlights
(Based on IFAS)
Total Revenues
(in billions of Rupiah)
82,967
7.5%
Total Expenses
(in billions of Rupiah)
57,700
6.8%
Profit for the year
(in billions of Rupiah)
14,205
10.5%
Total Assets
(in billions of Rupiah)
127,951
14.9%
Adjusted EBITDA
(in billions of Rupiah)
43,626
8.6%
Consolidated Statements of Comprehensive Income
(in billions of Rupiah, except for net income per share and per ADS)
Total Revenues
Total Expenses
Adjusted EBITDA
Operating profit
Profit for the year
Profit for the year attributable to:
Years ended December 31,
2013
2012
2011
2010
2009*
82,967
77,143
71,253
68,629
68,220
57,700
54,005
49,960
46,240
44,139
43,626
40,154
36,821
37,549
38,056
27,846
25,698
21,958
22,937
24,081
20,290
18,362
15,470
15,870
16,043
Owners of the parent company
14,205
12,850
10,965
11,537
11,399
Non-controlling interest
6,085
5,512
4,505
4,333
4,644
Total comprehensive income for the year
20,402
18,388
15,481
15,904
16,048
Total comprehensive income attributable to:
Owners of the parent company
14,317
12,876
10,976
11,571
11,404
Non-controlling interest
6,085
5,512
4,505
4,333
4,644
Net income per share
147.4
133.8
111.9
117.3
115.9
Net income per ADS (1 ADS : 40 common stock)
29,483.6 26,767.6 22,386.8 23,461.6 23,180.8
Total Revenues
(in billions of Rupiah)
68,220
68,629 71,253
82,967
77,143
Consolidated Statements of Financial Position
(in billions of Rupiah)
Total Assets
Total Liabilities
Total equity attributable to owners of the parent
company
127,951
111,369
103,054
100,501
97,931
50,527
44,391
42,073
44,086
48,436
60,542
51,541
47,510
44,419
38,562
Net working capital
4,638
3,866
(931)
(1,745)
(10,797)
Investment in other entities
304
275
235
254
151
Capital Expenditures
(in billions of Rupiah)
Telkom
Telkomsel
Others Subsidiaries
Total
2009 2010 2011
2012
2013
5,313
15,662
3,923
4,040
4,202
3,623
5,652
10,656
8,472
8,197
12,673
2,576
1,929
831
836
24,898
17,272
14,603
12,651
19,161
Total Assets
(in billions of Rupiah)
Consolidated Financial and Operational Ratios
100,501
103,054
97,931
111,369
127,951
Return on Asset (ROA) (%)1
11.1
11.5
10.6
11.5
11.6
Return on Equity (ROE) (%)2
23.5
24.9
23.1
26.0
29.6
Operating Profit Margin (%)3
Current Ratio (%)4
33.6
33.3
30.8
33.4
35.3
116.3
116.0
95.8
91.5
59.9
Total Liabilities to Equity (%)5
83.5
86.1
88.6
99.3
125.6
Total Liabilities to Total Assets (%)6
39.5
39.9
40.8
43.9
49.5
2009 2010 2011
2012
2013
* As restated. See Note 2p to our Consolidated Financial Statements.
(1) ROA is calculated as profit for the year attributable to owners of the parent company divided by total
assets at year end December 31.
(2) ROE is calculated as profit for the year attributable to owners of the parent company divided by total
equity attributable to owners of the parent company at year end December 31.
(3) Operating profit margin is calculated as operating profit divided by revenues.
(4) Current ratio is calculated as current liabilities divided by current liabilities at year end December 31.
(5) Total liabilities to equity is calculated as total liabilities divided by total equity attributable to owners
of the parent company at year end December 31.
(6) Total liabilities to total assets is calculated as total liabilities divided by total assets at year end
December 31.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
15
Revenues
(in billions of Rupiah)
Expenses
(in billions of Rupiah)
Operating profit
(in billions of Rupiah)
7.5%
82,967
77,143
68,220 68,629 71,253
6.8%
57,700
54,005
49,960
46,240
44,139
8.4%
27,846
25,698
24,081
22,937
21,958
2009 2010 2011
2012 2013
2009 2010 2011
2012 2013
2009 2010 2011
2012 2013
Adjusted EBITDA
(in billions of Rupiah)
Profit for the year
(in billions of Rupiah)
Net income per share
(Rupiah)
8.6%
43,626
40,154
38,056 37,549 36,822
10.5%
14,205
12,850
10.2%
147.4
133.8
11,399 11,537
10,966
115.9
117.3
111.9
2009 2010 2011
2012 2013
2009 2010 2011
2012 2013
2009 2010 2011
2012 2013
Assets
(in billions of Rupiah)
Liabilities
(in billions of Rupiah)
14.9%
127,951
111,369
97,931 100,501 103,054
13.8%
48,436
50,527
44,086
42,073
44,391
Total equity attributable to owners of
the parent company
(in billions of Rupiah)
17.5%
60,542
51,541
47,510
44,419
38,562
2009 2010 2011
2012 2013
2009 2010 2011
2012 2013
2009 2010 2011
2012 2013
16
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Operational Highlights
Broadband Subscribers
Fixed broadband (Speedy)
Mobile broadband (Flash)
Blackberry
Total Broadband Subscribers
Cellular Subscribers
Postpaid (kartuHalo)
Prepaid (simPATI, Kartu As)
Total Cellular Subscribers
Fixed Line Subscribers
Fixed wireline
Fixed wireless
Total Fixed Line Subscribers
Other Subscribers
Datacomm
Satellite transponder
Network
BTS
Customer Services
PlasaTelkom
Grapari
Mobile Grapari
TV) dan Usee TV (teknologi OTT T
Unit
Years ended December 31,
2013
2012
Changes (%)
(000) subscribers
(000) subscribers
(000) subscribers
(000) subscribers
(000) subscribers
(000) subscribers
(000) subscribers
(000) subscribers
(000) subscribers
(000) subscribers
(000) Mbps
(000) MHz
unit
location
location
unit
3,013
17,271
7,556
27,840
2,489
129,023
131,513
9,351
6,766
16,117
381,440
3,007
2,341
11,039
5,764
19,144
2,149
122,997
125,146
8,946
17,870
26,816
281,063
2,650
28.7
56.5
31.1
45.4
15.8
4.9
5.1
4.5
(62.1)
(39.9)
35.7
13.5
75,579
60,011
25.9
572
86
268
572
85
-
-
1.2
-
Broadband Subscribers
(in thousands)
Cellular Subscribers
(in thousands)
45.4%
5.1%
Speedy
Flash
Blackberry
kartuHalo
simPATI, kartu AS
17,271
11,039
7,556
5,764
3,013
2,341
129,024
122,997
2012 2013
2012 2013
2012 2013
2012 2013
2012 2013
2,149
2,489
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
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Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
17
Other Subscribers
(in thousands)
BTS
(in thousands)
35.7%
13.5%
Datacom
Satelit transponder
381,440
281,063
25.9%
75,579
60,011
2,650
3,007
2012 2013
2012 2013
2012
2013
18
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Common Stock and Bond Highlights
Telkom Share Price and Trading Volume on the Indonesia Stock Exchange 2012-2013
Volume
(in million shares)
Volume
Price
500
400
300
200
100
0
First
Quarter
2012
Second
Quarter
2012
Third
Quarter
2012
Fourth
Quarter
2012
First
Quarter
2013
Second
Quarter
2013
Third
Quarter
2013
Fourth
Quarter
2013
Price
(Rp)
2,500
2,000
1,500
1,000
500
0
Telkom ADS Price and Trading Volume on the New York Stock Exchange 2012-2013
Volume
(in million shares)
Volume
Price
2.4
2.1
1.8
1.5
1.2
0.9
0.6
0.3
0.0
First
Quarter
2012
Second
Quarter
2012
Third
Quarter
2012
Fourth
Quarter
2012
First
Quarter
2013
Second
Quarter
2013
Third
Quarter
2013
Fourth
Quarter
2013
Price
(US$)
50
40
30
20
10
0
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
19
Trade Price and Volume
The table below shows the high, low, closing quoted prices, trading volume, outstanding shares and market capitalization for our common
stock on the IDX during the periods indicated.
Table Trade Price and Volume
Calendar Year
High
Low
Closing
Price per Share of Common Stock
(in Rupiah)
Volume
(shares)
Market
Outstanding Shares
Capitalization
(Rp billion)
2009
2010
2011
2012
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2013
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
September
October
November
December
2014
January
February
2,070
1,960
1,610
1,990
1,430
1,740
1,970
1,990
2,580
2,230
2,580
2,450
2,375
2,450
2,375
2,350
2,200
2,275
2,420
1,150
1,390
1,320
1,330
1,330
1,400
1,590
1,730
1,760
1,760
1,900
1,950
1,980
1,950
2,100
2,025
1,980
2,060
2,170
1,890
1,590
1,410
1,810
1,400
1,630
1,890
1,810
2,150
2,200
2,250
2,100
2,150
2,100
2,350
2,175
2,150
2,275
2,325
20,872,067,500
98,347,123,900
28,539,250,000
98,347,123,900
22,207,895,000
96,931,696,600
23,002,802,500
95,745,344,100
5,197,855,000
96,096,969,100
6,934,820,000
95,921,374,100
5,100,152,500
95,767,844,100
5,769,975,000
95,745,344,100
27,839,305,000
97,100,853,600
5,993,025,000
95,745,344,100
8,265,647,500
96,044,401,100
7,206,438,500
97,100,853,600
6,374,194,000
97,100,853,600
2,644,068,500
97,100,853,600
2,019,709,500
97,100,853,600
2,055,114,500
97,100,853,600
2,299,370,000
97,100,853,600
1,758,433,800
97,100,853,600
2,015,617,700
97,100,853,600
190,512
160,272
142,128
182,448
141,120
164,304
190,512
182,448
216,720
221,760
226,800
211,680
216,720
211,680
236,880
219,240
216,720
229,320
234,360
(1) We conducted a two for one split of our common stock from a nominal value of Rp500 per share to Rp250 per share as resolved by the AGMS on July 30,
2004, effective October 1, 2004.
(2) We conducted a five for one split of our common stock from a nominal value of Rp250 per share to Rp50 per share as resolved by the AGMS on April 19, 2013,
effective September 2, 2013.
(3) The price per share of the common stock reflects this two splits above for all periods shown.
(4) Market capitalization is multiplying between the share price and issued and fully paid shares which is 100,799,996,400 shares.
Telkom Share Price and Market Capitalization on the Indonesia Stock Exchange 2012-2013
Price
(Rp)
2,500
2,000
1,500
1,000
500
0
Market Capitalization
Price
Market Capitalization
(in billions of Rupiah)
First
Quarter
2012
Second
Quarter
2012
Third
Quarter
2012
Fourth
Quarter
2012
First
Quarter
2013
Second
Quarter
2013
Third
Quarter
2013
Fourth
Quarter
2013
250
200
150
100
50
0
20
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
On December 30, 2013, the last day of trading on the IDX in 2013, the closing price for our common stock was Rp2.150,0
per share.
The high, low, closing prices and trading volume for our ADSs on the NYSE and the LSE for the periods indicated are
shown in the table below. Trading in ADSs is effected “off exchange” on the LSE. Under LSE rules, off exchange trading
means that transactions are carried out on other exchanges and once the transaction has taken place, it is reported to the
LSE.
Table of Telkom's Stock Price and Trading Volume on the NYSE and LSE
Calendar Year
High
Low
Closing
Price per ADS (NYSE)
(in US Dollars)
Volume
(in ADS)
Price per ADS (LSE)
High
Low
Closing
(in US Dollars)
Volume
(in ADS)
2009
2010
2011
2012
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2013
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
September
October
November
December
2014
January
February
41.55
43.80
36.96
41.14
31.69
37.00
41.14
41.00
50.61
45.32
50.61
47.20
41.69
42.39
41.69
40.90
40.86
37.49
40.53
20.19
30.33
30.29
29.26
29.26
30.38
34.28
36.00
33.75
36.17
38.75
34.54
33.75
34.54
36.95
34.70
33.75
33.91
35.19
39.95
67,767,999
35.65
69,803,576
30.74
69,279,100
36.95
88,190,589
30.36
19,265,880
34.83
32,660,280
38.93
19,696,121
36.95
16,568,308
35.85
67,061,105
45.08
13,876,752
42.74
15,688,290
36.31
18,713,653
35.85
18,782,410
36.31
40.76
36.54
35.85
6,791,001
5,975,745
5,866,608
12,697,081
36.27
39.23
5,498,292
5,149,305
40.76
42.00
35.89
40.12
31.04
36.64
39.78
40.12
50.59
45.83
50.59
47.44
41.69
42.10
41.69
40.95
37.38
37.26
38.06
25.67
30.76
21.02
30.24
30.24
30.40
34.30
36.50
33.44
37.06
39.31
35.62
33.44
35.62
37.29
34.43
33.44
33.83
35.98
41.02
34.91
3,757
19,673
30.50
1,406,292
36.50
30.95
33.70
39.10
36.50
746,278
236,546
293,809
88,412
127,511
35.33
6,579,103
45.28
12,819
45.34
6,465,258
36.27
35.33
36.27
41.69
36.36
35.33
37.36
38.06
79,240
21,786
44,011
20,830
-
956
-
-
On December 31, 2013, the last day of trading on the NYSE and LSE in 2013, the closing price for one Telkom ADS was
US$35.85 and US$35.33 respectively.
Corporate
Governance
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Environmental
Responsibility
Company
Profile
Additional
Information
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Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
21
Table Telkom's Bond
Bond
Out
standing
(Rp million)
Issuance
Date
Maturity
Date
Term
(Year)
Interest
Rate
Underwriter
Trustee
Rating
Obligasi II Telkom
2010 Seri A
Obligasi II Telkom
2010 Seri B
1,005,000 June 25, 2010 July 6, 2015
5
9.6% PT Bahana Securities
PT Danareksa Sekuritas
PT Mandiri Sekuritas
1,995,000 June 25, 2010 July 6, 2020
10
10.2% PT Bahana Securities
PT Danareksa Sekuritas
PT Mandiri Sekuritas
PT CIMB
Niaga Tbk
PT CIMB
Niaga Tbk
idAAA
idAAA
22
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
01
03
05
02
04
06
Event Highlights
01 January
Opening the GSM/3G cellular
services in Dili, Timor Leste, with
Telkomcel as brandname.
02 February
Launched Community Service
Contact Center 110 (toll-free
calls) as a synergy with the
National Police, for the reporting
of accidents and criminal acts.
03 March
Cooperation agreement with
the Provincial Government
of Yogyakarta to support the
“Yogyakarta Digital Government
Services” program and the
“Yogya Cyber City” program in
which installed Indonesia Wi-Fi
in Yogyakarta.
04 April
The Annual General Meeting
of Shareholders was held on
April 19, 2013, which among
other agendas approved the
appointment of Gatot Trihargo
as Commissioner.
05 May
a. Launched “Digitally
Connecting Indonesia”, a
cooperation program with
Intel Corporation, US, through
the provision of low cost
access to technology and
internet.
b. Ground breaking installation
of Maluku Cable System
(“MCS”) marine cable. MCS
is a part in the program
for constructing Sistem
Komunikasi Kabel Laut
(“SKKL”) Sulawesi Maluku
Papua Cable System
(“SMPCS”). SMPCS is the
continuation of the Palapa
Ring toward Indonesia Digital
Network (“IDN”).
06 June
Strengthen a cooperative
agreement with Garuda Indonesia
in providing services network
and supporting infrastructure
for the development of Garuda
Indonesia contact center services
through our subsidiary PT
Infomedia Nusantara.
07 July
We won an international
tender for the management of
Myanmar’s international network
via Mumbai, India, as part of
the modernization program
of Myanmar’s Information &
Communication Technology
(“ICT”) infrastructure.
08 August
a. Opening of the overseas
branch of Telin in Malaysia,
which provide the mobile
virtual network operator
(“MVNO”) by selling the Kartu
As 2in1 from Telkomsel.
b. Telkom Indonesia logo
refresh using red, white,
black and grey colors in the
logo, representing a spirit
of optimism and courage
in the face of challenges,
delivering the best for the
nation, determination and also
technology.
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Company
Profile
Additional
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Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
23
07
09
11
08
10
12
09 September
a. Launched the One Million
Speedy Instan Card Indonesia
Digital School (Spin-Card
IndiSchool) program in
support of education in
Indonesia through the
provision of low cost
broadband internet access to
school community.
b. A cellular service trial for
4G Long Term Evolution
(“LTE”) technology in order
to support the Asia Pacific
Economic Cooperation
(“APEC”) which will be held in
October in Bali.
10 October
a. The Board of Company
conducted the closing bell
ceremony on the trading
floor of the New York
Stock Exchange (NYSE) on
Thursday, October 31, 2013,
also marks as 18 years Telkom
listing in NYSE.
b. ICT infrastructure support in
the APEC 2013 event was held
in Bali, on 1-8 October 2013,
and became the Host Sponsor
APEC CEO’s Summit 2013.
c. Business cooperation with
Garuda Indonesia to provide
internet access service
through Wi-Fi technology in
Garuda Boeing 777-300ER
and Airbus 330-200 and 300.
11 November
a. Introduced the Assessment
Center Indonesia services by
State Minister of State-Owned
Enterprises Dahlan Iskan as
our contribution for better HR
management in Indonesia.
b. Ground Breaking for fiber
optic venture in Papua named
the Papua Cable System
(“PCS”). PCS also embodies
our firm commitment to
facilitate connectivity in areas
of Eastern Indonesia.
12 December
a. Supports the national
education project through our
participation in the National
State University Entrance
Examination (“SNMPTN”)
and the Joint State University
Entrance Examination
(“SBMPTN”) in 2014 as part
of our Mega commitment
“Telkom Indonesia for
Indonesian Education”.
b. Trusted to support the
telecommunication facilities in
the meeting of the Ministerial
Conference of the World
Trade Organization (“WTO
KTM”) IX in Bali.
24
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
01
03
05
02
04
06
Awards
01 January
a. Arief Yahya, President Director, is
nominated as “The Amazing Star:
Men’s Obsession 9 Tough CEOs”
by Men’s Obsession Magazine.
b. We received three awards in Bali
Service Excellence Award 2013
organized by MarkPlus Insight for
Speedy (internet provider fixed
broadband category), Telkomsel
(GSM operator category)
and Flash (internet wireless
broadband category).
03 March
a. The award for “Excellent Service
Performance” for our Contact
Center in the Contact Center
Service Excellence Award 2013
organized by Care Center for
Customer Satisfaction and
Loyalty.
b. Speedy and Flexi received “Gold
Brand Champion” awards in
the Indonesia Brand Champion
Award 2013 organized from
MarkPlus Insight.
02 February
a. Speedy service is nominated as
“Best Internet Service Provider
(ISP) in Indonesia 2012” from
Chip Magazine in Chip Award
2013.
b. Arief Yahya, President Director, is
one of the 19 CEOs of Indonesia’s
large companies named as
“Indonesia Most Admired CEO
2013” from Warta Ekonomi
Magazine.
04 April
Arief Yahya, President Director,
nominated as “Innovative CEO for
Nation” by Gatra Magazine.
05 May
“Diamond” award in the Cellular
telecommunication CDMA category
for Plasa Telkom in the Service
Quality Award 2013 organized by
Service Excellence Magazine.
06 June
a. “Best of Asia” award in the
category Asia’s icon on
corporate governance in the
Corporate Governance Asia
Annual Recognition Award
2013 organized by Corporate
Governance Asia Magazine.
b. “The Best Product Innovation
of Infrastructure Sector”
for IndiFinance, “The Best
Technology” for Indigo and
“The Best Corporate Innovation
Culture & Management” awards,
in the BUMN Innovation Award
2013 organized by the Ministry of
SOE.
c. Award as “Best Corporate
Image” in telecommunication
category and as “Corporate
Image Excellent” internet
provider category in Indonesia’s
Most Admired Companies
(“IMAC”) 2013 organized by
Bloomberg Businessweek
Indonesia Magazine and Frontier
Consulting Group.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
25
07
09
11
08
10
12
07 July
a. Awards in several categories,
including “The Best Managed
Company”, “The Best CEO” and
“The Best CFO” in the Finance
Asia Best Companies Award
2013 organized by Finance Asia
Magazine.
b. Award as “Winner” in the
Indonesian MAKE (Most Admired
Knowledge Enterprise) Award
2013 from Dunamis Organization
Services.
c. Award as “Best of the Best
Service Provider of the Year” and
“Best Wireless service Provider of
the Year”, in the Asia Pacific ICT
Award 2013 from Frost & Sullivan.
08 August
“The Best BUMN on Marketing 2013”
and “The Best CMO” awards in the
BUMN Marketing Day 2013 from the
Ministry for SOE.
09 September
“Best CEO of the Year” award for
Arief Yahya, President Director, in
the Anugerah Business Review 2013
from Business Review magazine.
10 October
a. Award as “The World’s Biggest
Public Companies” in Forbes
Global 2000 organized by
Forbes Magazine.
b. “Second Place Rank” in the SOE
Non Financial Listed category
in the Annual Report Award
(“ARA”) 2012 competition.
11 November
a. Award as “ Best Company in
Telecomunication Undustry” in
the Economic Challenges Award
2013 from Metro TV.
b. Award as “Best Contact Center
of the Year 2013” in the APCCAL
Expo 2013 organized by the
Asia Pacific Contact Center
Association Leaders (“APCCAL”)
held in Seoul, South.
12 December
a. Awards in Indonesia Human
Capital Study 2013 organized
by Dunamis Human Capital and
Business Review, with the highest
accolades as “aThe Best for CEO
Commitment” and “The Best for
All Criteria”.
b. Award as “The Best” in the SOE
Award 2013 organized by SOEs
Track Magazine, SOE Ministry and
PPM Management for category of
best competitive infrastructure, best
implementation of competitive open
SOEs good corporate governance
and best competitive CEO SOE
2013.
c. Award as ” Telecom Service
Provider of the Year” and “Data
Communication Service Provider
of the Year” in the 2013 Frost &
Sullivan Indonesia Excellence award
organized by Frost & Sullivan.
d. Awards as “Indonesia Marketing
Champion 2013” and “Marketer of
the Year 2013” for CEO, Arief Yahya,
from MarkPlus Inc.
e. Award as “Indonesia Most Trusted
Companies” from The Indonesian
Institute for Corporate Governance
(IICG) and also the “Indonesia
Trusted Company” award from SWA
Magazine.
f. Award as” Best Sustainability
Reporting Award 2012” in the
Industry category in the annual
Sustainability Reporting Award
(SRA) competition organized by the
National Center for Sustainability
Reporting (“NCSR”).
26
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
01
02
03
04
05
06
Certification
01
ISO 9001:2008 Certification
Issued to PT Finnet, our indirect
subsidiary by DQS GmbH in 2012.
Valid until 2015.
02
Customer Center of
Expertise Certification
Issued by SAP, in 2012. Valid until
2013
03
AS/NZS ISO 9001:2008
Certification
Issued to PT Administrasi Medika
(“AdMedika”), our indirect
subsidiary, by Verification New
Zealand Limited, in 2012. Valid
until 2015.
04
ISO 9001:2008
Certification
Issued to PT Dayamitra
Telekomunikasi (“Mitratel”), our
subsidiary by United Register
for System (“URS”) in 2013. Valid
until 2016.
05
ISO/IEC 27001:2005
Certification
Issued to PT Finnet, our indirect
subsidiary by DQS Gmbh, in 2012.
Valid until 2015.
06
ISO 9001:2008
Certification
Issued to West Consumer Service
Division, by TUV Rheinland Cert
GmbH in 2011. Valid until 2013.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
27
07
08
09
10
11
12
07
ISO 9001:2008
Certification
Issued to Business Service
Division by TUV Rheinland Cert
GmbH in 2013. Valid until 2016.
08
ISO 9001:2008
Certification
Issued to Tbk. Telkom Flexi
Division, by TUV Rheindland Cert
GmbH in 2011. Valid until 2014.
09
ISO 9001:2008
Certification
Issued to PT Telkom Akses, our
subsidiary, by TUV Rheinland
Cert GmbH in 2013. Valid until
2016
10
ISO/IEC 27001:2005
Certification
Issued to Infratel Division M Floor
and Access Division 7th Floor
Graha Citra Caraka Building,
by TUV Rheinland Japan Ltd.
in 2012. Valid until 2015
11
ISO 9001:2008
Certification
Issued to Enterprise Service
Division by TUV Rheindland Cert
GmbH in 2011. Valid until 2014.
12
The Second Phase of IPv6
Certificate: Connectivity to
Corporate Customers From
Any Segment of Its Services
Awarded by Ministry of
Communication and Information in
2013, to Infratel Division . Issued by
SAP, in 2012. Valid until 2013.
28
28
2013 Annual Report
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
PT Telekomunikasi Indonesia, Tbk
Preface
Preface
Highlights
Highlights
Management
Management
Report
Report
Business
Business
Overview
Overview
Management’s
Management’s
Discussion & Analysis
Discussion & Analysis
Corporate
Governance
Governance
Social &
Social &
Environmental
Environmental
Responsibility
Responsibility
Company
Company
Profile
Profile
Additional
Additional
Information
Information
(For ADR
(For ADR
Shareholders)
Shareholders)
Appendices
Appendices
2013 Annual Report
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
PT Telekomunikasi Indonesia, Tbk
29
29
Important point of Board of Commissioner supervisory in 2013
- Supervisory function through the Board committees comprising of Audit
Committee, Nomination and Remuneration Committee, and Risk and Planning
Evaluation and Monitoring Committee.
- One of the achievement that applauds was the consistency of the Directors in
focusing on the consolidation of different subsidiaries and business units at
Telkom, to move ahead in matching steps under a shared vision.
- The quality of the practice of Good Corporate Governance (“GCG”) at Telkom.
Report From
The President Commissioner
Jusman Syafii Djamal
President Commissioner
30
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Esteemed Shareholders,
to undertake in creating new
strength and form since its
growth opportunities, Telkom
initiation in 2009. Back then,
Telkom records another year
is on the right track to deliver
Telkom started to diversify
of excellent results in 2013,
sustained and increased value
into the telecommunications,
sustaining fine achievements
to shareholders in the years to
information, media and
in business growth and
come.
financial performance that
edutainment, and services, or
what we call the TIMES business
were accomplished the year
In the last two to three years,
portfolio. The fundamental
before. Along with strategic
the strategic transformation
transformation reflects
initiatives that we continue
of Telkom has gained in
ongoing developments in the
Left to Right:
Johnny Swandi Sjam
Independent Commissioner
Parikesit Suprapto
Commissioner
Hadiyanto
Commissioner
Jusman Syafii Djamal
President Commissioner
Gatot Trihargo
Commissioner
Virano Gazi Nasution
Independent Commissioner
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
31
telecommunications sector
or technological capability.
All various elements in Telkom's
driven by rapid changes and
Within the Telkom Group,
transformational agenda
progress in information and
the transformation promotes
have been built by stages in
communication technology.
inorganic growth through
a consistent and sustained
The transformation serves to
including through the synergy
evident on Telkom’s excellent
unlock Telkom's potentials by
or alliance with industry players,
achievements in 2013.
development of new businesses,
manner. The results are
eliminating existing constraints
in addition to organic growth
in terms of organization
through increased internal
structure, corporate culture,
productivity and efficiency.
32
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
All various elements
in Telkom's
transformational
agenda have been
built by stages in a
consistent and
sustained manner.
Board Assessment on the
Performance of Directors
The Board of Commissioners
applauds the consistency
of the Directors in focusing
on the principle of "first
thing first". In this case, the
consolidation of different
subsidiaries and business units
at Telkom, to move ahead in
matching steps under a shared
significantly to the increase in
function through the Board
our revenues and bottom line
committees comprising of
for the year.
Audit Committee, Nomination
and Remuneration Committee,
The Board of Directors has
and Risk and Planning
also shown promptness and
Evaluation and Monitoring
diligence in the realignment of
Committee. Overall, these
business portfolio, promoting
Board committees have
higher growth in subsidiaries
exercised their functions
through adoption of business
satisfactorily in accordance
models well-suited to the
with their respective areas of
overall direction of Telkom's
responsibilities.
long-term growth strategy. The
development of broadband
Excellent communications
infrastructure through the
and interactions between
Indonesia Digital Network
the Directors and the Board
("IDN") project also progresses
of Commissioners is shown
on track. Meanwhile, the size
during joint meetings between
and distribution of Telkom's
the two boards, which were
capital expenditure continue
regularly held at least once
to reflect our commitment in
a month throughout 2013.
investment on communication
Through these interactions,
infrastructure as the basis of
the Board of Commissioners
vision. The so-called Board of
business growth.
especially notes that
business plans at Telkom
Executive of Telkom Group has
been influential in promoting
synergy in the Group in terms
of alignment of strategies
and business development
planning. The result is higher
efficiency and productivity in
the utilization of the Group's
to higher business growth and
improved EBITDA.
This is manifested, for example,
in the successful execution of
one of the main programs of
The Board of Commissioners
have been developed after
supports the strategic
conducting careful scrutiny
initiative of the Directors
of all relevant aspects.
with regard to international
Decision-making processes,
expansion, which should be
and the implementation
pursued along with proven
of these decisions, have
opportunities in the domestic
been undertaken in a
Supervision by the Board
of Commissioners
The Board of Commissioners
prudent manner, and in
strict adherence to clearly
established mechanism and
procedures. This reflects well,
inter alia, on the quality of the
was closely involved with
practice of Good Corporate
developments at Telkom
Governance ("GCG") at
assets and resources, leading
market.
the Directors, namely support
throughout 2013, in its
Telkom. We believe that this
of our cellular business. In
2013, Telkomsel, the cellular
business arm of Telkom, has
once more shown a double-
digit growth, contributing
capacity as supervisory
will be to our advantage as
body for the management of
Telkom continues to grow and
the Company. In addition to
effectively compete with the
internal meetings of the Board,
best players in the industry,
we discharge our supervisory
both at regional and global
levels.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
33
Thus far, Telkom
has successfully
transformed itself
into a dynamic player
in one of the most
competitive industries.
The Outlook on Our
Business
Thus far, Telkom has
successfully transformed
itself into a dynamic player in
one of the most competitive
industries. Moving into 2014,
the Board of Commissioners
has reviewed the work
programs prepared by the
Directors. In our opinion,
the work programs and the
applauds the initiatives of
members, is deemed necessary
the Directors concerning
to maintain and strengthen
human capital development
the Board's performance in
at Telkom, especially efforts
anticipation of increased work
on developing science and
loads in line with expected
technology-competent human
growth of Telkom and Telkom
capital that are capable of
Group going forward.
competing at a global level.
This is a critical issue for
Telkom, and thus the theme
Appreciation to
Stakeholders
On behalf of the Board of
of our Annual Report 2013,
Commissioners, I would like
"Creating Global Talents and
to congratulate the Directors
Opportunities" is deemed
and staff at Telkom for their
appropriate. The time will
excellent achievements in 2013,
come when our global talents
along with my appreciation
will prove to be a source
for their dedicated hard work
of business innovations,
over the years. The Board of
spearheading the creation
Commissioners also extends
of new opportunities on
the highest appreciation to the
the global level to ensure
shareholders, loyal customers
sustainable growth in the
and all our other stakeholders,
targets set for 2014 represent
future.
a realistic indication of Telkom
potentials to grow and develop
in the long run, along the
lines set out in its Corporate
Strategic Scenario.
Changes in the Board
I would like to take this
for their vote of confidence
and steady support to Telkom.
Your continuing vote of
confidence and support do
opportunity to welcome
motivate all of us at Telkom
Gatot Trihargo, the Deputy
and the Telkom Group to
of Business Services at the
strive even harder for higher
The Board of Commissioners
Ministry of SOE, who was
achievements.
would like to remind the
Directors to be cognizant
of regulatory aspect of the
appointed to the Board of
Commissioners of Telkom at
the Annual General Meeting
domestic telecommunications
industry in the formulation of
of Shareholders of Telkom on
April 19, 2013. The appointment
the company’s business plans
of an additional Board
and strategies. Aside from that,
member, making a total of six
Jusman Syafii Djamal
President Commissioner
the Board of Commissioners
34
34
2013 Annual Report
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
PT Telekomunikasi Indonesia, Tbk
Preface
Preface
Highlights
Highlights
Management
Management
Report
Report
Business
Business
Overview
Overview
Management’s
Management’s
Discussion & Analysis
Discussion & Analysis
Corporate
Governance
Governance
Social &
Social &
Environmental
Environmental
Responsibility
Responsibility
Company
Company
Profile
Profile
Additional
Additional
Information
Information
(For ADR
(For ADR
Shareholders)
Shareholders)
Appendices
Appendices
2013 Annual Report
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
PT Telekomunikasi Indonesia, Tbk
35
35
We succeeded in maintaining our growth performance in
2013 above industry average.
- Financial performance above the targets set out in the Company’s Budget
Plan.
- Named as “the Most Trusted Company” for the fifth time in a row in the
Corporate Governance Perception Index survey.
- Quite optimistic about the business prospects in 2014 as we have established
major programs same as in 2013.
Report From
The President Director
Arief Yahya
President Director
36
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Estemeed Shareholders,
During the year, we continue to
initiatives in expanding broadband
allocate our resources, including
penetration. IDN contains the
In line with the expectations of
the largest portion of our capital
following elements: id-Access (direct
shareholders, we recorded another
expenditures, to strengthen the
to the home broadband access);
year of encouraging achievements
performance of our cellular business
id-Ring (fiber optics backbone
in 2013 following our satisfactory
under Telkomsel, our subsidiary.
infrastructure); and id-Con (ICT-based
performance of the year before.
Historically, Telkomsel is the largest
convergence services as new sources
Consistent and successful execution
contributor to our consolidated
of revenue going forward).
of our strategic work programs during
revenues. With improved synergy
the last couple of years has resulted in
within the Telkom Group, Telkomsel
We also focused on international
strengthened business fundamentals
was able to maintain excellent
expansion initiatives in 2013, targeting
for Telkom to maintain and sustain
performance in 2013, posting triple
footholds in 10 countries by 2015.
growth over the long term.
double-digit growth in terms of
Initiatives in international expansion
The strengthened fundamentals are
our growth momentum. As room
reflected on our performance at the
The Indonesia Digital Network
for growth in the domestic market
Indonesia Stock Exchange ("IDX")
("IDN") 2015 program represents our
becomes smaller, the search for new
revenues, EBITDA and profitability.
are essential if we are to maintain
during 2013, where prices of Telkom's
shares showed a steady and upward
trend exceeding the performance
of the industry index. Our market
capitalization grew by 18.8% to
Rp216.7 trillion, the fourth largest at
IDX by the end of the year.
Strategic Directions in 2013
We have consistently pursued our
growth strategy on the principle
of 'first thing first'. We do this by
focusing the resources of Telkom
Group on business segments that
showed either a strong performance
or an excellent future growth
potential. In 2013, our main work
programs are (i) strengthening the
performance of cellular business, (ii)
extending broadband penetration
in Indonesia, and (iii) engaging in
international expansion.
Left to Right:
Honesti Basyir
Director of Finance
Arief Yahya
President Director
Indra Utoyo
Director of Innovation &
Strategic Portfolio
Rizkan Chandra
Director of Network IT &
Solution
Sukardi Silalahi
Director of Consumer
Service
Priyantono Rudito
Director of Human Capital
Management
Muhammad Awaluddin
Director of Enterprise &
Business Service
Ririek Adriansyah
Director of Wholesale &
International Service
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
37
outlets of growth overseas become
has developed the Global Talent
allocated approximately 20% of
necessary. In addition, international
Program ("GTP") in order to equip
our human capital budget towards
expansion represents a strategy to
our employees with the necessary
creating this 'center of excellence'.
diversify our business risks, in view
capabilities in managing business in a
Our strategic vehicle to fulfill this
of the rapid developments and
global environment.
continuing convergence of the TIMES
objective is Telkom Corporate
University, whereby we strive to
industry that has increasingly become
The GTP initiative, in turn, is part of
improve our advantages in leadership,
borderless.
our consistent endeavor within the
competences, and global standard
last couple of years in developing
certifications.
More importantly, international
our human capital as a center of
expansion is also a very effective
excellence. This is our first and
method by which to improve the
foremost strategic initiative that will
Company Performance in 2013
By fine-tuning our focus on business
competences of our human capital.
be key to winning the competition
segments that demonstrated strong
This is especially true in regard the
and ensuring our sustained
growth, we succeeded in maintaining
inevitable competition with global
existence into the future. True to our
our growth performance in 2013
players in the industry. Thus, Telkom
commitment, we have consistently
above industry average.
38
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
In terms of financial results, we
recorded an increase of 7.5% in
consolidated revenues to Rp83
to 24,993 employees of the
The excellent performance and
Telkom Group in the Employee
achievements of the Telkom Group
Stock Option Program
have been recognized by domestic
trillion in 2013. Revenues from cellular
("ESOP").
and international institutions alike.
voice and from data, internet & IT
b. On July 30, 2013, a total of
Among the various awards that we
services contributed 38.7% and 38.2%,
211.0 million shares in the
received were:
respectively, to total consolidated
treasury stock acquired in
1. Asia’s Icon on Corporate
revenues. EBITDA, meanwhile, grew
the share buy-back program
Governance in Corporate
by 8.6% over last year's figure and
Phase I year 2007 were sold
Governance Asia Annual
amounted to Rp43.6 trillion, with
to market through a private
Recognition Award 2013 in Manila,
a relatively stable EBITDA margin
placement.
Philipina.
of 52.5%. Net income improved by
2. We undertook a 1:5 stock split
2. The Best CEO, The Best CFO and
10.5% from Rp12.9 trillion in 2012 to
corporate action on September
3rd Asia Best Managed Company
Rp14.2 trillion in 2013. Our bottom line
2, 2013, to improve the trading
from Finance Asia in Hong Kong.
represents a return on assets ("ROA")
liquidity of our shares at the
3. Best of The Best Service Provider
of 11.1% and a return on equity ("ROE")
Indonesia Stock Exchange.
of the Year fro Telkom and Best
of 23.5% in 2013, compared with
3. Telkom Corporate University
Wireless Service Provider of the
11.5% and 24.9%, respectively, in the
recorded a total of 1,010
Year for Telkomsel in Asia Pacific
previous year.
employees participating in the
ICT Award 2013.
GTP and 1,471 employees receiving
4. Certification of premium ethernet
We also continue to maintain
international standard professional
MEF-CE 2.0 from Metro Ethernet
adequate levels of capital
certifications.
Forum (MEF). Telkom is the first
expenditures to support future
4.
In the interest of business portfolio
provider of ethernet services in
growth. Total capital expenditures
realignment, we reduced our
Indonesia, the fourth in Asia, and
in 2013 amounted to Rp24.9 trillion,
majority shareholding at Indonua
the thirteenth in the world.
constituting 30% of total consolidated
Telemedia, a subsidiary in the
5. The Best Provider and The Best
revenues in that year, and an increase
media business, and acquired
Data Communication of The Year
of 44.2% over our spent in the
majority share ownership at
from Frost & Sullivan. Telkomsel
previous year. The largest portion, at
Patrakom, a subsidiary in VSAT for
also recognized as The Best
35.2% of total capital expenditures,
marine broadband business. We
Mobile Provider of The Year and
was allocated for the expansion of
also established PT Metra Digital
The Best Mobile Broadband
radio access network in our cellular
Media as a sub-holding company
Service of The Year.
business. The remaining budget was
to develop new business models
mainly spent for the expansion of
for our subsidiaries in the digital
Meanwhile, among domestic
broadband access and infrastructure
media business.
recognitions were:
as well as for business development
5. A re-mapping of the structure of
1. The Amazing Star, Men’s
of subsidiaries in Telkom Group in the
Area Telecommunication Office
Obsession 9 Tough CEO from
tower business, IT and media business,
(Kandatel) giving full authority
Men’s Obsession magazine.
and for international expansion.
on operational activities in the
The award are given to CEOs
Other noteworthy developments and
benefits in faster execution of
integrity, dedication, and
achievements in 2013 include:
work programs as well as in cost
loyality in developing business
1.
In accordance with the resolution
leadership.
and contributing to national
respective areas, with expected
with achievement, capacity,
of the GMS in 2013 concerning
6. Of the 10 countries initially
development efforts.
changes in the planned utilization
targeted in our international
2. The Best Product Innovation
of treasury stocks acquired in the
expansion program, we have
of Infrastructure Sector for
share buy-back program phase
successfully secured footholds
INDIFINANCE, The Best
I - IV, we have completed the
in 7 countries or areas, namely
Technology Innovation of
following approved programs,
Singapore, Hong Kong - Macau,
Infrastructure Sector for Indigo
namely:
Timor Leste, Australia, Myanmar,
and the highest recognition for
a. On May 31, 2013, a total of 59.8
Malaysia, and the United States.
innovation, The Best Corporate
million shares in the treasury
Innovation Culture & Management,
stock acquired in the share
We are indeed grateful that we have
in BUMN Innovation Award.
buy-back program Phase III
been able to rise above challenges
year 2009 were transferred
and achieve excellent results.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
39
3. Best of The Best for the corporate
consecutively that we received in the
and Best Chief Marketing Officer
Corporate Governance Perception
Business Prospects in 2014
Looking back on our performance
for Telkom EBIS Director in BUMN
Index survey by the Indonesian
during the last couple of years, we are
Marketing Award.
Institute for Corporate Governance
justifiably optimistic of our prospects
4. Best Corporate of The Year and
(IICG), and also recognized as 'Best
CEO Of The Year in Anugerah
of Asia' in Asia's Icon on Corporate
for 2014. Our priority programs for
2014 are the same as in 2013. We
Business Review.
Governance polling conducted by
will continue to allocate capital
5. Best For All Human Capital
Corporate Governance Asia magazine.
Criteria and Best CEO
Commitment from Indonesia
In 2013, as part of the implementation
Human Capital Study (IHCS).
of GCG practices, we have fully
6. The Best CEO of Most
adopted the International Financial
Competitive SOE 2013, Most
Reporting Standard ("IFRS") for our
expenditures and other resources
in support of our cellular business,
targeting double-digit growth for
Telkomsel, our cellular subsidiary. We
will push ahead with the expansion
of broadband infrastructure in the
Competitive SOE in Infrastructure
financial reports. We have also begun
Indonesia Digital Network 2015
and GCG Implementation Most
with the implementation of IFRS in
Competitive Listed SOE in
a number of our subsidiaries in the
Anugerah BUMN 2013.
Telkom Group. Further, we have also
7. Marketeer of The Year 2013 for
conformed to the ASEAN Corporate
CEO of Telkom Indonesia.
Governance Scorecard criteria, a
project. This will include construction
of the remaining network segments
in the Sulawesi-Maluku-Papua Cable
System, accelerated deployment
of FITH broadband access, and the
construction of additional Data Center
facilities. At the same time, we will
business initiatives in the 10 countries
or areas that we have previously
designated in our international
expansion program. We will also
Business and Operational
Constraints
In working towards our business and
operational targets in 2013, we faced a
countries.
recognized quality benchmark of
GCG implementation by publicly
listed companies in the six ASEAN
continue to promote and grow our
number of constraints related mainly
to external developments during the
Corporate Social Responsibility
In addition to our focus on business,
year. Unfavorable macro economy
we also continue to improve on
strengthen our digital media business
conditions, and especially the
our Corporate Social Responsibility
portfolio in 2014.
significant depreciation of the Rupiah
("CSR") commitments to society
against the US Dollar, have impacted
and the environment. Through
on our bottom line due to losses on
the Partnership and Community
foreign exchange translation. It also
Development Program ("PKBL"),
forced the suspension of a number
we disbursed funds totaling Rp174
of telecommunication infrastructure
billion in 2013. These funds were
projects, resulting in a less than
spent entirely for various community
optimum spend of our capital
welfare initiatives within the scope
expenditures budget. The targeted
of activities of the Community
deployment of Fixed-to-the-Home
Development Program.
("FTTH") broadband access was also
Words of Appreciation
On behalf of the Board of Directors,
allow me to express the highest of
appreciation for the dedication and
hard work of all employees that have
led to such excellent achievements
in 2013. I would also like to convey
our sincere thanks for the trust and
support that we continue to receive
from the Board of Commissioners,
less than satisfactory, due to external
We also allocated funds to our own
shareholders, business partners, loyal
factors related to location permits
CSR programs, focusing on initiatives
customers.
or local regulations as well as the
that promote higher proficiency
preparedness of supporting industries.
and utilization of Information and
Corporate Governance
The numerous recognitions that we
Communication Technology ("ICT")
among people and communities in
Indonesia. Under the Indonesia Digital
received over the years from a variety
Community ("Indigo") program, we
of external parties should serve as
currently have a number of initiatives,
a valid indication of the quality of
one of the most progressive being
our corporate governance practice
the IndSchool program. We were also
("GCG").
active helping natural disaster victims
In 2013, just to mention a few, we were
through the Telkom Peduli program,
awarded the citation of "Most Trusted
as well as through our participation
Company", the fifth such award
in the BUMN Peduli humanitarian aid
program administered by the Ministry
of SOE.
Long live Indonesia
Long live Telkom Indonesia
Arief Yahya
President Director/CEO
40
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2013 Annual Report
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PT Telekomunikasi Indonesia, Tbk
Preface
Preface
Highlights
Highlights
Management
Management
Report
Report
Business
Business
Overview
Overview
Management’s
Management’s
Discussion & Analysis
Discussion & Analysis
Business
Overview
42
Telecommunication Industry in
Indonesia
56
Telecommunication Services
Tariffs
43
Corporate Strategy
45
Business Outlook
46
Business Portfolio
58
Customer Services
61
Consumer Protection
62
Billing, Payment and Collection
54
Distribution and Marketing Strategy
64
Risk Factors
82
Network Infrastructure
86
Network Development
88
Human Capital
Corporate
Governance
Governance
Social &
Social &
Environmental
Environmental
Responsibility
Responsibility
Company
Company
Profile
Profile
Additional
Additional
Information
Information
(For ADR
(For ADR
Shareholders)
Shareholders)
Appendices
Appendices
2013 Annual Report
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
PT Telekomunikasi Indonesia, Tbk
41
41
42
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Telecommunications Industry
in Indonesia
Indra Utoyo
Director of Innovation & Strategic Portfolio
Corporate strategy governance
Our strategic initiatives support the
comprehensive transformation of our
organization, business portfolio, infrastructure,
systems, and corporate culture.
With directional strategy, we plan to seek
opportunities for inorganic growth through
acquisitions & alliances (“A&A”) and
corporate restructuring.
The increasingly open and tight competition
among telco operators, which is expected
to result in improved service quality, higher
industry efficiency.
We continued
to adapt to the
dynamics of the
industry by
updating our
strategic initiatives
with a focus on
implementing
the TIMES business
framework
and strengthening
internal
consolidation
Indonesia's telecommunication industry has shown rapid growth ever since the transformation of the telecommunication
sector from monopoly to competitive, enacted by the Government through Law No.36 Year 1999 on Telecommunication.
This growth is moreover further accelerated by advances in communication technology using radio frequencies, as
alternative telecommunication means to communication through cable networks and satellite.
Compared to the growth of fixed wireline telephony for many decades that eventually stagnated at only around 9,4 million
lines, the telecommunication teledensity in Indonesia has since experienced a very significant jump in less than 20 years
to more than 310 million lines, driven primarily by the growth of cellular telephone, as well as fixed wireless telephone.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
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Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
43
The cellular telephony business also
result in improved service quality,
new corporate culture we have
continues to grow through a variety
higher industry efficiency, and
established the “Telkom Corporate
of innovations as well as constant
constant innovations in products
University”, which aims to educate
adaptation to changes in market
or services, and will eventually
our employees in order to meet
demands and consumer preferences.
drive more growth in Indonesia's
international standards in the
While the growth in voice and Short
telecommunication industry.
TIMES industry.
Messaging Service (“SMS”) has
showed signs of declining in recent
years, there was at the same time a
CORPORATE STRATEGY
Our strategic target to achieve our
2. Focus on high growth or high
value portfolio
marked strengthening in the growth
objectives in 2013 was improving
Deploy resources to the parts
of data communication and mobile
market capitalization. Our strategies
of our portfolio with the highest
internet access services.
consisted broadly of:
growth and value potential will
- Directional strategy: sustainable
ultimately generate the optimum
There are a number of factors
competitive growth.
value for Telkom Group. This
or conditions that point to good
- Portfolio strategy: converged
includes supporting Telkomsel
growth prospects for Indonesia's
TIMES portfolio.
in order to sustain its growth
telecommunication industry, including:
- Parenting strategy: strategic
and market position as well as
1.
Indonesia's demographics, with
guidance.
the fourth largest population in
developing broadband through
our Indonesia Digital Network
the world and a fast growing
In 2013, we continued to adapt to the
program.
middle class segment, as well as
dynamics of the industry by updating
Indonesia's economy that has
our strategic initiatives with a focus
3. Accelerate international
shown stable and respectable
on implementing the TIMES business
growth in recent years, are
framework and strengthening internal
expansion
International expansion through
expected to drive further
consolidation. We believed that
partnerships, alliances and
demands for telecommunication
these strategic initiatives support
acquisitions, giving priority to the
and data services.
the comprehensive transformation
Asia Pacific region, the Middle
2. While internet penetration in
of our organization, business
East and North Africa. Our
the country is still relatively low
portfolio, infrastructure, systems, and
subsidiary Telin will be our main
compared to peer countries in
corporate culture that we believed
vehicle for international expansion.
the region, people in Indonesia is
was necessary to realize our vision of
becoming increasingly exposed,
becoming a leading TIMES company
4. Cost transformation
and are increasingly adopting
in the region. Besides providing a
Improve cost efficiency and
global trends in digital lifestyle, as
new growth stream, we believed that
infrastructure capability, by
shown especially in the marked
our TIMES business also helped to
utilizing technology (multiplay/
increase of smartphone usage
promote the sustainable growth of
multiservice/multiscreen), leverage
with more affordable prices as
our traditional telecommunications
existing asset (empowerment of
well as higher levels of social
business.
networking media activities.
the less productive assets) and
create a creative business model
We expect that the growth of
To achieve the objective of these
(through partnerships to share
mobile internet services will
three corporate broad strategies,
costs).
continue to be fueled on the
we have developed the following 10
back of the increasing popularity
strategic initiatives:
5. IDN (id-Access, id-Ring, id-Con)
of smartphones, tablets and
1. Center of Excellence
Development
other internet-enabled mobile
In order to improve our business
We plan to support our MP3EI
devices in Indonesia, faster data
performance and implement a
(Government’s Master Plan for
transmission of wireless networks,
and increasingly affordable smart
devices and mobile internet
services.
3. The increasingly open and
tight competition among telco
operators, which is expected to
We believe that the shifting of consumer
preference towards digital lifestyle will serve as
the key to unlock our potential business growth
in the future, that will lead to the increase in
demand for broadband services to compensate
the decline of our legacy business.
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Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
the Acceleration and Expansion
experience and customer
DKI Jakarta, West Java & Banten,
of Indonesia's Economic
engagement through exploration
Central Java, East Java, Kalimantan
Development) target of attaining
of best technology, development
and East Indonesia area.
broadband access to 30% of
appropriate business model and
households in Indonesia by the
partnership scheme.
10. Increasing synergy within Telkom
year 2015. IDN (Indonesia Digital
Group
Network) is also intended to
8. Execution of the best subsidiary
Optimalization synergy at the
bridge the digital divide.
management system
Provide strategic guidance to
strategic and operational levels, as
well as single main function and
6. Indonesia Digital Solution (“IDS”)
our subsidiaries is important for
cross functions.
– Convergent services in digital
ecosystem solution
the success of Telkom Group.
In general, guidance provided
In order to implement our directional
Developed the IDS strategic
to our subsidiaries will focus
strategy of sustainable competitive
initiative to support the Indonesia
on the aspects of planning and
growth, we plan to seek opportunities
Digital Network program such
optimalization of synergy within
for inorganic growth through
as the digital media ecosystem
the Telkom Group.
(cooperation with best partners
acquisitions & alliances (“A&A”) and
corporate restructuring, as described
and differentiation through
9. Managing portfolio through
below:
innovative business models) and
Board of Executives (“BoE”) and
business solution ecosystem
Chief Regional Officer (“CRO”)
1. A&A program
A&A implementationis part of
(accelerate development of
Manage our subsidiaries
our growth strategy objective to
innovative business ecosystem &
subsidiaries through a Board of
mitigate risks, develop capital,
convergence services for excellent
Executives, comprising the heads
increase competency as well as
customer experience) space.
of four businesses, namely, mobile
accelerate access to synergy and
(represented by Telkomsel),
value contribution. In 2013, we:
7.
Indonesia Digital Platform (“IDP”)
multimedia (represented by
– acquired all shares of PT Patra
– Platform enabler for ecosystem
Metra), infrastructure (represented
Telekomunikasi Indonesia
development
by Mitratel) and international
(“Patrakom”) and enabling
Developed IDP strategic initiative
(represented by Telin), and seven
us to integrate Parakom’s
to seek enhance overall customer
CROs representing Sumatera,
line of business, namely
Corporate
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45
satellite-based closed fixed
in service of development
which was launched in 2011. One of
telecommunications network
and modernization network
the three pillars of the master plan is
provider, as well as providing
customers to the broadband
development of national connectivity,
communication network
and solution, with a permit
as Operator of Micro Earth
Stations Communications
System ("SKSBM").
and fiber optic network.
including development of the
BUSINESS OUTLOOK (TREND
INFORMATION)
The significant trends, or
information and communication
technology sector. This is in line with
our IDN program and our strategic
initiative on the development of
- entered into strategic
developments that have had in
our Nusantara Superhighway
partnership with PT Trans
recent years, and may have in the
project (i.e. the Palapa ring project
Corpora and PT Trans Media
future, a material impact on our
known as id-Ring), an optical-based
Corpora by selling shares of
results of operations, financial
network of six interconnected
Indonusa (“Telkom Vision”)
condition and capital expenditures,
rings which links Indonesia’s
to strengthen Telkom Vision
include (i) an increase in cellular
main island groups, namely the
position in Pay TV industry.
telephone revenues with increases
Sumatra ring, the Java ring, the
- acquisition of PT Pojok Celebes
in subscribers, minutes of use,
Kalimantan ring, the Sulawesi ring,
Mandiri who engaged in
ARPU and regulatory aspects (ii)
the Bali and Nusa Tenggara ring
business-ticket booking &
an increase in revenues from data,
and the Maluku and Papua ring. We
online applications through
internet and information technology
expect that the development of
POINTER which has been
services revenues, and (iii) a
this extensive telecommunication
connected with the national
decrease in fixed lines telephone
network connecting all the six major
airline and a large number of
revenues.
hotels in Indonesia.
economic corridors will allow us to
offer more value-added services,
We believe favorable external
and to reach more customers in a
2. Corporate restructuring
Corporate restructuring
factors, among others, will support
much larger scale, as well as provide
our ability to continue to drive
opportunities for our products and
implemented through unit
revenue growth from data, internet
services in the IMES areas.
business spin-off program,
and information technology services
possible initial public offering
as well as from mobile phone
We believe the shift in consumer
of subsidiaries, established new
services. Indonesia's economy
preferences towards a digital lifestyle
subsidiaries and capital injection. In
recorded a relatively robust growth
will be a key factor that we expect
2013, the corporate restructuring
in recent years despite a sluggish
will drive our business in the future.
program that we already
global economy. With good
We believe this will lead to continuing
implemented such as:
economic fundamentals, Indonesia’s
increase in broadband demand
- business splitting: Metra
national economy is expected to
(including mobile broadband),
Digital Media splitting from our
continue to grow steadily, with a
compensating for the decline of
indirect subsidiaries, Infomedia;
corresponding increase in consumer
our legacy business (both fixed
- established new subsidiaries
purchasing power, which in turn is
wireline and cellular telephone
through overseas expansion
expected to result in higher demand
revenue and SMS revenue). We
such as in Malaysia (MVNO),
for telecommunications services,
expect the increase in demand for
Australia ( IT business process
for both basic telecommunications
data communications and corporate
outsourcing & solution),
services as well as the more
internet to continue next year as we
Timor Leste (mobile network
sophisticated value-added services
increase our capacity to cover more
operator), Hong Kong - Macau
that are part of the increasingly
small and medium enterprises.
(MVNO), Taiwan (MVNO),
prevalent digital lifestyle in modern
Myanmar (international
societies.
network), and United States
For further explanation of these
significant developments, see
of America (international
In the longer term, Indonesia’s
“Management's Discussion
network); and
economy is also expected to enjoy
and Analysis of the Company’s
- capitalization strengthening,
support from Government initiatives
Performance”.
increase competence
such as the Master Plan for the
and certification to our
Acceleration and Expansion of
subsidiary Telkom Akses
Indonesia’s Economic Development,
46
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Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Business Portfolio
Telkom Group’s
business portfolio
includes fixed wireline
services, fixed wireless
services, mobile
services, internet and
data communication
services, network
services,
interconnection
services, and
additional services.
We are a State-Owned Enterprise and currently the largest
telecommunication service and network provider in Indonesia.
We serve millions of customers throughout Indonesia with a
complete range of telecommunications services that include fixed
wireline and fixed wireless telephone connections, cellular services,
network and interconnection services, as well as internet and data
communication services. We also provide services in information,
media and edutainment, including cloud-based and server-based
managed services, e-Payment and IT enabler services, Pay-TV, as well
as e-Commerce and other portal services. We posted revenues of
Rp77,143 billion and Rp82,967 billion, respectively, for the years ended
December 31, 2012 and 2013.
Fixed line telephone services include local, direct long-distance
(“DLD”), and international call services, as well as other
telecommunications and supporting services. Fixed wireless services
include local and direct long-distance CDMA-based telephone
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2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
47
connections, and other
products, services and solutions
(“IMS”) services which
telecommunication services.
ranging from our legacy business
combines wireless and
Cellular services comprise
to the new economy business
fixed line technologies
cellulars telecommunication
(“NEB”). Our business portfolio is
for voice and data
service. Our telecommunications-
grouped into the following lines
communications.
related business may experience
of business:
certain seasonal effects.
Cellular and fixed wireless
A. Telecommunications
communications tend to increase
around the Ramadhan lunar
Business
Our telecommunications
We succeeded
in improving the
performance of our
fixed wireline business
month and the culmination
business portfolio includes
line through the
of the Eid festivity, as well as
(i) fixed wireline services,
implementation of a
during the December holiday
(ii) fixed wireless services,
“More for Less” program
season, while fixed line
(iii) cellular services,
communications from homes
(iv) internet and data
and offices may decrease when
communication services,
there are fewer working days in
(v) network services,
in 2013, where subscribers
are able to get deeper
discounts with greater
telephone usage such as
the period or a greater number
(vi) interconnection services,
unlimited talk time using
of subscribers are on vacation.
and (vii) ancillary services.
the house phone, unlimited
In 2013, except for OLOs who
broadband access with
use our interconnection services
1. Fixed Wireline Services
various bandwidth options
and Telkomsel’s employee
Our fixed wireline services
and television channels
cooperative (“Kisel”), none of our
include plain old telephone
with attractive program
customers accounted for more
services (“POTS”), value-
packages.
than 1% of our total revenues.
added services (“VAS”),
A substantial majority of our
services and session
Our fixed wireless
revenue has and continues to
initiation protocol (“SIP”)
business, which uses
Intelligent Network (“IN”)
2. Fixed Wireless Services
come from telecommunications-
services. IN services are
related services, including data
IP-based network services
and internet services. As a
company that provides TIMES,
that are connected to
our exchange systems
we continue to encourage
and telecommunications
innovations in sectors other than
network. Session Initiation
telecommunications, and capture
Protocol services are IP
synergies among all of our
multimedia subsystem
kartuHalo is still
recorded as the most
widely used postpaid
cellular services since
introduced in 1995
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Preface
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Management
Report
Business
Overview
Management’s
Discussion & Analysis
limited mobility CDMA
technology, is managed by
- kartuHalo. In 2013,
our Wireless Broadband
Division under the
kartuHalo launched
a new package, the
trademarks "Telkom Flexi"
HaloFit, targeting the
or "Flexi". In 2013, we
optimized existing BTSs
for our fixed wireless
network, but did otherwise
young professional
segment with three
main value added
services bundled
further develop our fixed
with the core services
wireless network or
conduct any new product
launches or promotional
campaigns activities for
this service.
3. Cellular Services
We provide cellular
communications services
using GSM technology
through our subsidiary,
Telkomsel. Cellular services
(excluding mobile data
services) remained the
largest contributor to our
consolidated revenues in
2013. We have two primary
types of cellular products
and services, postpaid
services represented by
“kartuHalo” and prepaid
services represented by
simPATI and Kartu As.
of voice and SMS.
The value added
services comprised
data services and
international roaming
services. kartuHalo also
launched kartuHalo
Family. This new
product, which is
targeted at families,
is offered to new and
existing subscribers,
and provides a number
of benefits such as
additional minutes
of calling to other
members within the
HaloFamily group,
convenient payment
through single billing,
and exclusive content
bonuses. Members
within the HaloFamily
group are able to top-
In 2013, with the increasing
up through the primary
demand for data services
member.
simPATI starter pack,
the simPATI Loop,
targeting the high-
value youth segment
with an enhanced data
package with additional
lifestyle content for
movies, music and
magazines. ”walk with
simPATI” program
also launched, which
invited the youth to
participate in a video
clip project and drew
positive attention from
customers in digital
media.
– Kartu As is a prepaid
service that bills
customers based on
seconds of talk time.
One of the programs
Kartu As products
launched in 2013 was
the Kartu As PlayMania
starter pack, which
targets the early youth
consumer segment.
The product features
edutainment content
aimed at young users in
the segment. Another
feature of this service
is the emergency call
service, which enables
users of Kartu As
from customers, Telkomsel
added various attractive
and competitive data
services to its range of
products and services to
complement its legacy in
voice and SMS. In order to
accelerate the adoption
of 3G mobile devices,
Telkomsel also intensified
collaboration with device
principals and distributors
of local and global brands
of mobile devices by
introducing affordable 3G
mobile device bundled
packages.
- simPATI is a prepaid
service that can be
purchased at any
cellular shop in the
form of starter packs
and top up vouchers.
In 2013, among other
efforts, we refreshed
our simPATI starter
pack with more
benefits to target data
users and higher value
customer acquisition.
We also launched a
new edition of our
"Indonesian Wi-Fi" was
launched in 2012 to
meet the needs of the
community in accessing
Wi-Fi based internet at
the airports, shopping
malls, hospitals,
universities/schools and
cafes
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2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
49
PlayMania to make
free call and SMS to
two favourite numbers.
We also launched
"Recharge Bonus
Gokil" program , which
drew an enthusiastic
response from Kartu
As subscribers. The
Recharge Bonus Gokil
program is designed
to provide bonus value
each time the user
engages in a top-up
transaction.
4. Broadband and Internet
Services
We provide a range of
products and services
in data communication
and internet services as
described below:
- Broadband internet,
our primary non-
cellular based
broadband internet
service, using ADSL
and fiber optic
technology, is offered
under the commercial
name “Speedy”. We
blackberry package
and non package data
services.
also provide a prepaid
- SMS services are
on-demand, “pay as
you use” broadband
internet service using
Speedy or Wi-Fi access
under the commercial
name of “Speedy
Instan”. We also offer
a triple play package
combining broadband
internet (Speedy),
telephone services
and content (UseeTV,
home monitoring and
music-Melon) under
the commercial name
“Indihome”.
- Cellular data
communication,
Telkomsel provides
internet and mobile
data communications
services through its
mobile cellular network,
with the commercial
name “Flash”,
provided to mobile and
fixed wireless telephone
subscribers.
-
“TelkomNet instan”
is our dial-up internet
access services.
- Wi-Fi/hotspot is a
wireless access solution
for intranet and mobile
internet data services
in a particular area by
utilizing our and other
ISP’s payment facilities,
or in bulk using
Customer Premises
Equipment-based
Wi-Fi technology. In
2012, we launched
“Indonesia Wi-Fi or @
wifi.id” to meet the
need for Wi-Fi based
internet service at
public places such
as airports, shopping
malls, hospitals,
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Business
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Discussion & Analysis
universities/schools,
cafes, and other public
places. Our “Indonesia
Wi-Fi” service has a
minimum speed of 10
These services can be
easily accessed from
any device that has
Wi-Fi capability by the
FlexiNet Unlimited or
Save” for regular
international calls.
Both services can be
accessed by dialing
a special prefix for
Mbps to accommodate,
Flexi Mobile Broadband
international calls. To
offloading, retail and
other uses.
- “FlexiNet” is our
internet access service
that uses the Telkom
Flexi fixed wireless
network. Our “Flexi
Hotspot” service
provides customers
who wish to enjoy
high speed internet
access through a
wireless internet
connection that is
supported by our
hotspot infrastructure.
username and the
password in each
hotspot.
- Virtual Private Network
(“VPN”) is a virtual
private network service
that uses the internet
for secure connection
to remote sites.
- “Astinet” provides
high quality internet
access using a default
internet gateway and
public IP address for
a dedicated, fixed
communication line
24 hours a day.
- VoIP. We provide
provide these services,
we cooperate with 79
international wholesale
carriers that can
support our IDD call
services worldwide, to
deliver VoIP traffics.
-
ISDN PRA is a
digital network to
facilitate multimedia
telecommunications
services, using wider
bandwidth as well
as inter-terminal
digital systems to
accommodate high-
speed, high-quality
and high-capacity
affordable international
voice, data and video
call services through
our premium VoIP
service package
communications
through a single
channel. We also
“Telkom Global-01017”
provide ISDN-based
as well as “Telkom
internet access.
- DINAccess is a wireless
communications
service with dedicated
access to provide
LAN interconnection
services and
multimedia services at
a speed adjustable to
customer needs.
- Global Datacom is a
data communications
service that lets
corporate customers
connect their
headquarters with
branch offices or
clients across the
globe. We work with
global partners through
Telin, our subsidiary,
Corporate
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PT Telekomunikasi Indonesia, Tbk
51
in providing these
services.
- Metro Link is a
Metro-network-based
connectivity services
that accommodates
point-to-point,
point-to-multipoint
and multipoint-
to-multipoint
communications.
- Metro I-net is a high
for subsequent sale to
to five year periods.
their customers.
- Value-added service
Datacom provides
additional facilities that
6. Interconnection Services
We also earn revenue from
other telecommunications
offer added value to
operators that utilize
data communications
our extensive network
customers.
5. Network Services
We directly manage
the provision of
infrastructure in Indonesia,
both for calls that end at
or transit via our network.
Similarly, we also pay
interconnection fees to
capacity data network
network services to
other telecommunications
solution based on IP
(Internet Protocol) or
customers comprising
operators when we use
of our business partners,
their networks to connect
ethernet that provides
commercial businesses
a call from our customers.
flexibility, ease of use
and OLOs. Our network
Interconnection services
and effectiveness
as well as quality
services include satellite
that we provide to other
assurance for corporate
satellite broadcasting,
transponder leasing,
telecommunications
operators comprise
and SME customers.
VSAT, audio distribution,
domestic and international
- Port Wholesale
as well as satellite-based
interconnection services.
provides wholesale
rental of port remote
access servers to
internet service
providers, content
service providers and
corporate customers
and terrestrial-based
In 2013, we have increased
leased lines. Our network
our efforts to optimize
services customers may
the capability of Telkom
enter into short-term deals
Group through exploiting
for several minutes of
broadcasting to longer-
synergies among Telkom,
Telkomsel and Telin with
term agreements for one
respect to interconnection
52
2013 Annual Report
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Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
services.
7. Ancillary Services
We have exclusive
business through our
subsidiary, Mitratel.
B. New Economy Business
agreements with some
(“NEB”) and Strategic
investors under revenue
Business Opportunities
sharing arrangements to
expand fixed line phone
Portfolio
NEB and Strategic Business
payments to service or
goods providers such
as PLN, Telkom, PDAM,
KAI, and others through
collecting agents
that include banks,
cooperatives, BPR,
convenience stores, and
services, public card
Opportunities are a part
others.
phones (including their
of our IME portfolio. We
maintenance), data and
have designated our
- Remittance is money
transfer service where
internet networks, and
subsidiary, Telkom metra, as
neither the money
ancillary facilities related
a sub-holding company that
sender nor the recipient
to telecommunications.
focusses on our IME business
development.
For more details about
the scheme of additional
Our information business
services, please see
portfolio includes:
need a bank account
to complete a transfer,
as transfers can be
accomplished using
only a mobile device.
1. IT Outsourcing or
- e-money provides
Note 39 in the
Consolidated Financial
Statements.
Managed Application
which provides cloud-
based and server-based
We also operate other
management services and
supporting and ancillary
IT consulting services.
businesses, which
include the lease and/
or supply of BTS to
other cellular operators
and the provision
of various support
2. e-Payment/Payment
services, including the
following:
- Billing payment, a
service that allows
facilities. We manage our
customers to make
telecommunications tower
services to customers
who wish to manage
money electronically
through certain media
(mobile, prepaid card,
or a virtual account
that can be accessed
via the Internet) for
use in electronic
transactions.
- e-Vouchers or Telkom
Voucher is a single
Corporate
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Responsibility
Company
Profile
Additional
Information
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Shareholders)
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2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
53
voucher issued by us
Our Media and Edutainment
accessed from Telkom's
that can be used to
business portfolio includes the
internet network,
purchase or recharge
following :
any of our services,
such as for Kartu As,
simPATI, Flexi Trendy,
and Speedy Hotspot.
3. IT enabler services
include business
process outsourcing
and knowledge process
1. Television broadcast
services comprising the
following
- Pay TV by satellite, a pay
TV service broadcasted
over satellite links
offering free content
such as video-on-
demand programming,
live TV, internet radio,
and some pay video
programming. Similar
to UseeTV Cable, the
offering premium-grade
OTT TV is also capable
contents in news, sports,
of allowing play back of
entertainment, and
outsourcing, which consist
others.
of:
- Network centric
-
IPTV, an Internet
Protocol-based television
value added services,
comprising IT-based
value-added services
for data and phone,
security services,
and server and
storage services for
connectivity customers.
-
Integration services,
comprising integration
services for network
and hardware
associated with
Customer Premises
Equipment (“CPE”),
integration services
for applications
and software, and
integration services for
computer hardware.
program content from
the last three days.
2. Advertising is a
commercial service for the
promotion of products
or services of any third
("IPTV") under the
commercial name
”UseeTV Cable”. The
service is delivered using
party that are presented
the Speedy broadband
in digital or print media,
access network, and
offers ”pause and
rewind” features for
contents such as
video-on-demand
such as radio, television,
internet, newspapers,
brochures/leaflets and
billboards.
programming, FTA TV,
premium TV, internet
3. Portal Services facilitates
content aggregation
radio and TVoD, allowing
and distribution. In
playback of program
content from the last
seven days.
- OTT TV (Over the
Top TV), an internet
TV service under the
commercial name
addition to sales and
payments related to our
products and services
conducted through our
e-Commerce portal, our
portal e-store and on-
device portal services also
”UseeTV” that can be
accommodate the sale
OTT TV (Over the Top TV), an internet TV
service under the commercial name ”UseeTV”
that can be accessed from our internet network,
offering free content such as video-on-demand
programming, live TV, internet radio, and some
pay video programming. As with UseeTV Cable,
OTT TV can re-broadcast up to the previous
three days
and distribution of content
or applications such as
games, applications, news,
sports news, educational
content, music, ring back
tones, SMS content and
others, which can be
downloaded directly by
customer mobile device
or internet users. Content
or applications can be
obtained either at a certain
price or free of charge.
54
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Muhammad Awaluddin
Director of Enterprise &
Business Service
3. Partnership Stores are
extensions of our distribution
channels, in cooperation
with a variety of third-party
marketing outlets such as
computer or electronic stores,
banks, and others.
4. Feet on The Street are sales
agents that conduct direct
marketing of our products,
particularly for our Speedy
products, through door-
to-door sales, open table
discussions, exhibitions,
product demonstrations, and
other similar activities.
5. Authorized dealers and
retail outlets are sales and
distribution outlets for a
variety of telecommunication
products such as Speedy
Instan cards, Flexi
subscription cards, starter
packs, prepaid SIM cards
and top-up vouchers. These
dealers are non-exclusive, and
they receive a discount on all
of the products they receive.
Retail outlets also include
outlets jointly operated by
us, Telkomsel and PT Pos
Indonesia, as well as other
outlets such as banks.
Marketing management
Plasa Telkom and GraPARI outlets are our
direct distribution channels.
We implement a comprehensive marketing
strategy to strengthen the brand and
increase sales, including through marketing
communication activity and development of
product and service distribution network
We set our telecommunications tariffs in
accordance with government regulations.
DISTRIBUTION AND
MARKETING STRATEGY
The following are the primary
distribution marketing channels
for our products and services:
1. Plasa Telkom and GraPARI
are outlet function as walk-
in customer service points,
where customers have
access to the full range of
our products and services.
GraPARI is specialize for
cellular services managed by
Telkomsel. In other hand, a
lower scale outlet of cellular
6. Account Management Teams
who manage relationships
services, GeraiHalo, managed
with our individual, business,
by third party.
and corporate customers.
2. Contact centers handle
enquiries regarding our
7. Telkom Solution Houses are
places where an enterprise
products, services and
customer can obtain
customer transactions. Our
information on a variety of
contact/call centers currently
TIMES solutions, products
do not handle payments.
Our contact centers also
operate our customer
care (telecaring) and
and services, and the latest
technology. At these Telkom
Solution Houses, we provide
free live demonstrations (such
telemarketing programs.
as Speedy, Hotspot, PDN,
Corporate
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Responsibility
Company
Profile
Additional
Information
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Shareholders)
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2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
55
Effective marketing
communication
activity plays an
important role in
ensuring that product
offerings reach the
intended segment or
potential customer
IP-Phone), live
ensuring that product offerings
demonstrations for
reach the intended segment
In the distribution of Telkom
commercial products
or potential customer . In
Flexi and Speedy Instan card
(such as video conference),
addition to marketing using
(SPIN Card) and mobile cellular
enterprise consultation and
traditional (offline) media such
products, we engage the
ecosystem business solutions
as advertisement placement
partnership of best-performing
for customized TIMES for
in television, print media,
dealers, giving each of these
corporations, and simulated
newspaper, and radio as well
partners a designated and
demonstrations (such as
as during local events, we have
exclusive sales area ("cluster")
e-Payment & VPN over GSM
also begun to intensify product
to manage. As of December 31,
and Flexi).
marketing through the digital
2013, we have partnerships with
8. SME Centers function as
a communication center
(online) media within various
53 official dealers that manage
digital communities as well as
more than 83 thousand of retail
building popularity in social
outlets in 96 clusters. In addition,
supported with advanced
networks.
office facilities, a community
We also have partnership
arrangements with seven
center where our customers
Plasa Telkom and GraPARI
national retail partners and 17
can interact, and a commerce
outlets are our direct distribution
national banking partners
center especially for
channels. In addition to its
e-Commerce solutions.
function as a direct channel for
For kartuHalo, Telkomsel focuses
our product distribution, these
on corporate and professional
9. Our website which provides
outlets also handles after-sales
customers with high usage
customers information on the
service for our customers, and
volumes. Marketing for this
entire range of our products
disseminates information on
segment is undertaken by
and services, multimedia as
programs, promotions and
special corporate account teams,
well as telephony, through the
products to customers and
which are also responsible for
official company websites at
end users. This distribution
maintaining long-term relations
www.telkom.co.id and
channel enables us to monitor
with our customers through
www.telkomsel.com
and improve service quality,
efforts to provide solutions
Marketing Strategy
Effective marketing
complaint handling performance,
suitable to the needs of the
and customer satisfaction level in
corporate customers.
general. As of December 31, 2013,
communications activity
we operated 572 Plasa Telkom
The simPATI and Kartu As
plays an important role in
and 86 GraPARI outlets through
products are designed to appeal
Indonesia.
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2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
towards a much wider target
events, the BLC facilities can
services which is connected
segment and particularly to
also be used by communities
through fixed line network
younger customers. Telkomsel
for events related to education
consists of the following:
uses above and below the line
and information technology
- activation fee
marketing channels to promote
development. As of December
- monthly subscription
its brands, including campaigns
31, 2013, we operate a total of
charges
aimed at schools and special
218 BLCs in various locations
- usage charges
interest groups, placing print
throughout Indonesia.
- additional facilities fee.
advertisements, billing insertions,
point-of-sale presentations,
and events promotion and
Market Share
The biggest contribution
B. Mobile cellular telephone
tariffs
sponsorship.
to our revenues comes
On April 7, 2008, the MoCI
from cellular revenues. For
issued Decree No.09/PER/M.
In keeping with changes in
information regarding our
KOMINFO/04/2008 (“MoCI
consumer behavior and lifestyle
cellular market share, see
Decree 09/2008”) regarding
trends, we consistently develop
“Additional Information (for ADR
“Mechanism to Determine
sales partnerships on a national
Shareholders) - Competition –
Tariff of Telecommunication
scale with number of partners.
Cellular”.
These comprise of sales of
bundled products through sales
outlets owned by the respective
partner, such as Samsung and
TELECOMMUNICATIONS
SERVICES TARIFFS
We set our telecommunications
Intel, among others.
tariffs in accordance with
government regulations.
Services which Connected
through Mobile Cellular
Network” which provides
guidelines to determine
cellular tariffs with a formula
consisting of network element
cost and retail services
As part of our strategy to
Under Law No.36/1999 and
activity cost.
promote internet technology
Government Regulation
to the broader public and to
No.52/2000, tariffs for operating
Under the Decree, the
improve customer knowledge
telecommunications network
cellular tariffs of operating
about broadband internet
and/or services are determined
telecommunication services
products and application, we
by providers based on the tariff
which connected through
have engaged in an initiative to
type, structure and with respect
mobile cellular network
develop Broadband Learning
to the price cap formula set by
consist of basic telephony
Centers ("BLCs"). At our BLCs,
the Government.
we provide facilities including
air conditioned rooms, personal
computers with internet
connections, blackboards,
educational materials, and
A. Fixed line telephone tariffs
The Government issued a
new tariff adjustment formula
- activation fee
in 2008, which is stipulated
- monthly subscription
services tariff, roaming tariff
and/or multimedia service
tariff, with the following
structure:
teachers and other speakers
in the MoCI Decree No.15/
charges
from our internal as well as
PER/M.KOMINFO/4/2008
- usage charges
in cooperation with other
dated April 30, 2008
- additional facilities fee.
institutions. The BLC program
concerning “Procedure for
primarily targets non-internet
Tariff Determination for Basic
C. Interconnection tariffs
users, as well as communities
Telephony Service which
ITRA, in its letter No.227/
that are interested in deepening
Connected through Fixed
their knowledge on internet
Line Network”.
and information technology
BRTI/XII/2010 dated
December 31, 2010,
decided to implement
topics, such as students and
Under the Decree, the tariff
new interconnection tariffs
collegues. In addition to facilitate
structure for basic telephony
effective from January 1, 2011
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Company
Profile
Additional
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2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
57
services of network lease.
Pursuant to the MoCI Decree,
the Government released
Director General of Post
and Telecommunication
Decision Letter No.115 of
2008 dated March 24, 2008
which stated “The Agreement
on Network Lease Service
Type Document, Network
Lease Service Tariff, Available
Capacity of Network Lease
Service, Quality of Network
Lease Service, and Provision
Procedure of Network Lease
Service in 2008 Owned
by Dominant Network
Lease Service Provider”, in
conformity with our proposal.
E. Tariff for other services
The tariffs for satellite lease,
telephony services and other
multimedia services are
determined by the service
provider by taking into
account the expenditures
and market price. The
Government only determines
the tariff formula for basic
telephony services. There is
for mobile cellular networks,
for SMS interconnection
no stipulation for the tariff of
satellite mobile networks
tariffs from Sender Keep
other services.
and fixed local networks and
All (“SKA”) basis to a cost-
effective from July 1, 2011 for
based interconnection fee
F. IMES tariffs
fixed wireless local network
calculation (“Non-SKA”)
In providing IME services,
with a limited mobility.
effective from June 1, 2012,
our New Economy Business,
for all telecommunication
we work with a number of
Based on Director General
provider operators.
of Post and Informatics
Decree No.201/KEP/DJPPI/
KOMINFO/7/2011 dated July
D. Network lease tariffs
Through the MoCI Decree No.
partners. These collaborations
are based on considerations
of capability, time to market
and idea creation. Tariffs
29, 2011, ITRA approved our
03/PER/M.KOMINFO/1/2007
for our IME services are
revision of RIO regarding the
dated January 26, 2007
determined in agreement
interconnection tariff. ITRA,
concerning “Network Lease”,
with these partners based on
in its letter No.262/BRTI/
XII/2011 dated December
the Government regulated
the scheme of cooperation
the form, type, tariff structure,
between us and each
12, 2011, changed the basis
and tariff formula for
respective partner.
58
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Hong Kong. Telkomsel’s
customer service point
had 408 outlet consisted
of 86 GraPARI and 322
GeraiHalo. We also have
268 unit mobile customer
service point namely
Mobile GraPARI.
2. Contact Center
Our contact centers are
call centers that allow
customers to make
enquiries regarding our
products and services,
billing, promotional offers
and submit complaints
by dialing "147" from any
phone line. We operate
contact center facilities
in Medan, Jakarta and
Surabaya.
For cellular subscribers,
Telkomsel operates call
centers under the brand
“Caroline” which is the
abbreviation of “Customer
Care Online” Caroline is
accessible through the
As part of
implementing the
principles of good
corporate governance
("GCG") towards
customers and
community, and
in line with our mission
to provide the best
and convenient
services, as well as
quality products and
competitive prices,
we continue
to maintain
communication
with customers
Sukardi Silalahi
Director of Consumer
Service
Customers management
We manage customers with classify into two
groups, personal customers and corporate
customers.
We offer service level guarantees, which
guarantee a specified minimum level of
service to customers in terms of product
quality and customer handling.
We routinely engage independent market
analysts to conduct surveys and market
research on our customers' levels of
satisfaction and loyalty. In 2013, we achieved
the following levels of the Customer
Satisfaction Index (“CSI”) and Customer
Loyalty Index (“CLI”).
88.5%
CSI average
CUSTOMER SERVICE
We provide our customers a
1. Plasa Telkom & GraPARI
Plasa Telkom is a walk-in
number of value-added services
customer service point
which allow them to conveniently
at which customers
access a wide range of our
products and services.
A. Personal Customer Segment
In order to facilitate our
can access information
on a range of products
and services, including
billing, payment,
account suspension,
individual customers' access
promotional deals and
to our products and services,
submit complaints. As of
we operate a network of Plasa
December 31, 2013, we
Telkom and GraPARI outlets,
maintained 572 outlet
and contact centers and also
Plasa Telkom in Indonesia
provide services through
our websites and on-line
applications.
and we opened an
overseas Plasa Telkom in
Corporate
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Responsibility
Company
Profile
Additional
Information
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Shareholders)
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2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
59
following numbers:
-
“133” by kartuHalo
users;
customers can download
through community
the application for use on
management, value added
Android and BlackBerry
resellers, marketing and
-
“155” (24 hours, free)
Appworld.
and “188” (24 hours,
chargeable) by simPATI
B. Corporate Customers
and Kartu As users; and
We categorize our corporate
sales using web-based
technology, and tele-
account management.
-
“021-21899811” in
customers into business,
Jakarta, “022-2553811”
enterprise, wholesale and
Our Enterprise Service
Division serves large
in Bandung, “031-
international groups based on
enterprise customers
8403811” in Surabaya,
a numbers of criteria such as
including State-Owned
“061-4578811” in
contribution to our revenues,
Enterprises, national
Medan, "0411-438150"
our customers' geographic
corporations and
in Makassar or
scope of operations and the
multinational corporations.
“08071811811” in other
type and range of products
Our Enterprise Service
areas of Indonesia,
when accessed
through cell phones
not operated by us
or through fixed
telephone lines.
3. Web-in
and services procured from
Division account managers
us. As part of our strategy
to provide streamlined
and respresentatives
managers manage
customer service, we operate
relationships by
account management teams
conducting visits to
to manage our relationships
our clients' offices. We
with our corporate clients
who are supported by the
categorize enterprise
customers into thirteen
Web-in is our facilities
Telkom Solution House, SME
groups based on our
to our customers, which
Centers and Contact Centers,
customers’ line of
customers can access
products and services
independently through our
website on “MyTelkom”
menu. Available services
include e-billing
registrations, collective
bill registrations, and
complaints.
as described below.
1. Account Management
Our Business Service
Division caters to business
business, namely bank
management services,
education management
services, energy &
resources services,
customers, which include
financial management
micro customers, SMEs,
local governments,
cooperatives and
rural credit banks. Our
services, government
management services,
hospitality & business
services, healthcare
& welfare services,
logistic & transport
Our cellular customers can
Business Service Division
access on-line services
accounts managers and
through Telkomsel website
representatives managers
services, manufacturing
on “MyTelkomsel” menu
manage customers
& agribusiness services,
that launched in 2013.
Through “MyTelkomsel”,
our customer may
purchase service
packages for Flash
directly by conducting site
media & communication
visits and telephonically.
We categorize business
customers into three
groups based on our
services, military & police
services, property &
construction services,
and trading & distribution
internet, telephone, SMS,
customer’s line of business
services.
MMS, and international
roaming conduct phone
public and general
services, construction and
Our Wholesale Service
credit transfers, purchase
manufacturing services,
Division caters to
flash gifts and monitor
and trading and business
wholesale customers
internet quota usage. The
services. In addition, we
also manage customers
which are categorized
into the following carrier
60
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
service groups:
– Group carrier
scope of ISP, VoIP,
closed user group, call
2. Telkom Solution Houses
service 1: handling
OLO Telkomsel,
PT. Hutchison CP
Telecommunication
(“Hutchison”), AXIS,
PT Sampoerna
Telekomunikasi
Indonesia and
PT Pasifik Satelit
Nusantara.
center and satellite
provider.
and SME Centers
We offer special services
to our corporate
Our subsidiary, Telin, caters
customers through our
to international carriers
Telkom Solution Houses
who provide TIMES
located in Jakarta,
portfolio overseas. The
Denpasar and Surabaya.
priority of provision of the
We also operate SME
services is determined in
line with the opportunity
Centers in Jakarta,
Surabaya, Bandung,
– Group carrier service
in every countries where
Palembang, Balikpapan
2: handling OLO
Indosat, XL-Axiata,
Bakrie Telecom, Smart
teams in Singapore and
account management
Centers function are as a
community and business
Telin operates. We operate
and Makassar. Our SME
Telecom, Batam Bintan
Jakarta as headquarter.
center.
Telecom and PT
Beginning in 2013, Telin
Indonesia Comnets Plus
commenced operating
3. Contact Center
(“ICON+”).
telecommunication
– Group carrier service
services in Hong Kong-
3: handling operators
within the business
Macau, Timor Leste,
Australia, Myanmar,
Malaysia, Taiwan and
We provide contact
number “500250” for
business customers
and a toll-free number
“08001Telkom”
United States of America.
(“08001835566”) for
enterprise customers.
Corporate
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Company
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PT Telekomunikasi Indonesia, Tbk
61
Service Level Guarantee
Program
We offer service level guarantees,
Customer Satisfaction and
Loyalty
We routinely engage
to provide fair compensation
by applying a service level
guarantee ("SLG"). This
commitment is adjusted with
which guarantee a specified
independent market analysts
customers' and society's
minimum level of service to
to conduct surveys and market
demands as articulated in our
customers in terms of product
research on our customers'
policy.
quality and customer handling.
levels of satisfaction and
loyalty. In 2013, we achieved the
Throughout 2013, we continued
For individual customers, the
following levels of the Customer
our efforts and improvement
program is available for fixed
Satisfaction Index (“CSI”) and
in managing product safety,
line, Flexi as well as data and
Customer Loyalty Index (“CLI”)
complaints and after-sales
internet subscribers. The service
using the “top two boxes” and
guarantees to ensure customers'
level guarantee is applicable
“top three boxes with seven
convenience and protection
to customers applying for
scales” methods as follow:
guarantee through the following
new connections, a change in
– personal customer segment:
measures, among others:
type of service, resolution of
80.16% in CSI and 67.64% in
- To ensure that the
service disruption, resumption
CLI.
development of a particular
of disconnected service and
– business customer segment:
new product will lead to the
complaints over customer billing.
91,23% in CSI and 87,27 % in
right product commercially
Under this program, we will
CLI.
acceptable in the market,
provide non-cash compensation
– enterprise customer segment:
we implements standard
such as free subscriptions for a
94.28% in CSI and 97.26% in
guidelines for the incubation
limited period, if we fail to meet
CLI.
the minimum standard.
For the corporate customer
segment, the service level
CONSUMER PROTECTION
As our responsibility to apply
process of innovation
products. An incubation
process is needed to support
the innovation and creation
of a new product through
guarantee is provided under a
good corporate governance
successive phases of idea
contract agreed between us and
(“GCG”) to our customers and
submission, customer and
the relevant customers. We offer
the public, and in line with our
idea validation, product
service level guarantees to OLOs
mission to provide excellent
validation, business model
and certain wholesale customers
service, convenience, quality
validation, and market
who use our SL Digital, IP Transit
products and competitive
validation.
and Metro-E products. Our
pricing, we ensure a continuous
- Upholding the principle
guarantee covers the availability
communication with our
of producing high quality
of our services and the time
customers. We believe that
products and services that
taken to install and repair the
efficient and proactive
can deliver maximum benefits
equipment we provide. We
communications play an
and contribute to economic
divide service levels guarantees
important role for the Company's
growth.
for such customers into five
going concern and to ensure that
- Consistently maintaining
classes of service (Bronze, Silver,
quality remains above standard.
ethical standards in
Gold, Platinum and Diamond)
product sales (direct sales),
which represent different levels
With respect to upholding
advertisement and promotion.
of price, products and services
service and after-sales service
- Applying ethical advertising
offered and technical parameters
standards, we are committed
practices, taking into
guarantee.
consideration the rules
on advertising ethics in
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PT Telekomunikasi Indonesia, Tbk
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Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Indonesia.
methods the convenient of
of residence with service usage
- Ensuring that the public has
telecommunication services
calculation that are based on
easy access to products and
customers, in cooperation with
(i) the number of minutes of use
after-sales service.
Collecting Agents (“CA”) such
for celluler sevice, (ii) charges
- Supporting healthy
as national commercial banks,
for value-added services used
competition principles and
regional development banks,
during a certain period, and
practices.
PT Pos Indonesia, various
(iii) subscription fees for basic
- Maintaining a customer
employee cooperatives,
services and other services. On
satisfaction orientation.
minimarkets and others.
July 2013, Telkomsel provided
- Strive continuously to satisfy
Payments can be made in cash
additional convenience for
the required benchmarks
or non-cash. Cash payment
postpaid customers through
as stipulated in a several
can be made at various our
e-billing, whereby billing
Ministerial Decrees governing
payment counters at Plasa
statements are sent via e-mail.
service quality standards,
Telkom, employee cooperatives,
namely Ministerial Decrees
banks, post offices, minimarkets
Telkomsel bill payments can
on Establishment of Service
and other sub CA outlets,
be made by cash payment at
Quality Standards for
while non cash payments can
Plasa GraPARI outlets or banks'
Domestic Fixed Network,
be made through auto debit,
teller, and also through ATM,
Domestic Long Distance
credit card, bank transfer to a
phone banking, internet banking,
Fixed Network, International
Telkom account (for corporate
mobile banking, credit card, and
Direct Dial Fixed Network,
customers/OLO), Automated
auto debit. Telkomsel has also
FWA Domestic Fixed
Network and Internet
Teller Machines (“ATM”), mobile
cooperated with certain CAs,
banking, internet banking or
comprising of private national
Telephony Services for Public
source of funds (Flexicash,
banks, regional development
Needs ("ITKP").
Mcash, or Tcash).
banks, and PT Pos Indonesia,
which are authorized to receive
Service Centers and
Consumer Complaints
Mechanism
We have customer service
For users of mobile services,
payments from kartuHalo
Telkomsel as one of our
customers. In addition, customers
subsidiaries has applied a
can also make payments via the
billing system based on Online
web TCare (https://my.telkomsel.
centers at all our regional and
Charging System (“OCS”) for its
com).
branch offices where customers
prepaid and postpaid products.
can visit in person, and we also
The new system is expected
offer an online complaints center
to improve service quality as
through our website
customers will be offered options
Customer Receivable
Management
The Finance, Billing and
(www.telkom.co.id) as well as
of payment method, while
Collection Center Unit (“FBCC”)
a contact center that can be
allowing Telkomsel to adopt
manage billing and payment
reached by dialing "147" for retail
regional cluster based pricing
of receivables of customers
customers and "500250" for
strategy.
business customers.
who are grouped according to
customer and product segments
BILLING, PAYMENT AND
COLLECTION
We have a periodic billing
Previously, Telkomsel applied
service management concept,
a centralized, accurate and
by applying Telkom Revenue
standardized periodic billing
Management System (“TREMS”).
system in all regions. Subscribers
The application of TREMS has
system that suits the products
of postpaid kartuHalo services
features that it:
and segment customers. We
would receive monthly billing
- Allows customers to pay bills
provides various payment
statements sent to their address
throughout the service area.
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PT Telekomunikasi Indonesia, Tbk
63
- Receives both cash and non-
In a case a customer has not
collection. If a customer has
cash payment.
made payment until the due
not made payment until his/
- Receives Security Deposit
date, the customer will be
her bill’s due date, Telkomsel
(“SD”) from a customer who
penalized according to the type
will suspend the customer
plans to unsubscribe which is
of products and services he/
outgoing calls. If such customer
estimated based on average,
she uses. Sanctions imposed
fails to make payments until
warm or pro-rata usages, the
may include the imposition of
the second month after the due
SD will be recalculated in the
late fees, call limitation and line
date, Telkomsel will disconnect
next bill.
disconnection as set out in the
the customer’s line. In the mean
- Receives an advance as down
Subscription Contract. We have
time, Telkomsel will keep seeking
payment which will be stated
applied Integrated Dunning
payment from such customer,
in the next month’s billing
Management System (“IDMS”)
including in collaboration with
statement.
designed to provide initial billing
debt-collecting agents.
- Facilitates partial payments
information and reminding
from corporate customers.
calls for current, 1-month and
A customer whose line has
- Facilitates payment by
2-month overdue bills. IDMS is
been disconnected, but intends
installments.
also used for electronic billing
to continue subscribing to
- Features Telkom Single
statement (“eBS”) which is sent
Telkomsel’s services must first
Invoice (“TSI”) which
to subscribers’ e-mail accounts.
settle his/her overdue bill and
combines multiple invoices
Invoices for corporate and OLO
fill out an application for new
from multiple services into
customers are printed and sent
services. Telkomsel does not
a single billing statement,
by special couriers.
charge fees or impose interest on
in addition to other various
late payments.
comfortable payment
Telkomsel has its own
transactions.
mechanism for receivalbe
64
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Risk Factors
As a business entity,
A. Risks Related to Indonesia
Telkom existence is
1. Political and Social Risks
affected by various
risk factors that could
adversely affect our
business, financial
condition, operations
or business prospects.
Current political and social events in Indonesia may adversely affect
our business
Indonesia is facing a couple of critical political events in 2014,
namely the Legislative Election scheduled for Indonesia is facing
a couple of critical political events in 2014, namely the Legislative
Election scheduled for April 9, 2014, and then the Presidential
Election for President and Vice President scheduled for July 9, 2014.
Political tensions are predicted to increase during the successive
stages of both the Legislative and the Presidential elections.
Corporate
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2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
65
As political tensions rose,
experienced political
enacted a new labor law
social and civil disturbances
instability, as well as general
that gave employees
and conflicts are also
social and civil unrest.
greater protections.
predicted to increase. Social
For example, since 2000,
Occasional efforts to reduce
conflicts, in particular, are
thousands of Indonesians
these protections have
predicted to escalate and
have participated in
prompted an upsurge in
become more of a problem
demonstrations in Jakarta
public protests as workers
in the lead-up period to the
and other Indonesian cities
responded to policies that
2014 Presidential Election.
both for and against former
they deemed unfavorable.
The dynamics of political
maneuvering to win the
sympathy of different
President Abdurahman
Wahid, former President
Megawati, and current
groups of the public will
President Susilo Bambang
There can be no assurance
that social and civil
disturbances will not
instead triggers frictions at
Yudhoyono as well as in
occur in the future and
the grass-root level.
response to specific issues,
on a wider scale, or that
Political tensions will
including fuel subsidy
reductions, privatization
almost certainly increase
of state assets, anti-
any such disturbances will
not, directly or indirectly,
materially and adversely
accompanied with a variety
corruption measures,
affect our business, financial
of political in-fighting as
decentralization and
condition, results of
well as social disturbances.
provincial autonomy and
operations and prospects.
Nevertheless, given the track
the American-led military
record of past elections in
campaigns in Afghanistan
Terrorist activities in
1999, 2004 and 2009 which
and Iraq. Although these
Indonesia could destabilize
were relatively peaceful,
demonstrations were
Indonesia, which would
safe and under control, the
generally peaceful, some
adversely affect our
vigilance of Indonesia's
security forces, and also
the now politically more
turned violent.
business, financial condition
and results of operations,
Separatist movements and
and the market price of our
mature Indonesian electors,
clashes between religious
securities
it is believed that security
and ethnic groups have also
conditions in 2014 will not
resulted in social and civil
There have been a number
be compromised.
unrest in parts of Indonesia,
of terrorist incidents in
Since 1998, Indonesia has
in Papua currently, where
May 2005 bombing in
such as Aceh in the past and
Indonesia, including the
experienced a process
of democratic change,
resulting in political
and social events that
have highlighted the
unpredictable nature
of Indonesia’s changing
political landscape. In
there have been clashes
between supporters of
Central Sulawesi, the Bali
bombings in October
those separatist movements
2002 and 2005 and the
and the Indonesian military,
bombings at the JW Marriot
including continued activity
and Rizt Carlton hotels
in Papua, by separatist
in Jakarta in July 2009.
rebels that has led to violent
Although the Government
incidents. There have also
has successfully countered
1999, Indonesia conducted
been inter-ethnic conflict,
some terrorist activities in
its first free elections for
for example in Kalimantan,
recent years and arrested
parliament and president.
as well as inter-religious
several of those suspected
Indonesia also has many
political parties, without
any one party holding
a clear majority. Due to
these factors, Indonesia
has, from time to time,
conflict such as in Maluku
of being involved in these
and Poso.
incidents, terrorist incidents
may continue and, if serious
Labor issues have also come
or widespread, might have
to the fore in Indonesia.
In 2003, the Government
a material adverse effect on
investment and confidence
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2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
in, and the performance of,
downgrade of US sovereign
affected Indonesia was the
the Indonesian economy
debt in 2012 and concerns
depreciation and volatility in
and may also have a
material adverse effect
on our business, financial
condition, results of
over the debt crisis in the
the value of the Indonesian
Eurozone. Uncertainty
over the outcome of the
Eurozone governments’
Rupiah as measured against
other currencies, such as
the US Dollar. The Rupiah
operations and prospects
financial support programs
continues to experience
and the market price of
and worries about sovereign
significant volatility.
our securities. There can be
finances generally are
no assurance that terrorist
activities will not occur
again in future, or that if
ongoing. If the crisis
becomes protracted,
or extends to Asia and
From 2009 to 2013, the
Indonesian Rupiah per US
Dollar exchange rate ranged
from a high of Rp8,508
such events do occur, they
Indonesia, we can provide
per US Dollar to a low of
will not have an impact on
no assurance that it will not
Rp12,270 per US Dollar.
have a material and adverse
As a result, we recorded
2. Macro Economic Risks
business.
business or our securities
market price in Indonesia
capital market.
Negative changes in global,
regional or Indonesian
economic activity could
adversely affect our
business
Changes in the Indonesian,
regional and global
economies can affect
our performance. Two
that impacted Indonesia’s
economy were the Asian
economic crisis of 1997
and the global economic
crisis which started in
2008. The 1997 crisis was
characterized in Indonesia
effect on Indonesia’s
economic growth and
consequently on our
Adverse economic
conditions could result in
less business activity, less
for consumers to spend
and reduced consumer
purchasing power, which
may reduce demand for
communication services,
which in turn would have
an adverse effect on our
foreign exchange losses of
Rp210 billion in 2011, Rp189
billion in 2012 and Rp249
billion in 2013. The Rupiah
depreciated significantly in
2013. As of December 31,
2013, the Indonesian Rupiah
per US Dollar exchange rate
Dollar compared to Rp9,670
per US Dollar as of
December 31, 2012.
To the extent that the
Indonesian Rupiah
depreciates further from
the exchange rate as
disposable income available
stood at Rp12,170 per US
business, financial condition,
of December 2013, our
results of operations and
prospects. There is no
US Dollar-denominated
obligations under our
assurance that there will not
accounts payable and
be a recurrence of economic
procurements payable, as
significant events in the past
including our services,
by, among others, currency
instability in future, or
well as payments for foreign
depreciation, a significant
that, should it occur, it will
currency-denominated
decline in real gross
domestic product, high
not have an impact on
the performance of our
interest rates, social unrest
business.
and extraordinary political
loans payable and bonds
payable, would increase in
Indonesian Rupiah terms. A
depreciation of the Rupiah
developments, while the
Fluctuations in the value of
would also increase the
global economic crisis that
the Indonesian Rupiah may
Rupiah cost of our capital
arose from the subprime
materially and adversely
expenditures as most of
mortgage crisis in the US
affect us
put Indonesia’s economy
under pressure, although
Our functional currency
not as severely as in 1997.
is the Indonesian Rupiah.
our capital expenditures are
priced in or with reference
to foreign currencies, mainly
US Dollars and Euros, while
The global financial markets
One of the most important
a substantial majority of
have also experienced
volatility as a result of the
effects of the Asian
economic crisis that
our revenues are in Rupiah.
Such depreciation of the
Corporate
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Company
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2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
67
Indonesian Rupiah would
result in losses on foreign
exchange translation,
activity, an economic
recession, loan defaults
or declining subscriber
Ratings, will not change
or downgrade the credit
ratings of Indonesia. Any
significantly affect our total
usage of our services, and
such downgrade could
expenses and net income
as a result, we may also
have an adverse impact on
and reduce the US Dollar
face difficulties in funding
liquidity in the Indonesian
amounts of dividends
received by holders of
our capital expenditures
and in implementing our
our ADSs. We can give no
business strategy. Any of
financial markets, the ability
of the Government and
Indonesian companies,
assurances that we will be
the foregoing consequences
including us, to raise
able to control or manage
our exchange rate risk
could have a material
adverse effect on our
additional financing and
the interest rates and other
successfully in the future or
business, financial condition,
commercial terms at which
that we will not be adversely
results of operations and
such additional financing is
affected by our exposure to
prospects.
exchange rate risk.
In addition, while the
Indonesian Rupiah has
generally been freely
from time by time, Bank
Indonesia has intervened
in the currency exchange
markets in furtherance of
available. Interest rates on
our floating rate Rupiah-
denominated debt would
Downgrades of credit
ratings of the Government
also likely increase. Such
or Indonesian companies
events could have material
could adversely affect our
adverse effects on our
business, financial condition,
results of operations and
As of the date of this
prospects.
Annual Report, Indonesia’s
sovereign foreign currency
3. Disaster Risks
convertible and transferable,
business
its policies, either by selling
long-term debt is rated
Indonesia is vulnerable to
Indonesian Rupiah or by
“Baa3” by Moody’s
natural disasters and events
using its foreign currency
(upgraded from “Ba1” on
reserves to purchase
Indonesian Rupiah. We
can give no assurances
January 18, 2012), “BB+”
by Standard & Poor’s
(upgraded from “bb” on
results
beyond our control, which
could adversely affect our
business and operating
that the current floating
April 8, 2011) and “BBB” by
exchange rate policy of
Bank Indonesia will not
be modified or that the
Government will take
Fitch Ratings (upgraded
Many parts of Indonesia,
from “BB+” on December
including areas where
15, 2011). Indonesia's short-
we operate, are prone to
term foreign currency debt
natural disasters such as
additional action to stabilize,
is rated “B1/NP” by Moody’s,
floods, lightning strikes,
maintain or increase
“B” by Standard & Poor’s
typhoons, earthquakes,
the Indonesian Rupiah’s
and “B” by Fitch Ratings. On
tsunamis, volcanic eruptions,
value, or that any of these
January 18, 2012, Moody’s
fires, droughts, power
actions, if taken, will be
successful. Modification
of the current floating
exchange rate policy
upgraded Indonesia’s
long-term debt rating to
investment grade status.
outages and other events
beyond our control. The
Indonesian archipelago is
one of the most volcanically
could result in significantly
The likelihood of these
active regions in the
higher domestic interest
rates, liquidity shortages,
capital or exchange
agencies reviewing or
changing these ratings
downwards this year is,
world as it is located in
the convergence zone of
three major lithospheric
controls or the withholding
based on the information
plates. It is subject to
of additional financial
that we have today, low.
significant seismic activity
assistance by multinational
However, we can give no
that can lead to destructive
lenders. This could result
assurances that Moody’s,
earthquakes, tsunamis or
in a reduction of economic
Standard & Poor’s or Fitch
tidal waves. From time
68
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
to time, natural disasters
have killed, affected or
widespread flooding occur
Ash and acrid smoke from
regularly during the rainy
the volcano have blanketed
displaced large numbers of
season from November
villages and crops.
people and damaged our
equipment. These events
to April. Cities, especially
Jakarta, are frequently
In 2010, our submarine
in the past, and may in the
subject to severe localized
cables forming part of our
future, disrupt our business
flooding which can result
backbone suffered damage
activities, cause damage to
in major disruption, and
due to a tsunami in West
equipment and adversely
affect our financial
performance and profit.
In recent years, several
natural disasters have
occurred in Indonesia
occasionally fatalities.
Jakarta experienced
significant floods in
February 2007 as did in
Solo in Central Java in
Sumatra and an earthquake
in Sumbawa. These were
repaired.
Although we have
January. In January 2009,
implemented a Business
torrential rain caused a dam
Continuity Plan (“BCP”)
(in addition to the Asian
to burst outside Jakarta,
and a Disaster Recovery
tsunami in 2004), including
flooding hundreds of homes
Plan (“DRP”), and test
tsunamis in Pangandaran
in a densely populated
these regularly and we have
in West Java in 2006
and 2010, an earthquake
in Yogyakarta in Central
Java in 2006, a hot mud
neighborhood, resulting in
insured our assets to protect
the death of approximately
from any losses attributable
100 people. Landslides
to natural disasters or
regularly occur in rural areas
other phenomena beyond
eruption and subsequent
during the wet season.
our control, there is no
flooding in Sidoarjo in East
Java in 2006 and separate
There are numerous
assurance that the insurance
coverage will be sufficient
earthquakes in Papua, West
volcanoes in Indonesia, any
to cover the potential
Java, Sulawesi and Sumatra
of which can erupt without
losses, that the premium
in 2009.
On September 2, 2009,
an earthquake in West
Java caused damage to
our assets. On September
30, 2009, an earthquake
in West Sumatra
disrupted the provision
of telecommunications
services in several
locations. Although our
Crisis Management Team
in cooperation with our
employees and partners
warning. In October and
November 2010, Mount
Merapi in Central Java
payable for these insurance
policies upon renewal will
not increase substantially
erupted several times, killing
in the future, or that
an estimated 140 persons,
natural disasters would not
displacing several hundred
significantly disrupt our
thousand others in a 20 km
operations.
radius, causing billions of
dollars of property damage
There are no assurances
and disrupting air travel.
Since April 2008, Mount
that future geological or
meteorological occurrences
Soputan in North Sulawesi,
will not have a significant
Mount Egon in Flores Island,
impact on Indonesian and
Nusa Tenggara, Mount Ibu
its economy. A significant
in North Maluku and Anak
earthquake, other geological
was able to restore services
Krakatau in the Sunda Strait
disturbance or weather-
quickly, the earthquake
have shown significant
caused severe damage to
increased volcanic activity.
our assets. There were a
number of earthquakes
Mount Sinabung, 60 km
(40 miles) southwest of
related natural disaster
in any of Indonesia’s
more populated cities
and financial centers
detected in 2010 through
Sumatra's main city Medan,
could severely disrupt
2013, although none of them
erupted on August 29,
2013 after lying dormant
for 400 years, and erupted
confidence, thereby
again in November 2013.
materially and adversely
the Indonesian economy
and undermine investor
presented significant risks
to our business in general.
Flash floods and more
Corporate
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69
affecting our business,
governance and reporting
financial condition, results of
requirements in multiple
operations and prospects.
Our operations may be
jurisdictions. There
may be less publicly-
available information
adversely affected by an
about Indonesian public
conformity with IFAS.
IFAS differs in certain
significant respects from
IFRS, and, as a result, there
are differences between
our financial results as
outbreak of avian influenza,
companies, including us,
reported under IFAS and
Influenza A (H1N1) virus or
than is regularly disclosed
IFRS, including profit for the
other epidemics
by public companies in
year attributable to owners
An outbreak of avian
influenza, Influenza A
(H1N1) virus or a similar
countries with more mature
of the parent company
securities markets. As a
result, investors may not
have access to the same
and net income per share.
We distribute dividends
based on profit for the
epidemic, or the measures
level and type of disclosure
year attributable to owners
taken by the Governments
as that available in other
of the parent company
of affected countries,
including Indonesia,
countries, and comparisons
and net income per share
with other companies in
determined in reliance on
against such an outbreak,
other countries may not be
IFAS.
could severely disrupt
the Indonesian and other
possible in all respects.
economies and undermine
Our financial results
investor confidence, thereby
are reported herein in
materially and adversely
affecting our financial
condition or results of
conformity with IFRS,
however, we report our
Using IFAS results,
our profit for the year
attributable to owners
of the parent company
would be Rp12,850 billion
financial results to OJK (as
and Rp14,205 billion for
operations and the market
the successor to Bapepam-
2012 and 2013, and our net
value of its securities.
LK) in conformity with IFAS,
income per share would be
Moreover, our operations
which differs in certain
Rp133.84 and Rp147.42 for
could be materially
significant respects from
2012 and 2013. Dividends
disrupted if our employees
IFRS, and we distribute
declared per share were
remained at home and away
dividends based on profit
Rp87.2 for 2012. The
from our principal places
of business for extended
for the year attributable
to owners of the parent
dividends per share for the
year 2013 will be decided at
period of time, which would
company and net income
the 2014 AGMS, scheduled
have a material and adverse
per share determined in
for April 2014.
effect on our financial
condition or results of
reliance on IFAS
operations and the market
In accordance with
We are incorporated in
Indonesia, and it may not
value of its securities.
regulations of OJK and
be possible for investors to
the IDX, we are required to
effect service of process, or
4. Other Risks
report our financial results
enforce judgments, on us
Indonesian Corporate
to OJK in conformity with
within the United States, or
Disclosure Standards differ
IFAS. We have provided to
to enforce judgments of a
in significant respects from
OJK our financial result for
foreign court against us in
those applicable in other
the financial year ended
Indonesia
countries, including the
December 31, 2013, on
United States
As an IDX, NYSE and
LSE listed company, we
are subject to regulatory
and exchange corporate
March 6, 2014 which
contains our audited
Consolidated Financial
We are a limited liability
company incorporated
in Indonesia, operating
Statements as of December
within the framework of
31, 2013 and for the years
Indonesian laws relating
then ended prepared in
to Indonesian companies
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Business
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Management’s
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with limited liability, and
Our controlling
Government's stake includes
all of our significant assets
shareholder’s interest may
are located in Indonesia. In
differ from those of our
addition, our Commissioners
other shareholders
and our Directors reside in
the Series A Dwiwarna
share which has special
voting rights and veto
rights over certain strategic
Indonesia and a substantial
The Government has a
matters under Indosat's
portion of the assets of
controlling stake of 53.1% of
Articles of Association,
such persons are located
our issued and outstanding
outside the United States.
shares of common stock
including decisions on
dissolution, liquidation
As a result, it may be
difficult for investors to
and the ability to determine
and bankruptcy, and also
the outcome of all actions
permits the Government to
effect service of process,
requiring the approval
or enforce judgments on us
of the shareholders. The
nominate one Director to
its Board of Directors and
or such persons within the
Government also holds our
one Commissioner to its
US, or to enforce against us
one Series A Dwiwarna
Board of Commissioners.
or such persons in the US,
share, which has special
judgments obtained in US
voting rights and veto
There may thus be instances
where Government interests
courts.
rights over certain matters,
will conflict with ours.
including the election and
There is no assurance that
We have been advised by
removal of our Directors and
the Government will not
Hadiputranto, Hadinoto &
Commissioners. It may also
direct opportunities to
Partners our Indonesian
use its powers as majority
Indosat or favor Indosat
legal advisor that judgments
shareholder or under the
of US courts, including
Dwiwarna share to cause
when exercising regulatory
power over the Indonesian
judgments predicated upon
us to issue new shares,
telecommunications
the civil liability provisions
amend our Articles of
industry. If the Government
of the US federal securities
Association or bring about
were to give priority to
laws or the securities laws
actions to merge or dissolve
Indosat’s business over
of any state within the
US, are not enforceable
in Indonesian courts,
us, increase or decrease
our authorized capital or
ours or to expand its stake
in Indosat, our business,
reduce our issued capital, or
financial condition, and
although such judgments
veto any of these actions.
results of operations
could be admissible as
One or more of these may
non-conclusive evidence
result in the delisting of
and prospects could be
materially and adversely
in a proceeding on the
underlying claim in an
Indonesian court. They
have also advised that
there is doubt as to
our securities from certain
affected.
exchanges. Further, through
the MoCI, the Government
B. Risks Related to Our Business
exercises regulatory
power over the Indonesian
1. Operational Risks
whether Indonesian courts
telecommunications
will enter judgments in
original actions brought
in Indonesian courts
industry.
As of December 31,
predicated solely upon the
2013, the Government
civil liability provisions of
had a 14.3% equity
the US federal securities
stake in PT Indosat Tbk.
A material failure in the
continuing operations of
our network, certain key
systems, gateways to our
network or the networks
of other network operators
could adversely affect our
laws or the securities laws of
("Indosat"), our competitor,
business, financial condition,
any state within the US. As
principally in fixed IDD
results of operations and
a result, the claimant would
telecommunications
prospects
be required to pursue claims
services, and the competitor
against us or such persons
in cellular services of
in Indonesian courts.
our majority owned
We depend to a significant
degree on the uninterrupted
subsidiary, Telkomsel. The
operation of our network
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71
to provide our services. For
overseas. We also depend
interrupted. Any failure that
example, we depend on
on certain technologically
results in an interruption
access to our fixed wireline
sophisticated management
of our operations or of the
network (“PSTN”) for the
information systems
operation of our fixed line
and other systems, such
network and the termination
as our customer billing
and origination of cellular
system, to enable us to
provision of any service,
whether from operational
disruption, natural
disaster or otherwise,
telephone calls to and from
conduct our operations.
could adversely affect our
fixed line telephones, and
Our network, including
business, financial condition,
a significant portion of our
our information systems,
results of operations and
cellular and international
IT and infrastructure and
prospects.
long-distance call traffic is
the networks of other
routed through the PSTN.
operators with whom our
Our networks, face both
We also depend on access
subscribers interconnected,
potential physical and
to internet and broadband
are vulnerable to damage
cyber security threats,
network and a cellular
network. Our integrated
or interruptions in operation
such as theft, vandalism
from a variety of sources
and acts intended to
network includes a copper
including earthquake, fire,
disrupt operations, which
access network, fiber optic
flood, power loss, equipment
could adversely affect our
access network, BTSs,
failure, network software
operating results
switching equipment, optical
flaws, transmission cable
disruption or similar events.
