20172017
Annual Report
AccelerAting the indonesiAn
digitAl economy
A
PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices
B
B
PT Telkom Indonesia (Persero) Tbk
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights Tata Kelola Perusahaan
Tanggung Jawab Sosial Perusahaan
Program Kemitraan dan Bina Lingkungan (PKBL)
Lampiran
DIsclAImEr
This Annual Report, hereinafter called “Report”, presents PT Telkom Indonesia (Persero) Tbk
performance for the period of January 1 to December 31, 2017. “Telkom”, “The Company” or
“We” refer to PT Telkom Indonesia (Persero) Tbk as a parent company, while “Telkom Group”
refers to the Telkom family comprising of parent company, subsidiary entities, as well as
domestic and international tier 2 subsidiaries. The word “Government” in this Report means
the Government of the Republic of Indonesia, while “the United States of America” denotes
the Government of the United States of America.
In making this Report, we refer to the Circular Letter of Financial Services Authority No. 30/
SEOJK.04/2016 on Annual Report Format and Content for Issuers and Public Companies
and several other regulations. Some parts of this Report could also be found on Report Form
20-F in accordance with the Securities and Exchange Commission (“SEC”) of the United
States of America. However, this Report is not attached to Report Form 20-F.
When we prepared this Report, we selected and presented important information and data
for the investors, the government and other parties. The materials of this Report came from
various reliable documents and sources. Financial data is presented in Rupiah (Rp) and US
Dollar (US$).
This report also contains our forward-looking statement such as our targets, expectations,
estimations, or projections in the future. Even after careful consideration, we realize that
this information is subject to risks and uncertainties. Hence, in line with the implementation
of good corporate governance, we could not guarantee that the said forward-looking
statement will be entirely fulfilled.
In addition to the Annual Report, we have also prepared a Sustainability Report of 2017. We
suggest to all parties to take a look to our Sustainability Report since the information and
data presented will complement this Report. Our Annual Report and Sustainability Report
are available for download at http://www.telkom.co.id
Furthermore, we invite all readers to submit questions and suggestions to this Report to:
Investor Relation Unit
Andi Setiawan
Tel.
Fax.
+62-21-5215 109
+62-21-5220 500
PT Telkom Indonesia (Persero) Tbk
E-mail
investor@telkom.co.id
Telkom Landmark Tower, 39th Floor
Facebook
TelkomIndonesia
Jl. Jend. Gatot Subroto Kav.52
Instagram telkomindonesia
Jakarta 12710, Indonesia
Twitter
@telkomindonesia
PT Telkom Indonesia (Persero) Tbk
PT Telkom Indonesia (Persero) Tbk
1
1
rEPOrT THEmE
ACCELERATING THE INDONESIAN DIGITAL
ECONOMY
Aligning to our transformation toward digital
telecommunication company, we are taking
an important role in accelerating Indonesian
digital economy. Our advanced and integrated
infrastructures open up a variety of economic
opportunities. We are also
catalyzing
Indonesian digital economy by providing
various digital technologies and platforms
as well as by becoming a medium for digital
startups to develop their innovations.
This is Telkom, for Indonesia.
2
2
PT Telkom Indonesia (Persero) Tbk
PT Telkom Indonesia (Persero) Tbk
THEmEs cONTINUITY
20172017
Annual Report
AccelerAting the indonesiAn
digitAl economy
2017
Accelerating the Indonesian Digital Economy
Aligning to our transformation toward digital telecommunication company,
we are taking an important role in accelerating Indonesian digital economy.
Our advanced and integrated infrastructures open up a variety of economic
opportunities. We are also catalyzing Indonesian digital economy by
providing various digital technologies and platforms as well as by becoming a
medium for digital startups to develop their innovations.
This is Telkom, for Indonesia.
2016 Annual Report
maximo
BUiLDiNG iNDoNESiaN
DiGiTaL ECoNomY
2016
Building
Economy
With integrated infrastructures, Telkom
Indonesian Digital
is ready to support the embodiment
of Indonesia’s vision as the largest
digital economy country in Southeast
Asia in 2020 and also to accelerate
Indonesian economy growth in digital
era. Telkom will continue to move
ahead with the community to realize
innovations and develop social welfare,
today and in the future.
2015
Building
Society
In order to realize a digital society,
Indonesian Digital
Telkom
provides
high
quality
connectivity
through
infrastructure
development and developing content
and applications that are useful in
people’s daily lives so as to provide
the best digitization experience for
customers.
2014
Sustainable Competitive Growth through Digital
Business
Investing in digital business is a necessity for Telkom to improve
competitiveness while maintaining sustainable competitive
growth in the future.
2013
Creating Global Talents and Opportunities
International expansion has become a necessity for us to be able
to maintain a high and sustainable growth rate. This strategic
initiative has led us to achieve double-digit growth and solidify
us as a provider company for TIMES service, which is dominant in
Indonesia and is acclaimed in the region.
PT Telkom Indonesia (Persero) Tbk
3
BrIEF PrOFIlE OF TElKOm AND ITs sUBsIDIArIEs
BRIEF PROFILE OF TELKOM
Company’s Name
PT Telkom Indonesia (Persero) Tbk
Commercial Name
Telkom
Business Field, Type of Products
and Services
Telecommunication and information
Media and edutainment
Telecommunication Infrastructure
Corporate Status
Public Company, State-Owned Enterprise
Ownership
52.09% The Government of the Republic of Indonesia
47.91% Public
Legality
NPWP 01.000.013.1-093.000
TDP 101116407740
SIUP 510/3-0689/2013/7985-BPPT
Date of Establishment
November 19, 1991
Legal Basis of Establishment and
Transformations
legal basis of establishment
Pursuant to the Government Regulation No.30 of
1965 on Establishment of State Telecommunication
Corporation.
legal basis of transformation
Pursuant to the Government Regulation No.25
of 1991, the Company’s status is transformed into
state-owned limited liability company (“company”)
based on Notarial Deed of Imas Fatimah, S.H.,
No.128, dated September 24, 1991 approved by
the Minister of Justice of the Republic of Indonesia
through Decree No.C2 6870.HT.01.01.Year.1991
dated November 19, 1991 and announced in State
Gazette of the Republic of Indonesia No.5 of
January 17, 1992 Supplement to the State Gazette
No.210.
4
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
Address and Contact of Corporate Office
Graha Merah Putih
Jl. Japati No. 1, Bandung
Jawa Barat, Indonesia - 40133
Phone
Fax
: +62-22-4521404
:+62-22-7206757
Call center
: 147
Website
E-mail
Social media
Facebook
Instagram
Twitter
: www.telkom.co.id
: corporate_comm@telkom.co.id
investor@telkom.co.id
:TelkomIndonesia
: telkomindonesia
: @telkomindonesia
Stock Listing
The Company was listed at Indonesia Stock Exchange
(IDX) and New York Stock Exchange (NYSE) on
November 14, 1995
Stock Symbol
Indonesia Stock Exchange: TLKM
New York Stock Exchange: TLK
Stock Type
Series A Dwiwarna shares and Series B shares
Authorized Capital
1 A series Dwiwarna share
399,999,999,999 B series share
Issued and Fully Paid Capital
1 A series Dwiwarna share
100,799,996,399 B series share
Rating
idAAA (Pefindo) for the year 2014, 2015, 2016, 2017
and 2018
Services Centers
7
Telkom Regional Offices (“Telkom Regional”)
60
Telecommunication Zones
535 Plasa Telkom Outlets
4
GraPARI Telkom Group in Bandung, Surabaya,
Tangerang and Medan
10
International GraPARI
in Saudi Arabia,
Singapore, Hong Kong, Macau, Taiwan and
Malaysia
432 GraPARI
in
Indonesia,
including
those
managed by third parties
761 GraPARI Mobile Units
1,142 IndiHome Mobile Units
Subsidiary Entities and Associations
11
Direct operating subsidiaries
1
Direct inactive subsidiary
22
Indirect subsidiaries
5
PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices
BRIEF PROFILE OF TELKOM’S SUBSIDIARIES
This part shows the brief profile of direct operating subsidiaries.
www.telkomsel.com
www.telkomakses.co.id
PT Telekomunikasi Selular
(Telkomsel)
PT Telkom Akses
(Telkom Akses)
PT Graha Sarana Duta
(Telkom Property)
Cellular operators with more than 196.3
million customers, 160.7 thousand BTS with
the widest coverage in Indonesia.
Products and Services:
• Kartu Halo (postpaid)
• simPATI (prepaid) for the middle class
segment
• Kartu As (prepaid) with affordable prices
• LOOP (prepaid) for the young adult
segment
• Mobile Financial Service (TCASH)
• Digital Advertising
• Enterprise Digital Services
Construction and management service
for
network
infrastructures.
fixed-broadband
access
Products and Services:
• Constructions service fixed-broadband
access network
• Operations and maintenance services
access network
of fixed-broadband
(Managed Services)
Property service provider offering mainly
smart
environmentally-friendly
properties concept.
and
Products and Services:
Property
property
management,
development, property lease and property
facilities.
www.patrakom.co.id
www.metra.co.id
www.mitratel.co.id
PT Patra Telekomunikasi
Indonesia (Patrakom)
PT Multimedia Nusantara
(Telkom Metra)
PT Dayamitra Telekomunikasi
(Mitratel)
the
Broadband satellite business
maritime business, natural
resources/
agricultures, banking and oil & gas segment.
for
Products and Services:
• Vessel Tracking Management System
Investment and holding company, expanding
to various basic services, company digital
services and ICT industry which is adjacent
to business portfolio service
through
acquisitions and erecting a strong business
ecosystem.
services provider
National scale telecommunication tower
infrastructure
(tower
provider), high quality with competitive
price and number of towers (end of year
2017) reaching up to 11,061 units and 13,083
tenants.
(VTMS)
• Vessel Management System (VMS)
• Mobile Satellite Service (MSS)
• Stabilized Antenna Satellite Services
• Radio-IP
• VSAT-SCPC
• VSAT-IP
• Prepaid Vessel Broadband (coconet)
6
Mitratel also manages tower through reseller
business scheme of 6,285 tenants, bringing
the total tenant Mitratel including tenants of
the reseller business to 19,368 tenant.
Products and Services:
• Built to Suit (B2S)
• Collocation & Reseller
• Microcell
• Solution Services (Tower Related Service)
Service
Products and Services:
Satellite, Bill Payment Switching, System
Integration, Manage
(cloud),
BPO-Resource Management, Customer
Relationship Management, e-Commerce,
Data Center, Digital Directory, Digital Printing,
e-Payment Platform, Online Payment
Solution, e-Health, Digital Music, Premise
Integration
Integration Service, System
Maritime, e-Tourism Platform,
Integrated
Digital Media, Agency, Service Desk
Management, Data Analytic, Bill Payment
Aggregator, Direct Carrier Billing, Digital
Advertising Platform, Manage Network
Service, Corporate Venture Capital, Health
Service, Internet Data Center, Consumer
Broadband, MediaHub, IoT, Medical Device,
BPO-ESS, e-Logistic, TaaS.
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights PT Jalin Pembayaran
Nusantara (Jalin)
PT Telekomunikasi Indonesia
International (Telin)
PT Metranet (Metranet)
www.telin.co.id
ATM, EDC and electronic money management
services
to support national payment
gateway.
Products and Services:
System and/or network management of
card payment instruments (APMK) including
switching, routing and settlement service.
Mobile and online media businesses by
increasing online visits, enriching services
and optimizing monetization process. On
November 2016, Metranet became a holding
company since the acquisition of 52% share
of PT Melon Indonesia (Melon) to strengthen
digital content business.
Products and Services:
• U-Ad provides platform digital advertising
• U-Point, virtual payment instrument
Global operator which offers solutions and is
enabler for digital businesses supported by
international service infrastructures focusing
on connectivity and cloud, reaching more
than 27 countries with global offices in 11
countries to realize Telkom as global digital
hub.
Products and Services:
• Voice Wholesale
• Data Connectivity
• Mobile Network Operator and Mobile
Virtual Network Operator
• Business Process Outsourcing
• Data Center
• Satellite Service
• Solution Service (Internet Security, IPX, Go
Presence)
www.telkominfra.co.id
www.pins.co.id
PT Infrastruktur Telekomunikasi
Indonesia (Telkom Infra)
PT PINS Indonesia (PINS)
for
domestic
service
Telecommunication management
(managed
and
service)
international infrastructure solutions provider
with business and capabilities in submarine
cable portfolio
the operation
through
and maintenance of Submarine Cable
Communications System.
Products and Services:
Energy Solution,
Service,
Construction Solution.
Submarine
Infrastructure Managed
and
Cableship
Mobility Services, CPE Services, and IoT
Services/M2M Solution.
Products and Services:
• Premise Equipment & Integration
Comprising of CPE Trading, Mobile Device
Trading, CPE Mobile Service, Enterprise
Premise Integration, ICT Security and
M2M Solution
• Internet of Things (IoT) solutions
7
PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices Highlights
Management Report
About Telkom Indonesia
Analysis and Discussion
8
8
PT Telkom Indonesia (Persero) Tbk
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights Corporate Governance
Corporate Social Responsibility
Partnership and Comunity Development Program (PKBL)
Appendices
Transform and
Digitize
TELKOM’S DIGITAL TRANSFORMATION
To be one of top ten telecommunication companies in Asia Pacific with the
largest market capitalization, we have digitalized our business by adapting
the connectivity-based business into end-to-end digital service experience
business for the purpose of making transformation into Digital Telco. The spirit
of transformation into Digital Telco came from 3 paradigms, namely Digital
(building and strengthening digital business), Lean (more agile, faster and
more productive), Customer Experience (always oriented towards providing
the best customer experience).
To Achieve The Goal, We Need To
Drive Transformation Across Three
Main Parts
Building A Digital Business
• Add value to the core business through compelling
digital offers
• Provide a mediation platform by opening up assets
to digital players
• Capture part of the digital value chain through
partnership/ investments
Transforming Into Digitized Enterprise
• Digitized Operations
• Transform back-end functions
• Digital touch point
Adopting Digital culture
• Agile in value experimentation and speed
• Foster collaboration practices
• Data driven fast decision
PT Telkom Indonesia (Persero) Tbk
9
9
PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices
PrODUcTs AND cUsTOmErs
PROVIDING VARIOUS
CUSTOMER SEGMENT
INTEGRATED SERVICES FOR EVERY
Enterprise
mobile
consumer
Focusing on corporate, small,
medium, and micro-scaled business
and
institutions
customers by providing end-to-end
ICT solution.
government
Focusing on cellular customers
by providing mobile voice, SMS,
value added-service and mobile
broadband.
(residential)
Focusing on retail
customers by providing immobile
telephone service, pay TV, internet
data and other telecommunication
services.
10
10
PT Telkom Indonesia (Persero) Tbk
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights 191.6
million
4.7
million
Prepaid
customers
Postpaid
customers
5.3
million
Fixed-Broadband
customers
(include 2.9 million
IndiHome
customers)
105.8
million
mobile Broadband
customers
196.3
million
cellular
customers
111.1
million
Broadband
customers
11
million
Fixed Wireline
(POTs) customers
1,453
corporate
customers
300,416
small, medium and
micro-scaled Business
customers
944
Government
Institution
customers
12
198
Other licensed
Operator (OlO)
customers
Internet
service Provider
(IsP), Value Added
service, Network
Access Provider
(NAP) customers
21
Transponder & closed
User Group (cUG)
customers
206
Global Partners /
customers
Wholesale and
International Business
Others
licensed operator and
Focusing on other
international
providing
interconnection service, circuit, satellite, tower
&
international
business
infrastructure
leasing and
providers
by
Serving various customers by providing
digital and property services.
PT Telkom Indonesia (Persero) Tbk
11
11
PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices INFrAsTrUcTUrEs
WE CONTINUE TO SUPPORT THE NATIONAL DEVELOPMENT AND
DIGITALIZATION BY PROVIDING EQUITABLE INFRASTRUCTURES AND
CONNECTIVITY IN THE OUTERMOST, FRONTIER AND LEAST DEVELOPED
REGIONS
Telkom-3s
(1180BT)
SHM
MOS
MAN
LON
LUX
AMS
PRS
MRS
MDR
FRA
SWI
MLN
PAL
WRS
KIV
VNA
SOF
IST
DUB
LSB
EIG
ALG
CAI
RYD
DUB
ND
DJI
IMEWE
BBG
SEA-ME-WE 5
SEA-ME-WE 4
BTM
DUM
JHB
SEO
SHI
TWN
TYO
C2C
APCN-2
SHA
HKG
MAC
RGN
BKK
HAN
BSW
SG
JKT
SBYDPS
IGG
DIL
SJC
DVO
MDO
SJ
TOR
CHG
NYX
SLO
LAX
ASH
FASTER
TNG-IA
AAG
HWI
JUS
UNITY
GUA
SEA-US
SP
mobile Network
Fiber Optic Access
Network
Fiber Optik
Backbone Network
id-Access
Indonesia Digital Access
160,705 BTs
• 50,324 BTS 2G
• 110,381 BTS 3G/4G
29,061 tower
12
18.6 million
FTTH home passed
7.2 million
optical distribution port (ODP)
Total: 155,524 km
• Domestic: 90,854 km
• International: 64,670 km
352,642 AP
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights SHM
MOS
MAN
LON
LUX
AMS
DUB
LSB
PRS
MRS
MDR
WRS
KIV
FRA
SWI
VNA
SOF
MLN
PAL
IST
EIG
ALG
CAI
RYD
SEO
SHI
TWN
TYO
C2C
APCN-2
SHA
HKG
MAC
RGN
BKK
HAN
BSW
SG
JKT
SBYDPS
IGG
DIL
SJC
DVO
MDO
DUB
ND
DJI
IMEWE
BBG
SEA-ME-WE 5
SEA-ME-WE 4
BTM
DUM
JHB
We continually invest in infrastructures in the Indonesia Digital Network program including access networks
(id-Access), backbone networks (id-Ring) to data centers and digital platforms (id-Con). Our fiber optic
networks spread from Aceh to Papua, becoming foundation of digital business growth. Global and national
submarine cable network comprising of SEA-ME-WE 5, SEA-US, BSCS, DMCS, AAG, SJC, IGG, SMPCS and
ASBL connecting Europe, Asia and America.
Telkom-2
(1570BT)
SJ
TOR
CHG
NYX
SLO
LAX
ASH
FASTER
TNG-IA
JUS
UNITY
GUA
SEA-US
AAG
HWI
id-ring
Indonesia Digital Ring
Point of Presence
(PoP)
SP
id-con
Indonesia Digital Convergence
satellite
Data center
Digital Platform
• Domestic: 42 PoP
• International: 57 PoP
• Telkom-2: 24 TPE
• Telkom-3s: 49 TPE
102,200 m2
gross facility data center
• Big Data & Analytics
• API Factory
13
PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices OPErATIONs AND sErVIcEs ArEA
WE ARE PRESENT IN VARIOUS PARTS OF THE WORLD TO PROVIDE TOTAL
SOLUTION SERVICES FOR OUR CUSTOMERS
11
7
FOOTPrINTs
all over the World
rEGIONAl
Divisions
60
TElEcOmmUNIcATION
Zones
535
PlAsA
Telkom Outlets
B
G
H
c
A
D
E
F
14
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights 4
GraPArI
Telkom Group
442
GraPArI
in Indonesia and
Overseas
761
mOBIlE
GraPARI Units
1,142
mOBIlE
IndiHome Units
Head and Regional Offices
International Offices
A. Corporate Office
B. Regional Division I Sumatera
C. Regional Division II Jakarta
D. Regional Division III West Java
E. Regional Division IV Central Java and
Special Region of Yogyakarta
F. Regional Division V East Java, Bali and Nusa Tenggara
G. Regional Division VI Kalimantan
H. Regional Division VII Eastern Indonesia Area
1. Singapore
2. Hong Kong
3. Timor-Leste
4. Australia
5. Malaysia
6. Macau
7. Taiwan
8. USA
9. Myanmar
10. Saudi Arabia
11. New Zealand
15
PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices TABlE OF cONTENTs
rEADING
THE rEPOrT
cONTENT
For ease of stakeholders,
Telkom divided this report
into two main parts.
First Part, from the front page of
the Report to the “Management
Report” and “Statement Letter”,
are dedicated to readers who want to
understand Telkom briefly. Investors
and other stakeholders who want
to understand more detail about
Telkom may continue to read this
Report from First Part to Second
Part, namely the “About Telkom”
section and so forth until end of
this Report.
1
4
16
18
26
44
102
16
THEmE
Disclaimer
Report Theme
Themes Continuity
TElKOm HIGHlIGHTs
Brief Profile of Telkom and Subsidiary Entities
Telkom’s Digital Transformation
Products and Customers
Infrastructures
Operations and Services Area
TABlE OF cONTENTs
HIGHlIGHTs
Financial Data Overview
Stock Highlight
Bonds, Sukuk or Convertible Bonds Information
mANAGEmENT rEPOrT
Report of the Board of Commissioners
Report of the President Director
Statement Letter of Responsibility for 2017 Annual Report
ABOUT TElKOm INDONEsIA
Company’s Identity of Telkom Indonesia
Vision and Mission
Brief History of Telkom
Business Activities
Awards and Certifications
Telkom Organizational Structure
Profile of Board of Commissioners
Profile of Directors
Telkom Indonesia Employees
Shareholders Composition
Subsidiaries, Associated Companies and Joint Ventures
Chronology of Registration of Stocks
Chronology of Listing of Bonds and Other Securities
Name and Address of Institution and/or
Supporting Capital Market Professionals
1
2
3
4
9
10
12
14
20
22
24
28
34
42
46
48
50
52
54
62
64
76
88
91
92
97
99
101
104
ANAlYsIs AND DIscUssION
Performance Highlight
Operational Overview by Segment
Marketing Overview
Comprehensive Financial Performance
Solvency
Receivables Collectability
Capital Structure
Capital Expenditure
Material Commitment for Capital Expenditure
Material Information and Fact After Accountant Reporting Date
Macroeconomy
Indonesian Telecommunication Industry
Business Prospects and Sustainability of the Company
Comparison Between Targets and Realizations
105
120
124
139
139
140
140
142
144
144
145
147
148
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
Corporate Governance
Corporate Social Responsibility
Partnership and Comunity Development Program (PKBL)
Appendices
Targets or Projections for the Next Year
Dividend
Realization of Public Offering Fund
Material Transaction Information Containing Conflict of Interest,
Transaction with Affiliated Parties, Investment,
Divestment and Acquisition
Changes in Regulation
Changes in Accounting Policy
cOrPOrATE GOVErNANcE
Implementation and Strengthening GCG Road Map 2013-2018
Corporate Governance Principle and Platform
Corporate Governance Assessment
Corporate Governance Structure
General Meeting of Shareholders (GMS)
The Board of Commissioners
Audit Committee
Committee for Nomination and Remuneration
Committee for the Planning and Risk Evaluation and Monitoring
Board of Directors
Corporate Secretary
Information Access and Company’s Data to Public
Internal Audit Unit
Internal Control System
Risk Management System
Whistleblowing System
Implementation of Share Ownership Policy of
Board of Directors and Board of Commissioners
Significant Legal Disputes
Information Regarding Administrative Sanctions
Corporate Culture
Corporate Code of Conduct
Telkom Employee Stock Ownership Program
cOrPOrATE sOcIAl rEsPONsIBIlITY (csr)
Corporate Social Responsibility Strategy
Corporate Social Responsibilities towards Customers:
Prioritizing Customer Satisfaction
Corporate Social Responsibilities towards Employees:
Building Human Capital
Corporate Social Responsibilities towards Socioeconomic Society
Corporate Social Responsibilities towards Environment:
Environment Conservation and Preservation
PArTNErsHIP AND cOmmUNITY DEVElOPmENT PrOGrAm (PKBl)
PKBL Summary
PKBL Report
APPENDIcEs
Glossary
List of Abbreviations
Cross Reference to OJK Circulation Letter
No.30/SEOJK.04/2016
cONsOlIDATED FINANcIAl sTATEmENTs
Audited Consolidates Financial Statements 2017
Audited PKBL Financial Statements 2017
Feedback Form of PT Telkom Indonesia (Persero) Tbk 2017 Annual Report
152
232
244
254
274
149
149
150
150
151
151
154
156
160
160
161
168
178
182
185
189
201
204
205
207
209
216
220
221
221
222
230
231
235
235
237
239
242
246
247
256
260
264
PT Telkom Indonesia (Persero) Tbk
17
HIGHLIGHTS
20
Financial Data Overview
22
Stock Highlight
24
Bonds, Sukuk or Convertible Bonds Information
“Telkom Indonesia maintained strong performance
in 2017, with growth in Revenue, EBITDA and
Net Income by 10.2%, 8.6%, and 14.4% year on
year respectively. Telkom’s market capitalization
reached Rp447.6 trillion, or 6.3% of total
capitalization in Indonesia Stock Exchange (IDX).”
FINANcIAl DATA OVErVIEW
consolidated statements of comprehensive Income
(in billion of Rupiah, except for net income per share
and per ADS)
Total Revenues
Total Expenses
EBITDA
Operating profit
Profit for the year
Profit for the year attributable to:
Owners of the parent company
Non-controlling interest
Total comprehensive profit for the year
Total comprehensive profit attributable to:
Owners of the parent company
Non-controlling interest
Net income per share
Net income per ADS (1 ADS : 100 common stock)
consolidated statement of Financial Position
(in billion of Rupiah)
Assets
Liabilities
Equity attributable to owner of the parent company
Net working capital (current asset - current liabilities)
Investment in associate entities
capital Expenditure
(in billion of Rupiah)
Telkom
Telkomsel
Others Subsidiaries
Total
consolidated Financial and Operation ratios
Return on Asset (ROA (%)(1)
Return on Equity (ROE) (%)(2)
Operating Profit Margin (%)(3)
Current Ratio (%)(4)
Total Liabilities to Equity (%)(5)
Total Liabilities to Total Assets (%)(6)
Debt to Equity Ratio(%)(7)
Debt to EBITDA Ratio (%)(8)
EBITDA to Interest Expense (x)(9)
2017
128,256
85,362
64,609
43,933
32,701
22,145
10,556
30,369
19,952
10,417
223.6
22,355
2017
198,484
86,354
92,713
2,185
2,148
2017
11,572
15,080
6,504
33,156
2017
11.2
23.9
34.3
104.8
93.1
43.5
31.6
54.9
23.3
Years ended on December 31,
2016
116,333
77,888
59,498
39,195
29,172
19,352
9,820
27,073
17,331
9,742
196.2
19,619
2015
102,470
71,552
51,415
32,418
23,317
15,489
7,828
23,948
16,130
7,818
157.8
15,777
2014
89,696
61,564
45,673
29,206
21,274
14,471
6,803
22,041
15,296
6,745
148.1
14,813
Years ended on December 31,
2016
179,611
74,067
84,384
7,939
1,847
2015
166,173
72,745
75,136
12,499
1,807
2014
141,822
55,830
67,721
1,976
1,767
Years ended on December 31,
2016
10,309
12,564
6,326
29,199
2015
9,641
11,321
5,439
26,401
2014
8,099
13,002
3,560
24,661
Years ended on December 31,
2016
10.8
22.9
33.7
120.0
87.8
41.2
30.1
53.4
21.2
2015
9.3
20.6
31.6
135.3
96.8
43.8
37.0
67.3
20.7
2014
10.2
21.4
32.6
106.1
82.4
39.4
27.3
51.3
25.2
2013
82,967
57,700
41,776
27,846
20,290
14,205
6,085
20,402
14,317
6,085
147.4
14,742
2013
128,555
51,834
59,823
4,638
304
2013
5,313
15,662
3,923
24,898
2013
11.0
23.7
33.6
116.0
86.6
40.3
26.4
48.5
27.8
NOTE :
(1) ROA is calculated as profit for the year attributable to owner of the parent company divided by total assets at year end December 31.
(2) ROE is calculated as profit for the year attributable to owner of the parent company divided by total equity attributable to owner 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 assets divided by current liabilities at year end December 31.
(5) Liabilities to equity ratio is calculated as total liabilities divided by total equity attributable to owners of the parent company at year end December 31.
(6) Liablities to total assets ratio is calculated as total liabilities divided by total assets at year end December 31.
(7) Debt to equity ratio is calculated as net debt divided by equity.
(8) Debt to EBITDA ratio is calculated as net d ebt divided by EBITDA.
(9) EBITDA to interest ratio is calculated as EBITDA divided by cost of fund.
20
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
Revenue
(Rp Billion)
200,000
150,000
100,000
50,000
0
EBITDA
(Rp Billion)
82,967
89,696
102,470
116,333
128,256
41,776
45,673
51,415
59,498
64,609
80,000
60,000
40,000
20,000
0
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
Net income
(Rp Billion)
Net income per share
(Rp)
14,205
14,471
15,489
19,352
22,145
147.4
148.1
157.8
196.2
223. 6
40,000
30,000
20,000
10,000
0
Asset
(Rp Billion)
200,000
150,000
100,000
50,000
0
400.0
300.0
200.0
100.0
0
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
Equity
(Rp Billion)
128,555
141,822
166,173
179,611
198,484
59,823
67,721
75,136
84,384
92,713
100,000
80,000
60,000
40,000
20,000
0
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
21
PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices sTOcK HIGHlIGHT
TELKOM’S STOCK INFORMATION IN IDX
In the table below, we present the highest, lowest and closing share prices, trading volumes, number of shares outstanding and market
capitalization of the common stock recorded at the Indonesia Stock Exchange (“IDX”) for the periods indicated:
Price per share of common stock
calendar Year
Highest
lowest
closing
Volume
(shares)
Outstanding
shares Excluded
Treasury stock
market
capitalization
(rp billion)
2013
2014
2015
2016
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2,580
3,010
3,170
4,570
3,510
4,010
4,570
4,400
(in rupiah)
1,760
2,060
2,485
3,045
3,045
3,305
3,950
3,640
2,150
2,865
3,105
3,980
3,325
3,980
4,310
3,980
27,839,305,000
97,100,853,600
216,720
24,035,761,600
98,175,853,600
288,792
18,742,850,400
98,198,216,600
312,984
23,017,915,300
99,062,216,600
401,184
5,852,647,000
98,198,216,600
335,160
5,808,895,400
99,062,216,600
401,184
5,821,745,500
99,062,216,600
434,448
5,534,627,400
99,062,216,600
401,184
2017
4,840
3,780
4,440
21,225,443,500
99,062,216,600
447,552
First Quarter
4,190
Second Quarter
4,670
Third Quarter
4,840
3,780
4,010
4,500
4,130
4,520
4,680
4,560,626,200
99,062,216,600
416,304
4,954,694,500
99,062,216,600
455,616
4,320,051,800
99,062,216,600
471,744
Fourth Quarter
4,710
3,910
4,440
7,390,071,000
99,062,216,600
447,552
September
October
November
December
January
February
2018
4,750
4,710
4,350
4,460
4,460
4,460
4,080
4,610
4,010
3,910
4,110
3,920
3,920
3,920
4,680
4,030
4,150
4,440
4,000
3,990
4,000
1,389,011,400
99,062,216,600
471,744
3,756,859,100
99,062,216,600
406,224
2,341,006,100
99,062,216,600
418,320
1,292,205,800
99,062,216,600
447,552
5,561,255,800
99,062,216,600
403,200
3,517,617,500
99,062,216,600
402,192
2,043,638,300
99,062,216,600
403,200
On the last IDX trading day in 2017, which was on December 29, 2017, the closing price for our common stock was Rp4,440. With
the share price, Telkom’s market capitalization reached Rp447.6 trillion, or 6.3% of the total capitalization in the Indonesia Stock
Exchange (IDX).
Volume (In million shares)
500
450
400
350
300
250
200
150
100
50
0
22
1st Quarter
2016
2nd Quarter
2016
3rd Quarter
2016
4th Quarter
2016
1st Quarter
2017
2nd Quarter
2017
3rd Quarter
2017
4th Quarter
2017
Price (Rp)
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
TELKOM’S STOCK INFORMATION IN NYSE
In the table below, we present the highest, lowest and closing share prices as well as the trading volumes of Telkom’s ADS stock
recorded at the New York Stock Exchange (“NYSE”) for the periods indicated:
calendar Year
Highest
lowest
closing
Price per ADs (NYsE)
(in Us Dollars)
2013
2014
2015
2016
2017
2018
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
September
October
November
December
January
February
25.31
24.38
23.54
34.65
26.92
30.96
34.65
33.57
36.19
31.34
34.45
36.19
34.55
16.88
16.95
17.05
21.22
21.22
25.06
29.63
27.17
28.10
28.10
30.26
33.50
29.15
35.95
34.26
34.55
29.73
31.96
32.36
32.51
32.51
30.50
29.15
30.35
28.12
29.50
28.12
17.93
22.62
22.20
29.16
25.43
30.73
33.04
29.16
32.22
31.17
33.67
34.30
32.22
34.30
30.04
31.08
32.22
29.03
30.05
29.03
Volume
(in ADs)
134,122,210
104,501,896
87,438,232
110,532,172
24,848,124
31,010,592
27,153,358
27,520,098
76,122,383
23,813,869
16,694,062
14,436,754
21,177,698
4,821,106
8,566,928
7,916,528
4,694,242
22,941,047
12,934,482
10,006,565
On the last trading day in NYSE for the year of 2017, which was on December 29, the closing price for Telkom’s 1 ADS was in the amount
of $32.22. Effective from October 26, 2016, we changed the Depository Receipt (DR) from 1 Depository Shares (DS) representing 200
shares to 1 DS represents 100 shares. The presentation on the table above have accomodated the ratio change.
Volume (In million ADS)
Price (US$)
4
3.5
3
2.5
2
1.5
1
0.5
0
1st Quarter
2016
2nd Quarter
2016
3rd Quarter
2016
4th Quarter
2016
1st Quarter
2017
2nd Quarter
2017
3rd Quarter
2017
4th Quarter
2017
40
35
30
25
20
15
10
5
0
23
PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices
INFORMATION OF CORPORATE ACTION RELATED TO STOCK
On June 29, 2016, the Company sold back 172,800,000 treasury stocks (equal to 864,000,000 treasury shares), which is part of
the phase IV buyback program with a total fair value of Rp3,259 billion (net of costs of sale of shares).
In 2017, the Company did not carry out any other stock-related corporate actions related to shares such as the sale of treasury
stock, stock split, reverse stock, dividend disbursement, distribution of bonus shares, Employee Stock Ownership Program
(ESOP) and changes to the nominal value of shares.
BONDs, sUKUK Or cONVErTIBlE BOND INFOrmATION
Bond
Outstanding
(rp million)
Date of
Issue
maturity
Date
Term
(Year)
Interest
rate
(%)
Underwriter
Trustee
rating
(Pefindo)
Telkom’s Bond
II 2010 serie B
1,995,000
June 25,
2010
July 6,
2020
10
10.20
PT Bahana Sekuritas;
PT Danareksa Sekuritas;
PT Mandiri Sekuritas
PT CIMB
Niaga Tbk
IdAAA
Telkom’s Bond I
Telkom 2015
serie A
Telkom’s Bond I
Telkom 2015
serie B
Telkom’s Bond
I Telkom 2015
serie C
Telkom’s Bond
I Telkom 2015
serie D
2,200,000
June 23,
2015
June 23,
2022
7
9.93
2,100,000
June 23,
2015
June 23,
2025
10
10.25
1,200,000
June 23,
2015
June 23,
2030
15
10.60
1,500,000
June 23,
2015
June 23,
2045
30
11.00
PT Bahana Sekuritas;
PT Danareksa Sekuritas;
PT Mandiri Sekuritas;
PT Trimegah Sekuritas Tbk
PT Bahana Sekuritas;
PT Danareksa Sekuritas;
PT Mandiri Sekuritas;
PT Trimegah Sekuritas Tbk
PT Bahana Sekuritas;
PT Danareksa Sekuritas;
PT Mandiri Sekuritas;
PT Trimegah Sekuritas Tbk
PT Bahana Sekuritas;
PT Danareksa Sekuritas;
PT Mandiri Sekuritas;
PT Trimegah Sekuritas Tbk
PT Bank
Permata
Tbk
PT Bank
Permata
Tbk
PT Bank
Permata
Tbk
PT Bank
Permata
Tbk
IdAAA
IdAAA
IdAAA
IdAAA
24
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights 25
PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices MANAGEMENT
REPORT
28
34
42
Report of the Board of Commissioners
Report of the President Director
Statement Letter of Responsibility for the 2017 Annual Report
“Board of Commissioners and Directors
work together in responding to changes
in behavior and community needs for
telecommunications services
in the
digital era, resulting in the Company’s
performance is satisfactory.”
REPORT OF THE BOARD OF COMMISSIONERS
“
We applaud the Board of
Directors’ accomplishments
in response to various
changes in community
behavior and the need
for telecommunications
services during the
current digital era. Various
innovations and investment
initiatives were carried
out in 2017 to express our
steadfast commitment to
accelerate our efforts to
turn Indonesia into a thriving
digital economy. In terms
of financial performance,
we have recorded healthy
Revenue, EBITDA and Net
Profit performances amid
our transformation journey
in becoming a world-class
digital telecommunication
company.
”
Hendri Saparini
President Commissioner
28
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights Corporate Governance
Corporate Social Responsibility
Partnership and Comunity Development Program (PKBL)
Appendices
Our respected shareholders and stakeholders,
REVIEW ON THE COMPANY’S FUTURE BUSINESS
PROSPECTS
Praise to Allah SWT, God the Almighty, for making Telkom Group
successful after a very challenging year 2017 by recording
We view that our future business as promising, along with the
healthy growth.
OUR PERSPECTIVE ON THE MACROECONOMY
AND INDUSTRY LANDSCAPE
Overall, 2017’s global economy was relatively stable and showed
a positive trend of recovery compared to the previous year. The
potential growth of the digital business, either fixed or cellular
segment. Penetration of the fixed broadband and smartphone
as well as the average data consumption of Indonesian people is
considered relatively low, all of which provide opportunities for
future business growth. Thus, to capture these opportunities,
we constantly continue to build and strengthen our integrated
infrastructure network, such as of the fiber optic cables both
positive upward trend in the global economy was marked by
backbone and access, including submarine cables connected to
economic recovery in developed countries like the United States,
other parts worldwide, data centers, 3G/4G BTS networks, and
Europe and Japan on top of strong economic growth of some
satellites to reach every corner in Indonesian region. In addition,
developing economies including ASEAN.
we will also continue to innovate by strengthening services
through various platforms and digital ecosystems that cover the
Meanwhile, Indonesia’s economy in 2017 also noted a good
payment system (digital payment), advertising, lifestyle (video,
performance at 5.07%. Household consumption remained the key
music and games) as well as e-commerce.
driver of domestic economic growth, supported by Government
spending on infrastructure in particular alongside better primary
We see utilization of the digital information and communication
commodities’ prices.
technology (digital ICT) will bring positive impacts to the
improvement of economic competitiveness, so that Telkom will
The information and telecommunication sectors respectively
have a strategic position in building and accelerating the growth
recorded excellent growth at 9.81%, higher than the national
of the digital-based economy in Indonesia. For this, Indonesian
economic growth. In other words, the telecommunications
Government has also provided support namely Stimulus
industry contributed significantly to the growth of the national
Package XIV in 2016 on e-commerce roadmap to push forward
economy as a whole. Further, the overall growth of the
improvement and expansion of economic activities throughout
telecommunications industry in 2017 was also indicated by the
Indonesia efficiently, which is also connecting people and
rapidly changing needs and behaviors of society, these have
networks globally. This is one of the initiatives to realize the
impacted the demand for good quality broadband services to
Government’s medium-term vision of turning Indonesia the
grow, both for mobile and fixed services. Meanwhile, connectivity
largest digital economy in Southeast Asia by 2020.
and various digital-based services have increasingly become a
necessity to support people daily activities including banking and
Besides, we are fully aware that every prospect and business
shopping on digital platforms online.
opportunity will always be filled with challenges and obstacles.
As for the fixed line segment, the main challenge faced by the
Company is how to accelerate penetration of fixed-broadband
services across Indonesia, given the vast geographical and
archipelagic characteristics Indonesia has. While in the mobile
segment, changes in communication patterns from voice and
PT Telkom Indonesia (Persero) Tbk
29
Highlights
Management Report
About Telkom Indonesia
Analysis and Discussion
SMS services to data service become our primary concern, on top
We also see that the Board of Directors has paid close attention
of the stronger competition in data services. However, we believe
to the importance of enhancing digital capability in line with the
that with a combination of right strategy and effective execution,
industry’s changing demands by moving toward all-out digital
the Company can overcome these challenges and obstacles.
services. Meanwhile, the Company’s ICT business also recorded
ASSESSMENT OF THE BOARD OF DIRECTORS’
PERFORMANCE IN 2017
a positive socio-economic impact for wider community members.
The Board of Commissioners would like to congratulate the
Company for such an excellent performance of the Board of
In supervising the performance of the Board of Directors, the
Directors for 2017. We will continue our support so that Telkom
Board of Commissioners is responsible for ensuring that all the
can grow sustainably and is able to drive the digital economy in
Company’s accomplishments are aimed toward the Company’s
Indonesia through innovative products and services. The Board
vision, mission, strategic objectives and program planning.
of Commissioners remains committed to providing motivation,
direction and input as part of our efforts to promote more
We recognize the Board of Directors’ good performance
sustainable future growth for all segments of Telkom services.
throughout 2017 was aided through the development and
implementation of strategies being carried out in order to achieve
2018 TARGET
the Company’s strategic objectives. As for financial performance,
compared with the previous year, the Company’s Revenue grew
In fulfilling many people’s changing behavior in terms of
by 10.2% to Rp128.3 trillion, EBITDA grew by 8.6% to Rp64.6
telecommunications needs for digital services, we will keep
trillion, and Net Profit increased by 14.4% to Rp22.1 trillion. Those
pushing forward with the Company’s transformation initiative to
positive figures were recorded during a slow growth in voice and
make Telkom a digital telecommunications company. Therefore
SMS services, alongside the tight competition for data services
the Company must continue to strengthen the development
in the mobile segment of the market. The data reflects the ability
of digital infrastructure in both fixed line and mobile segments
of the Board of Directors to make necessary strategic changes in
in an effort to provide the best digital experience including the
response to ongoing unfavorable circumstances.
development of new innovative products or services, while
strengthening the business ecosystem to reach a sustainable
From operational perspective, as of the end of 2017, Telkomsel’s
growth in all digital segments of the market. Moreover, to
subscribers grew 12.9% to 196.3 million customers across
further enhance digital capability, it is necessary to undertake
Indonesia, in addition to over 160 thousand BTS, where 110
acquisition and alliance initiatives that must be done selectively
thousand BTS of which were comprised of 3G and 4G BTS needed
by considering risk and return aspects coupled with synergy of
to deliver the best mobile broadband services. By the end of
our resources and collective actions at Telkom Group.
2017, Telkom recorded 2.9 million subscribers of IndiHome fixed
broadband service and grew by 82.6% from the previous year.
In terms of financial and operational performance, we expect
This is a remarkable operational performance number, which
Telkom to raise the bar higher even better than the industry’s
demonstrates the Board of Directors’ ability to understand
growth has projected, in order to maintain or even increase
the industry and gain competitive advantages through a set of
our market share. To that end, we have approved an adequate
strategic work programs.
allocation of capital expenditures to support both organic and
inorganic expansion efforts to achieve this strategic goal.
30
PT Telkom Indonesia (Persero) Tbk
BOARD OF COMMISSIONERS
From Left to Right
Cahyana Ahmadjayadi (Independent Commissioner), Dolfie Othniel Fredric Palit (Independent Commissioner), Hendri Saparini (President
Commissioner), Pamijati Pamela Johanna Waluyo (Independent Commissioner), Margiyono Darsasumarja (Independent Commissioner), Rinaldi
Firmansyah (Commissioner), Hadiyanto (Commissioner)
31
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk GOOD CORPORATE GOVERNANCE PRACTICES
ASSESSMENT ON THE PERFORMANCE OF BOARD
OF COMMISSIONERS’ COMMITTEES
The Board of Commissioners has always emphasized the
importance of implementing good corporate governance (GCG)
As part of our supervisory role, we are assisted by 3 (three)
as one of our main supervisory focuses. The implementation
committees comprised of an Audit Committee, Nomination and
of GCG’s best practices will support the achievement of the
Remuneration Committee, and Planning and Risk Evaluation and
Company’s sustainable performance.
Monitoring Committee (KEMPR). As of 2017, we assess that all
Committees under the Board of Commissioners have performed
In line with the Company’s growing business activities, we feel
greatly in providing recommendations and in giving full support
that a comprehensive risk management protocol is required to
to the Board of Commissioners so that our supervisory function
identifying any potential risks. The Board of Commissioners
to the Board of Directors can be implemented accordingly.
always plays an active role
in monitoring and providing
recommendations on the risks faced by the Company. The
The Audit Committee has shown good work, which includes
Board of Commissioners also believes that throughout 2017, the
in overseeing the effectiveness of internal control function as
Board of Directors has applied its best GCG practices effectively
part of Internal Control Over Financial Reporting (ICOFR) work
and consistently by
instilling the values
of transparency,
description, reviewing of financial information, reviewing of
accountability, responsibility, independence and fairness.
Internal Auditor’s findings, and providing recommendations
SOCIAL AND ENVIRONMENTAL RESPONSIBILITY
Meanwhile, the Nomination and Remuneration Committee has
on the best practices of good corporate governance (GCG).
been assisting us in providing recommendations on policies,
We appreciate each member of the Board of Directors who has
criteria and selection of strategic vacant positions within
taken real community action through a consistent Corporate
the Company including subsidiaries according to the GCG
Social and Environmental Responsibility (CSR) initiative. In
principles. Both the Planning and Risk Evaluation and Monitoring
the long run, Telkom’s CSR program aims to help accelerate
Committee have played an important role in conducting a
the development of the national digital economy between
comprehensive evaluation to the Board of Directors’ proposals
medium and micro businesses. Telkom’s strategic positioning
related to the Company’s Work and Budget Plan in monitoring its
is complemented by a widely distributed connectivity network
implementation throughout 2017.
throughout the country, equipped with comprehensive services
including e-commerce platform, will facilitate the expansion of
Moving forward, we will constantly encourage all members of
marketing network resources for medium and micro business
the Committees to continually improve their capabilities and
players. To these ends objective to deliver larger benefits to the
broaden their knowledge on the industry, business, finance
community, Telkom has also continued our CSR collaboration
and telecommunications technology so that they can work
with other State-Owned Enterprises (SOEs) such as through the
better when assisting Board of Commissioners in overseeing
development of BUMN Creative House (RKB), Digital Village to
Board of Directors.
support the digital economic development, and Digital Library
(PaDi) to raise literacy of Indonesian people on in light of today’s
ongoing digital technological advances.
REVIEW ON WHISTLEBLOWING SYSTEM (WBS)
IMPLEMENTATION/MANAGEMENT
Based on our observation results, implementation/management
of our whistleblowing system in Telkom Group was properly
carried out in 2017. The whistleblowing system helps us to
monitor any potential fraud and policy violations, including
violations of regulations of Telkom Group and subsidiaries. The
Board of Commissioners is also responsible for monitoring and
making decision on policy matters that relate to cases being
reported through the whistleblowing system.
32
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
Throughout 2017, we received 28 complaints, of which 2 of them
APPRECIATION TO STAKEHOLDERS
were worth investigating. In overall, we have assessed that the
implementation of the whistleblowing system for all employees
Last but not least, we extend our highest appreciation to the
and stakeholders being conducted by the management worked
Board of Directors and management, and all our employees for
well in 2017.
CHANGES
COMMISSIONERS IN 2017
IN COMPOSITION OF BOARD OF
all your strong dedication during 2017. We are thankful and would
like to express our gratitude to all shareholders, customers,
business partners and other stakeholders for their continuous
support and trust to Telkom Group.
According to the Annual General Meeting of Shareholders (AGMS)
In our mission to accelerate Indonesia’s digital economy, we
resolution dated 21 April 2017, there was a change in composition
continue our commitment to increase the value delivered to all
of the Board of Commissioners’ members. One of the Board
stakeholders through investment and innovation that goes hand
members, Mr. Pontas Tambunan, concluded his position, duties
in hand with Telkom’s initiative to transform the Company into a
and responsibilities as Commissioner. Hence, we welcome two new
more reliable digital telecommunication company regionally.
members, Mrs. Devy W. Suradji and Mr. Cahyana Ahmadjayadi, as
Independent Commissioner and Commissioner, respectively.
In the future, we hope to build further cooperation and a more
solid synergy with all stakeholders in a way that can improve our
Besides those changes, Mr. Dolfie Othniel Fredric Palit, our former
performance in the years to come.
Commissioner, is now serving Telkom Group’s Independent
Commissioner; and Mr. Rinaldi Firmansyah, our
former
Independent Commissioner, is now sitting as Commissioner.
Jakarta, April 5, 2018
On 22 December 2017, Mrs. Devy W. Suradji was appointed as
member of the Board of Directors in another SOE, and therefore
as of 31 December 2017, Telkom’s Board of Commissioners
composition is as follows:
Hendri Saparini
President Commissioner
Hendri Saparini
Hadiyanto
Rinaldi Firmansyah
: President Commissioner
: Commissioner
: Commissioner
Dolfie Othniel Fredric Palit
: Independent Commissioner
Margiyono Darsasumarja
: Independent Commissioner
Pamijati Pamela Johanna
Waluyo
: Independent Commissioner
Cahyana Ahmadjayadi
: Independent Commissioner
We believe that the new Board of Directors can perform better
supervision going forward. With various educational backgrounds,
expertise and experience, the Board of Commissioners will
always be ready to deal with future challenges while ensuring
that supervision of Telkom’s business activities and corporate
governance performs well consistently.
We would also like to take this opportunity to express our
gratitude and appreciation for the previous members of the
Board of Commissioners, particularly Mr. Pontas Tambunan and
Mrs. Devy W. Suradji, for the roles and contribution given during
their terms of office at Telkom.
33
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk REPORT OF THE BOARD OF DIRECTORS
“
The company constantly
increases its digital
capability and continues to
innovate with the support
of smart network and IT
infrastructure to digitize
every business process
in serving customers
and providing the best
customer experience.
”
Alex J. Sinaga
President Director
34
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights Corporate Governance
Corporate Social Responsibility
Partnership and Comunity Development Program (PKBL)
Appendices
The respected shareholders, Board of Commissioners, and all
customer experience and to enhance the competitiveness and
stakeholders,
the Company value to establish the Company’s position as one of
the top 10 (ten) major telecommunication market capitalization
On behalf of the Board of Directors we wish to extend praise to
companies in the Asia Pacific region by 2020.
God Almighty for His blessings, as PT Telkom Indonesia (Persero)
Tbk has successfully passed 2017 with a record of excellent
To create more effective and efficient business management,
financial and operational performance.
the Company transforms the organization from its original
MACRO-ECONOMIC
TELECOMMUNICATION INDUSTRY IN 2017
CONDITIONS
AND
The Indonesian economy in 2017 showed a satisfactory growth
approach to product portfolio based on Customer Facing Unit
(CFU) in accordance with customer segmentation, by continuing
to optimize its synergy potential. This is intended to make the
Company more adaptable in anticipating customer needs.
of 5.07%, higher than the previous year which marked 5.02%.
In order to ensure sustainable growth, in 2017, the Company
This reveals that the systematic efforts of the Government in
pursues 3 (three) main programs: Leading Digital Capability to
the management of various policies, including the package of
Provide Excellent Customer Experience; Champion of Digital in
economic policies and intensive infrastructure development
Home, Personal, Enterprise and Wholesale Service; and Smart
in various fields in recent years have exerted a positive impact.
Inorganic Growth. Through these three main programs, the
Domestic consumption contributes significantly to Gross
Company is able to innovate and successfully increase its digital
Domestic Product (GDP) which reflects an increase in people’s
capability with the support of smart network and IT infrastructure
purchasing power. This condition strengthens expectations that
in serving customers and providing the best customer experience.
the economy in coming years will grow better.
In addition, Telkom is also actively exploring inorganic business
growth opportunities, both
in terms of acquisitions and
The Information and Communication Sector, which includes the
partnerships, in order to strengthen the business ecosystem of
telecommunications industry, based on Indonesia Statistics
the Company to enhance its capabilities and company values.
Bureau (BPS) data, recorded growth of 9.81% in 2017, better than
the previous year which marked 8.87%. This growth is driven by
PERFORMANCE IN 2017
increasing demand for data connectivity and digital service &
solutions. In recent years, the contribution of data connectivity
In the midst of very tight and disruptive competition, the
and digital service & solutions to the total revenue of operators
Company’s business transformation, which includes business
has enlarged considerably. Changes in customer needs that
portfolio and customer segmentation throughout 2017, has
increasingly lead to these services demand operators respond
resulted in excellent financial and operational performance. The
quickly and innovatively to maintain sustainable growth.
Company’s revenue grew 10.2%, to Rp128.3 trillion from Rp116.3
STRATEGIC WORKING PROGRAM
trillion in 2016, surpassing the industry average as targeted.
Data, Internet and Information Technology Services grew by
28.7% to Rp55.3 trillion from Rp42.9 trillion in 2016 and were
The vision of the Company “Be the King of Digital in the
key drivers of consolidated revenue growth, with contribution to
Region” means that the Company is transforming into a Digital
total revenues significantly increased from 37% in 2016 to 43.2%
Telco, through the strengthening of broadband connectivity,
in 2017, while the enterprise segment revenues grew by 21% to
the development of a digital mediation platform, and the
Rp19.1 trillion from Rp15.8 trillion in 2016. This demonstrates how
improvement of digital services & solution services. The Company
the Company is on the right track towards evolving into a Digital
also conducts digitization of internal business processes and
Telecommunication Company.
adopts a digital culture. These three things aim to create the best
35
Highlights
Management Report
About Telkom Indonesia
Analysis and Discussion
The Company also recorded strong growth of earnings before
In the enterprise segment covering corporate customers, Micro,
interest, taxes, depreciation, and amortization (EBITDA) which
Small and Medium Enterprises, and government agencies,
went from 8.6% to Rp64.6 trillion. The increase in total expenses,
the Company provides end-to-end
ICT solution services
by 9.6% to Rp85.4 trillion, shows that the Company is still able to
covering connectivity, platforms, applications, business process
control costs quite well in the midst of aggressive infrastructure
outsourcing, and managed services. This segment recorded
development investment. Net Profit grew very significantly,
significant revenue growth, with total in-service bandwidth
by 14.4% to Rp22.1 trillion, with margin increasing to 17.3%
growing 10.9% to 2,799 Gbps from 2,524 Gbps in 2016.
compared to 2016 at 16.6%.
As for the Wholesale and International Business segment, the
The mobile segment still contributes the most to the Company’s
Company provides various services comprising carrier traffic,
consolidated revenues, with growth of 7.2% to Rp90.1 trillion,
wholesale connectivity, satellite services, telecommunication
increasing from Rp. 84 trillion in 2016. PT Telekomunikasi Selular
tower services, managed telecommunications services, and
as a subsidiary still maintains an excellent level of profitability,
infrastructure. The Company also manages the international
with EBITDA margin and Net Profit margin better than 2016.
footprint in 11 countries, and 57 Point of Present (PoP) in 27
countries. This segment contributed revenue growth of 26.8% to
The number of PT Telekomunikasi Selular’s customers reached
Rp7.4 trillion, increasing from Rp5.9 trillion in 2016.
196.3 million by the end of 2017, increasing 12.9% from 173.9
million at the end of 2016. This growth was achieved because of
In 2017, capital expenditure realization was Rp33.2 trillion or
an effective marketing program, supported by the superiority of
about 25.8% of revenue. The capital expenditure is used to build
PT Telekomunikasi Selular, both in terms of service quality and
broadband infrastructure which includes 3G/4G BTS, submarine
network coverage, reaching almost all parts of Indonesia.
and terrestrial fiber optic backbone network, Telkom3S, and
Telkom4 satellite (Red & White Satellite), fiber optic access
Mobile broadband customers at the end of year 2017 reached
network, and data center. As of the end of 2017, the Company
105.8 million, increasing 24.9% from the 84.7 million reported
had a total of 160,705 BTS, fiber optic backbone cable of 155,524
in 2016, with broadband data traffic growing twice as rapidly,
or by 126.2%, to 2,168,245 TB from 958,733 TB in 2016. PT
Telekomunikasi Selular also managed to increase the range of
km, and domestic and international gross facility data center of
102,200 m2.
4G LTE to 490 cities and districts throughout Indonesia by the
ACCELERATING INDONESIAN DIGITAL ECONOMY
end of 2017.
In order to realize an “Indonesian digital economy”, there are
In the customer segment,
IndiHome revealed very good
several important factors which include Government regulation
performance, contributing 64% to this segment revenue.
and policy, human resource capability,
logistics system,
IndiHome is an integrated fiber optic-based service package
infrastructure development and digital services acceleration,
that includes home phone service, high-speed internet, and
along with cyber security. The Company is committed to
interactive television service with IPTV technology. The number
accelerating the growth of an Indonesian digital economy by
of IndiHome customers grew 82.6% to 2.9 million customers in
building infrastructure and digital platforms aggressively, as well
2017 from 1.6 million customers by the end of 2016.
as developing a digital ecosystem.
36
PT Telkom Indonesia (Persero) Tbk
BOARD OF DIRECTORS
Sitting
Alex J. Sinaga (President Director)
Standing From Left to Right
David Bangun (Director of Digital and Strategic Portfolio), Mas’ud Khamid (Director of Consumer Service), Dian Rachmawan (Director of
Enterprise and Business Service), Herdy R. Harman (Director of Human Capital Management), Harry M. Zen (Director of Finance),
Abdus Somad Arief (Director of Wholesale and International Service), Zulhelfi Abidin (Director of Network and IT Solution)
37
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk The development of infrastructure and digital services has been
For e-commerce, the Company has developed an e-commerce
realized in the form of Indonesia Digital Network (IDN) program
marketplace through its subsidiary with brand blanja.com; it
which consists of id-Access (Indonesia Digital Access), id-Ring
is a joint venture with E-bay, integrated with digital payment,
(Indonesia Digital Ring), and id-Convergence (Indonesia Digital
advertising, and e-logistics. By the end of 2017, blanja.com
Convergence). id-Access is broadband access to fiber optic-based
already had about 3 million registered users.
customers for fixed-broadband and 3G/4G technology for mobile
broadband. id-Ring is a fiber optic-based highway broadband as a
OVERVIEW OF COMPANY PROSPECTS
backbone network connecting the islands of Indonesia, from Sabang
to Merauke. id-Convergence is an integrated IT service platform
The Company’s opportunities to grow in the future are still wide
complete with data center and various digital service platforms.
open driven by the increasing need for data connectivity and
digital service & solution services in every economic activity of
Through 2017, the Company realized the id-Access program in the
the community.
form of construction of 160,705 BTS, of which 68.7% are 3G and
4G BTS, with 3G and 4G BTS coverage covering 85% and 80% of
In the mobile segment, future growth potential will be in line with
the Indonesian population, respectively. To support high-quality
increasing smartphone usage. Smartphone penetration, which
data transmission, 58% of BTS backhaul fiberization program has
is currently around 55%, has promising growth potential ahead.
been performed. The Company also has fixed broadband access
The growing presence of smartphones will drive demand for
of 18.6 million fiber homes-passed and 352,642 Wi-Fi Access
mobile broadband and digital service & solutions. After winning
Points as of the end of 2017, utilized to serve all customers
the 2.3 GHz frequency auction with a 30 MHz spectrum width in
segments including BTS backhaul fiberization.
October 2017, the increased need for mobile broadband access
For id-ring program, the Company has built submarine and
operational costs as well as creating new business opportunities.
terrestrial fiber-optic backbone cables and satellites in the
Government programs on SIM card registration starting in
framework of arranging telecommunication access to all parts
October 2017 will have a long-term positive impact on improving
of Indonesia, including remote, underdeveloped and primitive
customer efficiency and quality and creating a healthier industry.
and service quality will be met with capital expenditure and
regions. As of the end of 2017, network fiber optic backbone has
reached 445 districts/cities.
In the customer segment, fixed-broadband service penetration
in Indonesia is still very low while the number of middle-class
For the id-convergence program, the Company has built and
households increases from year to year. It opens up opportunities
developed various digital platforms to support digital services &
for high-speed broadband services. The Company responds to
solutions, including IT & cloud services, managed security services,
these opportunities through IndiHome products that provide
digital financial technology (fintech), e-commerce, big data
fixed-broadband services, IPTV, and digital services, including
analytic, Internet of Things (IoT), and its supporting ecosystem.
smart home solutions.
For fintech, the Company, through PT Telekomunikasi Selular,
For the enterprise segment, the needs of corporate, MSME,
has developed mobile payment with TCASH brand to provide a
and governments for end-to-end ICT solution services are
digital payment experience to customers. Currently, TCASH is
increasing. Corporate is increasingly in need of business process
one of the largest electronic money services in Indonesia with
digitization in order to improve competitiveness. Meanwhile, the
over 13 million registered customers and an active customer
penetration of connectivity and digital solutions for MSME is still
base of around 3 million. TCASH has been supported by more
low. Governmental agencies, both central and local, increasingly
than 40,000 merchant outlets throughout Indonesia with Near
need digital services to improve service to the community. The
Field Communication (NFC) and QR Code technology. The
above conditions provide an opportunity for the Company to gain
fintech business is also strengthened by a subsidiary, PT Jalin
business growth in this segment.
Pembayaran Nusantara, as a switching provider that manages
non-cash payment transactions as well as one of the switching
agencies of National Payment Gateway (NPG).
38
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
For the wholesale & international business segment, the Company
PERFORMANCE TARGET IN 2018
and a consortium of global operators have successfully completed
the construction of the South East Asia - United States (SEA - US)
The Company strives to ensure sustainable growth. In 2018,
submarine cable project that connects Manado - Indonesia with
the Company established 3 (three) main programs, including
Los Angeles - the United States, more than 15,000 km in length.
Delivering Best Customer Experience which provides the best
Earlier in 2016, the Company and other consortiums completed
experience for customers in enjoying Telkom services digitally;
the construction of a submarine cable network connecting Dumai -
Expanding Digital Business which is an effort to maintain and
Indonesia, the Middle East and Western Europe through the South
enhance digital connectivity to encourage ICT and digital services
East Asia - Middle East - Western Europe 5 (SEA-ME-WE 5) more
& solution services as a new growth engine; and Intensifying Smart
than 20,000 km long. To integrate SEA-US network with SEA-ME-
Inorganic which is an active effort in acquisition or partnership
WE 5, the Company has built an Indonesian marine cable project
activities to strengthen digital capability and increase company
Global Gateway (IGG) of more than 5,480 km, connecting Dumai –
value. With 3 (three) main programs and various derivative
Manado, to be completed by the middle of 2018. The integration of
programs systematically organized, the Company is expected to
the entire marine cable system will become an important milestone
grow above the industry average in 2018.
in realizing the Company as a Global Digital Hub.
The Company is also actively initiating inorganic initiatives, both
through acquisitions and partnerships, to enhance added value,
BUILDING HUMAN RESOURCES AND DIGITAL
CULTURE
capability, and to strengthen the ecosystem of providing digital
The Company
recognizes
the
importance of building
services. In November 2017, the Company, through its subsidiary,
human resources with digital culture as a part of corporate
PT Sigma Cipta Caraka, gained 60% of PT Bosnet Distribution
transformation. The values that Telkom’s cultural reference
Indonesia shares in e-logistic ICT solutions. In the same month,
champion include The Telkom Way as a value system formulated
the Company through its subsidiary, PT Telekomunikasi Indonesia
as Philosophy to Be the Best, Principles to Be the Star, and
International, took over a majority position in TS Global Network
Practices to Be the Winner. This value system gives the spirit
Sdn Bhd, a provider of satellite communication solutions and
for every part of Telkom to always give the best, to exert total
services in Malaysia. In December 2017, the Company through its
capability, enthusiasm, and integrity.
subsidiary, PT Multimedia Nusantara, acquired a 60% stake in PT
Nutech Integrasi, which operates as an e-transportation service
Every Telkom person is also encouraged to build synergies
solution provider.
toward common goals, have initiative in serving and finding
new ways to solve problems. The internalization of values of
The Company also performs leveraging of its property assets,
The Telkom Way is always achieved through various activities
i.e. land and buildings, both from previously idle and from
of cultural activation, especially in daily work activities, so that
the program of modernization and transformation of network
the behavior and characteristics of the winners are imprinted in
infrastructure. These property assets generally have strategic
every person of Telkom.
locations in various cities in Indonesia which can be developed
into property investments such as office buildings, hotels,
In order to build digital competence, the Company provides
retails, and other productive forms. The development of these
training to strengthen digital culture, such as digital business,
investments is made through a subsidiary, PT Graha Sarana Duta,
user interface (UI), and user experience (UX). The Company has
which cooperates with third parties with appropriate schemes;
also provided digital tools for employees in their daily operations,
therefore, these property assets will provide greater benefits for
i.e. corporate portal applications, which
include e-offices,
the Company in the near future.
e-budgeting, files sharing, collaboration, career management,
training and so forth. Besides, the Company also motivates
employees to develop a digital-based innovation culture through
the Digital Amoeba program that yields products, services,
business process improvements and many more.
39
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
SOCIAL AND ENVIRONMENTAL RESPONSIBILITY
AS WELL AS PARTNERSHIP AND COMMUNITY
DEVELOPMENT PROGRAM (PKBL)
THE
OF
DEVELOPMENT
GOVERNANCE IMPLEMENTATION
CORPORATE
The Company implements governance, that refers to the Good
We are fully aware that Telkom is an integral part of society;
Corporate Governance (GCG) framework to faithfully conform
therefore, we always strive to realize social responsibility to the
to international regulations or provisions at the national level
community and the environment where we live.
and international best practice. The Company always upholds
The implementation of the Company’s social responsibility
of its implementation consistently across all levels of the
the principles of good governance and improves the quality
with the theme “Telkom Indonesia for Indonesia” with 3 (three)
Company’s operations.
pillars covering The Digital Environment which is the provision
of digital facilities to support and to connect various community
With reference to the Committee of Sponsoring Organizations
activities; The Digital Society which is to support community
of the Treadway Commission (COSO) Framework, the Company
empowerment through education about the optimal utilization
applies risk management to protect its assets and business
of digital services to facilitate daily life of the community; and
activities and create value for its stakeholders, which is also
The Digital Economy which is the support for micro, small, and
a form of compliance with applicable regulations. The role
medium enterprises, especially in a creative industry sector, in
and function of risk management which are very important
the form of SME “go digital”, “go online” and “go global” training
in supporting telecommunication business that has a wide
and SME product exhibitions.
area coverage requires a major investment, has a high level
of competition, has rapid technological development, and is
Telkom as a State-Owned Enterprise (BUMN) performs social
constrained by various regulations.
responsibility
in the form of Partnership and Community
Development Programs
(PKBL)
in the
form of welfare
The Company is continuously working to improve the policy and
improvement programs and community social life, based on the
infrastructure of GCG support systems through new initiatives
provisions of the Ministry of SOE.
to strengthen the quality of implementation of governance
practices through 3 (three) Main Pillars: Governance Structure
During 2017, Partnership Program funds that have been
Strengthening, Governance Process Strengthening, and Cultural
distributed totaling Rp269.58 billion to 8,367 Partners, consisting
Strengthening. The Company also continues to strengthen
of business sectors of industry, trade, agriculture, livestock,
the implementation of Enterprise Risk Management (ERM)
plantation, fishery, services, and others spread across various
with continuous improvement in policy and risk management
provinces in Indonesia. Realization of Community Development
frameworks, including improving internal controls to ensure the
Program amounted to Rp81.97 billion or 99.97% of funding
reliability of financial statements, as the Company has adopted
commitment, amounting to Rp82 billion, covering 7 (seven)
International Financial Reporting Standards (IFRS) since 2011.
areas, which are Natural Disaster Victim Assistance, Education
Assistance, Health Enhancement Assistance,
Infrastructure
Development Assistance or Public Facilities, Worship Facilities,
Natural Conservation Assistance and Social Assistance for
Poverty Reduction.
40
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
THE CHANGE OF THE BOARD OF DIRECTORS
MEMBERS OF 2017
With the change of the Board of Directors, we believe that the
Company can grow even more rapidly. The diversity of educational
background, expertise, and experience of the Board of Directors
The Annual General Meeting of Shareholders (AGMs) of the
become one of the Company’s main capital assets to continue
Company held on April 21, 2017 stipulates the change of the
to innovate in the face of increasingly tough challenges ahead.
nomenclature and the composition of the Board of Directors.
We express our deepest gratitude and highest appreciation for
The change in the composition of the Board of Directors was
the members of the Board of Directors who have terminated
implemented on March 15, 2017, as Mr. Indra Utoyo, Director of
their term of office in the Company for all of their contributions.
Digital and Strategic Portfolio, was appointed to be the Director of
Hopefully, the new mandate in new place can be performed as
PT Bank Rakyat Indonesia, Tbk, and on 20 April 2017, Mr. Honesti
excellently as possible.
Basyir, the Director of Wholesale and International Service and
the Director of Enterprise and Business Service was considered
On this occasion, representing the Board of Directors, we
the Managing Director of PT Kimia Farma (Persero), Tbk.
also extend our highest gratitude and appreciation to our
shareholders, Board of Commissioners, customers, business
At the AGMS, three new members of the Board of Directors were
partners, and other stakeholders for the support provided to
also determined, namely Mr. Mas’ud Khamid, Mr. David Bangun,
enable us to achieve excellent performance throughout 2017.
and Mr. Zulhelfi Abidin, respectively appointed as the Director of
Customer Service, the Director of Digital and Strategic Portfolios,
We also extend our greatest appreciation to management and
and the Director of Network and IT Solutions. Mr. Abdus Somad
all employees for the dedication and hard work in ensuring the
Arief, who was originally the Director of Network and IT Solution,
achievement of this excellent performance. Moreover, we invite
was appointed as the Director of Wholesale and International
all management and employees to work harder and smarter to
Service, while Mr. Dian Rachmawan, who was the Director of
achieve better performance in the future.
Customer Service, was appointed the Director of Enterprise and
Business Service.
Our performance and achievement throughout 2017 are
presented comprehensively in this Annual Report, including
The composition of the Board of Directors after the change is as
Consolidated Financial Statements and
the Center
for
follows:
Alex J. Sinaga
: President Director
Harry M. Zen
: Director of Finance
Mas’ud Khamid
: Director of Customer Service
Herdy R. Harman
: Director of Human Capital Management
Zulhelfi Abidin
: Director of Network and IT Solution
David Bangun
: Director of Digital and Strategic
Portfolio
Abdus Somad
Arief
: Director of Wholesale and International
Service
Dian Rachmawan
: Director of Enterprise and Business
Service
Management of Partnership and Community Development
Program Financial Statements in Fiscal Year of 2017 audited by
Purwantoro, Sungkoro & Surja Public Accounting Firm, (member
of Ernst & Young Global Limited firm) with the opinion of the
Financial Statement presented fairly in all material respects.
Jakarta, April 5, 2018
Alex J. Sinaga
President Director
41
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
STATEMENT OF THE MEMBER OF BOARD OF COMMISSIONERS
REGARDING WITH RESPONSIBILITY FOR 2017 ANNUAL REPORT
PT TELKOM INDONESIA (PERSERO) TBK
We the undersigned hereby declare that all the information in the PT Telkom Indonesia (Persero) Tbk 2017 Annual Report has
been presented in its entirety and that we assume full responsibility for the accuracy of the content of the Company’s Annual
Report.
This statement is made in all truthfulness.
Jakarta, April 5, 2018
Board of Commissioners
Hendri Saparini
President Commissioner
Hadiyanto
Commissioner
Rinaldi Firmansyah
Commissioner
Dolfie Othniel Fredric Palit
Independent Commissioner
Margiyono Darsasumarja
Independent Commissioner
Pamijati Pamela Johanna Waluyo
Independent Commissioner
Cahyana Ahmadjayadi
Independent Commissioner
Devy W. Suradji
Commissioner
(as of December 22, 2017)
Pontas Tambunan
Commissioner
(as of April 21, 2017)
STATEMENT OF THE MEMBER OF BOARD OF DIRECTORS
REGARDING WITH RESPONSIBILITY FOR 2017 ANNUAL REPORT
PT TELKOM INDONESIA (PERSERO) TBK
We the undersigned hereby declare that all the information in the PT Telkom Indonesia (Persero) Tbk 2017 Annual Report has
been presented in its entirety and that we assume full responsibility for the accuracy of the content of the Company’s Annual
Report.
This statement is made in all truthfulness.
Jakarta, April 5, 2018
Board of Directors
Alex J. Sinaga
President Director
Harry M. Zen
Director of Finance
David Bangun
Director of Digital &
Strategic Portfolio
Mas’ud Khamid
Director of Consumer Service
Zulhelfi Abidin
Director of Network & IT Solution
Herdy R. Harman
Director of Human Capital
Management
Abdus Somad Arief
Director of Wholesale &
International Service
Dian Rachmawan
Director of Enterprise and Business Service
Honesti Basyir
Director
(as of April 20, 2017)
Indra Utoyo
Director
(as of March 15, 2017)
ABOUT
TELKOM INDONESIA
46
48
50
52
54
62
64
76
88
91
92
97
99
Company’s Identity of Telkom Indonesia
Vision and Mission
Brief history of Telkom
Business Activities
Awards and Certifications
Telkom Organizational Structure
Profile of Board of Commissioners
Profile of Directors
Telkom Indonesia Employees
Shareholders Composition
Subsidiaries, Associated Companies and
Joint Ventures
Chronology of Registration of stocks
Chronology of Listing of Bonds and Other
Securities
101
Name and Address of Institutions and/or
Supporting Capital Market Professionals
“Our long journey has made important records
in the Indonesian telecommunications industry.
Now, by transforming ourselves towards digital
telecommunication company, we are again
becoming an important part of Indonesia’s digital
economy journey.”
COMPANY’S IDENTITY OF TELKOM INDONESIA
Meaning of
Logo
The logo refers to Telkom
Corporate philosophy, Always
The Best, which is a basic
belief that employees always
give their best in every work
they do and improve ordinary
things to be in better condition,
and will eventually shape
Telkom to become the best
telecommunications player.
Logo
The current Telkom
logo is stipulated in the
Company Regulations
No.PD.201.03/2014 on New
Corporate/Brand Identity
dated June 20, 2014.
Tagline
the world in
your hand
The tagline conveys a message
that Telkom will make things
easier and more fun in
accessing the world.
46
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk Philosophy
of Color
Red - Brave, Love, Energy,
White - Pure, Peace, Light,
Black - Base Color
Tenacious
Unified
Symbolizes willpower.
Reflects the company spirit
Reflects the spirit of
to always be optimistic and
Telkom to provide the best
Grey - Transition Color
brave in facing challenges.
for the nation.
Symbolizes technology.
PT Telekomunikasi Indonesia (Persero) Tbk
47
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk VISION AND MISSION
The vision of the Company “Be the King of Digital in the Region” means that the Company is
transforming into a Digital Telco, through the strengthening of broadband connectivity, the
development of a digital mediation platform, and the enhancement of digital services & solution
services. The Company also conducts digitization of internal business processes and adopts digital
culture. These three things are intended to create the best customer experience as well as to
enhance the Company’s competitiveness and value to establish the Company’s position as one of
the top 10 (ten) largest telecommunication companies in terms of market capitalization in the Asia
Pacific by 2020.