Our networks and
and radio transmission
equipment, an IP core
network, satellite and
application servers.
on interconnection to
the networks of other
telecommunications
Although we have a
comprehensive business
continuity plan and disaster
test and strive to improve,
equipment, particularly our
wireline access network,
face both potential
physical and cyber
security threats. Physical
threats include theft and
we cannot guarantee that
vandalism of our equipment
the implementation of such
and organized attacks
In addition, we also rely
recovery plan which we
operators to carry calls and
plans will be completely or
against key infrastructure
data from our subscribers to
partially successful should
intended to disrupt
the subscribers of operators
any portion of network
both within Indonesia and
be severely damaged or
operations. In addition,
telecommunications
72
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Management
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Business
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Management’s
Discussion & Analysis
companies worldwide
face increasing cyber
security threats as
businesses become
to criminal activity and
it could have an adverse
regular upgrades of our data
effect on our operating
security measures. However,
results
there is no assurance that
increasingly dependent on
our physical and cyber
telecommunications and
security measures will be
A revenue leakage is
a generic risk for all
telecommunications
computer networks and
adopt cloud computing
successful. Damage to our
network, equipment or
operators. We may face
technologies. Cyber security
data and the need to repair
revenue leakage problems,
threats include gaining
unauthorized access to
such damage resulting
from a physical or cyber
our systems or inserting
attack may materially
or problems with collecting
all the revenues to which we
may be entitled, due to the
computer viruses or
and adversely affect our
possibility of weaknesses at
malicious software in our
business, financial condition
the transactional level, delay
systems to misappropriate
and operating results. Our
in transaction processing,
consumer data and other
sensitive information,
corrupt our data or
disrupt our operations.
networks face potential
security threats, such as
theft or vandalism, which
dishonest customers or
other factors.
could adversely affect our
We have taken some
Unauthorized access may
operating results.
also be gained through
traditional means such
as the theft of laptop
We face a number of risks
relating to our internet-
computers, portable data
related services
devices and mobile phones
preventive measures against
the possibility of revenue
leakage by increasing
control functions in all
of our existing business
process, implementing
and intelligence gathering
In addition to cyber
revenue assurance methods,
on employees with access.
security threats, because
employing adequate policies
Although we have not
we provide connections
to the internet and host
and procedures as well as
implementing information
experienced any material
websites for customers and
systems applications to
successful cyber attacks to
develop internet content
minimize revenue leakages.
date that have affected our
and applications, we may
Nonetheless, there is no
operations, our network and
be perceived as being
assurance that in the future
our website are frequently
associated with the content
there will be no significant
targeted by cyber attacks.
carried over our network
revenue leakages or that any
A successful cyber attack
may lead us to incur
or displayed on websites
that we host. We cannot
such leakages will not have
a material adverse affect on
substantial costs to repair
and do not screen all of
our operating results.
damage or restore data,
implement substantial
this content and may face
litigation claims due to a
New technologies may
organizational changes and
perceived association with
adversely affect our ability
training to prevent future
this content. These types
to remain competitive
similar attacks and lost
of claims can be costly to
revenues and litigation costs
defend, divert management
The telecommunications
due to misused sensitive
resources and attention, and
industry is characterized
may damage our reputation.
by rapid and significant
information, and cause
substantial reputational
damage. We take preventive
A revenue leakage might
and remedial measures,
including enhanced
occur due to internal
weaknesses or external
changes in technology.
We may face increasing
competition due to
technologies currently under
cooperation with the police,
factors and if this happened
development or which
particularly in areas prone
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73
may be developed in the
through which we also
future. Future development
provide content to our
or suffer launch delays
or failures. The loss or
or application of new or
alternative technologies,
telecommunications
reduced performance of our
subscribers. We do not yet
satellites, whether caused
services or standards could
have substantial experience
by equipment failure or
require significant changes
as a content provider
its license being revoked,
to our business model,
the development of new
products, the provision
therefore we cannot assure
may adversely affect our
you that we will be able
financial condition, results
to effectively manage the
of operations and ability to
of additional services and
growth of this business.
provide certain services
substantial new investments
by us. New products and
We cannot assure you that
Our Telkom-1 and
services may be expensive
our technologies will not
to develop and may result
become obsolete, or be
in the introduction of
additional competitors
into the marketplace. We
cannot accurately predict
how emerging and future
technological changes will
subjected to competition
from new technologies in
the future, or that we will
be able to acquire new
technologies necessary
to compete in changed
Telkom-2 satellites have
a limited operational life,
currently estimated to
end approximately in 2015
and 2020, respectively. A
number of factors affect
the operational lives of
satellites, including the
affect our operations or
circumstances on
quality of their construction,
the competitiveness of our
commercially acceptable
the durability of their
services. Furthermore, we
terms. Our failure to react to
systems, subsystems and
cannot guarantee that we
rapid technological changes
component parts, on-board
will be able to effectively
could adversely affect our
fuel reserves, accuracy
integrate new technologies
business, financial condition,
of their launch into orbit,
into our existing business
results of operations and
exposure to micrometeorite
model.
prospects.
storms, or other natural
events in space, collision
As part of our continuing
Our satellites have limited
with orbital debris, or the
development of our TIMES
operational life they may
manner in which the satellite
business, we continue to
be damaged or destroyed
is monitored and operated.
seek to develop businesses
during in-orbit operation
We currently use satellite
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Management
Report
Business
Overview
Management’s
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transponder capacity on
fully insured the cost of
our satellites in connection
the satellite, the loss of
with many aspects of our
business, including direct
the Telkom-3 satellite
will require us to lease
leasing of such capacity and
transponder capacity from
routing for our international
a third-party provider to
eastern parts of Indonesia
which currently rely largely
on satellite coverage
for telecommunications
services, and could
adversely affect our
long-distance and cellular
fulfill our commitments
business, financial condition
services.
to our satellite operations
and results of operations.
customers, with likely lower
Moreover, International
margins than we would
2. Financial Risks
Telecommunication Union
have received from the use
We are exposed to interest
(“ITU”) regulations specify
of Telkom-3 had it been
rate risk
that a designated satellite
successfully launched. We
slot has been allocated
for Indonesia, and the
Government has the right
to determine which party
is licensed to use such
slot. While we currently
hold a license to use the
designated satellite slot,
are currently in the initial
Our debt includes bank
phases for the procurement
borrowings to finance
of a replacement satellite,
the Telkom-3S, which
is currently planned for
launch in 2016. Although
our operations. Where
appropriate, we seek to
minimize our interest
rate risk exposure by
the Telkom-1 satellite may
entering into interest rate
still be operational for
swap contracts to swap
in the event our Telkom-1
several years after the end
floating interest rates for
and Telkom-2 satellites
experience technical
problems or failure, the
of its currently estimated
operational lifespan in
2015, if there is any delay
Government may determine
in the development and
fixed interest rates over
the duration of certain
of borrowings. However,
our hedging policy may
that we have failed to
optimize the existing
slot under our license,
launch of the Telkom-3S,
not adequately cover our
or if the operational life of
exposure to interest rate
the Telkom-1 satellite ends
fluctuations and this may
which may result in the
before the Telkom-3S is
Government withdrawing
successfully launched, or
our license. We cannot
damage or failure renders
assure you that we will be
our existing satellites
able to maintain use of the
unfit for use, we would
designated satellite slot in a
need to lease additional
result in a large interest
expense and an adverse
effect on our business,
financial condition and
results of operations.
manner deemed satisfactory
transponder capacity from
2013 was a challenging year
by the Government.
a third party, which would
for Indonesia's economy
In anticipation of the
growth in demand for
satellite services and to
support our business
strategy with regard to
providing TIME services,
we signed a contract in
of the Telkom-3 Satellite
System. However, due to
likely increase our costs
of operations. Failure to
lease adequate satellite
due to increased pressure
on macro economy stability.
Responding to these
capacity from a third-party
challenges, Bank Indonesia
provider may also result
in service interruptions
and/or a cessation of our
satellite operations. The
business could increase
has adopted a tight
monetary policy by raising
its benchmark BI Rate by
175 basis points in order
to mitigate inflationary
pressures as well as to
2009 for the procurement
termination of our satellite
expenses associated with
stimulate corrections to
a launch failure in August
our provision of other
2012, the Telkom-3 satellite
telecommunications
the current account deficit
towards a more healthy and
ended up in an unusable
orbit. Although we had
services, particularly in the
sustainable balance.
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The trend in the increase
of BI Rate was followed by
increases in the JIBOR and
Overall, our financial risk
management program
aims to minimize losses
Bank Indonesia Certificate
on the financial assets and
(“SBI”) interest rates. In spite
financial liabilities arising
of the increasing trends of
from fluctuation of foreign
capital investment. For the
years ended
December 31, 2011, 2012
and 2013, our actual
consolidated capital
expenditures totaled
JIBOR and SBI interest rates
currency exchange rates.
Rp14,603 billion, Rp17,272
during 2013, the impact on
We have a written policy
billion and Rp24,898
the Company's liabilities of
for foreign currency risk
billion (US$3,030 million),
loan interest payment is still
management, which mainly
respectively. Our ability to
manageable and within the
covers time deposits
Company's work plan and
placements and hedging
budget going forward, with
to cover foreign currency
the ongoing uncertainties
in the global economy as
risk exposure for periods
ranging from three up to
well as the potential of high
twelve months.
inflation, and even though
Indonesia's economic
The exchange rate
fundamentals remain strong,
of Indonesian Rupiah
there is no assurance that
weakened relative to the
the benchmark BI Rate will
US Dollar in 2013, and in
decline or continue stable
We may not be able to
successfully manage our
the future, we can give
no assurance that we
will be able to manage
our exchange rate risk
fund capital expenditures
in the future will depend
on our future operating
performance, which is
subject to prevailing
economic conditions,
levels of interest rates and
financial, business and other
factors, many of which
are beyond our control,
and upon our ability to
obtain additional external
financing. We cannot
assure you that additional
financing will be available
foreign currency exchange
successfully or that our
to us on commercially
risk
business, financial condition
acceptable terms, or at all.
or results of operations will
In addition, we can only
Changes in exchange rates
not be adversely affected by
incur additional financing in
our exposure to exchange
compliance with the terms
have affected and may
continue to affect our
financial condition and
results of operations. Most
of our debt obligations are
rate risk.
We may be unable
to fund the capital
denominated in Indonesian
expenditures needed for
Rupiah and a majority of
us to remain competitive
denominated in US Dollars.
industry in Indonesia
Most of our revenues are
denominated in Indonesian
The delivery of
of our debt agreements.
Accordingly, we cannot
assure you that we will have
sufficient capital resources
to improve or expand
our telecommunications
or update our other
technology to the
extent necessary to
remain competitive
our capital expenditures are
in the telecommunications
infrastructure technology
Rupiah and a portion
is denominated in US
telecommunications
services is capital intensive.
in the Indonesian
Dollars (for example from
In order to be competitive,
telecommunications market.
international services). We
we must continually expand,
Our failure to do so could
may also incur additional
modernize and update
long-term indebtedness in
our telecommunications
have a material adverse
effect on our business,
currencies other than the
infrastructure technology,
financial condition, results of
Indonesian Rupiah, including
which involves substantial
operations and prospects.
the US Dollars, to finance
further capital expenditures.
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Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
3. Legal and Compliance Risks
which will be subject to the
Forward-looking statements
If we are found liable
for price fixing by the
discretion of the District
Court, which could have
Indonesian Anti-Monopoly
an adverse effect on our
Committee and for class
business, reputation and
action allegations, we may
profitability.
be subject to substantial
liability which could lead to
Class action lawsuits were
a decrease in our revenue
filed against Telkomsel
may not be accurate
This Annual Report
incorporates forward-
looking statements that
include announcements
regarding our current
goals and projections
and affect our business,
and Indosat during 2007
of our operational
reputation and profitability
and 2008 in the District
performance and future
On June 17, 2008, the
Indonesian Supervising
Committee for Business
Competition ("KPPU")
determined that our
Company, Telkomsel, PT
XL Axiata Tbk. (“XL”),
PT Bakrie Telecom Tbk.
(“Bakrie Telecom”), PT
Mobile-8 Telecom Tbk.
Court of Bekasi, the Central
business prospects. The
Jakarta District Court and
words “believe”, “expect”,
the Tangerang District
“anticipate”, “estimate”,
Court, relating to Temasek
“project” and similar words
Holdings (Private) Limited’s
identify forward-looking
prior cross ownership of
shares in Telkomsel and
statements. In addition,
all statements, other than
Indosat, alleging price fixing
statements that contain
of telecommunications
services. The plaintiffs
historical facts, are forward-
looking statements.
withdrew the lawsuit filed
While we believe that the
(“Mobile-8”) and PT Smart
with the District Court
Telecom (“Smart Telecom
of Bekasi. On January 27,
expectations contained
in these statements are
reasonable, we cannot
give an assurance that
2010, the court dismissed
the class action filed with
the Central Jakarta District
they will be realized.
Court on the basis that the
These forward-looking
plaintiffs did not establish
statements are subjected
now Smartfren had
jointly breached Article
5 of Law No.5/1999. We
and Telkomsel appealed
the KPPU’s ruling to the
Bandung District Court and
their legal standing and that
to a number of risks and
the South Jakarta District
two members of the plaintiff
uncertainties, including
Court, respectively. On April
class did not qualify as class
changes in the economic,
12, 2011, the Supreme Court
representatives. On May 24,
social and political situation
ordered a consolidation of
2010, the court dismissed
the appeals and appointed
the class action filed with
in Indonesia and other
risks described in "Risk
the Central Jakarta District
the Tangerang District
Factors". All forward-looking
Court to handle the appeals.
Court on the basis that the
statements, written or
Neither we nor Telkomsel
plaintiffs failed to establish
verbal, made by us or by
has received any notification
their legal standing as class
persons on behalf of us are
from the court with respect
representatives.
deemed to be subject to
to the resolution of this
those risks.
case. See Item 8 on Form
There can be no assurance
20F “Financial Information
that other subscribers,
4. Regulation Risks
– Consolidated Statements
people, or partners will
We operate in a legal and
and Other Financial
Information–Material
not file similar cases in the
regulatory environment that
future. If a District Court in
is undergoing significant
Litigation”. If the District
any new class action suit,
Court issues a verdict
issues a verdict in favor of
change. These changes
may result in increased
against our Company and/
such plaintiff, it could have
competition, which may
or Telkomsel, we could be
an adverse effect on our
result in reduced margins
subjected to the payment
business, reputation and
and operating revenue,
of a fine, the amount of
profitability.
among other things. These
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changes may also directly
reduce our margins or
reduce the costs of our
with us in providing
telecommunications
services. Furthermore, it
PER/M.KOMINFO/01/2009
resulted in a substantial
reduction in our revenues
competitors. These adverse
is impossible to anticipate
from these services. Although
changes resulting from
regulation may have a
material adverse effect
on us.
the regulatory policies
these services may be
that will be applied to new
resumed from August 6, 2013
technologies.
We derive substantial
under MoCI Regulation No.21
year of 2013 dated July 26,
2013, regarding the Operation
of Content Provider Services
Reformation in Indonesian
revenue from
telecommunications
interconnection services
on Mobile Cellular Network
regulation initiated by the
because we have the largest
and Local Fixed Wireless
Government in 1999 have, to
network in Indonesia and
Network with Limited
a certain extent, resulted in
our competitors must pay
Mobility, which replaced
the industry’s liberalization,
tariffs to connect to our
MoCI Regulation No.1/
including removal of barriers
network. As regulated by
PER/M.KOMINFO/01/2009
to entry and the promotion
the MoCI, interconnection
and Telkomsel resumed
of competition. However, in
rates have decreased in
these services in August 6,
recent years, the volume and
recent years. The current
2013, pursuant to the new
complexity of regulatory
changes has created an
interconnection rates,
decree, premium SMS service
effective in 2011, reduced
providers are required to
environment of considerable
rates by an average of
regulatory uncertainty. In
addition, as the legal and
regulatory environment
of the Indonesian
telecommunications
sector continue to change,
1.5% to 3.0% compared
to the previous rates
meet stricter requirements
that are more difficult to
comply with. Accordingly we
effective in 2008. See Legal
do not expect revenues from
Basis and Regulation –
premium SMS services to
Interconnection.
return to levels seen prior to
October 2011.
competitors, potentially with
The termination of
greater resources than us,
may enter the Indonesian
telecommunications
sector and compete
Telkomsel’s premium SMS
In the future, the Government
services previously from
October 2011 as a result
of MoCI Regulation No.1/
may announce or implement
other regulatory changes
which may adversely affect
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Management
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Business
Overview
Management’s
Discussion & Analysis
our business or our existing
distance service using
code. We were required to
licenses. We cannot assure
the “009” access code.
you that we will be able
to compete successfully
with other domestic and
There is a possibility that
other operators will be
granted IDD licenses in
open DLD access codes
in all remaining areas on
September 27, 2011, by
which date our network was
foreign telecommunications
the future. The operations
ready to be opened up to
operators, that regulatory
of incumbents and the
the three-digit DLD access
changes will not
entrance of new operators
codes in all coded areas
disproportionately reduce
into the international long-
throughout Indonesia.
our competitors’ costs
or disproportionately
reduce our revenues,
or that regulatory
distance market, including
the VoIP services provided
However, we believe that the
by such operators, continue
cost for operators who have
to pose a significant
not upgraded their network
changes, amendments or
competitive threat to us.
infrastructure to open their
interpretations of current or
We cannot assure you that
networks to the three-digit
future laws and regulations
such adverse effects will
access codes to do so is
promulgated by the
not continue or that such
significant. To date, neither
Government will not have a
increased competition
material adverse effect on
will not continue to
our business and operating
erode our market share
results.
or adversely affect our
of the OLOs have made a
request to us to connect
their networks to enable
their DLD access codes to
fixed telecommunications
be accessible, other than
services operating margins
with respect to Balikpapan,
and results of operations.
The entry of
additional Indonesian
telecommunications
operators as providers of
We face risks related to
international direct dialing
the opening of new long
services could adversely
affect our international
telecommunications
distance access codes
In an attempt to
services operating margins,
liberalize DLD services,
market share and results of
the Government issued
operations
regulations assigning each
provider of DLD services
and as such, we believe
that except with respect
to Balikpapan, none of the
DLD access codes for any
of the licensed operators
are usable by customers of
other operators. However,
if they do so in the future,
the implementation of any
new DLD access codes
can potentially increase
We obtained a license and
a three-digit access code
competition by offering our
entered the international
to be dialed by customers
subscribers more options
making DLD calls. In 2005,
for DLD services. In addition,
long-distance service
market in 2004, and
acquired a significant
market share for IDD
the MoCI announced
that three-digit access
codes for DLD calls will
the opening of new DLD
access codes is expected
to result in increased
competition and less
services by the end of 2006.
be implemented gradually
Indosat, one of our primary
within five years and that
cooperation among industry
competitors, entered this
it would assign us the
incumbents, which may
market prior to us and
continues to maintain a
substantial market share
for IDD services. Bakrie
Telecom was awarded an
IDD license in 2009 to
provide international long
“017” DLD access code for
result in reduced margins
five major cities, including
and revenues, among other
Jakarta, and allow us to
things, all of which may have
progressively extend it
to all other area codes.
Indosat was assigned
“011” as its DLD access
a material adverse effect
on us.
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New regulations for the
cellular (Telkomsel) towers
While the number of our
configuration of BTS towers
and our fixed wireless
fixed wireline subscribers
may delay the set up of new
(Telkom Flexi) towers may
increased by 4.0% at the
BTS towers or changes in
also disadvantage us by
end of 2012 and by 4.5% at
the placement of existing
requiring that we allow
the end of 2013, revenues
towers, and may erode
our competitors to expand
from our wireline voice
our leadership position by
quickly, particularly in urban
services decreased by 8.2%
requiring us to share our
areas where new space for
in 2012 and by 8.3% in 2013.
towers with our competitors
additional towers may be
The percentage of revenues
In 2008 and 2009, the
Government issued
difficult to obtain.
derived from our wireline
voice services out of our
Effective 2011, local
total revenues continued to
regulations relating to the
Governments are permitted
decrease from 12.2% in 2012
construction, utilization
to assess fees of up to 2.0%
to 10.4% in 2013.
and sharing of BTS towers.
of the tax assessed value
Pursuant to the regulations,
of towers. Although we do
the construction of BTS
towers requires permits
not expect the amount of
these fees to be material
We have been taking
various measures in
order to stabilize our
from the local government.
in 2013, there can be no
revenues from wireline
The local government has
assurance that they will not
voice services. However,
a right to determine the
be substantial in the future.
we cannot assure you
placement of the towers, the
location in which the towers
5. Competition Risks
can be constructed, and also
Related to Our Fixed
that we will be successful
in mitigating the adverse
impact of the substitution
to determine a license fees
Telecommunication Business
of mobile voice services
to build tower infrastructure.
We may further lose wireline
and other alternative
These regulations also
obligate us to allow
telephone subscribers and
means of communication
revenues derived from
for wireline voice services
other telecommunication
our wireline voice services
or in reducing the rate of
operators to lease
space and utilize our
may continue to decline,
which may materially
decline in our revenues
generated from wireline
telecommunications towers
adversely affect our results
voice services. Migration
without any discrimination.
of operations, financial
from wireline voice services
These regulations may
adversely affect in the
allocation, development
or expansion plan of our
condition and prospects
Revenues derived from
our wireline voice services
to mobile services and
other alternative means
of communication may
further intensify in the
continued to decline
future, which may affect the
new BTS towers as setting
during the past several
up of our new towers will
years mainly due to the
financial performance of
our wireline voice services
become more complicated.
increasing popularity of
and thus materially and
They may also adversely
affect our existing BTS
mobile voice services and
adversely affect our results
other alternative means
of operations, financial
towers if local governments
of communication, such
condition and prospects as
required any changes in the
as VoIP. Tariffs for mobile
a whole.
placement of the existing
towers.
services have declined
in recent years which
has further accelerated
Our fixed wireless business
is subject to intense
The requirement that
we share space on our
substitution of mobile for
competition
wireline voice services.
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Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Our fixed wireless telephone
of intense competition in
increased with the
business faces competition
our fixed wireless business
Blackberry’s popularity. The
from an increasing number
and the limited capacity
of operators, including Bakrie
of bandwidth. However,
increasing use of mobile
broadband services also
Telecom and Indosat, as well
we cannot assure you
adversely affects our market
as mobile cellular services,
that we will be successful
share and revenues from
SMS, VoIP services and
in mitigating the adverse
our fixed data and internet
e-mail.
impact. Competition may
services.
further intensify in the
Competition in the cellular
future, which may affect the
We have been taking
and fixed wireless markets
financial performance of
various measures in order
has remained intense, with
our fixed wireless services
each operator launching
and thus materially and
to mitigate the impact
of intense competition
increasingly attractive and
adversely affect our results of
in our data and internet
creative marketing programs.
operations, financial condition
businesses. However, we
The lower average tariffs due
and prospects as a whole.
to intense competition in the
cellular market has in part
Our data and internet
cannot assure you that
we will be successful in
mitigating such adverse
lead to declining ARPU for
services are facing increasing
impact. Competition may
Telkom Flexi, with blended
competition, and we may
further intensify in the
monthly prepaid and
experience declining margins
future, which may affect the
postpaid ARPU decreasing
from such services as such
financial performance of our
from approximately Rp9,500
competition intensifies
in 2011, Rp8,700 in 2012, and
Rp8,400 in 2013. In addition,
Our data and internet
data and internet services
and thus materially and
adversely affect our results
while fixed wireless tariffs
services are facing increase
of operations, financial
were previously generally
competition from other data
condition and prospects as
lower than GSM mobile
and internet operators as well
a whole.
cellular tariffs, in part due
as mobile operators.
to regulatory changes in
6. Competition Risks Related
December 2010 in how right-
Wireless broadband access
to Our Cellular Business
of-use fees are calculated,
operators that received
(Telkomsel)
tariff differences between
licenses in 2009 for
Competition from existing
fixed wireless services and
Wi-Max technology began
service providers and
GSM mobile cellular services
to establish their businesses
new market entrants may
are now generally negligible.
in the fourth quarter of 2010
adversely affect our cellular
As a result, our fixed wireless
(for instance First Media) and
services business
revenue tend to decline,
from Rp1,342 billion as of
in 2012 (Berca). In 2013, the
regulator has permitted the
The Indonesian cellular
December 31, 2011 to Rp1,225
Wi-Max operators to deploy
services business is highly
billion as of December 31,
the long term evolution
competitive. Competition
2012 and Rp1,051 billion as of
(“LTE”) technology. This will
among cellular services
December 31, 2013.
adversely affect our market
providers in Indonesia is
We have been taking
Speedy broadband service.
including pricing, network
various measures in order
The number of broadband
to mitigate the impact
mobile subscribers have
quality and coverage,
the range of services,
share and revenues from our
based on various factors,
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81
second largest operator
from current big players,
features offered and
customer service. Our
cellular services business,
operated through our
while also acquiring
additional frequency
allocations to facilitate
majority-owned subsidiary,
the roadmap to LTE
Telkomsel, competes
primarily against Indosat
and XL. Several other
smaller GSM and CDMA
operators also provide
(4G) technology. Further
operator consolidation is
likely in order to ensure
that each operator can
remain competitive,
cellular services in Indonesia,
reduce operational costs,
including PT Hutchison
CP Telecommunications
and also to “rebalance”
the broadband mobile
(“Hutchison”), PT Natrindo
frequency spectrum that
Telepon Seluler (“Natrindo”
require wider frequency
or “AXIS”), Smart Telecom
bandwidth. The MoCI
and Bakrie Telecom. In
also supports operator
suitability of business model,
the need to acquire new
expertises, and also risks
related to the online media
(copy rights, consumer
protection, confidentiality of
customer data).
Focusing on international
expansion is one of
our strategic business
intiatives. In particular,
we already expansion in
seven countries, namely
Hong Kong-Macau, Timor
Leste, Australia, Myanmar,
addition to current cellular
consolidation, as it has been
Malaysia, Taiwan, and
service providers, the MoCI
reluctant in recent years
United States of America
may license additional
to issue new licenses for
through our subsidiary, Telin.
cellular service providers
cellular players.
in the future, and such new
entrants may compete with
While operator
Expanding our operations
internationally exposes us to
a number of risks associated
consolidation may lead to
with operating in new
improved conditions in the
jurisdictions for example,
cellular telecommunication
our international operations
could be adversely affected
by political, or social
instability and unrest, by
regulatory changes, such
as an increase in taxes
applicable to our operations,
macroeconomic instability,
limitations on or controls
on the foreign exchange
trade, competition from
industry, it also present
challenges for Telkomsel
in maintaining its market
position.
"smartfren". On January 18,
7. Risks Related to
2011, Mobile-8 acquired a
Development of New
significant number of shares
Businesses
us.
In March 2010, Smart
Telecom and Mobile-8
announced the signing of
a cooperation agreement
to use the same logo and
brand under the brand name
in Smart Telecom, and on
April 12, 2011 PT Mobile-8
Telecom Tbk. changed
its name to PT Smartfren
The Company believes
that efforts to develop new
local operators, difference
businesses other than the
in consumer preferences
Telecom Tbk. In subsequent
telecommunication business
and a lack of expertise in
developments, XL has
plans for the acquisition
of Natrindo (Axis). On
September 29, 2013, XL-
as well as international
the local markets in which
expansion are necessary to
we will be operation. Any
ensure continuing business
of these factors could
growth. This is undertaken
cause our expected returns
Axiata has signed a CSPA
through the activities of
with Axis for the acquisition
our subsidiaries, Metra and
from our expansion to be
limited and could have a
of Axis’ shareholders.
The strategic acquisition
will position XL as the
Telin. Risks related to new
material and adverse effect
business development
include: competition
on our business, results of
operations and financial
condition.
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Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Network Infrastructure
Rizkan Chandra
Director of Network
IT & Solution
Network management
In The Master Plan and infrastructure IDN
network, we aim to do modernization
of legacy networks into broadband
infractructure network
we had 8,196,055 homepass with broadband
access
57.1%
Telkomsel’s digital network was supported by
69,864 BTS
28.7%
In 2013, we
continued to develop
infrastructure through
IDN program. The IDN
program demonstrates
our commitment to
ceaselessly build and
improve the quality,
efficiency and cost
structure of the
infrastructure. In line
with our transformation
to become TIMES
provider, we are
focusing our efforts
on the provision of
high-speed broadband
access via optical fiber
networks and Wi-Fi
(“id-Access”), IP-based
and optical backbone
network (“id-Ring “)
and integrated NGN in
the provision of various
services (“id-Con”).
Development of our network infrastructure to offer a more efficient and cost-competitive which is part of the
Government’s Master Plan for the Acceleration and Expansion of Indonesia's Economic Development (“MP3EI”)
in line with our transformation into a TIMES provider under our Indonesia Digital Network ("IDN") program. In
order to developing and improving our network into high quality, efficient and cost competitive infrastructure to
deliver our TIMES services, we have been developing and improving our network infrastructure which intended
to be a jointly developed network used by our various units in the Telkom Group that we called Telkom One
network.
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83
Our IDN program involves the following three program developments:
1.
id-Convergence (“id-Con”): convergence of the node service network infrastructure into a multi-service and
multi-screen integrated NGN.
2. id-Ring: development of our transport network infrastructure into an IP-based and optical backbone
network.
3. id-Access: development of our customer access network infrastructure into a high speed broadband access
through fiber optic and Wi-Fi networks.
A. Fixed Line Network and Transmission
1. Fixed Wireline Network
As of December 31, 2013, we managed 9.4 million fixed wireline connections. Our network and
infrastructure IDN master plan aims to modernize our legacy network to broadband access infrastructure
network.
Operating Statistics
Exchange capacity
Installed lines
Lines in service(1)
Subscriber lines
Public telephones
Leased lines in service(2)
Fixed wireline subscriber pulse production
(millions minutes)(3)
As and for the year Ended December 31,
2013
2012
2011
2010
2009
13,918,369
13,908,003
12,180,214
11,237,229
11,094,063
10,650,652
11,109,156
11,005,208
10,510,048
10,013,565
9,350,806
9,034,010
8,688,526
8,302,818
8,376,793
9,080,236
8,672,332
8,323,175
7,980,337
8,038,294
270,570
273,929
278,505
322,481
338,499
2,864
5,773
3,342
6,770
3,662
8,054
3,988
9,403
4,273
54,186 (4)
(1) Lines in service are subscriber lines and public telephone lines, including the lines in service that we operate under revenue-sharing arrangements.
(2) Excludes leased lines for our network and multimedia businesses.
(3) Consists of pulses generated by local and domestic long-distance calls, excluding calls from public pay phones and cellular phones.
(4) In millions of pulse for year 2009.
2. Fixed Wireless Network
Our infrastructure consists of mobile switching centers (“MSC”) that are connected to every other
trunk exchange. Each MSC is connected to a base station sub system (“BSS”), which consists of a base
station controller (“BSC”) and a base transceiver station (“BTS”). These, in turn, connect the customers’
handheld devices and fixed wireless terminals to our fixed wireless network. The number of fixed wireless
connections in service was 6.8 million as of December 31 2013.
3. Transmission Network
Throughout 2013, we continued to primarily focus on the development of our broadband network, which
serves as the backbone for our network infrastructure as a whole. Our backbone telecommunications
network consists of transmission networks, remote switching facilities and core routers, which connect
a number of access nodes. The transmission links between nodes and switching facilities comprise a
terrestrial transmission network, in particular fiber optic, microwave and submarine cable networks, as
well as satellite transmission networks and other transmission technologies.
Transmission Network
As of December 31,
2012
2013
Capacity (number of Transmission medium circuits)
E1
STM-1
STM-4
STM-16
STM-64
STM-256
131,546
131,303
720
736
92
100
55
58
260
337
3
3
Note:
The backbone transmission unit uses E1, STM1 (equivalent to 63 E1), STM4 (equivalent to 4 STM1), STM16 (equivalent to 4 STM4), STM64
(equivalent to 4 STM16), and STM256 (equivalent to 4 STM64). STM or Synchronous Transfer Mode is the unit typically used in backbone
transmission networks. Facilitating broadband services requires high capacity transmission networks using nxSTM-1 units. E1 units are used
to support legacy services.
We operate the Telkom-1 and Telkom-2 satellites as well as 205 earth stations, including one satellite
master control station. The Telkom-1 satellite has 36 transponders, including 12 extended C-band
transponders and 24 standard C-band transponders, while the Telkom-2 satellite has 24 standard C-band
transponders.
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Highlights
Management
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Business
Overview
Management’s
Discussion & Analysis
In addition to our Telkom-1 and
satellite, the Telkom-3S, which
the 2.1 GHz frequency.
Telkom-2 satellites, we also
lease transponder capacity
for 30 TPE (transponder
equivalent, @36 Mhz),
comprising 9 TPE from the
JSAT-5A (132 BT) satellite,
10 TPE from the Etuelsat
172A (172 BT) satellite, 8 TPE
from the Chinasat-10 (110 BT)
satellite, and 3 TPE from the
Intelsat-8 (169 BT) satellite.
The Telkom-3 satellite,
launched in August 2012, failed
to reach its orbit, resulting in
the Telkom-3 satellite being
positioned in an unusable
orbit. We had insurance
coverage for the procurement
costs of Telkom-3 satellite. We
will lease additional satellite
transponder capacity from
third parties, if requiredto fulfill
internal operational needs and
to accomodate the needs of
customers. We are currently
in the initial phases for the
procurement of a replacement
is currently planned for launch
As of December 31, 2013,
in 2016.
B. Cellular Network
Telkomsel’s digital network
was supported by 69,864
BTS with an overall network
Our cellular services, which are
capacity capable of facilitating
operated by our subsidiary,
the communication needs of
Telkomsel, have the most
131.5 million customers.
extensive network coverage
of any cellular operators in
C. Data and Internet
Indonesia. Telkomsel currently
operates on the GSM/
Network
To ensure a high level of
DCS, GPRS, EDGE and 3.5G
reliability, we have built
networks. The GSM/DCS
hierarchical and dual
network consists of 7.5 MHz
homing IP/MPLS-based
of bandwidth on the 900
internet and data networks.
MHz frequency and 22.5 MHz
Our IP backbone network
of bandwidth on the 1,800
now capable of serving
MHz frequency. Telkomsel’s
all of Indonesia and as of
3G network uses 10 MHz of
December 31, 2013 covered
bandwidth on the 2.1 GHz
of PoP locations with primary
frequency. Telkomsel tendered
and secondary PoP which
for and obtained a further
consisted of 22 terra router
5 Mhz of bandwidth on the
nodes, 6 core router nodes
2.1 GHz frequency in 2013,
and 128 PE router nodes.
which it began to use from
October 2013, bringing its
We also operate an ethernet
total bandwidth allocation on
carrier metro service as an
its 3G network to 15 MHz on
aggregator for broadband
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access traffic connecting to
IP backbone. As of December
31, 2013, 813 ethernet metro
nodes were in use to support
our 163.9 Gbps broadband
access services.
We provide fixed line-based
broadband internet access
using ADSL technology
under the brand “Speedy”.
As of December 31, 2013, we
had capacity for 8.2 million
homepass and were serving
3 million Speedy customers,
an increase of 28.7%
compared to 2.3 million
subscribers registered on
December 31, 2012.
D. International Networks
We operate international
Our wireless broadband
gateways in Batam, Jakarta,
diversify our services and
capture business opportunities
in South Asia, the Middle East
network infrastructure consists
and Surabaya to route
and Europe.
of wireless access gateways
outgoing and incoming calls
("WAG") that are connected
on our IDD service (“007”).
to wireless access connections
Our international network
("WAC"), which are in turn
is supported by submarine
connected to our access
points. Using a variety of
communications cable
systems (“SCCS”) including
wireless broadband terminals
the Dumai-Malaka Cable
such as laptop computers
System, and the Thailand-
and other handheld personal
Indonesia-Singapore (“TIS”)
devices, end users link to
system, as well as by
these access points to use
indefeasible rights of use,
our broadband Wi-Fi services.
and satellite capacity. To
As of December, 2013, the
consolidate our international
number of our wireless
network and expand domestic
broadband users had reached
broadband services, our
75,250 access point.
subsidiary, Telin, entered into
the Asia America Gateway
Our subsidiary, Telkomsel,
cable consortium in April
also provides mobile cellular
2007 to develop the Batam-
broadband service under
Singapore Cable System
the trade name “Flash”. As
which connects Batam with
of December 31, 2013, Flash
Singapore. Through Telin,
had 17.3 million subscribers, a
we plan in the long-term
56.5% increase compared to
to enhance international
11 million subscribers
telecommunication access to
registered on December 31,
regions in eastern Indonesia,
2012.
Furthermore, we have
entered into international
telecommunications service
agreements with a number
of overseas operators
to facilitate international
call interconnections.
Moreover, since we do not
have agreements with
telecommunications operators
in all our IDD destinations, we
have signed agreements with
SingTel, Telekom Malaysia,
Verizon, Belgacom, NTT,
TIS, France Telecom and
other telecommunications
operators under which
such operators act as hubs
and route international
calls to certain parts of the
world. As of December 31,
2013, we had agreements
with 79 international
telecommunication service
operators in 26 countries.
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2013 Annual Report
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Highlights
Management
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Business
Overview
Management’s
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We have focused on entering
optical backbone networks
mechanism, broadband
into more international
telecommunications
(“id-Ring”) and
access construction using
(iii) an integrated NGN for the
the MSAN platform, FTTH
service agreements with
provision of multiple services
construction project, IMS
other telecommunication
(“id-Con”).
operators to provide direct
construction project, and the
implementation of the Telkom
interconnections services
Among the development
cache system.
in the top 20 most popular
projects of our fixed wireline
calling destinations for IDD
network during 2013 are
In order to further strengthen
outgoing traffic. In addition
the capacity expansion of
our TIMES services, we plan to:
to connect with the 20 top
our backbone networks
1. Continue to improve the
countries for IDD outgoing
comprising the Ring-1B
calls, we are also connected
(Medan - Banda Aceh)
capability of our networks
to improve our enterprise
to several telecommunications
project, the Java-Sumatera-
broadband and broadband
operators in various other
Kalimantan ("Jasuka")
anywhere services in
countries.
project, the Java Backbone
Indonesia.
(Jakarta - Surabaya) project,
2. Continue to improve the
To support the international
the Palapa Ring mataram -
services both voice and data,
Kupang project, the Tarakan
Telin already operates points
Sangata Cable System
of presence ("POP") in various
("TSCS") project and the
capability of the full-IP
data transport network
through the following
programs: increasing
parts of the world, among
Sumatera Bangka Cable
domestic and international
others in Asia (Singapore,
System ("SBCS") project, the
internet bandwidth,
Hong Kong, Malaysia, Japan,
regional network improvement
expanding the Terra IP
South Korea and East Timor),
program through the
backbone, expanding IP
Europe (United Kingdom ,
Dense Wavelength Division
over lambda with 10 Gbps,
Germany and Netherland) and
Multiplexing ("DWDM")
the USA (Los Angeles, San
project in Regional Jakarta,
Jose and New York).
Java and Denpasar and
the Kalimantan and
40 Gbps and eventually
100 Gbps per lambda,
facilitating convergence
and realizing synergies
NETWORK DEVELOPMENT
Sulawesi SKSO project, the
among networks in Telkom
construction of new backbone
Group, continuing the
A. Fixed Line Network
Development
In 2013, we continued
to enhance our network
route and network through
the Sulawesi Maluku Papua
Cable System ("SMPCS")
project, 3rd route Jakarta-
infrastructure and develop our
Batam-Singapore network,
development of Metro
Ethernet which function as
a single metro transport
network to provide IP
and multi-play-based
IDN. Our IDN plans represent
and the system upgrade to
services, continuing the
our commitment to continue
increase the capacity of the
development of FTTH, and
developing and improving
Surabaya-Ujung Pandang/
continuing to replace our
the quality, efficiency and
Makasar-Banjarmasin ("SUB")
existing copper cables with
cost-structure of our network
cable system. Other important
fiber optic cables through
infrastructure. In line with our
projects are the improvement
the TITO mechanism.
transformation into a TIMES
in network reliability through
3. Expand the capacity of
provider, we are focused
the deployment of new
on delivering (i) high speed
FO cables as alternative
broadband access through
routes, broadband
a fiber optic network and
access construction and
IMS-based smart core,
install and implement of
new services, continue to
implement an integrated
through Wi-Fi (which we term
modernization with the
customer profile database,
“id-Access”), (ii) IP-based
trade-in/trade-out (“TITO”)
and optimize our service
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87
delivery platform as a
service brokerage and
orchestration.
by 1,124,080 homepass and
We expanded our metro
fiber to the home-based
ethernet network by setting
broadband access by 1,856,119
up and upgrading
4. Expand broadband
homepass. As of December
813 nodes which enables us to
coverage to enterprise
31, 2013, we had 8,196,055
provide broadband services
and residential customers
homepass with broadband
throughout Indonesia. The
through a series of
programs, including
managed enterprise
access. We also expanded
metro ethernet network is also
the capacity and coverage
used as the main link for the
of our metro ethernet and
IP DSLAM, MSAN for Speedy
services, managed smart
expanded the coverage and
broadband service, softswitch,
CPE, home automation,
capacity of IP Core through
IP VPN and GPON broadband,
surveillance, and home
the implementation of
whether for mobile backhaul,
interconnect.
10 Gbps and 40 Gbps lambda
corporate business solutions
IP-based network services and
or triple play services. In 2013,
For more details of our other
the implementation of terra
we added 5,242 node B BTSs,
major commitments and
router. In 2013, we added an
resulting in a total of 9,559
agreements, see Note 41 to
additional 6 terra router nodes
nodes B BTSs.
our Consolidated Financial
bringing the total number of
Statements.
terra router nodes that we
As of December 31, 2013, we
operate to 28 as of
had expanded our internet
B. Fixed Wireless Network
December 31, 2013, providing
gateway capacity to an
Development
nation-wide coverage in
installed capacity of 292 Gbps.
In 2013, we optimized existing
Indonesia.
BTSs for our fixed wireless
In order to ensure adequate
internet gateway capacity in
network, but did otherwise
As part of our IDN program,
anticipation of the expected
further develop our fixed
we improved our IP Core
rapid growth in fixed and
wireless network. As of
network used which supports
mobile broadband traffic. In
December 31, 2013 we had
our TIMES businesses and
2013, we also cooperated with
5,715 BTSs in our fixed wireless
integrated our NGN core
Akamai, Google and Yahoo to
network.
network between with our
operate a content distribution
fixed wireline and fixed
network (“CDN”) with a
C. Cellular Network Development
wireless businesses. Our IP
capacity of 261 Gbps.
GSM-based cellular services
Core was developed through
operated by our subsidiary,
the implementation of a
Throughout 2013, we
Telkomsel, now cover all cities
single platform terra-byte
continued to expand the
and regencies in Indonesia. In
router with fully redundant
coverage of our Indonesia
2013, Telkomsel deployed an
network architecture. As of
Wi-Fi services by installing
additional 15,567 BTS.
December 31, 2013, our IP core
additional access points,
network consisted of 6 core
through our own regular
D. Data Network Development
router nodes, 128 PE (primary
deployment program as well
In 2013, we continued to
edge) router nodes, 721 10GB
as through the implementation
improve the quality of our
ethernet ports and 2,650 1GB
of a variety of partnership
data network by increasing
ethernet ports.
our capacity and network
coverage. During the year,
we increased our MSAN-
based broadband access
schemes. A total of 75.250
access points were installed as
of December 31, 2013.
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Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Human Capital
We have gradually
sent our talents
to GTP for global
exposure and global
experience so they
are able to compete
with professionals
from global scale
companies.
In order to win the global competition, we continuously develops the
professionalism of our Human Capital through global certification and
global talent programs. This is especially important in anticipation
of the coming ASEAN Economic Community (“AEC”) starting from
2015. We realize that Human Capital plays a strategic position and
role towards achieving our vision as a world-class company with
global standards. Therefore, we continue to develop our existing
Human Capital, while also enhancing industrial relations aspects with
employees.
A. Human Capital Profile
We had a total of 25,011 employees as of December 31, 2013,
consisting of 17,881 Telkom employees and 7,130 employees of our
subsidiaries. This figure represents a decrease 2.6% compared
to the position as of December 31, 2012, reflecting the continued
implementation of our multi exit program initiated in 2002 which
aims to improve efficiency.
Corporate
Governance
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Responsibility
Company
Profile
Additional
Information
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Shareholders)
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2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
89
1. Employee Profile by Position
Chart Employee Profile by Position
Position
Telkom Subsidiaries
Telkom
Group
%
1.8
Position in 2013
34.2
15.9
Senior Management
Middle Management
135
2,711
306
441
1,276
3,987
Supervisors
9,936
2,095
12,031
1.8
15.9
48.1
Others
5,099
3,453
8,552
34.2
Total in 2013
17,881
7,130
25,011
100.0
Position in 2012
Senior Management
132
255
387
Middle Management
2,571
1,048
3,619
1.5
14.1
Supervisors
Others
9,991
6,491
1,774
11,765
45.8
3,421
9,912
38.6
Total in 2012
19,185
6,498
25,683
100.0
48.1
Senior Management
Middle Management
Supervisors
Others
2. Employee Profile by Educational Background
Chart Employee Profile by Educational Background
Level of Education
Telkom Subsidiaries
Telkom
Group
%
8.9
Level of Education in 2013
Pre University
Diploma Graduates
5,632
4,260
665
6,297
974
5,234
University Graduates
6,262
5,002
11,264
25.2
20.9
45.0
8.9
Post Graduates
Total in 2013
Level of Education in 2012
Pre University
Diploma Graduates
1,727
17,881
6,349
4,619
489
2,216
7,130
25,011
100.0
45.0
515
6,864
926
5,545
26.7
21.6
25.2
20.9
Pre University
Diploma Graduates
University Graduates
Post Graduates
University Graduates
6,506
4,634
11,140
43.4
Post Graduates
1,711
423
2,134
8.3
Total in 2012
19,185
6,498
25,683
100.0
3. Employee Profile by Age
Chart Employee Profile by Age
Age Group
Telkom Subsidiaries
Telkom
Group
%
Age Group in 2013
<30
31 - 45
>45
Total in 2013
Age Group in 2012
<30
31 - 45
>45
Total in 2012
756
4,170
12,955
17,881
820
4,654
13,711
19,185
1,644
2,400
2,001
6,171
3,485
16,440
9.6
24.7
65.7
7,130
25,011
100.0
1,538
2,358
4,429
9,083
531
14,242
9.2
35.4
55.4
6,498
25,683
100.0
9.6
24.7
65.7
<30
31 - 45
>45
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Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
B. HC Management
We have completed the
formulation of a Human
Capital Master Plan in order
to optimize the potentials
of human capital within the
Telkom Group. The Human
Capital Master Plan has been
prepared as a comprehensive
and integrated formulation
with reference to our long-
term and annual strategic
plan, as well as the business
strategies of each companies
within the Telkom Group.
The formulation of the
Human Capital Master Plan
is also based on an accurate
and measurable supply
and demand analysis using
relevant reference data,
particularly on productivity
ratios of a number of peer
companies.
Our Telkom Group Human
- develop staffing plan
Capital Master Plan consists
and employee career
of the following information:
development plan; and
- Projections of Telkom
- measure the human capital
Group human capital
numbers, calculated on
productivity.
the basis of the business
The requirement for
portfolios for the next five
human capital and related
years.
infrastructure is addressed
- Projections of the
with emphasis on the synergy
composition of our human
and optimization of internal
capital with reference to
resources existing within the
job stream, education, age
Telkom Group.
and position.
- A workforce plan that
Our human capital
contains annual human
management strategies
capital planning for each
emphasized on the
company in the Telkom
harmonization of the number
Group.
and competencies of our
workforce in line with our
Formulating an integrated
business portfolio that has
Human Capital Master Plan
increasingly focused on
helps our Company to:
TIMES. We are also striving
- acuratelly project the
to improve synergy and
human capital needs, in
efficiency among companies
terms of both numbers
within Telkom Group and will
and competencies;
continue to and to inculcate
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91
preferred corporate values.
1. HC Recruitment
any vacant position will be
We pursue these objectives in
HC recruitment is
a five year workforce plan as
undertaken by optimizing
filled internally.
On the external
well as an annual staffing plan
internal resources
recruitment, we intend to
that together provide a more
through synergies within
improve the composition
accurate information base
in support of our company’s
growth.
Our staffing plan is normally
the Group aimed at
promoting efficiency
in recruitment costs
and employee turnover
costs in each company,
of employees in terms
of age and education
level. Therefore we are
focusing our effort on
recruiting fresh graduates
finalized no later than the
as well as attracting the
with graduate and post-
fourth quarter of each
year and is valid for the
best candidates with the
graduate degree, majoring
specified qualifications
in fields that are in line
following year. The staffing
needed. This synergy also
with our business portfolio,
automatically facilitates
talents with excellent soft
employees in developing
skills and hard skills to
their careers within Telkom
become the future leaders
Group. Where possible,
of the company.
plan contains a variety
of information including
employees’ past, current
and future position;
position layer; job stream;
work location; number of
formations; monthly staffing
plans, including promotion,
mutation, employment status
(temporary/permanent) as
well as in and out mutations.
Our workforce plan is
formulated by identifying
staffing needs, with reference
to our Telkom Group Human
Capital Plan or Rolling Human
Capital Plan. Our workforce
plan focuses on increasing
both productivity and
efficiency by reference to
competitive benchmarks. We
expect to increase efficiency
by reducing the workforce
size, while maintaining
recruitment at approximately
20% of our retiring
employees.
Our workforce plan explains
our resource profile that is
calculated based on business
activities of each companies
within the Telkom Group, and
gives details about scope
of work, position, age and
educational backgrounds.
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Preface
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Management
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Business
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Management’s
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have been developed
and improved to
encourage fair and
transparent employees’
competency
assessment.
We have a directory
of competencies
specifying the
competencies needed
by our Company, which
is regularly updated
to keep pace with
business progresses,
including a number of
skills and knowledge
essential for our
business portfolio
transformation into
TIMES.
Our employee
competency
development
emphasizes the
following aspects:
- Character
development based
on The Telkom Way,
which refer to the
Philosophy to be
The Best (Ihsan),
Principle to be
The Star (Solid,
Speed, Smart) and
Practices to be the
Winner (Imagine,
Focus, Action).
- Competence
development with
global standard.
- Leadership
development
based on Telkom
Leadership
Architecture
referring to the
principles of Lead
by Heart and
Manage by Head.
In 2013, the recruitment
was done three times
through job fairs.
The scope of the
implementation of
synergies includes:
–
Implementation of job
fairs / career days.
–
Implementation of
joint selection stage I
(aptitude test).
– Co-utilization of the
candidate database.
– Synergy initiatives
in other fields of
recruitment.
constantly updated
every year to adjust to
the changing dynamics
of our business. Its
implementation is
also aligned with our
business strategy,
which refers to our
Corporate Strategic
Scenario (“CSS”),
Master Plan for
Human Capital
(“MPHC”), Human
Capital Development
Plan (“HCD Plan”),
organizational
transformation and our
During 2013, we hired 838
financial position.
new employees.
2. HC Competency
Development
a. Competency Based
Human Resources
Management
(“CBHRM”)
We have established
competency
development strategies
as articulated in Human
Capital Human Capital
Master Plan, which is
We use CBHRM
approach to assess our
existing human capital
competencies. This
CBHRM model consists
of Core Competency
(values), Generic
Competency (Personal
Quality) and the
Specific Competency
(Skill & Knowledge). All
of these three models
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In line with our
prominent educational
program is determined
business transformation
institutions/external
focusing on TIMES,
we strengthened
our human capital
trainings.
To improve
competencies through
collaboration between
education and
trainings to either
shift competencies or
develop competencies,
whether directly or
indirectly related to
our business and
our business units
and encourage cost
efficiency, we have
promoted synergies on
program cooperation,
participant cooperation
and cooperation on
operational strategies.
facilities.
Training for shifting
competencies aims
to develop employee
competencies
in response to
telecommunication
system transformation
from TDM based
to IP based and
IMES competencies.
Meanwhile, training
for developing
competencies has
been tailored to equip
employees with specific
competencies to
support our business
portfolio.
During 2013, the
employee training and
education programs
focused on technology,
telecommunication
marketing and
management, business
information, and
new wave business
development to
support our vision of
becoming the market
leader in TIMES. Most
of these trainings
were held at Telkom
Corporate University
and a number of
Meanwhile, to groom
our future leader, we
engage in leadership
development training
programs attended
by 897 employees,
including program:
- Basic Level
Leadership
(Emerging Leaders
Development
Program, First
Line Development
Program, Coaching
for Supervisor);
-
Intermediate
Level Leadership
(Managerial
Development
Program, Coaching
for Manager, 4DX
Certification); and
- Senior Level
Leadership
(Executive
Development
Program,
Commissionership
Executive Program,
Directorship
Executive Program).
Employee participation
in competence
by the Company’s
needs and those of
employees with respect
to gender equality and
equal opportunity to all
employees.
We have also
made other efforts
in competencies
development
including Knowledge
Management where
employees can
exchange ideas
and concepts and
share information
through articles made
accessible to all of
them.
In order to motivate
employees to
participate in
our competency
development tracks,
we have adopted an
objective performance
assessment system.
Employee assessment
is performed on two
aspects: results, based
on individual targets,
and process, based on
required competencies.
An online assessment is
conducted of a number
of demonstrated
behaviors of our
employees at work.
b. Telkom CorpU
In delivering our
corporate values which
are commitment to
long term and caring
meritocracy, we
invested heavily in
development or training
people. Consequently,
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PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
qualified people as
we understand that
it is always people
that play the most
significant role in a
company’s success.
- Center of
certification
(creating a global
standard)
Telkom CorpU is also
expected to produce
global HR standards.
Each of leadership
and competency
development
programs will
be supported
by international
standards and
produce man
of international
certification and
standards.
work assignments,
predeparture briefing,
assignments in and
outside the country,
final exam and
placement.
We have been sending
GTP talents gradually
in order to give them
global exposure and
global experience to
be able to compete
with international
scale companies. In
2013 we sent 1,010 of
our employees to 25
countries.
Telkom’s CorpU has
another program
in 2013, which is
an international
certification in various
fields for 1,471 persons.
Global Talent Program,
3. Employee Remuneration
here in after reffered
We provide a competitive
as GTP, is a special
assignment to the
remuneration package,
benchmarked against
talented employees to
labor market prices,
be formed into Great
which consists of basic
People aiming winning
salary and allowances,
the competition and
achieving business
benefits, and performance-
related incentives and
objectives by providing
bonuses, as well as other
them with overseas
benefits, including health
assignment experience
benefits for employees
coaching for leadership
and employee (people)
has become our first
and most important
strategic initiative
which is formulated as
“Center of Excellence”.
To establish this
objective, Telkom
CorpU was founded on
September 28, 2012,
which is expected
to create a system
capable of producing
great leaders and
people. There are
three main functions
of Telkom CorpU as a
center of excellence,
namely:
- Center of chiefship
(creating great
leader)
Telkom CorpU is
expected to create
future leaders who
are highly qualified
and globally
ready, capable
of performing
in successions
amid the grinding
demands of the
changing world.
We believe that a
successful leader
will leave behind
himself another
CorpU is just the
right vehicle to
- Center of
competence
(creating great
people)
Telkom CorpU is
great leader. Telkom
Initiated in 2012, this
and certification.
program is designed to
and post-employment
supporting this aim.
with reliable and
provide the company
globally competitive
talents to compete
with recruitment
process, which based
with foreign companies.
pace with market price
This program begins
movements.
and families. We also
provide pension plans
health programs. Those
remuneration packages
are regularly evaluated
to ensure that they keep
Bonuses were accrued
in the current year but
were distributed in the
year following that in
expected to produce
on predetermined
tough and highly
criteria, matching the
talent’s profile with
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aforementioned
infrastructure is the
Human Capital & General
Affairs website, that
can be accessed by
employees who wish to
comprehend policies and
other information related
to HR management and
development.
The HR application,
IHCMS Telkom Group
(Integrated Human
Capital Management
System Telkom Group),
is designed to meet the
needs of Telkom Group.
The IT-based HR services
consisting of online
which they were accrued.
the Company’s level of
Individual Work Targets
Over the last five years,
the Company paid out
annual bonus ranging
from Rp326.9 billion
to Rp513.9 billion. For
interest, which include
giving an opportunity
to take a pilgrimage/
religious services,
("SKI"), online attendance,
online Travel Warrant
("SPPD"), online leave,
online career and Annual
benchmarking to global
Tax Payment ("SPT"). We
the 2013 bonus, we will
scale telecommunications
have also implemented
refer to our 2013 audited
industry and enterprises,
various IT applications
financial statements and
as well as the opportunity
such as corporate business
the approval of GMS. Our
to attend international
automation processes,
subsidiaries also provide
seminar, and special
competitive remuneration
incentives. Reward
which include electronic
memos, virtual meetings,
packages for their
employees.
4. Employee Awards
Every year, we
simultaneously give a
number of awards as
token of appreciation
program was also carried
shared files, online
out by the companies
in the Telkom Group in
order to motivate their
employees.
5. IT-based HR Services
To help employees
surveys and intranet. In
the implementation of
"Go Green" program,
we replaced the HR
administration with
Employee Self Service
application ("ESS").
for employees showing
performing their duties, we
remarkable contributions
developed an integrated
In principle, we have
to our business targets
communications
implemented the "Go
achievements. The
infrastructure to facilitate
Green", which is HR
award giving policy was
the coordination and
administration has
stipulated in Telkom
dissemination of corporate
been replaced by the
Employee Reward policy
policy and business
application of ESS
for individuals or groups
in a variety of types
strategy among policy
makers, HR managers
(Employee Self Service),
so it can be categorized as
and forms, according to
and employees. The
Paperless Office.
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Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
6. Retirement Program
calculated based on
environment, we also
The retirement age for all our
their latest basic salary
have an Early Retirement
employees is 56. We have two
or take-home pay and
pension schemes, which are
years of services. PT
(a) Defined Benefit Pension
Plan (“DBPP”) tailored for
permanent employees who
were hired prior to July
1, 2002, and (b) Defined
Asuransi Jiwasraya
(Persero) manages
this program after
they secured annual
insurance contracts.
Contribution Pension Plan
Up to 2004, employees
(“DCPP”) that applies to other
would contribute 5%
permanent employees.
of their monthly basic
Program (“ERP”). The
program is run in line
with the execution of the
2013-2017 Human Capital
Master Plan which is
expected to release 1,548
employees. This program
is offered to employees
who are deemed to have
met certain requirements
a. Defined Benefit Pension
salaries to the program,
in terms of education,
Plan (“DBPP”)
DBPP is calculated for
participants based on
years of service, salary
level at retirement and is
while Telkomsel would
contribute the balance.
Since 2005, Telkomsel
has contributed the
entire amount to the
transferable to dependent
program.
age, position and
performance. From 2002
through December 31,
2013 we spent Rp7.3
trillion as compensation
for 14,195 employees
who participated in the
b. Defined Contribution
program. In 2013, we
Pension Plan (“DCPP”)
We operate a Defined
did not execute an early
retirement program.
families if the respective
employee passes away.
Telkom Pension Fund
Division administers
the program while the
main source of pension
fund comes from us and
employee contributions.
Employees participate in
the program with 18% of
their basic salary (before
March 2003, employee
contribution rate was
Contribution Pension
Plan for permanent
employees who were
recruited on or after
July 1, 2002. DCPP is
managed by several
appointed financial
institutions pension
fund from which
8.4%) while we contribute
employees can choose.
the balance. The minimum
Our contribution
monthly pension benefit
to the financial
for retired employees
is approximately
institutions pension
fund is determined
Rp425,000 per month. Our
by the portion taken
contribution to the pension
from participating
fund reached Rp187 billion,
employee’s basic salary,
Rp186 billion and Rp182
which totalled Rp5
billion, respectively, for the
billion, Rp5 billion and
years ended December 31,
Rp6billion, respectively,
2011, 2012 and 2013.
for the years ended
December 31, 2011, 2012
7. Health Service Program
a. Employee Health
Management
We believe that
improving employees’
welfare has a positive
impact on our
productivity. Hence,
we provide health
services for our
employees and retirees
and their direct family
members, which is
managed by our Health
Foundation (“Yakes”).
As of December 31,
2013, a total of 113,629
employees, retirees
and their families were
registered in Yakes.
Telkomsel operates its own
and 2013.
b. Post-Employment
DBPP for its employees.
With this program,
To create a more effective
employees are entitled
and competitive business
to retirement benefits
Health Services
Our employee
welfare includes post
retirement benefits,
including health
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insurance for all retired
8. Management of
employees’ union,
employees as well
as their spouses and
children. We provide
two types of funding
for these benefits,
which are:
(i) Employees who
were hired before
November 1, 1995
and have more
than 20 years of
Employee Relations with
“SEPAKAT”, has 3,972
Managament
Pursuant to the
Presidential Decree
No.83/1998 regarding
Ratification of ILO
Convention No.87/1948
regarding Freedom of
Association and Protection
members or representing
92.5% of Telkomsel’s total
employees. Neither we
nor our subsidiaries with
employees union have
experienced material labor
action.
of the Right Organize, our
9. Extracurricular Activities
employees established
the Telkom Employees
We provide the
opportunity for all
services are entitled
Union (“SEKAR”). As of
employees to participate
to health care
December 31, 2013, SEKAR
in various extracurricular
benefits managed
represented a total of
activities, especially those
by Yakes Telkom.
Our contribution
to this program
amounted to
Rp361billion, Rp300
billion and Rp301
billion respectively
for the years ended
December 31, 2011,
2012 and 2013.
16,283 employees or 91.1%
that support employee
of our total workforce
productivity. Our employee
which work in Telkom and
extracurricular activities
employed in the JVC.
covered religious, cultural
Pursuant to Law
and sporting activities.
These activities are also
No.13/2003 regarding
open to employees’
Manpower and
Regulation of the
Minister of Manpower
families, such as Al-Quran
reciting competitions,
church choirs, and Hindu
chanting (Utsawa Dharma
(ii) All other permanent
and Transmigration
employees are
entitled to health
services in the
form of insurance
benefits. Our
contribution to this
program amounted
No.PER.16/2011 concerning
Gita) as well as a range of
Procedures Preparation
sports activities.
and Ratification of
Company Regulations
and Preparation and
Registration Collective
C. Costs of Education & HR
Training
We allocated Rp265.3 billion
Work Agreement (“CWA”),
for our HR training and
to Rp19 billion, Rp18
SEKAR is entitled to
education programs during
billion and Rp17
billion respectively
for the years ended
December 31, 2011,
2012 and 2013.
represent employees in
2013, or an average of Rp10.6
the negotiation of the
million for each participating
CWA with management.
employee. In 2012, we
Currently, the applicable
allocated Rp158 billion.
of CWA is CWA V which
took effect from the date
Our subsidiaries provide
of August 23, 2013, and
health benefits through
ending on August 23, 2015.
health insurance program
Telkomsel and Infomedia
sponsored by the
also have employees’
government, known widely
unions. Telkomsel’s
as Jamsostek.
98
98
2013 Annual Report
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
PT Telekomunikasi Indonesia, Tbk
Preface
Preface
Highlights
Highlights
Management
Management
Report
Report
Business
Business
Overview
Overview
Management’s
Management’s
Discussion & Analysis
Discussion & Analysis
Management’s Discussion
and Analysis of the
Company’s Performance
102
Operational Review by Segment
122
Receivable Collectibility
107
Financial Overview
122
Capital Structure
109
Comprehensive Income Comparison
123
Capital Expenditures
119
Net Cash Flows
120
Obligation and Commitment
121
Liquidity
122
Working Capital
122
Solvency
124
Material Commitment For
Capital Investment
125
Changes In Accounting
Policies
125
Changes In Laws And
Regulation
126
Exchange Controls
127
Quantitative And Qualitative
Disclosures About Market
Risks
131
Related Party Transactions
132
Property, Plant & Equipment
132
Insurance
132
Material Information and Facts
Corporate
Governance
Governance
Social &
Social &
Environmental
Environmental
Responsibility
Responsibility
Company
Company
Profile
Profile
Additional
Additional
Information
Information
(For ADR
(For ADR
Shareholders)
Shareholders)
Appendices
Appendices
2013 Annual Report
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
PT Telekomunikasi Indonesia, Tbk
99
99
Management’s Discussion
and Analysis of the
Company’s Performance
100
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Management’s Discussion and Analysis
of the Company’s Performance
Honesti Basyir
Director of Finance
Financial growth above the industry average
Growth in revenue was driven by increased
revenue from data, internet and information
technology services by 14.8% and increased
revenue from cellular by 4.6%
7.5%
revenue
EBITDA grew by 8.6% in 2013
We generated net profit of Rp14,205 billion,
growth by 10.5% from previous year
10.5%
We succeed to
maintain growth
above the industry
average both in terms
of revenue, EBITDA
and profitability, as
well as continue to
allocate sufficient
capital expenditures to
support sustainability
growth in the future
The following discussion and analysis should be read in
We are the principal provider of local, domestic and
conjunction with our Consolidated Financial Statements
international telecommunications services in Indonesia,
for the years ended December 31, 2011, 2012 and
as well as the leading provider of mobile cellular services
2013 included elsewhere in this Annual Report. These
through our majority-owned subsidiary, Telkomsel. Our
Consolidated Financial Statements were prepared in
objective is to become a leading TIMES player in the
accordance with IFAS, which differs in certain significant
region. As of December 31, 2013, we had approximately
respects from IFRS. See Notes 48 to our Consolidated
175.5 million subscribers in service, comprising 131.5
Financial Statements for our reconciliation to IFRS.
million cellular subscribers through Telkomsel, 9.4 million
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
101
subscribers on our fixed wireline network, 6.8 million
December 31, 2013, compared to 39.8% for the year ended
subscribers on our fixed wireless network and 27.8 million
December 31, 2012.
broadband subscribers. We also provide a wide range
of other communication services, including telephone
In Indonesia mobile phones become the primary tool for
network interconnection services, multimedia, data
telecommunication. Not only with regard to telephony,
and internet communication-related services, satellite
but also in terms of internet usage. Over 50% of our
transponder leasing, leased line, intelligent network and
cellular revenues is derived from voice services, but the
related services, cable television and VoIP services. We
growing popularity of smartphones, contributes to the
also operates Multimedia businesses such as content and
growing of our data revenues. We believe the shape of
applications. We intend to continue to cope with market
competition in low voice tariffs began stabilized, while
and industry challenges that may arise from time to time
the data revenue start to contribute in our ARPU. This
by leveraging our customer base, network quality, brand
phenomenon is reflected in our increasing monthly ARPU
name and strategic execution capabilities.
from approximately Rp37,000 in 2012 to approximately
Rp37,500 in 2013 due to by increased revenue from data,
The economy of Indonesia in 2013 was buffeted as growth
internet and information technology services.
in gross domestic product slowed from average 6.3%
in 2010-2012 to 5.8% in 2013, inflation accelerated from
We believe that the competition has become more rational
average 4.5% in 2009-2012 to 8.4% in 2013 and the rupiah
in Indonesia, however, we still consider it as a major risk
depreciated from average Rp9,282 in 2009-2012 to Rp12,170
to our businesses. See “Risk Factors – Risks Related to
in 2013 (source: Center of Statistic Bureau). Though the
Our Business – Competition Risks Related to Our Cellular
exposure of our Company and our subsidiaries to foreign
Business (Telkomsel)”.
exchange rates are not material, we are exposed to foreign
exchange risk on sales, purchases and borrowings that are
Increase in Data, Internet and Information Technology
primarily denominated in US Dollars and Japanese Yen.
Services Revenues
Data, internet and information technology services
See “Quantitative and Qualitative Disclosure about Market
revenues accounted for 38.2% of our consolidated
Risks – Exchange Rate Risk”.
revenues for the year ended December 31, 2013, compared
to 35.9% for the year ended December 31, 2012. Revenues
Our revenues for the two-year period from 2012 through
from our data, internet and information technology
2013 reflected growth in revenues. This growth was largely
services increased by 14.8% from 2012 to 2013. The
driven by increases in revenues from data, internet and
increase in data, internet and information technology
information technology services, which increased by 14.8%
services revenues in 2013 was primarily due to a 23.7%
driven largely by increased mobile phone data usage and
increase in revenues from internet, data communication
mobile broadband subscriptions, and cellular revenues
and information technology services, largely driven by
which increased by 4.6%.
increased mobile phone data usage and mobile broadband
subscribers. As part of our transformation into a TIMES
Our operating results from 2012 to 2013 also reflected an
provider, and our corporate objective of growing our new
increase in expenses. This increase was mainly driven by
wave businesses, we seek to continue to increase such
operation, maintenance and telecommunication services
revenues.
expenses, which increased primarily as a result of an
increase in our network capacities to better serve our
customers especially for internet and data service.
Principal Factors Affecting our Financial
Condition and Results of Operations
Decrease in Fixed Lines Telephone Revenues
Our fixed lines telephone revenues decreased by 9.0%
from Rp10,662 billion in 2012 to Rp9,701 billion in 2013 as a
result of an 8.3% decrease in fixed wireline revenues and an
14.3% decrease in fixed wireless revenues. We believe that
fixed lines telephone revenues have been declining due to
Increase in Cellular Telephone Revenues with Increase in
the increased usage and declining tariffs of mobile cellular
Subscribers ARPU
Our cellular telephone revenues increased by 4.6% from
services and increased penetration of cellular subscribers
in Indonesia. Cellular provide increased convenience, and
2012 to 2013 due to an increase in the number of our
in certain cases where subscribers call other subscribers
cellular subscribers by 5.1% in 2013. Telkom's revenues
using the same provider’s network, tariffs can be lower
from cellular phone services (usage charges, monthly
than fixed wireline calls that are made to subscribers of
subscription charges and features) accounted for 38.7% of
another provider. We expect that the trend of declining
our consolidated revenues for the year ended
fixed lines telephone revenues will continue.
102
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Operational Review
by Segment
Our revenues from personnel segments still the major
contributor in 2013 which increased by 9.1% from 2012. This is in
line with our main program which supports Telkomsel to grew
double digits
Segment Overview
As part of the Company’s strategy to provide a one-stop solution to its customers in the Company’s organizational
structure to accommodate decision-making and performance assessment based on a customer-centric approach.
These changes result in our segment information presentation in 2012 when the management change segment
reporting from fixed wireline, fixed wireless, cellular and other into the corporate segment, home and other.
We have four main operating segments, namely: corporate, home, personal and others, as follows:
1. Our corporate segment provides telecommunications services including interconnection, leased lines, satellite,
VSAT, contact center, broadband access, information technology services, data and internet services to
companies and institutions.
2. Our home segment provides fixed wireline telecommunications services, pay TV, data and internet services to
home consumers.
3. Our personal segment provides mobile cellular and fixed wireless telecommunications services including mobile
access and information technology services, data and internet services to individual consumers.
4. Our others segment provides building management services.
For more detailed information regarding our segment information, see Note 38 to our Consolidated Financial
Statements. Our segment results for the year 2012 and 2013 were as follows:
A. Services based on Customer Segments
Corporate Segment
Satellite Transponder
Leased Channel & Satellite
IPLC
Datacomm
Corporate Internet
Fixed wireline
Fixed broadband (Speedy)
Home Segment
Fixed wireline
Fixed broadband (Speedy)
Personal Segment
Cellular
Fixed wireless (Classy + Trendy)
Mobile broadband (Flash)
Blackberry
Unit
(000) MHz
(000) e1
(000) Mbps
(000) Mbps
(000) Mbps
(000) subscribers
(000) subscribers
(000) subscribers
(000) subscribers
(000) subscribers
(000) subscribers
(000) subscribers
(000) subscribers
As and for year ended December 31,
2013
2012
3,007
415,540
9,421
381,440
62,687
1,408
315
7,943
2,698
131,513
6,766
17,271
7,556
2,650
388,462
15,782
281,063
66,340
1,343
263
7,603
2,078
125,146
17,870
11,039
5,764
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
103
B. Results of Operations by Segment
Year Ended December 31,
2013
2012
2011
(Rp billion)
US$ (million)
(Rp billion)
(Rp billion)
Corporate
Revenues
External revenues
Inter-segment revenues
Total segment revenues
Total Segment Expenses
Segment Results
Depreciation and amortization
Provision for impairment of receivables and inventory
Home
Revenues
External revenues
Inter-segment revenues
Total segment revenues
Total Segment Expenses
Segment Results
Depreciation and amortization
Provision for impairment of receivables and inventory
Personal
Revenues
External revenues
Inter-segment revenues
Total segment revenues
Total Segment Expenses
Segment Results
Depreciation and amortization
Provision for impairment of receivables and inventory
Other
Revenues
External revenues
Inter-segment revenues
Total segment revenues
Total Segment Expenses
Segment Results
Depreciation and amortization
Provision for impairment of receivables and inventory
17,041
8,549
25,590
(20,375)
5,215
(2,423)
(994)
6,669
2,794
9,463
1,400
703
2,103
15,579
6,468
22,047
14,279
5,289
19,568
(1,674)
(17,976)
(15,659)
429
(199)
(82)
548
230
778
4,071
(2,079)
(92)
7,360
2,223
9,583
(8,885)
(730)
(7,939)
578
(1,487)
(390)
59,028
2,358
61,386
48
(122)
(32)
4,850
194
5,044
1,644
(1,168)
(505)
54,087
2,188
56,275
3,909
(1,890)
(255)
8,171
1,888
10,059
(8,322)
1,737
(1,389)
(454)
48,733
2,180
50,913
(39,463)
(3,243)
(36,372)
(34,679)
21,923
(11,234)
(202)
229
909
1,138
1,801
(923)
(17)
19,903
16,234
(10,940)
(11,007)
(318)
(174)
19
75
94
117
648
765
70
350
420
(1,008)
(83)
(685)
(342)
130
(40)
(35)
11
(3)
(3)
80
(22)
-
78
(14)
-
104
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
C. Segment Results
2. Home Segment
Year ended December 31, 2013 compared to year
ended December 31, 2012.
1. Corporate Segment
Our corporate segment revenues increased by
Rp3,543 billion, or 16.1% from Rp22,047 billion in
2012 to Rp25,590 billion in 2013. The increase was
mainly due to an increase of Rp1,192.4 billion, or
35.7%, in revenues from other telecommunications
services, as a result of the increase in tower lease
revenues in line with the growth in tenancy ratio,
Our home segment revenues decreased by Rp120
billion, or 1.3% from Rp9,583 billion in 2012 to
Rp9,463 billion in 2013, mainly due to the decline of
Rp710.9 billion, or 13.2%, in fixed wireline revenue,
reflecting the decline in local usage revenue and
in monthly subscription revenue in line with the
shift in customer communication behavior trends.
These were compensated by an increase in other
telecommunication services of Rp225.9 billion,
or 24.6%, due to increases in CPE rent revenue
and sales of Flexi handsets. Data and Internet
and the increase in support CPE revenues. Network
revenues increased by Rp159.3 billion, or 4.7% due
revenues increased by Rp516.9 billion, or 16.1%,
to the increase in monthly subscription revenue
primarily reflecting the increase in C-band satellite
for Speedy in line with the 28.7% growth in
transponder monthly subscription revenue due
to higher market demand, and the increase in
Speedy customer base to 3.0 million subscribers.
Interconnection revenues increased by Rp197.3
Intel Ethernet Private Line (IPL) revenue. Data and
billion, or 98.2%, due to the increase in local cellular
Internet revenues increased by Rp1,395.1 billion,
or 27.0%, reflecting the increase in Value Added
Services revenue as well as the increase in Metro-E
E-line monthly revenue due to the migration from
low cap connectivity to high cap connectivity.
Interconnection revenues increased by Rp347.4
billion, or 6.2%, mainly as a result of the increase
in IP transit monthly subscription revenue due
to higher demand for Internet connectivity from
ISPs and corporate customers, and the increase
in revenues from wholesale voice. A decline of
revenue.
Our home segment expenses increased by Rp946
billion, or 11.9% from Rp7,939 billion in 2012 to
Rp8,885 billion in 2013, primarily due to an increase
of Rp1,496.7 billion, or 136.8%, in operation and
maintenance expenses as a result of the increase in
operation & maintenance expenses for Radio Base
Station ("RBS"). Interconnection expenses increased
by Rp193.9 billion, or 103.2%, due to the increase in
domestic wire line cellular interconnection expense
Rp243.4 billion, or 29.3%, was recorded in IDD 007
in line with the growth of cellular subscribers. A
retail OLO origin interconnection revenue
Our corporate segment expenses increased by
Rp2,399 billion, or 13.3%, from Rp17,976 billion in
2012 to Rp20,375 billion in 2013, primarily due
decline of Rp568.5 billion, or 86.0%, was recorded
in other expenses, due to the decline in other non-
operations expenses and in Biaya Pokok Penjualan
("BPP") construction expense.
to the increase of Rp1,985.3 billion, or 26.9%, in
3. Personal Segment
operation and maintenance expenses as a result of
higher tower rent expenses as well as the increase
in hardware system integration expense in line
with the growth of solution services provided to
Our personal segment revenues increased by
Rp5,111 billion, or 9.1%, from Rp56,275 billion in
2012 to Rp61,386 billion in 2013, mainly due
to the increase of Rp1,316.8 billion, or 4.3%, in
our corporate customers. General & administration
cellular revenues, reflecting the increase in long
expenses increased by Rp1,087 billion, or 99.0%,
reflecting increases in provision expenses for
distance cellular revenue as well as in cellular
monthly subscription revenue due to a 5.1%
telecommunication services receivables, bonuses for
growth in cellular subscriber base to 131.5 million
Directors, and in employee training expenses due
to our Global Talent Program. Marketing expenses
increased by Rp252.7 billion, or 52.6%, reflecting
increases in customer education expense and in
marketing expenses. A decline of Rp897.6 billion,
or 69.2%, was recorded in other expenses due to
a decline in other non-operating expenses, while
the decline of Rp6.4 billion, or 0.2%, in personnel
subscribers. Interconnection revenues increased
by Rp203 billion, or 5.4%, reflecting increases in
cellular IDD revenue and in local cellular revenue,
offset by a decrease of Rp48.9 billion, or 35.6%,
in incoming IDD OLO cellular revenue. Data and
Internet revenue increased by Rp3,275.1 billion,
or 16.3%,due to the increase in cellular data
communication revenue in line with the 10.8%
expenses reflected a decline in employee severance
growth in data services users to 60.5 million users,
payment, compensated by an increase in post-
retirement healthcare benefit expenses.
and the 86.1% growth in data traffic. Cellular SMS
revenue also increased due to successful promotion
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
105
of our simPATI and kartu As products. Other
4. Other Segment
telecommunication services revenue increased
Our other segment revenues increased by Rp373
by Rp270.9 billion, or 114.3%, from USO revenue.
billion, or 48.8%, from Rp765 billion in 2012 to
Network revenues increased by Rp173.5 billion, or
Rp1,138 billion in 2013, reflecting the increase of
64.8%, due to the increase in leased line colocation
Rp372 billion, or 48.6%, in TelkomProperty's other
revenue. Revenue from fixed wireless decreased
telecommunication revenues, mainly as a result of
by Rp221.5 billion, or 18.2%, reflecting the decline
an increase of Rp105 billion, or 31.0%, in building
of Rp129.1 billion, or 22.2%, in local prepaid usage
maintenance services revenue as well as the
in line with our retrenchment strategy for our fixed
increase in security services revenue due to tariff
wireless business.
adjustments. Revenue from project management
increased by Rp57.5 billion, or 51.3%, reflecting
Our personal segment expenses increased by
enhanced synergy within the Telkom Group.
Rp3,091 billion, or 8.5% from Rp36,372 billion
Revenue from management transport services a
in 2012 to Rp39,463 billion in 2013, mainly due
new line of business recorded an increase of Rp56.9
to an increase of Rp1,475.5 billion, or 14.6%, in
billion, or 100%, from 2012, while revenue from
depreciation expense, which reflected increases
building lease increased by Rp46.2 billion, or 65.0%,
in provision for asset impairment loss and in
due to an increase in rent rates.
depreciation of leased assets. Operation and
maintenance expenses increased by Rp1,930.3
Our other segment expenses increased by Rp323
billion,or 13.2%, as a result of the increase in
billion, or 47.2%, from Rp685 billion in 2012 to
operation & maintenance expenses for support
Rp1,008 billion in 2013, mainly reflecting the
facilities, operation & maintenance expenses
increase of Rp260.4 billion, or 46%, in operation and
for antenna and towers due to accelerated BTS
maintenance expenses, due to increases in project
construction by Telkomsel, and in operation and
management expenses, electricity bills, and in third-
maintenance expenses for building installations.
party cooperation expenses. Personnel expenses
increased by Rp28.9 billion, or 44%, mainly due to
the increase outsourcing expense.
Home Segment
(in billion)
Personal Segment
(in billion)
1.3%
9.1%
61,386
56,275
9,583
9,463
2012
2013
2012
2013
Corporate Segment
(in billion)
Other Segment
(in billion)
16.1%
25,590
22,047
2012
2013
48.8%
1,138
765
2012
2013
106
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Year ended December 31, 2012 compared to year
increase in cellular revenues of Rp4,957 billion, or
ended December 31, 2011
1. Corporate Segment
15.0% and an increase in interconnection revenue
by Rp444 billion, or 14.1% compared to 2011. The
Our corporate segment revenues increased by
increase in cellular revenues was primarily due to an
Rp2,479 billion, or 12.7%, from Rp19,568 billion in
increase in data and internet revenue by Rp2,553
2011 to Rp22,047 billion in 2012. The increase in
billion in 2012 as compared to 2011, or 49.1%, and
corporate segment revenues was primarily due to
an increase in long distance cellular revenue by
an increase in interconnection revenue of Rp1,632
Rp 1,397 billion in 2012 as compared to 2011, or
billion, or 40.8%, primarily resulting from an increase
20.6%. The increase in interconnection revenue was
in IP transit and outgoing IDD revenues. Data and
primarily due to an increase in local cellular revenue.
internet revenues increase of Rp705 billion, or 15.8%,
primarily due to an increase in revenues from Metro
Our personal segment expenses increased by
Ethernet and data, internet and telecommunication
Rp1,693 billion, or 4.9%, from Rp34,679 billion in
service in-line with an increase of 70.8% in Metro
2011 to Rp36,372 billion in 2012, primarily due to
Ethernet data volume from 140,733 Mbps in 2011 to
an increase in interconnection expenses of Rp196
240,315 Mbps in 2012.
billion, or 4.2% and an increase in operation and
maintenance expenses of Rp1,025 billion, or 7.6%.
Our corporate segment expenses increased by
The increase in operation and maintenance expense
Rp2,317 billion, or 14.8%, from Rp15,659 billion in 2011
was primarily due to an increase in transport
to Rp17,976 billion in 2012, primarily due to increase
expense and an increase in radio frequency
in operation and maintenance expense by Rp1,763
expenses. On the other hand, depreciation expenses
billion, or 31.4%, primarily resulting from cooperation
decreased by Rp1,066 billion or 9.9% due to the
expense and operating and maintenance expense
changes in the estimated useful lives of towers and
for antennae and towers. Personnel expense also
certain equipment.
increased by Rp459 billion, or 15.1%, from 2011.
2. Home Segment
4. Other Segment
Our other segment revenues increased by
Our home segment revenues decreased by Rp476
Rp345 billion, or 82.1%, from Rp420 billion in
billion, or 4.7%, from Rp10,059 billion in 2011 to
2011 to Rp765 billion in 2012, due to the increase
Rp9,583 billion in 2012, primarily due to a decrease
in TelkomProperty’s other telecommunication
in fixed wireline telephone revenues of Rp616 billion,
services of Rp273 billion, or 368%, resulting from
or 10.2%, which resulted from both decreased fixed
the increase in management project of Rp57 billion,
wireline ARPU and usage due to shifting usage to
or 102.8% and security services of Rp206 billion,
cellular and fixed wireless telephone services.
or 100%. In addition, lease revenues also increase
by Rp71 billion, or 20.5% due to the increase in
Our home segment expenses decreased by Rp383
building lease of Rp24 billion, or 48.7% and building
billion, or 4.6%, from Rp8,322 billion in 2011 to
maintenance of Rp46 billion, or 15.6%.
Rp7,939 billion in 2012, primarily reflecting an
increase in claim revenue by Rp521 billion due to an
Our other segment expenses increased by Rp343
insurance claim relating to the unsuccessful launch
billion, or 100.3%, from Rp342 billion in 2011 to
of the Telkom-3 satellite and increase in personnel
Rp685 billion in 2012, primarily due to an increase
expenses Rp382 billion or 11.7% in 2011.
in operating and maintenance expenses of Rp154
3. Personal Segment
billion, or 37.4%, primarily resulting from an increase
in project management expenses, expenses
Our personal segment revenues increased by
relating to the operation of buildings and land and
Rp5,362 billion, or 10.5%, from Rp50,913 billion in
electricity, gas and water expenses.
2011 to Rp56,275 billion in 2012, primarily due to an
Corporate
Governance
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Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
107
FINANCIAL OVERVIEW
Our assets increased by 14.9% to Rp127,951 billion, while liabilities
and equity attributable to owners of the parent increased by
13.8% and 17.5% to Rp50,527 billion and Rp60,542 billion.
We success to record the revenue of Rp 82,967 billion, which
was followed by net income of Rp14,205 billion.
A. Financial Position Comparison
Consolidated Statements of Financial Position
Total Current Assets
Total Non-Current Assets
Total Assets
Total Current Liabilities
Total Non-Current Liabilities
Total Liabilities
Total equity attributable to owners of the parent company
As of December 31,
2013
2012
2011
(Rp billion)
(US$ million)
(Rp billion)
(Rp billion)
33,075
94,876
127,951
28,437
22,090
50,527
60,542
2,718
7,796
10,514
2,337
1,815
4,152
4,975
27,973
83,396
111,369
24,107
20,284
44,391
51,541
21,258
81,796
103,054
22,189
19,884
42,073
47,510
Year ended December 31, 2013 compared to year
an increase in property, plant and equipment
ended December 31, 2012
1. Assets
a. Current Assets
of Rp9,714 billion, or 12.6% and advance and
prepaid expense of Rp1,784 billion or 50.8%.
As of December 31, 2013, our current assets
This increase was partially offset by a
were Rp33,075 billion (US$2,718 million)
decrease of Rp105 million, or 10.2% in prepaid
compare to Rp27,973 billion as of December
pension benefit costs.
31, 2012. The increase in current assets was
mainly due to the increase of Rp2,534 billion,
or 58.4% in other current financial assets and
2. Liabilities and Equity
a. Current Liabilities
in cash and cash equivalents Rp1,578 billion,
Current liabilities were Rp28,437 billion
or 12.0% and our third party trade receivable
(US$2,337 million) as of December 31, 2013
of Rp604 billion, or 13.3%.
and Rp24,107 billion as of December 31, 2012.
This increase was primarily due to:
This increase was partially offset by a
- An increase of Rp3,926 billion, or 57.3% in
decrease of Rp426 billion, or 97.7% in claim
third party trade payable; and
for tax refund.
- An increase of Rp761 billion, or 27.9% in
unearned income.
b. Non Current Assets
As of December 31, 2013 our non current
This increase was partially offset by a
assets were Rp94,876 billion (US$7,796
decrease of Rp899 million, or 14.6% in
million) and Rp83,396 billion as of December
accrued expense.
31, 2012. This increase was primarily due to
108
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
b. Non Current Liabilities
b. Non Current Assets
Non current liabilities were Rp22,090 billion
As of December 31, 2012 our non current
(US$1,815 million) as of December 31, 2013
assets were Rp83,396 billion (US$8,653
and Rp20,284 billion as of December 31, 2012.
million) and Rp81,796 billion as of December
Our non-current liabilities increase primarily
31, 2011. This increase was primarily due to
due to an increase of Rp2,507 billion, or
an increase of Rp2,150 billion, or 2.9% in
138.2% in obligation under finance lease. This
property, plant and equipment. This increase
increase was partially offset by a decrease of
was partially offset by:
Rp1,148 million, or 16.9% in bank loan.
- A decrease of Rp307 million, or 8.0% in
c. Equity
advances and other non-current assets as
a result of a decrease in advances in long
Total equity increase by Rp10,446 billion, or
term investment; and
15.6%, from Rp66,978 billion as of
December 31, 2012 to Rp77,424 billion
as of December 31, 2013. The increase of
equity was primarily the result of increase
of total comprehensive income for the year
- A decrease of Rp346 million, or 19.4% in
intangible assets.
2. Liabilities and Equity
a. Current Liabilities
attributable to owners of the parent of
Current liabilities were Rp24,107 billion
Rp14,317 billion in 2013, the sale of treasury
(US$2,501 million) as of December 31, 2012
stock of Rp2,262 billion, paid in capital of
and Rp22,189 billion as of December 31, 2011.
Rp1,250 billion. This increase offset by cash
This increase was primarily due to:
dividend of Rp Rp7.068 billion. As a result
- An increase of Rp1,373 billion, or 28.7% in
of foregoing, our retained earnings increase
accrued expenses, which mainly related
by Rp5,851 billion, or 15.6% and total equity
to salaries and benefits of Rp591 billion
attributable to owner of the parent increase
and early retirement program of Rp699
by Rp9,001 billion, or 17.5% from Rp51,541
billion; and
billion as of December 31, 2012 to Rp60,542
- An increase of Rp805 billion, or 77.5%
billion as of December 31, 2013.
taxes payable.
Year ended December 31, 2012 compared to year
ended December 31, 2011
1. Assets
a. Current Assets
This increase was partially offset by a
decrease of Rp1,042 million, or 13.2% in
third party trade payable, which mainly
related to purchases of equipments,
As of December 31, 2012, our current assets
materials and services from third parties.
were Rp27,973 billion (US$2,901 million)
compare to Rp21,258 billion as of December
b. Non Current Liabilities
31, 2011. The increase in current assets was
Non current liabilities were Rp20,284 billion
mainly due to the increase of Rp3,965 billion,
(US$2,105 million) as of December 31, 2012
or 1,063.0% in other current financial assets
and Rp19,884 billion as of December 31, 2011.
and in cash and cash equivalents Rp3,484
Our non-current liabilities increase primarily
billion, or 36.2%.
due to an increase of Rp1,500 billion, or
477.7% in obligation under finance lease. This
This increase was partially offset by:
increase was partially offset by:
- A decrease of Rp791 billion, or 100.0% in
- A decrease of Rp735 million, or 19.4% in
asset held for sale because it has been
deferred tax liabilities;
sold/realized in the year 2012 and the
- A decrease of Rp448 million, or 6.2% in
absence of additional assets available for
bank loan;
sale in 2012; and
- A decrease of Rp221 million, or 11.0% in
- A decrease of Rp415 billion, or 52.7% in
two step loan; and
prepaid taxes.
- A decrease of Rp171 million, or 5.0% in
bonds and notes.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
109
c. Equity
Total equity increase by Rp5,997 billion, or 9.8%, from Rp60,981 billion as of December 31, 2011 to Rp66,978 billion
as of December 31, 2012. The increase of equity was primarily the result of total comprehensive income for the year
attributable to owners of the parent of Rp18,388 billion in 2012, offset by cash dividend of Rp10,734 billion and
the acquisition cost of treasury stock of Rp1,744 billion. As a result of foregoing, our retained earnings increase by
Rp5,723 billion, or 18.0% and total equity attributable to owner of the parent increase by Rp4,031 billion, or 8.5% from
Rp47,510 billion as of December 31, 2011 to Rp51,541 billion as of December 31, 2012.
B. Comprehensive Income Comparison
The following table sets out our Statement of Comprehensive Income, itemized according to our main products
and services, for the three years 2013 through 2011. Each item is expressed as a percentage of total revenues or
expenses:
Revenues
Telephone Revenues
Cellular Revenues
Usage charges
Monthly subscription charges
Features
(Rp billion)
2013
(US$
million)
30,722
2,525
730
686
60
56
Total Cellular Revenues
32,138
2,641
Fixed Line Revenues
Usage charges
Monthly subscription charges
Call Center
Installation charges
Others
Total Fixed Line Revenues
Total Telephone Revenues
6,453
2,682
324
12
230
9,701
41,839
530
220
27
1
19
797
3,438
Data, Internet and Information Technology Services Revenues
Years Ended December 31,
2012
2011
%
(Rp billion)
%
(Rp miliar)
%
37.0
0.9
0.8
38.7
7.8
3.2
0.4
-
0.3
11.7
50.4
29,477
696
558
38.2
0.9
0.7
27,189
571
838
30,731
39.8
28,598
7,323
2,805
228
112
194
10,662
41,393
9.5
3.6
0.3
0.1
0.2
13.7
53.5
8,114
3,004
198
135
168
11,619
40,217
38.1
0.8
1.2
40.1
11.4
4.2
0.3
0.2
0.2
16.3
56.4
Internet, data communication
and information technology
services
Short Messaging Service
("SMS")
VoIP
e-Business
Total Data, Internet and
Information Technology Services
Revenues
Interconnection Revenues
Network Revenues
Others Telecommunications
Services Revenues
Total Revenues
Expenses
18,373
1,509
22.2
14,857
19.3
10,740
15.0
13,134
1,079
15.8
12,631
16.4
13,093
18.4
119
83
10
7
0.1
0.1
81
55
0.1
0.1
53
38
0.1
0.1
31,709
2,605
38.2
27,624
35.9
23,924
33.6
4,843
1,253
3,323
398
103
273
5.9
1.5
4.0
4,273
1,208
2,645
5.5
1.6
3.5
3,509
1,301
2,302
4.9
1.9
3.2
82,967
6,817
100.0
77,143
100.0
71,253
100.0
Operations, Maintenance and Telecommunication Services Expenses
Operations and maintenance
Radio frequency usage charges
Concession fees and Universal
Service Obligation (USO)
charges
10,667
3,098
1,595
877
255
131
18.5
5.4
2.8
9,012
3,002
1,452
16.7
5.6
2.7
9,191
2,846
1,235
18.4
5.7
2.5
Electricity, gas and water
1,063
87
1.8
879
1.6
836
1.7
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2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Cost of phone,set top box, SIM
and RUIM cards
Cost of IT service
Leased lines and CPE
Vehicles rental and supporting
facilities
Insurance
Project Management Expenses
Traveling expenses
Others
Total Operations, Maintenance
and Telecommunication Services
Expenses
Depreciation and Amortization
Expenses
Personnel Expenses
Salaries and related benefits
Vacation pay, incentives and
other benefits
Employees’ income tax
Net periodic pension costs
Net periodic post-retirement
health care benefits costs
Housing
Insurance
Other employee benefit
Other post-retirement benefits
costs
LSA expense
Early Retirement Program
Others
Total Personnel Expenses
Interconnection Expenses
Marketing Expenses
General and Administrative
Expenses
Loss (gain) on foreign exchange
- net
Other expenses
Total Expenses
Other Income
Operating Profit
Finance income
Finance costs
Share of loss of associated
companies
Profit Before Income Tax
Income Tax (Expense) Benefit
Profit for the Year
Total other comprehensive income
- net
Total comprehensive income for the
year
Profit for the year attributable to
owners of the parent company
Total comprehensive income for the
year attributable to owners of the
parent company
(Rp billion)
2013
(US$
million)
Years Ended December 31,
2012
2011
%
(Rp billion)
%
(Rp miliar)
%
752
677
440
439
374
138
53
36
62
56
36
36
31
11
4
3
1.3
1.2
0.8
0.8
0.6
0.2
0.1
0.1
687
222
407
293
671
102
57
19
1.3
0.4
0.8
0.5
1.2
0.2
0.1
-
879
144
406
291
431
46
54
13
1.8
0.3
0.8
0.5
0.9
0.1
0.1
-
19,332
1,589
33.6
16,803
31.1
16,372
32.8
15,780
1,297
27.3
14,456
26.8
14,864
29.7
3,553
3,252
1,160
873
374
220
92
71
66
19
-
53
9,733
4,927
3,044
4,155
249
480
57,700
2,579
27,846
836
(1,504)
(29)
27,149
(6,859)
20,290
112
292
267
95
72
31
18
8
6
5
2
-
4
800
405
250
341
20
39
4,741
212
2,288
69
(124)
(2)
2,231
(564)
1,667
-
20,402
1,676
14,205
14,317
-
-
-
6.2
5.6
2.0
1.5
0.6
0.4
0.2
0.1
0.1
0.1
-
0.1
16.9
8.5
5.3
7.2
3,257
3,400
1,022
789
90
200
83
38
65
121
699
22
9,786
4,667
3,094
3,036
0.4
189
0.8
1,973
6.0
6.3
1.9
1.5
0.2
0.4
0.2
-
0.1
0.2
1.3
0.1
18.2
8.6
5.7
5.6
0.3
3.7
3,001
2,815
1,043
501
199
198
70
-
65
96
517
52
8,555
3,555
3,278
2,934
210
192
100.0
54,005
100.1
49,960
2,559
25,696
596
(2,055)
(11)
24,226
(5,866)
18,360
26
-
(0.1)
-
-
-
(0.1)
-
(0.1)
-
665
21,958
546
(1,637)
(10)
20,858
(5,387)
15,471
11
6.0
5.6
2.1
1.0
0.4
0.4
0.2
-
0.1
0.2
1.0
0.1
17.1
7.1
6.6
5.9
0.4
0.4
100.0
-
(0.0)
-
-
-
(0.0)
-
(0.0)
-
18,386
(0.1)
15,481
(0.0)
12,850
12,876
134
-
-
-
10,966
10,977
112
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Income per share (full amount)
147.4
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
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Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
111
Year ended December 31, 2013 compared to year
c. Data, Internet and Information Technology
ended December 31, 2012
Services Revenues
1. Revenues
Our total data, internet and information
technology service revenues accounted for
Total revenues increased by Rp5,824 billion, or
38.2% of our consolidated revenues for the
7.5%, from Rp77,143 billion in 2012 to Rp82,967
year ended December 31, 2013, compared to
billion in 2013. The increase in revenues in 2013
35.9% for the year ended December 31, 2012
was due to the increase in all sub revenues
exclude revenues from fixed lines telephone.
Data, internet and information technology
The increase in revenues in 2013 was primarily
services revenues increased by Rp4,085
contribute by cellular telephone revenues and
billion, or 14.8%, from Rp27,624 billion in 2012
data, internet and information technology
to Rp31,709 billion in 2013. This increase was
services revenues.
a. Cellular Telephone Revenues
primarily due to an increase in revenues from
internet, data communication and information
technology services by Rp3,516 billion, or
Cellular telephone revenues increased by
23.7%, which was driven by this following
Rp1,407 billion, or 4.6%, from Rp30,731
revenues:
billion in 2012 to Rp32,138 billion in 2013
due to increases in all sub cellular telephone
- cellular data communication revenues
revenues. The increased primarily due to 5.1%
from an increase in Flash mobile
increase in our cellular subscriber.
broadband subscribers of 56.5%, from
11 million subscribers in 2012 to 17.3 million
Usage charges increased by Rp1,245 billion,
subscribers in 2013.
or 4.2%, from Rp29,477 billion in 2012 to
- Speedy monthly subscription revenues
Rp30,731 billion in 2013 due to an increase in
due to an increase in Speedy subscribers
both our prepaid and postpaid subscriber,
of 28.7% from 2.3 million subscribers in
also due to increasing of our Long Distance
2012 to 3.0 million subscribers in 2013.
Usage. Revenues from features increased by
- data communication Ethernet revenue
Rp128 billion or 22.9%, from Rp558 billion
due to increase in data volume which pass
in 2012 to Rp686 billion in 2013. Monthly
subscription charges increased by Rp34
through metro ethernet of 39.4%, from
240,315 Mbps in 2012 to 334,935 Mbps in
billion, or 4.9%, from Rp696 billion in 2012 to
2013, and
Rp730 billion in 2013 due to 15.8% increase in
- data communication VPN revenue due
our postpaid subscriber.
Our total cellular telephone revenues
to increase in data volume which pass
through VPN network of 14.1%, from
40,750 Mbps in 2012 to 46,505 Mbps in
accounted for 38.7% of our consolidated
2013.
revenues for the year ended December 31,
2013, compared to 39.8% for the year ended
SMS revenues increased by Rp503 billion,
December 31, 2012
b. Fixed Lines Telephone Revenues
or 4.0%, from Rp12,631 billion in 2012 to
Rp13,134 billion in 2013 due to a 25.2%
increased of our SMS volumes from 118.1
Fixed lines telephone revenues decreased
billion messages to 147.9 billion messages in
by Rp961 billion, or 9.0%, from Rp10,662
2013. Effective June 1, 2012, in line with the
billion in 2012 to Rp9,701 billion in 2013. The
cost-based interconnection regime for voice
decrease in fixed lines telephone revenues
calls, the Government implemented cost-
was primarily due to a decrease in usage
based interconnection for SMS. As Telkomsel
charges, of Rp870 billion, or 11.9%, and
historically had more incoming SMS than
monthly subscription charges revenues of
outgoing SMS, cost-based interconnection
Rp123 billion, or 4.4% which was primarily
for SMS resulted in an overall benefit for
caused by a decrease in local and domestic
Telkomsel.
long distance usage due to the shifting usage
to cellular telephone services.
112
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
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Management
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Business
Overview
Management’s
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d. Interconnection Revenues
g. Other Income
Interconnection revenues comprised
Other income increased by Rp20 billion, from
interconnection revenues from our fixed
Rp2,559 billion in 2012 to Rp2,579 billion in
line network and interconnection revenues
2013.
from Telkomsel’s mobile cellular network.
Interconnection revenues included incoming
2. Expenses
international long-distance revenues from
Total expenses increased by Rp3,695 billion, or
our IDD service (TIC-007).
6.8%, from Rp54,005 billion in 2012 to Rp57,700
billion in 2013. The increase in expenses was
Interconnection revenues increased by
attributable primarily due to increases in
Rp570 billion, or 13.3%, from Rp4,273
operations, maintenance and telecommunication
billion in 2012 to Rp4,843 billion in 2013.
services, depreciation and amortization also
This increase was triggered by an increase
general and administrative expenses. These
in domestic interconnection and transit
expenses are further explained below:
revenues of Rp353 billion, or 13.5%, primarily
due to an increase in cellular interconnection
a. Operations, Maintenance and
revenues of Rp335 billion, or 14.5%, and
Telecommunications Services Expenses
an increase of Rp218 billion, or 13.2% in
Operations, maintenance and
international interconnection revenues, due
telecommunications services expenses
to our promotion rate offers for international
increased by Rp2,529 billion, or 15.1%, from
calls and the increased number of incoming
Rp16,803 billion in 2012 to Rp19,332 billion in
calls to mobile subscribers.
2013.
e. Network Revenues
The increase in operations, maintenance and
Network revenues increased by Rp45
telecommunications services expenses was
billion, or 3.7%, from Rp1,208 billion in 2012
attributable by the following:
to Rp1,253 billion in 2013 mainly due to a
- An increase in operations and
increase in our revenues from leased lines
maintenance of Rp1,655 billion, or 18.4%,
services by Rp37 billion, or 4.5%, from Rp824
due to a decrease in expenses associated
billion in 2012 to Rp861 billion in 2013. This
with increasing the capacity of receiver
increase was due to increasing number of our
and transmission stations and Telkomsel’s
subscriber by 27,078 or 7.0%.
broadband services.
f. Other Telecommunications Services
- Cost of IT services increased by Rp455
billion, or 205.0%, from Rp222 billion in
Revenues from other telecommunications
2012 to Rp677 billion in 2013. This increase
services increased by Rp678 billion, or 25.6%,
was primarily due to the increase in
from Rp2,645 billion in 2012 to Rp3,323
integration system expenses.
billion in 2013. The increase was primarily due
- Electricity, Gas and water expenses
to an increase of Rp260 billion, or 64.8%, in
increased by Rp184 billion, or 20.9%, from
lease revenue, an increase in revenues from
Rp879 billion in 2012 to Rp1,063 billion
USO compensation due to an increase in
in 2013, due to an increase in electricity
USO projects to establish internet service
expenses due to increasing number of
centers in various provincial capital cities
our BTS and network for Telkomsel’s
in 2013 and an increase of Rp151 billion, or
broadband services and electricity tariff.
14.4%, in CPE and terminal revenue.
The above increases were offset by Insurance
The increase was partly offset by a decrease
expenses decreased by Rp297 billion, or
in revenues from pay TV of Rp131 billion, or
44.3%, from Rp671 billion in 2012 to Rp374
32.3%due to our corporate action the sale of
billion in 2013 due to no satellite insurance
TelkomVision one of our subsidiaries in pay TV.
payment for Telkom-3.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
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Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
113
Our total operations, maintenance and
to Rp3,044 billion in 2013 primarily due to
telecommunications services expenses
a decrease in advertising and promotion
accounted for 33.5% of our consolidated
expenses by Rp93 billion, or 3.9%, due to
expenses for the year ended December 31,
using selective media for promotion and
2013, compared to 31.1% for the year ended
increasing group synergy.
December 31, 2012.
b. Depreciation and Amortization Expenses
General and administrative expenses
f. General and Administrative Expenses
Depreciation and amortization expenses
increased by Rp1,119 billion, or 36.9%, from
increased by Rp1,324 billion, or 9.2%,
Rp3,036 billion in 2012 to Rp4,155 billion in
from Rp14,456 billion in 2012 to Rp15,780
2013 due in part to an increase in provision
billion in 2013 primarily due to increased in
for impairment of receivables by Rp674
depreciation expense by Rp1,476 billion, or
billion, or 73.7.0%, from Rp915 billion in 2012
10.8% from Rp13,635 billion in 2012 to Rp15,109
to Rp1,589 billion in 2013. This increase
billion in 2013. The increase in depreciation
primarily resulted from current year individual
expense primarily related to depreciation
and collective assessment for impairment of
of transmission installation and equipment
receivables. The increased also contribute
amounting to Rp1,065 billion or 14.0% and
by a 59.0% increased in training, education
an increase of loss in impairment of Rp349
and recruitment by Rp153 billion and a
billion, or 141.3% compare to prior year.
28.1% increased by Rp148 billion in general
c. Personnel Expenses
expenses,
Personnel expenses decreased by Rp53
This increase above was partially offset by
billion, or 0.5%, from Rp9,786 billion in 2012
a 34.1% decreased in social contribution
to Rp9,733 billion in 2013 due to no early
expenses by Rp44 billion, or 34.4%.
retirement programs were offered in 2013
that cause a decrease by Rp699 billion or
g. (Loss) gain on Foreign Exchange - net
100.0% in early retirement program expenses
Loss on foreign exchange - net increased
by Rp60 billion, from Rp189 billion in 2012
This decrease above was partially offset by
to Rp249 billion in 2013. The increase was
an increase in salaries and related benefits
primarily due to the appreciation of the US
by Rp296 billion or 9.1% from Rp3,257 billion
Dollar by 26.3%.
in 2012 to Rp3,553 billion in 2013 and an
increase in net periodic post-retirement
h. Other expenses
health care benefit costs by Rp284 billion, or
Other expenses decreased by Rp1,493 billion,
315.6%.
d. Interconnection Expenses
from Rp1,973 billion in 2012 to Rp480 billion
in 2013. The decrease primarily related to
derecognition in 2012 of the carrying value
Interconnection expenses increased by
of the Telkom-3 Satellite, which was built and
Rp260 billion, or 5.6%, from Rp4,667 billion
launched, but failed to reach usable orbit,
in 2012 to Rp4,927 billion in 2013 primarily
amounting to Rp1,606 billion.
due to an increase of Rp256 billion, or 7.4%
in domestic interconnection and transit
interconnection expenses, inline with an
3. Operating Profit and Operating Profit Margin
As a result of the foregoing, operating profit
increase of 13.5% in domestic interconnection
increased by Rp2,148 billion, or 8.4%, from
and transit revenues.
Rp25,698 billion in 2012 to Rp27,846 billion in
2013. Operating profit margin increased from
e. Marketing Expenses
33.3% in 2012 to 33.6% in 2013.
Marketing expenses decreased by Rp50
billion, or 1.6%, from Rp3,094 billion in 2012
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Management’s
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4. Profit before Income Tax and Pre-Tax Margin
was primarily due to the increase in revenues
As a result of the foregoing, profit before income
from cellular telephone, data, internet and
tax increased by Rp2,921 billion, or 12.1%, from
information technology services, interconnection
Rp24,228 billion in 2012 to Rp27,149 billion in
and other telecommunications services, partly
2013. Pre-tax margin increased from 31.4% in
offset by decreases in revenues from fixed lines
2012 to 36.7% in 2013.
telephone and network.
5. Income Tax Expense
a. Cellular Telephone Revenues
Income tax expense decreased by Rp993 billion,
Cellular telephone revenues increased by
or 16.9%, from Rp5,866 billion in 2012 to Rp6,859
Rp2,133 billion, or 7.5%, from Rp28,598 billion
billion in 2013, following the increase in profit
in 2011 to Rp30,731 billion in 2012 primarily
before income tax.
due to increases in usage and monthly
subscription charges, partially offset by a
6. Other Comprehensive (Expenses) Income
decrease in revenues from features.
Other comprehensive expenses increased by
Rp86 billion, or 330.8%, from Rp26 billion in 2012
Usage charges increased by Rp2,288 billion,
to Rp112 billion in 2013 due to increase in foreign
or 8.4%, from Rp27,189 billion in 2011 to
currency translation by Rp89 billion offset by
Rp29,477 billion in 2012 due to an increase in
decrease in change in fair value of available-for-
minutes of usage of 184.8 billion minutes, or
sale financial assets by Rp3 billion.
11.1% and a 16.9% increase in total subscribers.
7. Comprehensive Income for the Year
Monthly subscription charges increased by
Rp125 billion, or 21.9%, from Rp571 billion in
Comprehensive income for the year increased by
2011 to Rp696 billion in 2012 due to increase
Rp2,014 billion, or 11.0%, from Rp18,388 billion in
in Flash and Blackberry subscribers of 93.1%
2012 to Rp20,402 billion in 2013.
8. Profit for the Year Attributable to Non-
controlling Interest
Profit for the year attributable to non-controlling
with revenue growth of 21.5%. The increase
was partly offset by a decrease in revenues
from features, which decreased by Rp280
billion, or 33.4%, from Rp838 billion in 2011
to Rp558 billion in 2012 as a result of MoCI
interest increased by Rp573 billion, or 10.4%, from
Regulation No. 01/PER/M.KOMINFO/01/2009
Rp5,512 billion in 2012 to Rp6,085 billion in 2013.
regarding the provision of premium
messaging service and broadcasting short
9. Profit for the Year Attributable to Owners of the
message to many receivers.
Parent Company
Profit for the year attributable to owners of the
b. Fixed Lines Telephone Revenues
parent company increased by Rp1,355 billion, or
Fixed lines telephone revenues decreased
10.5%, from Rp12,850 billion in 2012 to Rp14,205
by Rp957 billion, or 8.2%, from Rp11,619
billion in 2013.
10. Net Income per Share
billion in 2011 to Rp10,662 billion in 2012. The
decrease in fixed lines telephone revenues
was primarily due to a decrease in usage
Net income per share increased by Rp14, or
charges, of Rp791 billion, or 9.7%, from Rp8,114
10.4%, from Rp134 in 2012 to Rp148 in 2013.
billion in 2011 to Rp7,323 billion in 2012 which
was primarily caused by a decrease in local
Year ended December 31, 2012 compared to year
and domestic long distance usage. Further,
ended December 31, 2011
1. Revenues
monthly subscription charges revenues
also decreased by Rp199 billion, or 6.6% in
2012. The decrease in fixed lines telephone
Total revenues increased by Rp5,890 billion, or
revenues was primarily due to shifting usage
8.3%, from Rp71,253 billion in 2011 to Rp77,143
to cellular telephone services.
billion in 2012. The increase in revenues in 2012
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c. Data, Internet and Information Technology
d. Interconnection Revenues
Services Revenues
Interconnection revenues comprised
Data, internet and information technology
interconnection revenues from our fixed
services revenues increased by Rp3,700
line network and interconnection revenues
billion, or 15.5%, from Rp23,924 billion in 2011
from Telkomsel’s mobile cellular network.
to Rp27,624 billion in 2012. This increase
Interconnection revenues included incoming
was primarily due to an increase in revenues
international long-distance revenues from our
from internet, data communication and
IDD service (TIC-007).
information technology services by Rp4,117
billion, or 38.3%, from Rp10,740 billion in 2011
Interconnection revenues increased by Rp764
to Rp14,857 billion in 2012, which was in turn
billion, or 21.8%, from Rp3,509 billion in 2011
largely driven by increases in cellular data
to Rp4,273 billion in 2012. This increase
communication revenues from increased
was triggered by an increase in domestic
mobile phone data usage and an increase
interconnection and transit revenues of
in Flash mobile broadband subscribers
Rp547 billion, or 26.4%, from Rp2,071 billion
of 99.5%, from 5.5 million subscribers in
in 2011 to Rp2,618 billion in 2012 primarily
2011 to 11.0 million subscribers in 2012. The
due to an increase in cellular interconnection
increase in revenues from internet, data
revenues of Rp538 billion, or 30.2%, and
communication and information technology
an increase of Rp217 billion, or 15.1% in
services was also due in part to an increase in
international interconnection revenues, due
Speedy subscribers of 30.9%, from 1.8 million
to our promotion rate offers for international
subscribers in 2011 to 2.3 million subscribers
calls and the increased number of incoming
in 2012, a 41.9% increase in data volumes
calls to mobile subscribers.
through our VPN network, from 28,702
Mbps in 2011 to 40,748 Mbps in 2012, and a
Our total interconnection revenues accounted
70.8% increase in data volumes through our
for 5.5% of our consolidated revenues for the
metro ethernet, from 140,733 Mbps in 2011 to
year ended December 31, 2012, compared to
240,315 Mbps in 2012.
4.9% for the year ended December 31, 2011.
SMS volumes decreased by 47.8% from
e. Network Revenues
226.4 billion messages in 2011 to 118.1 billion
Network revenues decreased by Rp93 billion,
messages in 2012, while SMS revenues
or 7.1%, from Rp1,301 billion in 2011 to Rp1,208
decreased by a smaller degree, by Rp462
billion in 2012 mainly due to a decrease in our
billion, or 3.5%, from Rp13,093 billion in 2011
revenues from leased lines services by Rp87
to Rp12,631 billion in 2012. The decrease in
billion, or 9.5%, from Rp911 billion in 2011 to
SMS volumes is in line with general increase
Rp824 billion in 2012. This decrease was due
in usage of internet-based messaging.
to declining prices for leased lines.