VISION
Be the King of
Digital in the Region
Tata Kelola Perusahaan
Tanggung Jawab Sosial Perusahaan
Program Kemitraan dan Bina Lingkungan (PKBL)
Lampiran
MISSION
Lead Indonesian Digital
Innovation and Globalization
Lead Indonesian Digital Innovation
1. Telkom
leads active
role
to
improve
Indonesian
competitiveness.
2. Being a leading digital company, Telkom should be a role
model in developing digital ecosystems and collaboration to
perform a variety of innovations.
3. Telkom promotes and empowers local digital innovation &
development.
Lead Globalization
Leverage Indonesian digital innovation to compete globally.
PT Telkom Indonesia (Persero) Tbk
49
BRIEF HISTORY OF TELKOM
Telkom Before and After
Independence of Indonesia Era
Phase 1
Telkom was established on October 23,
Phase 2
Our
institution as the Postal Service,
1856 by
the Government of
the
Telegraph and Telecommunications was
Netherlands, under the name “Post en
taken over by the Government of Indonesia
Telegraafdienst”, we were originally an
from the Netherlands after independence
institution serving postal and telegraph
in 1945. Through Perpu No.19 of 1960 and
services. The telephone presence then
PP No.240 of 1961, we changed into State
rivaled the postal and telegraph service,
Post and Telecommunication Company (PN
so we became the Postal Service,
Postel). Then through PP No.30 of 1965, we
Telegraph and Telephone (Post, Telegraph
changed again into State Telecommunication
en Telepjone Dienst) serving postal and
Company
(PN
Telecommunications).
telecommunications
services. Since
Furthermore, through PP No.36 of 1974, we
1892, our telephone service was already
became Public Company Telekomunikasi
used for long distance and in 1929 our
Indonesia (Perumtel).
telephone service was connected to an
international network.
Telkom
in Globalization Era
Phase 3
In 1991, with the publication of PP No.25 of 1991, our status changed to state-owned limited
liability company (Persero) PT Telkomunikasi Indonesia. This was our first step to becoming
a public company. In 1995, we were listed on the Indonesia Stock Exchange (IDX) and New
York Stock Exchange (NYSE). In the same year, we established Telkomsel to respond to the
widespread use of GSM technology in the country through the launch of Kartu Halo postpaid.
In 1997, Telkomsel succeeded in building GSM network in all provinces in Indonesia.
50
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk Telkom and New Paradigm
in Digital Era
Phase 4
Throughout the 2000s, along with the
Phase 6
We are constantly transforming and
development of over the top applications
evolving into a digital telecommunication
(OTT) or internet-based digital applications,
company to respond the opportunities
we
embarked
on
a
revolutionary
and risks of disruption in the digital
transformation to deal with digital disruption
era. Disruptive competitive growth
through various approaches. Some of the
or
innovation-based growth that
is
strategic things we did were changing the
innovative and out of the ordinary
product portfolio from infoComm to TIMES,
becomes the cornerstone of our current
build
customer-centric
organization,
strategy and for the years to come. This
develop
infrastructure,
improve human
is reflected in the development of our
resource capability and innovate business
products and services affecting the
disruption of the telecommunications
industry, especially those based on
digital services.
model.
Phase 5
ICT
market
(information
and
communications)
in
Indonesia was
increasingly crowded by global competitors.
Telkom
initiated
the
International
Expansion (InEx) as a global business
expansion strategy to seek new sources of
growth abroad. Telkom set a footprint in 11
countries and conducted business alliances
with global companies.
51
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk BUSINESS ACTIVITIES
BUSINESS ACTIVITIES BASED ON COMPANY’S
ARTICLES OF ASSOCIATION
PORTFOLIO, PRODUCT AND/OR SERVICE
The Articles of Association of PT Telkom Indonesia (Persero)
Company’s Articles of Association, which is the provision of
Tbk No.16 dated May 16, 2017 stipulates the purpose and
services in the telecommunication, informatics and network
objective of business activities, which is to conduct business in
service. Our business activities are developed in various business
the telecommunication network and service, informatics and
segments in accordance with technological transformation and
In general, our business activities in 2017 are in line with the
optimization of resources utilization. In correlation with the
market development.
purpose and objective, our business activities include:
1. Main Businesses
By developing a diversified business portfolio, we strive to
maximize our resources to deliver more value to our stakeholder.
a. To plan, construct, provide, develop, operate, market/
Currently we have 6 portfolios grouped into 5 business segments
sale/lease and maintain telecommunication network and
based on the customers we serve. In addition to optimizing the
informatics in a broad meaning by taking into account the
assets we also offer other products beyond the 6 portfolios of
laws and regulations.
such products.
b. To plan, develop, provide, market/sale and
improve
telecommunication and informatics services in a broad
meaning by taking into account the laws and regulations.
c. To conduct investment including capital participation in
other company along with and to reach the Company’s
purpose and objective.
2. Supporting Businesses
a. To provide services for payment transaction and transfer
of money through telecommunication network and
informatics.
b. To conduct other activities and businesses in order to
optimize the resources owned by the Company, among
others utilization of fixed assets and current assets,
information system facilities, education and training
facilities, maintenance and repair facilities.
c. To cooperate with other party in order to optimize the
resources of informatics, communication and technology
owned by other party that are
industry player of
informatics, communication and technology, along with
and to reach the Company’s purpose and objective.
52
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk
Telkom Group’s Product Portfolio
Business Segment
Fixed Portfolio
Comprises fixed voice and
fixed-broadband
Mobile Portfolio
Comprises mobile broadband services, value-
added service, mobile voice and SMS
Network infrastructure portfolio
Comprises network services, satellite,
infrastructure and tower
CONSUMER
MOBILE
Wholesale and International Portfolio
Comprises wholesale services, which include
interconnection and international business
ENTERPRISE
Enterprise digital portfolio
Comprises ICT platform services and smart
enabler platform services
Consumer digital portfolio
Comprises digital life services (e.g music and
games), e-commerce and video/TV
Property
Comprises property development,
property lease, property facilities and
property management
WHOLESALE AND
INTERNATIONAL
BUSINESS
OTHERS
The description of our product portfolios:
• Fixed portfolio comprises fixed voice and fixed broadband services. Our bundling program is marketed under the retail brand
“IndiHome”, which allows customers to choose one or more of our services, which consist primarily of broadband internet, fixed
wireline phone and interactive TV services.
• Mobile portfolio comprises mobile voice, SMS and value-added services, as well as mobile broadband. We provide mobile and
cellular communications services with GSM technology.
• Network infrastructure portfolio comprises our satellite operations, tower operations and infrastructure & network management.
• Wholesale and international business portfolio comprises wholesale telecommunication services, which include our interconnection
business and our international business.
• Enterprise digital portfolio comprises information and communications technology platform and smart enabler platform services.
• Consumer digital portfolio primarily comprises media and edutainment services that we offer to consumers such as mobile-based
digital services, e-Commerce services and IPTV services.
• Property, we aim to leverage our assets which are not currently being optimally utilized, to be developed into non network-related
facilities such as office buildings, business buildings, hotels and other profitable investments. Services offered included property
development, property lease, property facilities and property management.
53
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk AWARDS AND CERTIFICATIONS
AWARDS
JANUARY
FEBRUARY
MARCH
APRIL
MAY
54
25. Alex J. Sinaga was awarded as BUMN
synergy figure in Anugerah Tokoh BUMN
from Ministry of SOE.
JANUARY 25
FEBRUARY 24
24. IndiHome won Top Brand for Internet
Service Provider Fixed category in Top
Brand Award 2017 from Top Brand.
28. Telkom won Best Block Trade in The Asset
Triple A Regional Award from The Asset
Magazine.
MARCH 30
24. Telkom won Media Relation for Non-
Financial BUMN category in PR Indonesia
Award 2017 from SPS.
30. Alex J. Sinaga was awarded as Best
Achiever CEO BUMN in Obsession Award
2017 from Men’s Obsession Magazine.
APRIL 18
MAY 18
5. Telkom won Best Overall Corp University
Silver Award in Global Council of Corporate
University (Global CCU) Award from Annick
Renaud Coulon.
18. Telkom was selected as Special Mention
to IndiHome in Indonesia Most Creative
Companies 2017
from SWA & PPM
Management.
15. Telkom won Best Issuer for Infrastructure,
utilities and transportation category in
Bisnis Indonesia Award 2017 from Bisnis
Indonesia.
18. Telkom was awarded as Top Performing
Listed Companies 2017 in Best Listed
Companies 2017 from Investor Magazine.
19. Telkom was selected as Best Companies
to work for in HR Asia Award from HR Asia
Magazine.
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk JUNE
JULY
MAY 19
JUNE 2
JUNE 9
JULY 18
JULY 27
19. Telkom won awards for three categories
that are Top 15 Indonesia Most Admired
Company Choice 2017, Top 10 Indonesia
Most Admired Company Netizen
Choice and Indonesia Most Admired
Company Telecommunication category
in Indonesia Most Admired Companies
from Warta Ekonomi.
24. Telkom ranked 1st brand value in Indonesia
in Most Valuable Indonesian Brands 2017
from SWA + Brand Finance.
2. Telkom achieve the highest award the
Grand Stevie as the Organization of
the Year (8 Gold, 5 Silver and 18 Bronze)
in Asia Pacific Stevie Awards from Stevie
International.
9. Telkom won awards for three categories
Investor
that are Best CEO, Best
Relations Company and Best Corporate
Communication in Asia Excellence Award
from Corporate Governance Asia.
6. Telkom was awarded as Telecom Service
Provider of The Year in Asia Pacific ICT
Award from Frost and Sullivan.
11. Telkom won awards for four categories
ranked 2nd Indonesia Best
that are
Public Companies Based on WAI, ranked
4th ASEAN Best Public Companies
1st Indonesia
Based on WAI, ranked
Best Public Companies Based on WAI
Telecommunication Services category and
ranked 1st ASEAN Best Public Companies
Based on WAI Telecommunication Services
category in Wealth Added Creator Award
2017 from SWA, Stern & Co.
18. IndiHome won Fixed Broadband category
and SLI 007 in Original Brand Award 2017
from SWA and Bdigest.
27. Telkom was ranked 653 in Forbes Global
2000 List 2017 from Forbes.
55
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk AUGUST 15
AUGUST 18
SEPTEMBER 6
SEPTEMBER 14
AUGUST
SEPTEMBER
OCTOBER
56
15. Ranked 1st Best Managed Company and
ranked 1st Most Committed to Corporate
Governance
in Asia’s Best Companies
from Finance Asia.
18. Alex J. Sinaga was selected as Green
CEO Social Business Innovation 2017 in
Business Innovation & Green CEO Award
from Warta Ekonomi.
25. Alex J. Sinaga was selected as Best
Communicator CEO BUMN category in PR
Indonesia Best Communicators 2017 from
PR Indonesia Magazine.
30. Telkom won Indonesia Digital Learning/
in
Social
Social
Outstanding
Indonesia’s Best Corporate
Initiatives 2017 from SWA & MIX.
Campaign
6. Telkom won the best program for Education
Quality Improvement category through
Indonesia Digital Learning program,
Community
Improvement
Economy
category through Telkom Craft program
and Public Health Quality Improvement
category through Telkom Disability Care
program in Nusantara CSR Awards from La
Tofi School.
14. Telkom won awards for four categories
that are ranked 2nd Most Organized
Investor Relations, ranked 1st Strongest
to Corporate Governance,
Adherence
ranked 1st Most Consistent Dividend Policy
and ranked 2nd Best Strategic CSR in 7th
Annual Institutional Investor Awards for
Corporates from Alpha Southeast Asia.
19. Telkom was selected as Indonesia Living
in Living Legend
Legend Companies
Companies from SWA & Bdigest.
4.
IndiHome won IBBA Internet Broadband
category in The Indonesian Best Brand
Award from SWA, Mars and Metro TV.
10. Telkom was ranked 44 World’s Best
Employers in Forbes Global 2000 List 2017
from Forbes.
10. Telkom was ranked 142 Top Regarded in
Forbes Global 2000 List 2017 from Forbes.
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk OCTOBER 13
OCTOBER 14
OCTOBER 31
NOVEMBER
NOVEMBER 6
10. Telkom Disability Care’s Video was
selected as Runner Up of CSR profile
category in Festival Film Nusantara from
Puspen TNI + The Latofi school of CSR.
13. IPRA was awarded the Golden World
“In House Corporate
Award 2017
Communication”
for
“Synergizing the platform to manage
complexity” communication strategy to
Corporate Communication of PT Telkom
Indonesia (Persero) Tbk in Golden World
Award for Excellent in Public Relations
2017 from International Public Relations
Association (IPRA).
category
14. Telkom was selected as Best of the IBA
Awards to be eligible for the 2017 Grand
Stevie Awards thropy for winning 37
awards consisting of 8 gold, 10 silver and
19 bronze in International Business Award
(IBA) 2017 from Stevie International.
31. Alex J. Sinaga was selected as Spoke
Person of The Year in Indonesia PR of
The Year from Mix Magazine.
31. IndiHome won Top Fixed
Internet
Provider in Top IT & Telco 2017 from
TI TELCO, such as ASPEKTI (Asosiasi
Perusahaan
Telematika
Konsultan
Indonesia), IKTII (Ikatan Konsultan TI
Indonesia), ATSI (Asosiasi Penyelenggara
Telekomunikasi Seluruh Indonesia), ABDI
(Asosiasi Big Data Indonesia).
31. IndiHome ranked 1st ISP Fixed category
in Social Media Award from Media Wave
and Marketing Magazine.
3. Abdus Somad Arief was awarded
Leadership Excellence
in Technology
Innovation in Indonesia Best Employer
Brand Awards 2017 from World HRD
Congress, Employer Branding Institute -
India.
6. Telkom was selected as Industry Leader
in BUMN Performance Excellence Award
(KPKU) from Forum Excellence BUMN.
57
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk 9. Community Development Center Telkom
was won Business Practitioner category
in ICSB Indonesia Presidential Award
from International Council for Small
Business and ACSB.
10. Telkom was won awards for three
categories that are Top Shares 2017,
Top Corporate Reputation 2017
in
Telecommunication sector and Top
in Telecommunication
Issuer 2017
in Top Capital Market 2017
sector
from Business News
in
IPEI
collaboration with
Institute, IFLC (Investment & Financial
Learning Center), Asia Business
Research Center (ABRC).
Indonesia,
InfoVesta,
21. Telkom
became
of
Telecommunication
in
Economic Challenges Awards 2017
from Metro TV.
the winner
category
27. Telkom won Top 50 Big Cap - Public
Listed Companies & Best Non-Financial
Sector in The 9th IICD CG Awards from
IICD Partnership with Kontan.
28. Telkom was selected as 2017 Indonesia
Telecom Service Provider of The Year
& 2017 Indonesia Fixed Broadband
Service Provider of The Year
in
Indonesia Excellence Award from Frost
and Sullivan.
NOVEMBER 21
NOVEMBER 28
58
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk DECEMBER
DECEMBER 2
DECEMBER 15
DECEMBER 19
DECEMBER 20
2. PGRI Award to PT Telkom Indonesia
improving
for high dedication
teacher competence
in
Commemoration of 72nd Anniversary of
PGRI from PGRI.
Indonesia
in
in
8. Alex J. Sinaga was selected as Top 5 Most
Admired CEO in Telco Sector in Indonesia
Most Admired CEO Award 2017 from
Warta Ekonomi.
14. Telkom Indonesia as the Best BUMN
of 2017 Non-Financial category
in
Telecommunication and Broadcasting
Sector in Indonesia Financial Figures
Award from Investor Magazine.
15. Telkom Indonesia was appreciated as
Infrastructure Development Contribution
in Mastel Award 2017 from Mastel.
19. Telkom Indonesia won Most Trusted
Company Based on CGPI from IICG
and SWA.
20. Telkom Indonesia was selected as the
Implementing Agency for Testing of the
Best Domestic Telecommunication Tool
and Equipment in Appreciation Partners
SDPPI Sector 2017 from Ministry of
Communication and Informatics.
20. Telkom Indonesia as The Winner of
Indonesian Employers of Choice Award
2017 in Indonesian Employers of Choice
Award 2017 from SWA.
59
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk CERTIFICATIONS
No
Years
Sertification
Recipient
Institution
Validity Period
2014
2014
2014
2014
2014
2014
ISO 9001:2008
ISO/IEC 27001:2013
ISO/IEC 20000-1:2011
Telkom
Telkom
Telkom
SGS United Kingdom Ltd
SGS United Kingdom Ltd
SGS Hong Kong LLtd
BSI-CSA STAR (Cloud Security
Telkom Sigma
British Standards
Certification)
Institution (BSI)
BS OHSAS 18001:2007
Telkom Sigma
IQNeT & DQS GmBH
TMS 621081
Telkom Sigma
British Standards
Institution (BSI)
2014
EMS ISO 14001
Telkom Sigma
British Standards
Institution (BSI)
2014
OHSAS 18001:2007
Telkom Akses
British Standards
2015
ISO 22301:2012
Telkom
Institution (BSI)
SGS International
Certification Service
Singapore Pte Ltd
2015
2015
2015
2015
2015
2016
ISO 9001:2008
ISO 9001:2008
ISO 9001:2008
Telkom Infra
URS International
Telkom Metra
TUV Rheinland
AdMedika
Guardian Independent
ISO 9001:2008
ISO/IEC 27001:2013
Metrasat
ILCS
Certification (GIC)
TUV Rheinland
Bureau Veritas
Tier III Data Center Certification
Telkom Sigma
Uptime Institute
for Constructed Facilities (TCCF)
Sentul
2017
2017
2017
2017
2017
2017
2017
2017
2017
2018
2018
2018
2018
2018
2017
2016
Tier III Data Center Certification
Telkom Sigma
Uptime Institute
2017
for Constructed Facilities (TCCF)
Serpong
2016
Health & Safety Certification
Telkom Sigma
British Standards
Institution (BSI)
2016
Integrated Management System
Telkom Sigma
British Standards
Certification PAS 99:2012
Institution (BSI)
2016
ISO 27001
Telkom Sigma
British Standards
2016
2016
2016
2016
Tier III Data Center
Tier IV Data Center
ISO 20000 - 1:2011
ISO 27001:2013
Institution (BSI)
Telin Singapore
Uptime Institute
Telin Singapore
Uptime Institute
Telin
Telin
PT SGS
PT SGS
2019
2019
2019
2018
2019
2019
2017
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
60
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk No
24
25
26
27
28
29
30
31
32
Years
Sertification
Recipient
Institution
Validity Period
2016
2016
ISO 9001: 2015
ISO 17025:2008
Telkom Property
LLOYD Register
Test Lab (Digital
National Accreditation
Service Division)
Committee
2016
ISO 17025:2008
Calibration Lab
National Accreditation
(Digital Service
Committee
2016
ISO 9001:2008
2016
2016
ISO 27001:2013
ISO/IEC 27001:2013
Division)
PINS
Infomedia
AdMedika
United Registration of
System (URS)
TUV NORD Indonesia
British Standards
Institution (BSI)
2016
ISO 9001:2008
Telkom Akses
British Standards
Institution (BSI)
2016
2016
CIQS 2000:2009
ISO 9001:2008
Telkom Akses
TPCC
Patrakom
TUV Rheinland Cert
2019
2019
2019
2017
2019
2019
2017
2019
2018
GmbH Am Grauen Stein –
51105 KoIn
33
2017
OHSAS 18001:2007
Patrakom
TUV Rheinland Cert
2020
GmbH Am Grauen Stein –
51105 KoIn
34
35
36
37
2017
ISO9001:2015
Telkom Akses
British Standards
Institution (BSI)
2017
OHSAS 18001:2007
Telkom Akses
British Standards
Institution (BSI)
2017
Payment Card Industry Data
Telkom Sigma
TUV Rheinland
Security
2017
ISO/IEC 27001:2005
Finnet
TUV Rheinland
2019
2019
2018
2020
61
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk r
o
t
c
e
r
i
D
f
o
d
r
a
o
B
C
O
R
P
O
R
A
T
E
O
F
F
I
C
E
B
U
S
I
N
E
S
S
U
N
I
T
TELKOM ORGANIZATIONAL STRUCTURE
The following organizational structure is the latest version as of
December 31, 2017.
President Director
(Alex Janangkih Sinaga)
COO
Director of Enterprise &
Business Service (COO)
(Dian Rachmawan)
Director of Consumer
Service (CRO)
(Mas’ud Khamid)
Director of Wholesale &
International Service
(Abdus Somad Arief)
Director of Network,
IT & Solution
(Zulkifli Abidin)
Director of Digital &
Strategic Portofolio
(David Bangun)
AVP Secretary of
Directorate EBIS
AVP Secretary of
Directorate CONS
AVP Secretary of
Directorate WINS
AVP Secretary of
Directorate NITS
AVP Secretary of
Directorate DSP
VP Enterprise
Planning Strategy
(Yusron Haryadi)
VP Planning &
Resource Management
VP Enterprise
Bussines Development
(Dudy Effendi)
VP Marketing
Management
(Jemy V. Confido)
VP Enterprise
Parenting Operation
(Bagyo Nugroho)
VP Enterprise
Performance Integration
(Joni Heri)
OVP Consumer
Fulfillment
(Sujito)
OVP Consumer
Assurance
(Agus Winarno)
VP Wholesale &
International
Development
(Mohamad Ramzy)
VP Wholesale
& International
Voice
(Erik Orbandi)
VP Wholesale &
International Network
Service
(Bastian Sembiring)
EGM TV Video Division
(Aris Hartoni)
EVP Wholesale Service
Division
(Priyono)
EVP Enterprise Service
Division
(Siti Choiriana)
EVP Business Service
Division
(Tri Gunadi)
EVP Government Service
Division
(Mohammad Salsabil)
ICTO Project Business
Service
(Wahjudjati)
MILES Project Business
(Natal Iman Ginting)
VP Infrastructure Strategy
& Governance
(Era Kamali Nasution)
SVP Synergy & Portfolio
(Pramasaleh Hario Utomo)
VP IT Strategy &
Governance
(Sihmirmo Adi)
VP Solution
(Admiral Dasrin)
VP Infrastructure
Management
(Moh Riza Sutjipto)
EGM Service
Operation Division
(Herlan Wijanarko)
EGM Service &
Solution Division
(Imam Santoso)
EGM Planning &
Deployment Division
(Revolin Simulsyah)
EGM Information
Technology
(Alip Priyono)
VP Portfolio
Management
(Kukuh Pribadijanto)
EVP Strategic
Investment
(Setyanto Hantoro)
VP Strategic
Investment Planning
(Yusuf Wibisono)
VP Strategic
Investment Execution
(Bhimo Aryanto)
SVP Media & Digital Business
(Joddy Hernady)
VP Media & Digital
Strategy & Development
(Ign. Wiseto
Prasetyo Agung)
VP Media & Digital
Parenting & Performance
(Asli Brahmana)
VP Corporate Strategic
Planning
(Torkis Ropinda Sihombing)
Satellite Project of Telkom
(Tonda Priyanto)
EGM Digital Service Division
(Arief Musta’in)
Project CFU
Transformation
(Saiful Hidajat)
EVP Telkom Regional I
(Stanislaus Susatyo)
EVP Telkom Regional II
(Teuku Muda Nanta)
EVP Telkom Regional III
(I Ketut Budi Utama)
EVP Telkom Regional IV
(Joko Raharjo)
EVP Telkom Regional V
(Suparwiyanto)
62
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk
Director of Finance
(Harry M. Zen)
Director of Human
Capital Management
(Herdy Rosadi Harman)
SVP Corporate
Secretary
(Afriwandi)
SVP Internal Audit
(Harry Suseno
Hadisoebroto)
SVP Program
Management Office
(Ikhsan)
CEO’S Office
AVP Sekretariat
Direktorat KEU
AVP Sekretariat
Direktorat HCM
SVP Financial Planning &
Analysis
(Edi Witjara)
VP HC Strategic
Management
(Dwi Heriyanto B)
VP Budgeting &
Analysis
(Devindra Kamal)
VP HC Development
(Dharma Syahputra)
VP Subsidiaries &
Business Alignment
(Devy Alzy)
VP HC Organizational
Effectiveness
(Djonet Hartono)
Financial
Controller
Team
VP Telkom Smart Office
(Ardi Purwanto)
Personal
Assistant
BOD
VP Corporate
Communication
(Arif Prabowo)
VP Regulatory
Management
(Henry Christiadi)
VP Corporate
Office Support
(Hardi Purwanto)
VP Legal &
Compliance
(Junian Sidharta)
VP Planning &
Development Audit
(Imam Santoso)
VP Infrastructure &
Operation Audit
(Rahadian Krishna
Sundara)
VP Information
Technology Audit
(Setia Dwi
Kusumawardani)
VP Integrated &
Financial Audit
(Agus Widjajanto)
PMO
Controller
Team
AVP PMO Planning &
Design
AVP Monitoring
& Reporting
AVP Communications &
Supporting
VP Risk & Process
Management
(M. Noor Hidayat)
VP Investor Relation
(Andi Setiawan)
VP Corporate Finance &
Financial Policy
(Siti Rakhmawati)
SGM SSO
Finance Center
(Fajar Wibawa)
SGM SSO
Procurement &
Sourcing Center
(Weriza)
SGM Asset Management
Center
(Heru Kurniawan)
Project
T-ISCM
SGM Assessment Center
Indonesia
(Teuku Zilmahram)
SGM Community
Development Center
(Mochamad Sulthonul Arifin)
SGM Human Capital
Business Partner Center
(Yul Martin)
SGM Telkom Corporate
University Center
(Danang Baskoro
Dwinugroho)
EVP Telkom Regional VI
(Edwin Aristiawan)
EVP Telkom Regional VII
(Aris Devi Tjahjanto)
63
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
PROFILE OF BOARD OF COMMISSIONERS
MEMBER OF THE BOARD OF COMMISSIONERS AS OF DECEMBER 31, 2017
HENDRI SAPARINI
President Commissioner
Personal
Education
Born : Kebumen, June 16, 1964
Hendri Saparini’s educational background
Age : 53 years old
is a Bachelor’s degree from Gadjah
Mada University majoring in Economics
Citizenship and Domicile
in
1988, a Masters of
International
Hendri Saparini is 53 years old and
Development Policy, and Doctoral degree
was born in Kebumen, on June 16,
on International Political Economy, both
1964. She is an Indonesian citizen
from University of Tsukuba, Japan.
and lives in Jakarta. Besides being
President Commissioner, Hendri
Position and Basic Appointment
Saparini known as the Founder Center
Her position of being a President
of Reformation (CORE)
Indonesia
Commissioner
of
Telkom
is
as well as member of the National
accordance with
the
basis
in
of
Economic and Industry Committee.
appointment as a member of BOC that
is not an Independent Commissioner,
which is documented in Minister of State
Owned Enterprise Letter No.SR-7777/
MBU/2/2014 about proposal to change
the board of PT Telkom
Indonesia
(Persero) Tbk, which was read at
the Extraordinary General Meeting
of Shareholder dated December 19,
2014. This decision is effective from
December 19, 2014 until the 5th Annual
General Meeting of Shareholder since
her appointment.
Previous work experience and its time period are presented as follows:
No.
Position
Member of National Economic and Industry Committee
Think Tank Independent, CORE Indonesia
Guest Lecturer at LAN, Lemhanas and various Government Institutions
Budgetary Consultant for the Indonesian House of Representative Secretariat General
Managing Director, ECONIT Advisory Group
Member Committee OJK Development of Sharia Service
1
2
3
4
5
6
64
Period
2016 – now
2013 – now
2009 – now
2009 – 2012
2005 – 2013
2004 – now
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk HADIYANTO
Commissioner
Personal
Education
Born : Ciamis, October 10, 1962
Hadiyanto’s educational background is
Age : 55 years old
a Bachelor’s degree from Padjadjaran
University majoring in Law, a Master
Citizenship and Domicile
of Law (LLM) from Harvard University
Hadiyanto is 55 years old and was
Law School in the United States, and a
born in Ciamis, on October 10, 1962.
Doctoral degree in Law from Padjadjaran
He
is an Indonesian citizen and
University, Bandung.
lives in Bogor. In addition to being a
member of Telkom BOC, Hadiyanto
Position and Basic Appointment
is also a Secretary General of the
His position of being a Commissioner of
Ministry of Finance.
Telkom is in accordance with the basis of
appointment as a member of BOC that
is not an Independent Commissioner,
which is documented in Minister of State
Owned Enterprise Letter No.SR-244/
MBU/2012 about change to the Board of
the Commissioner of the company, which
was read at the Annual General Meeting
of Shareholder dated May 11, 2012. This
decision is effective from May 11, 2012
until the 5th Annual General Meeting of
Shareholder since his appointment.
Previous work experience and its time period are presented as follows:
No. Position
1
2
3
4
5
General Director for State Asset of the Ministry of Finance
President Commissioner, PT Garuda Indonesia Tbk
President Commissioner of PT Bank Export Indonesia
Head of the Legal of Secretariat General of the Ministry of Finance
Alternative Executive Director, World Bank
Period
2006 – 2016
2007 – 2012
2007 – 2009
2005 – 2006
2003 – 2005
65
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk RINALDI FIRMANSYAH
Commissioner
Personal
Position and Basic Appointment
Born : Tanjung Pinang, June 10, 1960
His position of being an Independent
Age : 57 years old
Commissioner of Telkom is in accordance
with the basis of appointment as a
Citizenship and Domicile
member of BOC that is an Independent
Rinaldi Firmansyah is 57 years old and
Commissioner, which
is documented
was born in Tanjung Pinang, on June 10,
in Minister of State Owned Enterprise
1960. He is an Indonesian citizen and lives
Letter No.SR-209/MBU/04/2015 about
in Jakarta. In addition to being a member
proposal to change the board of the
of Telkom BOC, Rinaldi Firmansyah also
Company, which was read at the Annual
as Advisory Board Member at Daestrum
General Meeting of Shareholder dated
Capital, Managing Partner at Fidelitas
April 17, 2015 and the transfer of his
Capital, Commissioner of PT Elnusa Tbk,
position as Commissioner, pursuant
and Commissioner of PT Bluebird Tbk.
to Ministerial Letter No. SR246/
Education
MBU/04/2017 dated April 21, 2017, on the
proposed Amendment of the Management
Rinaldi
Firmansyah’s
educational
of the Company, which was read in the
background is a Bachelor’s degree from
Annual General Meeting of Shareholders
Bandung Institute of Technology in 1985,
a Master of Business Administration
from IPMI in 1988, and a Doctoral degree
(AGM) on April 21, 2017. This decision is
effective from April 17, 2015 until the 5th
Annual General Meeting of Shareholder
in Management
from Padjadjaran
since his appointment.
University in 2014.
Previous work experience and its time period are presented as follows:
No.
Position
1
2
3
4
5
6
7
Advisory Board Member of Daestrum Capital
Commissioner of PT Indosat Tbk
Commissioner of PT Elnusa Tbk
Commissioner of PT Bluebird Tbk
President Commissioner of PT PLN Batam
CEO, PT Telekomunikasi Indonesia Tbk
CFO, PT Telekomunikasi Indonesia Tbk
Period
2016 – now
2015
2014 – now
2013 – now
2013 – 2016
2007 – 2012
2004 – 2007
66
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk DOLFIE OTHNIEL FREDRIC PALIT
Independent Commissioner
Personal
Position and Basic Appointment
Born : Kijang, Kepulauan Riau,
His position of being a Commissioner of
October 27, 1968
Telkom is in accordance with the basis of
Age : 49 years old
appointment as a member of BOC that
is not an Independent Commissioner,
Citizenship and Domicile
which is documented Minister of State
Dolfie Othniel Fredric Palit
is
Owned Enterprise Letter No.SR-7777/
49 years old and was born in Kijang,
MBU/2/2014 about proposal to change
Kepulauan Riau, on October 27,
the board of PT Telkom Indonesia (Persero)
1968. He is an Indonesian citizen
Tbk, which was read at the Extraordinary
and lives in Jakarta. In addition to
General Meeting of Shareholder dated
being a member of Telkom BOC, he
December 19, 2014 and the transfer of his
is an Expert Staff of the Coordinating
position as Independent Commissioner,
Minister for Human Development
pursuant to Ministerial Letter No. SR-
and Culture.
Education
246/MBU/04/2017 dated April 21, 2017,
on the proposed Amendment of the
Management of the Company, which was
Dolfie Othniel
Fredric
Palit’s
read in the Annual General Meeting of
educational
background
is
a
Shareholders (AGM) on April 21, 2017. This
Bachelor’s degree from Bandung
Institute of Technology in 1995.
decision is effective from April 21, 2017
until the 5th Annual General Meeting of
Shareholder since his appointment.
Previous work experience and its time period are presented as follows:
No.
Position
1
2
3
4
5
6
7
Bank Century Supervisory Team
Member of Budget Committee of House of Representative
Members of Indonesian House of Representative
Special Committee of the Law on the Healthcare and Social Security Agency
Coordinator, Indonesia Corruption Watch (ICW)
Executive Director, Institute for Strategic Consulting (Strategic Planning) Research Policy and Local
Autonomy (REKODE)
Executive Director, Bumi Indonesia Hijau Foundation
Period
2012 – 2014
2012 – 2014
2009 – 2014
2011
2010
2004 – 2009
2001 – 2003
67
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk MARGIYONO DARSASUMARJA
Independent Commissioner
Personal
Position and Basic Appointment
Born : Klaten, September 14, 1976
His position of being an Independent
Age : 41 years old
Commissioner of Telkom is in accordance
with the basis of appointment as a
Citizenship and Domicile
member of BOC that is an Independent
Margiyono Darsasumarja is 41 years
Commissioner, which
is documented
old and was born
in Klaten, on
in Minister of State Owned Enterprise
September 14, 1976. He is an Indonesian
Letter No.SR-209/MBU/04/2015 about
citizen and lives in Jakarta.
proposal to change the board of The
Education
Company, which was read at the Annual
General Meeting of Shareholder at
Margiyono Darsasumarja’s educational
April 17, 2015 and his position changes
background is a Bachelor’s degree
from Commissioner
into
Independent
from University of Indonesia majoring
Commissioner based on the Minister of
in Law in 2008, and a Master’s degree
State Owned Enterprise Letter No. SR-
in Cyber Law from the School of Law
241/MBU/04/2016 dated April 22, 2016
University of Leeds in 2012.
about proposal to change the board of
The Company which was read at the
Annual General Meeting of Shareholder
at April 22, 2016. This decision is effective
from April 22, 2016 until the 5th Annual
General Meeting of Shareholder since his
first appointment.
Period
2012 – 2015
2012 – 2014
2001 – 2011
Previous work experience and its time period are presented as follows:
No.
Position
Coordinator of Advocacy and Partnership for Government Reform of the Bureaucracy reform
Project
Lecturer In Law and Media Ethics at Bakrie University
Media Development Manager at Voice of Human Rights Media
1
2
3
68
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk PAMIJATI PAMELA JOHANNA WALUYO
Independent Commissioner
Personal
Position and Basic Appointment
Born : Jakarta, June 20, 1958
Her position of being
Independent
Age : 59 years old
Commissioner of Telkom is in accordance
with the basis of appointment as a
Citizenship and Domicile
member of BOC that is an Independent
Pamijati Pamela Johanna Waluyo
Commissioner, which
is documented
is 59 years old and was born in
in Minister of State Owned Enterprise
Jakarta, on June 20, 1958. She is
Letter No. SR-209/MBU/04/2015 about
an Indonesian citizen and lives in
proposal to change the board of The
Jakarta.
Education
Pamijati Pamela Johanna Waluyo’s
educational background
is
a
Company, which was read at the Annual
General Meeting of Shareholder dated
April 17, 2015. This decision is effective
from April 17, 2015 until the 5th Annual
General Meeting of Shareholder since
Master’s degree from the University
his appointment.
of Tech. Delft, Netherlands in 1983.
Previous work experience and its time period are presented as follows:
No.
Position
1
2
3
Director of Corporate Marketing, Obession Media Group
Assistant Director of Sales and Marketing, Metro TV
Corporate Public Relations, Metro TV & Media Group
Period
2014 – 2015
2006 – 2014
2000 – 2006
69
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk CAHYANA AHMADJAYADI
Independent Commissioner
Personal
Position and Basic Appointment
Born : Garut, July 12, 1955
His position of being a
Independent
Age : 62 years old
Commissioner of Telkom is in accordance
with the basis of appointment as a
Citizenship and Domicile
member of BOC that is an Independent
Cahyana Ahmadjayadi is 62 years old
Commissioner, which
is documented
and was born in July 12, 1955 in Garut.
in Minister of State Owned Enterprise
He is an Indonesian citizen and lives in
Letter No. SR-246/MBU/04/2017 about
Bandung.
Education
proposal to change the board of The
Company, which was read at the Annual
General Meeting of Shareholder dated
Cahyana Ahmadjayadi’s educational
background is a Bachelor’s degree of
industrial engineering from Bandung
April 21, 2017. This decision is effective
from April 21, 2017 until the 5th Annual
General Meeting of Shareholder since his
Institute of Technology
in
1980,
appointment.
Master degree in Law from University
of Padjajaran in 2004, a Doctoral
degree in Cyber Law from University
of Padjajaran in 2010.
Previous work experience and its time period are presented as follows:
No.
Position
Commissioner, PT Bank Mandiri (Persero)
Expert staff, Ministry of Communication and Informatics
Founder Pengelola Nama Domain Internet Indonesia (PANDI)
Period
2010-2013
2011
2006
Directorate of General Telematics Application-Ministry of Communication and Informatics
2005
Deputy for Communication & Infrormation Network, Ministry of Communication and
Informatics
Head of Telkom Regional V Division, West Java
2002
1993
1
2
3
4
5
6
70
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk MEMBER OF THE BOARD OF COMMISSIONERS ENDED IN 2017
DEVY W. SURADJI
Commissioner
Period : April 21, 2017 – December 22, 2017
Personal
Education
Born : Jakarta, April 9, 1970
Devy W. Suradji educational background
Age : 47 years old
is Bachelor’s degree
in Aquaculture,
Faculty
of
Fishery
from
Bogor
Citizenship and Domicile
Agricultural University in 1993, a Master
Devy W. Suradji is 47 years old
of Science in Health and Environmental
and was born in April 9, 1970
Management, Departement of Biology
in Jakarta. She is an Indonesia
and Environmental Science, University of
Citizen and lives in Jakarta. In
New Haven, Connectocut-USA in 1996.
addition to being a member of
Telkom BOC, Devy W. Suradji
Position and Basic Appointment
is Special Expert Staff of the
Her position of being a Commissioner of
Minister of SOE.
Telkom is in accordance with the basis of
appointment as a member of BOC that
is not an Independent Commissioner,
which is documented in Minister of State
Owned Enterprise Letter No.SR-246/
MBU/04/2017 about proposal to change
the board of The Company, which was
read at the Annual General Meeting of
Shareholder dated April 21, 2017. Devy
W. Suradji has ended his position, duties
and responsibilities as Commissioner
of Telkom since his appointment as a
member of the Board of Directors in other
SOE on December 22, 2017.
Previous work experience and its time period are presented as follows:
No.
Position
1
2
3
4
5
6
Special Expert Staff of the Minister of SOE
President Commissioner of the Board of Commissioner for PT Alam Bukit Tiga Puluh
Interim Operations Director WWF-Indonesia
WWF-International Fundraising Council
Marketing Director (Marketing and Communication Director) WWF - Indonesia
President Director PT Panda Lestari
Period
2017 - now
2012 – now
2016 – 2017
2012–2016
2009 –2017
2011 - 2013
71
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk PONTAS TAMBUNAN
Commissioner
Period : April 22, 2016 – April 21, 2017
Personal
Position and Basic Appointment
Born : Jakarta, February 16, 1961
His position of being a Commissioner of
Age : 57 years old
Telkom is in accordance with the basis of
appointment as a member of BOC that
Citizenship and Domicile
is not an Independent Commissioner,
Pontas Tambunan is 57 years old
which is documented in Minister of State
and was born in February 16, 1961 in
Owned Enterprise Letter No. SR-241/
Jakarta. He is an Indonesian citizen
MBU/04/2016 about proposal to change
and lives in Bekasi. In addition to being
the board of The Company, which was
a member of Telkom BOC, Pontas
read at the Annual General Meeting of
Tambunan is also as Deputy for the
Shareholder dated April 22, 2016. Pontas
Consturction and Transportation
Tambunan ended his position, duties
Facilities of Ministry of SOE.
and responsibilities as Commissioner of
Telkom in accordance with the resolution
Education
of the AGMS on April 21, 2017.
Pontas
Tambunan’s
educational
background is a Bachelor’s degree of
Law from Tarumanegara University in
1986, and a Master from Gadjah Mada
University in 2006.
Previous work experience and its time period are presented as follows
No.
Position
Deputy for the Consturction and Transportation Facilities of Ministry of SOE
Commissioner PT Pertamina EP
Finance Director of PT Perkebunan Nusantara V
Assistant Deputy for the Infrastructure and Logistic Business Sector
Commissioner of Pelabuhan Indonesia II (Persero)
Commissioner of PT Sucofindo (Persero)
Assistant Deputy for the Transportation Facilities Business Sector
Commissioner of PT Wijaya Karya (Persero) Tbk
1
2
3
4
5
6
7
8
72
Period
2015 - now
2015 – 2016
2012 – 2015
2010 – 2012
2010 – 2012
2010 – 2012
2006 – 2012
2001 – 2012
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk 2
3
4
5
6
7
8
9
10
11
EDUCATION, TRAINING, SEMINAR AND CONGRESS
To improve the competence of the member of the Board of Commissioners, Telkom provides an opportunity for member of the Board
of Commissioners to participate in education and training throughout the financial year 2017.
No
Education/Training
Commissioner Name
Time
Place
1
Mobile World Congress
Update Knowledge – Start Up
Update Knowledge Technology
(Silicon Valley)
1. Hendri Saparini
2. Dolfie Othniel Fredric Palit
3. Pamijati Pamela Johanna Waluyo
1. Dolfie Othniel Fredric Palit
2. Margiyono Darsasumarja
1. Hendri Saparini
2. Rinaldi Firmansyah
3. Pamijati Pamela Johanna Waluyo
7th Corprate University and Corporate
Learning Summit 2017
Hadiyanto
Cyber Risk Forum
Margiyono Darsasumarja
Panel Discussion of IKAI
Cahyana Ahmadjayadi
Risk Management Conference
Rinaldi Firmansyah
Focus Group Discussion Minisitry of
SOE
1. Devy W. Suradji
2. Rinaldi Firmansyah
3. Pamijati Pamela Johanna
4. Margiyono Darsasumarja
5. Cahyana Ahmadjayadi
February 27 – 30,
2017
Barcelona,
Spanyol
May 8 – 11, 2017
May 15 – 18, 2017
Mumbai and
Bangalore, India
San Fransisco,
USA
June 7-9, 2017
Berlin, Germany
September 7 – 8,
2017
September 14, 2017
September 24 – 27,
2017
Las Vegas, USA
Jakarta,
Indonesia
Toronto, Canada
October 3, 2017
Bogor, Indonesia
Risk Governance Master Class
Cahyana Ahmadjayadi
November 6 – 7, 2017 Singapore
Update Knowledge Technology
(Satellite)
1. Hendri Saparini
2. Rinaldi Firmansyah
3. Cahyana Ahmadjayadi
Benchmark Study Implementation of
Enterprise Architecture and Digital
Transformation
Hadiyanto
November 20 – 23,
2017
San Francisco &
Toronto
November 20 – 24,
2017
Canberra,
Australia
73
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk COMMISSIONER AFFILIATION RELATIONSHIPS
In accordance with the principle of transparency to implement GCG, Telkom declares affiliation with the other member of the Board of
Commissioners and major shareholders, including the name of the affiliated party.
Financial Relationship with
Familial Relationship with
Board of Commisioners
(BOC)
BOC
BOD
Controlling
Shareholder(1)
BOC
BOD
Controlling
Shareholder(1)
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Hendri Saparini
Hadiyanto
Rinaldi Firmansyah
Dolfie Othniel Fredric Palit
Margiyono Darsasumarja
Pamijati Pamela Johanna
Waluyo
Cahyana Ahmadjayadi*
Devy W. Suradji*
Pontas Tambunan **
NOTE:
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
(1) The controlling shareholder in this matter is the Government of Indonesia represented by the Minister of SOEs as a primary
shareholder
*
in position since April 21, 2017
** no longer in position since April 22, 2017
STATEMENT OF INDEPENDENCE
We requires Independent Commissioners to sign a Statement of Independence for Independent Commissioner when Independent
Commissioner has served for more than two (2) periods. Until now, the drafting of this report, our Independent Commissioners have
served since 2015 and 2016 so as not to serve more than two (2) periods.
74
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk 75
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk PROFILE OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS AS OF DECEMBER 31, 2017
ALEX J. SINAGA
President Director
Personal
Position and Basic Appointment
Born : Pematang Siantar,
His position as the President Director of
September 27, 1961
Telkom is in accordance with Extraordinary
Age : 56 years old
General Meeting of Shareholders (EGM)
of Telkom dated December 19, 2014. The
Citizenship and Domicile
decision is effective from December 19,
Alex J. Sinaga
is 56 years
2014 to the present. While the position
old and was born
in Siantar,
as President Commissioner of PT
September 27, 1961. He is an
Telkomsel based on the Resolutions of
Indonesian citizen, and lives in
the Shareholders of Telkomsel effective
Jakarta. Other than being the
January 1, 2015.
President Director of Telkom, Alex
J. Sinaga is also the President
Commissioner of Telkomsel.
Education
Alex
J.
Sinaga
education
background is a Bachelor degree
in Electrical Engineering from
Bandung Institute of Technology
and
a Master’s degree
in
Telematics from the University of
Surrey, Guidford-England.
Previous work experience and the time period is presented as follows:
No.
Position
President Director of Telkomsel
President Director of Multimedia Nusantara
Executive General Manager for Enterprise Service Division
Executive General Manager for Fixed Wireless Network Division
Senior Manager Business Performance Regional Division II Jakarta
General Manager Telkom West Jakarta
General Manager Telkom West Surabaya
General Manager Telkom Malang
1
2
3
4
5
6
7
8
76
Period
2012 – 2014
2007 – 2012
2005 – 2007
2002 – 2005
2002
2000 – 2002
1998 – 1999
1997 – 1998
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk
HARRY M. ZEN
Director of Finance
Personal
Education
Born : Tanjung Pinang, January 9,
Harry M. Zen’s educational background
1969
Age : 49 years old
is a Bachelor’s degree majoring
in
Metallurgy, Faculty of Engineering
University of
Indonesia and MBA
Citizenship and Domicile
in Corporate Finance and Financial
Harry M. Zen is 49 years old and was
Institutions & Market from the State
born in Tanjung Pinang, on January 9,
University of New York at Buffalo.
1969. He is an Indonesian citizen and
lives in Jakarta. Other than being
Position and Basic Appointment
Director of Finance, Harry M. Zen
His position as the Finance Director of
is also the President Commissioner
Telkom is in accordance with Annual
of GSD (Telkom Property) and a
General Meeting of Shareholders
Commissioner of Telkomsel.
(AGM) of Telkom on April 22, 2016. The
decision is effective from April 22, 2016
to the present.
Previous work experience and the time period is presented as follows:
No.
Position
1
2
3
4
5
President Director PT Credit Suisse Securities Indonesia
Director Barclays Capital
Co-Head Investment Banking, PT Bahana Securities
Assistant Vice President Citi Global Corporate Banking, Citibank Co.
Official Assistant Citi Global Consumer Banking, Citibank Co.
Period
2008 – 2015
2007 – 2008
2001 – 2008
1996 – 2001
1993 – 1994
77
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk ABDUS SOMAD ARIEF
Director of Wholesale and International Service
Personal
Education
Born : Sidoarjo, September 25,
Abdus
Somad Arief’s
educational
1963
Age : 54 years old
background
is a Bachelor’s degree
majoring
in Electro Engineering and
a Master’s degree in Information and
Citizenship and Domicile
Technology Systems
from Bandung
Abdus Somad Arief
is 54 years
Institute of Technology.
old and was born in Sidoarjo, on
September 25, 1963. He
is an
Position and Basic Appointment
Indonesian citizen and
lives
in
His position as
the Wholesale and
Jakarta. Other than being Director of
International Service Director of Telkom is
Wholesale and International Service,
in accordance with Extraordinary General
he is also serves as the President
Meeting of Shareholders (EGM) of Telkom
Commissioner of PT Telekomunikasi
on December 19, 2014. While the position
Indonesia International (Telin).
as Wholesale and International Service
Director based on the resolution of the
Annual General Meeting of Shareholders
(AGM) of Telkom on April 21, 2017. The
decision is effective to the present.
Previous work experience and its time period are presented as follows:
No
Position
President Commisioner, PT Infrastruktur Telekomunikasi Indonesia (Telkom Infra)
President Commisioner, PT Teltranet Aplikasi Solusi (Telkom Telstra)
Network & IT Solution Director, Telkom
Commisioner, PT Sigma Cipta Caraka (Telkom Sigma)
Commisioner, PT Telekomunikasi Selular (Telkomsel)
Commisioner, PT Daya Mitra Telekomunikasi (Mitratel)
Network Director, Telkomsel
President Commisioner, PT Pramindo Ikat Nusantara
Executive General Manager Enterprise Service Division, Telkom
Commissioner, PT Infomedia Nusantara
Vice President of Business Development, Telkom
Deputy Executive General Manager Enterprise Service Division, Telkom
1
2
3
4
5
6
7
8
9
10
11
12
78
Period
2015 – 2017
2015 – 2017
2014 – 2017
2015
2015
2012 – 2014
2012 – 2014
2011 – 2012
2009 – 2012
2010 - 2011
2008 – 2009
2007 – 2008
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk
HERDY ROSADI HARMAN
Director of Human Capital Management
Personal
Education
Born : Bandung, June 28, 1963
Herdy Rosadi Harman’s
educational
Age : 54 years old
background is a Bachelor’s degree from
Padjdjaran University majoring
in Law.
Citizenship and Domicile
He has a MBA degree from the Asian
Herdy Rosadi Harman is 54 years
Institute Management Philippines-Institute
old and was born in Bandung, on
Management Telkom University and Master
June 28, 1963. He is an Indonesian
of Law (LLM) from American University,
citizen and lives in Jakarta. Other
Washington DC, the United States.
than being Director of Human
Capital Management, he is also
Position and Basic Appointment
a Commissioner of GSD (Telkom
His position as the Human Capital
Property)
and
a President
Management Director of Telkom is in
Commissioner of Infomedia.
accordance with Extraordinary General
Meeting of Shareholders
(EGM) of
Telkom on December 19, 2014. The
decision is effective from December 19,
2014 to the present.
Previous work experience and its time period are presented as follows:
No.
Position
1
2
3
4
Director of Human Capital Management, Telkomsel
VP Regulatory Management, Telkom
VP Legal & Compliance, Telkom
General Manager Management Support, Telkom
Period
2012 – 2014
2007 – 2012
2006 – 2007
2004 – 2006
79
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk DIAN RACHMAWAN
Director of Enterprise & Business Service
Personal
Education and Domicile
Born : Surabaya, May 14, 1964
Dian
Rachmawan’s
educational
Age : 53 years old
background
is a Bachelor’s degree
Citizenship
from Sepuluh November
Institute of
Technology majoring
in Electro and
Dian Rachmawan is 53 years old
Telecommunication
Engineering
and was born in Surabaya, on
1987. He has a Master’s degree
in
in
May 14, 1964. He is an Indonesian
Communication and Real Time System,
citizen and lives in Bogor. Other
Telecommunication Engineering
from
than being Director of Enterprise &
University of Bradford, England in 1994.
Business Service, he is also the
President Commissioner of Telkom
Position and Basic Appointment
Telstra since May 2017.
His position as the Enterprise & Business
Service Director of Telkom is in accordance
with the resolution of the Annual General
Meeting of Shareholders (AGM) of Telkom
on April 21, 2017 and his previous position
as Consumer Service Director of Telkom
in accordance with the Extraordinary
General Meeting of Shareholders (EGM)
dated December 19, 2014.
Previous work experience and its time period are presented as follows:
No.
Position
Enterprise & Business Service Director, PT Telkom
Consumer Service Director, PT Telkom
CEO, PT Telekomunikasi Indonesia International (Hongkong) Limited
Director of Network Operation & Engineering, PT Telkom Indonesia International
Executive General Manager Division of Fixed Wireless Network, Telkom
General Manager, Telkom South Jakarta
General Manager for Interconnection & Partnership for Regional Division II Jakarta
AVP Interconnection Planning, Head Quarter, PT Telkom
1
2
3
4
5
6
7
8
80
Period
Apr 2017 – now
Dec 2014 – Apr 2017
2011 – 2014
2007 – 2011
2005 – 2007
2004 – 2005
2001 – 2004
2000 – 2001
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk DAVID BANGUN
Director of Digital & Strategic Portfolio
Personal
Education
Born
: Bandung, September 5,
David Bangun’s educational background
1965
is a Bachelor’s degree of Electrical
Age
: 52 years old
Engineering from Bandung Institute of
Citizenship and Domicile
in Electrical Engineering from Cornell
David Bangun is 52 years old and
University New York, USA.
Technology and a Master of Engineering
was born in Bandung, September
5, 1965. He is an Indonesian citizen
Position and Basic Appointment
and lives in Bandung. Other than
His position as the Digital & Strategic
being Director of Digital & Strategic
Portfolio Director of Telkom
is
in
Portfolio, he is also the President
accordance with the Annual General
Commissioner of Metra Digital
Meeting of Shareholders (AGM) of Telkom
Investama (MDI).
on April 21, 2017. The decision is effective
from April 21, 2017 to the present.
Previous work experience and its time period are presented as follows:
No.
Position
1
2
3
4
5
6
President Director PT Dayamitra Telekomunikasi (Mitratel)
Executive General Manager Network of Broadband
Commissioner PT Telkom Internasional
Executive General Manager Infratel
Vice President Infrastructure & Service Planning
Assistant Vice President Investment Analysis
Period
2014 – 2017
2013 – 2014
2011 - 2014
2011 – 2013
2009 – 2011
2007 - 2009
81
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
ZULHELFI ABIDIN
Director of Network & IT Solution
Personal
Education
Born
: Bukittinggi, January 1,
Zulhelfi Abidin’s educational background
1962
is a Bachelor’s degree from Bandung
Age
: 55 years old
Institute of Technology majoring
in
Information Engineering. He has a
Citizenship and Domicile
Master’s degree in Computer Science
Zulhelfi Abidin is 55 years old and
from University of Wollongong, Australia.
was born in Bukittinggi, on January
1, 1962. He is an Indonesian citizen
Position and Basic Appointment
and lives in Jakarta. Other than
His position as the Network & IT Solution
being Director of Network & IT
Director of Telkom is in accordance with
Solution, he is also the President
General Meeting of Shareholders (GMS)
Commissioner of Telkom Infra.
of Telkom on April 21, 2017. The decision is
effective from April 21, 2017 to the present.
Period
2015 –2017
2014 –2015
2012 –2015
2007 –2014
Previous work experience and its time period are presented as follows:
No.
Position
Director of BRI
Senior Executive Vice President, BRI
Commissioner, Bank BRI Syariah
Head of Information Systems Technology Division, BRI
1
2
3
4
82
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk
MAS’UD KHAMID
Director of Consumer Service
Personal
Education
Born
: Gresik, December 12,
Ma’ud Khamid’s educational background
1964
is a Bachelor’s degree from Sepuluh
Age
: 53 years old
November
Institute of Technology
majoring in Engineering Physics in 1989.
Citizenship and Domicile
Senior Executive Program and Global
Mas’ud Khamid is 53 years old and
Leadership Program
from Kellogg
was born in Gresik, on December
School Management Northwestern
12, 1964. He
is an
Indonesian
University of Chicago in 2006 and 2009
citizen and lives in Surabaya. Other
and Executive Education
in Harvard
than being Director of Consumer
Business School in 2015.
Service, he is also the President
Commissioner of PT Telkom Akses.
Position and Basic Appointment
His position as the Consumer Service
Director of Telkom is in accordance with
Annual General Meeting of Shareholders
(AGMS) of Telkom on April 21, 2017.
Previous work experience and its time period are presented as follows:
No.
Position
1
2
3
4
5
6
7
8
Chief of Commissioner, PT Sigma Citra Caraka (Telkom Sigma)
Director of Sales, PT Telekomunikasi Selular (Telkomsel)
Commissioner PT PINS Indonesia
Executive General Manager Telkom Flexi, PT Telkom Indonesia
Commissioner PT Metra Digital Media
Executive General Manager Telkom West Area, PT Telkom Indonesia
Executive General Manager Regional Jakarta Division, PT Telkom Indonesia
Executive General Manager Jatim Division, PT Telkom Indonesia
Period
2015 - 2017
2012 - 2017
2012 - 2014
2011 - 2012
2011 - 2012
2010 - 2011
2008 - 2010
2007 - 2008
83
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
MEMBER OF THE BOARD OF DIRECTORS ENDED IN 2017
INDRA UTOYO
Director of Digital & Strategic Portfolio
(as of March 15, 2017)
Personal
Education
Born : Bandung, February 17, 1962
Indra Utoyo’s educational background is a
Age : 56 years old
Bachelor’s degree from Bandung Institute
of Technology with major
in Electro
Citizenship and Domicile
Telecommunication Engineering. He has
Indra Utoyo is 56 years old and was
an MBA degree in Communication and
born in Bandung, on February 17, 1962.
Signal Processing from Imperial College
He is an Indonesian citizen and lives in
of Science, Technology and Medicine,
Bandung. Other than being Director
University of London, England.
of Digital & Strategic Portfolio, he is
also the President Commissioner of
Position and Basic Appointment
Metra Digital Investama (MDI) and a
His position as the Digital & Strategic
Commissioner of Telkom Metra.
Portfolio Director of Telkom
is
in
accordance with Extraordinary General
Meeting of Shareholders (EGM) of Telkom
on May 11, 2012. The decision is effective
from May 11, 2012 to the present.
Previous work experience and its time period are presented as follows:
No. Position
1
2
Director of IT Solution & Supply, Telkom
Senior General Manager Information System Center Telkom
Period
2007 – 2012
2005 – 2007
84
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk HONESTI BASYIR
Director of Wholesale and International Service
also acting as Director of Enterprise & Business Service
(as of April 20, 2017)
Personal
Education
Born : Padang, June 24, 1968
Honesti Basyir’s educational background
Age : 49 years old
is a Bachelor’s degree Bandung Institute
Citizenship and Domicile
Engineering. He has a Master’s degree in
Honesti Basyir is 49 years old and
Corporate Finance from Bandung School
of Technology with major in Industrial
was born in Padang, on June 24,
of Management.
1968. He is an Indonesian citizen
and lives in Bandung. Other than
Position and Basic Appointment
being Director of Wholesale and
Previously, he
served as Finance
International Service, he is also
Director, accordance to AGSM Telkom
Director of Enterprise & Business
in May 11, 2012 and as Wholesale and
Service
(since September
13,
International Service Director of Telkom
2016), the President Commissioner
is
in accordance with Extraordinary
of Telin and Telkom Metra.
General Meeting of Shareholders (EGM)
of Telkom on December 19, 2014. The
decision is effective from December 19,
2014 to the present.
1
2
3
4
5
6
Previous work experience and its time period are presented as follows:
No. Position
Finance Director, Telkom
Period
2012 – 2014
Vice President Strategic Business Development, Directorate IT Solution and Strategic Portfolio Telkom 2012
Vice President Strategic Business Development, Strategic Investment & Corporate Planning Telkom
2010 – 2012
Project Controller1, Project Management Office Telkom
Assistant Vice President, Business & Finance Analysis Telkom
Project Management Consultant, Garuda Maintenance Facility
2009 – 2010
2006 – 2009
1992 – 1993
85
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk EDUCATION, TRAINING, SEMINAR AND CONGRESS
To increase the competencies of the main leaders of Telkom, each member of the Board of Directors has the opportunity to participate
in education and training throughout the financial year 2017.
No
Education/Training
Director Name
Time
Place
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Speaker at ITB General Lecture
Alex J. Sinaga
February 8, 2017
Bandung
Participant of Executive Leadership Program (ELP)
from the Ministry of SOE
Alex J. Sinaga
April 26, 2017
Bogor
Speaker at IBD Expo 2017
Alex J. Sinaga
September 20, 2017
Jakarta
Lecturer at Seminar “BUMN Hadir di Kampus”
Alex J. Sinaga
October 28, 2017
Assessment Corporate Governance Perception Index
(CGPI) 2017
Alex J. Sinaga
November 9, 2017
Jakarta
Jakarta
Telco-exclusive Breakout Session at FinTech Festival
Alex J. Sinaga
November 15, 2017
Singapore
Speaker and Participant at Coordination meeting of
SOE
Peer Review Accreditation Corporate Learning
Improvement Process (CLIP) by The European
Foundation for Management Development (EFMD)
Assessment of Superior Performance Appraisal Criteria
(KPKU) 2017
Alex J. Sinaga
November 22, 2017
Bengkulu
Alex J. Sinaga
December 6, 2017
Jakarta
Alex J. Sinaga
December 11, 2017
Jakarta
Speaker at Seminar Digitalizing Wonderful Indonesia
Alex J. Sinaga
December 14, 2017
Jakarta
Executive Leadership Program
International Telecom Weeks
Capacity Asia 2017
Rakernakas PGRI
15
CHCO Sharing Session SWA Magazine
16
Leadership Training BPJS
17
OJK Leadership Training
18
General Lecture of University of Jakarta
19
Indonesia Business Development the Ministry of SOE
20 General Lecture Padjajaran University
21
Sharing Culture Development Paru Bandung Hospital
Abdus Somad Arief
April 28-29, 2017
Bandung
Abdus Somad Arief May 16-17, 2017
USA
Abdus Somad Arief
December 12, 2017
Hongkong
Herdy Rosadi
Harman
Herdy Rosadi
Harman
Herdy Rosadi
Harman
Herdy Rosadi
Harman
Herdy Rosadi
Harman
Herdy Rosadi
Harman
Herdy Rosadi
Harman
Herdy Rosadi
Harman
2017
2017
2017
2017
2017
2017
2017
2017
Jakarta
Jakarta
Jakarta
Jakarta
Jakarta
Jakarta
Bandung
Bandung
22
23
24
25
26
Strategic Marger & Acquisition
David Bangun
January, 2017
USA
ELP 1 Batch 2 (Executive Leadership Program) SOE -
Telkom
Speaker “IT Leader Forum” with the topic “Shaping
Change Through Leadership”
Keynote Speaker “Workshop Global Security Threat &
Trends Telkom Group”
Keynote Speaker Seminar, Topic : The Role of
Broadband as a Competitive Advantage to Develop
Indonesia’s Economy, Material Title: Telkom Broadband
Infrastructure Readines to Accelerate Indonesia
Broadband Plan
Zulhelfi Abidin
April 28 – 29, 2017
Bandung
Zulhelfi Abidin
July 13, 2017
Bogor
Zulhelfi Abidin
August 23, 2017
Jakarta
Zulhelfi Abidin
December 6, 2017
Jakarta
27
Speaker at SocialBakers
Mas’ud Khamid
May 15-20, 2017
Republik Ceko
86
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk DIRECTORS AFFILIATIONS AND RELATIONSHIPS
In accordance with the principle of transparency to implement GCG, Telkom declares the affiliation with the other Board members,
member of the Board of Commissioners and major shareholders, including the name of affiliated parties.
Financial Relationship with
Family Relationship with
Directors (BOD)
BOC
BOD
Controlling
Shareholder(1)
BOC
BOD
Controlling
Shareholder(1)
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Alex J. Sinaga
Harry M. Zen
Abdus Somad Arief
Herdy Rosadi Harman
Dian Rachmawan
David Bangun*
Zulhelfi Abidin*
Mas’ud Khamid*
Indra Utoyo**
Honesti Basyir***
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
NOTE :
(1)
Controlling Shareholder in this matter is the Indonesian government represented by the Ministry of State Owned Enterprises as the primary
shareholder
*
in position since April 21, 2017
**
in position until March 15, 2017
*** in position until April 20, 2017
87
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk TELKOM INDONESIA EMPLOYEES
Employees are our most valuable asset. 24,065 of our employees work professionally throughout 2017 to realize our goal to transform
ourselves to become digital telecommunication company and at the same time, to accelarate the development of the digital economy
of Indonesia. In line with that, we continue to build the digital competence and digital culture of our employees. This is our commitment
to Indonesia today and in the future.
EMPLOYEE PROFILE
Based on education level
Age ranges
4,572
8,490
11,003
11.4%
16.9%
17.6%
54.1%
Bachelor
Diploma
Preuniversity
Postgraduate
12,000
10,000
8,000
6,000
4,000
2,000
0
75.8%
24.2%
<30 years
31-45 years
>45 years
24,065 Telkom Group Employees
58.0%
13,956 Telkom’s Employees
42.0%
10,109 Subsidiaries’ Employees
Employees with right working culture are Telkom’s most valuable asset in achieving its vision to be “King of Digital”. As of the end
of 2017, Telkom Group has 24,065 employees comprising 13,956 employees in the parent company and 10,109 employees in the
subsidiaries. Continuing efforts to revitalize and improve the efficiency of human resources in previous years, the number of parent
company employees in 2017 was 6.5% lower compared to 2016.
Table of Telkom and Subsidiaries Employees in 2015-2017
No
Telkom Group Employees
1
2
Telkom Employees
Subsidiaries Employees
Total
2017
13,956
10,109
24,065
2016
14,933
8,943
23,876
2015
16,097
8,688
24,785
NUMBER OF EMPLOYEES BY EDUCATION LEVEL AND AGE DISTRIBUTION
By end of 2017, Telkom had 13,017 employees that held bachelor degree, represented 54.1% of Telkom’s total employees, higher than
in 2016 which was 40.1%. In subsidiaries, employees who held bachelor degree represented 53.7% or 6,987 of total employees. In
terms of distribution based on age, 13,062 employees were under 45 years, represented 54.3% of total Telkom employees. With such
composition of educational background and age distribution, the company had potential to regenerate its employees better in line with
the business requirements.
88
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk Table of Telkom and Subsidiaries Employees Based on Education in 2017
Education
Preuniversity
Diploma
Undergraduate
Graduate
Telkom
3,201
2,776
6,030
1,949
Subsidiaries
876
1,452
6,987
794
2017
Telkom Group
4,077
4,228
13,017
2,743
%
16.9
17.6
54.1
11.4
Table of Telkom Employees Based on Education in 2015-2017
Education
Preuniversity
Diploma
Undergraduate
Graduate
2017
2016
2015
Total
3,201
2,776
6,030
1,949
%
22.9
19.9
43.2
14.0
Total
3,834
3,217
5,987
1,895
%
25.7
21.5
40.1
12.7
Total
4,541
3,655
6,082
1,819
%
28.2
22.7
37.8
11.3
Table of Telkom and Subsidiaries Employees Based on Age in 2017
Age (years old)
Below 30
Between 30-45
Above 45
Table of Telkom Employees Based on Age in 2015-2017
Age (years old)
Below 30
Between 30-45
Above 45
Telkom
1,452
2,703
9,801
Subsidiaries
3,120
5,787
1,202
2017
Telkom Group
4,572
8,490
11,003
%
19.0
35.3
45.7
2017
2016
2015
Total
1,452
2,703
9,801
%
10.4
19.4
70.2
Total
1,155
2,966
10,812
%
7.7
19.9
72.4
Total
893
3,386
11,818
%
5.5
21.1
73.4
NUMBER OF EMPLOYEES BY POSITION, STATUS OF PERSONNEL AND GENDER
In general we have several levels of positions, namely senior management, middle management, supervisors, and other levels of officer.
The largest composition of employees in 2017 was in supervisory positions of 48.0% or 11,547 of employees. In a subsidiary entity, the
largest composition of employees was in other positions equal to 47.2% or 4,771 of employees.
The number of male employees were 18,231 employees, more than the number of female employees of 5,834 employees. We do not
differentiate male and female employees in terms of employment, but men have higher interest than women to work in our place,
especially in the field operation.
Table of Telkom and Subsidiaries Employees Based on Position in 2017
Position
Senior Management
Middle Management
Supervisor
Others
Total
Telkom
Subsidiaries
2017
205
3,950
8,294
1,507
13,956
450
1,635
3,253
4,771
10,109
Telkom
Group
655
5,585
11,547
6,278
24,065
%
2.7
23.2
48.0
26.1
100.0
89
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk Table of Telkom Employees Based on Position in 2015-2017
Level of Position
Senior Management
Middle Management
Supervisor
Others
2017
2016
2015
Total
205
3,950
8,294
1,507
%
1.5
28.3
59.4
10.8
Total
207
3,856
8,917
1,953
%
1.4
25.8
59.7
13.1
Total
187
3,281
9,913
2,716
%
1.2
20.4
61.6
16.9
Table of Telkom and Subsidiaries Employees Based on Gender in 2017
Gender Classification
Male
Female
Telkom
10,881
3,075
Subsidiaries
7,350
2,759
2017
Telkom
Group
18,231
5,834
%
75.8
24.2
Table of Telkom Employees Based on Gender in 2015-2017
Gender Classification
Male
Female
2017
2016
2015
Total
10,881
3,075
%
78.0
22.0
Total
11,803
3,130
%
79.0
21.0
Total
12,935
3,162
%
80.4
19.6
EQUAL OPPORTUNITIES IN THE COMPETENCY DEVELOPMENT
We conduct employee competency development to be more innovative and to creative and contribute to the progress of the company.
We provide equal opportunity for every employee to join our competency development program.
In 2017, we spent Rp109.6 billion on competency development, increased by Rp14.5 billion or 15.2% compared to 2016. The amount
did not include educational scholarships.
Type of Competency
Development Program
Training
Certification
Educational Scholarship
Total
Type of Competency
Development Program
Training
Certification
Educational Scholarship
Total
Telkom
16,580
859
117
17,556
Telkom
14,722
266
117
15,105
2017
Subsidiaries
4,199
312
16
4,527
2016
Subsidiaries
11,659
20
1
11,680
Telkom
Group
20,779
1,171
133
22,083
Telkom
Group
26,381
286
118
26,785
%
94.1
5.3
0.6
100
%
98.5
1.1
0.4
100
90
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk SHAREHOLDERS COMPOSITION
The authorized capital of the Company consists of 1 Series A
Dwiwarna share, and 399,999,999,999 Series B shares (common
3. Shareholders with Less than 5% Ownership
Telkom Shareholders with Individual Ownership Less than 5%, on
stock). The authorized subscribed and paid-up capital are
December 31, 2017
100,799,996,400 shares, consisting of a share of Series A
Dwiwarna share and 100,799,996,399 Series B shares. A share of
the Series A Dwiwarna Share is owned by the Government of the
Republic of Indonesia (the “Government”).
Group
Ordinary Stocks
Owned
Ownership
Percentage of
Outstanding
Common
Shares (%)
Composition of Shareholders Telkom on
December 31, 2017
Business/Institution
39,692,722,020
40.07
Individual
15,978,300
0.01
Foreign
Series A
Dwiwarna
Series B
(Ordinary Stock)
%
Local
Indonesian
Government
Public
Sub Total Capital
(placed and fully
deposited)
Treasury Shares
(shares that
have not been
re-purchased)
Total
1
1
51,602,353,559 52.09
47,459,863,040
47.91
99,062,216,599
100.0
1,737,779,800
-
1
100,799,996,399 100.0
Business/Institution
Limited liability
1,527,847,372
Mutual funds
2,335,982,606
Insurance company
2,608,784,450
Pension funds
646,453,350
Others
Individuals
78,777,750
553,317,192
1.54
2.36
2.64
0.65
0.08
0.56
Total
47,459,863,040
47.91
4. Percentage of Shares Owned Inside and Outside
Telkom’s shareholder composition per December 31, 2017 in
Indonesia
details are as follows:
On December 31, 2017, a total of 50,628 shareholders, including
the Government, registered as holders of ordinary shares of the
1. Shareholders with more than 5% Ownership
Company, including 37,639,647,870 ordinary shares owned by
(Major Shareholder/Controller)
Individual or
Group Identity
Type of
Share
Total Shares
Seri A
Seri B
Government
Percentage
Owned
1
-
2,310 shareholders outside Indonesia. Thus 38.0% of our shares
were owned by shareholders outside Indonesia and the rest
were controlled by domestic shareholders. On the same date
there were 90 ADS shareholders owning 76,327,568 ADS (1 ADS
Government
51,602,353,559
52.09
equivalent to 100 common shares).
2. Ownership of Shares by Directors and
Commissioners
5. List of 20 Largest Public Shareholders
Here is a list of the 20 largest public shareholders until
On December 31, 2017 there was no Commissioner or Director of
December 31, 2017.
the Company which has more than 1.0% of Company shares.
Institutions
BOD or BOC
Total Shares
Percentage
Owned
DJS KETENAGAKERJAAN PROGRAM JHT
GIC S/A GOVERNMENT OF SINGAPORE
Commissioner
Hendri Saparini
Hadiyanto
Rinaldi Firmansyah
Directors
Alex J. Sinaga
Dian Rachmawan
Abdus Somad Arief
Herdy Rosadi Harman
414,157
875,297
147,100
920,349
888,854
828,314
828,012
Total
4,902,083
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
BNYMSANV RE BNYMLB RE EMPLOYEES PROVIDEN
BNYM RE VIRTUS VONTOBEL EMERGING MARKETS
BBH BOSTON S/A VANGRD EMG MKTS STK INFD
JPMCB NA RE-VANGUARD TOTAL INTERNATIONAL
CITIBANK NEW YORK S/A GOVERNMENT OF NORW
PT. PRUDENTIAL LIFE ASSURANCE - REF
RBC S/A VONTOBEL FUND - EMERGING MARKETS
BBH BOSTON S/A MATTHEWS PACIFIC TIGER FU
JPMCB NA AIF CLT RE-STICHTING DEPOSITARY
GIC S/A MONETARY AUTHORITY OF SINGAPORE
SSB OBIH S/A ISHARES MSCI EMERGING MARKE
PT. TASPEN
SSB 2Q27 S/A ISHARES CORE MSCI EMERGING
REKSA DANA SCHRODER DANA PRESTASI PLUS-9
CITIBANK NEW YORK S/A JOHN HANCOCK FUNDS
SSB 1BA9 ACF MSCI EQUITY INDEX FUND B-IN
HSBC BANK PLC S/A SAUDI ARABIAN MONETARY
PT TASPEN (PERSERO) - THT
Percentage
2.45
1.50
1.11
0.81
0.79
0.62
0.60
0.60
0.47
0.42
0.41
0.37
0.36
0.35
0.34
0.32
0.32
0.31
0.30
0.29
91
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
SUBSIDIARIES, ASSOCIATED COMPANIES, AND
JOIN VENTURES
Government
*52.09%
Public
*47.91%
*Composition of share ownership.