Revenues declined by a smaller percentage
primarily due to the implementation of cost-
f. Other Telecommunications Services
based interconnection for SMS on June 1,
Revenues from other telecommunications
2012. Prior to June 2012, SMS were sent and
services increased by Rp343 billion, or 14.9%,
received among operators on a "Sender Keep
from Rp2,302 billion in 2011 to Rp2,645 billion
All" basis. Effective June 1, 2012, in line with
in 2012. The increase was primarily due to an
the cost-based interconnection regime for
increase of Rp307 billion, or 41.5% in CPE and
voice calls, the Government implemented
terminal revenue, an increase of Rp182 billion,
cost-based interconnection for SMS. As
or 83.1% in lease revenue, and an increase
Telkomsel historically had more incoming
of Rp146 billion, or 56.4% in revenues from
SMS than outgoing SMS, cost-based
pay TV. The increase in pay TV revenues was
interconnection for SMS resulted in an overall
primarily due to a 19% increase in the number
benefit for Telkomsel’s SMS revenues.
of subscribers from 1.0 million subscribers in
2011 to 1.2 million subscribers in 2012.
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Management’s
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This increase above was partially offset
- Radio frequency usage expenses
by a decrease in revenues from USO
compensation due to a decrease in USO
increased by Rp156 billion, or 5.5%, from
Rp2,846 billion in 2011 to Rp3,002 billion
projects to establish internet service centers
in 2012, due to an increase in bandwidth
in various provincial capital cities in 2012
used for cellular.
and a decrease in our directory assistance
revenues.
g. Other Income
The above increases were offset by the
following:
- A decrease in the cost of handset phone,
Other income increased by Rp1,894 billion, or
set up top box, SIM and RUIM cards of
184.8%, from Rp665 billion in 2011 to Rp2,559
Rp192 billion, or 21.8%, from Rp879 billion
billion in 2012. The increase primarily related
in 2011 to Rp687 billion in 2012. This
to insurance compensation received from
decrease was caused by the use of less
the insurer amounted to Rp1,772 billion with
expensive packaging for SIM and RUIM
regards to the insured Telkom-3 Satellite that
cards;
was built and launched, but failed to reach
its orbit on August 7, 2012. See Note 11 to our
- A decrease in operations and
Consolidated Financial Statements.
2. Expenses
maintenance of Rp179 billion, or 1.9%,
from Rp9,191 billion in 2011 to Rp9,012
billion in 2012 due to a decrease in
Total expenses increased by Rp4,044 billion, or
expenses associated with increasing the
8.1%, from Rp49.960 billion in 2011 to Rp54,004
capacity of receiver and transmission
billion in 2012. The increase in expenses was
stations and Telkomsel’s broadband
attributable primarily due to increases in
services.
operations, maintenance and telecommunication
services, personnel and interconnection
b. Depreciation and Amortization Expenses
expenses. These expenses are further explained
Depreciation and amortization expenses
below:
a. Operations, Maintenance and
decreased by Rp407 billion, or 2.7%, from
Rp14,863 billion in 2011 to Rp14,456 billion
in 2012, primarily due to lower impairment
Telecommunications Services Expenses
charge on fixed wireless cash generating
Operations, maintenance and
unit (“CGU”) by Rp316 billion, or 56.1% from
telecommunications services expenses
Rp563 billion in 2011 to Rp247 billion in 2012.
increased by Rp431 billion, or 2.6%, from
In addition, amortization expense decreased
Rp16,372 billion in 2011 to Rp16,803 billion in
by Rp23 billion, or 3.8%, from Rp599 billion in
2012.
2011 to Rp576 billion in 2012 due to decrease
in goodwill impairment expense and license
The increase in operations, maintenance and
amortization expense, and depreciation
telecommunications services expenses was
expense decrease by Rp68 billion, or 0.5%,
attributable by the following:
from Rp13,701 billion ini 2012 to Rp13,633
-
Insurance expenses increased by Rp240
billion in 2012. Decrease in depreciation
billion, or 55.7%, from Rp431 billion in 2011
expense primarily due to switching
to Rp671 billion in 2012 due to payment of
equipment and cable network expenses.
Telkom-3 satellite insurance;
- Concession fees and USO charges
c. Personnel Expenses
increased by Rp217 billion, or 17.6%, from
Personnel expenses increased by Rp1,231
Rp1,235 billion in 2011 to Rp1,452 billion in
billion, or 14.4%, from Rp8,555 billion in 2011
2012. This increase was primarily due to
to Rp9,786 billion in 2012 due in part to an
the increase in our total revenues, which
increase in vacation pay, incentives and other
we use to calculate the amount spent on
benefits by Rp586 billion, or 20.8%, from
USO projects, by Rp5,889 billion, or 8.3%;
Rp2,814 billion in 2011 to Rp3,400 billion in
and
2012, an increase by Rp182 billion or 35.2%
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in early retirement program expenses from
Rp129 billion in 2012. This decrease resulted
Rp517 billion in 2011 to Rp699 billion in
from our shareholders’ decision to lower
2012, and an increase in salaries and related
the amount of net profit spent on corporate
benefits by Rp256 billion or 8.5% from
social responsibility from 2.0% in 2011 to 1.0%
Rp3,001 billion in 2011 to Rp3,257 billion in
in 2012.
2012.
d. Interconnection Expenses
Professional fees decreased by Rp48 billion,
or 20.4%, while security and screening
Interconnection expenses increased by
expense decreased by Rp35 billion, or 36.1%,
Rp1,112 billion, or 31.3%, from Rp3,555 billion
from Rp97 billion in 2011 to Rp62 billion in
in 2011 to Rp4,667 billion in 2012 primarily
2012.
due to an increase of 43.5% in domestic
interconnection and transit interconnection
g. (Loss) gain on Foreign Exchange – net
expenses and an increase of 16.5% in
international interconnection fees.
Loss on foreign exchange - net decreased
by Rp21 billion, or 10%, from Rp210 billion in
2011 to Rp189 billion in 2012. The decrease
Our total interconnection expenses
was primarily due to the depreciation of the
accounted for 8.6% of our consolidated
Japanese Yen by 4.3% wich was partially
expenses for the year ended December 31,
offset by the appreciation of the US Dollar by
2012, compared to 7.1% for the year ended
6.3%.
December 31, 2011.
h. Other expenses
e. Marketing Expenses
Other expenses increased by Rp1,781 billion,
Marketing expenses decreased by Rp184
or 927.6%, from Rp192 billion in 2011 to
billion, or 5.6%, from Rp3,278 billion in 2011
Rp1,973 billion in 2012. The increase primarily
to Rp3,094 billion in 2012 primarily due to
related to derecognition of the carrying value
a decrease in advertising and promotion
of the Telkom-3 Satellite, which was built and
expenses by Rp249 billion, or 9.1% due to
launched, but failed to reach usable orbit on
marketing cost optimization.
August 7, 2012, amounting to Rp1,606 billion.
See Note 11 to our Consolidated Financial
f. General and Administrative Expenses
Statements.
General and administrative expenses
increased by Rp101 billion, or 3.4%, from
3. Operating Profit and Operating Profit Margin
Rp2,935 billion in 2011 to Rp3,036 billion in
As a result of the foregoing, operating profit
2012 due in part to an increase in general
increased by Rp3,740 billion, or 17.0%, from
expenses by Rp201 billion, or 61.7%, from
Rp21,958 billion in 2011 to Rp25,698 billion in
Rp326 billion in 2011 to Rp527 billion in
2012. Operating profit margin increased from
2012. The increase in general expenses
30.8% in 2011 to 33.3% in 2012.
was primarily due to vehicle facility
reimbursement expenses related to changes
4. Profit before Income Tax and Pre-Tax Margin
of our policy and directors’ severance pay
As a result of the foregoing, profit before income
due to the Board of Directors changes in
tax increased by Rp3,371 billion, or 16.2%, from
2012. Provision for impairment of receivables
Rp20,857 billion in 2011 to Rp24,228 billion in
increased by Rp32 billion, or 3.6%, from
2012. Pre-tax margin slightly increased from
Rp883 billion in 2011 to Rp915 billion in 2012.
29.3% in 2011 to 31.4% in 2012.
This increase primarily resulted from current
year individual and collective assessment for
5. Income Tax Expense
impairment of receivables.
Income tax expense increased by Rp479 billion,
or 8.9%, from Rp5,387 billion in 2011 to Rp5,866
The increase in provision for impairment of
billion in 2012, following the increase in profit
receivables was partially offset by a decrease
before income tax by 17.2%.
in social contribution expenses by Rp161
billion, or 55.5%, from Rp290 billion in 2011 to
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Preface
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Business
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6. Other Comprehensive (Expenses) Income
Year ended December 31, 2013 compared to year
Other comprehensive income increased by Rp15
ended December 31, 2012
billion, or 136.4%, from Rp11 billion in 2011 to
Rp26 billion in 2012 due to the increase foreign
1. Cash Flows from Operating Activities
currentcy translation by Rp24 billion offset by
Net cash provided by operating activities in
decrease in change in fair value of available for
2013 was Rp36,574 billion (US$3,005 million)
sale financial asset by Rp9 billion.
compared to Rp27,941 billion in 2012. The
7. Comprehensive Income for the year
increase was primarily due to an increase of
Rp5,103 billion, or 7.1%, in cash receipts from
Comprehensive income for the year increased by
customers and from other operators of Rp528
Rp2,907 billion, or 18.8%, from Rp15,481 billion in
billion or 13.2% due to the increase of our
2011 to Rp18,388 billion in 2012.
operating revenue and also due to the decrease
in cash payment for our expense of Rp.6,211
8. Profit for the Year Attributable to Non-
billion, or 18.5%. This was partially offset by an
controlling Interest
Profit for the year attributable to non-controlling
increase of Rp1,809 billion, or 32.4%, in payment
for income tax and cash payment to employees
interest increased by Rp1,018 billion, or 22.6%,
of Rp1,721 billion, or 21.1%.
from Rp4,505 billion in 2011 to Rp5,512 billion in
2012.
2. Cash Flows from Investing Activities
Net cash flows used in investing activities in
9. Profit for the Year Attributable to Owners of the
2013 was Rp22,702 billion (US$1,865 million)
Parent Company
Profit for the year attributable to owners of the
compared to Rp11,311 billion in 2012. This increase
was primarily due to an increase of Rp11,423
parent company increased by Rp1,885 billion, or
billion in acquisition of property and equipment.
17.2%, from Rp10,965 billion in 2011 to Rp12,864
This was partially offset by a decrease of Rp1,720
billion in 2012.
10. Net Income per Share
Net income per share increased by Rp21.9, or
billion or 42.9% in placement in time deposit and
an increase of cash received in divestment of
subsidiary and associate company Rp926 billion.
19.6.0%, from Rp111.9 in 2011 to Rp133.8 in 2012.
3. Cash Flows from Financing Activities
C. Net Cash Flows
Net cash flows used in financing activities
totaled Rp13,327 billion (US$1,095 million) in
The following table sets out information concerning
2013 compared to Rp13,314 billion in 2012. This
our consolidated cash flows, as set out in (and
increase by Rp13 billion, or 0.1%, was primarily
prepared on the same basis as) our Consolidated
due to a increase of Rp2,368 billion in proceed
Financial Statements:
from sale of treasury stock and a decrease of
Years ended December 31,
2013
2012
2011
(Rp billion)
(US$ million)
(Rp billion)
(Rp billion)
Net cash flows:
provided by operating activities
used in investing activities
used in financing activities
Net increase in cash and cash equivalents
Effect of foreign exchange rate changes on cash and cash
equivalents
Cash and cash equivalents at beginning of year
Ending balance of disposed subsidiary
Cash and cash equivalents at end of year
36,574
(22,702)
(13,327)
545
1,039
13,118
(6)
14,696
3,005
(1,865)
(1,095)
45
85
1,078
-
1,208
27,941
(11,311)
(13,314)
3,316
168
9,634
-
30,553
(14,505)
(15,539)
509
5
9,120
-
13,118
9,634
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119
Rp1,744 billion, in payments for treasury stock.
and a decrease of Rp4,976 billion, or 37.7%, in
This was partially offset by an increase of
cash payments for the acquisition of property
Rp1,227 billion, or 17.2%, in cash dividends paid to
and equipment. This was partially offset by
our stockholders and Rp1,083, or 30% to non-
a decrease of Rp1,862 billion or 14,323.1% in
controlling stockholders subsidiaries due to the
proceeds from insurance claims relating to
increase of our operating profit and a decrease
unsuccessful launch of the Telkom-3 satellite.
of Rp1,271 billion obtain from additional bank
loan.
Apart from cash on hand and cash in banks, we
invest the majority of our excess cash from time
Year ended December 31, 2012 compared to year
to time in time deposits. Since May 14, 2004, we
ended December 31, 2011
also have been investing a part of our excess
cash in Rupiah-based mutual funds and other
1. Cash Flows from Operating Activities
marketable securities. As of December 31, 2012,
Net cash provided by operating activities in
other current financial assets totaling Rp4,338
2012 was Rp27,941 billion (US$2,898 million)
billion (US$450 million) in mutual funds and
compared to Rp30,553 billion in 2011. The
other marketable securities were outstanding.
decrease was primarily due to an increase of
Rp8,235 billion, or 32.4%, in cash payments for
3. Cash Flows from Financing Activities
expenses. This was partially offset by an increase
Net cash flows used in financing activities
of Rp4,391 billion, or 6.5%, in cash receipts from
totaled Rp13,314 billion (US$1,381 million) in
customers due to the increase of our revenues.
2012 compared to Rp15,539 billion in 2011.
This decrease by Rp2,225 billion, or 14.3%, was
2. Cash Flows from Investing Activities
primarily due to a decrease of Rp3,075 billion, or
Net cash flows used in investing activities in 2012
41.9%, in repayment of two-step loans and bank
was Rp11,311 billion (US$1,173 million) compared
loans and a decrease of Rp315 billion, or 15.3% in
to Rp14,505 billion in 2011. This decrease was
payments for treasury stock. This was partially
primarily due to an increase of Rp3,975 billion,
offset by an increase of Rp1,058 billion, or 17.4%,
in purchases of available for sale financial assets
in cash dividends paid to our stockholders.
D. Obligation and Commitment
1. Contractual Obligation
The following table sets forth information on certain of our material contractual obligations as of December
31, 2013.
Contractual Obligations
Total
(Rp billion)
Less than 1 year
(Rp billion)
1-3 years
(Rp billion)
3-5 years
(Rp billion)
More than 5
years
(Rp billion)
By Payment Due Dates
Short-Term Loan(1)(6)
Long-Term Debts(2)(6)
Capital Lease Obligations(3)
Interest on Short-term Loans,
Long-term Debts and Capital
Lease Obligations(7)
Operating Leases(4)
Unconditional Purchase
Obligations(5)
432
14,855
4,969
1,935
14,037
18,461
432
4,445
648
423
1,845
18,461
5,405
1,060
360
3,270
-
1,756
1,097
782
3,249
2,164
370
3,095
5,827
-
-
Total
54,689
25,254
10,095
6,730
11,610
(1) Related to liabilities under short-term loans obtained from Bank CIMB Niaga Bank UOB, Bank Danamon, BRI and other banks. See Note 17 to our
Consolidated Financial Statements.
(2) See Notes 18-20 to our Consolidated Financial Statements.
(3) Related to the leases of the slot site of the tower, property and equipment under RSA, transmission installation and equipment, data processing
equipment, office equipment, vehicles and CPE assets.
(4) Related primarily to leases of leased line, telecommunication equipment and land and building.
(5) Capital expenditures committed under contractual arrangements.
(6) Excludes the related contractually committed interest obligations.
(7) See “Business Overview – Risk Factors – Risks Related to Our Business – Financial Risks – We are exposed to interest rate risk”..
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See Note 41 to our Consolidated Financial Statements for further details on our contractual commitments.
In addition to the above contractual obligations, as of December 31, 2013, we had long-term liabilities for
pension, post-retirement health care benefits and long service awards. In 2013 we contributed Rp302 billion
to our post-retirement health care benefits plan and to our defined benefit pension plan Rp182 billion. See
Notes 34 and 36 to our Consolidated Financial Statements.
2. Indebtedness
Consolidated total indebtedness (consisting of long-term liabilities, current maturities of long-term liabilities,
short-term bank loans and deferred consideration for business combinations) as of December 31, 2011, 2012
and 2013 were as follows:
Indonesian Rupiah
US Dollar(1)
Japanese Yen(2)
Total
As of December 31,
2013
2012
2011
(Rp billion)
(US$ million)
(Rp billion)
(Rp billion)
17,553
1,724
979
20,256
1,441
142
80
1,663
16,192
2,052
1,031
19,275
14,142
2,561
1,168
17,871
(1) The amounts as of December 31, 2011, 2012 and 2013 translated into Rupiah at Rp9,075, Rp9,645 and Rp12,180 = US$1, respectively, being the Reuters
sell rates for US Dollar at each of those dates.
(2) The amounts as of December 31, 2011, 2012 and 2013 translated into Rupiah at Rp117.0, Rp111.8 and Rp115.9 = Yen 1, respectively, being the Reuters sell
rates for Yen at each of those dates.
Of our total indebtedness, as of December 31, 2013, Rp5,525 billion, Rp6,465 billion and Rp2,853 billion were
scheduled for repayment in 2014, 2015 to 2016 and 2017 to 2018 and thereafter, respectively.
For further information on our Company’s indebtedness, see Notes 17-21 to our Consolidated Financial
Statements.
3. Material Contract
In 2013 and 2012, we did not enter into any new material contracts nor did we amend any existing material
contracts, other than contracts entered into or amended in the ordinary course of business.
E. Liquidity
1. Liquidity Sources
The main source of our corporate liquidity is cash provided by operating activities and long-term debt
through the capital markets as well as long-term and short-term loans through bank facilities. We divide our
liquidity sources into internal and external liquidity.
a. Internal Liquidity Sources
To fulfill our obligations we rely primarily on our internal liquidity. As of December 31,2013, we had
Rp14,696 billion in cash and cash equivalents available. In 2013, cash and cash equivalents increased by
Rp1,578 billion. In 2012, the increase of cash flow provided by operating activities primarily arise from
cash receipts from customers of Rp5,103 billion.
We made net repayments of current indebtedness for borrowed money of Rp7,967 billion in 2011,
Rp5,843 billion in 2012 and Rp6,239 billion in 2013. Cash outflows in 2013 reflected payments for long-
term liabilities of Rp4,803 billion and Short-term liabilities of Rp407 billion; and
Our internal liquidity strength reflected in our current ratio, which we calculate as current assets divided
by current liabilities, increased from 116.0% as of December 31, 2012 to 116.3% as of December 31, 2013.
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Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
121
b. External Liquidity Sources
- An increase of Rp105 billion in asset held for sale.
Our primary external sources of liquidity are
short and long-term bank loans, two-step
We believe that our working capital is sufficient
loans, bonds and notes payable. During the
for our present requirements. We expect that our
year 2013 we used external liquidity bank
working capital will continue to be addressed
loans of Rp2,665 billion; and Short-term bank
by various funding sources, including cash from
loans of Rp813 billion.
operating activities and bank loans.
c. Outstanding Liquidity Sources
G. Solvency
We had undrawn loan facilities which include
Our solvency or our ability to meet our short-
the following sources of unused liquidity:
term and long-term obligations highly influenced
- Bank CIMB Niaga loan facility in the
by our source of liquidity. Refer to explanation on
amount of Rp1,053 billion;
“Liquidity”.
- Japan Bank for International Cooperation
loan facility in the amount of
1. Current Liabilities
USD31,350,000;
Our ability to pay our current liabilities is
- BNI loan facility in the amount of Rp350
indicated by the ratios on the table below:
billion;
- UOB loan facility in the amount of Rp70
billion;
- BRI loan facility in the amount of Rp49
billion;
Ratios
2013
2012
Current ratio
Quick ratio
Cash ratio
116.3%
114.5%
75.8%
116.0%
113.6%
72.4%
- Bank Ekonomi Raharja loan facility in the
2. Non-Current Liabilities
amount of Rp18 billion;
Our ability to pay our debt is indicated by the
- Bank Bukopin loan facility in the amount
ratios on the table below
of Rp9 billion;
- BRI Syariah loan facility in the amount of
Rp1,402 million;
- Bank Syariah Mandiri loan facility in the
amount of Rp1,297 million; and
- Syndicated loan facility of BNI, BRI and
Bank Mandiri in the amount of Rp749
million.
F. Working Capital
Net working capital, calculated as the difference
between current assets and current liabilities,
amounted to a deficit Rp3,866 billion as of
December 31, 2012 and surplus Rp4,638 billion
(US$381 million) as of December 31, 2013. The
increase in net working capital was primarily due to:
- A substantial increase of Rp2,534 billion in other
current financial assets;
- An increase of Rp1,578 billion in cash and cash
equivalents; and
- An increase of Rp3,926 billion in trade payables
from third parties.
This was partially offset by:
- A decrease of Rp899 billion in accrued expense;
- A decrease of Rp528 billion in current maturities
of long-term liabilities; and
Ratios
2013
2012
Debt to equity ratio
Debt to EBITDA
33.5%
46.4%
37.4%
48.0%
Times interest earned ratio
29.0 times
19.5 times
For detail discussion about our debt, see Notes
17-21 to our Consolidated Financial Statements.
H. Receivable Collectibility
Our receivable collectability, indicated by the ratios
average collection period that show an average
of days that we take to collect our receivable and
receivable turnover that show how many times in
average the funds invested in receivable are turned
in one year.
Our average collection period were 26.5 days in
2013 and 24.7 days in 2012. Our receivable turnover
for 2013 and 2012 were 13.8 and 14.8
We have made provision for impairment of
receivables based on the collectability amount
of the historical impairment rates and individual
account of its customers’ credit quality and credit
history, amounted to Rp2,872 in 2013 and Rp2,047
billion in 2012. As of December 31, 2012 and 2011, the
carrying amount of our receivables considered past
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PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
due but not impaired amounted to Rp2,418 billion
ratios with reference to regional peers in the
and Rp2,189 billion, respectively. We concluded that
telecommunications industry.
past due but not impaired receivables, along with
receivables that are neither past due nor impaired,
For detail discussion about management policy on
are due from customers with good debt history and
capital structure, see Note 45 to our Consolidated
are expected to be recoverable.
Financial Statements.
For detail discussion about our receivable, see Note
J. Capital Expenditures
6 to our Consolidated Financial Statements.
In 2013, we incurred capital expenditures of
I. Capital Structure
Rp24,898 billion (US$2,046 million), less than
the originally budgeted Rp27,243 billion. This
Our capital structure as of December 31, 2013 is
decrease was mainly due to the delay of our SCCS
described as follows:
development projects.
Short Term Debt
Long Term Debt
Debt Total
Equity Attributable to Owner
Amount
(Rp billion)
Portion
(%)
Our capital expenditures are grouped into the
following categories for planning purposes:
432
19,824
20,256
60,542
0.5
24.6
25.1
74.9
- Broadband services, which consist of broadband,
IT, application and content and service node;
- Network infrastructure, which consists of core
transmission network, metro-ethernet and
Total Invested Capital
80,798
100.0
Regional Metro Junction (“RMJ”), IP backbone
and satellite;
We take a qualitative approach towards our capital
- Optimizing legacy, for wireline; and
structure and debt levels. Under our syndicated loan
- Capex supports.
agreement with BNI, BRI and Bank Mandiri, we are
required to maintain a debt to equity ratio of not
Of our Rp24,898 billion capital expenditure in
more than 2.0 and debt service coverage ratio of
2013, Telkom (as parent company) incurred capital
more than 1.25. As of December 31, 2013, our debt
expenditures of Rp5,313 billion (US$437 million),
to equity ratio was 33.5% and our debt service
Telkomsel incurred capital expenditures of Rp15,662
coverage ratio was 6.2, indicating our strong ability
billion (US$1,287 million) and our other subsidiaries
to meet our debt obligations. Our debt levels are
incurred capital expenditures of Rp3,923 billion
primarily driven by our plans to develop our existing
(US$322 million) as follows:
and new strategic businesses. In determining our
optimum debt levels, we also consider our debt
Table of realization of our capital expenditure
Telkom (parent company)
Broadband service
Network service
Optiming legacy
Support
Subtotal for Telkom
Subsidiaries
Telkomsel
Others
Subtotal for subsidiaries
Total for Telkom Group
Years Ended December 31,
2013
(Rp billion)
2012
(Rp billion)
2011
(Rp billion)
3,285.5
1,674.4
191.0
162.1
1,662.0
2,060.0
86.0
232.0
1,875.0
1,979.0
156.0
192.0
5,313.0
4,040.0
4,202.0
15,662.0
3,923.0
19,585.0
24,898.0
10,656.0
2,576.0
13,232.0
17,272.0
8,472.0
1,929.0
10,401.0
14,603.0
Actual future capital expenditures may differ from the amounts indicated above due to various factors,
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
123
including but not limited to the Indonesian economy,
For more detailed discussion regarding our
the Rupiah/US Dollar and Rupiah/Euro exchange
material commitments for capital expenditures,
rates and other applicable foreign exchange rates,
see Note 41A to our Consolidated Financial
the availability of vendor or other financing on terms
Statements.
acceptable to us, technical or other problems in
obtaining or installing equipment and whether we
2. Source of Funds
enter any new lines of business.
K. Material Commitment For Capital
Investment
Historically, we have good leverage and
funded our capital expenditures from cash
operating activities and external funds are
still in the optimal capital structure. In 2014,
we allocate capital expenditure increased
1. Purpose of the Commitment
significantly in accordance with the company's
As of December 31, 2013, we had material
business expansion plan, the amount of capital
commitments for capital expenditures under
expenditure to revenue ratio in the range of 25%-
certain contractual arrangements of Rp18,461
30%. The increase in capital expenditure is the
billion, principally relating to procurement and
most significant will be allocated in proportion to
installation of switching equipment, transmission
the increase in broadband services and also to
equipment and cable network. These include,
the subsidiary entities.
among others, broadband access development
with MSAN platform, GPON project, metro
We expect to fund the above commitments with
Ethernet expansion project, Sumatra-Bangka
our internal and external sources of funds. See
SBCS project, Tarakan-Tanjung Selor TSCS
explanation on “Capital Expenditures”.
project, Luwuk-Tutuyan TSCS project, DWDM
and DWDN project, new fiber optic cable
3. Denomination of Currency
deployment as an alternative route, JASUKA ISP
As of December 31, 2013, details of material
WDM Sumatera Bangka Cable System , IP Radio
commitment for capital investment by currency
Equipment project, XGPON project, Telkom
are as follows:
cache system project, TITO project, Indonesia
Wi-Fi project, VPN CISCO project, OSP FTTH
Currencies
project, Internet Protocol Backbone (“IPBB”)
project, Wireless Access Gateway project,
Sulawesi Maluku Papua cable system, PE Speedy
project, Surabaya-Ujung Pandang-Banjarmasin
Backbone Ring Capacity project and Wi-Fi
CISCO project.
Our subsidiary, Telkomsel, has material
commitments for capital expenditures related,
among others, to the construction of combined
2G and 3G core network as well as maintenance
and procurement of equipment and related
services for Next Generation Convergence,
IP RAN Rollout and Technical Support, Next
Generation Convergence Core Transport Rollout,
Gateway GPRS Support Node (“GSSN”). In
addition, TelkomProperty, Mitratel and Telin
also have material commitment for capital
expenditures, each related to construction
of Telkom Landmark Tower building,
telecommunication towers and OSS-BSS-VAS
System Rollout and Radio Access Network
(“RAN”) procurement..
Rupiah
US Dollar
JPY
Euro
SGD
Amounts in
Foreign Currencies
(in millions)
Equivalent in
Rupiah
-
660
58.0
0.3
0.2
10,404
8,043
7
5
2
18,461
4. Planned Actions to Mitigate Foreign Exchange
Risks
We are exposed to foreign exchange risk on
sales, purchases and borrowings transactions
that are denominated in foreign currencies,
primarily in US Dollars and Japanese Yen.
Nevertheless, our exposure to foreign exchange
rates risk is not material.
Management provides written policy for foreign
currency risk management mainly through
time deposits placements and hedging to
cover foreign currency risk exposures for the
time range of 3 up to 12 months. Increasing
risks of foreign currency exchange rates on our
124
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PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
obligations are expected to be offset by time deposits and receivables in foreign currencies that are equal to
at least 25% of the outstanding current liabilities.
For detail discussion on material commitments for capital investment, see Notes 41 and 44 to our
Consolidated Financial Statements.
OTHER DISCLOSURES
A. Changes In Accounting Policies
There are no changes in accounting policies implemented in the preparation of the 2013 Consolidated Financial
Statements, except for the implementation of a number of financial accounting standards (SAK) that have been
revised and are effective as of January 1, 2013 , among others:
SAK
PSAK 38
(revised 2012)
, "Common
Control
Business
Combination "
PSAK 60
(revised
2010),
"Financial
Instruments:
Disclosures
Impact of SAK Application
The company shall:
- implement pooling of interest method for an entity that received the business, with assumption at the initial
business merger under common control, and not since the beginning of the comparative period;
- the entity that receives as well as the one that dispose the business, in a business combination under common
control, shall recognize the difference between compensation transferred or received, and the carrying amounts
of each transaction of the business combination under common control, or the carrying amounts of the business
disposed in the equity statement and present it as the additional paid-in capital.
The company shall:
- provide qualitative disclosure in the context of quantitative disclosures related to credit risk, liquidity risk and
market risk;
- eliminate the requirement on exception to disclosures of credit risk, liquidity risk and market risk due to materiality
limits;
- exception to disclosure of maximum value of credit risk exposure of financial instruments which carrying amount
represent the best amount of maximum exposure to credit risk; disclosure of financial effect of collaterals held
as security and other credit quality improvement, with reference to the numbers that best reflects the maximum
exposure to credit risk; and remove the disclosure requirements of the carrying amount of financial assets that are
not yet due, or those that are not impaired based on renegotiated;
- eliminate disclosure requirements description of collateral held as security and other credit quality improvement
and the estimated fair value of financial assets that are past due at the end of the reporting period but not
impaired, and for financial assets that are individually determined to be impaired;
- emphasizing the disclosure requirements of financial assets or non-financial assets acquired during the period
through transfer of ownership of collateral held as security, or require other credit quality improvement (eg.
guarantees), and those assets meet the recognition criteria in other relevant PSAK;
- eliminate the requirement on implementing guidelines for disclosure related to materiality, as this requirement is
basically covered in PSAK 1 "presentation of financial statements"
For comprehensive discussions on significant changes of statement of financial accounting standards (PSAK),
see Note 2a to the Consolidated Financial Statements.
B. Changes In Laws And Regulation
During the year 2013 there were no changes in laws and regulation that significantly influence the Company. See
discussion in “Additional Information (for ADR Shareholders) – Legal Basis and Regulation”.
C. Exchange Controls
1. Exchange Rate Information
The following table shows the exchange rate of Indonesian Rupiah to US Dollar based on the middle
exchange rate which is calculated based on the Bank Indonesia buying and selling rates for the periods
indicated.
Exchange Rate Information
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
125
Calendar Year
at Period End
Average
Low
High
(Rp Per US$1)
2009 (1)
2010 (1)
2011 (1)
2012 (1)
2013
September(2)
October(2)
November(2)
December(2)
2014
January(2)
February(2)
9,400
8,991
9,068
9,670
12,189
11,613
11,234
11,977
12,189
11,634
12,226
11,634
10,356
9,078
8,773
9,419
11,597
11,346
11,367
11,613
12,087
12,057
12,180
11,935
11,980
9,365
9,170
9,670
12,270
11,613
11,593
11,977
12,270
12,267
12,267
12,251
9,400
8,924
8,508
9,000
10,922
10,922
11,018
11,354
11,830
11,620
12,047
11,620
Source: Bank Indonesia
(1) Determined based upon the last day middle exchange rate of each month announced by Bank Indonesia applicable for the period.
(2) Determined based upon the daily middle exchange rate announced by Bank Indonesia during the applicable period.
Under the current exchange rate system, the exchange rate of the Indonesian rupiah is determined by the
the exchange system. For example, only banks
market, reflecting the interaction of supply and
demand in the market. However, Bank Indonesia
are authorized to deal in foreign exchange
may take measures to maintain a stable
and execute exchange transactions related to
exchange rate. For the year 2013, the average
the import and export of goods. In addition,
rate of Rupiah to the US Dollar was Rp11,597, with
Indonesian banks (including branches of foreign
the lowest and highest rates being Rp12,270 and
banks in Indonesia) are required to report to
Rp10922, respectively.
Bank Indonesia any fund transfers exceeding
US$10,000. As a State-Owned Company, and
The exchange rates used for translation of
based on the decree of the Head of PKLN, we
monetary assets and liabilities denominated
are required to obtain an approval from PKLN
in foreign currencies are the buy and sell rates
prior to acquiring foreign commercial loans and
published by Reuters in 2011, 2012 and 2013. The
must submit periodical reports to PKLN during
Reuters buy and sell rates, applied respectively
the term of the loans.
to monetary assets and liabilities, were Rp9,060
and Rp9,075 to US$1.00 as of December 31,
D. Quantitative And Qualitative Disclosures
2011, Rp9,630 and Rp9,645 to US$1.00 as of
December 31, 2012 and Rp12,160 and Rp12,180 to
About Market Risks
We are exposed to market risks that arise from
US$1.00 as of December 31, 2013.
changes in exchange rates, interest rates, credit
risk and liquidity risk, each of which will have an
The Consolidated Financial Statements are
impact on us. We do not generally hedge our long-
stated in Rupiah. The translations of Rupiah
term liabilities in foreign currencies but hedge our
amounts into US Dollar are included solely for
obligations for the current year. As of December
the convenience of the readers and have been
31, 2013, assets in foreign currencies reached
made using the average of the market buy and
87% against our liabilities denominated in foreign
sell rates of Rp12,170 to US$1.00 published by
currencies. Our exposure to interest rate risk is
Reuters on December 31, 2013.
managed through a mix of fixed and variable rate
2. Foreign Exchange Controls
liabilities and assets, including short-term fixed rate
assets. Our exposure to such market risks fluctuated
Indonesia operates a liberal foreign exchange
during 2011, 2012 and 2013 as the Indonesian
system that permits the free flow of foreign
economy was affected by changes in the US Dollar-
exchange. Capital transactions, including
Rupiah exchange rate and interest rates themselves.
remittances of capital, profits, dividends and
We are not able to predict whether such conditions
interest, are free of exchange controls. A number
will continue during 2014 or there after.
of regulations, however, have an impact on
1. Exchange Rate Risk
We are exposed to foreign exchange risk on
126
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PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
sales, purchases and borrowings that are denominated in foreign currencies, primarily in U.S. dollar and
Japanese yen. Our exposures to other foreign exchange rates are not material. Increasing risks of foreign
currency exchange rates on our obligations are expected to be offset by time deposits and receivables in
foreign currencies that are equal to at least 25% of the outstanding current liabilities.
The information presented in the following table is based on assumptions of selling and buying rates in
US Dollar as well as other currencies, which were quoted by Reuters on December 31, 2013 and applied
respectively to monetary assets and liabilities. The buying and selling rates as of December 31, 2013 were
Rp12,160 and Rp12,180 to US$1, respectively.
However, we believe these assumptions and the information described in the following table may be
influenced by a number of factors, including a fluctuation and/or depreciation of the Rupiah in the future.
Outstanding Balance
as of December 31,
2013
Foreign
Currency
(million)
Rp Equiv.
(Rp
million)
Expected Maturity Date
2014
2015
2016
2017
2018
There
After
Fair Value
(Rp million)
ASSETS
Cash and Cash
Equivalents
US Dollar
394.30 4,801,232
4,801,232
Japanese Yen
1.23
142
142
Other(1)
11.42
138,826
138,826
Other Current
Financial Assets
US Dollar
10.78
131,256
131,256
Trade Receivables
Related Parties
US Dollar
2.44
29,660
29,660
Third Parties
US Dollar
Other(1)
Other Receivables
US Dollar
Other(1)
Other Current
Assets
66.27
806,437
806,437
0.17
2,030
2,030
0.68
0.13
8,271
1,584
8,271
1,584
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,801,231
142
138,825
-
131,256
-
29,660
-
-
-
-
806,437
2,030
8,271
1,583
US Dollar
-
-
-
-
-
-
-
-
-
Other(1)
-
-
-
-
-
-
-
-
-
Advances and
Other Non-current
Assets
US Dollar
5.76
70,253
70,253
-
-
-
-
-
70,253
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
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Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
127
Outstanding Balance
as of December 31,
2013
Foreign
Currency
(million)
Rp Equiv.
(Rp
million)
Expected Maturity Date
2014
2015
2016
2017
2018
There
After
Fair Value
(Rp million)
LIABILITIES
Trade Payables
Related Parties
US Dollar
1.40
17,014
17,014
Third Parties
US Dollar
275.35 3,356,036
3,356,036
Other(1)
4.33
52,711
52,711
Other Payables
US Dollar
Other(1)
Accrued Expenses
7.62
92,939
92,939
0.09
1,145
1,145
US Dollar
51.41
626,637
626,637
Japanese Yen
18.63
2,158
Other(1)
0.01
175
2,158
175
Advances from
Customers and
Suppliers
US Dollar
Other(1)
Current Maturities
of Long-term
Liabilities
1.60
0.01
19,526
19,526
122
122
US Dollar
34.85
424,611
424,611
Japanese Yen
767.90
88,976
88,976
Promissory Notes
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
US Dollar
28.67
349,169
276,022
39,690
33,457
Long-term
Liabilities(2)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17,014
- 3,356,036
-
52,711
-
-
-
-
-
-
-
92,938
1,145
626,637
2,158
175
19,526
122
-
-
465,501
116,603
-
348,665
US Dollar
78.82
960,416
Japanese Yen
7,678.98
889,763
-
-
352,264
240,707
154,036
54,318
159,091
972,764
88,976
88,976
88,976
88,976
533,859
893,355
(1) Assets and liabilities denominated in other foreign currencies are presented as US Dollars equivalents using the buy and sell rates quoted by
Reuters prevailing at the end of the reporting period.
(2) Long-term liabilities for the purpose of this table consist of loans denominated in foreign currencies from two-step loans, obligation under finance
leases and long-term bank loans, which in each case include their current maturities.
2. Interest Rate Risk
Our exposure to interest rate fluctuations results primarily from changes to the floating rate applied for
long-term debt. This risk relates to loans under the Government on-lending program that has been used to
finance our capital expenditures. Interest rate fluctuation is monitored to minimize any negative impact to
128
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Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
financial position. Borrowings at variable interest rates expose our Company and our subsidiaries to interest
rate risk. To measure market risk fluctuations in interest rates, our Company and our subsidiaries primarily
use interest margin and maturity profile of the financial assets and liabilities based on changing schedule of
the interest rate.
The actual cash flows from our debt are denominated in Rupiah, US Dollar and Japanese Yen, as appropriate
and as indicated in the table. The information presented in the table has been determined based on the
following assumptions: (i) fixed interest rates on Rupiah time deposits are based on average interest rates
offered for three month placements in effect as of December 31, 2013 by the banks where such deposits
were located; (ii) variable interest rates on Rupiah denominated long-term liabilities are calculated as of
December 31, 2013 and are based on contractual terms setting interest rates based on average rates for
the preceding six months on three month certificates issued by Bank of Indonesia or based on the average
three month deposit rate offered by the lenders; (iii) fixed interest rates on US Dollar deposits are based
on average interest rates offered for three month placements by the various lending institutions where
such deposits are located as of December 31, 2013 and (iv) the value of marketable securities is based on
the value of such securities on December 31, 2013. However, these assumptions may change in the future.
These assumptions are different from the rates used in our Consolidated Financial Statements; accordingly,
amounts shown in the table may differ from the amounts shown in our Consolidated Financial Statements.
Interest Rate Risk
Outstanding Balance
as of December 31, 2013
Original
Currency
(million)
Rp Equiv.
(Rp
million)
Rate
(%)
Expected Maturity Date
2014
2015
2016
2017
2018
There
after
Fair Value
(Rp million)
ASSETS
Fixed Rate
Cash and
Cash
Equivalents
Time deposit
Rupiah
8,185,170
8,185,170
US Dollar
309
3,767,769
1.00-
10.75
0.03-
3.00
8,185,170
3,767,769
Available-
for-Sale
Financial
Assets
Rupiah
140,782
140,782
1.60-
10.50
140,782
US Dollar
11
131,256
1.00-1.10
131,256
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,185,170
-
3,767,769
-
140,782
-
131,256
LIABILITIES
Short-term
Bank Loans
Variable Rate
Rupiah
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
129
Outstanding Balance
as of December 31, 2013
Original
Currency
(million)
Rp Equiv.
(Rp
million)
Rate
(%)
Principal
431,751
431,751
431,751
Interest
8,868
8,868
8,868
-
-
-
-
-
-
US Dollar
Principal
Interest
Long-term
Liabilities
Variable Rate
Rupiah
Expected Maturity Date
2014
2015
2016
2017
2018
There
after
Fair Value
-
-
-
-
-
-
-
-
(Rp million)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
431,751
-
-
-
Principal
9,233,335
9,233,335
3,685,445
2,651,044
950,368
835,399
1,101,079
- 9,026,752
Interest
1,661,906
1,661,906
6.58-11
635,136
416,386
221,357
141,741
247,286
-
-
US Dollar
Principal
83
1,008,692
473,948
264,718
175,757
94,269
Interest
2
21,332
1.17-3.25
11,228
6,402
2,806
896
-
-
-
1,033,891
-
-
Fixed Rate
Rupiah
Principal
3,000,000
3,000,000
-
1,005,000
-
-
1,995,000
-
3,141,774
Interest
1,471,571
1,471,571
6-11
299,970
253,070
203,490
203,490
511,551
US Dollar
Principal
53
643,807
196,624
126,358
53,911
53,911
213,003
Interest
7
82,847
4-11
24,982
16,136
12,331
10,142
19,256
-
-
-
-
671,332
-
Japanese Yen
Principal
8,447
978,739
88,976
88,976
88,976
88,976
622,835
-
1,009,958
Interest
1,506
174,511
3.1
29,646
26,887
24,197
21,371
72,410
-
-
Finance
Leases
Rupiah
Principal
4,897,255
4,897,255
619,554
505,559
516,397
547,251
544,922 2,163,572
4,897,255
Interest
1,927,184
1,927,184
419,551
357,392
310,156
260,375
208,217
371,493
1,927,184
US Dollar
Principal
Interest
7
1
71,100
9,085
28,000
19,541
18,138
5,068
353
3,215
2,639
2,506
685
40
-
-
71,100
9,085
(1) Long-term liabilities consist of loans which are subject to interest; namely two-step loans, bonds and notes, obligation under finance leases and
long-term bank loans, which in each case include their maturities.
130
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
E. Related Party Transactions
We are party to certain agreements and engage in transactions with certain parties that are related to us,
such as cooperatives and foundations. Such parties include the Government and entities related to or owned
or controlled by the Government, such as other State-Owned Enterprises. It is the Company's policy that the
pricing of these transactions be the same as those of arm’s-length transactions. For further details on our
related party transactions, see Note 37 to our Consolidated Financial Statement.
Revenue and Expenses Transaction with Affiliate
2013
2012
Description
Amount
%
of total
revenue
Amount
%
of total
revenue
Difference
%
REVENUE
Entity Under Common Control
Kisel
Indosat
Gratika
Lintasarta
Sub total
Associated Company
Indonusa2
CSM
Patrakom1
Others (each below Rp30 billion)
Total
2,751
1,053
342
64
4,210
45
31
-
99
4,385
3.3
1.3
0.4
0.1
5.1
0.1
0.0
-
0.1
5.3
2,351
1,033
3
85
3,472
-
47
80
27
3,626
3.1
1.3
0.0
0.1
4.5
-
0.1
0.1
0.0
4.7
400
17.0
20
1.9
339
11.300
(21)
(24.7)
738
21.3
45
100
(16)
(34.0)
(80)
(100.0)
72
266.7
759
20.9
2013
2012
Description
Amount
%
of total
expense
Amount
%
of total
expense
Difference
%
EXPENSES
Entity Under Common Control
Indosat
Kisel
Kopegtel
PLN
1,008
743
692
651
1.8
1.3
1.2
1.1
1,004
825
817
660
1.9
1.6
1.6
1.3
4
0.4
(82)
(9.9)
(125)
(15.3)
(9)
(1.4)
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
131
Jasindo
SPM
PT Pos Indonesia
Jamsostek
Sub total
Entity under significant influence
Yakes
Associated Company
PSN
CSM
Patrakom1
Sub total
Others (each below Rp30 billion)
Total
333
118
64
39
3,648
0.6
0.2
0.1
0.1
6.4
370
25
51
36
0.7
0.0
0.1
0.1
(37)
(10.0)
93
372.0
13
3
25.5
8.3
3,788
7.3
(140)
(3.7)
159
0.3
150
0.3
9
6.0
187
63
-
250
80
4,137
0.3
0.1
-
0.4
0.1
7.2
165
100
73
338
34
0.3
0.2
0.1
0.7
0.1
22
13.3
(37)
(37.0)
(73)
(100.0)
(88)
(26.0)
46
135.3
4,310
8.3
(173)
(4.0)
(1) Patrakom become a subsidiary on September 25, 2013.
(2) On October 8, 2013,the Company sold its 80% ownership in Indonusa.
F. Property & Equipment
Our property and equipment is used for telecommunication operations, which mainly consist of transmission
installation and equipment, cable network and switching equipment. A description of these is contained
elsewhere in Note 11 to our Consolidated Financial Statements.
Except for ownership rights granted to individuals in Indonesia, reversionary rights to land rests with the
Republic of Indonesia, pursuant to Agrarian Law No.5/1960. Land title is designated through land rights,
including Right to Build (Hak Guna Bangunan or HGB) and Right of Use (Hak Guna Usaha or HGU). Land title
holders enjoy full use of the land for a specified period, subject to renewal and extensions. In most instances,
land rights are freely tradable and may be pledged as security under loan agreements.
We own several pieces of land located throughout Indonesia with right to build and use for a period of 2-45
years, which will expire between 2014 and 2052. We believe that there will be no difficulty in obtaining the
extension of the land rights when they expire.
As of December 31, 2013, we, including our subsidiaries, had land use rights to 2,995 properties. We hold
registered rights to build and use for most of our properties. Pursuant to Government Regulation No.40/1996,
the maximum initial period for the right to build is 30 years, renewable for an additional 20 years. We are not
aware of any environmental issues that could affect the utilization of our property and equipment. All assets
owned by our Company have been pledged as collateral for bonds. Certain property and equipment of our
subsidiaries with gross carrying value amounting to Rp6,214 billion as of December 31, 2013 have been pledged
as collateral for lending agreements.
132
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Preface
Highlights
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Our property and equipment, excluding land, are
transaction has been reviewed by an
insured against risks arising from earthquake,
tsunami, eruption, fire, theft, lightning, acts of
God and other risks. Our assets are covered
under Property All Risk Insurance Policies on a
independent party. This SPA results in
the Company’s ownership in Patrakom to
increase from 40% to 80%.
sum insured basis and a first loss basis scheme.
(i). Transaction With Non Affiliate
Our insurance policies also include coverage
On November 29, 2013, based on notarial
against temporary interruptions of our business.
deed No. 54 of Ashoya Ratam, S.H.,
Our Telkom-1 and Telkom-2 satellites are insured
M.Kn, the Company entered into a SPA
separately. Our management believes that our
with PT Tanjung Mustika, Tbk for the
insurance coverage is adequate to cover potential
Company’s acquisition of the remaining
losses from the insured risks.
G. Insurance
20% Patrakom for Rp24.8 billion. This SPA
results in the Company’s ownership in
Patrakom to increase from 80% to 100%.
Our property and equipment, excluding land, are
Through the acquisition of Patrakom,
insured against risks arising from earthquake,
tsunami, eruption, fire, theft, lightning, acts of
God and other risks. Our assets are covered
under Property All Risk Insurance Policies on a
the Company can integrate Patrakom’s
business activities accordance with the
Company’s business development plan.
sum insured basis and a first loss basis scheme.
b. Divestment
Our insurance policies also include coverage
On October 8, 2013, the Company sold
against temporary interruptions of our business.
80% of its ownership in Indonusa to PT
Our Telkom-1 and Telkom-2 satellites are insured
Trans Cospora and PT Trans Media Corpora
separately. Our management believes that our
amounted Rp926 billion. Further on the
insurance coverage is adequate to cover potential
same date, the Company, Metra and PT
losses from the insured risks.
H. Material Information and Facts
1. Business Combination
a. Acquisition
(i). Transaction With Affiliate
Trans Corpora signed a Shareholders
Agreement in relation to mutual relationship
as shareholders of Indonusa, included the
right to the Company and Metra to sell its
20% remaining ownership in Indonusa to PT
Trans Corpora in 24 months after second
year of closing transaction on certain price
On September 25, 2013, based on notarial
(Put Option).
deed No. 22 of Ashoya Ratam, S.H. ,M.Kn,
the Company entered into a Sales and
2. Off-Balance Sheet Arrangements
Purchase Agreement (SPA) with PT
Our contingencies are described in Note 42
Elnusa Tbk for the Company’s acquisition
while our commitments are described in Note
of the 40% ownership in PT Patra
41a to our Consolidated Financial Statements
Telekomunikasi Indonesia (“Patrakom”)
and summarized in the Table of Contractual
for Rp45.6 billion. The Company is
Obligations on page 110-114 Other than the
related with Elnusa because of major
above, as of December 31, 2013, we had no
shareholder of the Company which is
off-balance sheet arrangements that were
the State of the Republic of Indonesia is
reasonably likely to have current or future
also the major shareholder of Pertamina
material effects on our financial position,
which is Pertamina is a shareholder of
revenues or expenses, results of operations,
Elnusa with 41.10% shareholding but
liquidity, capital expenditures or capital
there is no affiliate relationship in terms
resources.
of management between the Company
and Elnusa. In compliance with the
3. Subsequent Events after the Reporting Date
stock exchange regulation this affiliated
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
133
No
Date
Events
1
2
3
4
January 10, 2014
Sigma entered into short-term and long-term working capital credit facility agreements involving Rp25
billion and Rp322 billion, respectively, for the development of data center located in Sentul.
January 15, 2014
PT Graha Telkom sigma (GTS) and PT Granary Reka Cipta signed an agreement for the development
of utilization, and the development and processing of assets that belong to GTS located in Baturiti,
Tabanan Bali. The cooperation is carried out under a revenue-sharing agreement for 10 years.
January 20, 2014
The Company filed an objection to the Tax Underpayment Assessment for VAT for the year 2007 that
was received by the Company in November 2013 (Note 31).
January 22, 2014
Telkomsel received a formal verdict from the Tax Court concerning Telkomsel’s claim for tax refund for
import duties. Based on its verdict, the Tax Court accepted a portion of Telkomsel’s appeal. As of the
issuance date of the consolidated financial statements, Telkomsel plans to refund the accepted portion
of the claim amounting to Rp8.5 billion (Note 31).
5
January 23, 2014
The Company established subsidiary named PT Infrastruktur Telekomunikasi Indonesia (Telkom Infratel)
that had been legalized based on the Ministry of Law and Human Rights (MoLHR) Decision Letter No.
AHU-03196.AH.01.01. Year 2014.
6
January 29, 2014
The MoCI issued Decision Letter No. 42 Year 2014, granting Telkomsel the license to provide:
(1) Mobile telecommunication services with radio frequency bandwidth in the 900 MHz and 1800 MHz
bands;
(2) Mobile telecommunication services IMT-2000 with radio frequency bandwidth in the 2.1 GHz bands
(3G); and
(3) Basic telecommunication services.
These license replaced Decision letter No. 101/KEP/M.KOMINFO/10/2006 dated October 11, 2006.
7
January 30, 2014
The ITRB of Telkomsel, in its letter No. 118/KOMINFO/DJPPI/PI.02.04/01/2014, decided to implement
the new interconnection tariffs effective from February 2014 until December 2016, subject to evaluation
on an annual basis.
8
February 20, 2014
Infomedia made a drawdown from the credit facility from Bank UOB amounting to Rp70 billion.
The events above are expected to improve the Company’s performance in the future without posing a
material risk to the Company. For a complete discussion regarding subsequent events after the reporting
date, see Note 47 to our Consolidated Financial Statements.
4. Subsequent Events after the Accountant’s Report Date
We are not aware of any subsequent events occurred after the accountant’s report date until the issuance
date of this Annual Report.
134
134
2013 Annual Report
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
PT Telekomunikasi Indonesia, Tbk
Highlights
Highlights
Preface
Preface
Management
Management
Report
Report
Business
Business
Overview
Overview
Management’s
Management’s
Discussion & Analysis
Discussion & Analysis
Corporate
Governance
136
Concept and Foundation
137
Telkom’s GCG Framework and
Performance
172
Committees Under Board of
Director
185
Administrative Sanctions
175
Corporate Secretary/Investor
Relations (“IR”)
141
Corporate Governance
Structure
178
Internal Audit Unit
145
Board of Commissioners
180
Internal Control System
149
Board of Directors
181
Independent Auditor
185
Public Access to Information
186
Code of Ethics and Corporate
Culture
189
Whistleblowing System
192
GCG Implementation
Consistency
158
Committees Under the Board
of Commissioners
182
Risk Management
197
GCG Evaluation
183
Legal Proceeding and Lawsuits
Involving the Company
Corporate
Corporate
Governance
Governance
Social &
Social &
Environmental
Environmental
Responsibility
Responsibility
Company
Company
Profile
Profile
Additional
Additional
Information
Information
(For ADR
(For ADR
Shareholders)
Shareholders)
Appendices
Appendices
2013 Annual Report
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
PT Telekomunikasi Indonesia, Tbk
135
135
136
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Concept and Foundation
We have a commitment to become a learning organization, by turning its
organization into a knowledge based enterprise through competences
development in line with the company’s business needs in order to establish
center of excellent human capital in TIMES industry which can support business
performance and new culture implementation. Competent employees will create
business through blended-learning process, engaging resources in learning
process to participant to create a learning organization. We will be able to
respond the changes and to seize the opportunities provided by the changes
and capitalizing it to further build the company’s capacity and values in order
to achieve long term objectives and sustainability. It is none other than a true
embodiment of GCG which lead to our sustainable growth and future existence.
(GCG in the context of organizational learning perspective)
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
137
The year 2013 saw
the strengthening of
corporate governance
in the entire group
with the objective
of making the GCG
principles adhered
and aligned with
business demand and
the dynamic of the
industry, to which we
cope by transforming
our business portfolio
and organization.
The commitment to implement
GCG in organization reflect the
faith that GCG is a key element for
the successful achievement of an
effective, efficient and sustainable
business performance needed
to win the competition, and thus
ensures that the company could
properly fulfill its obligations
to its shareholders, customers,
employees, business partners,
the general public, and other
company’s stakeholders.
As our shares are listed and traded
at the BEI as well as NYSE, not
only is the implementation of GCG
shall conform to stipulations set
out in the Law for Limited Liability
Company and the Indonesian Code
of GCG as published by National
Committee on Governance Policies
("KNKG") in Indonesia, but the
effective practice of GCG shall
also conform to the provisions
of Sarbanes Oxley Act of 2002
("SOA") and other applicable rules
of the US SEC.
There are several provisions of
the issuance and signing of a Pact
SOA that apply to us, in particular,
of Integrity, proofing their full
those under: (i) SOA Section 404
commitment to the implementation
that require our management to
of GCG.
be responsible for the creation and
maintenance of adequate internal
The year 2013 was a year of
control over financial reporting
strengthening of GCG throughout
(“ICOFR”) to ensure the reliability
the group with the objective of
of our financial statements and that
ensuring that GCG implementation
they are prepared according to the
is always aligned with the growing
applicable accounting standards
demands in today’s business and
under Indonesia's Statements of
industry, to which we responded
Financial Accounting Standards
by transforming our business
and/or the IFRS; and (ii) those
portfolio and organization. The
under SOA section 302 that require
strengthening of our GCG was
our management to be responsible
built and the implementation of
for formulating, maintaining and
which is developed throughout
evaluating the effectiveness
the group towards the creation of
of our disclosure procedures
ethical business practices (GCG
and controls to ensure that
as ethics), integrity, proving that
information disclosed in reports is
GCG principles are inseparable part
in compliance with the Exchange
of day-to-day activities, focusing
Act and is recorded, processed,
on human and system. Through
summarized and reported within
the implementation of GCG, we
the period provided and then
strive to create a phase in which
accumulated and communicated
the company has been managed
to our management, including the
well (good-governed company
President Director and Director
- GGC). At this stage, we are not
of Finance, so that they can take
only able to manage risk well, but
decisions related to required
also has the ability to respond
disclosures.
to various changes, and seizing
the opportunities presented by
In regards the independence
these changes to improve the
of audit, we are in comply with
capacity and the value of the
provisions issued by the OJK
company, so as to support the
and the US SEC concerning the
achievement of company long-
independence of Audit Committee
term objectives and sustainability.
members.
(GCG in the perspective of learning
In line with the transformation
of our business portfolios into
TIMES businesses managed by us,
the implementation of GCG has
been further strengthened and
organization).
TELKOM’S GCG
FRAMEWORK AND
PERFORMANCE
developed within a group GCG
Our commitment to implement
framework. The commitment to
GCG is realized through the policies
create group GCG begins with
on the implementation of GCG
strengthening the commitment
and is stipulated in BoD Decree
from our BoC and BoD, through
No.29/2007 and strengthened
138
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
by the Guidance for Group
ensuring that every transaction,
internal control and supervision,
GCGNo.602/2011. This framework
whether internal or external, is
leadership, management of duties
integrates certain management
conducted in an ethical manner
and responsibilities, empowerment
systems as requirement or integral
and in accordance with good
of management and employee
part of GCG implementation,
corporate governance practices.
competences, performance
aiming to provide assurance for
The various systems involved
evaluation, and award and
the effective implementation
include: business ethics, policies
recognition.
of GCG up to operational level,
and procedures, risk management,
Road Map GCG
Investors
Vision &
Mission
Shareholders
BoC
BoD
Committee
Corporate Secretary
I
n
t
e
F
i
n
a
n
r
n
a
l
c
i
a
l
a
n
C
d
o
External
Transactions
E
x
t
e
m
m
u
r
n
a
l
n
i
t
y
A
u
d
i
t
G overn m ent and regulator
m unication & Disclosure
C o m
Internal
Transactions
Business
Ethics
Policy &
Procedures
Risk
Management
Internal Control &
Supervision
Effective
Leadership
Clarity of
Tasks and
Responsibilities
Management
Capability
and Employee
Competence
Effective
Performance
Evaluation
Reward and
Acknowledgement
Measurement and Accountability
Bussines Players and Business Community
A. Road Map & Good
Corporate Governance
Strengthening Initiatives
Over time, we continuously
mutually supporting each
of the company's performance
other towards the company’s
in a sustainable manner.
sustainable business growth. We
realize the need to anticipate
Our GCG implementation
refines and strengthen our GCG
the dynamics of business,
has gained recognition from
implementation, especially
through new initiatives of
integrating the management of
governance risk and compliance
(“GRC”) by managing
business performance, GCG,
risk management, legal
compliance, and corporate
social responsibility, which
therefore a number of GCG
external assessors and from the
initiatives will be continuously
perceptions of investors, and
explored and are designed to
we continually strive to improve
ensure the sustainability of the
the policy and infrastructure of
organization as we believe that
GCG support system through
rather than an impediment,
new initiatives to strengthen
GCG is actually capable of
governance, which we grouped
supporting a sustainable growth
into three main pillars include:
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
139
1. Strengthening of
Governance Structure
Develop governance
initiatives to strengthen
effective communication
and relationships between
the elements of the
corporate structure to avoid
potential agency problems
and to create an effective
chemistry between these
elements by monitoring
checks and balances
and to ensure that it is
characterized by the speed
and accuracy of decision
making, through: evaluation
and improvement of BoD/
BoC/Audit Committee
Charter, empowerment of
committees, implementation
of ”six-eyes principles”
to ensure accountability
of business initiatives,
internal control over financial
reporting, strengthening
leadership systems, and
implementation of notarial
others.
proxy, and others.
3. Strengthening of Culture
2. Strengthening of
Governance Process
Develop governance
initiatives to strengthen
the effective and efficient
governance of company
management, through:
implementation of
Enterprise Risk Management,
implementation of Pact
of Integrity within the
scope of business group,
strengthening IT governance,
remediation of internal
control and particularly of
Instill strong values through
the implementation of
our corporate culture and
business ethics as our capital
in doing business and having
an honorable workforce
with morals and integrity,
through implementation of
segregation of duty (“SOD”)
in business processes,
leadership role modeling,
ensuring business ethics
and prudent practices,
strengthening our corporate
values, and others.
Organizational Sustainable Chart
BUSINESS
PERFORMANCE
GOVERNANCE
BoD
Charter
BoC
Charter
Audit
Charter
Audit
Independen
STRUCTURE GOVERNANCE
Executive
Committee
Six Eyes
Principle
Notarial
Proxy
Audit
Committee
& KEMPR
ERM
PMS
IT
Governance
Internal
Control &
CSA
Early
Warning
Regularization
Memorandum &
Discrepancies
Report
Anti Fraud
Program
whistleblowing
System
RISK
PROCESS GOVERNANCE
COMPLIANCE
CORPORATE
SOCIAL
RESPONBILITY
GCG
SOD
Integrity
Pact
Job
Manual
Policy &
Procedures
Leadership
System
Competencies
Development
Reward &
Consequences
Legal &
Compliance
Prudential
Communication
CULTURE
Role
Modeling
Business
Ethics
Core
Values
ORGANIZATIONAL BELIEFS
KEMPR
ERM
PMS
: Planning and Risk Evaluation and Monitoring Committee
: Enterprise Risk Management
: Performance Management System
CSA
SOD
: Control Self-Assessment
: Segregation of Duties
140
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Following is the road map of the implementation and reinforcement of GCG from 2003-2015:
2003 – 2009
- Strengthening of GCG, Business
implementation of ”six eyes
principle” in business initiation
2013
- Strengthening of governance
Ethics, Distinct Job Manual
process.
("DJM") management, evaluation
of policies and procedures,
human resources competences
2010
- Strengthening of governance
structure through the
development, implementation
of GCG which involve business
group, by establishing Board
development, leadership
structure through policies in
of Executive to prepare the
development, strengthening of
notarial deeds and strengthening
Company’s capability in taking
independent audit, and others, in
of The Telkom Way corporate
strategic steps in managing
support of compliance with SOA
culture.
portfolio, which was supported
section 404 and section 302.
- Strengthening of governance
by a more suitable parenting
- Implementation of integrated
processes through risk
mechanism for business
audit (financial audit integrated
management as a culture.
ecosystem demand.
with ICOFR audit).
- Strengthening of IT governance.
- Evaluation and mapping of
2011
- Strengthening of governance
- Continuing to strengthening
of governance processes
to ensure harmonization of
policies, business processes and
structure through initiatives in
business process and business
operational processes.
developing Telkom Group GCG
transformation and organization
- Strengthening of governance
by establishing Telkom Group
transformation to “New Telkom”
structure involving: strengthening
GCG Manual as regulated in
in accordance with the Company
of BoC/BoD/Audit Committee
Company Policy No.PD.602/2011.
Office Organization Policy of
Charter, revitalization of executive
- Strengthening of governance
Telkom Group No.202.11/2013.
committees, development of
processes to ensure effective risk
Enterprise Risk Management
management and compliance
("ERM"), development of early
functions at the Company.
warning reports, implementation
of anti-fraud programs.
- Strengthening of governance
2012
- Strengthening of governance
2014
- Strengthening of governance
structure through the
implementationof GCG of
organization with a character
processes by ensuring the
structure through empowerment
of a holding company, which
existence of formal policies in all
of Telkom Group GCG,
processes to ensure responsibility
development of GCG
include the subsidiaries, through
the implementation of Board of
and accountability.
implementation checklist and
Executive mechanism and its
- Strengthening of governance
GCG self-assessment manual for
refinement.
structure through management
subsidiaries, and establishment
- Strengthening of governance
initiatives, among others:
of Directors of subsidiaries
processes through disciplined
implementation of regularization
as members of Telkom Group
implementation of ISO
memorandum, discrepancy
Executive Board and Vice
certification-based processes in
reporting, and strengthening of
President Telkom according to
the ”New Telkom”.
whistleblowing system.
the duties and responsibilities
- Strengthening of governance
as Group Head Telkom Group,
processes to realize risk
as regulated in Company
2015
- Strengthening of governance
management as a necessity in
Office Organization Policy
structure through the
each process and a discipline risk
No.PD.202/2012.
implementation of GCG
implementation.
- Strengthening of governance
assessment of subsidiaries.
- Strengthening of governance
processes to ensure
- Strengthening of governance
structure through policies
harmonization of business
processes to ensure ISO
of Pact of Integrity and the
processes with business and
certification/surveillance.
organization transformation.
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141
CORPORATE GOVERNANCE
STRUCTURE
assure the supervision on the
implementation of GCG was
conducted independently and
In enhancing our GCG practices,
comprehensively to reach the
we aim to improve both the
target of efficiency throughout
structure and the implementation
the company, as well as
process and ensure that the
principles of transparency,
accountability, responsibility,
independence and fairness
are applied at each level of
the company. This is aimed at
mitigating the risk of conflict
of interest in the execution
of the duties, functions and
responsibilities of our BoC, BoD,
management and employees.
Internally, the structure and the
safeguarding the company’s
integrity before the authorities
and public in general.
A. General Meeting of
Shareholders (“GMS”)
Subject to our Articles
of Association, the GMS,
comprising the Annual GMS
(“AGMS”) and Extraordinary
GMS (“EGMS”) constitute
our highest governance
body and are the primary
forums through which
procedure of GCG implementation
shareholders exercise their
is stipulated in the BoD Decree
on Guidance of GCG Management
No.29/2007 and No.602/2011,
which sets out an integrated
operational framework to
ensure that every transaction,
both internal and external, is
conducted in accordance with
the code of conduct or the
best GCG practices. Every year
we evaluate the effectiveness
of our implementation of this
policy. In the same time, we also
rights and authority over the
management of our company.
The AGMS must be held once
a year, while an EGMS may
be convened at any time, as
needed.
1. Telkom Shareholders
There are 2 (two) classes of
shares in Telkom, namely 1
Series A Dwiwarna Shares
(as controlling shareholder)
and 97.100.853.599 Series
B Shares. For more detail
Our GCG
implementation has
gained recognition
by external
assessors as well as
investors’perceptions,
and we strive to
improve the policies
and infrastructure
in support of GCG
through new initiatives
in strengthening our
corporate governance,
which falls into three
main pillars, namely:
Strengthening
Governance Structures,
Strengthening
Governance Processes,
Strengthening Culture.
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
about our shareholder
benefits of members of
its influence over management
composition diagram, see
the BoC and BoD;
in voting sessions or on other
Company Profile – Stock
- evaluating the
matters. The Government has
Overview – Shareholder
Company’s performance
exclusive rights to approve
Composition.
during the year under
mergers, acquisitions and
2. Shareholders Rights &
review;
divestment, or to liquidate our
Responsibility
At the AGMS and EGMS,
shareholders are entitled
to equal treatment and
standing, particularly in
expressing their opinions
and contributing to the
- deciding on the use of
Company based on decisions of
the Company’s profits,
the AGMS or EGMS.
including dividends; and
- amendments to the
The mechanism for exercising
Articles of Association.
voting rights by shareholders
The AGMS also has the
during an AGMS or EGMS
authority to approve the
provides for shareholders to
process of taking important
Financial Statement and
exercise their right to vote either
and strategic decisions in
Annual Report.
in person or through their legal
relation to:
proxy.
-
the election and
The Government of Indonesia, as
termination of the BoC
our controlling shareholder and
In 2013 we held the AGMS on
and the BoD;
holder of the Dwiwarna Series A
19 April 2013 with agenda &
- setting the amount
shares, is required to be aware of
resolutions as follow:
of remuneration and
its responsibility when exercising
Agenda
Agenda 1
Approve the Company’s Annual Report as presented by the Board of Directors, on the Company’s
condition and operation for the 2012 Financial Year including the Board of Commissioners’
Supervision Duty Report for the 2012 Financial Year.
AGM'S Decisions
Agenda 2
1. Ratify:
a. The Company’s Consolidated Financial Statements for the 2012 Financial Year audited by
the Public Accounting Firm Purwantono, Suherman & Surja (a member firm of Ernst & Young
Global Limited) according to its report No.RPC-3302/PSS/2013 dated February 28, 2013 with
unqualified opinion.
b. Partnership and Community Development Annual Report for the 2012 Financial Year in
conformity with Ministry of State Owned Enterprises Regulation with comprehensive
accounting bases besides Indonesian Financial Accounting Standards, audited by the Public
Accounting Firm Purwantono, Suherman & Surja (a member firm of Ernst & Young Global
Limited) according to its report No.RPC-3319/PSS/2013 dated March 11, 2013 with unqualified
opinion.
2. Consequently, by the approval of the Company’s Annual Report and Consolidated Financial
Statements) for the 2012 Financial Year and Annual Report on Partnership and Community
Development Program for the 2012 Financial Year, the AGMS hereby gives a full acquittal and
discharge (volledig acquit et decharge) to all members of the Board of Directors and Board
of Commissioners (including all of the Board of Directors and the Board of Commissioners
who quit/ended his term of office at the closing AGMS held in 2012) for their management
and supervision and for their management and supervision of Partnership and Community
Development Program performed during the 2012 Financial Year, to the extent are reflected in
the Company’s Annual Report, Consolidated Financial Statements for 2012 Financial Year and
Annual Report of Partnership and Community Development for the 2012 Financial Year above
and the actions do not contradict the prevailing laws and regulations.
Corporate
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143
Agenda
AGM'S Decisions
Agenda 3
1. Approve the appropriation of the Company’s net profit for the 2012 Financial Year in the amount
of Rp12,850,149,714,095,- which will be distributed as follows:
a. Cash dividend 55% of the net profit or in the amount of Rp7,067,582,342,752,- or at least of
Rp369.082 per share based on the number of shares issued (not including the shares bought
back by the Company) as of the Meeting date;
b. Special cash dividend 10% of the net profit or in the amount of Rp1,285,014,971,410,- or at
least of Rp67.016 per share based on the number of shares issued (not including the shares
bought back by the Company) as of the Meeting date;
c. Recorded as Retained Earning in the amount of Rp4,497,552,399,933,- which will be used for
the Company’s development.
2. Approve that the distribution of dividends for the 2012 Financial Year will be conducted with the
following conditions:
a. those who are entitled to receive Dividends are shareholders whose names are recorded in
the Company’s Register of Shareholders on June 3, 2013 at 16:00 hours Western Indonesia
Standard Time;
b. the Cash Dividend and Special Cash Dividend shall be paid in one lump sum on June 18, 2013.
3. The Board of Directors shall be authorized to regulate further the procedure of Dividend
distribution and to announce the same with due observance of the prevailing laws and
regulations.
4. Approve the amount of Partnership and Community Development Fund for the 2013 Financial
Year as follows:
a. Partnership Program of 0.0% of the Company’s net profit for the 2012 Financial Year.
b. Community Development Program of Rp87,907,879,618,- equal to 0.68% of the Company’s
net profit for the 2012 Financial Year.
Agenda 4
Delegate authority and authorize the Board of Commissioners with the prior approval of the
holders of shares of Series A Dwiwarna to determine the amount of bonus given to members of the
Board of Directors and the Board of Commissioners for the 2012 Financial Year as well as salary/
honorarium, allowances and benefits, and other benefits for members of the Board of Directors and
Board of Commissioners for the 2013 Financial Year.
Agenda 5
1. Approve the reappointment of Public Accounting Firm Purwantono, Suherman & Surja (a
member firm of Ernst & Young Global Limited) to conduct an integrated audit of the Company
for the 2013 Financial Year which audit will consist of the audit of the Consolidated Financial
Statements of the Company and audit of the Internal Control over Financial Reporting for the
2013 Financial Year.
2. Approve the reappointment of the Public Accounting Firm Purwantono, Suherman & Surja (a
member firm of Ernst & Young Global Limited) to conduct an audit the appropriation of funds
for the Partnership and Community Development Program for the 2013 Financial Year.
3. Grants authority to the Board of Commissioners to determine an appropriate audit fee and
other terms and conditions of appointment of the relevant Public Accounting Firm.
4. Grants authority to the Board of Commissioners to appoint an alternate Public Accounting Firm
as well as to determine the terms and conditions of its appointment; in the event the appointed
Public Accounting Firm cannot perform or continue its engagement, including audit fee.
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Agenda
AGM'S Decisions
Agenda 6
1. To Approve the changes to the Company’s plan for the use of treasury stock as result of the
Share Buyback I through IV, subject to the provisions of Bapepam-LK No.XI.B.2 about Buyback
Shares Issued by Public Listed Company, to include a way as the following:
a. Market placement
b. Cancellation;
c. Employee/ Management Stock Option Plan or Employee/ Management Stock Purchase Plan;
d. Equity conversion;
e. Funding.
2. The Board of Directors, in the implementation of the use/transfer of treasury stock from Share
Buyback Phase I, II, III and IV, must take into account the provisions of prevailing laws and
regulations, and obtain prior approval from the Board of Commissioners and reported the use/
transfer of the treasury stock to the Annual General Meeting of Shareholders;
3. The Board of Commissioners before giving approval must obtain prior approval from the holders
of shares of Series A Dwiwarna.
Agenda 7
1. Changing the nomenclature of Directors positions as follows:
a. Director Information Technology Solution and Strategic Portfolio became Director;
b. Director Enterprise & Wholesale became Director;
c. Director Compliance & Risk Management became Director;
d. Director Human Capital & General Affair became Director;
e. Director Network & Solution became Director;
f. Director Consumer became Director.
2. The composition of the Board of Directors who have been appointed in the AGMS dated May 11,
2012 are as follows:
a. Mr. Arief Yahya as President Director
b. Mr. Honesti Basyir as Director of Finance;
c Mr. Indra Utoyo as Director;
d. Mr. Muhammad Awaluddin as Director;
e. Mr. Ririek Adriansyah as Director;
f. Mr. Priyantono Rudito as Director;
g. Mr. Rizkan Chandra as Director;
h. Mr. Sukardi Silalahi as Director.
3. Segregation of duties and authority for each member of the Board of Directors along with
the nomenclature for each member of the Board of Directors outside President Director and
Director of Finance are subsequently regulated by the Board of Directors.
Agenda 8
a. To ratify the application of Regulation of Minister of State Owned Enterprises State Number:
PER-12/MBU/2012 dated August 24, 2012 on Supporting Body of the Board of Commissioners
in State-Owned Enterprise, as one of references for the arrangement of supporting body of the
Company’s Board of Commissioners.
b. To delegate authority to the holders of shares Series A Dwiwarna necessary to invoke
the exception to the Company for the Regulation of Minister of State Owned Enterprises
State Number: PER-12/MBU/2012 dated August 24, 2012 on Supporting Body of the Board
of Commissioners in State-Owned Enterprise in accordance with the prevailing laws and
regulations in Indonesia, including but not limited to, the laws and regulations in the field of
capital market and labors.
Agenda 9
1. Approve the Amendment to certain provisions of the Company’s Articles of Association, as
follows:
a. Article 4, paragraph 1 and paragraph 2 of the capital structure in connection with the stock
split of the Company of the original Rp250,- (two hundred and fifty rupiah) to Rp50,- (fifty
rupiah) per share and the subsequent delegation of authority to the Board of Directors with
the prior approval of the Board of Commissioners on the execution the Company's stock
split.
b. Article 22 paragraph 1 letter f, by removing the Partnership and Community Development
Program from the Company’s Work Plan and Budget;
both amendments are in accordance with Articles of Association Amendments Matrix that have
been distributed to the Shareholders of the Company.
2. Grants authority to the Board of Directors of the Company with the right of substitution to
restate the resolutions of this Meeting in a notarial deed, and further to submit a request of
approval and to notify the changes in Articles of Association of the Company to the Ministry of
Law and Human Rights of the Republic of Indonesia, and to register it in Company Register and
announce it in the Supplement to the State Gazette, in accordance with the prevailing laws and
regulations.
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145
Agenda
AGM'S Decisions
Agenda 10 1. Approved the appointment of Mr. Gatot Trihargo as Commissioner of the Company with a term
commencing from the closing of this Meeting and ending at the close of the fifth AGMS after his
appointment which will be held in 2018;
2. Therefore the complete composition of the member of the Board of Commissioners are as
follows:
a. Mr. Jusman Syafii Djamal as President Commissioner;
b. Mr. Parikesit Suprapto as Commissioner;
c. Mr. Hadiyanto as Commissioner;
d. Mr. Virano Gazi Nasution as Independent Commissioner;
e. Mr. Johnny Swandi Sjam as Independent Commissioner;
f. Mr. Gatot Trihargo as Commissioner.
with terms of office effective up to the closing of the Company’s AGMS which will be held in
2017, except for Mr. Jusman Syafii Djamal and Mr. Johnny Swandi Sjam up to the closing of the
Company’s AGMS which will be held in 2015; while Mr. Gatot Trihargo up to the closing of the
Company’s AGMS which will be held in 2018.
4. Grants authority to the Board of Directors of the Company with substitution rights to restate
the resolutions of this Meeting in a notarial deed and further notify the changes in Articles
of Association of the Company to the Minister of Law and Human Rights of the Republic of
Indonesia and other necessary actions in accordance with the prevailing laws and regulations.
All of the notes to the AGMS have been addressed
Commissioners is not authorized to run
properly in 2013.
B. Board of Commissioners
and manage the company, except in
situations where all members of the Board
The Board of Commissioners (“BoC”) is the
of Directors are suspended for a certain
company’s organ that supervises and advises the
reason.
company’s management run by its Directors’. The
- To give advice and opinions to the AGMS
BoC is collectively responsible to shareholders.
regarding annual financial reporting,
BoC members are appointed and dismissed by
development plan, the appointment of a
shareholders through a GMS. The term of office
public accounting firm as the company’s
for each member of Board of Commissioners is
auditor and on other important strategic
5 (five) years from the date of his/her election,
issues related to the company's corporate
unless the date of expiration of the term of office
actions.
falls on a day other than a workday, in which case
- To evaluate the company’s work plan and
such term of office shall expire on the following
budget, to keep up with progresses made
workday.
within the company, and to coordinate
with the Board of Directors when there are
1. Authorities and Responsibilities of the Board
indications that the company is in trouble,
of Commissioners
- To supervise the Company’s management
thus allowing the Directors to immediately
inform the shareholders immediately and
performed by Board of Directors, including
to recommend the necessary corrective
in corporate planning and development,
measures.
operations and budgeting, and compliance
- To ensure that the corporate governance
with the company’s Articles of Association
program has been implemented and
as well as in the implementation of GMS’s
maintained in accordance with prevailing
mandate and decisions. The Board of
rules and regulations.
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
2. BoC Composition
Brief profiles of members of the Board are
Board of Commissioners has 6 (six) members,
available on page 238-239 of this Annual
consisting of a President Commissioner as the
Report.
board chair, and five (5) Commissioners, two
of whom are Independent Commissioners.
3. Independence of BoC and Independent
From January 1, 2013 through April, 19,
2013, the composition of the Board of
Commissioners of Telkom comprised:
1) Jusman Syafii Djamal, President
Commissioner.
2) Hadiyanto, Commissioner.
Commissioners
Membership of our BoC has complied with
prevailing legislations and capital market
regulations regarding independence of BoC
membership and number of Independent
Commissioners in order to maintain
independence in BoC’s supervisory roles and
3) Parikesit Suprapto, Commissioner.
to ensure the implementation of the process
4) Johnny Swandi Sjam, Independent
of checks and balances. None of our BoC
Commissioner.
members is related by marriage or by blood
5) Virano Gazi Nasution, Independent
to each other up to the third degree, both in
Commissioner.
On April 19, 2013, AGMS approved
a straight line or lines to the side. We have 2
(two) Independent Commissioners, or 33% of
the total members of the Board. This number
changes to the composition of its Board of
has also exceeded the 30% minimum limit set
Commissioners. Thus, as of April 19, 2013, the
for independent commissioners set by the
new composition of Board of Commissioners
Indonesia Stock Exchange. The primary task
comprised:
of independent commissioners in addition
1) Jusman Syafii Djamal, President
oversight is to represent the interests of
Commissioner.
minority shareholders.
2) Hadiyanto, Commissioner.
3) Parikesit Suprapto, Commissioner.
4) Johnny Swandi Sjam, Independent
Commissioner.
4. Procedure of Determination of BoC
Remuneration
Each member of the Board of Commissioners
5) Virano Gazi Nasution, Independent
is entitled to monthly remuneration and
Commissioner.
6) Gatot Trihargo, Commissioner
benefits. They are also entitled to bonuses
based on the Company’s performance and
Each member of the Board of Commissioners also holds related assignments and activities in
committees under the BoC as follows:
Commissioner
Related Assignment and Activities
Jusman Syafii Djamal
Apart from holding the position of President Commissioner, he is also the
(President Commissioner)
Chairman of the Nomination and Remuneration Committee.
Johnny Swandi Sjam
Also serves as the Chairman of the Audit Committee, member of the
(Independent
Commissioner)
Virano Gazi Nasution
(Independent
Commissioner)
Hadiyanto
Evaluation and Monitoring of Planning and Risk Committee (“KEMPR”), and
member of the Nomination and Remuneration Committee.
Also serves as a member of the Audit Committee, KEMPR and the Nomination
and Remuneration Committee.
Also serves as a member of KEMPR and the Nomination and Remuneration
(Commissioner)
Committee.
Parikesit Suprapto
Also serves as the Chairman of KEMPR and member of the Audit Committee
(Commissioner)
and the Nomination and Remuneration Committee.
Gatot Trihargo
(Commissioner)
Also serves as a member of KEMPR and the Nomination and Remuneration
Committee.
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147
achievement which amount is determined by
- Execution of the 2013 Work Plan and
the shareholders in GMS. Commissioners are
also entitled to a lump sum allowance upon
resignation (at the end of their term).
BoC Remuneration is calculated based
on a formula set by the Nomination and
Remuneration Committee that is also used
for the determination of BoD salaries, and in
percentage refers to the President Director's
salary that has been approved by the GMS.
Pursuant to Minister of SOE Regulation
Budget (“RKAP”) and including the
2013 Capex, and ratifying the draft
for 2014 RKAP.
- Overseas expansion to 10 countries
(Singapore, Hong Kong-Macau,
Timor Leste, Australia, USA, Taiwan,
Malaysia-Brunei, SaudiArabia,
New Zealandand Myanmar) as the
embodiment of our vision to become
the leading TIMES player in the
region.
PER-07/MBU/2010. The GMS could specify
- Corporate action plan on
a different type of income and/or certain
amount from that which has been set out in
this ministerial regulation.
The procedure to determine BoC
remuneration are as follows:
- The BoC asks the Nomination and
Remuneration Committee to draft a
proposal for BoC remuneration.
PT Indonusa Telemedia, Patrakom
and establishment of InfraCo.
- Plan for treasury stock transfer.
- Key Performance Indicator (“KPI”) for
all members of the BoD based on the
Management Contract formulated by
the BoC and constituting part of the
evaluation of individual members of
the BoD by the BoC.
- The Nomination and Remuneration
ii. Provide response on periodic reports
Committee asks an independent party to
submitted by the Directors. Provide
develop a remuneration framework for
BoC.
response on the Company's Financial
Statements for Quarter I year 2013,
- The Nomination and Remuneration
Quarter II year 2013, and Quarter III year
Committee proposes such framework to
2013 and forwarded such responses to
BoC.
the Dwiwarna Shareholder.
- The BoC then proposes remuneration for
iii. Perform such duties related to the
BoC members to the GMS.
implementation of GMS:
- The GMS determines remuneration of BoC
- Discuss the agenda for the Annual
members.
GMS for fiscal year 2012.
- Discuss the stock split plan.
For the year 2013, the total remuneration of
- Discuss and propose the Public
our Commissioners is Rp18,3 billion, or each
of Commissioner received remuneration
amounting to Rp3,1 billion.
5. Board of Commissioners Activity Report
a. Implementation of Duties of BoC
In broad terms, throughout 2013, the Board
Accountant Firm ("KAP") to perform
the audit on Financial Statements for
the fiscal year ending on
December 31, 2013.
- Discuss and propose the
remuneration for the Board
of Directors and the Board of
of Commissioners has engaged in the
Commissioners.
following:
i. To discuss, give opinion and advice, and
b. BoC Meeting
ask for clarification, concerning, among
The BoC holds a meeting at least once a
others, the following:
- Changes in the organization
structure.
month or when deemed necessary by one
or more members of the BoC, or upon
the written request from one or more
- Ratifying the RJPP/CSS for 2014-
shareholders holding at least one tenth of
2018.
our outstanding shares.
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
The mechanism for decision-making in BoC meetings is based on consensus by deliberation. If
no consensus is reached, decisions are based by majority voting of members that are present or
represented by proxy at the meeting. If there are equal votes for and against a decision, then the
decision shall be based on the opinion of the Chairman of the meeting. The quorum for all meetings
of the BoC is more than half the BoC members who are present at the meeting, or represented by
proxy to a member present at such meeting.
In 2013, BoC met 13 (thirteen) times. BoC also held 14 joint-meetings with BoD throughout 2013.
Table of Attendance of BoC Meetings
Name
Position
Attendance
Jusman Syafii Djamal
President Commissioner
Johnny Swandi Sjam
Independent Commissioner
Virano Gazi Nasution
Independent Commissioner
Hadiyanto
Parikesit Suprapto
Gatot Trihargo*
* since 19 April 2013
Commissioner
Commissioner
Commissioner
13 from 13
12 from 13
13 from 13
9 from 13
13 from 13
8 from 10
Table of Attendance of BoC and BoD Joint Meetings.
Name
Position
Attendance
Jusman Syafii Djamal
President Commissioner
Johnny Swandi Sjam
Independent Commissioner
Virano Gazi Nasution
Independent Commissioner
Hadiyanto
Commissioner
Parikesit Suprapto
Commissioner
Gatot Trihargo*
Commissioner
Arief Yahya
President Director /CEO
Muhammad Awaluddin
Director of Enterprise &Business Service
Honesti Basyir
Director of Finance
Priyantono Rudito
Director of Human Capital Management
Rizkan Chandra
Director of Network, IT & Solution
Sukardi Silalahi
Director of Consumer Service
14 from 14
14 from 14
13 from 14
12 from 14
14 from 14
11 from 11
13 from 14
11 from 14
12 from 14
11 from 14
10 from 14
14 from 14
Ririek Adriansyah
Director of Wholesale & International Service
11 from 14
Indra Utoyo
Director of Innovation & Strategic Portfolio
13 from 14
* since 19 April 2013
Corporate
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Company
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2013 Annual Report
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149
6. Competency Improvement Program for Commissioners
In 2013, we held a number of trainings to improve the competence of BoC members.
Training Program for Commissioners Improvement
Name
Program
Location
Date
Jusman Syafii Djamal Mobile World Congress 2013
Barcelona, Spain
February 25 – 28, 2013
Parikesit Suprapto
Mobile World Congress 2013
Barcelona, Spain
February 25 – 28, 2013
Technology Development Update
China
October 17 – 21, 2013
7. Assessment on the Performance of Board of
9. BoC Address
Commissioners
As a general rule, the GMS performs the
BoC's official address is
Graha Merah Putih Building, 5th Floor
assessment on the performance of the BoC,
Jl. Jend. Gatot Subroto Kav.52
regarding the discharge of BoC duties and
Jakarta 12710, Indonesia.
responsibilities in the respective year.
C. Board of Directors
Accountability of the duties and
1. Structure of the Board of Directors
responsibilities of the Board of Commissioners
The BoD are elected and dismissed by the
for fiscal year 2013 will be carried out in the
GMS. To be elected, candidates must be
GMS in 2014.
GCG Assessment for Board of Commissioners
We also conduct an assessment on the
nominated by the Government as holder of
the Dwiwarna Series A Share. The term of
office for each Telkom's Director is 5 (five)
years from the date of his/her election, unless
implementation of GCG by the BoC as an
the date of expiration of the term of office
organ of GCG. The GCG assessment process
falls on a day other than a workday, in which
is performed by the IICG, an independent
case such term of office shall expire on the
agency that perform a CGPI rating on Telkom.
following workday. Shareholders, through
There are eleven aspects being assessed
an AGMS or an EGMS, have the right to
in the implementation of GCG towards an
discharge a Director at any time before the
ethical, honorable, fair and accountable
expiration of his/her term of office.
business, namely the aspects of commitment,
transparency, accountability, responsibility,
On April 19, 2013, AGM has approved
independence, fairness, competence,
the changes of the Board of Directors
leadership, strategy, policies, and knowledge
compositionas follow:
management.
1. Arief Yahya, President Director (CEO)
2. Honesti Basyir, Finance Director (CFO)
In this GCG assessment, we received the
3. Indra Utoyo, Director
rating of “Indonesia's Most Trusted Company”.
4. Priyantono Rudito, Director
8. BoC Secretary
5. Sukardi Silalahi, Director
6. RizkanChandra, Director
BoC is assisted by a Secretary of the BoC for
7. Muhammad Awaluddin, Director
ensuring that in performing their tasks, has
8. Ririek Adriansyah, Director.
complied with Telkom’s Articles of Association
and applicable legislations.
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Business
Overview
Management’s
Discussion & Analysis
Furthermore, based on the AGM resolution,
Telkom Group’s business portfolio and
the division of tasks and responsibilities
risk management as well as interfacing
for each member of the Board of Directors,
with external constituent.
along with the nomenclature for each
- To control the strategic planning
member of the Board of Directors, aside the
function within the Telkom Group and
President Director and Financial Director, is
determined based on the BOD’s decision.
to direct businesses development by
focusing on new businesses portfolio.
That BOD’s decision was determined on June
- To control corporate direction in driving
28, 2013 with the division of task, authorities
new business, entering/developing new
and nomenclature BOD as follows:
1. Sukardi Silalahi as the Director of
Consumer Service (CONS)
markets and for internationalization/
regionalization.
- To control the management of strategic
2. Muhammad Awaluddin as the Director of
aspects and finance, human capital
Enterprise & Business Service (EBIS)
3. Ririek Adriansyah as the Director of
and innovation and strategic portfolio
management on the entire businesses
Wholesale & International Service (WINS)
portfolio of Telkom's group.
4. Rizkan Chandra as the Director of
-
In charge of leadership development
Network, IT & Solution (NITS)
program in Telkom Group, and to
5. Indra Utoyo as the Director of Innovation
appoint and to dismiss certain official
& Strategic Portfolio (ISP)
6. Priyantono Rudito as the Director of
Human Capital Management (HCM)
positions, in accordance with the
established career management
regulations, and leadership
development program for the entire
2. Scope and Main Duties of the Board of
Telkom Group.
Directors
Pursuant to the Company's Articles of
- To submit reports on the Company’s
performance as required for a public
Association, the BoD is primarily responsible
company on a regular basis.
for leading and managing the company's
operations as well as controlling and
b. Director of Innovation & Strategic Portfolio
managing its assets, under the supervision of
(“ISP”)
the BoC.
- To determine the concept and formula
of the Company's Long-Term Plan
The BoD also has the right to act for and on
(corporate strategic scenario).
behalf of the company, inside or outside the
- To determine the governance
Court of Law, on any matters and for any
events, with any other parties.
policies and the mechanisms of the
management of corporate planning
and strategy (policies on the level of
The main duties of each Director are as
planning and strategy - corporate level,
follow (according to PD.202.11/r.00/HK.200/
business level and functional level).
COP-B0400000/2013 on the Organization of
- To determine the strategy and the
Telkom Group):
policy of the Telkom Group's business
a. President Director as CEO of Telkom
portfolio.
Group
- To coordinate the process of
structuring and/or reconstruction of
the aspects of corporate philosophy,
which includes but is not limited to
- To determine the strategy, policy
and recommendation for corporate
action and strategic investment for
the development of Telkom Group's
business.
vision, mission, objectives, corporate
- To determine the innovation strategy in
culture, and leadership architecture.
order to explore new sources of growth
- To formulate and to state the strategic
for Telkom Group's business portfolio.
direction for the conditioning ofthe
- To determine the parenting strategy to
Company’s capability in realizing
harmonize and optimize the capability
sustainable competitive growth across
of the Telkom Group's business entities
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
151
in enhancing the Company’s value.
- To facilitate the process of formulating
- To determine the policy, governance,
corporate level strategy, particularly
and mechanisms of innovation to
develop Telkom Group's business
portfolio.
on aspects related to the development
of center of excellent, organization
behavior, corporate culture, and
- Determining the policy, governance,
leadership architecture;
and mechanisms of managing the
- To determine the strategy and policies
synergy of Telkom Group.
- To carry out the advisory function
in the process of determining the
for human capital function, including
but is not limited to human capital
policy, organisation development, and
corporate level strategy, especially on
industrial relation;
matters related to business portfolio
- To determine the governance
development.
policy, and the mechanism for the
- To ensure the effectiveness of risk
management and planningof resources
management in all business processes
related to the development, utilization
for the entire units under the ISP
Directorate.
c. Finance Director (“KEU”)
- To determine the concept and the
and management of human resource.
- To determine the policy, governance,
and mechanism for the development
and interrelation of the entities/
institutions related to human
formula of the Company’s Long-Term
resources management, including
Financial Planning for Telkom Group;
but is not limited to the pension fund
- To facilitate the process of concepting
management institutions, employee and
the corporate level strategy, particularly
retire health care institutions, skill and
the financial perspective on, but is not
competence development insitution
limited to, strategic budgeting, business
or educational institution, and labour
& investment, parenting strategy,
union;
subsidiary performance, and capital
- To conduct the advisory role in
management;
- To determine financial and logistic
strategy and policies, which include,
but is not limited to Financial Policy,
determining corporate level strategy,
especially for matters related to Telkom
Group’s human resources development.
Financial System Support Policy, Asset
e. Director of Network, IT& Solution (“NITS”)
Management & Logistic Policy, Asset
- Determining the business plan and
Management & Logistic.
- To determine the governance
policies and the financial accounting
strategy in order to leverage the
capability of company’s resources
to develop/exploit the established
management (accounting), accounting
business/ services by utilizing
management (budgeting), and
corporate finance (treasury).
infrastructure, IT and solution to
support Telkom Group business
- To determine the policies, governance,
portfolio synergistically;
and mechanism of managing the
Annual Work Plan Budget (RKAP);
- To carry out the advisory role in
- Determining the policy, governance,
and mechanism for the utilization of
infrastructure/ network to support
determining corporate level strategy,
the growth of Telkom Group business
particularly for matters related to
Telkom Group’s financial resources.
portfolio;
- Determining the policy, governance,
and mechanism for the utilization of IT
d. Director of Human Capital Management
to support the growth of Telkom Group
(“HCM”)
business portfolio;
- The determine the concept and formula
- Determining the policy, governance,
for Human Capital Long Term Plan and
and mechanism for the conditioning
Human Capital Master Plan in Group;
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Business
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Management’s
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of excellent performance of services/
g. Director of Enterprise Business Service
solutions to support sustainable
(“EBIS”)
competitive growth of Telkom Group;
- To define the business strategy and
- To manage and to control the parenting
planning to leverage the Company's
mechanism in accordance with the
parenting strategy on the entire units
under the Directorate of NITS and/
or other units directly involved in the
process of managing the infrastructure
utilization and operation;
resources capability in creating a
competitive advantage to win the
competition and to achieve long term
growth of the corporate segment
business portfolio (enterprise and
business) of Telkom Group.
- Ensuring the effectiveness of risk
- To determine the parenting policies
management in all business processes
in all units under the Directorate of
NITS.
f. Director of Consumer Service (“CONS”)
- To define the strategy and business
and mechanisms in order to create
value through the optimization and
harmonization of the interrelation
between the parent company and
the entities managing the corporate
segment business (enterprise and
planning to leverage the Company's
business) of Telkom Group
resources capability in creating
competitive advantage to win the
competition and long term growth
of the consumer segment business
- To determine the policy, governance,
and mechanisms of the management of
corporate segment marketing function
(enterprise and business);
portfolio (consumer home services and
- To determine the policy, governance,
consumer personal services) within
Telkom Group;
and mechanisms of the management
of the corporate segment sales and/
- To determine the parenting policies
or account management function
and mechanisms in order to create
value through the optimization and
harmonization of the interrelation
between the parent company and the
(enterprise and business).
- Determine the policy, governance, and
mechanism of customer relationship
management for corporate segment
entire entities managing the consumer
(enterprise and business);
segment business within Telkom Group.
- Ensuring the effectiveness of risk
- To determine the policy, governance,
management in all business processes
and mechanisms of the management
of the consumer segment marketing
functions;
of the entire units under the Directorate
of Enterprise Service.
- To determine the policy, governance,
h. Director of Wholesale & International
and mechanisms of the management
Service (“WINS”)
of the consumer segment sales and/ or
- To define the strategy and business
partnership function;
planning to leverage the Company's
- To determine the policy, governance,
resources capability in creating
and mechanism of the management of
competitive advantages to win the
customer relationship management on
competition and to achieve long term
the consumer segment;
growth of the Wholesale & International
- Ensuring the effectiveness of business
segment business portfolio of Telkom
risk management in all units under the
Group.
Directorate of Consumer Service.
- Determining the parenting policies
and mechanisms in order to create
value through the optimization and
harmonization of the interrelation
between the parent company and the
entire entities managing the business
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
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153
operations for the Wholesale &
5. Determination of the Board of Directors’
International segment of Telkom Group.
- Determining the policy, governance,
Salary, Allowances and Facilities
The Nomination and Remuneration
and mechanisms of the management
Committee is responsible for formulating the
of Wholesale & International segment
Directors’ salaries, which is further discussed
marketing functions;
in a joint meeting of the BoD and BoC for
- Determine the policy, governance, and
approval. Following review by the Nomination
mechanisms of the management of
and Remuneration Committee and approval
the Wholesale & International segment
by the joint meeting of BoD and BoC, the
sales and/or account management
formula is then submitted to the AGMS for
function.
consideration and approval.
- Determining the policy, governance,
and mechanisms of the management of
In compliance with prevailing regulations,
customer relationship management for
the remuneration, allowances and facilities
Wholesale & International segment.
for members of the BoD are reported to the
- Ensuring the effectiveness of risk
capital market authorities and the Dwiwarna
management in all business processes
Series A Shareholder.
of the entire units under the Directorate
of Wholesale & International segment.
For the year 2013, the total remuneration
3. BoD Charter
of our Directors is Rp59,5 billion, or each of
Director received remuneration amounting to
In the case of activities and actions in the
Rp7,4 billion.
management of the Company that are not
governed by our Articles of Association or the
6. Board of Directors’ Meetings
provisions of the law, procedures are followed
Meetings of the BoD are chaired by the
that support the principle of accountability
President Director. In the event that the
through consensus, agreement and/or rules
President Director is unavailable or absent
between the members of the BoD. This
for a reason, the meeting will be chaired by a
charter is aimed at expediting the decision
member of the BoD appointed in the meeting.
making process, reducing bureaucracy
in the administration of the Company’s
The BoD meeting may be held at any time
management, and supporting improvements
deemed necessary at the request of one or
in performance. This charter also governs the
more members of the BoD, at the request of
working relationship between the BoD and
the BoC or upon a written request from one
the BoC, which is an institutional relationship
or more shareholders representing one-tenth
in that it is based on countable management
or more of the total number of outstanding
and supervisory mechanisms in accordance
shares of Common Stock.
with the prevailing provisions.
4. Policies on BoD Remuneration
The decisions of the BoD meeting shall be
reached by consensus through deliberation. If
Each Director is entitled to a remuneration
this method fails, the decision shall be passed
consisting of a monthly salary and other
by voting based on the majority votes by BoD
allowances (including pension benefits).
members cast in the meeting. A quorum is
Directors also receive an annual bonus
reached at a BoD meeting if more than half
based on our business performance and
of the members of the BoD are present or
achievements, which amount is determined
represented legally in the meeting. Each BoD
by shareholders at our GMS. The bonus and
member who is present at the meeting shall
incentive are budgeted every year based
be entitled to cast one vote (and one vote for
on recommendations of the Directors and
each other member of the BoD that he/she
confirmation from the BoC before being
represents).
considered by shareholders at an AGMS.
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Business
Overview
Management’s
Discussion & Analysis
In 2013 BoD met 46 times.
Table of BoD Attendance
BoD
Position
Arief Yahya
Indra Utoyo
President Director
Director of Innovation & Strategic Portfolio
Honesti Basyir
Director of Finance
Priyantono Rudito
Director of Human Capital Management
Sukardi Silalahi
Director of Consumer Service
Muhammad Awaluddin
Director of Enterprise Business Service
Ririek Adriansyah
Director of Wholesale & International Service
Rizkan Chandra
Director of Network, IT & Solution
Attendance
39 from 46
43 from 46
42 from 46
40 from 46
44 from 46
41 from 46
41 from 46
35 from 46
7. Competence Enhancement Programs for Directors
Throughout 2013, members of our BoD have attended a number of training programs, workshops,
conferences and seminars, as participant, in order to enhance their professional competences.
Table of Competence Enhancement Programs for Directors:
Name
Arief Yahya
Program
Location
Date
CEO Roundtable Discussion - OPTUS
SINGTEL GROUP
Melbourne, Australia
January 24-25, 2013
Mobile World Congress 2013
Barcelona
“Future Thinking and Grand Strategy
Development”
Melbourne Business
School, Victoria, Australia
February 24-28, 2013
September 15-19, 2013
ABAC (APEC Business Advisory
Meeting) Conference 2013
Ayana Resort, Bali
October 2-5, 2013
APEC CEO Summit
BNDCC, Bali
Bandung Cloud of knowledge
Institute Teknologi
Bandung, Bandung
October 5-6, 2013
October 26, 2013
US - ASEAN Meeting
Plasa Mandiri, Jakarta
November 12, 2013
International Seminar Conference
Learning Organization (ISCLO)
Bandung
December 4, 2013
Indra Utoyo
Seminar Paradox Marketing
Nanyang
Technopreneurship
Center, Singapore
March 28, 2013
APEC Summit 2013
Nusa Dua, Bali
October 5-8, 2013
Executive Development for BOD,
subject: Corporate Financial.
Kellogg , Northwestern
University, USA
October 21-25, 2013
Training Spirituality In Work Islam for
Senior Leader
Hotel Grand Lembang,
Bandung
November 14-16, 2013
Honesti
Basyir
MANDIRI CFO Forum
KOMPAS 100 CEO Forum
The Ritz Carlton Hotel,
Jakarta
Jakarta Convention
Center, Jakarta
International Seminar Conference
Learning Organization
Hotel Trans Studio,
Bandung
Priyantono
Rudito
Philip Kotler Live “ One Day Seminar”
The Rizt Calton Hotel,
Jakarta
April 22, 2013
November 27, 2013
December 4, 2013
March 18, 2013
Program “Future Thinking and Grand
Strategy Development”
Melbourne Business
School, Australia
September 16-19, 2013
“International Seminar Conferent
Learning Organization”
Hotel Trans Studio,
Bandung
December 4-5, 2013
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
155
Name
Sukardi
Silalahi
Program
Location
Date
Phillip Kotler Live One Day Seminar
The Ritz Carlton Hotel,
Jakarta
March 18, 2013
BUMN Marketing Day
Hotel Borobudur, Jakarta
August 27, 2013
High Performance Board
Lausanne, Switzerland
October 7-10, 2013
Mark Plus Converence
The Ritz Carlton Hotel,
Jakarta
Muhammad
Awaluddin
BUMN Marketers Club "Transformasi
Pegadaian"
Auditorium Pegadaian,
Jakarta
Phillip Kotler "The World is Shaking,
Indonesia is Standing : 8 Ways To
Grow"
The Ritz Carlton Hotel,
Jakarta
General lecture of MOCI chance of
North Sumatra to become province of
cyber
Universitas Sumatera
Utara, Medan
Paradox Marketing Seminar
CMO Forum "Paradox Marketing"
Nanyang Technological
University, Singapore
Menara Multimedia,
Jakarta
December 12, 2013
February 20, 2013
March 18, 2013
March 22, 2013
March 28, 2013
April 16, 2013
BUMN Marketers Club "Leading
Through Innovation"
BUMN Marketers Club "Brighten The
Future"
ABAC (APEC Business Advisory
Meeting) Conference 2013
Executive Education "Innovation For
Growth : Strategies & Best Practice"
Plaza Mandiri, Jakarta
May 22, 2013
Perum Peruri, Jakarta
September 25, 2013
BICC, Nusa Dua Bali
October 5-9, 2013
Wharton University
of Pennsylvania,
Philadelphia, USA
November 11-14, 2013
Chambers of commerce seminar
Four Season, Jakarta
January 30, 2013
Low Forum of SOE
State Own Enterprise
(SOE) Ministry, Jakarta
14th forum SOE marketers
Plaza Mandiri, Jakarta
Declaration of transparency SOE
roadmap
State Own Enterprise
(SOE) Ministry, Jakarta
March 18, 2013
May 22, 2013
May 22, 2013
Discussion of SOE position in state's
financial
KPK Building, Jakarta
September 12, 2013
Ririek
Adriansyah
Rizkan
Chandra
Executive Course Managing
Customers for Competitive Advantage
Parkville, University of
Melbourne, Australia
June 13-14, 2013
Meeting coordination of APEC
National committee
BNDCC-1, Bali
September 14, 2013
APEC CEO Summit Bali, 2013
BNDCC-1, Bali
CAFEO (Conference of ASEAN
Federation Engineers Organization)
Jakarta Convention
Center, Jakarta
October 5-7, 2013
November 11, 2013
Supply Chain Operations Referrence
(SCOR) Training with Problem Solving
Graduate House, Carlton,
Melbourne, Australia
November 18-20, 2013
156
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
8. Assessment on the Performance of Board of
namely financial, customer, internal
Directors
a. Process for the Assessment on the
Performance of Board of Directors
business process, and learning and growth,
translated into three types of KPI, namely
shared KPI, common KPI, and specific KPI.
The assessment on the performance of
Shared KPIs are the same in name, target,
the BoD is performed by the BoC as well
realization and achievement for all the
as the GMS, regarding the achievement
Directors. Common KPIs have the same
of key performance indicator (“KPI”) of
name and target, but specify different
the BoD in the discharge of its duties
realization and achievement for each of
and responsibilities as established by the
the Director. Specific KPIs are different
Articles of Association, the achievement
for each of the Directors and represent
on the RKAP.
Achievement of Directors' KPIs as a
basis for the evaluation by the BoC is
specific programs as the primary duty and
priority for the respective Director and
Directorate.
determined through internal processes.
c. Parties Performing the Assessment
The assessment process was initiated
The internal parties performing the
with completion of an online form
of the achievement of Management
assessment on the Management
Contract of the BoD are the Performance
Contract (“KM”) and followed by face-
Committee and the President Director.
to-face meeting for clarification and the
Overall, assessment on the performance of
determination of final performance scores
the BoD is performed by the BoC through
to be submitted to the Performance
the GMS mechanism in accordance with
Committee and President Director for final
established provisions.
decision and subsequently forwarded to
the Board of Commissioners.
d. GCG Assessment for Board of Directors
We also conduct an assessment on the
In 2013, the Directors' performance was
BoC’s as well as the BoD’s implementation
also evaluated by a Team appointed by the
of GCG The GCG assessment process is
State Ministry of SOE, which assessed the
performed by the IICG, an independent
performance of the company on the basis
agency that perform a CGPI rating
of the Excellent Performance Assessment
on Telkom. There are 11 aspects being
Criteria ("KPKU") for SOE. The KPKU was
assessed in the implementation of GCG
an adaption from the Malcolm Baldrige
towards an ethical, honourable, fair
Criteria for Excellence ("MBCFPE"),
according to which our criteria was
assessed at the level of "Emerging
and accountable business, namely the
aspects of commitment, transparency,
accountability, responsible, independence,
Industry Leader". This achievement ranks
fairness, competence, leadership, strategy,
among the highest of the SOEs assessed,
policies, and knowledge management.
reflecting the success of our earlier efforts
since 2000 to implement and assess its
In the GCG assessment, we are rated as
performance and those of its using the
“Indonesia Most Trusted Company”.
MBCFPE criteria.
9. Affiliated Relationship between members
b. Criteria Used in the Assessment on the
of Directors and Major and/ or Controlling
Performance of the Board of Directors.
The criteria used in the assessment on
Shareholders.
Currently there is no family relation of
the performance of the BoD is based
up to the third degree either vertically or
on the balanced scorecard method with
horizontally or by marriage between members
measurements on four main aspects,
of BOC and members of BOD, and or between
fellow members of the two boards.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
157
Table of affiliated relationships among members of BOC, members of BOD and major or controlling
shareholders.
Board of Commissioners
Board of Directors
Controlling
Shareholders
Affiliation with
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No
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Jusman Syafii
Djamal (President
Commissioner)
Johnny Swandi
Sjam (Independent
Commissioner)
Parikesit Suprapto
(Commissioner)
Hadiyanto
(Commissioner)
Virano Gazi Nasution
(Independent
Commissioner)
Gatot Trihargo
(Commissioner)
Arief Yahya
(President Director)
Honesti Basyir
(Director of Finance)
Indra Utoyo (Director
of Innovation&
Strategic Portfolio)
Sukardi Silalahi
(Director of
Consumer Service)
Muhammad
Awaluddin (Director
of Enterprise &
Business Service)
Rizkan Chandra
(Director of Network
IT & Solution)
Priyantono Rudito
(Director of
Human Capital
Management)
Ririek Adriansyah
(Director of
Wholesale &
International
Service)
15. Minister of SOEs
Note: X = There is no affiliate relationship
√ = There is affiliate relationship
158
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PT Telekomunikasi Indonesia, Tbk
Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
D. Committees under the Board of
a. Audit Committee Profile
Commissioners
1. Audit Committee
The Audit Committee conducts its duties
based on the mandate of the Audit
Committee Charter established by a Decree
of the Board of Commissioners. The Audit
Committee Charter is regularly evaluated
and, if necessary, amended to ensure the
Company's compliance to OJK and SEC
regulations and other relevant regulations.
In December 2012, the Capital Market
Financial Institution Supervisory Board
(Bapepam-LK) - now the Financial Services
Authority (“OJK”) issued the Regulation
No.Kep-643/BL/2012 dated 7 December 2012
on the Establishment and Implementation
of Audit Committee Work Implementation
replacing Regulation of Bapepam-LK No.Kep-
29/PM/2004 dated 24 September 2004
on the same matter. The new legislation is
intended to increase the independence, role
and authority of the Audit Committee to
assist the oversight function of the board of
commissioners of a public company.
Audit Committee Charter has been updated
in line with the new regulation and the new
Audit Committee Charter is established with
the Decree of the Board of Commissioners
No.07/KEP/DK/2013 dated 22 July 2013.
As of August 2013, we have an Audit
Committee consisting of six members:
two Independent Commissioners, one
Commissioner and three independent
external members who are not affiliated
with Telkom.
In 2013, there were changes in the
composition of the Audit Committee
membership. As of August 2013, the
Audit Committee consists of: (i) Johnny
Swandi Sjam (Independent Commissioner
- Chairman), (ii) Salam (Secretary), (iii)
Virano Gazi Nasution (Independent
Commissioner), (iv) Parikesit Suprapto
(Commissioner) no voting right because
of his affiliation with Government, (v)
Sahat Pardede, and (vi) Agus Yulianto.
Salam, Sahat Pardede, and Agus Yulianto
are independent external members who
are not affiliated with Telkom. The tenure
of Salam as a member/Audit Committee
secretary ended in August 2013.
The composition of the Audit
Committee as of December 31, 2013 is
as follow:
Membership
Name
Chairman
Johnny Swandi Sjam
Secretary
AgusYulianto
Member
Virano Gazi Nasution
Parikesit Suprapto
Sahat Pardede
Corporate
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Responsibility
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Profile
Additional
Information
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2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
159
Brief profiles of each member of the Audit
Agus Yulianto is a certified accountant
Committee are provided below:
with experience in auditing, accountancy
Johnny Swandi Sjam – Independent
Commissioner
As Chairman of the Audit Committee,
and finance. From 1983–1999, he was
an employee of the Financial and
Development Supervisory Board. He
has also worked as a senior consultant
Johnny Swandi Sjam is responsible for
with the Jakarta Initiative Task Force
directing, coordinating and monitoring the
as a procurement audit specialist for
execution of the duties of each member of
World Bank-funded projects. Before his
the Audit Committee.
Agus Yulianto - Member
Agus Yulianto is in charge of supervising
and monitoring the effectiveness of
appointment as a member of the Audit
Committee, he worked for the Public
Accountant Firm of HLB Hadori Sugiarto
Adi & Rekan as Chair of the Financial
Management Specialist Team for a
risk management (particularly financial
project in Aceh that was managed by
reporting risks) implemented by our
the World Bank and funded by the Multi
Board of Directors, monitoring possible
Donor Fund. He graduated with a degree
occurrence of fraud and/or irregularities
in Accountancy from Sekolah Tinggi
that could potentially harm the Company,
Akuntansi Negara Jakarta and received
and complaint handling.
his Master’s in Accountancy from Case
Western Reserve University, Cleveland,
In addition, starting in August 2013,
Ohio, USA.
Agus Yulianto also served to facilitate the
implementation of the tasks of the Audit
Committee members, correspondence,
preparing documentation, preparing the
Virano Gazi Nasution – Independent
Commissioner
Virano Gazi Nasution’s prime duty is to
Annual Report of the Audit Committee and
supervise and monitor the Company’s
the independent auditors to coordinate
information technology.
the selection process.
160
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Parikesit Suprapto – Commissioner
Parikesit Suprapto is responsible for
supervising and monitoring the Company’s
Degree in Business Administration from
Saint Mary’s University in Halifax, Canada.
GCG and keeps himself updated on
b. Duties and Responsibilities of the Audit
capital market regulations as well as other
Committee
laws that are relevant to the Company’s
The Audit Committee Charter outlines
operations.
Sahat Pardede – Member
Sahat Pardede’s primary duty is to
the Committee’s purpose, function and
responsibilities. It provides that the Audit
Committee is responsible for:
- Supervise the Company's audit and
supervise and monitor the integrated
reporting process on behalf of the BoC.
audit process and consolidated financial
- Providing recommendations to the Board
reporting, including the implementation
of Commissioners regarding the selection
of financial accounting standards and
of external auditor.
the effectiveness of Internal Control Over
- Discuss with internal and external auditors
Financial Reporting (“ICOFR”).
on the overall scope, for both of audit and
non audit work as well as their audit plan.
Sahat Pardede is a public accountant
- Reviewing the Company's consolidated
and a Managing Partner in the Public
Accountant Firm of Ghazali, Sahat &
financial statements as well as the
effectiveness of ICOFR.
Associates. Moreover, currently, he served
- Examine complaints relating to the
as Advisor to the Special Task Force for
Company's accounting process and
Upstream Oil and Gas Business Activities
financial reporting.
Republic of Indonesia (“SKK Migas”). He
- Convening regular meetings with internal
has considerable experience and expertise
and external auditors, without the
in auditing and possesses extensive
presence of management, to discuss the
knowledge of financial accounting and
results of their evaluation and audit of
internal control under SOA Section 404.
our internal controls as well as the overall
From 1981 to 2000, he was an employee
quality of our financial reporting.
of the Financial and Development
- Carrying out additional tasks that are
Supervisory Board. He graduated in
assigned by the BoC, especially on financial
accounting from Sekolah Tinggi Akuntansi
and accounting-related matters as well as
Negara - Jakarta and holds a Master
other obligations required by SOA.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
161
In addition, the Audit Committee also has the
provided auditing services and other financial
duty to receive and handle complaints. To
services to numerous private companies
support the implementation of its duties, the
and public institutions. He is a Certified
Audit Committee may appoint independent
Public Accountant and is also a member of
consultants or professional advisors.
the Indonesian Institute of Certified Public
c. Independence of Audit Committee
Accountants.
Regulations of OJK on Audit Committee
e. Audit Committee Pre-Approval Policies and
require that the Audit Committee comprises
Procedures
at least three members, one of whom must be
We have adopted pre-approval policies and
an Independent Commissioner who serves as
procedures under which all non-audit services
chairman, while the other two members must
provided by our independent registered
be independent. At least one of these two
public accounting firm must be pre-approved
members must have expert knowledge (in the
by our Audit Committee, as set forth in the
context of item 16A Form of 20 F) in the field
Audit Committee Charter. Pursuant to the
of accountancy and/or finance. In order to be
charter, permissible non-audit services may
considered independent under the prevailing
be performed by our independent registered
Indonesian rules, the external members of the
public accounting firm provided that:
Audit Committee:
(i) our Board of Directors must deliver to
- May not be an executive officer of a public
the Audit Committee (through the Board of
accountant firm that has provided audit
Commissioners) a detailed description of the
and/or non-audit services to us within the
non-audit service that is to be performed
six months prior to his or her appointment
by the independent public accounting firm,
as an Audit Committee member.
and (ii) the Audit Committee will determine
- May not have been our executive officer
whether the proposed non-audit service will
within the six months prior to his or her
affect the independence of our independent
appointment as an Audit Committee
public accounting firm or would give rise to
member.
any conflict of interest.
- May not be affiliated with our majority
shareholder.
Pursuant to Section 10(i)(1)(B) of the
- May not have a family relationship with any
Exchange Act and paragraph (c)(7)(i)(C)
member of the BoC or BoD.
of Rule 2-01 of Regulation S-X issued there
- May not own, directly or indirectly, any of
under, Audit Committee Charter waives the
our shares.
pre-approval requirement for permissible
- May not have any business relationship
non-audit services where: (i) the aggregate
that relates to our businesses.
amount of the fees for such non-audit
services constitutes no more than five percent
d. Audit Committee Financial Expert
of the total amount of fees paid by us to our
The Board of Commissioners has determined
independent registered public accounting
that Sahat Pardede, as an independent
firm during the year in which the services are
member of our Audit Committee, qualifies
provided, or (ii) the proposed services are not
as an Audit Committee Financial Expert in
regarded as non-audit services at the time
accordance with the requirements of Item
the contract to perform the engagement is
16A of Form 20-F and as an “independent”
signed. In addition to these two requirements,
member pursuant to the provisions of Rule
the performance of non-audit services must
10A-3 of the Exchange Act. Mr. Pardede has
be approved prior to the completion of the
been a member of our Audit Committee since
audit by a member of the Audit Committee
February 2004. Prior to his appointment as
who has been delegated pre-approval
a member of our Audit Committee, Sahat
authority by the full Audit Committee or by
Pardede practiced and is currently practicing,
the full Audit Committee itself.
as a Public Accountant in Indonesia and
162
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Audit Committee Report
On the recommendation of the Audit Committee, the Board
of Commissioners has approved the Consolidated Financial
Statements and Notes to the Consolidated Financial Statements,
and Management Evaluation on the Effectiveness of Internal
Control over Financial Reporting, for inclusion into the Company’s
Annual Report on Form 20F to be submitted to the US SEC.
Below is the report of the Audit
reviewed and discussed with E&Y,
E&Y’s professional judgment
Committee for 2013 fiscal year:
which is responsible for providing
may reasonably be deemed to
Independent Auditor and
Auditor Independency
In 2013, Telkom has re-appointed
an opinion on the effectiveness
interfere on independence. E&Y
of internal control on financial
has discussed its independence
reporting, as well as the quality
with our Audit Committee and has
and acceptability of financial
confirmed in its letter to us that,
KAP Purwantono, Suherman &
accountng standards used by the
in its professional judgment, E&Y
Surja, member firm of Ernst &
Company.
Young Global Limited ("E&Y") as
is independent from us. The Audit
Committee has also discussed
independent auditor to perform
The Audit Committee has also
with E&Y regarding the public
the integrated audit for 2013 fiscal
reviewed and discussed with E&Y
accounting firm’s independence
year. The re-appointment of E&Y as
regarding such other matters
from our management and from
independent auditor was approved
as are required to be discussed
our Company, including the
during the Annual General Meeting
with the Audit Committee
matters in the letter from E&Y, and
of Shareholders on April 19, 2013.
by the auditing standards on
considered the influence of the
communications with the Audit
public accounting firm’s non-audit
The Audit Committee has
Committee from the Public
services.
reviewed and discussed with E&Y,
Company Accounting Oversight
which is responsible for providing
Board (“PCAOB”), the rules of OJK
Integrated Audit
an opinion on the fair presentation
and the US SEC and any other
- The Audit Committee has
of our consolidated financial
applicable regulations.
statements and notes to the
reviewed management’s
report on its assessment
consolidated financial statements,
The Audit Committee has
of the effectiveness of our
with regard to the generally
obtained a letter from E&Y that
ICOFR as well as E&Y’s
accepted accounting principles
provides disclosures, such as
report on the effectiveness
in Indonesia and the International
those required by PCAOB Rule
of our Internal Control over
Financial Reporting Standard
3526, regarding any relationship
Financial Reporting. The Audit
(IFRS). The Audit Committee has
between E&Y and us that in
Committee has discussed
Corporate
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Responsibility
Company
Profile
Additional
Information
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Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
163
with management and E&Y
On the recommendation of the Audit Committee, the Board of
the significant deficiencies
Commissioners has approved the Consolidated Financial Statements
identified during the course
and Notes to the Consolidated Financial Statements, and Management
of the assessment, and
management’s plan to
Evaluation on the Effectiveness of Internal Control over Financial
Reporting, for inclusion into the Company's Annual Report on Form 20F
remediate the deficiencies
to be submitted to the US SEC.
of our internal control over
financial reporting.
Whistleblower
- The Audit Committee has
- The Audit Committee has formulated whistleblower procedures
discussed with the Company’s
regarding accounting, internal controls and auditing matters, including
Internal Auditors and E&Y the
procedures to ensure employee confidentiality and the anonymous
overall scope and plans for
submission of concerns in accordance with Bapepam Regulation
their respective audits. The
No.IX.1.5 and Section 301 of the Sarbanes-Oxley Act of 2002 regarding
Audit Committee met with
Public Company Audit Committees.
the Internal Auditors and E&Y,
- With regard to enterprise risk management, the Audit Committee
without management present,
monitored and supervised fraud and financial reporting risks that
to discuss the results of their
would have a material effect on financial statements.
examinations, their evaluations
of our Internal Control over
Financial Reporting and the
Audit Committee Meeting
During 2013, the Audit Committee held 30 meetings. These meetings
overall quality of our financial
were held pursuant to the Audit Committee Charter and intended to
reporting.
facilitate members of the committee in performing their duties and
responsibilities. The following is the audit meeting attendance table.
The Audit Committee also
reviewed and discussed the
Meetings of the Audit Committee
Name
Number of
Meetings
Number in
Attendance
Attendance
Percentage
Johnny Swandi Sjam
Parikesit Suprapto
Virano Gazi Nasution
Salam *
Sahat Pardede
Agus Yulianto
30
30
30
20
30
30
26
21
20
19
29
30
87%
70%
67%
95%
97%
100%
(*) Up to August, 2013
Jakarta, March 10, 2014
Johnny Swandi Sjam
Chairman of Audit Committee
Consolidated Financial Statements
and the Notes to the Consolidated
Financial Statement in the
Annual Report (Form 20-F) with
our management, including a
discussion of the quality and
the acceptability of our financial
accounting standards, the
reasonableness of significant
accounting judgments and the
adequacy of disclosures in the
Consolidated Financial Statements.
Management has confirmed to
our Audit Committee that such
consolidated financial statements:
(i) have been prepared with
integrity and objectivity
and are the responsibility of
management; and
(ii) have been prepared in
conformity with the accounting
principles generally accepted
in Indonesia as well as
the International Financial
Reporting Standard (IFRS).
164
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
2. Nomination and Remuneration
Committee
The Nomination and
Remuneration Committee was
formed pursuant to the Board
of Commissioners Decree
No.003/KEP/DK/2005 dated
April 21, 2005 regarding the
Establishment of Nomination
and Remuneration Committee.
a. Profile of Nomination and
Remuneration Committee
The following is the
membership composition
of the Nomination and
Remuneration Committee as
of December 31, 2013 based
on the Decree of the Board
of Commissioners No.15/KEP/
DK/2013 dated December 16,
2013.
Membership
Name
Chairman
Jusman Syafii Djamal
Member
Secretary/
Member
Parikesit Suprapto
Hadiyanto
Gatot Trihargo
Johnny Swandi Sjam
Virano Gazi Nasution
Ario Guntoro
Jusman Syafii Djamal –
Chairman/Commissioner
Jusman Syafii Djamal is the
chairman of the Committee
whose prime responsibility is
to direct and coordinate the
Committee’s functions.
Hadiyanto - Commissioner
Hadiyanto is a member of the
Committee and is responsible
for coordinating inputs
from parties related to the
controlling shareholders with
regard to nomination and
remuneration issues.
Parikesit Suprapto -
Commissioner
Parikesit Suprapto is a
member of the Committee
and is responsible for
coordinating inputs from the
controlling shareholders with
regard to nomination and
remuneration issues.
Gatot Trihargo -
Commissioner
Gatot Trihargo is a member
of the Committee and is
responsible for coordinating
inputs from the controlling
shareholders with regard to
nomination and remuneration
issues.
Johnny Swandi Sjam -
Independent Commissioner
Johnny Swandi Sjam is a
member of the Committee
and is responsible for
addressing nomination and
remuneration issues with the
management and external
independent parties.
Virano Gazi Nasution -
Independent Commissioner
Virano Gazi Nasution is a
member of the Committee
and is responsible for
addressing nomination and
remuneration issues with the
management and external
independent parties.
Ario Guntoro - Secretary to
the Board of Commissioner
Ario Guntoro is the secretary
of the Committee who is not
a Member of the Committee
and is responsible for
preparing and managing the
Committee’s administration
and documentation.
b. Duties and Responsibilities
of Nomination and
Remuneration Committee
The Nomination and
Remuneration Committee
was established to perform,
regulate and uphold the
principles of GCG related
to the nomination process
of strategic management
positions as well as to
determine the BoD’s
remunerations. The duties
and responsibilities of
the Nomination and
Remuneration Committee
are:
i. Nomination
-
To formulate policies
on criteria and
selection that are
required for strategic
positions within the
Company that is
one level below the
office of the Director
and the Board (the
Board of Directors
and the Board of
Commissioners)
of consolidated
subsidiaries with adherence
to the principles of good
corporate governance.
– To assist the Board of
Commissioners with or
consult with the Board
of Directors in selecting
candidates for strategic
positions within the
Company that is one level
below Director’s level and
the Board (the Board of
Directors and the Board
of Commissioners) of
consolidated subsidiaries.
– To provide recommendations
to the Board of
Commissioners to be
submitted to the holders of
the series of A Dwiwarna
shares on:
a. Composition of position
of the Board of Directors.
b. Succession planning of
the member of the Board
of Directors.
c. Assessment based on
standards developed
as evaluation materials
for the purpose of skill
improvement of members
of the Board of Directors.
ii. Remuneration
- Provide recommendations to
the Board of Commissioners,
to be submitted to the
General Meeting of
Shareholders through the
holders of A Dwiwarna series
of shares, regarding policy,
amount and/or structure
of the remuneration of the
Board of Directors and the
Board of Commissioners.
– Remuneration of the Board
of Directors and the Board
of Commissioners is in the
form of salary or honoraria,
benefits and permanent
facilities as well as variable
incentives.
– Conduct reviews on
employment contracts and/
or the performance of each
member of the Board of
Directors.
c. Independency of Nomination and
Remuneration Committee
To ensure independency in carrying
out its duties, the Nomination and
Remuneration Committee shall not
have members that have direct and
indirect relations with the Company.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
165
Report of the Nomination and
Remuneration Committee
The Committee has submitted inputs pertaining to the
composition of the Audit Committee and the Committee of
Planning and Risk Evaluation and Monitoring to help the Board
of Commissioners preparing the remuneration of member of
the Board of Directors
Nomination and Remuneration Committee has
participated in joint discussions with the Financial
Services Authority (“OJK”) on draft regulation that
Meeting of the Nomination and Remuneration
Committee
During 2013, the Nomination and Remuneration
will be implemented in all public companies listed
Committee held as many as 25 meetings, out of which, 14
in BEI regarding the Nomination and Remuneration
meetings were held in form of circulation of letters.
Committee.
As for the activities of the Committee during
2013 in conducting discussion to nomination and
remuneration issues are as follows:
Nomination
In 2013, the Committee has addressed suggestions
related to the organ membership composition at the
Secretariat of the Board of Commissioners such as
Audit Committee and Planning and Risk Evaluation
and Monitoring Committee (“KEMPR”).
Remuneration
Throughout 2013, the Committee assists the Board
of Commissioners in preparing proposals regarding
the remuneration of members of the Board of
Directors to be proposed to the Shareholders of
Series of A Dwiwarna shares. The proposal utilizes
a formula created by an independent consultant
in 2012, the materials for remuneration proposed
are based on remuneration benchmark in the
Information and Communication Technology (“ICT”)
industry both at domestic and regional levels.
Table of Meetings of Nomination and Remuneration
Committee
Number
of
Meetings
25
25
25
25
25
22
18
6
Meeting
Attended
25
24
24
25
20
19
17
6
Percentage
of
Attendance
100%
96%
96%
100%
80%
86%
94%
100%
Name
Jusman Syafii Djamal
Johnny Swandi Sjam
Virano Gazi Nasution
Parikesit Suprapto
Hadiyanto
Gatot Trihargo1
Yuki Indrayadi2
Ario Guntoro3
(1) Since April 19, 2013
(2) Until October 7, 2013
(3) Since October 7, 2013
Jakarta, March 10, 2014
Jusman Syafii Djamal
Chairman of Nomination and Remuneration Committee
166
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
3. Planning and Risk Evaluation and Monitoring
memberships are as follows:
Committee
The establishment and work implementation of
Planning and Risk Evaluation and Monitoring
Committee or KEMPR (previously Planning
and Risk Review Committee) refers to KEMPR
Charter which was last issued through the
Decree of the Board of Commissioners No.04/
KEP/DK/2011 dated 24 March 2011 on KEMPR
Charter of PT Telekomunikasi Indonesia, Tbk.
The Board of Commissioners Decree is an
amendment to the Board of Commissioners
Decree No.02/KEP/DK/2009 dated 26
February 2009 which was also issued as an
amendment to the Board of Commissioners
Decree No. 06/KEP/DK/2006 dated 19 May
2006.
KEMPR is formed to, among other things,
review the Company’s long-term strategic
plan and the annual work and budget plan,
and to provide recommendations to the BoC
on policies related to the above issues. The
Committee also monitors the execution of the
Company's business plans, as well as to perform
a comprehensive review on the results of such
monitoring as a reference for the BoC in its
oversight function over the Company’s business
process, capital expenditure budgeting, and risk
management.
a. Profile of Planning and Risk Evaluation and
Monitoring Committee
In 2012, the membership of KEMPR based on
BOC Decree No.07/KEP/DK/2012 dated May
28, 2012 consist of:
Membership
Name
Chairman
Secretary
Member
Parikesit Suprapto
Ario Guntoro
Hadiyanto
Johnny Swandi Sjam
Virano Gazi Nasution
Adam Wirahadi
Widuri Meintari Kusumawati
Membership
Name
Chairman
Secretary
Member
Parikesit Suprapto
Ario Guntoro
Hadiyanto
Johnny Swandi Sjam
Virano Gazi Nasution
Gatot Trihargo
Widuri Meintari
Kusumawati
In December 2013, KEMPR membership was
amended as the stipulation of Ario Guntoro
as Secretary of the Board of Commissioners,
and Agus Yulianto as KEMPR secretary
replace Ario Guntoro. Based on the Board of
Commissioners Decree No.17/KEP/DK/2013
dated December 18, 2013 regarding the
Membership Structure of Planning and Risk
Evaluation and Monitoring Committee of
PT Telekomunikasi Indonesia, Tbk., KEMPR
membership are as follows:
Membership
Name
Chairman
Secretary
Member
Parikesit Suprapto
Agus Yulianto
Hadiyanto
Johnny Swandi Sjam
Virano Gazi Nasution
Gatot Trihargo
Adam Wirahadi
Widuri Meintari
Kusumawati
Parikesit Suprapto - Commissioner
Parikesit Suprapto, 62 years old, has served
as our Commissioner since May 11, 2012.
Previously he was the Deputy of Business
Services at the Ministry of SOE (2010-
2012), Deputy Head of Banking and Finance
Industry at the Ministry of SOE (2008-
2010) and Advisor to the Minister of SOE
for Small Business Sector (2006-2008). In
corporate environment, have served as a
Commissioner of PT Indosat Tbk. (2011-2012)
and a Commissioner of
In May 2013, KEMPR conducted a change
PT Bank Negara Indonesia (Persero) Tbk.
of the membership, as Gatot Trihargo
He earned a Bachelor’s degree in Corporate
stipulated as KEMPR member. The changes
Economics from Sekolah Tinggi Manajemen
outlined in the Board of Commissioners
Industri, Jakarta (1980), a Master’s degree
Decree No.05/KEP/DK/2013 dated May 14,
in Economic Development from Indiana
2013 regarding the Membership Structure
University, Indiana, USA (1990) and a PhD
of Planning and Risk Evaluation and
degree in Development Economics from
Monitoring Committee of PT Telekomunikasi
the University of Notre Dame, Indiana, USA
Indonesia, Tbk. Based on the decree, KEMPR
(1995).
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
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Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
167
Parikesit Suprapto, Commissioner, is the
Guntoro was dismissed as the Secretary of
chairman of KEMPR who coordinates
KEMPR, and was appointed as Secretary to
and monitors the rest of the Committee’s
the Board of Commissioners.
members in performing their respective
tasks and responsibilities.
Ario Guntoro – Secretary (up to October 4,
2013)
Ario Guntoro is a professional with extensive
Agus Yulianto – Secretary (effective
October 4, 2013)
Agus Yulianto is a certified accountant and
has experiences in auditing, accounting,
and finance. In 1983-1999, he is a staff
experience in the field of finance, investment
in State Audit and Development Board.
and banking. Having been engaged in the
Agus Yulianto is also worked as a senior
private banking sector nationwide from
consultant in Jakarta Initiative Task
1994 to 1999 as a Corporate Officer to
Force, procurement audit specialist for
Branch Manager, Ario Guntoro worked for
projects funded by the World Bank. Prior
the National Banking Restructuring Agency
to being appointed as a member of the
("BPPN") from 1999 to 2004, with the last
Audit Committee, he worked in the Public
post of Assistant Vice President of the HIPA
Accountant Office HLB Hadori Sugiarto
Division. Prior to joining the KEMPR in 2004,
Adi & Rekan as the Head of Financial
served as a special adviser at
Management Specialist Team for a project
PT (Persero) PPA. Ario Guntoro obtained his
in Aceh which is managed by the World
degree in Economics from the University of
Bank and funded by Multi Donor Fund. He
Gadjah Mada in 1993. Effective on October
obtained his degree in Accounting from the
4, 2013, by the Decree of the Board of
State College of Accountancy, Jakarta and
Commissioners No.10/KEP/DK/2013 dated
acquired his Masters in Accounting from
October 4, 2013 on the Appointment of
Case Western Reserve University, Cleveland,
Mr. Ario Guntoro as Secretary to the Board
Ohio, United States of America. Effective
of Commissioners of the Company (Persero)
on October 4,2013 , by the Decree of the
PT Telekomunikasi Indonesia, Tbk, Ario
Board of Commissioners No.11/KEP/DK/2013
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
dated October 4, 2013 on the Appointment
State College of Accountancy, Jakarta.
of Mr. Agus Yulianto as Secretary to the
And a Master's degree in Accountancy
Planning and Risk Evaluation and Monitoring
and Financial Information Systems from
Committee of Limited Liability Company
Cleveland State University in Ohio, USA.
(Persero) PT Telekomunikasi Indonesia. As
secretary to the KEMPR, Agus Yulianto is in
Commissioner Gatot Trihargo was appointed
charge of coordinating the implementation
as a members of KEMPR based on the
of all tasks of the Committee and
the scheduling and execution of the
Decree of the Board of Commissioners
No.05/KEP/DK/2013 dated May 14, 2013
Committee's work, as well as evaluating
on the Membership Composition of the
and monitoring the achievement of Capital
Planning and Risk Evaluation and Monitoring
Expenditure.
Hadiyanto – Commissioner
Hadiyanto, 51 years old, has served as our
Committee of Limited Liability Company
(Persero) PT Telekomunikasi Indonesia,
Tbk. As a member of KEMPR, Gatot
Trihargo is responsible for monitoring and
Commissioner since May 11, 2012. Currently,
supervision of RJPP/CSS implementations,
he also serves as Director General of State
RKAP implementations, and enterprise risk
Treasury at the Ministry of Finance of the
management implementations, as well as
Republic of Indonesia. He has assumed,
the development of non-organic business
among other positions, Head of the Legal
initiative implementations.
Bureau, Secretariat General of the Ministry
of Finance and was the Alternate Executive
Johnny Swandi Sjam – Independent
Director at the World Bank, Washington D.C.,
US. In the corporate environment served as
Commissioner
Johnny Swandi Sjam, 53 years old, has
the President Commissioner of PT Garuda
served as our Independent Commissioner
Indonesia Tbk (2007-2012) and President
since January 1, 2011. Currently he is also
Commissioner of PT Bank Export Indonesia
the Chairman of the Standing Committee
(2007-2009). He holds a Bachelor’s degree
on Infrastructure and Telecommunications
in Law from the University of Padjadjaran,
Services at the Indonesian Chamber of
Bandung, a Master of Law Degree (“LLM”)
Commerce and Industry (“KADIN”). He
from Harvard University Law School, USA,
previously served, among other positions, as
and a PhD. in Law from the University of
a Commissioner at PT Inti Limited (2010-
Padjadjaran, Bandung.
2011), the President Director of PT Indosat
Tbk. (2007-2009), the Director of PT Indosat
In KEMPR, Hadiyanto who is also a
Tbk. (2005-2007), the President Director
Commissioner of the Company monitors
of Satelindo (2002-2003), and several
and supervises the RJPP/CSS executions,
other important positions at subsidiaries
RKAP implementation, and enterprise risk
of Indosat like Satelindo, Sisindosat and
management as well as inorganic business
Intikom (1997-2002). He holds a Diploma
initiative development.
Gatot Trihargo – Commissioner
Gatot Trihargo, 53 years old, serves as
III in Computer Engineering from Bandung
Institute of Technology, a Diploma IV from
Sekolah Tinggi Manajemen Industri of
the Department of Industry of Indonesia,
a Commissioner since 19 April 2013. He
a Bachelor’s degree in Informatics
currently serves as a Deputy of Services
Management from Gunadarma University,
Business in the Ministry of State-Owned
Jakarta, and a Master’s degree in Business
Enterprises of the Republic of Indonesia.
Policy and Administration from the
Holds a degree in accounting from the
University of Indonesia, Jakarta.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
169
In KEMPR, Johnny Swandi Sjam who is
and member of academic and regulatory
also an Independent Commissioner of the
compiler teams at several ministries during
Company monitors and supervises the
2001- 2003. Adam Wirahadi earned his
RJPP/CSS execution, RKAP implementation,
Bachelor Degree in Economic Accounting
and enterprise risk management as well as
(1998) and in Law (2007) both from
inorganic business initiative development.
Universitas Indonesia.
Virano Gazi Nasution – Independent
Commissioner
Virano Gazi Nasution, 45 years old, has
Widuri Meintari Kusumawati – Member
Widuri Meintari Kusumawati's main task
is evaluating the RKAP as proposed by
served as our Independent Commissioner
the management and monitoring how the
since May 11, 2012. He was previously the
RKAP progresses while also monitoring the
Commercial Director of PT Indonesia
Comnet Plus, a subsidiary of PT PLN
(Persero) (2009-2012), Advisor to the
Company’s subsidiary’s business.
Prior to joining the KEMPR, Widuri Meintari
Minister of Communications and Informatics
Kusumawati worked for the Ministry of
(2008-2009), and the President Director
Finance of the Republic of Indonesia (2000-
of PT Bakrie Telecom Tbk. (2001-2005).
He earned his Master of Science degree
2003) and for a domestic private bank
(2003-2004). She earned her Bachelor
in Engineering Economics from Stanford
Degree in Economics Accounting from the
University, USA.
Universitas Gadjah Mada in 2000.
In KEMPR, Virano Gazi Nasution who is
b. Duties and Responsibilities of Planning and
also an Independent Commissioner of the
Risk Evaluation and Monitoring Committee
Company monitors and supervises the
KEMPR scope of work covers:
RJPP/CSS execution, RKAP implementation,
- Submit an evaluation report on the RJPP
and enterprise risk management as well as
or CSS as well as the RKAP as proposed
inorganic business initiative development.
by BoD according to a schedule
Adam Wirahadi – Member
Adam Wirahadi’s main task in the
specified by the BoC.
- Provide recommendations to the BoC
related to the approval of CSS and RKAP.
Committee is monitoring the Company’s risk
- Submit evaluation reports to the BoC on
management, its compliance with applicable
the execution of CSS and RKAP as well
rules and regulations and evaluating
Directors’ legal actions that need prior
as the implementation of the Company's
risk management.
approval from the Board of Commissioners.
- Provide recommendations on the
implementation of risk management.
Prior to his appointment as KEMPR member
in 2003, Adam Wirahadi served in the
c. Independence of Planning and Risk
Ministry of Finance of the Republic of
Evaluation and Monitoring Committee
Indonesia during 1999-2000. In 2001-2003,
All members of the Planning and Risk
he was as a researcher/analyst at an NGO
Evaluation and Monitoring Committee
and concurrently a business environment
(except for Parikesit Suprapto, Hadiyanto,
consultant, an expert staff at the House
Johnny Swandi Syam, Gatot Trihargo, and
of Representative during 2001-2002,
Virano Gazi Nasution) comprise of external
and independent members.
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Report of the Planning and
Risk Evaluation and Monitoring
Committee
The activity of the Committee of Planning and Risk Evaluation
and Monitoring in 2013 was to oversee the implementation
of RJPP / CSS and implementation of RKAP which include
monitoring the realization of RKAP, aiming at strengthening
the business.
Throughout 2013, the KEMPR
Annual Message ("CAM") and
monitoring the realization of
supervises and monitors the
2014 RKAP. In line with the
2013 RKAP both in achieving
implementation of CSS current
strategy for regular updates on
revenue, cost, and profit. In
year, implementation of 2013 RKAP,
RJPP, the CSS for 2014-2018 is
monitoring the achievement of
capital expenditures in 2013 RKAP,
an update on the CSS for 2013-
revenue, the focus of KEMPR
the Company's risk management
2017.
analysis investments in Subsidiaries.
is aimed at strengthening the
broadband business efforts as
In addition, the KEMPR also
2. Annual Business and Budget
a growth base of the Company.
evaluates the proposal for CSS
Plan
While focus on monitoring
2014-2018, the proposal for RKAP
In performing the 2013 Annual
cost is directed at ensuring the
2014, and engages in such other
Business Budget Plan, the Board
growth of cost do not exceed
duties as assigned by the BoC.
of Commissioners instructs the
the set target.
Board of Directors to ensure
Activities of the KEMPR in
2013
1. Corporate Strategic Scenario
the timely implementation of
To monitor the performance
capital expenditure, especially
of its subsidiaries, in addition
in order to support the
to Telkomsel, KEMPR also
(“CSS”)
broadband development. The
conducts monitoring on
The KEMPR monitors the
integrated supply chain concept
Dayamitra, Indonusa, and
implementation of RJPP/
CSS for the period 2013-
is currently being developed
Metra. KEMPR monitoring
in the Company to anticipate
on Telkomsel is directed at
2017, in particular related to
the dynamic changes of micro
monitoring the growth of the
developments in current year,
demand.
and evaluates the proposed
CSS for the period 2014-2018,
The focus of KEMPR in
company both core and new
wave revenue growth, as well
as margin growth. The focus
which forms the basis for the
monitoring the implementation
of Dayamitra monitoring
formulation of 2013 Corporate
of the 2013 RKAP includes
is aimed at optimizing the
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
171
telecommunication towers
Outsourcing. Entering the second half of 2013, significant risk grew with
collocation ratio as well as
the addition of exchange rate risk. KEMPR specifically monitors efforts
increased margins. As for
to mitigate risks that fall into significant risk.
the monitoring of Indonusa
is focused on management's
4. Actions by the Board of Directors that Require Prior Approval of the
efforts in improving
Board of Commissioners
financial and operational
Throughout 2013, the KEMPR has reviewed actions by the BoD that
management in Indonusa.
require prior approval of the Board BoC, including:
While monitoring in Metra is
- Review on threshold adjustments towards the Board of Directors
focused on Metra's efforts
actions which require prior approval of the Board of Commissioners.
in managing the business
– Evaluation on the advance request for Capex budget release 2013.
portfolio ranging from the
– Evaluation on approval application for the divestment in PT Indonusa
telecommunication, information,
shares.
media and edutainment
- Evaluation on the takeover of Elnusa shares in Patrakom
segments contained in Metra's
subsidiaries.
Meeting of the Planning and Risk Evaluation and Monitoring Committee
Throughout 2013, the KEMPR held 20 committee meetings.
In order to obtain more
optimal results in monitoring,
KEMPR conducted several
field visits to monitor the
progress of implementation
of capital expenditure and
the development of RKAP
achievements. Field visits
Table of Meeting by Planning and Risk Evaluation and Monitoring
Committee
Name
Number of meetings
Number
Percentage
CSS RKAP ERM CA
of Meeting
of
Attended
Attendance
2
2
0
Parikesit Suprapto
conducted by KEMPR in 2013
Hadiyanto
include field visits to the
following constructions:
- SKKL JB2S (Jakarta-
Gatot Trihargo(1)
Johnny Swandi Sjam 2
Bangka-Batam-Singapura)
- SKKL LTCS (Luwuk-Tutuyan
Cable System)
Virano Gazi Nasution
Ario Guntoro(2)
-
Indonesia Wi-Fi area Bali
Agus Yulianto(3)
- Monitoring of Mitratel
telecommunication towers
field
Adam Wirahadi(4)
Widuri Meintari
2
2
0
1
2
9
9
7
9
9
3
6
8
9
0
0
0
0
0
1
0
1
1
5
5
5
5
5
5
3
4
8
17
16
12
16
16
11
9
14
20
85%
80%
80%
80%
80%
100%
100%
100%
100%
3. Enterprise Risk Management
(“Manajemen Risiko Perseroan”)
KEMPR is in charge of
monitoring the implementation
of ERM in 2013, including
the handling of risks which
have significant impact on
the 2013 RKAP. Some of the
risk types which fall into the
significant risk category in 2013
are Regulation Risk, Speedy
Business Risk, Wi-Fi Business
Risk, and Risks associated with
(1) Joined KEMPR effective on April 19,2013
(2) As KEMPR Secretary up to October 4, 2013
(3) Effective on October 4, 2013 as Secretary of KEMPR
(4) Effective since May 4, 2013 up to November 6, 2013 conducting assignments outside
KEMPR
Jakarta, March 10, 2014
Parikesit Suprapto
Chairman of KEMPR
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Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
E. Committees under BoD
1. Legal Basis
In discharging its duties and responsibilities in
4. Profile of Members of Executive Committees
Members of the Executive Committees are
members of the BoD, see Profile of Directors in
managing the Company, the BoD has established
page 240-241 for complete profiles.
a mechanism for decision-making or approval of
the BoD through a number of committees under
BoD called Executive Committees (joint approval
authority) as defined in the BoD Charter. The
Committees are expected to bring more efficiency
and expedite BoD decision-making process in the
respective areas of each Committee.
The following are descriptions of each of the
Executive Committees:
a) Ethics and HR Committee
i. Composition of Ethics and HR Committee
Chairman : President Director
Secretary : VP Human Capital Policy or VP
Organization Development
The Chairman and Executive Committee members
Members : 1) Director of Human Capital
are the Company’s Directors. In exercising its
duties, the Executive Committees may hire
independent parties for assistance.
The existence of Executive Committees changes
from time to time according to the dynamics of
business and organizational changes. BoC issued
company regulation that establishes the following
Executive Committees:
a. Ethics and HR Committee.
b. Treasury and Financial Committee.
c. Subsidiary Management Committee.
d. Investment Committee.
e. Risk, Compliance and Revenue Assurances
Committee.
f. Disclosure Committee.
g. Procurement Committee.
h. Single Point Margin Committee.
Management
2) Director of Wholesale &
International Service
3) Relevant Directors
Unit
: 1) SGM Human Capital Center
2) One of the VPs in HCM
Directorate
3) Coordinator Performance
Measurement Group
4) VP Legal & Compliance
ii. Authority
- To determine and to approve the policies
in implementing and upholding Good
Corporate Governance.
- To determine and to approve the policies
on the corporate ethics and employee
discipline.
- To determine and to approve the policies
2. Company Policy on Independence of Committees
on human capital management.
The Committees are established by the BoD,
with the authority to make decisions/approvals
b) Treasury and Financial Committee
on policies/operating transactions that require
i. Composition of Treasury and Financial
approval from at least 2 (two) Directors.
Committee
3. Company Policies and Formal Practice on
Committees Meetings
- Committee Meetings are meetings attended
by Committee members, and approvals
or proposals for decisions of Executive
Committees are made directly during
Committee meetings, which are legitimate if
attended by more than half of the Committee
Chairman : Director of Finance
Secretary : VP Corporate Finance
Members : Director of Innovation &
Strategic Portfolio
Unit
: 1) VP Financial & Logistic Policy
2) VP Management Accounting
3) VP Risk & Process
Management
members.
ii. Authority
- The mechanism for Committee decisions
- Determine and approve treasury/
with respect to its duties, responsibilities and
authorities are made through Committee
Meetings or without a Committee meetings
(Circular Decision), both of which are legally
binding.
financial transactions related to financial
accounting, treasury and tax, accounting
management, asset and procurement
management.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
173
- Determine and approve strategies for
corporate cash management.
- Determine and approve the corporate
financial risk acceptance.
c) Subsidiary Management Committee
i. Composition of Subsidiary Management
Committee
Chairman : Director of Finance
Secretary : VP Strategic Business
Development or VP
Management Accounting
will be delivered by the Company’s
representative/proxy as shareholders
at such GMS of subsidiaries, including
the appropriation of net profit
by subsidiaries, determination of
components and amounts of the
remuneration and or compensation
for members of the BoD and BoC of
subsidiaries, that under provisions of
the subsidiaries’ Articles of Association
require the Company’s approval as a
shareholder.
Members : 1) Director of Innovation &
- Conduct the fit and proper test
Strategic Portfolio
2) Director of Wholesale &
International Service
3) Relevant Director
for candidates for BoD and BoC of
subsidiaries that are selected from
outside the Company.
Unit
: 1) VP Corporate Strategic
d) Investment Committee
Planning
i. Composition of Investment Committee
2) VP Legal & Compliance
Chairman : President Director
3) VP Financial Logistic Policy
Secretary : VP Management Accounting
atau VP Management
Members : 1) Director of Finance
Accounting
ii. Authority
- Determine or approve strategic
plans, directions and policies related
to business management and risk
management at the subsidiaries.
2) Director of Network, IT &
Solution
3) Director of Innovation &
Strategic Portfolio
4) Director of Wholesale &
International Service
5) Relevant Directors
- Approve the related transactions and/
Unit
: 1) VP Infrastructure Service &
or business initiatives of subsidiaries
in order to expedite decision making
process with due adherence to GCG
practices and prudence principles.
- Approve actions proposed by the BoD of
subsidiaries that under the provisions of
subsidiaries' Articles of Association must
have written approval from the Company
Governance
2) VP Consumer Product
Planning
3) VP Corporate Strategic
Planning
4) VP Risk & Process
Management
as shareholder of the subsidiaries.
ii. Authority
- Approve corporate actions planned
- Determine and approve the Company’s
to be executed by subsidiaries, such
as addition and subtraction of capital
investment capex programs.
(issuance of new shares/capital
e) Risk, Compliance, and Revenue Assurance
injection/equity call/divestment) at the
Committee
subsidiaries, mergers, and acquisitions.
i. Composition of Risk, Compliance and
- Approve the GMS agenda of subsidiaries
Revenue Assurance Committee
proposed in writing by the BoD, BoC or
Chairman : Director of Wholesale &
shareholders of subsidiaries that under
International Service
the provisions of the relevant subsidiary’s
Secretary : VP Risk & Process Management
Articles of Association are eligible
to propose such GMS agenda to be
discussed at the GMS of subsidiaries.
- Approve the planned decisions made
at the GMS of subsidiaries which
Members : 1) Director of Finance
2) Relevant Directors
Unit
: 1) Head of Internal Audit
2) VP Legal & Compliance
3) VP Risk & Process
Management
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Management
Report
Business
Overview
Management’s
Discussion & Analysis
ii. Authority
deficiencies, individually or collectively,
- Determine the Company’s risk profile and
pose material weaknesses that must be
risk appetite.
disclosed in a report to the US SEC, as
- Determine policies in risk management
well as reported to External Auditors and
and compliance.
the Audit Committee.
- Eliminate inefficient business processes,
- Provide recommendations and/or a letter
strengthen internal controls and risk
mitigation.
of representation to Certifying Officer/
Approver to certify/approve a disclosure
- Monitor the effectiveness of the revenue
to be submitted to external parties.
assurance process.
- Recommend prevention and resolution
g) Procurement Committee
of potential leaks in revenue cycle.
i. Composition of Procurement Committee
f) Disclosure Committee
Chairman : Director of Wholesale &
International Service
i. Composition of Disclosure Committee
Secretary : VP Supply Planning & Control
Chairman : Director of Finance
Vice
: Director of Wholesale &
International Service
Members : 1) Director of Human Capital
Management
2) Director of Finance
Secretary : VP Enterprise Management
3) Director of Network, IT &
Audit or SGM Finance Billing &
Collection Center or VP Investor
Relations
Solution
4) Director of Innovation &
Strategic Portfolio
Member
: Set in more details in the
Unit
: 1) SGM Supply Center
relevant Company Regulations
concerning Disclosure
Guidelines.
2) VP Legal & Compliance
3) VP of Directorate of Relevant
User
ii. Authority
ii. Authority
- Approve disclosures of historical
information and forward looking
statements, defined as all information
that contain elements of projections
- Approve the procurement in accordance
with the provisions stipulated in the
applicable logistic policies.
(future result) in terms of operations,
h) Single Point Margin Committee
financial position, financial performance,
i. Membership Composition of Single Point
and other financial and statistical issues.
Margin Committee
- Determine the materiality level of
Chairman : Director Innovation & Strategic
an event or risk to be disclosed, and
ensure that all material information
Portfolio
Secretary : VP Enterprise Business Strategy
that may influence the preparation of
Member
: 1) Director Enterprise &
such disclosure have been completely,
accurately and consistently disclosed in
detail pursuant to the applicable rules
(compliance).
Business Service
2) Director of Network, IT &
Solution
3) Relevant Director
- Discuss significant deficiencies related
Unit
: 1) VP Innovation, Strategy &
to internal control over financial
reporting as reported by Internal Audit
(based on findings from Test of Control
and the audit of internal control by
external auditors) to see whether these
Synergy
2) VP Management Accounting
3) VP of relevant business
Directorate
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
175
ii. Authority
to investors and filing through online media,
- To approve and determine the amount of
designing details of meetings and presentations
Single Point Margin on price offering for
and dissemination of statements.
End User outside Telkom Group
b. Coordinating the implementation of
- To oversee and to evaluate the
Shareholder Relations, which includes
implementation of Single Point Margin in
responding to requests for information from
Telkom Group.
Shareholder.
F. Corporate Secretary/Investor Relations
(“IR”)
c. Coordinating investor relations program
development that includes identification
interaction target, approach program to all
investors and other activities related to intensity
Chaired by a Vice President ("VP") under Head of
development of investor interest.
Corporate Communication & Affair, previously under
d. Coordinating information development
the Director of Finance, IR is responsible for preparing
program, which consists of information
disclosure of information around the inter-relationship
development including a series of tasks such as
between the Company and its shareholders in
information platform development, feedback
accordance with specified procedure, and for
management, strategic information processing
keeping up a systematic feedback mechanism to
related to stock price fluctuations and trends
assist the management in responding to the dynamic
and other activities related to the enrichment of
shareholders and the capital market in a timely and
information the Company needs to obtain.
effective manner.
e. Coordinating the implementation of annual
meeting and conference calls.
1. Profile of Corporate Secretary
f. Coordinating the selections of communications
The Corporate Secretary is currently held
media for periodic reports and disclosures,
by Honesti Basyir. Currently, he is also as our
provisions of document filing, website
Director of Finance since May 11, 2012. Prior to
management and other activities related to the
his appointment he has held a number of key
information provisions needed by investors and
positions with Telkom, including Vice President
the capital markets community.
(“VP”) for Strategic Business Development at
g. Providing recommendations/advice to BoD on
ITSS Directorate (2012), VP for Strategic Business
issues related to corporate action in response
Development at SICP (2010-2012), Project
to various investor information and matters
Controller of Project Management Office (2009-
relating to the capital market.
2010) and Assistant Vice President (“AVP”) for
Business & Finance Analysis (2006-2009). He
We really pays attention to the two important
holds a Bachelor’s degree in Industrial Technology
principles of GCG, which are accountability and
from Institut Teknologi Bandung (1992) and a
transparency. Through the IR unit and marketing
Master’s degree in Corporate Finance from Sekolah
unit, we continuously strives to ensure that all
Tinggi Manajemen Bandung (2004).
information released is accurate, clear, precise and
2. Activities of the Corporate Secretary
The main activities of the Corporate Secretary/IR
comprehensive in order to increase and maintain
market integrity and stakeholders’ confidence.
are as follows:
The Corporate Secretary has strategic roles and
a. Directing, organizing and controlling
duties to ensure GCG implementation both at
administration process, fulfilling requests for
the company and within the scope of the group’s
information for annual reports, information
overall businesses (subsidiary governance).
176
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
The duties and role of the Corporate Secretary are performed by several work units, namely:
No. Duties and Roles of the Corporate Secretary
Person in Charge
1.
Corporate Governance
a. Communication, coordination with other divisions/ units/ subsidiaries
Head of Corporate
related to the implementation, monitoring, assessment and review of
Communication & Affair
GCG
b. Build trusts towards the management’s ability to manage the
company and build long-term values for stakeholders
c. Facilitate and promote effective relations between the BoC and BoD
by focusing on agency problems while upholding check and balance
procedure
d. Ensure the management of contracts between owners and managers
and BoD and BoC charters to ensure effective control on decisions
not explicitly made in the contract and during certain condition to
ensure the company’s going concern.
e. Balance out competence and information adequacy to the BoC
and BoD to prevent competency gap and asymmetric information
between the BoC and BoD.
f. Manage and ensure that the Company’s Annual Report has covered
Investor Relations Sub
GCG implementation in the Company.
CSR
g. Coordinate the Company’s activities related to Corporate Social
Responsibility.
Directorate – Head Of
Corporate Communication
& Affair
Public Relation Unit - CDC
Corporate philosophy
h. Socialize and monitor the implementation of Corporate Philosophy,
Organizational
Corporate Values, System, Business Ethics and Corporate Culture.
Development Sub
GCG Policy
i. Prepare a policy and framework of GCG management within the
Directorate – DIT HCM
Subdit Risk Process
Company including GCG policies within subsidiaries (subsidiary
Management – Head of
governance).
CRMGA
2.
BoD Administration & Corporate Office
Assist the BoD with various activities, information and documentation,
Corporate Office Support
Administrations - Sub Unit,
including:
Corporate Communications
a. Prepare special List of Members of BOD and BOC and their families
& Affairs Unit
either within the company or its affoliate with regards to share
ownership, business relationship, and other related roles at the
Company and its subsidiaries that have potentials to bring conflict of
interests.
b. Prepare Shareholder List.
c. Attend BOD meetings and prepare minutes of meetings.
d. Organize GMS.
3
Synergy and Coordination
a. Communicate and build synergy with the Group’s Corporate
Subdit Innovation Strategy
Secretary to address issues on information and other matters related
& Synergy
to Telkom Group’s vision, mission, and GCG.
b. Programs of communication and synergy within Telkom Group.
War Room Subdit
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
177
No. Duties and Roles of the Corporate Secretary
Person in Charge
4
Legal/Regulatory Compliance
a. Compliance with financial and capital market provisions:
Investor Relations
- Remind and provide advices to BOD to ensure that the Company
Sub Directorate –
always comply with and follow the Capital Market Regulations and
Head of Corporate
uphold the Company’s Business Ethics and Work Ethics.
Communication & Affair,
- Keep updated with the capital market more particularly with
and Legal Compliance
regards to its prevailing regulations and with GCG international
Sub Directorate- Head of
practices.
CRMGA
- As a contact person that facilitates communication between the
Company and stakeholders as well as with OJK and IDX, on which
the Company’s shares are listed.
b. Regulatory Compliance:
Regulatory Management
- Remind and provide advices to BOD to ensure that the Company
Sub Directorate–Head of
always complies with prevailing regulations and follow all
Corporate Communication
stipulations.
& Affairs
- Keep updated on the industry, particularly the regulations inforce
and shall apply to the company.
c. Compliance with the company’s law and legal.
Legal & Compliance Sub
Keep updated on prevailing regulations and ensure that the Company
Directorate – Head of
always complies with the law.
5 Communication/Disclosure (Liaison Officer)
CRMGA
a. Communication with Financial Authorities, investors, and the capital
Investor Relations Sub
market:
Directorate – Head of
- Manage two-way communications and maintain good relationship
Corporate Communication
with OJK and IDX.
& Affair
- Prepare and communicate accurate, comprehensive, and true
information with regards to the Company’s performance and
prospects with stakeholders, and the Capital Market Community in
collaboration with relevant Units.
- Provide services to shareholders in terms of information related
to the company’s condition (for instance: through information to
investor, journalist gatherings and regular analysis of the impacts of
macro economy on the company.
- Publicize the Company’s corporate actions in a tactical, strategic
and punctual manner.
b. Communication with the public, customers and internal functions:
Public Relations Sub
- Determine criteria for type and contents of information to be
Directorate – Head of
disclosed to stakeholders, including information that can be
Corporate Communications
released as a public document.
& Affairs
- Revise display and governance of internal media and build good
relationship with stakeholders through significant events.
- Keep and updated all information regarding the Company to be
distributed to stakeholders through the Company’s website, bulletin
or other media.
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
G. Internal Audit Unit
Number of Personnel at Internal
personnel with Certified Fraud
Internal Audit Unit (“IA”) has an
Audit
Examiner (”CFE”) certification,
active role in applying control
function over the Company’s
business activities.
1. Head of Internal Audit Unit
Internal Audit appointed and
discharged by the President
Director after approval from the
Board of Commissioners. As per
31 December 2013, this strategic
post was assumed by Erry
As at December 31, 2013, the
two personnel with Certified
IA unit is supported by 50
Information System Audit
qualified staff.
(“CISA”) certification, and
one personnel with Certified
Management Audit (“CMA”)
certification. Throughout 2013,
IA actively engages its auditors
improve auditor’s competence
to prepare for international
in performing audit tasks and
certifications such as Certifed
secure business growth, IA
Information System Auditor
continuously made efforts such
(“CISA”) and Certified Internal
IA is headed by a Group Chief
2. Qualification/Professional
Certification
In order to maintain and
Anwardiredja.
as:
Auditor (“CIA”).
Brief profile of
Erry Anwardiredja:
Served as Head of Internal
Audit of Telkom since 2012
and appointed to the position
based on a decree signed by
the President Director. Pursued
a career with Telkom and its
subsidiaries since 1989, with 19
- engaging IA auditors in
trainings, seminars and
3. Internal Audit Unit Structure
workshops on technical
subjects; and
and Status
As stipulated in Capital
- engaging IA auditors
Market regulations, IA is an
in continuous learning
programs that have
independent unit to other units
and reports directly to the
local and international
President Director.
certifications.
Presented below is Telkom’s
years of professional experience
At present, IA has seven
Internal Audit organizational
in various management
positions. His immediate prior
positions were as VP Internal
Audit and VP Financial System
at Telkomsel (2009-2011).
auditors with national
structure.
certification as Qualified
Internal Auditor (“QIA”), and
six auditors with international
certifications, namely one
Head of Internal Audit
ERRY ANWAR DIREDJA
VP Infrastructure &
Operations Audit
HARRY SUSENO
HADISOEBROTO
VP Enterprise Management Audit
PURWOTO
VP Support & Subsidiary Audit
PURWADI SISWANA
AVP Service & Delivery Audit
SETIA DWI KUSUMAWARDHANI
AVP Financial &
Asset Management Audit
SAUL RUDI NIXSON
AVP Service Operations Audit
JOKO PRIYONO
AVP Share Service Audit
JONI PATHIBANG
AVP Infrastructure & Supply Audit
IMAM SANTOSO
AVP ICOFR &
Risk Management Audit
TATANG BASARI
AVP Subsidiary Audit
ENDRIZAL
AVP IT Support Audit
I KETUT DARSUMANTRA
AVP Quality Assurance &
System Development Audit
EDI DJOKO SUWASONO
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
179
4. Vision, Mission, Duties and
and defined by the Company
and make recommendations
Responsibilities of Internal
Audit
As an integral part of the
as well as based on the IA's
for improvements in terms of
professional assessment.
design and implementation.
company, IA has a vision to
To facilitate the risk-based
The next step is to participate
be “a smart partner” to the
audit paradigm in carrying out
in the activities of internal
Board of Directors, the Board of
its duties and responsibilities,
consulting services. Internal
Commissioners, the Business/
IA has implemented the Audit
consulting services, among
Work Units and Subsidiaries, in
Management System (“AMS”)
other objectives, focus on
order to achieve the Company's
management tool, an online
the implementation of the
objectives and as a driving
application to document all of
Company's operations classified
force in the creation of a
the implementations of risk-
into infrastructure management
disciplined culture at all levels
based audits.
of the organization in regard
the implementation of all
Improvements in IA’s
(of production tools), as
well as product and service
support operations, including
stipulations of prevailing laws,
participation are carried out by
identification of Group Financial
regulations, policies, procedures
improving the quality assurance
Reporting Risk/”GFRR”,
and business processes. As
for the company's operations
preparation of subsidiaries’
“a smart partner”, IA has a
through audit and non-audit
business process and human
mission to provide professional,
activities. Audits are performed
resource management. Internal
objective and independent
to ensure that potential
consulting activity is more
internal audit services and
business risks are mitigated
of a preventative solution to
consultation to the BoD, the
by effective internal controls.
secure that business operations
BoC and the Work/Business
If deficiencies are found in the
remain in the right direction and
Units, to provide assurance
regarding the adequacy of
internal control mechanism of
within the corridor of prevailing
a certain business process, or
regulations.
financial reporting, to actively
when certain risks turned out to
ensure the implementation of
be out of control, a substantive
As part of a company highly
internal controls, to support
test is performed on the audit
committed to successful GCG,
the improvement of GCG
practices, and to evaluate
the implementation of risk
management.
object as the next step to find
IA has an important role in the
the root cause of the problem.
whistleblower mechanism which
is the domain of the Audit
In addition, as consequence
Committee and the Executive
of our dual listing in the IDX
Investigative Committee (“EIC”)
The vision and mission
and the NYSE, IA periodically
of which Head of IA is also
statements of IA is implemented
examines and audits the
the secretary. Whistleblower
through systematic and
effectiveness and adequacy of
mechanism serves to
measurable activities in line with
internal control mechanism in
accommodate any “complaint”
prevailing standards in each
terms of financial reporting in
filed by employees and
phase of the audit process from
line with the Internal Control
forwarded to the management.
preparation, implementation
over Financial Reporting
and monitoring of follow-up
("ICOFR") standards.
actions. Therefore, a risk-based
If the Audit Committee and the
EIC consider that the complaint
needs further investigations,
audit methodology is used
In order to support audit
IA is to prepare follow-up
during the preparation phase
and encourage each unit’s
actions as part of the audit
of an audit as the primary
awareness of the importance
assignment.
guideline to determine the
of internal control, all relevant
auditability of units based on
business units perform quarterly
Findings from such activities
the risk level, that is, the higher
Control Self Assessment
are reported to the President
the risk, the higher is the need
(“CSA”) over its internal control
Director with a copy for the
for an audit. The risk levels of
responsibilities. Periodically,
Audit Committee and later
an auditeeare based on risks
IA also reviews findings in the
distributed to the respective
that have been mapped out
CSA to assess their adequacy
auditee for follow-ups and
corrective measures.
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Further control are necessary
of the company's disclosure
transactional level. Our
to ensure that an auditee has
controls and procedures
compliance activities in 2013
provided adequate response
under the supervision and
included:
over the results of the audit and
with the participation of the
- Supporting business
consulting service. Operational
management, including the
follow-ups are conducted
President Director, which is
by the auditee while being
of the same level as Chief
monitored by the IA. For this
Executive Officer (“CEO”)
purpose, follow-ups are limited
and Finance Director, which
to significant business process
is of the same level as Chief
activities with legal advice
by delivering legal opinions
on planned actions and
issues in relation to
their compliance with
the applicable laws or
areas with an agreed time frame
Financial Officer (“CFO”) (as
regulations (legal advisory).
of completion.
such term is defined in Rules
- Supporting business/
5. Internal Audit Charter
Telkom’s IA unit has an
13a-15(e) and 15d-15(e) under
the Securities Exchange Act).
corporate transactional
activities by conducting
Based on this evaluation, the
review of any draft
Internal Audit Charter as
CEO and CFO have concluded
one of the company’s formal
that, as of December 31, 2013,
documents containing a broad
the company’s disclosure
agreements/contracts
(procurement and non-
procurement) to ensure
description of the vision,
controls and procedures were
in advance that the
mission, structure, status, duties,
effective. Disclosure controls
procurement or partnerships
responsibilities and authority of
and procedures conducted
the IA, including competence
by the management include
requirements for its auditors.
controls and procedures
Internal Audit Charter has
that are designed to ensure
been formulated based on
that information required
procedure has complied
with the procurement/
partnership procedures
established by the Company
and the external regulations.
international standards for the
to be disclosed in reports
- Conducting a legal review of
professional internal auditing
filed or submitted under the
planned business initiatives,
practices issued by the Institute
Exchange Act is recorded,
policies and planned
of Internal Auditors (“IIA”),
processed, summarized and
and had been approved by
reported within the time
cooperation (legal review of
business & policy initiatives).
the President Director and the
periods specified in the SEC’s
- Settlement of litigation
Audit Committee.
rules and forms, and that such
and non-litigation cases
information is accumulated
(litigation).
6. The Implementation of Audit
and communicated to our
Work and Consulting Activities
management, including the CEO
C. Evaluation on the Effectiveness
in 2013
In accordance with the 2013
and CFO, as appropriate, to
of Internal Control
allow timely decisions regarding
1. Management’s Report
Annual Internal Audit Work
required disclosure.
on Internal Control over
Plan,,during the year 2013 the IA
has conducted and completed
B. Compliance
Financial Reporting
The Company's
67 auditee and consultation
Our corporate compliance
Management is responsible
objects from its 2013 Annual
is managed by the Legal &
Work Plan.
INTERNAL CONTROL
SYSTEM
Compliance unit under the
Directorate of CRMGA. This
unit endeavors to ensure
that our policies, corporate
for establishing and
maintaining adequate
internal control over financial
reporting, as such term is
defined in Exchange Act
decisions and business activities
Rules 13a-15(f) and
A. Financial and Operational
are done in compliance with
15d-15(f). The internal control
Control
Disclosure Controls and
Procedures
prevailing law and regulations,
over financial reporting
both internal and external. We
is a process designed by,
are proactively implementing
or under the supervision
Management conducted an
compliance policies at the
evaluation on the effectiveness
business unit level and the
of, the CEO and CFO, and
executed by the Board of
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
181
Directors, management and
become inadequate because
to materially affect, our
other personnel, to provide
of changes in conditions,
Company’s internal control
reasonable assurance
regarding the reliability
of financial reporting
and the preparation of
consolidated financial
statements for external
purposes in accordance
with generally accepted
or that the degree of
compliance with the
over financial reporting.
policies or procedures may
We are committed to
deteriorate.
The management has
continual improvements in
internal control processes,
and will continue to review
assessed the effectiveness
and monitor the control
of the company’s internal
over financial reporting and
accounting principles, and
control over financial
includes those policies and
reporting as of
procedures that (1) pertain
December 31, 2013. In
to the maintenance of
records that, in reasonable
detail, accurately and fairly
making this assessment
the management used
the criteria set forth in
its procedures in order to
ensure compliance with the
requirements of Sarbanes-
Oxley Act and related
regulations as stipulated by
COSO. We will also continue
reflect the transactions and
Internal Control – Integrated
to assign significant
dispositions of the assets of
Framework issued by the
company resources from
the Company, (2) provide
Committee of Sponsoring
time to time to improve its
reasonable assurance that
transactions are recorded
as necessary to permit
Organizations of the
Treadway Commission
(“COSO”). Based on this
internal control over financial
reporting.
preparation of Consolidated
assessment, management
INDEPENDENT AUDITOR
Financial Statements in
concluded that as of
accordance with generally
December 31, 2013, our
In line with existing procedures
accepted accounting
internal control over financial
and taking into consideration the
principles, and that receipts
reporting was effective.
independence and qualifications of
and expenditures of the
independent auditors, our Annual
Company are being made
2. Attestation Report of
General Meeting of Shareholders
only in accordance with
authorizations of the
Company’s management
and Board of Directors,
and (3) provide
reasonable assurance
regarding prevention
or timely detection of
unauthorized acquisition,
use or disposition of the
the Registered Public
(“AGMS”) on April 19, 2013 appointed
Accounting Firm
the Public Accountant Firm (or
The effectiveness of our
“KAP”) Purwantono, Suherman &
internal control over financial
Surja (a member firm of Ernst &
reporting as of December
Young Global Limited), a registered
31, 2013 has been audited by
KAP with OJK, to perform the
KAP Purwantono, Suherman
audit on our Consolidated Financial
& Surja, an independent
Statements for the fiscal year ending
registered public accounting
December 31, 2013. The fee for the
firm, as stated in their
audit on the Consolidated Financial
Company’s assets that could
report which appears on
Statements for fiscal year 2013 was
have a material effect on
the Consolidated Financial
agreed at Rp28.2 billion (excluding
the Consolidated Financial
Statements.
VAT).
Statements.
3. Changes in Internal Control
The independent auditor for our
Because of its inherent
over Financial Reporting
Consolidated Financial Statements
limitations, internal control
There have been no
for fiscal year 2011 was KAP
over financial reporting
significant changes in our
Tanudiredja, Wibisana & Rekan, a
may not prevent or detect
Company’s internal control
member firm of the PwC global
all misstatements. Also,
over financial reporting
network.
projections of any evaluation
during the most recently
of effectiveness to future
periods are subject to
the risk that controls may
completed fiscal year that
KAP Purwantono, Suherman
would materially affect
or are reasonably likely
& Surja has been our public
accountant firm since 2012. The
182
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PT Telekomunikasi Indonesia, Tbk
Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
public accountant whose signature appears on the Independent Auditor
continuity of competency
Report for fiscal year 2013 is Hari Purwantono.
development. Regularly
assessing the quality of
KAP Purwantono, Suherman & Surja is also assigned to perform an audit on
implementation of risk
the Effectiveness of Internal Control on Financial Reporting for fiscal year
management through Risk
2013 and an audit on funds utilization of the Partnership and Community
Management Index, Risk
Development Program (“PKBL”) for fiscal year 2013.
Fees and Services of the External Auditor
The following table summarizes the fees for audit service in 2011,
2012 and 2013
For years ended December 31
2011 1
20122
20132
(Rp million)
Audit Fees
Tax Service Fee
All other fees
40,503
26,619
28,240
70
400
-
326
-
-
(1) Audited by KAP Tanuredja, Wibisana & Rekan.
(2) Audited by KAP Purwantono, Suherman & Surja.
.
RISK MANAGEMENT
A. Risk Management System
Since 2006, we have has initiated the implementation of a risk
management system with reference to the COSO Enterprise Risk
Management framework. Risk management is inherent in the
implementation of GCG as well as internal control mechanism within the
company.
Our stated vision with regards to risk management is: "Promoting a risk
management as EMBEDDED CULTURE within all scopes of business
processes and operations." Therefore, since 2008 we have established
and developed:
- Structural Aspects which include developing risk management
vision, mission, commitment, tone at the top, conducive internal
environment, policy, competence development, IT tools and systems.
- Operational Aspects which include determination of Risk
Acceptance Criteria, conducting risk assessment and developing
specific-functions risk management.
- Maintenance Aspects which include monitoring risk management
implementation, periodical risk reporting report, safeguarding the
Culture Survey and Risk
Maturity Level.
Currently, the implementation
of risk management in the
Company is integrated across
the entire entity. We have
established road map of the
Entity Risk Management
development as follows:
- 2013 : improvement of ERM
Maturity Level at
Quantified Level initial
stage.
- 2014 : improvement of
ERM Maturity Level
at Quantified Level
intermediate stage.
- 2015 : improvement of
ERM Maturity Level
at Quantified Level
Advanced stage.
- 2016 : improvement of ERM
Maturity Level to
Optimized Level.
B. Evaluation of the Effectiveness
of Risk Management Systems
The effectiveness of the Risk
Management System is
evaluated through:
1. Quarterly review and
monitoring of unit risk
management.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
183
2. Preparation of regular
changes in currency
(i.e. Information System
quarterly Risk and
Compliance Analysis
Reports.
exchange rate and
deficient funding.
Security through
implementation of ISO
- Legal & compliance risks
27000).
3. Meetings to discuss
including legal issues
6. Development of Corporate
corporate risks through
encountered by the
Internal Control Program.
meetings at BoD as well as
Company.
7. Development of Regulatory
BoC level.
- Regulatory risks
Management.
4. Measurement of risk culture
including regulatory
implementation through
provisions that Company
internal surveys conducted
should comply with.
on a number of respondents.
- Competition risks
5. Measurement of risk
including potential
LEGAL PROCEEDING AND
LAWSUITS INVOLVING THE
COMPANY
management maturity level
tighter competition
In the ordinary course of business,
(ERM Maturity Level).
across entire business
we have been named as defendant
C. Risks encountered by the
portfolio.
in various legal actions related
to land disputes, monopolistic
Company
D. Efforts to Manage Risks
practice and unfair business
Risks encountered by us are
To manage the aforementioned
competition, and SMS cartel
detailed in “Business Overview”
risks, hawse have undertaken
practices. With regard to the legal
– “Risk Factors”. In general,
following efforts:
proceedings described below, we
these risks include:
1. Established and developed
do not believe that subsequent
1. Country-related risks such as
structural, operational
investigations or court decisions
changes in politics, society,
and maintenance aspects
regarding those cases will have
macro economy and natural
over risks management
significant financial impact on
disasters that are likely to
implementation across entire
us or our subsidiaries. Based on
occur in Indonesia.
our subsidiaries.
management's estimates on the
2. Company-related risks that
2. Improving the Quality of
probable outcomes of those cases,
include:
Risk-based Decision Making
we have made provisions of Rp49
- Operational risks,
(six eyes principles).
billion as at December 31, 2013.
including potential
3. Development of Business
disruptions on productive
Continuity Management and
See Note 42 in the Company’s
assets, security of the
Crisis Management.
Consolidated Financial Statements.
assets from external
4. Development of Revenue
interference, potential
Assurance to prevent
The following describes
revenue leakage, changes
leakage and Anti Fraud
certain current significant legal
in technology and risks
Program.
proceedings involving us, our
arising from satellite
5. Development of Enterprise
subsidiaries and our Board of
business.
Security Governance in
Commissioners and Board of
- Financial risks including
safeguarding physical and
Directors:
changes in interest rates,
non-physical assets
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
A. Cases Involving the Company
Case
Legal Status
Financial Impact
(Rp)
Commission for the Supervision of Business Competition
(“KPPU”)
We are the defendant with KPPU as plaintiff in the case of
In appeal at the Central
allegation of violation of Article 5 of Law No.5 of 1999 on
Jakarta District Court
Prohibition of Monopolistic and Unfair Business Competition
Practices
Civil Court
Telkom and Achmad Mansuri collectively as Defendant with
In appeal at the Supreme
R. Hady Soentoro as Plaintiff in the appeal case to the court
Court
decission
Telkom, the Provincial Government of South Sulawesi, the
Regional Government of Gowa Regency, and the National Land
In appeal at the Supreme
Agency collectively as Defendant with Andi Jindar Pakki et al. as
Court
Plaintiff in the land right dispute at Telkom Makassar
Indonesia National Board of Arbitration (“BANI”)
Telkom as Defendant and PT Giland Teknikatama as Plaintiff in the
arbitration case of allegation of default in PKS PPLT
Appeal at Bandung
District Court for
annulment of BANI
decision
Telkom as Defendant and PT Khatulistiwa Dwi Bhakti as Plaintiff in
Administration process of
the arbitration case of allegation of default in PKS PPLT
payment
18 billion
110 billion
57,6 billion
1,7 billion
4 billion
Assosiasi Pengusaha Wartel Indonesia (“APWI”)
Telkom, Telkomsel, BRTI and MoCI collectively as Defendant, with
BPP APWI as Plaintiff in the dispute case of allegation of unlawful
act related to distribution of airtime rights revenues of Internet
In appeal at the Supreme
Court
3,7 billion
kiosk (wartel) operators
B. Cases Involving Subsidiaries
Financial Impact
(Rp)
18 billion
Case
Legal Status
Lawsuit by APWI
Telkomsel has been sued by APWI related to the payment of air
Telkomsel is currently in
the appeal process at the
time by telecommunication kiosks (wartel), which also involved
Supreme Court
Telkom and BRTI.
Bankruptcy Lawsuit
Telkomsel faced a bankcruptcy lawsuit related to the
Telkomsel has been
declared free from
implementation of the business cooperation agreement with
bankruptcy status based
PT Prima Jaya Informatika. Telkomselis alleged to incur liabilities
on the Appellate Decision,
due to the suspension of distribution after the Purchase Order
which is upheld by a
issued by PT Prima Jaya Informatika is rejected.
Judicial Review decision at
KPPU
Telkomsel and certain other Operators were investigated by KPPU
the Supreme Court.
Telkomsel is currently
waiting for the notification
related to allegation of SMS cartel practices by said Operators.
from the Central Jakarta
KPPU has issued a Decision which sentenced Telkomsel to pay
District Court regarding
25 billion
Rp 25 billion in penalty, for which decision Telkomsel has filed an
the start of the Joint
appeal at the District Court.
Proceedings at the court.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
185
C. Cases Involving Members of Board of
are published in print or electronic mass media or
Commissioners and Board of Directors
In 2013, there were no legal proceedings involving
disseminated specifically to employees and their
families. Some corporate information is also published
any serving member of the BoC and BoD.
in our internal magazine.
ADMINISTRATIVE SANCTIONS
In addition, we can be contacted directly at:
During 2013, there were no administrative sanctions by
Investor Relations
the capital market authority or other authorities to the
Graha Merah Putih 5th Floor
Company or members of its BoC and BoD.
Jl. Jend. Gatot Subroto Kav.52
PUBLIC ACCESS TO INFORMATION
Jakarta 12710
Tel.
Fax.
: 62-21-521 5109
: 62-21-522 0500
Our corporate disclosures can be accessed through
Email/mailist : investor@telkom.co.id
our website (www.telkom.co.id). Certain disclosures
Below is a list of our disclosure and coordination activities for fiscal year 2013:
Information Transparency
Activities
Number of
Activities
Date
Conference Call(*)
Analyst/Investor Meetings
Public Expose
General Meeting of Shareholders
Investor Release
Investor Conference
Roadshow
Newspaper Announcement:
a. GMS
b. Financial Statements
c. Dividend
d. Stock Split
3
181
1
1
5
3
4
3
2
1
1
1 May, 23 July, 6 November
9, 10, 11, 15, 16, 17, 23, 30 January, 6, 20 February, 13, 14, 20, 21, 25, 26, 27, 28
March, 2, 3, 4, 9, 10, 11, 24 April, 2, 8, 15, 16, 23, 29, 30 May, 5, 11, 12, 13, 19, 20,
25, 26, 27 June, 3, 4, 10, 11, July, 1, 21, 22, 28, 29 August, 2, 5, 11, 12, 13, 18, 19, 23
September, 9, 10 October, 7, 13, 14, 18, 20, 21, 25, 28 November, 4, 11, 12, 17, 19
December 2013
27 November
19 April
11, 15 January, 6 March, 31 July, 28 November
18-22 March, 20-22 May, 2-3 October
27-28 September, 1 October, 3-4 October, 28-30 October
20 March, 4 April, 23 April.
7 March, 19 July
23 April
21 August
*) A Conference call is a meeting forum between our BoD and investors, both domestic and international, to report the results of the
quarterly financial statements through electronic media, namely a teleconference. Conference calls are usually held to coincide with the
publication of quarterly report, which is issued in the form of an Info Memo.
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Management
Report
Business
Overview
Management’s
Discussion & Analysis
from our previous management of
C. Business Ethics of Telkom
Group Strengthening
Accordance to the direction
A code of ethics for all Telkom
Group employees which require
that employees to:
1. Acts and carries out his/her
CODE OF ETHICS AND
CORPORATE CULTURE
Given that an organization is none
other than the people within it
our morals and ethics are the
foundation for the application of
GCG in our company. Learning
governance, our application of GCG
is an integral part of our approach
to excellence in our performance:
being profitable, obeying the law,
being ethical and instilling an
awareness among our employees
of our social responsibility to the
public as we strive to be a good
citizen to ensure that we will
continue to grow and be loved by
our customers.
and can be viewed on our
5. The company protect
website at http://www.telkom.
anyone who reports
co.id/en/investor-relations/
information about legal
tata-kelola-perusahaan/kode-
violations, unethical actions
etik. Amendments of the code
or other actions that violate
of ethics will similarly be posted
the principles of GCG.
on our website.
of the GCG development and
duties honestly and fairly.
implementation surrounding
2. Places the interests of
the Group, we have issued a
policy on the application of
the Company above any
personal or group interests.
GCG in Telkom Group (No.
3. Respects individual rights
PD.602.00/r.00/HK000/
and diversity as a source
COP-D0030000/2011) which
of strength for the Telkom
articulates our measures to
Group.
strengthen our corporate
4. Upholds the corporate
culture and business ethics
culture.
A. Business Ethics
within the Group. Our
5. Safeguards corporate
We believe that a good business
commitment to our code of
assets and maintains the
principle is ethical business,
which refers to doing business
sustainably and with excellent
performance, in compliance
with ethical principles on the
basis of prevailing laws and
regulations. In line with Decree
of the Directors No.KD.05/2005,
we have a business ethics
that defines the standards of
organizational behavior as well
as employee behavior in the
interactions with customers,
suppliers, contractors,
colleagues, and other parties
that have an interaction with
the company.
ethics in managing the Group is
confidentiality of corporate
as follows:
information.
1. The companies within
6. Produces quality products
the Telkom Group strive
to be companies that
can be role models by
and provides the best
service to customers.
7. Pursues corporate profits
operating a strong, healthy
and growth by complying
and fair business driven
by honorable values
and complying with the
law while respecting all
stakeholders.
with the provisions of the
law and business ethics.
8. Is responsible for all his/her
decisions and actions.
9. Upholds and enhances the
2. The companies within the
reputation of the Telkom
Telkom Group must operate
Group.
or manage their business
10. Respects the public and the
with due attention to ethical
environment.
business principles and
the prevailing laws and
D. Socialization and Enforcement
B. Implementation of Code
regulations.
3. The companies within the
of Business Ethics
Socialization and assessment
of Ethics by the Board of
Commissioners, Board of
Directors and Employees
In compliance with the
Telkom Group practice the
are undertaken each year
principles of GCG and are
to instill and reinforce the
concerned with the public,
comprehension of Corporate
provisions of Section 406 of the
culture and the environment.
Values and Business Ethics by
Sarbanes Oxley Act (“SOA”)
2002, our code of ethics
applies equally to our Board
of Commissioners, Board of
Directors and other key officers
as well as all of our employees
4. Any act against the law or
all employees. The socialization
breach of ethics is forbidden,
programs involves aspects of
even if undertaken for
GCG, business ethics, integrity
business reasons or while
pact, fraud, risk management,
under pressure from any
internal control ("SOA"),
party.
whistleblowing, prohibition
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
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187
of gratuities, IT governance,
COSO framework on internal
security of information, and
control audit at the entity level.
other issues related to the
practice of good corporate
E. Corporate Culture
governance. The assessment
Systems and cultures are
meanwhile is carried out
continuously developed to
through a Business Ethics
meet the demand and to cope
Survey involving all employees
with the business changes in
as survey respondents. This
order to realize our aspirations
survey is implemented online
to continue to advance, be
through the Company's portal/
valued by our customers, be
intranet media. At the end of
competitive in our industry
the survey, each employee is
and be a role model for other
required to sign a statement of
companies. In 2009, we began
compliance with business ethics
the transformation to a new
applicable at the Company.
corporate culture known as
“The Telkom Way”. Our culture
The comprehension and
were further developed in
practice of business ethics,
2013 with the enactment of
along with the results of the
Leadership Arcitecture and
yearly survey, are audited
Corporate Culture (“LACC”) of
internally as well as externally
Telkom Group
through the SOA 404 audit
process, related to the
The company’s culture is fully
implementation of control
described as follows:
environment in accordance with
Moral and ethic are
the foundation for the
implementation of
GCG in our Company,
given that organization
is merely an assembly
of people. Over time,
we learn that the
implementation of
GCG can not be
separated from
conducting business
ethically and building
the awareness of
the Company and
employees.
Practices to be the winner
IMAGINE - FOCUS - ACTION
Principles to be the Star
SOLID
SPEED
SMART
Philosophy to be the Best
Always The Best
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Business
Overview
Management’s
Discussion & Analysis
Philosophy to be the Best: Always The Best
Philosophy to be the Best: Integrity, Enthusiasm,
Always the Best is a basic belief to always provide
Totality
the best in every job we do. Always the Best
Always the Best requires our employees to have
have the essence of "Ihsan" which in this sense is
integrity, enthusiasm, and totality.
translated to "best". Employees who have Ihsan
spirit will always provide better results than it
Principles to be the Star: Solid, Speed, Smart
should be, so the ihsan attitude will automatically
Principles to be the Star of the Telkom Way is the 3S,
be guided by a sincere heart. When every activity
namely Solid, Speed, as well as a Smart which is
that we do is a form of worship to the God
also the core values or great spirit. Explanation of
Almighty.
Solid, Speed Smart is as follows:
SOLID
SPEED
SMART
One Heart
Starting Point
Intuition
Mental
One Mind
Setting Direction
Innovation
Reasoning
One Action
Taking Action
Impressive
Physical
Practices to be the Winner : Imagine - Focus – Action
Practices to be the Winner of The Telkom Way is the IFA which is Imagine, Focus, Action as well as the Key
Behaviors. Explanation of Imagine, Focus and Action is as follow:
Always The Best (ATB)
It is the result of Imagine, Focus and Action
Imagine
I
Always The Best
F
A
Focus
Action
Imagine
- Begin from the end
Focus
- First thing comes first
Action
- The world can only be changed
- The vision or dreams of a true
- Establish proof of progress
through imagination plus action
leader
- Prioritize resources allocation
- A vision without action is just a
- Start with what is desired, not
from what is feasible
fantasy, action without vision is
just a momentary sensation
- Create quick wins
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
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189
F. Evaluation of the Implementation of Business
Telkom Group employees, or third
Ethics and Corporate Culture
Each year, we conduct an internal survey to
assess the effectiveness of the application of
our corporate culture and business ethics. This is
known as the Business Ethics Family Survey. The
survey, which is conducted online to allow us to
reach all our employees quickly, asks questions
about GCG, business ethics, The Telkom Way, anti
fraud, internal control, the integrity pact, the whistle
blowing system and more. The survey results for
2011, 2012, and 2013 were 74.87 points, 79.07 points,
and 75.80 points out of a possible 100 points.
party, may submit complaints
regarding the accounting and
auditing issues, breach of policy,
allegations of fraud and/or
corruption, and violations of
code of ethics, directly to the
President Commissioner, or
to the Chairman of the Audit
WHISTLEBLOWING SYSTEM
Committee of
As part of our entity level controls, Telkom has since
2006 implemented a whistleblower program that is
PT Telekomunikasi Indonesia, Tbk.
designed to receive, examine, and follow up complaints
-
Information reported must be supported by
from employees of Telkom Group and third parties in
sufficient evidence and considered reliable for
confidentiality. The implementation of whistleblower
further investigation.
program is administered by the Audit Committee
established on the BoC Decree further ratified by the
B. Protection for Reporting
BoD Decree.
The Company’s policy on whistleblowing
protection is stipulated in BoD Decree
A. Whistleblowing Management
No. KD.48/2009to accommodate and ensure the
Telkom Group's employees or any third party
safety of employees and third parties who file
may submit complaints regarding accounting
complaints or report violations.
and auditing issues, policy violations, fraud and/
or corruption, and violation of code of conduct
C. Parties managing Complaints
directly to the President Commissioner or the
Complaints are managed by the Audit Committee
Chairman of the Audit Committee of
who will follow up complaints received in
PT Telekomunikasi Indonesia, Tbk. via email, fax or
accordance with established procedures.
mail to the following address:
Email
: ka301@telkom.co.id
Fax
: (62-21) 527 1800
D. Complaints Handling
In order to meet the OJK Rule No.IX.1.5 and the
Sarbanes-Oxley Act of 2002 Section 301 regarding
Website
: www.whistleblower.telkom.co.id
the Audit Committee of a Public Company Audit
Letter
: Audit Committee
Committee, complaint handling must be included
PT Telkomunikasi Indonesia Tbk.,
in GCG improvement framework. Therefore, certain
Graha Merah Putih, 5th floor
Jl. Jend. Gatot Subroto Kav. 52
Jakarta 12710
conditions for filing complaints are necessary
to ensure that a complainant has full sense of
responsibility and does not intend to defame
someone's reputation.
In filing complaints the following criteria must be
met:
The Audit Committee will follow up complaints
- a complaint is filed via website, email, fax or
filed by third parties including, and especially those
mail.
from the Telkom Group's employees relating to:
-
it provides information on issues of internal
- Accounting and Auditing
control, accounting, auditing, regulatory
violations, fraud and/or corruption, and
violations of the code of ethics.
Accounting and internal control problemsover
financial reporting that might lead to material
misstatements in the financial statements and
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Overview
Management’s
Discussion & Analysis
Learning from our
audit issues, especially concerning the independence of the Public
Accountant Firm.
previous management
- Violations against regulations
of governance, our
application of GCG is
an integral part of our
approach to excellence
in our performance:
being profitable,
obeying the law, being
ethical and instilling
an awareness among
our employees of our
social responsibility to
Violation of capital market regulations and laws pertaining to the
operation of Telkom and violations of internal regulations that could
potentially harm the Company.
- Frauds/or suspected corruption
Fraud and/or corruption by officials and /or Telkom’s employees.
- Code of Ethics
Unhealthy attitudes of Directors and Management that may
ruin Telkom’s reputation or cause harm to our business. These
dishonorable actions may include: dishonesty, conflict of interest or
misleading information to the public.
We have also established a working mechanism between the Audit
Committee and both the Internal Audit and Investigations Committee,
including with subsidiaries to follow up incoming complaints.
In addition, the whistleblower program has also been socialized to and
comprehended by majority employees.
During 2013, the Audit Committee followed up two complaints filed
that were worth investigations and fell into the category of complaints
that are related to accounting, internal control, regulatory violations,
the public as we strive
suspected fraud, and code of ethics violations.
to be a good citizen
to ensure that we
will continue to grow
and be loved by our
customers.
The application and results of whistleblowing systems:
Description
Quantity
Remarks
Number of complaints
Qualified
Complaint category
Complaint progress
3
2
2
1
Complaints received
Complaints deemed worth follow ups
Suspected Fraud
Complaint being processed and followed up
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
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191
E. Whistleblowing System Procedure
WHISTLE
BLOWER
•
•
•
•
Website
Email
Fax
Letters
WHISTLEBLOWING SYSTEM PROCEDURE
THE AUDIT COMMITTEE / BOARD OF COMMISSIONERS
PARTIES
Initial Review
Does it have
anything to do with
BoD
NO
Initial Review by the
Internal Audit
YES
Report
Does it need more
information
YES
•
•
•
Initial Review
Formulating TOR and
Independent Auditor
Procurement
Investigative audit
and follow up
by Investigative
Committee
YES
•
•
•
•
Accounting and Auditing
Violations on Regulations
Frauds and or Corruption
Code of Ethic
NO
Does it meet the
procedure
NO
BoC Opinion
Investigative Audit?
YES
Supervision of the
Audit Committee
Investigative audit
by Independent
Auditor
•
•
Report discussion
Follow up
Report
Report and
recommendation
Shareholders
NO
Report to
shareholders?
Documented
Information
NO
BoD
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Overview
Management’s
Discussion & Analysis
GCG IMPLEMENTATION
CONSISTENCY
At our environment, an extensive
and increased comprehension
towards GCG has been achieved
as the company experienced
and learnt things during its
implementation. Telkom strongly
believes that GCG is a dynamic
system that needs to be
strengthened from time to time
to make it always adaptable to
changes in our business. Through
continuous updating, instead
of getting in the way, GCG
implementation will contribute
more to our business growth.
Our GCG implementation is
integrated with the management
of compliance, risk management
and internal control. This
practice requires us to be able
to manage GRC in alignment
with the management of our
business performance and
ensure the business as a going
concern. Initially, implementing
risk management was not easy,
requiring time to master the
competencies, achieve greater
accuracy in recognizing the
industry and organizational risks
and embed a culture of risk within
the corporate culture. However,
thanks to the commitment,
consistency and patience of the
management, risk management
is now making a very positive
contribution to the planning and
decision making processes, and
A. Performance Management
Management System
System
To instigate GCG, particularly
Application which principally
measures basic elements of
accountability, we manage
individual performance and
our accountability for our
employees’ performance
through an Employee
individual competencies (core
competency and specific
competency). The individual
Performance Management
performance assessment refer
System, as stated in Company
to realization of management
policy No.PD.208.00/2011.
contract and employee
In accordance with the
purposes and objectives
competencies assessment
done using 360 degrees
of the policy, the principles
assessment by the employee
of objectivity, fairness and
itself, employee’s supervisor,
transparency are applied by
subordinates and colleague.
referring to the guidelines
Both assessment process
on responsible performance
performed online using web
measurement and appraisal
based information system
in the management contract
application through our portal/
mechanism, the determination
intranet.
of performance indicators
according to the scope of
B. Implementing the Integrity
work and role of each unit
Pact and Strengthening the
and individual within the
organization and the setting of
Anti-Gratuity Policy
We began to implement the
agreed targets that refer to the
Integrity Pact consistently
Company’s performance targets
after the Integrity Pact
as stated in the corporate
plan. Performance targets
policy was issued in 2009.
The Integrity Pact policy is
are formulated on the basis
aimed at sharpening GCG
of the corporate plan and are
implementation, particularly
broken down to the unit, sub
in relation to the GCG
unit and employee level with
implementation areas namely
due attention to the SMART
integrity code, business ethics,
principle Specific, Measurable,
avoiding conflict of interest,
Achievable, Realistic, and
prohibition on gratuities,
Time Related. Evaluation is
prohibition on insider trading,
conducted regularly (daily,
information confidentiality,
weekly, monthly, quarterly
preventing actions intended
and annually) according to
for self-enrichment of the
the performance indicator
enrichment of other party that
measured in the management
could cause financial loss in
reinforcing GCG implementation at
review mechanism, which is
the areas of procurement and
Telkom Group.
The following key activities have
been implemented consistently
to support GCG practices and
ensure that it is aligned with the
management of the business:
supported by various online
partnership, service integrity
applications.
and financial reporting integrity.
To complement the existing
Although the Company already
Decree No.PD.208.00/2011,
practices GCG, it is important
we have passed the regulation
to allot particular attention
No.PR.208.01/r.00/PS730/
to certain areas to prevent
COP-B0011000/2012 dated
potential financial loss to the
March 22, 2012 regarding
Company and to create “islands
the Employee Performance
of integrity” as one of the
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
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Shareholders)
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193
instruments of bureaucracy
performance is assessed by
related activities are carried
reform and the prevention
KPKU of the Ministry of SOE
out effectively, responsibly and
of collusion, corruption
and internally self-assessment
transparently and are able to
and nepotism (“KKN”), by
is performed at Business Unit/
deliver sustained added value
concentrating on measures to
Division level.
create openness, accountability
to the company, while avoiding
any conflict with the interests of
and participation.
D. Corporate Planning
the stakeholders.
The direction of the President
Governance
Consistency in planning
E. IT Governance
Director and the Integrity Pact
governance is a key concern for
As a company engaging in the
in the presence of senior leader
management in implementing
business of information and
Telkom Group.
GCG. According to Company
data provider for customers,in
policy, the management ensures
which security must be
C. ISO-Based Process
that the corporate planning is
guaranteed, we always strives to
Management
Since 1996 we have consistently
systematic, simple, organized,
strengthen our IT governance.
integrated, aligned with the
We also strives to always
applied the ISO-based quality
corporate vision and mission,
maximize the use of technology
management system and
and can be properly executed
in managing the company, since
integrated it with the Malcolm
according to previous plans, it
it will directly contribute to the
Baldrige-based performance
should also facilitate evaluation
improvement of good corporate
excellence criteria since
and control when applied.
governance implementation.
2001. Our second application
of the ISO and Malcolm
Baldrige-based quality
The corporate planning model
corporate value chainwhich
comprises three phases:
covers all production equipment
Almost all points in our
management system is aimed
1. Aligning stakeholder
infrastructure networks and
at establishing governance
expectations.
all important aspects of
processes and performance
2. Formulation the corporate
management such as finance,
through disciplined processes
strategy (strategic
logistics and human resources,
and proper documentation
formulation).
including services to employees,
to achieve process-based
performance excellence in
the Company refers to the
3. Implementation of the
customers, suppliers and
business strategy.
other stakeholders have been
integrated into the IT network.
assessment of performance
GCG guarantees and provides
excellence Malcolm Balridge. In
assurance that the entire
The IT governance management
2013, the Company’s excellent
planning process and all
framework refers to Control
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Report
Business
Overview
Management’s
Discussion & Analysis
Objectives for Information and
Several examples of IT
other criteria to create supplier
related Technologies (“COBIT”),
governance practice in our
ranking and shorter suppliers
and is articulated in our policy
operation are user access
list, and Eligible Bidder stage,
on Information Security
review, password management,
which is the final selection for
Systems (No.KD.57/Year 2007),
audit log/audit trail and end
suppliers eligible for bidding or
comprising:
1.
Information, data/
user computing.
being engaged in a procurement
process.
information processing
systems, networks and
F. e-procurement Implementation
As a manifestation of GCG
The benefits of the system are,
supporting facilities, which
and Integrity Pact, we have
among others, the speed of the
are critically important
been consistent with our
tender process, the electronic
information assets.
application-based procurement
selection of tender participant
2. An information security
management to curtail
according to the specified
system to assure information
meetings between suppliers and
requirements, electronic selection
integrity and assets, in order
the procurement committee as
of the winner, and other benefits
to protect our competitive
all tenders and negotiations are
related to enhanced quality of
value, cash flow, profitability,
done through the monitors in
the process, reasonable prices,
legal compliance and
commercial image.
3. An information security
system covering risk
assessment, security
assessment, legal and
order to make making them fair
fairness, transparency and
and transparent.
absence of any intervention.
We select suppliers through
G. Human Resource (“HR”)
three main stages which are
supplier registration stage
Competence Development
The gradual change in business
regulatory compliance and
where suppliers register their
portfolio from infocom to TIMES
business requirements.
names online through Supply
has created shifts in terms of
4. The successful
Management and Logistic
necessary competence. Based on
implementation of
information security
Enhancement (“SMILE”),
our formulated GCG framework,
followed by Selection stage
the competence and capability
systems through shared
where we make assessment on
of human resource is one of
understanding, control,
suppliers depending on their
important elements in GCG
monitoring and evaluation of
business classification and
practice.
policy implementation.
Knowledge management processes in KAMPIUN
Business
Strategy
Knowledge Needs
Inventarisation
Knowledge Sources
Inventarisation
KNOWLEDGE ACQUISITION
Knowledge
Collection
Database and
Capture Tools
Telkom KM
Networks
Workstation Group
Workstation Group
User
User
KNOWLEDGE SHARING
Project
Document
Project Work
KNOWLEDGE UTILISATION
Individual Work
Individual Work
Sharing Tools
Collaborative Tools
Communications
Links Network
Intranets
Working
Document
Brosur
Webpages
Document Distribution
System
Collaborative Tools
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
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195
In the implementation,
is an ideal condition where we
H. The Management of
knowledge management is
will keep running without being
Information Ownership and
focused on creating business
dependent upon any particular
values that can produce
employee. This is to be
Intangible Assets
Information and all intangible
sustainable and competitive
achieved by projecting us into
assets, including research,
advantages by optimizing
a knowledge-based enterprise
technologies, and intellectual
the acquisition, sharing and
through the transformation
property rights earned through
utilization of knowledge the
of Learning Center into a
assignments within and/or at
company needs for continuous
Corporate University (CorpU),
the expense of the company
improvements.
which has become a channel
are the property of Telkom.
for competence improvement
hawse have a regulations on
To support our knowledge
to support our business needs
the Management of Intellectual
management process, we had
so as to establish a center of
Knowledge and Intellectual
a Knowledge Management
excellence human capital who
Property Rights in accordance
System called KAMPIUN,
have international standards
with No.PD.605/2011.
which is a sort of data bank
within the TIMES industry. They
Through the protection and
(repository) used as a tool
are then expected to support
management of intellectual
for all employees to improve
business improvement and
property we expect to be able
insights and knowledge by
the implementation of our
to increase income generation
uploading or downloading any
new culture tag-lined “from
and maintain our competitive
knowledge they may need via
competence to commerce"
advantage. Creativity and
the system to find solutions
which means that competent
innovation with regard to new
for many different problems
employees are likely to create
and existing products and
they find at work, which in
business.
turn will help improving work
services is a corporate asset.
We manage a database of
productivity and quality.
Please refer to "Human Capial"
creations, brands, industrial
section on page 88 for more
designs, inventions, trade
The final objective of knowledge
detailed information on
secrets, copyrights, trademarks,
management is to create a
human resource competence
industrial design rights, patents,
learning organization, which
development.
and rights to trade secrets.
CorpU transformation to become the international center of excellent human capital
Great Spirit:
- Corporate University
- Telkom University
- Assessment Center
Center of Excellence
LE AR NING SOLUTIONS DELIVERY SYSTEMS
Biz Learning
Solutions
Learning
Programs
Req.
Manpower
Supply
Future Biz.
Leaders
Dev. Gaps
Analysis
Learning
Innovations
Learning
Programs
Str. Learning
Partnership
Knowledge
Management
LEARNING SOLUTIONS architecture
Leadership Academy
Functional Academy
Consumers
EWS
Network
ITSS
Assessment Centre
Telkom University
Organizational Research Centre
Suppliers/Customers Dev. School
Alliance & Partnership Centre
LEARNING FOCUS
LE ARNING STRATEGY GOVERN ANCE
INTE RNATIONAL LANGUAGE AND BUS INESS
Learning
Infrastructure
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Business
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Management’s
Discussion & Analysis
We routinely manage various activities that constitute intangible assets, such as innovation, through our portal
http://inovasi.telkom.co.id which can be accessed by all employees.
I. Relations with Stakeholders
Understanding and comprehending the needs and expectations of stakeholders are an important part of
the GCG management to create fairness among all stakeholders. Through our corporate culture "The Telkom
Way", the management has strived to foster corporate values and culture by leading all employees to a shared
understanding of values that should always be informed to all stakeholders and make such values including
inherent norms and principles of governance as the center of their inspiration.
The following are some identified stakeholder values:
Stakeholder
Stakeholder Value
Customer
Shareholder
Employees
Government
Competitor
Investor and Finance Community
Community
Product and service satisfaction level
Accuracy and transparency in invoicing and operating
Guarantee product and service continuity
Continuously provide dividend to shareholder
Increasing trend on share
Adaptable to new environment
Win over market and ready to compete
Continuous growth of financial performance
Guarantee of business governance expansion
World class practice
Employee Welfare
Good career place
Abide to government regulation
Transparent and abide to tax regulation
Role model for all SOE
Participant in increasing PDB
Fair business competition
Mutual business partner
Resource sharing to press cost
Transparency in company report
Good financial report
Employment
Economy multiplier effect
Provide positive impact for public at large
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
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197
Follow ups on Complaints from
SOE or companies other than
A part from assessment by
Customers and the Community
Under current business conditions,
listed companies or SOEs.
IICG, we are frequently chosen
to be observed by other rating
where telecommunications
The process for CGPI assessment
agencies since we are considered
penetration has exceeded, growth
and rating consists of four stages
as benchmark or model for other
in voice (telephone use) has
with different weighing:
companies. Following is some of
reached saturation point and the
1. Self assessment, the company
our other achievements:
competition is getting fiercer,
was asked to complete the
1) Ranked 1st as the Most
maintaining a balance between
questionnaire in accordance
Committed to a Strong
the needs and expectations
with the GCG assessment
Dividend Policy from Finance
of all our stakeholders brings
theme.
Asia Best Companies Award
its own challenges for GCG
2. Observing document, the
2013.
implementation. Complaints
company submitted policies,
2) The Best of Asia for the
have been made by customers
procedures and other evidence
category of Asia’s Icon on
and the public about the
demonstrations our application
Corporate Governance in
telecommunications services
of GCG.
Corporate Governance Asia
among others are tariff war
3. Assessment of papers and
Annual Recognition Award
that leads to a decline in ARPU
presentations, the company
2013.
and diminishing of service
prepared a paper describing
3) The Best Corporate Overall
quality, fixed billing complaints,
GCG activities in line with
from Indonesian Institute for
pulse credit absorption. We
the assessment theme and
Corporate Directorship (“IICD”)
use the complaints as input to
presented it to the jury.
on Corporate Governance
evaluate and improve its services
4. Observation, where the IICG
practices in listed companies
quality, and responding and
jury visited us for interview,
in Indonesia.
follow up every customers and
observation and an on-
4) Ranked 2nd The Best GCG
society complaints, as it is our
site review to confirm the
Implementation in Anugerah
commitment to put forward
implementation of GCG in
Business Review.
ethical business practices and
the company, referring to the
5) The Best GCG Implementation
provide satisfactorily services to
results of the self-assessment,
from Anugerah BUMN.
customers and other shareholders.
document and paper
6) Corporate Governance
GCG EVALUATION
assessment
Perception Index – The Most
Trusted Companies 2013 as the
As a result, we are again awarded
most trusted company from
We monitor GCG performance
the recognition as The Most
IICG in collaboration with SWA
through annual evaluations by the
Trusted Company, in line with the
Magazine based on investor,
IICG, an independent GCG rating
GCG assessment theme for 2013,
analyst and fund manager
company in Indonesia. The IIGC
namely "GCG in Perspective of
survey.
routinely conduct CGPI surveys
Knowledge".
and ratings on listed companies,
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PT Telekomunikasi Indonesia, Tbk
Highlights
Highlights
Preface
Preface
Management
Management
Report
Report
Business
Business
Overview
Overview
Management’s
Management’s
Discussion & Analysis
Discussion & Analysis
Social and
Environmental
Responsibility
201
CSR Strategy
212
Social and Community Development
202
Environment Preservation
220
Responsibility to Consumer
206
Employment, Health and Work Safety (“K3”)
Corporate
Corporate
Governance
Governance
Social &
Social &
Environmental
Environmental
Responsibility
Responsibility
Company
Company
Profile
Profile
Additional
Additional
Information
Information
(For ADR
(For ADR
Shareholders)
Shareholders)
Appendices
Appendices
2013 Annual Report
2013 Annual Report
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199
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Business
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Management’s
Discussion & Analysis
Priyantono Rudito
Director of Human Capital Management
Social and Environmental Responsibility
Our CSR strategy is based on the “Triple Bottom
Line” concept for sustainable business existence
and growth through a balanced.
A business entity should pay attention to the
achievements aspects of Profit-People-Planet
(“3P”) in a balance.
In addition to the pursuit of financial gain
(profit), a business entity should also be
actively involved in supporting the welfare
of society (people) while contributing to the
preservation of the environment (planet).
Our CSR
commitments made
in line with our core
competencies in the
fields of Information
and Communication
Technology (ICT)
to encourage the
acquisition and
utilization of ICTs for
the improvement the
welfare of Indonesian
society.
In Indonesia, the implementation
Regulation (“PP”) No.47/2012
of Social and Environmental
on Social and Environmental
Responsibility for corporations,
Responsibility in Limited Liability
also known universally as
Company, as the implementing
Corporate Social Responsibility
regulation for the stipulations of
(“CSR”), is mandatory for business
Article 74 of Law No.40/2007
entities incorporated as a limited
on Limited Liability Company.
liability company with business
Thus, PP No.40/2012 serves as
activities in the area of, and/
the basis for us in developing and
or related to, natural resources.
implementing our CSR programs,
This is regulated in Government
internally as well as externally.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
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201
In addition, as a State-Owned
and growth through a balanced
vision & mission statements as
Enterprise (“SOE”), we are
approach towards achievements
well as the Company's business
also obliged to implement a
in aspects of Profit-People-
portfolios, whereby we have
Partnership and Community
Planet (“3P”). In addition to the
defined its existence as a business
Development Program (“PKBL”).
pursuit of financial gain (profit),
entity under the theme of
Activities carried out within the
a business entity should also be
"Telkom Indonesia for Indonesia".
scope of PKBL are governed by
actively involved in supporting the
In regard CSR, this theme is
the Minister of SOE Regulation
welfare of society (people) while
pursued through the objective of
No.PER-05/MBU/2007 dated
contributing to the preservation
"Enlightening Society", namely
April 27, 2007, on Partnership
of the environment (planet).
supporting progress of people in
Program of SOE and Small Scale
Indonesia towards greater welfare
Businesses and Community
The achievement of corporate
through activities in the three
Development Programs, which has
sustainability encompassing
main pillars of Telkom CSR that
been lastly amended by Minister
aspects of economic
are in line with the Triple Bottom
of SOE Regulation No.PER-08/
sustainability, social sustainability,
Line concept, as follow:
MBU/2013 dated September 10,
and environmental sustainability
- Digital Environment.
2013. In essence, activities in PKBL
also refers to the guidance
We concern for the
have a purpose similar to CSR,
procedures of ISO 26000 for
environment is manifested
and thus represent one form of
socially responsible conduct of
through the provision
the implementation of CSR.
business organizations as part of
and management of
the practice of good corporate
telecommunication
CSR STRATEGY
Our CSR strategy is based on the
governance (“GCG”).
infrastructure and a variety of
Information & Communication
“Triple Bottom Line” concept for
Further, our CSR activities are
Technology (“ICT”) facilities
sustainable business existence
also aligned to the Company's
to support and connect the
CSR strategy base on concept
“Triple Bottom Line”
Telkom Indonesia
For Indonesia
ENLIGHTENING SOCIETY
PLANET
PEOPLE
PROFIT
E n viro n m e ntal
Preserv atio n
Infrastru cture
Disaster R elief
E d u c atio n
P u blic H e alth
C ulture &
Civilizatio n
P artn ership
P u blic S ervic e
Get Connected
Be Empowered
Go Commerce
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Enrich Capacity
Empowering Comunity
Enabling Creativity
Provides a Variety
of Public ICT Facilities
Community Empowerment
Through Education
Supporting Creative
Ideas Implementation
GOOD CORPORATE GOVERNANCE
GOOD CORPORATE CITIZEN
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activities of communities,
provision of ICT facilities in
development of infrastructures
including in environment
a variety of public services,
and facilities for the community,
preservation of the respective
as well as by supporting the
and disaster assistance, and (iv)
areas as well as in emergency
development of micro, small
programs related to responsibility
response situations during
and medium enterprises, and
to consumers.
natural disasters.
- Digital Society.
We also contributes to
the empowerment of
especially those in the creative
industry sector, related to the
optimization of ICT utilization.
ENVIRONMENT
PRESERVATION
communities, in line with
Overall, the three main pillars
We realize the importance of
current global trends where
of our CSR are implemented
preserving the environment,
social interactions are
through a variety of programs in
and thus strive at all times to
being increasingly shaped
7 (seven) activity areas, namely:
minimize the negative impact
by progress in ICT. In this
(i) partnership, (ii) public service,
to the environment due to our
regard, we intend to empower
(iii) education, (iv) healthcare,
operational activities as well as
the communities through
(v) culture & civilization, (vi)
the activities of communities and
education on the optimum
environmental preservation, and
the society in general. We are
utilization of ICT, so that
(vii) disaster relief/social charity.
also active in supporting various
community members may
national programs related to
benefit in their daily life and
Following is a description of
environment preservation.
activities.
our social and environmental
- Digital Economy.
responsibility activities conducted
A. Policy
We actively seeks to create
during 2013, which for reporting
Our commitment to be
synergy with relevant
purposes are grouped into
environmentally responsible
stakeholders in creating
programs in (i) environment
is stipulated in Circular Letter
greater economic welfare
preservation, (ii) programs in
No.ED.130/PS000/SDM-
for the nation and people of
employment, work health and
20/2008 regarding efficiency
Indonesia by supporting the
safety, (iii) programs in PKBL,
measures within
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
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PT Telekomunikasi Indonesia, Tbk, which are
carried out through a variety of internal and
community programs. Environmental impacts
caused by the company's operations must
be kept at a minimum level and we assume
responsibility for such impacts.
B. Type of Program
We strive to run a variety of programs related
to environment preservation summarized in
Telkom’s Go Green Action, which is a program
that covers carbon emissions mitigation, office
building energy efficiency, BTS energy efficiency,
use of renewable energy, paperless office
concept, waste management, water treatment
and recycling, bike to work and earth hour.
1. Carbon Emissions Mitigation Efforts
We have yet to specifically calculate the
carbon footprint from its operations.
Nevertheless, since 2009 we have engaged
in a number of initiatives to consistently
and purposely reduce the consumption of
electricity in our operational activities. Thus,
we also contributes to efforts in carbon
emission mitigation, the electricity consumed
was generated by power plants using
conventional fossil fuels (coal and diesel fuel)
that are sources of carbon (“CO2”) emission
into the atmosphere.
In our implementation, these initiatives are
undertaken through a strategy of utilizing
highly efficient equipment with new
technologies that are more environment
friendly, among others:
- The use of AC equipped with inverter
technology, retrofiting existing fluid
and thermodynamics systems with
Artticmaster technology, and replacing
freon in AC equipment with hydrocarbon
refrigerant.
- Replacing TL lamps with LED lamps that
feature higher energy efficiency of up to
90%.
-
Installing capacitor banks at our STOs to
reduce energy loss due to reactive power.
- Replacing TDM-switches in switching
equipment with soft-switches that
consume less electricity, dissipate less
heat, and have smaller footprint.
We strive to conduct
various programs
environmental
conservation, which
is summed up in the
Telkom Go Green Action
program.
- Replacing existing linear-mode type
rectifiers with switch-mode type rectifiers
that require lower input power while giving
higher efficiency conversion.
- Construction and operation of green data
centers, which feature zero depletion
refrigerant (no CFC), zero depletion
FAP (N2 100% natural gas), environment
friendly materials (mercury-free) and
energy-efficient (from the use of LED
lamps and cooling system management).
Aside from contributing to carbon emission
mitigation efforts, these initiatives to reduce
electricity consumption have also result in
efficiencies in operational and maintenance
costs, as well as reduced equipment down
time due to failure of air conditioning system.
2. Office Building Energy Efficiency
We have made energy systems in our office
buildings more efficient. A variety strategic
measures is applied, such as:
- The use of capacitor banks to improve
the power factor, to comply with the
KVAR limit of PLN, and to reduce wasted
electricity due to the large apparent
power from capacitive loads. In 2013, we
conducted a series of joint trials with
PT Excelindo Chandra Mulia (holder of
Top Saver 2000) and have implemented
the use of Top Saver for non-inverter
equipment in order to reduce power losses
and will continue in the following years.
-
Installation of reflective glass of 6 mm
thickness to reduce heat from the
outside, allowing for more efficient use
of air conditioning systems. A series
of joint trials were conducted during
2013 with PT Sadean Energy Indonesia,
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Business
Overview
Management’s
Discussion & Analysis
holder of Reflecto Coatings for Building
operations of 3.996 units of outdoor BTSs
on the use of film-coating materials on
allowed us to save energy for cooling purpose
external windows and glass wall panels
by 30% or an equivalent of Rp48 billion.
on buildings. The film-coated glass allows
visible light to pass, while reflecting all or
4. Use of Renewable Energy
most of the radiant heat from outside. This
Significant carbon emissions mitigation
results in considerable reduction in the
effort has been made by changing energy
use electricity for air conditioning and for
consumption pattern from using non-
lighting. Implementation of the program
renewable energy to using renewable energy
started near the end of 2013 and will
such as energy from solar, water and the wind.
continue in the coming years.
Although small in scale, we have begun to
- Replacement of conventional lighting with
implement the concept of "carbon free" for
LED lighting that are energy-efficient and
some operational activities. The use of solar
also environment-friendly as they do not
contain mercury.
- Retrofitting chiller AC with modern,
cells as energy to run BTSs allows 961.39 ton
of CO2 emission reduction each year.
energy-efficient technology used in
Telkomsel is the pioneer in operating BTS’s
building automation system (“BAS”),
that use renewable energy from solar energy,
resulting in more efficient operation by
micro hydro, and low power consumption, and
building operators as well as the use of
has operated thousands environment-friendly
more environment-friendly refrigerants.
BTS.
Implementation of the program started in
mid-2013 and will continue in the coming
Renewable energy is used in some islands and
years.
other cities that 24/7 still used generators,
- The proper and strict implementation of
by starting to use hybrid power plants that
operational schedules for lighting and
combine solar cells and wind power. The use
equipment, without compromising the
of renewable energy like hybrid power plant
comfort and safety of building occupants,
is expected to save electricity consumption,
in order to reduce inefficient use of
maintenance costs and fuel consumption by
electricity.
98%. Meanwhile, the remaining 2% of fuel
- Provide continuous and consistent
consumption is still needed for maintenance
education on energy conservation
purpose.
to building occupants, including the
placement of signage/stickers at various
5. Paperless Office Concept
strategic locations to remind employees to
Another initiative in the mitigation of carbon
reduce the use of electricity and water.
emissions is through the implementation of
-
Implementing a lighting zoning scheme
the paperless office concept. We have already
by segregating areas with lights-on based
implemented this concept through the online
on their needs, in order to improve the
appropriate use of energy and thus saving
energy.
-
Installation of timers for outdoor lighting.
3. BTS Energy Efficiency
A significant energy saving is achieved by
using outdoor BTS for all Telkom Flexi and
Telkomsel BTSs. Outdoor BTSs are smaller
in compare with indoor BTSs and require
no substations and cooling system. The
By upholding the vision of being a
company that superior in providing
TIMES in the region, with the
mission of providing high quality
TIMES services at competitive
prices, as well as to be the model
for the best managed corporation.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
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office memo system since 1998 in a number
of carbon emissions mitigation efforts. In
of work units nations-wide. Subsequently,
this regard, we have a strong commitment to
our management has issued policies to
responsible of water use and treatment.
significantly reduce the budget for office
papers. By minimizing paper use, we have
Our water consumption is relatively low, used
succeeded in reducing the amount of paper
mainly for building operations and drinking
waste.
water for employees, which is majority
supplied by the local Water Company
At present, all of our works units have
("PDAM") of the areas in which we operate.
implemented the online official memo
However, we have made a strategic step
application for internal office memo traffic.
in water treatment by making bio pores
Throughout 2013, the number of internal
and installing storage tanks around our
official memos generated by all of our works
office buildings to hold rain water, as well
units through the online official memo
as implementing a simple water recycling
application has reached 221,286 memos.
process using charcoal-based filtration. The
filtered water is then used to wash cars and
Assuming that on the average, a single official
water plants.
memo consists of 2 (two) pages and is
directed to 3 (three) recipients, which in turn
8. Bike to Work
forwarded further to another 3 (three) people
In order to live a healthy life and mitigate
each. These 221,286 memos require a total
carbon emissions, we urges employees to
of 3,983,148 pieces of paper, or equivalent
bike to work on Fridays. The suggestion
to 7,966 reams of paper. By using the online
was initiated in 2009 and has gained good
official memo applications, we have saved on
responses from most of our employees
the use of 7,966 reams of paper.
even until 2013. We hope this habit will
be long preserved and is part of "Bike to
We have also socialized the implementation
Work" national movement instilled among
of the concept among employees as well as
employees.
our customers, inter alia through the use of
electronic billing, and centralized bill payment
9. Earth Hour
through teller service, automated teller
We participates in the annual "Earth Hour"
machine ("ATM"), phone banking, internet
promoted by WWF that aims to preserve
banking, mobile banking and auto debit.
the environment by reducing electricity
consumption. This activity is carried out
6. Management of Hazardous and Toxic ("B3")
by keeping a power outage for 1 hour on
Waste
Saturday in the fourth week of March of each
Waste disposal is managed jointly with
year, which is scheduled at 20:30 to 21:30.
local Sanitation Department. It is routinely
monitored to reduce the amounts of left
C. Certification in the Field of Environment
over waste. We also manages waste and
Embracing the vision to be a leading company
its disposal in a responsible manner at all
in TIMES business across the region and to
operational offices.
actualize a mission to provide high quality TIMES
services at competitive prices while trying to
7. Use and Management of Recycled Water
become a role model of corporate management,
Water is vital for human life and plays an
we shall also consider environmental control,
important role in maintaining the ecosystem.
and health and work safety. To meet government
Therefore, the use and management of water
regulations in applying SMK3, in 2013 Telkom and
has become an issue no less important than
our subsidiary, property earned SMK3 certificates.
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Management’s
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EMPLOYMENT, HEALTH AND WORK SAFETY (“K3”)
A. Employment
1. Policy
The policy of HR management is directed on
the attainment of vision, mission and corporate
target (sustainable competitive growth) as well
as HR management target. The HR management
target is to establish great leader and great
development for existing employees. External
recruitment is focused on hiring professionals
to fill positions that competence is not owned
by existing employees and recruit fresh
graduates with the aim to fill the position left
by employees due to retirement, improving
the composition of employees in terms
of education, age and streams (corporate
people with productivity above industry average
function).
with high level of engagement in managing
Telkom Group business portfolio which focusing
c. Competence Development
on TIMES. We are also striving to improve
synergy and efficiency among companies within
Telkom Group and will continue to focus on how
to deliver our values.
Law No.13 on Employment and Collective Work
The human resource competency
development was brought about through
education and training in competence
conversion as well as competence
development, both directly or indirectly
related to our business strategies and
Agreement (“CWA”) between the management
operations.
and the union, serves as a reference throughout
the employment policy to ensure the compliance
with the applicable rules and legislation and to
minimize the occurrence of violations of human
rights in the employment relationship.
a. Management of Employee Relations with
Management
Referring to The Presidential Decree No.83
year 1998 on Ratification of ILO Covention
In addition, we also hold a variety of programs
to improve employee competencies, which are
currently managed through Telkom CorpU.
Among of the programs are international
certification and GTP, which provide
opportunities for company’s best talents to
have global exposures and experiences by
stationing them in many countries.
No.87 year 1948 on Freedom of Association
d. Employee Remuneration
and Protection of the Right to Organize
Convention, a group of Telkom employee
established “Serikat Karyawan Telkom” or
“SEKAR”. Up to 31 December 2013, SEKAR
has 16.283 employee member or 91,1% of total
employee working for Telkom and JVC. To
We offer competitive employee remuneration
packages that consist of monthly salary,
various allowances and facilities such as
housing, pension plan and health pursuant
to prevailing rules and regulations, which are
regularly revisited to secure competitiveness
avoid the potential conflict arising in the next
within the industry.
PKB, the Management enhances the role of
LKS Bipartit which conducted on monthly
e. Health Care
basis.
b. HR Recruitment
Our recruitment is done through internal and
external recruitment. Internal recruitment
is done by optimizing the Telkom Group
existing resource through synergy to achieve
cost efficiency for employee turnover, and
to obtain the best talent suitable for needs
and at the same time facilitating career
Managed by Yakes, we provide medical
benefits for employees and their family
intended at improving the Company's
productivity. To monitor the employees’
health, we organized annual medical check up
in order to obtain employees’ health status
(stakes). In addition, we also issued a policy
of of healthy living paradigm. Health benefit
is also provided for all retiree, including their
family, categorized in two types of funding,
namely:
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
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Shareholders)
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– Employees who were hired prior to
The awards are presented to motivate for
November 1, 1995 and have served over
improved contribution in the future.
20 years, are eligible for helath insurance
managed by Yakes Telkom; and
h. Level of employees turnover
– The Remaining employees are given access
Employee turnover is due to situations in which
to health services in the form of insurance
employees leave the company for various
benefits.
reasons like voluntary resignation, being
For our subsidiary employees, medical
assigned as officials at Telkom, our subsidiaries
benefits are provided though health insurance
or other government entities, death, retirement
program sponsored by the government,
and early retirement, which is a program that
known as Jamsostek.
f. Retirement Program
is offered openly and voluntarily in nature, to
employees that meet certain criteria.