Excludes treasury stock
PT Satelit Multimedia
Indonesia
Metra TV
Notes:
Direct Subsidiaries (consolidated)
Unconsolidated
Indirect Subsidiaries (consolidated)
92
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk
PT Nusantara
Sukses Sarana
PT Nusantara
Sukses Realti
PT Graha Sakura
Nusantara
93
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
As of December 31, 2017, Telkom had consolidated the financial statements of all subsidiaries owned directly or indirectly as follows:
SUBSIDIARIES WITH DIRECT OWNERSHIP
Company
PT Telekomunikasi
Selular
(“Telkomsel”),
Jakarta, Indonesia
Share
Ownership
65%
Business Field
Operational
Status
Total Asset
Before
Elimination
(Rp billion)
Telecommunication
- operators of
telecommunication
facilities and
mobile phone
services using the
technology of Global
System for Mobile
Communications
(“GSM”)
Telecommunication
Operating
85,748
Operating
13,606
Telecommunication
network services and
multimedia
Operating
13,275
100%
100%
100%
Telecommunication
Operating
9,125
100%
99.99%
100%
100%
100%
100%
100%
Construction,
services and trade in
telecommunications
Office leasing
and building
management
and maintenance
services, civil
consultant and
developer
Services and
telecommunications
development
Construction,
services and trade in
telecommunications
Telecommunications
-providing satellite
communications
systems, services
and related facilities.
Multimedia portal
services
Payment Services -
principal activities,
switching activities,
clearing and
settlement
Operating
5,716
Operating
5,641
Operating
3,473
Operating
1,871
Operating
576
Operating
524
Operating
225
Address
Telkom Landmark Tower, 1st
Tower, 1st -20th floor. Jl. Jend.
Gatot Subroto Kav. 52 South
Jakarta, 12710, Indonesia
Telkom Landmark Tower,
2nd Tower, 25th-27th floor.
Jl. Jend. Gatot Subroto
Kav.52 South Jakarta, 12710,
Indonesia
Telkom Landmark Tower, 2nd
Tower, 41th floor. Jl. Jend.
Gatot Subroto Kav.52 South
Jakarta, 12710, Indonesia
Telkom Landmark Tower, 2nd
Tower, 16-17 floor. Jl. Jend.
Gatot Subroto Kav. 52, South
Jakarta, 12710, Indonesia
Telkom
Building, West
Jakarta. Jl. S. Parman Kav.
8 West Jakarta,
11440,
Indonesia
Multimedia Tower. Jl. Kebon
Sirih No.10, Central Jakarta,
10110, Indonesia
Annex
Kuningan
Plaza
Building 7th floor. Jl. Rasuna
Said Kav C11-C14 South
Jakarta, Indonesia
Mugi Griya Building, 5th
floor. Jl. MT Haryono Kav. 10
Jakarta, 12810, Indonesia
Jl. Pringgondani II, No. 33,
Alternatif Cibubur, Depok
16954, Indonesia
Mulia Business Park, J
Building.
Jl. Letjen MT
Haryono Kav. 58 – 60
Pancoran, Jakarta,
12780,
Indonesia
Dea Tower, 1st Tower, 8th floor.
Jl. Mega Kuningan Barat
IX Kav. E.4.3 No.1 Jakarta,
12950, Indonesia
PT Dayamitra
Telekomunikasi
(“Dayamitra”),
Jakarta, Indonesia
PT Multimedia Nusantara
(“Metra”),
Jakarta, Indonesia
PT Telekomunikasi
Indonesia International
(“Telin” or “TII”),
Jakarta, Indonesia
PT Telkom Akses
(“Telkom Akses”),
Jakarta, Indonesia
PT Graha Sarana Duta
(“GSD”),
Jakarta, Indonesia
PT PINS Indonesia
(“PINS”)
Jakarta, Indonesia
PT Infrastruktur
Telekomunikasi
Indonesia
(“Telkom Infratel”),
Jakarta, Indonesia
PT Patra Telekomunikasi
Indonesia
(“Patrakom”),
Jakarta, Indonesia
PT Metranet
(“Metranet”),
Jakarta, Indonesia
PT Jalin Pembayaran
Nusantara
(“Jalin”),
Jakarta, Indonesia
94
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk Company
PT Napsindo Primatel
Internasional
(“Napsindo”),
Jakarta, Indonesia
Share
Ownership
60%
Operational
Status
Stopped
Operating in
January 13,
2006
Business Field
Telecommunications
providing the
Network Access
Point (NAP), Voice
Over Data (VOD),
and other related
services
SUBSIDIARIES WITH INDIRECT OWNERSHIP
Total Asset
Before
Elimination
(Rp billion)
5
-
Address
Company
PT Sigma Cipta Caraka
(“Sigma”),
Tangerang, Indonesia
Share
Ownership
100%
Telekomunikasi
Indonesia
International Pte. Ltd.,
Singapore
PT Infomedia
Nusantara
(“Infomedia”),
Jakarta, Indonesia
100%
100%
PT Telkom Landmark
Tower
(“TLT”),
Jakarta, Indonesia
PT Metra Digital Media
(“MD Media”),
Jakarta, Indonesia
55%
99.99%
Business Field
Operational
Status
Total Asset
Before
Elimination
(Rp billion)
Information
technology services -
implementation and
system integration,
outsourcing, and
maintenance and
software licenses
Telecommunication
Data and information
services - providing
information services
of telecommunication
and other information
services in the form
of print and electronic
media, and call center
services
Property development
and management
services
Information services
in a special directory
form
Operating
6,064
Operating
3,048
Operating
2,122
Operating
2,009
Operating
1,106
PT Finnet Indonesia
(“Finnet”),
Jakarta, Indonesia
TS Global Network
Sdn. Bhd.
(“TSGN”),
Petaling Jaya,
Malaysia
Telekomunikasi
Indonesia
International Ltd.,
Hong Kong
PT Metra Digital
Investama
(“MDI”),
Jakarta, Indonesia
60%
Information
technology services
Operating
907
49%
Satellite service
Operating
818
100%
Telecommunication
Operating
710
Operating
658
99.99%
Trade services,
information
technology and
multimedia,
entertainment and
investment
Address
Graha Telkom sigma. Jl.
Kapten Subijanto Dj Bumi,
Serpong
South
Tangerang, 15321, Indonesia
Damai,
Maritime
Square, #09-
63 Harbour Front Center,
Singapore - 099253
Infomedia Nusantara
PT
Head Office.
RS.
Fatmawati 77-81 Jakarta,
12150, Indonesia
Jl.
Telkom Landmark Tower
Building Jl. Jend Gatot
Subroto Kav 52 South
Jakarta, 12710, Indonesia
Wisma Aldiron Dirgantara 2nd
floor Suite 202-209 & 231-
237. Jl. Jend. Gatot Subroto
Kav.72 Pancoran
South
Jakarta, 12780 Indonesia
Menara Bidakara 1, 12th floor.
Jl. Jend. Gatot Subroto Kav.
71-73, South Jakarta, 12870
Indonesia
Teknorat ½ street, Cyber 3,
6300 Cyberjaya, Selangor
Darul Ehsan, Malaysia
Suite 905, 9/F, Ocean
Centre, 5 Canton Road, Tsim
Sha Tsui, Kowloon, Hong
Kong
The East Tower 36th floor.
Jl. Dr. Ide Anak Agung Gde
Agung Kav. E.3.2 No. 1,
Kuningan Timur Setiabudi,
South
12950,
Jakarta,
Indonesia
95
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk Company
Share
Ownership
Business Field
Operational
Status
Total Asset
Before
Elimination
(Rp billion)
100%
Telecommunication
Operating
639
99.99%
Services and trade
Operating
303
100%
Health insurance
administration
services
Operating
273
100%
Digital content sales
service
Operating
231
60%
Networking and
e-commerce services
Operating
203
51%
Tourism services
Operating
100%
Telecommunication
Operating
60%
Provider system
integrator services
Operating
100%
Telecommunication
Operating
178
123
60
36
99.99%
Satellite services
Operating
18
99.99%
Building and hotel
management services
Not Yet
Operating
99.99%
Services and trade
Not Yet
Operating
99.83%
Subscription
broadcasting services
Operating
-
-
-
Telekomunikasi
Indonesia
International
(“TL”)
S.A, Dili, Timor Leste
PT Nusantara Sukses
Investasi
(“NSI”),
Jakarta, Indonesia
PT Administrasi
Medika
(“Ad Medika”),
Jakarta, Indonesia
PT Melon Indonesia
(“Melon”),
Jakarta, Indonesia
PT Metraplasa
(“Metraplasa”),
Jakarta, Indonesia
PT Graha Yasa Selaras
(“GYS”),
Jakarta, Indonesia
Telekomunikasi
Indonesia
International Pty. Ltd.,
(“Telkom Australia”),
Sydney, Australia
PT Nutech Integrasi
(“Nutech”),
Jakarta, Indonesia
Telekomunikasi
Indonesia
International Inc.
(“Telkom USA”),
Los Angeles, USA
PT Satelit Multimedia
Indonesia
(“SMI”),
Jakarta, Indonesia
PT Nusantara Sukses
Sarana
(“NSS”),
Jakarta, Indonesia
PT Nusantara Sukses
Realti
(“NSR”),
Jakarta, Indonesia
PT Metra TV
(“Metra TV”),
Jakarta, Indonesia
96
Address
Timor Plaza 4th Floor, Rua
Presidente Nicolao Lobato,
Comoro, Dili Timor Leste
Multimedia Tower, Gedung
Annex 2nd floor. Jl. Kebon
Central
Sirih No 10-12,
Jakarta, Indonesia
STO Telkom Gambir Gedung
C 3rd floor. Jl. Medan Merdeka
Selatan No.
12, Central
Jakarta, 10110, Indonesia
Telkom Building, 7th floor. Jl
Sisingamangaraja Kav 4-6,
Kebayoran Baru, Jakarta,
Indonesia
Mulia Business Park, J
Building. Jl. Letjen MT
Haryono Kav. 58 – 60
Pancoran, Jakarta
12780,
Indonesia
Jl. Cimanuk No. 33 Bandung
Level 4, 241 Commonwealth
Street Surry Hills NSW 2010,
Australia
Jl. Tanjung Barat Raya,
No.17, Pasar Minggu, South
Jakarta, 12510, Indonesia
800 Wilshire Boulevard,
Suite 620 Los Angeles,
California 90017
Telkom Landmark Tower, 2nd
Tower, 41th floor. Jl. Jend.
Gatot Subroto Kav.52 South
Jakarta, 12710
Multimedia Tower, Jl. Kebon
Sirih No 10-12,
Central
Jakarta, Indonesia
Menara Multimedia,
Kebon Sirih No
Central Jakarta, Indonesia
Jl.
10-12,
Telkom Landmark Tower,
2nd Tower 41th floor. Jl. Jend.
Gatot Subroto Kav.52 South
Jakarta, 12710, Indonesia
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk CHRONOLOGY OF REGISTRATION OF STOCKS
Telkom is listed in the Indonesian Stock Exchange (BEI) and New York Stock Exchange (NYSE) since November 14, 1995, with shares
code TLKM and TLK.
Date
Corporate Actions
13/11/1995
First Public Pre-Offering
Composition of Shareholding
Government
of Republic of
Indonesia
8,400,000,000
Public
%
-
Sale of Shares Held by Government
(933,334,000)
933,334,000
Telkom New Shares Issuance
-
933,333,000
-
-
-
Composition of Shareholding
7,466,666,000
1,866,667,000
20.0
11/12/1996
Government Shares Block Sale
(388,000,000)
388,000,000
-
Composition of Shareholding
7,078,666,000
2,254,667,000
24.2
15/05/1997
Government Distributes Incentive Shares
to All Public Shareholders
(2,670,300)
2,670,300
-
Composition of Shareholding
7,075,995,700
2,257,337,300
24.2
7/5/1999
Government Shares Block Sale
(898,000,000)
898,000,000
-
Composition of Shareholding
6,177,995,700
3,155,337,300
33.8
2/8/1999
Distribution of Shares Bonus (Issuance)
(Every 50 Shares Gets 4 Shares)
494,239,656
252,426,984
-
Composition of Shareholding
6,672,235,356
3,407,764,284
33.8
7/12/2001
Government Shares Block Sale
(1,200,000,000)
1,200,000,000
-
Composition of Shareholding
5,472,235,356
4,607,764,284
45.7
16/07/2002
Government Shares Block Sale
(312,000,000)
312,000,000
Composition of Shareholding
5,160,235,356
4,919,764,284
1/10/2004
Denomination of Shares Nominal Value
with Ratio of 1:2
10,320,470,712
9,839,528,568
-
48.8
48.8
21/12/2005
Shares Repurchase Program (I)1
-
(211,290,500)
-
Composition of Shareholding
10,320,470,712
9,628,238,068
48.3
29/06/2007
Shares Repurchase Program (II)2
-
(215,000,000)
-
Composition of Shareholding
10,320,470,712
9,413,238,068
47.7
20/06/2008
Shares Repurchase Program (III)3
-
(64,284,000)
-
Composition of Shareholding
10,320,470,712
9,348,954,068
47.5
19/05/2011
Shares Repurchase Program (IV)4
-
(520,355,960)
Composition of Shareholding
10,320,470,712
8,828,598,108
-
46.1
0.3
46.9
46.9
Assignment of Shares Repurchase
Program III to Employees through ESOP
Program
-
59,811,400
Composition of Shareholding
10,320,470,712
8,888,409,508
46.3
Assignment of Shares Repurchase
Program I through Private Placement
-
211,290,500
-
Composition of Shareholding
10,320,470,712
9,099,700,008
Denomination of Shares Nominal Value
with Ratio of 1:5
Assignment of Shares Repurchase
Program II through Private Placement
51,602,353,560
45,498,500,040
-
1,075,000,000
-
Composition of Shareholding
51,602,353,560
46,573,500,040
47.4
97
14/06/2013
30/07/2013
2/9/2013
13/06/2014
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
Composition of Shareholding
Government
of Republic of
Indonesia
Public
%
-
22,363,000
-
Date
Corporate Actions
Assignment of Remaining Shares
Repurchase Program III through Private
Placement
21/12/2015
29/06/2016
Composition of Shareholding
51,602,353,560
46,595,863,040
47.5
Assignment of Remaining Shares
Repurchase Program IV through Private
Placement
-
864,000,000
-
Composition of Shareholding
51,602,353,560
47,459,863,040
47.9
2017
No corporate action
-
-
-
Share Ownership Composition
51.602.353.560
47.459.863.040
47.9
NOTE :
1. First shares buy back program began on 21 December 2005 (simultaneously with the EGMS at the time such program was approved)
and ended in June 2007.
2. Second shares buy back program began on 29 June 2007 (simultaneously with the EGMS at the time such program was approved)
and ended in June 2008.
3. Third shares buy back program began on 20 June 2008 (simultaneously with the EGMS at the time such program was approved)
and ended in December 2009.
4. Fourth shares buy back program began on 19 May 2011 (simultaneously with the AGMS at the time such program was approved) and
ended in November 2012.
98
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk
CHRONOLOGY OF LISTING OF BONDS AND OTHER SECURITIES
We issued bonds for the first time on July 16, 2002 valued at Rp1,000 billion in nominal price for a period of five years. These bonds
were traded in Surabaya Stock Exchange and yielded 17% annual fixed interest. On July 16, 2007, Telkom has repaid its bond debts.
Telkom issued bonds in rupiah for the second time on June 25, 2010, each valued at Rp1,005 billion for Series A with a period of five
years and Rp1,995 billion for Series B with a period of ten years. Such bond issuance had been listed in IDX. Telkom has repaid Bond II
Series A which was due on July 6, 2015.
Bond Name
Bond I Telkom
Year 2002
Bond II Telkom
Year 2010 Series
A
Amount
(Rp million)
Issuance
Date
Maturity Date
Period
(year)
Interest
Rate
Underwriter Trustee
Date of
Repayment
1,000,000 July 16,
July 16, 2007
5
17.00 % PT
2002
1,005,000 June 25,
July 6, 2015
5
9.60 %
2010
Danareksa
Sekuritas
PT Bahana
Sekuritas; PT
Danareksa
Sekuritas;
PT Mandiri
Sekuritas;
PT BNI Tbk,
PT BRI Tbk
July 16,
2007
PT CIMB
Niaga Tbk
July 6, 2015
Subsequently on June 16, 2015, Telkom issued Shelf Registration Bond I Phase I Year 2015 each in amount of Rp2,200 billion for
Series A with a period of 7 (seven) years, Rp2,100 billion for Series B with a period of 10 (ten) years, Rp1,200 billion for Series C with a
period of 15 (fifteen) years and Rp1,500 billion for Series D with a period of 30 (thirty) years. The bond was listed in BEI with PT Bahana
Securities, PT Danareksa Sekuritas and PT Mandiri Sekuritas as the underwriters. PT CIMB Niaga Tbk was again appointed as the
trustee. The report on the use of these bond funds is described further in the Analysis and Discussion section.
Pefindo on March 9, 2017 has rated Shelf Registration Bond I Telkom Phase I Year 2015 and Bond II Series B Year 2010 for period March
9, 2017 until March 1, 2018 with idAAA (stable outlook) rating.
Bond Name
Amount
(Rp million)
Issuance
Date
Maturity Date
Period
(year)
Interest
Rate
Underwriter
Trustee
Rating
Bond II
Telkom Year
2010 Series B
Shelf
Registration
Bond I Telkom
Year 2015
Series A
1,995,000 June 25, 2010 July 6, 2020
10
10.20 % PT Bahana
Sekuritas; PT
Danareksa
Sekuritas;
PT Mandiri
Sekuritas
2,200,000 June 23,
June 23, 2022
7
9.93 % PT Bahana
2015 1
Sekuritas; PT
Danareksa
Sekuritas;
PT Mandiri
Sekuritas;
PT Trimegah
Sekuritas
PT CIMB Niaga
Tbk
idAAA
PT Bank
Permata Tbk
idAAA
99
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk Bond Name
Amount
(Rp million)
Issuance
Date
Maturity Date
Period
(year)
Interest
Rate
Underwriter
Trustee
Rating
Shelf
Registration
Bond I Telkom
Year 2015
Series B
Shelf
Registration
Bond I Telkom
Year 2015
Series C
Shelf
Registration
Bond I Telkom
Year 2015
Series D
2,100,000 June 23, 2015 June 23,
10
10.25 % PT Bahana
2025
Sekuritas; PT
Danareksa
Sekuritas;
PT Mandiri
Sekuritas;
PT Trimegah
Sekuritas
1,200,000 June 23, 2015 June 23, 2030
15
10.60 % PT Bahana
Sekuritas; PT
Danareksa
Sekuritas;
PT Mandiri
Sekuritas;
PT Trimegah
Sekuritas
1,500,000 June 23, 2015 June 23,
30
11.00 % PT Bahana
2045
Sekuritas; PT
Danareksa
Sekuritas;
PT Mandiri
Sekuritas;
PT Trimegah
Sekuritas
PT Bank
Permata Tbk
idAAA
PT Bank
Permata Tbk
idAAA
PT Bank
Permata Tbk
idAAA
NOTE :
1 Shelf Registration Bonds 1 Telkom 2015 Series A was issued June 16, 2015 but the official sale transaction was on June 23, 2015
100
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk NAME AND ADDRESS OF INSTITUTIONS AND/OR SUPPORTING
CAPITAL MARKET PROFESSIONALS
Supporting
Capital Market
Professionals
External Auditor KAP Purwantono,
Sungkoro & Surja
(member firm of
Ernst & Young
Global Limited)
Securities
Admin Bureau
PT Datindo
Entrycom
Trustee
PT Bank CIMB Niaga
Tbk
PT Bank Permata
Tbk.
Central
Custodian
PT Kustodian Sentral
Efek Indonesia
Address
Service
Fee
Assignment
Period
Bursa Efek Jakarta
Building, 2nd Tower,
7th floor
Jl. Jend. Sudirman Kav.
52 53
Jakarta - 12100
Wisma Sudirman
Jl. Jend. Sudirman Kav
34 35
Jakarta - 10220
Graha Niaga, 20th floor
Jl. Jend. Sudirman
Kav. 58
Jakarta – 12190
WTC II Building 28th
floor
Jl. Jend Sudirman
Kav.29 31
Jakarta 12920
Conducting Integrated
Audit of PT Telkom
Indonesia (Persero)
Tbk (“Telkom”) and the
General Audit of financial
statements of subsidiaries.
Publishing Consent Letter.
Acting as a depository
institution (Custodian) of
ordinary Telkom shares
traded on the Stock
Exchange.
Representing the interests
of Bond holders with
the Company for Bond II
Telkom.
Representing the interests
of Bond holders with the
Company for Telkom Shelf
Registration Bond phase I.
Bursa Efek Jakarta
Building, Tower 1, 5th
floor
Jl. Jend. Sudirman Kav
52 53
Jakarta - 12190
- Providing a central
depository and
settlement of stock
transactions on the Stock
Exchange.
- Storage services and
Rp43.7 billion
Since 2012
Rp136 million
Since 1995
Rp75 million
Since 2010
Rp75 million
Since 2015
Rp10 million
Since 1995
Ranking Agent
PT Pemeringkat Efek
Indonesia
Panin Tower Senayan
City, 17th floor
Jl. Asia Afrika Lot. 19
Jakarta - 10270
settlement of securities
transactions, distribution
of corporate action
results.
Providing ranking on
credit risk of Telkom bond
issuance.
ADS Custodian
Bank
The Bank of
New York Mellon
Corporation
101 Barclay Street, New
York
United States of
America - 10286
Acting as a depository
institution (Custodian) of
ADS shares traded on the
NYSE.
Official Service
Agent in the
United States
Puglisi and
Associates
Law Consultant
Hadiputranto,
Hadinoto & Partners
Acting as an authorized
representative in the US
with regard to securities in
accordance with the law and
regulations.
Acting as capital market
legal counsel
850 Library Ave #
204, Newark
United States of
America - 19711
Bursa Efek
Jakarta Building Tower
2
21st floor Jl. Jend.
Sudirman Kav. 52 53,
Jakarta - 12190
Rp150 million
Since 2012
-
Since 1995
US$500
Since 2012
Rp218 million
Since 1995
Notary
Notaris/PPAT
Ashoya Ratam, SH,
MKn
Jl. Suryo No.54
Kebayoran Baru
Jakarta 12180
Acting as notary
Rp25 million
Since 2012
101
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk ANALYSIS AND
DISCUSSION
104 Performance Highlight
105 Operations Overview by Segment
120 Marketing Overview
124 Comprehensive Financial Performance
139 Solvency
139 Receivables Collectability
140 Capital Structure
140 Capital Expenditure
142 Material Commitment for Capital Expenditure
144 Material Information and Fact after Accountant
Reporting Date
144 Macroeconomy
145 Indonesian Telecommunication Industry
147 Business Prospect and Sustainability of the
Company
148 Comparison Between Targets and Realizations
149 Targets or Projections for the Next Year
149 Dividend
150 Realization of Public Offering Fund
150 Material Transaction Information Containing
Conflict of Interest, Transaction with Affiliated
Parties, Investments, Divestments and
Acquisitions
Changes in Regulation
Changes in Accounting Policy
151
151
“Our sustainable revenue growth demonstrates
our success in managing and creating economic
opportunities during the current transition toward
digital communication era. Supported with strategic
efforts
to
improve business efficiencies and
productivities, we will continue to innovate and invest
to add economic value for our stakeholders”
PERFORMANCE HIGHLIGHT
Continuing the positive performance in the previous years, our revenue continued to grow in 2017 with
the largest revenue contribution from the mobile segment.
Revenue 2017
Increased 10.2%
compared to 2016
Rp128.3 T
Rp64.6 T
EBITDA
Increased 8.6%
Rp33.2 T
Capital Expenditure
Increased 13.5%
Rp22.1 T
NET INCOME
Increased 14.4%
Rp223.55
EPS
Increased 13.9%
The increase in our capital expenditure aims to accelerate the digital business, in line with the rapid
development of the digital age.
196.3 Million
Cellular Subscriber
2017
increased 12.9%
compared to 2016
105.8 Million Subscriber
Mobile Broadband*
Increased 24.9% Compared to 2016
Increased 82.6%
Compared to 2016
2.9 Million Subscriber
IndiHome
*include Flash user, Blackberry user, and PAYU
104
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk OPERATIONAL OVERVIEW BY SEGMENT
PREFACE
In 2017, we reorganized Telkom Group’s business portfolio based on a more specific customers segmentation. The reorganization
caused a change in the management and organizational structure in managing our business portfolio. Inline with that, we changed
the description of the business segment information that differ from the previous year’s business segment information and presented
the new description in the consolidated financial report. In the 2016 report, we operated in four business segments, namely home,
personal, corporate, and others.
Starting from 2017, our report elaborates 5 main operational segments, namely mobile, consumer, enterprise, wholesale and
international business (“WIB”), and other segments. The consumer segment provides fixed line telephone, pay TV, data, internet, and
other telecommunication services to residential customers. The mobile segment provides mobile voice, SMS, value-added service, and
mobile broadband products, and the enterprise segment provides end-to-end solution to corporate, MSME and goverment institution
customers. Moreover, WIB segment provides interconnection, lease line, satellite, VSAT, broadband access, information technology,
data and internet services to Other Licensed Operator and international customers. Other segment mainly provides digital service.
The following diagram explains the restructuring of portfolio and transformation of business segments we did in 2017.
Business Segment
2016
Products and
Services Portofolio
Business Segment
2017
HOME
Focuses on retail
customers
PERSONAL
Focusing on cellular
customers
CORPORATE
Focuses on corporations
and institutional -based
customers
OTHERS
Focus on subsidiaries
that support
Telkom Group’s
operation
Fixed Portfolio
Mobile Portfolio
Network Infrastructure
Portfolio
Wholesale and
International Portfolio
Enterprise Digital
Portfolio
Consumer
Digital Portfolio
Property
CONSUMER
Focusing in retail
customers
MOBILE
Focusing on cellular
customers
ENTERPRISE
Focusing on corporate,
government institutions
and MSME
WIB
Focusing on Other
Licensed Operators
(0LO) and international
client
OTHERS
Focus on digital and
property service
105
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
SEGMENT PERFORMANCE HIGHLIGHTS
The following table shows an overview of the performance of each of the business segments of Telkom Group from 2015 to 2017.
Telkom’s Results of Operation By Segment
Growth
2017-2016
(%)
Years ended December 31,
2017
2016
2015
(Rp billion)
(US$ million)
(Rp billion)
(Rp billion)
Mobile
Revenues
External Revenues
Inter-segment revenues
Total segment revenues
External expenses
Inter-segment expenses
Total Segment expenses
Segment Results
Depreciation and amortization
Provision recognized in current period
Consumer
Revenues
External Revenues
Inter-segment revenues
Total segment revenues
External expenses
Inter-segment expenses
Total Segment expenses
Segment Results
Depreciation and amortization
Provision recognized in current period
Enterprise
Revenues
External Revenues
Inter-segment revenues
Total segment revenues
External expenses
Inter-segment expenses
Total Segment expenses
Segment Results
Depreciation and amortization
Provision recognized in current period
WIB
Revenues
External Revenues
Inter-segment revenues
Total segment revenues
External expenses
Inter-segment expenses
Total Segment expenses
Segment Results
106
7.2
13.3
7.4
4.3
14.6
6.9
8.2
5.9
31.7
6.7
(84.7)
(7.3)
(6.0)
(44.0)
(13.7)
65.3
(1.5)
(1.8)
21.0
30.5
25.2
15.9
55.8
29.9
(79.6)
54.1
661.3
26.8
5.9
11.9
18.0
16.8
17.6
(5.2)
90,073
3,086
93,159
(39,452)
(14,382)
(53,834)
39,325
(13,560)
(291)
11,105
287
11,392
(10,360)
(1,563)
(11,923)
(531)
(2,839)
(385)
19,130
16,801
35,931
(20,653)
(15,027)
(35,680)
252
(2,136)
(668)
7,439
15,305
22,744
(12,333)
(5,611)
(17,944)
4,800
6,639
227
6,866
(2,908)
(1,060)
(3,968)
2,898
(999)
(21)
819
21
840
(764)
(115)
(879)
(39)
(209)
(28)
1,410
1,238
2,648
(1,522)
(1,108)
(2,630)
19
(157)
(49)
548
1,128
1,676
(909)
(414)
(1,323)
354
83,998
2,724
86,722
(37,814)
(12,547)
(50,361)
36,361
(12,808)
(221)
10,410
1,877
12,287
(11,024)
(2,793)
(13,817)
(1,530)
(2,881)
(392)
15,816
12,877
28,693
(17,813)
(9,647)
(27,460)
1,233
(1,386)
119
5,866
14,451
20,317
(10,451)
(4,805)
(15,256)
5,061
71,203
4,847
76,050
(36,461)
(10,483)
(46,944)
29,106
(12,978)
(136)
8,936
2,319
11,255
(9,988)
(2,910)
(12,898)
(1,643)
(2,500)
(226)
16,818
4,276
21,094
(14,398)
(4,633)
(19,031)
2,063
(1,296)
(611)
5,603
11,270
16,873
(8,957)
(4,991)
(13,948)
2,925
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk Telkom’s Results of Operation By Segment
Depreciation and amortization
Provision recognized in current period
Other
Revenues
External Revenues
Inter-segment revenues
Total segment revenues
External expenses
Inter-segment expenses
Total Segment expenses
Segment Results
Depreciation and amortization
Provision recognized in current period
OPERATIONAL HIGHLIGHT
Growth
2017-2016
(%)
38.9
(46.6)
563.2
188.0
219.3
134.8
483.3
144.5
(59.7)
15.8
100.0
Unit
Years ended December 31,
2017
2016
2015
(Rp billion)
(US$ million)
(Rp billion)
(Rp billion)
(2,382)
(127)
126
602
728
(979)
(70)
(1,049)
(321)
(22)
(2)
(176)
(9)
9
44
54
(72)
(5)
(77)
(24)
(2)
(0)
(1,715)
(238)
(1,893)
(33)
19
209
228
(417)
(12)
(429)
(201)
(19)
(1)
122
—
122
(243)
—
(243)
(121)
(13)
—
Year Ended on December, 31
2017
2016
2015
Broadband Subsribers
Fixed broadband 1)
IndiHome
Mobile broadband 2)
Total Broadband Subsribers
Cellular Subsribers
Postpaid (kartuHalo)
(000) subscribers
(000) subscribers
(000) subscribers
(000) subscribers
(000) subscribers
Prepaid (simPATI, Kartu As, Loop)
(000) subscribers
Total Cellular Subsribers
(000) subscribers
Fixed Line Subsribers
Fixed wireline (POTS)
Total Fixed Line Subsribers
Other Subscribers
Datacomm
Satellite-transponder
Network
BTS 2G
BTS 3G/4G
Total BTS (3)
Customer Services
PlasaTelkom
Grapari Telkom Group
Grapari (Indonesia and abroad)
Grapari Mobile
IndiHome Mobile
Employees
(000) subscribers
(000) subscribers
Mbps
MHz
unit
unit
unit
location
location
location
unit
unit
people
5,266
2,965
105,808
111,074
4,739
191,583
196,322
10,957
10,957
938,040
5,050
50,324
110,381
160,705
535
4
442
761
1,142
4,329
1,624
84,729
89,058
4,180
169,740
173,920
10,663
10,663
764,397
6,801
50,344
78,689
129,033
566
416
487
3,983
1,069
73,887
77,870
3,509
149,131
152,641
10,277
10,277
532,549
4,648
48,394
54,895
103,289
572
414
392
24,065
23,876
24,785
(1) Total of fixed broadband subsribers including IndiHome triple play subscribers is 2.9 million, 1.6 million, and 1.1 million in 2017, 2016, and 2015
(2) Mobile broadband includes Flash user, Blackberry user, and PAYU
(3) Since 2014 the BTS that we disclose is Telkomsel BTS
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Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
CONSUMER
• Fixed Line
• Pay TV
•
• Other Telecommunications Services
Internet and Data
MOBILE
• Mobile voice
• SMS
• Mobile broadband
• Value added service
ENTERPRISE
End to end service for Corporate and Institutional
customers
ICT Platform
• Enterprise connectivity
•
• Data center and cloud
Smart Enabler
Platform
• Payment
• Digital advertising
• Big data and data
IT services
Revenue (Rp Billion)
Mobile Enterprise
Consumer
WIB
Others
Expenses (Rp Billion)
services
• Business process
outsourcing services
• Devices and hardware
sales and services
analytics
• Network
connectivity
Mobile Enterprise
Consumer
WIB
Others
WHOLESALE AND
INTERNATIONAL BUSINESS
• Domestic & international carrier
traffic
• Wholesale connectivity
• Tower
• Satellite
• Telecommunication & infrastructure
managed service
OTHERS
• Digital Service
90,073 (70.4%)
126 (0.1%)
7,439 (5.8%)
19,130 (15.0%)
11,105 (8.7%)
39,452 (47.1%)
20,653 (24.7%)
12,333 (14.7%)
10,360 (12.4%)
979 (1.2%)
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Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk
CONSUMER SEGMENT
"IndiHome is our main product and service in the consumer segment. Supported by fiber optic network, we provide telecommunication,
information, education, interactive TV and entertainment service for consumer customers."
Consumer Revenue
(Rp Billion)
11,105
10,410
8,936
2.9 million
IndiHome
subscribers,
increased 82.6%
12,000
10,000
8,000
6,000
4,000
2,000
0
0
7,171,184
Optical Distribution
Port (fiber optic
based broadband
access)
352,642
Acces Point Wi-Fi
2017
2017
2016
2016
2015
2015
Consumer Expenses
(Rp Billion)
10,360
11,024
9,988
12,000
10,000
8,000
6,000
4,000
2,000
0
2017
2017
2016
2016
2015
2015
Consumer Result
(Rp Billion)
745
(614)
(1,052)
800
600
400
200
0
(200)
(400)
(600)
(800)
(1,000)
(1,200)
2017
2016
2015
The Consumer segment includes operating results from business lines that provide services to individual customers, residential
and apartment. The products offered include fixed line telephony, high speed data internet, interactive TV, and digital advertising
as well as derivative products from the above service convergence (OTT, IoT, Artificial Intelligence, home online shopping). Since its
launch in early 2015, IndiHome delivers excellent performance growth. In 2017, IndiHome contributed 64% to consumer segment
revenues. The development of production equipment in the form of modernization from copper to fiber optic network, expansion to
locations in accordance with target market, aggressive sales team and product innovation increasingly customized and supported
by global-class content partners, IndiHome offers premium retail services such as HBO, Fox Channel, Cinemax, beIN SPORTS, Disney
Channel, Discovery, AFC, CATCHPLAY, iflix and HOOQ. Otherwise we also work with local content, TV free to air, and other special
channels. Customized service options are provided in the form of add on services such as global call, internet speed upgrades,
Movin’, minipack, antivirus and wifi.id seamless to enjoy unlimited internet access from 352,642 Acces Point (AP) Indonesia Wi-Fi
devices all over Indonesia. The programs are packed through a variety of product packages according to customer needs and of
course with competitive prices.
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Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk Corporate Governance
Corporate Social Responsibility
Partnership and Comunity Development Program (PKBL)
Assembly of Telkom Akses Technician which are in charge for installation and maintenance IndiHome service.
As of December 31, 2017, IndiHome customers reached 2.9 million subscribers, increased by 82.6% compared to the previous year.
We believe that the potential of IndiHome fixed broadband service is still huge. In the future, the need for high quality fixed broadband
services will be increasingly needed along with the increasing economy in Indonesia. Moreover, fixed broadband penetration in
Indonesia is still relatively low compared to regional countries. To ensure the availability of IndiHome services throughout Indonesia,
we currently provide fiber optic based broadband access amounting to 7.2 million Optical Distribution Port (ODP) which expand
following market developments.
Consumer Segment’s Financial Performance 2015 – 2017
Consumer segment contributes revenue of 8.7% of our total revenues in 2017. Here is the consumer segment performance tables over
the last three years:
Consumer Segment
Revenues
Expenses
Results
2017-2016
2017
2016
2015
(%)
6.7
(6.0)
221.3
(Rp billion)
(US$ million)
(Rp billion)
(Rp billion)
11,105
(10,360)
745
819
(764)
55
10,410
(11,024)
(614)
8,936
(9,988)
(1,052)
in 2017, revenues in the consumer segment amounted to Rp11,105 billion (US$819 million), an increase of Rp695 billion or 6.7%
compared to Rp10,410 billion in 2016 in line with the increase in IndiHome subscribers. While expenses in 2017 decreased by Rp664
billion or 6.0% from Rp11,024 billion in 2016 to Rp10,360 billion (US$764 million). This prompted the consumer segment to book a
profit of Rp745 billion (US$55 million), better than the previous year which recorded an operating loss of Rp614 billion, in other words,
from 2016 to 2017 the segment result increased by 221.3%.
In the period 2015-2016, consumer segment revenues increased by Rp1,474 billion, or 16.5% from Rp8,936 billion to Rp10,410 billion.
Expenses also increased by Rp1,036 billion or 10.4% from Rp9,988 billion to Rp11,024 billion. Operating loss in this segment decreased
by Rp438 billion or 41.6% due to higher revenue increase compared to expenses.
PT Telkom Indonesia (Persero) Tbk
111
MOBILE SEGMENT
"Through Telkomsel, we are committed to provide the best mobile service experience to support the society’s mobility by providing
mobile voice, SMS, value added service and mobile broadband services. Mobile segment is a major contributor to our revenue, with
mobile broadband becoming the backbone of future growth in line with increasing smartphone users in Indonesia."
196.3 million
cellular subscribers,
increased 12.9%
105.8 million
mobile broadband
subscribers,
increased 24.9%
160,705 BTS
spread over 150
TrueBEx city in
indonesia
13 million
registered TCASH
users with 3 million
active users
TCASH can be
used on 40,000
merchant outlets
Mobile Revenue
(Rp Billion)
90,073
83,998
71,203
100,000
80,000
60,000
40,000
20,000
0
2017
2016
2015
Mobile Expenses
(Rp Billion)
39,452
37,814
36,461
40,000
30,000
20,000
10,000
0
2017
2016
2015
Mobile Result
(Rp Billion)
50,621
46,184
34,742
60,000
50,000
40,000
30,000
20,000
10,000
0
2017
2016
2015
In the mobile segment, Telkom Group serves the customers through its subsidiary, Telkomsel. Mobile product portfolio consists of
mobile voice, SMS, value added service and mobile broadband services. Market brand for postpaid customers is kartuHalo, while our
prepaid customers consist of simPATI, Kartu As, and Loop consumers. Mobile broadband service Telkomsel Flash is supported by LTE/
HSPDA/3G/EDGE/GPRS technology. We also add more contents to improve our mobile customers’ experience, including cooperating
with video streaming service provider, music streaming provider, and games developer. Telkomsel also complement its services with
mobile financial technology (fintech) platform, TCASH and T-Wallet. TCASH is a new payment tool through mobile phone, available for
prepaid and postpaid customer. While downloading T-Wallet through mobile phone, customers are able to conduct online shopping
transactions, pay bills, and transfer money. Currently, there are approximately 3 million TCASH’s active users which used on 40,000
merchant outlets throughout Indonesia. Currently TCASH registered subscribers reach 13 million with 3 million active users that can be
used in 40,000 merchants throughout Indonesia.
To improve the quality of its service, Telkomsel invested in network and infrastructure development, building 31,672 BTS in 2017, so
that total BTS were 160,705 BTS of which 110,381 of them were 3G/4G BTS or 69%. Our 3G base stations reach 85% of Indonesia’s
population, while 4G BTS can reach about 80% of the Indonesia’s population. To support BTS operations, we have 29,061 towers, of
which 11,061 towers were in Mitratel and 18,000 towers were under Telkomsel. In October 2017, Telkomsel was declared as the winner
of the tender for the 2,300 MHz spectrum. Additional spectrum of 30 MHz will be utilized to strengthen 4G LTE service and maximize
the quality of broadband service for customers all over Indonesia. In addition, we also conduct BTS modernization with fiber backhaul.
Until 2017, 58% of BTS had been modernized.
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Corporate Social Responsibility
Partnership and Comunity Development Program (PKBL)
With QR code scan, we make payments through TCASH at many merchants, cafes and restaurants throughout Indonesia.
Mobile broadband subscribers reached 105.8 million in 2017, increased by 24.9% from 84.7 million subscribers in 2016, with traffic
data broadband reach to 2,168,245 TB or increased 126.2% from 958,733 TB in 2016. Telkomsel also succeeded in increasing 4G LTE
range to 490 cities and district across Indonesia at the end of 2017. The mobile segment performance remained strong and became
the biggest contributor for consolidated revenue in 2017. Although SIM card penetration is already high, we believe that the potential
growth of the cellular industry will continue, especially due to digital business, inline with increasing of smartphone users as device
prices continue to slide downward.
Mobile Segment’s Financial Performance 2015 – 2017
The mobile segment was the largest contributor to revenue in 2017, accounted for 70.4% of our total revenue. Below is the table of
mobile segment performance over the last three years:
Mobile Segment
Revenues
Expenses
Results
2017-2016
2017
2016
2015
(%)
7.2
4.3
9.6
(Rp billion)
(US$ million)
(Rp billion)
(Rp billion)
90,073
(39,452)
50,621
6,639
(2,908)
3,731
83,998
(37,814)
46,184
71,203
(36,461)
34,742
The mobile segment recorded revenues of Rp90,073 billion (US$6,639 million), an increase of Rp6,075 billion or 7.2% compared to
Rp83,998 billion in 2016 due to increased data and internet consumption. Segment expenses in 2017 also increased by Rp1,638 billion,
or 4.3%, to Rp39,452 billion (US$2,908 million), in line with the increase in revenue. Compared to 2016, the segment result increased
by Rp4,437 billion or 9.6% to Rp50,621 billion (US$3,731 million).
In the period 2015-2016, mobile segment revenues increased by Rp12,795 billion or 18.0% from Rp71,203 billion to Rp83,998 billion.
Expenses also increased by Rp1,353 billion or 3.7% from Rp36,461 billion to Rp37,814 billion. Operating income increased by Rp11,442
billion or 32.9%.
PT Telkom Indonesia (Persero) Tbk
113
ENTERPRISE SEGMENT
"We provide end-to-end solution for corporate, MSME and government institution in Indonesia. By integrating various resources that we
own, we offer superior ICT platform and smart enabler services that is superior."
Enterprise Revenue
(Rp Billion)
19,130
15,816
16,818
1,453
corporate subscribers
300,416 MSME
subscribers and
944 government
institution subscribers
20,000
15,000
10,000
5,000
0
2017
2016
2015
Enterprise Expenses
(Rp Billion)
20,653
17,813
14,398
1,861 Gbps
corporate internet
and 938 Gbps
datacomm
25,000
20,000
15,000
10,000
5,000
0
2017
2016
2015
Enterprise Result
(Rp Billion)
(1,523)
(1,997)
2,420
102,200 m2
gross facilities
(41,000 m2
aggregate capacity)
data center
2,500
2,000
1,500
1,000
500
0
(500)
(1,000)
(1,500)
(2,000)
2017
2016
2015
Enterprise segment provides service for corporate, MSME and government institution customers in relation to end-to-end solution service,
which include the services of fixed (fixed voice & fixed broadband); network infrastructure (satellites); enteprise digital (connectivity, device,
data center, cloud, IT service, BPO); digital life & smart platform (digital advertising, financial service, video/TV, e-commerce, others digital
life, big data & smart platform, IoT; and extensive service (professional & advance service). These various services benefit customers as they
are assisted by professionals to plan their required solutions, help reach targets on time, with efficient cost and minimum risk.
Currently, we serve 302,813 customers, consisting of 1,453 corporate customers, 300,416 MSME customers and 944 government
institution customers. To provide the best services for our customers, we developed data centers with 102,200 m2 gross facilities
(aggregate capacity 41,000 m2) in Indonesia and Singapore. Until 31 December 2017, our datacomm capacity reached 938 Gbps and
provide 1,861 Gbps bandwidth for corporate internet. Enterprise segment will have a favorable growth opportunity. The growth potential
comes from the increasing need of corporate cutomers for integrated ICT service. ICT service is also increasingly required by the large
number of Micro Small Medium Enterprises (MSME), most of which have not enjoyed a high quality ICT service yet. In addition, the
Company has also developed a digital payment platform under the “T-Money” brand for business-to-business (B2B) segments.
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Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk Corporate Governance
Corporate Social Responsibility
Partnership and Comunity Development Program (PKBL)
Telin-3 Data Center in Singapore.
Likewise with government institutions that increasingly require integrated ICT services to be able to maximize the aspect of good
corporate governance. Various government agencies and local governments increasingly utilize digital services to support them in
improving services to the community through smart city platform as it has been used in 329 cities across Indonesia.
To complement the various services in the enterprise segment, we also acquire and form a new subsidiary that supports our business. In 2017,
we made several acquisitions including the acquisition of PT Bosnet Distribution Indonesia engaged in the FMCG (Fast Moving Consumers
Good) ICT Solution and PT Nutech Integration engaged in the field of ICT Transportation through Telkom Metra. As for the establishment of
a new subsidiary, in 2016 we established PT Jalin Payment Nusantara (Jalin) engaged in ICT focusing on non-cash payment system business
that supports national payment gateway.
Enterprise Segment’s Financial Performance 2015 – 2017
The revenue contribution of the enterprise segment on our revenues was 15.0% of total revenue in 2017. Here is the table of enterprise
segment performance over the last three years:
Enterprise Segment
Revenues
Expenses
Results
2017-2016
2017
2016
2015
(%)
21.0
15.9
23.7
(Rp billion)
(US$ million)
(Rp billion)
(Rp billion)
19,130
(20,653)
(1,523)
1,410
(1,522)
(112)
15,816
(17,813)
(1,997)
16,818
(14,398)
2,420
In 2017, the segment’s operating revenues increased by Rp3,314 billion, or 21.0%, to Rp19,130 billion (US$1,410 million) compared to
Rp15,816 billion in the previous year. This was mainly due to the increasing needs of customer digitalization especially in corporate
customers, MSME and government institutions. The enterprise segment expenses also increased to Rp20,653 billion (US$1,522
million), increased by Rp2,840 billion or 15.9% compared to Rp17,813 billion in 2016. Due to the increase in revenue was higher than
the increase in expense, operating loss improved to Rp1,523 billion (US$112 million) in 2017, better than operating loss of Rp1,997
billion in 2016.
In the period of 2015-2016, the revenue of the enterprise segment decreased by Rp1,002 billion, or 6.0% from Rp16,818 billion to
Rp15,816 billion. While expenses increased by Rp3,415 billion or 23.7% from Rp14,398 billion to Rp17,814 billion. The decrease in
revenues and a substantial increase in operating expenses resulted in an operating loss of Rp1,997 billion in 2016, while in 2015 still
recorded operating profit of Rp2,420 billion.
PT Telkom Indonesia (Persero) Tbk
115
WHOLESALE AND INTERNATIONAL BUSINESS (WIB) SEGMENT
"Wholesale and International Business segment mainly provides products and services to operators, other telecommunications
service providers and international business. Strengthening the infrastructure and development of business models and new business
innovations are the key factors to our success in winning the domestic market, penetrating the international market and competing with
other large telecommunication companies in order to realize the company’s vision."
24 TPE
Telkom-2 satellite
&
49 TPE
Telkom-3S satellite
Foot print in
11 countries
155.524 km
fiber optic backbone
network 90,854
km (domestic)
and 64,670 km
(international)
57 (international)
and 42 (domestic)
points of presence
(PoP)
WIB Revenue
(Rp Billion)
7.439
5.866
5.603
8.000
6.000
4.000
2.000
0
2017
2016
2015
WIB Expenses
(Rp Billion)
12.333
10.451
8.957
15.000
12.000
9.000
6.000
3.000
0
WIB Result
(Rp Billion)
0
(1.000)
(2.000)
(3.000)
(4.000)
(5.000)
2017
2016
2015
2017
2016
2015
(4.894)
(4.585)
(3.354)
The wholesale and international business segment’s products and services include OLO service, domestic and international carrier
traffic, wholesale connectivity, tower, satellite and telecommunication & infrastructure management services. Telkom’s international
business is conducted by its subsidiary, Telin, which already established presences in 11 countries, namely Singapore, Hong Kong,
Macau, East Timor, Australia, Myanmar, Malaysia, Taiwan, United States, Saudi Arabia and New Zealand. Several services, among
others, include facilities-based operator, cellular operator, mobile virtual network operator (“MVNO), wholesale voice, wholesale data,
and business process outsourcing.
To support data and voice services, we have fiber optic based backbone network of 155,524 km, 90,854 km is domestic and 64,670
km is international. We also have 57 points of presence (PoP) in major cities around the world, including 23 PoP in Asia (9 PoP in
Indonesia, 4 PoP in Singapore, 3 PoP in Hong Kong and 1 PoP each in Dili , Dubai, Kuala Lumpur, Seoul, Tokyo, Taipei and Yangoon), 21
PoP in Europe (1 PoP each in Amsterdam, Palermo, Milan, Stockholm, Luxembourg, Switzerland, Kiev, Warsaw, Moscow, Madrid, Sofia,
Vienna, Frankfurt, Berlin, London, Manchester, Paris, Marseilles, Munich, Dublin and Brussels) and 13 PoP in America, namely 1 PoP in
Toronto - Canada and 12 PoP in the United States (2 PoP in Los Angeles, and 1 each PoP in Ashburn, New York, Guam, Hawaii, Chicago,
Seattle, Miami, Palo Alto, Santa Clara and San Jose). In domestic, we have 42 PoP comprising 8 main PoP in Batam (Batam Center and
Bukit Dangas), Jakarta (Jatinegara and Cikupa), Surabaya (Rungkut and Kebalen) and Manado (Manado Centrum and Manado Paniki),
and 34 primary PoP in 29 cities in Indonesia.
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Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk Corporate Governance
Corporate Social Responsibility
Partnership and Comunity Development Program (PKBL)
Telkom-3S Satellite was launched on February 15, 2017 in Guiana Space Center, Kourou, French Guiana.
To improve services in both domestic and global, Telkom deploys submarine cable network. The global submarine cable deployment is
partly our own investment and some others through a participation in a submarine cable consortium consisting of Batam Singapore
Cable System (BSCS), Dumai Malacca Cable System (DMCS), Asia-America Gateway (AAG), South East Asia-Japan Cable System
(SJC), South East Asia Middle East Western Europe 5 (SEA-ME-WE 5) and Southeast Asia-United States (SEA-US). While domestic
submarine cable consists of Sulawesi Maluku Papua Cable System (SMPCS) and Aceh-Sibolga-Batam-Larantuka (ASBL). To connect
European, Asian, and American continents, currently we are building Indonesia Global Gateway (IGG) submarine cable network
which connecting 12 major city including Batam, Jakarta, Surabaya and Manado. IGG connects SEA-ME-WE5 that connecting Dumai
(Indonesia), the Middle East and West Europe along approximately 20,000 km with SEA-US that connecting Manado (Indonesia) and
Los Angeles (United States) along approximately 15,000 km. Until the end of 2017, 445 districts across Indonesia have been connected
by fiber-based backbone infrastructure.
Currently we have 2 satellites namely Telkom-2 and Telkom-3S. Telkom-2 has a capacity of 24 TPE (transponder equivalent to 36 Mhz)
of C-band standard that reaches across Indonesia and most of Southeast Asia, while Telkom-3S has a capacity of 49 TPE consisting of
24 TPE C-band standard with coverage of all Indonesia and most of Southeast Asia region, 12 TPE extended C-band and 13 TPE Ku-band
with coverage all over Indonesia. As an effort to improve our services, we plan to launch another satellite that is currently in the process.
Wholesale and International Business Segment’s Financial Performance 2015 – 2017
The Wholesale and International Business segment contributed 5.8% to total revenues in 2017. The following table shows the
performance of the Wholesale and International Business segment over the last three years:
WIB Segment
Revenues
Expenses
Results
2017-2016
(%)
26.8
18.0
(6.7)
2017
2016
2015
(Rp billion)
(US$ million)
(Rp billion)
(Rp billion)
7,439
(12,333)
(4,894)
548
(909)
(361)
5,866
(10,451)
(4,585)
5,603
(8,957)
(3,354)
The Wholesale and International Business segment recorded revenues of Rp7,439 billion (US$548 million) in 2017, an increase of
Rp1,573 billion or 26.8% compared to Rp5,866 billion in 2016. The increase in revenue was in line with our increased infrastructure
capacity, to provide a wider service to customers both in domestic and overseas. Operating expenses in 2017 increased by Rp1,882 billion
or 18.0% to Rp12,333 billion (US$909 million) compared to Rp10,451 billion in 2016 primarily due to expenditures for infrastructure
development. Due to the increase in expense was higher than the increase in revenue operating loss reached Rp4,894 billion (US$361
million) in 2017, an increase of Rp309 billion or 6.7%, compared to Rp4,585 billion in the previous year.
In the period of 2015-2016, WIB segment revenues increased by Rp263 billion or 4.7% from Rp5,603 billion to Rp5,866 billion.
Expenses also increased by Rp1,494 billion or 16.7% from Rp8,957 billion to Rp10,451 billion. Segment WIB still recorded an operating
loss of Rp4,585 billion or an increase of Rp1,231 billion or 36.7% due to an increase in expenses greater than revenue increase.
PT Telkom Indonesia (Persero) Tbk
117
OTHERS SEGMENT
“Our business activities in this segment are digital service provisions. We will continue to strengthen our digital services as part of the
business ecosystem to support the acceleration of Indonesia’s digital economy growth now and in the future.”
3 million
registered users
blanja.com
34 million
active users MelOn
Others Revenue
(Rp Billion)
126
19
122
150
120
90
60
30
0
2017
2016
2016
Others Expenses
(Rp Billion)
979
417
243
1,000
800
600
400
200
0
2017
2016
2015
Others Result
(Rp Billion)
0
(200)
(400)
(600)
(800)
(1,000)
2017
2016
2015
(853)
(398)
(121)
In digital services, Telkom currently offers digital lifestyle such as digital music, video and games with MelOn brand, while e-commerce
service with blanja.com brand. Currently we have about 34 million active users MelOn and 3 million registers users accessing blanja.com.
blanja.com is a joint venture between Telkom and eBay, which has the concept of an online-marketplace. Currently, blanja.com has
thousands of merchants offering various products from different categories and also committed to bring MSMEs into digital (Go
Digital) to compete in the global market. blanja.com has a mission to encourage the acceleration of Indonesia’s digital economy growth
by increasing opportunities for original Indonesian products, including products of SOE partners.
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Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk Others Segment’s Financial Performance 2015–2017
The contribution of others segments to our revenue in 2017 is 0.1%. Here are the other segment performance tables over the last three
years:
Others Segment
Revenues
Expenses
Results
2017-2016
2017
2016
2015
(%)
563.2
134.8
(114.3)
(Rp billion)
(US$ million)
(Rp billion)
(Rp billion)
126
(979)
(853)
9
(7)
(63)
19
(417)
(398)
122
(243)
(121)
Revenue in others segments recorded revenues of Rp126 billion (US$9 million), an increase of Rp107 billion or 563.2% compared to
Rp19 billion in 2016. Meanwhile the increase in expenses in 2017 amounted to Rp562 billion or 134.8%, to Rp979 billion (US$72 million)
This resulted in a loss of operating income increased by Rp455 billion or 114.3% to Rp853 billion (US$63 million) compared to Rp398
billion in 2016.
In the period of 2015-2016, other segment income decreased by Rp103 billion or 84.4% from Rp122 billion to Rp19 billion. While
expenses also increased by Rp174 billion or 71.6% from Rp243 billion to Rp417 billion. This caused an increase in operating loss by
Rp277 billion or 228.9% from Rp121 billion to Rp398 billion.
119
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk MARKETING OVERVIEW
MARKET SHARE
MARKETING STRATEGY
With 9.8% growth in 2017, higher than the economic growth
of 5.1% in the same year, the telecommunication industry
has a strategic role in fostering national economic growth. A
healthy industry growth shows that people still have unmet
communication and access to information. This means that the
market share of the telecommunication industry is still wide
open, especially with the growing purchasing power and the
development of digital economy.
We have
implemented a comprehensive marketing and
promotional strategy to bolster our brand and to boost sales,
including through marketing communication activities and
product and service distribution channel development. To
increase sales, we also use above and below the line marketing
channels to promote our services to certain parties and
communities. We also continue to place advertisement in
printed and electronic media and implement marketing methods
such as point of sales broadcasting as well as promotion and
In mobile segment, the three largest cellular operators in Indonesia
sponsorship events.
are Telkomsel, Indosat Ooredo and XL Axiata, which collectively
accounted for more than 80% of the market share based on the
estimated number of total subscribers as of December 31, 2017.
The penetration of SIM cards in the cellular industry in Indonesia
To be more effective and efficient, our marketing strategies are
customized based on the characteristics of our targeted business
and customer segments.
is quite high making continued growth in penetration increasingly
limited. Our subsidiary, Telkomsel, is still the largest provider with
1. Consumer
approximately 196.3 million cellular subscribers, of which 105.8
million are mobile broadband subscribers.
For the fixed broadband segment, in addition to optimizing
marketing personnel in all branch offices in Indonesia, we
under brand IndiHome and PT Link Net Tbk, which is affiliated
with the Lippo Group and operates under the “LinkNet” brand,
have a significant market share. we also compete with MNC
Play Media and MyRepublic which entered the market in 2015.
One of our fixed broadband products and services, IndiHome,
which combines interactive television, internet and telephone
programs, growth of 82.6% with total subscribers 2.9 million by
Zone marking and aggressive direct sales strategies are
applied
in
IndiHome product penetration
in consumer
segment, with positioning as premium retail service for
consumer segment. With this strategy, IndiHome will continue
to be expansive in providing both coverage and product
services while maintaining high quality aspects, up-to-date
infrastructure technology and service ease by developing
various conventional good service channels (Grapari Telkom
Group & Mobile IndiHome) or with digital services through
myIndiHome. The measure of service quality follows the
customer experience rules using the Net Promotion Score
(NPS) approach.
the end of 2017. While our enterprise customers accounted for
302,813 consisting of 1,453 corporate customers, 300,416 MSME
2. Mobile
customers and 944 customers of government institution.
Furthermore, for the telecommunication tower business line,
we had approximately 29,061 towers
in 2017, comprising
approximately 11,061 towers owned by Mitratel and approximately
18,000 towers owned by Telkomsel. Overall, we have more tower
numbers than our other competitor towers. In terms of industry
growth, market share in this line of business has decreased in the
last two years when the mobile network industry experienced
market consolidation and the rearrangement of the spectrum.
In the context of the digital economy, the dynamic development of
the telecommunications sector has opened up new opportunities,
particularly with the increasing growth of Over The Top services
such as WhatsApp, Facebook, and Line, which provide a substitute
service to basic telecommunications services such as voice and
SMS. The presence of these Over The Top services has affected
the use of legacy services, particularly SMS, which has resulted in
traffic falling in past years.
120
Our marketing strategy for mobile customers is to encourage
customers who are currently still using mobile services and
SMS to use mobile broadband services. One of our efforts
in 2017 is to offer a bundling device program with a wide
selection of data packages.
We also continue the promotion with various mobile package
options to encourage mobile broadband users to increase the
use of these services. Our promotional focus is targeting the
youth segment with the Loop brand and data package options
that match their characteristics and needs.
In 2017, we introduced new products and changed the mobile
package option to attract different customer groups. For
example, we introduced HaloKick, a mobile package option
for postpaid customers offering more rewards and benefits,
including greater internet quota, content quota to access high
definiton videos, TCASH balance, and Telkomsel POIN.
In addition, we also changed the Talkmania package, as a
mobile package option aimed at maintaining our legacy
business and business data penetration. We also have various
discount programs to increase customer awareness using
MyTelkomsel applications.
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk 3. Enterprise
DISTRIBUTION CHANNEL
We implement a “SMART CONNECTED SOCIETY” marketing
strategy for enterprise customers which consist of:
To strengthen our reach to customers throughout Indonesia, we
a. SMART government
initiative, under which we aim
have various management strategies of the main distribution
to become the Government’s strategic
information
network for our products and services, namely through:
and communications technology (“ICT”) partner by
collaborating with government on strategic ICT mega-
deals that focus on the digital customer experience;
b. an enterprise CONNECTED ecosystem initiative, under
which we market end-to-end digital ICT solutions to our
corporate customers which provide customized solutions
for each of our customers; and
c. the MSME digital SOCIETY initiative, under which we
market basic ICT solutions in bundled packages to MSME
in Indonesia through crafting the best-fit digital market
platform and provide experience to digitize the business
of MSME customers so that more efficient and effective to
the customer.
4. Wholesale and International Business
Our marketing strategy for wholesale and international
business customers emphasizes on:
a. Smart pricing, creative and innovative business schemes for
business traffic (voice) as well as network services business
to meet customer needs and achieving business goals;
b. Eyeball aggregation strategy, maximizing business data &
internet through aggregation of traffic from and / or to the
customer; and
c. Improving service for international data center, MNO,
MVNO and BPO customers in order to maintain strong
relationships with our customers for a long term basis.
1. Face to Face Customer Service Point
Plasa Telkom and GraPARI serve as walk-in customer service
points for customers to access all Telkom and Telkomsel’s
products and services, including checking bills, making
payments,
subscription cancellation, promotion and
complaint handling.
As of 31 December 2017, we have 535 Plasa Telkom outlets,
432 GraPARI centers in Indonesia, 10 GraPARI overseas (Saudi
Arabia, Singapore, Hong Kong, Macau, Taiwan and Malaysia)
and 4 GraPARI Telkom Group. We also operate 761 GraPARI
mobile units and 1,142 IndiHome mobile units.
2. Authorized Dealers and Retail Outlets
This distribution network provides Telkomsel products such
as starter packs, prepaid SIM cards and top-up vouchers.
We operate an authorized dealers and retail outlets
network across which is non-exclusive with a discount on all
marketable products.
3. Partnership Stores
This scheme is an extension of our distribution channels
through cooperation with various third party marketing
outlets, such as computer or electronic stores, banks through
ATM networks and other business networks.
5. Other and Digital Services
Our marketing strategy for Digital Service focus on Digital
4. Contact Centers
Innovation, namely:
a. Creating unique digital services such as digital music,
video, gaming, e-commerce, and travelling with different
experiences from before;
Serving as call centers, we have contact centers that help
customers access products and services including checking
bills, promotional
information, and handling complaints
and access to certain service features. We operate a 24-
b. Building Digital Business Model covering a wider market in
hour contact center facility in Jakarta, Semarang, Bandung,
order to support Indonesia Digital Economics;
Surabaya, Makasar, Malang and Medan.
c. Providing customer experience innovation through Digital
Theme Park, Experience Center and Digital Experience in
Telkom Group service outlets;
d. Leveraging assets and inventory of Telkom Group as an
insight in the improvement of digital services and customer
experience; and
5. Account Management Team
Especially for corporate customers, MSME and government
institutions and wholesale, we have a team that manages
relationships with those customer to explore opportunities
in order to give an ICT solutions and develops a product and
e. Growing Digital Business Portfolio through investments
in Digital Startups until they become a part of Indonesian
service distribution network.
Digital Ecosystem.
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Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
6. Sales Specialist
10. Website
Sales Specialist have deep product and technical knowledge in
We operate www.telkom.co.id and www.telkomsel.com in order
order to provide appropriate and effective recommendations
to facilitate our customers to access products and services.
of solutions to corporate customers who work together with
Some features of services available are e-billing, registration,
our account management team.
collective billing information and filing complaints.
7. Tele Account Management Team
11. Social Media
We have tele account management team which supports our
According to today’s growing digital lifestyle, we use social
MSME customers and other prospective business customers
media such as Facebook, Instagram and Twitter, to provide
through inbound and outbound calls for pre-sales, sales and
information and communicate with customers about our
other customer service requirements.
products and services.
8. Channel Partner
For enterprise customers, we cooperate with VAR (Value
Added Reseller) who carry out sales and marketing activities
to meet specific enterprise customer demands and for retail
customers to offer retail packages. We also work with third
parties to conduct sales activities through certain events.
9. Digital Touch Point
Digital touch point is a web-based and mobile-based service
provided for IndiHome and corporate customers. We provide
MyIndiHome as a mobile-based self-care service for IndiHome
customers. Through the application, customers can make
subscription requests, billing and payment management,
reporting and monitoring network issues, and accessing video
on demand and customer reward programs.
122
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk
123
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk COMPREHENSIVE FINANCIAL PERFORMANCE
Throughout the year 2017, we still recorded good financial performance even though some businesses experienced slower growth.
Total assets increased by 10.5% from Rp179,611 billion in 2016 to Rp198,484 billion in 2017 as well as revenues in 2017 increased by
10.2% from in Rp116,333 billion in 2016 to Rp128,256 billion in 2017. This drove an increase in net income in 2017 by 14.4%, from
Rp19,352 billion in 2016 to Rp22,145 billion and EBITDA increased by 8.6% to Rp64,609 billion compared to Rp59,498 billion from
previous year.
The growth of our financial performance over the last three years can be seen in the following graph.
198,484
179,611
166,173
86,354
74,067
72,745
92,713
84,384
75,136
128,256 116,333
102,470
22,145
19,352
15,489
200,000
150,000
100,000
50,000
0
Total Asset
Total Liabillity
Total Equity
Revenue
Net Income
2017
2016
2015
FINANCIAL POSITION OVERVIEW
These tables show financial position of Telkom for three years, from 2015 to 2017.
Consolidated statements of
financial position table
Total Current Assets
Total Non-Current Assets
Total Assets
Total Short-term Liabilities
Total Long-term Liabilities
Total Liabilities
Total Equity attributable to owners of the
parent company
Growth
2017-2016
(%)
(0.3)
14.4
10.5
14.1
19.5
16.6
9.9
Years ended December 31,
2017
2016
2015
(Rp billion)
(US$ million)
(Rp billion)
(Rp billion)
47,561
150,923
198,484
45,376
40,978
86,354
92,713
3,506
11,124
14,629
3,344
3,020
6,365
6,833
47,701
131,910
179,611
39,762
34,305
74,067
84,384
47,912
118,261
166,173
35,413
37,332
72,745
75,136
124
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk Financial Position Comparison
Composition of Assets and Liability during 2017, 2016 and 2015 can be seen in the following diagram.
Diagram of Assets Composition Telkom Group in 2015-2017
2017
2016
2015
150,923 (76.0%)
47,561 (24.0%)
131,910 (73.4%)
47,701 (26.6%)
118,261 (71.2%)
47,912 (28.8%)
Current Asset
Non Current Asset
Diagram of Liability Composition Telkom Group in 2015-2017
2017
2016
2015
45,376 (52.5%)
40,978 (47.5%)
39,762 (53.7%)
34,305 (46.3%)
35,413 (48.7%)
37,332 (51.3%)
Long-term Liabilities
Short-term Liabilities
Comparison of Financial Position as of December 31 2017
b. Non Current Assets
Compared to as of December 31 2016
As of December 31, 2017, non-current assets reached
Rp150,923 billion (US$11,124 million), increase by Rp19,013
1. Assets
As of December 31, 2017, we recorded total assets of
billion or 14.4% compared to Rp131,910 billion in 2016.
Increase in non-current assets is mainly caused by:
Rp198,484 billion (US$14,629 million), an increase of 10.5%
•
Increase in property and equipment by Rp15,673 billion
from Rp179,611 billion in 2016.
a. Current Assets
or 13.7% due to increase in transmission network;
•
Increase in deferred tax asset by Rp2,035 billion or
264.6% due to asset revaluation;
Current assets reached Rp47,561 billion (US$3,506 million)
•
Increase in other non-current asset by Rp762 billion or
as of December 31, 2017, decreased by Rp140 billion or
6.6%.;
0.3% from Rp47,701 billion as at 31 December 2016. The
•
Increase in intangible asset by Rp441 billion or 14.3%;
decrease in our current assets was mainly due to:
and
• Decrease in cash and cash equivalent by Rp4,622
•
Increase in long-term investment by Rp301 billion atau
billion or 15.5% due to dividend payment and capital
16.3%.
expenditure;
• Decrease in other receivables by Rp195 billion or
These increase were offset by decrease in prepaid pension
36.3%; and
benefit cost by Rp199 billion or 1.0%.
• Decrease in prepaid tax Rp191 billion or 8.9%.
These decrease were offset by:
•
Increase in other current asset by Rp1,937 billion or
36.9% due to radio frequency licensing;
Increase in trade receivables by Rp1,859 billion or
25.2% due to increase in third party receivables by
2. Liabilities
As of December 31, 2017 our liabilities amount to Rp86,354
billion (US$6,365 million), increased 16.6% from Rp74,067
billion in 2016.
a. Short-term
•
•
•
Rp1,208 billion;
Increase in other current financial asset by Rp702
billion or 47.7%; and
Increase in claim for tax refund by Rp316 billion or
53.4%.
As of December 31, 2017, our short-term liabilities reached
Rp45,376 billion (US$3,344 million), increased 14.1%
compared to Rp39,762 billion as at 31 December 2016.
The short-term liabilities increase was mainly due to:
125
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
•
Increase in trade payables by Rp2,056 billion or 15.2%
Comparison of Financial Position as of December 31, 2016
due to an increase in third party debt of Rp2,707 billion;
compared to as of December 31, 2015
•
Increase in short-term bank loans by Rp1,378 billion or
151.3%;
1. Assets
•
Increase
in accrued expenses by Rp1,347 billion
As of December 31, 2016, total assets increased by 8.1% from
or
11.9% due to operational, maintenance dan
Rp 166,173 billion in 2015 to Rp 179,611 billion in 2016.
telecommunication service expense;
•
Increase in current maturities of long term borrowings
a. Current Assets
by Rp688 billion or 15.2%; and
As of December 31, 2016, our current assets were Rp47,701
•
Increase in advances from customers and suppliers by
billion compare to Rp47,912 billion as of December 31,
Rp400 billion or 47.6%.
The increase was compensated by:
2015. The decrease in current assets were mainly due to:
• A decrease in other current financial assets by Rp1,347
billion, or 47.8% due to the withdrawal of escrow
• A decrease in taxes payable by Rp164 miliar or 5.6%; and
account related to the transfer of Flexi business;
• A decrease in prepaid revenues by Rp136 billion or 2.4%.
• A decrease in our advances and prepaid expense by
b. Long-term Liabilities
Rp593 billion, or 10.2%;
• A decrease in prepaid tax amounted to Rp534 billion,
As of December 31, 2017, our long-term liabilities reached
or 20.0%; and
Rp40,978 billion (US$3,020 million), increased by 6,673
billion or 19.5% from Rp34,305 billion as of December 31,
2016. The increase in long-term liabilities was due to:
•
•
Increase
employment benefits obligation by Rp4,069 billion or
in pension benefits and other post-
66,4%;
Increase in long-term borrowings by Rp1,607 billion or
6.1% due to increase in bank loans by Rp1,965 billion
and other borrowings by Rp499 billion. The increase is
compensated by decrease in obligation under finance
leases by Rp342 billion, bonds and notes by Rp340
billion and two step loans by Rp175 billion;
•
•
Increase in other liabilities by Rp565 billion or 1,948.3%
Increase in deferred tax liabilities by Rp188 billion or
25.2%; and
•
Increase in long service award provision Rp145 billion
or 23.7%.
3. Equity
Our total equity increased by Rp6,586 billion or 6.2% from
Rp105,544 billion as at December 31, 2016 to Rp112,130 billion
(US$8,265 million) as of December 31, 2017.
The increase was mainly due to total retained earning
increase by Rp8,281 billion or 10.8% to Rp19,952 billion
due to increase in total comprehensive income for the year
attibutable to owners of the parent company. The increase
was compensated by decrease in non controlling interest by
Rp1,743 billion or 8.2%.
• A decrease in receivable by Rp154 billion, or 2.0% due
to an decrease in related party receivable.
These decrease were offset by:
• An increase in our cash and cash equivalents Rp1,650
billion, or 5.9% due to increase in cash receipt from
operational activities;
• An increase in tax restution by Rp526 billion, or
797.0% related to income tax restitution for Telkom’s
subsidiaries; and
• An increase in receivable by Rp182 billion, or 51.3%.
b. Non Current Assets
As of December 31 2016, our non current assets
were Rp131,910 billion and Rp118,261 billion as of
December 31, 2015.
The increases in non current assets were mainly due to:
• An increase in fixed asset by Rp10,798 billion or
10.4% related to addition of fixed assets of Telkom
primarily related to access infrastructure and backbone
installation and addition of fixed assets of Telkomsel
primarily related to access radio network;
• An increase in our advanced and other noncurrent asset
of Rp3,342 billion, or 40.9% related to an increase in
down payment for Telkom 3S and Telkom 4 satellite
purchases, restitution claim VAT of subsidiaries and
prepaid taxes of overpaid VAT of Telkom; and
• An increase in deferred tax assets Rp568 billion, or
282.6%.
126
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk
This increased was offset by decrease in prepaid pension
• A decrease in deferred amounted to Rp1,365 billion,
benefit costs amounted to Rp1,132 billion, or 85.0% due
or 64.7% due to a decrease in deffered tax liabilities
to an incrrease in defined benefit obligation by Rp2,344
of Telkom and Telkomsel by Rp459 billion and Rp950
billion or 14% due to a change in actuarial assumption
billion respectively. The decrease of Telkomsel was
related to a decrease in discount rate by 1% from 9% in
related to assets transfer of flexi business (CBTA);
2015 to 8% in 2016. Meanwhile, fair value of pension assets
• A decrease
in obligations under finance
leases
increase by Rp1,212 billion or 6.8% due to actual benefit
amounted to Rp587 billion, or 14.9%;
from investment by Rp2,601 billion and was offset by
• A decrease in two-step loans amounted to Rp229
benefit paid by Rp1,432 billion.
billion, or 17.7%; and
• A decrease in bond and notes by Rp177 billion, or 1.9%.
2. Liabilities
As of December 31, 2016, total liabilities increased by 1.8%
This decrease was offset by:
from Rp72,745 billion in 2015 to Rp74,067 billion in 2016.
• An increase in pension and other postemployment
a. Short-term Liabilities
benefits amounted to Rp1,955 billion, or 46.9% due
to an increase in define benefit obligation by Rp2,415
As of December 31, 2016, our short-term liabilities were
billion or 22% due to a change in actuarial assumption
Rp39,762 billion compared to Rp35,413 billion as of
related to a decrease in discount rate by 0.75% from
December 31, 2015. The increases in short-term liabilities
9.25% in 2015 to 8.5% in 2016 resulting in actuarial
were primarily due to:
• An increase in accrued expenses by Rp3,036 billion,
or 36.8% in line with operating, maintenance and
loss by Rp1,735 billion. Meanwhile, fair value of pension
assets increase by Rp941 billion or 8.6% due to an
increase in stock fair value and mutual fund by Rp403
telecommunication service as well as an increase
billion and Rp473 billion respectively;
in expenses by 12%. This increases were related
significantly with operational and maintenance
• Other lending of Dayamitra by Rp697 billion; and
• An increase in long service awards amounted to Rp112
expenses of Telkomsel Tower in line with an increase in
billion, or 22.4%.
tower leased addition in 2016 significantly. In addition,
it was also due to an increase in employee benefit
3. Equity
expenses of Telkom and Telkomsel Rp720 billion and
Rp284 billion respectively, especially related to to an
increase in incentives;
Total equity increased by Rp12,116 billion, or 12.9%, from
Rp93,428 billion as of December 31, 2015 to Rp105,544
billion as of December 31, 2016. The increase of equity was
• An
increase
in unearned revenues amounted to
Rp1,203 billion, or 27.6% related to prepaid pulse
reload voucher;
• An increase in current maturities on long-term liabilities
Rp679 billion, or 17.7%; and
primarily due to:
• An increase in additional paid-in capital and a decreased
in treasury stock due to sale of treasury stock in 2016 by
Rp3,300 for 864 million shares in the price of Rp3,820/
share (full value) while the price of treasury stock was
• An increase in short-term bank loan Rp309 billion, or
Ro1,263 billion;
• An increase in retained earnings by Rp6,158 billion or
8.7% due to total comprehensive income for the year
attributable to parent Company by Rp17,331 billion
reduced by devidend by Rp11,213 billion; and
• An increase in non-controlling interest edpenses due to
the addition of net comprehensive income attributable
to non-controlling owner by Rp9,820 billion reduced by
devidend by Rp7,058 billion.