We offers two pension schemes, namely
i. Gender equality and equal employment
Defined Benefit Pension Plan ("PPMP")
opportunity
tailored for permanent employees who
We have no gender discrimination policies
were hired prior to July 1, 2002, and Defined
related to employment. All regulations are
Contribution Pension Plan ("PPIP") that apply
applied consistently and equitably to all
to other permanent employees.
employees regardless of gender. Similarly, the
g. Employee Awards
employment opportunities offered apply to all
employees, with positions available to us do
On regular basis, we give a number of awards
not specify the qualifications that differentiate
to high achievers individuals and units who
by gender. Position requirements specifies only
have shown remarkable contributions to our
the education and competencies (soft skills
business targets achievements.
and hard skills) requirement. Employee rights
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(compensation, benefits, career development
g. The pension program
opportunities and competencies, working
- PPMP
time, working facilities) and obligations
PPMP is managed by Dana Pensiun and
applicable to all employees regardless of
the benefit is calculated by an actuary
gender.
2. Type of Program
based on years of service, salary level
at retirement and is transferable to
dependent families if the respective
During 2013, we implemented the following
employee passes away.
activities in employment aspect:
- PPIP
a. Negotiation of CWA between Management
PPIP is a pension plan for permanent
and employees is conducted every two years.
employees who were recruited after July 1,
b. 838 employees were hired during 2013
through recruitment.
2002, managed by several appointed
Pension Fund Financial Institutions
c. Competency development in 2013 is provided
from which employees can choose. The
for employee both still in active duty and
Company's annual contribution to the PPIP
entering retirement period.
d. A variety of International certification
is determined by a portion taken from
participating employee’s basic salary.
programs for 1,471 employees.
- Welfare support for retired employees.
e. Employee remuneration was based on their
h. A number of awards were given to high
performance and annually adjusted to market
achievers by both internal and external parties
benchmark.
while other awards were given to outstanding
f. By the end of 2013, the number of employees
units, with the following details:
and retirees and their families who
-
internal awards to 443 employees;
participated in its core health services Yakes
- honor medals from the Indonesian
we reached 113.629 people.
President were given to eight employees;
and
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- unit awards were given to four units.
i. Staff turnover during 2013 involved 1.327
people, including 781 who took early
retirement.
3. Financial Impact
Following is the financial impact of some
employment programs:
a. Expenses for pre-retirement training for
employees of Rp1.5 billion.
b. Expenses for welfare support for retired
employees of Rp10.2 billion.
c. The expenditures for recruitment program
reached Rp7.5 billion.
d. Budget allocation for Competency
development amounted to Rp265.3 billion.
e. The Company’s contribution for post-
retirement health care and insurance benefits
during 2012 are Rp302 billion and Rp17 billion,
respectively.
f. Our contributions for PPMP and PPIP during
2013 respectively reached Rp182 billion and
Rp6 billion.
Zero accident program is organized
pursuant to labor regulations and
K3 rules evaluated and assessed
each year. Our commitment to
realize security and safety in work
environment is manifested in the
policy set out in the Company’s
Board of Directors Decree
regarding the Determination of the
Company’s.
Decree regarding the Determination of the
Company’s (Enterprise Security Governance
and Safety Regulation) No.KD.37/UM400/COO-
D0030000/2010 dated October 26, 2010.
2. Type of Program
g. Cost incurred for the award was Rp8.5 billion.
In 2012-2013, various activities were carried out
Please see the Human Capital section on page 88
for more detailed information on employment.
B. Health and Work Safety
1. Policy
Since 2009, K3 was managed focusing on how
to accomplish zero accident rate. The program
is organized pursuant to labor regulations and
K3 rules evaluated and assessed each year. Our
commitment to realize security and safety in
work environment is manifested in the policy
set out in the Company's Board of Directors
related to the K3 program including:
a. Training on work safety
- Training for General HSE Expert and SMK3
Internal Auditor.
- Simulation of Fire Emergency Response at
Witel Bogor.
- Earthquake Emergency Response Training
and simulation in Jakarta Timur.
- Simulation of Flood Emergency Response
against vital objects in collaboratoin
with Indonesian Navy ("TNI AL") at Witel
Bekasi.
- K3 Seminar held each two-monthly in
collaboration with Jaring K3.
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b. Achievement of ”zero accident”
Location
Safety Hours
Telkom Bekasi Area
Telkom Bogor Area
Telkom West Jakarta Area
Telkom South Jakarta
Telkom East Jakarta Area
Telkom North Jakarta Area
Telkom Tangerang Area
Telkom Regional Sumatera
Telkom Regional West Java
Telkom Regional Central Java
Telkom Regional East Java
Telkom Regional Kalimantan
Telkom Regional KTI
Telkom GMP Bandung
Telkom GMP Jakarta
Telkom GCC Central Jakarta
1.638.569
2.143.736
2.503.164
1.592.892
4.077.024
2.269.530
3.834.832
2.012.569
2.094.151
2.044.573
2.041.061
5.092.684
8.671.826
2.025.063
3.404.798
4.086.952
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c. Online SMK3 Application and Online Safety
- Awards fromthe Ministry of
Care
Manpower,Directorate General of
- The development of online SMK3
Supervision and Fostering Employment on
application, in accordance with the
the on audits on OHSE management system
Government Regulation No. 50 Year 2012,
recommended to obtain a "Satisfactory
can be accessed by all organic employees,
Level for the Advanced category", for
contains SMK3 measurement criteria
Telkom Area Jakarta Barat, Telkom Area
and can be used for online monitoring,
Balikpapan Kalimantan Timur, Telkom Area
evaluating and analyzing purposes to
Jakarta Selatan, Gedung Kantor Pusat
simplify and to expedite the implementation
Telkom, and Gedung Telkom in Solo.
process andinformation updating
nationwide.
e. Internal Audit on SMK3
- Online Safety Care Application is a means
To ensure that the company has set the HSE
to raise employee awareness on aspects
goals, objectives and programs that meet
related to their respective work place, for
the HSE policy, SMK3 audit was conducted
example, to inform working conditions with
internally once a year (in the West, South,
potential risk of K3 to prepare its solutions.
Central, East, North Jakarta, Bekasi, Bogor,
Tangerang areas) and by regionally through
d. Awards received in K3 (Zero accident)
sampling (West Java/Lembong, East Java/
- Awards received in OHSE (Zero accident)
Malang, Central Java/Semarang, Sumatra/
from the Ministry of Man power between
Medan, KTI/Bali)
1 January 2009 untill 31 December 2012 for
13 office locations.
3. Financial Impact
- Awards received in OHSE (Zero accident)
The expenditures for programs related to K3 in
from the Governor of Banten between
2013 reached Rp1.7 billion.
1 January 2009 untill 31 December 2012 for
Telkom Area Tangerang.
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Social and Community
Development
The object of these programs
is the economic activities of
communities, which can be directly
or indirectly related to our core
business, with the aim of building
harmonious relationship with these
communities
A. Policy
With reference to the Board
of Directors Decree No.KD.21/
PR000/COP-B0030000/2010,
we implements the
Partnership Program and
Community Development
Program, as well as a variety
of CSR initiatives related to
community development. The
object of these programs is
the economic activities of
communities, which can be
directly or indirectly related
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to our core business, with the aim of building
painted batik artisans in its production
harmonious relationship with these communities
process.
while also contributing directly to improve their
welfare.
ii. Arul Jewellery
B. Type of Program
1. Partnership and Economic Empowerment of
Communities
a. Partnership Program
The Partnership Program provides
H.M. Fakhrurozzi, a resident of Martapura,
Banjar Regency, South Kalimantan, is a
traditional gold and gemstone artisan
who inherited the skills and business in
gemstone from his forefathers. From
his home at Jl. Kertak Baru, Martapura,
revolving loan facilities for working capital
H.M. Fakhrurozzi began to expand his
as well as funds assistance for training in
entrepreneurship for Small and Medium
gold and gemstone jewellery business
under the trademark Arul Jewellery. To
Enterprises (“SME”) in the manufacturing,
get the necessary funding, he applied
trading, agriculture, animal husbandry,
plantation, fisheries, services, and other
for a working capital loan under our SME
Partnership Program. Aside from the
economic sectors. Up until the end of 2013,
working capital loan, we also provided
we have 3,975 SME Partners throughout
Indonesia, while total disbursement of
training in business and product
knowledge, as well as assistance in
revolving loans amounted to Rp124.4 billion.
product marketing through participation
Following is brief descriptions of the activities
those with a national scope held in Jakarta.
in various local trade exhibitions as well as
of a couple of our SME Partners.
i. Batik Bulan Gemilang
So far, his business is progressing well.
Batik Bulan Gemilang is the trademark of a
Starting from just three assistants, Arul
hand-painted batik business initiated since
Jewellery now employs ten employees,
1997 by Wulan Utoyo, a housewife living
while its turnover has increased from
in Batang, Pekalongan Regency, Central
Rp20 million per month to around
Java, who started a small home business
Rp50 million per month.
of producing and selling hand-painted
batik products with the help of just two
2. Social and Community Assistance
assistants. Subsequently, Wulan Utoyo
Throughout 2013, we have provided a total of
became a our SME Partner, and received
Rp57.2 billion within the Social and Community
assistance in the form of working capital
assistance scheme. These funds were used for a
loans, marketing assistance for national
variety of assistance programs in natural disaster
and export sales, as well as training in the
assistance, community training and education,
management of business. About 70% of
community healthcare, construction of public and
these products, comprising batik clothing
worship facilities, and environment preservation.
articles for men and women, are sold in
a. Community Education and Training
the domestic market (local as well as
Aiming to improve the quality of education
national), while the remaining are exported
be it stakeholders’ expertise, knowledge
to overseas markets, mainly to Malaysia,
and behavior, which in this case refers to
Singapore and Japan, but also to the
Telkom Groups community and employees’
United States and a number of European
family. Activities involved include programs
countries.
like “Dedicated to My Teachers”, Bandung
Knowledge Cloud, Scholarship Program,
Batik Bulan Gemilang contributes to the
Internet Education at Disadvantaged Villages,
economy in the immediate communities,
Integrated Digital School, Edu Campus
by involving some 300 independent hand-
Development Center, Assistance for National
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Sports Achievement and Indonesia Digital
iii. Internet Education at Disadvantaged
School.
i. Dedicated to My Teachers
Villages
To help broaden the horizons of people,
This program has run for 7 (seven) years
especially the young generation, living at
and is one of our initiatives to help create
disadvantaged villages with poor road
education quality in Indonesia, mostly
access, We provides internet education
through the provision of training and other
through site visit by teams using
assistance to improve the capability and
motorcycles that have been specially
quality of teachers in Indonesia.
equipped with a computer set and wireless
Internet connection. In 2013, this activity
In 2013, the program was organized in the
was concentrated in several areas in
form of training for teachers of high school
Banten dan West Java provinces.
and equivalent level school in 6 (six) cities
(Banyuwangi, Kendari, Banjarmasin, Kudus,
Bukit Tinggi and Mataram), with training
iv. Bandung Knowledge Cloud
We developed the Bandung
materials in Information Technology, public
Knowledge Cloud in cooperation with
speaking, effective writing, and character
Lembaga Pengembangan Inovasi Dan
building (“ESQ”).
ii. Scholarship Program
Kewirausahaan (“LPIK”) ITB. Bandung
Knowledge Cloud is a repository of
knowledge developed by school teachers,
In cooperation with a leading higher
and can be used by students nation-
learning institution in Jakarta, we provided
wide to improve the quality of education.
scholarship grants to economically
Activities in Bandung Knowledge Cloud
disadvantaged, high performing students.
began with organizing workshops to
Unlike other existing our scholarship
programs, this particular scholarship
program is given without a service
obligation.
improve the capability of teachers in
creating digital teaching contents. This
was followed by a series of competitions,
including competition in digital teaching
content development for teachers. On the
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initiative of these teachers, and particularly
in relation to Bandung Knowledge cloud, a
Digital Teacher Community (“KGD”) forum
has also been established.
v. Integrated Digital School
A CSR program in education by Telkomsel,
our subsidiary, providing DNA (device-
network-application) technology-based
educational support facilities for schools.
The program was first launched in 2012,
and in 2013 has been expanded to
25 schools in Central Java, Yogyakarta,
East Java and Bali.
vi. Edu Campus Development Center
The Edu Campus Development Center
(“ECDC”) program from Telkomsel, our
subsidiary, is intended to provide non-
academic skills for under-graduate
students at universities to help them
prepare for the job market. Program
participants will receive training to obtain
international certification from Adobe
Certified Associate (“ACA”), Microsoft
Office Specialist (“MOS”) dan Microsoft
Technology Associate (“MTA”) through
online exams. In 2013, the ECDC program
was conducted at five universities in
Indonesia, namely ITB, ITS, USU, Unmul and
Undip, with a total of 2,000 participants.
vii. Assistance for National Sports
Achievement
We have assisted the national sports
achievement through the following
programs and activities such as funding
assistance for the try-out and training of
the golf team to participate at the 2013
SEA Games in Myanmar, multi-event
cooperation between Telkom and KONI for
the preparation of bicycle racing athletes
that will participate in 2013 SEA Games,
2014 Asian Games, 2015 SEA Games, and
2016 Olympic Games, funding assistance
for 2 junior tennis players to participate in
various tennis competitions for one year,
assistance of coaching tennis Telkom FIKS
national championship, help participation
in SOE Sport Event 2013, and assistance
IndiSchool is one of our
CSR initiatives in the field of
education, and as part of our
participation to help building
the nation and the state
of Indonesia by providing
broadband internet facilities
in schools.
for sending bridge athlete of Telkom
Group on the 19th Transnational Open Team
Championship.
viii. Indonesia Digital School (“IndiSchool”)
The IndiSchool program is a CSR
initiative in the field of education, and
part of our participation in supporting
the progress of the people and nation
of Indonesia. Through IndiSchool, we
provides broadband internet access
facilities in schools in Indonesia in our
efforts to “Develop a Smart Indonesia”
using information and communication
technology. With better and more
affordable access to information, and
especially to educational contents,
students and teachers will benefit from the
improved quality of learning and teaching
activities. IndiSchool program targets
the installation of broadband internet
Wi-Fi access points at 100,000 schools
throughout Indonesia. The IndiSchool
program is also intended to help reduce
the gap in education quality between
schools in urban areas and those located
in Indonesia's backward regions, outermost
islands, and border regions uses a VSAT
(Very Small Aperture Terminal) installation
with parabolic antenna equipment to
provide internet access.
As of December 2013, We have installed
Wi-Fi internet access points at 17,845
schools throughout Indonesia.
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b. Development of Infrastructure and Public
iii. Assistance for the Construction of Public
Facilities
A variety of activities aimed at improving
services to the community in the field of
telecommunications infrastructure. The
Facilities
Assistance is provided in the form
of participation in various activities
to construct public facilities and
activities undertaken include Listrik Rakyat
infrastructures. This type of assistance may
Mandiri Program, Broadband Learning Center
be initiated by the local governments and
Program ("BLC"), assisting the development
non-profit organizations in collaboration
of public facilities, and Taman Bungkul.
with Telkom consist of:
i. Listrik Rakyat Mandiri Program
- Assistance in the construction/
This program aims to help accelerate the
renovation of school buildings in
national electrification program to bring
Deli Serdang, Jakarta, Bekasi, Bogor,
electricity to areas not yet served by PLN
Bandung, Ciparay, Rancaekek,
electricity grid, using a simple pico-power
Sukabumi, Bojonegoro, Pontianak,
technology that is easy to implement
Balikpapan, Singaraja, Atambua.
independently by local communities. In
- Construction of public bath, wash
2013, the program was conducted at two
and toilet (“MCK”) facilities in
locations, namely at Dusun Dampit, Desa
Jakarta, Bandung, Garut, Banjarmasin,
Dampit, Kecamatan Bringin, Kabupaten
Palangkaraya.
Ngawi, and at Dusun Jambu, Desa Sedayu,
- Renovation of public sport facilities,
Kecamatan Arjosari, Kabupaten Pacitan,
maintenance of public roads/sewers,
both in the East Java Province.
ii. Broadband Learning Center ("BLC")
Another initiative to broaden public
clean water provision, maintenance
of community security centers, and
others, in various locations.
access to Telkom’s TIMES facilities is by
iv. Taman Bungkul
providing assistance to build wide internet
Taman Bungkul is located at Jalan Raya
access. Our main target is the various
Darmo, Surabaya, East Java, in a location
local government ("Pemda") through the
that was previously a slums area. In 2007,
provision of computers with Wi-Fi facilities.
the area was completely renovated with
BLC’s current roles as a training center for
funds from Community Development
those who want to learn internet basics,
Program totalling Rp1.2 billion. Following
educating the public through internet
the renovation, the 1,400 square meters
training, and educating SMEs, particularly
area has now become a city park in the
our partners, through trainings on how
middle of Surabaya, featuring a skate park
to create a blog to market their products
and BMX bike tracks, a jogging track, an
online.
Broadband Learning Center facilities
have been built at various locations,
including Banda Aceh, Aceh Besar, Lubuk
open stage area used for a variety of live
performances, and a green park area. We
also installed public phone booths and free
Wi-Fi in the area.
Linggau, Pekan Baru, Yogyakarta, Klaten,
Taman Bungkul is now one of Surabaya's
Salatiga, Kendal, Jepara, Surabaya, Malang,
public recreation places, visited by city
Banyuwangi, Pontianak, Kapuas Hulu,
residents as well as out-of-town visitors to
Kendari, Tana Toraja, and Abepura.
We supported the development
of public facilities, including
school renovations, toilets
and sports facilities.
the city, and especially during the evening
times when visitors can enjoy a variety of
recreational activities in the park, including
local culinary delights. Taman Bungkul
received the 2013 Asian Townscape Sector
Award, one of several award categories
in the annual Asian Townscape Award
(“ATA”) competition.
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c. Community Health Improvement
- Construction of Al-Quran School at
We provided healthcare assistance to travelers
Kecamatan Cibodas, Tangerang, Banten.
during the annual Lebaran homecoming
- Construction of Al-Quran Reading Center
season in 2013 in cooperation with STIKES
at Bantar Gebang, Bekasi, West Java.
Dharma Husada Bandung, we established
- Donations for the contruction of churches
Healthcare Command Center facilities at six
in Toraja, Papua, Simalungun, and Toba
locations that are prone to traffic accidents
Samosir.
Cikalong Wetan, Rajamandala, Jalan Cagak
- Assistance the construction of mosque in
Subang, Patok Beusi, Puska Nagara and
various regions.
Limbangan Garut. With 130 personnel, these
- Construction of Tahfidz Tanbihul Ghofilin
facilities operated from D-5 (August 3, 2013) to
boarding school's dormitory in Cibinong.
D+1 (August 10, 2013).
Other initiatives in community healthcare
Assistance
support were blood donor drives in Bandung,
We have always active in helping victims of
Jember, Surabaya, Jakarta, and Medan, mass
natural disasters throughout Indonesia, during
circumcision, maternal health clinics and infant
the emergency response period as well as
nutrition, and donation of leg prosthesis.
post-disaster period. The assistance comprise
e. Natural Disaster Relief and Community
d. Improvement Worship Facilities
of donations of the nine staple items and
community kitchens, medication and health
We also participate in efforts to improve the
command posts, bath-wash-toilet tents, and
quality of religious life in Indonesia, among
free telecommunication facilities.
other things through assistance in the
construction and maintenance of places of
In 2013, activities in post-disaster assistance
worship such as mosques, churches and those
include:
of other religions.
- Assistance for refugees from Mount
Sinabung eruption, September 2013.
In 2013, assistance for worship facilities took
- Assistance for victims of floods at a number
the form of, among others:
of other areas such as Jabodetabek,
- Construction of An-Nahl Islamic boarding
Pekalongan, Sukoharjo, Bojonegoro,
school at Leuwiliang, Bogor, West Java.
Sampang Madura, and Kendari.
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- Disaster response for Aceh earthquake. A
Island, the Thousand Islands, to help
Crisis Management Team (“CMT”) was set
lessen the impact of environment
up to handle the impact of the earthquake
pollution from the dumping of some 100
in Aceh, through the set up of a command
tons of garbage each day from Jakarta
post to distribute aids for disaster victims,
to the sea in the Thousand Islands area.
as well as to secure and rehabilitate the
- The planting of 15,000 mangrove trees
damaged telecommunication infrastructure
at Kampung Garapan, Desa Tanjung
in the area.
Pasir, Tangerang, on 8 June 2013.
- Telkomsel, our subsidiary, operates the
- Built the Green Belt to minimize coastal
TERRA (Telkomsel Emergency Response
erosion in Indramayu.
and Recovery Activity) program as an
- Planting trees in Bandar Lampung,
emergency response program on the
Makassar, the banks of Bengawan Solo
occasion of natural disasters in Indonesia.
River, Jember, and Madura.
During 2013, the TERRA program was
- Making the biopori holes in Bogor and
active in, among others Aceh earthquake
Bandung.
disaster, Ambon floods disaster, and
Eruption of Mount Sinabung disaster.
f. Environment Preservation
These activities also involve the
participation of school/university students,
environmental activists, and local
We participate in planting activities in various
community members.
regions in Indonesia that organized with the
social institutions.
i. Go Green Smile
An activity program representing our
concern for the preservation of the
environment, by engaging in:
ii. CSR Bahari
Telkomsel, our subsidiary, organized the
CSR Bahari program as its participation in
preserving Indonesia's maritime and coastal
environment. The activities consist of coral
- Beach cleaning activity at Pramuka
reef planting and beach cleaning, as well
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as donation of cellular telecommunication
national unity through its telecommunication
facilities for personnel of Indonesian Armed
services. The activities consist of coral
Forces on duty at the locations and the local
reef planting and beach cleaning, as well
fishermen. The first event in CSR Bahari
as donation of cellular telecommunication
program was conducted on October 28,
facilities for personnel of Indonesian Armed
2013 at four locations, namely Weh Island,
Forces on duty at the locations and the local
Biak, Sangihe and Maumere. The date and
fishermen.
locations, corresponding with Youth Pledge
Day commemoration and the four outermost
C. Financial Impact
points of the Indonesian archipelago,
In 2013, funds for Community Social Development
represents the contribution of Telkomsel to
Program reached Rp181.7 billion.
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Responsibility to Consumer
As part of GCG practice, related
to our responsibility towards
our customers and communities
as stakeholders, we continue to
maintain communication with
customers.
In line with our mission to provide
products and services with the best
quality and at competitive prices, as
well as part of the practice of good
corporate governance (“GCG”) related
to our responsibility to the consumer
and society as our stakeholders, we
have always takes care to maintain
communication with its customers.
Proactive and smooth flow of
communication is a prerequisite for
ensuring the rights of consumer and
the customers, which will eventually
determine the continuation of the
Company's business as well as its
sustainable growth.
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A. Policy
We have a commitment to
uphold at all times the interests
of consumer and customers
of its products and services.
This commitment is continually
adjusted to market needs and
demands, as formally regulated
in a series of our management's
policies regarding aspects of
product development, product
safety, service level guarantee,
and customer complaint
handling.
To ensure that our
newly developed
product is just the
right product, in terms
of commercial,and is
well received in the
market, we apply a
guideline in incubating
innovation product.
B. Type of Program
Throughout 2013, we continued
to engage in various initiatives
designed to ensure protection
of idea submission, customer
and idea validation, product
validation, business model
validation, and market
to the right of the consumer for
validation.
quality products and convenient
services.
1. Products/Services
Development
In line with the rapid
advances made and
changes in Information
and Communication
Technology ("ICT"), we are
fully aware that product/
service development in the
TIMES business portfolios
demands a high degree of
innovation capability, while
also carrying a high level
of uncertainties in terms of
customers, problems and
solutions. To ensure that the
development of a particular
new product will lead to the
right product commercially
acceptable in the market,
we implements standard
guidelines for the incubation
process of innovation
products. An incubation
process is needed to
support the innovation and
creation of a new product
through successive phases
In this way, we strive to
ensure the best result
with optimum efforts
in new product/service
development, while also
ensuring that the consumer
receive the benefits in
terms of quality, reliability,
availability, billing and
payment, service coverage,
product compatibility,
product features, and
availability of product
support factors.
2. Telkom Integrated Quality
Assuranc ("TIQA")
Customer satisfaction
through TIQA within the
ROSE (Raise on Service
Excellence) framework
a. Upholding the principle
of producing high
quality products and
services that can deliver
maximum benefits
as well as contribute
to national economic
growth.
b. Consistently maintaining
ethical standards in
product sales (direct
sales), advertisement and
promotion.
c. Applying ethical
advertising practices,
taking into consideration
the rules on advertising
ethics in Indonesia.
d. Ensuring that the public
has easy access to
products and after-sales
service.
e. Supporting healthy
competition principles
and practicest.
3. Service Level Guarantee
To ensure the fulfillment
of standards in after-sales
service, we are committed to
fair compensation through
the implementation of service
level guarantee (“SLG”).
4. Service Center and
Mechanism for Consumer
Complaints
We have customer service
centers at all our regional
and branch offices where
customers can visit in person,
and we also offer an online
complaints center through
our corporate website
(www.telkom.co.id) as well
as a contact center that
can be reached by dialing
"147" for retail customers
and “500250” for business
customers.
C. Financial Impact
In 2013, we expended a total
of Rp2.7 billion for programs
related to products/services
development that are Bandung
Digital Valley and Jogja Digital
Valley program.
222
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Highlights
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Preface
Preface
Management
Management
Report
Report
Business
Business
Overview
Overview
Management’s
Management’s
Discussion & Analysis
Discussion & Analysis
Company
Profile
224
A Brief History of Telkom
225
Line of Business
225
Organizational Structure
230
Subsidiaries and Associated
Companies
240
Profile of the Board of
Directors
236
Telkom’s Subsidiaries Chart
242
Stock Overview
238
Profile of the Board of
Commissioners
249
Addresses
Corporate
Corporate
Governance
Governance
Social &
Social &
Environmental
Environmental
Responsibility
Responsibility
Company
Company
Profile
Profile
Additional
Additional
Information
Information
(For ADR
(For ADR
Shareholders)
Shareholders)
Appendices
Appendices
2013 Annual Report
2013 Annual Report
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223
223
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Report
Business
Overview
Management’s
Discussion & Analysis
A brief history of Telkom
Pursuant to the Articles of
Association, we are engaging
in the business of providing
telecommunication and informatics
networks and services, and optimizing
the Company resources.
We are a state-owned
enterprise that operates in the
telecommunications and network
services sector in Indonesia. We
are subject to the prevailing laws
and regulations in this country.
Given its status as a state-owned
enterprise whose shares are
traded on the stock market, the
Government of the Republic
of Indonesia is the Company’s
majority shareholder, while the
remainder of the Company’s
common stock is owned by the
public. The Company’s shares are
traded on the Indonesia Stock
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
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225
Exchange (“IDX”), the New York
utilization of the Company’s
Wholesale to the Director of
Stock Exchange (“NYSE”), the
property, plant and
Enterprise & Business Service,
London Stock Exchange (“LSE”)
equipment and movable
who focuses on developing the
and Publicly Offered Without
assets, information system
enterprise and small medium
Listing (“POWL”) in Japan. For
facilities, education and
enterprise business segments.
detail information regarding our
training facilities and
2. We realigned the division
history, see “Strength Born of a
maintenance and repair
which was formerly under the
Long History”.
facilities.
Director of Compliance & Risk
Management to the Director
LINE OF BUSINESS
A detail description of the
of Wholesale & International
Company's products and services
Service, who focuses on
As stated in our Articles of
can be found in the section
developing the wholesale
Association, our business is to
“Business Overview - Business
business segment. We also
provide telecommunications
Portfolio”.
networks and telecommunications
and information services, and
to optimize the Company’s
resources. To attain the
ORGANIZATIONAL
STRUCTURE
transferred the duties and
authority over the compliance,
legal and risk management
functions to the Head of
Compliance, Risk Management
aforementioned objectives, the
We have adopted a holding
& General Affairs.
Company may undertake business
company approach to corporate
3. We realigned the division
activities that incorporate the
management, which we believe
which was formerly under
following:
should provide productive
the Director of IT, Solution &
flexibility for all our business
Strategic Portfolio (“ITSSP”)
1. Main Business
entities in accordance with the
to the Director of Innovation
a. To plan, build, deliver,
needs of the respective units.
& Strategic Portfolio, who
develop, operate, market
focuses on business innovation
or sell/lease, and maintain
In implementing this holding
and business portfolio
telecommunications and
company approach:
development.
information networks in
1. The role of the corporate office
4. We realigned the division
the broadest sense with
is focused on the Corporate
which was formerly under
respect to provisions of
Level Strategy function
the Director of NWS to the
laws and regulations.
(directing strategy, portfolio
Director of Network, IT &
b. To plan, develop, deliver,
strategy and parenting
Solution, who focuses on
market or sell and improve
strategy).
management and utilization of
telecommunications and
2. Parenting style is tailored to
infrastructure, IT and service
information services in
the particular characteristics of
operation & management,
the broadest sense with
the business entity.
to provide support for the
respect to provisions of
3. We seek to empower each
development of established
laws and regulations.
business entity in line with
businesses.
their respective particular
5. We realigned the division
2. Supporting Business
characteristics.
a. To provide payment
which was formerly under the
Director of Human Capital
transaction and
Accordingly, we have initiated
& General Affair to the
remittance services via
a number of changes in 2013
Director of Human Capital
telecommunications and
involving reorganization of
Management, who focuses
information networks.
divisions as well as division of
on managing human capital.
b. To carry out activities
duties and authority of the Board
We also transferred of duties
and other undertakings
of Directors, as follows:
and authority over the supply
in respect of optimizing
1. We realigned the division
management function to the
the Company’s resources,
which was formerly under
Head of Compliance, Risk
among others the
the Director of Enterprise &
Management & General Affairs.
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Management’s
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In addition, we introduced Board of Executives to improve our parenting mechanism. The Board’s membership
comprises all members of Telkom’s Board of Directors and a number of Chiefs of Business. The Chiefs of
Business title is reserved for senior business experts, who are our senior executives and horizontally positioned
equivalent to our Directors. Our Chief of Business is meant to serve in formulating corporate level strategy
decisions, fostering a harmonious relationship between subsidiaries and the parent.
Telkom’s Organizational Structure
Directorate
Function and Authority
NITS Directorate
Focuses on managing the Infrastructure Strategy & Governance, IT Strategy & Governance,
and Solution, as well as managing the IT utilization and service operation & management,
in order to support the capitalization of established businesses and also controlling
infrastructure operations through the Network of Broadband, Information System Center
Division, Wireless Broadband Division and Broadband Division.
ISP Directorate
Focuses on managing the functions of Corporate Strategic Planning, Strategic Business
Development, Innovation Strategy & Synergy, as well as the operational management of the
Solution Convergence Division and Innovation & Design Center units.
CONS Directorate
Focuses on managing the consumer business segment and the operational management of
the Consumer Services Division
EBIS Directorate
Focuses on managing the enterprise and small medium enterprise business segment as
well as managing the Enterprise Services Division and Business Services Division.
WINS Directorate
Focuses on managing the wholesale and international business segment, and the
operational management of the Wholesale Services Division.
HCM Directorate
Focuses on managing the company’s human resources and the operational management
of human resources centrally through the Human Capital Center unit, as well as controlling
operations of the Telkom Corporate University Center, Assessment Center Indonesia, and
Community Development Center units.
FIN Directorate
Focuses on the company’s financial management, and managing financial operations
centrally through the Finance, Billing & Collection Center unit.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
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Business
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Management’s
Discussion & Analysis
Company’s Organizational
Structure
President Director
(Arief Yahya)
Director Human Capital Management
(Priyantono Rudito)
Head of CCA
(Rinto Dwi Hartomo)
- VP Public Relation (Arif Prabowo)
- VP Regulatory Management (Henry Christiadi)
- VP Corporate Office Support (Dodi Irawan)
- VP Investor Relation (Honesti Basyir)
- VP War Room (Dwi Sasongko Purnomo)
Head of CRMGA
(Triana Mulyatsa)
- VP Legal and Complience (Rudy Agustian)
- VP Risk and Process Management (Ikhsan)
- VP Supply Planning & Control (I Ketut Dodi Wirawan)
- SGM Supply Center (Weriza)
Head of Internal Audit
(Erry Anwardiredja)
- VP Infrastructure and Operations Audit
(Harry Suseno Hadisoebroto)
- VP Support & Subsidiary Audit (Purwadi Siswana)
- VP Enterprise Management Audit (Purwoto)
- VP HC Policy (Sofyan Rohidi)
- VP Industrial Relation (Wien Aswantoro Waluyo)
- VP Organization Development
(Danang Baskoro Dwi Nugroho)
- SGM Human Capital Center (Pandji Darmawan)
- SGM Community Development Center
(Nur Hassim Haji Rusdi)
- SGM Telkom Corporate University (Tonda Priyanto)
- SGM Assessment Center Indonesia (Rini Lestari Utami)
Director of Finance
(Honesti Basyir)
- VP Financial & Logistic Policy (Agus Hery Prasetyo)
- VP Management Accounting (Edi Witjara)
- VP Corporate Finance (Gatot Rustamadji)
- SGM Finance Billing & Collection Center
(Martinus Wisnu Adji)
Director of Innovation & Strategic Portofolio
(Indra Utoyo)
- VP Corporate Strategic Planning (Jajat Sutarjat)
- VP Strategic Business Development (Setyanto Hantoro)
- VP Innovation Strategic & Synergy (Mustapa Wangsaatmadja)
- SGM Innovation & Design Center (Joddy Hernady)
- EGM Divisi Solution Convergence (Achmad Sugiarto)
Director of Consumer Service
(Sukardi Silalahi)
Director of Enterprise and Business Service
(Muhammad Awaluddin)
Director of Wholesale & International Service
(Ririek Adriansyah)
Director of Network IT & Solution
(Rizkan Chandra)
- VP Consumer Product Planning (Teni Agustini)
- VP Enterprise Business Strategy (Wisnu Haryadi)
- VP Consumer Relationship Management
(Rosyidul Umam Aly)
- VP Consumer Marketing & Sales (Jemy)
- EGM Consumer Service Division (Suparwiyanto)
- EGM West Telkom Division (Prasabri Pesti)
- EGM East Telkom Timur (Iskriono Windiarjanto)
- VP Enterprise Service (Yusron Hariyadi)
- VP Business Service (Ilmianto)
- EGM Enterprise Service Division (Siti Choiriana)
- EGM Business Service Division (Yusron Hariyadi)
- VP Wholesale & International Development
(Yusuf Wibisono)
- VP Wholesale & International Voice Service (Erik Orbandi)
- VP Wholesale & International Network Service
(Budi Satria Dharma Purba)
- VP Infrastructure Service & Governance (Arief Musta’in)
- VP IT Strategy & Governance (Alip Priyono)
- VP Solution (Dani Ramdani)
- EGM Broadband Division (Revolin Simulsyah)
- EGM Wholesale Service Division (Zulheldi)
- EGM Wireless Broadband (Pramasaleh Hario Utomo)
- EGM Network of Broadband (Era Kamali Nasution)
- SGM Information System Center (Halim Sulasmono)
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
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Company’s Organizational
President Director
(Arief Yahya)
Director Human Capital Management
(Priyantono Rudito)
- VP HC Policy (Sofyan Rohidi)
- VP Industrial Relation (Wien Aswantoro Waluyo)
- VP Organization Development
(Danang Baskoro Dwi Nugroho)
- SGM Human Capital Center (Pandji Darmawan)
- SGM Community Development Center
(Nur Hassim Haji Rusdi)
- SGM Telkom Corporate University (Tonda Priyanto)
- SGM Assessment Center Indonesia (Rini Lestari Utami)
Director of Finance
(Honesti Basyir)
- VP Financial & Logistic Policy (Agus Hery Prasetyo)
- VP Management Accounting (Edi Witjara)
- VP Corporate Finance (Gatot Rustamadji)
- SGM Finance Billing & Collection Center
(Martinus Wisnu Adji)
Director of Innovation & Strategic Portofolio
(Indra Utoyo)
- VP Corporate Strategic Planning (Jajat Sutarjat)
- VP Strategic Business Development (Setyanto Hantoro)
- VP Innovation Strategic & Synergy (Mustapa Wangsaatmadja)
- SGM Innovation & Design Center (Joddy Hernady)
- EGM Divisi Solution Convergence (Achmad Sugiarto)
Structure
Head of CCA
(Rinto Dwi Hartomo)
- VP Public Relation (Arif Prabowo)
- VP Regulatory Management (Henry Christiadi)
- VP Corporate Office Support (Dodi Irawan)
- VP Investor Relation (Honesti Basyir)
- VP War Room (Dwi Sasongko Purnomo)
Head of CRMGA
(Triana Mulyatsa)
- VP Legal and Complience (Rudy Agustian)
- VP Risk and Process Management (Ikhsan)
- VP Supply Planning & Control (I Ketut Dodi Wirawan)
- SGM Supply Center (Weriza)
Head of Internal Audit
(Erry Anwardiredja)
- VP Infrastructure and Operations Audit
(Harry Suseno Hadisoebroto)
- VP Support & Subsidiary Audit (Purwadi Siswana)
- VP Enterprise Management Audit (Purwoto)
Director of Consumer Service
(Sukardi Silalahi)
Director of Enterprise and Business Service
(Muhammad Awaluddin)
Director of Wholesale & International Service
(Ririek Adriansyah)
Director of Network IT & Solution
(Rizkan Chandra)
- VP Consumer Product Planning (Teni Agustini)
- VP Enterprise Business Strategy (Wisnu Haryadi)
- VP Consumer Relationship Management
(Rosyidul Umam Aly)
- VP Consumer Marketing & Sales (Jemy)
- EGM Consumer Service Division (Suparwiyanto)
- EGM West Telkom Division (Prasabri Pesti)
- EGM East Telkom Timur (Iskriono Windiarjanto)
- VP Enterprise Service (Yusron Hariyadi)
- VP Business Service (Ilmianto)
- EGM Enterprise Service Division (Siti Choiriana)
- EGM Business Service Division (Yusron Hariyadi)
- VP Wholesale & International Development
(Yusuf Wibisono)
- VP Wholesale & International Voice Service (Erik Orbandi)
- VP Wholesale & International Network Service
(Budi Satria Dharma Purba)
- VP Infrastructure Service & Governance (Arief Musta’in)
- VP IT Strategy & Governance (Alip Priyono)
- VP Solution (Dani Ramdani)
- EGM Broadband Division (Revolin Simulsyah)
- EGM Wholesale Service Division (Zulheldi)
- EGM Wireless Broadband (Pramasaleh Hario Utomo)
- EGM Network of Broadband (Era Kamali Nasution)
- SGM Information System Center (Halim Sulasmono)
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SUBSIDIARIES AND ASSOCIATED COMPANIES
We have experienced continuous organic and inorganic growth. Organic growth is achieved through expansion of
our existing operations and creating synergies between our subsidiaries. Inorganic growth is accomplished through
acquisition of companies that we deemed were capable to add strategic value to our entire Group and contributing
to the long-term revenue growth and sustainability of business.
The following table illustrates our corporate structure as of December 31, 2013, including our direct and indirect
equity ownership in our subsidiaries.
A complete list of our subsidiaries and investments in associated companies, and our ownership percentage of
each entity, as of December 31, 2013, is set forth below and is contained in Notes 1d and 10 to our Consolidated
Financial Statements included elsewhere in this report.
Direct Subsidiaries
Companies
Percentage
of
Ownership
Interest
Nature of Business
Operational
Status
Description
PT Telekomunikasi
Selular
(“Telkomsel”)
65%
Telecommunication Operational
PT Multimedia
Nusantara
("Telkom metra”)
100%
Multimedia and line
telecommunication
services
Operational
PT Telekomunikasi
Indonesia
International
(“Telin”)
100%
Telecommunication Operational
Telkomsel, established on May 26,
1995, provides telecommunication
facilities and mobile cellular services.
Telkom metra, acquired on
May 9, 2003, is our NEB holding
company. Telkom metra focuses on
network construction, development,
maintenance and services,
and multimedia services (data
communications systems, portal and
online transaction services).
Previously known as PT Ariawest
International, Telin was established on
July 31, 2003 and is a wholly owned
subsidiary of Telkom. Currently, Telin
has obtained the Jartaptup license
and Network Access Provider license.
Telin provides network services and
international telecommunication
services, as well as international
business.
PT Pramindo Ikat
Nusantara (“pins”)
100%
Telecommunication
construction and
services
Operational
Pins was originally established to
operate our KSO in Sumatra. It was
acquired on August 15, 2002.
PT Dayamitra
Telekomunikasi
(“Dayamitra” or
“Mitratel”)
100%
Telecommunication Operational
Mitratel provides fixed line
telephone services, supply of
telecommunications facilities and
infrastructure and telecommunications
services. Acquired on May 17, 2001,
Mitratel transformed itself by entering
the telecommunications infrastructure
supply business, which includes
supplying telecommunications towers
to meet the BTS installment needs of
telecommunications operators all over
Indonesia.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
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Shareholders)
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2013 Annual Report
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Percentage
of
Ownership
Interest
99.99%
Companies
PT Graha Sarana
Duta (“GSD” or
“TelkomProperty”)
Nature of Business
Operational
Status
Description
Operational
Acquired on April 25, 2001,
TelkomProperty operates throughout
Indonesia and manages buildings
owned by us and third parties.
Leasing of
offices and
providing building
management
and maintenance
services, civil
consultant and
developer
PT Napsindo
Primatel
Internasional
(“Napsindo”)
60%
Telecommunication Ceased
operation
Napsindo provided Network Access
Point (“NAP”), Voice Over Data
(“VOD”) and other related services.
Established on December 29, 1998,
Napsindo ceased operation as at
January 13, 2006.
PT Telkom Akses
(“Telkom Akses”)
100%
PT Patra
Telekomunikasi
Indonesia
(“Patrakom”)
100%
Construction,
services and trade
in the field of
telecommunication
Telecommunication
and fixed line
communication
system
Operational
Telkom Akses was established on
November 26, 2012.
Operational
Patrakom was established on
September 28, 1995
Indirect Subsidiaries
Companies
Percentage
of Ownership
Interest
PT Infomedia
Nusantara
(“Infomedia”)
100%
PT Sigma
Cipta Caraka
(“telkomsigma”)
99.99%
ownership by
Telkom metra
Nature of Business
Operational
Status
Description
Operational
Infomedia was acquired on
September 22, 1999 to operate
KSO in Sumatra. Infomedia has
transformed the from 3 pillars
business (directory service, contact
services and content services)
to become Business Process
Outsourching and Digital Media &
Rich Content.
Operational Telkomsigma was established on May
1, 1987. Which focuses on providing IT
and Service solutions.
Data and
information
service – provides
telecommunication
information
services and other
information services
in the form of print
and electronic media
and call center
services
Information
technology
service – system
implementation and
integration service,
outsourcing and
software license
maintenance
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Percentage
of Ownership
Interest
100% ownership
by Telin
Companies
Telekomunikasi
Indonesia
International Pte.
Ltd.
(“Telin Singapore”)
Nature of Business
Operational
Status
Description
Telecommunication Operational Telin Singapore was established on
December 6, 2007, pursuant to the
laws of Singapore. Telin Singapore
is a wholly owned subsidiary of
Telin Indonesia. The Company has
obtained Facility Based Operator
License. Currently, it provides
wholesale voice, wholesale data and
Managed Service.
PT Metra Plasa
(“metraplasa”)
60% ownership
by Telkom metra
Website
development
services
Operational Telkom metra established metraplasa
with eBay International AG on April
9, 2012.
PT Administrasi
Medika
(“AdMedika”)
75% ownership
by Telkom metra
Health insurance
and administration
services
PT Finnet Indonesia
(“Finnet”)
60% ownership
by Telkom metra
Banking data and
communication
Operational AdMedika, established on February
25, 2010. AdMedika is serving the
online claim services betwen the
hospitals and health insurance
companies
Operational Finnet was established on October
31, 2005, as a provider of IT
infrastructure, applications and
content for information systems and
financial transactions for the banking
and financial services industry.
PT Telkom
Landmark Tower
(“TLT”)
55%
ownership by
TelkomProperty
Service for property
development and
management
Operational TelkomProperty established TLT with
Yakes Telkom on February 1, 2012.
Telekomunikasi
Indonesia
International Ltd.
(“Telin Hong Kong”)
100% ownership
by Telin
(Hong Kong)
Telecommunication Operational Telin Hong Kong was established in
Hong Kong on December 8, 2010.
A wholly owned subsidiary of Telin
Jakarta, Tellin Hong kong obtained
Unified Carrier License on March 1,
2011, Service Based Operator for
MVNO on July 27, 2011 and License
for Operating Money Service on
July 18, 2012. Currently, it provides
wholesale voice, wholesale data and
retail mobile services. The MVNO
service was provided under the
brand Kartu As 2in1.
PT Metranet
(“metranet”)
99,99%
ownership by
Telkom metra
Multimedia portal
service
Operational Metranet was established on April 17,
2009.
Telekomunikasi
Selular Finance
Limited (“TSFL”)
100% ownership
by Telkomsel
Finance
Still in
liquidation
process
TSFL was established on April
22, 2002 to raise funds for the
development of Telkomsel’s business
through the issuance of debenture
stock, bonds, mortgages or any other
securities.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
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Percentage
of Ownership
Interest
100% ownership
by Telin
Companies
Telekomunikasi
Indonesia
International (TL)
S.A. (“Telin Timor
Leste”)
Nature of Business
Operational
Status
Description
Telecommunication Operational Telin Timor Leste was a subsidiary
of Telin Indonesia established on
September 17, 2012. Telin TL has
obtained radio spectrum license
and general registration certificate.
It provides cellular services with
coverage all over Timor Leste
districts and broadband internet with
3G on 850Mhz frequency, Corporate
Solution, as well as Wholesale Voice
and Data.
TelkomProperty established GYS with
Yakes Telkom on April 27, 2012 to
focus on hospitality services.
PT Graha Yasa
Selaras (“GYS”)
51%
ownership by
TelkomProperty
Tourism service
Dormant
PT Metra Digital
Media (“mdmedia”)
99.99%
ownership by
Telkom metra
Telecommunication
Information Services
Operational mdmedia established on January 8,
2013.
PT Infomedia Solusi
Humanika (“ISH”)
100% ownership
by Infomedia
Labor recruitment
services
Operational
Infomedia Solusi Humanika
established on October 24, 2012
PT Pojok Celebes
Mandiri (“pointer”)
51% ownership
by Telkom metra
Travel agency/
bureau
Operational pointer established on August 30,
2013.
PT Satelit
Multimedia
Indonesia (“SMI”)
99.99%
ownership by
Telkom metra
Trading and
services in
telecommunication
network, satellite,
and multimedia
equipment
PT Metra Media
(“MM”)
99.83%
ownership by
Telkom metra
Trading, supplier,
construction,
services, etc.
Telekomunikasi
Indonesia
International Pty
Ltd.,Australia
(“Telkom Australia”)
100% ownership
by Telin
Telecommunications
and IT based
services
Operational SMI established on March 25, 2013.
Operational MM established on January 8, 2013.
Operational Telkom Australia a wholly owned
subsidiary of Telin Indonesia.
Established on January 9, 2013,
engaging in Business Process
Outsourcing (BPO), Information
Technology Outsourcing (ITO), and IT
Services.
PT Metra TV
(“Metra TV”)
99.83%
ownership by
Telkom metra
Subscription
broadcasting
services
Operational Metra TV established on
January 8, 2013.
PT Telekomunikasi
Indonesia
International
(Myanmar Branch)
100% ownership
by Telin
Providi Network
and International
Information
Communication
Service, also
International
Business.
Operational Telin Myanmar is a branch office of
PT Telekomunikasi Indonesia
International. Established on
August 16, 2013, pursuant to the laws
of Myanmar.
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Percentage
of Ownership
Interest
100% ownership
by Telin
Hong Kong
100% ownership
by Telin
Hong Kong
100% ownership
by Telin
Companies
Telkom Macau
Limited
Telkom Taiwan
Limited
Telekomunikasi
Indonesia
International (USA)
Inc
Associated Companies
Companies
Percentage
of Ownership
Interest
Nature of Business
Operational
Status
Description
Telecommunication Dormant
Telecommunication Dormant
Telkom Macau is a subsidiary of Telin
Hong Kong and established on
May 13, 2013.
Telkom Taiwan is a subsidiary of Telin
Hong Kong, Established on June 3,
2013.
IT and
Telecommunications
Services (Contents
Services)
Dormant
Telekomunikasi Indonesia
International (USA) Inc is a wholly
owned subsidiary by Telin Indonesia
estabilished on December 11, 2013.
Nature of Business
Operational
Status
Description
PT Integrasi Logistik
Cipta Solusi
(“ILCS”)
49% ownership
by Telkom metra
e-trade logistic
services and other
related services
Operational
Telkom metra established ILCS with
Pelindo II on September 21, 2012.
PT Citra Sari
Makmur (“CSM”)
25%
PT Pasifik Satelit
Nusantara (“PSN”)
22.38%
Very Small
Aperture Terminal
(“VSAT”), network
application services
and consulting
services on
telecommunications
technology and
related facilities
Satellite
transponder leasing
and satellite-based
communication
services in the Asia
Pacific region
Operational
CSM was established on
February 14, 1986.
Operational
Established on July 2, 1991, PSN
held its initial public offering of its
ordinary shares in June 1996, listing
them on the National Association
of Securities Dealers Automated
Quotations (“NASDAQ”), but was
delisted on November 6, 2001 in
connection with its failure to meet
certain NASDAQ National Market
Listing conditions.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
235
Companies
Percentage
of Ownership
Interest
PT Indonusa
Telemedia
(“Indonusa” or
“TelkomVision”)
20% (including
through 0.46%
ownership by
TelkomMetra)
Nature of Business
Operational
Status
Description
Pay television and
content services
Operational
Joint Venture Companies
Company
Percentage
of Ownership
Interest
Nature of Business
PT Melon Indonesia
(“Melon”)
51%
ownership by
Telkom metra
Digital Content
Exchange Hub
services (“DCEH”)
Operational
Status
Operational
Telekomunikasi
Indonesia
International
(Malaysia) Sdn. Bhd.
49%
Ownership
by Telin
Telecommunications,
MVNO Services
Operational
Established on May 7, 1997,
TelkomVision is a multimedia
(pay-TV, internet service) service
provider. Since 2007, TelkomVision
was the first Pay TV operator in
Indonesia to launch DTH Prepaid
(Prepaid Satellite Pay-TV), under the
“TelkomVision” brand. on October
8, 2013 company sold Indonusa
1,036,059,483 shares (equivalent
80% of its ownership in Indonusa) to
PT Trans Corpora and Trans Media
Corpora.
Description
Melon is a joint venture company
between Telkom metra and
South Korea Telecom. Melon was
established on August 16, 2010.
This company, which grew out of
our expansion into the Media &
Edutainment business, provides
digital music and related content
services for cell phones, personal
computers, consumer electronic
channels and other digital media.
Telekomunikasi Indonesia
International (Malaysia) Sdn.
Bhd. is a Joint Venture Company
established on July 2, 2013,
obtaining Applications Service
Provider Class (ASP(C)) on July
23, 2013 and Network Service
Provider (NSP) on August 23,
2013. Engaging in the business
of providing a full range of
telecommunication services
and other business related to
telecommunications systems,
data processing, systems and
information systems in Malaysia.
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Telkom’s Subsidiaries Chart
53.14%
35%
65%
100%
100%
100%
Celluler
Multimedia
Tower Business
Telco Equipment
eBay
International age
Ir. Rinaldi
Buchari
Ir. Rinaldi
Buchari
Ir. Harry John
Dedy
Mardhianto
PT Jiraf Imaji
Solusi
40%
0.17%
0.01%
60%
99.83%
99.99%
0.01%
99.99%
0.01%
99.99%
49%
51%
99.83%
60%
51%
75%
99.99%
49%
0.17%
40%
25%
0.01%
Ir. Rinaldi
Buchari
PT Mekar
Prana Indah
1. PT SWADAYANUSA
KENCANA RAHARJA 9.5%
2. Sofian Susantio 9.5%
3. Ravi Varma Kanason 4.75%
4. Shia Kok Rat 1.25%
Bambang
Lusmiadi
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
237
46.86%
Erry Anwardiredja
0.01%
100%
99.99%
100%
100%
International
Business
Property &
Construction
Netco & Opco
VSAT
100%
100%
100%
49%
100%
100%
51%
55%
51%
45%
49%
20%
25%
22.38%
1. Magic Alliance Labuan
80%
38.29%
36.71%
- Trans Corpora 80%
- Telkom 19,54%
- TelkomMetra 0,46%
PT TIGATRA
MEDIA
Media Trio (L)
Ine
Limited 24.10%
2. The Bank of New York 10%
3. Telesat Canada 3.70%
4. Hughes Telecommunication
& Space 3.70%
5. Others 22.80%
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Profile of the Board
of Commissioners
Jusman Syafii Djamal
President Commissioner
Jusman Syafii Djamal, 59 years old, has served as
our President Commissioner since January 1, 2011.
Currently, he also serves as President Commissioner
(Independent) at PT Cardig Aero Services Tbk, as
President Commissioner (Independent) at PT Toba
Bara Sejahtera Tbk., as President Commissioner
(Independent) at PT Mandala Airline Tbk,
and as Chairman at Matsushita Gobel
Foundation. Since May 20, 2011, he is by
appointment of the President of the
Republic of Indonesia, a member of
the National Innovation Committee
(a think tank of the President
of the Republic Indonesia on
Innovation Policy). He was served
as the Minister of Transportation
for the “Indonesia Bersatu
Pertama” cabinet (2007-2009)
and concurrently a member of the National Transportation Safety
and Security Evaluation Team (2007) founded to evaluate and
find the “root causes” of accidents in Shipping/Marine, Railways
and Highways transportation. He has vast experience in aircraft
industry management due to exposures to a variety of strategic
positions; as the President Director of PT Dirgantara Indonesia
(2000-2002), as Director of Human Resources of PT IPTN (1999-
2000), as Director of Helicopters, Defense Technology and Satellite
(1996-1999), as Chairman of PT IPTN’s Restructuring Program
Implementation team (1998-2001), and as Chief Project Engineer
for N250 Development & Constructional Design (1989-1995).
As a professional aerodynamics engineer with twenty years of
experience in Computational Aerodynamics and Configuration
Development, he holds, an Intellectual Property Right Patent No.ID
0 021 669 for electronic-based Flight Control Systems issued on
August 15, 2008 together with the late Bambang Pamungkas. He
was awarded the Nararya Dedicational Award from the Republic
of Indonesia on August 17, 1995. He is co-author of Grand Techno
Economic Strategy- Siasat Memicu Produktivitas (Mizan Publishers,
2009). He earned his Bachelor of Mechanical Engineering in
Aeronautical Engineering from Institut Teknologi Bandung (1983).
Parikesit Suprapto
Commissioner
Parikesit Suprapto, 62 years old, has served as our
Commissioner since May 11, 2012. Previously he was
the Deputy of Business Services at the Ministry
of SOE (2010-2012), Deputy Head of Banking and
Finance Industry at the Ministry of SOE (2008-
2010) and Advisor to the Minister of SOE for
Small Business Sector (2006-2008). He was a
Commissioner of PT Indosat Tbk. (2011-2012) and
a Commissioner of PT Bank Negara Indonesia
(Persero) Tbk. He earned a Bachelor’s degree
in Corporate Economics from Sekolah Tinggi
Manajemen Industri, Jakarta (1980), a Master’s
degree in Economic Development from Indiana
University, Indiana, USA (1990) and a PhD
degree in Development Economics
from the University of Notre Dame,
Indiana, USA (1995).
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
239
Hadiyanto
Commissioner
Johnny Swandi Sjam
Independent Commissioner
Hadiyanto, 51 years old, has served as our
Commissioner since May 11, 2012. Currently, he also
serves as Director General of State Treasury at the
Ministry of Finance of the Republic of Indonesia.
He has assumed, among other positions, Head
of the Legal Bureau, Secretariat General of
the Ministry of Finance and was the Alternate
Executive Director at the World Bank,
Washington D.C., US. In corporate environment
he had served as the President Commissioner
of PT Garuda Indonesia Tbk (2007-2012) and
President Commissioner of PT Bank
Export Indonesia (2007-2009). He
holds a Bachelor’s degree in Law
from the University of Padjadjaran,
Bandung, a Master of Law Degree
(“LLM”) from Harvard University
Law School, USA, and a PhD.
in Law from the University of
Padjadjaran, Bandung.
Johnny Swandi Sjam, 53 years old, has served as
our Independent Commissioner since January
1, 2011. Currently he is also the Chairman of
the Standing Committee on Infrastructure and
Telecommunications Services at the Indonesian
Chamber of Commerce and Industry (“KADIN”).
He previously served, among other positions, as a
Commissioner at PT Inti Limited (2010-2011), the
President Director of PT Indosat Tbk. (2007-2009),
the Director of PT Indosat Tbk. (2005-2007), the
President Director of Satelindo (2002-2003), and
several other important positions at subsidiaries
of Indosat like Satelindo, Sisindosat and
Intikom (1997-2002). He holds a Diploma
III in Computer Engineering from Bandung
Institute of Technology, a Diploma IV from
Sekolah Tinggi Manajemen Industri of
the Department of Industry of Indonesia,
a Bachelor’s degree in Informatics
Management from Gunadarma University,
Jakarta, and a Master’s degree in
Business Policy and Administration from
the University of Indonesia, Jakarta.
Virano Gazi Nasution
Independent Commissioner
Gatot Trihargo
Commissioner
Virano Gazi Nasution, 45 years old, has served as our
Independent Commissioner since May 11, 2012. He
was previously the Commercial Director of
PT Indonesia Comnet Plus, a subsidiary of PT PLN
(Persero) (2009-2012), Advisor to the Minister
of Communications and Informatics (2008-
2009), and the President Director of
PT Bakrie Telecom Tbk. (2001-2005). He
earned his Master of Science degree in
Engineering Economics from Stanford
University, USA.
Gatot Trihargo, 53 years old, serves as a
Commissioner, Tbk since 19 April 2013. He currently
serves as a Deputy of Services Business in the
Ministry of State-Owned Enterprises of the
Republic of Indonesia. Holds a degree in
accounting from the State College of
Accountancy, Jakarta. And a Master's
degree in Accountancy and Financial
Information Systems from Cleveland
State University in Ohio, USA.
Our Board of Commissioners was appointed based on the resolution of Telkom’s AGMS No.Tel.83/PR000/COP-A0070000/2013 dated on April 23,
2013. There is no affiliation between members of the Board of Commissioners and Board of Directors, but there is an affiliation with shareholders. For a
description regarding trainings attended to improve the competency of Board of Commissioners, see “Corporate Governance – Corporate Governance
Structure – Board of Commissioners”.
240
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Profile of the
Board of Directors
Arief Yahya
President Director (CEO)
Honesti Basyir
Director of Finance
Arief Yahya, 52 years old, has served as
our President Director since May 11, 2012.
Concurrently, he also serves as President
Commissioner of Telkomsel, our subsidiary.
Prior to his appointment as President Director,
he led a career with Telkom in various
positions, including as Director of
Enterprise & Wholesale (2005-2012),
Head of Regional Division V East Java
(2004-2005) and Head of Regional
Division VI Kalimantan (2003-2004).
He holds a Bachelor’s degree in
Electrical Engineering from Institut
Teknologi Bandung (1986) and a
Master’s degree in Telematics
University of Surrey, UK (1994).
from
Honesti Basyir, 45 years old, has served as our
Director of Finance since May 11, 2012. Prior to
his appointment as Director of Finance, he has
held a number of key positions with Telkom,
including Vice President (“VP”) for Strategic
Business Development at ITSS Directorate
(2012), VP for Strategic Business Development
at SICP (2010-2012), Project Controller of
Project Management Office (2009-
2010) and Assistant Vice President
(“AVP”) for Business & Finance
Analysis (2006-2009). He holds
a Bachelor’s degree in Industrial
Technology from Institut Teknologi
Bandung (1992) and a Master’s
degree in Corporate Finance
from Sekolah Tinggi Manajemen
Bandung (2004).
Indra Utoyo
Director of Innovation & Strategic
Portfolio
Sukardi Silalahi
Director of Consumer Service
Indra Utoyo, 51 years old, Indra Utoyo has
served as our Director of Innovation &
Strategic Portfolio (“ISP”) since May 11, 2012.
He joined Telkom in 1986 and has held a
variety of positions, prior to his appointment
as Director of ISP he served as Director of
Information Technology Solution & Supply
(2007-2012). He holds a Bachelor’s degree in
Electrical Engineering from Institut Teknologi
Bandung (1985) and a Master’s degree in
Communication & Signal Processing from
Imperial College, UK (1994).
Sukardi Silalahi, 48 years old, has served as
our Director of Consumer Service since May 11,
2012. He joined Telkom in 1991 and, prior to his
appointment as Director of Consumer Service,
he served in a variety of positions, including
Executive General Manager (“EGM”) of Eastern
Consumer Service Division (2011-2012), Deputy
EGM of Western Consumer Service Division
(2010-2011), EGM of Regional Division VI
Kalimantan (2008-2010) and Deputy EGM
of Fixed Wireless Network Division (2007-
2008). He holds a Bachelor’s degree in Civil
Engineering from Institut Teknologi Bandung
(1989).
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
241
Muhammad Awaluddin
Director of Enterprise & Business
Service
Muhammad Awaluddin, 45 years old, has
served as our Director of Enterprise &
Business Service (“EBIS”) since May 11, 2012.
Concurrently, he also serves as President
Commissioner of Infomedia, our indirect
subsidiary. Prior to his appointment as
Director of EBIS, he served, among other
positions, as President Director of Infomedia
(2010-2012), EGM of Access Network Division
(2010) and EGM of Regional Division
I Sumatra (2007-2010). He holds
a Bachelor’s degree in Electrical
Engineering from Universitas
Sriwijaya, Palembang (1990) and
a Master’s degree in Business
Administration from the European
University, Antwerp, Belgium
(1998).
Rizkan Chandra
Director of Network IT & Solution
Rizkan Chandra, 44 years old, has served as
our Director of Network IT & Solution (“NITS”)
since May 11, 2012. Concurrently, he also serves
as Commissioner of Telkomsel, our subsidiary,
and as Commissioner at Metranet, our
indirect subsidiary. Prior to his appointment
as Director of NITS, among other positions,
he served as President Director of Sigma, our
indirect subsidiary (2010-2012), Senior General
Manager (“SGM”) of Telkom Learning Center
(2008-2010) and VP for Infrastructure &
Service Planning (2007-2008). He holds
a Bachelor’s degree in Informatics
from Institut Teknologi Bandung
(1992) and a Master’s degree
in Management of Technology
from the National University of
Singapore (2000).
Priyantono Rudito
Director of Human Capital Management
Ririek Adriansyah
Director of Wholesale & International Service
Priyantono Rudito, 46 years old, has served as
our Director of Human Capital Management
(“HCM”) since May 11, 2012. Concurrently, he
also serves as Commissioner of Telkomsel, our
subsidiary. Since he joined Telkom in 1991, he
had served in a number of positions, including
as VP for Corporate Strategic Planning (2011-
2012) and VP Marketing & Consumer Care
(2007-2011). He holds a Bachelor’s degree in
Industrial Engineering from Institut Teknologi
Bandung (1991) and a Master’s degree of
Business in Marketing (1997) and a Doctoral
degree in Management (2011) from the
Royal Melbourne Institute of
Technology, Australia.
Ririek Adriansyah, 50 years old, has served as
our Director of Wholesale & International Service
(“WINS”) since May 11, 2012. Concurrently, he also
serves as President Commissioner of Telin,
our subsidiary. He joined Telkom in 1990 and,
prior to his appointment as Director of WINS,
served as, among other positions, President
Director of Telin, our subsidiary (2011-2012),
Director of Marketing & Sales, Telin (2010-
2011), Director of International Carrier Service,
Telin (2008-2010) and Deputy EGM of Infratel
Division (2004-2008). He holds a Bachelor’s
degree in Electrical Engineering from
Institut Teknologi Bandung (1989).
Board of Directors has served based on the resolution of our AGMS No.Tel.83/PR000/COP-A0070000/2013 dated on April 23, 2013. There is no affiliation
between members of the Board of Directors and shareholders. For a description regarding duties of Board of Directors and trainings attended to improve
the competency of Board of Directors, see “Corporate Governance – Corporate Governance Structure – Board of Directors”.
242
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Stock Overview
The Government’s ownership
of the Dwiwarna share gives
it effective control over our
Company even if it reduces
its ownership of our common
stock, and its rights with
respect to the Dwiwarna share
may only be modified by
an amendment of our Articles
of Association, which the
Government may veto.
A. Shareholder Composition
Our authorized capital consists of 1 Series A
Dwiwarna share and 399,999,999,999 Series B
(common stock) shares. Among this authorized
shares, 100,799,996,400 of which are issued and
fully paid, consists of the Series A Dwiwarna share
and 100,799,996,399 common stock. The Series
A Dwiwarna share is owned by the Government
and carries special voting rights and the right
to nominate, and to veto the appointment and
removal of, any director or commissioner, the
issue of new shares and amendments to our
Articles of Association including amendments
to merge or dissolve us prior to the expiry of its
term of existence, to increase or decrease our
authorized capital or to reduce our subscribed
capital. The material rights and restrictions placed
on the common stock also apply to the Dwiwarna
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
243
share, except that the Government cannot transfer the Dwiwarna share. The Government’s ownership of
the Dwiwarna share gives it effective control over our Company even if it reduces its ownership of our
common stock, and its rights with respect to the Dwiwarna share may only be modified by an amendment
of our Articles of Association, which the Government may veto. See Notes 23 to our Consolidated Financial
Statement.
Company Shareholders per December 31, 2013
Government
Public
Capital Subtotal (issued and outstanding)
Treasury Stock
Total
1
-
1
-
1
Series A Dwiwarna
Share
Series B Shares
(Common Stock)
%
53.14
46.86
51,602,353,559
45,498,500,040
97,100,853,599
100.00
3,699,142,800
0
100,799,996,399
100.00
Our shareholder composition as of December 31, 2012 is as follows:
1. Shareholders Owning More Than 5% of Shares
Title of Class
Person or Group
Number of Shares
Percentage of Ownership
Series A
Series B
Government
Government
1
51.602.353.559
-
53,14
2. Shares Owned by Directors or Commissioners
As of December 31, 2013, none of our Directors or senior managers have more than 1.0% of our shares. In
addition, on December 31, 2013 the Commissioners have no common stock of our Company’s.
Directors or Commissioners
Number of Shares
Percentage of Ownership
Directors
Indra Utoyo
Honesti Basyir
Priyantono Rudito
Sukardi Silalahi
Total
27,540
540
540
540
28,620
<0.01
<0.01
<0.01
<0.01
<0.01
3. Shareholders Owning Less Than 5% of Shares
Group
Number of Shares of Common
Stock Owned
Percent (%) of Common
Stock Owned
Foreign
Local
Business
Individual
Business Entities
Companies
Mutual Funds
37,225,349,109
15,439,800
2,129,760,716
2,704,444,356
Insurance Companies
1,987,715,400
Pension Funds
Others
Individuals
Total
679,575,650
81,817,350
673,848,287
45,497,950,668
38.34
0.01
2.19
2.79
2.05
0.70
0.08
0.69
46.85
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2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
4. Proportion of Common Stock Held in Indonesia and Abroad
As of December 31, 2013, we had 50,940 common stock shareholders, including the Government. This
total includes 38,290,928,072 common stock shares owned by 1,819 shareholders outside Indonesia. As of
the same date, there were 106 ADS shareholders who owned 56,880,158 ADS (1 ADS is equivalent to 200
common stock shares).
B. Chronology of Stock Issued
Date
Corporate Actions
Share Ownership Composition
Government of the
Republic Indonesia
%
Public
%
13/11/1995
Pre Initial Public Offering (“Pre-IPO”)
8,400,000,000
100.0
14/11/1995
IPO
Sale of Government’s shares
(933,334,000)
New shares issued by Telkom
-
-
933,334,000
933,333,000
-
-
-
Share Ownership Composition
7,466,666,000
80.0
1,866,667,000
20.0
11/12/1996
Block Sale of Government’s shares
(388,000,000)
-
388,000,000
-
Share Ownership Composition
7,078,666,000
75.8
2,254,667,000
24.2
15/05/1997
Distribution of incentive shares by the
Government to public shareholders
(2,670,300)
-
2,670,300
-
Share Ownership Composition
7,075,995,700
75.8
2,257,337,300
24.2
07/05/1999
Block Sale of Government’s shares
(898,000,000)
-
898,000,000
-
Share Ownership Composition
6,177,995,700
66.2
3,155,337,300
33.8
02/08/1999
Distribution of bonus shares (emission)
(every 50 shares acquire 4 shares)
494,239,656
-
252,426,984
-
Share Ownership Composition
6,672,235,356
66.2
3,407,764,284
33.8
07/12/2001
Block Sale of Government’s shares
(1,200,000,000)
-
1,200,000,000
-
Share Ownership Composition
5,472,235,356
54.3
4,607,764,284
45.7
16/07/2002
Block Sale of Government’s shares
(312,000,000)
-
312,000,000
-
Share Ownership Composition
5,160,235,356
51.2
4,919,764,284
48.8
Share Ownership Composition
10,320,470,712
51.2
9,839,528,568
48.8
21/12/2005
Share repurchase program (I)1
10,320,470,712
51.7
9,628,238,068
48.3
29/06/2007
Share repurchase program (II)2
10,320,470,712
52.3
9,413,238,068
47.7
20/06/2008 Share repurchase program (III)3
10,320,470,712
52.5
9,348,954,068
47.5
19/05/2011
Share repurchase program (IV)4
10,320,470,712
53.9
8,828,598,108
46.1
14/06/2013
Transferred a portion of Share repurchase
program III to employees through ESOP
Program
30/07/2013
Transferred share repurchase program I by
private placement
10,320,470,712
53.7
8,888,409,508
46.3
10,320,470,712
53.1
9,099,700,008
46.9
Share Ownership
51,602,353,560
53.1 45,498,500,040
46.9
(1) The first share repurchase program started on December 21, 2005 (the date of the Extraordinary General Meeting of
Shareholders at which the program was approved) and ended in June 2007.
(2) The second share repurchase program started on June 29, 2007 (the date of the Extraordinary General Meeting of Shareholders
at which the program was approved) and ended in June 2008.
(3) The third share repurchase program started on June 20, 2008 (the date of the Extraordinary General Meeting of Shareholders at
which the program was approved) and ended in December 2009.
(4) The fourth share repurchase program started on May 19, 2011 (the date of the Annual General Meeting of Shareholders at which
the program was approved) and ended in November 2012.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
245
1. Employee Stock Ownership Program
The Employee Stock Ownership Program (“ESOP”) is an employee-owner scheme that provides our
employee with an ownership interest in our Company. At our initial public offering on November 14, 1995, a
total of 116,666,475 shares were issued to 43,218 employees. On June 14, 2013, the Company transferred a
portion of the treasury stock to its employees as part of the 2012 annual incentives. The 59,811,400 (equal to
299,057,000 shares after stock split) treasury stock transferred to 24.993 employees which had a total fair
value of Rp641 billion.
As of December 31, 2013, 284,336,610 of our shares were owned by 28,115 of our employees and our retirees.
2. Purchases of Equity Securities by The Issuer and Affiliated Purchasers
Period
Total Number of Share
Purchased
Average Price Paid per
Share in (Rp)
2006
2007
2008
2011
2012
-
118,376,500
126,364,000
245,834,000
283,085,460
520,355,960
-
8,044
9,689
8,491
7,337
7,996
Total Number of
Shares Purchased
as Part of Publicly
Announced Plan
Maximum Number of
Shares that May Yet
Be Purchased Under
the Plans
-
1,007,999,964
118,376,500
889,623,464
244,740,500
763,259,464
490,574,500
517,425,464
773,659,960
645,161,290
1,010,930,460
124,805,330
246
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
As of December 31, 2012,
(ninety) days before the sale,
interest at a fixed rate of 17%
we had repurchased
and Rp11,400 per share, which
per annum, payable quarterly
1,010,930,460 common stock
is the closing price on the day
beginning October 16, 2002.
shares, equivalent to 5.0% of
before the selling date.
The bonds was traded on the
our issued and outstanding
Surabaya Stock Exchange and
common stock, at an aggregate
As of December 31, 2013,
matured on July 16, 2007. The
repurchase price of Rp8,067
our treasury stock balance is
trustee of the bonds was BRI
billion, excluding broker and
739,828,560 or after stock split
(effective from January 17,
custodian fees. Under our
3,699,142,800 common stock
2006 replacing BNI) and the
repurchase program, we
shares, equivalent to 3.7% of
custodian was PT Kustodian
repurchased 118,376,500 shares
our issued and outstanding
Sentral Efek Indonesia. The
in 2006, 126,364,000 shares in
common stock which comprise
bonds were fully repaid on
2007, 245,834,000 shares in
of Share Buyback Phase II and
July 16, 2007.
2008, 283,085,460 shares in
IV with average repurchase
2011 and 237,270,500 shares
price after stock split were
Second IDR bond issued on
in 2012. In 2011 and 2012, we
Rp1,832 and Rp1,462, excluding
June 25, 2010 with a nominal
repurchased 520,355,960
broker and custodian fees. See
amount of Rp1,005 billion for
common stock shares at an
Note 25 to our Consolidated
a five-year period and Rp1,995
aggregate repurchase price
Financial Statement.
Rp3,803 billion.
billion for a ten-year period
for Series A and Series B,
We plan to retain, sell or use
respectively, were listed on the
On April 19, 2013 in accordance
repurchased stock for other
IDX.
with the Resolution of the
purposes in accordance with
AGMS and regard with
Bapepam-LK Rule No.XI.B.2,
The underwriters of the bonds
clause 4 letter a number
Law No.40/2007 regarding
are PT Bahana Securities,
(3) Bapepam-LK XI.B.2 we
Limited Liability Companies
PT Danareksa Sekuritas and
executed the transfer of
and the resolutions of the
PT Mandiri Sekuritas. And the
59,811,400, or after stock split
AGMS on April 19, 2013, that
trustee is PT CIMB Niaga Tbk.
299,057,000 shares of Series
require the Board of Directors
As of December 31, 2011, the
B from Share Buyback Phase
to seek prior approval from
rating for the bonds issued by
III through Employee Stock
the Board of Commissioners
PT Pemeringkat Efek Indonesia
Ownership Program.
to undertake any change or
(Pefindo) is idAAA (stable
transfer of treasury stock and
outlook). See “Highlights –
On 29 July 2013, we have sold
report its utilization or transfer
Common Stock and Bond
211,290,500 or after stock split
to the AGMS. Before giving
Highlights”.
1,056,452,500 shares which are
its approval, the Board of
part of Share Buyback Phase
Commissioners must consult
D. Dividend Policy
I by private placement. The
with the holder of the Series A
The AGMS has the authority
selling price was Rp11,400 per
Dwiwarna share.
share, which is not lower than
to determine the amount
of dividends we pay. Our
Rp8,657 per share which is the
C. Chronology of Bonds
dividend payout ratio for 2013
average repurchase price of
On July 16, 2002, the Company
will be decided at the AGMS
treasury stock, Rp11,288 per
issued a five-year bonds
scheduled for 2014.
share which is the average
amounting to Rp1,000 billion,
closing price for the last 90
at par value. The bonds bore
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
247
Table Chronology of Cash Dividend
Dividend Year Date of AGMS
Payout Ratio (%)1
Amount of Dividens
(Rp million)
Dividend per Share (Rp)
2008
2009
2010
2011
2012
June 12, 2009
June 11, 2010
May 19, 2011
May 11, 2012
April 19, 2013
55
50
55
65
65
5,840,7082
5,666,070
6,345,3503
7,127,3334
8,352,5975
59.39
57.61
64.52
74.21
87.24
(1) Represents the percentage of profit attributable to owners of the parent paid to shareholders in dividends.
(2) Including interim cash dividend paid in December 2009 amounting to Rp524,190 million.
(3) Including interim cash dividend paid in December 2010 and January 2011 amounting to Rp276,072 million and Rp250,085 million
respectively.
(4) Consists of cash dividend amounting to Rp6,030.8 million and special cash dividend amounting Rp1,096.5 million.
(5) Consists of cash dividend amounting to Rp7,067.6 million and special cash dividend amounting Rp1,285.0 million.
Telkomsel Dividend
Pursuant to AGMS in April 2013, Telkomsel approved the payment of a cash dividend of Rp13,358 billion,
which represented 85% of Telkomsel’s net profit in 2012, Rp4,675 billion of this dividend was distributed to
SingTel Mobile.
In 2011, 2012, and 2013 cash dividends were paid to SingTel Mobile, a non-controlling shareholder of Telkomsel,
amounting to Rp2,726 billion, Rp3,231 billion and Rp4,675 billion.
E. Capital Market Supporting Professionals
Capital Market
Supporting Professionals
INDEPENDENT
AUDITORS
Public Accountant Firm
(KAP) Purwantoro,
Suherman & Surja
(Member firm of Ernst &
Young Global Limited)
Address
Services
Fees
Service period
Rp26,619,000,000
2013
Indonesian Stock
Exchange Building
Tower 2, 7th Floor
Jl. Jend. Sudirman
Kav. 52 - 53
Jakarta 12190, Indonesia
Tel. : (62-21) 5289 5000
Fax. : (62-21) 5289 4100
Integrated Audit
PT Telekomunikasi
Indonesia, Tbk.
(“Telkom”) and
General Audit on the
Financial Statements
of subsidiaries in fiscal
2012.
Public Accountant Firm
(KAP) Tanudiredja,
Wibisana & Rekan
(Member firm of
PricewaterhouseCoopers
Global Network)
Plaza 89
Jl. H.R. Rasuna Said
Kav. X-7 No. 6
Jakarta 12940
Tel.: (62-21) 521 2901
Fax.: (62-21) 5290 5555
Issuance of consent
letter.
Rp4,400,000,000
2013
SHARE REGISTRAR
PT Datindo Entrycom
Puri Datindo
Wisma Sudirman
Jl. Jend. Sudirman
Kav. 34, Jakarta 10220
Tel. : (62-21) 570 9009
Fax. : (62-21) 570 9026
Performs custodian
services for the
common stock of
Telkom traded at
the Indonesia Stock
Exchange.
Rp136,000,000
Since IPO of
Telkom in 1995
248
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Capital Market
Supporting Professionals
TRUSTEE
Address
Services
Fees
Service period
PT Bank CIMB Niaga Tbk. Graha Niaga, 7th Floor
Rp75,000,000
2010
Representing
the interest of
bondholders in
interaction with the
Company related to
Telkom II Bonds.
- Provides centralized
Rp30,000,000
Since 1995
custodian and
settlement of share
transactions at IDX
- Custodian and
settlement services
in securities
transactions and
share distribution in
corporate actions
Provides risk rating
on bonds issued by
Telkom.
Rp140,250,000
2010, 2011
Jl. Jend. Sudirman
Kav. 58, Jakarta 12190
Tel. : (62-21) 300 6420
ext. 32001 - 32003
Fax. : (62-21) 250 5777
Jakarta Stock Exchange
Building
Tower 1, 5th Floor
Jl. Jenderal Sudirman,
Kav. 52 - 53
Jakarta, 12190
Tel. : (62-21) 529 91099
Fax. : (62-21) 529 91199
Panin Tower - Senayan
City, 17th Floor
Jl. Asia Afrika Lot. 19
Jakarta 10270
Tel. : (62-21) 7278 2380
Fax. : (62-21) 7278 2370
101 Barclay Street
22nd Floor
West New York
NY 10286
Tel. : (1-212) 815 8162
Fax. : (1-212) 571 3050
Performs custodian
services for ADS
traded at the NYSE
and LSE.
US$57,111
Since 1995
CUSTODIAN
PT Kustodian Sentral Efek
Indonesia
RATING AGENCY
PT Pefindo
DEPOSITORY FOR ADS
The Bank of New York
Mellon
Depositary Receipts
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
249
ADDRESSES
Company: PT Telekomunikasi Indonesia, Tbk
No
Office
Address
Telephone
Fax
1
2
3
Head Office
Graha Merah Putih Telkom
www.telkom.co.id
Jl. Japati No. 1, Bandung 40133
(62-22) 452 7101
(62-22) 424 0313
Corporate Communication & Affairs
corporate_comm@telkom.co.id
Graha Merah Putih, 1st Floor
Jl. Jend. Gatot Subroto Kav. 52 , Jakarta 12710
(62-21) 529 22007
(62-21) 521 1117
Investor Relation
investor@telkom.co.id
Graha Merah Putih, 5th Floor
Jl. Jend. Gatot Subroto Kav. 52, Jakarta 12710
(62-21) 521 5109
(62-21) 522 0500
4 Network of Broadband Division
Graha Merah Putih, 9th Floor
Jl. Jend. Gatot Subroto Kav. 52, Jakarta 12710
(62-21) 522 1400
(62-21) 522 1500
(62-21) 522 9600
5
Access Division
Graha Merah Putih, 7th Floor
Jl. Jend. Gatot Subroto Kav. 52, Jakarta 12710
(62–21) 5290 3482
(62–21) 522 1300
6 Maintenance Service Center
Graha Merah Putih, 4th Floor, Jl. Japati No. 1, Bandung 40133
(62-22) 452 4129
(62-22) 452 4125
7
Information System Center
ISCenter@telkom.co.id
Graha Merah Putih Telkom, 4th Floor
Jl. Japati No. 1, Bandung 40133
(62-22) 452 4228
(62-22) 720 1890
8 Wireless Broadband Division
Graha Flexi, 2nd Floor, Jl. Kebon Sirih No. 36, Jakarta 10110
(62-21) 344 7070
(62-21) 344 0707
9
Broadband Division
Sek.divbb@gmail.com
Graha Merah Putih, 7th Floor
Jl. Jend. Gatot Subroto Kav. 52, Jakarta 12710
(62–21) 5290 3482
(62–21) 522 1300
10 Solution Convergence Division
www.c4.telkom.co.id
c4@telkom.co.id
Multimedia Tower, 15th - 17th Floor
Jl. Kebon Sirih No. 12, Jakarta 10110
11
Research & Development Center
Jl. Gegerkalong Hilir No. 47, Bandung 40152
12 Divisi Consumer Services
Graha Merah Putih 14th Floor
Jl. Jend. Gatot Subroto Kav. 52 , Jakarta 12710
(62-21) 386 0500
(62-21) 386 6267
(62-21) 386 0300
(62-22) 457 1050
(62-22) 457 1051
(62-22) 201 4669
(62-22) 201 3505
(62-21) 7072 6162
(62-21) 520 2764
13
Enterprise Services Division
Multimedia Tower 19th Floor
Jl. Kebon Sirih No 10-12, Jakarta Pusat 10110
(62-21) 386 6600
(62-21) 386 8400
14 Business Service Division
Jl. Letjen S. Parman Kav. 8, 2nd Floor, Jakarta 11440
(62-21) 565 8500
(62-21) 565 2800
15 Wholesale Services Division
Graha Merah Putih, 8th Floor
Jl. Jend. Gatot Subroto Kav. 52, Jakarta 12710
(62-21) 5291 7007
(62-21) 5289 2080
16 Human Capital Center
Graha Merah Putih Telkom, 5th Floor
Jl. Japati No. 1, Bandung 40133
(62-22) 452 5428
(62-22) 720 6986
17 Corporate University
Jl. Gegerkalong Hilir No. 47, Bandung 40152
(62-22) 201 4508
(62-22) 201 4441
(62-22) 201 4429
18 Management Consulting Center
Jl. Cisanggarung No. 2, Bandung 40115
(62-22) 452 1620
(62-22) 452 1549
19 Assessment Service Center
Jl. Hegarmana No. 71, Bandung 40141
(62-22) 203 9255
(62-22) 203 5269
(62-22) 203 9231
20 Community Development Center
Graha Merah Putih 6th Floor, Jl. Japati No. 1, Bandung 40133
(62-22) 452 6169
(62-22) 452 6130
21
Supply Center
Graha Merah Putih 6th Floor, Jl. Japati No. 1, Bandung 40133
(62-22) 452 6327
(62-22) 720 6583
22 Finance, Billing & Collection Center
Graha Merah Putih 3rd Floor, Jl. Japati No. 1, Bandung 40133
(62-22) 452 3371
(62-22) 452 3377
250
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Direct Subsidiaries
No
Entity
Address
Telephone
Fax
1
2
3
4
5
6
7
8
9
PT Telekomunikasi Selular
www.telkomsel.com
Wisma Mulia 15th Floor
Jl. Jend. Gatot Subroto Kav. 42 , Jakarta 12710
PT Graha Sarana Duta
www.telkomproperty.co.id
Telkom Property Tower, Annex Building
Jl. Kebon Sirih No. 10-12 , Jakarta 10110
PT Telekomunikasi Indonesia
International
www.telin.co.id
Jamsostek Tower, North Tower, 24th Floor
Jl. Jend. Gatot Subroto Kav. 38 , Jakarta 12710
(62-21) 524 0811
(62-21) 529 06091
(62-21) 380 0900
(62-21) 3483 0653
(62-21) 2995 2300
(62-21) 5296 2358
PT Multimedia Nusantara
www.metra.co.id
The East Tower, 37th Floor
Jl. Dr. Ide Anak Agung Gede Agung Kav. E3.2 No. 1 , Jakarta 12950
(62-21) 521 0123
(62-21) 521 0124
PT Dayamitra Telekomunikasi
www.mitratel.co.id
Graha Pratama Building, 5th Floor
Jl. M.T. Haryono Kav. 15 , Jakarta 12810
PT Pramindo Ikat Nusantara
www.pramindo.com
Plaza Kuningan, Annex Building, 7th Floor
Jl. HR. Rasuna Said Kav. C11-C14, Jakarta Selatan 12940
PT Napsindo Primatel International
Elektrindo Building, 6th Floor
Jl. Prof. Dr. Supomo No. 139, Tebet, Jakarta Selatan
PT Telkom Akses
Telkom Building, 7th Floor
Jl. S. Parman Kav. 8, Jakarta Barat 11440
PT Patra Telekomunikasi Indonesia
www.patrakom.co.id
Jl. Pringgodani 2 No. 33
Alternatif Cibubur, Depok 16954
(62-21) 8370 9592
(62-21) 8370 9593
(62-21) 8370 9591
(62-21) 520 2560
(62-21) 5292 0156
(62-21) 520 9202
(62-21) 520 9305
(62-21) 2933 7000
(62-21) 2933 6000
(62-21) 845 4040
(62-21) 845 7610
Indirect Subsidiaries
No
Entity
Address
Telephone
Fax
PT Infomedia Nusantara
www.infomedianusantara.co.id
Jl. RS. Fatmawati Kav. 77-81, Jakarta 12150
(62-21) 720 1221
(62-21) 720 1226
PT Finnet Indonesia
www.finnet-indonesia.com
Bidakara Tower, 2th Floor
Jl. Jend. Gatot Subroto Kav. 71-73, Jakarta 12870
(62-21) 829 9999
(62-21) 828 1999
PT Sigma Citra Caraka
www.telkomsigma.co.id
PT Administrasi Medika
www.admedika.co.id
Telekomunikasi Indonesia
International Pte. Ltd.
www.telin.sg
PT Metra Plasa
Dea Tower, 7th & 8th Floor, Kawasan Mega Kuningan
Jl. Mega Kuningan Barat IX Kav. E43 No. 1, Jakarta 12950
(62-21) 576 2150
(62-21) 576 2155
Telkom STO Gambir, C Building, 3rd, 4th & 5th Floor
Jl. Medan Merdeka Selatan No. 12, Jakarta 10110
1 Maritime Square #09-63
Harbour Front Center, Singapore 099253
(62-21) 3483 1100
(62-21) 3483 5489
(65) 6278 8189
(65) 6273 1169
Mulia Business Park, Building J
Jl. Letjen MT Haryono Kav. 58 – 60 Pancoran, Jakarta 12780
(62-21) 7918 7250
(62-21) 7918 7252
PT Telkom Landmark Tower
Graha Merah Putih, 6th Floor
Jl. Jend. Gatot Subroto Kav. 52, Jakarta 12710
Telekomunikasi Indonesia
International Hong Kong Limited
www.telin.hk
Suite 905, 9F, Ocean Center No. 5
Canton Road, Tsim Sha Tsui
Kowloon, Hong Kong
PT Metra-Net
www.metranet.co.id
Mulia Business Park, Building J
Jl. Letjen MT Haryono Kav. 58 – 60
Pancoran, Jakarta 12780
Telekomunikasi Indonesia
International (TL), S.A
www.telkomcel.tl
Timor Plasa 4th Floor
Rua Presidente Nicolau Labato
Comoro, Dili, Timor Leste
(62-21) 521 5565
(62-21) 521 5576
(852) 3102 3309
(852) 3102 3306
(62-21) 7918 7250
(62-21) 7918 7252
(670) 7408 0002
(670) 7408 0002
Level 5, 30 Collins Street, Melnourne VIC 3000
(61) 3 963 98 270
Telekomunikasi Indonesia International
Australia Pty. Ltd.
www.telkom.au
Telekomunikasi Indonesia International
(Myanmar Branch)
13
Telkom Macau Limited
14
Telkom Taiwan Limited
No. #0502, Level 5, Sakura Tower
No. 339, Bogyoke aung-san street
Kyauktada township, Yangon
Av. Praia Grande No. 369, Keng Ou
Commercial Building 17/FL, Macau
10F No. 15 Sec.2, Keelung Road
Xinyi District, Taipei City 11052 Taiwan
PT Metra Digital Media
www.mdmedia.co.id
Jl. RS Fatmawati No. 77-81
Jakarta Selatan 12940
PT Pojok Celebes Mandiri
www.pointer.co.id
Jl. Condet Raya No. 333/J Balekambang
Kramat Jati, Jakarta Timur 13530
Graha Yasa Selaras
www.gys.co.id
Jl. Cisanggarung No. 2
Bandung, 40115
(95) 9420182434
(853) 2855 3191
(886) 2875 25071
(62-21) 720 1221
(62-21) 720 1226
(62-21) 520 2560
(62-21) 5292 0156
(62-21) 2937 3372
(62-21) 8087 6387
PT Infomedia Solusi Humanika
www.ish.co.id
Jl. RS Fatmawati No. 75, Bank Mandiri Building 5th Floor
South Jakarta 12150
(62-22) 872 45817
(62-22) 872 45817
1
2
3
4
5
6
7
8
9
10
11
12
15
16
17
18
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
251
No
Entity
19
PT Metra Media (MM)
20
PT Metra TV
Address
Telephone
Fax
The East Tower 37th Floor. Jl. Dr. Ide Anak Agung Gde Agung
Kav. E.3.2 No. 1, Kuningan Timur, Setiabudi, Jakarta Selatan 12950
(62-21) 720 1221
The East Tower 37th Floor. Jl. Dr. Ide Anak Agung Gde Agung
Kav. E.3.2 No. 1, Kuningan Timur, Setiabudi, Jakarta Selatan 12950
(62-21) 521 0123
(62-21) 521 0124
21
PT Satelit Multimedia Indonesia
The East Tower 37th Floor. Jl. Dr. Ide Anak Agung Gde Agung
Kav. E.3.2 No. 1, Kuningan Timur, Setiabudi, Jakarta Selatan 12950
(62-21) 521 0123
(62-21) 521 0124
22
23
Telekomunikasi Indonesia
International (USA) Inc.
Registered Office: 2711 Centerville Road, Suite 400
Wilmington, Delaware 19808
Telekomunikasi Selular Finance
Limited (“TSFL”)
c/o International Management (Mauritius) Ltd.
4th Floor, Les Cascades Bldg,
Edith Cavell Street, Port-Louis.
Republic of Mauritius
(62-21) 521 0123
(62-21) 521 0124
(230) 212 9800
(230) 212 9833
Associated Companies
No
Entity
Address
Telephone
Fax
1
2
3
4
PT Citra Sari Makmur
www.csmcom.com
Chase Plaza, 16th Floor
Jl. Jend. Sudirman Kav. 21, Jakarta 12910
PT Pasifik Satelit Nusantara
www.psn.co.id
Kantor Taman Building, A9 Unit C3 - C4
Jl. Mega Kuningan Raya Lot 8/9 No. 9
Kawasan Mega Kuningan, Jakarta 12950
PT Integrasi Logistik Cipta Solusi
www.ilcs.co.id
Telkom North Jakarta Plaza, 4th Floor
Jl. Yos Sudarso Kav. 23-23, Jakarta Utara
PT Indonusa Telemedia
www.telkomvision.com
Plasa TelkomVision Building, 3rd Floor
Jl. Prof. Dr. Supomo No. 139, Tebet, Jakarta 12810
(62-21) 520 8311
(62-21) 570 0194
(62-21) 570 4656
(62-21) 576 2292
(62-21) 576 2290
(62-21) 4393 2555
(62-21) 4393 6555
(62-21) 829 8800
(62-21) 831 7400
Joint Venture Companies
No
1
2
Entity
Address
Telephone
Fax
PT Melon Indonesia
www.melon.co.id
Telkom DCS 1 Building, 7th Floor
Jl. Sisingamangaraja Kav. 4 – 6, Kebayoran Baru, Jakarta Selatan 12110
(62-21) 724 4493
(62-21) 724 4390
Telekomunikasi Indonesia
International (Malaysia) Sdn. BHD.
Suite 23, A-1, 23 A Floor, Wisma UOA II, No. 21
Jalan Pinang, 50450 Kuala Lumpur, Malaysia
(60) 3233 20680
252
252
2013 Annual Report
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
PT Telekomunikasi Indonesia, Tbk
Highlight
Highlights
Preface
Preface
Management
Management
Report
Report
Business
Business
Overview
Overview
Management’s
Management’s
Discussion & Analysis
Discussion & Analysis
Additional
Information
(ADR Shareholder’s)
254
Summary of Significant
Differences Between
Indonesian Corporate
Governance Practices and the
NYSE’S Corporate Governance
Standards
256
Relationship with the
Government and Government
Agencies
258
Capital Market Trading
Mechanism and Telkom ADS
256
Summary of Significant
Differences Between IFAS and
IFRS
260
Taxation
262
Legal Basis and Regulation
268
Competition
272
Licensing
276
Trademark, Copyrights,
Industrial Designs and Patents
256
Articles of Association
262
Research and Development
278
Definitions
Corporate
Governance
Governance
Social &
Social &
Environmental
Environmental
Responsibility
Responsibility
Company
Company
Profile
Profile
Additional
Additional
Information
Information
(For ADR
(For ADR
Shareholders)
Shareholders)
Appendices
Appendices
2013 Annual Report
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
PT Telekomunikasi Indonesia, Tbk
253
253
254
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Highlight
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
SUMMARY OF
SIGNIFICANT
DIFFERENCES
BETWEEN
INDONESIAN
CORPORATE
GOVERNANCE
PRACTICES AND
THE NYSE’S
CORPORATE
GOVERNANCE
STANDARDS
The following is a summary of
significant differences between the
corporate governance practices
followed by Indonesian companies
and those required by NYSE listing
standards for domestic US issuers.
A. Overview of Indonesian
Law
Indonesian public companies
are required to observe and
comply with certain good
corporate governance practices.
The requirements and the
standards for good corporate
governance practices for public
companies are embodied in
the following regulations: Law
No.40/2007 on Limited Liability
Companies (“Indonesian
Company Law”), Law
No.8/1995 on Capital Markets
(“Capital Markets Law”), Law
No.19/2003 on State-Owned
Enterprises, Regulation of
the Minister of State-Owned
Enterprises No.PER-09/
MBU/2012 on Amendment
of Regulation of the Minister
of State-Owned Enterprises
No.PER-01/MBU/2011 on the
Implementation of Good
Corporate Governance to
State-Owned Enterprises;
regulation of OJK (“OJK
Regulations”) and the rules
issued by the IDX. In addition
to the above, the articles of
association of public companies
incorporate provisions
directing the implementation
of good corporate governance
practices.
On November 30, 2004,
the National Committee on
Governance (“NCG”) was
established pursuant to the
Decree of the Coordinating
Minister for Economic Affairs
No.KEP.49/M.EKONOM/1/2004
(“KEP.49”), which was formed
to revitalize the former National
Committee on Good Corporate
Governance established in
1999. The NCG aimed at
enhancing comprehension
and implementation of good
governance in Indonesia and
advises the Government on
governance issues, both in
public and corporate sectors.
The NCG formulated the
Code for Good Corporate
Governance 2006 (“Code”)
which recommended setting
more stringent corporate
governance standards for
Indonesian companies,
such as the appointment of
independent audit committee
and nomination and
remuneration committees by
the Board of Commissioners,
as well as increasing
the scope of disclosure
obligations for Indonesian
companies. Although the NCG
recommended that the Code
B. Composition of
Independent Board of
Directors and Board of
Commissioners
The NYSE listing standards
provide that the Board of
Directors of a US listed
company must consist of
a majority of Independent
Directors and that certain
committees must consist solely
of Independent Directors.
Unlike companies incorporated
in the US, the management
of an Indonesian company
consists of two organs of
equal stature, the Board of
Directors and the Board of
Commissioners. Generally,
the Board of Directors is
responsible for the day-to-
day business activities of the
company and is authorized
to act for and on behalf of
the company, while the Board
of Commissioners has the
authority and responsibility
to supervise the Board of
Directors and is statutorily
mandated to provide advice
to the Board of Directors by
Indonesian Company Law.
With regard to the Board of
Commissioners, the Indonesia
Company Law requires a
public company Board of
Commissioners to have at least
two members. Although the
Indonesian Company Law is
silent as to the composition of
the Board of Commissioners,
Listing Regulation No.I-A in
KEP.305/BEJ/07-2004 issued
be adopted by the Government
by the IDX (“IDX Regulation
as a basis for legal reform,
as of the date of this Annual
Report, the Government has
not enacted regulations that
fully implement the provisions
of the Code.
I-A”) states that at least
30% of the members of the
Board of Commissioners
of a public company (such
as our Company) must be
independent.
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The Indonesian Company
of the Exchange Act require
address, among other things:
Law states that the Board of
foreign private issuers whose
director qualification standards,
Directors has the authority to
shares are listed on the NYSE
director responsibilities,
manage the daily operation of
to have an Audit Committee
director access to management
the company and must have
comprised of Independent
and independent advisers,
at least two members, each of
Directors. However, such
director compensation, director
whom must meet the minimum
foreign private issuers may
orientation and continuing
qualification requirements
be exempted from the
education, management
set forth in the Indonesian
independence requirement if (i)
succession, and an annual
Company Law. In addition,
the home country government
performance evaluation itself.
based on IDX Regulation I-A,
or stock exchange requires
In addition, the CEO of a US
the Board of Directors of the
the company to have an Audit
company must certify to the
listed company must consist of
Committee; (ii) the Audit
NYSE annually that he or she
at least one unaffiliated director.
Committee is separate from the
is not aware of any violations
C. Committees
Board of Directors and includes
by the company of the NYSE’s
non-board members as in our
corporate governance listing
NYSE listing standards require
case, members from the Board
standards. The certification
that a US listed company must
of Commissioners; (iii) the
must be disclosed in our
have an Audit Committee,
Audit Committee members are
Annual Report to shareholders.
a nominating/corporate
not selected by management
Indonesian law does not have
governance committee and
and no executive officers of the
disclosure requirements similar
a compensation committee.
company is a member of the
to NYSE listing standards.
Each of these committees must
Audit Committee; (iv) the home
However, the Capital Markets
consist solely of Independent
country government or stock
Law generally requires
Directors and must have a
exchange requires the Audit
Indonesian public companies
written charter that addresses
Committee to be independent
to disclose certain types of
certain matters specified in the
of the company’s management
information to shareholders and
listing standards.
and (v) the Audit Committee
to OJK, particularly information
is responsible for appointment,
relating to changes in the public
The Indonesian Company Law
retention and oversight the
company’s shareholdings and
does not require Indonesian
work of the external auditor.
material facts that may affect
public companies to form any
the decision of shareholders to
of the committees described
Not all members of our Audit
maintain their share ownership
in the NYSE listing standards.
Committee are Independent
in such public company.
However, OJK Rule No.IX.1.5 and
Directors as required by Rule
the IDX Regulation I-A require
10A-3 of the Exchange Act. We
E. Code of Business Conduct
the Board of Commissioners
rely on the general exemption
of an IDX- listed company
pursuant to Rule 10A-3(c)(3)
and Ethics
NYSE listing standards require
(such as our Company) to
regarding the composition
each US listed company to
establish an Audit Committee,
of the Audit Committee. We
adopt, and post on its website,
which must consist of at least
believe that our reliance on this
a code of business conduct
three members, one of whom
exemption does not materially
and ethics for its Directors,
must be an Independent
and adversely affect the ability
officers and employees. There
Commissioner and serve as
of the Audit Committee to act
is no similar requirement under
chair of the Audit Committee,
independently.
while the other two members
must be independent parties of
whom at least one such party
must have accounting and/or
D. Disclosure Regarding
Corporate Governance
The NYSE listing standards
Indonesian law. However,
companies that are required
to file or furnish reports to
the SEC must disclose in their
Annual Reports whether they
finance expertise.
require US companies to adopt,
have adopted a code of ethics
and post on their websites, a
for their senior financial officers.
The NYSE Listing Standards as
set of corporate governance
required by Rule 10A-3(c)(3)
guidelines. The guidelines must
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Report
Business
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Management’s
Discussion & Analysis
SUMMARY OF
SIGNIFICANT
DIFFERENCES
BETWEEN IFAS
AND IFRS
changes made before Notary
(“MoF”). In turn, and under
Ashoya Ratam, S.H., MKn. No.
the authority of the MoF,
11 dated May 8, 2013. Notice of
the Minister of State-Owned
the amendment of articles was
Enterprise (“MSOE”) exercises
accepted by the Minister of Law
the rights vested in these
and Human Rights of the Republic
securities as our “controlling
of Indonesia through Letter
shareholder.”
See Note 48 to the Consolidated
Financial Statements.
ARTICLES OF
ASSOCIATION
Our Articles of Association are
registered in accordance with
the Limited Liability Company
Law No.1/1995, and approved by
Ministerial Decree No.C2-7468.
HT.01.04.TH.97 of 1997. Pursuant
to the issuance of the Company
No.AHU-AH.01.10-22501 on
June 7, 2013.
RELATIONSHIP WITH
THE GOVERNMENT AND
GOVERNMENT AGENCIES
As our majority shareholder
and controlling shareholder,
the Government has an
interest in our performance,
both in terms of the service
we provide to the nation and
Our relationship with the
our ability to operate on a
Government is multi-faceted.
commercial basis. The material
The Government is our majority
rights and restrictions that
and controlling shareholder.
apply to our common stock
It is also our regulator as it
also apply to the Series A
adopts, administers and enforces
Dwiwarna share, except that
relevant laws that regulate
the Government may not
telecommunications sector, sets
transfer the Series A Dwiwarna
Law No.40 of 2007 which revoked
tariffs and issues licenses. It is also
share, and has right of veto
Limited Liability Companies
one of our customers and one of
with regard to:
Law No.1/1995, we amended our
our lenders.
(i) the nomination,
appointment and removal
Articles of Association which
was approved by the Minister of
Law and Human Rights of the
Republic of Indonesia pursuant to
Decree of the Minister of Justice
and Human Rights No.AHU.46312.
AH.01.02/2008 dated July 31,
2008 and registered in State
Gazette of the Republic of
Indonesia No.84 dated October
17, 2008, Supplement to State
Gazette No.20155.
The most recently amended in
Articles of Association were about
the changes in capital structure
by splitting the par value of the
Company's shares (stock split) of
the original Rp250 to Rp50 and
the elimination of the Partnership
and Community Development
“PKBL” program from our Work
Plan and Budget. The editorial
As used in this section, the
of our Directors, (ii) the
term “Government” includes the
nomination, appointment and
Government of Indonesia and
removal of our Commissioners,
its ministries, directly-owned
(iii) the issuance of new shares
government departments and
and (iv) any amendments to
agencies, but excludes SOEs.
our Articles of Association,
A. The Government as
Shareholder
The Government is our
majority and controlling
shareholder and owned
53.14% of our common stock
as of December 31, 2013. Its
ownership of the Series A
including with respect to
actions to merge or dissolve
our Company, increase or
reduce our authorized capital,
or reduce our subscribed
capital.
B. The Government as Regulator
The Government regulates
Dwiwarna share gives it special
the telecommunications
voting and veto rights. Under
sector through the MoCI.
relevant laws, the “ownership”
The MoCI has the authority
of our common stock and
to issue regulations that
the single outstanding Series
implement laws, which are
A Dwiwarna share is vested
typically broad in scope.
in the Ministry of Finance
Through such decrees the
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257
MoCI defines the structure
The sub-loan borrowings were
of the industry, determines
made through the Government
tariff formulas, establishes our
and are guaranteed by it. As
USO, and otherwise controls
of December 31, 2013, we
many factors that could
had a total of Rp1,915 billion
influence our competitive
(US$157 million) in such
position, operations and
outstanding two-step loans,
financial position. Through
including current maturities.
the DGPT, the MoCI regulates
We are required to pay the
the allocation of frequencies
Government interest and
and sets numbers for fixed
repay the principal, which
It is our policy not
to enter into any
transactions with
affiliates unless the
terms are no less
favorable to us than
they would be with a
telephone lines.
the Government then remits
to the respective lenders. As
third party.
We are required to obtain a
of December 31, 2013, 73.4%
license from the DGPT for
of such sub-loan borrowings
each type of service offered,
were denominated in foreign
including for the frequencies
currencies, with the remaining
we use (as allocated by the
26.6% denominated in Rupiah.
MoCI). We and other operators
In 2013, the annual interest
are required to pay frequency
rates charged 6.79% on loans
usage fees. Telkomsel also
repayable in Rupiah, 4.0%
holds licenses issued by the
on those denominated in
MoCI (some of which were
US Dollar and 3.1% for those
previously issued by the
denominated in Japanese Yen.
Minister of Communications)
for the provision of cellular
D. The Government as Customer
services, and from the
Indonesian Investment
Certain Government
departments and agencies
Coordinating Board in relation
purchase services from us as
to Telkomsel’s investments
direct customers, the terms
for the development of
of which are negotiated on a
cellular phone services with
commercial basis.
national coverage, including
No services are provided for
the expansion of network
free or on an in-kind basis. We
coverage. The Government,
deal with these departments
through the MoCI as regulator,
and agencies as separate
has the authority to issue new
customers. In 2013, the amount
licenses for the establishment
of revenues from Government
of new joint ventures and other
departments and agencies
new arrangements, particularly
was Rp779 billion, which was
in telecommunications.
approximately 0.94% of our
consolidated revenues and
C. The Government as Lender
did not constitute a material
In July 1994, the Government
part of our revenues. The
arranged a facility under which
Government departments
certain foreign institutions
and agencies are treated for
provided us with a two-step
tariff purposes with respect
loan for certain expenditures
to connection charges
(the “sub-loan borrowings”).
and monthly charges as
“residential”, which tariffs
are lower than the business
service rates. This does not
apply to the tariffs for local,
long distance and IDD calls.
It is our policy not to enter into
any transactions with affiliates
unless the terms are no less
favorable to us than they
would be with a third party.
The SOE Ministry has advised
us that it would not cause
us to enter into transactions
with other entities under its
control unless the terms were
consistent with our policy as
referred to above.
Pursuant to OJK regulations,
because we are listed on the
IDX, any transaction where
there is an inherent conflict
of interest (as defined below)
with another IDX-listed
company must be approved
by majority of the holders of
our common stock who do
not have a conflict of interest
in the proposed transaction,
unless such conflict of interest
existed before listing and was
fully disclosed in the offering
documents.
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Report
Business
Overview
Management’s
Discussion & Analysis
CAPITAL MARKET
TRADING
MECHANISM AND
TELKOM ADS
Our common stock is listed and
traded on the IDX. Our ADSs are
also listed and traded on the NYSE
and the LSE as ADSs, where one
ADS represents 200 shares of
Common Stock. Our shares are also
Publicly Offered Without Listing
(“POWL”) in Japan.
A. The Indonesian Stock
Market
Indonesia’s stock market, known
as the IDX, grew out of the
December 1, 2007 merger of
two stock exchanges operating
in two different locations in
Indonesia, the Jakarta Stock
Exchange in the capital and the
Surabaya Stock Exchange in
East Java.
As at December 31, 2013, the
IDX had 483 issuers for equity
and 113 active brokerage houses.
In 2013, IDX recorded a trading
volume of 1.343 billion shares.
As at December 31, 2013, the
total market capitalization was
valued at Rp4.219,02 trillion
(US$346,67billion).
cash market (except for rights issues, which can only be traded on
the cash market and the negotiated market for the first session). The
regular market is the mechanism for trading stock in standard lots on
a continuous auction basis during exchange hours. Auctions on the
IDX on regular market and cash market take place according to the
price and time priorities. Price priority refers to the giving of priority
to buying orders at a higher price or selling orders at a lower price. If
buying or selling orders are placed at the same price, priority is given to
the earlier placed buying or selling order (time priority). Trading on the
negotiated market is conducted through direct negotiation between
(i) IDX members, (ii) clients through one IDX member, (iii) a client and
an IDX member, or (iv) an IDX member and the PT Kliring Penjaminan
Efek Indonesia (“KPEI”). KPEI provides clearing and guarantee services
of stock exchange transactions settlement. It also improves efficiency
and certainty of transactions settlement in IDX.
On November 14, 2012 IDX issued a Decree of BOD No.Kep-00399/
BEI/11-2012 regard with the Change of Trading Regulation No.IIA on
Equity – Type Securities Trading that mentioned about the change
of IDX’ trading hours, which effected on January 2, 2014 with trading
sessions as follow:
Trading Session
Market
Day
Trading Hours
Pre-opening
Regular
Monday - Friday
08.45.00-08.55.00
1st
2nd
Regular
Monday-Thursday
09.00.00-12.00.00
Cash
Friday
09.00.00-11.30.00
Negotiation
Regular
Monday-Thursday
13.30.00-15.49.59
Friday
14.00.00-15.49.59
Negotiation Monday-Thursday
13.30.00-16.15.00
Friday
14.00.00-16.15.00
Pre-closing
Regular
Monday-Friday
15.50.00-16.00.00
Post Trading
Regular
Monday-Friday
16.05.00-16.15.00
On November 8, 2013 IDX issued a Decree of BOD No.Kep-00071/
BEI/11-2013 regard with the Change of Trading Regulation No.IIA on
Equity – Type Securities Trading that mentioned about the change of
Trading is divided into three
lot size, tick price and maximum price movement, which effected on
segments, the regular market,
January 2, 2013.
negotiated market and the
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Lot size will change from 500 shares to 100 shares and tick price and maximum share price movement will
change as follow:
Previous
New
Group Price
Tick Price
Maximum Share
Price Movement
Group Price
Tick Price
Maximum Share
Price Movement
≤Rp200
Rp200 – Rp500
Rp500 – Rp2.000
Rp2.000 – Rp5.000
≥Rp5.000
Rp1
Rp5
Rp10
Rp25
Rp50
Rp10
Rp50
Rp100
Rp250
Rp500
≤Rp500
Rp1
Rp20
Rp500 – Rp5.000
Rp5
Rp100
≥Rp5.000
Rp25
Rp500
Transactions on the IDX regular
include fines, written warnings,
New York”) serves as the
market must be settled no later
suspension or revocation of
“Depositary” for our ADSs
than the third trading day after
licenses.
which are traded on the NYSE
the transaction. Transactions
and LSE.
on the negotiated market are
When conducting share
settled on the basis of the
transactions on the IDX, each
Investors pay a depositary fee
agreement between the selling
exchange member is required
directly or through a broker
exchange members and the
to pay a transaction cost for
acting on their behalf for the
buying exchange members, on
transactions on the regular
delivery or surrender of ADSs
a transaction by transaction
market and cash market of
for the purpose of withdrawal.
basis. Transactions on the IDX
0.03%, guarantee fund 0.01%
The Depositary also collects
cash market must be settled
of the transaction value and
fees for making distributions to
on the day of the transaction
VAT and other tax obligation.
investors by deducting the fee
and reported to the IDX. If an
For the negotiated market,
from the amount distributed
exchange member defaults on
a transaction cost is 0.03%
or by selling a portion of the
the settlement of a transaction,
or depended on exchange
distributable property to
the securities can be traded by
policy. A minimum monthly
pay the fee. The Depositary
direct negotiation on cash and
transaction fee of Rp2 million is
may collect its annual fee for
carry terms. Each exchange
applied as a contribution for the
depositary services by making
member is required to pay a
provision of exchange facilities
a deduction from the cash
transaction fee as stipulated
and continues in effect for
distributions or by directly
by the IDX. Any delay in
members who are suspended
billing investors or by charging
payment of the transaction
or Exchange Member Approval
the book-entry system accounts
fee is subject to a fine of 1.0%
(“SPAB”) revoked.
of the outstanding amount
of the parties acting on their
behalf. The Depositary may
for each day of delay. The IDX
B. Trading on the NYSE and
refuse to provide fee-generating
may impose sanctions on its
members for any violation of
LSE
Bank of New York Mellon
exchange rules, which may
(previously “The Bank of
services until its bills for such
services are paid.
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Management
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Management’s
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TAXATION
The following summary contains
a description of the principal
Indonesian and US federal tax
consequences of the purchase,
ownership and disposition of ADSs
or shares of common stock. This
summary does not purport to be a
complete description of all of the
tax considerations that may be
relevant to a decision to purchase,
own or dispose of ADSs or shares
of common stock.
Investors should consult their tax
advisors about the Indonesian
and US Federal, state and local
tax consequences to them of
the purchase, ownership and
disposition of ADSs or shares of
common stock.
A. Indonesian Taxation
The following is a summary of
the principal Indonesian tax
consequences of the ownership
and disposition of common
stock or ADSs to a non-resident
individual or non-resident
entity that holds common stock
or ADSs (a “Non-Indonesian
Holder”).
1. Dividends
Dividends declared by us
out of retained earnings
and distributed to a Non-
Indonesian Holder in respect
of common stock or ADSs
are subject to Indonesian
withholding tax, which, as
of the date of this Annual
Report is at the rate of
20%, on the amount of the
distribution (in the case of
cash dividends) or on the
shareholders’ proportional
share of the value of the
distribution. A lower rate
provided under double
taxation treaties may be
applicable provided the
recipient is able to comply
tax and the obligation to pay
with the applicable strict
lies with the buyer (if it is an
requirements. Under the US-
Indonesian taxpayer) or our
Indonesia double taxation
Company (if the buyer is a
treaty, the withholding tax
non-resident taxpayer).
on dividends is generally, in
the absence of a 25% voting
In cases where a purchaser
interest, reduced to 15%.
2. Capital Gains
The sale or transfer of
common stock through
or Indonesian broker will be
required under Indonesian
tax laws to with hold tax on
payment of the purchase price
for common stock or ADSs
the IDX is subject to a final
through the IDX, theoretically,
withholding tax at the rate
that payment may be exempt
of 0.1% of the value of the
from Indonesian withholding
transaction. The broker
or other Indonesian income
executing the transaction is
tax under applicable double
obligated to withhold such
taxation treaties to which
tax. The holding of founder
Indonesia is a party (including
shares or the sale or transfer
the US-Indonesia double
of founder shares through
taxation treaty).
an IDX may, under current
Indonesian tax regulations,
3. Stamp Duty
be subject to additional
0.5% final income tax.