51.3%;
These increases were offset by:
• A decrease in trade payable by Rp476 billion, or 3.4%
due to an decrease in trade payables to related party;
• A decrease in tax payable by Rp319 billion, or 9.7%; and
• A decrease in other debts by Rp118 billion, or 40.7%.
b. Long-term Liabilities
As of December 31, 2016, our long-term liabilities were
Rp34,305 billion compare to Rp37,332 billion as of
December 31, 2015. The decrease in long-term liabilities
was primarily due to:
• A decrease in bank loans amounted to Rp3,505 billion,
or 22.7% due to a decrease of bank debt of Telkomsel
by Rp4,172 billion and was offset by an increase in bank
debt of Dayamitra by Rp1,097 billion;
127
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
PROFIT AND LOSS OVERVIEW
The following table shows Telkom’s Comprehensive Income for three years from 2015 to 2017, with each item expressed as a percentage
of total revenue or expense.
Table of Comprehensive
Income
Growth
2017-2016
(%)
Years ended December 31,
2017
2016
2015
(Rp billion)
(US$ million)
%
(Rp billion)
%
(Rp billion)
%
10.2
128,256
Revenues
Telephone Revenus
Cellular
Usage charges
Monthly subscription charges
Fixed Line
Usage charges
Monthly subscription charges
Call center
Others
Interconnection Revenues
Data, Internet and Information
Technology Revenues
Celluler internet and data
Short Messaging Service (SMS)
Internet, data communication and
information technology services
Pay TV
Others
Network Revenues
Other Telecommunications Revenues
Sales of peripherals
Telecommunication tower leases
Call center service
E-payment
E-health
CPE and terminal
Power supply
Others
Expenses
Depreciation and Amortization Expenses
Operations, Maintenance and
Telecommunication Services Expenses
Operations and Maintenance
Radio frequency usage charges
Leased lines and CPE
Concession fees and USO charges
Cost of IT service
Cost of sales of handset
Electricity, gas and water
Cost of SIM cards and vouchers
(4.6)
(3.2)
(2.8)
(73.0)
(11.6)
(21.2)
(1.5)
-
(11.7)
24.7
16.2
34.1
(17.4)
15.4
25.7
451.6
29.7
53.0
53.8
8.6
43.1
19.1
13.3
179.2
1,831.0
49.0
9.6
10.3
17.1
16.9
16.0
1.1
1.4
69.4
4.3
8.0
46.5
Vehicles rental and supporting facilities
(18.0)
Tower leases
Insurance
46.6
14.8
128
43,911
37,246
37,176
70
6,665
3,032
3,260
290
83
5,175
68,535
37,961
13,192
15,085
1,944
353
1,873
8,762
2,292
796
970
505
470
536
560
2,633
85,362
20,446
36,603
19,929
4,276
2,607
2,249
2,648
1,544
1,037
914
301
472
294
9,453
3,236
2,745
2,740
5
491
223
240
21
6
381
5,051
2,798
972
1,112
143
26
138
646
169
59
71
37
35
40
41
194
6,292
1,507
2,698
1,469
315
192
166
195
114
76
67
22
35
22
100.0
116,333
100.0
102,470
100.0
34.2
29.0
29.0
0.1
5.2
2.4
2.5
0.2
0.1
4.0
53.4
29.6
10.3
11.8
1.5
0.3
1.5
6.8
1.8
0.6
0.8
0.4
0.4
0.4
0.4
2.1
46,039
38,497
38,238
259
7,542
3,847
3,311
290
94
4,151
58,971
28,308
15,980
13,073
1,546
64
1,444
5,728
1,490
733
678
424
415
192
29
1,767
39.6
33.1
32.9
0.2
6.5
3.3
2.8
0.2
0.1
3.6
50.6
24.3
13.7
45,118
37,285
36,853
432
7,833
4,635
2,821
275
102
4,290
47,820
19,665
15,132
11.2
12,307
1.3
0.1
1.2
4.9
1.3
0.6
0.6
0.4
0.4
0.2
0.0
1.5
581
135
1,231
4,011
1,516
721
668
126
192
221
—
567
44.0
36.3
35.9
0.4
7.7
4.5
2.8
0.3
0.1
4.2
46.7
19.2
14.8
12.0
0.6
0.1
1.2
3.9
1.5
0.7
0.7
0.1
0.2
0.2
—
0.6
100.0
77,888
100.0
71,552
100.0
24.0
18,532
23.8
18,534
25.9
42.9
23.3
5.0
3.1
2.6
3.1
1.8
1.2
1.1
0.4
0.6
0.3
31,263
17,047
3,687
2,578
2,217
1,563
1,481
960
624
367
322
256
40.1
21.9
4.7
3.3
2.8
2.0
1.9
1.2
0.8
0.5
0.4
0.3
28,116
15,129
3,626
1,913
2,230
882
1,493
1,014
444
296
646
312
39.3
21.1
5.1
2.7
3.1
1.2
2.1
1.4
0.6
0.4
0.9
0.4
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk Table of Comprehensive
Income
Others
Personnel Expenses
Salaries and related benefits
Vacation pay, incentives and other
benefits
Pension benefit cost
Early retirement program
Long Service Award (LSA) Expense
Net periodic post employment health
care benefits cost
Other employee benefit cost
Other post-employment benefit cost
Others
Interconnection Expenses
Marketing Expenses
General and Administrative Expenses
General Expenses
Provision for impairment of receivables
Training, education and recruitment
Collection expenses
Travelling
Professional fees
Meeting
Social contribution
Others
Other expenses
Gain / loss on foreign exchange-net
Other expenses
Other Income
Operating Profit
Finance Income
Finance Costs
Share of profit of associated companies
Profit Before Income Tax
Income Tax (Expense) Benefit
Profit for the Year
Other comprehensive income (expenses)
- net
Net comprehensive income for the year
Profit for the year attributable to owners
of the parent company
Profit for the year attributable to
non-controlling interest
Net comprehensive income attributable
to owner of the parent company
Net comprehensive income for the year
attributable to non-controlling interest
Growth
2017-2016
(%)
Years ended December 31,
2017
2016
2015
(Rp billion)
(US$ million)
%
(Rp billion)
%
(Rp billion)
%
0.2
16.6
7.9
6.4
0.6
1.0
0.2
0.3
0.1
0.1
0.0
5.0
4.6
5.8
1.4
1.4
0.5
0.5
0.5
0.6
0.2
0.2
0.5
2.8
0.1
2.7
106.2
(0.6)
4.6
(13.6)
59.2
(100.0)
7.6
69.3
(24.4)
(12.5)
(24.4)
(7.2)
27.5
14.1
(10.9)
101.1
33.1
(11.2)
8.9
(16.2)
16.4
47.0
(24.8)
(49.7)
(198.1)
(46.5)
38.5
12.1
(16.4)
(1.5)
(30.7)
11.7
10.4
12.1
(11.1)
12.2
332
13,529
7,821
3,339
1,700
-
255
276
62
42
34
2,987
5,268
5,260
1,449
1,494
531
135
475
498
241
197
240
1,269
(51)
1,320
1,039
24
997
576
246
125
-
19
20
5
3
3
220
388
388
107
110
39
10
35
37
18
15
18
94
(4)
97
77
0.4
15.8
9.2
3.9
2.0
0.0
0.3
0.3
0.1
0.0
0.0
3.5
6.2
6.2
1.7
1.8
0.6
0.2
0.6
0.6
0.3
0.2
0.3
1.5
-(0.1)
1.5
43,933
3,238
1,434
(2,769)
61
106
(204)
4
42,659
3,144
(9,958)
32,701
(734)
2,410
(2,332)
(172)
30,369
2,238
22,145
1,632
10,556
778
19,952
1,471
10,417
768
161
13,612
7,476
3,865
1,068
628
237
163
82
48
45
3,218
4,132
4,610
1,626
743
399
152
436
594
207
134
319
2,521
52
2,469
750
39,195
1,716
(2,810)
88
38,189
(9,017)
29,172
(2,099)
27,073
19,352
9,820
17,331
9,742
0.2
17.5
9.6
5.0
1.4
0.8
0.3
0.1
0.1
0.1
0.1
4.1
5.3
5.9
2.1
1.0
0.5
0.2
0.6
0.8
0.3
0.2
0.4
3.2
0.1
3.2
131
11,874
5,684
4,575
432
683
152
216
53
47
32
3,586
3,275
4,204
1,032
1,010
393
368
347
424
163
116
351
1,963
46
1,917
1,500
32,418
1,407
(2,481)
(2)
31,342
(8,025)
23,317
631
23,948
15,489
7,828
16,130
7,818
129
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
Profit and Loss Comparison
Composition of Revenues and Expenses during 2015 until 2017 can be seen in the following diagram.
Diagram of Revenues Composition Telkom Group in 2015-2017
2017
2016
2015
68.535 (53,4%)
43.911 (34,2%)
1.873 (1,5%)
5.175 (4,0%)
8.762 (6,8%)
58.971 (50,7%)
46.039 (39,6%)
1,444 (1,2%)
4.151 (3,6%)
5.728 (4,9%)
Data, Internet, and
Information Technology
Interconnection
Telephone
Other Connection
Network
47.820 (46,7%)
45.118 (44,0%)
1.231 (1,2%)
4.011 (3,9%)
4.290 (4,2%)
Diagram of Expenses Composition Telkom Group in 2015-2017
2017
2016
2015
36.603 (42,9%)
20.446 (24,0%)
13,529 (15,8%)
1.269 (1,5%)
2.987 (3,5%)
5.268 (6,2%)
5.260 (6,2%)
31.263 (40,1%)
18.532 (23,8%)
13.612 (17,5%)
2.521 (3,2%)
3.218 (4,1%)
4.132 (5,3%)
4.610 (5,9%)
28.116 (39,3%)
18.534(25,9%)
1.963 (2,7%)
11.874 (16,6%)
3.275 (4,6%)
3.586 (5,0%)
4.204 (5,9%)
Operation, Maintenance and
Telecommunication Services
Personnel
Marketing
Other
Depreciation and Amortization
General and Administrative
Interconnection
Comparison of Profit and Loss for The Year Ended December 31,
b. Fixed Lines Revenues
2017 Compared to Year Ended December 31, 2016
1. Revenues
We recorded an increase in revenues by Rp11,923 billion or
10.2%, from Rp116,333 billion in 2016 to Rp128,256 billion
Fixed line revenues decreased by Rp877 billion or 11.6%,
from Rp7,542 billion in 2016 to Rp6,665 billion in 2017. The
decrease in fixed line revenues occurred due to a decrease
in usage charges by Rp815 billion or 21.2%.
(US$9,453 million) in 2017. This increase is mainly due to the
c. Data, Internet and Information Technology Services
data, internet and information technology services revenue.
Revenues
a. Cellular Telephone Revenues
We derived data, internet and information technology
services revenues of Rp68,535 billion (US$5,051 million),
Our cellular revenues accounted for 29.0% of our 2017
increase by Rp9,564 billion or 16.2% from Rp58,971 billion
consolidated revenues. Our cellular revenues decrease
in 2016. Revenue from this business activity accounted
by Rp1,251 billion, or 3.2%, from Rp38,497 billion in 2016
for 53.4% of consolidated revenue in the year ended
to Rp37,246 billion. The decrease is due to a decrease in
December 31, 2017. Increase in data revenues, internet and
usage charges revenue by Rp1,062 billion or 2.8%.
information technology services is mainly due to:
130
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk
• An increase in internet and celuller data by Rp9,653
g. Other Income
billion or 34.1% due to the growth in mobile broadband
Other income increased by Rp289 billion or 38.5%, from
usage from 84.7 million subscribers in 2016 to 105.8
Rp750 billion in 2016 to Rp1,039 miliar (US$77 million)
million subscribers in 2017;
in 2017.
• An increase in internet, data communications and
information technology services revenue increased
2. Expenses
by Rp2,012 billion or 15.4% in line with growing fixed
Total expenses
increased by Rp7,474 billion, or 9.6%,
broadband subscribers from 4.3 million to 5.3 million,
increased from Rp77,888 billion in 2016 to Rp85,362 billion
which include IndiHome subscribers;
(US$6,292 million) in 2017.
•
Increased Paid TV revenue by Rp398 billion or 25.7%
as IndiHome subscribers accessed UseeTV; and
a. Operations, Maintenance and Telecommunication
•
Increase in other income by Rp289 billion or 451.6%.
Service Expenses
This increase is compensated by a decrease in SMS revenue
service expenses contributed 42.9% from the total
by Rp2,788 billion or 17.4% due to over the top service.
of
Company’s expenses. Operations, maintenance
The revenue of Data, Internet and Information Technology
and telecommunication service expenses increased by
Services without SMS revenue reached Rp55,343 billion or
Rp5,340 billion, or 17.1%, from Rp31,263 billion in 2016 to
Operations, maintenance
and
telecommunication
increased 28.7%.
d. Interconnection Revenues
Our interconnection revenues consist of interconnection
revenues from Telkom’s fixed line and interconnection
Rp36,603 billion (US$2,698 million) in 2017. This increase
was primarily attributable to the following:
• An increase in operations and maintenance expenses
by Rp2,882 billion, or 16.9%, due to an increase of
network maintenance;
revenues from Telkomsel’s cellular network. Interconnection
revenues
include
international direct
incoming calls
• An increase in cost of IT services expense by Rp1,085
billion or 69.4% in line with increase in Telkom Sigma’s
from IDD 007 services. Interconnection revenues in 2017
information technology revenue;
increased by Rp1,024 billion or 24.7% from Rp4,151 billion
in 2016 to Rp5,175 billion (US$381 million) in 2017, due to
• An increase in radio frequency usage charges expense
by Rp589 billion or 16.0% due to additional radio
increased in domestic interconnection revenue.
frequency by Telkomsel;
e. Network Revenues
Our network revenues increased by Rp429 Billion or
29.7%, from Rp1,444 billion in 2016 to Rp1,873 (US$138
• An increase in cost of SIM card and vouchers sales by
Rp290 billion or 46.5%;
• An increase in others expense by Rp171 billion or
106.2%; and
million) in 2017.
• An increase in tower leases expense by Rp150 billion
f. Other Telecommunications Services Revenues
Other telecommunications services increased by Rp3,034
billion or 53.0%, from Rp5,728 billion in 2016 to Rp8,762
billion (US$646 million) in 2017. The increased was mainly
due to:
•
•
•
Increase in other income by Rp866 billion or 49.0%;
Increase in peripheral sales by Rp802 billion or 53.8%;
Increased electricity rental service amounting to Rp531
billion or 1831.0%;
Increase in CPE and terminal revenue by Rp344 billion
or 179.2%; and
Increase in call center revenue by Rp292 billion or
43.1%.
•
•
or 46.6%.
b. Depreciation and Amortization Expenses
Depreciation and amortization expenses increased by
Rp1,914 billion, or 10.3%, from Rp18,532 billion in 2016
to Rp20,446 billion (US$1,507 million) in 2017 due to
Telkomsel’s acceleration of transmission depreciation.
c. Personnel Expenses
Personnel expenses contributed 15.8% from our total
expenses. This expense increases by Rp83 billion or 0.6%,
from Rp13,612 billion in 2016 to Rp13,529 billion (US$997
million) in 2017.
This increase was driven by:
• A decrease in vacation pay, incentives and other
benefits expenses by Rp526 billion, or 13.6%; and
• A decrease in early retirement program by Rp628
billion due to no programs in 2017.
131
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
The decrease was offset by:
3. Operating Profit and Operating Profit Margin
• An increase in pension benefit cost by Rp632 billion, or
As a result of the foregoing, operating profit increased by
59.2% in line with increase in pensions obligation;
Rp4,738 billion, or 12.1%, from Rp39,195 billion in 2016 to
• An increase in salaries and related benefits expenses by
Rp43,933 billion (US$3,238 million) in 2017. Operating profit
Rp345 billion, or 4.6%; and
margin increased from 33.7% in 2016 to 34.3% in 2017.
• An increase in net periodic post-employment health
care benefit cost by Rp113 billion, or 69.3%.
4. Profit before Income Tax and Pre-Tax Margin
d. Interconnection Expense
Our profit before income tax increased by Rp4,470 billion,
or 11.7%, from Rp38,189 billion in 2016 to Rp42,659 billion
Interconnection expense decreased by Rp231 billion,
(US$3,144 million) in 2017. Pre-tax margin increased from
or 7.2%, from Rp3,218 billion in 2016 to Rp2,987 billion
32.8% in 2016 to 33.3% in 2017.
(US$220 million) in 2017 in line with decrease in usage
charges revenues.
5. Income Tax Expense
e. Marketing Expense
Income tax expense increased by Rp941 billion, or 10.4%, from
Rp9,017 billion in 2016 to Rp9,958 billion (US$734 million) in
Marketing expenses increased by Rp1,136 billion, or 27.5%,
2017, inline with the increase in profit before income tax.
from Rp4,132 billion in 2016 to Rp5,268 billion (US$388
million) in 2017. This increase was primarily due to an
6. Other Comprehensive Income
increased promotion by Telkomsel.
In 2017, other comprehensive income amounted to Rp2,332
f. General and Administrative Expenses
General and administrative expenses increased by Rp650
billion, or 14.1%, from Rp4,610 billion in 2016 to Rp5,260
billion (US$172 million) due to an actuarial losses by Rp2,375
billion. In the previous year, Telkom’s other comprehensive
income amounted to Rp2,099 billion.
billion (US$388 million) in 2017. This increase primarily
7. Profit for the Year Attributable to Owners of the Parent Company
due to:
• An increase in provision for impairment of receivables
by Rp751 billion, or 101.1% due to more prudent
estimation methods undertaken by management; and
• An increase in training, education and recruitment
Profit for the year attributable to owners of the parent
Company increased by Rp2,793 billion, or 14.4%, from
Rp19,352 billion in 2016 to Rp22,145 billion (US$1,632
million) in 2017.
expenses by Rp132 billion, or 33.1%.
8. Profit for the Year Attributable to Non-controlling Interest
Profit for the year attributable to non-controlling interest
This increase was offset by a decrease in general expenses
increased by Rp736 billion, or 7.5%, from Rp9,820 billion in
by Rp177 billion or 10.9%.
2016 to Rp10,556 billion (US$778 million) in 2017.
g. Gain (loss) on Foreign Exchange – net
Gain on foreign exchange – net amounted to Rp51 billion
(US$4 million), while in 2016 loss on foreign exchange net
by Rp52 billion.
h. Other Expenses
9. Net Comprehensive Income for the Year
Net Comprehensive income for the year increased by Rp3,296
billion, or 12.2%, from Rp27,073 billion in 2016 to Rp30,369
billion (US$2,238 million) in 2017.
10. Net Income per Share
Other expenses decreased by Rp1,149 billion or 46.5%,
from Rp2,469 billion in 2016 to Rp1,320 billion (US$97
Net income per share increased by Rp27.36 or 13.9%, from
Rp196.19 in 2016 to Rp223.55 in 2017.
million) in 2017.
132
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk
Comparison of Profit and Loss for The Year Ended December 31,
c. Data, Internet and Information Technology Services
2016 Compared to Year Ended December 31, 2015
Revenues
1. Revenues
Our data, internet and information technology service
Total revenues increased by Rp13,863 billion, or 13.5%, from
revenues contributed 50.6% of our consolidated revenues
Rp102,470 billion in 2015 to Rp116,333 billion in 2016. The
as of December 31, 2016, compared to 46.6% as of
increase in revenues in 2016 was due to the increase in data
December 31, 2015. The increase of data, internet and
internet and information technology service revenues and
information technology service revenues amounted to
cellular telephone revenues, and to a lesser extent others
Rp11,151 billion, or 23.3%, from Rp47,820 billion in 2015 to
telecomunication services revenues.
Rp58,971 billion in 2016 was due to:
a. Cellular Telephone Revenues
• An increase in data cellular and internet revenues by
Rp8.643 billion, or 44.0% due to a growth in mobile
Cellular telephone revenues contributes 33.1% of our
broadband usage from 73.9 million subscribers in
consolidated income as of 31 December 2016. Cellular
2015 to 84.7 million subscribers in 2016 related to high
telephone revenues increase by Rp1,212 billion, or 3.3%,
adoption of smartphone (3G/4G);
from Rp37,285 billion in 2015 to Rp38,497 billion in 2016.
• An increase in Pay TV income by Rp965 billion, or
This increase was due to an increase in usage charges by
166.1% due to an increased in UseeTV subscribers;
Rp1,385 billion or 3.8% due to an increase in Telkomsel
• An increase in SMS Revenues increased by Rp848
subscribers from 152.6 million to 173.9 million.
billion, or 5.6%, driven from successful implementation
This increase was offset by an decrease in monthly
subscription charges by Rp173 billion, or 40.0%.
b. Fixed Lines Revenues
Fixed lines revenues decreased by Rp291 billion, or 3.7%,
of cluster-based pricing; and
• An increase in communication internet revenue by
Rp766 billion, or 6.2% related to an increased of Fixed
Broadband subcribers growth from 4.0 million to 4.3
million, which include IndiHome subscribers.
from Rp7,833 billion in 2015 to Rp7,542 billion in 2016.
This increase was offset by decrease in other data and
The decrease in fixed lines revenues was primarily due to
internet revenues by Rp71 billion, or 52.6% from Rp135
decrease in usage charges by Rp788 billion, or 17.0% from
billion in 2015 to Rp64 billion in 2016.
Rp4,635 billion in 2015 to Rp3,847 billion in 2016.
This decrease was due to an
increase
in monthly
Interconnection
revenues comprised
interconnection
subscription amounted to Rp490 billion, or 17.4% due to the
revenues from our fixed line network and interconnection
success of IndiHome bundling program implementation.
revenues from Telkomsel’s mobile cellular network.
d. Interconnection Revenues
Including incoming international long-distance revenues
from our IDD service (TIC007).
Interconnection revenues decreased by Rp139 billion, or
3.2% from Rp4,290 billion in 2015 to Rp4,151 billion in 2016.
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Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
e. Network Revenues
• An increase in leased lines and CPE amounted Rp665
Network revenues increased by Rp213 billion, or 17.3%,
billion, or 34.8% used for operational and maintenance
from Rp1,231 billion in 2015 to Rp1,444 billion in 2016
of leased lines; and
primarily due to a decrease in leased line amounted and
•
Increased cost of SIM card sales and vouchers Rp180
an increase in number of leased transponder satellite from
billion or 40.5%.
4,648 million MHz to 6,801 million MHz.
f. Other Telecommunications Services Revenues
Rp324 billion or 50.2%Rp324 billion or 50.2%.
In 2016, revenues from other telecommunications service
increased by Rp1,717 billion, or 42.8%, from Rp4,011 billion
b. Depreciation and Amortization Expenses
in 2015 to Rp5,728 billion in 2016. The increase was
Depreciation and amortization expenses decreased by
primarily due to:
Rp2 billion, or 0.0%, from Rp18,534 billion in 2015 to
The increase was compensated by decrease tower lease cost
• An increase in other revenues by Rp1,200 billion, or
Rp18,532 billion in 2016.
211.6% due to an increase in manage service revenues;
• An increase in e-payment revenues by Rp298 billion or
c. Personnel Expenses
236.5%; and
Personnel expenses contributed 17.5% from our total
• An increase in e-health revenues by Rp223 billion or
expenses. This expense increases by Rp1,738 billion, or
116.1%.
g. Other Income
Other income decreased by Rp750 billion, from Rp1,500
14.6%, from Rp11,874 billion in 2015 to Rp13,612 billion in
2016. This increase was driven by:
• An increase in employees’ salary expenses amounted
to Rp1,792 billion, or 31.5%; and
billion in 2015 to Rp750 billion in 2016.
• An increase in net periodic pension costs amounted to
Rp636 billion, or 147.2%.
2. Expenses
Total expenses increased by Rp6,336 billion, or 8.9%, from
This increase was offset by a decrease in employees
Rp71,552 billion in 2015 to Rp77,888 billion in 2016
insentives expenses amounted Rp710 billion, or 15.5%.
a. Operations, Maintenance and Telecommunication
d. Interconnection Expense
Service Expenses
Interconnection expense decreased by Rp368 billion, or
Operations, maintenance
and
telecommunication
10.3%, from Rp3,586 billion in 2015 to Rp3,218 billion in
service expenses contributed 40.1% from the total of
2016 in line with decrease in interconnection revenues.
Company’s expenses. Operations, maintenance and
telecommunication service expenses increased by Rp3,147
e. Marketing Expense
billion, or 11.2%, from Rp28,116 billion in 2015 to Rp31,263
Marketing expenses increased by Rp857 billion, or 26.2%,
billion in 2016. This increase was primarily attributable to
from Rp3,275 billion in 2015 to Rp4,132 billion in 2016.
the following:
• An
increase
in operations, maintenance and
of 4G LTE and IndiHome.
This increase was primarily due to an increased promotion
telecommunication service expenses by Rp1,918 billion,
or 12.7%, due to an increase of expenses in line with
network maintenance to improve our cellular and
IndiHome business performance;
• An
increase
in
informatics
technology services
expenses by Rp681 billion, or 77.2%;
134
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk
f. General and Administrative Expenses
5. Income Tax Expense
General and administrative expenses increased by Rp406
Income tax expense increased by Rp992 billion, or 12.4%, from
billion, or 9.7%, from Rp4,204 billion in 2015 to Rp4,610
Rp8,025 billion in 2015 to Rp9,017 billion in 2016, following
billion in 2016 primarily due to:
the increase in profit before income tax.
• An increase in general and administrative expenses
amounted to Rp594 billion, or 57.6%; and
6. Other Comprehensive Income
• An increase in professional service expenses amounted
In 2016, other comprehensive income amounted to Rp2,099
to Rp170 billion, or 40.1%.
billion due to an actuarial losses amounted to Rp2,058 billion.
In the previous year, Telkom recorded other comprehensive
This increase was offset by:
income in the amount of Rp631 billion.
• A decrease in provision for doubtful impairment of
receivables by Rp267 billion, or 26.4%; and
7. Profit for the Year Attributable to Owners of the Parent
• A decrease in collection expenses amounted to Rp216
Company
billion, or 58.7%.
Profit for the year attributable to owners of the parent Profit
for the year attributable to owners of the parent Company
g. Gain (loss) on Foreign Exchange – net
increased by Rp3,863 billion, or 24.9%, from Rp15,489 billion
Loss on foreign exchange – net increased by Rp6 billion,
in 2015 to Rp19,352 billion in 2016.
from Rp46 billion in 2015 to Rp52 billion in 2016.
h. Other Expenses
Other expenses increased by Rp552 billion, from Rp1,917
8. Profit for the Year Attributable to Non-controlling Interest
Profit for the year attributable to non-controlling interest
increased by Rp1,992 billion, or 25.4%, from Rp7,828 billion
billion in 2015 to Rp2,469 billion in 2016.
in 2015 to Rp9,820 billion in 2016.
3. Operating Profit and Operating Profit Margin
As a result of the foregoing, operating profit increased by
Rp6,777 billion, or 20.9%, from Rp32,418 billion in 2015 to
9. Net Comprehensive Income for the Year
Net Comprehensive income for the year increased by Rp3,125
billion, or 13.0%, from Rp23,948 billion in 2015 to Rp27,073
Rp39,195 billion in 2016. Operating profit margin increased
billion in 2016.
from 31.6% in 2015 to 33.7% in 2016.
4. Profit before Income Tax and Pre-Tax Margin
As a result of the foregoing, profit before income tax increased
by Rp6,847 billion, or 21.8%, from Rp31,342 billion in 2015
to Rp38,189 billion in 2016. Pre-tax margin increased from
30.6% in 2015 to 32.8% in 2016.
10. Net Income per Share
Net income per share increased by Rp38.42 or 24.4%, from
Rp157.77 in 2015 to Rp196.19 in 2016.
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Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
2015 to 2017.
Cash Flow Table
Net Cash
provided by operating activities
used in investing activities
used in financing activities
CASHFLOW OVERVIEW
The following tables presents the information about our consolidated cash flow, as shown on our Consolidated Financial Report from
Growth
2017-2016
(%)
As of Desember 31,
2017
2016
2015
(Rp billion)
(US$ million)
(Rp billion)
(Rp billion)
Net increase in cash and cash equivalents
(363.1)
(4,654)
Effect of exchange rate changes on cash and cash
equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
126.9
5.9
(15.5)
32
29,767
25,145
4.6
19.8
17.6
49,405
(33,007)
(21,052)
3,641
(2,433)
(1,552)
(343)
2
2,194
1,853
47,231
(27,557)
(17,905)
1,769
(119)
28,117
29,767
43,669
(27,421)
(6,407)
9,841
604
17,672
28,117
Cashflow Comparison
Composition of Cash Receipt and Cash Disbursement from 2015 to 2017 on graphic below.
Diagram of Cash Receipt Composition Telkom Group in 2015-2017
2017
2016
2015
127,669 (90.3%)
1,550 (1.1%)
12,219 (8.6%)
118,326 (89.5%)
3,007 (2.3%)
10,921 (8.3%)
906 (0.7%)
20,634 (16.6%)
102,663 (82.7%)
Operation
Invesment
Financing
Diagram of Cash Disbursement Composition Telkom Group in 2015-2017
2017
2016
2015
78,264 (53.6%)
71,095 (54.5%)
58,994 (51.6%)
33,271 (22.8%)
34,557 (23.7%)
28,826 (22.1%)
30,564 (23.4%)
27,041 (23.6%)
28,327 (24.8%)
Operation
Invesment
Financing
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Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk
Comparison of Cash Flow for Year Ended December 31, 2017
2. Cash Flows from Investing Activities
Compared to Year Ended December 31, 2016
In 2017, net cash flows used in investing activities was
Rp33,007 billion (US$2,433 million) an increase of Rp27,557
Our total cash and cash equivalents as of December 31, 2017
billion in 2016.
amounted to Rp25,145 billion (US$1,853 million), decreased by
Rp4,622 billion or 15.5% compared to the year of 2016 amounted
Cash receipts from investing activities amounted to Rp1,550
to Rp29,767 billion. The largest cash receipts by Rp127,669 or
billion in 2017, compared to Rp3,007 billion recorded in 2016,
90.3% came from operations activities, followed by receipts
The amount is decreased by Rp1,457 billion, or 48.5%. The
from financing activities by Rp12,219 billion or 8.6% and from
investment activities by Rp1,550 billion or 1.1%.
cash receipts came from:
• Proceeds from sale of property and equipment of Rp1,367
billion;
Cash received is mostly used for operating activities by Rp78,264
• Proceeds from insurance claims of Rp155 billion; and
billion or 53.6%, investment activity by Rp34,557 billion or
• Dividends received from associated companies of Rp28 billion.
23.7% and financing activities by Rp33,271 billion or 22.8%.
Cash disbursements from
investing activities amounted
1. Cash Flows from Operating Activities
to Rp34,557 billion, increased by Rp3,993 billion, or 13.1%
In 2017, we recorded net cash provided by operating activities
compared to Rp30,564 billion in 2016. Cash disbursements
were Rp49,405 billion (US$3,641 million) compared to
Rp47,231 billion in 2016.
were used for:
• Purchases of property and equipment of Rp32,294 billion;
• Placement in time deposits and available-for-sale financial
Cash receipts
from operating activities amounted to
assets of Rp676 billion ;
Rp127,669 billion, increased by Rp9,343 billion, or 7.9%
compared to 2016. The cash receipts came from:
• Cash receipts from customers and other operator of
Rp125,111 billion;
• Interest income received of Rp1,431 billion;
• Other cash receipts of Rp542 billion; and
• Tax refund receipts of Rp585 billion.
• Purchases of intangible assets of Rp508 billion;
• Increases advances for purchases of property and
equipment of Rp490 billion;
• Additional contribution on
Rp269 billion;
long-term
investments of
• Business acquisition, net of acquired cash of Rp243 billion; and
• Purchases in other assets of Rp77 billion.
Cash disbursements from operating activities amounted
3. Cash Flows from Financing Activities
to Rp78,264 billion, increased by Rp7,169 billion, or 10.1%
Net cash flows used in financing activities in 2017 was
compared to 2016. The cash disbursements were used for:
• Cash payments for expenses of Rp49,604 billion;
• Payment for corporate and final
income taxes of
Rp21,052 billion (US$1,552 million) compared to with
Rp17,905 billion in 2016.
Rp11,846 billion;
• Cash payments to employees of Rp11,739 billion;
• Payments for interest cost of Rp3,133 billion; and
• Payment for value added taxes after of Rp1,942 billion.
Cash receipts from financing activities amounted to Rp12,219
billion, which increased by Rp1,298 billion, or 11.9% from
Rp10,921 billion in 2016. The cash receipts came from:
• Proceeds from bank loans and other borrowings of
Rp12,169 billion; and
• Capital contribution of non-controlling
interests
in
subsdiaries of Rp50 billion.
In 2017, we have cash disbursement for financing activities
of Rp33,271 billion. Compared to Rp28,826 billion in 2016,
the amount increased by Rp4,445 billion or 15.4%. The cash
disbursements were used for:
• Cash devidends paid to the Company’s stockholders and
to non-controlling stockholders of subsidiaries of Rp11,627
billion, and Rp12,355 billion; and
• Repayment of bank loans and other borrowings of
Rp9,289 billion.
137
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk Comparison of Cash Flow for Year Ended December 31, 2016
Cash disbursements from
investing activities amounted
Compared to Year Ended December 31, 2015
to Rp30,564 billion, increased by Rp2,237 billion, or 7.9%
compared to 2015. Cash disbursements were used for:
As of December 31, 2016, total cash and cash equivalent amounted
• Purchases of property and equipment of Rp26,787 billion;
to Rp29,767 billion, increased by Rp1,650 billion, or 5.9%
•
Increases advances for purchases of property and
compared to 2015. Operating activity accounted for the largest
equipment of Rp1,338 billion;
cash receipts Rp118,326 billion,or 89.5%, followed by financing
• Purchases of intangible assets of Rp1,098 billion;
activity amounted to Rp10,921 billion, or 8.3% and investing
• Placement in time deposits and available-for-sale financial
activity amounted to Rp3,007 billion, or 2.3%. In total, cash
assets of Rp983 billion;
receipts increased by Rp8,051 billion, or 6.5% compared to 2015.
• Acquisition of non-controlling interest in subsidiary of
Rp138 billion;
The majority of cash used for operating activities amounted to
• Acquisition of business, net of acquired cash of Rp137 billion;
Rp71,095 billion, or 54.5% investment activities amounted to
• Additional contribution on long-term investments of Rp43
Rp30,564 billion, or 23.4% and financing activities amounted to
billion; and
Rp28,826 billion, or 22.1%. Compared to 2015, cash disbursement
•
Increase in other assets of Rp40 billion.
increased by Rp16,123 billion, or 14.1%.
1. Cash Flows from Operating Activities
Net cash flows used in financing activities in 2016 was
In 2016 net cash provided by operating activities was Rp47,231
Rp17,905 billion compared to with Rp6,407 billion in 2015.
billion compared to Rp43,669 billion in 2015. Cash receipts
Cash receipts from financing activities amounted to Rp10,921
from operating activities amounted to Rp118,326 billion,
billion, which decreased by Rp9,713 billion, or 47.1% compared
3. Cash Flows from Financing Activities
to 2015. The cash receipts came from:
• Proceeds from loans and other borrowings of Rp7,479 billion;
• Proceed from sale of treasury stock of Rp3,259 billion; and
in
• Capital contribution of non-controlling
interests
subsdiaries of Rp183 billion.
Cash disbursements from financing activities amounted to
Rp28,826 billion, which increased by Rp1,785 billion, or 6.6%
compared to 2015. The cash disbursements were used for:
• Cash devidends paid to the Company’s stockholders and
to non-controlling stockholders of subsidiaries of Rp11,213
billion, and Rp7,058 billion; and
• Repayment of loans and other borrowings of Rp10,555 billion.
increased by Rp15,663 billion, or 15.3% compared to 2015.
The cash receipts came from:
• Cash receipts from customers and other operator of
Rp116,116 billion;
Interest income received of Rp1,736 billion; and
•
• Other cash receipts after netted with the other cash
disbursement of Rp474 billion.
Cash disbursements from operating activities amounted
to Rp71,095 billion, increased by Rp12,101 billion, or 20.5%
compared to 2015. The cash disbursements were used for:
• Cash disbursements for expenses of Rp42,433 billion;
• Payment for corporate and final
income taxes of
Rp11,304 billion;
• Cash payments for employees of Rp11,207 billion;
• Payments for interest cost of Rp3,455 billion; and
• Payment for value added taxes after netted with the
receipt of claim for value added taxes of Rp2,696 billion.
2. Cash Flows from Investing Activities
Net cash flows used in investing activities in 2016 was
Rp27,557 billion compared to Rp27,421 billion in 2015, an
increase of Rp136 billion or 0.5%. Cash receipts from investing
activities amounted to Rp3,007 billion, increased by Rp2,101
billion, or 231.9% compared to 2015. The cash receipts came
from:
• Proceeds from escrow accounts of Rp2,159 billion;
• Proceeds from sale of property and equipment of
Rp765 billion;
• Proceeds from insurance claim of Rp60 billion; and
• Dividends received from associated entities of Rp23 billion.
138
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk SOLVENCY
Liquidity is key to short-term and long-term solvency. All liquidity ratios presented in these Statements show good ability of Telkom
and its Subsidiary to pay their debts. In general, Telkom’s liquidity in 2017 was better than its liquidity in 2016. This indicates that
Telkom business group has good liquidity and the ability to meet its liabilities.
The sources of liquidity of Telkom and its subsidiary primarily come from the cash inflows and outflows from business operations,
financing and investments. Please refer to section “Liquidity”. For more details on the debts of Telkom and its Subsidiary, please see
notes 12-16 to the Consolidated Financial Statements.
a. Short-term Liabilities
Telkom and its subsidiary use and analyze short-term liquidity ratios to oversee the current asset adequacy to carry on the business
and meet the current liabilities due. The short-term liquidity ratios of Telkom and its Subsidiary are presented in current ratio, quick
ratio and cash ratio in the following table.
RATIO
Current Ratio
Quick Ratio
Cash Ratio
2017
104.8%
81.3%
60.2%
2016
120.0%
98.4%
78.6%
2015
135.3%
109.6%
87.4%
Our current ratio 104.8% indicates the availability of our current assets more than current debt. Therefore, we have the ability to
repay the debt that matures in the short term. Similarly, our quick ratio and cash ratio 81.3% and 60.2% indicate our policies that
concern on risk of short-term debt maturity date.
b. Long-term Liabilities
The long-term liquidity ratios serve as the measuring instrument for Telkom and its Subsidiary to analyze their ability to meet long-
term liabilities. Three ratios are used, which are debt-to-equity ratio, debt-to-EBITDA and EBITDA-to-interest-expense as shown
in the following table.
RATIO
Debt To Equity Ratio
Debt To EBITDA
EBITDA to interest expense
2017
31.6%
54.9%
23.3X
2016
30.1%
53.4%
21.2X
2015
37.0%
67.3%
20.7X
The debt to equity ratio 31.6% indicates that our equity is more than our long-term liabilities. This means we have more than enough
capability to pay long-term liabilities. Similarly, the debt to EBITDA ratio 54.9% and the EBITDA ratio to interest expense by 23.3
times, indicates that our management of our long-term liabilities is highly controlled and has very low risk.
RECEIVABLES COLLECTABILITY
Our collectability rates in 2017 is 26.2 days with receivables rollover ratio of 13.9. We also created provision against business receivables
value depreciation based on the collective historical rate of value depreciation and credit history of customers individually in the
amount of Rp4,331 billion in 2017 and Rp2,990 billion in 2016. This was done to anticipate the uncollected parts of business receivables
throughout 2017.
In calculating and presenting the due receivables amount, we do not differentiate business receivables of affiliated party and
receivables of third party. Consolidated receivables which due per December 31, 2017 and 2016 were of Rp3,354 billion and Rp3,005
billion respecteively. Receivables that were not impaired in value considered as good rating and collectible. For further details on
Company’s receivables, please see Note 5 in the Consolidated Financial Statement.
Table of Receivables Collectability Year 2015 -2017
RATIO
Average collection ratio
Receivables turnover ratio
Average Collection Duration Ratio (%)
2017
26.2
13.9
2016
23.1
15.8
2015
26.8
13.6
139
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk CAPITAL STRUCTURE
We have funding resources available to run the Company resulting from short-term debt, long-term debt and equity. The largest
composition of our capital structure comes from equity.
The following are tables and diagrams which illustrating the capital structure and composition of Telkom during the last three years.
Diagram of Capital Structure Composition Telkom Group in 2015-2017
2017
2016
2015
92,713
(72.3%)
33,183
(25.9%)
2,289
(1.8%)
84,384
(72.6%)
30,888
(26.6%)
911
(0.8%)
Equity
Long-term Liabillities
Short-term Liabillities
75,136
(68.5%)
34,010
(31.0%)
602
(0.5%)
Table of Capital Structure Telkom Group in 2015-2017
Capital Structure
Short-term
Long-term
Debt
Equity
Total Invested Capital
2017
(Rp billion)
(US$ million)
2016
(Rp billion)
2015
(Rp billion)
2,289
33,183
35,472
92,713
128,185
169
2,446
2,614
6,833
9,448
911
30,888
31,799
84,384
116,183
602
34,010
34,612
75,136
109,748
MANAGEMENT POLICY ON CAPITAL STRUCTURE
Management policy on capital structure was drawn based on qualitative and quantitative approaches, in order to determine the
optimal funding composition from equity and debt. Periodically, we assess its capital structure, leverage level and performance of the
debt payment as the basis of decision for addition or payments of short-term or long-term debt. If possible, a financing scheme can be
renewed with a more efficient funding scheme.
We also maintains its capital structure well at the level it believes will not risk its credit rating, or at least equal to its competitors’ credit
rating while at the same time maintains a capital structure to optimize the cost of capital (weighted average cost of capital) as well as
tax benefits. In maintaining the balance of capital structure, we use several financial ratios. In 2017, Our debt-to-equity ratio (“DER”)
was 31.6% and our debt service coverage ratio was 4.3 times, indicating the Company’s high ability to repay the debt. During 2017, the
Company has complied with capital requirements provided by the external parties. For information of management policy on capital
management, see Note 38 to the Consolidated Financial Statements.
CAPITAL EXPENDITURE
In line with our strategy of transforming into digital telecommunication Company, we invest our capital according to short-term,
medium-term and long-term needs. In addition, dynamic technology changes and increased connectivity needs and the digital
economy era are driving us to accelerate capital expenditure spending.
AMOUNT OF CAPITAL EXPENDITURE
The total capital expenditure of Telkom group in 2017 amounted Rp33,156 billion (US$2,444 million), increased by Rp3,957 billion or
13.5% compared to capital expenditure in 2016. The amount covered the investment of Telkom, as the parent Company and its subsidiaries.
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Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk The Table of Capital Expenditure of Telkom Group Year 2015-2017
Years ended December 31,
Telkom (parent company)
Subsidiaries
Telkomsel
Others
Subtotal for subsidiaries
Total for Telkom Group
(Rp billion)
11,572
15,080
6,504
21,584
33,156
2017
(US$ million)
853
1,111
479
1,591
2,444
2016
(Rp billion)
10,309
12,564
6,326
18,890
29,199
2015
(Rp billion)
9,641
11,321
5,439
16,760
26,401
Telkomsel as one of our subsidiaries, invested the largest capital expenditure with total Rp15,080 billion while Telkom invested capital
expenditure amounting to Rp11,572 billion. The total investment of capital expenditure from other subsidiaries amounting to Rp6,504
billion.
TYPES OF CAPITAL EXPENDITURE
Capital expenditure carried out by Telkom can be categorized as follows:
• Broadband services, comprises of broadband access, IT, application and content, as well as service node;
• Network infrastructure, comprises of transmission network, metro ethernet and Regional Metro Junction (“RMJ”), and IP backbone
as well as satellite;
• Optimizing legacy, comprises of fixed wired telephone; and
• Other supporting capital expenditures.
PURPOSE OF CAPITAL EXPENDITURE
In general, we invest capital expenditure for strengthening infrastructure and improving Company performance. This is to anticipate
rapid market changes in line with the present era of digital economy.
Diagram of Capital Expenditure Composition Telkom Group in 2015-2017
2017
2016
2015
15,080
(45.8%)
11,572
(34.9%)
6,504
(19,6%)
12,564
(43.0%)
10,309
(35.3%)
6,326
(21.7%)
11,321
(42.9%)
9,641
(36.5%)
5,439
(20.6%)
Telkomsel
Telkom
Others Subsidiaries
The following are some of Telkom’s capital expenditure and its subsidiaries:
1. Built 31,672 BTS units. Total BTS by the end of 2017 was 160,705 BTS, grew 24.5% from the previous year, including 110,381 BTS
3G/4G.
2. Built fiber optic network access to residential to support fixed broadband services, WiFi access point, broadband services for the
enterprise segment, and support Telkom’s leading digital business supply strategy. In the end of 2017, Telkom has 18.6 million
home-passed to support IndiHome fixed broadband services.
3. Completed the Southeast Asia-United States (SEA-US) cable project, which connects Manado - Indonesia to California - USA.
4. Built the Indonesian Global Gateway (IGG) submarine cable project to connect 12 cities in Indonesia including Batam, Jakarta,
Surabaya and Manado is expected to be completed in 2018.
5. Developed Telkom satellite 4, tower and data center.
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Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk
MATERIAL COMMITMENT FOR CAPITAL EXPENDITURE
OBJECTIVES OF MATERIAL CONTRACTS FOR CAPITAL EXPENDITURE
We have several material contracts for capital expenditure by parent companies and subsidiaries. Material contract is mainly for the
procurement and installation of transmission equipment and cable network.
The following table presents a material contract for capital expenditure, including project-related agreements by Telkom and its
subsidiaries.
Telkom
Parties to contract
Contract date
Agreement
Consorsium NEC Corporation and PT
NEC Indonesia
PT Industri Telekomunikasi Indonesia May 5, 2014
May 28, 2013
PT Lintas Teknologi Indonesia
November 17, 2015
PT Datacomm Diangraha
November 20, 2015
PT Sisindokom Lintas Buana
November 23, 2015
Space System/Loral, LLC
NEC Corporation
February 29, 2016
May 12, 2016
NEC Corporation
July 18, 2016
PT Huawei Tech Investment
October 10, 2016
PT Huawei Tech Investment
November 25, 2016
PT Fiberhome Technologies Indonesia
and PT Abhimata Citra Abadi
PT ZTE Indonesia
PT Asuransi Jasa Indonesia
December 6, 2016
May 31, 2017
October 31, 2017
PT ZTE Indonesia
November 1, 2017
Konsorsium Bisnis Submarine Cable
November 10, 2017
PT ZTE Indonesia
PT Lancs Arche Consumma
December 22, 2017
December 22, 2017
Procurement agreement of Sulawesi Maluku Papua Cable
System (SMPCS) Package-2
Procurement and installation agreement of Outside Plant
Optic (OSP-FO) Access
Procurement and installation agreement of DWDM
Platform ALCATEL
Procurement and Installation Agreement of Metro
Ethernet Platform ALU
Procurement and Installation Agreement of Expand PE
VPN Cisco
Procurement agreement of Telkom-4 Satellite System
Procurement and installation agreement of Sistem
Komunikasi Kabel Laut (“SKKL”) Indonesia Global Gateway
Procurement and installation agreement of Radio IP
Backhaul Node-B Telkomsel Platform NEC
Procurement and installation agreement of 10 Gigabyte
Capable Passive Optical Network (“XGPON”) Platform
Huawei
Procurement and installation agreement of DWDM
Platform Huawei
Procurement and installation agreement of XGPON
Platform Fiber Home
Procurement agreement for STB Platform ZTE
Procurement Agreement for Telkom-4 Satellite Launch
Insurance Services
Procurement and Installation Agreement of STB 4K and
ONT Enterrise Platform ZTE
Procurement and installation agreement of Sistem
Komunikasi Kabel Laut (“SKKL”) Sabang-Lhoksemawe-
Medan
Procurement for ONT Retail Platform ZTE
Procurement and installation agreement of Expand
Capacity of Network Capacity DWDM Platform Coriant for
NARU 2017
Contract date
April 17, 2008
Agreement
Combined 2G and 3G Network Rollout agreements
April 17, 2008
March and June, 2009
Technical Service Agreement (TSA) for Combined 2G and
3G Network
2G BSS and 3G UTRAN Rollout agreement as network
provider of 2G GSM BSS and 3G UMTS Radio Access
Network
Telkomsel
Parties To Contract
PT Ericsson Indonesia, Ericsson AB,
PT Nokia Siemens Networks, NSN Oy,
dan Nokia Siemens Network GmbH &
Co. KG
PT Ericsson Indonesia and PT Nokia
Siemens Networks
PT Ericsson Indonesia Ericsson AB,
PT Nokia Siemens Networks, NSN
Oy, Huawei International Pte. Ltd., PT
Huawei and PT ZTE Indonesia
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Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk Parties To Contract
PT Dimension Data Indonesia and PT
Huawei
Contract date
February 3, 2010
Amdocs Software Solutions Limited
Liability Company and PT Application
Solutions
PT Application Solutions
Amdocs Software Solutions Limited
Liability Company and PT Application
Solutions
PT Huawei
Wipro Limited, Wipro Singapore
Pte. Ltd. and PT WT Indonesia
PT Ericsson Indonesia
PT Dimension Data Indonesia
February 8, 2010
February 8, 2010
July 5, 2011
March 25, 2013
April 23, 2013
October 22, 2013
May 25, 2016
Agreement
Maintenance and procurement of equipment and related
service agreement for Next Generation Convergence Core
Transport Rollout and Technical Support
Onlince Charging System (OCS) and Service Control
Points (SCP) System Solution Development agreement
Technical Support Agreement to provide technical support
service for OCS and SCP
Developing and extension of Rollout agreement for
Customer Relationship Management and Contact Center
Solutions
Technical Support Agreement for the procurement of
Gateway GPRS Support Node (GGSN) Service Complex
Development and procurement of OSDSS Solution
agreement
Procurement of GGSN Service Complex Rollout agreement
Maintenance and procurement of equipment and related
service agreement for Next Generation Convergence RAN
Transport Rollout
SOURCES OF FUNDS OF MATERIAL CONTRACTS FOR CAPITAL EXPENDITURE
The sources of funds utilized to fulfill the above contracts were generated from the Company’s internal and external sources. Historically,
the Company has good leverage ratios and is able to finance capital expenditures. In 2017, Company’s capital expenditures allocation
was adjusted to the Company’s business plans. Please refer to the discussion of “Capital Expenditure”.
DENOMINATED CURRENCIES OF MATERIAL CONTRACTS FOR CAPITAL EXPENDITURE
In conducting transactions related to material contracts for capital expenditure, we use the Rupiah and foreign currencies, they are
US Dollar and Japanese Yen. The composition of the value of material contracts for capital expenditure as of December 31, 2017 by
currency denomination was as follows:
Table of Material Commitment based on Currencies
Amounts in Foreign
Currencies (in million)
Equivalent in Rupiah (in billion)
Rupiah
US Dollar
Euro
Total
-
192
0.21
-
6,737
2,604
3
9,344
FOREIGN CURRENCY RISK MITIGATION OF MATERIAL CONTRACTS FOR CAPITAL EXPENDITURE
When we are committed to the payment of capital expenditure with foreign currency, we understand that there is an uncertain foreign
exchange rate risk. On the other hand, we also have the opportunity to gain foreign exchange gains from exchange rates on time
deposits and receivables denominated in foreign currency, which set at least 25% of short-term liabilities in foreign currency payable.
Under these conditions, we minimize exchange rate risk by “offsetting” a trade-off between the exchange rate losses from material
contracts for capital expenditure and exchange rate gain from time deposits and accounts receivable. In general, it lowers the exposure
of foreign currency exchange risk to immaterial.
For more detail discussion of the material contracts for capital expenditure and foreign exchange rate risk can be seen in Notes 34
significant contracts and agreements and Notes 37 financial risk management in the Consolidated Financial Statements of 2017.
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Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk MATERIAL INFORMATION AND
FACT AFTER ACCOUNTANT
REPORTING DATE
In line with the principles of transparency and accountability
4. On February 28, 2018, Metra signed a Conditional Sales
in conducting good corporate Governance, we presented
Purchase Agreement with shareholders of PT Swadharma
material information and facts that occured after the date of the
Sarana Informatika (“Swadharma”) for 36.5% share ownership
accountant’s report, as follows:
amounting to Rp219 billion and new share purchase through
1. On January 30, 2018, the Company, through Metranet,
an increase of share capital valued at Rp178 billion so that
entered into a conditional shares subscription agreement
ownership of Metra became 51%. Swadharma is a company
with Cellum Global Zrt. (“Cellum”) through two stages. In the
engaged in the management of computer technology facilities,
first phase, Metranet will subscribe new shares amounting to
especially in the banking sector. These new investments are
US$4,000,000 (equivalent to 20.4% ownership) and second
expected to strengthen the Company business portfolio.
phase at US$2,000,000 so the ownership of Metranet will be
equivalent to 30.4% ownership. Cellum is mobile payment
and commerce services solutions provider. These new shares
are expected to strengthen TIMES portfolio, particularly
strengthening
the Fin-Tech Telkom Group’s business
ecosystem.
2. Until the issuance of the consolidated financial statements,
the Company and its subsidiaries have drawn down and
entered into credit facility agreement:
a. On January 4, 2018 and February 13, 2018, GSD withdrew
loans from 2017’s facility agreement with BNI and Bank
Mandiri amounting to Rp68 billion and Rp150 billion,
respectively.
b. On February 9, 2018, Telin entered into a credit facilities
agreements with Bank of Tokyo Mitsubishi UFJ amounting
to US$10 billion.
c. On January 10, 2018, Telkomsel amended the overdraft
agreement with Deutsche Bank, dated April 8, 2015,
for total facilities up to Rp750 billion for the purpose of
financing Telkomsel’s working capital.
d. On February 26, 2018, Telkom Infra, Infomedia and the
Company entered into several Joint Borrowing credit
facilities agreements with Bank DBS amounting to Rp325
billion, Rp275 billion, and Rp50 billion, respectively.
e. On February 26, 2018, the Company and Telin entered
into several Joint Borrowing credit facilities agreements
with Bank Mandiri amounting to Rp775 billion and Rp50
billion, respectively.
f. On February 26, 2018, the Company entered into a Joint
Borrowing credit facilities agreements with BNI amounting
to Rp825 billion.
g. On February 26, 2018, Telin entered into a special credit
facilities agreements with Bank Mandiri amounting to
Rp50 billion.
3. On February 27, 2018, The Minister of Communications and
Multimedia Malaysia (“MCM”) has issued approvals for foreign
70% ownership of TSGN, through licensing amendments.
MACROECONOMY
GLOBAL ECONOMY IN 2017
The global economy in 2017 grew 3%, up from 2.4% in the
previous year and higher than expected. The growth rate
was the strongest since 2011, which is a positive signal of the
global economic recovery at a fairly good pace despite several
challenges such as conflicts in some regions.
The good economic growth in emerging markets and developing
economies was a major driver of global economic growth. The
improvement in global growth also as resulted from an increase
in manufacturing activities, trade and investment values, and
the recovering prices for commodities such as oil, coal and CPO,
favoring commodity exporting countries.
China, Asia’s main economic power, managed to maintain a
relatively stable economic growth at around 6.8%, supported
by a recovery in export performance. Developed countries,
especially the European region, experienced better economic
growth in 2017, driven mainly by increased capital expenditures
and
improved export performance.
In the United States,
increased private consumption was an important factor driving
its economic growth. While in Japan, rising economic growth was
a combination of strong domestic market and rising exports as a
result of the recovering global demand.
ASEAN remained among the regions with high economic growth
throughout 2017, buoyed by domestic consumption and trade
activities and a recovery of major commodities. Based on the
World Bank data, some countries posted relatively good growth
rates, such as Malaysia 5.9%, and Vietnam 6.8%, Philippines
6.7%, Thailand 3.9% and Singapore around 3.6%.
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Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk INDONESIAN ECONOMY
INDONESIAN
TELECOMMUNICATIONS
INDUSTRY
SHIFT
PATTERN
IN TELECOMMUNICATIONS
INDUSTRY
Based on the Central Bureau of Statistics (BPS) data, the
Indonesian economy grew quite well at 5.07% in 2017, slightly
The telecommunications
industry grew very well
in 2017,
higher than the previous year’s growth of 5.02%. Domestic
continuing the trend in recent years. The Central Bureau of
consumption still played a major role in the economic growth,
Statistics (BPS) recorded the Information and Communication
contributing for more than half of Indonesia’s Gross Domestic
sector, which includes the telecommunications industry grew by
Product (GDP), reflecting strong consumer purchasing power.
9.81% better than last year’s 8.87% or well above the national
The Indonesian government was also able to manage inflation
economic growth. This means that the telecommunications
well throughout 2017, with a controlled inflation at 3.6%.
industry is one of the main drivers of the national economy.
The relatively low inflation allowed Bank Indonesia (BI) to
The important thing in the telecommunications industry in
establish a loose interest rate policy. BI’s 7-day reverse repo rate
Indonesia in general is the ongoing change of communication
moved down from 4.8% at the beginning of the year to 4.3% by
pattern and behavior, where people have started to use data
the end of 2017. The low interest rate also encouraged banking
services more than voice service and SMS in communicating.
intermediation activities with the business, including in order to
This is in line with the increasing number of smartphone users
support infrastructure development in Indonesia.
with penetration reaching above 55% by the end of 2017.
The emergence of a variety of over-the-top (OTT) platforms
Meanwhile, the rupiah exchange rate against the US dollar
that support text-based and video-based communication
based on BI rate was relatively stable, where the Rupiah only
services which in turn offer convenience and better experience
depreciated by 0.5% during 2017. The rupiah exchange rate
increasingly grows communication behavior using data services.
moved from Rp13,485 per US$ at the beginning of the year to
The growth in the use of data services is a key driver of the growth
Rp13,548 per US$ at the end of 2017. The stable exchange rate
of the domestic telecommunications industry. On the other hand,
was supported by the national foreign exchange reserves of
the use of voice service and SMS is declining rapidly over time.
US$130 billion in December 2017, rising significantly from US$116
billion in the previous year.
In order to improve the security and efficiency aspects of the
industry, the government has enacted the SIM card registration
The solid economic conditions in Indonesia led to an upgrade
regulation through Regulation of the Minister of Communications
in the credit rating from Standard & Poor’s (S&P) in May 2017
and Information No. 14 of 2017, with the registration period
to investment grade (BBB-) with a stable outlook, following an
starting in October 2017 until the end of February 2018.
upgrade from another rating agency Fitch and Moody’s. The
rating upgrades reflected the improvement in Indonesia’s risk
On the other hand, demand for fixed broadband services is
profile and impacted on lower financing costs.
increasing, especially fiber optic-based services that offer
high-speed internet. The need for high-speed internet services
to residential is increasing as the community needs access to
information, entertainment and others.
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Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk COMPETITION IN THE TELECOMMUNICATIONS
INDUSTRY
Telkom Group has a comprehensive range of products and
services covering cellular, fixed broadband and fixed voice,
enterprise,
interconnection and satellite services with an
overview of the competition as follows:
1. Mobile Business
2. Fixed Voice & Broadband Business (Fixed Business)
The demand for fixed broadband services in Indonesia
increased significantly throughout 2017, especially in big cities,
marked by the increasing number of users of the services.
Indonesian people increasingly expect high-quality internet
connectivity in their residential, thus encouraging operators
to continue to invest in and develop fixed broadband services
in various regions of Indonesia. Fixed broadband services with
content such as IPTV are also increasingly popular due to
In mobile business, Telkomsel, Indosat and XL are the three
their better prices and quality. In addition to Telkom through
largest operators with a total market share estimated at
its IndiHome brand, players in the fixed broadband business
about 80% of the cellular industry in terms of revenue. Other
include LinkNet, Biznet, MNC Play and MyRepublic which
operators that join the competition in the mobile business
began operating since 2015.
include Hutchison and Smartfren. Telkomsel currently remains
the market leader with the widest coverage as its excellence,
Some strategies are carried out by fixed broadband operators
while XL and Indosat continue to compete by offering more
in the face of competition such as bundling services, offering
competitive prices. Competition mainly takes place in Java
internet with higher speed and providing more various
where all operators focus on building their networks; while
content. Currently, the penetration of fixed broadband
outside Java, Telkomsel is relatively dominant supported by
services, especially high-speed internet, in Indonesia is still
its wide infrastructure.
very low compared to some neighboring countries such as
Singapore and Malaysia, thus becoming an opportunity for
The year 2017 continued the trend of shifting from voice and
the business growth of such services in line with the growth of
SMS services (legacy services) to digital data and services
middle class population in Indonesia.
(digital business). The high competition was reflected by
intens promotions by operators such as offering data bonuses
3. Enterprise Business
and data packages at relatively low prices, in an effort to
The main services provided by Telkom Group in the enterprise
encourage customers to move from legacy to data services
business is an integrated ICT solution service. The trend of
while tapping into customer base and increasing market
digitizing business processes in both companies, government
share. Incentives to customers in the form of data bonuses
agencies and MSMEs in order to create efficiency while
or affordable price data package were possible considering
providing the best experience has driven the demand for this
the absence of handset subsidies in the cellular industry in
ICT solution service.
Indonesia. The competition of prices for data services was
getting tighter following the SIM card registration obligation
The fulfillment of services to the enterprise business which
beginning in October 2017, where operators offered data
is Telkom supported by several subsidiaries in Metra Holding
packages at affordable price in the hope that more customers
(Telkom Metra), such as Telkom Sigma in the aspect of system
will register SIM cards in the operators’ respective networks.
integration development, data center and cloud manage
service needs, Infomedia in fulfilling call center and BPM,
In the coming years, the growth in the number of new
Metrasat and Patrakom in the provision of transponder
subscribers is expected to slow as the number of SIM cards in
and satellite communications, PINS in the provision of
circulation is estimated to have reached more than 370 million,
supporting telecommunication equipment and IoT solution,
exceeding the 262 million population. The communication
Finnet in providing billing payment switching and aggregator
pattern in the community will continue to change, by shifting
solutions, AdMedika in providing e-health services, MD
and turning to using smartphone devices, using data and
Media in providing digital advertising, Telkom Telstra in
digital services, which can be used to obtain information,
providing manage network and professional service, ILCS in
entertainment, transactions and other economic activities.
providing digital seaport solution, and Jalin which is engaged
The presence of Over-The-Top (OTT) platforms will remain a
manage ATM. The competitors in the enterpise business is
challenge for mobile operators, considering that the services
quite scattered but in general there is no single player that
directly or indirectly substitute basic cellular services namely
provides a complete solution or integrated.
voice and SMS services that continue to show downward trend.
in providing ATM (automated teller machine) switching and
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Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk
4. International Traffic and Interconnection Business
Competition in international communication services today
is not only dealing with other domestic and international
BUSINESS PROSPECTS AND
SUSTAINABILITY OF THE
COMPANY
NATIONAL
PROJECTION
POLITICAL
AND
ECONOMIC
telecommunication operators, but also coming from digital
Telkom believes that the business growth prospects in the
companies that provide voice and video-based applications
telecommunications industry are still quite well, marked by the
such as Skype, Line and WhatsApp. To that end, in 2017 we
high growth of data traffic and the relatively low penetration of
expanded the global interconnection market by penetrating
smartphones, especially 4G and fixed broadband. In recent years,
into the voice-hubbing market, interconnecting inter-country
the information and communications sector has grown very well
traffic, and SMS A2P (Application to Person) SMS traffic
and has become an important contributor to the national growth.
market. The development of this interconnection market will
Nevertheless, Telkom remains cautious about the economic and
continue to continue in the coming years.
political dynamics, both national and international, which may
arise and negatively affect Telkom’s performance particularly in
5. Network and Satellite Infrastructure Business
the short-term.
Telkom through Mitratel has a telecommunication tower
infrastructure business, with other major players, among
Although in general some important economic indicators are
others Tower Bersama
Infrastructure, Sarana Menara
expected to remain stable, but in 2018 we are aware potential
Nusantara (Protelindo) and Solusi Tunas Pratama and
increase on domestic interest rate considering it is very likely that
Indosat and XL Axiata telecommunication operators. There
the interest rates in the United States will increase following the
are also some telecommunication tower providers with
positive economic recovery. While from the political side, in 2018
fewer towers. Tower rental business continues to grow in
the Indonesian political situation will be colored by 171 regional
line with the expansion of telecommunication operators in
head election simultaneously in various regions. Furthermore, in
building BTS, especially outside Java Island. For urban areas,
the second half of 2018, preparations for presidential elections
telecommunication towers no longer grow and are replaced
scheduled for April 2019 will also begin. This will directly or
by microcells with the aim of targeting dense areas of density
indirectly affect Telkom Group’s business, whether it be an
with smaller radius. Mitratel continues to aggressively develop
opportunity or a challenge that needs to be anticipated.
itself in this microcell solution.
Fundamentally Indonesia’s economy is still strong enough by
Satellite industry in Indonesia is one of the industries with
posting positive growth of 5.1% during 2017. The growth was
a high level of competition in Southeast Asia. This can be
influenced by increased investment and consumer purchasing
seen from the shifting of market structure since 2003 from
power supported by the controlled rate of
inflation. The
monopoly to oligopoly, and even allowing competition
Indonesian economy is believed to continue to grow fairly well
between Indonesian satellite operators and foreign satellite
in the future. One of the important elements that can support
operators. One of the main reasons for the demand for satellite
Indonesia’s economic growth is better infrastructure such as toll
services is still growing is the growth of telecommunication
roads, railways, power plants, ports and airports that will facilitate
needs in remote areas of Indonesia, especially in areas not yet
the movement of goods and people in economic activities.
connected by fiber optic.
POTENTIAL TO BE THE BIGGEST DIGITAL
ECONOMY IN SOUTHEAST ASIA
President Joko Widodo has a vision that Indonesia can become
Southeast Asia’s largest digital economy by 2020. To achieve this
vision, the availability of infrastructure and the expansion of access
to ICT services in all parts of Indonesia are of great importance.
The government through the Ministry of Communications and
Information has initiatives to build infrastructure one of which
is through the construction of Palapa Ring which is a submarine
cable network that connects the outer islands in the western,
central and eastern parts of Indonesia. The Palapa Ring project
is expected to be entirely completed by 2019 which will facilitate
the expansion of access to ICT services throughout Indonesia so
as to encourage the utilization of various digital services. This will
further provide opportunities for growth in ICT-based economic
activities (digital economy) such as e-commerce and also expand
the range of marketing, expand financial inclusion and encourage
the growth of creative industries in various fields.
147
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk Indonesia’s greatest challenge to become the digital economic giant in Southeast Asia is how to improve national digital competitiveness.
In the IMD World Digital Competitiveness 2017 report, Indonesia’s score was still quite low compared to 63 countries surveyed using
around 50 indicators. The lack of investment in the development of human resources (HR) in the field of digital technology was among
the causes of the low competitiveness of Indonesia. The findings of the IMD World Digital Competitiveness 2017 report are in line with
a survey conducted by the Center for Research and Development of Post and Information Technology (Puslitbang PPI) in 2015. The
results of the survey indicate that farmers and fishermen groups have low literacy on internet access so it requires more intensive
education to be part of the development of the digital economy.
Equality in coverage and data access is also a major challenge in the telecommunications industry as a key driver of the development
of the digital economy in Indonesia. With the highest average data access quality still in Java, there is still imbalance in the quality of
broadband connectivity access in various regions in Indonesia. Indonesia is estimated to have more than 370 million SIM cards used by
mobile users by the end of 2017, with smartphone users estimated more than 220 million. The number of smartphones continues to
grow quite rapidly indicating that the potential demand for data and digital services will continue to increase. With the support of ICT
infrastructure and a stronger digital ecosystem, Indonesia is at the forefront to become the largest digital economy in Southeast Asia.
Telkom is committed to support the development of an equality telecommunications infrastructure in Indonesia towards the realization
of this vision. At the same time, the dynamics of digital economy also brings business opportunities for companies, such as e-commerce
and financial technology. In responding to the opportunities, Telkom has taken strategic measures to grow digital services supported
by Telkom Group’s telecommunications network and infrastructure, such as the presence of an online shopping platform under the
name blanja.com which supports the marketing of Micro Small and Medium Enterprise (MSME) products more broadly and a mobile
payment platform through TCASH.
The potential growth in the financial technology business is characterized by the growing digital financial transactions. As of the end of
December 2017, TCASH was recorded to have approximately 15 million registered users, with 3 million activate users. Mobile financial
services such as TCASH have a central role in accelerating the digital economy in Indonesia.
COMPARISON BETWEEN TARGETS AND REALIZATIONS
Our performance in 2017 was excellent with a revenue growth of 10.2%, EBITDA growth of 8.6%, and net income growth of 14.4%. In
2017, Telkom recorded a revenue growth which outperformed the industry average at 9.8%. In 2017, we achieved a profit of Rp128,256
billion, up 10.2% from last year’s profit.
Our EBITDA margin was 50.4%, lower than the EBITDA margin of 2016 which was at 51.1%. Our net income margin realization reached
17.3%, higher than the 16.6% recorded in 2016. Furthermore, we have also exhausted capital expenditures of 25,8% of revenues in
2017, slightly exceeded the target set at approximately 23% -25% in the beginning of 2017.
Strategies implemented by Telkom Group in 2017 to record such achievements included, among others, maintaining dominance in the
cellular market and procuring capital expenditure for infrastructure development. Below is a table describing our targets or strategy
projection in 2017.
Indicator
Realization in 2017
Targets in Early 2017
Revenue growth
EBITDA Margin
Revenue growth outperform
average revenue, and revenue
business continued to increase.
the
industry’s
from digital
Revenue growth expected to outperform the
industry’s average revenue, and revenue from
digital business continued to increase.
The EBITDA margin and net
income margin
were to decline slightly in accordance with the
development of broadband infrastructure, both
in mobile and fixed line business, and further
increased the revenue portion of the digital
business segment.
The EBITDA margin and net income margin were
projected to decline slightly in accordance with
the development of broadband infrastructure,
both in mobile and fixed line business, and further
increased the revenue portion of the digital
business segment.
Capital expenditure
Capital expenditure amounted to 25,8% of
revenue per year with a focus on building
broadband infrastructure.
to 23-25%
Capital expenditure amounted
of revenue per year with a focus on building
broadband infrastructure.
148
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk TARGETS OR PROJECTIONS FOR THE NEXT YEAR
From time to time, Telkom always strives to create sustainable growth. To that end, in 2018 we have established 3 main programs
consisting of (1) Delivering Best Customer Experience, which is to build the best digital experience in a comprehensive range of
aspects supported by a qualified infrastructure, to enhance more personal relationships and anticipate customer needs thus creating
strong customer loyalty (customer stickiness); (2) Expanding Digital Business, where we will strive to maintain digital connectivity
and drive digital solutions, both ICT services and digital services, as new growth engines; and (3) Intensifying Smart Inorganic, where
we actively seek to explore acquisitions or partnerships to strengthen digital capability and enhance enterprise value.
By 2018, Telkom targets revenue to be above industry projection. IndiHome’s contribution will be increased in our revenue with
opportunities that are still open and wide for penetration. In addition, we will continue to maintain our dominance in the cellular market,
and increase aggressiveness in digital business..
The increasing contribution of digital business is expected to affect the EBITDA and net income margins. On the other hand, the portion
of revenues from legacy services, i.e. voice and SMS, will decrease. We have allocated a capital expenditure of around 24% -27% of
revenue in 2018 to build broadband infrastructure in both cellular and fixed line segments.
Generally, our strategy plan for 2018 is as follows:
Telkom Group Strategy Targets in 2018
Indicator
Revenue growth
EBITDA margin
Expenditure capital
DIVIDEND
2018 Targets
Revenue growth above the industry’s average.
Digital business contribution to EBITDA and net income margins is in line with
the acceleration of IndiHome and other digital businesses growths. Broadband
expansion, both in mobile and fixed line businesses, will be continued and is expected
to lower EBITDA and net income margins.
Capital expenditure of 24-27% % of revenues with an investment focused on digital
business infrastructure.
In the last five years, we have a dividend pay out policy with the approval of the Annual General Meeting of Shareholders (“AGMS”).
Each year, we distribute cash dividends to shareholders with a payout ratio ranging from 60% to 70%.
Then, for performance in 2017, we will set the payment ratio, dividend amount, and total final dividend at the AGMS to be held in 2018.
Here are dividend payment data and information from 2013 to 2017.
Table of Dividend Payments of Telkom for 2013 - 2017
Dividen
Year
Dividend Policy
Date of Dividend
Payment in Cash
and/or Date of
Dividend
Distribution in
Non-Cash
Payment Ratio
/ Payout ratio
(%) 1
2012
2013
2014
AGMS, April 19, 2013
June 18, 2013
AGMS, April 4, 2014
AGMS, April 17, 2015
May 19, 2014
May 21, 2015
2015
AGMS, April 22, 2016
May 26, 2016
2016
AGMS, April 21, 2017
May 26, 2017
65
70
60
60
70
Dividend
Amount paid
per year
(Million Rp)
8,352,5972
9,943,2943
8,782,8124
9,293,1845
13,546,4116
Dividend
Amount per
Share (cash
and/or non-
cash) after Stock
Split (Rp)
87.24
102.40
89.46
94.64
136.75
1. The payment ratio shall be the profit percentage attributable to the owner of holding entity paid to the shareholders as dividends.
2. Consists of cash dividend in the amount of Rp7,067,582 million and special cash dividend in the amount of Rp 1,285,015 million.
3. Consists of cash dividend in the amount of Rp7,812,588 million and special cash dividend in the amount of Rp2,130,706 million.
4. Consists of cash dividend in the amount of Rp7,319,010 million and special cash dividend in the amount of Rp1,463,802 million.
5. Consists of cash dividend in the amount of Rp7,744,304 million and special cash dividend in the amount of Rp1,548,880 million.
6. Consists of cash dividend in the amount of Rp11,611,211 million and special cash dividend in the amount of Rp1,935,200 million.