Stock transactions in Indonesia
are subject to stamp duty.
Pursuant to Government
Subject to the promulgation
Regulation No.24/2000 on the
of implementing regulations,
amendment and the amount
the estimated net income
of stamp duty rates Imposing
received or accrued from
Limits Imposed Price Nominal
the sale of movable assets
stamp duty, a transaction of
in Indonesia, which may
up to Rp1,000,000 needs a
include common stock not
stamp duty of Rp3,000, while
listed on an IDX or ADSs,
any transaction of more than
by a Non-Indonesian holder
Rp1,000,000 needs a stamp
(with the exception of
the sale of assets under
Article 4 paragraph (2)
of the Indonesian income
tax law) may be subject to
Indonesian withholding tax
duty of Rp6,000.
B. Considerations Regarding
Certain U.S. Federal Income
Tax
The following is a summary
at the rate of 20%. In 1999,
of certain US federal income
the Ministry of Finance
issued a decision that
tax considerations relating to
the acquisition ownership and
stipulates the estimated net
disposition of ADSs or common
income for the sale of shares
stock by US Holders (as defined
received by a non-resident
below) that hold their ADSs or
taxpayer in a non-public
common stock as “capital assets”
company to be 25% of the
(generally, property held for
sale price, resulting in an
investment) under section 1221
effective withholding tax
of the US Internal Revenue Code
rate of 5% of the sales price.
(the “Tax Code”). This summary
This is a final withholding
is based upon existing US federal
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income tax law, which is subject
that certain holding period
or common stock (generally,
to differing interpretations or
requirements are met. Note
a distribution in excess of
change, possibly with retroactive
that as from January 1, 2011,
125% of the average annual
effect.
dividends from a qualified
distributions paid by us in
foreign corporation are
the three preceding taxable
1. Threshold Passive Foreign
treated as ordinary income
years). In addition, a US
Investment Company (“PFIC”)
with a maximum tax rate
Holder will be subject to an
Classification Matters
of 39.6% for non-corporate
interest charge on such gain
A non-US corporation, such
recipients of dividends
or excess distribution. Finally,
as our Company, will be
treated as a PFIC, for US
federal income tax purposes,
received after the end of
the 15% maximum rate on
2010.
Company dividends would
not apply if we become
if 75% or more of its gross
3. Sale or Other Disposition of
classified as a PFIC.
income consists of certain
ADSs or Common Stock
types of “passive” income or
A US holder will generally
5. Backup Withholding Tax
50% or more of its assets are
recognize capital gain or
and Information Reporting
passive. Based on our 2013
loss upon the sale or other
Requirements
income and assets, we do
disposition of ADSs or
US backup withholding tax
not believe that we should be
common stock in an amount
and information reporting
classified as a PFIC. Because
equal to the difference
requirements generally
PFIC status is a fact-intensive
between the amount
apply to certain payments
determination made on an
realized upon the disposition
to certain non corporate
annual basis, no assurance
and the holder’s adjusted
holders of stock. A payor
can be given that we are not
tax basis in such ADSs or
will be required to withhold
or will not become classified
common stock. Any capital
backup withholding tax from
as a PFIC. The discussion
gain or loss will be long-term
any payments of dividends
below under “Dividends” and
if the ADSs or Common
on, or the proceeds from
“Sale or Other Disposition of
Stock have been held for
the sale or redemption of,
ADSs or common stock” is
more than one year and will
ADSs or common stock
written on the basis that we
generally be US source gain
within the US or by a US
will not be classified as a PFIC
or loss for US foreign tax
payor or US middleman to a
for US federal income tax
credit purposes.
holder, other than an exempt
purposes.
4. PFIC Considerations
recipient, if such holder
fails to furnish its correct
2. Dividends
If we were to be classified as
taxpayer identification
Any cash distributions
paid by us out of earnings
and profits, as determined
a PFIC in any taxable year, a
number or otherwise fails
US Holder would be subject
to comply with, or establish
under US federal income tax
intended to reduce or
to special rules generally
an exemption from, such
backup withholding tax
principles, will be subject to
eliminate any benefits from
requirements. The backup
tax as dividend income and
the deferral of US federal
withholding tax rate is 25%
will be includible in the gross
income tax that a US Holder
for years through 2013.
income of a US Holder upon
could derive from investing
receipt. A non-corporate
in a non-US company that
The backup withholding tax
recipient of dividend income
does not distribute all of its
is not an additional tax and
will generally be subject
earnings on a current basis.
may be credited against
to tax on dividend income
In such event, a US Holder
a US holder’s regular US
from a “qualified foreign
may be subject to tax at
federal income tax liability
corporation” at a maximum
ordinary income tax rates on
or, if in excess of such
US federal tax rate of 15%
(i) any gain recognized on
liability, refunded by the
rather than the marginal tax
the sale of ADSs or common
Internal Revenue Service
rates generally applicable to
stock and (ii) any “excess
(“IRS”) if a timely refund
ordinary income provided
distribution” paid on ADSs
claim is filed with the IRS.
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Management’s
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RESEARCH AND
DEVELOPMENT
of Bandung and Yogyakarta
also doing its function as a business
namely Bandung Digital Valley
incubator beside held still the creative
name ("BDV") and Jogja Digital
digital communiy event.
We routinely make investments
to improve products and services.
Total expenditure reached about
Rp13 billion, Rp13 billion and Rp14
billion (US$1 million), in 2011,
2012 and 2013, respectively. In
2013, our spending investments
were channeled to research
and development to support of
the implementation of mobile
broadband, cloud computing,
and development of ecosystem-
based solutions, such as e-tourism,
mobile payment, mobile games,
and smart home solution, that
are designed to promote a digital
lifestyle in Indonesia. Development
encompasses the areas of business,
product and services, as well as
in telecommunication network
infrastructure.
In term of business, service
and product, the research and
development programs included
mobile advertising center,
Appstore, smart home (home
monitoring, telemetering, wireless
sensor network, smart home over
power line), mobile payment,
data center, e-tourism, games,
intelligent car, map-based social
media platform, e-learning content
enrichment, Telkom game center,
over the top TV, SmartTV, speedy
monitoring, smart home over
power line, smart device 4GLTE,
business signaling, TENOSS and
TCEM.
In terms of telecommunication
network infrastructure, we engaged
in research and development
programs related to NGN, IMS,
Service Broker, 100G, QoS
transport, Supercore, any wire
GPON/10GPON, Wi-Fi, Femtocell,
QoS EVDO, GPS and IPv6.
We have developed two business
incubator located in the city
Valley ("JDV"). Each incubator is
intended to help build a national
LEGAL BASIS AND REGULATION
digital creative industry while
strengthening our business
The framework for the
portfolio.There were three
telecommunications industry is
categories of incubation carried out
comprised of specific laws, government
in 2013, consist of:
regulations, ministerial regulations
– The first is the incubation for
and ministerial decrees enacted
idea (innovative idea), which
and issued from time to time. The
is product idea/prototype/
current telecommunications policy
product that is not market-
was first formulated and articulated
tested yet, but is considered
in the Government’s “Blueprint of the
to have excellent business
Indonesian Government’s Policy on
opportunity.
Telecommunications”, contained in
– Second is the product
MoC Decree No.KM.72/1999 dated
incubation (innovative product),
September 17, 1999.
which is product that has been
proven preferred by users, but
A. Telecommunications Law
has not been tested in terms of
The telecommunications sector is
revenue/business.
primarily governed by Law No.36
– Last one is the business
incubation (innovative
of 1999 (“Telecommunications
Law”), which became effective
business), which is product
on September 8, 2000. The
that has been proven preferred
Telecommunications Law sets
by market tested and has also
guidelines for industry reforms,
been proven generating good
including industry liberalization,
revenue.
facilitation of new entrants and
enhanced transparency and
In conducting the incubation
competition.
program, we adopt the Lean
Startup framework, in which the
The Telecommunications Law
process is divided into stages
eliminated the concept of
of customer validation, product
“organizing entities” thereby ending
validation, business model
our and Indosat’s responsibility
validation and market validation.
for coordinating domestic and
ideaincubation uses customer &
international telecommunications
idea validation stages. Product
services, respectively. To
incubation uses product validation
enhance competition, the
stage. While business incubation
Telecommunications Law
uses business & market validation.
prohibits monopolistic practices
and unfair competition among
In 2012, BDV has successfully
telecommunications operators.
incubated 18 startup companies
and in 2013 incubated 12 startup
The Telecommunications Law
companies, began with selecting
was implemented through several
new productand business
Government Regulations, Ministerial
proposals.While the JDV, since
Regulations and Ministerial Decrees.
inaugurated in August 2013, has
The most important of such
conducted a number of activities
regulations include:
and is warmly welcomed by the
- Government Regulation
creative digital community inJogja
No.52/2000 regarding
and greater Jogja. In 2014, JDV will
Telecommunications Services.
Corporate
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Profile
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263
- MoCI Regulation No.1/
certain organizational and
dated October 31, 2008 and
PER/M.KOMINFO/01/2010
administrative reforms that
amended by MoCI Regulation
dated January 25, 2010
regarding Operation of
included transferring licensing
No.1/PER/M.KOMINFO/02/2011
and regulatory authority
dated February 7, 2011 (“MoCI
Telecommunications Networks.
to two newly established
Regulation No.36/2008”).
- MoC Decree No.KM.21/2001
general directorates, the
Pursuant to MoCI Regulation
regarding the Provision
of Telecommunications
Services that was most
Directorate General of Posts
No.36/2008, the ITRA was
and Informatics Resources
assigned the authority to
and Equipment (“DGRE”) and
regulate the Indonesian
recently amended by MoCI
Directorate General of Post and
telecommunication industry,
Regulation No.31/PER/M.
Informatics (“DGPI”) pursuant
including the provision of
KOMINFO/09/2008 regarding
to MoCI Regulation No.17/
telecommunication networks
the Third Amendment of
Decree of the Minister of
PER/M.KOMINFO/10/2010
and services. The ITRA which
regarding the Organization
is chaired by the Director
Communication No.KM.21/2001
and Administration of Ministry
General of Post and Informatics
regarding the Provision of
of Communication and
Operations and comprises of
Telecommunications Services.
Information. Following the
nine members, including six
- MoC Decree No.33/2004
reforms, certain adjustments
members of the public, and
regarding Supervision of
were made through MoCI
three members selected from
Healthy Competition in the
Regulation No.15/PER/M.
Government institutions (DGRE
Provision of Fixed Network and
KOMINFO/06/2011 dated
and Director of DGPI and a
Basic Telephony Services.
June 20, 2011 regarding title
government representative
- MoC Decree No.KM.4/2001
adjustments in a number
dated January 16, 2001
of Decrees and/or MoCI
appointed by the Minister
of Communication and
regarding the Determination
regulations that regulate
Information).
of Fundamental Technical
Special Materials in Post
Plan National 2000 for
and Telecommunications
C. Classification and Licensing of
National Telecommunications
and/or in Decrees of the
Development most
Director General of Posts
Telecommunications Providers
The Telecommunications Law
recently amended by MoCI
and Telecommunications,
organized telecommunication
Regulation No.09/PER/M.
which transfer all substances
services into following three
KOMINFO/06/2010 dated
related to the postal and
categories: (i) provision
June 9, 2010 regarding
the sixth amendment of
telecommunications sectors to
of telecommunication
the DGPI including licensing,
networks, (ii) provision of
MoC Decree No.KM.4/2001
numbering, interconnection,
telecommunication services,
regarding the Determination
universal service obligation
and (iii) provision of special
of Fundamental Technical
and business competition.
telecommunications services.
Plan National 2000 for
Meanwhile, matters related
National Telecommunications
to radio frequency spectrum
Licenses issued by MoCI are
Development.
and standardization of
telecommunications
required for each category
of telecommunications
B. Telecommunications Regulators
equipments were transferred to
services. MoCI Regulation
In February 2005, the authority to
the DGRE.
regulate the telecommunications
industry was transferred from
Following the enactment
the MoC to a newly-established
of the Telecommunications
Ministry, the MoCI. Pursuant
Law, the MoC established
to authorities assigned to him
an independent regulatory
No.1/2010 and MoC Decree
No.KM.21/2001 dated May 31,
2001 regarding the Operation
of Telecommunications
Services, as amended by
MoCI Regulation No.31/
through Telecommunication Law,
body as stipulated in MoC
PER/M.KOMINFO/09/2008
the Minister of Communication
Decree No.KM.31/2003 dated
dated September 9, 2008, are
and Information sets policies,
July 11, 2003 regarding the
the principal implementing
regulates, supervises and controls
Establishment of the ITRA
regulations governing licensing.
telecommunications industry in
which was later revoked by
Indonesia. On October 28,
2010, MoCI engaged in
MoC Regulation No.KM.36/
MoCI Regulation No.1/2010
PER/M.KOMINFO/10/2008
classified network operations
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into fixed and mobile networks.
the three-digit access number.
customers in June 2004 using
MoC Decree No.KM.21/2001
MoCI Decree No.6/2005 did
the “007” IDD access code.
categorized the provision of
not provide for immediate
The Indosat IDD access code
services into basic telephony
implementation of the three-
is “001”. Our December 2005
services, value-added telephony
digit system for DLD calls,
interconnection agreement with
services, and multimedia
but as the first DLD service
Indosat enables Indosat’s network
services.
provider, we were required to
customers to access our IDD
gradually open our network to
services by dialing “007” and our
D. Introduction of Competition
the three-digit access codes
network customers to access
in the Indonesian
Telecommunications Industry
In 1995, we were granted a
in all coded areas throughout
Indosat’s IDD services by dialing
Indonesia by April 1, 2010. We
“001”.
were assigned the “017” DLD
monopoly to provide local
access code, while Indosat
G. Limited Mobility Wireless
fixed line telecommunications
was assigned “011”. The MoCI
services until December 31,
thereafter amended the
Services
MoC Decree No.KM.35/2004
2010, and DLD services until
National Telecommunications
dated March 11, 2004 regarding
December 31, 2005. Indosat and
Plan as provided in MoCI Decree
Implementation of Fixed Wireless
Satelindo (which subsequently
No.43/P/M.KOMINFO/12/2007
Networks with Limited Mobility,
merged with Indosat) were
dated December 3, 2007,
as amended by MoCI Decree
granted a duopoly for
(“MoCI Decree No.43/2007”),
No.16/PER/M.KOMINFO/06/2011
provision of basic international
which delayed the deadline for
dated June 27, 2011, (“MoC Decree
telecommunications services
the implementation of three
No.KM.35/2004”) provides that
until 2004.
digit access code for DLD calls
only local fixed network operators
throughout all the area code in
holding licenses issued by the
As a consequence of the
Indonesia until September 27,
MoC may offer limited mobility
Telecommunications Law, the
2011.
Government terminated our
wireless (or fixed wireless)
access services. In addition, MoC
exclusive rights to provide
Pursuant to MoCI Decree
Decree No.35/2004 states that
domestic fixed line telephone
No.43/2007, we opened our
each limited mobility wireless
and DLD services and Indosat’s
network to the “01X” three-
access operator must provide
and Satelindo’s duopoly rights
digit DLD access service in
basic telephone services. Under
to provide basic international
Balikpapan by April 3, 2008.
an automated migration feature,
telephone services. Instead, the
Since that date, our customers
customers are able to make and
Government adopted a duopoly
are able to make DLD calls
receive calls on their fixed limited
policy to create competition
from Balikpapan by first dialing
mobility wireless access phones
between Indosat and us as
Indosat’s “011”. As stipulated in
using a different number with a
comprehensive service and
MoCI Regulation No.43/2007,
different area code.
network providers.
we have provided a nation-
wide network for three-digit
H. Cellular
E. DLD Services
access code for fixed and fixed
Cellular telephone service is
To liberalize DLD services, the
wireless DLD with “01X” that
provided in Indonesia on the radio
Government amended the
can be used by Indosat or
frequency spectrum of 1.8 GHz
National Telecommunications
other licensed operator starting
(DCS technology),2.1 GHz (UMTS
Technical Plan pursuant
to MoCI Decree No.6/P/M.
KOMINFO/5/2005 dated
September 27, 2011. To date, no
technology) and 900 MHz (GSM
other licensed operators have
and UMTS technology). The MoCI
submitted a request to us to
regulates the use and allocation
May 17, 2005 (“MoCI Decree
connect their networks and
of the radio frequency spectrum
No.6/2005”) to assign each
enable DLD access.
for mobile cellular networks.
provider of DLD services a
three-digit access code that
F. IDD Services
Telkomsel has obtained frequency
allocation for cellular services
would permit their customers
We received our IDD license in
on the 900 MHz, 1.8 GHz and
to select an alternative DLD
May 2004 and began offering
2.1 GHz frequency bands. The
services provider by dialing
IDD fixed line services to
Government conducted tenders
Corporate
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for the allocation of the 2.1 GHz
Operations provides that
radio frequency spectrum, and
interconnection charges
operators which also amended
all interconnection agreements
allocated bandwidth, in 2006,
between two or more network
signed in December 2006.
the goverment allocates through
operators must be transparent,
These agreements temporarily
the tender process for allocation
mutually agreed upon and fair.
served in lieu of RIOs while the
at 5 MHz, while for the allocation
of additional radio spectrum
On February 8, 2006, the
ITRA continued to review the
RIO proposals received from
allocated through an evaluation
MoCI issued Regulation No.8/
ourselves and other operators.
mechanism was in 2009 and a
PER/M.KOMINFO/02/2006
selection in 2013. The allocation
on Interconnection (“MoCI
On February 5, 2008, the ITRA
of bandwidth in the 2.1 GHz
Regulation No.8/2006”),
required that we and other
frequency spectrum is regulated
mandated a cost-based
operators begin implementing
by:
interconnection tariff scheme
the cost-based interconnection
- MoCI Decree No.19/KEP/M.
for all network and services
tariff regime. On April 11, 2008,
KOMINFO/2/2006 dated
operators replacing the
pursuant to Directorate General
February 14, 2006 regarding
previous revenue-sharing
of Post and Telecommunication
the Determination of Winner
scheme. Under the new scheme,
(“DGPT”) Decree No.205/2008,
of IMT-2000 Mobile Cellular
interconnection charges are
the ITRA and the MoCI
Operator Selection at 2.1 GHz
determined by the network
approved RIO proposals from
Radio Frequency Band.
operator on which a call
all operators to replace previous
- MoCI Decree No.268/KEP/M.
terminates based on a long-run
interconnection agreements.
KOMINFO/9/2009 regarding
incremental cost formula.
The RIO approved in 2008
the Determination of
was effective until July 29, 2011
Additional Allocation of Radio
MoCI Regulation No.8/2006
when new interconnection
Frequency Bandwidth Blocks,
requires operators to submit
charges were implemented
Tariffs, and Payment Scheme
to the ITRA annual RIO
as stipulated in ITRA Letter
Radio Frequency Spectrum
proposals containing proposed
No.227/BRTI/XII/2010 dated
Right of Usage Fees for IMT-
interconnection tariffs for the
December 31, 2010 regarding
2000 Moble Cellular Operators
coming year. Operators are
the Implementation of
at 2.1 GHz Radio Frequency
required to use the cost-based
Interconnection Charges
Band.
methodology in preparing
in 2011. This is the result of
- MoCI Decree No.191 Year 2013
RIO proposals, and the ITRA
interconnection charges
regarding the Determination
and MoCI are required to use
recalculation conducted
of PT Telekomunikasi Selular
the same methodology in
in 2010 by MoCI that was
as Winner in the Selection of
evaluating the RIO proposals
agreed on by all operators and
Users of Additional Frequency
and approving interconnection
outlined in a Memorandum of
Bandwidth at 2.1 GHz Radio
tariffs.
Frequency Band for IMT-2000
Understanding. The results of
this interconnection charges
Moble Cellular Operators.
Pursuant to MoCI Regulation
reform caused a slight decrease
I.
Interconnection
The Telecommunications Law
No.8/2006 and ITRA Letter
in interconnection costs.
No.246/BRTI/VIII/2007 dated
August 6, 2007, we submitted
On December 12, 2011, the
expressly prohibits monopolistic
a RIO proposal to the ITRA in
ITRA changed the SMS
and unfair business practices
October 2007, which covered
interconnection fee basis from
and requires network providers
adjustments for operational,
a “Sender Keep All” basis to
to allow users to access other
configuration, technical and
a cost basis interconnection
users or obtain services from
service offerings. In December
fee calculation which required
other networks by paying
2007, we and all other
certain amendments to
interconnection fees agreed
network operators signed new
RIOs agreed upon in 2011.
upon by each network operator.
interconnection agreements
MoCI Regulation No.8/2006
Government Regulation
that superseded previous
stipulates that the RIO of
No.52/2000 dated July 11, 2000
interconnection agreements
telecommunications network
regarding Telecommunications
between us and other network
operators generating operating
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revenue that is equal to
or more than 25% of the
combined revenues of all
basis for the licensing and
Furthermore, MoCI Regulation
regulates the provision of
No.37/2006 dated December 6,
IPTV services, including the
2006 requires foreign satellite
telecommunication operators
rights and obligations of IPTV
operators to obtain a landing
that serve the same respective
providers, technical standards,
right license to operate in
segment, must obtain ITRA’s
foreign ownership requirements
Indonesia which requires
approval, necessitating changes
and the use of domestic
(i) foreign satellite operators
in our and Telkomsel’s RIOs
independent content providers.
to coordinate with domestic
which were approved on June
20, 2012. Until this report is
MoCI Regulation
published, no recalculation
No.11/2010 recognizes
of interconnection fees
for 2012 had been done as
IPTV as a convergence
of telecommunications,
satellite operators, including us,
to ensure that no Indonesian
satellite and terrestrial systems
will be disrupted by their
operation, and (ii) the country
doing such should have been
broadcasting, multimedia
of origin of the foreign satellite
preceded by an evaluation on
and electronic transactions
operations must also give
interconnection charges in 2011.
and provides that only a
permission to the Indonesian
consortium comprising at
satellite to operate in that
J. VoIP
least two Indonesian entities
country.
In January 2007, the
may be licensed as an IPTV
Government implemented new
provider. Each consortium
M. Consumer Protection
interconnection regulations
must together hold licenses as
Under the Telecommunications
and a five-digit access code
a local fixed network provider,
Law, each network provider is
system for VoIP services
pursuant to MoCI Decree
internet services provider
required to protect consumer
and one broadcast services
rights in relation to, among
No.06/P/M.KOMINFO/5/2005.
provider. Such consortium may
others, quality of services,
Under the Decree, the prefix
only provide IPTV services
tariffs and compensation.
for VoIP, which was originally
in the area covered by all
Customers injured or
01X, was changed to 010XY.
three required licenses. MoCI
damaged by negligent
On April 27, 2011, the MoCI
Regulation No.11/2010 further
operations may file claims
issued Regulation No.14/
requires that IPTV services
against negligent providers.
PER/M.KOMINFO/04/2011,
be delivered through a wire
Telecommunications consumer
which imposed quality control
network.
standards in relation to VoIP
services, which became
effective three months
We obtained our IPTV license
telecommunication operators.
through our subsidiary,
protection regulations
provide service standards for
thereafter, to which we and
PT Indonusa Telemedia, on
N. USO
other operators must adhere
April 27, 2011. Our operating
All telecommunications
the regulation.
license covers Jabodetabek,
operators, whether network or
Bandung, Surabaya, Bali and
service providers, are bound by
K. IPTV
In August 19, 2009,
MoCI issued Ministerial
Decree No.30/PER/M.
Semarang.
L. Satellite
a USO regulation that requires
them to contribute to providing
telecommunication facilities
Our international satellite
and infrastructure in the interest
KOMINFO/8/2009 regarding
business is highly regulated.
of opening equal access to
the undertaking of IPTV
In addition to being subject
telecommunications throughout
services in Indonesia, in order
to domestic licensing
all regions in Indonesia, which
to address the convergence
requirements and regulation
is generally done by way of
of telecommunications
for the use of orbital slots and
financial contribution. MoCI
services with broadcasting
radio frequencies, our satellite
Regulation No.32/PER/M.
and electronic transactions. In
operations also been the
KOMINFO/10/2008 dated
July 2010, MoCI replaced this
subject of ratio communications
October 1, 2008 regarding the
regulation with MoCI Regulation
Agency of the International
USO (as amended by MoCI
No.11/PER/M.KOMINFO/07/2010
Union.
(“MoCI Regulation No.11/2010”)
which established the legal
Regulation No.03/PER/M.
KOMINFO/02/2010 dated
February 1, 2010) (“MoCI
Corporate
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Regulation No.32/2008”)
provides that USO funds
on the bandwidth of the radio
providers that own
frequency spectrum that we
telecommunication towers
received will be used to fund
use.
telephone, SMS and internet
and other tower owners are
obligated to allow other
access in remote and other
In addition to radio frequency
telecommunication operators to
areas of Indonesia that have
spectrum right-of-use fees,
utilize their telecommunication
been classified as USO regions
Government Regulation
towers without any
where it is not economical to
No.7/2009 requires all
discrimination, with due regards
provide these services.
telecommunications operators
to the technical capacity of the
to pay an annual license fee for
respective tower.
USO payment requirements
telecommunication operation,
are calculated as a percentage
which is equal to 0.5% of
Since the operations of
of our and Telkomsel’s
unconsolidated gross revenues,
telecommunication towers
unconsolidated gross revenues
less uncollectable receivables
involves a number of relevant
less uncollectable receivables
from the telecommunication
Government bodies, on March
from the telecommunication
operation write-off and
30, 2009, a joint regulation is
operation write-off and
payments received for
interconnection domestic
domestic interconnection
issued in the forms of Minister
expense.
of Home Affairs Regulation
No.18/2009, Minister of Public
parties. Pursuant to Government
Pursuant to Law No.28/2009
Works Regulation No.07/PRT/
Regulation No.7/2009 dated
regarding Local Taxes and
M/2009, MoCI Regulation No.19/
January 16, 2009 regarding
Local Fees, local governments
PER.M.KOMINFO/03/2009
Tariffs for Non-Tax State
are permitted to impose fees
and Head of the Investment
Revenue that apply to the
on the sites that we use for
Coordinating Board
Ministry of Communication and
telecommunications towers.
Regulation No.3/P/2009
Information (“GR No.7/2009”),
The fees may not exceed 2%
regarding Guidelines for the
the current USO tariff rate is
of the site’s assessed tax value.
Construction and Shared Use
1.25% of gross revenue.
Currently, there are some 525
of Telecommunications Towers
local (provincial and regency
(“Joint Decree”).
O. Telecommunication Regulatory
level) governments through
Charges
On January 16, 2009, the
out Indonesia that may be
The Joint Decree regulates that
authorized to impose these fees
license for telecommunication
Government issued Government
to increase in the future.
Regulation No.7/2009, which
sets the types of non-tax state
revenues that apply to the MoCI
P. Telecommunications Towers
On March 17, 2008, the MoCI
tower construction is to be
issued by regents or mayors,
and for Jakarta Province, its
Governor. The Joint Decree also
derived from various services,
issued MoCI Regulation No.02/
provides for tower construction
including telecommunications.
PER/M.KOMINFO/3/2008
regarding Guidelines on
standards and requires
that telecommunications
On December 13, 2010, the
Construction and Utilization
towers be made generally
Government issued Government
of Sharing Telecommunication
available for shared use by
Regulation No.76/2010
amending Government
Towers (“MoCI Regulation
telecommunications service
No.02/2008”). Under MoCI
providers. The owner of a
Regulation No.7/2009. Pursuant
Regulation No.02/2008,
to Government Regulation
the construction of
telecommunications tower
is allowed to collect a fee,
No.76/2010, we are no longer
telecommunications towers
which is negotiated with
required to pay right-of-use
requires permits from the
reference to costs associated
fees calculated with reference
relevant governmental
with investment and
to the BTSs that we deploy in
institution, while the local
operational costs, the return
our network, except for BTSs
government determines the
of investment and a profit.
deployed in our backbone, with
placement and locations at
Monopolistic practices in the
effect from December 15, 2010.
which telecommunications
ownership and management of
As a result, our right-of-use
towers may be constructed. In
telecommunications towers is
fees are now calculated based
addition, telecommunications
prohibited.
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Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Ririek Adriansyah
Director of Wholesale & International Service
FACING BUSINESS COMPETITION
Telkomsel remained the largest national
licensed provider of cellular services in
Indonesia, with approximately 131.5 million
cellular subscribers.
42.4%
celluler market share
We believe that Telkomsel competes
effectively in the Indonesian cellular market
on the basis of price, coverage, service
quality and value added services.
Telkomsel is the largest consumer customer
base IDD service.
Competition Law
The Government
currently promotes
liberalization,
competition and
transparency in the
telecommunications
sector. It does not
prevent providers
from attaining and
capitalizing upon a
dominant market
position.
COMPETITION
Measures following the Telecommunications Law’s adoption in 2001 moved the Indonesian telecommunications
sector from a duopoly between Indosat and us to one with multiple competing providers. See “Legal Basis and
Regulation – Introduction of Competition in the Indonesian Telecommunications Industry”.
Competition Law
The Government currently promotes liberalization, competition and transparency in the telecommunications
sector. It does not prevent providers from attaining and capitalizing upon a dominant market position. However,
the Government does prohibit operators from abusing a dominant position. In March 2004, the MoC issued
Decree No.33/2004, which prescribes measures to prohibit such abuse by dominant network and service
providers. A provider is considered dominant based on factors such as scope of business, service coverage
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
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269
area and control of a particular
merger or acquisition is completed
Regulation – Introduction of
market. Specifically, Decree
if the transaction exceeds certain
Competition in the Indonesian
No.33/2004 prohibits dumping,
asset or sales value thresholds.
Telecommunications Industry”.
predatory pricing, cross-subsidies,
mandatory use of a provider’s
A. Fixed Line, Fixed Wireless
Indosat remains our largest
services (to the exclusion of
competitors) and hampering
mandatory interconnection
and DLD
Our exclusive right to
competitor with respect to
fixed line and DLD services and
provide domestic fixed line
we also compete against other
(including discrimination against
telecommunications services
fixed line service providers
specific providers).
in Indonesia ended following
such as PT Bakrie Telecom
Competition in the
telecommunications sector,
like all Indonesian business
the Telecommunications Law’s
Tbk. (formerly Ratelindo) and
implementation in 2000.
PT Batam Bintan Telecom.
The MoC issued licenses to
However, traditional fixed line
Indosat for domestic fixed line
services have faced and will
sectors, is also governed more
services in August 2002 and
continue to increasingly face
generally by Law No.5/1999
for DLD telephone services
competition from cellular
dated March 5, 1999 regarding
in May 2004. We entered
services, particularly as cellular
Prohibition of Monopolistic
into an interconnection
tariffs decrease, and from other
Practice and Unfair Business
agreement with Indosat dated
alternate services such as fixed
Competition (“Competition
September 23, 2005 to allow
wireless, SMS, VoIP and e-mail
Law”). The Competition Law
interconnection between
services.
bans agreements and activities
our local fixed line services
tending toward unfair business
in Jakarta, Surabaya, Batam,
Telkom Flexi, our fixed wireless
competition, as well as the abuse
Medan, Balikpapan, Denpasar
network is the largest in
of a dominant market position.
and certain other areas.
Indonesia with coverage of
Pursuant to the Competition
By 2006, Indosat was able
370 cities offering limited
Law, the Commission for
to provide nationwide DLD
mobility and charging
the Supervision of Business
services through its CDMA-
customers based on PSTN
Competition (“KPPU”) has been
based fixed wireless network,
tariff that is principally lower
established as Indonesia’s antitrust
its fixed line network and these
than GSM. For comparison,
regulator with the authority to
interconnection arrangements
Indosat in 2004 launched its
enforce the provisions of the
with us.
Competition Law.
CDMA-based fixed wireless
phone service under the
The Competition Law is
implemented by various
In an attempt to liberalize
brand name “StarOne” in
DLD services, the Government
Jakarta and Surabaya. Bakrie
required each DLD provider
Telecom offers fixed wireless
regulations, including Government
to implement a three-digit
services in more than 30 cities
Regulation No.57/2010 dated
access code to be dialed by
and Mobile-8 was granted
July 20, 2010 regarding Mergers
customers making DLD calls.
a nationwide fixed wireless
and Acquisitions Potentially
These regulations were first
access license in 2009. In
Causing Monopolistic Practices
implemented in Balikpapan
general, the technologies
or Unfair Business Practices.
in 2008, with Balikpapan
employed by CDMA and fixed
Government Regulation
residents given the option
wireless access operators
No.57/2010 permits voluntary
to make a normal DLD call
are less capital-intensive,
consultation with the KPPU
or to select a three-digit
previously allowing these
prior to a merger or acquisition,
code assigned to Indosat
operators to offer more
resulting in the KPPU issuing a
or to us. Under current
competitive prices than GSM
non-binding opinion. Government
regulations, this system is
operators. Furthermore,
Regulation No.57/2010 also
to be applied nationally
licensing fees for radio stations
requires that a mandatory report
beginning September 27,
of fixed wireless mobile phone
be made to the KPPU after a
2011. See “Legal Basis and
connections is lower than
cellular.
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B. Cellular
We operate our cellular service
business through our majority-
owned subsidiary, Telkomsel.
As of December 31, 2013,
Indonesia’s cellular market
is dominated by Telkomsel,
Indosat and XL Axiata, which
collectively account for 80.4%
of the full-mobility cellular
market. Other providers
include Hutchison, Natrindo,
Smart Telecom and Bakrie
Telecom.
There were approximately
310 million full-mobility cellular
subscribers in Indonesia as
of December 31, 2013, a 12.3%
Indonesia and in 2012 were
communications through the
each awarded an additional
internet using computers or
10 MHz of spectrum on the 3G
smartphones.
license frequency bandwidth
(2.1 GHz). This additional
spectrum increased their
VoIP operators compete
primarily on the basis of
respective total allocated
price and service quality.
frequency spectrum to
VoIP operators, including
20 MHz and 25 MHz each.
us, offer budget calls and
In accordance with the
other products aimed at
announcement of MoCI No.19/
price sensitive users such
PIH/KOMINFO/2/2013 dated
as prepaid calling cards. We
February 25, 2013, Telkomsel
currently offer our primary
has been selected as one of
VoIP service “Telkom Global-
the companies to be granted
01017” and the lower-cost
an additional 3G license with
alternative “Telkom Save”.
radio frequency in the 2.1 GHz
Telkom Save offers discounted
bandwidth.
rates for certain countries to
which there is heavy traffic
from Indonesia while offering
increase from approximately
C. IDD
276.0 million as of
December 31, 2012.
We believe that Telkomsel
competes effectively in the
Indonesian cellular market on
the basis of price, coverage,
We compete in traditional
regular VoIP tariff rates for
IDD services (non-VoIP) in
other countries. In addition to
Indonesia primarily with
other VoIP operators, we also
Indosat, as well as Bakrie
compete with internet-based
Telecom. IDD also faces
voice services likes Skype and
competition with VoIP and
Google Talk.
other internet-based voice
service quality and value added
services likes Skype and
E. Satellite
services. As of December 31,
Google Talk.
2013, Telkomsel remained
the largest national licensed
D. VoIP
The Asia-Pacific region and
especially Southeast Asia
continues to need satellites for
provider of cellular services in
Indonesia, with approximately
We formally launched our
both telecommunications and
VoIP services in September
broadcasting infrastructure.
131.5 million cellular subscribers
2002. VoIP uses data
This need is driven by the high
and a market share of 42.4%
of the full-mobility cellular
market. The second and the
third largest providers were
Indosat and XL Axiata, which
have a market share of 19.2%
and 18.7% respectively, based
on the estimated number of
communications to transfer
demand from services such as
voice traffic over the internet,
cellular backhaul, broadband
which usually provides
backhaul, enterprise network,
substantial cost savings to
OUTV (Occasional Usage
subscribers. A number of
TV), military and goverment
other companies, including
network, DTH television, flight
XL Axiata, Indosat, Atlasat
communication, and disaster
Solusindo Pte, Ltd.,
recovery.
subscribers as of December 31,
PT Gaharu Sejahtera, PT Satria
2013. In addition to the
nationwide GSM operators,
a number of smaller regional
GSM, analog and CDMA fixed
wireless providers operate in
Indonesia.
Widya Prima, PT Primedia
At the same time, the supply of
Armoekadata Internet and
available satellite transponders
PT Jasnita Telekomindo also
in Southeast Asia is limited.
provide licensed VoIP services
Almost all of the orbital slot
in Indonesia. Other unlicensed
positions covering Southeast
operators also provide VoIP
Asia are occupied. Of the
services that may be accessed
satellites currently under
Hutchison and Natrindo also
provide cellular services in
through websites or through
construction one is planned to
software that allows voice
occupy the 1180E orbital slot,
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
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but it is estimated to enter
the coverage of the Telkom-1
The current trend in the
service only in 2016.
and Telkom-2 satellites
satellite business is the
include AsiaSat-2, AsiaSat-4,
development of broadband
Generally, large global satellite
AsiaSat-3S, Apstar-2R,
satellite. As the bandwidths
operators can use economies
Apstar-5, Apstar-6, ThaiCom-3,
in the C-Band and Ku-Band
of scales to offer more
Measat-2, Measat-3, Measat-3a,
frequencies are fully utilized,
competitive prices without
PanAmSat-4 and PanAmSat-7.
utilization of the Ka-Band
affecting their financial
Our direct competitors in Asia
frequencies will become an
performance. This may result in
are MeasatSdn. Bhd, which
option. The technology for
a market premium subsidy in
operates the Measat satellites,
Ka-Band frequencies has been
very competitive markets.
APT Satellite which operates
progressing rapidly in the last
the Apstar satellites, and Shin
decade. Broadband satellite
There are 18 satellite operators
Satellite PCL, which operates
utilize Ka-Band frequencies
with satellites covering
the ThaiCom satellites.
Southeast Asia:
1. SES Global (Luxembourg)
The satellite industry in
with a re-use configuration,
resulting in capacities of up
to 100 Gbps. Currently, we
2. Eutelsat Asia (France)
Indonesia is one of the most
are engaged in design and
3. APT Satellite (Hong Kong)
competitive in Southeast Asia.
demand studies for broadband
4. AsiaSat (Hong Kong)
This is evident from the shift
satellites.
5. JSAT (Japan)
6. MEASAT (Malaysia)
in market structure since 2003
from monopoly to oligopoly.
F. BTS
7. MCI – Media Citra Indostar
One of the reasons for this
As of December 31, 2013,
(Indonesia)
8. Indosat (Indonesia)
9. VinaSat (Vietnam)
shift in market structure is that
we operated 75.579 BTS
the domestic satellite industry
located throughout Indonesia.
is not strictly regulated by
Through our subsidiary,
10. SingTel/Optus (Singapore)
the Government of Indonesia.
Mitratel, we lease out space
11. Telkom (Indonesia)
12. ChinaSat (China)
Although Ministerial Regulation
to other operators to place
No.37/P/M.KOMINFO/12/2006
their telecommunications
13. Mabuhay (Philippines)
dated December 6, 2006
equipment on these towers,
14. Thaicom (Thailand)
15. ABS (Hong Kong)
issued by the MoCI was
for which we receive a fee. Our
intended as an entry barrier for
principal competitors in this
16. Lippo Star (Indonesia)
foreign satellite operators, the
business are XL Axiata, Indosat,
17. Intelsat (US)
18. Telesat (Canada)
currently applied “open sky”
Bakrie Telecom and PT Tower
policy has in fact increased
Bersama Infrastructure Tbk.
competition amongst domestic
Our satellite operations
and foreign satellite operators.
G. Others
primarily consist of leasing
Another factor in the shift in
Deregulation in the Indonesian
satellite transponders
market structure is the limited
telecommunications sector
capacity to broadcasters and
capacity of domestic satellite
has encouraged competition in
operators of VSAT, cellular
operators, which are thus
the multimedia, internet, and
and IDD services and ISPs,
unable to benefit from the fast
data communications services
as well as providing earth
growing market demands in
businesses. The diversification
station satellite up linking
Indonesia.
and down linking services to
of businesses has gained
momentum with the result that
domestic and international
In view of market opportunities
competition is now intense,
users. We face competition
and limited supply, we plan to
particularly in terms of price,
from foreign and domestic
expand our satellite business
range of services offered,
service providers and compete
with the construction of
quality and network coverage,
most closely in Indonesia
Telkom-3S satellite through a
as well as customer service
with Indosat and PSN. Other
partnership on acquired orbital
quality.
private satellites serving the
slot. The Telkom-3S satellite is
broadcasting market within
currently under development.
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LICENSING
To provide national
telecommunications services,
we have a number of product
and service licenses that are
consistent with the applicable laws,
regulations or decrees.
Following the issuance of
MoCI Regulation No.01/PER/M.
KOMINFO/01/2010 (“MoCI Decree
No.01/2010”) dated January 25,
2010 concerning the Provision
of Telecommunication Network,
we were required to adjust our
telecommunications license to
provide telecommunications
services. We have secured new
licenses that have been adjusted as
required of which are as follows:
A. Fixed Network and Basic
Telephony Services
Based on the report submitted
by us concerning the operation
of fixed network and as part
of the adjustment to MoCI
Decree No.01/2010, we had
our licenses adjusted in 2010
for the operation of local fixed
network, direct long distance,
international call and closed
fixed network, explained as
follows:
- MoCI Decree No.381/KEP/M.
KOMINFO/10/2010 dated
October 28, 2010 on the
License of Operating Local
Fixed Network and Basic
Telephony Services of
PT Telekomunikasi Indonesia
Tbk;
- MoCI Decree No.382/
KEP/M.KOMINFO/10/2010
dated October 28, 2010 on
the License of Operating
Fixed Network of Domestic
Long Distance and Basic
licences from the Indonesian
Telephony of
Investment Coordinating
PT Telekomunikasi Indonesia
Board that permit Telkomsel to
Tbk;
develop cellular services with
- MoCI Decree No.383/KEP/M.
national coverage, including
KOMINFO/10/2010 dated
the expantion of its network
October 28, 2010 on the
capacity. In addition, Telkomsel
License of Operating Fixed
holds permits and licenses
Network of International
from and registrations with
Call and Basic Telephony
certain regional governments
Services of
and/or governmental agencies,
PT Telekomunikasi Indonesia
primarily in connection with its
Tbk; and
operations in such regions, the
- MoCI Decree No.398/KEP/M.
properties it owns and/or the
KOMINFO/11/2010 dated
construction and use of its BTS.
November 12, 2010 on the
License of Operating Closed
Fixed Network of
C. International Calls
We commenced our
PT Telekomunikasi Indonesia
international call service in
Tbk.
2004. Our license for operating
a fixed network to provide
Following the issuance of
international call services was
MoCI Decrees No.381, 382 and
adjusted in 2010 to meet the
383, our previous licenses for
requirements of MoCI Decree
operating a fixed network
No.01/2010 with the issuance
and basic telephony services
of MoCI Decree No.383/2010.
previously owned by us based
The license does not have a
on MoC Decree No.KP.162
set expiry date, but it will be
of 2004 dated May 13, 2004
evaluated in 2015.
ceased to be in effect. The
licenses do not have a set
We have a license to operate a
expiry date, but are evaluated
closed fixed network based on
every five years.
B. Cellular
MoCI Decree No.398/KEP/M.
KOMINFO/11/2010, which
amends the previous license,
Telkomsel holds licenses to
to meet the provisions in MoCI
operate a nationwide mobile
Decree No.01/2010. The license
cellular telephone network
allows us to lease the installed
using 7.5 MHz of radio
closed fixed network, to among
frequency bandwidth in the
others, telecommunication
900 MHz band, 22.5 MHz of
network and service operators,
radio frequency bandwidth in
including providing an
the 1800 MHz band, and 15 MHz
international telecommunication
of radio frequency bandwidth
transmission facility through a
in the 2100 MHz band. The
SCCS directly to Indonesia for
licenses do not have a set expiry
overseas telecommunication
date, but will be evaluated every
operators.
five years. Telkomsel also hold
Corporate
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According to MoCI
Decree No.16/PER/M.
KOMINFO/9/2005 dated
October 6, 2005 concerning
Provision of International
Telecommunications
Transmission Facilities
through SCCS, overseas
telecommunications
operators wishing to
provide an international
telecommunications
transmission facilities through
the SCCS directly to Indonesia
are required to set up a
partnership with a fixed network
of international call services or
closed fixed network provider.
In line with MoCI Decree
No.16/2005, the international
telecommunication transmission
facilities provided through SCCS
are served by us on the basis of
landing rights attached to our
license to operate fixed network
of international call services.
We have also secured landing
rights based on the landing
right Letter No.006-OS/DJPT.6/
HLS/3/2010 dated March 2,
2010 from MoCI.
On March 2, 2010, the MoCI
issued Decree No.75/KEP/M.
KOMINFO/03/2010 granting
D. VoIP
our subsidiary, Telin, a license
We are licensed to provide
Telkomsel is also licensed to
provide public VoIP services
to operate a closed fixed
internet telephony services for
based on DGPT Decree No.226/
line network which enables
public needs as stated in DGPT
Telin to provide international
Decree No.384/KEP/DJPT/M.
infrastructure services.
KOMINFO/11/2010 dated
Separately, Telin secured landing
November 29, 2010 on Voice
rights in Indonesia from the
over Internet Protocol ("VoIP")
DIRJEN/2009 regarding the
provision of ITKP services.
This license does not have a
set expiry date, but it will be
evaluated every five years by
DGPT to provide international
services. This license does not
the Government.
telecommunications
have a set expiry date, but it will
transmission facilities through
be evaluated every five years.
SCCS.
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E. ISP
We are licensed as an ISP under
DGPI Decree No.83/KEP/DJPPI/
KOMINFO/4/2011 dated April 7,
2011. This license does not have
a set expiry date, but it will be
evaluated every five years.
Telkomsel is also licensed to
provide multimedia internet
access services with nation-
wide coverage under DGPT
Decree No.213/DIRJEN/2010.
This license does not have
a set expiry date, but it will
be evaluated annually, with a
in twelve zones, comprising
2.3 GHz radio frequency
eight zones on 3.3 GHz (North
are now permitted to freely
Sumatra, South Sumatra,
choose their technology in
Central Sumatra, West
providing BWA on the 2.3 GHz
Kalimantan, East Kalimantan,
radio frequency, subject to a
West Java, JABODETABEK and
requirement that they pay an
Banten) and five zones on
annual usage rights fee for the
2.3 GHz (Central Java, East
third through the tenth year of
Java, Papua, Maluku, and the
the license period in which a
northern part of Sulawesi).
technology divergent from that
specified in MoCI Regulation
In August 2009, the MoCI issued
No.22/2009 is used. On January
Ministerial Decree No.237/
KEP/M.KOMINFO/7/2009
9, 2012, MoCI announced that
it plans to make available for
regarding the Appointment
bidding additional 2.3 GHz radio
of the Winning Bidders for
frequency in the 2300-2360
comprehensive evaluation every
Packet Switched-Based
MHz range for BWA services
five years.
Local Fixed Access Network
utilizing neutral technology.
F. Internet Interconnection
Service
We hold a license to provide
internet interconnection
services by referring to
DGPI Decree 331/KEP/M.
KOMINFO/09/2013 dated
on September 24, 2013
regarding license for Internet
Interconnection Service
(Network Access Point) for
PT Telekomunikasi Indonesia
Tbk. This license does not have
a set expiry date, but it will be
evaluated every five years.
G. BWA
In July 2009, we won a tender
for a BWA license and the
right to provide BWA services
Operators Using the 2.3 GHz
Radio Frequency for Wireless
MoCI Regulation No.19/2011
Broadband Services. Because
also stipulates domestic
of inadequate implementation
component obligations for
by the winning bidders, the
telecommunications devices
MoCI later issued Regulation
and equipment used in
No.19/PER/M.KOMINFO/09/2011
providing BWA on the 2.3 GHz
dated September 14, 2011
radio frequency. Initial domestic
(“MoCI Regulation No.19/2011”),
component obligations are
which released operators on
30% for subscriber stations
the 2.3GHz radio frequency
and 40% for base stations, to
from the obligation to use the
be increased to 50% within five
particular technology specified
years.
in the bid terms for the 2.3 GHz
radio frequency, which were set
As a result of the switch to
out in MoCI Regulation No.22/
neutral technology under
PER/M.KOMINF0/04/2009
MoCI Regulation No.19/2011,
April 24, 2009 (“MoCI
we lost vendor support for
Regulation No.22/2009”).
our preferred technology,
Pursuant to MoCI Regulation
which is based on fixed BWA
No.19/2011, operators on the
technology. Vendors instead
Corporate
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preferred to support the mobile
a set expiry date but will be
activities, with the launch of
BWA technology selected
thoroughly evaluated every five
Telkomsel Tunai prepaid card.
by other operators. Mobile
years.
BWA technology competes
J. Remittance Service
with Telkomsel. We therefore
I. Payment Method Using
Based on a license from Bank
returned 4 of the 5 zones, which
we had received. We retained
e-Money
Following the implementation
Indonesia No.11/23/Bd/8,
dated August 5, 2009, we may
our BWA license for Maluku
of Bank Indonesia’s Regulation
operate as a money transfer
zone so we would continue
No.11/11/PBI/2009 and Circular
services provider.
to qualify as a BWA operator
Letter of Bank Indonesia
on 2.3 GHz and have the right
No.11/10/DASP each dated on
K. IPTV
to access the BWA networks
May 13, 2009 regarding how
On April 27, 2011, we and
maintained by other operators.
to use card-based payment
TelkomVision together
instruments (“APMK”) and
obtained a license to operate
Becoming a broadband
Bank Indonesia’s Regulation
IPTV services through MoCI
wireless access operator is in
No.11/12/PBI/2009 and Circular
Decree No.MCIT.160/KEP/M.
line with the transformation
Letter of Bank Indonesia
KOMINFO/04/2011 regarding
of our business to TIMES,
which requires us to have
infrastructure that is
No.11/11/DASP each dated
the Telkom and TelkomVision
May 13, 2009 on e-money,
IPTV Service Consortium
Bank Indonesia has redefined
Agreement. We now provide
capable of responding to an
the meaning of “principal”
IPTV services in five locations:
increasingly complex market
and “acquirer” in operating
Greater Jakarta, Bandung,
and the demand for ever
APMK and e-money business.
Semarang, Surabaya and Bali,
more convergent products
In light of these regulations,
under the brand “UseeTV”.
and services, whether in
Bank Indonesia confirmed our
the consumer, enterprise or
status as an issuer of e-money
L. Construction Services
wholesale segments.
H. Data Communication
System (“SISKOMDAT”)
We provide SISKOMDAT
based on letter of Directorate
of Accounting and Payment
Business License (“IUJK”)
On June 6, 2012, the City
System of Bank Indonesia
Government of Bandung issued
No.11/13/DASP dated May 25,
a construction services business
2009. We operate our e-money
license to us through IUJK No.
services under DGPI
business under the brand
1-3273-858971-2-001772 for
Decree No. 169/KEP/DJPPI/
names “T-cash” and “Flexi cash”.
Telkom. The IUJK is valid for
KOMINFO/6/2011 dated June
the execution of construction
6, 2011 regarding License for
With the issuance of Bank
services throughout the domain
Data Communications Systems
Indonesia Circular Letter No.
of the Republic of Indonesia,
Services Operation for
9/9/DASP dated January
comprising architecture, civil,
PT Telekomunikasi Indonesia
19, 2007, Telkomsel is also
mechanical and electrical works.
Tbk. This license does not have
permitted to conduct APMK
The IUJK is valid until June 5,
2015.
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TRADEMARK, COPYRIGHTS, INDUSTRIAL DESIGNS AND PATENTS
We constantly seek to develop product and service innovations in line with a dynamic business portfolio.
To provide both protection for and recognition of the creativity involved, we have registered a number of
intellectual property rights, including trademarks, copyrights, industrial design and patents, with the Directorate
General of Intellectual Property Rights at the Ministry of Law and Human Rights of the Republic of Indonesia.
The intellectual property rights we have registered include: (i) trademarks for our products and services,
corporate logo and name; (ii) copyrights on our corporate name and logo, product and service logos, computer
programs, research and songs; and (iii) simple and ordinary patents on technological inventions in the form of
telecommunications products, systems and methods.
Following is the list of brands that have been registered by us in 2013
No
1
2
3
4
5
Title
Application No.
Application Date
Registration Date
Speedytrek Xpose Ur Music
J002009011733
April 8, 2009
April 19, 2013
Speedy Grovia
DELIMA
TELEPON RUMAH
Flexi-Lebih Irit kan
J002010035301
October 1, 2010
December 9, 2013
J002011004453
May 11, 2011
January 7, 2013
J002011026179
July 1, 2011
August 19, 2013
J002011026180
July 1, 2011
August 19, 2013
Following is the list of brands applied for registration in 2013.
No.
Title
1
2
3
4
5
6
U See Zone
UTV
U Zone
U
U meet me
Indi Home
Application No.
J002013014812
J002013004813
J002013004814
J002013004815
J002013022833
J002013057688
Application Date
April 2, 2013
April 2, 2013
April 2, 2013
April 2, 2013
May 16, 2013
December 3, 2013
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
277
The following list the copyrights that have been registered by us in 2012 and 2013:
No.
Innovation Title
Application No.
Application Date
Registration Date
Innovation
Number
1
2
3
4
5
6
7
8
9
“Transformer” Computer Program
C00201203811
August 8, 2012
July 1, 2013
63830
“Global Billing Application” Computer Program C00201203812
August 8, 2012
July 1, 2013
63831
“Internet Bijak” Logo
C00201203814
August 8, 2012
July 17, 2013
64136
“Telkom Cloud-explore the possibilities” Logo
C00201203815
August 8, 2012
July 17, 2013
64137
U See TV Logo
SIP Client
C00201203815
August 8, 2012
October 29, 2013
65176
C00201104855
December 20, 2011
October 12, 2012
60930
Location Based Social Networking
C00201104856
December 20, 2011
October 12, 2012
60931
Supply Chain Management Application
C00201200612
February 8, 2012
December 10, 2012
61589
RBT Advertising
C00201200613
February 8, 2012
December 10, 2012
61590
10 Web-based Remote Control Application on
C00201200614
February 8, 2012
December 10, 2012
61591
Speedy Network
Flexi Belajar
C00201200615
February 8, 2012
December 10, 2012
61592
Customized Personal View
C00201200616
February 8, 2012
December 10, 2012
61593
Telkomsel Market
C00201200617
February 8, 2012
December 10, 2012
61594
11
12
13
We applied for the following copyrights in 2012 and 2013:
No.
Innovation Title
Type of Intellectual Property Rights
Application No.
Application Date
Registration Date
1
2
3
4
5
6
7
8
9
U See Zone
U Zone
U
10
UTV
Telkom Telemetering Smart
Home
Telkom Game Center
Application
Computer Program
C00201205695
December 11, 2012
Computer Program
C00201300509
February 7, 2013
ART Promo Application
Computer Program
C00201300510
February 7, 2013
Telkom Store Application
Computer Program
C00201300511
February 7, 2013
Qonnect Application
Computer Program
C00201300512
February 7, 2013
Telkom SNS Hub Client
Computer Program
C00201300513
February 7, 2013
Logo
Logo
Logo
Logo
C00201301288
April 2, 2013
C00201301289
April 2, 2013
C00201301290
April 2, 2013
Coo201301291
April 2, 2013
11
12
Firmware Telkom Gateway
Computer Program
C00201301292
April 2, 2013
Indi Home
Logo
C00201305330
December 3, 2013
No registration of patent is filed and registered in 2013
-
-
-
-
-
-
-
-
-
-
-
278
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
DEFINITIONS
3G
The generic term for
third generation mobile
telecommunications technology.
3G offers high speed connections
to cellular phones and other mobile
devices, enabling video conference
and other applications requiring
broadband connectivity to the
internet.
3.5G
A grouping of disparate mobile
telephony and data technologies
designed to provide better
performance than 3G systems,
as an interim step towards
deployment of full 4G capability.
Adjusted EBITDA
Adjusted EBITDA is defined as
earnings before interest, tax,
depreciation and amortization.
Adjusted EBITDA and other related
ratios in this Annual Report serve
as additional indicators on our
performance and liquidity, which is
a non GAAP financial measure.
ADS
American Depositary Share
(also known as an American
Depositary Receipt, or an “ADR”), a
certificate traded on a US securities
market (such as New York Stock
Exchange) representing a number
of foreign shares. Each of our ADS
instruments, a payment instrument
in the form of credit cards,
BSS
Base Station Subsystem, the
Automated Teller Machine (“ATM”)
section of a cellular telephone
and/or debit cards.
network responsible for handling
ARPU
Average Revenue per User,
traffic and signaling between a
mobile phone and the network
switching subsystem. A BSS is
a measure used primarily
composed of two parts: the BTS
by telecommunications and
and the BSC.
networking companies which
states how much money we make
from the average user. It is defined
BTS
Base Transceiver Station,
as the total revenue from specified
equipment that transmits and
services divided by the number of
receives radio telephony signals to
consumers for those services.
and from other telecommunication
systems.
Backbone
The main telecommunications
network consisting of transmission
BWA
Broadband Wireless Access, a
and switching facilities connecting
technology that provides high
several network access nodes. The
speed wireless internet access or
transmission links between nodes
computer networking access over a
and switching facilities include
wide area.
microwave, submarine cable,
satellite, optical fiber and other
transmission technology.
Bandwidth
The capacity of a communication
link.
Bapepam-LK
Badan Pengawas Pasar Modal
dan Lembaga Keuangan, or the
Indonesian Capital Market and
Financial Institution Surpervisory
CDMA
Code Division Multiple Access, a
transmission technology where
each transmission is sent over
multiple frequencies and a unique
code is assigned to each data
or voice transmission, allowing
multiple users to share the same
frequency spectrum.
CPE
Customer Premises Equipment,
Agency, the predecessor to the
any handset, receiver, set-top box
represents 200 of our Series B
OJK.
shares.
or other equipment used by the
consumer of wireless, fixed line or
ADSL
Asymmetric Digital Subscriber Line,
a type of digital subscriber line
technology, a data communications
technology that enables faster data
transmission over copper telephone
lines than a conventional voice
band modem can provide.
APMK
Alat Pembayaran Menggunakan
Kartu or card-based payment
Broadband
A signaling method that includes or
broadband services, which is the
property of the network operator
handles a relatively wide range (or
and located on the customer
band) of frequencies.
premises.
BSC
Base Station Controller, an
DCS
Digital Communication System, a
equipment responsible for radio
mobile cellular system using GSM
resource allocation to mobile
technology operating in the 1800
station, frequency administration
MHz frequency band.
and handover between BTSs
controlled by the BSC.
Defined Benefit Pension Plan
A type of pension plan in which
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
279
an employer promises a specified
copper feeder distribution and
which operates over two separate
monthly benefit on retirement
subscriber lines.
that is predetermined by a
formula based on the employee’s
earnings history, tenure of service
DTH
Direct-to-Home satellite
sets of wires, usually twisted pair
cable. E1 link data rate is 2,048
Mbps (full duplex), which is divided
into 32 timeslots.
and age, rather than depending
broadcasting, the distribution
on investment returns. It is
of television signals from high-
considered ‘defined’ in the sense
powered geostationary satellites
Earth Station
The antenna and associated
that the formula for computing the
to small dish antennas and satellite
equipment used to receive or
employer’s contribution is known in
receivers in homes across the
transmit telecommunication signals
advance.
country.
via satellite.
Defined Contribution Pension Plan
A type of retirement plan in which
Dual Band
The capability of a mobile cellular
the amount of the employer’s
network and mobile cellular
EDGE
Enhanced Data rates for GSM
annual contribution is specified.
handsets to operate across two
Evolution, a digital mobile phone
Individual accounts are set up
frequency bands, for example GSM
technology that allows improved
for participants and benefits are
900 and GSM 1800.
data transmission rates as a
based on the amounts credited to
these accounts (through employer
contributions and, if applicable,
e-Business
Electronic Business solutions,
GSM.
backward-compatible extension of
employee contributions) plus any
including electronic payment
investment earnings on the money
services, internet data centers and
in the account. Only employer
content and application solutions.
contributions to the account are
Refer to “New Economy Business
guaranteed, not the future benefits.
(“NEB”) and Strategic Business
Edutainment
Education and Entertainment.
EVDO
Evolution Data Optimize, a
In defined contribution plans, future
Opportunities Portfolio” under
standard high speed 3G wireless
benefits fluctuate on the basis of
Business Overview.
broadband for CDMA.
investment earnings.
Dial-Up
Access to the internet using fixed
e-Commerce
Electronic Commerce, the buying
Fixed Line
Fixed wireline and fixed wireless.
and selling of products or services
telephone lines or mobile phone.
over electronic systems such as
the internet and other computer
DLD
Domestic Long Distance, a long
networks.
distance call service designed for
customers who live in different
e-Money
Electronic Money, money or
areas but still within one country.
script that is only exchanged
These areas normally have different
electronically.
area codes.
Down link
Radio signal frequency emitted by
e-Payment
Also known as electronic funds
Fixed Wireless
The local wireless transmission link
using a cellular, microwave, or radio
technology to connect customers
at a fixed location to the local
telephone exchange.
Fixed Wireline
A fixed wire or cable path linking
a subscriber at a fixed location to
a local exchange, usually with an
transfer, the electronic exchange
individual phone number.
the satellite to earth station.
or transfer of money from one
DSL
Digital Subscriber Line,
account to another, either within
a single financial institution or
FTTx
Fiber to the “x”, a generic term
across multiple institutions, through
for any broadband network
a technology that allows
computer-based systems.
architecture that uses optical fiber
combinations of services including
voice, data and one way full motion
video to be delivered over existing
E1 Link
The backbone transmission unit
to replace all or part of the usual
metal local loop used for last mile
telecommunication. The generic
280
2013 Annual Report
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
term originated as a generalization
network and only utilizes the
of several configurations of fiber
network when there is data to be
Intelligent Network
A service-independent
deployment such as fiber to the
sent.
home, fiber to the node or fiber to
the building.
GSM
Global System for Mobile
telecommunications network where
the logic functions are taken out of
the switch and placed in computer
nodes distributed throughout the
Gateway
A peripheral that bridges a packet
Telecommunication, a European
network. This provides the means
standard for digital cellular
to develop and control services
based network (IP) and a circuit
telephone.
based network (PSTN).
Gb
Gigabyte, a unit of information
Homepass
A connection with access to fixed
line voice, IPTV and broadband
used, for example, to quantify
services.
computer memory or storage
capacity.
HSPA+
Evolved High Speed Packet Access
Gbps
Gigabyte per second, the average
is defined in the Third Generation
Partnership Project Release 7. It
number of bits, characters, or
introduces a simpler IP-centric
more efficiently allowing new or
advanced telephony services to be
introduced quickly.
Interconnection
The physical linking of a carrier’s
network with equipment or
facilities not belonging to that
network.
IP
Internet Protocol, the method or
blocks per unit time passing
architecture for the mobile network
protocol by which data is sent from
between equipment in a data
bypassing most of the legacy
one computer to another on the
transmission system. This is
equipment. HSPA+ boosts peak
internet.
typically measured in multiples of
data rates to 42 Mbit/s on the
the unit bit per second or byte per
downlink and 22 Mbit/s on the
second.
uplink.
GHz
Gigahertz. The hertz (symbol Hz),
IDD
International Direct Dialing, a
the international standard unit of
service that allows a subscriber to
frequency defined as the number
make an international call without
of cycles per second of a periodic
the assistance or intervention of
IP Core
A block of logic data that is used
in making a field programmable
gate array or application-specific
integrated circuit for a product.
IP DSLAM
Internet Protocol-Digital Subscriber
phenomenon.
an operator from any telephone
Line Access Multiplexer, a network
terminal.
GMS
General Meeting of Shareholders,
which may be an Annual General
IME
Information, Media and
Meeting of Shareholders (“AGMS”)
Edutainment.
or an Extraordinary General
Meeting of Shareholders (“EGMS”).
IMT-2000
International Mobile
device located near the customer’s
location that allows telephone lines
to make faster connections to the
internet by connecting multiple
customer Digital Subscriber Lines
(DSLs) to a high-speed internet
backbone line using multiplexing
techniques.
GPON
Gigabyte-Passive Optical Network,
Telecommunications-2000, a body
of specifications provided by the
the most widely deployed type of
International Telecommunication
IP VPN
A data communication service
passive optical network system
Union. Application services include
using IP Multi Protocol Label
that bring optical fiber cabling and
wide area wireless voice telephone,
Switching (“MPLS”) and based on
signals all or most of the way to
mobile internet access, video calls
any to any connection. This service
end users.
and mobile TV, all in a mobile
is connected to the data security
environment.
GPRS
General Packet Radio Service, a
Installed Lines
Complete lines fully built-out to the
data packet switching technology
distribution point and ready to be
that allows information to be sent
connected to subscribers.
and received across a mobile
systems, L2TP and IPSec. The
speed depends on the customer’s
needs and ranges from 64 Kbps to
2 Mbps.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
281
IPTV
Internet Protocol Television, a
Mbps
Megabyte per second, a measure of
NGN
Next Generation Network, a general
system through which television
speed for digital signal transmission
term that refers to a packet-based
services are delivered using the
expressed in millions of bits per
network able to provide services,
Internet Protocol suite over a
second.
packet-switched network such
as the internet, instead of being
delivered through traditional
Metro Ethernet
Bridge or relationship between
including telecommunication
services, and able to make use
of multiple broadband, quality
of service enabled transport
terrestrial, satellite signal, and cable
locations that are apart
technologies and in which service-
television formats.
geographically, this network
related functions are independent
connects LAN customers at several
from underlying transport related
ISDN
Integrated Services Digital
different locations.
Network, a network that provides
end-to-end digital connectivity and
MHz
Megahertz, a unit of measure of
technologies. A NGN is intended
to be able to, with one network,
transport various services (voice,
data, and various media such as
allows simultaneous transmission of
frequency equal to one million
video) by encapsulating these into
voice, data and video and provides
cycles per second.
high speed internet connectivity.
ISP
Internet Services Provider, an
Mobile Broadband
The marketing term for wireless
internet access through a portable
packets, similar to how such packet
are transmitted on the internet.
NGNs are commonly built around
the Internet Protocol.
organization that provides access
modem, mobile phone, USB
to the internet.
Wireless Modem or other mobile
Node B
A BTS for a 3G W-CDMA/UMTS
devices.
network.
Kbps
Kilobyte per second, a measure of
speed for digital signal transmission
MoCI
The Ministry of Communication
OBCE
Operational, Business and
expressed in thousands of bits per
and Information, to which
Customer support system and
second.
regulatory responsibility over
Enterprise relations management,
telecommunications was
which is part of our strategic
Lambda
Lambda indicates the wavelength
transferred from the Ministry
initiatives.
of Communication (“MoC”) in
of any wave, especially in physics,
February 2005.
electronics engineering and
mathematics.
MSAN
Multi Service Access Networks,
OJK
Otoritas Jasa Keuangan, or the
Indonesian Financial Services
Authority, the successor of
Leased Line
A dedicated telecommunications
represent the third generation of
Bapepam-LK, is an independent
optical access network technology
institution with authority to
transmissions line linking one fixed
and are single platforms capable
regulate and supervise financial
point to another, rented from an
of supporting traditional, widely
services activities in the banking
operator for exclusive uses.
deployed, access technologies and
sector, capital market sector as
services as well as emerging ones,
well as non-bank financial industry
Local Exchange Capacity
The aggregate number of lines at
while simultaneously providing
sector.
a gateway to a NGN core. MSAN
a local exchange connected and
will enable us to provide triple
available for connection to outside
play services that distribute high
OLO
Other Licensed Operators, i.e.
plant.
speed internet access, voice
operators other than our Company.
LTE
Long Term Evolution technology,
a standard for high-speed wireless
packet services and IPTV services
simultaneously through the same
infrastructure.
data communication for mobile
phones and data terminals.
Network Access Point
A public network exchange facility
Optical Fiber
Cables using optical fiber
and laser technology through
which modulating light beams
representing data are transmitted
where ISPs connected with one
through thin filaments of glass.
another in peering arrangements.
282
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Highlights
Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Outside Plant
The equipment and facilities used
PSTN
Public Switched Telephone
into a fixed wireless telephone that
uniquely identifies a CDMA network
to connect subscriber premises to
Network, a telephone network
subscription and that contains
the local exchange.
operated and maintained by us and
subscriber-related data such as
the KSO Units for us and on our
phone numbers, service details and
behalf.
memory for storing messages.
Pay TV
Pay Television, premium television,
or premium channels, subscription-
based television services, usually
Pulse
The unit in the calculation of
provided by both analog and
telephone charge.
digital cable and satellite, but also
increasingly via digital terrestrial
and internet television.
Radio Frequency Spectrum
The part of the electromagnetic
spectrum corresponding to
Satellite Transponder
Radio relay equipment embedded
in a satellite that receives signals
from earth and amplifies and
transmits the signal back to the
earth.
PDN
Packet Data Network, a digital
radio frequencies, i.e. frequencies
lower than around 300 GHz (or,
SCCS
Submarine Communications Cable
communications network which
equivalently, wavelengths longer
System, a cable laid on the sea bed
breaks a group data to be
than about 1 mm).
transmitted into segments called
packets, which are then routed
independently.
PKLN
Tim Pinjaman Komersial Luar
RIO
Reference Interconnection Offer,
a regulatory term covering all
facilities, including interconnection
between land-based stations to
carry telecommunication signals
across stretches of ocean.
SDP
Service Delivery Platform, a set
Negeri, or Foreign Commercial
administrative issues offered by
service delivery architecture (such
Loan Coordinating Team, an inter-
one telecommunications operator
as service creation, session control
agency team of the Government
to other telecommunications
and protocols) for a type of service.
tariffs, technical facilities and
of components that provide a
charged with, among others,
operator for interconnection
considering requests of Indonesian
access.
State-Owned Enterprises such as
us for consent to obtain foreign
commercial loans.
POWL
Public Offering Without Listing.
SIM card
Subscriber Identity Module, a
RMJ
Regional Metro Junction, an inter-
“smart” card designed to be
inserted into cellular phone
city cable network installation
that uniquely identifies a GSM
service in one regional (region/
network subscription and contains
province).
subscriber-related data such as
phone numbers, service details and
memory for storing messages.
Premium SMS
Premium Short Message Service, a
Roaming
A general term referring to the
text messaging service component
extension of connectivity service in
of phone, web, or mobile
a location that is different from the
SME
Small and Medium Enterprise.
communication systems, using
home location where the service
standardized communications
was registered.
SMS
Short Messaging Service, a
protocols that allow the exchange
of short text messages between
fixed line or mobile phone devices.
RUIM card
Removable User Identity Module, a
technology allowing the exchange
of text messages between mobile
smart card designed to be inserted
phones and between fixed wireless
phones.
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
283
SOE
State-Owned Enterprise, a
TITO
Trade-In, Trade-Off, a conversion
some combination of encryption,
digital certificates, strong user
Government-owned corporation,
scheme to replace copper
authentication and access control
state-owned company, state-
with optical cable. Refer to
to secure the traffic they carry.
owned entity, state enterprise,
“Development and Modernization
These provide connectivity to
publicly owned corporation,
of Broadband Access through
many machines behind a gateway
Government business enterprise,
the TITO Scheme” under Network
or firewall.
or parastatal, a legal entity created
Development.
by a Government to undertake
commercial activities on behalf of
an owner Government.
Trunk Exchange
A switch that has the function of
VSAT
Very Small Aperture Terminal, a
relatively small antenna, typically
connecting one telephony switch
1.5 to 3.0 meters in diameter, placed
Softswitch
A central device in a telephone
to another telephony switch, which
in the user’s premises and used
can either be a local or a trunk
for two-way communications by
network that connects calls from
switch.
satellite.
one phone line to another, entirely
by means of software running on
a computer system. This work was
UMTS
Universal Mobile Telephone System,
WiMAX
Worldwide Interoperability
formerly carried out by hardware,
one of the 3G mobile systems
for Microwave Access, a
with physical switchboards to route
being developed within the ITU’s
telecommunications technology
the calls.
IMT-2000 framework.
that provides wireless transmission
STM-1
Synchronous Transport Module
USO
Universal Service Obligation,
of data using a variety of
transmission modes, from point-
to-point links to portable internet
level-1, the SDH ITU-T fiber optic
the service obligation imposed
access.
network transmission standard with
by the Government on all
a bit rate of 155.52 Mbps. The other
telecommunications services
standards are STM-4, STM-16 and
providers for the purpose of
Wireless Access Network
Any type of computer network
STM-64.
providing public services in
that is not connected by cables
Switch
A mechanical, electrical or
electronic device that opens or
VoIP
Voice over Internet Protocol, a
Indonesia.
of any kind. It is a method by
which homes, telecommunications
networks and enterprise (business)
installations avoid the costly
closes circuits, completes or breaks
means of sending voice information
process of introducing cables
an electrical path, or selects paths
using the IP.
or circuits, used to route traffic in a
telecommunications network.
Terra Router
Terra Router or terabit router on
VPN
Virtual Private Network, a secure
private network connection, built
on top of publicly-accessible
into a building, or as a connection
between various equipment
locations.
Wireless Broadband
Technology that provides high
the theory allows the network
infrastructure, such as the
speed wireless internet access or
capacity on a scale of terabits (1
internet or the public telephone
computer networking access over a
terabit = 1 million gigabits).
network. VPNs typically employ
wide area.
TIMES
Telecommunication, Information,
Media, Edutainment and Service.
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Preface
Management
Report
Business
Overview
Management’s
Discussion & Analysis
Cross Reference to
Bapepam-LK Regulation No.X.K.6
Pursuant to Bapepam-LK Regulation No.X.K.6, we are required to present our Annual Report in accordance with
the format and content stipulated in the regulation. This table provides a cross-reference between this Annual
Report and Bapepam-LK Regulation No.X.K.6 to demonstrate our compliance with this requirement.
Criteria
Page
Section in Annual Report
1.
Summary of Important Financial Data
a) Summary of important financial data for the
14-15
Financial Highligths
last three years
b) Information of share issued during each
quarterly period in the last two years
2. Board of Commissioners’ Report
3. Board of Directors’ Report
4. Company Profile
18-21
Common Stock and Bond Highlights
28-33
34-39
Report From The President Commissioner
Report From The President Director
a) Name, address, telephone, fax, email, website
249-251
Addresses
and/branch or representative offices;
b) Company’s brief history
c) Company's line of business including product
and services
2-3, 224-
241
225, 46-53 Line of Business, Business Portfolio
-Strength Born of A Long History
-A Brief History Of Telkom
d) Organization structure in the form of a chart
e) Company’s vision and mission
f) Board of Commissioner’s profile
g) Board of Director’s profile
h) Number of employees and description of their
competency development
i) Description regarding shareholders and
percentage of ownership
228-229
12
238-239
240-241
88-89,
92-93
242-243
Company’s Organizational Structure
With Our Vision, Mission and Values
Profile of the Board of Commissioners
Profile of the Board of Directors
Human Capital
Shareholder Composition
j) Chart/diagram of the major and controlling
243
Shareholder Composition
shareholders
k) Information of subsidiaries, associated
230-237
Subsidiaries and Associated Companies
companies and joint ventures
l) Share listing chronology
m) Listing chronology of other securities and
securities rating
244-246
246
Chronology of Stock Issued
Chronology of Bonds
n) Name and address of rating agency
o) Information of capital market institutions and
248
247-248
Capital Market Supporting Professionals
Capital Market Supporting Professionals
professionals
p) Awards and certification received by the
24-27
Awards and Certifications
company
5. Management’s Analysis and Discussion
a) Review of operations per operational segment 102-106
107-120
b) Comparative analysis of financial performance
Operational Review By Segment
Financial Overview
in the last two years
122
c) Company’s solvency
122
d) Company’s receivable collectability
e) Capital structure and capital structure policy
122-123
f) Material commitments for capital expenditure 124-125
g) Material information and facts subsequent to
133
the date of the accountant’s report
Solvency
Receivable Collectibility
Capital Structure
Material Commitment for Capital Investment
Subsequent Events after the Reporting Date
Corporate
Governance
Social &
Environmental
Responsibility
Company
Profile
Additional
Information
(For ADR
Shareholders)
Appendices
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
285
Criteria
h) Company’s prospects
i) Comparison between targets/projections at
beginning of fiscal years and actual results
j) Targets/projections to be achieved for one
year
k) Description of the marketing of the
company’s products and services
l) Description of the dividend policy, date and
total dividend per share and total dividend
per year declared and paid for the last two
years
m) Use of proceeds from the public offerings:
n) Material information regarding investment,
expansion, divestment, merger/acquisition,
debt/capital restructuring, affiliated
transaction and transaction involving conflict
of interest
Page
45
34-39
Section in Annual Report
Business Outlook (Trend Information)
Report From The President Director
39
Report From The President Director
54-56
Marketing and Distribution
246-247
Dividend Policy
N/A
44-45, 123,
131, 132-133
N/A
Corporate Strategy, Capital Expenditures,
Related Party Transactions, Material
Information and Facts
o) Changes in laws and regulations
p) Changes in accounting policies
125
125
Changes in Laws and Regulation
Changes in Accounting Policies
6. Corporate Governance
a) Board of Commissioners
b) Board of Directors
c) Audit committee
d) Other committees under the supervision of
the Board of Commissioners and/or Directors
e) Corporate secretary
f) Internal audit unit
g) Internal control system
h) Risk management system
i) Material litigation faced by the company
145-149
149-157
158-163
164-
165,166-171,
172-175
175-177
178-180
180-181
182-183
183-185
j) Administrative sanctions
k) Code of conduct and corporate culture
l) Employees/managements share ownership
185
186-189
245
Board of Commissioners
Board of Directors
Audit committee
Nomination and Remuneration Committee,
Planning and Risk Evaluation and Monitoring
Committee, Committee Under BoD
Corporate Secretary/Investor Relation (“IR”)
Internal Audit Unit
Internal Control System
Risk Management
Legal Proceeding and Lawsuits Involving The
Company
Administrative Sanctions
Code of Ethics and Corporate Culture
Employee Stock Ownership Program
program
m) Whistleblowing system
7. Company’s corporate social responsibility, on
environment, employment, health and work safety,
social and community development as well as
product responsibility
189-191
198-221
Whistleblowing Systems
Social and Environmental Responsibility
8. Audited Financial Statements
9. Signature of the Board of Commissioners and Directors
Statement of the Member of Board of Commissioners and Directors
Regarding
Responsibility for Annual Reporting 2013
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia, Tbk
We hereby state that all information has been fully disclosed in Annual Report 2013 Perusahaan Perseroan
(Persero) PT Telekomunikasi Indonesia, Tbk and we are solely responsible for the accuracy of the content.
This statement is considered to be true and correct.
Jakarta, March 10, 2014
Board of Commissioners
Hadiyanto
Commissioner
Jusman Syafii Djamal
President Commissioner
Parikesit Suprapto
Commissioner
Johnny Swandi Sjam
Independent Commissioner
Gatot Trihargo
Commissioner
Virano Gazi Nasution
Independent Commissioner
Board of Directors
Arief Yahya
President Director
Honesti Basyir
Director of Finance
Priyantono Rudito
Director of Human Capital
Management
Sukardi Silalahi
Director of Consumer Service
Rizkan Chandra
Director of Network IT
& Solution
Muhammad Awaluddin
Director of Enterprise &
Business Service
Ririek Adriansyah
Director of Wholesale &
International Service
Indra Utoyo
Director of Innovation &
Strategic Portfolio
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND FOR THE YEAR THEN ENDED
WITH INDEPENDENT AUDITORS’ REPORT
TABLE OF CONTENTS
Page
Independent Auditors’ Report
Consolidated Statement of Financial Position ................................................................................
1-3
Consolidated Statement of Comprehensive Income ......................................................................
4
Consolidated Statement of Changes in Equity ...............................................................................
5-6
Consolidated Statement of Cash Flows..........................................................................................
7
Notes to the Consolidated Financial Statements............................................................................
8-124
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
As of December 31, 2013
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
Notes
2013
2012
LIABILITIES AND EQUITIES
CURRENT LIABILITIES
Trade payables
Related parties
Third parties
Other payables
Taxes payable
Accrued expenses
Unearned income
Advances from customers and suppliers
Short-term bank loans
Current maturities of
long-term liabilities
Total Current Liabilities
NON-CURRENT LIABILITIES
Deferred tax liabilities - net
Other liabilities
Long service award provisions
Post-retirement health care benefit costs provisions
Retirement benefits obligation and other post-
retirement benefits
Long-term liabilities - net of current maturities
Obligations under finance leases
Two-step loans
Bonds and notes
Bank loans
Total Non-current Liabilities
TOTAL LIABILITIES
2o,2r,2u,
14,44
2c,37
2u,44
2t,31
2c,2r,2u,15,
27,34,37,44
2r,16
2c,37
2c,2p,2u,
17,37,44
2c,2m,2p,2u,
18,37,44
2t,31
2r
2s,35
2s,36
2s,34
2u,18,44
2m,11
2c,2p,19,37
2c,2p,20,37
2c,2p,21,37
826
10,774
388
1,698
5,264
3,490
472
432
5,093
28,437
3,004
472
336
752
2,795
4,321
1,702
3,073
5,635
22,090
50,527
432
6,848
176
1,844
6,163
2,729
257
37
5,621
24,107
3,059
334
347
679
2,248
1,814
1,791
3,229
6,783
20,284
44,391
The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements
taken as a whole.
2
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
As of December 31, 2013
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
EQUITY
Capital stock - Rp50 par value per Series A
Dwiwarna share and Series B share
Authorized - 1 Series A Dwiwarna share and
399,999,999,999 Series B shares
Issued and fully paid - 1 Series A Dwiwarna
share and 100,799,996,399 Series B shares
Additional paid-in capital
Treasury stock
Difference due restructuring and other
transactions of entities under common
control
Effect of change in equity of
associated companies
Unrealized holding gain on
available-for-sale securities
Translation adjustment
Difference due to acquisition of non-controlling
interests in subsidiaries
Other reserves
Retained earnings
Appropriated
Unappropriated
Net Equity Attributable to Owners of the parent
company
Non-controlling Interests
TOTAL EQUITY
Notes
2013
2012
1c,23
2d,2v,24
2v,25
5,040
2,323
(5,805)
5,040
1,073
(8,067)
2d,24
2f
2u
2f
1d,2d
1d
33
2b,22
-
386
38
391
(508)
49
15,337
43,291
60,542
16,882
77,424
478
386
42
271
(508)
49
15,337
37,440
51,541
15,437
66,978
TOTAL LIABILITIES AND EQUITY
127,951
111,369
The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements
taken as a whole.
3
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Year Ended December 31, 2013
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
Notes
2013
2012
2c,2r,26,37
82,967
77,143
REVENUES
Operations, maintenance and
telecommunication service expenses
Depreciation and amortization
Personnel expenses
Interconnection expenses
General and administrative expenses
Marketing expenses
Loss on foreign exchange - net
Other income
Other expenses
OPERATING PROFIT
Finance income
Finance costs
Share of loss of associated companies
PROFIT BEFORE INCOME TAX
INCOME TAX (EXPENSE) BENEFIT
Current
Deferred
PROFIT FOR THE YEAR
2c,2r,28,37
2k,2l,2m,2r,
11,12,13
2c,2r,2s,15,27,
34,35,36,37
2c,2r,30,37
2c,2g,2h,2r,2t,
6,7,29,37
2r
2q
2r,3,11c
2r,11c
2c,37
2c,2r,37
2f,10
2t,31
(19,332)
(16,803)
(15,780)
(14,456)
(9,733)
(4,927)
(4,155)
(3,044)
(249)
2,579
(480)
27,846
836
(1,504)
(29)
(9,786)
(4,667)
(3,036)
(3,094)
(189)
2,559
(1,973)
25,698
596
(2,055)
(11)
27,149
24,228
(6,995)
136
(6,859)
20,290
120
(8)
112
(6,628)
762
(5,866)
18,362
31
(5)
26
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation
Change in fair value of available-for-sale financial assets
1d,2b,2f
2u
Other Comprehensive Income - net
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
20,402
18,388
Profit for the year attributable to:
Owners of the parent company
Non-controlling interests
Total comprehensive income for the year attributable to:
Owners of the parent company
Non-controlling interests
BASIC AND DILUTED EARNINGS PER SHARE
(in full amount)
Net income per share
Net income per ADS (200 Series B shares per ADS)
2b,22
2b,22
2x,32
14,205
6,085
20,290
14,317
6,085
20,402
12,850
5,512
18,362
12,876
5,512
18,388
147.42
29,483.60
133.84
26,767.60
The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements
taken as a whole.
4
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T
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2013
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
Notes
2013
2012
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from:
Customers
Other operators
Total cash receipts from revenues
Interest income received
Advance receipts from (refund to) customers
Cash receipts others - net
Cash payments for expenses
Cash payments to employees
Payments for income taxes
Payments for interest costs
77,013
4,521
81,534
832
186
216
(27,440)
(9,883)
(7,395)
(1,476)
71,910
3,993
75,903
585
(37)
-
(33,651)
(8,162)
(5,586)
(1,111)
Net cash provided by operating activities
36,574
27,941
CASH FLOWS FROM INVESTING ACTIVITIES
Divestment of investment in subsidiary
Proceeds from sale of property and equipment
Divestment of long-term investment
Proceeds from insurance claims
Proceeds from sale of available-for-sale financial assets
Acquisition of property and equipment
Placement in time deposits
Increase in advances and other non-current assets
Increase in advances for purchases of property and equipment
Acquisition of intangible assets
Acquisition of business, net of acquired cash
Acquisition of long-term investments
Acquisition of non-controlling interests in subsidiaries
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank loans
Proceeds from sale of (payments for) treasury stock
Proceeds from short-term bank loans
Proceeds from promissory notes
Capital contribution of non-controlling interests in subsidiaries
Cash dividends paid to the Company’s stockholders
Repayments of two-step loans and bank loans
Cash dividends paid to non-controlling interests of subsidiaries
Payments of obligations under finance leases
Repayments of promissory notes
Repayments of short-term bank loans
Repayments of medium-term notes
Proceeds from medium-term notes
Net cash used in financing activities
NET INCREASE IN CASH AND CASH EQUIVALENTS
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
ENDING BALANCE OF DISPOSED SUBSIDIARY
CASH AND CASH EQUIVALENTS AT END OF YEAR
3
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5
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12
13
1d,3
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21
25
17
20
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19,21
11
20
17
20
20
4
4
926
466
153
60
49
(19,644)
(2,288)
(791)
(775)
(637)
(201)
(20)
-
-
360
-
1,875
53
(8,221)
(4,008)
(134)
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(437)
(230)
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(33)
(22,702)
(11,311)
2,665
2,368
813
60
50
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(4,803)
(4,690)
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(471)
(407)
(8)
-
3,936
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590
351
120
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(4,259)
(3,607)
(418)
(403)
(654)
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10
(13,327)
(13,314)
545
3,316
1,039
13,118
(6)
168
9,634
-
14,696
13,118
The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements
taken as a whole.
7
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL
a. Establishment and general information
Perusahaan Perseroan (Persero) PT Telekomunikasi
Indonesia Tbk (the “Company”) was
originally part of “Post en Telegraafdienst”, which was established and operated commercially in
1884 under the framework of Decree No. 7 dated March 27, 1884 of the Governor General of the
Dutch Indies and was published in State Gazette No. 52 dated April 3, 1884.
In 1991, the status of the Company was changed into a state-owned limited liability corporation
(“Persero”) based on Government Regulation No. 25/1991. The ultimate parent of the Company
is the Government of the Republic of Indonesia (the “Government”) (Notes 1c and 23).
The Company was established based on notarial deed No. 128 dated September 24, 1991 of
Imas Fatimah, S.H. Its deed of establishment was approved by the Ministry of Justice of the
Republic of
Indonesia in its Decision Letter No. C2-6870.HT.01.01.Th.1991 dated
November 19, 1991 and was published in State Gazette No. 5 dated January 17, 1992,
Supplement No. 210. The Articles of Association has been amended several
times,
the latest amendment of which was about, among others, the change of capital structure through
the Company’s 5-for-1 stock split whereby each share with par value of Rp250 would be split into
Rp50 per share, and the Partnership and Community Development Programme (PKBL) was
excluded from the Work Plan and Company Budgets, based on notarial deed No. 11 dated
May 8, 2013 of Ashoya Ratam, S.H., MKn. The latest amendment was accepted and approved by
the Ministry of Law and Human Rights of the Republic of Indonesia (“MoLHR”) in its Letter
No. AHU-AH.01.10-22500 dated June 7, 2013.
In accordance with Article 3 of the Company’s Articles of Association, the scope of its activities is
to provide telecommunication network and services and informatics, and to optimize the
Company’s resources in accordance with prevailing regulations. To achieve this objective, the
Company is involved in the following activities:
a. Main business:
i. Planning, building, providing, developing, operating, marketing or selling, leasing and
maintaining telecommunications and information networks in accordance with prevailing
regulations.
ii. Planning, developing, providing, marketing or selling and improving telecommunications
and information services in accordance with prevailing regulations.
b. Supporting business:
i. Providing
payment
transactions
and money
transferring
services
through
telecommunications and information networks.
ii. Performing activities and other undertakings in connection with the optimization of the
Company's resources, which, among others, include the utilization of the Company's
property and equipment and moving assets, information systems, education and training,
and repairs and maintenance facilities.
The Company’s head office is located at Jalan Japati No. 1, Bandung, West Java.
The Company was granted several
the
Republic of Indonesia which are valid for an unlimited period of time as long as the Company
complies with prevailing laws and telecommunications regulations and fulfills the obligation stated
in those licenses. For every license, an evaluation is performed annually and an overall
evaluation is performed every 5 (five) years.
telecommunications licenses by the government of
8
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
a. Establishment and general information (continued)
The Company is obliged to submit reports of services annually to the Indonesian Directorate
General of Post and Informatics (“DGPI”), which replaced the previous Indonesian Directorate
General of Post and Telecommunications (“DGPT”). The reports comprise information such as
network development progress, service quality standard achievement, total customers, license
telephone services for public
payment and universal service contribution, while for internet
information required such as operational performance,
purpose (“ITKP”),
customer segmentation, traffic, and gross revenue.
there is additional
Details of these licenses are as follows:
License
License No.
Type of services
License to operate
local, fixed line and
basic telephone
services network
License to operate
fixed domestic
long distance and
basic telephone
services network
License to operate
fixed international
and basic telephone
services network
License to operate
fixed closed
network
License to operate
internet telephone
services for public
purpose
License to operate
as internet service
provider
License to operate
data communication
system services
License to operate
packet switched
based local fixed
line network
License to operate
network access
point
381/KEP/
M.KOMINFO/
10/2010
382/KEP/
M.KOMINFO/
10/2010
Local fixed line and
basic telephone
services network
Fixed domestic long
distance and basic
telephone services
network
Grant date/latest
renewal date
October 28, 2010
October 28, 2010
383/KEP/
M.KOMINFO/
10/2010
Fixed international
and basic telephone
services network
October 28, 2010
398/KEP/
M.KOMINFO/
11/2010
384/KEP/DJPT/
M.KOMINFO/
11/2010
83/KEP/DJPPI/
KOMINFO/
4/2011
169/KEP/DJPPI/
KOMINFO/
6/2011
331/KEP/
M.KOMINFO/
07/2011
331/KEP/
M.KOMINFO/
09/2013
Fixed closed
network
November 12, 2010
ITKP
November 29, 2010
Internet service
provider
April 7, 2011
Data communication
system services
June 6, 2011
Packet switched
based local fixed
line network
Network Access
Point
(“NAP”)
July 27, 2011
September 24, 2013
9
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
b. Company’s Board of Commissioners, Board of Directors, Audit Committee, Corporate
Secretary and employees
1. Boards of Commissioners and Directors
Based on resolutions made at the Annual General Meeting (“AGM”) of Stockholders of the
Company held on May 11, 2012 as covered by notarial deed No. 14 of Ashoya Ratam, S.H.,
MKn. and the AGM of Stockholders of the Company held on May 8, 2013 as covered by
notarial deed No. 11 of Ashoya Ratam, S.H., MKn., the composition of the Company’s
Boards of Commissioners and Directors as of December 31, 2013 and 2012, respectively,
was as follows:
President Commissioner
Commissioner
Commissioner
Commissioner
Independent Commissioner
Independent Commissioner
President Director
Director of Finance
Director of Innovation and
Strategic Portfolio
Director of Enterprise and
Business Service
Director of Wholesale and
International Services
Director of Human Capital
Management
Director of Network, Information
Technology and Solution
Director of Consumer
2013*
2012
Jusman Syafii Djamal
Parikesit Suprapto
Hadiyanto
Gatot Trihargo**
Virano Gazi Nasution
Johnny Swandi Sjam
Arief Yahya
Honesti Basyir
Jusman Syafii Djamal
Parikesit Suprapto
Hadiyanto
-
Virano Gazi Nasution
Johnny Swandi Sjam
Arief Yahya
Honesti Basyir
Indra Utoyo
Indra Utoyo
Muhamad Awaluddin
Muhamad Awaluddin
Ririek Adriansyah
Ririek Adriansyah
Priyantono Rudito
Priyantono Rudito
Rizkan Chandra
Rizkan Chandra
Services
Sukardi Silalahi
Sukardi Silalahi
*
The change of Director’s title is based on Director’s Regulation No.202.11/r.00/HK.200/COP-B0400000/2013 dated June 25,
2013 and Director’s Decree No. SK.2287/PS320/HCC-10/2013 dated June 28, 2013.
** Appointed in the General Meeting of Stockholders held on April 19, 2013
2. Audit Committee and Corporate Secretary
The composition of the Company’s Audit Committee and the Corporate Secretary as of
December 31, 2013 and 2012, were as follows:
Chair
Secretary
Member
Member
Member
Member
Corporate Secretary
2013
2012
Johnny Swandi Sjam
Agus Yulianto
Parikesit Suprapto
-
Sahat Pardede
Virano Gazi Nasution
Honesti Basyir
Johnny Swandi Sjam
Salam
Parikesit Suprapto
Agus Yulianto
Sahat Pardede
Virano Gazi Nasution
Agus Murdiyatno
10
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
b. Company’s Board of Commissioners, Board of Directors, Audit Committee, Corporate
Secretary and employees (continued)
3. Employees
As of December 31, 2013 and 2012, the Company and subsidiaries had 25,011 employees
and 25,683 employees (unaudited), respectively.
c. Public offering of securities of the Company
the Republic of
The Company’s shares prior to its Initial Public Offering (“IPO”) totalled 8,400,000,000, consisting
of 8,399,999,999 Series B shares and 1 Series A Dwiwarna share, and were 100%-owned by the
Government of
Indonesia (the “Government”). On November 14, 1995,
933,333,000 new Series B shares and 233,334,000 Series B shares owned by the Government
were offered to the public through an IPO and listed on the Indonesia Stock Exchange (“IDX”)
the Jakarta Stock Exchange and the Surabaya Stock Exchange) and
(previously
700,000,000 Series B shares owned by the Government were offered to the public and listed on
the New York Stock Exchange (“NYSE”) and the London Stock Exchange (“LSE”), in the form of
American Depositary Shares (“ADS”). There were 35,000,000 ADS and each ADS represented
20 Series B shares at that time.
In December 1996, the Government had a block sale of its 388,000,000 Series B shares, and
in 1997, distributed 2,670,300 Series B shares as incentive to the Company’s stockholders who
did not sell their shares within one year from the date of the IPO. In May 1999, the Government
further sold 898,000,000 Series B shares.
To comply with Law No. 1/1995 on Limited Liability Companies, at the the Annual General
Meeting (“AGM”) of Stockholders of the Company on April 16, 1999, the Company’s stockholders
resolved to increase the Company’s issued share capital by the distribution of 746,666,640 bonus
shares through the capitalization of certain additional paid-in capital, which were made to the
Company’s stockholders in August 1999. On August 16, 2007, Law No. 1/1995 on Limited
Liability Companies was amended by the issuance of Law No. 40/2007 on Limited Liability
Companies which became effective on the same date. Law No. 40/2007 has no effect on the
public offering of shares of the Company. The Company has complied with Law No. 40/2007.
In December 2001,
the Government had another block sale of 1,200,000,000 shares or
11.9% of the total outstanding Series B shares. In July 2002, the Government further sold a block
of 312,000,000 shares or 3.1% of the total outstanding Series B shares.
At the AGM of Stockholders of the Company held on July 30, 2004, the minutes of which are
covered by notarial deed No. 26 of A. Partomuan Pohan, S.H., LLM.,
the Company’s
stockholders approved the Company’s 2-for-1 stock split for Series A Dwiwarna and Series B
share. The Series A Dwiwarna share with par value of Rp500 per share was split into 1 Series A
Dwiwarna share with par value of Rp250 per share and 1 Series B share with par value
of Rp250 per share. The stock split resulted in an increase of the Company’s authorized capital
to
stock
1 Series A Dwiwarna share and 79,999,999,999 Series B shares, and the issued capital stock
from 1 Series A Dwiwarna share and 10,079,999,639 Series B shares to 1 Series A Dwiwarna
share and 20,159,999,279 Series B shares. After the stock split, each ADS represented 40 Series
B shares.
from 1 Series A Dwiwarna share and 39,999,999,999 Series B shares
11
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
1. GENERAL (continued)
c. Public offering of securities of the Company (continued)
During the Extraordinary General Meeting (“EGM”) held on December 21, 2005 and the AGM
held on June 29, 2007, June 20, 2008, and May 19, 2011, the Company’s stockholders approved
phase I, II, III and IV plan, respectively, of the Company’s program to repurchase its issued
Series B shares (Note 25).
During the period December 21, 2005 to June 20, 2007,
the Company had bought back
211,290,500 shares from the public (stock repurchase program phase I). On July 30, 2013, the
Company has sold all such shares (Note 25).
in the AGM held on April 19, 2013 as covered by notarial deed No. 38 of
On April 19, 2013,
Ashoya Ratam, S.H., MKn., dated April 19, 2013 the stockholders approved the changes to the
Company’s plan on the treasury stock acquired under phase III (Notes 23 and 25).
At the AGM held on April 19, 2013, the minutes of which are covered by notarial deed No. 38 of
Ashoya Ratam, S.H, MKn, dated April 19, 2013 the Company’s stockholders approved the
Company’s 5-for-1 stock split for Series A Dwiwarna and Series B shares. Series A Dwiwarna
share with par value of Rp250 per share was split into 1 Series A Dwiwarna share with par value
of Rp50 per share and 4 Series B shares with par value Rp50 per share. The stock split resulted
the Company’s authorized capital stock from 1 Series A Dwiwarna and
in an increase of
79,999,999,999 Series B shares to 1 Series A Dwiwarna and 399,999,999,999 Series B shares,
and the issued capital stock from 1 Series A Dwiwarna and 20,159,999,279 Series B shares to 1
Series A Dwiwarna and 100,799,996,399 Series B shares. After the stock split, each ADS
represented 200 Series B shares (Notes 23 and 25).
As of December 31, 2013, all of the Company’s Series B shares are listed on the IDX and
50,155,649 ADS shares are listed on the NYSE and LSE (Note 23).
As of December 31, 2013, the Company’s outstanding rupiah bonds represents the second
Rupiah bonds issued on June 25, 2010 with a nominal amount of Rp1,005 billion for a five-year
period and Rp1,995 billion for a ten-year period for Series A and Series B, respectively, are listed
on the IDX (Note 20a).
d. Subsidiaries
As of December 31, 2013 and 2012, the Company has consolidated the following directly or
indirectly owned subsidiaries (Notes 2b and 2d):
(i) Direct subsidiaries:
Subsidiary/place of
incorporation
Nature of business/
date of incorporation
or acquisition by
the Company
Date of
start of
commercial
operations
Percentage of
ownership interest
Total assets
before elimination
2013
2012
2013
2012
PT Telekomunikasi
Telecommunication
1995
65
65
73,336
63,576
Selular (“Telkomsel”)
Jakarta, Indonesia
PT Dayamitra
Telekomunikasi
(“Dayamitra”),
Jakarta, Indonesia
provides
telecommunication
facilities and mobile
cellular services
using Global Systems
for Mobile
Communication
(“GSM”) technology/
May 26, 1995
Telecommunication/
May 17, 2001
1995
100
100
7,363
4,931
12
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
d. Subsidiaries (continued)
(i) Direct subsidiaries: (continued)
Subsidiary/place of
incorporation
Nature of business/
date of incorporation
or acquisition by
the Company
Date of
start of
commercial
operations
Percentage of
ownership interest
Total assets
before elimination
2013
2012
2013
2012
PT Multimedia Nusantara
(“Metra”),
Jakarta, Indonesia
Multimedia and line
telecommunication
services/ May 9, 2003
PT Telekomunikasi
Indonesia International
(“TII”),
Jakarta, Indonesia
Telecommunication/
July 31, 2003
PT Pramindo Ikat
Nusantara
(“Pramindo”),
Jakarta, Indonesia
Telecommunication
construction and
services/ August 15,
2002
1998
100
100
5,297
3,395
1995
100
100
3,804
2,440
1995
100
100
1,365
1,202
PT Graha Sarana Duta
Leasing of offices
1982
99.99
99.99
1,574
622
(“GSD”),
Jakarta, Indonesia
and providing building
management and
maintenance services,
civil consultant and
developer/
April 25, 2001
PT Indonusa Telemedia
(“Indonusa”),
Jakarta, Indonesia*
Pay television and
content services/
May 7, 1997
1997
20
(including
0.46%
ownership
through
Metra)
100
(including
0.46%
ownership
through
Metra)
-
771
PT Telkom Akses
Construction
2013
100
100
946
-
(“Telkom Akses”),
Jakarta, Indonesia
service and trade in
the field of
telecommunication/
November 26, 2012
PT Patra Telekomunikasi
Telecomunication
1996
100
Indonesia (“Patrakom”)
Jakarta, Indonesia**
provides fixed line
communication system/
September 28, 1995
PT Napsindo Primatel
Internasional
(“Napsindo”),
Jakarta, Indonesia
Telecommunication -
provides Network
Access Point (NAP),
Voice Over Data
(VOD) and other
related services/
December 29, 1998
1999; ceased
operations on
January 13,
2006
60
40
60
255
218
5
5
On October 8, 2013, the Company disposed 80% of its interest in PT Indonusa (Notes 3 and 9).
*
** On September, 25 and November, 29, 2013, the Company acquired additional interest of 40% and 20%, respectively, of Patrakom
(Note 3).
13
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
d. Subsidiaries (continued)
(ii) Indirect subsidiaries:
Subsidiary/place of
incorporation
Nature of business/
date of incorporation
or acquisition by
the Company
Date of
start of
commercial
operations
Percentage of
ownership interest
Total assets
before elimination
2013
2012
2013
2012
PT Sigma Cipta Caraka
Information technology
1988
100
100
1,890
1,014
(“Sigma”),
Tangerang, Indonesia
PT Infomedia Nusantara
(“Infomedia”),
Jakarta, Indonesia
Telekomunikasi
Indonesia
International (“TL”) S.A.,
Timor Leste
Telekomunikasi
Indonesia
International Pte. Ltd.,
Singapore
service - system
implementation and
integration service,
outsourcing and
software license
maintenance/
May 1,1987
Data and information
service - provides
telecommunication
information services
and other information
services in the form of
print and electronic
media and call
center services/
September 22,1999
Telecommunication/
September 11, 2012
Telecommunication/
December 6, 2007
1984
100
100
1,223
985
2012
100
100
803
75
2008
100
100
785
519
PT Metra Digital Media
Telecommunication
2013
100
(“MDM”),
Jakarta, Indonesia
information services/
January 8, 2013
-
55
60
692
-
493
150
203
112
55
60
100
100
75
60
100
51
75
60
100
51
90
127
86
40
32
51
95
95
33
7
PT Telkom Landmark
Tower (“TLT”),
Jakarta, Indonesia
PT Finnet Indonesia
(“Finnet”), Jakarta,
Indonesia
Telekomunikasi Indonesia
International Ltd.,
Hong Kong
Service for property
development and
management/
February 1, 2012
Banking data and
communication/
October 31, 2005
Telecommunication/
December 8, 2010
2012
2006
2010
PT Administrasi Medika
Health insurance
2010
(“Ad Medika”),
Jakarta, Indonesia
administration services/
February 25, 2010
PT Metra Plasa
(“Metra Plasa”),
Jakarta, Indonesia
Website
services/
April 9, 2012
PT Metra-Net (“Metra-Net”), Multimedia portal
Jakarta, Indonesia
service/ April 17, 2009
PT Graha Yasa Selaras
(“GYS”)
Jakarta, Indonesia
Tourism service/
April 27, 2012
2012
2009
2013
14
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
d. Subsidiaries (continued)
(ii) Indirect subsidiaries: (continued)
Subsidiary/place of
incorporation
Nature of business/
date of incorporation
or acquisition by
the Company
Date of
start of
commercial
operations
Percentage of
ownership interest
Total assets
before elimination
2013
2012
2013
2012
-
-
-
-
65
100
PT Pojok Celebes
Mandiri (“Pointer”)
Jakarta,
Indonesia
Tour agent/bureau
services/
August 30, 2013
Telekomunikasi Indonesia
Internasional Pty Ltd.
Australia
Telecomunication/
January 9, 2013
2008
51
2013
100
PT Satelit Multimedia
Indonesia (“SMI”)
Jakarta, Indonesia
PT Metra Media (“MM”)
Jakarta, Indonesia
Telkomsel Finance B.V.,
(“TFBV”), Amsterdam,
The Netherlands*
Aria West International
Finance B.V.
(“AWI BV”),
The Netherlands**
Telekomunikasi Selular
Finance Limited
(“TSFL”), Mauritius***
PT Metra TV
(“Metra TV”)
Telekomunikasi
Indonesia
International
(USA) Inc.
USA
Commerce and
2013
99.99
providing network
services,
telecommunication
satellite, and
multimedia services/
March 25, 2013
Trade service, construction
2013
99.83
leveransir/supplier,
services, etc./
January 8, 2013
Finance - established
2005
in 2005 for the
purpose of borrowing,
lending and
raising funds
including issuance
of bonds, promissory
notes or debts/
February 7, 2005
Established to engage
in rendering services
in the field of trade
and finance services/
June 3, 1996
1996; ceased
operations on
July 31, 2003
-
-
Finance - established
2002
65
65
to raise funds
for the development of
Telkomsel’s business
through the issuance
of debenture stock,
bonds, mortgages or
any other securities/
April 22, 2002
Pay TV
services/ January 8,
2013
Telecommunication/
December 11,2012
2013
2013
99.83
-
-
100
14
7
6
0
-
-
-
-
-
-
-
-
-
8
0
0
-
-
*
Based on Decision Letter No. 959/2013 dated November 1, 2013 from Amsterdam Court, TFBV was liquidated effective from
August 22, 2013.
** On December 2, 2013, AWI was liquidated.
*** As of December 31, 2013, TSFL was under liquidation process.
*
15
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
d. Subsidiaries (continued)
(a) Metra
On April 2, 2012, based on notarial deed No. 03 dated April 2, 2012 of Utiek R. Abdurachman,
S.H., MLI., MKn., Metra established PT Metra Plasa (“Metra Plasa”) with authorized capital of
Rp50 million and issued and fully paid capital of Rp12.5 million.
On July 20, 2012, based on the Circular Resolution of Stockholders of Metra Plasa, as
covered by notarial deed No. 1 dated October 1, 2012 of Utiek R. Abdurachman, S.H., MLI.,
MKn., Metra Plasa’s stockholders agreed on the following:
i.
ii.
iii.
to increase Metra Plasa’s authorized capital from Rp50 million to Rp60 billion consisting of
6,000,000 shares with nominal value of Rp10,000 (full amount) per share;
to increase its issued and fully paid capital from Rp12.5 million owned 100% by Metra to
Rp15.25 billion by issuing 1,523,750 additional shares with nominal value of Rp10,000
(full amount) per share;
from the issued new shares, 913,750 shares with total nominal value of Rp9 billion were
subscribed by Metra while 610,000 shares with total nominal value of Rp6 billion were
subscribed by eBay International AG at a premium totaling Rp78 billion. Metra’s
ownership was diluted to 60% with the remaining 40% owned by eBay International AG.
On September 21, 2012, based on notarial deed No. 11 dated September 21, 2012 of
N.M. Dipo Nusantara Pua Upa, S.H., MKn., which was approved by the MoLHR in its Letter
No. AHU-50211.AH.01.01/2012 dated September 26, 2012, Metra established a company
with Pelindo II, a related party of the Company, under the name PT Integrasi Logistik Cipta
Solusi (“ILCS”) with Metra obtaining 49% ownership. ILCS is engaged in providing E-trade
logistic services and other related services.
On January 8, 2013, based on notarial deed No. 02 dated January 8, 2013 of Utiek R.
Abdurachman, S.H., MLI., MKn., which was approved by the MoLHR through its Letter
No. AHU-03276.AH.01.01/2013 dated January 29, 2013, Metra established a subsidiary,
PT Metra Media (“MM”), and obtained 99.83% ownership. MM is engaged in providing trade,
construction, advertising and other services.
On January 8, 2013, based on notarial deed No. 03 dated January 8, 2013 of Utiek R.
Abdurachman, SH., MLI., MKn., which was approved by the MoLHR through its Letter
No. AHU-03261.AH.01.01/2013 dated January 29, 2013, Metra established a subsidiary,
PT Metra TV (“Metra TV”), and obtained 99.83% ownership. Metra TV is engaged in providing
subscription-broadcasting services.
On January 22, 2013, based on notarial deed No. 28 dated January 22, 2013 of N.M. Dipo
Nusantara Pua Upa, S.H., MKn., which was approved by the MoLHR through its Letter
No. AHU-03084.AH.01.01/2013 dated January 28, 2013; Metra established a subsidiary,
PT Metra Digital Media (“MDM”), and obtained 99.83% ownership. MDM is engaged in
providing telecommunication information and other services.
16
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
d. Subsidiaries (continued)
(a) Metra (continued)
On March 25, 2013, based on notarial deed No. 38 dated March 25, 2013 of N.M. Dipo
Nusantara Pua Upa, S.H., MKn., which was approved by the MoLHR in its Letter
No. AHU-20566.AH.01.01/2013 dated April 17, 2013, Metra established PT Satelit Multimedia
is engaged in commerce and
Indonesia (“SMI”) and obtained 99.99% ownership. SMI
providing network services, telecommunication, satellite, and multimedia devices.
On August 16, 2013, based on notarial deed No. 5 dated August 16, 2013 of
N.M. Dipo Nusantara Pua Upa, S.H., MKn. which was approved by the MoLHR in its Letter
No. AHU-0081886.AH.01.09/2013 dated August 30, 2013, Metra changed the ownership of
PT Pojok Celebes Mandiri (“Pointer”) after the signing of Sales and Purchase of Shares
Agreement dated June 12, 2013 regarding the purchase of Pointer’s shares of 2,550 shares
equivalent to Rp255 million or 51% ownership.
(b) TII
Based on the Circular Resolution of Stockholders of TII dated September 11, 2012, as
covered by notarial deed No. 04 dated October 4, 2012 of Siti Safarijah, S.H., TII’s
stockholders agreed to establish a subsidiary in Timor Leste under the name Telekomunikasi
Indonesia International (“TL”) S.A. to engage in providing telecommunication services.
On January 9, 2013, based on the Circular Resolution of the Stockholders of TII dated
January 9, 2013, as covered by notarial deed No. 04 dated February 6, 2013 of Siti Safarijah,
S.H., TII’s stockholders agreed to establish a subsidiary, Telekomunikasi
Indonesia
Internasional Australia Pty. Ltd. (“Telkom Australia”). Telkom Australia is engaged in providing
telecommunication services and IT-based services.
Indonesia International (Hong Kong) Ltd.
On May 13, 2013, TII
established a subsidiary in Macau under the name Telkom Macau Ltd, (“Telkom Macau”).
Telkom Macau is engaged in providing telecommunication services.
through Telekomunikasi
Indonesia International (Hong Kong) Ltd.
On June 3, 2013, TII
established a subsidiary in Taiwan under the name Telkom Macau Ltd, (“Telkom Taiwan”).
Telkom Taiwan is engaged in providing telecommunication services.
through Telekomunikasi
On December 11, 2013, TII established a subsidiary in the United States of America,
Telekomunikasi Indonesia International (USA), Inc. Ltd. (“Telkom USA”). Telkom USA will be
engaged in providing telecommunication services. For the year ended December 31, 2013,
Telkom USA had no financial and operational activities yet.
(c) GSD
Based on notarial deed No.71 dated December 27, 2011 of Kartono, S.H. which was
approved by the MoLHR through its Decision Letter No. AHU-05281.AH.01.01/2012 dated
February 1, 2012, GSD established a subsidiary under the name PT Telkom Landmark Tower
the Company, with GSD
(“TLT”), with Yayasan Kesehatan (“Yakes”), a related party of
obtaining 55% ownership. TLT is engaged in property development and management.
Based on notarial deed No.48 dated February 7, 2012 of Sri Ahyani, S.H. which was
approved by the MoLHR in its Letter No. AHU-22272.AH.01.01/2012 dated April 27, 2012,
GSD established a subsidiary under the name PT Graha Yasa Selaras (“GYS”), with Yakes, a
related party of the Company, with GSD obtaining 51% ownership. GYS is engaged in the
tourism business.
17
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
d. Subsidiaries (continued)
(d) Telkom Akses
On November 26, 2012, based on notarial deed No. 20 dated November 26, 2012 of Siti
Safarijah, S.H. which was approved by
the MoLHR in its Letter No. AHU-
60691.AH.01.01/2012 dated November 28, 2012, the Company established a wholly owned
subsidiary, PT Telkom Akses (“Telkom Akses”). Telkom Akses is engaged in providing
construction service and trade in the field of telecommunication.
(e) Sigma
On June 29, 2012, based on notarial deed No. 3 dated August 13, 2012 of Utiek R.
Abdurachman, S.H., MLI, MKn., Sigma entered into a Sales Purchase Agreement to purchase
150,000 shares of PT Sigma Solusi Integrasi (“SSI”) or the equivalent of 30% of SSI’s total
ownership, with a transaction value of Rp26 billion from Marina Budiman, a non-controlling
interest. On July 19, 2012, Sigma settled the transaction.The difference between the
acquisition cost and the carrying amount of the interest acquired amounting to Rp22 billion is
recorded as part of “Difference due to acquisition of non-controlling interests in subsidiaries”
which is presented under the equity section of the consolidated statement of financial position.
On August 15, 2012, based on notarial deed dated August 15, 2012 of Ny. Bomantari
Julianto, S.H., Sigma entered into a Conditional Sales Purchase Agreement with
PT Bina Data Mandiri (“BDM”) to purchase a Data Center Business, with a transaction value
of Rp230 billion, from BDM. Based on the closing agreement dated November 30, 2012, the
identifiable assets arising from the acquisition comprised of land, buildings, machine and
equipment with total
fair value amounting to Rp150 billion and intangible assets which
included customer contracts and backlog with fair value amounting to Rp3 billion. The
acquisition resulted in a goodwill amounting to Rp77 billion.