149
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk REALIZATION OF PUBLIC OFFERING FUND
As of December 31, 2017, We have several outstanding bonds held by investor as follows:
Name of the Bond
Amount
Date of Issue
Maturity Date
Bond II Telkom 2010 series B
1.995.000
June 25, 2010
July 6, 2020
The Continuous Bonds I Telkom
2015 series A
The Continuous Bonds I Telkom
2015 series B
The Continuous Bonds I Telkom
2015 series C
The Continuous Bonds I Telkom
2015 series D
2.200.000
June 23, 2015
June 23, 2022
2.100.000
June 23, 2015
June 23, 2025
1.200.000
June 23, 2015
June 23, 2030
1.500.000
June 23, 2015
June 23, 2045
Time Periode
(year)
10
7
10
15
30
The rating of the bonds is AAA of Pefindo and secured by all of the Issuer Company’s assets, tradable or non-tradable, either existing or
those that will exist in the future. The underwriters of the bonds are PT Bahana Sekuritas (“Bahana”), PT Danareksa Sekuritas, PT Mandiri
Sekuritas and PT Trimegah Sekuritas, with PT Bank Permata Tbk as the appointed Trustee.
In 2017, all public offering fund had been realized in accordance with the plan to use the proceeds from the public offering, by recording
the remaining balance from the public offering can be seen in the following table.
Realization of Public Offering Fund
Public Offering Fund
Public offering cost
Net amount
Realization:
a. Business Development
b. Acquisition
Total realization
Balance
Amount
(in billion rupiah)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
For more details related to information about Bond please see Note 16 to the Consolidated Financial Statements.
MATERIAL TRANSACTION INFORMATION CONTAINING CONFLICT
OF INTEREST, TRANSACTION WITH AFFILIATED PARTIES,
INVESTMENT, DIVESTMENT AND ACQUISITION
As part of good corporate Governance (GCG) implementation, we comply with POJK No.31/POJK.04/2015 which requires companies
to disclose material transaction information that may affect stock prices or investment decisions.
Accordingly, in this report we declare to have identified and disclosed material transactions containing conflict of interest, transactions
with affiliates, and investment, divestment and acquisition transactions throughout 2017, as follows:
1. On November 13, 2017, Telkom through its subsidiary, PT Sigma Cipta Caraka (Telkom Sigma), acquired 60% share of PT Bosnet
Distribution Indonesia, a FMCG (Fast Moving Consumers Good).
2. On November 24, 2017, Telkom through its subsidiary, PT Telekomunikasi Indonesia International (Telin), has entered into conditional
sales and purchase agreement to acquire up to 70% of equity of TS Global Network Sdn Bhd (TSGN), Malaysia’s premier satellite
communications service and solution specialist.
3. On December 13, 2017, Telkom through its subsidiary, PT Multimedia Nusantara (Telkom Metra), acquired 60% share of PT Nutech
integration that engaged in ICT Transportation.
150
Analysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlightsPT Telkom Indonesia (Persero) Tbk CHANGES IN REGULATION
Compliance with regulations is a form of implementation of good corporate Governance (GCG) in Telkom. In 2017, Telkom has identified
some new regulations in the telecommunication and information industry as well as the possibility of their impacts upon the operations,
financial statements and business of Telkom.
In 2017, there is no new Regulation Legislation provisions that have significant impact on the financial statements of Telkom.
Laws and Regulations Having Significant Effect
No
Laws and Regulations Having Significant Effect
Effects on Financial Statement
1
N/A
N/A
CHANGES IN ACCOUNTING POLICY
SUMMARY OF SIGNIFICANT ACCOUNTING POLICY
We prepare and publish the consolidated financial statements of Telkom and its subsidiaries under Financial Accounting Standard
(“SAK”) in Indonesia which covers the Statement of Financial Accounting Standard (“PSAK”) in Indonesia and Interpretation of
Financial Accounting Standard (“ISAK”) in Indonesia issued by the Board of Financial Accounting Standard – Indonesian Accountant
Association. In addition, we also follow the Regulation of Capital Market and Financial Institution Supervisory Body (Bapepam-LK)
No.VIII.G.7 regarding “the Financial Report Presentation and Disclosure of Issuer or Public Company”, as attached in the letter KEP347/
BL/2012. Accounting standard and interpretation that have been certified by the Board of Financial Accounting Standard (“DSAK”), but
have not been taken into effect for the ongoing financial report are disclosed in Note 2 Consolidated Financial Report.
SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND THE INTERNATIONAL FINANCIAL
REPORTING STANDARD (“IFRS”)
Since 2011, Telkom adopted IFRS in preparing financial statements to the New York Stock Exchange (NYSE).
Summary of significant differences between the PSAK and IFRS are as follows:
1. Land Rights
According to PSAK, land rights shall be recorded as part of fixed asset and shall not amortized unless there is an evidence indicating
that the extension or renewal of land right is most likely or certainly unobtainable. The legal fee for the application of extension or
renewal of land right shall be acknowledged as intangible asset and shall be amortized for the duration of legal period or economical
period of the land, whichever shorter.
According IFRS, land right shall be recorded as the lease and be presented as part of fixed assets. The land right shall be amortized
during the lease period.
2. Transaction with Related Parties
According to Regulation of Bapepam-LK No.VIII.G.7 regarding the Financial Report Presentation and Disclosure of Issuer or Public
Company, the entity related to the government constitutes a party controlled, jointly controlled or influenced by a government.
The government in this matter is the Minister of Finance or Regional Government that constitutes the shareholder of the entity.
According to IFRS, entity related to the government is the entity that is controlled, jointly controlled or influenced by a government.
The government in this matter shall refer to the government, government institution and similar institution either local, national or
international.
In 2017, there was no new PSAK/ISAK that has significant impact to Telkom’s financial report.
Table of Changes in Accounting Year 2017
No Accounting Policy
1
N/A
The Impact on Financial Statements
N/A
151
Corporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)AppendicesPT Telkom Indonesia (Persero) Tbk CORPORATE
GOVERNANCE
154
Implementation and Strengthening GCG Road Map 2013-2018
156
Corporate Governance Principle and Platform
160
Corporate Governance Assessment
160 Corporate Governance Structure
161
General Meeting of Shareholders
168
178
The Broad of Commissioners
Audit Committee
182 Committee for Nomination and Remuneration
185
189
Committee for The Planning and Risk Evaluation and Monitoring
Broad of Directors
201 Corporate Secretary
204
Information Access and Company Data to Public
205
Internal Audit Unit
207
Internal Control System
209 Risk Management System
216 Whistleblower System
220
Implementation of Share Ownership Policy of Board of Directors and
Board of Commissioners
221 Significant Legal Disputes
221
Informations Regarding Administrative Sanctions
222 Corporate Culture
230 Corporate Code of Conduct
231 Employee Stock Ownership Program
“We understand the importance of managing
various business risks. To that end, we apply the
principle of Good Corporate Governance as one
of the important pillars that must be understood
and implemented in every operational area.
This is the key to our success in maintaining the
reputation and trust of our stakeholders.”
IMPLEMENTATION AND STRENGTHENING
GCG ROAD MAP 2013-2018
2015
• The strengthening of Business Ethnics
encompassing Telkom Group.
• The launching of the Culture Year.
• The strengthening of the governance organs
through GCG assessment for subsidiary
entities.
• The strengthening of
process to ensure
surveillance.
the governance
ISO certification /
2016
• The Implementation of “ Role Model
GCG”.
2013
• The strengthening of the governance
organs through GCG development and
implementation
involving the business
group through the establishment of an
Executive Board, with the aim of shaping
Company’s capabilities in carrying out
strategic
to portfolio
management supported by a parenting
mechanism more in line with business
ecosystem demands.
related
steps
to ensure
• Continuing the strengthening of the
governance process
the
business process is in line with the “ New
Telkom” business and organizational
transformation in accordance with the
Telkom’s Corporate Office Organizational
Policy No.202.11/2013.
2014
for
GCG
though
• The strengthening of the governance
organs
the
implementation of an organization having
the characteristics of a holding company
encompassing subsidiary entities through
the
implementation of an Executive
Board mechanism and implementational
improvements.
• The strengthening of the governance
ISO/ISO certification
process through
process discipline fir “ New Telkom”
• The implementation of the COSO 2013
Framework as a basis for Internal Control
and Integrated Audit
154
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights 2017
Enhancing GCG Framework, comply
with
regulation
national
and
international best
practices.
the
following
2018
• Improving Corporate Governance Practice
to Enhance Competitive Advantage, based
on ASEAN Corporate Governance Scorecard
(OECD Corporate Governance Principles).
• Implementation for some subsidiaries.
155
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices CORPORATE GOVERNANCE PRINCIPLE AND
PLATFORM
We continuously committed for implementing good corporate
governance (GCG) principles at all operational levels to create
performance and accountability processes, as well as meeting
the expectations of our stakeholders.
3. Principle of Responsibility
Complying with the prevailing laws and regulations and
implementing sound corporate principles. We ensure to
comply with all prevailing laws and regulations, consisting
of laws/regulations on taxation, fair competition, industrial
relations, work health/safety, remuneration standards, as well
as other relevant regulations. Furthermore, a VP Legal and
Compliance function has also been established, structurally
Decree of the Board of Directors regarding GCG Guidelines
assigned to ensure the compliance of all laws and regulations.
No.29/2007 and GCG Group Guidelines No.602/2011 are our
clear evidence of GCG implementation. The Decision of the Board
4. Principle of Independence
of Directors contains several GCG implementation systems to
Professional without any conflicts of interest nor pressure
ensure that GCG has been applied to ethical internal and external
from any party that is against the laws and regulations and
transactions and in accordance with good corporate governance
sound corporate principles. We explicitly have set forth the
rules/authorities in regard to corporate decision making in
the Board Charter and the Company’s Articles of Association.
Furthermore, We implement several supplementary policies
in the Company’s Corporate Governance Guidelines, such as
policy regarding conflict of interest transactions, prohibition
of political party donations, and prohibition on affiliations.
5. Principle of Equality and Equity
We apply the principle of equality and equity in fulfilling the
rights of stakeholders arising from agreements and prevailing
laws and regulations. The implementation is conducted in
several operational aspects, covering honoring minority
shareholder rights, insider trading prohibition, balanced
scorecard-based performance management, open bidding
and e-procurement in the procurement of goods/services.
practices.
In addition, we continually strive to improve the policies and
infrastructure of GCG support systems. Through new initiatives to
strengthen the quality of governance practices’s implementation,
by
strengthening
governance processes, and strengthening the culture that we
refers as 3 main pillars.
strengthening governance
structures,
IMPLEMENTATION OF BASIC GCG PRINCIPLES
As one of the public companies that have listed their shares in IDX
since more than 21 years ago, we have implemented all the basic
principles of GCG, including:
1. Principle of Transparency
Transparency in the decision-making process and providing
material and relevant information regarding the Company. We
routinely publish Financial Statements and Annual Report and
other material information easily accessible to investors. Such
information is provided in the form of Company’s website,
print media and press releases, one-on-one meetings with
investors, public expose and press gatherings.
2. Principle of Accountability
Clarity of the
functions, role and responsibilities of
shareholders, Board of Commissioners, Directors, Committees,
and the Corporate Secretary in order to make the Company
management effective. We ensure the availability of charters
necessary for each of the Company’s main organs, to create
check and balances mechanism on the authorities and roles
in the Company management. Furthermore, Key Performance
Indicator (KPI) criteria and operational targets are also clearly
set out.
156
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights IMPLEMENTATION OF GCG PRINCIPAL BASED ON OJK CORPORATE GOVERNANCE GUIDANCE
In addition to the application of GCG basic principles, We also implemented corporate governance principles based on OJK’s
Corporate Governance Guidance for Public Company, as follow:
Principle
Recommendation
Implementation
Status
Principle 1
Improving the value of
shareholders Annual General
Meeting (GMS) management.
1. Technical methods or procedures for open and
closed voting that prioritize independence
and interest of the shareholders.
The Company already has technical procedures
for voting set out in the procedures for the General
Meeting of Shareholders.
Comply
2. Members of the Board of Directors and the
Board of Commissioners attend the Annual
GMS.
All of the members of the Board of Directors and
the Board of Commissioners attended the GMS.
Comply
3. A summary of minutes of GMS is available at
the Website at least 1 year.
We provided a Summary of Minutes of GMS at the
Company’s Website under Investor Relations.
Comply
Principle 2
Improving the Public Listed
Company Communication
Quality with Shareholders or
Investors.
1. To have a policy on communications between
Public Company and shareholders and
investors.
2. Post the policy on communications of a
Public Company at the Website.
Principle 3
Strengthen the Membership
and Composition of Board of
Commissioner.
1. Determining
of
Commissioners members should take into
account the Company’s Conditions.
number Board
the
2. Determination of
the composition of
members of the Board of Commissioners
takes into account the required variety of
skills, knowledge and experience.
We have a policy on communications with Investors
through Non Deal Roadshow, One on One Meeting,
Earnings Call, Public Expose, Conference and
Investor Summit.
We have made available materials of each Earnings
Call, Conference and materials of presentation to
investors at the Company’s website to provide
equality for Shareholders and Investors regarding
the implementation of Communications with the
Company.
Comply
Comply
We have complied with the provision applicable
to the Company as Public Company as set out in
Article 20 of POJK No.33/POJK.04/2014 that the
number of members of the Board of Commissioners
must be more than 2 (two) persons.
At the Shareholders’ discretion, members of the
Board of Commissioners have been appointed by
taking into account a variety of skills, knowledge,
experiences and
the Company’s business
conditions and complexity.
Comply
Comply
Principle 4
Improving the Quality of
Duty and Responsibility of
Board of Commissioner.
1. The Board of Commissioners has a policy to
self-assess the performance of the Board of
Commissioners.
Basically, the assessment of the performance of
the Board of Commissioners is carried out by Class
A Dwiwarna Shareholders through the mechanism
of a Gweneral Meeting of Shareholders.
Explain
2. The self-assessment policy is reported in an
Annual Report.
We do not have any self-assessment policy yet,
therefore there
is no self-assessment policy
reported in the Annual Report.
Explain
3. The Board of Commissioners has a policy of
resignation in the event of involvement in
any financial crimes.
Comply
In accordance with our Articles of Association,
jo. Regulation of the Financial Services Authority
No.33/POJK.04/2014 any member of
the
Board of Commissioners who does not meet
any requirements to be a member of the Board
of Commissioners as set out in the Articles of
Association and Regulation of the Financial
Services
No.33/POJK.04/2014
including any involvement in any financial crimes,
consequently his/her position will be null and void.
Authority
In the event that the member of the Board of
Commissioners resigns, it will be resolved at a GMS.
157
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices
Principle
Recommendation
Implementation
4. The Board of Commissioners or the NRC
sets out a provision of succession in the
Nomination Process of a member of the
Board of Directors.
Principle 5
Strengthening Membership
and Compositions of
Directors.
1. Determination of the number of members
of Board of Directors takes into account the
Company’s conditions and effectiveness in
decision-making.
2. Determination of
the Composition of
members of Board of Directors takes into
account a variety of skills, knowledges and
experiences as required.
3. Members of the Board of Directors in charge
of accounting and finance have skills and/or
knowledge in accounting.
1. The Board of Directors has a policy to self-
assess the performance of the Board of
Directors.
2. The self-assessment policy is reported in an
Annual Report.
3. The Board of Directors has a policy of
resignation in the event of involvement in
any financial crimes.
Principle 6
Improving the Quality of
Implementing Task and
Responsibility of Board of
Directors.
The Nomination and Remuneration Committee
sets out in the Nomination and Remuneration
Committee Charter that among its duties is to give
recommendations to the Board of Commissioners
the Class A Dwiwarna
which will
Shareholders about the Planning of Succession of
Members of the Board of Directors.
inform
In addition, as an SOE, the provision of succession
of the Board of Directors refers to Regulation of
the SOE Minister No.PER-03/MBU/02/2015 on
the requirements, procedures for the appointment
and dismissal of a member of the Board of
Directors of an SOE.
Determination of the number of members of
the Board of Directors of the Company refers
to the Article 2 paragraph (1) and paragraph
(2) POJK No.33/POJK.04/2014
regarding
Board of Directors and Board of Commisioner
listed Company which provides that the
of
Board of Directors of Listed Companies or
Public Companies must consist of at least 2
(two) members which 1 (one) of them have to be
appointed as the President Director.
At the Shareholders’ discretion, members of the
Board of Directors of the Company have been
appointed by taking into account a variety of skills,
knowledges, experiences, and the Company’s
conditions and business complexity.
The member of the Board of Directors in charge
of accounting and finance in the Company is the
Finance Director who has sufficient accounting
and financial knowledge and experience as can be
seen in the position and education history of the
Board of Directors under the section of Profiles of
the Board of Directors.
The Board of Directors has a Self-Assessment
policy as set out in the section of Performance
Assessment of the Board of Commissioners and
the Board of Directors.
Results of the Self-Assessment of the Board
of Directors are reported
in the Company’s
Annual Report under the section of Corporate
Governance.
In accordance with our Articles of Association jo.
Regulation of the Financial Services Authority
No.33/POJK.04/2014, any member of the Board
of Directors who does not meet any requirements
to be a member of the Board of Directors as set
out in the Articles of Association including any
involvement in any financial crimes, consequently
his/her position will be null and void.
In the event that the member of the Board of
Directors resigns, it will be resolved at a GMS.
Status
Comply
Comply
Comply
Comply
Comply
Comply
Comply
Principle 7
158
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
Principle
Recommendation
Implementation
Improving Corporate
Governance Aspect through
Stakeholders Participation.
1. To have a Policy to prevent Insider Trading.
of
accordance with Regulation
In
the
Human Capital Management Director No.PR
209.05.r.00/PS800/COP-A4000000/2017 on
Employees’ Compliance Ethics, the provision to
prevent Insider Trading is as set out in Article
7 on Gross Violations, which includes Abuse of
Authority or Position.
2. To have a Policy of Anticorruption and
Antifraud.
3. To have a Policy on the Selection and
Capacity Building of Suppliers and Vendors.
4. To have a Policy on the Fulfillment of
Creditors’ Rights.
5. To have a Policy on whistleblowing system.
6. To have a Policy on the granting of long-term
incentives to the Board of Directors and
Employees.
the existence of
We are always committed
to preventing
Corruption in our Company. This is realized
integrity pact
through
completed by all employees of Telkom and the
existence of a separate website as an integrity
portal for all employees of Telkom, called
myintegrity.telkom.co.id.
We select our vendors and suppliers
in
accordance with our internal procurement policy
managed through the Share Service Operation
Procurement Department and implemented by
reference to Regulation of the Finance Director
No.PR.301.08/r.01/COP-A00110000/2016
on
Procurement Implementation Guidelines.
We have a policy to fulfill the rights of our creditors
through the Corporate Finance Unit that sets out
and manages the rights of our creditors.
Indonesia, Tbk and
to Decision of
the Board of
Pursuant
Commissioners No.08/KEP/DK/2016
dated
8 June 2016 on the Provision of Complain
Handling Procedures (Whistleblowers) at PT
Telkom
its consolidated
Subsidiaries and ratified by Regulation of the
Board of Directors No. PD.618.00/r.00/HK200/
COP-C0000000/2016 dated 21 December 2016,
Telkom guarantees and ensures the protection
of identity of the whistleblowers, whether the
employees or third parties filing any complaints or
reports of alleged violations.
In determining the incentives to be earned by the
Board of Directors, we are guided by Regulation
of the Minister of SOE’s No.PER-04/MBU/2014
on the Setup Guidelines on Income Allocation
Guidance for Board of Directors, Board of
Commissioners, and Board of Trustees of State
Owned Enterprises, as for the incentives for
employees, it is set out in the Collective Labor
Agreement Chapter VI on compensations and
benefits. In addition, we also provide long-term
incentives in the form of Employee Stock Option
Plan (ESOP), which was last done in 2013.
Status
Comply
Comply
Comply
Comply
Comply
Comply
Principle 8
Improving the
Implementation of
Information Disclosure.
1. To use information technology more widely
other than a Website as a medium of
information disclosure.
2. The Annual Reports of Public Companies
disclose the most current beneficial owners
of the Company’s shareholding, at least
5% other than major shareholders and
Controllers.
We are also active in a variety of social media as
a medium of information disclosure and product
promotion. In addition, we also use the mailing list
system as a medium of information disclosure and
communication for investors.
Comply
We disclose the most current beneficial owners
of the Company’s shareholding with 5% or more
shareholding in our Annual Report under the
section of Composition of Shareholding.
Comply
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Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices CORPORATE GOVERNANCE ASSESSMENT
3. The observation phase, when the Indonesian Institute for
In assessing the implementation of our corporate Governance,
we use Corporate Governance Perception Index (CGPI) as our
assessment and ranking, its process including three phases with
Corporate Governance (IICG) Jury reviews the Company and
conducts discussions and question and answer sessions, as
well as confirm the implementation of GCG in the Company
to the Board of Directors, Board of Commissioners and Senior
each of them have different values:
Leader.
1. The self assessment phase, when the Company completes
The results of the GCG assessment and grading are determined
self assessment questionnaires based on GCG rating theme.
from the self assessment results, completion of documents,
papers and observations. From these results, Telkom has once
2. The document observation phase, when the Company
again received the title of The Most Trusted Company, with a
submits their policies, procedures, and other evidence that
total score of 91.20. The GCG assessment theme of 2016/2017 is
reflects GCG implementation in the Company.
“Change Management in GCG Framework”.
CORPORATE GOVERNANCE STRUCTURE
We have a governance structure consisting of Main Organs and Supporting Organ, in accordance to the Law of the Republic of Indonesia
No.40/2007 regarding Limited Liability Company.
Main Organs of the Company consist of General Meeting of Shareholders (GMS), Board of Commissioners and Board of Directors. The
Company’s Supporting Organs consist of Audit Committee, Committee for Nomination & Remuneration, Committee for Planning and
Risk Evaluation & Monitoring, Corporate Secretary, Internal Auditor and Risk & Process Management Unit.
First Unit
General Meeting of Shareholders
(GMS)
DIRECTORS
BOARD OF
COMMISSIONERS
Corporate Secretary
Audit Committee
Internal Auditor
Risk & Management Unit
Supporting Unit
Committee for
Nomination & Remuneration
Committee for Planning and Risk
Evaluation & Monitoring
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PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights GENERAL MEETING OF SHAREHOLDERS (GMS)
3. Determination of the Company’s Net Income, including
dividend, in the financial year.
In accordance with the Company’s Articles of Association and
4.
The determination of remuneration for the members of the
the laws and regulations, we conduct the GMS as the highest
Board of Directors and Board of Commissioners.
governance organ that facilitates shareholders to make key
5.
The appointment of a Public Accounting Firm to Audit the
decisions and strategies. We hold an Annual GMS (AGMS) once
every year with the following regular discussion agenda:
Company’s Financial Statements, including Audit of Internal
Control over Financial Reporting and Appointment of a
Public Accounting Firm to Audit the Financial Statements of
1.
Approval of the Company’s Annual Report, including the
Partnership and Community Development Programs.
Board of Commissioners Supervisory Task Report.
2. Ratification of the Company’s Financial Statement and the
Annual Partnership and Community Development Program
Report, as well as the Exemption of Liabilities of the members
of the Board of Directors and Board of Commissioners.
AGMS RESOLUTION FOR 2015 FINANCIAL YEAR
The AGMS of the 2015 Financial Year was conducted on April 22, 2016. The agenda and status of the AGMS of the 2015 financial year
are as follows:
Agenda
AGMS Resolution
Status of the AGMS
Resolution
1
2
3
To approve the Annual Report of the Company which substantially have been presented in the Meeting
by the Board of Directors regarding the condition and operation of the Company for the Financial Year
2015 including the Board of Commissioners’ Supervision Duty Report for the Financial Year 2015.
Resolution effective
immediately.
Resolution effective
immediately.
To ratify:
a. The Company’s Financial Statements for the Financial Year 2015 which has been audited by
the Public Accountant Firm Purwantono, Sungkoro & Surja (a member firm of Ernst & Young
Global Limited) according to its report No.RPC 326/PSS/2016 dated February 26, 2016 stated
with opinion “the accompanying consolidated financial statements report present fairly, in
all material respects, the consolidated financial position of Perusahaan Perseroan (Persero)
PT Telekomunikasi Indonesia Tbk and its subsidiaries ended as of December 31, 2015 and the
financial performance in accordance with Indonesian Financial Accounting Standards”;
b. Partnership and Community Development Annual Report for the Financial Year 2015 which
compiled pursuant to Minister of State Owned Enterprise’s Regulation which is a comprehensive
accounting basis in addition to Indonesian Financial Accounting Principle that generally accepted
in Indonesia and have been audited by the Public Accountant Firm Purwantono, Sungkoro & Surja
(a member firm of Ernst & Young Global Limited) according to its report No.RPC-103/PSS/2016/
DAU dated January 27, 2016 stated with opinion “the accompanying financial statements
present fairly, in all material respects, financial position of Center for the Management of
Partnership and Community Development Program of Perusahaan Perseroan (Persero) PT
Telekomunikasi Indonesia Tbk dated December 31, 2015 and financial performance and cash
flow for the year ended on such date in accordance with the Non Publicly Accountable Entities
Financial Accounting Standards”.
c. Then, by the approval of the Company’s Annual Report including Supervisory Task of the Board
of Commissioner Report and the ratification of Financial Statement for the Financial Year 2015
and Annual Report on Partnership and Community Development Program for the Financial Year
2015, the Meeting hereby grant a full acquittal and discharge (volledig acquit et de charge) to
members of the Board of Directors dan the Board of Commissioners who serves in the Financial
Year 2015 consecutively for the managerial and supervisory actions of the Company as long as
those actions are not criminal act and those actions are reflected in the Company’s Annual Report,
Financial Statements (Consolidated) for Financial Year 2015 and Annual Report of Partnership
and Community Development for the Financial Year 2015.
To approve the enforcement of Minister of State Owned Enterprise’s Regulation No.PER-09/
MBU/07/2015 dated July 3, 2015 regarding Partnership Program and Community Development
Program as of the implementation of such regulation to become guidance for the Company in
conducting the Partnership and Community Development Program, with due regard to provision in
the field of Capital Market.
Has been followed-up.
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Resolution
• Dividend distribution
was conducted on May
21, 2015.
• The decision on reserve
effective immediately.
Agenda
4
AGMS Resolution
1.
To Approve and determine the appropriation of the Company’s net profit for the Financial Year
2015 in the amount of Rp15,488,659,107,742,- which will be allocated to:
a. Cash Dividend amounting to 50% of the net profit or in the amount of Rp7,744,304,153,942,-
in amount Rp78.864 per share based on the number of shares issued (excluding the shares
already bought back by the Company) as of the date of the Meeting date which numbers
98,198,216,600 shares;
b. Special Dividend amounting to 10% from net profit or in the amount of Rp1,548,880,470,432,-
in amount Rp15.773 per share based on the number of shares issued (excluding the shares
already bought back by the Company) as of the date of the Meeting date which numbers
98,198,216,600 shares;
c. Recorded as Retained Earning in the amount of 40% from net profit or amounting to
Rp6,195,474,483,368,- which will be used for the development of the Company.
2. To Approve the distribution of Cash Dividend and Special Dividend for the Financial Year 2015 will
be conducted with the following conditions:
a.
those who are entitled to receive Cash Dividend and Special Dividend are shareholders
whose names are recorded in the Company’s Shareholders on May 4, 2016 up to 16:00
Western Indonesia Standard Time;
b. Cash Dividend and Special Dividend shall be paid all at once on May 26, 2016.
3. To the Board of Directors granted the authorization to regulate further the procedure of dividend
distribution and to announce the same with due observance of the prevailing laws and regulations
in the stock exchange where the Company’s share are listed.
4. The amount of fund of Community Development Program of Telkom Group for the Financial Year
2016 of Rp82,000,000,000,- or equivalent with 0.53% of the Net Income for the Financial Year
2015 which source of funds taken from the Company’s burden.
5
6
1. To grant authority and authorize to the Board of Commissioners, with prior approval from Serie A
Dwiwarna shareholder to determine the amount of tantieme which will be given to the members
of Board of Director of the Company for the Financial Year 2015 and salary including facility and
allowances fo the financial year 2016.
Has been implemented.
2. To determine the amount of performance tantieme for the Board of Commissioners of the Company
for the Financial Year 2015 and honorarium including facility and allowances for the financial
year 2016 in accordance with prevalling laws, then authorize to the Board of Commissioners after
consultation with Serie A Dwiwarna shareholder to put in detail this Meeting’s resolution in a Board
of Commissioners’ Resolution in the name of General Meeting of Shareholder.
1. Reappointment of Public Accounting Firm Purwantono, Sungkoro & Surja (a member firm of Ernst
& Young Global Limited) to conduct an integrated audit of the Company for the Financial Year
2016 which include the audit of the Consolidated Financial Statements of the Company, and the
audit of the Internal Control Audit on Financial Reporting for the Financial Year 2016 and to audit
the Financial Statements of Partnership and Community Development Program for the Financial
Year 2016.
The PAF’s approval is
effective immediately.
2. Reappointment of Public Accounting Firm Purwantono, Sungkoro & Surja (a member firm of Ernst
& Young Global Limited) to audit the appropriation of funds for the Partnership and Community
Development Program for the Financial Year 2016.
3. To grant authority to the Boards of Commissioners to determine the amount of audit fee and other
terms and conditions of appointment of the relevant Public Accounting Firm.
4. To grant authority to the Board of Commissioners to appoint an alternate Public Accounting Firm
and determine the terms and conditions of its appointment; in the event the appointed Public
Accounting Firm can not perform or continue its duty for any reason including the agreement on
the amount for audit fee is unattainable.
7
1.
To approve granting the authority and authorize to the Board of Commissioners with prior
approval from Serie A Dwiwarna shareholder, in the case of the Board of Directors uses/diverts
Company’s Treasury Stock from Buy Back Share IV.
Has been implemented.
2. Utilization/diversion of Company’s Treasury Stock from Buy Back Share IV through the sales
either within or outside stock exchange does not require approval from General Meeting of
Shareholders in accordance with regulation in the field of Capital Market.
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8
AGMS Resolution
1. Honorably dismissal from their offices the following names:
Status of the AGMS
Resolution
Resolution effective
immediately.
a. Mr. HERI SUNARYADI as Director;
b. Mr. PARIKESIT SUPRAPTO as Independent Commissioner;
effective as of the close of the Meeting with appreciation for contribution of efforts and thoughts
during their term as the member of Board of the Commissioners and the Board of Directors of
the Company.
2. To assign Mr. MARGIYONO DARSASUMARJA from his office as Commissioner who was appointed
under resolution Annual General Meeting of Shareholders year 2015 PT Telkom Indonesia
(Persero) Tbk on the April 17, 2015 to become Independent Commissioner by continuing his term
of office.
3. To appoint the following names:
a. Mr. HARRY M ZEN as Director;
b. Mr. PONTAS TAMBUNAN as Commissioner;
with the term of office effective as of the close of the Meeting and will end as of close of the
fitfth Annual General Meeting of Shareholders without prejudice the right of General Meeting of
Shareholders to dismiss anytime.
4. For the members of the Board of the Commissioners and the Board of Directors who are appointed
as reffered in number 3 above who still serve in other positions that are prohibited under the
prevailing regulation to hold multiple offices with the position as member of the Board of
Commissioner and the Board of Directors of State Owned Enterprises, then the concerned must
resign from his position.
5. By the dismissal, assignment and appointment as stated in number 1 and 2 above, the composition
of the member of the Board of the Company are becomes as follows:
a. BOARD OF DIRECTORS:
• Mr. ALEX J. SINAGA - President Director;
• Mr. HARRY M. ZEN - Director;
• Mr. INDRA UTOYO - Director;
• Mr. MUHAMMAD AWALUDDIN - Director;
• Mr. HONESTY BASYIR - Director;
• Mr. HERDY ROSADI HARMAN - Director;
• Mr. ABDUS SOMAD ARIEF - Director;
• Mr. DIAN RACHMAWAN - Director.
b. BOARD OF COMMISSIONERS::
• Mrs HENDRI SAPARINI - President Commissioner;
• Mr. DOLFIE OTHNIEL FREDRIC PALIT - Commissioner;
• Mr. HADIYANTO - Commissioner
• Mr. PONTAS TAMBUNAN - Commissioner;
• Mr. MARGIYONO DARSASUMARJA - Independent Commissioner;
• Mr. RINALDI FIRMANSYAH - Independent Commissioner;
• Mrs PAMIJATI PAMELA JOHANNA WALUYO - Independent Commissioner;
6. To authorize with the right of substitution to the Board of Directors to state resolution adopted
in the Meeting into notarial deed and to appear before Notary or authorized official and to make
any adjustments or corrections which are necessary when required by the competent authority
for the purposes of implementation of the resolutions of the Meeting.
Note: All of the above AGMS resolutions are in line with the adopted agenda and is reflected in the AGMS invitation.
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Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices AGMS RESOLUTION OF 2016 FINANCIAL YEAR
In addition, we have conducted AGMS on 21 April 2017 for the performance of the financial year 2016 with details of the agenda and the
realization of the resolution of the AGMS of the financial year 2016 as follows:
Status of the AGMS
Resolution
Resolution effective
immediately.
Resolution effective
immediately.
• Dividend distribution was
conducted on May 26,
2017.
• The decision on reserve
effective immediately.
Agenda
AGMS Resolution
1
2
To approve the Annual Report of the Company including the Board of Commissioners’ Supervision Duty
Report for the Financial Year 2016, namely regarding the condition and operation and supervisory of
the Company as substantially have been presented in the Meeting by the Board of Directors and the
Board of Commissioners.
1. To ratify:
a. The Company’s Consolidated Financial Statements for the Financial Year 2016 which has
been audited by the Public Accountant Firm Purwantono, Sungkoro & Surja (a member firm
of Ernst & Young Global Limited) according to its report number RPC 3036/PSS/2017 dated
March 2, 2017 stated with opinion “the accompanying consolidated financial statements
report present fairly, in all material respects, the consolidated financial position of
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk and its subsidiaries ended
as of December 31, 2016 and the financial performance and consolidated casf flow for the
year ended on such date in accordance with Indonesian Financial Accounting Standards;
b. Partnership and Community Development Annual Report for the Financial Year 2016
which compiled pursuant to Minister of State Owned Enterprise’s Regulation which is a
comprehensive accounting basis in addition to Indonesian Financial Accounting Principle
that generally accepted in Indonesia and have been audited by the Public Accountant Firm
Purwantono, Sungkoro & Surja (a member firm of Ernst & Young Global Limited) according
to its report RPC-2925/PSS/2017 dated January 25, 2017 stated with opinion “the
accompanying financial statements present fairly, in all material respects, financial position
of Center for the Management of Partnership and Community Development Program of
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk dated December 31, 2016
and financial performance and cash flow for the year ended on such date in accordance with
the Non Publicly Accountable Entities Financial Accounting Standards;
2. Then, by the approval of the Company’s Annual Report for the Financial Year 2016 including
Supervisory Task of the Board of Commissioner Report and the ratification of Financial Statement
for the Financial Year 2016 and Annual Report on Partnership and Community Development
Program for the Financial Year 2016, the Meeting hereby grant a full acquittal and discharge
(volledig acquit et decharge) to members of the Board of Directors and the Board of Commissioners
who serves in the Financial Year 2016 consecutively for the managerial and supervisory actions of
the Company as long as those actions are not criminal act and those actions are reflected in the
Company’s Annual Report, Financial Statements (Consolidated) for Financial Year 2016 and Annual
Report of Partnership and Community Development for the Financial Year 2016.
3
1. To Approve and determine the appropriation of the Company’s net profit for the Financial Year
ended on the December 31, 2016 in the amount of Rp19,352,026,828,926,- (nineteen trillion three
hundred fifty two billion twenty six million eight hundred twenty eigh thousand and nine hundred
and twenty six Rupiah) which will be allocated to:
a. Dividend amounting to 60% of the net profit or in the amount of Rp11,611,211,188,567.60
(eleven trillion six hundred eleven billion two hundred eleven million one hundred eighty
eight thousand five hundred sixty seven point six zero Rupiah) including amount of Interim
Dividend which had been distributed to shareholders on the December 27, 2016 based on
the Board of Directors Meeting which had been approved by the Board of Commissioners on
the December 6, 2016 in amount Rp1,919,726,695,491.40 (one trillion nine hundred ninety
billion seven hundred twenty six million six hundred ninety five thousand and four hundred
ninety one point four zero Rupiah), therefore the amount of cash dividend will be distributed
to shareholders in amount of Rp9,691,484,493,076.18 (nine trillion six hundred ninety one
billion four hundred eighty four million four hundred ninety three thousand seventy six point
one eight Rupiah) and added special dividend of 10% or amount of Rp1,935,200,213,724.32
(one trillion nine hundred thirty five billion two hundred million two hundred thirteen
thousand seven hundred twenty four point three two Rupiah) distributed as cash dividend,
therefore dividend (either cash dividend and special dividend) to shareholders per shares of
Rp117.3675 (one hundred and seventeen point three six seven five Rupiah) and specifically
dividen for Government/Republic of Indonesia will be paid in accordance with prevailling
laws, with notes:
• State of Rp6,056,439,231,453.30 (six trillion fifty six billion four hundred thirty nine million
two hundred thirty one thousand four hundred fifty three point three zero Rupiah).
• Public of Rp5,570,245,475,347.20 (five trillion five hundred seventy billion two hundred
forty five million four hundred seventy five thousand three hundred forty seven point two
zero Rupiah)
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PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights Agenda
AGMS Resolution
Status of the AGMS
Resolution
b. 30% of Net Profit of the Company or amount of Rp5,805,615,426,634.10 (five trillion eight
hundred five billion six hundred fifteen million four hundred twenty six thousand six hundred
thirty four point one zero Rupiah) determined as Retairned Earning.
2. To Approve the distribution of Cash Dividend and Special Dividend for the Financial Year 2016 will
be conducted with the following conditions:
a.
those who are entitled to receive Cash Dividend and Special Dividend are shareholders whose
names are recorded in the Company’s Shareholders on May 5, 2017 up to 16:15 Western
Indonesia Standard Time;
b. Cash Dividend and Special Dividend shall be paid all at once on May 26, 2017.
3. To the Board of Directors granted the authorization to regulate further the procedure of dividend
distribution and to announce the same with due observance of the prevailing laws and regulations
in the stock exchange where the Company’s share are listed.
4
1.
To grant authority and authorize to series A Dwiwarna shareholder to determine the amount
of tantiem for financial year 2016 and to determine honorarium allowance, facility and other
incentive to members of the Board of Commissioners for financial year 2017.
Has been implemented.
5
6
7
2. To grant authority and authorize to the Board of Commissioners by first obtaining written
approval of series A Dwiwarna Shareholders to determine the amount of tantiem for financial year
2016 and to determine salary, allowance, facility and other incentive to members of the Board of
Directors for financial year 2017.
1. Reappointment of Public Accounting Firm Purwantono, Sungkoro & Surja (a member firm of Ernst
& Young Global Limited) to conduct an integrated audit of the Company for the Financial Year
2017 which include the audit of the Consolidated Financial Statements of the Company, and the
audit of the Internal Control Audit on Financial Reporting for the Financial Year 2017 and to audit
the Financial Statements of Partnership and Community Development Program for the Financial
Year 2017.
2. Reappointment of Public Accounting Firm Purwantono, Sungkoro & Surja (a member firm of Ernst
& Young Global Limited) to audit the appropriation of funds for the Partnership and Community
Development Program for the Financial Year 2017.
3. To grant authority to the Boards of Commissioners to:
a. to appoint an alternate Public Accounting Firm and determine the terms and conditions of its
appointment; in the event the appointed Public Accounting Firm can not perform or continue
its duty for any reason including the reason of prevailling law and the agreement on the
amount for audit fee is unattainable.
b. Determine the amount of audit fee and other terms and conditions of appointment of the
relevant Public Accounting Firm.
The PAF’s approval is effective
immediately.
To approve the ratification of Minister of State Owned Enterprise’s Regulation number PER-03/
MBU/12/2016 regarding amendment of Minister of State Owned Enterprise’s Regulation number
PER-09/MBU/07/2015 regarding State Owned Enterprise’s Partnership Program and Community
Development Program.
Has been followed-up.
In the First Part:
The meeting with the majority vote 79,071,727,019 (98.770%) of the total votes issued in the Meeting
resolved to approve amandment of the Articles of Association related with the right of serie A
Shareholder.
Resolution effective
immediately.
In the Second Part:
The meeting with the majority vote 79,071,727,020 (98.770%) of the total votes issued in the Meeting
resolved to approve amandment of the Articles of Association which is not related with the right of
serie A Shareholder.
Therefore in the seventh Agenda of the Meeting resolved:
1.
To approve amendment and/or adjustment standarization of the Articles of Association of public
State Owned Enterprise related with the change of right share of series A Dwiwarna by recompile
all of the Articles of Association, in accordance with Letter Minster of State Owned Enterprise as
proxy of shareholder seri A Dwiwarna.
2. To grant authority to shareholder seri A Dwiwarna to amend and revise to the provisions of the
Articles of Association of the Company as referred to in the event of any amendment and / or
revision to the provisions issued by the competent authority including the institutions relating
to the public company and / or shareholder series A Dwiwarna as necessary in the framework
of submission of reporting and / or approval of amendment of the Articles of Association to the
authorized institution.
3. To grant authority to the Board of Directors of the Company with rights of substitution to restate
amendment and/or adjusment of the Articles of Association of the Company into a notarial deed
and further submit application approval and/or notify amendment of Articles of Association of the
Company to the Minister of Law and Human Rights of the Republic of Indonesia and/or authorized
institution pursuant to the prevailing laws and regulations.
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AGMS Resolution
8
1. Confirmation Honorably dismissal from their offices the following names:
a. Mr. MUHAMMAD AWALUDDIN as Director as of September 9th 2016;
b. Mr. INDRA UTOYO as Director as of March 15th 2017; and
c. Mr. HONESTI BASYIR as Director as of April 20th 2017.
Status of the AGMS
Resolution
Resolution effective
immediately.
with appreciation for contribution of dedication and thoughts during their term as the member of
the Board of Directors of the Company.
2. Honorably dismissal Mr. HADIYANTO and Mr. PONTAS TAMBUNAN respectively as Commissioner
with appreciation for contribution of dedicaation and thoughts during their term as member of the
Board of Commissioner of the Company.
3. Changing of the nomenclature of the Board of Directors as follow:
a. President Director to become President Director;
b. Director to become Finance Director;
c. Director to become Consumer Service Director;
d. Director to become Human Capital Management Director;
e. Director to become Network & IT Solution Director;
f. Director to become Digital & Strategic Portfolio Director;
g. Director to become Wholesale & International Service Director; and
h. Director to become Enterprise & Business Service Director.
4. Divert task:
a. Mr. HARRY M ZEN formerly as Director to become Finance Director;
b. Mr. DIAN RACHMAWAN formerly as Director to become Enterprise & Business Service
Director;
c. Mr. HERDY ROSADI HARMAN formerly as Director to become Human Capital Management
Director; and
d. Mr. ABDUS SOMAD ARIEF formerly as Director to become Wholesale & International Service
Director.
5. To appoint the following names:
a. Mr. HADIYANTO as Commissioner;
b. Ms. DEVY W SURADJI as Commissioner;
c. Mr. CAHYANA AHMADJAYADI as Independent Commissioner;
d. Mr. MAS’UD KHAMID as Consumer Service Director;
e. Mr. ZULHELFI ABIDIN as Network & IT Solution Director; and
f. Mr. DAVID BANGUN as Digital & Strategic Portfolio Director.
with the term of office effective as of the close of the Meeting and ended at the closing of the fitfth
Annual General Meeting of Shareholders without prejudice to the rights of General Meeting of
Shareholders to dismiss at anytime.
6. For the members of the Board of Directors and the Board of Commissioners who are appointed
as reffered in number 5 above who still serve in other positions that are prohibited under the
prevailing regulation to hold multiple offices with the position as member of the Board of
Commissioner and the Board of Directors of State Owned Enterprises, then the concerned must
resign from his position.
7. By the dismissal, assignment and appointment as stated in number 1 and 2, 4 and 5 above
mentionded, then composition of the member of the Board of the Company are becomes as
follows:
a. Board of Directors
• Mr. ALEX J. SINAGA as President Director;
• Mr. HARRY M. ZEN as Finance Director;
• Mr. MAS’UD KHAMID as Consumer Service Director;
• Mr. HERDY ROSADI HARMAN as Human Capital Management Director;
• Mr. ZULHELFI ABIDIN as Network & IT Solution Director;
• Mr. DAVID BANGUN as Digital & Strategic Portfolio Director;
• Mr. ABDUS SOMAD ARIEF as Wholesale & International Service Director; and
• Mr. DIAN RACHMAWAN as Enterprise & Business Service Director.
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PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights Agenda
AGMS Resolution
Status of the AGMS
Resolution
b. Board of Commissioners
• Mrs. HENDRI SAPARINI as President Commissioner;
• Mr. DOLFIE OTHNIEL FREDRIC PALIT as Independent Commissioner;
• Mr. HADIYANTO as Commissioner;
• Ms. DEVY W. SURADJI as Commissioner;
• Mr. RINALDI FIRMANSYAH as Commissioner;
• Mr. MARGIYONO DARSASUMARJA as Independent Commissioner;
• Mrs. PAMIJATI PAMELA JOHANNA WALUYO as Independent Commissioner; and
• Mr. CAHYANA AHMADJAYADI as Independent Commissioner.
To authorize with the right of substitution to the Board of Directors to state resolution adopted in
the Meeting into notarial deed and to appear before Notary or authorized official and to make any
adjustments or corrections which are necessary when required by the competent authority for the
purposes of implementation of the resolutions of the Meeting.
Note: All of the above AGMS resolutions are in line with the adopted agenda and is reflected in the AGMS invitation.
167
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices THE BOARD OF COMMISSIONERS
We have a Board of Commissioners with collective duties and responsibilities to supervise the Board of Directors in performing its
duties and responsibilities and advise the Board of Directors on the implementation of the business and the application of Good
Corporate Governance (GCG) principles.
WRITTEN POLICY CONCERNING DIVERSITY OF THE BOARD OF COMMISSIONERS
We guarantee non-discrimination in the workplace, including in the selection and appointment of members of the Board of
Commissioners. We apply this to meet the principles of fairness in the application of GCG and UU No.39 Year 1999 on Human Rights.
Although we do not yet have a written policy on the diversity of the Board of Commissioners, we ensure that members of the Board of
Commissioners are selected and appointed based on their expertise, proficiency, and integrity.
Both men and women have equal opportunity to be appointed as members of the Board of Commissioners as long as they meet the
stipulated requirements and conditions. As of December 31, 2017, we have men and women members of the Board of Commissioners with
the necessary expertise and proficiency, including economics, public policy, media, telecommunications, marketing, and public relations.
Table of The Diversity of Board of Commissioners, per 31 December 2017
No
Name
Position
Gender
Background of Expertise & Skill
Level of
Education
1
2
3
4
5
6
7
Hendri Saparini
President
Commissioner
Rinaldi Firmansyah
Commissioner
Hadiyanto
Dolfie Othniel Fredric Palit
Margiyono Darsasumarja
Pamijati Pamela Johanna Waluyo
Cahyana Ahmadjayadi
Commissioner
Independent
Commissioner
Independent
Commissioner
Independent
Commissioner
Independent
Commissioner
Female
Economics, Development Policy
Doctor
Male
Male
Male
Engineering, Telecommunications,
Business and Finance
Business and Finance
Doctor
Doctor
Public Policy and Economic Crime
Bachelor
Male
Media, Media and Internet Law
Master
Female
Sales, Marketing, Public Relations
Master
Male
Engineering, Telecommunications, Law
and Content Application
Doctor
THE COMPOSITION OF BOARD OF COMMISSIONERS
Pursuant to the resolutions of the Annual General Meeting of Shareholders (AGMS) held on 21 April 2017, we changed the
composition of the Board of Commissioners. Hadiyanto whose term of office ended at the 2017 AGMS was reappointed as
Commissioner until the 2022 AGMS. Then, Pontas Tambunan was honorably dismissed from his position as commissioner. The
2017 AGMS decided to appoint Devy W. Suradji and Cahyana Ahmadjayadi as Commissioner and Independent Commissioner,
with a term of office until the 2022 AGMS. However, on December 22, 2017, Devy W. Suradji was appointed to the Board of
Directors of Perusahaan Perseroan (Persero) PT Angkasa Pura I based on the resolutions of the General Meeting of Shareholders
of Limited Perusahaan Perseroan (Persero) PT Angkasa Pura I.
Table of Composition of the Board of Commissioners of PT Telkom per December 31, 2016
No
Name
Title
Hendri Saparini
President Commissioner
Dolfie Othniel Fredric Palit
Commissioner
Hadiyanto
Pontas Tambunan
Commissioner
Commissioner
Margiyono Darsasumarja
Independent Commissioner
Rinaldi Firmansyah
Independent Commissioner
Gender
Female
Male
Male
Male
Male
Male
Pamijati Pamela Johanna Waluyo
Independent Commissioner
Female
1
2
3
4
5
6
7
168
Appointment
Discharge Date
December 19, 2014
December 19, 2014
May 11, 2012
April 22, 2016
April 17, 2015
April 17, 2015
April 17, 2015
AGMS 2019
AGMS 2019
AGMS 2017
AGMS 2017
AGMS 2020
AGMS 2020
AGMS 2020
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights 1
2
3
4
5
6
7
1
2
3
4
Table of Composition of the Board of Commissioners of PT Telkom per December 31, 2017
No
Name
Title
Hendri Saparini
Rinaldi Firmansyah
Hadiyanto
President Commissioner
Commissioner
Commissioner
Dolfie Othniel Fredric Palit
Independent Commissioner
Margiyono Darsasumarja
Independent Commissioner
Gender
Female
Male
Male
Male
Male
Appointment
Discharge Date
December 19, 2014
AGMS 2019
April 17, 2015
April 21, 2017
AGMS 2020
AGMS 2022
December 19, 2014
AGMS 2019
April 17, 2015
Pamijati Pamela Johanna Waluyo
Independent Commissioner
Female
April 17, 2015
Cahyana Ahmadjayadi
Independent Commissioner
Male
April 21, 2017
AGMS 2020
AGMS 2020
AGMS 2022
Double Position of the Board of Commissioners
Some members of Telkom’s Board of Commissioners hold more than one positions, either in Telkom or in Telkom’s subsidiary. Complete
information regarding the double position of the Board of Commissioners may be seen in the following table:
Table of Double Position of Telkom’s Board of Commissioners
No
Name
Hendri Saparini
Rinaldi Firmansyah
Title
Other Title
President Commissioner
None
PT Telkom
Commissioner
1. Member Audit Committee (Non Voting
Hadiyanto
Commissioner
Member)
2. Member KNR
1. Member KNR
2. Chairman KEMPR
Dolfie Othniel Fredric Palit
Independent Commissioner
1. Member Audit Committee
2. Member KNR
3. Member KEMPR
5
Margiyono Darsasumarja
Independent Commissioner
1. Chairman Audit Committee
2. Member KNR
3. Member KEMPR
6
7
Pamijati Pamela Johanna Waluyo
Independent Commissioner
1. Chairman KNR
2. Member KEMPR
Cahyana Ahmadjayadi
Independent Commissioner
1. Member Audit Committee
2. Member KNR
3. Member KEMPR
Remarks: KEMPR (Committee for Planning and Risk Evaluation and Monitoring), KNR (Committee for Nomination and Remuneration)
Subsidiary
None
None
None
None
None
None
None
169
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices CRITERIA FOR SELECTING MEMBERS OF THE
BOARD OF COMMISSIONERS
All of these requirements must be fully met by all of the
Independent Commissioners during their terms of office.
We elect and appoint members of the Board of Commissioners
under the Company’s Articles of Association, who at the time of
appointment and during their terms of office are required to:
1. Have good character, moral, and integrity;
2. Legally capable;
3. Within 5 (five) years prior to the appointment and during their
terms of office:
a. Have not been declared insolvent;
In accordance with the Articles of Association of the Company,
the number and conditions of Independent Commissioners are
subject to the regulation applicable to the capital market, which
in this case is OJK Regulation No. 33/POJK.04/2014 concerning
the Board of Directors and the Board of Commissioners of Issuers
or Public Companies. Article 20 paragraph (3) stipulates that if
the Board of Commissioners consists of more than 2 members,
the number of Independent Commissioners must be at least 30%
b. Have not served as members of any Board of Directors
of the total members of the Board of Commissioners.
and/or Board of Commissioners who were found guilty of
causing any company to be declared insolvent;
c. Have not been sentenced for committing any criminal act
that is detrimental to state finances and/or related to the
financial sector; or
d. Have not served as members of any Board of Directors
and/or Board of Commissioners who during their terms of
office:
• Have failed to hold an AGMS;
• Have caused their accountability as members of any such
Board of Directors and/or Board of Directors to be rejected
by the GMS or have failed to provide accountability as
members of any such Board of Directors and/or Board of
Commissioners to the GMS; or
• Have caused any company that obtained any permit,
approval, or registration from the OJK to fail to satisfy
its obligation to submit an Annual Report and/or
financial statements to the OJK;
4. Are committed to complying with the applicable laws and
regulations; and
5. Have knowledge and/or expertise required by the Company.
All of these requirements must be met without exception by all of
the members of the Board of Commissioners.
INDEPENDENCE
INDEPENDENT COMMISSIONER
STATEMENT
OF
EACH
In performing their duties and responsibilities, each Independent
Commissioner must maintain their independence. Therefore, we
require Independent Commissioners to sign the Integrity and
Independence Pact at the time of appointment, which will be
renewed annually. By 2017, all of our Independent Commissioners
have declared such written independence commitment.
Table of Independence Statement of Each Independent
Commissioner
Name
Position
Date of Signing
Status
Dolfie Othniel Fredric Palit
Independent
Commissioner
April 21, 2017
First Time as
Independent
Commissioner
Margiyono Darsasumarja
Independent
Commissioner
April 21, 2017
Renewal
Pamijati Pamela Johanna
Waluyo
Independent
Commissioner
April 21, 2017
Renewal
Cahyana Ahmadjayadi
Independent
Commissioner
April 21, 2017
First Time
CRITERIA FOR SELECTING
COMMISSIONERS
INDEPENDENT
THE BOARD CHARTER OF THE BOARD OF
COMMISSIONERS
In addition to referring to the criteria for selecting members of
the Board of Commissioners, we elect and appoint Independent
Commissioners under the following additional criteria:
1. Be not any persons who have been employed or had duties
and responsibilities to plan, lead, control, or supervise the
Company’s operations for the past six months, except for
the reappointment as Independent Commissioners for the
following period;
2. Have no share whether directly or indirectly in the Company;
3. Have no affiliation with the Company, any member of the
Board of Commissioners, member of the Board of Directors,
or Shareholder of the Company; and
4. Have no business relationship whether directly or indirectly
with the Company’s business operations.
We adopt a Board Charter of the Board of Commissioners as a
reference for the Board of Commissioners in performing its duties
to conform with GCG practices under Decision Letter of the Board
of Commissioners No. 16/KEP/DK/2013 dated December 17, 2013.
The Charter of the Board of Commissioners contains the code of
conduct, authority, duties, responsibilities, obligations, division of
tasks, meetings, provisions on conflict of interest, shareholding,
and the relationship of the Board of Commissioners to the Board
of Directors and the GMS. In addition, in carrying out its duties
and functions, the Board of Commissioners are also guided by the
Articles of Association and the joint decree between the Board of
Commissioners and the Board of Directors.
170
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
AUTHORITIES, DUTIES, AND RESPONSIBILITIES
OF THE BOARD OF COMMISSIONERS
The Board of Commissioners has the following duties and
responsibilities:
1. To conduct the supervision and accountable for the supervision
to the management policies, the performance of management
in general, either regarding the Company or the Company’s
business, give advice to the Board of Directors.
5. To propose to GMS, through the Board of Directors, the
appointment of public accountant to conduct the audit
towards Company’s Financial Report including the audit
for the internal control over financial report, pursuant to
the prevailing provisions from the capital market authority
whereby the Company’s shares are listed and/or registered.
6. To give the report regarding the supervision duties that have
been conducted in the financial year that has just ended to
GMS.
2. To supervise the policies of Company’s management
7. To conduct other supervisory duties as determined by GMS.
conducted by the Board of Directors as well as to give advice
to the Board of Directors including to give advice regarding
the development plan of the Company, annual plan and
budget of the Company, the implementation of the provisions
in Articles of Association of the Company and resolutions
of GMS as well as the provisions of laws and regulations by
taking into account the Company’s interest.
3. To organize the annual GMS and other GMS pursuant to its
authority as stipulated under the laws and regulations and
Articles of Association.
4. To conduct the duties, authorities and responsibilities
pursuant to the provisions of laws and regulations, Articles of
Association of the Company and GMS resolutions.
Any member of Board of Commissioners shall be
jointly
responsible for all Company’s losses caused by the mistake
or negligence of the member of Board of Commissioners in
performing the duties. Members of Board of Commissioners shall
not be liable for the Company’s loss if they can prove that:
1. Such loss is not caused by their mistake or negligence;
2. They have performed in good faith, full responsibility, and
prudentially for the interest and based on the purpose and
objective of the Company;
3. They do not have any conflict of interest either directly or
indirectly with the management activities causing the loss;
and
5. To conduct the duties and responsibilities in good faith, full
4. They have taken the action to prevent the occurrence or
responsibility, and prudentially.
continuation of such loss.
6. To scrutinize and review the Annual Report prepared by the
Board of Directors as well as to sign the said Annual Report.
7. To form the Audit Committee and other committee to assist
the Board of Commissioners in performing its duties and
responsibilities.
8. To evaluate the performance of the committee that assists
the performance of its duties and responsibilities at the end of
financial year.
THE BOARD OF COMMISSIONERS’ MEETING
Based on the Regulation of OJK No.33/POJK.04/2014 Article
31, the Board of Commissioners shall be obliged to conduct
the meeting for at least 1 (one) time within 2 (two) months or
at any time as deemed necessary. The quorum for all of Board
of Commissioners’ meeting shall be the presence of more than
half of total members of Board of Commissioners. In addition,
Then, in addition to performing its duties and responsibilities, the
Board of Commissioners shall also be obliged to organize joint
Board of Commissioners also has the following powers:
1. To give the opinion and inputs to AGMS regarding the periodic
report and other report from the Board of Directors.
2. To supervise the implementation of working plan and budget
of the Company (including the investment budget) for the
previous financial year as well as to submit the assessment as
well as the opinion to AGMS.
3. To monitor the development of Company’s activities and
in the event that the Company indicates the degradation
symptom, to immediately request the Board of Directors to
announce it to the shareholders and to give inputs regarding
the improvement steps to be taken.
4. To give opinions and inputs to GMS regarding any other
important issue deemed important for the management of the
Company.
meeting with the Board of Directors at least 1 (one) time within
4 (four) months and it may also be held at any time as deemed
necessary. Joint meeting by the Board of Directors and Board of
Commissioners within the Company shall also be referred to as
the Joint Meeting.
The mechanism in making the resolutions in the Board of
Commissioners’ meeting shall be based on the deliberation
to reach a consensus. If a consensus cannot be reached, then
the resolution shall be made based on the majority votes
from members of Board of Commissioners that are present
or represented in the meeting. If the votes are equal, then the
resolution shall be made based on the opinion of the Chairman
of Meeting.
Throughout 2017, the Board of Commissioners has convened
21 internal meetings and 13 joint meetings between the Board
of Commissioners and the Board of Directors. The following
tables describe the agenda and the frequency of attendance of
members of the Board of Commissioners in the meetings.
171
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices Table of the Agenda and Attendance in the Board of Commissioners’ Meetings
No
1.
2.
3.
Date
Agenda/Discussion of the Meeting
Board of Commissioners present at the Meeting
HS
HD
PT
DWS
DOFP MGD
RF
PJW
CA
Wednesday,
January 18, 2017
1. Discussions on the Strategic Approval
of the Fit Project
2. Update on the Integrated Audit of the
√
2016 Financial Year
3. Miscellaneous
Friday, February
3, 2017
Proposed Candidate of Telkom’s Board of
Directors
√
Wednesday,
February 8, 2017
1. Approval Request
for the Release
Commitment Budget Capex Phase 1 of
2017
-
-
-
N/A
√
N/A
2. Re-explanation of the Fit Strategic
√
√
√
N/A
Project Approval
3. Telkom Board of Directors Member
Nomination
-
-
-
√
√
√
√
√
N/A
√
N/A
√
√
√
N/A
4.
Friday, February
24, 2017
1. Extension of Committee Membership
and Committee Staff
2. Recommendation
regarding
Increase of the Secretariat Staff
Pay
3. Determination of Moving Date to TLT
4. Progress Update on Strategic Project
Thursday, March
23, 2017
1. Recommendations regarding Change in
Telkomsel’s Management
Wednesday, April
5, 2017
2. Approval Request on Strategic Fit
Project
1. Determination of GMS Chairmanship of
2017.
2. Recommendation
Remuneration
Committee of 2017
of
regarding
the
Company
the
5.
6.
3. Recommendations on Remuneration
Increase for Double Position of Board of
Directors
7.
Thursday, April
26, 2017
1. Recommendation on Changes to the
Audit Committee Membership.
2. Recommendation on Changes
to
the Nomination and Remuneration
Committee Membership
3. Miscellaneous
8.
Wednesday, May
31, 2017
1. Discussions on CSS Ratification Date
Change.
√
√
-
-
-
N/A
-
√
√
√
N/A
-
N/A
√
√
√
-
N/A
√
√
-
N/A
√
√
√
√
N/A
√
-
N/A
√
√
√
√
-
√
2. Changes to the Company’s Articles of
Association Threshold
√
√
N/A
√
3. DSP Director Project Briefing
4. Miscellaneous
9.
Tuesday, June 13,
2017
1. Discussions on the Final Threshold of
the Articles of Association
10.
11.
12.
Wednesday, July
12, 2017
Monday, July 31,
2017
Wednesday,
August 16, 2017
2. Miscellaneous
1. Submission of CSS Draft 2018-2022.
2. Miscellaneous
1. Submission of CSS Draft 2018-2022.
2. Miscellaneous
Remuneration
√
√
√
√
√
√
√
√
N/A
N/A
N/A
N/A
√
√
-
-
-
-
-
-
-
√
√
√
√
√
√
√
√
√
√
-
-
√
√
√
√
√
√
√
√
172
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
Date
Agenda/Discussion of the Meeting
Board of Commissioners present at the Meeting
HS
HD
PT
DWS
DOFP MGD
RF
PJW
CA
No
13.
14.
15.
16.
Monday,
September 4,
2017
Wednesday,
September 13,
2017
Monday, October
2, 2017
Discussions
Strategic Fit Project
regarding Approval
of
1. Discussions on the Final Approval
regarding Telkom Project
2. Transfer of Remuneration Consultant
3. Miscellaneous
1. Extension of Work Tenure for Board of
Commissioner Staff
2. Miscellaneous
Thursday, October
12, 2017
1. Discussions on the Final Approval for
Strategic Fit Project
17.
Wednesday,
November 1, 2017
2. Submission of Board of Commissioner
Resolution
of
Assignment for Managers of Subsidiary
Companies Requiring the Approval of
Category A Dwiwarna Shareholders
regarding Method
1. Submission of RKAP 2018 First Draft.
2. Discussions on
Strategic Project
3. Miscellaneous
the Approval
for
18.
19.
Thursday,
November 2, 2017
Discussions on the Approval of Strategic
Project
Tuesday, 28
November 2017
1. Submission of the 2018 Board of
Commissioners Secretariat Budget
Plan
2. Submission of the Date for the Fit and
Proper Test for the President Director
Candidate of PT Daya Mineral (Mitratel)
20. Wednesday,
1. Approval on the Ratification of the 2018
December 6, 2017
RKAP
2. Discussions on
the Approval
for
Strategic Fit Project
21.
Tuesday,
December 19, 2017
1. Recommendation on the Adjustment of
Stipends for PDLN
2. Submission of the MISD Application.
3. Mitratel President Director Candidate
4. Discussions on
the Approval
for
Strategic Fit Project
-
-
-
-
-
-
-
√
-
√
√
√
-
√
√
√
√
√
√
√
√
√
√
√
√
√
√
-
√
√
√
√
√
√
√
√
√
√
√
√
N/A
N/A
√
N/A
-
-
-
√
-
N/A
√
√
√
√
√
√
N/A
N/A
√
√
N/A
√
-
-
-
N/A
√
√
√
√
√
√
√
√
N/A
-
-
√
√
-
√
Total Attendances
Total Meetings
Attendance Level of the Board of Commissioners (%)
21
21
100
12
21
57
2
6
33
9
15
60
4
21
19
20
21
95
17
21
81
18
21
86
15
15
100
Remarks: HS (Hendri Saparini), HD (Hadiyanto), PT (Pontas Tambunan), DWS (Devy W. Suradji), DOFP (Dolfie Othniel Fredric Palit), MGD (Margiyono
Darsasumarja), RF (Rinaldi Firmansyah), PJW (Pamijati Pamela Johanna Waluyo), CA (Cahyana Ahmadjayadi).
173
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices Table of Agenda and Board of Commisioner’s Attendance of The Joint Meeting
Date
Agenda/Discussion of the Meeting
Board of Commissioners who were present
HS
HD
PT
DWS
DOFP
MGD
RF
PJW
CA
No
1
Tuesday, January 24,
2017
1. Company
Performance
for
December 2016
2. Progress
Update
regarding
Integrated Audit for the 2016
Financial Year
2
Friday, February 24, 2017
1.
IFAS Integrated Audit 2016 Sign-Off
2. Company
Performance
for
January 2017
3
Thursday, March 23, 2017
1. Company
Performance
for
Tuesday, April 25, 2017
February 2017
2. Elaboration on the Implementation
of PMK No. 213/2016 at Telkom
Company Performance
2017
for March
Wednesday, May 24, 2017 Company Performance for April 2017
Wednesday, June 21, 2017 Company Performance for May 2017
Monday, 31 July 2017
1. Company Performance for June
Thursday, August 24,
2017
Wednesday, September
20, 2017
2017
2. Ratification of CSS 2018-2022
Company Performance for July 2017
1. Company Performance for August
2017
2. Miscellaneous
Tuesday, October 24,
2017
Company Performance for September
2017
Tuesday, November 28,
2017
1. Company
Performance
for
October 2016
2. Submission of RKAP Plan for 2017
Friday, December 8, 2017
Ratification of 2018 RKAP
Tuesday, December 19,
2017
Company Performance for November
2017
4
5
6
7
8
9
10
11
12
13
Total Attendances
Total Meetings
Attendance Level of the Board of Commissioners (%)
√
√
√
√
√
√
√
√
√
√
√
√
√
13
13
100
-
-
-
-
√
√
√
√
√
√
√
√
√
9
13
69
√
N/A
-
N/A
√
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2
3
67
√
-
-
-
√
-
-
√
√
-
4
10
40
-
-
√
-
√
-
-
-
-
√
-
-
-
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
3
13
23
13
13
13
13
100
100
√
N/A
√
N/A
-
-
√
√
√
√
√
√
-
√
-
9
13
69
N/A
√
√
√
√
√
√
√
√
√
√
10
10
100
Remarks: HS (Hendri Saparini), HD (Hadiyanto), PT (Pontas Tambunan), DWS (Devy W. Suradji), DOFP (Dolfie Othniel Fredric Palit), MGD (Margiyono
Darsasumarja), RF (Rinaldi Firmansyah), PJW (Pamijati Pamela Johanna Waluyo), CA (Cahyana Ahmadjayadi).
174
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights Table of Agenda and Board of Directors’ Attendance of The Joint Meeting
No
Date
Agenda/Discussion of the Meeting
1
2
3
4
5
6
7
8
9
10
11
12
13
Tuesday, January
24, 2017
1. Company Performance for December
2016
2. Progress Update regarding Integrated
Audit for the 2016 Financial Year
Friday, February 24,
2017
1.
IFAS Integrated Audit 2016 Sign-Off.
2. Company Performance for January
2017
Thursday, March 23,
2017
1. Company Performance for February
2017
2. Elaboration on the Implementation of
PMK No. 213/2016 at Telkom
Company Performance for March 2017
Company Performance for April 2017
Company Performance for May 2017
Tuesday, April 25,
2017
Wednesday, May 24,
2017
Wednesday, June
21, 2017
Monday, 31 July 2017
1. Company Performance for June 20177
Thursday, August
24, 2017
Wednesday,
September 20, 2017
Tuesday, October
24, 2017
Tuesday, November
28, 2017
Friday, December
8, 2017
Tuesday, December
19, 2017
2. Ratification of CSS 2018-2022
Company Performance for July 2017
1. Company Performance for August 2017
2. Miscellaneous
Company Performance for September 2017
1. Company Performance for October 2016.
2. Submission of RKAP Plan for 2017
Ratification of 2018 RKAP
Company Performance for November 2017
Board of Directors who were present
PD
Dir.
NITS
Dir.
WINS
Dir.
EBIS
Dir.
KEU
Dir.
HCM
Dir.
CONS
Dir.
DSP
√
√
√
√
√
√
√
√
-
-
√
√
√
√
√
-
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
-
√
√
√
√
√
√
√
√
√
√
√
√
-
√
√
√
√
√
√
√
√
√
√
√
√
√
-
√
√
√
√
√
√
-
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
Total Attendances
Total Meetings
Attendance Level of the Board of Commissioners (%)
11
13
85
12
13
92
12
13
92
12
13
92
13
13
100
11
13
85
13
13
13
13
100
100
Remarks: PD (President DIrector), Dir. NITS (Director of Network, IT, & Solution), Dir. WINS (Director of Wholesale and International Service), Dir. EBIS
(Director of Enterprise & Business Service), Dir. KEU (Director of Finance), Dir. HCM (Director of Human Capital Management), Dir. CONS (Director of
Consumer Service), dan Dir. DSP (Director of Digital & Strategic Portfolio).
ASSESSMENT OF THE PERFORMANCE OF THE
BOARD OF COMMISSIONERS
ASSESSMENT OF THE COMMITTEE UNDER THE
BOARD OF COMMISSIONERS
The Shareholders shall assess the performance of the Board
of Commissioners during the current Financial Year based on a
report of performance of the Board of Commissioners accounted
for in the AGMS.
The criteria used to assess are performance report of the Board
of Commissioners that are accounted for in the Company’s
Annual General Meeting of Shareholders. Through the report
Shareholders conduct an assessment of the performance of the
Board of Commissioners during the current financial year. The
party conducting the assessment of the Board of Commissioners
of the Company is the Shareholder through the Annual General
Meeting of Shareholders of the Company.
The Board of Commissioners has been assisted by a number of
committees, including the Audit Committee, the Committee for
Nomination and Remuneration, and the Committee for Planning
and Risk Evaluation and Monitoring (KEMPR). In 2017, the Audit
Committee assisted the Board of Commissioners in overseeing
the audit process conducted by independent auditors. In addition,
the Audit Committee also provided very good assistance in
evaluating and providing recommendations on both internal and
external audit results.
In addition, The Committee for Nomination and Remuneration
(KNR) assisted the Board of Commissioners in supporting
the Board of Directors in making strategic decisions. The
Committee has performed its responsibilities well in providing
recommendations related to the nomination and remuneration of
the Board of Directors and the top management.
175
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices Meanwhile, the Committee for Planning and Risk Evaluation and Monitoring (KEMPR) assisted the Board of Commissioners in business
planning and risk management. With the assistance of the Committee, the Board of Commissioners could give considerations to the
Board of Directors on Telkom’s long-term business continuity, including the Company’s decisions on Mergers & Acquisitions (M&A).
BOARD OF COMMISSIONER REMUNERATION POLICY
KNR* by the instruction from
Board of Commissioners create
remuneration draft. The Result
will be decide in AGMS
1
3
KNR ask Independent Party for
Suggestion
2
Independent Party give its
suggestion to KNR
5
4
AGMS
Board of Commissioners
Remuneration Mechanism and
Procedure
*KNR : Committee for Nomination and Remuneration
We determine the remuneration of the Board of Commissioners
For 2017, the total remuneration paid to the entire Board of
through the following procedures:
1. The Board of Commissioners requests the KNR to draft a
Commissioners was Rp76.3 billion. Taxes from remuneration
borne by our Company amounted to Rp4.9 billion. The table
below sets forth the remuneration that our Commissioners
remuneration proposal for the Board of Commissioner.
received in 2017:
2. The Committee for Nomination and Remuneration requests
an independent party to draw up a framework on the
Table on the Recapitulation of Remuneration for Telkom’s
remuneration of the Board of Commissioner.
Board of Commissioners
3. The Committee for Nomination and Remuneration proposes
the remuneration to the Board of Commissioners.
4. The Board of Commissioner proposes remuneration for the
Board of Commissioner the GMS.
Value (Rp million)
Board of Commissioners
Salary & and
other Wages
Bonuses
Total
5. The GMS delegates authority and power to the Board
Hendri Saparini
of Commissioners with the prior approval of Series A
Rinaldi Firmansyah
Shareholders to determine the remuneration for the Board of
Commissioner.
Hadiyanto
Pontas Tambunan (4)
1,326
10,518
11,844
1,194
1,194
9,408
10,602
9,464
10,658
311
6,288
6,599
Margiyono Darsasumarja
1,194
9,408
10,602
Dolfie Othniel Fredric
Palit
Pamijati Pamela Johanna
Waluyo
Cahyana Ahmad Jayadi (3)
Devy W. Suradji (2)
Parikesit Suprapto (5)
1,194
9,466
10,660
1,194
9,408
10,602
820
820
311
311
1,131
1,131
-
2,564
2,564
Remarks:
(1) “THR” refers to tunjangan hari raya or religious holiday allowance
(2) Since the AGMS on April 21, 2017 up to December 22, 2017
(3) Since the AGMS on April 21, 2017
(4) Up to AGMS on April 22, 2017
(5) Up to AGMS on April 22, 2016
The structure of the remuneration of the Board of Commissioners
is governed by the provisions of the Regulation of the State
Minister for State Owned Enterprises No.PER-04/MBU/2014 on
Guidelines for the Determination of Income for Directors, Board
of Commissioner and Board of Trustees of SOE’s.
Based on the said regulation, the income component for members
of the Board of Commissioners consists of:
1. Salaries;
2. Allowances;
3. Facilities; and
4. Bonus/Incentive.
176
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights THE BOARD OF COMMISSIONERS PARTICIPATION
IN BPJS KESEHATAN PROGRAM
ASSESSMENT OF DIRECTORS’ PERFORMANCE
We use a balance scorecard with four main measurement
We held a discussion on the follow up of SOE Minister’s Letter
aspects, namely financial, customer, internal business process,
Number SE-06/MBU/10/2017 regarding SOE Participation in the
and learning and growth in the implementation of an assessment
National Security Agency Operation Program. In principle, we
of the performance of members of the Board of Directors. In
always support the Government to realize its programs, including
addition, we also use criteria based on three KPI elements that
the National Health Insurance Program. We then decided to
are shared KPI, common KPI, and specific KPI.
involve all Directors and members of the Board of Commissioners
and their families to participate in BPJS Kesehatan Program.
Shared KPI is a KPI with the same naming, target, realization
and achievement for all Directors. Common KPIs are KPIs with
the same naming and targets, but different realizations and
achievements for each Board of Directors. Specific KPI is a
different KPI for each Board of Directors and is a specific program
that becomes the main task and priority of each Director and
Directorate he leads.
Assessment on the performance of the Board of Directors shall
be conducted by the Board of Commissioners or by the GMS, with
reference to the achievement of the Key Performance Indicator
(“KPI”) of the Board of Directors in the implementation of its
duties and responsibilities in accordance with the Company’s
Articles of Association and achievement of the realization of the
RKAP. Assessment on the performance of the Board of Directors
is initiated by filling out the realization of Contract Management
(“KM”) online and followed up by face-to-face meetings for the
clarification process and final performance final assignment
submitted to the Performance Committee and President
Director for final determination and submitted to the Board of
Commissioners.
Furthermore, we also evaluate the performance of the Board of
Directors based on Criteria for Superior Performance Appraisal
(“KPKU”) of SOE’s. KPKU is the criterion of performance
superiority assessment based on Malcolm Baldrige Criteria for
Performance Excellence (MBCFPE). In 2017, the performance of
the Board of Directors is again assessed by the team appointed
by the Ministry of SOE’s to assess the performance advantage of
the SOE’s KPKU. The results of the assessment in the last three
years showed a significant increase in performance.
Table of KPKU Results Assessment Year 2014-2017
Year
2014
2015
2016
2017
Score
667
722.25
730.5
746.50
177
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices AUDIT COMMITTEE
COMPOSITION OF THE AUDIT COMMITTEE
Pursuant to Financial Services Authority (OJK) Regulation
In accordance with the OJK Regulation and the US SEC, the Audit
No.55/POJK.04/2015 dated December 23, 2015 and the US
Committee shall consist of at least three members, one of whom
SEC Exchange Act 10A-3 and in compliance with the principles
is an Independent Commissioner acting as chairperson. The
of good corporate governance (GCG) and other regulations, we
remaining two members shall be independent.
have an Audit Committee which runs its functions accordingly.
The Audit Committee assists the Board of Commissioners in
carrying out its oversight function in accordance with the Audit
Committee Charter last adjusted in 2013 by Decision of the Board
of Commissioners No.07/KEP/DK/2013 dated July 22, 2013.
Pursuant to the resolutions of the 2017 AGMS dated April 21,
2017 which stipulate changes to the composition of the Board
of Commissioners, we also adjusted the composition of the
Audit Committee under Decision of the Board of Commissioners
No.05/KEP/DK/2017 dated April 28, 2017 on the Composition
In relation to OJK Regulation No.55/POJK.04/2015 dated
of the Audit Committee of Perusahaan Perseroan (Persero) PT
December 23, 2015 on the Establishment and Guidelines of
Telekomunikasi Indonesia Tbk, as follows:
Implementation of the Works of Audit Committee, we have
conducted an internal review. So far, we have not found any
significant matters that need to be re-adjusted even though our
Audit Committee Charter was last adjusted in 2013.
Table of the Composition of Audit Committee Per December 31, 2017
Title
Chairman
Name
Duplicate Position Status
Basis of Appointment
Margiyono Darsasumarja*
Independent Commissioner
of
Decision
Commissioners
DK/2017 dated April 28, 2017.
Board
of
No.05/KEP/
the
Secretary
Tjatur Purwadi
Independent member
Member
Rinaldi Firmansyah*
Commissioner/
Non Voting Member
Dolfie Othniel Fredric Palit*
Independent Commissioner
Cahyana Ahmadjayadi*
Independent Commissioner
Sarimin Mietra Sardi
Independent Member
of
the
Board
of
Decision
Commissioners
No.05/KEP/
DK/2014 dated March 25, 2014,
then set out in Decision of the Board
of Commissioners No.09/KEP/
DK/2016 dated July 27, 2016, and
lastly stipulated under the decision
of the Board of Commissioners
No.05/KEP/DK/2017 dated April 28,
2017.
of
Decision
Commissioners
DK/2017 dated April 28, 2017.
Board
of
No.05/KEP/
the
of
Decision
Commissioners
DK/2017 dated April 28, 2017.
Board
of
No.05/KEP/
the
of
Decision
Commissioners
DK/2017 dated April 28, 2017.
Board
of
No.05/KEP/
the
of
the
Decision
Board
of
No.04/KEP/
Commissioners
DK/2016 dated March 31, 2016 lastly
stipulated under the decision of the
Board of Commissioners No.05/
KEP/DK/2017 dated April 28, 2017.
Term of Service
2017 - present
2014 - present
2017 - present
2015 - present
2017 - present
2016 - present
Remarks: *Profile of members of Audit Committee can be seen on the profile of the Board of Commissioners
Table of the Composition of the Previous Audit Committee
Title
Chairman
Secretary
Member
Name
Rinaldi Firmansyah*
Tjatur Purwadi
Duplicate Position Status
Independent Commissioner
Non-affiliated external member
Margiyono Darsasumarja*
Independent Commissioner
Dolfie Othniel Fredric Palit*
Commissioner/ Non Voting Member
Pontas Tambunan*
Sarimin Mietra Sardi
Commissioner/ Non Voting Member
Independent Member
Remarks: *Profile of members of Audit Committee can be seen on the profile of the Board of Commissioners
178
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights PROFILE OF AUDIT COMMITTEE MEMBERS
THAT ARE NOT MEMBERS OF THE BOARD OF
COMMISSIONERS
Sarimin Mietra Sardi
Born : Ujungpandang, September 17, 1958
Age : 59 years
Tjatur Purwadi
Born : Surabaya, January 28, 1956
Age : 61 years
Citizenship Domicile
Indonesian citizen, domiciled in Indonesia.
Title and Basis of the Appointment
Secretary and Member of the Audit Committee under
Decision of the Board of Commissioners of Limited Liability
Citizenship and Domicile
Indonesian citizen, domiciled in Indonesia
Title and Basis of the Appointment
Member of the Audit Committee under Decision of the Board
of Commissioners of Perusahaan Perseroan (Persero) PT
Telekomunikasi Indonesia Tbk No.04/KEP/DK/2016 dated March
31, 2016 and latest under Decision of the Board of Commissioners
No.09/KEP/DK/2016 dated July 27, 2016.
Company PT Telekomunikasi Indonesia Tbk No.05/KEP/
Term of Service
DK/2014 dated March 25, 2014 and latest under Decision
March 31, 2016 up to the present.
Letter of the Board of Commissioners No.09/KEP/DK/2016
dated July 27, 2016. Tjatur Purwadi currently is not holding
any position inside or outside the Company other than the
office of Secretary of the Audit Committee.
Education
D4 Accounting at Sekolah Tinggi Akuntansi Negara (STAN),
Jakarta.
S2 Master of Management at Universitas Pendidikan Indonesia
Term of Service
2014 up to present.
Education
S1 Accounting at University of Gadjah Mada, Yogyakarta.
S2 Master of Management in Finance at University of Padjajaran,
Bandung.
conducting
Career Experience
2014 – Present
Secretary/Member of the Audit Committee.
(Responsible to facilitate the Audit Committee members’
performance
preparing
documentation, making reports of changes to the Audit
Committee Charter, and coordinating the selection process of
independent auditors. In accordance with Decision of the Board
of Commissioners No.09/KEP/DK/2016, he was appointed
as Secretary and financial expert concurrently for the Audit
Committee).
correspondence,
2012 – 2014
Director - Assurance Team KAP Tanudiredja, Wibisana & Rekan/
PwC.
1979 – 2012
PT Telkom Indonesia (Persero) Tbk
(Holding a number of strategic offices including Vice President
(VP) - Financial & Logistic Policy and Head of Internal Audit).
(UPI), Jakarta.
Career Experience
2016 – Present
Independent Member of the Audit Committee.
(Responsible for supervising and monitoring the integrated audit
process, financial statement consolidation process, effectivity
of internal control of financial reporting. In accordance with
Decision of the Board of Commissioners No.09/KEP/DK/2016,
he was appointed as member of the Audit Committee).
1982 – 2014
PT Telkom Indonesia (Persero) Tbk.
(Holding a number of strategic offices including Deputy SGM
Finance Operation and Director of Finance & HR of Telkom
Pension Fund).
179
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices SCOPE, DUTIES, AND RESPONSIBILITIES OF
AUDIT COMMITTEE
INDEPENDENCE OF AUDIT COMMITTEE
The Audit Committee shall perform its duties and responsibilities
statement of integrity and independence as a commitment to
as follows:
uphold GCG principles and have integrity at all times and be
1. To assist the Board of Commissioners in selecting process of
independent in performing their duties and responsibilities.
independent auditors to conduct the integrated audit for the
Accordingly, we are convinced that the decisions made
Company.
through the Audit Committee will be free of pressure from any
We require all members of the Audit Committee to sign a
2. To oversee the integrated audit process for the Company and
other parties.
the audit process of the subsidiaries of which the financial
statements are consolidated into the Company’s consolidated
AUDIT COMMITTEE’S MEETING
financial statements.
3. To give independent opinions in the event of any different
Regulation of
the Financial Services Authority No.55/
opinion between the management and the independent
POJK.04/2015 dated December 23, 2015 on the Establishment
auditors.
and Guidelines of Implementation of the Works of Audit
4. To give pre-approval of non-audit services to be assigned to
Committee, in particular Article 13, stipulates that the Audit
the independent auditors.
5. To review any financial information to be published by the
Company, such as financial statements, projections, and any
other financial information.
Committee shall hold regular meetings at least once in three
months. However, the Audit Committee Charter sets out that the
Audit Committee shall hold meetings once every month.
6. To monitor the adequacy of the management’s efforts to
build and operate effective internal control, in particular the
internal control of financial reporting.
7. To monitor the effectiveness of the Company’s Internal Audit.
8. To monitor the follow-up of internal auditor’s findings by the
Pursuant to the above provisions, the Audit Committee held 23
meetings throughout 2017. The meetings were held in accordance
with the requirements of the Audit Committee Charter and aimed
to facilitate the performance of duties and responsibilities of
each member of the Audit Committee.
Board of Directors.
9. To provide means for receiving, reviewing, and following up
on complaints involving the Company and its consolidated
subsidiaries.
10. To monitor the compliance of the Company with the laws
and regulations on capital market and any other laws and
regulations in relation to the Company’s business.
11. To monitor the effectiveness of risk management policies
created and implemented by the management.
12. To perform such other duties as assigned by the Board of
Commissioners.
Table of the Attendance of Audit Committee’s Meetings
Name
Total
Meetings
Total
Attendance
Margiyono Darsasumarja
Tjatur Purwadi
Rinaldi Firmansyah
Dolfie Othniel Fredric Palit
Cahyana Ahmadjayadi(1)
Sarimin Mietra Sardi
23
23
23
23
12
23
Remark: (1) started in April 28, 2017
22
22
22
17
10
23
Percentage
of
Attendance
(%)
96
96
96
74
83
100
180
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights EDUCATION AND TRAINING
To build the capacity of the Audit Committee members to carry out their duties and responsibilities, we organized and engaged them
in various training programs, workshops, conferences and seminars throughout 2017.
Table of Education and Training of Audit Committee
Name
Training Program
Date
Location
Rinaldi Firmansyah
RIMS 2017 CANADA CONFERENCE
September 24-27, 2017
Toronto
Margiyono Darsa Sumardja
Cyber Risk Forum in Las Vegas
September 7-8, 2017
Las Vegas
Cahyana Ahmadjayadi
3rd Pitch Training Swiss Innovation Challenge Indonesia 2017
Agustus 27, 2017
Panel Discussion on the Participation of the Audit Committee
in the Implementation of POJK No.13/POJK.03/2017 regarding
the Use of Public Accountant Services and Public Accountant
Offices in Bank Financial Services, Capital Market, Non-Bank
Financial Industry.
September 14, 2017
Bandung
Jakarta
Tjatur Purwadi
Recent PSAK Workshop according to IFRS Convergence
January 1, 2017
May 16-19, 2017
Bali
Master Class Risk Governance
November 6-7, 2017
Singapore
Panel Discussion on the Participation of the Audit Committee
in the Implementation of POJK No.13/POJK.03/2017 regarding
the Use of Public Accountant Services and Public Accountant
Offices in Bank Financial Services, Capital Market, Non-Bank
Financial Industry.
September 14, 2017
Jakarta
Sarimin Mietra Sardi
Recent PSAK Workshop according to IFRS Convergence
January 1, 2017
Mei 16-19, 2017
Bali
RIMS 2017 CANADA CONFERENCE
September 24-27, 2017
Toronto
Panel Discussion on the Participation of the Audit Committee
in the Implementation of POJK No.13/POJK.03/2017 regarding
the Use of Public Accountant Services and Public Accountant
Offices in Bank Financial Services, Capital Market, Non-Bank
Financial Industry.
September 14, 2017
Jakarta
RIMS 2017 CANADA CONFERENCE
September 24-27, 2017
Toronto
PERFORMANCE AND
AUDIT COMMITTEE’S ACTIVITIES
IMPLEMENTATION OF
During 2017, the Audit Committee has implemented its functions,
among others, as follows:
1. To conduct the supervision of the Integrated Audit process
for the financial year of 2017
The Audit Committee has conducted the discussion with
the Internal Auditor and independent auditor Ernst & Young
(EY) in relation to the quality and acceptability of financial
implemented by the Company,
accounting standard
the properness of significant accounting estimate
and judgement and the adequacy of disclosure in the
consolidated financial report as well as the internal control
conducted by the Management, therefore the quality of
financial report released by Management can be presented
properly and there is no material misstatement.
The Audit Committee has also reviewed and discussed the
audited consolidated financial report and the notes upon the
consolidated financial report in the Annual Report (Form 20F)
with Company’s management. With regard to the company’s
risk management, the Audit Committee also supervised and
monitored the frauds and risks on the financial reporting that
may materially affect the financial report.
2. To conduct the supervision and review to the plan and
implementation of the work program of Internal Auditor
Unit for the financial year of 2017
The Audit Committee has conducted the review and discussion
regarding the proposal of Internal Audit Unit’s working
program for 2017 in relation to the risks that may occur in 2017
before such work program is determined by the Management.
The Audit Committee conducted a quarterly discussion
on the findings and recommendation of the result of
audit process and internal consultation made by Internal
Audit Unit, including the monitoring of the follow-up acts
completed by the Management.
181
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices 3. To conduct the supervision upon the audit process of
Partnership and Community Development (PKBL) program
conducted by Community Development Center (CDC) Unit
for the financial year of 2017
The Audit Committee has conducted the discussion with the
Management of CDC and independent auditor Ernst & Young
(EY) in relation to the implementation of Partnership and
Community Development program in 2017, the audit process
for the financial report in the financial year of 2017 as well as
the agreed upon procedure/AUP.
4. To conduct the review of the information on the incoming
complaints through the Whistleblower (WBS) program for
the financial year of 2017
To provide opportunities and convenience to all parties
in submitting complaints either from the Telkom Group
employees or from outside the Telkom Group (third parties),
the Audit Committee has prepared a Whistleblower application
system that can be accessed easily from anywhere through
the Internet.
COMMITTEE FOR NOMINATION AND
REMUNERATION
We have a Committee for Nomination and Remuneration assisting
the Board of Commissioners in overseeing the qualification
determination and the nomination and remuneration process
of the Board of Commissioners, the Board of Directors and the
executive officers. The committee plays an important role in the
application of GCG principles, in particular to ensure the process
of selection and remuneration policy making conforms with
professional and independent considerations without pressure
from any other parties.
The Committee for Nomination and Remuneration works under
OJK Regulation No.34/POJK.04/2015 regarding Nomination and
Remuneration Committee of Issuers or Public Companies. In addition,
we also have a Committee for Nomination and Remuneration
Charter stipulated by Decision of the Board of Commissioners
No.06/KEP/DK/2017 dated April 28, 2017 regarding Composition
of the Nomination and Remuneration Committee of Perusahaan
Perseroan (Persero) PT Telekomunikasi Indonesia, Tbk.
COMPOSITION OF THE COMMITTEE FOR
NOMINATION AND REMUNERATION
OJK Regulation No.34/POJK.04/2015 regarding Nomination
and Remuneration Committee of Issuers of Public Companies
stipulates that the Nomination and Remuneration Committee
shall consist of at least three members, one of whom is an
Independent Commissioner who shall serves concurrently as
Chairman of the Nomination and Remuneration Committee. The
remaining two members may be appointed from any members of
the Board of Commissioners, external parties, or management
parties under the Board of Directors. Until now, KNR does not
have any members from external parties.
Pursuant to such regulation, the Board of Commissioners
issued Decision of the Board of Commissioners No.06/KEP/
DK/2017 dated April 28, 2017 on the Composition of the
Nomination and Remuneration Committee of Perusahaan
Perseroan (Persero) PT Telekomunikasi Indonesia Tbk which
stipulates that the Nomination and Remuneration Committee
Members are as follows.
Table of the Composition of the Committee for Nomination
and Remuneration
Position
Member’s Name
Chairman/
Member
Pamijati Pamela Johanna
Waluyo*/Independent
Commissioner
Secretary
Ario Guntoro/Secretary of
the Board of Commissioners
Duties of
each member
To be responsible to give the
directions and coordination
of the implementation of
duty.
To be responsible to give and
manage the administration
and documentation of the
Committee
Member
Hadiyanto */ Commissioner
Rinaldi Firmansyah*/
Independent Commissioner
Dolfie Othniel Fredric
Palit*/Independent
Commissioner
Margiyono Darsasumarja*/
Independent Commissioner
Cahyana Ahmadjayadi*/
Independent Commissioner
be
responsible
the
to
To
coordinate
inputs
coming from the parties
relationship
that
with
controlling
shareholders in relation to
the issue of nomination and
remuneration.
has
the
182
Remarks: *profile of member of KNR can be seen on the profile of the Board of
Commissioners.
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights PROFILE OF MEMBER OF KNR THAT ARE NOT
MEMBER OF THE BOARD OF COMMISSIONERS
Ario Guntoro – Secretary of KNR
Born : Prabumulih, January 27, 1970
Age : 47 years
Citizenship and Domicile
Indonesian Citizen, domicile in Indonesia.
Title and Basis of Appointment
Secretary of the Nomination and Remuneration Committee
based on the Decision of the Board of Commissioners No.15/
KEP/DK/2013 dated December 16, 2013.
Term of Service
Year 2013 up to present.
Education
1993
Bachelor degree in economics from University of Gadjah Mada.
Career Experience
2008 – 2013
Holding the office of Secretary of the Planning and Risk
Evaluation and Monitoring Committee (KEMPR) of PT Telkom
Indonesia (Persero) Tbk.
2004 – 2008
Member of Committee For The Planning And Risk Evaluation And
Monitoring (KEMPR) PT Telkom Indonesia (Persero) Tbk.
2004
Serving as special advisor to PT PPA (Persero).
1999 – 2004
Working at the Indonesian Bank Restructuring Agency (BPPN),
with the last position as Assistant Vice President of HIPA Division.
1994 – 1999
Working at private banks, holding a range of offices from
Corporate Officer to Brand Manager.
SCOPE, DUTIES, AND RESPONSIBILITIES OF KNR
Duties and responsibilities of the Committee for the Nomination
and Remuneration are as follows:
1. To prepare the policy, criteria and selection needed for the
strategic titles within the Company namely the one title below
the Director and Executive (member of the Board of Directors
and member of the Board of Commissioners) consolidated
subsidiaries that refer to the principles of good corporate
governance.
2. To assist the Board of Commissioners together with or
through the consultation with the Board of Directors to
select the candidate for strategic titles within the Company
(member of the Board of Directors and member of the Board
of Commissioners) consolidated subsidiaries.
3. To give recommendations to the Board of Commissioners
to be conveyed to the holder of series A Dwiwarna shares
regarding:
a. The composition of title of member of the Board of Directors.
b. The succession planning of members of the Board of Directors.
c. Assessment based on the parameter that has been
prepared as the evaluation material for the capability of
members of the Board of Directors.
4. Provide recommendations to the Board of Directors to be
submitted to the General Meeting of Shareholders through
the shareholders of the A Dwiwarna Series concerning the
policies, amount and/or structures for the remuneration of
the Board of Directors and Board of Commissioners.
5. Remuneration of Directors and Board of Commissioners in the
form of salary or honorarium, allowances and facilities that are
fixed and incentives that are variable.
6. Review the employment contract and/or performance
statement of each member of the Board of Directors.
In general, the Chairman of the Committee for Nomination
and Remuneration shall perform a function as a director and
coordinator of the performance of the Committee’s duties. The
Secretary of the Committee shall assist the Chairman in preparing
and managing the administration and documentation of the
Committee’s activities. The members of the Committee shall
coordinate the inputs of the parties relating to the controlling
shareholders related to the nomination and remuneration.
INDEPENDENCE OF THE COMMITTEE FOR
NOMINATION AND REMUNERATION
Each member of the Committee for Nomination and Remuneration
is required to uphold GCG principles and has a commitment to
maintain integrity and independence in performing their duties
and responsibilities to ensure that they make professional
decisions without pressure from any other parties. Accordingly,
we require each member of the Committee for Nomination and
Remuneration to sign a statement of integrity and independence.
MEETING OF THE COMMITTEE FOR NOMINATION
AND REMUNERATION
OJK Regulation No.34/POJK.04/2014 regarding Nomination
and Remuneration Committee of Issuers or Public Companies
requires that the Nomination and Remuneration Committee
shall hold meetings at least once every four months. In 2017, the
Committee for Nomination and Remuneration held 36 meetings,
including 26 meetings by circulation.
Table of Agenda and Attendance of the Meeting of the
Committee for Nomination and Remuneration 2017
Name
Total
Meetings
Total
Attendance
Percentage of
Attendance
(%)
36
31
10
20
28
35
34
35
23
Hendri Saparini
Hadiyanto
Pontas Tambunan (2)
Devy W. Suradji (3)
Dolfie Othniel Fredric
Palit
Margiyono Darsasumarja
Rinaldi Firmansyah
Pamijati Pamela
Johanna Waluyo
Cahyana Ahmadjayadi (1)
Remarks:
(1)since April 28, 2017
(2)until April 21, 2017
(3)until Desember 22, 2017
36
36
13
23
36
36
36
36
23
100
86
77
87
78
97
94
97
100
183
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices EDUCATION AND TRAINING OF KNR
In financial year 2017, we did not require the members of the Committee for Nomination and Remuneration to engage in any
educational and training activities to improve their competence and capacity because the activities of the Committee for
Nomination and Remuneration, in particular the remuneration proposal process, were supported by professional and experienced
independent consultants.
PERFORMANCE AND IMPLEMENTATION OF KNR’S ACTIVITIES
Throughout 2017, the Committee for Nomination and Remuneration assisted the Board of Commissioners in making strategic
decisions, including:
Letter/Decision
Date
Letter of the Board of Commissioners No.027/SRT/DK/2017 regarding Recommendation on Nominees of the Board of
Directors of Telkom
January 25, 2017
Letter of the Board of Commissioners No.042/SRT/DK/2017 regarding Mechanism of Selection of Top Talent of One Level
under the Board of Directors
February 10,
2017
Letter of the Board of Commissioners No. 043/SRT/DK/2017 regarding Recommendation on Nominees of the Board of
Directors of PT Telkom Indonesia, Tbk
February 13,
2017
Letter of the Board of Commissioners No.051/SRT/DK/2017 regarding Concurrent Appointment of Secretary and Member
of the Audit Committee of Telkom
March 6, 2017
Letter of the Board of Commissioners No.052/SRT/DK/2017 regarding Appointment of the Nomination and Remuneration
Committee Staff
March 6, 2017
Letter of the Board of Commissioners No.059/SRT/DK/2017 regarding New Honorarium Changes
Letter of the Board of Commissioners No.060/SRT/DK/2017 regarding New Honorarium Changes
Letter of the Board of Commissioners No.096/SRT/DK/2017 regarding Request for Tantiem for Financial Year 2016 and
Remuneration of the Board of Directors and the Board of Commissioners for Financial Year 2017
March 8, 2017
March 8, 2017
April 21, 2017
Letter of the Board of Commissioners No.098/SRT/DK/2017 regarding Recommendation on Commissioners and Nominees
of Directors of Telkomsel
April 26, 2017
Decision of the Board of Commissioners No.06/KEP/DK/2017 regarding Composition of the Nomination and Remuneration
Committee of PT Telkom Indonesia, Tbk
April 28, 2017
Letter of the Board of Commissioners No.107/SRT/DK/2017 regarding Approval of Proposed Changes to the Members of
the Board of Commissioners of Telkomsel
May 5, 2017
Letter of the Board of Commissioners No.142/SRT/DK/2017 regarding Procedures for Recommending the Company’s
Representatives to Become Candidate Members of the Board of Directors and the Board of Commissioners of Subsidiary
July 11, 2017
Letter of the Board of Commissioners No.181/SRT/DK/2017 regarding Changes of the Company’s Representatives at
Subsidiary
August 30, 2017
Letter of the Board of Commissioners No.197/SRT/DK/2017 regarding Survey Consultants of the Remuneration of the
Company Management for Year 2017
September 19,
2017
Letter of the Board of Commissioners No.202/SRT/DK/2017 regarding Appointment of Secretariat Staff of the Board of
Commissioners in Document Administration
Oktober 2, 2017
Letter of the Board of Commissioners No.205/SRT/DK/2017 regarding Delivery of Proposal for Changes of the Company’s
Representatives in Strategic Subsidiary
Oktober 2, 2017
Letter of the Board of Commissioners No.206/SRT/DK/2017 regarding Request for Approval of Recommended
Representatives of PT Telkom in Subsidiary
Oktober 2, 2017
Letter of the Board of Commissioners No.213/SRT/DK/2017 regarding Appointment of Secretary of the KEMPR at the
Secretariate of the Board of Commissioners of PT Telkom Indonesia, Tbk
Oktober 12, 2017
Letter of the Board of Commissioners No.217/SRT/DK/2017 regarding Completeness of Documents Required for the
Approval of the Company’s Recommended Representatives in Subsidiary
Oktober 17, 2017
Decision of the Board of Commissioners No.09/KEP/DK/2017 regarding Procedures for Filling the Positions of Management
of Strategic Subsidiaries of PT Telkom Indonesia, Tbk
Oktober 17, 2017
Letter of the Board of Commissioners No.227/SRT/DK/2017 regarding Appointment of Secretariat Staff of the Board of
Commissioners for Institutional Relationships
Oktober 26, 2017
Letter of the Board of Commissioners No.232/SRT/DK/2017 regarding Explanations of the Completeness of Documents
Required for the Approval of the Company’s Representatives in Subsidiaries of PT Telkom Indonesia, Tbk
Oktober 31, 2017
Letter of the Board of Commissioners No.238/SRT/DK/2017 regarding Appointment of the KEMPR Staff at the Secretariat
of the Board of Commissioners
Oktober 28, 2017
Letter of the Board of Commissioners No.239/SRT/DK/2017 regarding Appointment of Secretariat Staff of the Board of
Commissioners for Audit Committee Document Administration
November 10,
2017
Letter of the Board of Commissioners No.248/SRT/DK/2017 regarding Delivery of Schedules of Fit and Proper Tests for the
Nominees of President Director of Mitratel
November 10,
2017
Letter of the Board of Commissioners No.253/SRT/DK/2017 regarding Request for Approval of the Recommended
Representatives of Telkom in PT Daya Mitratel
December 4,
2017
No
1.
2.
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
184
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights COMMITTEE FOR THE PLANNING AND RISK EVALUATION AND MONITORING
We have a Committee for Planning and Risk Evaluation and Monitoring which assists the Board of Commissioners in performing its
duties of risk planning, management, and evaluation. This is in line with our commitment to run the Company with good planning and
by taking into account various risks.
The Committee performs its duties and responsibilities, as stipulated by the Committee for Planning and Risk Evaluation and Monitoring
Charter, under Decision of the Board of Commissioners No.04/KEP/DK/2011 dated March 24, 2011 regarding Charter of the Planning
and Risk Evaluation and Monitoring Committee of Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia, Tbk. The decision
stipulates, among other things, as follows:
1. The establishment and the appointment of its members;
2. The structure and requirements of membership, duties, responsibilities, and authority; and
3. The scope of works, meetings, reporting, term of office, and funding.
COMPOSITION OF KEMPR
The composition of the Committee for Planning and Risk Evaluation and Monitoring (KEMPR) is stipulated by Decision of the Board of
Commissioners No.07/KEP/DK/2017 dated May 8, 2017 regarding Composition of the Planning and Risk Evaluation and Monitoring
Committee of Telkom as follows.
Table of Composition of Committee for the Planning and Risk Evaluation and Monitoring
Title
Name
Term of Service
Duties of Each Member
Chairman of KEMPR
Hadiyanto*/ Commissioner
Starting from February 8, 2015
Member of KEMPR
Dolfie Othniel Fredric Palit*/
Independent Commissioner
Margiyono Darsasumarja*/
Independent Commissioner
Starting from May 12, 2015
Starting from May 12, 2015
Pamijati Pamela Johanna Waluyo*/
Independent Commissioner
Starting from May 12, 2015
Cahyana Ahmadjayadi*/
Independent Commissioner
Starting from May 8, 2017
Devy W. Suradji(1)*/Commissioner
Starting from May 8, 2017
Sri Hartati Rahayu
Starting from March 31, 2016
To give the direction, to coordinate and
monitor the implementation of duties of all
Members of Committee.
To conduct the supervision and monitoring
towards the implementation of RJPP/CSS,
RKAP and the enterprise risk management as
well as the implementation of initiative for the
non organic business growth.
To give the review, evaluation and report
in the sector of legal, compliance as well as
risk control to support the implementation
of duties of supervision of the Board
of Commissioners duty
supervise
management of the Company conducted by
the Board of Directors.
to
Remarks: * profile of the Members of KEMPR can be seen on the profile of the Board of Commissioners.
(1) Until December 22, 2017
185
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices PROFILE OF MEMBER OF KEMPR OUTSIDE THE
MEMBER OF THE BOARD OF COMMISSIONERS
SCOPE, DUTIES, AND RESPONSIBILITIES OF
KEMPR
Sri Hartati Rahayu
Committee for the Planning and Risk Evaluation and Monitoring
Born : Majalengka, December 21, 1971
has the following duties and responsibilities:
Age : 46 years old
Citizenship and Domicile
1. To conduct a comprehensive evaluation upon the proposal
of the Company’s Long Term Plan (“RJPP”) or CSS and
Company’s Budget Activity Plan as submitted by the Board of
Indonesian citizen, domiciled in Indonesia.
Directors;
Title and Basis of Appointment
2. To conduct the evaluation towards the implementation of
RJPP and RKAP to be in line with the target of RJPP and RKAP
Member of the Risk and Risk Evaluation and Monitoring and
as have been ratified by the Board of Commissioners; and
Evaluation Committee based on Decision of the Board of
3. To conduct the monitoring towards the implementation of
Commissioners No.12/KEP/DK/2016.
enterprise risk management within the Company.
Term of Service
March 31, 2016 up to present.
Education
1995
INDEPENDENCE OF KEMPR
The Committee for Planning and Risk Evaluation and Monitoring
is not regulated by any regulator. However, we still require the
Committee to have good integrity and maintain its independence
Bachelor degree in Law from University of Padjajaran.
as set forth in the KEMPR Carter Chapter 4 point 4.b.
1999
Master’s degree in Banking Law, Law of Finance and Investments
in Emerging Economies, Legal Aspects of International Finance
and Trade Law (LL.M Banking & Finance Law) from London
School of Economics and Political Science (LSE), London, United
Kingdom.
Career Experience
2016 – Present
Risk Evaluation and Monitoring Committee Member.
KEMPR’S MEETING
In 2017, KEMPR conducted 6 Committee meetings attended by
the members who are members of the Board of Commissioners
and non-members of the Board of Commissioners, with the
following detail of attendance:
Meeting Attendance Table of Committee for Planning and Risk
Evaluation and Monitoring 2017
Name
Total
Attendance
Percentage of
Attendance (%)
2010 – 2011
Independent member of Audit Committee and Risk Monitoring
Committee of PT Bank DBS Indonesia.
Hadiyanto
Dolfie Othniel F.P*
Margiyono D.S
6
2
6
6
6
6
6
100%
33%
100%
100%
100%
100%
100%
Pamijati Pamela Johanna Waluyo
Cahyana Ahmadjayadi**
Devy W. Suradji(1)**
Sri Hartati Rahayu
Remarks:
* Could not join meeting due to state duty
** Defined as a member of KEMPR as of May 2017
(1) Until December 22, 2017
2008 – 2009
Head of Legal and Corporate Secretary PT Bank Barclays
Indonesia.
2002 – 2005
Vice President Global Consumer Group Legal Counsel CitiGroup
Indonesia - Citibank N.A.
186
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights EDUCATION AND TRAINING OF KEMPR
In the financial year of 2017 education and training have
been given to the Members of KEMPR in order to improve the
competence of the Member of KEMPR. Education and training
In addition, in line with the implementation of RJPP 2017-
2021 and the preparation of RJPP 2018-2022, the KEMPR
review the Company’s Inorganic Program, sharpen the
monitoring of RJPP Implementation specially regarding
determination of deliverables that reflecting strategic
that have been conducted by KEMPR for the financial year of
objectives achievement
2017 are among others:
No Date
1.
June 7-9,
2017
Name of
Training
7th Corporate
University
and Corpo-
rate Learning
Summit 2017,
Berlin
Organizer
Remarks
-
Financial
Education and
Training Agen-
cy & Fleming
Conference
2.
September
7-8, 2017
Cyber Risk
Forum
Risk & Insur-
ance Manage-
ment Society
3.
November
6-7, 2017
Risk Gover-
nance Master
Class Training &
Certification
Enterprise Risk
Management
Academy
4.
November
20-24,
2017
5.
December
6-8, 2017
Benchmark
Study Imple-
mentation of
Enterprise
Architecture
and Digital
Transforma-
tion, Canberra,
Australia
Yogyakarta
ERM 2017
International
Conference
-
Enterprise Risk
Management
Academy
It is also an
education/
training of
the Audit
Committee
It is also an
education/
training of
the Audit
Committee
-
-
IMPLEMENTATION OF KEMPR’S ACTIVITIES
b. Preparation of RJPP 2018-2022
In the preparation of RJPP 2018 -2022, the KEMPR
focused, on:
• The implementation of the Company’s transformation
process to Digital Telco;
• The sharpening of
implementation of
inorganic
programs which aim not only financial targets,
but also to improve the competence of Telkom in
telecommunications, information, media, edutainment,
and other services;
• The importance of measures to anticipate the decline in
legacy business; and
• Proactively monitoring the development of regulations
and taking appropriate measures to prevent such
development of regulations from adversely affecting
the Company.
2. Company’s Work and Budget Plan as well as Capital
Expenditure
a. Monitoring focus of RKAP and Capital Expenditure of
2017
In the implementation of RKAP 2017, the KEMPR’s
monitoring focus is, among others, on the implementation
of efforts to keep expense growth from exceeding revenue
growth; the monetization of IndiHome’s business; the
achievement of Telkomsel’s performance, the management
of several strategic businesses of the Company in the
digital area such as e-commerce and digital financial
Pursuant to charter KEMPR, the Decision of the Board of
services; and the management of subsidiaries.
Commissioners No.10/KEP/DK/2017 dated October 27, 2017
regarding Amount of Certain Action of the Board of Directors
On the capital expenditure side, the monitoring of capital
that Must First Obtain a Written Approval from the Board of
Commissioners, and/or Seri A Shareholder, as well as Decision
of the Board of Commissioners No.02/KEP/DK/2017 dated
February 24, 2017 regarding Standard Operating Procedures
(SOP) In Relation to the Process of Approval from the Board of
expenditure is primarily directed at the absorption of
budgets and due performance of development; the
preparation of capital expenditure monitoring system
(capex tracking); and the effectiveness of capital
expenditures for revenue and service quality improvement.
Commissioners, consist of:
1. Company’s Long Term Plan (“RJPP”)
a. Evaluation of RJPP 2017-2021
b. Evaluation to the Proposal of RKAP and Capital
Expenditure of 2018
The evaluation of the proposal of RKAP and capital
In monitoring the implementation of RJPP 2017-2021, the
expenditure of 2018 focuses on 4 (four) things as follows:
KEMPR focuses, among others, on the implementation
• The need
for
improvement of digital business
of the Company’s transformation program, updating of
previously identified risk profiles at the time of preparation
of RJPP 2017-2021, and monitoring of international foot
print performance.
management in the Telkom Group to give added values
to the Company;
• Setting the of priority or focus of RKAP and capital
expenditure of 2018 on the business sectors that are
strategic for the Company;
187
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices • Sharpening of inorganic programs to aim not only
ecosystem initiatives, the optimization of My IndiHome as
at the achievement of financial targets but also the
a hub to improve customer experience and loyalty, and the
improvement of the Company’s capability in all of its
implementation of dynamic pricing for IndiHome services.
portfolios; and
The mitigation programs to reduce the uncertainty of
• The strengthening of capability of subsidiaries to
inorganic initiatives are developed through the preparation
increase the wallet share from non-Telkom Group
of a comprehensive analysis of changes in macroeconomic,
markets.
political, social, security and environmental conditions.
3. Enterprise Risk Management
4. Certain Action from the Board of Directors that Requires
Monitoring of the updating of the Company’s risk profile
is one of the approaches taken by the KEMPR in evaluating
the Approval from the Board of Commissioners
In 2017, KEMPR has assisted the Board of Commissioners in
the implementation of risk management of the Company.
reviewing the proposal of strategic plans as submitted by the
Based on CSS 2018-2022, the risk groups that need to
Board of Directors, among others:
gain the Company’s attention
include the uncertainty
a. The Release of budget of capital expenditure of 2017;
of digital business development and the uncertainty of
b. The implementation of external funding of the Company; and
inorganic initiatives. The mitigation programs to reduce
c. Strategic fit of corporate action
in
the digital
risks related to the digital business development include the
telecommunication portfolio.
development of smart government and enterprise-connected
188
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights BOARD OF DIRECTORS
We have a Board of Directors with collective duties and responsibilities to manage the Company in accordance with the Company’s
Articles of Association. In performing its duties, members of the Board of Directors act and decide on a policy in accordance with the
duties and responsibilities of each member.
COMPOSITION OF THE BOARD OF DIRECTORS
During 2017, there is a change in the composition of the board of directors due to the following matters:
1. On March 15, 2017, Mr. Indra Utoyo was appointed as the director of PT Bank Rakyat Indonesia (Persero) Tbk;
2. On April 20, 2017, Mr. Honesti Basyir was appointed President Director of PT Kimia Farma (Persero) Tbk.
Therefore, the result of the resolution of the Annual General Meeting of Shareholders (AGMS) on April 21, 2017, regarding the changes
of the Board of Directors of the Company are as follows:
1. Muhammad Awaluddin, Honesti Basyir, and Indra Utoyo were honorably dismissed from their position as Directors.
2. Mas’ud Khamid, Zulhelfi Abidin, and David Bangun were elected and appointed as Director of Consumer Service, Director of Network
& IT Solution and Director of Digital & Strategic.
Table of Composition of Board of Directors of PT Telkom per December 31, 2016
No
Name
Title
Appointment
Discharge Date
1
2
3
4
5
6
7
Alex J. Sinaga
Harry M. Zen
Indra Utoyo
Honesti Basyir
Herdy Rosadi Harman
Abdus Somad Arief
Dian Rachmawan
President Director
Director of KEU
Director of DSP
Director of WINS and EBIS
Director of HCM
Director of NITS
Director of CONS
2014
2016
2012
2012
2014
2014
2014
AGMS 2019
AGMS 2021
AGMS 2017
AGMS 2017
AGMS 2019
AGMS 2019
AGMS 2019
Remarks: KEU (Finance), DSP (Digital & Strategic Portfolio), WINS (Wholesale and International Service), EBIS (Enterprise & Business Service), HCM
(Human Capital Management), NITS (Network, IT & Solution), and CONS (Consumer Service).
Table of Composition of the Board of Directors of PT Telkom per December 31, 2017
No
Name
Title
Appointment
Discharge Date
1
2
3
4
5
6
7
8
Alex J. Sinaga
Harry M. Zen
Mas’ud Khamid
Herdy Rosadi Harman
Zulhelfi Abidin
David Bangun
Abdus Somad Arief
Dian Rachmawan
President Director
Director of KEU
Director of CONS
Director of HCM
Director of NITS
Director of DSP
Director of WINS
Director of EBIS
2014
2016
2017
2014
2017
2017
2014
2014
AGMS 2019
AGMS 2021
AGMS 2022
AGMS 2019
AGMS 2022
AGMS 2022
AGMS 2019
AGMS 2019
Remarks: KEU (Finance), CONS (Consumer Service), HCM (Human Capital Management), NITS (Network, IT & Solution), DSP (Digital & Strategic
Portfolio), WINS (Wholesale and International Service), and EBIS (Enterprise & Business Service).
WRITTEN POLICY ON DIVERSITY OF THE BOARD OF DIRECTORS
In the selection and appointment of the Board of Directors, we guarantee that there is no discrimination. We apply this to meet the
fairness principles in the application of GCG and Law No.39 of 1999 on Human Rights. We do not currently have a written policy
specifically governing the diversity of the Board of Directors, but we ensure that members of the Board of Directors are selected and
appointed based on their expertise, skills and integrity.
Based on the results of the AGMS of 2017, we have a composition of the Directors which are all male. This happens unintentionally
based on the selection of candidates for the Board of Directors and we do not intend to discriminate against women for the office of
the Board of Directors.
189
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices Diversity Table of Directors, Per 31 Desember 2017
No
Name
Position
Gender
Background of Expertise & Skills
Level of Education
1
2
3
4
5
6
7
8
Alex J. Sinaga
President Director
Male
Harry M Zen
Mas’ud Khamid
Director of KEU
Director of CONS
Herdy Rosadi Harman
Director of HCM
Zulhelfi Abidin
David Bangun
Abdus Somad Arief
Dian Rachmawan
Director of NITS
Director of DSP
Director of WINS
Director of EBIS
Male
Male
Male
Male
Male
Male
Male
Telecommunication and Telematics
Engineering
Magister
Administration, Business and Finance
Magister
Telecommunication Network Engineering
and Leadership in Retail Business
Bachelor
Law, Business Administration
Technical Information
Telecommunication and Electrical
Engineering
Magister
Magister
Magister
Technology and Information Systems
Magister
Telecommunications Engineering
Magister
Remarks: KEU (Finance), CONS (Consumer Service), HCM (Human Capital Management), NITS (Network, IT & Solution), DSP (Digital & Strategic
Portfolio), WINS (Wholesale and International Service), and EBIS (Enterprise & Business Service).
DOUBLE POSITION BOARD OF DIRECTORS
Some of our Directors have dual positions, either in Telkom as the holding company or subsidiaries. Information on the dual positions
of Directors can be seen in the following table:
Table of Double Title of the Board of Directors per December 31, 2017
No Name
PT Telkom
Title
Other Title
Subsidiary
1
2
3
4
5
6
7
8
Alex J. Sinaga
Harry M. Zen
President Director
Director of KEU
Mas’ud Khamid
Director of CONS
Herdy Rosadi Harman
Director of HCM
Zulhelfi Abidin
David Bangun
Director of NITS
Director of DSP
Abdus Somad Arief
Dian Rachmawan
Director of WINS
Director of EBIS
None
None
None
None
None
None
None
None
President Commissioner of Telkomsel.
Commissioner of Telkomsel.
President Commissioner of GSD (Telkom
Property).
President Commissioner of Telkom Akses.
President Commissioner of Infomedia, and
Commissioner of GSD (Telkom Property).
Commissioner of Telkom Infra.
President Commissioner of MDI,
President Commissioner of Metranet, and
Member of the Governing Board YPT.
President Commissioner of Telin.
President Commissioner of Teltranet Aplikasi
Solusi (Telkom Telstra).
Remarks: KEU (Finance), CONS (Consumer Service), HCM (Human Capital Management), NITS (Network, IT, & Solution),DSP (Digital & Strategic
Portfolio), WINS (Wholesale and International Service), and EBIS (Enterprise & Business Service).
THE BOARD CHARTER OF THE BOARD OF
DIRECTORS
AUTHORITIES, DUTIES, AND RESPONSIBILITIES
OF THE BOARD OF DIRECTORS
In performing its duties, responsibilities, and authority, the
Board of Directors shall be guided by the Charter of the Board
of Directors established by Decree of the Board of Directors
No.PD.604.00/r.00/HK000/C00-D0030000/2011 dated July 11
, 2011. The Charter of the Board of Directors contains the code of
conduct, authority, duties, responsibilities, obligations, division of
tasks, meetings, provisions on conflict of interest, shareholding,
provisions on the mechanisms and division of authorities among
members of the Board of Directors which are not set out by the
Company’s Articles of Association and the applicable laws and
regulations. The charter is intended to improve the performance
of the Board of Directors and optimize the work time of the Board
of Directors in managing the company.
The Board of Directors has the following duties and responsibilities:
1. To conduct and be responsible for the management of the
Company for the Company’s interest pursuant to the purposes
and objectives of the Company as stipulated under the Articles
of Association.
2. To organize the annual GMS and other GMS as stipulated
under the provisions of laws and regulations and Articles of
Association.
3. To conduct the duties and responsibilities in good faith, full
responsibility, and prudentially.
4. To form the Committee to support the effectiveness of the
implementation of duties and responsibilities of the Board of
Directors.
5. To evaluate the performance of the committee that has been
formed at the end of financial year.
190
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights The duties and responsibilities of each member of the Board of
Directors in accordance with their activities are as follows:
President Director (CEO Telkom Group)
1. To coordinate the process, to structure or reconstruct the
corporate philosophical aspects which shall include but not
limited to the vision, mission, objective, corporate culture as
well as leadership architecture;
2. To formulate and state the strategic direction in order to
enable the Company to realize the sustainable competitive
growth in all Telkom’s business portfolios, and risk control as
well as interfacing with external constituent;
3. To control the function of strategic planning within Telkom as
a group and direct the effort to grow by focusing to the new
business portfolio;
8. To implement advisory functions in the determination of
corporate level strategies, especially for the matters related
to the aspect of financial and supply resources of Telkom as
a group; and
9. To ensure the effectiveness of management of all risks in
the business process within the scope of all units under the
supervision of Directorate of KEU.
Director of Digital & Strategic Portfolio (“DSP”)
1. To determine the conception and formulation of Company’s
Long-Term Plan (corporate strategic scenario);
2. To determine the policies on good governance and mechanism
to manage the Company’s planning and its strategy (the policy
for the setting of planning level and its strategy - corporate
level, business level and functional level);
3. To determine the strategy and policy of Telkom Group’s
4. To control the corporate direction in the effort for driving
business portfolio;
new business, entering/developing new market as well as
internationalization/regionalization;
5. To control the management of strategic aspect of the functions
of finance, human capital and innovation & strategic portfolio
in all business portfolio implemented by Telkom as a group;
6. To lead the process of leader development of Telkom Group
as well as to appoint and terminate the title holder in certain
position pursuant to the stipulation of career management
as determined as well as leader development for Telkom as a
group; and
7. To periodically report the performance of the Company
pursuant to the provisions prevail for public company.
Director of Finance (“KEU”)
1. To determine the conception and formulation of Long-Term
Plan of Company’s finance within Telkom as a group;
2. To facilitate the process for the formulation of the concept
of corporate level strategy especially the financial & asset
perspective for the aspect of among others, but not limited to
the strategic budgeting, business and investment, parenting
strategy, subsidiary performance, capital management and
supply management;
3. To determine the functional strategy and policy in the financial
and asset sectors, which shall cover among others, but not
limited to the financial policy, asset management policy,
supply management policy and financial system support
policy;
4. To determine the functional strategy and policy in the sector
of risk management to ensure the effectiveness of business
continuity management;
5. To manage investor relations to protect the psychology of
investors;
6. To determine the policy of good governance, and mechanism
of management of financial accounting (accounting sector
including the presentation of financial reporting), management
accounting (budgeting sector) and corporate finance supply
and risk as well as the control of its implementation;
7. To determine the policy, good governance and mechanism of
the management of Company’s budgeting process (RKAP);
4. To determine the strategy, policy and recommendation of
corporate action and strategic investment for Telkom Group’s
business development;
5. To determine the innovation strategy in order to “explore”
to get new source of growth for the development of Telkom
Group’s business portfolio;
6. To determine the parenting strategy to harmonize and
optimize the capability of Telkom Group’s business entities in
improving the Value of the Company;
7. To determine the policy, good governance, and mechanism
for the innovation for the development of Telkom Group’s
business portfolio;
8. To determine the policy, good governance and mechanism to
manage the synergy of Telkom Group;
9. To conduct the advisory function in the process to set the
strategy on the corporate level strategy, especially for
the matters in relation to the aspect of business portfolio
development; and
10. To ensure the effectiveness of the management of all risks in
the business process within all units under the supervision of
the Directorate of ISP.
Director of Human Capital Management (“HCM”)
1. To determine the conception and formulation of Long-Term
Plan of Human Capital and Master Plan of Human Capital
as a group;
2. To facilitate the formulation process of corporate level
strategy concept especially for the aspect in relation to the
development of center of excellence, for people aspect, human
capital, organization design corporate culture and leadership
architecture and industrial relation;
3. To determine the functional strategy and policy in the sector
of human capital, among others but not limited to the sector
of human capital development, human capital system,
human capital operation, organization development, and
industrial relation;
4. To prepare and execute the program of Telkom Smart Office;
191
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices 5. To determine the policy, good governance, and mechanism
to manage and the planning as well as the management of
resources (development, empowerment and management of
HR) and organization development;
6. To determine the policy, good governance, and mechanism
of development and inter-relation with the entity/institution
that relates to the management of HR which are among others
but not limited to the institutions that manage the pension
fund, the management of employees and retired people,
the management to develop the skill and competence or
educational institution as well as labor union institution;
7. To conduct the partnership and community development
program;
8. To conduct the advisory function in the determination of
2. To determine the policy and mechanism of parenting in
order to create value of the Company by optimizing and
harmonizing the interrelation between “parent” and all
entities that manage the business operation of the consumer
segment within the scope of Telkom as a group;
3. To determine policy, good governance and mechanism of the
management of marketing function in consumer segment;
4. To determine the policy, good governance and mechanism of
the management of sales function and/or channel partnership
in consumer segment;
5. To determine the policy, good governance and mechanism of
the management of customer relationship management in
consumer segment; and
6. To ensure the effectiveness of management of all risks in the
business process of all units under the supervisions of the
strategy on the corporate level strategy, especially those that
Directorate of Consumer Service.
relate to HR of Telkom as a group; and
9. To ensure the effectiveness of management of all risks in the
Director of Enterprise Business Service (“EBIS”)
business process within all units under supervision of the
Directorate of HCM.
Director of Network, IT & Solution (“NITS”)
1. To determine the planning and business strategy to leverage
the capability of Company’s resources in order to grow/make
bigger/“exploit” the “established” business/service through
the utilization of infrastructure, IT and solution to support the
business portfolio of Telkom Group in synergy;
2. To determine the policy, good governance and mechanism
to utilize the infrastructure/network to support the business
portfolio of Telkom Group;
3. To determine the policy, good governance and mechanism
to utilize IT to support the growth of business portfolio of
Telkom Group;
4. To determine the policy, good governance and mechanism to
create the best performance upon the service/solution that
supports the sustainable competitive growth of Telkom Group;
5. To set and control the mechanism of “parenting” which
is adjusted with parenting strategy to all units under the
supervision of Directorate of NITS and or other unit that is
directly involved in the implementation process of utilization
activities and infrastructure operation; and
6. To ensure the effectiveness of management of all risks in the
business process of all units under the supervisions of the
Directorate of NITS.
Director of Consumer Service (“CONS”)
1. To determine the planning and business strategy to leverage
the capability of Company’s resources in realizing the
competitive advantage to win the competition and the long-
term growth of business portfolio in the consumer segments
(consumer home services and consumer personal services)
within the scope of Telkom as a group;
192
1. To determine the planning and business strategy to leverage
the capability of Company’s resources in the realization of
competitive advantage to win the competition and long-
term growth of business portfolio in the corporate segment
(enterprise, government and business) within the scope of
Telkom as a group;
2. To determine the policy and mechanism of parenting in
order to create the value of the Company by optimizing
and harmonizing the inter-relation between “parent” and
all entities that manage the business of corporate segment
(enterprise, government and business) within the scope of
Telkom as a group;
3. To determine the policy, good governance and mechanism
of the management of marketing function in the corporate
segment (enterprise, government and business);
4. To determine the policy, good governance and mechanism
of the management of sales function and/or account
management
(enterprise,
government and business);
the corporate segment
in
5. To determine the policy, good governance and mechanism
of the management of customer relationship management
in the corporate segment (enterprise, government and
business); and
6. To ensure the effectiveness of management of all risks in the
business process of all units under the supervisions of the
Directorate of EBIS.
Director of Wholesale & International Business
Service (“WINS”)
1. To determine the planning and business strategy to leverage
the capability of Company’s resources in the realization of
competitive advantage to win the competition and long-term
growth of business portfolio in the wholesale & international
segment within the scope of Telkom as a group;
2. To determine the policy and mechanism of parenting in
order to create the value of the Company by optimizing and
harmonizing the inter-relation between “parent” and all
entities that manage the business of wholesale & international
segment within the scope of Telkom as a group;
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights 3. To determine policy, good governance and mechanism
BOARD OF DIRECTORS’ MEETING
of management of marketing function in the wholesale &
international segment;
The Board of Directors shall hold an
internal meeting
4. To determine the policy, good governance and mechanism
periodically at least 1 (one) time in each month and may also be
of the management of sales function and/or account
held at any time as necessary. In addition, the Board of Directors
management in the wholesale & international segment;
shall also hold a meeting with the Board of Commissioners at
5. To determine the policy, good governance and mechanism of
least once in 4 (four) months and may also be held at any time
the management of customer relationship management in the
as necessary. The joint meetings of the Board of Directors and
wholesale & international segment; and
Board of Commissioners within the Company are referred to as
6. To ensure the effectiveness of management of all risks in
the Joint Meeting.
the business process of all units under the supervisions of
Directorate of WINS.
The meeting quorum shall be reached if more than half of
members of Board of Directors are present or legally represented
Then, in addition to the obligation to perform its duties and
in such meeting. Any member of Board of Directors that present
responsibilities, the Board of Directors also has the following
shall have a casting vote (and one vote for any other Director
powers:
that is being represented). The decision making in the Board
1. Each member of the Board of Directors is authorized to act
of Directors’ meeting shall be based on the deliberation to
reach a consensus. If the consensus cannot be reached, then
the resolution shall be made based on the majority votes from
members of Board of Directors that are present.
In 2017, the Board of Directors’ meetings have been held for
57 times with the agenda and attendance level of the Board of
Directors as follows.
for and on behalf of the Board of Directors in representing the
Company in and out of court on all matters and in any events,
binding the Company with other parties, and performing
any actions either in connection with the management or
ownership subject to the restrictions contained in the Articles
of Association and the laws and regulations on capital markets.
2. Without prejudice to
its responsibilities, the Board of
Directors for certain acts may appoint one or more persons as
its attorney under conditions set out by the Board of Directors
by virtue of a special power of attorney.
3. For certain acts, the Board of Directors must first obtain
written consent of the Board of Commissioners and/or GMS
as set out in the Articles of Association of the Company.
Any member of the Board of Directors shall be jointly responsible
for all Company’s losses caused by the mistake or negligence
of the member of Board of Directors in performing its duties.
Members of Board of Directors shall not be liable for the
Company’s loss if they can prove that:
1. Such loss is not caused by their mistake or negligence;
2. They have performed actions in good faith, full responsibility,
and prudentially for the interest and based on the purpose
and objective of the Company;
3. They do not have any conflict of interest either directly or
indirectly for the management activities causing the loss; and
4. The have taken the action to prevent the occurrence or
continuation of such loss.
193
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices Table of Agenda and Attendance in the Board of Directors’ Meetings
No
Date
Agenda/Discussion of the Meeting
AJS HMZ MK
HRH
(1)
ZA
(1)
DB
(1)
ASA
DR
HB
(2)
IU
(3)
Board of Directors present at the meeting
1.
January 3,
1. Performance Report of December 2016
2017
2. Report of FU HCM
3. Update on the Working Readiness Ceremony of
2017
4. Update on KPKU Materials
5. Limited Agenda Report
2.
January 11,
1. Report on the Ytd Operation & Revenue
2017
Performance of December 2016 and Operation &
Revenue Performance of January 2017
2. Report of FU HCM
3. Update on Telkom 3S Satellite Launch Event
4. Limited Agenda Report
√
√
N/A
√
N/A
N/A
√
-
√
√
√
√
N/A
√
N/A
N/A
√
√
√
√
3.
January 17,
1. Performance Report of January 2017
2017
2. Report FU HCM
√
√
N/A
√
N/A
N/A
√
√
-
√
3. Limited Agenda Report
4.
January 24,
1. Report of FU HCM
2017
2. Performance Report of January 2017
3. Update on the GMS and the Proposal of Dividends
√
√
N/A
√
N/A
N/A
√
√
√
√
for Subsidiaries
4. Limited Agenda Report
5.
January 31,
1. Report of FU HCM
2017
2. Performance Report of January 2017
3. Report on the 2017 BUMN Hadir untuk Negeri
Program
4. Update on the T3S Launch and Post-launch Plan
5. Limited Agenda Report
6.
February 7,
1. Performance Report of January 2017
2017
2. Report of FU Finance
√
√
N/A
√
N/A
N/A
√
√
√
√
3. Update on Telkom
Integrated Supply Chain
√
√
N/A
√
N/A
N/A
Management (TISCM)
4. Limited Agenda Report
7.
February 14,
1. Performance Report of February 2017
2017
2. Limited Agenda Report
8.
February 21,
1. Performance Report of February 2017
2017
2. Report of GRAPARI Telkom Group
3. Update on Telkom Craft Indonesia
4. Update on the Progress of TLT Readiness and
Relocation Celebration Event
5. Limited Agenda Report
-
√
N/A
√
N/A
N/A
-
-
√
√
√
√
-
√
√
√
N/A
√
N/A
N/A
√
√
√
√
9.
February
1. Performance Report of February 2017
28, 2017
2. Limited Agenda Report
√
√
N/A
√
N/A
N/A
√
-
-
√
194
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights No
Date
Agenda/Discussion of the Meeting
AJS HMZ MK
HRH
(1)
ZA
(1)
DB
(1)
ASA
DR
HB
(2)
IU
(3)
Board of Directors present at the meeting
10.
March 7,
1. Performance Report of February 2017
2017
2. Report of FU HCM
3. Report of FU Finance
4. Limited Agenda Report
11.
March 14,
1. Performance Report of March 2017
2017
2. Update IFRS 15
3. Limited Agenda Report
12.
March 21,
1. Performance Report of March 2017
2017
2. Update on blanja.com Rebranding
3. Limited Agenda Report
13.
March 29,
1. Appointment of Acting Director of DSP
2017
2. Performance Report of March 2017
√
√
N/A
√
N/A
N/A
√
√
√
√
√
√
√
N/A
√
N/A
N/A
√
√
N/A
√
N/A
N/A
-
√
√
√
√
√
N/A
3. Report of Grapari Telkom Group
4. Ratification of Annual Report of 2016 –
√
√
N/A
√
N/A
N/A
-
-
√
N/A
Retirement Fund
5. Limited Agenda Report
14.
March 31,
1. Report of FU HCM
2017
2. Limited Agenda Report
15.
April 4,
1. Performance Report of March 2017
2017
2. Limited Agenda Report
16.
April 11,
1. Performance Report of March & April 2017
2017
2. Report of FU Finance
√
√
√
√
N/A
N/A
√
√
N/A
N/A
N/A
N/A
√
√
-
√
√
√
N/A
N/A
3. Report of Grapari Telkom Group
√
√
N/A
√
N/A
N/A
√
√
√
N/A
4. Report of FU HCM
5. Limited Agenda Report
17.
April 20,
1. Performance Report of April 2017
2017
2. Update on the 2017 First Leadership Meeting
Theme and Scenario
3. Limited Agenda Report
18.
April 25,
1. Handover of Works of Dir NITS & Dir CONS
2017
2. Update on Joint Meeting Materials – The
√
√
N/A
√
N/A
N/A
√
√
√
N/A
Company’s Performance in March 2016
√
√
√
√
√
√
√
√
N/A
N/A
3. Update on the 2017 First Leadership Meeting
Theme and Scenario
19.
May 12,
1. Performance Report of April & May 2017
2017
2. Report on the CDC Program for the Declaration of
Cultural Programs
3. Update on the 2017 BUMN Hadir untuk Negeri
Activity, Halal Bihalal and Telkom Anniversary
4. Limited Agenda Report
20. May 16,
1. Performance Report of May 2017
√
√
√
√
√
√
√
√
N/A
N/A
2017
2. Update on Telkom Anniversary Activities
√
√
-
√
√
√
-
√
N/A
N/A
3. Limited Agenda Report
195
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices Board of Directors present at the meeting
No
Date
Agenda/Discussion of the Meeting
AJS HMZ MK
HRH
21.
May 23,
1. Performance Report of May 2017
2017
2. Update on Draft Rolling CSS 2018-2022
3. Limited Agenda Report
22. May 30,
1. Performance Report of May 2017
2017
2. Telkom Group SIAGA RAFI 2017 Report
3. Limited Agenda Report
23.
June 6,
1. Performance Report of May 2017
2017
2. Limited Agenda Report
24.
June 13,
1. Performance Report of June 2017
2017
2. Update on the Preparation for RAFI Post Visits,
Halal Bi Halal and Telkom Anniversary
3. Limited Agenda Report
25.
June 19,
1. Update on Joint Meeting Materials
2017
2. Update on Inorganic: Review & Progress
26.
June 20,
1. Performance Report of June 2017
2017
2. Report the Preparation for RAFI Post Visits, Halal
Bi Halal and Telkom Anniversary
3. Limited Agenda Report
27.
July 5, 2017
1. Performance Report of June 2017
2. Limited Agenda Report
28.
July 11, 2017
1. Performance Report of June & July 2017
2. Update on the Theme of Telkom Group’s 2017
Second Leadership Meeting
3. Limited Agenda Report
29.
July 18,
1. Performance Report of July 2017
√
√
√
√
√
√
√
√
(1)
√
√
√
√
√
√
-
√
√
-
√
√
√
√
√
-
√
√
√
√
-
√
√
√
ZA
(1)
DB
(1)
ASA
DR
HB
(2)
IU
(3)
√
√
-
√
-
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
N/A
N/A
√
√
N/A
N/A
N/A
N/A
√
N/A
N/A
√
N/A
N/A
√
N/A
N/A
√
N/A
N/A
√
N/A
N/A
2017
2. Report of FU HCM
√
√
√
√
√
√
√
√
N/A
N/A
3. Limited Agenda Report
30.
August 1,
1. Performance Report of July 2017
2017
2. Update on T2 Satellite
3. Update on the Assesment of Digital Grapari
Telkom Group
4. Report on the 2017 BUMN Hadir untuk Negeri
Activity and the 72nd National Independence Day
in Banten Province
5. Limited Agenda Report
31.
August 8,
1. Performance Report of July 2017
2017
2. Limited Agenda Report
32.
August 15,
1. Performance Report of August 2017
2017
2. Report of FU Finance
√
√
√
√
√
√
√
√
N/A
N/A
√
√
-
√
√
√
√
√
N/A
N/A
3. Update on the Activity of the 2017 Post and
√
√
√
√
√
√
√
√
N/A
N/A
Telecommunications Day
4. Limited Agenda Report
33.
August 22,
1. Performance Report of August 2017
2017
2. Report : Acceleration of Fiberization in Surabaya
√
√
√
√
√
√
√
√
N/A
N/A
3. Limited Agenda Report
196
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights No
Date
Agenda/Discussion of the Meeting
AJS HMZ MK
HRH
Board of Directors present at the meeting
(1)
√
√
√
√
√
√
√
√
√
-
√
√
-
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
ZA
(1)
DB
(1)
ASA
DR
HB
(2)
IU
(3)
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
N/A
N/A
N/A
N/A
√
N/A
N/A
√
√
√
√
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
√
√
√
-
√
√
√
√
N/A
N/A
34.
August 28,
Report Agenda of Satellite Telkom-1 Status and
2017
Telkom-2 Relocation Plan
35.
August 28,
Service Recovery Plan of Telkom-1 Satellite
2017
36.
August 29,
1. Performance Report of August 2017
2017
2. Report on the Evaluation of Jurong Business Plan
Data Center
3. Limited Agenda Report
37.
August 30,
Follow up on Telkom-1 Satellite
2017
38.
September
Service Recovery Plan of Telkom-1 Satellite
1, 2017
39.
September
1. Performance Report of August 2017
5, 2017
2. Limited Agenda Report
40.
September
Progress of Telkom 1 Satellite Handling
7, 2017
41.
September
1. Performance Report of August 2017 & September
12, 2017
2017
2. Update on the Preparation of RI President Visit
to Balkondes Tuksongo and Breksi Balkondes
Groundbreaking
3. Limited Agenda Report
42.
September
1. Performance Report of September 2017
19, 2017
2. Report on Telkom-1 Satellite Post-recovery
√
√
√
√
√
√
√
√
N/A
N/A
3. Limited Agenda Report
43.
September
1. Performance Report of September 2017
26, 2017
2. Report on Telkom-1 Satellite Handling
3. Report of FU HCM
√
√
√
√
-
√
√
-
N/A
N/A
4. Update on the Preparation of CGPI
5. Limited Agenda Report
44. October 4,
1. Performance Report of September 2017
2017
2. Report on Telkom-1 Satellite Post-recovery
√
√
√
√
√
√
√
√
N/A
N/A
3. Limited Agenda Report
45. October 10,
1. Performance Report of September & October 2017
2017
2. Report on Telkom-1 Satellite Post-Recovery
(additional report on the Designation of Name &
√
√
-
√
√
√
√
√
N/A
N/A
Logo of Telkom-4 Satellite)
3. Limited Agenda Report
46. October 16,
Limited Agenda Report
2017
47.
October 17,
1. Performance Report of October 2017
2017
2. Update on the Preparation of Event 2017
Communic
Indonesia 2017 Exhibition, and
Funwalk on Post and Telecommunications Day
3. Update on the Theme of Telkom Group’s 2017
Third Leadership Meeting
4. Report on Telkom-1 Satellite Post-recovery
(additional Appointment of Nama & Logo Satelit
Telkom-4)
5. Limited Agenda Report
√
√
√
√
√
√
√
√
N/A
N/A
√
√
√
√
√
√
√
√
N/A
N/A
197
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices No
Date
Agenda/Discussion of the Meeting
AJS HMZ MK
HRH
Board of Directors present at the meeting
ZA
(1)
DB
(1)
ASA
DR
HB
(2)
IU
(3)
48. October 23,
1. Update on Joint Meeting Materials:
the
2017
Company’s Performance in September 2017
2. Update on the Results of Telkom Group’s 2017
Third Pre-Leadership Meeting
49. October 31,
1. Performance Report of October 2017
2017
2. Limited Agenda Report
50. November
1. Performance Report of November 2017
7, 2017
2. Limited Agenda Report
51.
November
1. Performance Report of October 2017
14, 2017
2. Report on Telkom-1 Satellite Recovery
3. Update on the Preparation of 2017 KPKU
4. Limited Agenda Report
52. November
1. Performance Report of November 2017
21, 2017
2. Limited Agenda Report
53. November
1. Performance Report of November 2017
28, 2017
2. Report of FU HCM
(1)
√
-
√
√
√
√
-
√
√
√
√
-
√
-
√
√
√
√
√
√
√
√
√
√
-
√
√
√
√
√
√
-
√
√
√
√
N/A
N/A
√
√
N/A
N/A
N/A
N/A
√
N/A
N/A
√
N/A
N/A
3. Update on the Progress of Implementation of
√
√
√
√
√
√
√
√
N/A
N/A
Digital Touch Point (DTP)
4. Limited Agenda Report
54.
December
1. Performance Report of November 2017
5, 2017
2. Report on the Readiness of 2017 KPKU
√
√
√
√
√
√
√
√
N/A
N/A
3. Limited Agenda Report
55. December
1. Limited Agenda Report
12, 2017
2. Performance Report of December 2017
3. Update on the Implementation of 2018 TelkomCraft
4. Limited Agenda Report
56.
December
1. Performance Report of December 2017
19, 2017
2. Report on the Preparation of 2018 Work
Readiness Ceremony
3. Limited Agenda Report
57.
December
1. Performance Report of December 2017
28, 2017
2. Limited Agenda Report
Total Attendances
Total Meetings
Attendance Level of the Board of Commissioners (%)
√
√
√
√
√
√
-
√
N/A
N/A
√
-
54
57
95
√
√
53
57
93
√
√
35
40
88
-
√
52
57
91
√
√
36
40
90
√
√
40
40
100
√
√
50
57
88
√
N/A
N/A
√
N/A
N/A
52
57
91
14
17
11
11
82
100
Remarks: AJS (Alex J Sinaga), HMZ (Harry M Zen), MK (Mas’ud Khamid), HRH (Herdy Rosadi Harman), ZA (Zulhelfi Abidin), DB (David Bangun), ASA
(Abdus Somad Arief), DR (Dian Rachmawan), HB (Honesti Basyir), IU (Indra Utoyo).
(1)Start from April 21, 2017
(2)HB until April 20, 2017
(3)IU until 15 March 2017
198
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights DIRECTORS REMUNERATION POLICY
KNR by the instruction from
Board of Commissioners create
remuneration draft The Result will
be decide in AGMS
1
3
5
4
AGMS
KNR ask independent Party for
Suggestion
2
Independent Party give its
suggestion to KNR
Board of Directors Remuneration
Mechanism and Procedure
*KNR : Committee for Nomination and Remuneration
The procedure for determining the remuneration of members of the Directors of Telkom are as follows:
1. The Board of Commissioners requests the KNR to draft a remuneration proposal for the Directors.
2. The Committee for Nomination and Remuneration requests an independent party to draw up a framework on the remuneration of
the Directors.
3. The Committee for Nomination and Remuneration proposes the remuneration to the Board of Commissioners.
4. The Board of Commissioner proposes remuneration for the Directors the GMS.
5. The GMS delegates authority and power to the Board of Commissioners with the prior approval of Series A Shareholders to
determine the remuneration for the Board of Directors.
Basis for the Determination and Structure of Remuneration
The structure of the remuneration of the Directors is governed by the provisions of the Regulation of the State Minister for State
Owned Enterprises No.PER-04/MBU/2014 on Guidelines for the Determination of Income for Directors, Board of Commissioner and
Board of Trustees of SOE’s.
Based on the GMS regulation, the income component for members of the Directors consists of:
1. Salaries;
2. Allowances;
3. Facilities; and
4. Bonus/Incentive.
The determination of income in the form of salary / honorarium, allowances and facilities that are fixed in accordance with the
conditions of the Company. While bonus/work incentive is an annual employment benefit based on the performance of the Company,
the amount determined by the General Meeting of Shareholders.
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Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices For 2017, the total remuneration of the entire Board of Directors was Rp159.2 billion. Taxes from remuneration borne by our Company
amounted to Rp10.5 billion. The table below sets forth the remunerations that our Directors received in 2017:
Table on the Recapitulation of Remuneration for Telkom’s Board of Directors
Board of Directors
Alex J. Sinaga
Harry Mozarta Zen
David Bangun (2)
Indra Utoyo (3)
Dian Rachmawan
Abdus Somad Arief
Herdy Rosadi Harman
Honesti Basyir (4)
Heri Sunaryadi (6)
Muhammad Awaluddin (5)
Mas'ud Khamid (2)
Zulhelfi Abidin (2)
Value (Rp million)
Salary
Bonuses and THR
Other
Allowances
Total
2,880
2,592
1,765
648
2,592
2,592
2,592
864
-
-
1,791
1,800
19,475
12,183
216
17,311
17,527
17,527
17,527
17,311
5,345
11,919
216
216
300
300
208
75
300
300
300
100
-
-
208
208
22,655
15,075
2,189
18,034
20,419
20,419
20,419
18,275
5,345
11,919
2,215
2,224
Remarks:
(1) “THR” refers to tunjangan hari raya or religious holiday allowance
(2) Since the AGMS on April 21, 2017
(3) Up to March 15, 2017
(4) Up to April 20, 2017
(5) Up to September 9, 2016
(6) Up to the AGMS on April 22, 2016
THE BOARD OF DIRECTORS PARTICIPATION IN THE BPJS KESEHATAN PROGRAM
We fully support Government programs aimed at improving the welfare of the people. One of them is the National Health Insurance
Program. On January 2, 2018 we held a discussion on the follow up of SOE’s Minister’s Letter Number 06/MBU/10/2017 regarding SOE
Participation in the National Implementation Guarantee Agency Program and decided that all Directors and members of the Board of
Commissioners and their families will be participants of BPJS Kesehatan.
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PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights CORPORATE SECRETARY
PROFILE OF CORPORATE SECRETARY
The Corporate Secretary is an organ of the company which
has a significant role in facilitating the company’s internal
communication, connect the company and its shareholders, the
Financial Services Authority, and other stakeholders as well as
ensure the Company’s compliance with the applicable rules and
regulations in the field of capital market regulations.
Telkom has appointed Vice President (“VP”) of Investor Relations
to also perform tasks and duties of a Corporate Secretary in
accordance with the Financial Services Regulation No.35/
POJK.04/2014 regarding Corporate Secretary of the Issuer
Companies or Public Companies. Investor Relations is responsible
to prepare and provide information needed by the company’s
shareholders as required by capital market regulations, and
manage a systematic feedback mechanism so that management
could anticipate and respond to dynamics of shareholders and
capital market in effective and efficient manner.
CORPORATE SECRETARY FUNCTIONS
According to Telkom’s Guidelines on GCG, the functions of the
Corporate Secretary are:
1. To prepare and communicate information accurate, complete,
and timely regarding the performance and prospect of the
company to stakeholders.
2. To synergize with related units, including the subsidiaries, for
dissemination of information (socialization), implementation,
monitoring and reviewing of GCG, and its implementation.
Andi Setiawan
Born : June 6, 1978
Age : 39
Nationality and Domicile
Indonesian, domiciled in Indonesia.
Position and Appointment Basis
Corporate Secretary of the Company based on the Directors
3. To assist the Board of Directors
in various activities,
Decision Letter.
information, and documentation, among others:
a. Preparing the Register Book of Shareholders;
b. Attending the Board of Directors’ meetings and preparing
its minutes of meetings; and
c. Preparing and organizing GMS.
4. To publish the Company’s information in tactical, strategic and
timely manner.
TASKS AND DUTIES OF CORPORATE SECRETARY
1. Preparing and organizing GMS,
particularly the Annual Report;
including the material,
2. Attending the Board of Directors’ meetings and joint meetings
between the Board of Directors and the Board of Directors;
3. Managing and maintaining documents related to the
Company’s activities, including the GMS’s documents, the
Board of Directors’ minutes of meetings, the minutes of joint
meetings between the Board of Directors and the Board
of Commissioners, and other important documents of the
Company; and
4. Determining criteria regarding types and contents of
information that can be presented to the stakeholders,
including
information that can be published as public
documents.
Term of Office
March 4, 2015 up to present.
Education
He holds a Bachelor’s degree on Financial Management (S1) from
University of Indonesia.
Career History
2014
PT Telekomunikasi Seluler as GM of Investor Relations.