On September 17, 2012, based on notarial deed No. 10 dated September 17, 2012 of Utiek
R. Abdurachman, SH., MLI., MKn., Sigma’s stockholders agreed to liquidated its subsidiary,
PT Sigma Karya Sempurna (“SKS”), effective from September 17, 2012. The liquidation
constituted a process of internal restructuring of Sigma Group’s business. As of the issuance
date of the consolidated financial statements, the liquidation process has been carried out to
the extent of sales of assets and liabilities settlement.
On January 17, 2013, Sigma signed a shares sale and transfer and loan assignment
agreement with Landes kredit bank Baden-Wuttemberg-Forderbank (“L-Bank”), and Step
Stuttgarter Engineering Park Gmbh.
(“STEP”) as stockholders of PT German Center
Indonesia (“GCI”). Based on the agreement, Sigma agreed to buy all the shares of GCI owned
loan at a purchase price of
by L-Bank and STEP and take over L-Bank’s stockholders’
US$17.8 million (equivalent to Rp170 billion). The closing of this transaction was held on April
30, 2013 (Note 3a).
18
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
d. Subsidiaries (continued)
(f)
Infomedia
On October 24, 2012 based on notarial deed No. 15 dated October 24, 2012 of Zulkifli
Harahap, S.H., which was approved by the MoLHR through its Decision Letter No. AHU-
Infomedia established a wholly owned
55715.AH.01.01/2012 dated October 30, 2012,
subsidiary under the name PT Infomedia Solusi Humanika (“ISH”). ISH is engaged in the
services for distribution and supply of labor.
On December 17, 2012, based on notarial deed No. 231 dated December 17, 2012 of M.
Kholid Artha, SH., Infomedia purchased 1,778 and 1,777 shares of Balebat, a subsidiary of
Infomedia, or the equivalent of 15.73% and 15.73%, respectively, of Balebat’s total ownership,
with a transaction value of Rp4.4 billion and Rp4.4 billion, respectively, from Zikra Lukman
and Siti Chadijah, respectively, who are the non-controlling interests. The difference between
the purchase price and the carrying amount of the interests acquired amounting to Rp1 billion
is recorded as part of “Difference due to acquisition of non-controlling interests in subsidiaries”
which is presented under the equity section of
financial
position.
the consolidated statements of
Based on notarial deed No. 04 dated March 7, 2013 of Sjaaf De Carya Siregar, S.H.,
Infomedia’s stockholders agreed to distribute dividend which was returned as the increment of
issued and fully paid capital amounting to Rp44 billion.
Based on notarial deed No. 18 dated July 24, 2013 of Zulkifli Harahap, S.H., Infomedia’s
stockholders approved an increase in its paid-in capital by 88,529,790 shares, amounting to
Rp44 billion.
On November 20, 2013, Infomedia had an agreement on business transfer of its Telephone
Directory Management business to MD Media.
(g) Dayamitra
On April 5, 2013, based on notarial deed No.002 dated April 5, 2013 of Andi Fatma Hasiah,
S.H.,M.Kn., Dayamitra’s stockholders agreed to distribute dividend which was returned as
increment of issued and fully paid capital amounting to Rp31 billion.
e. Authorization for the issuance of the consolidated financial statements
The consolidated financial statements were prepared and approved to be issued by the Board of
Directors on February 28, 2014.
19
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements of
the Company and subsidiaries have been prepared in
accordance with Financial Accounting Standards (“Standar Akuntansi Keuangan” or “SAK”) including
Indonesian Financial Accounting Standards (“Pernyataan Standar Akuntansi Keuangan” or “PSAK”)
and Interpretation of Financial Accounting Standards (“Interpretasi Standar Akuntansi Keuangan” or
“ISAK”) in Indonesia published by Financial Accounting Standard Board of Indonesian Institute of
Accountants and Regulation No. VIII.G.7 of the Capital Market and Financial Institution Supervisory
Agency (“Bapepam-LK”) regarding the Presentation and Disclosures of Financial Statements of
Issuers or Public Companies, enclosed in the decision letter KEP- 347/BL/2012.
a. Basis of preparation of financial statements
The consolidated financial statements, except for the consolidated statements of cash flows, are
prepared on the accrual basis. The measurement basis used is historical cost, except for certain
accounts, which are measured using the basis mentioned in the relevant notes herein.
The consolidated statements of cash flows are prepared using the direct method and present the
changes in cash and cash equivalents from operating, investing and financing activities.
Figures in the consolidated financial statements are presented and rounded to billions of
Indonesian rupiah (“Rp”), unless otherwise stated.
Changes to the statements of financial accounting standards (PSAKs) and interpretations
financial accounting standards (“Interpretasi Standar Akuntansi
of statements of
Keuangan” or “ISAKs”)
On January 1, 2013, the Company and subsidiaries adopted new and revised PSAKs, which were
effective in 2013. Changes to the Company and subsidiaries’ accounting policies have been made
as required in accordance with the transitional provisions in the respective standards and
interpretations.
The adoption of these new/revised standards and interpretations had no material effect to the
consolidated financial statements:
•
•
PSAK 38 (Revised 2012), “Common Control Business Combination”
PSAK 60 (Revised 2010), “Financial Instruments: Disclosures”
Several PSAKs and ISAKs have been issued by the Indonesian Financial Accounting Standards
Board (DSAK) that are considered relevant to the financial reporting of the Company and its
financial statements covering the periods beginning on or
subsidiaries but are effective only for
after either January 1, 2014 or January 1, 2015
Effective beginning on or after January 1, 2014
•
•
ISAK 27, “Transfer of Assets from Customers”, adopted from International Financial Reporting
Interpretations Committee (“IFRIC”) 18
ISAK 28, “Extinguishing Financial Liabilities with Equity Instruments”, adopted from IFRIC 19
Effective beginning on or after January 1, 2015
•
•
•
•
•
•
•
•
“Presentation of Financial Statements”, adopted from International
PSAK 1 (2013),
Accounting Standards (IAS) 1
PSAK 4 (2013), “Separate Financial Statements”, adopted from IAS 4
PSAK 15 (2013), “Investments in Associates and Joint Ventures”, adopted from IAS 28
PSAK 24 (2013), “Employee Benefits”, adopted from IAS 19
PSAK 65,
Reporting Standards (IFRS) 10
PSAK 66, “Joint Arrangements”, adopted from IFRS 11
PSAK 67, “Disclosure of Interest in Other Entities”, adopted from IFRS 12
PSAK 68, “Fair Value Measurement”, adopted from IFRS 13
“Consolidated Financial Statements”, adopted from International Financial
The Company is currently evaluating and has not yet determined the effects of these accounting
standards and intrepretations on the consolidated financial statements.
20
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
b. Principles of consolidation
The consolidated financial statements include the assets and liabilities of the Company and
subsidiaries in which the Company, directly or indirectly has ownership of more than half of the
voting power and has the ability to govern the financial and operating policies of the entity unless,
in exceptional circumstances,
it can be clearly demonstrated that such ownership does not
constitute control, or the Company has the ability to control the entity, even though the ownership
is less than or equal to half of the voting power. Subsidiaries are consolidated from the date on
which effective control is obtained and are no longer consolidated from the date control ceases.
the profit and loss and net assets of
the
Non-controlling interest represents the portion of
subsidiaries not attributable, directly or indirectly,
to the Company. Profit or loss and each
component of other comprehensive income are attributed to the owners of the Company and to
the non-controlling interests proportionally in accordance with their ownership in the subsidiaries.
Non-controlling interests are presented under the equity section of the consolidated statement of
financial position, separately from the owners of
In the consolidated
statement of compherensive income, total profit or loss and total comprehensive income that can
be attributed to the owners of the Company and to the non-controlling interests are presented
separately, and not presented as income or expense.
the Company’s equity.
Intercompany balances and transactions have been eliminated in the consolidated financial
statements.
c. Transactions with related parties
The Company and subsidiaries have transactions with related parties. The definition of related
parties used is in accordance with the Bapepam-LK’s Regulation No. VIII.G.7 regarding the
Presentations and Disclosures of Financial Statements of Issuers or Public companies, enclosed
in the decision letter No. KEP-347/BL/2012.The party which is considered as a related party is a
person or entity that is related to the entity that is preparing its financial statements.
Under the Regulation of Bapepam-LK No.VIII.G.7 regarding the Presentations and Disclosures of
Financial Statements of Issuers or Public companies, enclosed in the decision letter No.KEP-
347/BL/2012, a government-related entity is an entity that
jointly controlled or
significantly influenced by a government. Government in this context is the Minister of Finance or
the Local Government, as the shareholder of the entity. Formerly, the Company and subsidiaries
in its disclosure applied the definition of related party used based on PSAK 7 “Related Party”.
is controlled,
Key management personnel are identified as the persons having authority and responsibility for
planning, directing and controlling the activities of the entity, directly or indirectly, including any
director (whether executive or otherwise) of the Company and subsidiaries. The related-party
status extends to the key management of the subsidiaries to the extent they direct the operations
of subsidiaries with minimal involvement from the Company’s management.
d. Business combinations
Business combination is accounted for using the acquisition method. The consideration
transferred is measured at fair value, which is the aggregate of the fair value of the assets
transferred, liabilities incurred or assumed and the equity instruments issued in exchange for
the acquiree. Acquisition-related costs are expensed as incurred. The acquiree’s
control of
identifiable assets and liabilities are recognized at their fair values at the acquisition date.
Goodwill arising on acquisition is recognized as an asset and measured at cost representing the
excess of the aggregate of the consideration transferred and the amount of any non-controlling
interests in the acquiree’s net identifiable assets acquired and liabilities assumed. For each
business combination, non-controlling interest is measured at fair value or at the proportionate
share of the acquiree’s identifiable net assets. The choice of measurement basis is made on a
transaction-by-transaction basis.
21
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
d. Business combinations (continued)
The excess of the fair value of identifiable assets acquired and the liabilities assumed at the date
of acquisition over the aggregate fair value of consideration transferred and non-controlling
interest in the acquiree at the acquisition date is a bargain purchase and recognized as gain in
profit or loss at the acquisition date. Such gain is attributed to the acquirer.
When the determination of consideration from a business combination includes contingent
consideration, it is measured at its fair value on acquisition date. Contingent consideration is
classified either as equity or a financial
liability are
subsequently remeasured to fair value with changes in fair value recognized in profit or loss when
adjustments are recorded outside the measurement period. Changes in the fair value of the
contingent consideration that qualify as measurement-period adjustments are adjusted
retrospectively, with corresponding adjustments made against goodwill. Measurement-period
information obtained during the
adjustments are adjustments that arise from additional
measurement period, which cannot exceed one year from the acquisition date, about facts and
circumstances that existed at the acquisition date.
liability. Amounts classified as a financial
In case of loss of control over a subsidiary, the Company:
•
derecognizes the assets (including goodwill) and liabilities of the subsidiary at the carrying
amounts when its loses of control;
derecognizes the carrying amounts of any non-controling interests of its former subsidiary on
the date when it loses control;
recognizes the fair value of the consideration received (if any) from the transaction, events, or
condition that caused the loss of control;
recognizes the fair value of any investment retained in the subsidiary at fair value on the date
of loss of control;
recognizes any surplus or deficit in profit or loss that is attributable to the Company.
•
•
•
•
In a business combination achieved in stages, the acquirer remeasures its previously held equity
interest in the acquiree at its acquisition-date fair value and recognizes the resulting gain or loss, if
any, in profit or loss.
Based on PSAK 38 (Revised 2012), “Common Control Business Combination”, the transfer of
assets, liabilities, shares or other ownership instruments among the companies under common
control would not result in a gain or loss. Since the restructuring transaction between entities
under common control does not result in a change of the economic substance of the ownership of
assets, liabilities, shares or other instruments of ownership, which are exchanged, assets or
liabilities transferred are recorded at book value using the pooling-of-interests method. In applying
the pooling-of-interests method, the components of the financial statements for the period during
which the restructuring occurred must be presented in such a manner as if the restructuring has
occurred since the beginning of the earliest period presented. The excess of consideration paid or
received over the carrying value of interest acquired, net of income tax, is directly recognized to
equity and presented as “Additional Paid-in Capital” under the equity section of the consolidated
statement of financial position.
At the initial application of PSAK 38 (Revised 2012), all balances of the Difference In Value of
Restructuring Transactions of Entities under Common Control was reclassified to “Additional Paid-
in Capital” in the consolidated statement of financial position.
22
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
e. Cash and cash equivalents
Cash and cash equivalents comprises cash on hand and in banks and all unrestricted time
deposits with an original maturity of three months or less at the time of placement.
Time deposits with maturities of more than three months but not more than one year are
presented as other current financial assets.
f.
Investments in associated companies
Investments in companies where the Company and subsidiaries have 20% to 50% of the voting
rights, and through which the Company and subsidiaries exert significant
influence, but not
control, over the financial and operating policies are accounted for using the equity method. Under
this method, the Company and subsidiaries recognize their proportionate share in the income or
loss of the associated companies from the date that significant influence commences until the date
that significant influence ceases. When the Company and subsidiaries’ share of loss exceeds the
carrying amount of the investments in associated companies, the carrying amount is reduced to nil
and recognition of further losses is discontinued except to the extent that the Company and
subsidiaries have incurred legal or constructive obligations or made payments on behalf of the
associated companies.
Investment in a joint venture is accounted for using the equity method whereby the participation in
a joint venture is initially recorded at cost and subsequently adjusted for changes that occur after
the acquisition in the share of the venturer of the joint venture’s net assets.
The Company and subsidiaries determine at each reporting date whether there is any objective
evidence that the investments in the associated companies are impaired. If there is, the Company
and subsidiaries calculate and recognize the amount of impairment as the difference between the
recoverable amount of the investments in associated companies and their carrying value.
These assets are included in long-term investment in the consolidated statement of financial
position.
The functional currency of PT Pasifik Satelit Nusantara (“PSN”) and PT Citra Sari Makmur
(“CSM”) is the United States dollar (“U.S. dollars”) and the functional currency of Scicom (MSC)
Berhad (“Scicom”) and Telin Malaysia is the Malaysian ringgit (“MYR”). For the purpose of
reporting these investments using the equity method, the assets and liabilities of these companies
as of the statement of financial position date are translated into Indonesian rupiah using the rate of
exchange prevailing at that date, while revenues and expenses are translated into Indonesian
rupiah at the average rates of exchange for the year. The resulting translation adjustments are
reported as part of translation adjustment in the equity section of the consolidated statement of
financial position.
g. Trade and other receivables
Trade and other receivables are recognized initially at fair value and subsequently measured at
amortized cost, less provision for impairment. This provision for impairment is made based on
management’s evaluation of the collectibility of outstanding amounts. Receivables are written off
in the year during which they are determined to be uncollectible.
h.
Inventories
Inventories consist of components, which are subsequently expensed or transferred to property
and equipment upon use. Components represent telephone terminals, cables, and other spare
parts. Inventories also include Subscriber Identification Module (“SIM”) cards, Removable User
Identity Module (“RUIM”) cards, handsets, set top box, wireless broadband modems, and blank
prepaid vouchers, which are expensed upon sale.
23
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
h.
Inventories (continued)
The costs of inventories comprise of the purchase price, import duties, other taxes, transport,
handling, and other costs directly attributable to their acquisition. Inventories are recognized at the
lower of cost and net realizable value. Net realizable value is the estimate of selling price less the
costs to sell.
Cost is determined using the weighted average method for components, SIM cards, RUIM cards,
handsets, set top box, wireless broadband modem, and blank prepaid voucher.
The amounts of any write-down of inventories below cost to net realizable value and all losses of
inventories are recognized as expense in the period in which the write-down or loss occurs. The
amount of any reversal of any write-down of inventories, arising from an increase in net realizable
value, is recognized as a reduction in the amount of general and administrative expenses in the
year in which the reversal occurs.
Provision for obsolescence is primarily based on the estimated forecast of future usage of these
items.
i. Prepaid expenses
Prepaid expenses are amortized over their future beneficial periods using the straight-line method.
j. Assets held for sale
Assets (or disposal groups) are classified as held for sale when their carrying amount is to be
recovered principally through a sale transaction rather than through continuing use and a sale is
considered highly probable. They are stated at the lower of carrying amount and fair value less
costs to sell.
Assets that meet the criteria to be classified as held for sale are reclassified from property and
equipment and depreciation on such assets is ceased.
k.
Intangible assets
Intangible assets consist of goodwill arising from business acquisitions, license and software.
Intangible assets are recognized if it is probable that the expected future economic benefits that
are attributable to each asset will flow to the Company or subsidiaries, and the cost of the asset
can be reliably measured.
if any.
Intangible assets are stated at cost
Intangible assets are amortized over their useful lives. The Company and subsidiaries estimate
the recoverable value of their intangible assets. When the carrying amount of an asset exceeds its
estimated recoverable amount, the asset is written down to its estimated recoverable amount.
less accumulated amortization and impairment,
Intangible assets are amortized using the straight-line method, based on the estimated useful lives
of the assets as follows:
Software
License
Other intangible assets
Years
3-20
3-20
1-30
Intangible assets are derecognized when no further economic benefits are expected, either from
further use or from disposal. The difference between the carrying amount and the net proceeds
received from disposal is recognized in the consolidated statement of comprehensive income.
24
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
l. Property and equipment - direct acquisitions
Property and equipment directly acquired are stated at cost less accumulated depreciation and
impairment losses.
The cost of an item of property and equipment includes: (a) purchase price, (b) any costs directly
attributable to bringing the asset to its location and condition and (c) the initial estimate of the
costs of dismantling and removing the item and restoring the site on which it is located. Each part
of an item of property and equipment with a cost that is significant in relation to the total cost of the
item is depreciated separately.
Property and equipment, except land rights, are depreciated using the straight-line method based
on the estimated useful lives of the assets as follows:
Buildings
Leasehold improvements
Switching equipment
Telegraph, telex and data communication equipment
Transmission installation and equipment
Satellite, earth station and equipment
Cable network
Power supply
Data processing equipment
Other telecommunications peripherals
Office equipment
Vehicles
Asset Customer Premise Equipment (“CPE”)
Other equipment
Years
15-40
2-15
3-15
5-15
3-25
3-20
5-25
3-20
3-20
5
2-5
4-8
10
2-5
The depreciation method, useful life and residual value of an asset are reviewed at least at each
financial year-end and adjusted, if appropriate. The residual value of an asset is the estimated
amount that the Company and subsidiaries would currently obtain from disposal of the asset, after
deducting the estimated costs of disposal, if the asset were already of the age and in the condition
expected at the end of its useful life.
The Company and subsidiaries periodically evaluate their property and equipment for impairment,
whenever events and circumstances indicate that the carrying amount of the assets may not be
recoverable. When the carrying amount of an asset exceeds its estimated recoverable amount,
the asset is written down to its estimated recoverable amount, which is determined based on the
higher of its fair value less cost to sell or value-in-use.
Property and equipment acquired in exchange for a non-monetary asset or for a combination of
monetary and non-monetary assets are measured at fair value unless (i) the exchange transaction
lacks commercial substance; or (ii) the fair value of neither the asset received nor the asset given
up is reliably measurable.
Major spare parts and standby equipment that are expected to be used for more than 12 months
are recorded as part of property and equipment.
When assets are retired or otherwise disposed of,
their cost and the related accumulated
depreciation are derecognized from the consolidated statements of financial position, and the
resulting gains or losses on the disposal or sale of the property and equipment are recognized in
the consolidated statement of comprehensive income.
25
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
l. Property and equipment - direct acquisitions (continued)
Certain computer hardware can not be used without the availability of certain computer software.
In such circumstance, the computer software is recorded as part of the computer hardware. If the
computer software is independent from its computer hardware, it is recorded as part of intangible
assets.
The cost of maintenance and repairs is charged to the consolidated statements of comprehensive
income as incurred. Significant renewals and betterments are capitalized.
Property under construction is stated at cost until construction is completed, at which time it is
reclassified to the specific property and equipment account
to which it relates. During the
construction period until the property is ready for its intended use or sale, borrowing costs, which
include interest expense and foreign currency exchange differences incurred on loans obtained to
finance the construction of the asset, as long as it meets the definition of a qualifying asset, are
capitalized in proportion to the average amount of accumulated expenditures during the period.
Capitalization of borrowing cost ceases when the construction is completed and the asset is ready
for its intended use.
Equipment
depreciated over its estimated useful life using the straight-line method.
temporarily unused is reclassified to equipment not used in operations and
m. Leases
In determining whether an arrangement is, or contains a lease, the Company and subsidiaries
perform an evaluation over the substance of the arrangement. A lease is classified as a finance
lease or operating lease based on the substance, not the form, of the contract. Finance lease is
recognized if the lease transfers substantially all the risks and rewards incidental to the ownership
of the leased asset.
Assets and liabilities under a finance lease are recognized in the consolidated statement of
financial position at amounts equal to the fair value of the leased assets or, if lower, the present
value of the minimum lease payments. Any initial direct costs of the Company and subsidiaries
are added to the amount recognized as assets.
Minimum lease payments are apportioned between the finance charge and the reduction of the
outstanding liability. The finance charge is allocated to each period during the lease term so as to
produce a constant periodic rate of interest on the remaining balance of the liability. Contingent
rents are charged as expenses in the year in which they are incurred.
lives as
Leased assets are depreciated using the same method and based on the useful
estimated for directly acquired property and equipment. However,
there is no reasonable
certainty that the Company and subsidiaries will obtain ownership by the end of the lease term,
the leased assets are fully depreciated over the shorter of the lease term and their economic
useful lives.
if
Lease arrangements that do not meet the above criteria are accounted for as operating leases for
which payments are charged as an expense on the straight-line basis over the lease period.
n. Deferred charges - land rights
The Company and subsidiaries have implemented ISAK 25, “Land Rights”, which was effective
starting on January 1, 2012. Based on ISAK 25, costs incurred to process the initial legal land
rights are recognized as part of the property and equipment and are not amortized. Costs incurred
to process the extension or renewal of legal
land rights are deferred and amortized over the
shorter of the term of the land rights or the economic life of the land.
26
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
o. Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the
ordinary course of business from suppliers. Trade payables are classified as current liabilities if
payment is due within one year or less (or in the normal operating cycle of the business, if this
period is longer). If not, they are presented as non-current liabilities.
Trade payables are recognized initially at fair value and subsequently measured at amortized cost
using the effective interest rate method.
p. Borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are
subsequently carried at amortized cost; any difference between the proceeds (net of transaction
costs) and the redemption value is recognized in the consolidated statement of comprehensive
income over the period of the borrowings using the effective interest method.
Fees paid on obtaining loan facilities are recognized as transaction costs of the loan to the extent
that it is probable that some or all of the facilities will be drawn down. In this case, the fee is
deferred until the drawdown occurs. To the extent there is no evidence that it is probable that
some or all of the facilities will be drawn down, the fee is capitalized as a pre-payment for liquidity
services and amortized over the period of the facilities to which it relates.
q. Foreign currency translations
The functional currency and the recording currency of the Company and subsidiaries are both the
Indonesian rupiah, except for the functional currency of Telekomunikasi Indonesia International
Pte. Ltd., Hong Kong, Telekomunikasi
Indonesia International Pte., Singapore, and
Indonesia International S.A., Timor Leste whose accounting records are
Telekomunikasi
maintained in U.S. dollars. Transactions in foreign currencies are translated into Indonesian rupiah
at the rates of exchange prevailing at transaction date. At the consolidated statement of financial
position date, monetary assets and liabilities denominated in foreign currencies are translated into
Indonesian rupiah based on the buy and sell
the
consolidated statement of financial position date, as follows:
rates quoted by Reuters prevailing at
2013
2012
Buy
Sell
Buy
Sell
United States dollar (“US$”) 1
Euro 1
Yen 1
12,160
16,744
115.67
12,180
16,774
115.87
9,630
12,721
111.65
9,645
12,743
111.84
The resulting foreign exchange gains or losses, realized and unrealized, are credited or charged
to the consolidated statement of comprehensive income of the current year, except for foreign
exchange differences incurred on borrowings during the construction of qualifying assets which
are capitalized to the extent that the borrowings can be attributed to the construction of those
qualifying assets (Note 2l).
27
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
r. Revenue and expense recognition
i.
Fixed line telephone revenues
Revenues from fixed line installations,
including incremental costs, are deferred and
recognized as revenue and costs over the expected term of the customer relationships. Based
on reviews of historical
the Company determined the
expected term of the customer relationships in 2013 and 2012 to be 18 years and 10 years,
respectively. Revenues from usage charges are recognized as customers incur the charges.
Monthly subscription charges are recognized as revenues when incurred by subscribers.
information and customer trends,
ii. Cellular and fixed wireless telephone revenues
Revenues from postpaid service, which consist of usage and monthly charges, are recognized
as follows:
•
Airtime and charges for value added services are recognized based on usage by
subscribers.
• Monthly subscription charges are recognized as revenues when incurred by subscribers.
Revenues from prepaid card subscribers, which consist of
the sale of starter packs
(also known as SIM cards in the case of cellular and RUIM in the case of fixed wireless
telephone and start-up load vouchers) and pulse reload vouchers, are recognized as follows:
•
•
Sales of SIM and RUIM cards are recognized as revenue upon delivery of the starter
packs to distributors, dealers or directly to customers.
Sales of pulse reload vouchers (either bundled in starter packs or sold as separate items)
are recognized initially as unearned income and recognized proportionately as usage
revenue based on duration and total of successful calls made and the value added
services used by the subscribers or the expiration of the unused stored value of the
voucher.
• Unutilized promotional credits are netted against unearned income.
iii.
Interconnection revenues
The revenues from network interconnection with other domestic and international
telecommunications carriers are recognized monthly on the basis of the actual recorded traffic
for the month. Interconnection revenues consist of revenues derived from other operators’
subscriber calls to the Company and subsidiaries’ subscribers (incoming) and calls between
subscribers of other operators through the Company and subsidiaries’ network (transit).
iv. Data, internet and information technology service revenues
Revenues from data communication and internet are recognized based on service activity and
performance which are measured by the duration of internet usage or based on the fixed
amount of charges depending on the arrangements with customers.
Revenues from sales, installation and implementation of computer software and hardware,
computer data network installation service and installation are recognized when the goods are
delivered to customers or the installation takes place.
Revenue from computer software development service is recognized using the percentage-of-
completion method.
28
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
r. Revenue and expense recognition (continued)
v. Revenues from network
Revenues from network consist of revenues from leased lines and satellite transponder
leases which are recognized over the period in which the services are rendered.
vi. Other telecommunications service revenues
Revenues from other telecommunications services consist of Revenue-Sharing Arrangements
(“RSA”) and sales of other telecommunication services or goods.
leases where the property and
The RSA are recorded in a manner similar to capital
equipment and obligation under RSA are reflected in the consolidated statement of financial
position. All revenues generated from the RSA are recorded as a component of revenues,
while a portion of the investors’ share of the revenues from the RSA is recorded as finance
costs with the balance treated as a reduction of the obligation under RSA.
Universal Service Obligation (“USO”) compensation from construction activities to design,
build and finance assets for the grantor is recognized on the stage of completion basis.
Revenues from operating and maintenance activities in respect of
the assets under the
concession are recognized when the services are rendered.
In concession contract under USO, the Company and subsidiaries have contractual rights to
receive considerations from the grantor. The Company and subsidiaries recognize a financial
asset in their consolidated statement of financial position, in consideration for the services
they provide (designing, building, operation or maintenance of assets under concession).
Such financial assets are recognized in the consolidated statement of financial position as
Accounts Receivable, for the amount of fair value of the infrastructure on initial recognition
and subsequently at amortized cost. The receivable is settled by means of the grantor’s
payments received. The financial income calculated on the basis of the effective interest rate
is recognized as finance income.
Revenues from sales of other telecommunication services or goods are recognized upon
completion of services and or delivery of goods to customers.
vii. Multiple-element arrangements
Where two or more revenue-generating activities or deliverables are sold under a single
arrangement, each deliverable that is considered to be a separate unit of accounting is
accounted for separately. The total revenue is allocated to each separately identifiable
component based on the relative fair value of each component and the appropriate revenue
recognition criteria are applied to each component as described above.
viii. Agency relationship
Revenues from an agency relationship are recorded based on the gross amount billed to the
customers when the Company and subsidiaries act as principal
in the sale of goods and
services. Revenues are recorded based on the net amount retained (the amount paid by the
the Company and
customer less amount paid to the suppliers) because in substance,
subsidiaries act as agents and earned commission from the suppliers of the goods and
services sold.
29
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
r. Revenue and expense recognition (continued)
ix. Customer loyalty programme
The Company and subsidiaries operate a loyalty point programme, which allows customers to
accumulate points for every certain multiple of the usage of telecommunication services. The
points can then be redeemed in the future for free or discounted products, provided other
qualifying conditions are achieved.
Consideration received is allocated between the telecommunication services and the points
issued, with the consideration allocated to the points equal to their fair value. Fair value of the
points is determined based on historical information about redemption rate of award points,
Fair value of the points issued is deferred and recognized as revenue when the points are
redeemed or expired.
x. Service concession arrangements
The Company and subsidiaries have implemented ISAK 16,” Service Concession
Arrangements”, which is effective starting on January 1, 2012. Based on ISAK 16, revenues
relating to construction or upgrade services under a service concession arrangement are
recognized based on the stage of completion of the work performed. Operation or service
revenue is recognized in the period in which the service is provided. When more than one
service is provided in the service concession arrangements, the consideration received is
allocated by reference to the relative value of the services.
Further, the developed infrastructure assets under these arrangements are not recognized as
property and equipment of the operator, because the contractual arrangements do not convey
the right to control the use of the public services infrastructure assets to the operator.
xi. Expenses
Expenses are recognized as they are incurred.
s. Employee benefits
i. Short-term employee benefits
All short-term employee benefits which consist of salaries and related benefits, vacation pay,
incentives and other short-term benefits are recognized as expense on undiscounted basis
when employees have rendered service to the Company and subsidiaries.
ii. Pension and post-retirement health care benefit plans
the present value of estimated future benefits that
The net obligations in respect of the defined pension benefit and post-retirement health care
benefit plans are calculated at
the
employees have earned in return for their service in the current and prior periods, less the fair
value of plan assets and as adjusted for unrecognized actuarial gains or losses and
unrecognized past service cost. The calculation is performed by an independent actuary using
the defined benefit obligation is
the projected unit credit method. The present value of
rates of
determined by discounting the estimated future cash outflows using interest
government bonds that are denominated in the currencies in which the benefits will be paid
and that have terms to maturity approximating the terms of the related retirement benefit
obligation. Government bonds are used as there is no deep market for high quality corporate
bonds.
30
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
s. Employee benefits (continued)
ii. Pension and post-retirement health care benefit plans (continued)
Plan assets are assets that are held by the pension and post-retirement health care benefit
plans. These assets are measured at fair value at the end of the reporting period, which is
based on the securities’ quoted market price information. The amount of prepaid pension
costs that can be recognized is limited to the total of any unrecognized past service costs,
losses and the present value of economic benefits available in the
unrecognized actuarial
form of refunds from the plan or reductions in future contributions to the plan.
Actuarial gains or losses arising from experience adjustments and changes in actuarial
assumptions, when exceeding the greater of 10% of the present value of defined benefit
obligation or 10% of the fair value of plan assets, are charged or credited to the consolidated
statements of comprehensive income over the average remaining service lives of the relevant
employees. Prior service cost is recognized immediately if vested or amortized over the
vesting period.
For defined contribution plans, the regular contributions constitute net periodic costs for the
period in which they are due and as such are included in staff costs when they become
payable.
iii. Long Service Awards (“LSA”) and Long Service Leave (“LSL”)
Employees of Telkomsel are entitled to receive certain cash awards or certain numbers of
days leave benefits based on length of service requirements. LSA are either paid at the time
the time of
the employees reach certain anniversary dates during employment, or at
termination. LSL is either a certain number of days leave benefit or cash, subject to approval
by management, provided to employees who have met the requisite number of years of
service and with a certain minimum age.
Actuarial gains or losses arising from experience and changes in actuarial assumptions are
charged immediately to the consolidated statements of comprehensive income.
The obligation with respect to LSA and LSL is calculated by an independent actuary using the
projected unit credit method.
iv. Early retirement benefits
Early retirement benefits are accrued at the time the Company makes a commitment to
provide early retirement benefits as a result of an offer made in order to encourage voluntary
redundancy. A commitment to a termination arises when, and only when a detailed formal
plan for the early retirement cannot be withdrawn.
v. Pre-retirement benefits
Employees of the Company are entitled to a benefit during a pre-retirement period in which
they are inactive for 6 months prior to their normal retirement age of 56 years. During the pre-
retirement period, the employees still receive benefits provided to active employees, which
leave, bonus and other
include, but are not limited to regular salary, health care, annual
benefits. Benefits provided to employees who enter pre-retirement period are calculated by an
independent actuary using the projected unit credit method.
vi. Other post-retirement benefits
Employees are entitled to home leave passage benefits and final housing facility benefits to
their retirement age of 56 years. Those benefits are calculated by an independent actuary
using the projected unit credit method.
31
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
s. Employee benefits (continued)
vii. Share-based payments
The Company operates an equity-settled, share-based compensation plan. The fair value of
the employees’ services rendered which compensated with the Company’s shares is
recognized as an expense in the consolidated statement of comprehensive income and
credited to additional paid-in capital at the grant date.
Gains or losses on curtailment are recognized when there is a commitment to make a material
reduction in the number of employees covered by a plan or when there is an amendment of
defined benefit plan terms such that a material element of future services to be provided by
current employees will no longer qualify for benefits, or will qualify only for reduced benefits.
Gains or losses on settlement are recognized when there is a transaction that eliminates all further
legal or constructive obligations for part or all of the benefits provided under a defined benefit
plan.
t.
Income tax
Current and deferred income taxes are recognized as income or an expense and included in the
consolidated statement of comprehensive income, except to the extent that the tax arises from a
transaction or event which is recognized directly in equity, in which case, the tax is recognized
directly in equity.
Current tax assets and liabilities are measured at the amounts expected to be recovered or paid
using the tax rates and tax laws that have been enacted at each reporting date. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable
tax regulation is subject to interpretation. Where appropriate, management establishes provisions
based on the amounts expected to be paid to the tax authorities.
The Company and subsidiaries recognize deferred tax assets and liabilities for temporary
differences between the financial and tax bases of assets and liabilities at each reporting date.
The Company and subsidiaries also recognize deferred tax assets resulting from the recognition
of future tax benefits, such as the benefit of tax losses carried forward to the extent their future
realization is probable. Deferred tax assets and liabilities are measured using enacted or
substantively enacted tax rates and tax laws at each reporting date which are expected to apply to
taxable income in the years in which those temporary differences are expected to be recovered or
settled, such as tax rates and tax laws which have been enacted or substantially enacted at each
reporting date.
The carrying amount of deferred tax asset is reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to
allow the benefit of part or all of that deferred tax asset to be utilized.
Deferred tax assets and liabilities are offset in the consolidated statement of financial position,
except if these are for different legal entities, in the same manner the current tax assets and
liabilities are presented.
Amendment to tax obligation is recorded when an assessment letter (“Surat Ketetapan Pajak” or
“SKP”) is received or if appealed against, when the results of the appeal are determined. The
additional taxes and penalty imposed through an SKP are recognized as income or expense in
the current year profit or loss, unless objection/appeal is taken. The additional taxes and penalty
imposed through the SKP are deferred as long as they meet the asset recognition criteria.
32
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
u. Financial instruments
The Company and subsidiaries classify financial instruments into financial assets and financial
liabilities. Financial assets and liabilities are recognized initially at fair value including transaction
costs. These are subsequently measured either at fair value or amortized cost using the effective
interest rate method in accordance with their classification.
i.
Financial assets
The Company and subsidiaries classify their financial assets as (i) financial assets at fair
value through profit or loss, (ii) loans and receivables, (iii) held-to-maturity financial assets or
(iv) available-for-sale financial assets. The classification depends on the purpose for which the
financial assets are acquired. Management determines the classification of financial assets at
initial recognition.
Purchases or sales of financial assets that require delivery of assets within a time frame
established by regulation or convention in the marketplace (regular way trades) are
recognized on the trade date, i.e., the date that the Company and subsidiaries commit to
purchase or sell the assets.
The Company’s financial assets include cash and cash equivalents, other current financial
assets, trade receivables and other receivables, long-term investments, advances and other
non-current financial assets.
a. Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets classified as held
for trading. A financial asset is classified as held for trading if it is acquired principally for
the purpose of selling or repurchasing it in the near term and for which there is evidence
of a recent actual pattern of short-term profit taking. Gains or losses arising from changes
in fair value of
the trading securities are presented as other (expenses)/income in
consolidated statement of comprehensive income in the period in which they arise.
Financial asset measured at fair value through profit loss consists of derivative asset-put
option which is recognized as part of other current financial assets.
b. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Loans and receivables consist of,
among other things, cash and cash equivalents, trade receivables, other receivables,
other current financial assets and other non-current financial assets.
These are initially recognized at fair value including transaction costs and subsequently
measured at amortized cost, using the effective interest method.
c. Held-to-maturity financial assets
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturities that management has the positive intention and ability to
hold to maturity, other than:
a)
b)
c)
those that the Company upon initial recognition designates as assets at fair value
through profit or loss;
those that the Company designates as available for sale; and
those that meet the definition of loans and receivables.
No financial assets were classified as held-to-maturity financial assets as of
December 31, 2013 and 2012.
33
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
u. Financial instruments (continued)
i.
Financial assets (continued)
d. Available-for-sale financial assets
Available-for-sale investments are non-derivative financial assets that are intended to be
held for indefinite period of time, which may be sold in response to needs for liquidity or
changes in interest rates, exchange rates or that are not classified as loans and
receivables, held-to-maturity investments or financial assets at fair value through profit or
loss. Available-for-sale financial assets consist of bonds and mutual funds which are
recorded as other current financial assets.
Available-for-sale securities are stated at fair value. Unrealized holding gains or losses on
available-for-sale securities are excluded from income of
the current period and are
reported as a separate component in the equity section of the consolidated statements of
financial position until realized. Realized gains or losses from the sale of available-for-sale
securities are recognized in the consolidated statements of comprehensive income, and
are determined on the specific identification basis. A decline in the fair value of any
available-for-sale securities below cost that is deemed to be other than temporary is
charged to the consolidated statement of comprehensive income.
ii. Financial liabilities
The Company and subsidiaries classify their financial liabilities as (i) financial liabilities at fair
value through profit or loss or (ii) financial liabilities measured at amortized cost.
The Company and subsidiaries’ financial liabilities include trade payables and other payables,
loans and other borrowings which consist of short-term bank loans,
accrued expenses,
obligations under capital lease, two step loans, bonds and notes, and bank loans.
a. Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss are financial liabilities classified as
held for trading. A financial
is incurred
principally for the purpose of selling or repurchasing them in the near term and for which
there is evidence of a recent actual pattern of short-term profit taking.
liability is classified as held for trading if
it
No financial liabilities were categorized as held for trading as of December 31, 2013 and
2012.
b. Financial liabilities measured at amortized cost
Financial liabilities that are not classified as liabilities at fair value through profit or loss fall
into this category and are measured at amortized cost. Financial liabilities measured at
amortized cost are trade payables, other payables, accrued expenses, loans, bonds and
notes.
iii. Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the consolidated
the
financial position when there is a legally enforceable right
statement of
recognized amounts and there is an intention to settle on a net basis, or realize the assets
and settle the liabilities simultaneously.
to offset
34
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
u. Financial instruments (continued)
iv. Fair value of financial instruments
Fair value is the amount for which an asset could be exchanged, or liability settled, in an
arms’ length transaction.
The fair value of financial instruments that are traded in active markets at each reporting date
is determined by reference to quoted market prices, without any deduction for transaction
costs.
For financial instruments not traded in an active market, the fair value is determined using
appropriate valuation techniques. Such techniques may include using recent arm’s length
market
is
substantially the same, a discounted cash flow analysis or other valuation models.
reference to the current
fair value of another
transactions,
instrument
that
An analysis of fair values of financial
measured are provided in Note 44.
v.
Impairment of financial assets
instruments and further details as to how they are
The Company and subsidiaries assess the impairment of financial assets if there is objective
evidence that a loss event has a negative impact on the estimated future cash flows of the
financial asset. Impairment is recognized when the loss event can be reliably estimated.
Losses expected as a result of future events, no matter how likely, are not recognized.
Impairment loss on financial assets carried at cost is measured as the difference between the
asset’s carrying amount and the present value of estimated future cash flows discounted at
the financial asset’s original effective interest
rate. Cash flows relating to short-term
receivables are not discounted if the effect of discounting is immaterial.
When a decline in the fair value of an available-for-sale financial asset has been recognized in
other comprehensive income and there is objective evidence that the asset is impaired, the
cumulative loss that had been recognized in other comprehensive income is recognized in
profit or loss as an impairment loss. The amount of the cumulative loss is the difference
between the acquisition cost (net of any principal repayment and amortization) and current fair
value, less any impairment loss on that financial asset previously recognized.
vi. Derecognition of financial instrument
The Company and subsidiaries derecognize a financial asset when the contractual rights to
the cash flows from the financial asset expire, or when the Company and subsidiaries transfer
substantially all the risks and rewards of ownership of the financial asset.
The Company and subsidiaries derecognize a financial liability when the obligation specified
in the contract is discharged or cancelled or expired.
v. Treasury stock
Reacquired Company shares of stock are accounted for at their reacquisition cost and classified
as “Treasury Stock” and presented as a deduction to equity. The cost of
treasury stock
sold/transferred is accounted for using the weighted average method. The portion of treasury
stock transferred for employees ownership program is accounted for at
its fair value. The
difference between the cost and the proceeds from the sale/transfer value of treasury stock is
credited to “Additional Paid-in Capital”.
35
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
w. Dividends
Dividend distribution to the Company’s stockholders is recognized as a liability in the Company’s
consolidated financial statements in the year in which the dividend is approved by the Company’s
stockholders. The Company recognizes interim dividend as a liability based on the Board of
Directors’ decision with the approval from the Board of Commissioners.
x. Basic earnings per share and earnings per ADS
Basic earnings per share is computed by dividing profit for the year attributable to owners of the
parent company by the weighted average number of shares outstanding during the year. Income
per ADS is computed by multiplying basic earnings per share by 200, the number of shares
represented by each ADS.
The Company does not have potentially dilutive financial investments.
y. Segment information
The Company and subsidiaries' segment information is presented based upon identified operating
segments. An operating segment is a component of an entity: a) that engages in business
activities from which it may earn revenues and incur expenses (including revenues and expenses
relating to transactions with other components of the same entity); b) whose operating results are
regularly reviewed by the Company and subsidiaries' chief operating decision maker
i.e.,
Directors, to make decisions about resources to be allocated to the segment and assess its
performance, and c) for which discrete financial information is available.
z. Provision
Provision is recognized when the Company and subsidiaries have a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation, and a reliable estimate can be made of
the obligation.
aa. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the
circumstances.
The Company and subsidiaries make estimates and assumptions concerning the future. The
resulting accounting estimates will, by definition, seldom equal the related actual results. The
estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are addressed below.
i. Retirement benefits
The present value of the retirement benefit obligations depends on a number of factors that
are determined on an actuarial basis using a number of assumptions. The assumptions used
in determining the net cost (income) for pensions include the discount rate. Any changes in
these assumptions will impact the carrying amount of retirement benefit obligations.
The Company and subsidiaries determine the appropriate discount rate at the end of each
reporting period. This is the interest rate that should be used to determine the present value of
estimated future cash outflows expected to be required to settle the obligations.
In
determining the appropriate discount rate, the Company and subsidiaries consider the interest
rates of government bonds that are denominated in the currency in which the benefits will be
paid and that have terms to maturity approximating the terms of the related retirement benefit
obligations.
36
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
aa. Critical Accounting Estimates and Judgements (continued)
i. Retirement benefits (continued)
If there is an improvement in the ratings of such government bonds or a decrease in interest
rates as a result of improving economic conditions, there could be a material impact on the
discount rate used in determining the post-employment benefits obligations.
Other key assumptions for retirement benefit obligations are based in part on current market
conditions. Additional information is disclosed in Notes 34, 35 and 36.
ii. Estimating useful lives of property and equipment and intangible assets
The Company and subsidiaries estimate the useful lives of their property and equipment and
intangible assets based on expected asset utilization, considering strategic business plans,
expected future technological developments and market behavior.The estimates of useful
lives of property and equipment are based on the Company and subsidiaries’ collective
assessment of industry practice, internal technical evaluation and experience with similar
assets.
The Company and subsidiaries review estimates of useful lives at least each financial year
end and are updated if expectations differ from previous estimates due to physical wear and
tear, technical or commercial obsolescence and legal or other limitations on the use of the
assets. The amounts and timing of recorded expenses for any year will be affected by
changes in these factors and circumstances. A change in the estimated useful
lives of the
property and equipment is a change in accounting estimates and is applied prospectively in
profit or loss in the period of the change and future periods.
Details of the nature and carrying amount of property and equipment are disclosed in Note 11
and intangible assets in Note 13.
iii. Provision for impairment of receivables
The Company and subsidiaries assess whether there is objective evidence that
trade
receivables have been impaired at the end of each reporting period. Provision for impairment
of receivables is calculated based on a review of the current status of existing receivables and
historical collection experience. Such provision is adjusted periodically to reflect the actual
and anticipated experience. Details of
the nature and carrying amount of provision for
impairment of receivables are disclosed in Note 6.
iv.
Income taxes
Significant judgement is required in determining the provision for income taxes. There are
many transactions and calculations for which the ultimate tax determination is uncertain. The
Company and subsidiaries recognize liabilities for anticipated tax audit
issues based on
estimates of whether additional taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recorded, such differences will impact
the current and deferred income tax assets and liabilities in the year
in which such
determination is made. Details of the nature and carrying amount of income tax are disclosed
in Note 31.
v.
Impairment of non-financial assets
The Company and subsidiaries annually assess whether goodwill
is impaired. Other non-
financial assets are reviewed for impairment whenever events or changes in circumstances
the asset exceeds its recoverable amount. The
indicate that
recoverable amount of an asset or a cash-generating unit (“CGU”) is determined based on the
higher of its fair value less costs to sell and its value in use, calculated on the basis of
management’s assumptions and estimations.
the carrying amount of
37
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
aa. Critical Accounting Estimates and Judgements (continued)
v.
Impairment of non-financial assets (continued)
In determining value in use, the Company and subsidiaries apply management judgement in
establishing forecasts of future operating performance, as well as the selection of growth rates
and discount rates. These judgements are applied based on our understanding of historical
information and expectations of future performance. Changing the key assumptions, including
the discount rates or the growth rate assumptions in the cash flow projections, could
materially affect the value in use calculations.
For the years ended December 31, 2013 and 2012, the Company recognized Rp596 billion
and Rp247 billion, respectively, of impairment loss on property and equipment pertaining to
the fixed wireless services. A 1% increase in the discount rate used would result in an
increase in impairment loss of approximately Rp703 billion and Rp458 billion in 2013 and
2012, respectively. However, the recoverable amount of the fixed wireless CGU is most
sensitive to whether management will be able to implement its plans, including the cost
it generates positive cash flows and returns to profitability as
efficiency plan, such that
projected.
if
If
management’s initiatives are not performing as expected in the next financial year, analysis
will be required to assess whether there will be further impairment next year (Note 11b).
the fixed wireless CGU continues to decline or
the performance of
vi. Fair value of put option and investment in PT Indonusa Telemedia
In determining the fair value, the Company uses management’s judgment to determine future
projected operational performance, growth rate and discount rate. These considerations are
applied on the basis of management’s understanding of historical information and expectation
of future operational performance. Detail of the nature and recorded amount of Put Option and
investment in Indonusa is disclosed in Notes 3,5 and 10.
3. BUSINESS COMBINATIONS
a. Acquisitions
Acquisition of PT German Center Indonesia
On January 17, 2013, Sigma signed a sales and purchase of shares agreement and transfer of
debt with Landeskreditbank Baden-Wurttemberg-Forderbank (“L-Bank”) and Step Stuttgarter
Engineering Park Gmbh (“STEP”) as the shareholders of PT German Centre Indonesia (“GCI”).
Based on the agreement, on April 30, 2013, Sigma has bought shares owned by L-Bank and
STEP in GCI. Through the acquisition, Sigma enlarged its data center capacity that can be offered
its customers.
Acquisition of Patrakom
On September 25, 2013, based on notarial deed No. 22 of Ashoya Ratam, S.H. ,M.Kn, the
Company entered into a Sales and Purchase Agreement (SPA) with PT ELNUSA Tbk for the
Company’s acquisition of the 40% ownership in PT Patra Telekomunikasi Indonesia (“Patrakom”)
for Rp45.6 billion. This SPA results in the Company’s ownership in Patrakom to increase from
40% to 80% (Note 10).
Subsequently, on November 29, 2013, based on notarial deed No. 54 of Ashoya Ratam, S.H.,
M.Kn., dated November 29, 2013 the Company has signed a SPA with PT Tanjung Mustika Tbk
for the Company’s acquisition of the remaining of 20% ownership in Patrakom for Rp24.8 billion.
38
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
3. BUSINESS COMBINATIONS (continued)
a. Acquisitions (continued)
Acquisition of Patrakom (continued)
Patrakom is a satellite-based closed fixed telecommunications network operator and as provider
of communications solutions and network with a permit as Operator of Micro Earth Stations
Communications Systems (“SKSBM”) in partnership with manufacturers of telecommunications
equipment to serve various companies.Through the acquisition of Patrakom, the Company can
integrate Patrakom’s business activities in accordance with the Company’s business development
plan.
The fair values of the assets acquired and liability transferred at the acquisition dates are as
follows:
GCI
Patrakom
Total
Cash and equivalents
Other current assets
Property and equipment (Note 11)
Current liabilities
Non-current liabilities
Fair value of the identifiable net
assets acquired
Bargain purchase
Fair value of previously held equity interests
Fair value of the consideration transferred
3
18
225
(15)
(16)
215
(42)
-
173
39
122
171
(171)
(45)
116
-
(46)
70
42
140
396
(186)
(61)
331
(42)
(46)
243
fair value of
The excess of
consideration transferred, amounting Rp42 billion, was recorded as other
consolidated statement of comprehensive income of
acquisition amounting to Rp4.3 billion was incurred in the current period.
the
income in the
the current year. Cost related to the
the identifiable net assets acquired over the fair value of
Since the acquisition dates, GCI and Patrakom has generated operating revenue amounting to
Rp23 billion.
The business combination transactions mentioned above complied to the related Bapepam-LK
Regulations.
b. Disposal of Indonusa
On October 8, 2013, the Company sold 80% of its ownership in Indonusa to PT Trans Cospora
and PT Trans Media Corpora for Rp926 billion. Further, on the same date, the Company, Metra
and PT Trans Corpora signed a Shareholders Agreement that establishes mutual relationship
among the shareholders of Indonusa, including the grant of the right to the Company and Metra to
sell their 20% remaining ownership in Indonusa to PT Trans Corpora at any time in 24 months
after the second year of the closing transaction at a certain price (Put Option).
The Company had received the full payment for the sale transaction.
39
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
3. BUSINESS COMBINATION (continued)
b. Disposal of Indonusa (continued)
The Company recognized the gain on sale of Indonusa shares in the consolidated statement of
comprehensive income of the current year as follows:
Fair value of considerations received:
Cash
Put Option
Fair value of interest retained in Indonusa (Note 10)
Carrying amount of assets and liabilities of Indonusa
Gain on sale of shares
4. CASH AND CASH EQUIVALENTS
Cash on hand
Cash in banks
Related parties
Rupiah
PT Bank Mandiri (Persero) Tbk (“Bank Mandiri”)
PT Bank Negara Indonesia (Persero) Tbk (“BNI”)
PT Bank Rakyat Indonesia (Persero) Tbk (“BRI”)
PT Bank Tabungan Negara (Persero) Tbk (“BTN”)
Others
Foreign currencies
Bank Mandiri
BNI
BRI
Others
Sub-total
Third parties
Rupiah
Deutsche Bank AG (“DB”)
Others (each below Rp50 billion)
Foreign currencies
Standard Chartered Bank (“SCB”)
Others (each below Rp50 billion)
Sub-total
Total cash in banks
40
Amount
926
289
182
(14)
1,383
2013
2012
7
7
804
409
70
50
6
913
284
87
13
1
1,339
1,298
458
224
75
0
757
222
20
2
0
244
2,096
1,542
62
163
225
313
102
415
640
62
162
224
112
65
177
401
2,736
1,943
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
4. CASH AND CASH EQUIVALENTS (continued)
Time deposits
Related parties
Rupiah
BRI
BNI
Bank Mandiri
BTN
PT Bank Syariah Mandiri (”BSM”)
Others (each below Rp20 billion)
Foreign currencies
BRI
BNI
Bank Mandiri
Sub-total
Third parties
Rupiah
PT Bank Central Asia Tbk (“BCA”)
PT Bank Mega Tbk (“Bank Mega”)
PT Bank Pembangunan Daerah Jawa Barat
dan Banten Tbk (“BJB”)
PT Bank Muamalat Indonesia Tbk
PT Bank Yudha Bhakti
PT Bank Tabungan Pensiunan Nasional Tbk
PT Bank Internasional Indonesia Tbk (“BII”)
PT Bank CIMB Niaga Tbk (“Bank CIMB Niaga”)
PT Bank Ekonomi Raharja Tbk (“Bank Ekonomi”)
PT Bank Panin Tbk
PT Bank Bukopin Tbk (“Bank Bukopin”)
PT Bank OCBC NISP Tbk (“OCBC NISP”)
Citibank N.A. (“Citibank”)
PT Bank Danamon Indonesia Tbk (“Bank Danamon”)
PT Bank UOB Indonesia (“Bank UOB”)
Others (each below Rp50 billion)
Foreign currencies
OCBC NISP
SCB
Sub-total
Total time deposits
Grand Total
41
2013
2012
2,445
1,975
1,271
375
50
-
6,116
3,260
264
-
3,524
9,640
599
275
245
150
145
136
126
83
73
70
65
-
-
-
-
102
2,069
244
-
244
2,313
11,953
14,696
2,883
1,511
312
401
23
20
5,150
1,966
112
222
2,300
7,450
-
335
170
153
-
167
120
225
-
100
160
400
400
61
60
46
2,397
517
804
1,321
3,718
11,168
13,118
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
4. CASH AND CASH EQUIVALENTS (continued)
Interest rates per annum on time deposits are as follows:
Rupiah
Foreign currencies
2013
2012
1.00% - 11.50%
0.03% - 3.00%
2.25% - 8.50%
0.05% - 3.50%
The related parties in which the Company and subsidiaries place their funds are state-owned banks.
The Company and subsidiaries placed a majority of their cash and cash equivalents in these banks
because they have the most extensive branch networks in Indonesia and are considered to be
financially sound banks, as they are owned by the State.
Refer to Note 37 for details of related party transactions.
5. OTHER CURRENT FINANCIAL ASSETS
2013
2012
Time deposits
Related parties
BRI
Others
Sub-total
Third parties
SCB
CIMB Niaga
OCBC NISP
Others
Sub-total
Total time deposits
Available-for-sale financial assets
Related parties
Government
State-owned enterprises
PT Bahana Securities (“Bahana”)
Sub-total
Third parties
Total available-for-sale financial assets
Derivative asset - Put Option
Others
Total
1,000
19
1,019
1,859
1,800
1,600
10
5,269
6,288
133
74
-
207
65
272
297
15
1,650
-
1,650
1,350
-
1,000
-
2,350
4,000
123
67
48
238
72
310
-
28
6,872
4,338
As of December 31, 2013 and 2012, time deposits denominated in foreign currency amounted to
Rp59 billion and Rp0, respectively.
The time deposits have maturities of more than three months but not more than one year, with interest
rates as follows:
Rupiah
Foreign currency
Refer to Note 37 for details of related party transactions.
42
2013
1.60% - 10.50%
1.00% - 1.10%
2012
6.25% - 6.75%
-
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
6. TRADE RECEIVABLES
Trade receivables arise from services provided to both retail and non-retail customers, with details as
follows:
a. By debtor
(i) Related parties
State-owned enterprises
Indonusa
PT Indosat Tbk (“Indosat”)
CSM
Patrakom*
Others
Total
Provision for impairment of receivables
Net
(ii) Third parties
Individual and business subscribers
Overseas international carriers
Total
Provision for impairment of receivables
Net
2013
2012
877
180
48
45
-
241
1,391
(491)
900
549
-
55
51
56
62
773
(72)
701
2013
2012
7,010
497
7,507
(2,381)
5,126
6,177
320
6,497
(1,975)
4,522
Trade receivables from certain parties are presented net of
the Company and subsidiaries’
liabilities to such parties due to the existence of a legal right of set-off in accordance with the
agreements with those parties.
b. By age
(i) Related parties
Up to 6 months
7 to 12 months
More than 12 months
Total
Provision for impairment of receivables
Net
*In 2013, Patrakom was fully consolidated (Note 3).
43
2013
2012
836
223
332
1,391
(491)
900
442
248
83
773
(72)
701
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
6. TRADE RECEIVABLES (continued)
b. By age (continued)
(ii) Third parties
Up to 3 months
More than 3 months
Total
Provision for impairment of receivables
Net
(iii) Aging of total trade receivables
2013
2012
4,526
2,981
7,507
(2,381)
5,126
3,969
2,528
6,497
(1,975)
4,522
Not past due
Past due up to 3 months
Past due more than 3 to 6 months
Past due more than 6 months
Total
2013
2012
Provision for
impairment
of receivables
Gross
Gross
Provision for
impairment
of receivables
3,618
1,525
703
3,052
8,898
10
401
321
2,140
2,872
3,174
1,250
455
2,391
7,270
140
157
193
1,557
2,047
The Company and subsidiaries have made provision for impairment of trade receivables
based on the collective assessment of historical impairment rates and individual assessment
of their customers’ credit history. The Company and subsidiaries do not apply a distinction
between related party and third party receivables in assessing amounts past due. As of
December 31, 2013 and 2012, the carrying amount of trade receivables of the Company and
subsidiaries considered past due but not
impaired amounted to Rp2,418 billion and
Rp2,189 billion, respectively. Management has concluded that receivables past due but not
impaired, along with trade receivables that are neither past due nor impaired, are due from
customers with good credit history and are expected to be recoverable.
c. By currency
(i) Related parties
Rupiah
U.S. dollar
Total
Provision for impairment of receivables
Net
2013
2012
1,361
30
1,391
(491)
900
686
87
773
(72)
701
44
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
6. TRADE RECEIVABLES (continued)
c. By currency (continued)
(ii) Third parties
Rupiah
U.S. dollar
Euro
Hong Kong dollar
Total
Provision for impairment of receivables
Net
d. Movements in the provision for impairment of receivables
Beginning balance
Provision recognized during the year (Note 29)
Receivables written-off
Acquisition
Disposal (Note 3)
Reclassification
Ending balance
2013
2012
6,699
806
1
1
7,507
(2,381)
5,126
5,770
722
3
2
6,497
(1,975)
4,522
2013
2012
2,047
1,589
(622)
1
(158)
15
2,872
1,732
848
(533)
-
-
-
2,047
The receivables written off are related-party and third-party trade receivables.
Management believes that the provision for impairment of trade receivables is adequate to cover
losses on uncollectible trade receivables.
Certain trade receivables of the subsidiaries amounting to Rp1,700 billion have been pledged as
collateral under lending agreements (Notes 17 and 21).
Refer to Note 37 for details of related party transactions.
7.
INVENTORIES
Components
SIM cards, RUIM cards, set top box, and
blank prepaid vouchers
Others
Total
Provision for obsolescence
Components
SIM cards, RUIM cards, set top box, and
blank prepaid vouchers
Modules
Total
Net
45
2013
2012
272
102
157
531
(21)
(1)
-
(22)
509
183
134
410
727
(51)
(1)
(96)
(148)
579
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
7.
INVENTORIES (continued)
Movements in the provision for obsolescence are as follows:
Beginning balance
Divestment
Provision (reversal) recognized during the year
Reclassification
Inventories written-off
Ending balance
2013
2012
148
(1)
(29)
(96)
-
22
106
-
67
-
(25)
148
The inventories
recognized as expense and included in operations, maintenance, and
telecommunication service expenses (Note 28) for the years ended December 31, 2013 and 2012
amounted to Rp752 billion and Rp633 billion, respectively.
Management believes that the provision is adequate to cover losses from declines in inventory value
due to obsolescence.
Certain inventories of the Company’s subsidiaries amounting to Rp53 billion have been pledged as
collateral under lending agreements (Notes 17 and 21).
As of December 31, 2013 and 2012, modules and components held by the Company and subsidiaries
have been insured against
theft, and other specific risks with book value amounting to
Rp280 billion and Rp272 billion, respectively. Modules are recorded as part of property and
equipment. Total sum insured as of December 31, 2013 and 2012 amounted to Rp261 billion and
Rp275 billion, respectively.
fire,
Management believes that the insurance coverage is adequate to cover potential losses of certain
inventories which happens to the Company and subsidiaries.
8. ADVANCES AND PREPAID EXPENSES
Frequency license (Notes 41c.i and 41c.ii)
Prepaid rental
Advances
Salaries
Deferred expense
Insurance
Others (each below Rp50 billion)
Total
Refer to Note 37 for details of related party transactions.
2013
2012
2,330
744
297
209
124
84
149
3,937
2,563
666
120
165
45
18
144
3,721
46
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
9. ASSET HELD FOR SALE
This account represents the carrying amount of Telkomsel’s equipment
to be exchanged with
equipment of Nokia Siemens Network Oy (“NSN Oy”) and PT Huawei Tech Investment
(“PT Huawei”). The equipment will be used as part of the settlement for the exchanges of equipment
from these companies.
In 2013, Telkomsel’s equipment with net carrying amount of Rp105 billion is reclassified to asset held
for sale (Note 11c.vi).
Asset held for sale is presented under personal segment (Note 38).
10. LONG-TERM INVESTMENTS
Percentage
of
ownership
Beginning
balance
Addition
(Deduction)
Long-term
2013
Share of
net (loss)
profit of
associated
company
Dividend
Translation
adjustment
Ending
balance
investments
in associated
companies:
Indonusaa
PT Melon Indonesia
(“Melon”)b
ILCSc
Telin Malaysiad
CSMe
PSNf
Patrakomg
Scicomh
Sub-total
Other long-term investments
Total long-term investments
Long-term investments in
associated companies:
Indonusaa
Melonb
ILCSc
Telin Malaysiad
CSMe
PSNf
Total
20.00
51.00
49.00
49.00
25.00
22.38
40.00
29.71
-
42
48
-
20
-
46
98
254
21
275
182
-
-
20
-
-
(46)
(88)
68
-
68
7
(3)
(11)
(6)
(20)
-
2
2
(29)
-
(29 )
-
-
-
-
-
-
(2)
(3)
(5)
-
(5 )
-
-
-
4
-
-
-
(9)
(5)
-
(5)
Assets
Liabilities
Revenue
Loss
2013
655
90
88
37
1,273
817
2,960
669
22
13
1
1,387
2,148
4,240
363
73
4
0
306
462
1,208
189
39
37
18
-
-
-
-
283
21
304
(124)
(6)
(22)
(11)
(181)
(55)
(399)
47
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
10. LONG-TERM INVESTMENTS (continued)
Percentage
of
ownership
Beginning
balance
Additions
2012
Share of
net (loss)
profit of
associated
company
Dividend
Translation
adjustment
Ending
balance
Long-term
investments
in associated
companies:
Scicomh
ILCSc
Patrakomg
PT Melon Indonesia
(“Melon”)b
CSMe
PSNf
Sub-total
Other long-term investments
Total long-term investments
29.71
49.00
40.00
51.00
25.00
22.38
101
-
43
44
26
-
214
21
235
-
49
-
-
-
-
49
-
49
(2)
(1)
5
(2)
(11)
-
(11)
-
(11)
(8)
-
(2)
-
-
-
(10)
-
(10)
2012
7
-
-
-
5
-
12
-
12
98
48
46
42
20
-
254
21
275
Long-term investments in
associated companies:
Scicomh
ILCSc
Patrakomg
Melonb
CSMe
PSNf
Total
Assets
Liabilities
Revenue
Profit (loss)
223
104
218
89
1,168
590
2,392
17
7
102
7
905
1,512
2,550
399
1
226
10
403
292
1,331
40
(3)
12
(4)
(44)
1
2
a
Indonusa had been the Company’s subsidiary until 2013 when the Company disposed 80% of its interest in Indonusa
(Notes 1d and 3).
b Melon is engaged in providing Digital Content Exchange Hub services (“DCEH”). As a result of the existence of substantive
participating rights held by the other venturer over the significant financial and operating policies of Melon, Metra does not
have control over Melon.
ILCS is engaged in providing E-trade logistic services and other related services.
c
d Telin Malaysia is engaged in telecommunication services in Malaysia.
e CSM is engaged in providing Very Small Aperture Terminal (“VSAT”), network application services and consulting services
on telecommunications technology and related facilities.
f PSN is engaged in providing satellite transponder leasing and satellite-based communication services in the Asia-Pacific
Region. The Company’s share in losses of PSN has exceeded the carrying amount of its investment since 2001; accordingly,
the investment value has been reduced to Rp nil. The unrecognized share of losses of PSN for the years ended December
31, 2013 and 2012 are Rp298 billion and Rp206 billion, respectively.
g Patrakom has been engaged in providing satellite communication system services, related services and facilities to
companies in the petroleum industry. Starting in 2013, Patrakom has been consolidated (Notes 1d and 3).
h Scicom is engaged in providing call center services in Malaysia. On September 19, 2013, the Company sold its investment in
Scicom (MSC) Berhad-Malaysia (Scicom), with the proceeds of disposal and the carrying amount of the investment on the
date of disposal amounting to Rp153 billion and Rp88 billion, respectively, resulting in a gain of Rp65 billion.
48
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
11. PROPERTY AND EQUIPMENT
January 1,
2013
Business
acquisition
Divestment
Additions
Deductions
Translations
2013
Reclassifications/ December 31,
At cost:
Directly acquired assets
Land rights
Buildings
Leasehold improvements
Switching equipment
Telegraph, telex and data
977
3,787
783
23,750
communication equipment
19
Transmission installation
and equipment
Satellite, earth station and
equipment
Cable network
Power supply
Data processing equipment
Other telecommunications
peripherals
Office equipment
Vehicles
Other equipment
Property under construction
Assets under finance lease
Transmission installation
and equipment
Data processing equipment
Office equipment
Vehicles
CPE assets
RSA assets
85,289
7,267
27,658
10,434
8,196
280
680
71
111
1,312
2,873
339
15
-
22
459
110
120
-
0
-
-
158
-
3
-
-
5
0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(110)
(601)
(0)
(1)
-
(11)
(1)
(2)
-
(30)
-
-
-
-
-
13
98
24
428
-
1,777
56
2,084
253
968
230
138
279
0
15,349
3,170
5
-
26
-
-
-
(1)
(27)
(2,896)
-
(2)
220
32
(2,577)
(13)
(1,311)
10,098
(2)
(117)
(71)
(62)
-
(1)
(1)
-
-
(330)
(221)
(8)
(0)
-
-
87
(37)
1,136
129
(10)
(41)
(16)
(5)
(14,690)
-
-
-
-
-
-
1,098
4,224
812
18,705
6
95,853
7,456
28,987
11,755
9,230
500
770
332
104
1,971
5,683
123
7
26
22
459
Total
174,322
396
(756)
24,898
(5,048)
(5,689)
188,123
January 1,
2013
Business
acquisition
Divestment
Additions
Impairment
Deductions
Translations
2013
Reclassifications/ December 31,
Accumulated depreciation
and impairment losses:
Directly acquired assets
Buildings
Leasehold improvements
Switching equipment
Telegraph, telex and
data communication
equipment
Transmission installation
and equipment
Satellite, earth station and
equipment
Cable network
Power supply
Data processing equipment
Other telecommunications
peripherals
Office equipment
Vehicles
Other equipment
Assets under finance lease
Transmission installation
and equipment
Data processing equipment
Office equipment
Vehicles
CPE asets
RSA assets
Total
Net Book Value
1,739
609
17,105
16
41,210
4,684
17,291
5,982
6,355
259
548
61
102
782
261
7
-
11
253
97,275
77,047
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(142)
(181)
(0)
(1)
-
(6)
(1)
(1)
(3)
-
-
-
-
-
163
67
1,982
0
7,609
663
1,022
1,171
738
18
72
25
4
896
37
1
1
2
41
-
-
-
-
321
226
49
-
-
-
-
-
-
-
-
-
-
-
-
(0)
(27)
(2,718)
(62)
-
(3,466)
-
(13)
(1,205)
(1,269)
(2)
(106)
(67)
(49)
-
(1)
(1)
-
(330)
(215)
(6)
(0)
-
-
(239)
(317)
(292)
(221)
(10)
(49)
(16)
(5)
0
-
-
-
-
-
1,840
649
12,903
3
46,666
5,190
17,758
6,794
6,822
267
564
68
100
1,345
83
2
1
13
294
(335)
14,512
596
(4,727)
(5,959)
101,362
86,761
49
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
11. PROPERTY AND EQUIPMENT (continued)
At cost:
Directly acquired assets
Land rights
Buildings
Leasehold improvements
Switching equipment
Telegraph, telex and data
communication equipment
Transmission installation
and equipment
Satellite, earth station and
equipment
Cable network
Power supply
Data processing equipment
Other telecommunications
peripherals
Office equipment
Vehicles
Other equipment
Property under construction
Assets under finance lease
Transmission installation
and equipment
Data processing equipment
Office equipment
Vehicles
CPE assets
RSA assets
January 1,
2012
Additions
Deductions
Translations
2012
Reclassifications/ December 31,
842
3,417
650
25,470
20
78,584
7,069
26,392
9,339
8,082
472
727
84
111
1,203
305
344
27
48
22
479
135
98
6
91
-
746
35
1,965
194
323
-
60
6
1
11,024
2,582
6
-
-
-
-
-
(0)
(3)
(1,438)
-
(0)
272
130
(373)
(1)
(1,680)
7,639
-
(244)
(83)
(210)
-
(47)
(4)
-
(43)
(10)
(0)
-
(48)
-
-
163
(455)
984
1
(192)
(60)
(15)
(1)
(10,872)
(4)
(11)
(12)
-
-
(20)
977
3,787
783
23,750
19
85,289
7,267
27,658
10,434
8,196
280
680
71
111
1,312
2,873
339
15
-
22
459
Total
163,687
17,272
(3,810)
(2,827)
174,322
Accumulated depreciation and
impairment losses:
Directly acquired assets
Buildings
Leasehold improvements
Switching equipment
Telegraph, telex and data
communication equipment
Transmission installation
and equipment
Satellite, earth station and
equipment
Cable network
Power supply
Data processing equipment
Other telecommunications
peripherals
Office equipment
Vehicles
Other equipment
Assets under finance lease
Transmission installation
and equipment
Data processing equipment
Office equipment
Vehicles
CPE assets
RSA assets
Total
Net Book Value
January 1,
2012
Additions
Impairment
Deductions
Translations
2012
Reclassifications/ December 31,
1,671
502
17,412
17
35,169
4,135
16,952
4,916
6,189
353
523
74
98
270
217
9
47
9
227
88,790
74,897
130
63
2,065
0
6,894
517
1,057
1,221
1,001
5
61
6
5
514
51
4
1
2
36
-
-
-
-
153
94
-
-
-
-
-
-
-
-
-
-
-
-
-
(0)
(3)
(1,112)
(62)
47
(1,260)
-
(988)
-
(238)
(59)
(165)
-
(14)
(4)
-
(2)
-
-
(48)
-
-
(1)
(18)
(62)
(480)
(96)
(670)
(99)
(22)
(15)
(1)
-
(7)
(6)
-
-
(10)
13,633
247
(2,633)
(2,762)
1,739
609
17,105
16
41,210
4,684
17,291
5,982
6,355
259
548
61
102
782
261
7
-
11
253
97,275
77,047
50
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
11. PROPERTY AND EQUIPMENT (continued)
a. Gain on disposal or sale of property and equipment
Proceeds from sale of property and equipment
Net book value
Gain on disposal or sale
of property and equipment
b. Assets impairment
2013
2012
466
(53)
413
360
(282)
78
(i)
As of December 31, 2013 and 2012, the CGUs that independently generate cash inflows
were fixed wireline, fixed wireless, cellular and others. As of December 31, 2013 and 2012,
there were indications of impairment in the fixed wireless CGU (presented as part of personal
segment), which were mainly due to increased competition in the fixed wireless market that
resulted in lower average tariffs, declining active customers and declining Average Revenue
Per User (“ARPU”). The Company assessed the recoverable value of the assets in the CGU
and determined that assets for the fixed wireless CGU were impaired by Rp596 billion and
Rp247 billion as at December 31, 2013 and 2012, respectively, which are recognized in the
consolidated statement of comprehensive income under “Depreciation and amortization”.
The recoverable amount has been determined based on value-in-use (VIU) calculations.
These calculations used pre-tax cash flow projections approved by management covering a
five-year period and with cash flows beyond the five-year period extrapolated using a
perpetuity growth rate. The cash flow projections reflect management’s expectations of
revenue, Earnings Before Interest, Tax, Depreciation and Amortization (“EBITDA”) growth
and operating cash flows on the basis that the fixed wireless CGU generates positive net
cash flows starting from 2014. Management’s cash flow projection also incorporates
management’s reasonable expectations for developments in macro economic conditions and
market expectations for the Indonesian telecommunications industry. As of December 31,
2013 and 2012, management applied a pre-tax discount
rate of 13.5% and 12.3%,
respectively, derived from the Company’s post-tax weighted average cost of capital and
benchmarked to externally available data. As of December 31, 2013 and 2012, the perpetuity
growth rate used of 0% and 0.5%, respectively, assumes that subscriber numbers and
average revenue per user may continue to decrease after five years.
the performance of
the fixed wireless CGU continues to decline or if management’s
If
initiatives are not performing as expected in the next financial year, analysis will be required
to assess whether there will be further impairment next year.
(ii) Management believes that there is no indication of impairment in the value of other CGUs as
of December 31, 2013 and 2012.
c. Others
(i)
Interest capitalized to property under construction amounted to Rp100 billion and
Rp44 billion for
respectively. The
the years ended December 31, 2013 and 2012,
capitalization rate used to determine the amount of borrowing costs eligible for capitalization
ranges from 9.75% to 13.07% and from 7.72% to 9.75% for the years ended December 31,
2013 and 2012, respectively.
(ii) No foreign exchange loss was capitalized as part of property under construction for the years
ended December 31, 2013 and 2012.
51
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
11. PROPERTY AND EQUIPMENT (continued)
c. Others (continued)
(iii) On August 7, 2012, Telkom-3 Satellite with a total value of Rp1,606 billion was built and
launched, but failed to reach its orbit. The carrying value of the satellite was charged to other
expenses in the 2012 consolidated statement of comprehensive income. Telkom-3 Satellite
was insured with insurance coverage that was adequate to cover losses from the insured
risks such as the event experienced by the Company. Insurance claim was made and the
amount of insurance compensation amounting to Rp1,772 billion was agreed and approved
by the insurer and recorded as part of other income in the 2012 consolidated statement of
comprehensive income. In November 2012, the Company received the proceeds from the
insurance claim.
(iv)
In 2012, Telkomsel decided to replace certain equipment units with net carrying amount of
Rp1,037 billion, as part of a modernization program. Accordingly, Telkomsel changed the
estimated useful
the effect of additional depreciation
expense amounted to Rp131 billion.
lives of such equipment. In 2013,
The impact of the change in the estimated useful lives of the equipment for the year ended
December 31, 2014 is to decrease the profit before income tax by Rp84 billion.
(v)
In 2012, the useful lives of Telkomsel’s towers were changed from 10 years to 20 years to
reflect their current economic lives. The impact is a reduction of depreciation expense by
Rp606 billion recognized in the 2013 consolidated statement of comprehensive income.
The impact of the change in the estimated useful lives of the towers in future periods is to
increase the profit before income tax as follows:
Years
2014
2015
2016
2017
(vi) Exchange of property and equipment
Amount
565
469
301
92
• In 2011,
the Company and PT Industri Telekomunikasi
Indonesia (“INTI”) signed
Purchase Orders of Procurement and Installation Agreement for the Modernization of the
Copper Cable Network through Optimization of Asset Copper Cable Network with
Trade In/Trade Off with total procurement value amounting to Rp1,499 billion up to
December 31, 2013.
In 2013 and 2012, the Company derecognized the copper cable network asset with net
carrying value of Rp1.6 billion and Rp6.2 billion, respectively, and recorded the fiber optic
from the exchange transaction of Rp203 billion and Rp430 billion,
network asset
respectively.
• In 2013, certain equipment units of Telkomsel with net carrying amount of Rp268 billion
were exchanged with equipment from NSN Oy and PT Huawei. As of December 31, 2013,
Telkomsel’s equipment with net carrying amount of Rp105 billion are going to be
therefore, Telkomsel’s
from NSN Oy and PT Huawei;
exchanged with equipment
equipment units were reclassified as assets held for sale (Note 9).
52
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
11. PROPERTY AND EQUIPMENT (continued)
c. Others (continued)
(vi) Exchange of property and equipment (continued)
In 2012, certain equipment units of Telkomsel with net carrying amount of Rp1,686 billion
were exchanged with equipment from NSN Oy and PT Huawei, where Rp791 billion
relates to asset held for sale that was recognized in 2011.
The cost of the acquired equipment is measured at the aggregate of the carrying amount
of the equipment given up and the amount of cash paid.
(vii) The Company and subsidiaries own several pieces of
land rights located throughout
Indonesia with Building Use Rights (“Hak Guna Bangunan” or “HGB”) for a period of
2 - 45 years which will expire between 2014 and 2052. Management believes that there will
be no issue in obtaining the extension of the land rights when they expire.
(viii) As of December 31, 2013, the Company and subsidiaries’ property and equipment except
land rights, with net carrying amount of Rp72,000 billion were insured against fire, theft,
earthquake and other specified risks, with a maximum loss claim of Rp4,449 billion,
US$52.51 million, EURO0.63 million, SGD16.55 million and HKD8.44 million, and on a first
loss basis of Rp6,815 billion including business recovery of Rp324 billion with the Automatic
Reinstatement of Loss Clause. In addition, Telkom-1 and Telkom-2 were insured separately
for US$3.41 million and US$28.55 million, respectively. Management believes that
the
insurance coverage is adequate to cover potential losses from the insured risks.
(ix) As of December 31, 2013, the percentage of completion of property under construction was
around 32.69% of the total contract value, with estimated dates of completion between
January 2014 and December 2015. The balance of property under construction mainly
consists of buildings, transmission installation and equipment, cable network and power
supply. Management believes that
the
construction in progress.
there is no impediment
to the completion of
(x) All assets owned by the Company have been pledged as collateral for bonds (Note 20a).
Certain property and equipment of the Company’s subsidiaries with gross carrying value
amounting to Rp6,214 billion have been pledged as collateral under lending agreements
(Notes 17 and 21).
(xi)
In 2012, the Company and Telkomsel derecognized certain assets under USO arrangements
(Note 41c.v), with cost and net carrying amount of Rp259 billion and Rp137 billion,
respectively. The net carrying amount of the assets was charged to the 2012 consolidated
statement of comprehensive income.
(xii) As of December 31, 2013, the cost of fully depreciated property and equipment of the
Company and subsidiaries that are still used in operations amounted to Rp40,791 billion. The
Company and subsidiaries are currently performing modernization of network assets to
replace the fully depreciated property and equipment.
(xiii) As of December 31, 2013, the total fair values of land rights and buildings of the Company
and subsidiaries, which are determined based on the sale value of the tax object (“Nilai Jual
Objek Pajak” or
the related land rights and buildings, amounted to
Rp15,307 billion.
“NJOP”) of
53
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
11. PROPERTY AND EQUIPMENT (continued)
c. Others (continued)
(xiv) The Company and Telkomsel entered into several agreements with PT Profesional
Telekomunikasi
Indonesia, PT Tower Bersama Infrastructure Tbk, PT Solusindo Kreasi
Pratama, PT Prima Media Selaras, PT Naragita Dinamika Komunika and other tower
providers to lease spaces in telecommunication towers (slot) and sites of the towers for a
period of 10 years. The Company and Telkomsel may extend the lease period based on the
agreement by both parties. In addition, the Company and subsidiaries also have lease
commitments for property and equipment under RSA,
transmission installation and
equipment, data processing equipment, office equipment, vehicles and CPE assets with the
option to purchase certain leased assets at the end of the lease terms. Future minimum
lease payments for assets under finance lease are as follows:
Year
2013
2012
2013
2014
2015
2016
2017
2018
Thereafter
Total minimum lease payments
Interest
Net present value of minimum lease payments
Current maturities (Note 18a)
Long-term portion (Note 18b)
-
1,070
885
847
813
754
2,535
6,904
(1,935)
4,969
(648)
4,321
12. ADVANCES AND OTHER NON-CURRENT ASSETS
Advances and other non-current assets as of December 31, 2013 and 2012 consist of:
2013
2012
Advances for purchase of property and equipment
Prepaid rental - net of current portion (Note 8)
Frequency license - net of current portion (Note 8)
Long-term trade receivables - net of current portion (Note 6)
Deferred charges
Claim for tax refund - net of current portion (Note 31)
Security deposits
Restricted cash
Assets not used in operations - net
Others
Total
1,550
1,403
619
558
529
499
73
54
0
9
5,294
652
548
398
354
334
279
607
3,172
(848)
2,324
(510)
1,814
775
1,367
279
294
471
-
103
217
0
4
3,510
Prepaid rental covers rent of leased line and telecommunication equipment and land and building
under lease agreements of the Company and subsidiaries with rental periods ranging from 1 to 33
years.
Long-term trade receivables are measured at amortized cost using the effective interest rate method
payable in installments over 4 years, and arose from providing telecommunication access and
services in rural areas (USO) (Note 41c.v).
54
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
12. ADVANCES AND OTHER NON-CURRENT ASSETS (continued)
As of December 31, 2013 and 2012, deferred charges represent deferred Revenue-Sharing
Arrangement (“RSA”) charges and deferred Indefeasible Right of Use (“IRU”) Agreement charges.
Total amortization of deferred charges for the years ended December 31, 2013 and 2012 amounted to
Rp91 billion and Rp87 billion, respectively.
As of December 31, 2013 and 2012, restricted cash represents time deposits with original maturities
of more than one year and cash pledged as collateral for bank guarantees for the USO contract
(Note 41c.v) and other contracts.
As of December 31, 2013 and 2012,
temporarily idle property and equipment amounted to Rp0 billion and Rp0.4 billion, respectively.
the carrying amount of
the Company and subsidiaries’
Refer to Note 37 for details of related party transactions.
13. INTANGIBLE ASSETS
(i) The changes in the carrying amount of goodwill, software, license and other intangible assets for
the years ended December 31, 2013 and 2012 are as follows:
Gross carrying amount:
Balance, December 31, 2012
Additions
Deductions
Reclassifications/ translations
Balance, December 31, 2013
Accumulated amortization:
Balance, December 31, 2012
Amortization expense during
the year
Deductions
Reclassifications/ translations
Balance, December 31, 2013
Net Book Value
Weighted-average amortization
period
Goodwill
Software
License
Other
intangible
assets
Total
269
1
-
-
270
2,909
521
(8)
10
3,432
(29)
(1,825)
-
-
-
(29)
241
(458)
8
(3)
(2,278)
1,154
66
1
-
-
67
(31)
(6)
-
-
(37)
30
400
114
(112)
(1)
401
(316)
(114)
112
-
(318)
83
3,644
637
(120)
9
4,170
(2,201)
(578)
120
(3)
(2,662)
1,508
7.51 years
11.30 years
3.63 years
Goodwill
Software
License
Other
intangible
assets
Total
Gross carrying amount:
Balance, December 31, 2011
Additions
Acquisition of BDM’s data
center (Note 1d)
Deductions
Reclassifications
Balance, December 31, 2012
192
0
77
-
-
269
2,536
431
-
(58)
-
2,909
815
-
-
-
(749)
66
233
6
3
-
158
400
3,776
437
80
(58)
(591)
3,644
55
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
13. INTANGIBLE ASSETS (continued)
Goodwill
Software
License
Other
intangible
assets
Total
Accumulated amortization:
Balance, December 31, 2011
Amortization expense during
the year
Deductions
Reclassifications
Balance, December 31, 2012
Net Book Value
Weighted-average amortization
period
(29)
(1,459)
-
-
-
(29)
240
(424)
58
-
(1,825)
1,084
(339)
(6)
-
314
(31)
35
(160)
(36)
-
(120)
(316)
84
(1,987)
(466)
58
194
(2,201)
1,443
6.86 years
10.43 years
11.11 years
(ii) Goodwill resulted from sales-purchase transaction of Data Center Business between Sigma and
BDM in 2012 (Note 1d), acquisitions of Ad Medika in 2010 and Sigma in 2008.
(iii) The estimated annual amortization expense of intangible assets from December 31, 2013 is
approximately Rp475 billion. The remaining amortization periods of intangible assets, excluding
land rights, range from 1 to 20 years.
(iv) The aggregate amounts of goodwill allocated to each CGU are as follows:
Sigma
Ad Medika
Total
2013
2012
88
82
170
88
82
170
Metra performed its annual impairment tests on those CGUs based on fair value less cost to sell
using discounted cash flow projections. The impairment tests used management-approved cash
flow projections covering a five-year period. Key assumptions used in the impairment tests are as
follows:
2013
2012
Sigma
Ad Medika
Sigma
Ad Medika
Discount rate
Perpetuity growth rate
11.0%
4.5%
14.0%
4.5%
11.8%
4.5%
11.5%
4.5%
As of December 31, 2013 and 2012, no impairment charge was required for goodwill on
acquisition of subsidiaries, with any reasonably possible changes to the key assumptions applied
not likely to cause the carrying amounts of the CGUs to exceed their recoverable amounts.
(v) As of December 31, 2013, the cost of fully amortized intangible assets that are still used in
operations amounted to Rp1,321 billion.
14. TRADE PAYABLES
Related parties
Purchase of equipment, materials and services
Payables to other telecommunications providers
Sub-total
2013
2012
805
21
826
412
20
432
56
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
14. TRADE PAYABLES (continued)
Third parties
Purchase of equipment, materials and services
Radio frequency usage charges, concession fees
and Universal Service Obligation charges
Payables to other telecommunications providers
Sub-total
Total
Trade payables by currency are as follows:
Rupiah
U.S. dollar
Others
Total
Refer to Note 37 for details of related party transactions.
15. ACCRUED EXPENSES
2013
2012
9,758
960
56
10,774
11,600
2013
2012
8,174
3,373
53
11,600
2013
2012
Operations, maintenance and telecommunications services
Salaries and benefits
General, administrative and marketing expenses
Interest and bank charges
Early retirement program
Total
2,504
1,453
1,126
181
-
5,264
6.023
621
204
6.848
7,280
4,146
3,111
23
7,280
2,917
1,491
882
174
699
6,163
Accruals for early retirement program arose from the Decision No. PR.206.01/r.02/PD000/COP-
B0010000/2012 dated November 1, 2012 of the Human Capital and General Affairs Director on early
retirement program and communicated to the employees on the same date. The Company estimated
the accrual on the basis of the number of eligible employees that met the criteria stipulated in the
Company’s regulation related to this program. Accrued early retirement benefits as of
December 31, 2012 amounting to Rp699 billion were charged to the 2012 consolidated statement of
comprehensive income (Note 27). In 2013, early retirement program has been completed and the
related costs have been fully paid to the eligible employees.
Refer to Note 37 for details of related party transactions.
16. UNEARNED INCOME
Prepaid pulse reload vouchers
Other telecommunications services
Others
Total
2013
2012
3,117
46
327
3,490
2,352
132
245
2,729
57
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
17. SHORT-TERM BANK LOANS
Lenders
Bank CIMB Niaga
Bank UOB
Bank Danamon
BRI
Others
Total
2013
Outstanding
2012
Outstanding
Currency
Original
currency
(in millions)
Rupiah
equivalent
Original
currency
(in millions)
Rupiah
equivalent
Rp
Rp
Rp
Rp
Rp
US$
-
-
-
-
-
-
155
130
80
50
17
-
432
-
-
-
-
-
0.42
20
-
-
-
13
4
37
Refer to Note 37 for details of related party transactions.
Other significant information relating to short-term bank loans as at December 31, 2013 is as follows:
Total
facility
(in
Borrower Currency billions)
Maturity
date
Interest
payment
period
Interest
rate
per annum
Security
Bank CIMB Niaga
April 25, 2005 a
Balebat
Rp
12
October 18, 2014 Monthly
11.00%
April 29, 2008 a
Balebat
Rp
10
October 18, 2014 Monthly
11.00%
March 21, 2013
Infomedia
March 25, 2013
Infomedia
March 27, 2013
Infomedia
April 28, 2013
GSD
Rp
Rp
Rp
Rp
38
38
24
85
October 18, 2014 Monthly
10.25%
October 18, 2014 Monthly
10.25%
October 18, 2014 Monthly
10.25%
August 18, 2014 Monthly
9.75%
September 30,
2013
GSD
Rp
50
August 18, 2014 Monthly
9.75%
BRI
March 14, 2013
Infomedia
Rp
Bank Danamon
August 23, 2013
Infomedia
Rp
50
80
March 14, 2014 Monthly
10.00%
August 23, 2014 Monthly
10.50%
Bank UOB
November 22,
2013
Infomedia
Rp
200 November 22, 2014 Monthly
10.60%
Property and
equipment
(Note 11),
inventories
(Note 7), and trade
receivables (Note 6)
Property and
equipment
(Note 11),
inventories
(Note 7), and trade
receivables (Note 6)
Trade receivables
(Note 6)
Trade receivables
(Note 6)
Trade receivables
(Note 6)
Property and
equipment
(Note 11)
Property and
equipment
(Note 11)
Trade receivables
(Note 6)
Trade receivables
(Note 6)
Trade receivables
(Note 6)
The credit facilities obtained by the Company’s subsidiaries are used for working capital purposes.
a based on the latest amendment on October 10, 2012
58
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
18. CURRENT MATURITIES OF LONG-TERM LIABILITIES
a. Current maturities
Notes
2013
2012
Bank loans
Obligations under finance leases
Bonds and notes
Two-step loans
Total
21
11
20
19
Refer to Note 37 for details of related party transactions.
b. Long-term portion
Scheduled principal payments as of December 31, 2013 are as follows:
4,475
510
440
196
5,621
3,956
648
276
213
5,093
Year
Notes
Total
2015
2016
2017
2018 Thereafter
Bank loans
Bonds and notes
Two-step loans
Obligations under finance leases
21
20
19
11
5,635
3,073
1,702
4,321
2,854
1,045
215
525
1,040
33
218
535
853
-
220
552
487
-
196
545
401
1,995
853
2,164
Total
14,731
4,639
1,826
1,625
1,228
5,413
19. TWO-STEP LOANS
Two-step loans are unsecured loans obtained by the Government which are then re-loaned to the
Company. The loans entered into up to July 1994 were recorded and payable in rupiah based on the
exchange rate at the date of drawdown. Loans entered into after July 1994 are payable in their original
currencies and any resulting foreign exchange gain or loss is borne by the Company.
2013
Outstanding
2012
Outstanding
Original
currency
(in millions)
Rupiah
equivalent
Original
currency
(in millions)
Rupiah
equivalent
Lenders
Overseas banks
Total
Current maturities (Note 18a)
Long-term portion (Note 18b)
Currency
Yen
US$
Rp
8,447
35
-
979
429
507
1,915
(213)
1,702
9,215
40
-
Lenders
Overseas banks
Currency
Payment
schedule
Interest
payment
period
Interest
rate
per annum
US$
Rp
Yen
Semi-annually
Semi-annually
Semi-annually
Semi-annually
Semi-annually
Semi-annually
59
1,031
382
574
1,987
(196)
1,791
4.00%
6.79%
3.10%
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
19. TWO-STEP LOANS (continued)
The loans are intended for the development of telecommunications infrastructure and supporting
telecommunication equipment. The loans are payable in semi-annual
installments and are due on
various dates through 2024.
Since 2008, the Company has used all facilities under the two-step loans program and the drawdown
period for the two-step loans has expired.
The Company is required to maintain financial ratios as follows:
a. Projected net revenue to projected debt service ratio should exceed 1.2:1 for the two-step loans
b.
originating from the Asian Development Bank (“ADB”).
Internal financing (earnings before depreciation and finance costs) should exceed 20% compared
to annual average capital expenditures for loans originating from the ADB.
As of December 31, 2013, the Company complied with the above-mentioned ratios.
Refer to Note 37 for details of related party transactions.
20. BONDS AND NOTES
Bonds and notes
Currency
2013
Outstanding
2012
Outstanding
Original
currency
(in millions)
Rupiah
equivalent
Original
currency
(in millions)
Rupiah
equivalent
Bonds
Series A
Series B
Promissory Notes
PT Huawei
PT ZTE Indonesia (“ZTE”)
Medium Term Notes (“MTN”)
PT Finnet Indonesia (“Finnet”)
Total
Current maturities (Note 18a)
Long-term portion (Note 18b)
a. Bonds
Rp
Rp
US$
US$
Rp
-
-
18
11
-
1,005
1,995
213
136
-
3,349
(276)
3,073
-
-
46
22
-
1,005
1,995
445
216
8
3,669
(440)
3,229
Bonds
Principal
Issuer
Listed
on
Issuance
date
Maturity
date
Interest
payment
period
Interest
rate
per annum
Series A
Series B
Total
1,005 The Company
1,995 The Company
IDX
IDX
June 25, 2010
June 25, 2010
July 6, 2015
July 6, 2020
Quarterly
Quarterly
9.60%
10.20%
3,000
60
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
20. BONDS AND NOTES (continued)
a. Bonds (continued)
The bonds are secured by all of the Company’s assets, movable or non-movable, either existing
or in the future (Note 11c.x). The underwriters of the bonds are Bahana, PT Danareksa Sekuritas
and PT Mandiri Sekuritas and the trustee is PT CIMB Niaga Tbk.
The Company received the proceeds from the issuance of bonds on July 6, 2010.
The funds received from the public offering of bonds net of issuance costs, are to be used for
increasing capital expenditure which consisted of: wave broadband (bandwidth, softswitching,
datacom, information technology and others), infrastructure (backbone, metro network, regional
internet protocol, and satellite system) and optimizing legacy and supporting
metro junction,
facilities (fixed wireline and wireless).
As of December 31, 2013, the rating of the bonds issued by PT Pemeringkat Efek Indonesia
(Pefindo) is idAAA (stable outlook).
Based on the indenture trusts agreement, the Company is required to comply with all covenants or
restrictions, including maintaining financial ratios as follows:
1. Debt to equity ratio should not exceed 2:1.
2. EBITDA to finance costs ratio should not be less than 5:1.
3. Debt service coverage is 125%.
As of December 31, 2013, the Company has complied with the above mentioned ratios.
b. Promissory Notes
Supplier
Currency
Principal
Issuance
date
Payment
schedule
PT Huawei
PT ZTE
Indonesia
(“ZTE”)
US$
US$
0.3
0.1
June 19, 2009
August 20, 2009
Semi-annually
(January 11, 2014 -
June 23, 2016)
Semi-annually
(February 11, 2014 -
June 15, 2016)
Interest
payment
period
Interest
rate
per annum
Semi-annually
6 month LIBOR+2.5%
Semi-annually
6 month LIBOR+1.5%
6 month LIBOR+2.5%
Based on Agreement of Frame Supply and Deferred Payment Arrangement between the
Company and ZTE and PT Huawei, the promissory notes issued by the Company to ZTE and
PT Huawei are vendor financing facilities with no collateral covering 85% of Hand-over Report
(“Berita Acara Serah Terima”) projects with ZTE and PT Huawei.
61
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
21. BANK LOANS
Lenders
Currency
Rp
Rp
Rp
Rp
Rp
US$
Rp
US$
Rp
US$
Rp
US$
Rp
BRI
Syndication of banks
BNI
BCA
Bank Mandiri
ABN Amro Bank N.V.
Stockholm (“AAB
Stockholm”) and Standard
Chartered Bank
Bank CIMB Niaga
Japan Bank for International
Cooperation (“JBIC”)
Bank Bukopin
Bank Ekonomi
Others (each below Rp10 billion)
Total
Unamortized debt issuance cost
Current maturities (Note 18a)
Long-term portion (Note 18b)
2013
Outstanding
2012
Outstanding
Original
currency
(in millions)
Rupiah
equivalent
Original
currency
(in millions)
Rupiah
equivalent
-
-
-
-
-
55
-
18
-
1
-
-
-
3,035
2,426
1,305
858
722
673
365
219
31
12
-
-
1
9,647
(56)
9,591
(3,956)
5,635
-
-
-
-
-
68
-
30
-
-
-
0
-
4,011
1,950
1,201
1,564
1,417
659
174
289
-
-
41
3
-
11,309
(51)
11,258
(4,475)
6,783
Refer to Note 37 for details of related party transactions.
Other significant information relating to bank loans as of December 31, 2013 is as follows:
Total
facility
(in
Borrower
Currency billions)
Current
period
payment
Payment
schedule
Interest
payment
period
Interest
rate
per annum
Security
Syndication of banks
July 29, 2008a
(BNI, BRI and
BJB)
June 16, 2009a
(BNI and BRI)
December 19, 2012
(BNI, BRI and
Bank Mandiri) k
The Company
Rp
2,400
600
Semi-annually
(2010-2013)
Quarterly
3 months
JIBOR+1.20%
The Company
Dayamitra
Rp
Rp
2,700
2,500
675
-
Semi-annually
(2011-2014)
Semi annually
(2014-2020)
Quarterly
Quarterly
3 months
JIBOR+2.45%
3 months
JIBOR+3.00%
BCA
July 9, 2009b&c
and July 5, 2010b&c
Telkomsel
Rp
4,000
666
Semi-annually
(2009-2016)
Quarterly
December 16, 2010a
TII
Rp
200
40
Semi-annually
(2011-2015)
Quarterly
Bank Mandiri
July 9, 2009b&c
and July 5, 2010b&c
Telkomsel
Rp
5,000
695
Semi-annually
(2009-2016)
Quarterly
3 months
JIBOR+1.00%
3 months
JIBOR+1.25%
3 months
JIBOR+1.00%
BRI
October 13, 2010a
The Company
July 20, 2011a
Dayamitra
Rp
Rp
3,000
1,000
1,000
160
Semi-annually
(2013-2015)
Semi-annually
(2011-2017)
Quarterly
Quarterly
3 months
JIBOR+1.25%
3 months
JIBOR+1.40%
62
None
None
Property
and
equipment
(Note 11) and
trade
receivables
(Note 6)
None
None
None
None
Property
and
equipment
(Note 11)
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
21. BANK LOANS (continued)
Total
facility
(in
Borrower
Currency billions)
Current
period
payment
Payment
schedule
Interest
payment
period
Interest
rate
per annum
Security
BRI (continued)
April 26, 2013
GSD
Rp
141
October 30, 2013
GSD
Rp
70
October 30, 2013
GSD
Rp
34
-
-
-
Monthly
(2014-2018)
Monthly
10.00%
Monthly
(2014-2021)
Monthly
10.00%
Monthly
(2014-2021)
Monthly
10.00%
ABN Amro Bank N.V.
Stockholm Branch
(“AAB Stockholm”)
and Standard
Chartered Bank
December 30, 2009b&d
Telkomsel
US$
0.3
0
Semi-annually Semi-annually
BNI
October 13, 2010a
The Company
December 23, 2011 a
PIN
Rp
Rp
1,000
500
(2011-2016)
286
43
Semi-annually
(2013-2015)
Semi-annually
(2013-2016)
Quarterly
Quarterly
6 months
LIBOR+0.82%
3 months
JIBOR+1.25%
3 months
JIBOR+1.50%
November 28, 2012a
Metra
Rp
44
4
Annually
(2013-2015)
Monthly
10.25%
March 13, 2013a&h
Sigma
Rp
300
35
Monthly
(2013-2015)
Monthly
1 month
JIBOR+3.35%
March 26, 2013a
Metra
Rp
60
15
Quarterly
(2013-2016)
Quarterly
10.25%
May 2, 2013a
Sigma
Rp
312
-
Monthly
(2015-2021)
Monthly
1 month
JIBOR+3.35%
Property
and
equipment
(Note 11) and
lease
agreement
Property
and
equipment
(Note 11) and
trade
receivables,
(Note 6) and
lease
agreement
Property
and
equipment
(Note 11) and
trade
receivables,
(Note 6) and
lease
agreement
None
None
Inventories
(Note 7)
and trade
receivables
(Note 6)
Property
and
equipment
(Note 11) and
trade
receivables
(Note 6)
Property
and
equpment
(Note 11) and
trade
receivables
(Note 6)
Property
and
equpment
(Note 11) and
trade
receivables
(Note 6)
Property
and
equpment
(Note 11) and
trade
receivables
(Note 6)
63
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
21. BANK LOANS (continued)
Total
facility
(in
Borrower
Currency billions)
Current
period
payment
Payment
schedule
Interest
payment
period
Interest
rate
per annum
Security
BNI (continued)
November 25, 2013a
Japan Bank for
International
Cooperation (“JBIC”)
Metra
Rp
90
-
Quarterly
(2013-2016)
Monthly
10.25%
Property
and
equpment
(Note 11) and
trade
receivables
(Note 6)
March 26, 2010a&e
The Company
US$
0.06
0
Semi-annually Semi-annually
(2010-2015)
March 28, 2013a&j
The Company
US$
0.03
-
Semi-annually Semi-annually
4.56% and
6 months
LIBOR+0.70%
2.18% and
6 months
LIBOR+1.20%
None
None
Bank CIMB Niaga
March 21, 2007f
GSD
Rp
21
4
July 28, 2009g
Balebat
Rp
2
0.6
Quarterly
(2007-2015)
Monthly
(2010-2015)
Monthly
9.75%
Monthly
11.00%
May 24, 2010 g
Balebat
Rp
1
0.4
Monthly
(2010-2015)
Monthly
11.00%
March 31, 2011
GSD
Rp
24
March 31, 2011
GSD
Rp
13
March 31, 2011
GSD
Rp
12
September 9, 2011
GSD
Rp
41
September 9, 2011
GSD
Rp
11
3
2
2
4
3
Monthly
(2011-2020)
Monthly
9.75%
Monthly
(2011-2019)
Monthly
9.75%
Monthly
(2011-2016)
Monthly
9.75%
Monthly
(2011-2021)
Monthly
9.75%
Monthly
(2011-2015)
Monthly
9.75%
64
Property
and
equipment
(Note 11)
Property
and
equipment
(Note 11),
inventories
(Note 7),
and trade
receivables
(Note 6)
Property
and
equipment
(Note 11),
inventories
(Note 7),
and trade
receivables
(Note 6)
Property
and
equipment
(Note 11) and
lease
agreement
Property
and
equipment
(Note 11) and
lease
agreement
Property
and
equipment
(Note 11) and
lease
agreement
Property
and
equipment
(Note 11) and
lease
agreement
Property
and
equipment
(Note 11) and
lease
agreement
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
21. BANK LOANS (continued)
Total
facility
(in
Borrower
Currency billions)
Current
period
payment
Payment
schedule
Interest
payment
period
Interest
rate
per annum
Bank CIMB Niaga (continued)
August 2, 2012g
Balebat
Rp
4
1
Monthly
(2012-2015)
Monthly
11.00%
September 20, 2012a
TLT
Rp
1,150
September 20, 2012a
TLT
Rp
118
-
-
Monthly
(2015-2030)
Monthly
Monthly
(2015-2030)
Monthly
3 Month
JIBOR
+3.45%
9.00%
October 10, 2012g
Balebat
Rp
1
0.5
Monthly
(2012-2015)
Monthly
11.00%
August 26, 2013
Balebat
Rp
3.5
0.2
Monthly
(2013-2018)
Monthly
11.00%
Bank Ekonomi
September 10, 2008a&h
Sigma
Rp
33
15
Monthly
(2009-2015)
Monthly
9.00%
August 7, 2009a&h
Sigma
Rp
35
August 7, 2009a&h
Sigma
Rp
20
3
7
February 23, 2011a&h
Sigma
Rp
30
16
Monthly
for some
installments
(2009-2013)
Monthly
for some
installments
(2009-2014)
Monthly
(2011-2015)
Monthly
9.00%
Monthly
9.00%
Monthly
9.00%
Security
Property
and
equipment
(Note 11),
inventories
(Note 7),
and
trade
receivables
(Note 6)
Property
and
equipment
(Note 11)
Property
and
equipment
(Note 11)
Property
and
equipment
(Note 11),
inventories
(Note 7),
and
trade
receivables
(Note 6)
Property
and
equipment
(Note 11),
inventories
(Note 7),
and
trade
receivables
(Note 6)
Property
and
equipment
(Note 11)
and trade
receivables
(Note 6)
Property
and
equipment
(Note 11)
and trade
receivables
(Note 6)
Property
and
equipment
(Note 11)
and trade
receivables
(Note 6)
Property
and
equipment
(Note 11)
and trade
receivables
(Note 6)
65
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
21. BANK LOANS (continued)
Total
facility
(in
Borrower
Currency billions)
Current
period
payment
Payment
schedule
Interest
payment
period
Interest
rate
per annum
Bank Ekonomi (continued)
February 23, 2011a&h
Sigma
US$
0.002
0.0003
Monthly
(2011-2015)
Monthly
6.00%
Bank Bukopin
August 4, 2011 i
Patrakom
Rp
9
2
Monthly
(2012-2015)
Monthly
11.00%
June 28, 2013
Patrakom
Rp
35
1.5
December 18, 2012
Patrakom
US$
0.013
0.0003
Monthly
(2013-2016)
Monthly
(2013-2016)
Monthly
11.00%
Monthly
6.50%
Security
Property
and
equipment
(Note 11)
and trade
receivables
(Note 6)
Property
and
equipment
(Note 11)
and trade
receivables
(Note 6)
Property
and
equipment
(Note 11)
Property
and
equipment
(Note 11)
The credit facilities obtained by the Company and subsidiaries are used for working capital purposes.
a As stated in the agreements, the Company and subsidiaries are required to comply with all covenants or restrictions such as
on dividend distribution, obtaining new loans, including maintaining financial ratios. As of December 31, 2013, the Company
and subsidiaries have complied with the ratios.
b Telkomsel has no collateral for its bank loans, or other credit facilities. The terms of the various agreements with Telkomsel’s
lenders and financiers require compliance with a number of pledges and negative pledges as well as financial and other
covenants, which include, among other things, certain restrictions on the amount of dividends and other profit distributions
which could adversely affect Telkomsel’s capacity to comply with its obligation under the facility. The terms of the relevant
agreements also contain default and cross default clauses. As of December 31, 2013, Telkomsel has complied with the
above covenants.
In January 2012, the availability periods of the facilities from BCA and Bank Mandiri expired.
c
d Pursuant to the agreements with PT Ericsson Indonesia (“Ericsson Indonesia”) and Ericsson AB (Note 41a.ii), Telkomsel
entered into an EKN-Backed Facility Agreement (“facility”) with ABN Amro Bank N.V. Stockholm branch (as “the original
lender”) and Standard Chartered Bank (as “the original lender” , “the arranger”, “the facility agent” and “the EKN agent”), and
ABN Amro Bank N.V., Hong Kong (as “the arranger”) for the purchase of Ericsson telecommunication equipment and
services. The facilities consist of facility 1, 2 and 3 amounting to US$117 million, US$106 million, and US$95 million,
respectively. The availability period of facility 1, 2 and 3 expired in July 2010, March 2011 and November 2011, respectively.
In October 2011, EKN agreed to reduce the premium on the unused facility by US$3 million through a cash refund.
In connection with the agreement with NSW-Fujitsu Consortium, the Company entered into a loan agreement with JBIC, the
international arm of Japan Finance Corporation, for the purchase of NSW-Fujitsu Consortium telecommunication equipment
and services. The facilities consist of facility A and B amounting to US$36 million and US$24 million, respectively.
e
f Based on the latest amendment on March 31, 2011
g Based on the latest amendment in 2013
h
i
j
In March 2013, the bank loan was fully repaid by Sigma through refinancing with BNI
In August 2013, the bank loan was rescheduled up to February 2015
In connection with the agreement with NEC Corporation Consortium and TE SubCom, the Company entered into a loan
agreement with JBIC, for the procurement of goods and services from NEC Corporation Consortium and TE SubCom for the
Southeast Asia Japan Cable System project. The facilities consist of facility A and facility B amounting to US$18.8 million and
US$12.5 million, respectively
66
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
22. NON-CONTROLLING INTERESTS
Non-controlling interests in net assets of subsidiaries:
Telkomsel
Metra
GSD
Patrakom
Napsindo
Total
Non-controlling interests in total comprehensive
income (loss) of subsidiaries:
Telkomsel
Metra
Patrakom
GSD
Napsindo
Total
23. CAPITAL STOCK
2013
2012
16,735
87
58
2
-
16,882
15,340
66
31
-
-
15,437
2013
2012
5,499
14
-
(1)
-
5.512
6,071
20
0
(6)
-
6,085
2013
Description
Series A Dwiwarna share
Government
Series B shares
Government
The Bank of New York Mellon Corporation*
Directors (Note 1b):
Indra Utoyo
Honesti Basyir
Priyantono Rudito
Sukardi Silalahi
Public (individually less than 5%)
Total
Treasury stock (Note 25)
Total
Number of
shares
Percentage
of ownership
Total
paid-up capital
1
51,602,353,559
10,031,129,780
27,540
540
540
540
35,467,341,100
97,100,853,600
3,699,142,800
100,799,996,400
-
53.14
10.33
-
-
-
-
36.53
100.00
-
100.00
0
2,580
502
0
0
0
0
1,773
4,855
185
5,040
*The Bank of New York Mellon Corporation serves as the Depositary of registered ADS holders for the Company’s ADSs.
67
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
23. CAPITAL STOCK (continued)
Description
Series A Dwiwarna share
Government
Series B shares
Government
The Bank of New York Mellon Corporation*
Directors (Note 1b):
Indra Utoyo
Honesti Basyir
Priyantono Rudito
Sukardi Silalahi
Public (individually less than 5%)
Total
Treasury stock (Note 25)
Total
2012
Number of
shares**
Percentage
of ownership
Total
paid-up capital
1
-
0
51,602,353,559
10,988,441,080
27,540
540
540
540
33,154,520,300
95,745,344,100
5,054,652,300
100,799,996,400
53.90
11.48
-
-
-
-
34.62
100.00
-
100.00
2,580
549
0
0
0
0
1,658
4,787
253
5,040
* The Bank of New York Mellon Corporation serves as the Depositary of registered ADS holders for the Company’s ADSs.
** After stock split (Note 1c)
The Company issued only 1 Series A Dwiwarna share which is held by the Government and cannot
be transferred to any party, and has a veto in the General Meeting of Stockholders of the Company
with respect to election and removal from the Boards of Commissioners and Directors, issuance of
new shares, and amendments of the Company’s Articles of Association.
24. ADDITIONAL PAID-IN CAPITAL
Proceeds from sale of 933,333,000 shares in excess of par value
through IPO in 1995
Excess of value over cost of selling 211,290,500 shares
treasury stock phase I (Note 25)
Difference in value arising from restructuring
transactions and other transactions between entities
under common control (Note 2d)
Excess of value over cost of treasury stock transferred to
employee stock ownership program (Note 25)
Capitalization into 746,666,640 Series B shares in 1999
Net
2013
2012
1,446
544
478
228
(373)
2,323
1,446
-
-
-
(373)
1,073
68
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
24. ADDITIONAL PAID-IN CAPITAL (continued)
Difference in value arising from restructuring transactions and other transactions of entities under
common control amounting Rp478 billion arose from the early termination of the Company’s exclusive
rights to provide local and inter-local fixed line telecommunication services, for which the Company is
required by the Government to use the funds received from this compensation for the development of
telecommunication infrastructure. As of December 31, 2013 and 2012, the accumulated development
of the related infrastructure amounted to Rp537 billion.
25. TREASURY STOCK
Phase
Basis
Period
I
II
III
-
IV
EGM
AGM
AGM
BAPEPAM - LK
AGM
December 21, 2005 - June 20, 2007
June 29, 2007 - December, 28, 2008
June 20, 2008 - December 20, 2009
October 13, 2008 - January 12, 2009
May 19, 2011 - November 20, 2012
Maximum Purchase
Number
of Shares
1,007,999,964
215,000,000
339,443,313
4,031,999,856
645,161,290
Amount
Rp5,250
Rp2,000
Rp3,000
Rp3,000
Rp5,000
Movements in treasury stock as a result of the repurchase of shares are as follows:
2013
Number
of shares
5,054,652,300
-
%
Rp
Number
of shares*
5.01
-
8,067
3,868,299,800
-
1,186,352,500
(299,057,000)
(0.29)
(433)
2012
%
3.84
1.17
-
-
Rp
6,323
1,744
-
-
-
-
(1,056,452,500)
3,699,142,800
(1.05)
3.67
(1,829)
5,805
5,054,652,300
5.01
8,067
Beginning balance
Number of shares
acquired
Transfer to employees
ownership programme
Proceeds from sale of
treasury stock
Ending balance
*After stock split (Note 1c)
Pursuant to the AGM of Stockholders of the Company held on June 11, 2010, the stockholders
approved the changes to the Company’s plan for the treasury stock as a result of the Share Buyback
I, II and III, as follows:
(i) sold, through or outside stock exchange; (ii) cancellation by deduct its
equity; (iii) implementation of equity stock conversion and (iv) funding.
Based on the Annual General Meeting of the Company on April 19, 2013, the Company's stockholders
approved the change to the plan for the treasury stock phase III, which was decided to be used for the
implementation of the Employee Stock Ownership Program (“ESOP”) for the year 2013.
On May 31, 2013, the Company offered all
its subsidiaries
(collectively referred to as the “participants”), the right to purchase a fixed number of its shares at a
certain price. The shares have become an entitlement of the employees on the transaction dates and
are no longer conditional on the satisfaction of any vesting conditions. Shares which are held by
employees through the ESOP have a lock-up period that varies from 0 up to 12 months, depending on
the position of the employee.
its eligible employees and those of
In the lock-up period, participants may not transfer shares or have shares transactions either through
or outside the stock exchange.
69
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
25. TREASURY STOCK (continued)
Price per share offered was Rp10,714 and each participant received allowance (discount) of
Rp5,575 per share. At the closing of this program, the Company had transferred a part of the treasury
stock phase III to employees totaling 59,811,400 shares (equivalent to 299,057,000 shares after the
stock split) with fair value amounting to Rp661 billion. The excess in value of treasury stock recovered
over acquisition cost of the stock amounting to Rp228 billion was recorded as additional paid-in capital
(Note 24).
The difference between the fair value of treasury stock and amount paid by the participants amounting
to Rp353 billion is recorded in the consolidated statement of comprehensive income (Note 27).