2010
PT Summarecon Agung Tbk as a Manager of Investor Relations.
2007
PT Bakrieland Development Tbk as a Manager of Corporate
Secretary.
2004
PT Pemeringkat Efek Indonesia as a Corporate Rating Analyst.
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Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices TRAINING AND EDUCATION OF CORPORATE SECRETARY
In order to improve the competence of Corporate Secretary/Investor Relations, the Company has held trainings designated to the
Investor Relations unit as follows:
Date
Training Program
March 8, 2017
Workshop Merger & Acquisition POJK 74/POJK.14/2016 and
Regulation Bapepam-LK IX.H.1
Organizer
Indonesian Corporate Secretary
Association (ICSA) and Indone-
sian Stock Exchange (IDX)
Location
Jakarta
April 4, 2017
Indonesia Investment Forum 2017
Euromoney
April 18, 2017
Workshop POJK No. 10/POJK.04/2017 and No. 11/POJK.04/2017
May 15, 2017
Workshop POJK No. 07/POJK.04/2017 concerning Document of
Registration Statement in the Framework of Public Offering of
Equity Securities, Debt Securities and / or Sukuk
May 18-19, and 22-
23, 2017
Certified Risk Professional
Indonesian Financial Service
Authority (OJK)
ICSA and BEI
Rajawali Training
June 5, 2017
Sharing Session Internet of Things
Telkom Corporate University
June 12, 2017
Governance, Risk and Compliance (GRC) Forum 2017
OJK
Jakarta
Jakarta
Jakarta
Jakarta
Jakarta
Jakarta
August 1–2,2017
Finance Refreshment
Telkom Corporate University
Bandung
August 7-9, 2017
Financial Management for Holding Company
Telkom Corporate University
Bandung
August 9-10, 2017
GCG Workshop
Telkom Corporate University
Bandung
August 16, 2017
POJK 21/POJK.04/2015 on Implementing Open Corporate
Governance Guidelines through Apply Comply or Explain Seminar
ICSA and BEI
September 27,
2017
POJK No. 51/POJK.03/2017 on Sustainable Finance Seminar
ICSA
October 4, 2017
Indonesia Annual Report Forum 2017 Seminar
Indonesia Annual Report Forum
(IARF)
Jakarta
Jakarta
Jakarta
October 16-18,
2017
October 31, and
November 15, 2017
Strategy and Valuation - Merger and Acquisition
Telkom Corporate University
Jakarta
Shared Service Operation Organisation
Telkom Corporate University
Jakarta
November 6, 2017
Preparation of Annual Report Workshop
Telkom Corporate University
Bogor
November 8-10,
2017
Mutual Fund Week: Future Investment, Easy and Affordable
Investor Relations Telkom and
OJK
Surabaya
November 22-23,
2017
Digi Summit 2017: 2018 Challenges, Opportunities, and the
Importance of Digital Synergy Orchestration
Telkom Digital Strategic Port-
folio
December 8, 2017
Sustainable Finance and Investment: Green Index Reference and
Sustainability Report
BEI
Jakarta
Jakarta
December 21, 2017
Forum Investor Relations BUMN
Investor Relations Telkom
Jakarta
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PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights IMPLEMENTATION OF CORPORATE SECRETARY’S TASKS
Throughout the 2017 financial year, the Corporate Secretary has performed its tasks in accordant with the tasks and duties of Corporate
Secretary as described under the applicable laws and regulations. The activities performed relating to the Corporate Secretary/
Investor Relations task implementation are:
Date
Name of Activities
Organize by
Remarks
January 18, 2017
Nomura Indonesia All Access
March 9 and 15, 2017 Non Deal Roadshow
March 16-17, 2017
Non Deal Roadshow
Nomura
Mandiri Sekuritas
Morgan Stanley
March 28-30, 2017
Credit Suisse 20th Annual Asian Investment Conference
Credit Suisse
April 17, 2017
Macquarie Corporate Day
May 4-5, 2017
CIMB 11th Annual Indonesia Conference
May 8-9, 2017
Indonesia Investor Conference 2017
Macquarie
CIMB Securities
Citigroup
Jakarta
Jakarta
Singapore
Hong Kong
Jakarta
Bali
Jakarta
May 16-17, 2017
8th Annual DB Access Asia Conference
Deutsche Bank
Singapore
May 29, -June 2,
2017
Non Deal Roadshow
June 8-9, 2017
Nomura Investment Forum Asia 2017
June 13, 2017
2017 Yuanta FHC Forum for Asia Investment and Fortune
June 15-16, 2017
Asia Telco and Internet Conference 2017
August 15-16, 2017
Non Deal Roadshow
August 30-31, 2017
Non Deal Roadshow
September 13-15,
2017
24th CLSA Investors’ Forum
October 30-31, 2017
Non Deal Roadshow
November 1-2, 2017
Non Deal Roadshow
November 3, 2017
Non Deal Roadshow
November 7-8, 2017
10th Annual DB Access Indonesia Conference
November 13-15 and
17, 2017
November 30 – De-
cember 1, 2017
Non Deal Roadshow
Non Deal Roadshow
December 5-6, 2017
Non Deal Roadshow
Credit Suisse
Nomura
Yuanta
UBS
Goldman Sachs
Danareksa
CLSA
Telkom
Credit Suisse
JP Morgan
Deutsche Bank
Deutsche Bank
London, Frankfurt, and
Amsterdam
Singapore
Taiwan
Hong Kong
Singapore
Jakarta
Hong Kong
Jakarta and Singapore
Hong Kong
Singapore
Jakarta
New York, Boston, and San
Fransisco
Morgan Stanley
London
CIMB
Kuala Lumpur
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Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices INFORMATION ACCESS AND COMPANY’S PUBLIC
DATA
3. Media
During the year 2017, we conducted news releases through
print and electronic media in order to disseminate information
To meet the principles of transparency and accountability
to the stakeholders.
in the application of Good Corporate Governance (GCG), we
provide access to corporate information and data to the public
4. Meeting with Analysts and Investors
on a regular basis through various approaches and channels of
communication. We also do this to establish communication with
stakeholders and in order to fulfill the disclosure requirement of
We conduct meetings with analysts and investors to provide
information on the Company’s performance and prospects
as well as updates on the telecommunications industry in
capital market information contained in the Financial Services
general.
Authority Regulation (POJK) No.31/POJK.04/2015 regarding
Disclosure of Material Information and Facts by Issuers or
5. Contact Via E-Mail
Companies Public.
We are open to communicating with stakeholders via e-mail.
For stakeholders who are our customers, can communicate via
The approaches and channels of communication we do and
e-mail customercare@telkom.co.id, while e-mail investor@
provide can be explained below:
1. General Meeting Of Shareholders (GMS)
Through the GMS, we convey the company’s performance
information to shareholders and involving shareholders to
participate in decision-making on strategic matters, especially
those requiring shareholder approval.
2. Website www.telkom.co.id
telkom.co.id. intended for investors.
6. Internal Media
Intra Telkom is a medium that we use for our information,
education and socialization facilities to all internal employees
of the Company.
7. Social Media
Through our website www.telkom.co.id, our stakeholders can
access up-to-date information on Telkom, including Profiles,
Corporate Governance, CSR Programs, Careers, Reports
including annual reports and financial reports, as well as
Telkom Group products.
We use a variety of social media to communicate with
stakeholders, including the millennial youth, who are very familiar
with digital media and social media. We have a social media
account on twitter (@Telkomcare), facebook (www.facebook.
com/Telkomcare), and Instagram (@Telkomindonesia).
Social Media Ecosystem
Twitter-Why three accounts ?
@TelkomIndonesia
Campaign & Brand
@TelkomCare
Customer Service
@TelkomPromo
Promo & Deals
210,690 Fans
118,877 Followers
84,809 Fans
243,304 Followers
551,519 Fans
142,174 Followers
The nature of Twitter is different from Facebook where all content that is posted will be seen-it is not a
pay to play model. With three accounts, we have the ability to provide consumers with an expectation of
the content that they will see in their feeds.
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PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights INTERNAL AUDIT UNIT
We have an Internal Audit or Internal Audit Unit (IA) that provides independent and objective views on the conditions of our internal
controls, risk management and corporate governance processes in our business activities. The purpose of this function is to become
catalyst by giving recommendations for Telkom in improving its business operations.
VISION, MISSION, AND STRUCTURE OF INTERNAL AUDIT UNIT
Vision
The Internal Audit (IA) becomes a “Smart Partner” for management, work units/business units and subsidiaries, in particular to create
a culture of discipline in implementing all applicable policies, business processes, and statutory provisions.
Mission
1. Provide services and internal audit consulting in a professional, objective and independent manner for the Management, Business
Units/Work Units, and subsidiaries.
2. Provide assurance on the feasibility of financial reports.
3. Actively monitor the implementation of internal control, provide support in improving the implementation of GCG, and evaluate the
implementation of risk managament.
STRUCTURE AND POSITION OF THE INTERNAL AUDIT UNIT
IA is a unit directly responsible to the President Director and an independent unit of other work units. This is in line with the prevailing
capital market regulations. Here is the organizational chart of IA Telkom.
President Director
Board of
Commissioner
SVP Internal Audit
Harry Suseno
Hadisoebroto
VP Infrastructure &
Operations Audit
Rahardian Krishna S.
VP Integrated &
Financial Audit
Agus Widjajanto
VP Planning &
Development Audit
Imam Santoso
VP IT Audit
Setia Dwi
Kusumawardani
Main Auditor
Achmad Aliyadin
INTERNAL AUDIT CHARTER, DUTIES, AND RESPONSIBILITIES OF INTERNAL AUDIT
Internal Audit Charter
Telkom’s Internal Audit Unit is equipped with an Internal Audit Charter as a company’s formal document, comprising of description of
vision, mission, structure, status, duties and responsibilities of IA, including requirements for IA’s personnel as an auditor. The drafting
of Internal Audit Charter guided by the international standards for IA profession practices, issued by the Institute of Internal Auditor
(“IIA”), and has been approved by the President Director as well as the Audit Committee based on the Board of Directors’ Resolution
No.Tel.09/PW000/UTA/COP-C0000000/2015 regarding Internal Audit Charter.
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Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices Duties and Responsibilities
INTERNAL AUDIT UNIT COMPOSITION
Based on Internal Audit Charter, duties and responsibilities of the
Our Internal Audit is led by a Senior Vice President of Internal
Internal Audit are:
1. To compose Annual Internal Audit plan;
Audit who is appointed and dismissed by the President Director
upon the approval of the Board of Commissioners. Until the end
2. To execute the Annual Internal Audit Plan that has been
of 2017, Senior Vice President of Internal Audit is assisted by
consulted by the Audit Committee or has been reviewed by
members of 78 people.
Audit Committee;
3. To examine and evaluate the adequacy of internal control and
PROFILE OF SVP OF INTERNAL AUDIT
risk management system based on the Company’s Policy;
4. To examine and assess the efficiency and effectivity in the field
of finance, accounting, operational, human capital, marketing,
IT, and other activity;
5. To review and/or audit the Company’s financial statement
periodically;
6. To inspect the compliance to the related regulation ;
7. To identify the alternative improvement and efficiency and
to increase efficiency and effectivity of the utility of sources
and fund;
8. To create audit report and to deliver that report to the
President Director and the Board of Commissioner c.q. Head
of Audit Committee;
9. To monitor, analize and report the implementation of the
improvement that has been recommended;
10. Give objective improvement recommendation and information
about the activity that has been inspected to all management
level of the Company and the afiliation of the Company;
Harry Suseno Hadisoebroto
Born : Bandung, June 24, 1966
11. To provide consultation needed by
the Company’s
management and its affilation company which the coverage
Age : 51
of the assignment has been agreed before;
12. To carry out task number 2 - 10 for the Company’s afiliation
upon request by the President Director of the Company
Nationality and Domicile
Indonesian, domiciled in Indonesia.
(management instruction);
Position and Appointment Basis
13. To collaborate with the Audit Committee, including monitor
the follow up of the recommendation by the result of the
inspection that have a significant impact and deliver the
report to the Audit Committee;
14. To compose the evaluation methodology and progam to
increase the quality of internal audit activity cooperating/
coordinating with Audit Committee;
15. To review and/or depth inspection of the audit committee
request in order to follow up whistleblower and/or allegations
of fraud (fraud) on the Company or its affiliated company,
and deliver the results of the investigation to the President
Director and the Audit Committee; and
16. To conduct the preliminary inspection with a particular purposes.
Senior Vice President of Internal Audit based on the Board of
Directors Resolution No. 1905/PS720/HCC-10/2015 dated June
9, 2015 which effectively prevail from July 1, 2015.
Term of Office
July 1, 2015 up to present.
Education
1999
Postgraduate Study: Engineering – Project Management (MSc.),
University of Manchester, Institute of Science and Technology,
Manchester, United Kingdom.
1990
Graduate Study: Civil Engineering (Ir.), Bandung Institute of
Technology, Indonesia.
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PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
Carreer History
TRAINING AND EDUCATION OF INTERNAL AUDIT
May 1, 2014 – June 30, 2015
PT Telekomunikasi Seluler as SVP Internal Audit.
During 2017, to improve quality, we involve our internal auditors
in various trainings. The training followed by Internal Audit in
April 1, 2011 - April 30, 2014
PT Telekomunikasi Indonesia (Persero) Tbk. as VP Infrastructure
& Supply Management Audit.
January 1, 2010 - March 31, 2011
PT Telekomunikasi Indonesia (Persero) Tbk. as AVP Infrastructure
Audit.
2017 is as follows:
Programs
Certification Training
Operational Training
Competency
Enhancement Training
Number of
Participants
Number of Days
14
23
12
148
66
35
November 1, 2007 - December 31, 2009
INTERNAL CONTROL SYSTEM
PT Telekomunikasi Indonesia (Persero) Tbk. as Deputy General
Manager Kandatel Malang.
TASK IMPLEMENTATION OF INTERNAL AUDIT
UNIT
As one of the listed listed companies in the USA capital market, we
have an obligation to comply with the provisions of SOX Section
404 which includes building, maintaining, testing and disclosing
the effectiveness of internal control over financial reporting.
In accordance with the Annual Internal Audit Work Plan, in the
Internal control is a process designed by/or under the supervision
year 2017, Unit IA implemented 78 assignments consisting of
of the President Director and the Director of Finance and run
audit, consultation, evaluation and review activities, as follows:
by the Board of Directors, management and other personnel.
Sub Departement
Audit
IOA
IFA
ITA
Total
11
14
12
37
IC
10
1
8
19
Review Evaluation
Total
0
15
0
15
0
7
0
7
21
37
20
78
QUALIFICATION AND PROFESSIONAL
CERTIFICATION OF INTERNAL AUDIT
To ensure the quality of internal controls is well under way, our
internal audit unit members possess the various certifications
that are relevant and necessary in carrying out their work. Here
are the details of certification held by Internal Audit members.
Certification Type
Certified Internal Audit (CIA)
Qualified Internal Auditor (QIA)
Certified Fraud Examiner (CFE)
Certified Information System Audit (CISA)
ISO 27001:2013
BCMS (ISO 22301)
ITSMS (ISO 20000-1)
Certified Ethical Hacker (CEH)
QMS (ISO 9000)
Certified Accountant (CA)
Number of
Certification
1
4
1
2
3
1
2
1
1
3
The goal is to obtain public confidence in the effectiveness of
financial reporting and the preparation of consolidated financial
statements
in accordance with the Financial Accounting
Standards of the Indonesian Institute of Accountants.
In practice, we use the Internal Control-Integrated Framework
2013 reference from The Committee of Sponsoring Organizations
of the Treadway Commission (COSO). COSO’s internal controls
contain five mutually tied components that we have applied at all
levels and business units of the company, including:
1. Control Environment
a. Demonstrates commitment to integrity and ethical values
(CE.01)
b. Exercises oversight responsibility (CE.02)
c. Establishes structure, authority and responsibility (CE.03)
d. Demonstrates commitment to competence (CE.04)
e. Enforces accountability (CE.05)
2. Risk Assessment
a. Specifies relevant objectives (RA.01)
b. Identifies and analyzes risk (RA.02)
c. Assesses fraud risk (RA.03)
d. Identifies and analyzes significant change (RA.04)
3. Control Activities
a. Selects and develops control activities (CA.01)
b. Selects and develops general controls over technology
(CA.02)
c. Deploys through policies and procedures (CA.03)
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Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices 4. Information and Communication
5. Monitoring Activity
a. Uses relevant information (IC.01)
b. Communicates internally (IC.02)
c. Communicates externally (IC.03)
a. Conducts ongoing and/or separate evaluations (MA.01)
b. Evaluates and communicates deficiencies (MA.02)
These five components have been applied and applied to Telkom’s policies, among them as follows:
APPLICATION IN TELKOM
Control Environment
• We build corporate culture as a guide for key role holders in building leadership patterns and strengthening organizational
synergies and enhancing sustainability competitive growth based on the values that have been formulated in The Telkom Way.
It is continuously reinforced and sustained which includes four dimensions, namely the spiritual dimension, the emotional
dimension, the intellectual dimension and the physical dimension as well as the great spirit of core values ie 3S: Solid, Speed,
Smart.
• We ensure the effectiveness of conducting Internal Audit activities implemented by implementing the SOA 302/404
prerequisites and managed with a risk based audit approach. We also ensure that effective coordination and co-operation with
internal and external parties and business risks to all business activities are adequately managed with internal control systems.
• We have a Competency Directory that defines the company’s competency needs. One of them is Stream Finance which includes
the competence of Corporate Finance with the sub area of Capital Structure competency and Working Capital Management
(Treasury Management). Then, Accounting with sub area competence of Financial Accounting, Management Accounting
and Corporate Tax. The competency development policy is aimed at creating superior, global quality and highly competitive
employees.
Risk Assessment
• We have several considerations in developing accounting policies such as Statements of Financial Accounting Standards
(PSAK), Interpretation of Statements of Financial Accounting Standards (ISAK), International Accounting Standards (IAS),
Related Laws, and changes in impacted internal environments.
• We have a principle of financial assertion in ICOFR planning that is well respected by all relevant employees.
• We manage internal and external corporate risk with established mechanisms. We also implement a fraud-controlled policy
control system and have potential fraud prevention.
Control Activities
• We set up a Business Process Owner (BPO) and AO (Application Owner) with ICOFR responsibilities and responsibilities.
•
Risk determination rules and internal controls refer to the ICOFR policy consisting of segregation of duties, risk determination,
determination of internal controls.
• We have guidelines for the implementation of information systems security that are aligned with company needs and can be
implemented on an ongoing basis.
Information and Communication
• We have accounting policies implemented under IFRS, outlined in accordance with accounting principles and implementation,
including information or data related to the process and disclosure of financial reporting, and regulates the components of the
consolidated financial statements.
• We have an information technology policy that provides a frame of reference for each process or unit associated with the
organization’s IT operations in the preparation and implementation of guidelines and procedures. The scope of IT regulations
in our company covers aspects of governance of IT governance and IT management.
Monitoring Activity
• We have an Internal Audit Charter that includes the auditor’s requirements in the Internal Audit unit, which has professional
integrity and behavior, knowledge of risks and important controls in the field of information technology, knowledge of capital
market laws and regulations.
• We have a policy on Reporting and Waiver Mechanisms, which is to issue reports and resolve waivers by business units,
anticipate and mitigate the impact of hidden risks, in an effort to enforce discipline.
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PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights The implementation of the five components is also in line with the Regulation of the Minister of State-Owned Enterprises Article 26
paragraph 2 of 2011 on Internal Control System. As of December 31, 2017, we have assessed the effectiveness of our internal control
over the company’s financial reporting with the report’s results being effective. The effectiveness assessment has also been audited
by KAP Purwantono, Sungkoro & Surja, an independent and registered public accounting firm.
In addition to referring to the COSO framework, we are committed to ensuring that our policies, compliance and all business activities
are conducted in accordance with applicable internal and external laws and regulations such as legal advisory, legal opinion, legal
review and litigation. The unit responsible for compliance with legislation is the Legal & Compliance Unit under the Corporate Secretary
Department.
RISK MANAGEMENT SYSTEM
Telkom implements risk management to protect its assets and business activities as well as to create values for its stakeholders. The
risk management also constitutes compliance towards the prevailing regulations. The role and function of risk management are very
important in supporting the telecommunication business that has a wide scope of business area, requires a big investment, has a high
competition level, rapid development of technology, regulated business as well as change in the ways of communication.
GENERAL ILLUSTRATION REGARDING THE RISK MANAGEMENT SYSTEM
The implementation of risk management system in Telkom shall be based on the Regulation of Minister of SOE No.1 of 2011 which
obliges SOE to implement risk management. Further, the implementation of risk management also constitutes the obligation of Telkom
as a company listed in the New York Stock Exchange (NYSE) to fulfill the Sarbanes-Oxley Act, especially article 302 and 404.
The implementation of risk management of Telkom in 2006 began with the formation of Risk Management & Legal Compliance (RMLC)
Unit under the coordination of Executive Vice President (EVP). Further, in 2007 the Directorate of Compliance & Risk Management
(CRM) was formed under the control of Director of CRM. With an improving level of awareness on risk management and the existence of
bigger business challenge, in 2013 the function of the Directorate of CRM was changed into the Directorate of Wholesale & International,
meanwhile, to implement the management of Governance, Risk & Compliance the Department of Compliance, Risk Management &
General Affair (“CRMGA”) was formed under the supervision of Head of CRMGA. In line with the business dynamic and organization
that is keep growing, in 2016 the function of Risk Management was conducted by Sub-Directorate of Risk & Process Management
which constitutes a part of the Directorate of Finance. The journey in managing Telkom’s Risk Management from 2006 to 2017 has led
the company to the level whereby the risk has been considered in the decision making of strategy, operation, compliance supervision
or in the internal control over financial reporting (ICOFR).
2006
Risk Management
& Legal Complience Unit
(RMLC)
2007
2013
Complience,
Risk Management &
General Affair
Departement (“CRMGA”)
2017
Complience & Risk
Management Directorate
(CRM)
Sub Directorate of Risk
& Process Management,
Dit KEU
Chart of Development of Telkom Risk Management Function 2006-2017
209
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices In 2017, Telkom kept trying to improve the implementation of risk
The objectives of the implementation of risk managements are:
management by emphasizing the Revenue Assurance & Fraud
1. Ensure that all risks that may disturb the action to achieve
Management System. Further, in the next year of 2018, Telkom
company’s objectives can be anticipated in advance and
will strengthen the Enterprise Risk Profile Group & Advisory
responded properly as well as to get new opportunities that
through Business Continuity Management (BCM), Revenue
support the action to achieve Company’s objective.
Assurance & Fraud, Insurance Management and Enterprise Risk
2. Prepare the Framework Standard to implement the Company’s
Management (ERM) of Telkom Group.
Risk Management so that the risk management can be more
coordinated and integrated.
Risk Management Policies of Telkom refers to the Regulation
of
Board
of
Directors
No.PD.614.00/r.00/HK.200/
The main framework of Telkom’s Risk Management shall refer to
COP-D0030000/2015 dated September 30, 2015 regarding
the framework from COSO (COSO ERM Framework), which shall
Telkom Enterprise Risk Management and Regulation of Finance
cover three main components namely:
Director
No.PR.614.01/r.00/HK200/COP-D0030000/2016
1. The implementation of company’s risk management must be
regarding the implementing guideline for Telkom Enterprise Risk
able to support the company’s objective from the aspects of
Management.
strategic, operational, reporting and compliance.
GIC
E
T
A
R
T
S
S
N
TIO
A
R
E
P
O
G
TIN
R
O
P
E
R
E
C
N
LIA
P
M
O
C
Internal Environment
Objective Setting
Event Indentification
Risk Assessment
Risk Response
Control Activities
B
S
U
U
S
B
I
N
S
I
E
D
S
S
I
A
R
U
Y
E
N
T
I
T
Y
-
D
I
V
I
S
I
L
O
E
N
N
I
T
V
E
L
Information & Communication
Monitoring
COSO ERM Framework Diagram
210
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
Strategic Aspect:
Operational Aspect:
The management and implementation of risk management shall be made
in order to give added values through the process of company’s planning
such as on the preparation of Company’s Long Term Plan (Corporate Stra-
tegic Scenario), Annual Budgeting (RKAP) or the process of strategic de-
cision making.
The implementation of risk management to protect company’s asset are
conducted through among others:
1. Physical security management for infrastructure security.
2. IT Security Management System which shall cover confidentiality, in-
tegrity and availability.
3. Management of Occupational Health and Safety (OHS) System.
4. The Development of Business Continuity Management, Disaster Re-
covery Plan and Crisis Management Team.
5. The Management of Revenue Assurance and Anti-Fraud Program.
Compliance Aspect:
Reporting Aspect:
Risk management shall be made in order to give added values through:
1. Compliance management upon the External or Internal Regulation.
2. Compliance management upon the provisions of SOX through the de-
The risk management shall be made in order to give added value through
the stipulation of the disclosure controlling process of financial reporting
through the Disclosure Control Procedure (“DCP”).
sign and implementation of adequate internal control.
2. Company’s risk management shall be implemented in all organization levels within the company which shall cover the Enterprise
level, Division, Business Unit and Subsidiary. In line with such matter, good governance of Telkom’s risk management shall be
adjusted with the structure and hierarchy of organization policies namely:
Board of Directors
Risk Committee
Company’s Risk Management
Unit
To determine the policies in relation to the risk management and to ensure that company’s risk management has
been implemented in all company’s management processes effectively.
To determine certain policies, review and recommendation upon the company’s risk and to give the feedback or
guideline to the responsible person of company’s risk.
To coordinate the implementation of company’s risk management policies.
Internal Audit Unit
To give an independent opinion to the Board of Directors, Risk Committee, and Company’s Risk Management unit.
Unit Manager
All Employees
Subsidiary
To implement and supervise all company’s risk management processes in the unit that he/she manages.
To conduct company’s risk management policies based on their role and position effectively and efficiently.
To implement the risk management in the subsidiary in the framework of implementation pursuant to the risk
management framework of Telkom.
3. The implementation of company’s risk management shall consist of 8 components of process namely:
a. Internal development.
b. Objective setting.
c. Event identification.
d. Risk assessment.
e. Risk response.
f. Control activities.
g. Information/ communication.
h. Monitoring.
211
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices To be able to conduct 8 components of process in the framework of COSO nicely, Telkom develops and maintain company’s risk
management through the structural and operational aspects.
1. Structural aspect
2. Operational Aspect
Develop the supportive internal environment, namely:
a. To build the commitment and Tone at the Top.
b. To put the foundation of risk management in framework of GCG.
c. To form a Risk Management Organization Unit.
d. The development of Policy, Guideline for Risk Acceptance Criteria
(RAC), Guideline for Risk Assessment (Risk & Control Self-
Assessment/RCSA) and Good Governance.
e. The development of competence in the field of risk management.
f. The provision of adequate tools and system.
Focus on:
a. The implementation of risk assessment in the level of corporate,
business unit and subsidiary as well as the preparation of adequate
mitigation plan.
b. The development of risk assessment methodology for specific function
that combines the implementation of COSO ERM Framework with
standard reference or other guideline.
c. The maintenance aspect that is focused on the process of information,
communication, review and continuous improvement.
In the implementation of risk management system, Telkom also pays attention and combines the said COSO framework with other
relevant reference and guideline among others:
1
2
3
4
ISO 31000
ISO 27001
ISO 22301
ISO 20000
Enterprise Risk Management as the implementation comparison and complementary
Information Security Management System (ISMS) as a reference in the development of risk management to ensure
Information Security in terms of Confidentiality, Integrity and Availability.
Business Continuity Management System (BCMS) as a reference in the effort to ensure business continuity
Information Technology Service Management (ITSM) as a reference to ensure IT service
ORGANIZATION OF RISK MANAGEMENT IN THE CORPORATE LEVEL
Telkom implements risk management system in all organization levels, namely:
1. Corporate Level.
2. Business Unit in the Company’s Office.
3. Business Unit (Division/Center).
4. Subsidiary.
In reference to the Regulation of Board of Directors and the Regulation of the Director of Human Capital Management in 2017, Telkom’s
risk management function is implemented by Sub-Directorate of Risk & Process Management in the Directorate of Finance:
VP RISK & PROCCESS
MANAGEMENT
AVP Accounting &
Treasury Policy
AVP Process
Management
AVP Risk Managament
Governance & Quality
Management Project
Leader
212
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights TYPES OF RISK AND MANAGEMENT METHOD
Risk management system helps Telkom to identify significant risks for the business sustainability. Telkom has identified the risks in
Indonesia specifically, namely the risk of social and politic, macro economy, disaster and other risks. Further for the business risks, Telkom
has identified the risk of operational, finance, law and compliance, regulation, inherent risk to the fixed and mobile telecommunication
business. In addition to such risks, Telkom also conducts the quantitative and qualitative disclosure upon the market risk.
Type of risk
Risks
The impact to Telkom
Mitigation/risk management
a. Risks related to Indonesia
Political and social
disruption
The
of political
stability and social instability to
specific issues.
Have negative impact to the business,
condition,
financial
operation,
business proceeds and prospect as
well as market price for securities.
The change of global, regional, or
Indonesian economic activities.
fluctuation
The
exchange rate.
of
rupiah
The increase of loan interest rate.
The decrease of government or
company’s credit rating.
condition,
1. Have the impact on the business,
business
financial
proceeds or business prospect.
2. Have a material adverse effect to
the business, financial condition,
business proceeds or business
prospect.
thunder,
storm,
Flood,
earthquake,
tsunami, volcano
eruption, epidemic, fire, drought,
power shut down and other event
beyond our control.
its business operations
Disrupting
and give negative
impact to the
financial performance and profit,
business prospect as well as market
price of securities.
1. Monitoring of the influence of social
political instability to the disruption of
operational/service
2. The maintenance
awareness
through the improvement of safety &
security functions.
of
1. Monitoring of the influence of macro
economy to the change to increase
the expense through cost leadership
program.
2. To look for the opportunity to increase
the spending of apbn pursuant to the
government focus (maritime, tourism,
energy, transportation, etc).
1. Transfer of risk by using the insurance
of assets to anticipate the natural
disaster and fire.
2. Coordination
ASKALSI
(Indonesian sea cable association) to
secure SKKL.
with
Disrupting
its business operation
and giving the negative impact to
the financial performance and profit,
business prospect as well as market
price of securities.
3. Preventive & corrective action by
preparing the disaster recovery plan
and crisis management team.
The use of a competent legal consultant
that has experience with the
issues
on corporate
in other countries
law
particularly the United States of America.
Indonesian
corporate
information disclosure standard
is significantly different than
what is implemented in other
countries including the United
States of America.
The difference in the regulation
of dividend determination.
The issue on the legal certainty
in Indonesia and United States
of America
the
implementation of law.
including
The possibility on the difference
in the
interest of controlling
shareholders with the interest
from other shareholders.
Macro economy
Risk of disaster
Other risks
b. Business related risks
Operational risk
The failure in the sustainability of
network operation, main system,
gateway on our network or other
operator’s network.
impact to the
Has the negative
business,
condition,
financial
proceeds from the operation and
business prospect.
Threat of physical and cyber
security,
theft,
such
destruction, or other action.
as
Has the negative
business,
proceeds
materially.
from
financial
impact to the
condition,
operation
the
Implementation of BCM, BCP, and DRP.
integrated
for
(IMS)
1.
2. Certification
management
infrastructure management.
of
system
1. The upgrade of preventive action in
the form of vulnerability assessment
and penetration test periodically.
2. Monitor and identification all of types
of attack in the real time as well as to
choose and conduct a necessary action
immediately.
3. Preparing the recommendation to
handle cyber attack based on the
historical incident analysis.
Intensive coordination with relevant
parties to handle the cyber attack.
4.
in
Risk
service.
relation
to
internet
May face a lawsuit and damage the
reputation.
To be more prudent in the preparation of
contract with content provider partner.
213
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices Type of risk
Risks
The impact to Telkom
Mitigation/risk management
Leak of revenue due to the
internal capability weakness or
external factor.
Has a negative impact to our business
proceeds.
1. Acceleration of leak detection time and
revenue indicated as an external fraud
in real time.
2. Monitoring the critical point of the leak
of revenue especially on the rejected
billing call.
New technology.
Has an impact on the competitive
power.
The limit of operation period,
damage or ruin, delay or failure
to launch, or the revocation of
satellite license.
Can create loss to financial condition,
proceeds
and
capability to give services.
operation
from
1. The
of
preparation
technology
roadmap by
into account
taking
future technologies and the possible
implementation
competitor’s
technologies.
of
2. Acceleration of IDN (Indonesia Digital
Network) program to support future
services.
1. The planning to change the satellite
of which operation period will be
immediately expired.
2. The insurance of satellite operation
3.
during the active period.
Insurance
launching of new satellite.
for manufacturing and
4. Developing the understanding with
regulator in relation to the satellite
operation by telkom.
Financial risk
Interest rate risk.
Foreign exchange rate risk.
The
limit
expenditure.
to
fund
capital
Has an adverse effect to the business,
financial condition and proceeds from
the operation.
Interest rate swap contract from the float
interest rate to become the fix interest
rate upon certain loan term.
Has negative impact on the financial
condition or proceeds
from the
operation.
Placement of time deposit and hedging
to cover the fluctuation risk of foreign
exchange.
Has a material adverse effect to
the business, financial condition,
operational
and
business prospect.
performance
Maintaining and improving the company’s
performance to obtain the trust from
national or global fund institution/source.
Legal and compliance risk
Regulation risk
Penalty/fine by KPPU in relation
to the price fixing and the
occurrence of class action.
Reducing our
negative
reputation and profit.
revenue and has
impact to the business,
The change of Indonesian or
international regulation.
Has the
condition,
financial
performance and business prospect.
impact to the business,
operational
Strengthening
legal
corporate action plan or certain contract.
review
towards
1. Analysis on
the
regulation plan towards the industry in
general and telkom in particular.
impact of
the
the
phone
Losing
customers and revenue from the
service of cable phone voice call.
cable
The competition on the internet
service (fixed broadband).
2. Giving inputs so that the regulation
that will be stipulated will give positive
impact to the company and industry.
Has a material adverse effect on the
proceeds from operation, financial
condition and our business prospect.
1.
Improving QoS – quality of service for
cable phone customers.
2. Giving value added service.
Has a negative impact on the business,
operational
financial
condition
performance and business prospect.
1. Strengthening the perception and
quality of indihome as new digital life
style.
2. Acceleration on the launching of the
for fixed broadband
infrastructure
service.
The competition on mobile
service.
Has a negative impact on the business,
financial
operational
condition
performance and business prospect.
1. Acceleration of the
launch of the
infrastructure for 4G service.
2. Improving QoS – quality of service.
Risk in relation to fix and mobile
telecommunication business
214
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights REVIEW ON THE EFFECTIVENESS OF RISK MANAGEMENT SYSTEM
In 2017, Telkom’s risk management system has been implemented effectively in supporting every policy and business process of
Telkom and its subsidiaries. The assessment on the effectiveness of Risk management implementation was conducted through the
evaluation process, namely:
1. One-on-one Evaluation/discussion with business unit as necessary.
2. Workshop for the sharing in the implementation and development of ERM with the subsidiaries as necessary.
3. Audit Program on Risk Management Implementation as necessary.
4. Evaluation with the Risk Committee, Compliance and Revenue Assurance in BoD level as necessary.
5. Evaluation with Planning and Risk Monitoring Evaluation Committee (KEMPR) as necessary.
The effectiveness of Telkom’s risk management system is integrated with the use of supporting infrastructure by using a risk
management information application tools/system, among others:
1. Generic Tools Enterprise Risk Management Online (ERM Online) which is used by all units to manage Risk Assessment.
2. Specific Tools for the purpose of certain risk management such as:
a. Fraud Management System (FRAMES) application is used as an early detection system for the possibility of Customer Fraud.
b. i-Library application managed by the Service Operation Division and to be used for the management of documentation system
of Integrated Management System.
c. SMK 3 Online application managed by Security & Safety Unit for Health and Safety documentation management.
d. Security & Safety application managed by Security & Safety Unit for the monitoring of Physical Security management.
e. Telkomcare application for the coordination with Crisis Management Team.
To maintain the quality of risk management, Telkom has also implemented the risk management competence development through
trainings. Moreover, Telkom has also conducted socializations as well as workshop in relation to risk management in the office of the
division and subsidiaries so that every person in Telkom is able to understand risks with the same point of view.
Table of Training of Telkom’s Risk Management in 2017
No. Type of Training
1
2
3
4
5
6
7
8
ISO 31000
Risk Assesment ICOFR
Fraud & Reveue Assurance
ISMS & Internal Auditor ISMS
Risk Management
Enterprise Risk Governance
Internal Auditor BCMS
Hedging
Time
February 2017
March 2017
April 2017
May 2017
May 2017
May 2017
September 2017
October 2017
During 2017 Telkom received the visits or was asked by external parties to conduct sharing sessions for the implementation of Risk
Management, Internal Control, Process Management, Good Corporate Governance and Insurance Management among others from:
• PT Inalum
• Ministry of Finance
• PT Kimia Farma
• PT Sucofindo
• PT Astra (Astra Risk Management Forum 2017)
• SKK Migas
• PT Elnusa
: February 17, 2017
: March 24, 2017
: June 9, 2017
: July 13, 2017
: August 16, 2017
: August 29, 2017
: November 8, 2017
In 2017, Telkom received awards or certifications for its implementation of Telkom’s risk management system from external parties namely:
External Institution
PT. SGS Indonesia
Type of Award
Integrated Management System for the Infrastructure Management which covers:
The Certificate of IS0 20000:2011 – IT Service Management System
215
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices WHISTLEBLOWING SYSTEM
Since 2006, we have established a violation reporting system known as the Whistleblowing System (WBS). Through the WBS, all
individuals inside and outside Telkom may report violations, fraud, or any other ethical violations that occur in Telkom’s environment.
The WBS is administered by the audit committee through a decree of the board of commissioners and ratified by a decision of the
board of directors. In order for WBS to be of maximum benefit, we have promoted the WBS to our employees. It is part of our effort to
uphold business ethics and work ethics.
In addition, we have also established a working mechanism between the audit committee and the Internal Audit and a protocol with
Telkomsel to follow up on the complaints received.
MECHANISM FOR THE VIOLATION REPORT
All individuals at all levels of our internal staffs, including directors, commissioners and committee members under commissioners, are
entitled to use the WBS.
Reports can be submitted by email, fax or mail to the following addresses:
Komite Audit
PT Telkom Indonesia (Persero) Tbk
Telkom Landmark Tower, 2nd Tower, 40th Floor
Jl. Jend. Gatot Subroto Kav 52, Jakarta, 12710
Email: whistleblower@telkom.co.id; ka301@telkom.co.id
Fax: +62 021 5271800
Website: www.telkom.co.id
The Complaint must fulfil the following requirements:
1.
It is submitted through the website, email, fax or letter.
2. Complaints submitted related to the issue on internal control, accounting, auditing, breach of regulation, allegation on the fraud
and/or allegation of corruption, and the breach of code of ethics.
3. The information that is reported must be supported with sufficient evidence and those are reliable to be used as the initial data to
conduct further investigation.
PROTECTION TO THE COMPLAINANT
In the implementation of the WBS, we guarantee the protection of the complainent’s identity. This protection of confidentiality is
set out in Decision of the Board of Commissioners No.08/KEP/DK/2016 dated June 8, 2016 regarding Policy and Procedures on
Handling Whistleblowers of PT Telkom Indonesia Tbk and Consolidated Subsidiaries which was then ratified by Regulation of the Board
of Directors No. PD.618.00/r.00/HK200/COP-C0000000/2016 dated December 21, 2016.
Moreover, the implementation of WBS always puts forward confidentiality and principle of presumption of innocence in following up
every complaint or report submitted. This is stated in the WBS standard handling procedure for the purpose of encouraging employees
to report violations safely without fear or worrying about safety.
216
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights THE COMPLAINT HANDLING
The WBS is handled by the audit committee in accordance with
OJK regulation No.55/POJK.04/2015 and the Sarbanes-Oxley
Act 2002 Section 301 on the Public Company Audit Committee.
On the other hand, requirements of complaint are also necessary
to ensure that the complainant submits the complaint in a
responsible and non-defamatory manner against a person.
In general, complaint reports submitted by internal or third parties
handled by the audit committee covers the following topics:
1. Accounting and Auditing
The accounting and auditing topic covers issues of accounting
and internal control over financial reporting that could
potentially lead to material misstatement in the financial
statements. In addition, this topic also covers audit issues,
especially the application of accounting standards, and the
independence of the public accounting firm.
2. Violation of Regulation
This topic includes violations of capital market regulations and
laws and regulations concerning the Company’s operations.
Breaches of the Company’s internal regulations that could
potentially result in losses are also reported under this topic.
3. Fraud and/or The Allegation of Corruption
This topic includes fraud and/or alleged corruption committed
by Company’s officers and/or employees.
4. Code of Ethics
This topic includes complaints about any improper behaviors
of the management and employees that are likely to defame
Company’s reputation or even result in corporate losses. Such
improper behaviors include dishonesty, conflict of interest with
Telkom, and misleading information disclosure to the public.
217
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices THE COMPLAINT HANDLING MECHANISM
For complaints to be addressed promptly, we encourage complainants to ensure correctness and accuracy of the information and provide
sufficient supporting data. In practice, some WBS cases can not be processed due to inaccurate and unreliable data and information.
INVESTIGATION PROCESS
Appointment
of Expert
Expert
Yes
No
Need Experts ?
The Investigation
Case Review
Subsidiaries ?
No
Forming an
Investigation
Team
Yes
Letter of the President
Director to Subsidiary Cc.
1. Related President Director
of Telkom
2. Audit Committee
3. Internal Audit of Subsidiary
Subsidiary
Discussion
FU ?
Yes
Yes
Combined FU ?
No
No
Response
Letter
t
i
d
u
A
e
e
t
t
i
m
m
o
C
T
N
E
D
S
E
R
P
I
R
O
T
C
E
R
D
I
Approval to
Follow-up
I
N
O
T
A
G
T
S
E
V
N
I
I
E
E
T
T
M
M
O
C
I
i
y
r
a
d
i
s
b
u
S
R
H
I
S
B
U
Remark: TPTA (Tim Pertimbangan Tindakan Administrasi (Administrative Measures Consideration Team))
218
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
THE COMPLAINT HANDLING MECHANISM
For complaints to be addressed promptly, we encourage complainants to ensure correctness and accuracy of the information and provide
sufficient supporting data. In practice, some WBS cases can not be processed due to inaccurate and unreliable data and information.
REPORTING AND FOLLOW-UP
Material
Evaluation
Archives
CC
Report on
The Result of
Investigation
The Audit
Report
Investigation by
Subsidiary
FU ?
No
Yes
No
TPTA ?
Yes
FU Notes
FU Notes
FU Report
Documentation
End
TPTA Report
TPTA Subsidiary
No
Joint Team ?
Yes
TPTA - Joint
TPTA Report
FU UBIS
FU Report
219
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices THE PARTY THAT MANAGES THE COMPLAINT
Whistleblower Protection Officer (“WPO”) constitutes the
member of Audit Committee that is assigned to handle the
complaint by:
1. Receiving the complaint.
2. Administering the complaint.
IMPLEMENTATION OF SHARE OWNERSHIP
POLICY OF BOARD OF DIRECTORS AND BOARD
OF COMMISSIONERS
The Regulation of the Financial Services Authority No.11/
POJK.04/2017 regarding Ownership Report or Any Changes
in the Share Ownership of the Public Company requires every
3. Conducting the initial verification whether the complaint is in
member of our Board of Directors and Board of Commissioners to
line with the criteria.
report on the change of direct and indirect ownership of shares.
4. Monitoring the follow up of the complaint.
The Audit Committee through the meeting shall determine:
ownership by members of the Board of Directors and Board
1. To give approvals to follow up of complaints received.
of Commissioners and their amendments throughout 2017.
2. To give approvals on whether a complaint is to be followed up
We provide that particular information on the beginning if this
In line with the above regulation, we provide information on share
by an internal or external party.
Annual Report.
3. To give an assessment on whether the follow up of a complaint
is already sufficient or not.
The Internal Auditor has the role in:
1. Conducting the initial assessment on the complaint received
by the Audit Committee.
2. Preparing initial assessment reports and submitting the
reports to the President Director to be copied to the Audit
Committee.
The Investigation Committee has its role in:
1. Conducting further investigation upon the complaint that has
been initially assessed by the Internal Auditor.
2. Preparing reports on the result of further investigation and
submitting the reports to the President Director to be copied
to the Audit Committee.
THE RESULT OF COMPLAINT HANDLING
In 2017, there were 28 whistleblowing complaints submitted but
after the Audit Committee reviewed the complaints, there were
only 2 (two) complaints that qualified as whistleblower while the
remaining 26 qualified as service/product complaints.
Description
Total Complaint
Fulfil the requirements
Total
28
2
Remarks
Received complaints
Complaint that is proper to
be followed up
220
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights SIGNIFICANT LEGAL DISPUTES
Throughout 2017, none of the members of our board of commissioners and directors, both those who remain in office and whose terms
of office have expired, had any legal disputes or faced any civil or criminal cases. As a business entity, we are facing 88 legal cases
consisting of 23 criminal law cases and 65 civil law cases.
Table of Recapitulation of 2015-2017 Lawsuits against Telkom
Status
In process
Final and binding (inkracht)
Sub Total
Total
Telkom’s Legal Issues
2017
2016
2015
Criminal
4
19
23
Civil
36
29
65
Criminal
9
0
9
Civil
36
24
60
Criminal
Civil
2
1
3
6
4
10
88
69
13
Significant legal issues faced by the company during the period of January to December 2017 can be seen in the table as follows.
Key Case Charts Faced by Telkom and Subsidiaries Year 2017
Object of Dispute
Type of Court
Status of Dispute
Financial
Implications (Rp
miliar)
Telkom*
Telkom became Defendant at the South Jakarta
District Court with the allegation of bad faith in
terminating transponder service to PT Citra Sari
Makmur (PT CSM).
District Court
Note: * the case shown is the most relevant case during 2017
The South Jakarta District Court issued a
summons to Telkom on August 24, 2017. Telkom
follows the entire trial process
-
INFORMATIONS REGARDING ADMINISTRATIVE SANCTIONS
In 2017 Financial Year, there was no Administrative Sanctions issued by the Capital Market Authority and other Authority against The
Company, Board of Directors of The Company and Board of Commissioners of The Company. Therefore, there is no information about
Administrative Sanctions in this section.
221
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices CORPORATE CULTURE
“The Telkom Way” has become Telkom’s corporate culture or corporate values since June 10, 2013 as stipulated by the Board of Directors
under Decree of the Board of Directors of Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk, No.PD.201.00/r.00/
HK250/COP-B0020000/2013 regarding Leadership Architecture and Corporate Culture. Furthermore, guidelines for the
implementation of the Corporate Culture within the Telkom Group environment are set out in Regulation of the Director of Human
Capital & General Affairs of Telkom No.PR.201.01/r.00/HK250/COP-B0400000/2013 regarding Corporate Culture of Telkom Group.
The stipulation of the corporate culture above refers to the concept of the management of Telkom Group, which is based on the 8S
elements namely Spirituality, Style, Shared Values, Strategy, Staff, Skill, System, and Structure. The Corporate Culture is formulated
in detail as follows:
The Telkom Way
KEY BEHAVIOR
(IMAGINE, FOCUS, ACTION)
PRACTICES TO BE WINNER
CORE VALUES
(SOLID, SPEED, SMART)
POWER PLAY TO BE THE STAR
BASIC RELIEF : ALWAYS THE BEST
(INTEGRITY, ENTHUSIASM, TOTALY)
POWER PLAY TO BE THE STAR
IFA
Imagine
Focus
Action
Solid
Speed
Smart
• Planning Victory
• Set The Target
• Risk Anticipation
• Focus
• Set Quick Win
• Source Optimization
• Real Action
• Evaluation
• Continuous Inprovement
• Sinergy
• Common Vision
• Trust
•
Iniciative
• Fast Service
• Decision Speed
• Target Understanding
• Set The Priority
•
Integrity
ALWAYS THE BEST
Integrity
Integrity
•
• Positive Behavior
• Honesty
Enthusiasm
Totaly
• Enthusiasm
• Sincerity
• Will To Be The best
• Totality
• Self Improvement
• Commitment to Work
1. Philosophy to be the Best: Always The Best
Always the Best is a basic belief to always give the best in every job. Always the Best has the essence of “Ihsan” which in this sense
is translated into “the best”. Any individual of the Telkom Group who has the spirit of Ihsan will always give better work results than
expected, that the attitude of ihsan will therefore automatically be guided by a sincere heart when any activity undertaken is a form
of worship to the God Almighty.
2. Philosophy to be the Best: Integrity, Enthusiasm, Totality
Always the Best urges every individual of the Telkom Group to have integrity, enthusiasm, and totality.
222
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights 3. Principles to be the Star: Solid, Speed, Smart
Principles to be the Star of The Telkom Way means 3S which stands for Solid, Speed, Smart which also becomes the core values or
great spirit.
a. Solid
All individuals of the Telkom Group must provide the best (Always The Best) and increase solidarity among all individuals of the
Telkom Group as one Great Team.
b. Speed
All individuals of the Telkom Group must work quickly at every opportunity to win the competition because the fast ones will
beat the slow ones.
c. Smart
All individuals of the Telkom Group are required to work smartly, that is to understand the goals to be achieved, to determine
priorities and to always look for new better ways to achieve the goals.
4. Practices to be the Winner: Imagine - Focus – Action
Practices to be the Winner of The Telkom Way means IFA which stands for Imagine, Focus, Action which is also the Key Behaviors.
The Telkom Way
#1
Philosophy
to be the Best
“Insan Terbaik”
Principles to be the Star
“Insan Bintang” :Solid,
Speed, Smart (3s)
Practice to be
the Winner
223
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices CORPORATE CULTURAL ACTIVATION PROGRAMS OF 2017
COMPELLING
STORY
ROLE
MODEL
UPGRADE
SKILL TO
CHANGE
ROLE MODEL
• Setting Customer Experience Vision
Increasing Number of Culture Agent
•
• Set Up CA as A CX Champion
• Set Up Leader as A Digital Leader
• Set Up Leader as “Fun Working” Builder
COMPELLING STORY
• Set Up & Communicating Program and COE 2017
• Design New Scheme & Artefact of KIPAS
Budaya for Promoting Service Culture & Digital
Engagement
• Designing WOW Culture Activation Comm: TTW
BOOM Quiz, Culture Reality Story
• Running Monthly Thematic Culture Activation
• Embrace Culture to Employee Volunteer Program
& Community Program
• Culture Award: “Finding Telkom Group Culture
Heroes 2017”
• Finalizing Web Culture
• Culture Agent On Boarding
• Culture Agent Meet and Greet
• Training “From Culture to Customer Experience”
(TA, CSR, 14, Satpam)
• Design Evaluation & Rewarding Criteria
• Designing Digital Workstyle Guideline
• Entropy Clinic
• Do’s & Don’t Artefact Policy
• Designing Culture Fit Gamification
FORMAL
PROCESS &
SYSTEM
UPGRADE SKILL TO CHANGE
FORMAL PROCESS & SYSTEM
Culture Activation Framework
Our corporate culture is internalized top down. The CEO
To accelerate the implementation of corporate cultural activities
of Telkom Group is a role model of Corporate Culture and
at the unit level, all Unit Leaders are instructed to establish a
assigns all Unit Leaders to be Role Models. Role Models are
Cultural Activation Provocation Community (Komunitas Provokasi
also obliged to select and assign Culture Agents in charge of
Aktivasi Budaya/KIPAS Budaya) in their respective units. A total of
organizing cultural activation initiatives in the relevant units
123 units of KIPAS Budaya were recorded until December 2017.
and motivating all employees to participate in the initiatives
to allow smooth internalization process of The Telkom Way.
Each unit has discretion to name their KIPAS Budaya according
To date the Telkom Group has assigned 1,677 Culture Agents
to their respective goals. The theme of KIPAS Budaya activities is
(consisting of 1,165 Culture Agents of Telkom and 512 Culture
tailored to the Company’s business strategy. In 2017, the theme
Agents of Subsidiaries) who prior to carrying out their duties as
was set nationally, namely “Organizing On Living In Digital Work-
Culture Agents were engaged in the Culture Agent on Boarding
Style to Deliver Customer Experiences”. As a reference for unit
program to provide skills and knowledge as well as common
cultural activation activities, a Calendar of Event was published
perception to be Culture Agents.
with an approach of National Days.
224
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights CALENDAR OF EVENT
Calendar of Event (COE) is a media to communicate cultural activation programs every month as a reference or guidance for Telkom
Group units to arrange and implement cultural activation programs in each unit to instill The Telkom Way corporate cultural values to
employees’ daily work behaviors.
CALENDAR OF EVENT CULTURE ACTIVATION 2017
Cultural activation is organized with the aim of internalizing corporate cultural values into the behaviors of all employees so they will
express such values in all of the Company’s business activities.
In 2017, the Cultural Program Calendar of Event was prepared with an approach of national days to strengthen the implementation of
The Telkom Way values. The activities as set out in the Calendar of Event, among others, were:
1. Kartini’s Day Event
Held in April with the aim to signify and imitate the values of Kartini’s struggle in advancing education for women.
225
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices 2. Telkomer’s Back to School
Held in May in commemoration of National Education Day. In this activity, Telkomers conducted teaching or knowledge sharing
activities in some schools or communities on how to use the internet in a healthy way and use gadgets wisely. The profession of
Telkomers was also expected to inspire Indonesian students to advance the country.
Telkomer’s Back to School
3. Kids Go to Office
Held in June during the holidays of school year turn. In the activity themed “Mom & Dad My Inspirations (Ayah-Ibuku Inspirasiku)”,
employees were allowed to invite their children to participate directly in playing the role of the parents in the office. This activity
aimed to provide experience and inspiration of Telkomers’ profession in working and at the same time introducing the existing work
culture.
Kids Go to Office
226
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights 4. Independence Day
Held in August with the theme “FOLK FESTIVAL: Working Together, Together Working (PESTA RAKYAT: Kerja Bersama, Bersama
Kerja)”, referring to the slogan of the 2017 Indonesian Independence Day “Indonesia Works Together (Indonesia Kerja Bersama)”. The
activity was held simultaneously on 17 August.
5. Customer’s Day Event
Held in September with the theme “We Care U More” referring to the theme of National Customer Day “Authentic Services and
Experience (Pelayanan dan Pengalaman yang Otentik)”, with the aim to provide services and experience to customers by prioritizing
the corporate character, culture, and vision.
6. Raise Youth Spirit Event
Held in October in commemoration of the Youth Pledge Day.
7. Mother’s Day Event
Held in December with various activities including Parenting Seminar and a visit to Senior Housing (Panti Werdha) managed by
women.
Mother’s Day Event
The efforts to internalize and strengthen the Corporate Culture were also implemented in various innovative ways, including through:
1. TTW BOOM Quiz
Aiming to measure the understanding and concern of Telkomers Group about corporate culture. Quizzes were conducted periodically
and on line.
2. Culture Reality Story
Is a digital media which contains a collection of articles about Telkom Group employees for their service to the Company that has
The Telkom Way cultural values and manages to give positive impacts on the surrounding work environment and the Telkom Group’s
environment.
227
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices 3. Leaders Talk Values
Is an activity held by Role Models in delivering values contained in The Telkom Way to employees to instill the values of The Telkom
Way.
FROM CULTURE TO CUSTOMER EXPERIENCE
Leaders Talk Values
In an effort to implement the corporate culture that can be perceived directly by the Telkom Group’s customers, the Culture to
Customer Experience training was provided to frontliner supervisors such as Frontline Supervisors of PT Telkom Akses, CSR, Call
Center 147 & Socio Media Agent.
Training Culture to Customer Experience
228
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights FINDING TELKOM GROUP CULTURE HEROES
As part of appreciation to the units and employees who have actively activated The Telkom Way’s corporate culture, the “Finding the
Telkom Group Culture Heroes” activity was held in 2017. In this activity, awards were given to The Most Admired Culture Activation
Unit, The Most Inspiring Role Model and The Most Inspiring Culture Agent by the CEO of the Telkom Group at the Telkom Award 2017..
IMPLEMENTATION EFFECTIVENESS EVALUATION OF CORPORATE CULTURE
The effectiveness of the implementation of corporate culture is evaluated by measuring the Cultural Health Index using a Corporate
Cultural Entropy Survey. To date the Telkom Group has maintained the Corporate Cultural Health Index at the PRIME or HEALTHY level.
TELKOM BECOME CORPORATE CULTURE BENCHMARKING
Telkom’s efforts to activate its corporate culture The Telkom Way have attracted other companies to pay benchmarking visits. Among
the companies are ABMA LAND, AUTO 2000, KIMIA FARMA, LPS, MNC Group, PJB, PLN, RSUD Bantul, Taspen, Bio Farma.
Benchmark
Telkom Smart Office
To support the creation of digital work environment digital life style work station has been developed under the Project Telkom Smart
Office and the existing rooms have been designed with the theme “Working at Telkom Group has to be fun”.
Furthermore, to maintain the existing work stations, Culture Guardian has been established. Culture Guardian consists of representatives
of each unit and floor in the Telkom Landmark Tower Building who are responsible for keeping the rooms comfortable with the concept
of Digital Life Style. Each Culture Guardian will make a report on the existing conditions and problems to be addressed.
In addition to the Work Station, Telkom Employee Shuttle Buses are also provided for employees living in Bekasi, Depok, Bogor, and
Tangerang. Equipped with wifi, a mini bar, and a toilet, an Employee Shuttle Bus is a convenient transportation mode for employees.
229
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices
CORPORATE CODE OF CONDUCT
IMPLEMENTATION OF CODE OF CONDUCT FOR DIRECTORS, BOARD OF COMMISSIONERS, AND
EMPLOYEES
In accordance with OJK Circular No.32/SEOJK.04/2015 regarding Corporate Governance Guidelines and Sarbanes-Oxley Act (“SOA”)
2002 section 406, we own and run a code of ethics that applies to all levels of the organization. Telkom code of conduct specified
by the decision of the Board of Directors no. PD. 201.01/2014 regarding Business Ethics in Telkom Group and the decision of the
Director of the Human Capital Management No. PR.209.05/r.00/PS800/COP-A4000000/2017 regarding Ethics and Compliance
employee. That particular decision explained about the business ethics devoted to the external environment and the work ethic of
employees devoted to internal Telkom. Telkom’s business ethics applies to members of the Board of Directors, Member of the Board of
Commissioners and employees of a large family of Telkom in dealing with customers, suppliers, contractors and other external parties
who have a relationship with the company. Employee work ethic applies to fellow employees during work in Telkom Group..
PRINCIPLES OF THE CODE OF CONDUCT
Principles of Telkom’s Code of Conduct regulates the following:
1. Employee Ethics
Which is the system of values or norms that are used by all employees and leaders in the daily work with the following scope:
a. Main Behavior of Employees:
• Capacity and Capability of Employees.
• Duties and Prohibitions.
• Confidentiality of Information.
•
Infrastructure.
• Work environment.
b. Main Behavior of Leaders:
• Behavior of Leaders.
• Behavior of Directors.
• Behavior of Chief Executive Officer (CEO) and Chief Financial Officer (CFO).
2. Business Ethics
Which is the system of values or norms that is upheld by the Company as guidelines for the Company, Management, and its
Employees to interact with its environment with the following scope:
a. Relationship with Regulator.
b. Relationship with Stakeholder.
c. Additional Terms.
SOCIALIZATION OF CODE OF CONDUCT AND EFFORTS TO ENFORCE THEM
We send out the socialization materials to employees about GCG understanding, business ethics, integrity pacts, fraud, risk
management, internal control (“SOA”), whistleblowing, banning gratuities, IT governance, safeguarding information security and other
matters. integrated with respect to Corporate Governance Practices, every year. It is intended that employees can always maintain and
apply the code of conduct as part of the Telkom Group’s big family.
We also organise e-learning business ethics and ethics and employee compliance with the entire population of employees through
the media portal/intranet which aims to deepen understanding karayawan up a code of conduct in carrying out daily activities. In
addition each employee also required to make a statement in the form of integrity pact signed and observed by all employees for being
employees of the Telkom.
230
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights EMPLOYEE STOCK OWNERSHIP PROGRAM
The employee and/or management stock ownership program, or Employee Stock Ownership Program (“ESOP”), is a form of employee
participation to also gain ownership of Telkom. During the Initial Public Offering (IPO) of November 14,1995, as many as 116,666,475
shares are owned by 43,218 employees.
Further, on June 14, 2013, Telkom has transferred a part of its buy back shares in the form of employee-owned stock as part of the
annual work incentive for the 2012 financial year. As many as 59,811,400 recovered shares (equivalent to 299,057,000 shares after
stock split) were transferred to 24,993 employees with a total fair value of Rp661 billion.
Telkom did not hold the ESOP program in 2017, thus, no information is available on the number of shares and/or options, implementation
period, requirements for eligible employees/management, and the implementation price shown in this Report.
231
Corporate GovernancePT Telkom Indonesia (Persero) TbkCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices CORPORATE SOCIAL
RESPONSIBILITY (CSR)
235
235
Corporate Social Responsibility Strategy
Social Responsibilities Towards Customers:
Prioritizing Customer Satisfaction
237
Social Responsibilities Towards Employees:
Building Human Capital
239
Social Responsibilities Towards
Socioeconomic Society
242
Social Responsibilities Towards
Environment: Environment Conservation
and Preservation
“Not only through products and services, but our
passion to play a role in Indonesia development is also
done through social and environmental responsibility.
In line with this, we undertake various initiatives that
emphasize responsibility for employees, consumers,
communities and the environment.”
• Carbon Decreases
363,937 Ton Eqv CO2
T
N
E
M
N
• Planting Trees Program
VIR O
N
E
• Saving :
Electric 408,460 Mwh
Paper 10,262 rim
Water 1,724 dam3
TELKOM
CSR
P
E
O
P
L
E
• Digital Application
C
U
S
T
O
M
E
R
• Customers Satisfaction
Index 86.7%
• Digital Application: e-office,
e-budgeting, file sharing
collaboration, carreer
management, traning, etc
S
E
L O Y E
P
M
E
• Zero Accident Program
• Customer Loyality
Index 81.2%
• 24.2% Female Employees
In conducting every business activity, we understand
industry are, among others, customers’ health and safety,
the
importance of carrying out the corporate social
use of materials, and environmental considerations in
responsibilities or CSR. Therefore, in this section, we
granting credits to customers.
present information and data about the corporate social
responsibilities emphasizing on the manpower, customer,
Furthermore, we also present detailed information and data
socioeconomic society, and environmental aspects.
related to various social responsibility topics in the Sustainability
The presentation of the information about corporate social
The stakeholders are highly recommended to download the
responsibilities in this Annual Report mainly refers to the
Sustainability Report 2017 from the following webpage https://
provisions of the Indonesian Financial Services Authority
www.telkom.co.id/servlet/tk/about/id_ID/stockdetail/laporan-
(Otoritas Jasa Keuangan / OJK). Certain topics of social
berkelanjutan.html and thoroughly read it to complete the data
responsibilities required by the OJK are not entirely relevant
and information presented in this Annual Report.
Report of Telkom prepared in accordance with the GRI Standards.
to our business characteristics. The topics irrelevant to our
operational activities in the telecommunication and digital
234
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
CORPORATE SOCIAL RESPONSIBILITY
STRATEGY
Conducted Activities
In order to fulfil our social responsibilities towards our
The implementation of our social responsibilities has the theme
customers, we conducted a series of activities, among others
of “Telkom Indonesia Untuk Indonesia” by emphasizing three
the implementation of Telkom Integrated Quality Assurance
pillars, namely:
(TIQA) program, granting of after-sales warranty, and
1. Digital environment, means the development, provision and
implementation of customer service policies. Specifically
management of telecommunication infrastructure and various
for customer service, our policies emphasize on the service
facilities of information and communication technology (ICT)
delivery, service assurance, and measurement of service quality.
to support and connect all people activities, including the
environment conservation activities.
Product Information
2. Digital Community, means
to support community
We always ensure that our customers obtain the most accurate
empowerment through education on optimization of the
and updated product information which may help them in
utilization of ICT to assist in the activities of the people
making decisions. We, therefore, provide product information
daily life.
through various approaches. For mobile starter pack, the product
information may be found on the packaging. Furthermore, we
3. Digital Economy, means the development of ICT facilities
also provide product information on our website and promotional
in various public services used by the people, as well as the
activities as well as marketing communication conducted
support on micro and medium enterprises, especially in the
intensively.
creative industry sector, in relation to the optimization of
ICT utilization.
Customer Satisfaction
SOCIAL RESPONSIBILITIES TOWARDS
CUSTOMERS: PRIORITIZING CUSTOMER
SATISFACTION
TARGETS AND PLANS IN 2017
The performance measurement of the implementation of our
social responsibilities towards our customers was conducted
through the survey of customer satisfaction, dissatisfaction and
Every year, we evaluate customer satisfaction through the survey
mechanisms of Customer Satisfaction Index/CSI, Customer
Dissatisfaction Index/CDI and Customer Loyalty Index/CLI.
In general, we conclude that the customer satisfaction and
customer loyalty in 2017 for the Indihome products and wifi.id are
better than those of the previous year. However, in conjunction
with the CDI survey results, we ought to pay more attention to
the development of Indihome products and services in order
to reduce the customer dissatisfaction over the products and
loyalty. In 2017, we achieved customer satisfaction and loyalty
services.
of 86.7 and 81.2, higher than previous year. The achievement
indicates the success of our customer relationship maintenance
efforts.
The
following
graph
and
table
show
the
survey
results of CSI, CDI and CLI
from 2015
to 2017.
The following table shows the achievement of our social
responsibilities towards the customers in 2017.
Specific CSI, CDI and CLI Graph for IndiHome and wifi.id for
2015-2017
Table of Achievement of Social Responsibilities Towards the
Customers for 2015-2017
No. Explaination
Measurement
Unit
2017
2016
2015
1
2
3
Customer
Satisfaction
Index
Customer
Dissatisfaction
Index
Customer
Loyalty Index
Percent
86.7
85.3
83.1
Percent
2.6
2.5
3.2
Percent
81.2
78.3
78.6
100.00
90.00
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0
.
7
6
8
2
.
1
8
.
3
5
8
.
3
8
7
1
.
3
8
.
6
8
7
.
6
2
5
2
.
2
3
.
2017
2016
2015
Customer Satisfaction Index
(IndiHome & Wifi.id)
Customer Loyal Index
(IndiHome & Wifi.id)
Customer Dissatisfaction
Index (IndiHome & Wifi.id)
235
Corporate Social ResponsibilityPT Telkom Indonesia (Persero) TbkCorporate GovernancePartnership and Comunity Development Program (PKBL)Appendices
Specific CSI Table for IndiHome and wifi.id Based on the
Specifically for the celular’s customers, we provide “Caroline”
Measurement Indicators for 2017
call center, which is an abbreviation for customer care online. The
CSI
Product & Service
Delivery System
Service Mindset
Relationship
Corporate Image
IndiHome
86.1%
84.0%
86.8%
86.2%
87.8%
85.7%
Wifi.id
87.4%
88.8%
86.2%
87.0%
86.5%
88.4%
contact numbers of Caroline are as follows:
1. 133 for Halo Card.
2. 188 (24 hours, paid) for simPATI and AS Card.
3. 0807-1811811 (PSTN local rate) for national scale.
Moreover, the corporate customer complaints may be submitted
through:
1. 1500250 and e-mail tele-am@telkom.co.id and social media
@Smart_Bisnis (Twitter) and Smartbisnis (Facebook) for
Specific CDI Table for IndiHome and wifi.id Based on the
MSME customers.
Measurement Indicators for 2017
CDI
Product & Service
Delivery System
Service Mindset
Relationship
Corporate Image
IndiHome
Wifi.id
2.5%
3.7%
1.2%
2.9%
1.9%
2.8%
2.7%
2.0%
4.5%
2.0%
2.4%
2.4%
2. 08001 Telkom or 08001035566 and e-mail: c4@telkom.
co.id, and social media @TelkomSolution (Twitter) and
TelkomSolutionID (Facebook) for corporate customers and
Government institutions.
In 2017, there was a percentage increase of direct settlement of
complaints compared to that of the previous year. The following
table shows the duration of customer complaint settlement for
the past three years:
Table of Settlement of Customer Complaint Percentage for
2015-2017
No.
Customer Complaints
2017
2016
2015
1
Internet
Directly settled
Settled in 1 – 3 days
Settled in more than 3 days
2
Telephone
Directly settled
Settled in 1 – 3 days
Settled in more than 3 days
37.0
59.8
3.2
30.0
65.6
4.4
22.1
60.5
17.4
23.7
60.9
15.4
19.9
65.2
14.9
35.7
66.2
14.0
Specific CLI Table for IndiHome and wifi.id Based on the
Measurement Indicators for 2017
CLI
Switching Barrier
Attitude
Behaviour
Emotional
Customer Complaints
IndiHome
79.9%
77.4%
80.8%
76.3%
85.0%
Wifi.id
82.5%
86.2%
84.8%
71.2%
87.9%
In response to customer complaints, we provide different
approaches for
individual and corporate customers. For
individual customers, the complaints may be submitted to
the customer service center called Plasa Telkom. In addition,
individual customer complaints can also be submitted through
complaint media:
1. Plasa Telkom.
2. Call Center: 147.
3. Social Media: @telkomcare (twitter), telkomcare (fb).
4. Apps: my IndiHome.
5. Complaint via web chat at www.indihome.co.id.
236
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
SOCIAL RESPONSIBILITIES TOWARDS
EMPLOYEES: BUILDING HUMAN CAPITAL
TARGETS AND PLANS IN 2017
reputation in the past few years and have been implementing
employees’ health and safety management system. The
implementation of employees’ health and safety management
system was conducted online through Safety Care Online and
the SAS Portal application in accordance with the Government
We had a zero-accident program with respect to the Occupational
Regulation No.50 of 2012.
Health and Safety (OH&S) in 2017. In line with previous year’s
performance, no employee died due to occupational accidents
Labor Practices
in our operational area. In relation to the turnover rate, it
was lower in 2017 than that of the previous year. We shall
We have
labor practices
in place
in accordance with the
indeed maintain our excellent performance for the upcoming
internationally applicable statutory provisions and business ethics.
years. In the coming year, we will continue implementing
We tend to pay much attention to the aspects of gender equality
the zero-accident program and reducing the turnover rate.
and work opportunity. Our female President Commissioner shows
Table of Employee Turnover for 2015-2017
No.
Description
Unit of
Measurement
2017
2016
2015
1
Turnover Rate
people
27
11
8
Conducted Activities
Our social responsibilities towards the employees were conducted
through several approaches and activities. For instance, in case
of employees’ health and safety (OH&S), we gave a socialization
about responses to disasters and first aid. In addition, we have
also been maintaining safe business hours and zero fatality
that every single person, without discriminating genders, may hold
the highest office in our company.
Meanwhile, we also appreciate employee’s rights to gather and
unite which regulated by the regulation. We have Telkom’s SEKAR,
which is Telkom’s Employee Union. SEKAR is Telkom employee
union which represent all of PT Telkom Indonesia (Persero) Tbk.
Employee. SEKAR also acting as employee’s representative in
drafting collective labor agreement (PKB) with the Company.
The following table shows the managerial recruitment, training
and positions in our company based on gender from 2015 to 2017.
Table of Employee Recruitment of Telkom Based on Gender for 2015-2017
No.
1
a
b
Description
2017
2016
2015
Male
Female
Male
Female
Male
Female
New Employees
Age group 18-25
Age group 26-30
Total
232
21
253
147
13
160
200
20
220
202
24
226
170
66
236
200
30
230
Table of Number of Employees and Hours of Training of Telkom Based on Gender as of 31 December for 2015-2017
No.
Types of Training
1
2
3
a
Certification training
SUSPIM Training
Regular Training
Operational technical field
b Management field
Total
2017
2016
2015
Male
Female
850
822
321
262
Hours of
Training
43,440
38,136
Male
Female
308
446
118
62
Hours of
Training
14,168
38,880
Male
Female
471
243
168
28
Hours of
Training
21,712
21,680
14,719
6,060
639,408
19,849
5,598
498,885
13,335
3,179
379,389
9,367
5,352
4,299
416,240
12,385
1,761
223,168
7,464
16,391
6,643
720,984
20,603
3,493
2,105
5,778
177,191
321,694
3,883
9,452
551,933
14,049
488
2,691
3,375
111,913
267,476
422,781
23,034
26,381
17,424
237
Corporate Social ResponsibilityPT Telkom Indonesia (Persero) TbkCorporate GovernancePartnership and Comunity Development Program (PKBL)Appendices
Table of Number of Employees of Telkom Based on
Rate of Occupational Accidents
Managerial Positions and Gender as of 31 December for 2015-
2017
2016
2015
accident in 2017. This is considered an excellent achievement of
Male
Female
Male
Female Male
Female
our efforts in taking care of the employees’ health and safety.
In line with our achievement in 2016 and 2015, we recorded zero
2017
No.
Managerial
Position
1
2
3
Band Position I
Band Position II
Band Position
III
Total
111
498
8
44
110
420
8
40
92
402
6
28
2,027
319
1,661
212
1,686
205
2,636
371
2,191 260
226
239
3,007
2,451
2,419
In the case of remuneration, we comply with the provisions of the
provincial minimum wage (upah minimum provinsi / UMP) regulation.
We set the lowest salary in our Company to be above the UMP level.
Our employee turnover rate in 2017 reached 0.2% increased from
0.1% in 2016. Most of the employees were not working with the
Company anymore due to employees’ own request.
The following table presents the comparison between the
remuneration and UMP level and our employee turnover rate
from 2015 to 2017.
Table of Comparison between the Employee Remuneration of
Telkom and UMP Level for 2015-2017*)
Complaints of Labor Issues
We understand the importance of manpower as one of the
most crucial components in conducting business activities and
achieving performance targets as effectively and efficiently as
possible. Therefore, we make our best efforts to minimize the
negative impacts of existing labor issues. One of the efforts we
make is to provide a number of employee complaint mechanisms
for the early detection and settlement of problems.
Complaints of labor issues may be submitted through:
1. HR helpdesk, is a complaint mechanism through the web-in
service, email-in service HR_helpdesk@telkom.co.id, and
phone-in service number 1500305.
2. HR Wiki, is a search engine service used by the employees to
obtain information about the manpower of Telkom.
3. Employee aspiration, is an adaptation of the employee
suggestion system (ESS) which may be utilized by the
employees to convey their suggestions and aspirations.
4. Employee reference, is a catalogue of human capital or
No.
Description
2017
2016
2015
employment policy of Telkom available to the employees,
Male
Female
Male
Female
Male
Female
including regulations and explanations.