On July 30, 2013, the Company resold 211,290,500 shares (equal to 1,056,452,500 shares after the
stock split) for the repurchase of shares of treasury stock phase I with fair value amounting to
Rp2,409 billion. The excess in value of the treasury stock sold over their acquisition cost amounting to
Rp544 billion was recorded as additional paid-in capital (net of related costs to sell the shares)
(Note 24).
26. REVENUES
Telephone Revenues
Cellular
Usage charges
Monthly subscription charges
Features
Fixed lines
Usage charges
Monthly subscription charges
Call center
Installation charges
Others
Total Telephone Revenues
Interconnection Revenues
Domestic interconnection and transit
International interconnection
Total Interconnection Revenues
Data, Internet, and Information Technology Service
Revenues
Internet, data communication and information technology
services
Short Messaging Services (“SMS”)
Voice over Internet Protocol (“VoIP”)
E-business
2013
2012
30,722
730
686
32,138
6,453
2,682
324
12
230
9,701
41,839
2,971
1,872
4,843
18,373
13,134
119
83
29,477
696
558
30,731
7,323
2,805
228
112
194
10,662
41,393
2,618
1,655
4,273
14,857
12,631
81
55
Total Data, Internet, and Information Technology Service
Revenues
31,709
27,624
70
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
26. REVENUES (continued)
Network Revenues
Leased lines
Satellite transponder lease
Total Network Revenues
Other Telecommunications Service Revenues
Customer Premise Equipment (“CPE”) and terminal
Leases
USO compensation
Directory assistance
Pay TV
Others
Total Other Telecommunications Service Revenues
2013
2012
861
392
1,253
1,197
661
508
308
274
375
3,323
824
384
1,208
1,046
401
253
295
405
245
2,645
TOTAL REVENUES
82,967
77,143
The details of net revenues received by the Company and subsidiaries from agency relationships for
the year ended December 31, 2013 and 2012 are as follows:
Gross revenues
Compensation to value added service providers
Net revenues
Refer to Note 37 for details of related party transactions.
27. PERSONNEL EXPENSES
Salaries and related benefits
Vacation pay, incentives and other benefits
Employees’ income tax
Net periodic pension costs (Note 34)
Net periodic post-retirement health care benefit costs (Note 36)
Housing
Insurance
Other employee benefit
Other post-retirement benefit costs (Note 34)
LSA expense (Note 35)
Early retirement program (Note 15)
Others
Total
Refer to Note 37 for details of related party transactions.
71
2013
2012
18,663
(290)
18,373
15,059
(202)
14,857
2013
2012
3,553
3,252
1,160
873
374
220
92
71
66
19
-
53
9,733
3,257
3,400
1,022
789
90
200
83
38
65
121
699
22
9,786
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
28. OPERATIONS, MAINTENANCE AND TELECOMMUNICATION SERVICE EXPENSES
2013
2012
Operations and maintenance
Radio frequency usage charges (Notes 41c.i and 41c.ii)
Concession fees and Universal Service Obligation charges
Electricity, gas and water
Cost of phone, set top box, SIM and RUIM cards
Cost of IT services
Leased lines and CPE
Vehicles rental and supporting facilities
Insurance
Project Management
Travelling expenses
Others
Total
Refer to Note 37 for details of related party transactions.
10,667
3,098
1,595
1,063
752
677
440
439
374
138
53
36
19,332
9,012
3,002
1,452
879
687
222
407
293
671
102
57
19
16,803
29. GENERAL AND ADMINISTRATIVE EXPENSES
2013
2012
Provision for impairment of receivables (Notes 6d)
General expenses
Training, education and recruitment
Travelling
Collection expenses
Professional fees
Meetings
Security and screening
Social contribution
Stationery and printing
Others
Total
Refer to Note 37 for details of related party transactions.
30. INTERCONNECTION EXPENSES
Domestic interconnection and transit
International interconnection
Total
Refer to Note 37 for details of related party transactions.
72
1,589
675
412
341
340
272
138
93
85
73
137
4,155
2013
2012
3,720
1,207
4,927
915
527
259
259
341
187
105
62
129
55
197
3,036
3,464
1,203
4,667
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION
a. Claims for tax refund
The Company
Value added tax (“VAT”)
Subsidiaries
Value added tax (“VAT”)
Corporate income tax
Income tax
Article 23 - Withholding tax on service delivery
Import duties
Total claims for tax refund
Short-term portion
Long-term portion
b. Prepaid taxes
Subsidiaries
Corporate income tax
VAT
Income tax
Article 23 - Withholding tax on service delivery
c. Taxes payable
The Company
Income taxes
Article 4 (2) - Final tax
Article 21 - Individual income tax
Article 22 - Withholding tax on goods delivery and
imports
Article 23 - Withholding tax on service delivery
Article 25 - Installment of corporate income tax
Article 26 - Withholding tax on non-resident income
Article 29 - Corporate income tax
VAT
2013
2012
142
306
38
13
10
509
(10)
499
2013
2012
58
445
22
525
2013
2012
11
34
5
12
53
1
165
441
722
-
399
18
9
10
436
(436)
-
34
336
2
372
6
21
-
10
30
3
198
374
642
73
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION (continued)
c. Taxes payable (continued)
Subsidiaries
Income taxes
Article 4 (2) - Final tax
Article 21 - Individual income tax
Article 23 - Withholding tax on service delivery
Article 25 - Installment of corporate income tax
Article 26 - Withholding tax on non-resident income
Article 29 - Corporate income tax
VAT
2013
2012
48
82
34
440
16
284
72
976
1,698
d. The components of income tax expense (benefit) are as follows:
2013
2012
Current
The Company
Subsidiaries
Deferred
The Company
Subsidiaries
909
6,086
6,995
(149)
13
(136)
6,859
37
60
32
378
18
674
3
1,202
1,844
878
5,750
6,628
(501)
(261)
(762)
5,866
The reconciliation between the income tax expense calculated by applying the applicable tax rate
of 20% to the profit before income tax less income subject to final tax, and the net income tax
expense as shown in the consolidated statement of comprehensive income is as follows:
Profit before income tax
Less income subject to final tax
Tax calculated at the Company’s applicable
statutory tax rate of 20%
Difference in applicable statutory tax rate
for subsidiaries
Non-deductible expenses
Final income tax expenses
Others
Net income tax expense
74
2013
2012
27,149
(1,780)
25,369
5,074
1,213
460
93
19
6,859
24,228
(913)
23,315
4,663
1,050
381
52
(280)
5,866
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION (continued)
d. The components of income tax expense (benefit) are as follows: (continued)
The reconciliation between the profit before income tax and the estimated taxable income of the
Company for the years ended December 31, 2013 and 2012 is as follows:
2013
2012
Profit before income tax
Add back consolidation eliminations
Consolidated profit before income tax and eliminations
Less profit before income tax of the subsidiaries
Profit before income tax attributable to the Company
Less income subject to final tax
Temporary differences:
Provision for impairment and
trade receivables written-off
Provision for impairment of assets
Net periodic pension and other post-retirement
benefits costs
Finance lease
Deferred installation fee
Provision for personnel expenses
Valuation of fair value of long-term investment
Depreciation and gain on sale of property
and equipment
Payment of provision for early retirement program
Other provisions
Net temporary differences
Permanent differences:
Net periodic post-retirement health care benefit costs
Employee benefits
Donations
Equity in net income of associates and subsidiaries
Gain on sale of long term investment
Others
Net permanent differences
Taxable income of the Company
Current corporate income tax expense
Final income tax expense
Total current income tax expense of the Company
Current income tax expense of the subsidiaries
Total current income tax expense
75
27,149
11,992
39,141
(24,143)
14,998
(433)
14,565
854
596
414
366
83
(13)
(352)
(403)
(699)
33
879
374
247
193
(11,979)
(499)
460
(11,204)
4,240
848
61
909
6,086
6,995
24,228
10,536
34,764
(21,616)
13,148
(344)
12,804
43
246
291
(196)
(72)
537
-
(424)
699
(19)
1,105
90
218
215
(10,583)
-
360
(9,700)
4,209
842
36
878
5,750
6,628
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION (continued)
d. The components of income tax expense (benefit) are as follows: (continued)
Tax Law No. 36/2008 which futher regulated in Government Regulation No. 77/2013 stipulates a
reduction of 5% from the top rate applicable to qualifying listed companies, for those whose stocks
are traded in the IDX which meet the prescribed criteria that the public owns 40% or more of the
total fully paid and traded shares, and such shares are owned by at least 300 parties, with each
party owning less than 5% of the total paid-up shares. These requirements must be met by a
company for a period of 183 days in one tax year. The Company has met all of the required
criteria; therefore, for purposes of calculating income tax expense and liabilities for the financial
reporting periods of December 31, 2013 and 2012, the Company has reduced the applicable tax
rate by 5%.
The Company applied a tax rate of 20% for the fiscal years 2013 and 2012. The subsidiaries
applied a tax rate of 25% for the fiscal years 2013 and 2012.
The Company will submit the above corporate income tax computation in its income tax return
(“Surat Pemberitahuan Tahunan” or “Annual SPT”) for the fiscal year 2013 that will be reported to
the tax office based on prevailing regulations. The amount of corporate income tax for the year
ended December 31, 2012 agreed with what was reported in the Annual SPT.
e. Tax assessment
(i) The Company
The Directorate General of Tax (“DGT”) assessed the Company for Value Added Tax,
withholding income taxes and corporate income tax for fiscal year 2011. Tax assessment for
the fiscal year 2008 has been completed with the issuance of Tax Assessment Letter (SKP)
No. SPHP-2/WPJ.19/KP.03/2014 regarding notice of workup with no correction for Income
Tax Article 21/22/23/26 and 4 (2).
the Company received SKPKBs No. 00056/207/07/093/13 to
In November 2013,
No. 00065/207/07/093/13 dated November 15, 2013, for the underpayment of Value Added
Tax (VAT) for the fiscal year January - September and November 2007 of Rp142 billion. On
January 2014,
the Company filed an objection to the Tax Authorities regarding the
underpayment of VAT. As of the issuance date of the consolidated financial statements, the
Tax Authorities have not yet issued their decision on the objection.
(ii) Telkomsel
On February 25, 2009, the Tax Authorities filed a judicial review request to the Indonesian
Supreme Court (“SC”) for the Tax Court’s acceptance of Telkomsel’s appeal on 2002
withholding tax amounting to Rp 115 billion. On April 3, 2009, Telkomsel filed a contra-appeal
to the SC. In November 2012 Telkomsel received a favorable verdict from the SC which
accepted Telkomsel’s contra-appeal.
On April 21, 2010, the Tax Authorities filed a judicial review request to the SC for the Tax
Court’s acceptance of Telkomsel’s request to cancel the Tax Collection Letter (STP) for the
underpayment of December 2008 Income Tax Article 25 amounting to Rp429 billion (including
a penalty of Rp8 billion). In May 2010, Telkomsel field a contra-appeal to the SC. As of the
date of approval and authorization for issuance of these consolidated financial statements, the
judicial review is still in process.
76
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION (continued)
e. Tax assessment (continued)
On August 10, 2010, the Tax Authorities filed a judicial review request to the SC for the Tax
Court’s acceptance of Telkomsel’s appeal on 2004 and 2005 VAT totaling Rp215 billion. In
September 2010, Telkomsel filed a contra-appeal to the SC. As of the date of approval and
authorization for issuance of these consolidated financial statements, the judicial review is still
in process.
In May and June 2012, Telkomsel received the refund of penalty of 2010 Income Tax
Article 25 underpayment amounting to Rp15.7 billion based on the Tax Court’s verdict. On
July 17, 2012, the Tax Authorities filed a judicial review request to the SC on the Tax Court’s
verdict. On September 14, 2012, Telkomsel filed a contra-appeal to the SC. As of the date of
approval and authorization for issuance of these consolidated financial statements, the judicial
review is still in process.
In August 2012, the Tax Authorities accepted Telkomsel’s objection and refunded the whole
claim for 2008 underpayment of VAT amounting to Rp232 billion (including penalty of Rp81.9
billion).
On March 12, 2012, Telkomsel received assessment letters as a result of a tax audit for the
fiscal year 2010 by the Tax Authorities. Based on the letters, Telkomsel overpaid corporate
income tax and underpaid VAT amounting to Rp597.4 billion and Rp302.7 billion (including
penalty of Rp73.3 billion),
respectively. Telkomsel accepted the assessment on the
overpayment of corporate income tax and Rp12.1 billion of the underpayment of the VAT
(including penalty of Rp6.3 billion). The accepted portion was charged to the 2012
consolidated statement of comprehensive income. On April 5, 2012, Telkomsel received a
refund for the overpayment of corporate income tax for fiscal year 2010 amounting to
Rp294.7 billion, net of underpayment of VAT. On May 24, 2012, Telkomsel filed an objection
to the Tax Authorities for the underpayment of VAT of Rp290.6 billion (including penalty of
Rp67 billion) and recorded it as a claim for tax refund. On May 1, 2013, the Tax Authorities
rejected Telkomsel’s objection. Subsequently, on July 29, 2013, Telkomsel filed an appeal to
the Tax Court. As of
these
consolidated financial statements, the appeal is still in process.
the date of approval and authorization for the issuance of
In December 2013, the Tax Court accepted Telkomsel’s appeal on 2006 VAT and withholding
taxes totaling Rp116 billion. The amount which was previously presented as part of claims for
tax refund is reclassified to advances and other non-current assets.
f. Deferred tax assets and liabilities
The details of the Company and subsidiaries' deferred tax assets and liabilities are as follows:
(Charged)
credited to the
consolidated
statements of
comprehensive
income
December 31,
2012
Acquisition/
divestment
of
subsidiaries
December 31,
2013
The Company
Deferred tax assets:
Provision for impairment of receivables
Net periodic pension and other post-retirement
benefits costs
Employee benefit provisions
Deferred connection fee
Accrued expenses and provision for
inventory obsolescence
Provision for early retirement expense
Total deferred tax assets
276
129
173
54
22
140
794
77
170
84
(30)
16
5
(140)
105
-
-
-
-
-
-
-
446
213
143
70
27
-
899
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION (continued)
f. Deferred tax assets and liabilities (continued)
(Charged)
credited to the
consolidated
statements of
comprehensive
income
December 31,
2012
Acquisition/
divestment
of
subsidiaries
December 31,
2013
Deferred tax liabilities:
Finance leases
Land rights, intangible assets, and others
Valuation of long-term investment
Difference between accounting and tax bases
of property and equipment
Total deferred tax liabilities
Deferred tax liabilities of the Company - net
Telkomsel
Deferred tax assets:
Employee benefit provisions
Provision for impairment of receivables
Recognition of interest under USO arrangements
Total deferred tax assets
Deferred tax liabilities:
Intangible assets
Finance leases
Difference between accounting and tax bases
of property and equipment
Total deferred tax liabilities
Deferred tax liabilities of Telkomsel - net
Deferred tax liabilities of other subsidiaries - net
Deferred tax liabilities - net
Deferred tax assets - net
(64)
(14)
0
(1,581)
(1,659)
(865)
206
118
6
330
(44)
(22)
(2,363)
(2,429)
(2,099)
(95)
(3,059)
89
73
3
(70)
38
44
149
48
4
(6)
46
(18)
(99)
95
(22)
24
(109)
64
71
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(9)
(9)
(78)
9
(11)
(70)
(1,543)
(1,615)
(716)
254
122
0
376
(62)
(121)
(2,268)
(2,451)
(2,075)
(213)
(3,004)
82
(Charged)
credited to the
consolidated
statements of
comprehensive
income
December 31,
2011
Realized
to equity
December 31,
2012
(58)
91
140
43
(31)
(8)
177
-
-
-
-
-
-
-
276
173
140
129
54
22
794
The Company
Deferred tax assets:
Provision for impairment of receivables
Employee benefit provisions
Provision for early retirement expense
Net periodic pension and other post-retirement
benefit costs
Deferred connection fee
Accrued expenses and provision for
inventory obsolescence
Total deferred tax assets
334
82
-
86
85
30
617
78
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION (continued)
f. Deferred tax assets and liabilities (continued)
(Charged)
credited to the
consolidated
statements of
comprehensive
income
December 31,
2011
Realized
to equity
December 31,
2012
Deferred tax liabilities:
Land rights, intangible assets, and others
Finance leases
Difference between accounting and tax bases
of property and equipment
Total deferred tax liabilities
Deferred tax liabilities of the Company - net
Telkomsel
Deferred tax assets:
Employee benefit provisions
Provision for impairment of receivables
Recognition of interest under USO arrangements
Total deferred tax assets
Deferred tax liabilities:
Finance leases
Intangible assets
Difference between accounting and tax bases
of property and equipment
Total deferred tax liabilities
Deferred tax liabilities of Telkomsel - net
Deferred tax liabilities of other subsidiaries - net
Deferred tax liabilities - net
Deferred tax assets - net
(21)
(33)
(1,929)
(1,983)
(1,366)
151
64
-
215
-
(49)
(2,529)
(2,578)
(2,363)
(65)
(3,794)
67
7
(31)
348
324
501
56
53
6
115
(22)
5
166
149
264
(30)
735
27
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5)
(14)
(64)
(1,581)
(1,659)
(865)
207
117
6
330
(22)
(44)
(2,363)
(2,429)
(2,099)
(95)
(3,059)
89
As of December 31, 2013 and 2012, the aggregate amounts of temporary differences associated
with investments in subsidiaries and associated companies, for which deferred tax liabilities have
not been recognized were Rp24,252 billion and Rp20,317 billion, respectively.
Realization of the deferred tax assets is dependent upon the Company and subsidiary’s capability
in generating future profitable operations. Although realization is not assured, the Company and
subsidiaries believe that it is probable that these deferred tax assets will be realized through
reduction of future taxable income when temporary differences reverse. The amount of deferred
tax assets is considered realizable; however, it could be reduced if actual future taxable income is
lower than estimates.
g. Administration
Since 2008 to 2012, the Company has been consecutively entitled to income tax rate reduction of
5% for meeting the requirements in accordance with the Government Regulation No. 81/2007 in
conjunction with the Ministry of Finance Regulation No. 238/PMK.03/2008. On the basis of
historical data, for the year 2013, the Company calculates the deferred tax using the tax rate of
20%.
The taxation laws of Indonesia require that the Company and subsidiaries submit individual tax
returns on the basis of self-assessment. Under prevailing regulations, the DGT may assess or
amend taxes within a certain period. For fiscal years 2007 and earlier, this period is within ten
years of the time the tax became due, but not later than 2013, while for fiscal years 2008 and
onwards, the period is within five years of the time the tax became due.
79
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION (continued)
g. Administration (continued)
The Minister of Finance of the Republic of Indonesia has issued Regulation No.85/PMK.03/2012
dated June 6, 2012 concerning the appointment of State-Owned Enterprises ("SOEs") to withhold,
deposit and report VAT and Sales Tax on Luxury Goods ("PPnBM") according to the procedures
outlined in the Regulation which is effective from July 1, 2012. The Minister of Finance of the
Republic Indonesia also has issued Regulation No.224/PMK.011/2012 dated December 26, 2012
concerning the appointment of SOEs to withhold income tax article 22 which is effective from
February 23, 2013. The Company has withheld, deposited, and reported the VAT and PPnBM or
VAT and also income tax article 22 in accordance with the Regulation.
No tax audit has been conducted for fiscal years 2003, 2005, 2006, 2007, 2009, and 2010 on the
Company. Tax audits have been completed for all other fiscal years, except for fiscal year 2011.
The Company received a certificate of tax audit exemption from the DGT for fiscal years 2007,
2008, 2009 and 2010, 2012 which is valid unless the Company files for corporate income tax
overpayment, in which case a tax audit will be performed.
32. BASIC AND DILUTED EARNINGS PER SHARE
Basic earnings per share is computed by dividing profit for the year attributable to owners of the
parent company amounting to Rp14,205 billion and Rp12,850 billion by the weighted average number
of shares outstanding during the period totaling 96,358,660,797 and 96,011,315,505 (after stock split)
for the years ended December 31, 2013 and 2012, respectively.
Basic earnings per share amounted to Rp147.42 and Rp133.84 (in full amount) for the years ended
December 31, 2013 and 2012, respectively.
The calculation of basic earning per share in 2012 has been retrospectively adjusted in connection
with the Company’s stock split (Note 1c).
No diluted earnings per share is computed because the Company does not have potentially dilutive
financial investments for the years ended December 31, 2013 and 2012.
33. CASH DIVIDENDS AND GENERAL RESERVE
In the AGM of Stockholders of the Company as stated in notarial deed No. 14 dated May 11, 2012 of
Ashoya Ratam,S.H.,MKn., the Company’s stockholders agreed on the distribution of cash dividend
and special cash dividend for 2011 amounting to Rp6,031 billion and Rp1,096 billion, respectively. On
the Company paid the cash dividend and special cash dividend totalling
June 22, 2012,
Rp7,127 billion.
In the AGM of Stockholders of the Company as stated in notarial deed No. 38 dated April 19, 2013 of
Ashoya Ratam,S.H.,MKn., the Company’s stockholders agreed on the distribution of cash dividend
and special cash dividend for 2012 amounting to Rp7,068 billion and Rp1,285 billion, respectively. On
June 18, 2013,
the Company paid the cash dividend and special cash dividend totalling
Rp8,354 billion.
80
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
33. CASH DIVIDENDS AND GENERAL RESERVE (continued)
Appropriation of Retained Earnings
Under the Limited Liability Company Law, the Company is required to establish a statutory reserve
amounting to at least 20% of its issued and paid-up capital.
The balance of the appropriated retained earnings of the Company as of December 31, 2013 and
2012 amounted to Rp15,337 billion.
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS
2013
2012
Prepaid pension benefit costs
The Company
Infomedia
Prepaid pension benefit costs
Pension benefit costs provision and
other post-employment benefit
Pension
The Company
Telkomsel
Pension benefit costs provisions
Other post-retirement benefits
Obligation under the Labor Law
Pension benefit costs provision and
other post-employment benefits
Net periodic pension costs
The Company
Telkomsel
Infomedia
Net periodic pension costs (Note 27)
Other post-retirement benefit costs (Note 27)
Employee benefit costs under the Labor Law
a. Prepaid pension benefit costs
927
-
927
1,644
613
2,257
349
189
2,795
678
194
1
873
66
17
1,031
1
1,032
1,373
419
1,792
310
146
2,248
592
197
0
789
65
38
The Company sponsors a defined benefit pension plan to employees with permanent status prior
to July 1, 2002. The pension benefits are paid based on the participating employees’ latest basic
salary at retirement and the number of years of their service. The plan is managed by Telkom
Pension Fund (“Dana Pensiun Telkom” or “Dapen”). The participating employees contribute 18%
(before March 2003: 8.4%) of
their basic salaries to the pension fund. The Company’s
contributions to the pension fund for the years ended December 31, 2013 and 2012 amounted to
Rp182 billion and Rp186 billion, respectively.
The following table presents the change in projected pension benefits obligation, change in
pension plan assets,
the pension plan and net amount recognized in the
Company’s consolidated statement of financial position as of December 31, 2013 and 2012, for its
defined benefit pension plan:
funded status of
81
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS
(continued)
a. Prepaid pension benefit costs (continued)
2013
2012
Change in projected pension benefits obligation
Projected pension benefits obligation at beginning of year
Service costs
Interest costs
Pension plan participants' contributions
Actuarial (gains) losses
Expected pension benefits paid
Projected pension benefits obligation at end of year
Change in pension plan assets
Fair value of pension plan assets at beginning of year
Expected return on pension plan assets
Employer’s contributions
Pension plan participants' contributions
Actuarial (losses) gains
Expected pension benefits paid
Fair value of pension plan assets at end of year
Funded status
Unrecognized prior service costs
Unrecognized net actuarial (gains) losses
Prepaid pension benefit costs
19,249
450
1,183
44
(5,387)
(656)
14,883
18,222
1,485
182
44
(2,474)
(656)
16,803
1,920
78
(1,071)
927
16,188
372
1,151
44
2,123
(629)
19,249
16,597
1,517
186
44
507
(629)
18,222
(1,027)
217
1,841
1,031
The expected return is determined based on market expectation for returns over the entire life of
the obligation by considering the portfolio mix of the plan assets. The actual return on plan assets
was (Rp989) billion and Rp2,024 billion for the years ended December 31, 2013 and 2012
respectively. Based on the Company’s regulation issued on January 14, 2014 regarding Dapen’s
Funding Policy,
the Company will not give contribution to Dapen when Dapen’s Funding
Sufficiency Ratio (FSR) is above 105%. Therefore, the Company expects no contribution to
defined benefit pension plan in 2014.
The movements of the prepaid pension benefit costs during the years ended December 31, 2013
and 2012 are as follows:
Prepaid pension benefit costs at beginning of year
Net periodic pension costs less amounts
charged to subsidiaries
Amounts charged to subsidiaries
under contractual agreement
Employer’s contributions
Prepaid pension benefit costs at end of year
2013
2012
(1,031)
265
21
(182)
(927)
(990)
133
12
(186)
(1,031)
82
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS
(continued)
a. Prepaid pension benefit costs (continued)
As of December 31, 2013 and 2012, pension plan assets mainly consisted of :
Government bonds
Indonesian equity securities
Corporate bonds
Others
Total
2013
2012
40.30%
21.97%
21.19%
16.54%
37.96%
21.82%
16.91%
23.31%
100.00%
100.00%
Pension plan assets also include Series B shares issued by the Company with fair values totaling
Rp336 billion and Rp223 billion, representing 2.00% and 1.23% of
total plan assets as of
December 31, 2013 and 2012, respectively, and bonds issued by the Company with fair values
totaling Rp151 billion and Rp159 billion representing 0.90% and 0.87% of total plan assets as of
December 31, 2013 and 2012, respectively.
The actuarial valuation for the defined benefit pension plan and the other post-retirement benefits
(Notes 34b and 34c) was performed based on the measurement date as of December 31, 2013
and 2012, with reports dated February 28, 2014 and February 28, 2013, respectively, by
PT Towers Watson Purbajaga (“TWP”), an independent actuary in association with Towers
Watson (“TW”) (formerly Watson Wyatt Worldwide). The principal actuarial assumptions used by
the independent actuary as of December 31, 2013 and 2012 are as follows:
Discount rate
Expected long-term return on pension plan assets
Rate of compensation increases
The components of net periodic pension costs are as follows:
Service costs
Interest costs
Expected return on pension plan assets
Amortization of prior service costs
Net periodic pension costs
Amount charged to subsidiaries
under contractual agreements
Net periodic pension costs less
amounts charged to subsidiaries (Note 27)
2013
2012
9.00%
9.75%
8.00%
6.25%
8.25%
8.00%
2013
2012
450
1,183
(1,485)
139
287
(21)
266
372
1,151
(1,517)
139
145
(12)
133
83
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS
(continued)
a. Prepaid pension benefit costs (continued)
Historical information:
2013
2012
2011
2010
2009
Present value of funded defined
(14,883)
(19,249)
(16,188)
(11,924)
(10,131)
benefit obligation
Fair value of plan assets
16,803
18,222
16,597
15,098
12,300
Surplus (deficit) in the plan
1,920
(1,027)
409
3,174
2,169
Experience adjustments arising on
plan liabilities
Experience adjustments arising on
(20)
(1)
(156)
(314)
(318)
plan assets
2,474
(507)
(410)
(1,604)
(2,028)
b. Pension benefit costs provisions
(i) The Company
The Company sponsors unfunded defined benefit pension plans and a defined contribution
pension plan for its employees.
The defined contribution pension plan is provided to employees hired with permanent status
on or after July 1, 2002. The plan is managed by Financial Institutions Pension Fund (“Dana
Pensiun Lembaga Keuangan” or “DPLK”). The Company’s contribution to DPLK is determined
salaries and amounted to
based on a certain percentage of
Rp6 billion and Rp5 billion for the years ended December 31, 2013 and 2012, respectively.
the participants’
Since 2007, the Company has provided pension benefit based on uniformulation for both
participants prior to and from April 20, 1992 effective for employees retiring beginning
February 1, 2009. The change in benefit had increased the Company’s obligations by
Rp699 billion, which is amortized over 9.9 years until 2016. In 2010, the Company replaced
the uniformulation with Manfaat Pensiun Sekaligus (“MPS”). MPS is given to those employees
reaching retirement age, upon death or upon being disabled starting from February 1, 2009.
The change in benefit had increased the Company’s obligations by Rp435 billion, which is
amortized over 8.63 years until 2018.
84
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS
(continued)
b. Pension benefit cost provisions (continued)
(i) The Company (continued)
The Company also provides benefits to employees during a pre-retirement period in which
they are inactive for 6 months prior to their normal retirement age of 56 years, known as pre-
retirement benefits (“Masa Persiapan Pensiun” or “MPP”). During the pre-retirement period,
the employees still receive benefits provided to active employees, which include, but are not
limited to, regular salary, health care, annual leave, bonus and other benefits. Since 2012, the
Company has issued a new requirement for MPP effective for employees retiring beginning
April 1, 2012, whereby the employee is required to file a request for MPP and if the employee
does not file the request, he or she is required to work until the retirement date.
The following table presents the change in projected benefits obligation of MPS and MPP for
the years ended December 31, 2013 and 2012:
2013
2012
Change in projected benefits obligation
Unfunded projected benefits obligation at
beginning of year
Service costs
Interest costs
Actuarial gains
Benefits paid by employer
Unfunded projected benefits obligation
at end of year
Unrecognized prior service costs
Unrecognized net actuarial losses
Pension benefit costs provisions at end of year
2,436
97
150
(342)
(141)
2,200
(506)
(50)
1,644
2,440
104
173
(128)
(153)
2,436
(639)
(424)
1,373
Movements of the pension benefit costs provisions during the years ended December 31,
2013 and 2012:
Pension benefit costs provisions at beginning of year
Net periodic pension costs
Employer’s contributions
Pension benefit costs provisions at end of year
2013
2012
1,373
412
(141)
1,644
1,067
459
(153)
1,373
85
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS
(continued)
b. Pension benefit costs provisions (continued)
(i) The Company (continued)
The principal actuarial assumptions used by the independent actuary based on the
measurement date as of December 31, 2013 and 2012 are as follow:
Discount rate
Rate of compensation
The components of total periodic pension costs are as follows:
Service costs
Interest costs
Amortization of prior service costs
Recognized actuarial losses
Total periodic pension costs (Note 27)
Historical information:
2013
2012
9.00%
8.00%
6.25%
8.00%
2013
2012
97
150
132
33
412
104
173
133
49
459
2013
2012
2011
2010
2009
Present value of funded defined
benefit obligation
(2,200)
(2,436)
(2,440)
(2,096)
(1,622)
Deficit in the plan
(2,200)
(2,436)
(2,440)
(2,096)
(1,622)
Experience adjustments arising
on plan liabilities
3
72
(30)
23
309
(ii) Telkomsel
Telkomsel provides a defined benefit pension plan to its employees. Under
this plan,
employees are entitled to pension benefits based on their latest basic salary or take-home pay
and the number of years of their service. PT Asuransi Jiwasraya (“Jiwasraya”), a state-owned
life insurance company, manages the plan under an annuity insurance contract. Until 2004,
the employees contributed 5% of their monthly salaries to the plan and Telkomsel contributed
any remaining amount required to fund the plan. Starting 2005, the entire contributions are
fully made by Telkomsel.
Telkomsel’s contributions to Jiwasraya amounted to Rp nil and Rp45 billion for the years
ended December 31, 2013 and 2012, respectively.
86
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS
(continued)
b. Pension benefit costs provisions (continued)
(ii) Telkomsel (continued)
The following table presents the change in projected pension benefits obligation, change in
pension plan assets, funded status of the pension plan and net amount recognized in the
Company’s consolidated statement of financial position for its defined benefit pension plan:
2013
2012
Change in projected pension benefits obligation
Projected pension benefits obligation at beginning of year
Service cost
Interest cost
Actuarial gains (losses)
Expected pension benefits paid
Projected pension benefits obligation at end of year
Changes in pension plan asset
Fair value of pension plan assets at beginning of year
Expected return on pension plan assets
Employer’s contributions
Actuarial gains (losses)
Expected pension benefits paid
Fair value of pension plan assets at end of year
Funded status
Unrecognized items in the consolidated
statement of financial position:
Prior service costs
Net actuarial gain (losses)
Pension benefit costs provisions
1,472
130
88
(789)
(2)
899
666
40
-
(265)
(2)
439
(460)
0
(153)
(613)
The components of the net periodic pension costs are as follows:
Service costs
Interest costs
Expected return on pension plan assets
Amortization of past service costs
Recognized actuarial losses
Net periodic pension costs (Note 27)
2013
2012
130
88
(40)
1
15
194
1,238
119
83
36
(4)
1,472
458
31
42
139
(4)
666
(806)
0
387
(419)
119
83
(31)
1
25
197
87
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS
(continued)
b. Pension benefit costs provisions (continued)
(ii) Telkomsel (continued)
The net periodic pension costs for the pension plan was calculated based on actuary
measurement date as of December 31, 2013 and 2012, with reports dated February 20,
2014 and February 12, 2013, respectively, by TWP, an independent actuary in association
with TW. The principal actuarial assumptions used by the independent actuary based on the
measurement date as of December 31, 2013 and 2012, are as follows:
Discount rate
Expected long-term return on plan assets
Rate of compensation increases
Historical information
2013
2012
9.00%
9.00%
6.50%
6.00%
6.00%
6.50%
Present value of funded defined
benefit obligation
Fair value of plan assets
Deficit in the plan
Experience adjustments arising
on plan liabilities
Experience adjustments arising
2013
2012
2011
2010
2009
(899)
439
(460)
(1,472)
666
(1,237)
458
(806)
(779)
(663)
246
(417)
(399)
154
(245)
43
71
(44)
9
(17)
on plan assets
265
(139)
(192)
(49)
25
c. Other post-retirement benefits
The Company provides other post-retirement benefits in the form of cash paid to employees on
their retirement or termination. These benefits consist of last housing allowance (“Biaya Fasilitas
Perumahan Terakhir” or “BFPT”) and home passage leave (“Biaya Perjalanan Pensiun dan
Purnabhakti” or “BPP”).
Movements of
December 31, 2013 and 2012:
the other post-retirement benefit costs provisions for
the years ended
Other post-retirement benefit costs provisions
at beginning of year
Other post-retirement benefit costs
Other post-retirement benefits paid by the Company
Net other post-retirement benefit
costs provisions at end of year
88
2013
2012
310
66
(27)
349
273
65
(28)
310
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS
(continued)
c. Other post-retirement benefits (continued)
The principal actuarial assumptions used by the independent actuary as of December 31, 2013
and 2012 are as follows:
Discount rate
Rate of compensation
2013
2012
9.00%
8.00%
6.25%
8.00%
Components of
December 31, 2013 and 2012:
the total periodic other post-retirement benefit costs for
the years ended
Service costs
Interest costs
Amortization of past service costs
Recognized actuarial losses
Other post-retirement benefit costs (Note 27)
Historical information:
2013
2012
11
30
7
18
66
10
32
7
16
65
Present value of funded defined
benefit obligation
Deficit in the plan
Experience adjustments arising on
plan liabilities
d. Obligation under the Labor Law
2013
2012
2011
2010
2009
(450)
(450)
(508)
(508)
(462)
(462)
(409)
(409)
(336)
(336)
(7)
5
(13)
11
(1)
Under Law No. 13 Year 2003, the Company and subsidiaries are required to provide minimum
pension benefit, if not covered yet by the sponsored pension plans, to their employees upon
retirement age. The total related obligation recognized as of December 31, 2013 and 2012
amounted to Rp189 billion and Rp146 billion, respectively. The related employee benefit costs
charged to expense amounted to Rp17 billion and Rp38 billion for the years ended December 31,
2013 and 2012, respectively.
35. LONG SERVICE AWARDS (“LSA”)
Telkomsel provides certain cash awards or certain number of days leave benefits to its employees
based on the employees’ length of service requirements, including LSA and LSL. LSA are either paid
at the time the employees reach certain years during employment, or at the time of termination. LSL
are either certain number of days leave benefit or cash, subject to approval by management, provided
to employees who meet the requisite number of years of service and with a certain minimum age.
The obligation with respect to these awards was determined based on an actuarial valuation using the
Projected Unit Credit method, and amounted to Rp336 billion and Rp347 billion as of
December 31, 2013 and 2012, respectively. The related benefit costs charged to expense amounted
to Rp19 billion and Rp121 billion for the years ended December 31, 2013 and 2012, respectively
(Note 27).
89
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
36. POST-RETIREMENT HEALTH CARE BENEFITS
The Company provides a post-retirement health care plan to all of
its employees hired before
November 1, 1995 who have worked for the Company for 20 years or more when they retire, and to
their eligible dependents. The requirement to work for 20 years does not apply to employees who
retired prior to June 3, 1995. The employees hired by the Company starting from November 1, 1995
are no longer entitled to this plan. The plan is managed by Yakes.
The defined contribution post-retirement health care plan is provided to employees hired with
permanent status on or after November 1, 1995 or employees with terms of service less than 20 years
at the time of retirement. The Company’s contribution amounted to Rp17 billion and Rp18 billion for
the years ended December 31, 2013 and 2012, respectively.
The following table presents the change in the projected post-retirement health care benefits
obligation, change in post-retirement health care benefits plan assets, funded status of the post-
retirements health care benefits plan and net amount recognized in the Company’s consolidated
statement of financial position as of December 31, 2013 and 2012:
2013
2012
Change in projected post-retirement
health care benefits obligation
Projected post-retirement health care benefits
obligation at beginning of year
Service costs
Interest costs
Actuarial (gains) losses
Expected post-retirement health care benefits paid
Projected post-retirement health care benefits
obligation at end of year
Change in post-retirement health care benefits plan assets
Fair value of plan assets at beginning of year
Expected return on plan assets
Employer’s contributions
Actuarial (losses) gains
Expected post-retirement health care paid
Fair value of plan assets at end of year
Funded status
Unrecognized net actuarial losses
Post-retirement health care benefit costs provisions
13,162
70
813
(3,099)
(293)
10,547
56
755
2,074
(270)
10,653
13,162
9,913
744
302
(1,005)
(293)
9,661
(992)
240
(752)
8,986
720
300
177
(270)
9,913
(3,249)
2,570
(679)
90
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
36. POST-RETIREMENT HEALTH CARE BENEFITS (continued)
As of December 31, 2013 and 2012, plan assets mainly consisted of:
Mutual funds
Equity securities
Time deposits
Others
Total assets
2013
2012
81.80%
13.14%
3.68%
1.38%
81.00%
7.61%
10.72%
0.67%
100.00%
100.00%
Yakes plan assets also include Series B shares issued by the Company with fair values totaling
Rp120 billion and Rp35 billion representing 1.25% and 0.35% of total plan assets as of December 31,
2013 and 2012, respectively.
The expected return is determined based on market expectation for returns over the entire life of the
obligation by considering the portfolio mix of the plan assets. The actual return on plan assets was
(Rp261 billion) and Rp896 billion for the years ended December 31, 2013 and 2012, respectively. The
Company expects to contribute Rp226 billion to its post-retirement health care plan during 2014.
The components of net periodic post-retirement health care benefit costs are as follows:
Service costs
Interest costs
Expected return on plan assets
Recognized actuarial losses
Net periodic post-retirement benefit costs
Amounts charged to subsidiaries
under contractual agreements
Net periodic post-retirement health care benefit
costs less amounts charged to subsidiaries (Note 27)
2013
2012
70
813
(744)
236
375
(1)
374
56
755
(720)
-
91
(1)
90
The movements of the projected post-retirement health care benefit costs provisions for the years
ended December 31, 2013 and 2012, are as follows:
Projected post-retirement health care benefit costs provisions
at beginning of year
Net periodic post-retirement health care benefits costs
less amounts charged to subsidiaries (Note 27)
Amounts charged to subsidiaries under
contractual agreements
Employer’s contributions
Projected post-retirement health care benefit
costs provisions at end of year
2013
2012
679
374
1
(302)
752
888
90
1
(300)
679
91
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
36. POST-RETIREMENT HEALTH CARE BENEFITS (continued)
The actuarial valuation for the post-retirement health care benefits was performed based on the
measurement date as of December 31, 2013 and 2012, with reports dated February 28, 2014 and
February 28, 2013, respectively, by TWP, an independent actuary in association with TW. The
principal actuarial assumptions used by the independent actuary as of December 31, 2013 and
2012 are as follows:
Discount rate
Expected long-term return on plan assets
Health care costs trend rate assumed for next year
2013
2012
9.00%
9.50%
7.00%
6.25%
7.50%
7.00%
1% change in assumed future health care costs trend rates would have the following effects:
1% point increase 1% point decrease
Service costs and interest costs
Accumulated post-retirement health care benefits obligation
289
1,720
(227)
(1,413)
Historical information:
Present value of funded defined
benefit obligation
Fair value of plan assets
2013
2012
2011
2010
2009
(10,653)
9,661
(13,162)
9,913
(10,547)
8,986
(8,741)
8,005
(7,166)
6,022
Deficit in the plan
(992)
(3,249)
(1,561)
(736)
(1,144)
Experience adjustments arising on
plan liabilities
Experience adjustments arising on
plan assets
(56)
74
(64)
(231)
(722)
1,005
(177)
(222)
(691)
(756)
37. RELATED PARTY TRANSACTIONS
In the normal course of its business, the Company and subsidiaries entered into transactions with
related parties. It is the Company's policy that the pricing of these transactions be the same as those
of arm’s length transactions.
a. Nature of relationships and accounts/transactions with related parties
Details of the nature of relationships and transactions/accounts with significant related parties are
as follows:
Related parties
The Government
Ministry of Finance
State-owned enterprises
Nature of relationships
with related parties
Majority stockholder
Entity under common control
Indosat
Entity under common control
92
Nature of transactions/accounts
Finance costs and investment in
financial instruments
Operation expenses, purchase of property
and equipment, construction and
installation services, insurance expense,
finance income, finance costs,
investment in financial instruments
Interconnection revenues, interconnection
expenses, telecommunications facilities
usage, operating and maintenance cost,
leased lines revenue, satellite transponders
usage revenues, usage of data
communication network system expenses
and lease revenues
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
37. RELATED PARTY TRANSACTIONS (continued)
a. Nature of relationships and accounts/transactions with related parties (continued)
Details of the nature of relationships and transactions/accounts with significant related parties are
as follows:
Related parties
Nature of relationships
with related parties
PT Aplikanusa Lintasarta
Entity under common control
(“Lintasarta”)
Indosat Mega Media
CSM
Entity under common control
Associated company
Patrakom*
Associated company
PSN
Associated company
Indonusa**
Associated company
PT Industri Telekomunikasi
Indonesia (“INTI”)
Entity under common control
Nature of transactions/accounts
Network revenues, usage of data
communication network system expenses
and leased lines expenses
Network revenues
Satellite transponders usage revenues,
leased lines revenues, transmission lease
expenses
Satellite transponders usage revenues,
leased lines revenues, transmission lease
expenses
Satellite transponders usage revenues,
leased lines revenues, transmission lease
expenses, interconnection revenues and
interconnection expense
Leased line revenues, telecommunication
services revenue, data telecommunication
expense
Purchase of property and equipment
PT Asuransi Jasa Indonesia
Entity under common control
Insurance of property and equipment
(“Jasindo”)
PT Jaminan Sosial Tenaga Kerja
Entity under common control
Insurance for employees
(“Jamsostek”)
PT Perusahaan Listrik Negara
Entity under common control
Electricity expenses
(Persero) (“PLN”)
PT Pos Indonesia
State-owned banks
BNI
Bank Mandiri
BRI
BTN
BSM
PT Bank BRI Syariah
(“BRI Syariah”)
Bahana
Entity under common control
Entity under common control
Entity under common control
Entity under common control
Entity under common control
Entity under common control
Entity under common control
Entity under common control
Entity under common control
Koperasi Pegawai Telkom
Entity under common control
(“Kopegtel”)
PT Sandhy Putra Makmur
Entity under common control
(“SPM”)
Koperasi Pegawai Telkomsel
Entity under common control
(“Kisel”)
PT Graha Informatika
Nusantara (“Gratika”)
Directors and commissioners
Yakes
Entity under common control
Key management personnel
Entity under significant
influence
* Patrakom became a subsidiary on September 25, 2013 (Note 3).
** On October 8, 2013, the Company sold its 80% ownership in Indonusa (Notes 3 and 10).
93
Cost of SIM cards
Finance income and finance costs
Finance income and finance costs
Finance income and finance costs
Finance income and finance costs
Finance income and finance costs
Finance costs
Finance costs
Available-for-sale financial assets, bonds
and notes
Purchase of property and equipment,
construction and installation services,
leases of buildings, leases of vehicles,
purchases of materials and construction
services, utilities maintenance and
cleaning services and RSA revenues
Leases of buildings, leases of vehicles,
purchase of materials and construction
services, utilities maintenance and
cleaning services
Leases of vehicles, printing and distribution
of customer bills, collection fee, and other
services fee, distribution of SIM cards and
pulse reload vouchers
Leased lines revenues, purchase of
property and equipment, installation expense,
and maintenance expense
Honorarium and facilities
Medical expenses
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
37. RELATED PARTY TRANSACTIONS (continued)
b. Transactions with related parties
The following are significant transactions with related parties:
REVENUES
Entity under common control
Kisel
Indosat
Gratika
Lintasarta
Sub-total
Associated companies
Indonusa**
CSM
Patrakom*
Sub-total
Others (each below Rp30 billion)
Total
EXPENSES
Entity under common control
Indosat
Kisel
Kopegtel
PLN
Jasindo
SPM
PT Pos Indonesia
Jamsostek
Sub-total
Entity under significant influence
Yakes
Associated companies
PSN
CSM
Patrakom*
Sub-total
Others (each below Rp30 billion)
Total
2013
2012
Amount
% of
total revenues
Amount
% of
total revenues
2,751
1,053
342
64
4,210
45
31
-
76
99
4,385
3.32
1.27
0.41
0.08
5.08
0.05
0.04
-
0.09
0.12
5.29
2,351
1,033
3
85
3,472
-
47
80
127
27
3,626
3.05
1.34
0.00
0.11
4.50
-
0.06
0.10
0.16
0.04
4.70
2013
2012
Amount
% of
total expenses
Amount
% of
total expenses
1,008
743
692
651
333
118
64
39
3,648
159
187
63
-
250
80
4,137
1.77
1.30
1.21
1.14
0.58
0.21
0.11
0.07
6.39
0.28
0.33
0.11
-
0.44
0.14
7.25
1,004
825
817
660
370
25
51
36
3,788
150
165
100
73
338
34
4,310
1.94
1.59
1.58
1.27
0.71
0.05
0.10
0.07
7.31
0.29
0.32
0.19
0,14
0.65
0.07
8.32
* Patrakom became a subsidiary on September 25, 2013 (Note 3).
** On October 8, 2013, the Company sold its 80% ownership in Indonusa (Notes 3 and 10).
94
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
37. RELATED PARTY TRANSACTIONS (continued)
b. Transactions with related parties (continued)
2013
2012
Amount
finance income
Amount
% of total
% of total
finance income
FINANCE INCOME
Entity under common control
State-owned banks
530
62.87
366
61.41
FINANCE COSTS
Majority stockholder
The Government
Entity under common control
State-owned banks
Total
PURCHASE OF PROPERTY
AND EQUIPMENT (Note 11)
Entity under common control
Kopegtel
State-owned enterprises
Sub-total
Others (each below Rp30 billion)
Total
2013
2012
Amount
% of total
finance costs
Amount
% of total
finance costs
84
518
602
5.59
34.44
40.03
82
424
506
3.99
20.63
24.62
2013
2012
Amount
% of total
fixed assets
purchased
Amount
% of total
fixed assets
purchased
223
126
349
59
408
1.03
0.58
1.61
0.27
1.88
237
98
335
47
382
1.60
0.66
2.26
0.32
2.58
Presented below are balances of accounts with related parties:
2013
2012
Amount
% of
total assets
Amount
% of
total assets
a. Cash and cash equivalents (Note 4)
b. Other current financial assets (Note 5)
c. Trade receivables - net (Note 6)
d. Advances and prepaid expenses (Note 8)
Others
e. Advances and other non-current
assets (Note 12)
Entity under common control
BNI
Others
Total
11,736
1,226
900
82
52
3
55
95
9.17
0.95
0.70
0.06
0.04
0.00
0.04
8,992
1,888
701
18
-
14
14
8.07
1.69
0.63
0.02
-
0.01
0.01
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
37. RELATED PARTY TRANSACTIONS (continued)
b. Transactions with related parties (continued)
f.
Trade payables (Note 14)
Entity under common control
INTI
Kopegtel
Indosat
State-owned enterprises
Sub-total
Entity under significant influence
Yakes
Others
Total
g. Accrued expenses (Note 15)
Majority stockholder
The Government
Entity under common control
State-owned banks
Total
h. Advances from customers and suppliers
Majority stockholder
The Government
i. Short-term bank loans (Note 17)
Entity under common control
BRI
BSM
BRI Syariah
Total
j.
Two-step loans (Note 19)
Majority stockholder
The Government
k. Bonds and notes (Note 20)
Entity under common control
Bahana
l.
Long-term bank loans (Note 21)
Entity under common control
BRI
BNI
Bank Mandiri
Total
2013
2012
Amount
% of total
liabilities
Amount
% of total
liabilities
115
82
17
1
215
43
568
826
17
53
70
19
50
14
3
67
0.23
0.16
0.03
0.00
0.42
0.09
1.12
1.63
0.04
0.10
0.14
0.04
0.09
0.03
0.01
0.13
197
115
31
3
346
39
47
432
17
72
89
64
-
5
-
5
0.44
0.26
0.07
0.01
0.78
0.09
0.11
0.98
0.04
0.16
0.20
0.14
-
0.01
-
0.01
1,915
3.79
1,987
4.48
-
-
8
0.02
4,043
2,351
1,069
7,643
8.00
4.65
2.12
14.77
4,630
2,349
1,417
8,396
10.43
5.29
3.19
18.91
96
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
37. RELATED PARTY TRANSACTIONS (continued)
c. Significant agreements with related parties
i. The Government
The Company obtained two-step loans from the Government (Note 19).
ii.
Indosat
The Company has an agreement with Indosat
telecommunications services to the public.
for
the provision of
international
The Company has also entered into an interconnection agreement between the Company’s
fixed line network (Public Switched Telephone Network or “PSTN”) and Indosat’s GSM mobile
cellular telecommunications network in connection with the implementation of
the Indosat
Multimedia Mobile services and the settlement of
the related interconnection rights and
obligations.
The Company also has an agreement with Indosat for the interconnection of Indosat's GSM
mobile cellular telecommunications network with the Company's PSTN, enabling each party’s
customers to make domestic calls between Indosat’s GSM mobile network and the Company’s
fixed line network and allowing Indosat’s mobile customers to access the Company’s IDD
service by dialing “007”.
The Company has been handling customer billings and collections for Indosat. Indosat is
gradually taking over the activities and performing its own direct billing and collection. The
Company receives compensation from Indosat computed at 1% of the collections made by the
Company beginning January 1, 1995, plus the billing process expenses which are fixed at a
certain amount per record. On December 11, 2008, the Company and Indosat agreed to
implement IDD service charge tariff which already takes into account the compensation for
billing and collection. The agreement is valid and effective starting on January to December
2012, and can be applied until a new agreement becomes available.
On December 28, 2006, the Company and Indosat signed amendments to the interconnection
agreements for the fixed line networks (local, SLJJ and international) and mobile network for
the cost-based tariff obligations under the MoCI Regulations No. 8
the implementation of
Year 2006 (Note 40). These amendments took effect on January 1, 2007.
Telkomsel also entered into an agreement with Indosat
telecommunications services to its GSM mobile cellular customers.
for the provision of
international
The Company provides leased lines to Indosat and subsidiaries, namely PT Indosat Mega
Media and Lintasarta. The leased lines can be used by these companies for telephone,
telegraph, data, telex, facsimile or other telecommunication services.
iii. Others
The Company has entered into agreements with associated companies, namely CSM, PSN
and Gratika for the utilization of the Company's satellite transponders or frequency channels
and leased lines.
Telkomsel has an agreement with PSN for the lease of PSN’s transmission link. Based on the
agreement, which was made on March 14, 2001, the minimum lease period is 2 years since
the operation of the transmission link and is extendable subject to agreement by both parties.
As of the issuance date of the consolidated financial statements, the extension is still
in
process.
97
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
37. RELATED PARTY TRANSACTIONS (continued)
c. Significant agreements with related parties (continued)
iii. Others (continued)
Koperasi Pegawai Telkomsel (“Kisel”) is a cooperative that was established by Telkomsel’s
employees to engage in car rental services, printing and distribution of customer bills,
collection and other services principally for the benefit of Telkomsel. Telkomsel also has
dealership agreements with Kisel for distribution of SIM cards and pulse reload vouchers.
d. Key management personnel remuneration
Key management personnel consists of
Company and its subsidiaries.
the Boards of Commissioners and Directors of
the
The Company and subsidiaries provide honorarium and facilities to support the operational duties
of the Board of Commissioners and short-term employment benefits in the form of salaries and
facilities to support the operational duties of the Board of Directors. The total of such benefits is as
follows:
2013
2012
Amount
% of
total expenses
Amount
% of
total expenses
Board of Directors
Board of Commissioners
354
106
0.62%
0.19%
252
61
0.49%
0.12%
38. SEGMENT INFORMATION
Management manages the Company's business portfolios using the customer-centric approach, as part of the
Company’s strategy to provide one-stop solution to customers.
The Company and subsidiaries have four main operating segments, namely personal, home, corporate and
others. The personal segment provides mobile cellular and fixed wireless telecommunications services to
individual customers. The home segment provides fixed wireline telecommunications services, pay TV, data and
internet services to home customers. The corporate segment provides telecommunications services, including
interconnection, leased lines, satellite, VSAT, contact center, broadband access, information technology services,
data and internet services to companies and institutions. Operating segments that are not monitored separately
by the Chief Operation Decision Maker are presented as "Others", which provides building management services.
Management monitors the operating results of the business units separately for the purpose of making decisions
about resource allocation and performance assessment. Segment performance is evaluated based on operating
profit or loss and is measured consistently with operating profit or loss in the consolidated financial statements.
However,
operating segments.
the financing activities and income taxes are not separately monitored and are not allocated to
98
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
38. SEGMENT INFORMATION (continued)
Segment
accounted at market prices.
revenues and expenses include transactions between operating segments and are
Corporate
Home
Personal
Others
Total before
elimination
Elimination
Total
consolidated
2013
Segment results
Revenues
External revenues
Inter-segment revenues
Total segment revenues
Expenses
External expenses
Inter-segment expenses
17,041
8,549
25,590
6,669
2,794
9,463
59,028
2,358
61,386
229
909
1,138
82,967
14,610
97,577
(15,211 )
(5,164 )
(5,939)
(2,946)
(32,991)
(6,472)
(980)
(28)
(55,121)
(14,610)
Total segment expenses
(20,375 )
(8,885)
(39,463)
(1,008)
(69,731)
Segment results
5,215
578
21,923
130
27,846
Other information
Segment assets
Asset held-for-sale
Long-term investments
Total consolidated assets
Capital expenditures
Depreciation and amortization
Impairment of assets
Provision for impairment of receivables
39,718
-
182
(6,237)
(2,423 )
-
(994 )
18,992
-
101
75,604
105
21
(2,340)
(15,662)
(1,487)
(11,234)
-
(390)
(596)
(202)
135,885
105
304
(24,898)
(15,184)
(596)
(1,589)
1,571
-
-
(659)
(40)
-
(3)
2012
-
(14,610)
(14,610)
-
14,610
14,610
-
(8,343)
-
-
-
-
-
-
82,967
-
82,967
(55,121)
-
(55,121)
27,846
127,542
105
304
127,951
(24,898)
(15,184)
(596)
(1,589)
Corporate
Home
Personal
Others
Total before
elimination
Elimination
Total
consolidated
Segment results
Revenues
External revenues
Inter-segment revenues
Total segment revenues
Expenses
External expenses
Inter-segment expenses
15,579
6,468
22,047
7,360
2,223
9,583
54,087
2,188
56,275
(13,961 )
(4,015 )
(5,646)
(2,293)
(31,169)
(5,203)
Total segment expenses
(17,976 )
(7,939)
(36,372)
Segment results
4,071
1,644
19,903
117
648
765
(669)
(16)
(685)
80
77,143
11,527
88,670
(51,445)
(11,527)
(62,972)
25,698
-
(11,527)
(11,527)
-
11,527
11,527
-
30,458
254
17,780
-
67,216
21
611
-
116,065
275
(4,971)
-
Other information
Segment assets
Long-term investments
Total consolidated assets
Capital expenditures
Depreciation and amortization
Impairment of assets
Provision for impairment of receivables
and inventory obsolescence
(92 )
(505)
(318)
(4,375)
(2,079 )
-
(2,083)
(10,664)
(1,168)
(10,940)
-
(247)
(150)
(22)
-
-
(17,272)
(14,209)
(247)
(915)
-
-
-
-
77,143
-
77,143
(51,445)
-
(51,445)
25,698
111,094
275
111,369
(17,272)
(14,209)
(247)
(915)
The Company predominantly generates revenue and profit within Indonesia. Revenue with respect to
international interconnections and assets held by geographical location are disclosed in Note 26 and
Note 1, respectively.
99
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
39. REVENUE-SHARING ARRANGEMENTS (“RSA”)
The Company has entered into separate agreements with several investors under RSA to develop
fixed lines, public card-phone booths, data and internet network, and related supporting
telecommunications facilities.
As of December 31, 2013, the Company has 4 RSA’s with 4 investors. The RSA’s are located in East
Java, Makassar, Pare-pare, Manado, Denpasar, Mataram and Kupang, with concession periods
ranging from 129 to 148 months.
Under the RSA,
the investors finance the costs incurred in developing the telecommunications
facilities and the Company manages and operates the telecommunications facilities upon the
completion of the construction. Repairs and maintenance costs during RSA period are borne jointly by
the Company and investors. The investors legally retain the rights to the property and equipment
constructed by them during the RSA periods. At the end of the RSA period, the investors transfer the
ownership of the telecommunications facilities to the Company at a nominal price.
Generally, the revenues earned in the form of line installation charges, outgoing telephone pulses and
monthly subscription charges are shared between the Company and investors based on certain
agreed amount and/or ratio.
40. TELECOMMUNICATIONS SERVICE TARIFFS
Under Law No. 36 Year 1999 and Government Regulation No. 52 Year 2000, tariffs for operating
telecommunications network and/or services are determined by providers based on the tariff type,
structure and with respect to the price cap formula set by the Government.
a. Fixed line telephone tariffs
The Government has issued a new adjustment tariff formula which is stipulated in the Decree
No. 15/PER/M.KOMINFO/4/2008 dated April 30, 2008 of the Ministry of Communication and
Information (“MoCI”) concerning “Procedure for Tariff Determination for Basic Telephony Services
Connected through Fixed Line Network”.
tariff structure for basic telephony services connected through fixed line
Activation fee
Under the Decree,
network consists of the following:
•
• Monthly subscription charges
• Usage charges
•
Additional facilities fee.
b. Mobile cellular telephone tariffs
the MoCI
On April 7, 2008,
issued Decree No. 09/PER/M.KOMINFO/04/2008 regarding
“Mechanism to Determine Tariff of Telecommunication Services Connected through Mobile
Cellular Network” which provides guidelines to determine cellular tariffs with a formula consisting
of network element cost and retail services activity cost. This Decree replaced the previous
Decree No. 12/PER/M.KOMINFO/02/2006.
100
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
40. TELECOMMUNICATIONS SERVICE TARIFFS (continued)
b. Mobile cellular telephone tariffs (continued)
Basic telephony services tariff
Under MoCI Decree No. 09/PER/M.KOMINFO/04/2008 dated April 7, 2008, the cellular tariffs of
operating telecommunication services connected through mobile cellular network consist of the
following:
•
• Roaming tariff, and/or
• Multimedia services tariff,
with the following traffic structure:
•
• Monthly subscription charges
• Usage charges
•
Additional facilities fee.
Activation fee
c.
Interconnection tariffs
The Indonesian Telecommunication Regulatory Body (“ITRB”), in its letter No. 227/BRTI/XII/2010
dated December 31, 2010, decided to implement new interconnection tariffs effective from
January 1, 2011 for cellular mobile network, satellite mobile network and fixed local network, and
effective from July 1, 2011 for fixed wireless local network with a limited mobility.
Based on Decree No. 201/KEP/DJPPI/KOMINFO/7/2011 dated July 29, 2011 of the Director
General of Post and Informatics,
ITRB approved the Company’s revision of Reference
Interconnection Offer (“RIO”) regarding the interconnection tariff.
ITRB, in its letter No. 262/BRTI/XII/2011 dated December 12, 2011, decided to change the basis
for interconnection SMS tariff to cost basis with a maximum tariff of Rp23 per SMS effective from
June 1, 2012, for all telecommunication provider operators.
d. Network lease tariffs
Through MoCI Decree No. 03/PER/M.KOMINFO/1/2007 dated January 26, 2007 concerning
“Network Lease”, the Government regulated the form, type, tariff structure, and tariff formula for
services of network lease. Pursuant
to the MoCI Decree, the Director General of Post and
Telecommunication issued its Letter No. 115 Year 2008 dated March 24, 2008 which stated “The
Agreement on Network Lease Service Type Document, Network Lease Service Tariff, Available
Capacity of Network Lease Service, Quality of Network Lease Service, and Provision Procedure of
Network Lease Service in 2008 Owned by Dominant Network Lease Service Provider”,
in
conformity with the Company’s proposal.
e. Tariff for other services
The tariffs for satellite lease, telephony services, and other multimedia are determined by the
service provider by taking into account the expenditures and market price. The Government only
determines the tariff formula for basic telephony services. There is no stipulation for the tariff of
other services.
101
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS
a. Capital expenditures
As of December 31, 2013, capital expenditures committed under the contractual arrangements,
principally relating to procurement and installation of switching equipment,
transmission
equipment and cable network are as follows:
Currencies
Rupiah
U.S. dollar
JPY
Euro
SGD
Total
Amounts in
foreign currencies
(in millions)
Equivalent
in rupiah
-
660
58
0.3
0.2
10,404
8,043
7
5
2
18,461
The above balance includes the following significant agreements:
(i)
The Company
Contracting parties
The Company and Sansaine Huawei Consortium
Initial date of
agreement
August 3, 2009
The Company and PT ZTE Indonesia
September 4, 2009
The Company and PT ZTE Indonesia
October 6, 2010
The Company and PT Industri Telekomunikasi
Indonesia
December 30, 2010
The Company and PT Lintas Teknologi Indonesia
June 8, 2011
The Company and G-Pas Consortium
June 14, 2011
The Company and Mandiri Maju Consortium
June 14, 2011
The Company and PT QDC Technologies
June 14, 2011
The Company and TEKKEN-DMT Consortium
June 14, 2011
The Company and DJAFa Consortium
June 14, 2011
The Company and PT Telekomindo Primakarya
June 14, 2011
The Company and PT Nasio Karya Pratama
June 14, 2011
The Company and Jembo Kabel-Tridayasa
Consortium
The Company and Pancamas Consortium
June 14, 2011
June 14, 2011
Significant provisions of the
agreement
Procurement and installation agreement
for softswitch and modernization of
MSAN Divre I, Divre II, Divre III and Divre
IV
Procurement and installation agreement
for modernization of MSAN softswitch
Divre VI and Divre VII
Procurement and installation agreement
for Gigabit Capable Passive Optical
Network (G-PON)
Procurement and installation agreement
for copper wire access modernization
through Trade In/Trade Off method
Procurement and installation agreement
for DWDM Alcatel Lucent (ALU)
Procurement and installation agreement
for Outside Plant Fiber Optic (OSP-FO)
Access and RMJ GPAS
Procurement and installation agreement
for OSP-FO Access and RMJ
Procurement and installation agreement
for OSP-FO Access and RMJ
Procurement and installation agreement
for OSP-FO Access and RMJ
Procurement and installation agreement
for OSP-FO Access and RMJ
Procurement and installation agreement
for OSP-FO Access and RMJ
Procurement and installation agreement
for OSP-FO Access and RMJ
Procurement and installation agreement
for OSP-FO Access and RMJ
Procurement and installation agreement
for OSP-FO Access and RMJ
102
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
a. Capital expenditures (continued)
(i)
The Company (continued)
Contracting parties
Initial date of
agreement
The Company and PT Ardhinusa Mitratel
June 14, 2011
The Company and PT Karya Mitra Nugraha
June 14, 2011
The Company and PT Merbau Prima Sakti
June 14, 2011
The Company and PT Huawei Tech Investment
October 11, 2011
The Company and PT Bina Nusantara Perkasa
December 9, 2011
The Company and PT Multipolar Technology
December 29, 2011
The Company and PT Huawei Tech Investment
January 5, 2012
The Company and PT Ericsson Indonesia - PT
Infracell Nusatama
The Company and PT Len Industri (Persero)
February 8, 2012
March 29, 2012
The Company and PT Sisindokom Lintasbuana
July 4, 2012
The Company and PT Ketrosden Triasmitra - PT
Nautic Maritime Salvage Consortium
August 30, 2012
The Company and Furukawa and Partners
Consortium
November 14, 2012
The Company and INTI-Huawei Consortium
November 14, 2012
The Company and JF DJAFA Consortium
November 14, 2012
The Company and PT Mastersystem Infotama
December 5, 2012
The Company and Binainfo Lokatara Consortium
December 7, 2012
The Company and PT Huawei Tech Investment
December 20, 2012
The Company and PT Infra Karya Pratama
December 28, 2012
The Company and ASN - PT Lintas Consortium
May 6, 2013
The Company and PT Sisindokom Lintasbuana
May 8, 2013
The Company and NEC Corp - PT NEC Indonesia
Consortium
May 28, 2013
Significant provisions of the
agreement
Procurement and installation agreement
for OSP-FO Access and RMJ
Procurement and installation agreement
for OSP-FO Access and RMJ
Procurement and installation agreement
for OSP-FO Access and RMJ
Procurement and installation agreement
for IMS (IP-Multimedia System)
Procurement and installation agreement
for “Sistem Komunikasi Kabel Laut”
(“SKKL”) Sumatera-Bangka (SBCS) and
SKKL Tarakan-Tanjung Selor (TSCS)
Procurement and installation agreement
for Telkom Cache System
Procurement and installation agreement
for ISP WDM SBCS JASUKA
Procurement and installation agreement
for IMS
Procurement and installation agreement
for copper wire access modernization
through Trade In/Trade Off method
Procurement and installation agreement
for managed WIFI for Program of
Indonesia WIFI Package-1
Procurement and installation agreement
for SKKL Luwuk-Tutuyan Cable System
(LTCS)
Procurement and installation of Outside
Plant Fiber To The Home (OSP FTTH)
DIVA Regional V and VII
Procurement and installation of OSP
FTTH DIVA Regional III, IV and VI
Procurement and installation agreement
of OSP FTTH DIVA Regional II
Procurement and installation agreement
for IP Backbone (IPBB) System
Procurement and installation agreement
for Wireless Access Gateway (WAG),
Policy and Charging Enforcement
Function (PCEF) and Policy and
Chargingrule Function (PCRF) Platform
Ericsson
Procurement and installation agreement
for WAG, PCEF and PCRF Huawei
Procurement and installation agreement
for managed WIFI for Program of
Indonesia WIFI Package-2
Procurement and installation agreement
of Sulawesi Maluku Papua Cable System
(SMPCS) project
Procurement and installation agreement
for expansion of PE-VPN CISCO
Procurement and installation of SMPCS
package-2
103
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
a. Capital expenditures (continued)
(i)
The Company (continued)
Contracting parties
Initial date of
agreement
The Company and PT Huawei Tech Investment
June 3, 2013
The Company and PT Datacomm Diangraha
June 26, 2013
The Company and PT NEC Indonesia
July 8, 2013
The Company and PT Lintas Teknologi Indonesia
July 22, 2013
The Company and NEC Corporation
October 2, 2013
The Company and PT ZTE Indonesia
October 2, 2013
The Company and PT Wahana Ciptasinatria
November 7, 2013
The Company and PT Cisco Technologies
Indonesia
The Company and PT Huawei Tech Investment
November 14, 2013
December 6, 2013
The Company and PT Huawei Tech Investment
December 6, 2013
The Company and PT ASB-PT ALU Indonesia-PT
GBN - PT Lintas Consortium
December 6, 2013
(ii) Telkomsel
Contracting parties
Telkomsel, PT Ericsson Indonesia, Ericsson AB,
PT Nokia Siemens Networks, NSN Oy and Nokia
Siemens Network GmbH & Co. KG
Telkomsel, PT Ericsson Indonesia and PT Nokia
Siemens Networks
Telkomsel, PT Ericsson Indonesia, Ericsson AB,
PT Nokia Siemens Networks, NSN Oy, Huawei
International Pte. Ltd., PT Huawei and PT ZTE
Indonesia
Telkomsel, PT Packet Systems Indonesia and PT
Huawei
Initial date of
agreement
April 17, 2008
April 17, 2008
March and June
2009
February 3, 2010
Significant provisions of the agreement
Procurement and installation agreement
for expansion of Metro Ethernet Platform
Huawei
Procurement and installation agreement
for expansion of Maintenance Support
(MS) Service for Metro Ethernet Platform
ALU
Procurement and installation agreement
for expansion of PE-Speedy and redirector
Procurement and installation agreement
for expansion of DWDN platform ALU
Procurement and installation agreement
for expansion of Ring Capacity of
Surabaya-Ujung Pandang-Banjarmasin
Backbone
Procurement and installation agreement of
OLT and ONT
Procurement and installation agreement
for Policy Control Equipment and
Enforcement Function (PCEF)
The partnership for procurement and
installation agreement of WIFI CISCO
Procurement and installation agreement
for IP Radio Equipment for Backhaul
Node-B Telkomsel Package-2 Platform
Huawei
Procurement and installation agreement
for 10 Gigabyte of Capable Passive
Optical Network (XGPON) Platform
Huawei
Procurement and installation agreement
for XGPON Platform ALU
Significant provisions of the agreement
The combined 2G and 3G CS Core
Network Rollout Agreements
Technical Service Agreement (TSA) for
combined 2G and 3G CS Core Network
2G BSS and 3G UTRAN Rollout
agreement for the provision of 2G GSM
BSS and 3G UMTS Radio Access
Network
Maintenance and procurement of
equipment and related service agreement
for Next Generation Convergence IP RAN
Rollout and Technical Support
104
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
a. Capital expenditures (continued)
(ii) Telkomsel (continued)
Contracting parties
Telkomsel, PT Datacraft Indonesia and PT
Huawei
Initial date of
agreement
February 3, 2010
Telkomsel, Amdocs Software Solutions Limited
Liability Company and PT Application Solutions
February 8, 2010
Telkomsel and PT Application Solutions
February 8, 2010
Telkomsel, PT Nokia Siemens Networks and
NSN Oy
Telkomsel and PT Nokia Siemens Networks
Telkomsel, Amdocs Software Solutions Limited
Liability Company and PT Application Solutions
January 27, 2011
January 27, 2011
July 5, 2011
Telkomsel and PT Ericsson Indonesia
December 21, 2011
Telkomsel, Apple South Asia Pte. Ltd. and
PT Mitra Telekomunikasi Selular (“MTS”)
Telkomsel and Huawei International Pte. Ltd. and
PT Huawei
Telkomsel and PT Ericsson Indonesia
July 16, 2012
July 17, 2012
March 25, 2013
Telkomsel and Wipro Limited, Wipro Singapore
Pte. Ltd. and PT WT Indonesia
Telkomsel and PT Ericsson Indonesia
April 23, 2013
October 22, 2013
(iii) GSD
Contracting parties
TLT and PT Adhi Karya
Initial date of
agreement
November 6, 2012
TLT and PT Indalex
February 11, 2013
GSD and PT Pembangunan Perumahan
(Persero)
TLT and PT Jaya Kencana
March 5, 2013
May 14, 2013
Significant provisions of the
agreement
Maintenance and procurement of
equipment and related service agreement
for Next Generation Convergence Core
Transport Rollout and Technical Support
Online Charging System (“OCS”) and
Service Control Points (“SCP”) System
Solution Development Agreement
Technical Support Agreement to provide
technical support services for the OCS
and SCP
Soft HLR Rollout Agreement
Soft HLR Technical Support Agreement
Development and Rollout agreement for
Customer Relationship Management and
Contact Center solutions
Development and Rollout Operating
Support System (“OSS”) agreement
Purchasing of iPhone products and
provision of cellular network service
CS Core System Rollout and CS Core
System Technical Support agreement
Technical Support Agreement (TSA) for
the procurement of Gateway GPRS
Support Node (“GGSN”) Service Complex
agreement
Development and procurement of
OSDSS Solution agreement
Procurement of GGSN Service Complex
Rollout agreement
Significant provisions of the
agreement
Service arrangement structure and main
contractor architecture for Telkom Tower
Building development project
Procurement agreement for the Façade
construction phase I unitized system
Tower I and Tower II of Telkom Landmark
Tower Building
Development of Telkomsel’s building
agreement
Procurement and installation agreement
for electrical construction of Telkom
Landmark Tower Building
105
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
a. Capital expenditures (continued)
(iv) DMT
Contracting parties
DMT and PT M Jusuf & Sons
(v) TII
Initial date of
agreement
December 20, 2012
Significant provisions of the
agreement
Telecommunication tower development
agreement
Contracting parties
TL and Digicel (TL) LDA (Digicel)
TL, Ericsson AB and PT Ericsson Indonesia
Initial date of
agreement
August 28, 2012
November 2, 2012
TL, Ericsson AB and PT Ericsson Indonesia
February 1, 2013
TL and PT Cascadiant Indonesia
December 31, 2012
December 31, 2012
November 20, 2013
Significant provisions of the
agreement
Trading tower location agreement
Operational Supporting System (OSS),
Base Sub Station (BSS) and Value
Added System (VAS) System Rollout and
Radio Access Network (RAN) and Core
System Rollout agreement
Management service agreement for end-
to-end mobile network
Installation and maintenance service
agreement
Purchase of equipment phase I
agreement
Purchase of equipment phase II
agreement
b. Borrowings and other credit facilities
(i)
As of December 31, 2013, the Company has bank guarantee facilities for tender bond,
performance bond, maintenance bond, deposit guarantee and advance payment bond for
various projects of the Company, as follows:
Lenders
BRI
BNI
Bank Mandiri
Total
Total
facility
350
250
150
750
Maturity
Currency
March 14, 2014
March 31, 2014
December 23, 2014
Rp
US$
Rp
US$
Rp
Facility utilized
Original
currency
(in millions)
Rupiah
equivalent
-
0
-
0
-
209
1
100
2
45
357
(ii)
Telkomsel has a US$3 million bond and bank guarantee and standby letter of credit facilities
with SCB, Jakarta. The facilities expire on July 31, 2014. Under these facilities, as of
December 31, 2013, Telkomsel has issued a bank guarantee of Rp20 billion (equivalent to
US$1.7 million) for a 3G performance bond (Note 41c.i). The bank guarantee is valid until
March 24, 2014.
Telkomsel has a Rp200 billion bank guarantee facilitiy with BRI. The facility will expire on
September 25, 2014. Under the facility, as of December 31, 2013, Telkomsel has issued a
bank guarantee of Rp20 billion (equivalent to USD1.6 million) as a 3G performance bond
(Note 41c.i) valid until May 31, 2014 and Rp111 billion (equivalent to USD9.1 million) as
payment commitment guarantee for annual right of usage fee valid until March 31, 2014.
Telkomsel also has a Rp100 billion bank guarantee with BNI. The bank guarantee is valid
until December 11, 2014. Telkomsel was this facility to replace the time deposit used
guaranty for the USO program amounting to Rp92,653 billion.
(iii) TII has a US$15 million bank guarantee from Bank Mandiri. The facility expires on
December 19, 2014. Under this facility, as of December 31, 2013, TII has issued a bank
to US$0,76 million) for mobile spectrum license
guarantee of Rp9 billion (equivalent
performance bond in Timor Leste.
106
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
c. Others
(i) 3G license
reference
With
07/PER/M.KOMINFO/2/2006,
No. 268/KEP/M.KOMINFO/9/2009 and No. 191 year 2013 of the MoCI (Note 2i), Telkomsel is
required, among other things, to:
Decision
Letters
No.
the
to
1. Pay an annual BHP fee which is calculated based on a certain formula over the license
term (10 years) as set forth in the Decision Letters. The BHP is payable upon receipt of
the notification letter (“Surat Pemberitahuan Pembayaran”) from the DGPI. The BHP fee is
payable annually up to the expiry date of the license.
2. Provide roaming access for the existing other 3G operators.
3. Contribute to USO development.
4. Construct a 3G network which covers at least 14 provinces by the sixth year of holding the
3G license.
5.
Issue a performance bond each year amounting to Rp20 billion or 5% of the annual fee to
be paid for the subsequent year, whichever is higher.
(ii) Radio Frequency Usage
Based on the Decree No. 76 dated December 15, 2010 of the Government of the Republic of
Indonesia, which amended Decree No. 7 dated January 16, 2009, the annual frequency
usage fees for bandwidths of 800 Megahertz (“MHz”), 900 MHz and 1800 MHz are
determined using a formula set forth in the Decree. The Decree is applicable for 5 years
unless further amended.
As an implementation of the above Decree, the Company and Telkomsel paid the first year
and second year annual frequency usage fees in 2010 and 2011, respectively.
Based on Decision Letters No. 495 dated August 29, 2012 and No. 491 dated
August 29, 2012, the MoCI determined that the third year (Y3), 2012, annual frequency usage
fees of the Company and Telkomsel were Rp174 billion and Rp1,718 billion, respectively. The
fees were paid in December 2012.
Based on Decision Letters No. 881 dated September 10, 2013 and No. 884 dated
September 10, 2013, the MoCI determined that the fourth year (Y4), 2013, annual frequency
the Company and Telkomsel were Rp213 billion and Rp1,649 billion,
usage fees of
respectively. The fees were paid in December 2013 (Note 2i).
(iii) Apple, Inc
On January 9 and July 16, 2009, Telkomsel entered into agreements with Apple, Inc for the
purchase of iPhone products, marketing it to customers using third parties (PT Trikomsel OKE
and PT Mitra Telekomunikasi Selular) and providing cellular network services over a 3-year
term. Subsequently, on July 16, 2012, Telkomsel replaced the agreements with a new
agreement. Cumulative minimum iPhone units to be purchased up to June 2015 are at least
500,000 units.
107
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
c. Others (continued)
(iv) Future Minimum Lease Payments of Operating Lease
The Company and subsidiaries entered into non-cancelable lease agreements with both third
and related parties. The lease agreements cover leased lines, telecommunication equipment
and land and building with terms ranging from 1 to 10 years and with expiry dates between
2014 and 2023.
Future minimum lease payments under the operating lease agreements as of December 31,
2013 are as follows:
As lessee
As lessor
(v) USO
Total
14,037
4,571
Less than
1 year
1-5
years
More than
5 years
1,845
1,025
6,365
2,596
5,827
950
The MoCI issued Regulation No. 15/PER/M.KOMINFO/9/2005 dated September 30, 2005,
which sets
forth the basic policies underlying the USO program and requires
telecommunications operators in Indonesia to contribute 0.75% of their gross revenues (with
due consideration for bad debts and interconnection charges) for USO development. Based
the contribution was
on the Government’s Decree No. 7/2009 dated January 16, 2009,
changed to 1.25% of gross revenues, net of bad debts and/or interconnection charges and/or
connection
Decree
No. 05/PER/M.KOMINFO/2/2007 was replaced by Decree No. 45 year 2012 of the MoCi
which was effective from January 22, 2013. The Decree stipulates, among other things, the
exclusion of certain revenues that are not considered as part of gross revenues as a basis to
calculate the USO charged, and changed the payment period which was previously on a
quarterly basis to become quarterly or semi-annually.
Subsequently,
December
charges.
2012,
in
Based on MoCI Decree No. 32/PER/M.KOMINFO/10/2008 dated October 10, 2008 which
replaced MoCI Decree No. 11/PER/M.KOMINFO/04/2007 dated April 13, 2007 and MoCI
Decree No. 38/PER/M.KOMINFO/9/2007 dated September 20, 2007, it is stipulated that,
in providing telecommunication access and services in rural areas
among others,
by
determined
(USO Program),
Balai Telekomunikasi dan Informatika Pedesaan (“BTIP”) which was established based on
MoCI Decree No. 35/PER/M.KOMINFO/11/2006 dated November 30, 2006. Subsequently,
based on Decree No. 18/PER/M.KOMINFO/11/2010 dated November 19, 2010 of MoCI, BTIP
was changed to Balai Penyedia dan Pengelola Pembiayaan Telekomunikasi dan Informatika
(“BPPPTI”).
selection
provider
process
through
the
is
a
108
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
c. Others (continued)
(v) USO (continued)
a. Company
On March 12, 2010, the Company was selected in a tender by the Government through
BTIP to provide internet access service centers for USO sub-districts for a total amount of
Rp322 billion, covering Nanggroe Aceh Darussalam, Sumatera Utara, Sulawesi Utara,
Gorontalo, Sulawesi Tengah, Sulawesi Barat, Sulawesi Selatan and Sulawesi Tenggara.
On December 23, 2010, the Company was selected in a tender by the Government
through BTIP to provide mobile internet access service centers for USO sub-districts for a
total amount of Rp528 billion, covering Jambi, Riau, Kepulauan Riau, Sulawesi Utara,
Sulawesi Tengah, Gorontalo, Sulawesi Barat, Sulawesi Tenggara, Kalimantan Tengah,
Sulawesi Selatan, Papua and Irian Jaya Barat.
b. Telkomsel
On January 16 and 23, 2009, Telkomsel was selected in a tender by the Government
through BTIP to provide telecommunication access and services in rural areas
(USO Program) for a total amount of Rp1.66 trillion, covering all Indonesian territories
except Sulawesi, Maluku and Papua. Telkomsel will obtain local fixed-line licenses and
the right to use radio frequency in the 2390 MHz - 2400 MHz bandwith.
the agreements with BTIP were amended, which
Subsequently,
amendments cover, among other things, changing the price to Rp1.76 trillion and
changing the term of payment from quarterly to monthly or quarterly.
in 2010 and 2011,
In January 2010, the MoCI granted Telkomsel operating licenses to provide local fixed-
line services under the USO program.
On December 27, 2011, Telkomsel (on behalf of Konsorsium Telkomsel, a consortium
which was established with Dayamitra on December 9, 2011) was selected by BPPPTI as
a provider of the USO Program in the border areas for all packages (package 1 to
package 13) with a total price of Rp830 billion. On such date, Telkomsel was also
selected by BPPPTI as a provider of the USO Program (upgrading) of “Desa Pinter” or
“Desa Punya Internet” for 1, 2 and 3 packages with a total price of Rp261 billion.
109
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
c. Others (continued)
(v) USO (continued)
For the years ended December 31, 2013 and 2012, the Company and Telkomsel recognized
the following amounts:
Revenues
Construction
Operation of telecommunication
service centre
Profits
Construction
Operation of telecommunication
service centre
2013
2012
67
508
11
150
245
353
6
83
As of December 31, 2013, the Company’s and Telkomsel’s trade receivables from the USO
programs which are measured at amortized cost using the effective interest rate method
amount to Rp654 billion (Notes 6 and 12).
42. CONTINGENCIES
In the ordinary course of business, the Company and subsidiaries have been named as defendants in
various legal actions in relation with land disputes, monopolistic practice and unfair business
competition and SMS cartel practices. Based on management's estimate of the probable outcomes of
these matters, the Company and subsidiaries have recognized provision for losses amounting to
Rp49 billion as of December 31, 2013.
a. The Company, Telkomsel and seven other local operators are being investigated by The
Commission for the Supervision of Business Competition (“Komisi Pengawasan Persaingan
Usaha” or “KPPU”) for allegations of SMS cartel practices. As a result of the investigations on
June 17, 2008, KPPU found that the Company, Telkomsel and certain other local operators had
violated Law No. 5 year 1999 article 5 and charged the Company and Telkomsel penalty in the
amounts of Rp18 billion and Rp25 billion, respectively.
Management believes that there are no such cartel practices that led to a breach of prevailing
regulations. Accordingly, the Company and Telkomsel filed an appeal with the Bandung District
Court and South Jakarta District Court on July 14, 2008 and July 11, 2008, respectively.
110
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
42. CONTINGENCIES (continued)
Due to the filing of case by operators in various courts, the KPPU subsequently requested the
Supreme Court (SC) to consolidate the cases into the Central Jakarta District Court. Based on the
SC’s decision letter dated April 12, 2011, the SC appointed the Central Jakarta District Court to
investigate and resolve the case.
As of
the issuance date of
notification on the case from the court.
the consolidated financial statements,
there has not been any
b. The Company is a defendant in a case filed in Makassar District Court by Andi Jindar Pakki and
his affiliates over a land property on Jl. A.P. Pettarani. On May 8, 2013, the court pronounced its
verdict and ordered the Company to pay fair compensation or to vacate and surrender the
disputed land to the plaintiffs.
On May 20, 2013 the Company filed an appeal to the Makassar High Court, objecting to the
District Court’s ruling. In December 2013, the Makassar High Court pronounced its verdict that is
favorable to the plaintiffs and the Company filed an appeal to the Supreme Court. As of the
issuance date of the consolidated financial statements, no decision has been reached on the
appeal.
43. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES
Assets and liabilities denominated in foreign currencies are as follows:
Assets
Cash and cash equivalents
Other current financial assets
Trade receivables
Related parties
Third parties
Other receivables
Advances and other non-current assets
Total assets
Liabilities
Trade payables
Related parties
Third parties
Other payables
Accrued expenses
Short-term bank loan
Advances from customers and suppliers
Current maturities of long-term liabilities
Promissory notes
Long-term liabilities - net of current maturities
Total liabilities
Liabilities - net
Assets
Cash and cash equivalents
Other current financial assets
Trade receivables
Related parties
Third parties
Other receivables
Advances and other non-current assets
Total assets
U.S. dollar
(in millions)
Japanese yen
(in millions)
Others*
(in millions)
Rupiah
equivalent
(in billions)
2013
394.30
10.78
2.44
66.27
0.68
5.76
480.23
(1.40)
(275.35)
(7.62)
(51.41)
-
(1.60)
(34.85)
(28.67)
(78.82)
(479.72)
1.23
-
-
-
-
-
1.23
-
-
-
(18.63)
-
-
(767.90)
-
(7,678.98)
(8,465.51)
0.51
(8,464.28 )
2012
11.42
-
-
0.17
0.13
-
11.72
-
(4.33)
(0.09)
(0.01)
-
(0.01)
-
-
-
(4.44)
7.28
4,940
131
30
808
10
70
5,989
(17)
(3,409)
(94)
(629)
-
(20)
(514)
(349)
(1,850)
(6,882)
(893)
U.S. dollar
(in millions)
Japanese yen
(in millions)
Others*
(in millions)
Rupiah
equivalent
(in billions)
412.69
7.17
9.03
74.89
1.20
9.89
514.87
1.33
-
-
-
-
-
1.33
6.38
-
-
0.44
0.06
-
6.88
4,042
69
87
727
12
95
5,032
* Assets and liabilities denominated in other foreign currencies are presented as U.S. dollar equivalents using the buy and sell rates quoted by
Reuters prevailing at the end of the reporting period.
111
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
43. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES (continued)
Liabilities
Trade payables
Related parties
Third parties
Other payables
Accrued expenses
Short-term bank loans
Advances from customers and suppliers
Current maturities of long-term liabilities
Promissory notes
Long-term liabilities - net of current maturities
Total liabilities
Liabilities - net
2012
U.S. dollar
(in millions)
Japanese yen
(in millions)
Others*
(in millions)
Rupiah
equivalent
(in billions)
(1.49)
(320.34)
(0.92)
(75.07)
(0.42)
(0.80)
(30.75)
(68.62)
(112.84)
(611.25)
-
-
-
(32.87)
-
-
(767.90)
-
(8,446.87)
(9,247.64)
(96.38)
(9,246.31 )
-
(2.41)
(0.13)
(3.00)
-
(0.20)
-
-
-
(5.74)
1.14
(14)
(3,120)
(10)
(759)
(4)
(10)
(383)
(661)
(2,035)
(6,996)
(1,964)
* Assets and liabilities denominated in other foreign currencies are presented as U.S. dollar equivalents using the buy and sell rates quoted by
Reuters prevailing at the end of the reporting period.
The Company and subsidiaries’ activities expose them to a variety of financial risks, including the
effects of changes in debt and equity market prices, foreign currency exchange rates, and interest
rates.
If the Company and subsidiaries report monetary assets and liabilities in foreign currencies as of
December 31, 2013 using the exchange rates on February 28, 2014, the unrealized foreign exchange
gain will increase by Rp13 billion.
44. FINANCIAL RISK MANAGEMENT
1. Financial risk management
the Company and subsidiaries’
The Company and subsidiaries activities expose them to a variety of financial risks such as
market risks (including foreign exchange risk and interest rate risk), credit risk and liquidity risk.
Overall,
financial risk management program is intended to
minimize losses on the financial assets and financial liabilities arising from fluctuation of foreign
currency exchange rates and the fluctuation of interest rates. Management has a written policy for
foreign currency risk management mainly on time deposit placements and hedging to cover
foreign currency risk exposures for periods ranging from 3 up to 12 months.
Financial risk management is carried out by the Corporate Finance unit under policies approved
by the Board of Directors. The Corporate Finance unit identifies, evaluates and hedges financial
risks.
a. Foreign exchange risk
The Company and subsidiaries are exposed to foreign exchange risk on sales, purchases
and borrowings that are denominated in foreign currencies. The foreign currency
denominated transactions are primarily in U.S. dollar and Japanese yen. The Company and
subsidiaries’ exposures to other foreign exchange rates are not material.
Increasing risks of foreign currency exchange rates on the obligations of the Company and
subsidiaries are expected to be offset by the effects of the exchange rates on time deposits
and receivables in foreign currencies that are equal to at least 25% of the outstanding current
liabilities.
112
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
44. FINANCIAL RISK MANAGEMENT (continued)
1. Financial risk management (continued)
a. Foreign exchange risk (continued)
The following table presents the Company and subsidiaries’ financial assets and financial
liabilities exposure to foreign currency risk:
2013
2012
U.S. dollar
(in billions)
Japanese yen
(in billions)
U.S. dollar
(in billions)
Japanese yen
(in billions)
0.48
(0.48)
0.00
0.00
(8.47)
(8.47)
0.51
(0.61)
(0.10)
0.00
(9.25)
(9.25)
Financial assets
Financial liabilities
Net exposure
Sensitivity analysis
A strengthening of the U.S. dollar and Japanese yen, as indicated below, against the rupiah
at December 31, 2013 would have decreased equity and profit or loss by the amounts shown
below. This analysis is based on foreign currency exchange rate variances that the Company
and subsidiaries considered to be reasonably possible at the reporting date. The analysis
assumes that all other variables, in particular interest rates, remain constant.
December 31, 2013
U.S. dollar (1% strengthening)
Japanese yen (5% strengthening)
Equity/profit (loss)
0
(48)
A weakening of the U.S. dollar and Japanese yen against the rupiah at December 31, 2013
would have had an equal but opposite effect on the above currencies to the amounts shown
above, on the basis that all other variables remain constant.
b. Market price risk
The Company and subsidiaries are exposed to changes in debt and equity market prices
related to available-for-sale investments carried at fair value. Gains and losses arising from
changes in the fair value of available-for-sale investments are recognized in equity.
The performance of
the Company and subsidiaries’ available-for-sale investments is
monitored periodically, together with a regular assessment of their relevance to the Company
and subsidiaries’ long-term strategic plans.
As of December 31, 2013, management considered the price risk for the Company’s
available-for-sale investments to be immaterial in terms of the possible impact on profit or loss
and total equity from a reasonably possible change in fair value.
c.
Interest rate risk
Interest rate fluctuation is monitored to minimize any negative impact to financial position.
Borrowings at variable interest rates expose the Company and subsidiaries to interest rate
risk (Notes 17, 18, 19, 20 and 21). To measure market risk pertaining to fluctuations in interest
rates, the Company and subsidiaries primarily use interest margin and maturity profile of the
financial assets and liabilities based on changing schedule of the interest rate.
113
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
44. FINANCIAL RISK MANAGEMENT (continued)
1. Financial risk management (continued)
c.
Interest rate risk (continued)
At reporting date, the interest rate profile of the Company and subsidiaries’ interest-bearing
borrowings was as follows:
Fixed rate borrowings
Variable rate borrowings
Sensitivity analysis for variable rate borrowings
2013
2012
(9,591)
(10,665)
(7,025)
(12,250)
At December 31, 2013, a decrease (increase) by 25 basis points in interest rates of variable
rate borrowings would have increased (decreased) equity and profit or loss by Rp27 billion,
respectively. This analysis assumes that all other variables, in particular foreign currency
rates, remain constant.
d. Credit risk
The following table presents the maximum exposure to credit risk of
subsidiaries’ financial assets:
the Company and
2013
2012
Cash and cash equivalents
Other current financial assets
Trade and other receivables, net
Long-term investments
Advances and other non-current assets
Total
14,696
6,872
6,421
21
685
28,695
13,118
4,338
5,409
21
614
23,500
The Company and subsidiaries are exposed to credit risk primarily from trade receivables and
other receivables. The credit risk is managed by continuous monitoring of outstanding
balances and collection.
Trade and other receivables do not have any major concentration risk whereas no customers.
receivables balance exceeds 2% of trade receivables at December 31, 2013.
Management is confident in its ability to continue to control and sustain minimal exposure to
credit risk given that the Company and subsidiaries have provided sufficient provision for
impairment of receivables to cover incurred loss arising from uncollectible receivables based
on existing historical data on credit losses.
e. Liquidity risk
Liquidity risk arises in situations where the Company and subsidiaries have difficulties in
fulfilling financial liabilities when they become due.
Prudent liquidity risk management implies maintaining sufficient cash in order to meet the
Company and subsidiaries’ financial obligations. The Company and subsidiaries continuously
perform an analysis to monitor financial position ratios, such as liquidity ratios, and debt equity
ratios, against debt covenant requirements.
114
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
44. FINANCIAL RISK MANAGEMENT (continued)
1. Financial risk management (continued)
e. Liquidity risk (continued)
The following is the maturity profile of the Company and subsidiaries’ financial liabilities:
December 31, 2013
Trade and other payables
Accrued expenses
Loans and other borrowings
Bank loans
Obligations under
finance leases
Two-step loans
Bonds and notes
Total
December 31, 2012
Trade and other payables
Accrued expenses
Loans and other borrowings
Bank loans
Obligations under
finance leases
Two-step loans
Bonds and notes
Carrying
amount
Contractual
cash flows
2014
2015
2016
2017
2018 and
thereafter
11,988
5,264
(11,988)
(5,264)
(11,988)
(5,264)
-
-
-
-
-
-
-
-
10,023
(11,618)
(5,028)
(3,264)
(1,248)
(980)
(1,098)
4,969
1,915
3,349
(6,904)
(2,308)
(4,817)
(1,070)
(292)
(582)
37,508
(42,899)
(24,224)
(885)
(285)
(1,311)
(5,745)
(847)
(278)
(215)
(813)
(271)
(203)
(2,588)
(2,267)
(3,289)
(1,182)
(2,506)
(8,075)
Carrying
amount
Contractual
cash flows
2013
2014
2015
2016
2017 and
thereafter
7,456
6,163
(7,456)
(6,163)
(7,456)
(6,163)
-
-
-
-
11,295
(12,585)
(5,118)
(3,869)
(2,518)
2,324
1,987
3,669
(3,172)
(2,462)
(5,462)
(652)
(283)
(757)
(548)
(277)
(505)
(398)
(270)
(1,287)
-
-
(602)
(354)
(263)
(203)
-
-
(478)
(1,220)
(1,369)
(2,710)
Total
32,894
(37,300)
(20,429)
(5,199)
(4,473)
(1,422)
(5,777)
The difference between the carrying amount and the contractual cash flows is interest value.
2. Fair value of financial assets and financial liabilities
a. Fair value measurement
Fair value is the amount for which an asset could be exchanged, or liability settled, between in
an arm’s length transaction.
The Company and subsidiaries determined the fair value measurement
purposes of each class of financial assets and financial
methods and assumptions:
for disclosure
liabilities based on the following
(i) The fair values of short-term financial assets and financial liabilities with maturities of one
trade receivables, other receivables, other
year or less (cash and cash equivalents,
current assets, trade payables, other payables, dividend payable, accrued expenses,
advances from customers and suppliers and short-term bank loans) are considered to
approximate their carrying amounts as the impact of discounting is not significant .
115
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
44. FINANCIAL RISK MANAGEMENT (continued)
2. Fair value of financial assets and financial liabilities (continued)
a. Fair value measurement (continued)
(ii) Available-for-sale financial assets primarily consist of shares, mutual funds and Corporate
and Government bonds. Shares and mutual funds actively traded in an established market
are stated at fair value using quoted market price or, if unquoted, determined using a
valuation technique. Corporate and Government bonds are stated at
fair value by
reference to prices of similar securities at the reporting date.
(iii) The fair values of long-term financial
liabilities are estimated by discounting the future
contractual cash flows of each liability at rates offered to the Company and subsidiaries for
similar
the Company and
subsidiaries, except for bonds which are based on market prices.
liabilities of comparable maturities by the bankers of
The fair value estimates are inherently judgmental and involve various limitations, including:
a. Fair values presented do not
take into consideration the effect of
future currency
fluctuations.
b. Estimated fair values are not necessarily indicative of the amounts that the Company and
subsidiaries would record upon disposal/termination of the financial assets and liabilities.
b. Classification and fair value
The following table presents the carrying value and estimated fair values of the Company and
subsidiaries' financial assets and liabilities based on their classifications:
Cash and cash equivalents
Other current financial assets
Trade and other receivables, net
Long-term investments
Advances and other non-current assets
Total financial assets
Trade and other payables
Accrued expenses
Loans and other borrowings
Short-term bank loans
Obligations under finance leases
Two-step loans
Bonds and notes
Long-term bank loans
Total financial liabilities
December 31, 2013
Trading
Loans and
receivables
Available for
sale
Other
financial
liabilities
Total
carrying
amount
Fair
value
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,696
6,600
6,421
-
685
28,402
-
-
-
-
-
-
-
-
-
272
-
21
-
293
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,696
6,872
6,421
21
685
28,695
(11,988)
(5,264)
(11,988)
(5,264)
(432)
(4,969)
(1,915)
(3,349)
(9,591)
(432)
(4,969)
(1,915)
(3,349)
(9,591)
14,696
6,872
6,421
21
685
28,695
(11,988)
(5,264)
(432)
(4,969)
(1,921)
(3,490)
(9,474)
(37,508)
(37,508)
(37,538)
116
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
44. FINANCIAL RISK MANAGEMENT (continued)
2. Fair value of financial assets and financial liabilities (continued)
b. Classification and fair value (continued)
December 31, 2012
Trading
Loans and
receivables
Available for
sale
Other
financial
liabilities
Total
carrying
amount
Fair
value
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,118
4,028
5,409
-
614
23,169
-
-
-
-
-
-
-
-
-
310
-
21
-
331
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(7,456)
(6,163)
(37)
(2,324)
(1,987)
(3,669)
(11,258)
13,118
4,338
5,409
21
614
23,500
(7,456)
(6,163)
(37)
(2,324)
(1,987)
(3,669)
(11,258)
13,118
4,338
5,409
21
614
23,500
(7,456)
(6,163)
(37)
(2,324)
(2,075)
(4,022)
(11,346)
(32,894)
(32,894)
(33,423)
Cash and cash equivalents
Other current financial assets
Trade and other receivables, net
Long-term investments
Advances and other non-current assets
Total financial assets
Trade and other payables
Accrued expenses
Loans and other borrowings
Short-term bank loans
Obligations under finance leases
Two-step loans
Bonds and notes
Long-term bank loans
Total financial liabilities
c. Fair value hierarchy
The table below presents the recorded amount of financial assets measured at fair value and
limited mutual funds participation unit for debt-based securities where the Net Asset Value
(“NAV”) per share of the investments information is not published as explained below:
December 31, 2013
Fair value measurement at reporting date using
Quoted prices
in active markets
for identical
assets or
liabilities
(level 1)
Significant
other
observable
inputs
(level 2)
Significant
unobservable
inputs
(level 3)
Balance
272
297
569
48
-
48
224
-
224
0
297
297
Financial assets
Available-for-sale securities
Fair value to profit or loss securities
(Note 3)
Total
December 31, 2012
Fair value measurement at reporting date using
Quoted prices
in active markets
for identical
assets or
liabilities
(level 1)
Significant
other
observable
inputs
(level 2)
Significant
unobservable
inputs
(level 3)
Financial assets
Balance
Available-for-sale securities
310
52
210
48
117
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
44. FINANCIAL RISK MANAGEMENT (continued)
2. Fair value of financial assets and financial liabilities (continued)
c. Fair value hierarchy (continued)
Available-for-sale financial assets primarily consist of shares, mutual funds and Corporate and
Government bonds. Corporate and Government bonds are stated at fair value by reference to
the reporting date. As they are not actively traded in an
prices of similar securities at
established market, these securities are classified as level 2.
Shares and mutual funds actively traded in an established market are stated at fair value
using quoted market price and classified within level 1. The valuation of the mutual funds
invested in Corporate and Government bonds requires significant management judgment due
to the absence of quoted market prices, the inherent lack of liquidity and the long-term nature
of such assets. As these investments are subject to restrictions on redemption (such as
transfer restrictions and initial lock-up periods) and observable activity for the investments is
limited, these investments are therefore classified within level 3 of the fair value hierarchy.
Management considers among other assumptions, the valuation and quoted price of the
arrangement of the mutual funds.
Reconciliations of the beginning and ending balance for investment measured at fair value
using significant unobservable inputs (level 3) as of December 31, 2013 and 2012 are as
follows:
Balance at January 1
Purchase
Put Option
Included in consolidated statement of comprehensive
income
Realized loss - recognized in profit or loss
Unrealized loss - recognized in other
comprehensive income
Redemption
Balance at December 31
2013
2012
48
-
289
-
8
(48)
297
64
8
-
(1)
(2)
(21)
48
45. CAPITAL MANAGEMENT
The capital structure of the Company and subsidiaries is as follows:
Short-term debts
Long-term debts
Total debts
Equity attributable to owners
Total
2013
2012
Amount
Portion
Amount
Portion
0.53%
24.54%
25.07%
74.93%
100.00%
37
19,238
19,275
51,541
70,816
0.05%
27.17%
27.22%
72.78%
100.00%
432
19,824
20,256
60,542
80,798
118
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
45. CAPITAL MANAGEMENT (continued)
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue
as a going concern in order to provide returns for stockholders and benefits to other stakeholders and
to maintain an optimum capital structure to minimize the cost of capital.
Periodically, the Company conducts debt valuation to assess possibilities of refinancing existing debts
with new ones which have more efficient cost that will lead to more optimized cost-of-debt.
In case of
idle cash with limited investment opportunities, the Company will consider buying back its shares of
stock or paying dividend to its stockholders.
In addition to complying with loan covenants, the Company also maintains its capital structure at the
level it believes will not risk its credit rating and is comparable with its competitors.
Debt to equity ratio (comparing net interest-bearing debt to total equity) is a ratio which is monitored
by management to evaluate the Company’s capital structure and review the effectiveness of the
Company’s debts. The Company monitors its debt levels to ensure the debt to equity ratio complies
with or is below the ratio set out in its contractual borrowings and that such ratios are comparable or
better than those of regional area entities in the telecommunications industry.
The Company’s debt to equity ratio as of December 31, 2013 and 2012 is as follows:
Total interest-bearing debts
Less cash and cash equivalents
Net debts
Total equity attributable to owners
Net debt to equity ratio
2013
2012
20,256
(14,696)
5,560
60,542
19,275
(13,118)
6,157
51,541
9.18%
11.95%
As stated in Notes 19, 20 and 21, the Company is required to maintain a certain debt to equity ratio
and debt service coverage ratio by the lenders. During the years ended December 31, 2013 and 2012,
the Company has complied with the externally imposed capital requirements.
46. SUPPLEMENTAL CASH FLOWS INFORMATION
The non-cash investing activities for the years ended December 31, 2013 and 2012 are as follows:
Acquisition of property and equipment credited to:
Trade payables
Obligations under finance leases
Non-monetary exchange
Acquisition of data center business
2013
2012
6,412
3,201
268
-
4,627
2,588
1,686
150
119
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
47. SUBSEQUENT EVENTS
a. On January 10, 2014, Sigma entered into short-term and long-term working capital credit facility
agreements involving Rp25 billion and Rp322 billion, respectively, for the development of data
center located in Sentul.
b. On January 15, 2014, PT Graha Telkom sigma (GTS) and PT Granary Reka Cipta signed an
agreement for the development of utilization, and the development and processing of assets that
belong to GTS located in Baturiti, Tabanan Bali. The cooperation is carried out under a revenue-
sharing agreement for 10 years.
c. On January 20, 2014, the Company filed an objection to the Tax Underpayment Assessment for
VAT for the year 2007 that was received by the Company in November 2013 (Note 31).
d. On January 22, 2014, Telkomsel received a formal verdict
from the Tax Court concerning
Telkomsel’s claim for tax refund for import duties. Based on its verdict, the Tax Court accepted a
portion of Telkomsel’s appeal. As of the issuance date of the consolidated financial statements,
Telkomsel plans to refund the accepted portion of the claim amounting to Rp8.5 billion (Note 31).
e. On January 23, 2014,
the Company established subsidiary named PT Infrastruktur
Telekomunikasi Indonesia (Telkom Infratel) that had been legalized based on the Ministry of Law
and Human Rights (MoLHR) Decision Letter No. AHU-03196.AH.01.01. Year 2014.
f. On January 29, 2014, the MoCI issued Decision Letter No. 42 Year 2014, granting Telkomsel the
license to provide:
a. Mobile telecommunication services with radio frequency bandwidth in the 900 MHz and 1800
MHz bands;
b. Mobile telecommunication services IMT-2000 with radio frequency bandwidth in the 2.1 GHz
bands (3G); and
c. Basic telecommunication services.
The license replaced Decision letter No. 101/KEP/M.KOMINFO/10/2006 dated October 11, 2006.
g. On
January
letter
ITRB
No. 118/KOMINFO/DJPPI/PI.02.04/01/2014, decided to implement the new interconnection tariffs
effective from February 2014 until December 2016, subject to evaluation on an annual basis.
Telkomsel,
2014,
30,
the
its
of
in
h. On February 20, 2014, Infomedia made a drawdown from the credit facility from Bank UOB
amounting to Rp70 billion.
120
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
48. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND IFRS (INTERNATIONAL
FINANCIAL REPORTING STANDARDS)
The following tables set forth a reconciliation of the consolidated statement of financial position as of
December 31, 2013 and consolidated statements of comprehensive income for the year ended
December 31, 2013, in each case between PSAK and IFRS.
PSAK
RECONCILIATION
IFRS
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
DECEMBER 31, 2013
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Other current financial assets
Trade receivables - net of provision for
impairment of receivables
Related parties
Third parties
Other receivables - net of provision for
impairment of receivables
Inventories - net of provision for obsolescence
Advances and prepaid expenses
Claims for tax refund
Prepaid taxes
Asset available for sale
Total Current Assets
NON-CURRENT ASSETS
Long-term investments
Property and equipment - net of
accumulated depreciation
Prepaid pension benefit costs
Advances and other non-current assets
Intangible assets - net of
accumulated amortization
Deferred tax assets - net
Total Non-current Assets
TOTAL ASSETS
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade payables
Related parties
Third parties
Other payables
Taxes payables
Accrued expenses
Unearned income
Advances from customers and suppliers
Short-term bank loans
Current maturities of long-term liabilities
Total Current Liabilities
14,696
6,872
900
5,126
395
509
3,937
10
525
105
33,075
304
86,761
927
5,294
1,508
82
94,876
127,951
826
10,774
388
1,698
5,264
3,490
472
432
5,093
28,437
121
-
-
778
(778)
-
-
-
-
-
-
-
-
(162)
22
-
-
(15)
(155)
(155)
962
(962)
-
-
-
-
-
-
-
-
14,696
6,872
1,678
4,348
395
509
3,937
10
525
105
33,075
304
86,599
949
5,294
1,508
67
94,721
127,796
1,788
9,812
388
1,698
5,264
3,490
472
432
5,093
28,437
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
48. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND IFRS (INTERNATIONAL
FINANCIAL REPORTING STANDARDS) (continued)
PSAK
RECONCILIATION
IFRS
NON-CURRENT LIABILITIES
Deferred tax liabilities - net
Other liabilities
Long service award provisions
Post-retirement health care benefit
provisions
Retirement benefits obligation and other
post-retirement benefits
Long-term liabilities - net of current maturities
Obligations under finance leases
Two-step loans
Bonds and notes
Bank loans
Total Non-current Liabilities
TOTAL LIABILITIES
EQUITY
Capital stock
Additional paid-in capital
Treasury stock
Effect of change in equity of
associated companies
Unrealized holding gain on
available-for-sale securities
Translation adjustment
Difference due to acquisition of non-controlling
interests in subsidiaries
Other reserves
Retained earnings
Net equity attributable
to owners of the parent company
Non-controlling interests
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
3,004
472
336
752
2,795
4,321
1,702
3,073
5,635
22,090
50,527
5,040
2,323
(5,805)
386
38
391
(508)
49
58,628
60,542
16,882
77,424
127,951
(96)
-
-
241
470
-
-
-
-
615
615
-
(478)
-
(386)
(38)
(391)
508
149
(153)
(789)
19
(770)
(155)
2,908
472
336
993
3,265
4,321
1,702
3,073
5,635
22,705
51,142
5,040
1,845
(5,805)
-
-
-
-
198
58,475
59,753
16,901
76,654
127,796
122
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
48. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND IFRS (INTERNATIONAL
FINANCIAL REPORTING STANDARDS) (continued)
PSAK
RECONCILIATION
IFRS
REVENUES
Operations, maintenance and
telecommunication service expenses
Depreciation and amortization
Personnel expenses
Interconnection expenses
Marketing expenses
General and administrative expenses
Loss on foreign exchange - net
Other income
Other expenses
OPERATING PROFIT
Finance income
Finance costs
Share of loss of associated companies
PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE
PROFIT FOR THE YEAR
OTHER COMPREHENSIVE INCOME
(LOSS)
Foreign currency translation
Change in fair value of available-for-sale
financial assets
Defined benefit plan actuarial gain
Net Other Comprehensive Income
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR
Profit for the year attributable to:
Owners of the parent company
Non-controlling interests
Total comprehensive income for the year
attributable to:
Owners of the parent company
Non-controlling interests
BASIC AND DILUTED EARNINGS
PER SHARE (in full amount)
Net income per share
Net income per ADS
(200 Series B shares per ADS)
82,967
(19,332)
(15,780)
(9,733)
(4,927)
(3,044)
(4,155)
(249)
2,579
(480)
27,846
836
(1,504)
(29)
27,149
(6,859)
20,290
120
(8)
-
112
20,402
14,205
6,085
20,290
14,317
6,085
20,402
-
-
(25)
(96)
-
-
-
-
2
-
(119)
-
-
-
(119)
(41)
(160)
-
-
4,999
4,999
4,839
(159)
(1)
(160)
4,697
142
4,839
82,967
(19,332)
(15,805)
(9,829)
(4,927)
(3,044)
(4,155)
(249)
2,581
(480)
27,727
836
(1,504)
(29)
27,030
(6,900)
20,130
120
(8)
4,999
5,111
25,241
14,046
6,084
20,130
19,014
6,227
25,241
147.42
29,483.60
0.35
145.77
(330.02)
29,153.58
123
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2013 and for the Year Then Ended
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
48. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND IFRS (INTERNATIONAL
FINANCIAL REPORTING STANDARDS) (continued)
a. Employee benefits
Under PSAK, the actuarial gains or losses are recognized as income or expense when the net
cumulative unrecognized actuarial gains or losses at the end of the previous reporting period
exceed 10% of the present value of the defined benefit obligation. These gains or losses are
recognized on a straight-line basis over the expected average remaining service years of the
employees. The change in the defined benefit obligation due to plan changes affecting vested
benefits is recognized immediately in profit or loss, while the effect of plan changes affecting
unvested benefits is amortized over future periods to the date the amended benefits vest. Interest
income on plan assets is determined based on their long-term rate of expected return. PSAK does
not specify which administration costs to include as part of the return on plan assets.
Under IFRS, remeasurements consist of actuarial gains or losses,
including the difference
between the actual return on plan assets (net of taxes and administration costs) with return
implied by the discount rate, and changes in the asset ceiling are recognized directly to other
comprehensive income. The entire change in the defined benefit obligation due to plan changes is
to be recognized immediately through profit or loss. Net interest on the net de ned bene t liability
or asset comprises interest cost on the de ned bene t obligation and interest income on plan
assets that are measured using the discount rate at the beginning of the year. Only administration
costs directly related to the management of plan assets are included as part of the return on plan
assets.
b. Land rights
Under PSAK, land rights are recorded as part of property and equipment and are not amortized,
unless there is indication that the extension or renewal of land rights is not expected to be or will
not be received. Costs incurred to process the extension or renewal of land legal rights are
recognized as intangible assets and amortized over the shorter of the term of the land rights or the
economic life of the land.
Under IFRS, land rights are accounted for as finance lease and presented as part of property and
equipment. Land rights are amortized over the lease term.
c. Related party transactions
Under Bapepam - LK Regulation No. VIII.G.7 regarding the Presentation and Disclosures of
Financial Statements of Issuers or Public Companies, a government-related entity is an entity that
is controlled, jointly controlled or significantly influenced by a government. Government in this
context is the Ministry of Finance or the Local Government, as the shareholder of the entity.
jointly controlled or
Under IFRS, a government-related entity is an entity that
significantly influenced by a government. Government in this context refers to the Government of
Indonesia, government agencies and similar bodies whether local, national or international.
is controlled,
124
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
2013 Annual Report
PT Telekomunikasi Indonesia, Tbk
PT Telekomunikasi Indonesia, Tbk.
Investor Relations
Grha Merah Putih 5th floor
Jl. Jend. Gatot Subroto Kav. 52
Jakarta 12710, Indonesia
T +62 21 521 5109
F +62 21 522 0500
email : investor@telkom.co.id
IDX : TLKM
NYSE : TLK
LSE : TKID
www.telkom.co.id
Creating Global Talents
and Opportunities
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• Telkom’s Solid
Profitability
Increasing in Net
Income
Rp 14.2 trillion
10.5%
Increasing number of
cellular subscribers
131.5 million
• Increasing
number of
customers above
Industry
5.1%
Increasing number of
broadband subscribers
27.8 million
Increasing number of
Fixedline subscribers
9.3 million
45.4%
4.5%
25.9%
• Network
Strengthening
Number of BTS
75,579 BTS