1
2
3
4
Senior
Management
Middle
Management
100% 100% 100% 100% 100% 100%
Digital Working Style
100% 100% 100% 100% 100% 100%
Supervisor
100% 100% 100% 100% 100% 100%
Others
100% 100% 100% 100% 100% 100%
*) The smallest wage for new employees at entry-level positions
Table of Telkom Employee’s Turnover for 2015-2017
No. Description
2017
2016
2015
The development of digital technology affects the culture
and way of working becomes faster, easier and more open. We
utilize various digital applications for employees to support
daily operations such as corporate portal applications including
e-office, e-budgeting, file sharing collaboration, career
management, training and others
1
2
Number of employees of Telkom
(people)
Rate of employee turnover
-On employees’ own request
-Due to becoming administrators
of political parties
-Due to becoming board of direc
tors of State-Owned Enterprises
/ government officials
-Disciplinary violation
-Marriage with any employees of
Telkom
-Pension
-Death
13,956
14,933
16,097
In addition, we also create a flexible and open work culture, to
attract employees in doing various innovations, one of the
programs is Digital Amoeba. This program is specifically intended
to find the internal talents of Telkom that facilitate employees
who want to develop digital startup.
27
15
0
4
0
8
0
0
11
11
0
0
0
0
0
0
11
8
0
1
2
0
0
0
3
Percentage of Turnover (%)
0.2
0.1
0.1
238
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
SOCIAL RESPONSIBILITIES TOWARDS
SOCIOECONOMIC SOCIETY
Indonesia for Indonesia, and with the main program of: Planet –
Digital Environment, People – Digital Society, and Profit – Digital
Economy.
TARGETS AND PLANS IN 2017
Some of the activities we conducted were, among others,
We had a number of targets and plans in 2017 in carrying out our
renovations of veteran houses, Telkom CSR Day, and Gantari
social responsibilities towards socioeconomic society. The CSR
Award for disabled people. In addition, we also conducted the
and Partnership and Environment Development Program (PKBL)
Telkom Berbagi 2017 program which was carried out in the month
schemes were our bases in preparing budgets and funding
of Ramadhan and to celebrate the Eid al-Fitr. Other activities we
targets for our programs. We present more detailed information
conducted were Telkom Peduli Budaya Nusantara and Telkom
about our social responsibility plans in the Sustainability Report.
Craft Indonesia. In the educational aspect, we conducted the
Conducted Activities
programs of Digital Library (Pustaka Digital), Indonesia Digital
Learning, and SOE Goes to Campus (BUMN Hadir di Kampus). In
addition, as a clear manifestation in encouraging the growth of
The
implementation of our social responsibilities towards
the digital industry through community development programs,
socioeconomic society was conducted through the schemes of
we are organizing Indigo program of the nation which is the
CSR programs and PKBL activities. Our CSR program was called
incubator program and accelerator of Indonesian digital startup,
SOE for Nation (BUMN Hadir untuk Negeri) with the theme of
starting from pre-incubation stage to funding. We present more
detailed information about CSR and PKBL activities of Telkom in
the Sustainability Report 2017 of Telkom.
Theme: Telkom Indonesia Untuk Indonesia
Planet
People
Profit
DIGITAL ENVIRONMENT
DIGITAL SOCIETY
DIGITAL ECONOMY
Wifi Corner
SocioDigi Leader
TelkomCraft Indonesia
Broadband Learning Center
& Digital Library
BLC
Disability Care
UKM Go Digital
SOE Creative House and Digital
UKM Village
Space Exploration by Children of
the Nation
Training for Online Marketing
Digital Lounge Creative Camp
SOE Goes to Campus
Village Economic Center
Telkom Cares About Cutures
Renovation of Veteran Houses
Indonesia Digital Learning
Donation for the victims of Natural
Disasters
239
Corporate Social ResponsibilityPT Telkom Indonesia (Persero) TbkCorporate GovernancePartnership and Comunity Development Program (PKBL)Appendices In 2017, the costs incurred for the implementation of our social responsibility activities reached Rp418.08 billion. The largest proportion
of the costs incurred was for the partnership programs in the amount of Rp307.61 billion, followed by Rp81.97 billion for environment
development programs and Rp28.50 billion for CSR programs.
Table of Costs Incurred for Social Responsibilities towards Socioeconomic Society for 2015-2017
No.
1.
2.
3.
Description of Programs
CSR Programs
Partnership Programs
Environment Development Programs
Total Costs
2017
(Rp billion)
2016
(Rp billion)
2015
(Rp billion)
28.5
307.6
82.0
418.1
19.3
360.9
82.0
462.2
18.3
347.0
72.4
437.7
We used such funds to carry out various community social development programs as stated in the following table:
Table of Realization of Fund Distribution for Partnership Programs and Increase of Number of Partners
Number of Partners
Fund Distribution (Rp billion)
No.
Business Sector
1
2
3
4
5
6
7
8
Industry
Trade
Agriculture
Animal Husbandry
Plantation
Fisheries
Service industry
Others
Sub Total
2017
1,683
4,592
120
237
121
199
1,404
11
8,367
2016
1,784
6,371
200
351
201
276
1,751
22
10,956
2015
1,895
6,972
229
429
207
333
1,896
20
11,981
Partnership Program Fund
Total
CAGR (%)
(23.6)
(8.6)
Table of The Distribution of Funds for Community Program
No.
Donation Type
1
2
3
4
5
6
7
8
Natural Disaster Victims Donation
Education Donation
Healthcare Improvement
Donation
Improvement of Infrastructure
and Public Facilities Donation
Place of Worship Donation
Nature Conservation Donation
Civil Society in Order for Poverty
Alleviation Donation
Capacity Improvement Donation
to Foster Partners
Total
CAGR (%)
2017
20
392
113
311
395
18
86
0
1.335
(7.0)
Total Donation Objects
2016
2015
20
492
154
221
382
30
22
115
1.436
64.1
17
336
62
170
219
27
2
42
875
240
2017
53.9
144.6
4.4
8.6
3.4
6.5
47.8
0.4
269.6
38.0
307.6
(14.8)
2017
0.7
25.1
4.8
11.8
10.2
1.1
28.3
-
82.0
-
2016
60.9
203.5
7.2
13.3
5.4
8.0
61.5
1.2
360.9
0
360.9
4.0
Total Disbursement
(Rp billion)
2016
0.9
35.7
10.4
13.4
10.6
0.9
1.6
8.4
82.0
13.2
2015
56.4
194.0
6.8
12.8
5.6
9.2
55.3
0.9
341.0
6.0
347.0
2015
1.3
41.2
1.5
15.7
8.5
0.8
0.0
3.5
72.4
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
Local Workers
We pay attention to the socioeconomic impacts of our business activities, one of which was the impacts of recruitment of local workers.
The recruitment was conducted both directly, which was carried out by Telkom, or indirectly, by our contractors.
Anti-Corruption
We have been making any efforts possible to prevent corruption. We undertook prevention, supervision and enforcement involving
active participation of every function in the company. One of our efforts was selecting suppliers in several stages, such as registration
through the Supply Management and Logistic Enhancement (SMILE) application, selection of suppliers, and determination of suppliers
entitled to participate in the tender.
Our anti-corruption policies require every person in our company to sign an Integrity Pact. We also have a specific portal with respect
to corruption called myintegrity.tellkom.co.id. In order for our employees to have an adequate capacity to prevent corruption, we
conducted an anti-corruption training for our employees.
241
Corporate Social ResponsibilityPT Telkom Indonesia (Persero) TbkCorporate GovernancePartnership and Comunity Development Program (PKBL)Appendices SOCIAL RESPONSIBILITIES TOWARDS
ENVIRONMENT: ENVIRONMENT CONSERVATION
AND PRESERVATION
TARGETS AND PLANS IN 2017
In 2017, we had a number of targets and plans to cope with
the environmental aspect. Those targets and plans were,
among others, related to the water consumption, liquid waste
management, electricity consumption and saving, and solid
waste management. The following table presents data of our
achievement for the targets we set in 2017.
Table of Realization for Social Responsibility Efforts of
Telkom towards the Environment 2015-2017
No.
Description
Units of
Measurement
2017
2016
2015
Electricity
Consumption
MWh
408,460 415,428 478,924
CO2
emissions
Ton Eqv CO2
363,937
370,147
426,714
1.
2.
3.
Water Usage and Liquid Waste Management
We conserve water by using automatic water taps in office
buildings. Our primary water source is from the drinking water
company in Jakarta used for the domestic needs of the company.
Specifically for the needs of vehicle washing and plant watering,
we utilize the recycled water through simple filtration processes
with charcoal. In addition, we also conserve water by making
biopores and water reservoirs around the office buildings. In
2017, our water usage is 1,724 1000M3.
Graph of Office Clean Water Consumption
and Emissions of Telkom 2015-2017 1000M3
1,724
873
1,297
2,000
1,500
1,000
500
0
Water
Consumption
1.000 M3
1,724
873
1,297
2017
2016
2015
4.
Paper Saving
Reams of
paper
10,262
10,124
10,604
Conducted Activities
Energy Efficiency and Eco-Friendly Energy
Utilization
We have an energy management initiative with active and passive
design approach, which was carried out in three main programs:
Managed Service Program, Managed Service Asset Protection
Program, and Managed Service Program for electricity. Based on
the computation in 2012, we calculate the CO2 emissions from the
utilization of electricity and petroleum.
We have implemented various initiatives in relation to energy
through energy conservation approaches and utilization of eco-
friendly energy. For instance, since 2010, we have utilized inverter-
equipped AC’s. Our data centre also prioritize the usage of LED
lights and cooling system management to conserve more energy.
To reduce the energy usage of office buildings, we utilize reflective
glass with 6mm of thickness to reduce the incoming heat.
We also combined the energy reduction program with health
benefits through the bicycle utilization initiative every Friday. In
2017, we participated in the Earth Hour activities to reduce energy
consumption and give positive contributions towards emission
reduction and enhancement of environment and air quality.
In order to decrease the use of paper materials, we have utilized
online official memo. We have also provided digital platforms for
customers to make digital transactions, such as the utilization of
electronic bills and e-banking digital transaction application, to
help reduce paper usage. In 2017, we succeeded in saving 10,262
reams of paper, compared to the usage of 10,124 reams of paper
in 2016. assuming an average 1 official memo consists of 2 pieces
and shown to the 3 peoples recipient each forwarded to 3 peoples.
242
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
Table of Electricity Consumption Savings through the LED Lights Usage Initiative for 2015-2017
No
Year
Number of Locations
Number Installed
Savings
(Kwh)
Savings
(Rp)
Reduction
(Kg CO2)
1.
2.
3.
2015
2016*
2017*
191
0
0
Remarks:* there was no addition of LED lights
34,783
12,733,125
13,048,932,710
11,345,214.59
0
0
13,498,201
14,158,633,463
12,026,897.74
4,499,401
4,719,544,488
4,008,965.91
Table of Electricity Consumption Savings of Telkom through the Eco-Friendly AC’s Utilization Initiative for 2015-2017
No
Year
Number of Locations
Number Installed
1.
2.
3.
2015
2016
2017
460
0
0
6,642
980
0
Savings
(Kwh)
Savings
(Rp)
Reduction
(Kg CO2)
2,222,807
2,889,649,620
1,980,521.39
7,945,273
10,328,854,536
7,079,238.49
2,850,440
3,705,571,584
2,539,741.93
In the past three years, energy usage decreased from 478,924 MWh in 2015 to 408,460 MWh in 2017. In conjunction
with the decrease of energy usage, emissions also decreased to 363,937 Ton Eqv CO2. The decrease of energy
lights and eco-friendly AC’s. We present
consumption was due to electricity savings through the utilization of LED
in the Sustainability Report 2017.
more detailed
information about our achievement of energy savings
in 2017
Graph of Electricity Consumption of Telkom for 2015-2017 (MWh)
Graph of Emission of Telkom for 2015-2017 (Ton Eqv CO2)
408,460
415,428
478,924
363,937
370,147
426,714
500,000
450,000
400,000
350,000
450,000
400,000
350,000
300,000
2017
2016
2015
2017
2016
2015
Further, the utilization of eco-friendly energy is implemented on the Base Transceiver Station or BTS by using solar panels
and micro hydro. In certain areas where the electricity supply for the BTS resource is hardly obtainable, we utilize the
combination of generators, solar panels, and wind energy to generate electricity in order to decrease the petroleum usage.
Management System of Solid Waste of Hazardous Toxic Materials and Non-Hazardous
and Non-Toxic Materials (Limbah Padat B3 dan Non-B3)
In the case of waste management, we submit both the solid waste of hazardous and toxic materials or the so-called
B3 waste, and non-B3 waste, to the Government official mechanism through the
local Sanitary Agency. Specifically
for the management of mercury lamps B3 waste, we cooperate with the manufacturers of Phillips and Osram lamps.
Environmental Complaint Mechanisms
Our business characteristics in the telecommunication and digital industry cause relatively low impacts on the environment. Therefore,
there was no complaint from the citizens or other stakeholders about environmental issues so far. Should there be any violation of
environmental regulations, we welcome any complaints to the mechanism of Whistle Blowing System (WBS) or complaints may be
submitted directly to the Corporate Secretary.
Certification in Field of Environment
In conformity with our concern for the environment, our data centre that is managed by Telkom Sigma has obtained a certification in
the field of environment, namely the ISO 14001, by the British Standards Institution.
Table of Certification in the Field of Environment Obtained by Telkom for 2017
No.
Year
Certification
Recipient
Certifying Institution
Validity Period
1
2014
EMS ISO 14001
Telkom Sigma
The British Standards Institution (BSI)
2017
243
Corporate Social ResponsibilityPT Telkom Indonesia (Persero) TbkCorporate GovernancePartnership and Comunity Development Program (PKBL)Appendices
PARTNERSHIP AND
COMMUNITY DEVELOPMENT
PROGRAM (PKBL)
246 PKBL Summary
247 PKBL Report
“Being part of Indonesia, means to help
build and prosper the community. This is
done not only through our products and
services and operational activities which
have positive economic impact. Moreover,
through the Partnership and Community
Development Program we are also giving
more value to life in Indonesia.”
Highlights
Management Report
About Telkom Indonesia
Analysis and Discussion
PARTNERSHIP & COMMUNITY
DEVELOPMENT PROGRAM (PKBL)
PARTNERSHIP
PROGRAM
Rp307.61 billion*
2017 PARTNERSHIP PROGRAM REALIZATION
8,367 Partners
COMMUNITY
DEVELOPMENT
PROGRAM
Rp81.97 billion
Trading
Industry
Farms
Services
Fishery
Plantation
Agriculture
Others
Rp144.56 billion
4,592 Partners
Rp53.92 billion
1,683 Partners
Rp8.56 billion
237 Partners
Rp47.8 billion
1,404 Partners
Rp6.48 billion
199 Partners
Rp3.46 billion
121 Partners
Rp4.37 billion
120 Partners
Rp430 million
11 Partners
2017 COMMUNITY DEVELOPMENT PROGRAM REALIZATION
Natural Disaster Victim Donation
Rp690 million
Education Donation
Healthcare Improvement
Donation
Rp25.08 billion
Rp4,78 billion
Improvement of Infrastructure and/or
Public Facilities Donation
Rp11.85 billion
Places of Worship Donation
Rp10.21 billion
Nature Conservation Donation
Rp1,1 billion
Civil Society in Order for Poverty
Alleviation Donation
Rp28.26 billion
*Including Fostering Partnership Fund
246
PT Telkom Indonesia (Persero) Tbk
Corporate Governance
Corporate Governance
Corporate Social Responsibility
Corporate Social Responsibility
Partnership and Comunity Development Program (PKBL)
Partnership and Comunity Development Program (PKBL)
Appendices
Appendices
PARTNERSHIP AND COMMUNITY DEVELOPMENT
PROGRAM (PKBL) REPORT
PKBL OBJECTIVES
The Partnership and Community Development Program (PKBL) is a community empowerment focused on the economic and social
aspects that directly or indirectly relates to Telkom’s main business. The PKBL is not only an obligation for Telkom as an SOE, but
also an effort to manage the impacts of the Company’s policies and operational activities on the community and natural environment
on an ongoing basis. The program consists of the Partnership Program which includes distribution of loan funds to Small Medium
Enterprise (SME) and Foster Partner Capacity Enhancement, and the Community Development Program which includes seven Objects
of Donation, namely:
Natural Disaster
Victim Donation
Education Donation
Healthcare
Improvement Donation
Improvement of
Infrastructure and/
or Public Facilities
Donation
Places of Worship
Donation
Nature Conservation
Donation
Civil Society in Order
for Poverty Alleviation
Donation
LEGAL BASIS AND GENERAL POLICY
The implementation of PKBL activities is regulated through Law
To perform this obligation, the Company has formulated policy
No.19 dated June 19, 2003 on SOE and a Decree of the Minister
and operational guidelines under Regulation of the Board of
of State-Owned Enterprises which has been amended from
Directors PR.202.60/r.00/HK200/COP-A2000000/2017 dated
time to time, the last one was by Regulation of the Minister of
August 8, 2017 about the Community Development Center
State-Owned Enterprises No.PER-02/MBU/7/2017 dated July
Organization.
5, 2017 regarding the Second Amendment to Regulation of the
Minister of State-Owned Enterprises No.PER-09/MBU/07/2015
on the Partnership Program and Community Development
Program of State-Owned Enterprises, and Letter of the Minister
of State-Owned Enterprises No.S-513/MBU/08/2016 dated
August 30, 2016 concerning the Delivery of Aspirations of Public
Shareholders for the Preparation of the 2017 Corporate Work
Plans and Budgets.
PT Telkom Indonesia (Persero) Tbk
247
SUCCESS PARAMETER
CSR (PKBL) Index
In 2017, the Company conducted a measurement of CSR (PKBL)
Index with the achievement of 73.07%. The achievement shows
that the Company’s CSR activities brought an impact at the rate
of >70% on customer loyalty and corporate reputation.
Net Promoter Score - NPS
In addition to measuring the CSR (PKBL) Index, the Company
also measured the rate of public recommendation and promotion
to use Telkom products in the Net Promoter Score (NPS). The
survey resulted in the following NPS.
The results of NPS measurement in 2017 showed positive value
from the perspective of the community in recommending the use
of Telkom products.
The Effectiveness of Partnership Program Fund
Disbursement
In 2017, the target of fund disbursement of the Partnership
Program was 80% of available funds with the realization rate of
93.72% and score of 3.
Table of Effectiveness of Partnership Program Fund
Disbursement 2015-2017
Partnership Program
Year
2017
2016
2015
Total Funds Disbursed
307.61
360.92
346.97
Net Promoter Score Partnership Program
Total Funds Allocated
328.21
366.54
384.34
42.88%
PROMOTERS
35.32%
PASSIVES
21.80%
DETRACTOR
NPS = PROMOTERS-DETRACTOR
NPS PARTNERSHIP PROGRAM = 21.08%
Net Promoter Score Community Development Program
41.74%
PROMOTERS
38.53%
PASSIVES
19.72%
DETRACTOR
Fund Disbursement Effectiveness
Rate (%)
Fund Disbursement Effectiveness
Score
93.72
98.47
90.28
3
3
3
The Collectability of Partnership Program Funds
The target of collectability rate in 2017 was 80% while the
realization was 85.17% with the score of 3.
Table of Collectability of Partnership Program Funds
Percentage 2015-2017
Collectibillity
Year
2017
2016
2015
Collectability Rate (%)
85.17
88.54
71.37
Score
3
3
3
The Effectiveness of Community Development Program
Fund Disbursement
The 2017 target of 80% was channelled from the allocation of
Rp82 billion with the realization of Rp81.97 billion or 99.97% of
the 2017 fund allocation.
Table of Effectiveness of Community
Development Program Fund Disbursement
Community Development
Program
2017
2016
2015
Year
NPS = PROMOTERS-DETRACTOR
Total Funds Disbursed
81.97
81.97
72.41
NPS COMMUNITY DEVELOPMENT PROGRAM = 22.02%
Total Funds Allocated
82.00
82.00
82.00
Fund Disbursement
Effectiveness Rate
99.97
99.97
88.30
248
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights
PKBL BUDGET ALLOCATION
Table of realization of total Foster Partners and Fund
Disbursements per Business Sector from 2015-2017
The allocation of funds for PKBL activities, as stipulated by the
Ministry of SOE, stemmed from the Company’s profit allowance
for the Partnership Program funds and the Company’s budget
Business
Sector
Number of Foster
Partners
Total Disbursements
(billion Rp)
2017
2016
2015
2017
2016
2015
allocation for the Community Development Program funds. The
Industry
1,683
1,784
1,895
53.92
60.92
56.37
realization of PKBL fund disbursement in 2015 2017 was as
Trade
4,592
6,371
6,972
144.56
203.48
193.97
follows
Table of Budget Allocation of Partnership
Programs and Community Development 2016-2017
Type of Program
2017
2016
% of Change
Partnership Program
328.21
366.54
(10.46)
Agriculture
Livestock
Plantation
Fisheries
Service
Others
120
237
121
199
200
351
201
276
229
429
207
333
4.37
7.18
6.77
8.56
13.29
12.81
3.46
6.48
5.4
5.56
7.97
9.21
1,404
1,751
1,896
47.80
61.52
55.32
11
22
20
0.43
1.16
0.95
Sub Total
8,367
10,956
11,981
269.58
360.92
340.96
82.00
410.21
82.00
448.54
0.00
(8.55)
Fostering
Partnership
Fund
Total
38.03
0
6.01
269.58
360.92
340.96
Community
Development
Program
Total
PKBL REALIZATION
CAGR (%)
(23.63)
(8.56)
(14.77)
4.02
The number of recipients of the Partnership Program funds in
2017 decreased by 23.63% compared to 2016, while the amount
of funds disbursed in 2017 decreased by 14.77%.
PKBL Program in 2017 consists of The Partnership Program and
The Community Development Program.
Partnership Program
The Partnership Program is a program of empowering economic
competence to
increase revenues through small medium
enterprise activities by providing low interest loan funds that are
set aside from a portion of SOEs’ operating profits with a focus
on digitizing partnership management, providing digitalization
training for foster partners and involving foster partners in
national and international exhibitions.
In 2017, the Partnership Program fund disbursement amounted
to Rp269.58 billion to 8,367 Foster Partners which consisted
Photos of Disbursement in Palembang
of industry, trade, agriculture, livestock, plantation, fisheries,
service and other business sectors. The realization of total
To enhance the capacity of the Foster Partners, we focused on
Foster Partners and Fund Disbursements per Business Sector
three main activities, namely Digitizing the Partnership Program
from 2015 to 2017 is shown below.
Management, Providing Digitalization Training for the Foster
Partners and Involving the Foster Partners in National and
International Exhibitions.
249
PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices Partnership Program Management Digitalization
Since the implementation of PKBL Management Information System (SIM) in 2007, Telkom has used digital technology to manage
the data of Foster Partners in the Partnership Program. In 2016, Telkom implemented loan application for the Partnership Program
through SmartBisnis website and instalment payment through virtual bank accounts with Bank Mandiri and Bank BNI. In 2017, the
instalment payment service through virtual accounts was expanded in collaboration with subsidiaries of PT Finnet Indonesia as a non-
bank payment point aggregator, including PT Pos Indonesia, PT Pegadaian, Alfamart and Indomart. It is aimed to facilitate the Foster
Partners in making instalment payments.
PROPOSAL
OBJECTIVES AND
RECEIVABLES
SME COMMUNITIES
FOSTER PARTNERS
VIRTUAL ACCOUNT
SIM PKBL
STARBOX
DIGITALIZED MANAGEMENT
OF THE PARTNERSHIP
PROGRAM
SME Digitalization Training
We have been providing the training since 2015 in order to help the Foster Partners, promote and market their products to enter the
global market by utilizing the facilities of blanja.com website. In 2017, training was provided for 1,094 SME. In addition to digitalization
training, we also conducted digitalization seminars to broaden the Foster Partners’ insight.
SME Go Digital Workshop in Surabaya
250
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights National and International Exhibitions
Table of Distribution of Community Development Program
Funds per Type of Donation 2015-2017
Telkom has consistently encouraged its Foster Partners to
participate in national and international exhibitions. In 2017,
150 Foster Partners took part in Telkom Craft Indonesia which
No Donation Type
is a part of Rumah Kreatif BUMN and Telkom’s improvement in
enhancing the capacity of its Foster Partners. Other exhibitions
included Adiwastra Exhibition, Kriyanusa Exhibition and
international exhibition Sail Sabang 2017. Previously, Telkom
had participated in similar exhibitions such as Sail Komodo -
Labuan Bajo, Sail Raja Ampat, Sail Tomini and Sail Karimata
For overseas exhibitions, Telkom engaged Foster Partners in
an exhibition in Algeria in 2016 and the Foire Internationale De
Marseille-France Exhibition in 2017.
1
2
3
4
5
6
7
8
Nature Disaster
Victims Donation
Education and/or
Training Donation
Healthcare
Improvement
Donation
Development
of Public
Infrastructure and
Utilities Donation
Religion Facility
Donation
Natural
Preservation
Donation
Poverty Alleviation
Donation
Capacity
Improvement
Donation to Foster
Partners
Total Donation Objects
Total Disbursement
(Rp billion)
2017
2016
2015
2017
2016
2015
20
20
17
0.69
0.94
1.30
392
492 336
25.08 35.68
41.15
113
154
62
4.78 10.42
1.47
311
221
170
11.85
13.37
15.73
395
382
219
10.21
10.62
8.47
18
30
27
1.1
0.91
0.75
86
22
2
28.26
1.64
0.01
-
115
42
-
8.39
3.52
Telkom Craft Indonesia Exhibition
Nature Disaster Victims Donation
Total
1,335
1,436 875
81.97
81.97
72.41
CAGR (%)
(7.03)
64.11
-
13,20
Natural disaster donation is aimed at relieving the burden of the
people affected by natural disasters. In 2017, Telkom distributed
aid affected by disasters, such as floods in Bandung and Bima
Regencies, eruptions of Mount Agung and Mount Sinabung,
landslide in Pacitan and earthquake disaster in Pidie Jaya.
Sail Sabang Exhibition
The Community Development Program
The Community Development Program
is a community
empowerment program in the Company’s business areas which
covered Natural Disaster Donation, Education and Training
Donation, Public Health Donation, Public Facility Donation,
Religious Facility Donation, Environmental Preservation
Donation, and Poverty Alleviation Donation. The donation is
Donation of SOE Care for Mount Agung Disaster
part of the SOE’s Hadir untuk Negeri Program.
The actual distribution of
funds
for
the Community
Development Program amounted to Rp81.97 billion or
99.97% of fund disbursement commitment of Rp82 billion.
The following table shows the distribution of funds for the
Community Development Program per type of donation from
2015 until 2017.
251
PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices Education Donation
As the implementation of the commitment to development
of the country’s digital technology competence, Telkom
is active in improving the quality of education under the
Indonesia Digital Learning program by providing Digital
Library (Pustaka Digital/PaDi) facilities and My Teacher My
Hero Program. Up to 2017, Telkom has provided 3,991 units of
PaDi, and digital training for 1,099 teachers under My Teacher
My Hero program. The IDL Program was also appreciated by
Prosthetic Leg Aid
the President of the Republic of Indonesia in his speech at the
opening of the 2017 PGRI Congress.
Other forms of Public Health Donation included blood donation
and cheap market in Makassar under the Safari Ramadhan
In addition to improving the community’s ability to use
program.
digital technology, Telkom also participated in maintaining
the local wisdom and cultural values in the young generation
through Telkom Peduli Budaya program which was held in 5
cities, namely Bandung, Yogyakarta, Balikpapan, Makassar
and Pekanbaru, and organized the Siswa Mengenal Nusantara
program which was joined by 20 students as of 2017.
Cheap Market in order of Safari Ramadhan
Improvement of Infrastructure and/or Public Facilities
Donation
The purpose of this program is to improve services to the public
in terms of facilities and infrastructure. The program is expected
to increase the community’s accessibility to their activities,
facilitate activities with the support of the improvement of
bridges and clean water supply for the Badui communities, and
provide the infrastructure of Mama-Mama Market in Papua.
Appreciation of Indonesia Digital Learning Program held by Telkom Indonesia
Healthcare Improvement Donation
Donation for public health is also a concern of Telkom, among
others through the Disability Care program which has been
running since 2016. The implementation of the 2017 Disability
Care program included the Gantari Award which was held in
collaboration with the Kick Andy Foundation for people with
disabilities who were selected as inspirators for persons with
disabilities to live independently.
Overall in 2017, Telkom has distributed aid to 590 difable people
(deaf, blind, and disabled people) as well as providing Broandband
Learning Center Difable (BLC-D) donation and as well as the
development of Mata Hati disability community.
BLC Mama Mama Market
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PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights Places of Worship Donation
Civil Society in Order for Poverty Alleviation Donation
In addition to the construction of Public Facilities, Telkom
Through Civil Society in Order for Poverty Alleviation Donation,
gives attention to the construction and
improvement of
Telkom hopes to improve the lives of the poor both in urban and
religious facilities in order to improve the implementation of
rural areas. The Civil Society in Order for Poverty Alleviation
religious activities of the community. The donation includes the
Donation provided in 2017 included 150 Housse of the Bedah
construction and renovation of mosques and churches.
Rumah Veteran program in West Java, 52 Houses of Bedah Rumah
Pensiunan Telkom, Balai Ekonomi Desa (Balkondes) in Magelang,
the groundbreaking of which was done in 2016 by SOE’s Minister.
Mosque Donation Delivery
Nature Conservation Donation
The donation program for Nature Conservation is part of the
Company’s commitment to the environment. The Environmental
Preservation Program includes reforestation around Merapi
Mount area, Wali Pohon in Lembang, and preservation of 50,000
trees around Lake Toba which were planted in 2016.
The Visit of the President of Indoneisa in Balkondes
Employee Volunteer Program (EVP)
The Employee Volunteer Program (EVP) is part of the main
program Work Life Integration which serves as a forum to facilitate
social activities initiated by Insan Telkom Group (Telkomers)
in the scope of individuals, business units, and employee
communities within the Telkom Group. In 2017, the EVP was
run as a strengthening of corporate culture by 87 Kipas Budaya.
Tree-Planting
EVP CDC
EVP CDC
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PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices APPENDICES
256 Glossary
260 List of Abbreviations
264 Cross Reference to OJK Circulation Letter No.30/SEOJK.04/2016
GLOSSARY
2G
The abbreviation for second generation: relating to or using a
Bandwidth
The capacity of a communication link.
technology that gave mobile phone users improved features and
allowed people to send text messages (SMS).
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.
4G/LTE
A fourth generation super fast internet network technology based
on Internet Protocol (IP) that makes the process of data transfer
much faster and stable.
Adjusted EBITDA
Adjusted EBITDA is defined as earnings before interest, tax,
Bapepam-LK
Badan Pengawas Pasar Modal dan Lembaga Keuangan, or the
Indonesian Capital Market and Financial Institution Supervisory
Agency, the predecessor to the OJK.
Broadband
A signaling method that includes or handles a relatively wide
range (or band) of frequencies.
BSS
Base Station Subsystem, the section of a cellular telephone
network responsible for handling traffic and signaling between
a mobile phone and the network switching subsystem. A BSS is
composed of two parts: the BTS and the BSC.
depreciation and amortization. Adjusted EBITDA and other related
ratios in this Annual Report serve as additional indicators on our
BTS
Base Transceiver Station, equipment that transmits and receives
performance and liquidity, which is a non-GAAP financial measure.
radio telephony signals to and from other telecommunication
systems.
ADS
American Depositary Share (also known as an American Depositary
Receipt, or an “ADR”), a certificate traded on a U.S. securities
C-Band
C-Band is a frequency allocation for communications satellites.
market (such as New York Stock Exchange) representing a number
C-Band uses 3.7-4.2GHz for downlink and 5.925-6.425Ghz for
of foreign shares. Each of our ADS represents 100 of our Series B
uplink. The lower frequencies that C Band uses perform better
shares having a par value of Rp50 per share (“common stock”).
under adverse weather conditions than the Ku band or Ka band
frequencies.
ARPU
Average Revenue per User, a measure used primarily by
telecommunications and networking companies which states how
Consortium
Co-financing a project or enterprise undertaken by two or more
much money we make from the average user. It is defined as the
banks or financial institutions.
total revenue from specified services divided by the number of
consumers for those services.
Backbone
The main telecommunications network consists of transmission
CPE
Customer Premises Equipment, any handset, receiver, set-top
box or other equipment used by the consumer of wireless, fixed
line or broadband services, which is the property of the network
and switching facilities that connect multiple network access
operator and located on the customer premises.
nodes. The transmission network between node and switching
facilities
includes microwaves, submarine cables, satellites,
optical fibers, and other transmission technologies.
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PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights Cybersecurity
Cyber security is an effort to protect information from cyber-
Gbps
Gigabyte per second, the average number of bits, characters,
attack. Cyber-attack in information operations is any kind of
or blocks per unit time passing between equipment in a data
deliberate action to disrupt the confidentiality, integrity, and
transmission system. This is typically measured in multiples of
availability of information.
the unit bit per second or byte per second.
DWIWARNA SHAREHOLDERS
Shares owned by The Indonesian Government.
e-Commerce
Electronic Commerce, the buying and selling of products or
services over electronic systems such as the internet and other
computer networks.
EDGE
Enhanced Data rates for GSM Evolution, a digital mobile phone
technology that allows improved data transmission rates as a
backward-compatible extension of GSM.
GPRS
General Packet Radio Service, a data packet switching technology
that allows information to be sent and received across a mobile
network and only utilizes the network when there is data to be sent.
GMS
General Meeting of Shareholders, which may be an Annual
General Meeting of Shareholders (“AGMS”) or an Extraordinary
General Meeting of Shareholders (“EGMS”).
GraPARI
Telkomsel’s customer service network.
Edutainment
Education and Entertainment.
GSM
Global System for Mobile Telecommunication, a European
standard for digital cellular telephone.
Fiber Optic
Cables using optical fiber and laser technology through which
modulating light beams representing data are transmitted
Homes passed
A connection with access to fixed line voice, IPTV and broadband
through thin filaments of glass.
services.
Fixed Line
Fixed wireline and fixed wireless.
Fixed Wireline
A fixed wire or cable path linking a subscriber at a fixed location to
a local exchange, usually with an individual phone number.
FTTH
Fiber To The Home are the implementation of fiber optic network
that reaches up to customer point or known as customer premise.
ICT Platform
an abbreviation of information and communications technology
platform. ICT platform services consist of enterprise connectivity,
IT services, data center and cloud services, business process
outsourcing, device & hardware sales and services.
Interconnection
The physical linking of a carrier’s network with equipment or
facilities not belonging to that network.
Gateway
A peripheral that bridges a packet based network (IP) and a circuit
based network (PSTN).
Intranet
a computer network based on TCP / IP protocols such as the
internet, however the usage is restricted or closed and only certain
people or users who can log on and use the intranet network.
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PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices IP
Internet Protocol, the method or protocol by which data is sent
MHz
Megahertz, a unit of measure of frequency equal to one million
from one computer to another on the internet.
cycles per second.
IP Backhaul
A term used to define a communication path, particularly
Mobile Broadband
The marketing term for wireless internet access through a
a microwave or optical fiber, between a base station with a
portable modem, mobile phone, USB Wireless Modem or other
communication or network communication switch.
mobile devices.
IPO
Initial Public Offering, the first sale of stock by a Company to the
Monetization
convert an asset or any object into money or legal tender.
public.
IPTV
Internet Protocol Television, a system through which television
services are delivered using the Internet Protocol suite over a
packet-switched network such as the internet, instead of being
delivered through traditional terrestrial, satellite signal, and
cable television formats.
ISP
Internet Services Provider, an organization that provides access
to the internet.
Network Access Point
A public network exchange facility where ISPs connected with
one another in peering arrangements.
OJK
Otoritas Jasa Keuangan, or the Indonesian Financial Services
Authority, the successor of Bapepam-LK, is an independent
institution with authority to regulate and supervise financial
services activities in the banking sector, capital market sector as
well as non-bank financial industry sector.
Ku-Band
The Kurtz-under band (Ku band) is a frequency range or segment
PSTN
Public Switched Telephone Network, a telephone network
operated and maintained by us and the KSO Units for us and on
of the radio spectrum 11-17GHz. This range is often used for
our behalf.
satellite communications, including VSAT, and some types of
satellite antennas.
Pulse
The unit in the calculation of telephone charge.
Mbps
Megabyte per second, a measure of speed for digital signal
transmission expressed in millions of bits per second.
Reverse Stock
The compression of shares to become smaller amount of shares
using higher value per share.
Metro Ethernet
Bridge or relationship between
locations that are apart
geographically, this network connects LAN customers at several
RMJ
Regional Metro Junction, an inter-city cable network installation
different locations.
service in one regional (region/province).
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PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights Satellite Transponder
Radio relay equipment embedded in a satellite that receives
TIMES
signals from earth and amplifies and transmits the signal back
Telecommunication,
Information, Media, Edutainment and
to the earth.
SCCS
Submarine Communications Cable System, a cable laid on the
sea bed between land-based stations to carry telecommunication
signals across stretches of ocean.
Service.
TPE
A normalized way to refer to transponder bandwidth it simply
means number of transpounders used
if the same total
bandwidths used is 36 Mt transponder (1 TPE = 36 MHz).
SIM cards
is a stamp-sized smart
Subscriber
card placed on a mobile phone that holds the key to the
Identity Module card
telecommunication service.
Treasury Stock
SMS
Company’s share temporarily repurchased or bought back from
the outstanding share.
Short Messaging Service, a technology allowing the exchange
UMTS
of text messages between mobile phones and between fixed
Universal Mobile Telephone System, one of the 3G mobile
systems being developed within the ITU’s IMT 2000 framework.
VSAT
Very Small Aperture Terminal, a relatively small antenna, typically
1.5 to 3.0 meters in diameter, placed in the user’s premises and
used for two-way communications by satellite.
wireless phones.
SOA
Sarbanes-Oxley Act, effective from July 30, 2002, also known as
Public Company Accounting Reform and Investor Protection Act
and Corporate and Auditing Accountability and Responsibility
Act.
Stock Split
Splitting the number of shares becoming more shares using
lower value per share.
Switching
A mechanical, electrical or electronic device that opens or closes
circuits, completes or breaks an electrical path, or selected paths
or circuits, used to route traffic in a telecommunications network.
259
PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices LIST OF ABBREVIATIONS
Keyword
Descripstions
Keyword
Descripstions
CFO
CGPI
CISA
CLI
COE
CONS
CORE
COSO
CRM
CRMGA
CSI
CSR
CSS
DER
DiLo
DMCS
DS
DSAK
DSP
DWDM
EBIS
EBITDA
Chief Financial Officer
Corporate Governance Perception
Index
Certified Information System Audit
Customer Loyalty Index
Calendar of Event
Consumer Service
Center of Reformation
Committee of Sponsoring
Organizations of the Treadway
Commission
Compliance Risk Management
Compliance, Risk Management, &
General Affair
Customer Satisfaction Index
Corporate Social Responsibility
Corporate Strategic Scenario
Debt Equity Ratio
Digital Lounge
Dumai Malacca Cable System
Depository Shares
Dewan Standar Akuntansi Keuangan
(Board of Financial Accounting
Standard)
Digital & Strategic Portfolio
Dense Wavelength Division
Multiplexing
Enterprise & Business Service
Earning Before Interest Tax
Depreciation and Amortization
Edutainment
Education and Entertainment
EGMS
Extraordinary General Meeting of
EPS
ERM
ESS
Shareholders
Earning per Share
Enterprise Risk Management
Employee Suggestion System
AAG
AC
AGMS
AO
ARPU
ASBL
ATL
BCM
B3
BEI
BLC
BLC-D
BOC
BOD
BPJS
BPO
BSCS
BTL
BTS
Asia America Gateway
Air Conditioner
Annual General Meeting of
Shareholders
Application Owner
Average Revenue per User
Aceh-Sibolga-Batam-Larantuka
Above The Line
Business Continuity Management
Bahan Berbahaya dan Beracun
(Hazardeus and Toxic Materials)
Bursa Efek Indonesia (Indonesia Stock
Exchange)
Broadband Learning Center
Broadband Learning Center Difable
Board of Commisioner
Board of Director
Badan Penyelenggara Jaminan Sosial
(Social Security Administrator)
Business Process Outsourcing
Batam Singapore Cable System
Below The Line
Base Transceiver Station
BUMN (SOE)
Badan Usaha Milik Negara (State-
Owned Enterprises)
Certified Accountant
Compound Annual Growth Rate
Capital Expenditure
Community Development Center
Customer Dissatisfaction Index
Certified Ethical Hacker
Chief Executive Officer
Certified Fraud Examiner
Customer Facing Unit
Certified Internal Audit
CA
CAGR
CAPEX
CDC
CDI
CEH
CEO
CFE
CFU
CIA
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PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights Keyword
Descripstions
Keyword
Descripstions
Employee Stock Ownership Program
IFRS
International Financial Reporting
ESOP
EVP
EY
FMCG
FRAMES
FTTH
FU
GraPARI
Gbps
GCG
GGSN
GHz
GMS
GNNT
GPRS
GRC
GSD
GSM
HCM
HSDPA
IA
IAS
ICT
Employee Volunteer Program
Ernst & Young
Fast Moving Consumers Good
Fraud Management System
Fiber To The Home
Functional Unit
Graha Pari Sraya
Gigabyte per second
Good Corporate Governance
Gateway GPRS Support Node
Gigahertz
General Meeting of Shareholder
Gerakan Nasional Non-Tunai (National
Non-Cash Movement)
General Packet Radio Service
Governance, Risk, and Compliance
Graha Sarana Duta
Global System for Mobile
Telecommunication
Human Capital Management
High Speed Downlink Packet Access
Internal Audit
International Accounting Standards
Infomation and Communication
Technology
ICOFR
Internal Control Over Financial
IDL
IDN
IDN
IDX
IFAS
Reporting
Indonesia Digital Learning
Indonesian Digital Network
International Domain Name
Indonesia Stock Exchange
Indonesian Financial Accounting
Standards
IGG
IICG
InEx
IoT
IP
IPO
IPTV
ISAK
ISO
ISP
ITX
KAP
Standard
Indonesia Global Gateway
Indonesia Institute for Corporate
Governance
International Expansion
Internet of Things
Internet Protocol
Initial Public Offering
Internet Protocol Television
Interpretasi Standar Akuntansi
Keuangan (Interpretation of
Statements of Financial Accounting
Standards)
International Organization for
Standardization
Internet Services Provider
Indonesia Tourism Exchange
Kantor Akuntan Publik (Public
Accountant Firm)
KEMPR
Komite Evaluasi dan Monitoring
KEU
KM
KNR
KPI
KPKU
Perencanaan dan Risiko (Committee
for Planning and Risk Evaluation and
Monitoring)
Keuangan (Finance)
Kontrak Manajemen (Contract
Management)
Komite Nominasi dan Remunerasi
(Committee for Nomination and
Remuneration)
Key Performance Indicator
Kriteria Penilaian Kinerja Unggul
(Criteria for Superior Performance
Appraisal)
261
PT Telkom Indonesia (Persero) TbkCorporate GovernanceCorporate Social ResponsibilityPartnership and Comunity Development Program (PKBL)Appendices Keyword
KPPU
Descripstions
Keyword
Descripstions
Komisi Pengawasan Persaingan Usaha
OSP-FO
Outside Plan Fiber Optic
Kwh
LED
LSA
LSE
M&A
M2M
Mbps
MDI
MHz
MNO
MVNO
MSS
NAP
NITS
NPS
NPWP
NYSE
OCS
OECD
(Commission for the Supervision of
Business Competition)
Kilo Watt Hour
Light Emitting Diode
Long Service Award
London Stock Exchange
Merger & Acquisition
Machine to Machine
Megabyte per second
Metra Digital Investama
Megahertz
Mobile Network Operator
Mobile Virtual Network Operator
Mobile Satellite Service
Network Access Point
Network, IT, & Solution
Net Promotor Score
Nomor Pokok Wajib Pajak (Tax
Identification Number)
New York Stock Exchange
Online Charging System
Organization for Economic Co-
operation and Development
OHSAS
Occupational Health and Safety
OJK
OLO
ONT
Assessment System
Otoritas Jasa Keuangan (Indonesia
Financial Service Authority)
Other Licensed Operator
Optical Network Termination
OTT
PaDi
PAYU
PKBL
PE-VPN
PMK
PN
POJK
PoP
POTS
PSAK
PSTN
QIA
QMS
QoS
RAC
RAN
RCSA
RJPP
RKAP
Over The Top
Pustaka Digital (Digital Library)
Pay As You Use
Program Kemitraan Bina Lingkungan
(Partnership and Community
Development)
Provider Edge-Virtual Private Network
Peraturan Menteri Keuangan (Minister
of Finance Regulation)
Perusahaan Negara (State Company)
Peraturan Otoritas Jasa Keuangan
(Regulation of Indonesia Financial
Services Authority)
Point of Presence
Plain Old Telephone Service
Pernyataan Standar Akuntansi
Keuangan (Statements of Financial
Accounting Standards)
Public Switched Telephone Network
Qualified Internal Auditor
Quality Management System
Quality of Service
Risk Acceptance Criteria
Radio Access Network
Risk & Control Self Assessment
Rencana Jangka Panjang Perusahaan
(Company’s Long Term Plan)
Rencana Kerja Anggaran dan
Pendapatan (Budgeting and Revenue
Work Plan)
OSDSS
Operational and Strategic Decision
Support Systems
RMJ
Regional Metro Junction
262
PT Telkom Indonesia (Persero) TbkAnalysis and DiscussionAbout Telkom IndonesiaManagement ReportHighlights Keyword
Descripstions
ROA
ROE
SAK
SCP
SCPC
SDM
Return on Asset
Return on Equity
Standar Akuntansi Keuangan (Financial
Accounting Standard)
Service Control Points
Single Carrier per Channel
Sumber Daya Manusia (Human Capital)
SEA-ME-WE-5
South East Asia – Middle East –
SEA-US
SEC
SEOJK
SHA
SIM
SIUP
SJC
SLI
MSME
SMILE
Western Europe 5
South East Asia-United States
Securities and Exchange Commission
Surat Edaran Otoritas Jasa Keuangan
(Circular Letter of Indonesia Financial
Service Authority)
Shareholders Agreement
Sistem Informasi Manajemen
(Management Information System)
Surat Izin Usaha Perdagangan
(Business Trade License)
South East Asia Japan
Sambungan Langsung Internasional
(Direct International Line)
Micro Small and Medium Enterprise
Supply Management and Logistic
Enhancement
SMPCS
Sulawesi Maluku Papua Cable System
SMS
SOP
SOX
Short Messaging Service
Standard Operating Procedures
Sarbanes Oxley Act
Keyword
SPH
Descripstions
Surat Pernyataan Harta (Aset
STB
TIMES
TIQA
TISCM
TLT
TSA
TSO
UC&C
UMTS
USO
UTRAN
VAS
VOD
VoIP
VSAT
VP
VTMS
WBS
WIB
WINS
Witel
WPO
Declaration Letter)
Set Top Box
Telekomunikasi, Informasi, Media,
Edutainment, and Services
Telkom Integrated Quality Assurance
Telkom Integrated Supply Chain
Management
Telkom Landmark Tower
Technical Support Agreement
Telkomsel Smart Office
Unified Communication &
Collaboration
Universal Mobile Telephone System
Universal Service Obligation
UMTS Terrestrial Radio Access
Network
Value Added Service
Voice Over Data
Voice over Internet Protocol
Very Small Aperture Terminal
Vice President
Vessel Tracking Management System
Whistleblowing System
Wholesale and International Business
Wholesale and International Service
Wilayah Telekomunikasi
Whistleblower Protection Officer
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NO.30/SEOJK.04/2016
CRITERIA
Form of annual report
EXPLANATION
PAGES
Annual Report should be able to be reproduced in printed document copy and electronic document copy
I
1
√
√
√
√
√
√
20
2 Annual Report presented as printed document should be printed on light-colored, good quality, A4 sized paper, bound and
possible to be reproduced in good quality
3 Annual Report presented as electronic document copy is the Annual Report converted to pdf format
II Content of annual report
1
General requirements
a. Annual Report should at least contain
1) Key financial data highlight;
information about:
2) Share information (if any);
3) Directors’ report;
4) Board of commissioners’ report;
5) Issuer or public company’s profile;
6) Management discussion and analysis;
7) Issuer or public company’s governance;
8) Issuer or public company social and environmental responsibility;
9) Audited annual financial report; and
10) Statement of directors and board of commissioners on the responsibility
for the annual report.
b. Annual Report may present information in the form of images, graphs, tables, and/or diagrams by including clear title and/or
description to be easily read and understood.
2. Description of the Contents of Annual Report
a. Key Financial Data Highlight
Highlights of Key Financial Data presents information in comparative form over
a period of 3 (three) financial years or since the commencement of business if
the Issuer or Public Company has been running for less than 3 (three) years,
and should at least contain:
1) Revenue;
2) Gross profit;
3) Profit (loss);
4) Profit (loss) attributable to parent and non-controlling interests;
5) Comprehensive profit (loss);
6) Comprehensive profit (loss) attributable to parent and non-controlling;
7) Net profit (loss) per share;
8) Total assets;
9) Total liabilities;
10) Total equity;
11) Profit (loss) to total asset ratio;
12) Profit (loss) to equity ratio;
13) Profit (loss) to revenue ratio;
14) Current ratio;
15) Liabilities to equity ratio;
16) Liabilities to total asset ratio; and
17) Other financial information and ratios relevant to issuer or public company
and their industry type.
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EXPLANATION
b. Share Information
Information of share (if any) at least contains:
PAGES
22-24
1) Shares issued for three months period (if any) presented in comparative
form in the last 2 (two) financial years at least contain:
a) Outstanding shares;
b) Market capitalization by the price in the stock exchange where the
share is listed;
c) Highest, lowest, and closing share price by the price in the stock
exchange where the share is listed; and
d) Traded volume in the stock exchange where the share is listed.
2) In the event of corporate actions such as stock split, reverse stock, stock
dividend, bonus share, and par value decrease, share price information
referred to in point 1) should then include explanation concerning at least:
a) Date of corporate actions;
b) Ratio of stock split, reverse stock, stock dividend, bonus share, and par
value decrease;
c) Amount of outstanding shares before and after corporate actions; and
d) Share price before and after corporate actions.
3) In the event that the company’s share trade is suspended and/or delisted
during the year reported, Issuer or Public Company should explain the
reason for such suspension and/or delisting; and
4) In the event that such suspension and/or delisting referred to in point 3)
still goes on until the final period of Annual Report, the Issuer or Public
Company should explain the action carried out by the company in solving
the matter.
c. Director’s Report
Report from the Directors at least contain:
34-41
1) Brief description about the performance of issuer or public company, that
at least include:
a) Strategies and strategic policies of issuer or public company;
b) Comparison between achievement of results and targets; and
c) Constraints experienced by issuer or public company;
2) Description of business prospects;
3) Implementation of issuer or public company’s governance; and
4) Changes in the composition of the board of directors and reasons for such
changes (if any).
d. Board of Commissioners’ Report
Report from Board of Commissioners’ at least contains:
28-33
1) Assessment on the performance of the directors in managing the issuer or
public;
2) Supervision of implementation of issuer or public company’s strategies;
3) Views on the business prospects of issuer or public company established
by the Board of Directors;
4) Views on the implementation of issuer or public company’s governance;
5) Changes in the composition of board of commissioners and reasons for
such changes; and
6) Frequency and method of advising the member of directors.
e. Profile of Issuer or Public Company
The Issuer or Public Company’s Profile at least contains:
1) Name of issuer or public company, including, if any, changes in names, rea-
sons for such changes, and the effective date of name;
2) Access to issuer or public company, including branch or representative
offices that enables people to obtain the information of:
a) Address;
b) Telephone number;
c) Facsimile number;
d) E-mail address; and
e) Web site address;
3) Brief history of the issuer or public company;
4) Vision and mission of issuer or public company;
4-7
4-5
50-51
48-49
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EXPLANATION
5) Business activities under the latest articles of association, business
activities conducted during the financial year, and type of goods and/or
services offered;
PAGES
52-53
6) Organizational structure of issuer or piblic company in a form of chart, of at
62-63
least to 1 (one) structural level under the directors, with name and position
included;
7) Profile of the directors, consisting of at least:
76-87
a) Name and position that corresponds to the duties and responsibilities;
b) Latest photograph;
c) Age;
d) Nationality;
e) Educational background;
f) Employment record, consisting of:
1. Legal basis of Board of Directors members appointment for the first
time at the related issuer or public company;
2. Double position, either as member of directors, commissioners,
and/or committee as well as other positions (if any); and
3. Work experience and the time period both inside and outside the
issuer or public company;
g) Education and/or trainings participated by member of directors in
enhancing the competencies within a financial year (if any); and
h) Affiliation with other member of directors, commissioners, and major
shareholders (if any), consisting of the names of affiliated parties;
8) Profile of Board of Commissioners, consisting of:
64-75
a) Name;
b) Latest photograph;
c) Age;
d) Nationality;
e) Educational background;
f) Employment record, consisting of:
1.
Legal basis of non-Independent Board of Commissioners
members appointment at the related Issuer or Public
Company;
2. Legal basis of Independent Board of Commissioners members
appointment at the related Issuer or Public Company;
3. Double position, either as member of Board of Commissioners,
Directors, and/or Committee, as well as other positions (if
any); and
4. Work experience and the time period both inside and outside
the Issuer or Public Company;
g) Education and/or trainings participated by member of Board of
Commissioners in enhancing the competencies within a financial
year (if any);
h) Affiliation with other member of Board of Commissioners and
Major Shareholders (if any), consisting of the names of affiliated
parties; and
i)
Independence Commissioners’ disclosure of independency in
terms of the board has served more than 2 period (if any);
9)
In the event of a change in the composition of the Board of
71-72, 84-85
Commissioners and/or Directors taking place after the fiscal year until
the deadline of Annual Report submission, management composition
stated in the Annual Report is then the composition of the Board of
Commissioners and/or Directors both the latest and the previous one;
10)
Number of employees and description of the range of educational
88-90
background and ages in a financial year;
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EXPLANATION
11)
Name of Shareholders and ownership percentage at the end of financial
year. Information includes among others:
a) Shareholders having 5% (five percent) or more shares of Issuer or
Public Company;
b) Member of Directors and Board of Commissioners owning shares
of Issuer or Public Company; and
c) Group of public shareholders each having less than 5% (five
percent) share ownership of Issuer or Public Company;
12)
Number of shareholders and ownership percentage at the end of
financial year presented in the following classifications:
a) Local institution ownership;
b) Foreign institution ownership;
c) Local individual ownership; and
d) Foreign individual ownership;
13)
Information concerning major and controlling shareholder of Issuer or
Public Company, both direct and indirect, until the individual owner,
presented in the form of scheme or diagram;
PAGES
91
91
91
14)
Names of subsidiaries, associated companies, joint ventures in which
92-96
Issuer or Public Company (if any); For subsidiaries, information of
Company’s address should be added;
15)
Chronology of shares listing, number of shares, share value, and
97-98
offering price from the beginning of listing up to the end of the financial
year and name of Stock Exchange where Issuer or Public Company’s
shares are listed (if any);
16)
Chronology of other securities listing other than the securities reffered
99-100
to in point 15) that contains the least securities’ name, year of issuance,
maturity date, offering value, and rating (if any);
17)
Names and addresses of institutions and/or capital market supporting
professionals;
18)
In the event that capital market supporting professionals provides
services periodically to the Issuer or Public Company, there should be
information on services provided, fees and period of assignment; and
101
101
19)
Award and certification received by the Issuer or Public Company, both
54-61
national and international scale during the fiscal year (if any), that
includes:
a) Name of Award and/or certification;
b) Rewarding body or institution; and
f. Management Discussion and Analysis
Annual Report must contain discussion and analysis of Financial Report and
c) Validity period of the award and/or certification (if any).
other significant information by emphasizing material changes taking place
during the year under review. It should at least contain:
1)
Operational review by business segment in accordance with the
105-119
industry of Issuer or Public Company, consisting of at least:
a) Production, which includes process, capacity and its development;
b) Revenue; and
c) Profitability.
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EXPLANATION
2)
Comprehensive financial performance including a comparison between
the financial performance of the last two financial years, explanation
on the causes of such changes and their impact, which among others
includes:
a) Current assets, non-current assets, and total assets;
b) Short-term liabilities, long-term liabilities, and total liabilities;
c) Equity;
PAGES
124-138
d) Revenue, expenses and profit (loss), other comprehensive revenue
and comprehensive income (loss); and
e) Cash flow;
Capability to pay debts by presenting relevant ratio;
Collectable accounts of Issuer or Public Company receivable by
presenting relevant ratio;
3)
4)
5)
Capital structure and Management’s policies on the capital structure, as
well as basis of the policy making;
139
139
140
6)
Discussion on material commitment for the investment of capital goods
142-143
with explanation concerning:
a) Purpose of such commitment;
b) Sources of funds expected to fulfill to the commitment;
c) Currency of denomination;
d) Steps taken by the Issuer or Public Company to protect the position
of related foreign currency against risks;
7)
Discussion on capital goods investments realized within the last
140-141t
Financial year, that at least contains:
a) Type of capital goods investments;
b) Purpose of capital goods investments;
c) Value of capital goods investments issued.
8)
Material information and facts occurring after the date of accountant’s
144
report (if any);
9)
Business prospects of Issuer or Public Company in relation to the industry,
147-148
economy in general, and international market, and accompanied with the
supporting quantitative data from reliable Data resource;
10)
Comparison between target/projection at the beginning of financial
148
year and the realization, that includes:
a) Revenue;
b) Profit (loss);
c) Capital structure; or
d) Other information deemed necessary by the Issuer or Public
Company.
11)
Target/projection of the Issuer or Public Company within 1 (one) year,
149
that includes:
a) Revenue;
b) Profit (loss);
c) Capital structure;
d) Dividend policy; or
e) Other information deemed necessary by the Issuer or Public
Company.
12) Marketing aspects of the goods and/or services of Issuer or Public
120-122
Company, including among others marketing strategies and market Share;
13)
Description of dividend during the past 2 (two) financial years (if any),
149
includes at least:
a) Dividend policy;
b) Date of cash dividend payment and/or date of non-cash dividend
Distribution;
c) Amount of dividend per share (cash and/or non-cash); and
d) Amount of dividend paid per year;
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EXPLANATION
14)
Realization of the use of proceeds from Public Offering is under the
Following conditions:
a)
In the event that during the financial year reported, the Issuer is
Obliged to submit Report on Realization of Use of Proceeds, then
Annual Report should disclose accumulated realization of use of
Proceeds until the end of the financial year; and
b)
In the event that there is a change in the use of proceeds as stipulated
in Financial Services Authority Regulation on Report on Realization of
Use of Proceeds, the Issuer should then explain such change;
PAGES
150
15) Material information (if any) concerning, among others investment,
150
expansion, divestment, merge, acquisition, debt/capital restructuring,
affiliated transaction, and transaction with conflict of interests, taking
place during the financial year (if any). Information includes:
a) Date, value and object of transaction;
b) Name of transacting parties;
c) Nature of affiliated relation (if any);
d) Explanation of fairness of transaction; and
e) Compliance with related rules and regulations.
16)
Description of changes in regulation which have a significant effect on
the Issuer or Public Company and its impacts on the financial report (if
any); and
17)
Changes in the accounting policy, rationale and impacts on the financial
statement (if any);
151
151
g. Governance of Issuer or Public Company
Governance of Issuer or Public Company at least contains brief description of:
1)
Directors, consisting of among others:
189-200
a) Scope of work and responsibility of each member of the Directors;
b) Disclosure that the Directors have Directors’ Charter;
c) Disclosure of procedures, basis of decision, and amount of remuneration
for members of Directors, along with the relation between remuneration
and the performance of Issuer or Public Company;
d) Disclosure of company policies and the implementation on
frequency of Directors meetings, including joint meetings with the
Board of Commissioners and attendance of members of Directors
in such meetings;
e) Disclosure of resolutions of GMS of 1 (one) previous year and the
realization during the fiscal year, along with reasons in the event
that there is a resolution not yet realized:
1. Resolutions of GMS realized in one financial year; and
2. Reasons in the event that there is a resolution not yet realized.
f) Disclosure of resolutions of GMS during financial year, that
includes:
1. Resolutions of GMS realized in one financial year; and
2. Reasons in the event that there is a resolution not yet realized;
and
g) Disclosure of company policies on performance assessment of
members of Directors;
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EXPLANATION
2)
Board of Commissioners, consisting of among others:
PAGES
168-177
a) Description of responsibility of the Board of Commissioners;
b) Disclosure that the Board of Commissioners has Board of Commis-
sioners’ Charter;
c) Disclosure of procedures, basis of decision, and amount of remu-
neration for members of Board of Commissioners;
d) Disclosure of company policies and the implementation on fre-
quency of Board of Commissioners meetings, including joint meet-
ings with the Directors, and attendance of members of Board of
Commissioners in such meetings;
e) Disclosure of Issuer or Public Company’s policies on performance
assessment of members of Directors and Board of Commissioners
and its implementation, including among others:
1.
Procedure of performance assessment implementation;
2. Criteria of assessment; and
3. Parties conducting the assessment.
f) Disclosure of performance assessment of committee supporting
the duties of Board of Commissioners; and
g)
In the event that the Board of Commissioners did not establish
Committee of Nomination and Remuneration, the least informa-
tion to disclose includes:
1.
2.
Reasons for not establishing a committee; and
Procedure of nomination and remuneration implemented
during financial year;
3)
Syariah Supervisory Board, for Issuer or Public Company running busi-
ness under the principles of syariah as expressed in the Articles of As-
Not
applicable
sociation, contains at least:
a) Name;
b) Tasks and responsibilities of Syariah Supervisory Board; and
c) Frequency and method of advising and supervisory on the compli-
ance of Syariah Principles in Capital Market toward the Issuer or
Public Company;
4)
Audit Committee, consisting of among others:
a) Name and position in the committee;
b) Age;
c) Nationality;
d) Educational background;
e) Employment record, consisting of:
178-182
1.
Legal basis of appointment as member of committee;
2. Double position, either as member of Board of Commission-
ers, directors, and/or committee and other positions (if any);
and
3. Work experience and the time period, both inside and outside
the Issuer or Public Company;
f) Period of service of Audit Committee members;
g) Disclosure of independence of Audit Committee;
h) Disclosure of company policies and the implementation on fre-
quency of Audit Committee meetings and the attendance of Audit
Committee members in such meetings;
i)
Education and/or trainings participated within a financial year (if
any); and
j) Brief description activities carried out by Audit Committee during
the financial year based on what is stated in Audit Committee
Charter;
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EXPLANATION
5)
Other committees the Issuer or Public Company has in order to sup-
port the function and tasks of Directors and/or Board of Commission-
ers, such as Nomination and Remuneration Committee, consisting of
PAGES
182-188
among others:
a) Name and position in the committee;
b) Age;
c) Nationality;
d) Educational background;
e) Employment record, consisting of:
1.
Legas basis of appointment as committee member;
2. Double position, either as member of Board of Commission-
ers, Directors and/or committee and the other positions (if
any); and
3. Work experience and the time period both inside and outside
the Issuer or Public Company;
f) Period of service of committee members;
g) Description of the tasks and responsibilities;
h) Disclosure that the committee has charter of committee;
i) Disclosure of independence of committee members;
j) Disclosure of company policies and the implementation on fre-
quency of committee meetings and the attendance of committee
members in such meetings;
k) Education and/or trainings participated within a financial year (if
any); and
l) Brief description activities carried out by committee during the
financial year;
6)
Corporate Secretary, consisting among others:
201-203
a) Name;
b) Domicile;
c) Employment record, consisting of:
1.
Legal basis of appointment as Corporate Secretary; and
2. Work experience and the time period both inside and outside
the Issuer or Public Company;
d) Educational background;
e) Education and/or trainings participated within a financial year; and
f) Brief description activities carried out by Corporate Secretary
during the financial year;
7)
Internal Auditing Unit, consisting among others:
205-207
a) Name of Internal Auditing Unit’s chief;
b) Employment record, consisting of:
1.
Legal basis of appointment as Internal Auditing Unit’s chief;
and
2. Work experience and the time period both inside and outside
the Issuer or Public Company;
c) Qualification/certification as an Internal Audit (if any);
d) Education and/or trainings participated within a financial year;
e) Structure and position of Internal Auditing Unit;
f) Description of tasks and responsibilities of Internal Auditing Unit;
g) Disclosure that the the unit has charter Internal Auditing Unit; and
h) Brief description of tasks implementation of Internal Auditing Unit
during the financial year;
8)
Description of internal control system implemented by Issuer or Public
Company, consisting of at least:
207-209
a) Operational and financial control, along with compliance with other
prevailing rules and regulations; and
b) Review on effectiveness of internal control system;
9)
Risk management system implemented by Issuer or Public Company,
consisting of at least:
209-215
a) General description of risk management system of Issuer or Public
Company;
b) Types of risks and efforts to manage such risks; and
c) Review on effectiveness of the risk management system of Issuer
or Public Company;
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10) Material litigation faced by the Issuer or Public Company, subsidiaries,
present members of the Board of Commissioners and Directors (if any),
PAGES
221
including among others:
a) Material of the case/claim;
b) Status of settlement of case/claim; and
c)
Impacts on the financial condition of the Issuer or Public Company;
11)
Information on administrative sanctions to Issuer or Public Company,
members of the Board of Commissioners and Directors, by capital
market authority and other authorities during the fiscal year (if any);
12)
Information on code of conducts and culture of Issuer or Public
221
230
Company (if any) consisting of:
a. Main points of code of conducts;
b. Form of socialization of code of conducts and efforts to enforce it;
and
c. Disclosure of that code of conducts is applicable to member of
Directors, Board of Commissioners, and employers of Issuer or
Public Company;
13)
14)
Information on corporate culture or corporate values (if any);
Explanation on employees and/or Management share ownership
program carried out by Issuer or Public Company, including among
others amount, period of time, requirements for eligible employees
and/or Management, and exercise price (if any):
222-229
231
a. Amount of share and/or options;
b. Time period of exercise;
c. Requirements for eligible employees and/or Management; and
d. Exercise price;
15)
Explanation on Whistleblowing System at the Issuer or Public Company
216-220
to report misconducts causing potential loss to the company or the
stakeholders (if any), consisting of among others:
a. Means of submitting the report on misconducts;
b. Protection for whistleblower;
c. Handling of whistleblowing;
d. Party managing whistleblowing; and
e. Results of whistleblowing handling, consisting of at least:
1. Number of whistleblowing registered and processed
in
financial year; and
2. Follow up of whistleblowing;
16)
Implementation of Public Company Governance Guidelines for Issuer
156-159
that issues Equity Securities or Public Company, consisting of:
a. Disclosure of implemented recommendations; and/or
b. Explanation
concerning
unimplemented
recommendation,
including reasons for such conditions and alternatives (if any);
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EXPLANATION
PAGES
h. Social and Environmental Responsibility of
1)
Information on Issuer or Public Company’s social and environmental
Issuer or Public Company
responsibility consisting of policies, types of programs, and cost, in
relation of the aspects of among others:
a. Environment, among others:
242-243
1. Use of environmentally friendly and recyclable material and
energy;
2.
Issuer or Public Company’s waste management system;
3. Mechanisms of complaints on environmental concern;
4. Certification in the field of environment;
b. Labor practices, occupational health and safety, among others:
237-238
1.
Equality in gender and work opportunity;
2. Work facility and safety;
3. Employees turnover;
4. Level of work accident;
5. Eduation and/or training.
6. Remuneration; and
7. Mechanisms of complaints on Employment concern;
c. Social and community development, among others:
1. Use of local work force;
239-241
2. Empowerment of the Issuer or Public Company’s surrounding
community, among others by the use of raw materials
produced by the community or provision of education to the
community;
3.
Improvement of social facilities and infrastructure;
4. Other forms of donations; and
5. Communication on anti curruption policy and procedure
in the Issue or Public Company, as well as training on anti
corruption(if any).
d. Product and/or services responsibility, among others:
1. Consumers’ health and safety;
2. Product and/or services information; and
235-236
3. Facilities for customers’ complaints, number of complaints
and complaints handling.
2)
Issuer or Public Company may disclose information referred to in
point 1) as part of the Annual Report or in a separate report, such as
submitted at the same time as Sustainability Report or Corporate Social
Responsibility Report, and therefore the Issuer or Public Company
is excluded to disclose information on social and environmental
responsibility in the Annual Report; and
3)
The report referred to in point 2) is submitted to Financial Services
Authority at the same time as the Annual Report submission.
i. Audited Financial Report
The Financial Report contained in the Annual Report should be presented
276
in accordance with Financial Accounting Standard in Indonesia and has
been audited by Accountant. The Financial Report should contain statement
regarding responsibility on the Financial Report
in compliance with
Regulations in Capital Market sector on the Directors’ responsibility to the
Financial Report or Regulations in Capital Market sector on periodical report of
Securities Companies in the event that the Issuer is a Securities Company; and
j. Statement of members of Directors and Board
Statement of members of Directors and Board of Commissioners on the
42-43
of Commissioners on the Responsibility for
Responsibility for the Annual Report is composed in accordance to the
the Annual Report
format of Statement of members of Directors and Board of Commissioners on
the Responsibility for the Annual Report as attached in the Appendix as an
inseparable part of the FSA Circulation Letter.
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FINANCIAL STATEMENT
2017 Audited Consolidated Financial Statement
2017 Audited PKBL Financial Statement
Feedback form of PT Telkom Indonesia (Persero) Tbk 2017 Annual Report
PERUSAHAAN PESEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2017 AND FOR THE YEAR THEN ENDED
WITH INDEPENDENT AUDITOR’S REPORT
TABLE OF CONTENTS
Independent Auditor’s Report
Consolidated Statements of Financial Position
Consolidated Statements of Profit or Loss and Other Comprehensive Income
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
Page
1
2
3-4
5
6-126
These consolidated financial statements are originally issued in Indonesian language
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of December 31, 2017
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
Notes
2017
2016
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
Assets held for sale
Prepaid taxes
Claim for tax refund
Other current assets
Total Current Assets
2c,2e,2u,3,31,37
2c,2e,2u,4,31,37
2g,2u,2ab,5,37
2c,31
2g,2u,37
2h,6
2j,9
2t,26
2t,26
2c,2i,2m,7,31
NON-CURRENT ASSETS
Long-term investments
Property and equipment - net of accumulated depreciation
Prepaid pension benefit cost
Intangible assets - net of accumulated amortization
Deferred tax assets - net
Other non-current assets
2f,2u,8
2l,2m,2aa,9,34
2s,29
2d,2k,2n,2aa,11
2t,26
2c,2g,2i,2n,2t,2u,10,26,31,37
Total Non-current Assets
TOTAL ASSETS
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade payables
Related parties
Third parties
Other payables
Taxes payable
Accrued expenses
Unearned income
Advances from customers
Short-term bank loans
Current maturities of long-term borrowings
Total Current Liabilities
NON-CURRENT LIABILITIES
Deferred tax liabilities - net
Unearned income
Long service award provisions
Pension benefits and other post-employment benefits
obligations
Long-term borrowings - net of current maturities
Other liabilities
Total Non-current Liabilities
TOTAL LIABILITIES
EQUITY
Capital stock
Additional paid-in capital
Treasury stock
Other equity
Retained earnings
Appropriated
Unappropriated
Net equity attributable to:
Owners of the parent company
Non-controlling interests
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
2o,2u,12,37
2c,31
2u,37
2t,26
2c,2u,13,31,37
2r,14
2c,31
2c,2p,2u,15a,31,37
2c,2m,2p,2u,15b,31,37
2t,26
2r,14
2s,30
2s,29
2c,2m,2p,2u,16,31,37
2u,2o
1c,18
2v,19
2v,20
2f,2u,21
28
2b,17
25,145
2,173
29,767
1,471
1,545
7,677
342
631
10
1,947
908
7,183
894
6,469
537
584
3
2,138
592
5,246
47,561
47,701
2,148
130,171
-
3,530
2,804
12,270
150,923
198,484
896
14,678
217
2,790
12,630
5,427
1,240
2,289
5,209
45,376
933
524
758
10,195
27,974
594
40,978
86,354
5,040
4,931
(2,541 )
387
15,337
69,559
92,713
19,417
112,130
198,484
1,847
114,498
199
3,089
769
11,508
131,910
179,611
1,547
11,971
172
2,954
11,283
5,563
840
911
4,521
39,762
745
425
613
6,126
26,367
29
34,305
74,067
5,040
4,931
(2,541 )
339
15,337
61,278
84,384
21,160
105,544
179,611
The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements
taken as a whole.
1
These consolidated financial statements are originally issued in Indonesian language
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the Year Ended December 31, 2017
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
REVENUES
Operation, maintenance and telecommunication service expenses
Depreciation and amortization expenses
Personnel expenses
Interconnection expenses
General and administrative expenses
Marketing expenses
Gain/ (loss) on foreign exchange - net
Other income
Other expenses
OPERATING PROFIT
Finance income
Finance costs
Share of profit of associated companies
PROFIT BEFORE INCOME TAX
INCOME TAX (EXPENSE) BENEFIT
Current
Deferred
PROFIT FOR THE YEAR
OTHER COMPREHENSIVE INCOME
Notes
2c,2r,22,31
2c,2r,24,31
2k,2l,2m,9,11
2c,2r,2s,23,31
2c,2r,31
2c,2r,25,31
2c,2r,31
2q
2l,2r,9c
2r,9c
2c,31
2c,2p,2r,31
2f,8
2t,26
Other comprehensive income to be reclassified to profit or
loss in subsequent periods:
Foreign currency translation
Change in fair value of available-for-sale financial assets
Share of other comprehensive income of associated companies
Other comprehensive income not to be reclassified to profit or
loss in subsequent periods:
Defined benefit plan actuarial (loss) gain - net
Other comprehensive income - net
2f,2q,21
2u,21
2f,8
2s,29
2017
2016
128,256
116,333
(36,603 )
(20,446 )
(13,529 )
(2,987 )
(5,260 )
(5,268 )
51
1,039
(1,320 )
43,933
1,434
(2,769 )
61
42,659
(11,357 )
1,399
(9,958 )
(31,263 )
(18,532 )
(13,612 )
(3,218
))) ))))
(4,610 )
(4,132 )
(52 )
750
(2,469 )
39,195
1,716
(2,810 )
88
38,189
(10,738 )
1,721
(9,017 )
32,701
29,172
24
20
(1 )
(2,375 )
(2,332 )
(40 )
0
(1 )
(2,058 )
)))))) )
(2,099
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
30,369
27,073
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 (100 Series B shares per ADS)
2b,17
2b
2x,27
22,145
10,556
32,701
19,952
10,417
30,369
19,352
9,820
29,172
17,331
9,742
27,073
223.55
22,354.64
196.19
19,619.11
The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements
taken as a whole.
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4
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
For the Year Ended December 31, 2017
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
Notes
2017
2016
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from:
Customers
Other operators
Total cash receipts from customers and other operators
Interest income received
Cash payments for expenses
Cash payments to employees
Payments for corporate and final income taxes
Payments for interest costs
Payments for value added taxes - net
Receipts for tax refund
Other cash receipts - net
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Redemption of time deposits and available-for-sale
financial assets
Proceeds from sale of property and equipment
Proceeds from insurance claims
Dividends received from associated company
Purchase of property and equipment
Increase in advances for purchases of property and equipment
Purchase of intangible assets
Placement in time deposits and available-for-sale financial
assets
Acquisition of non-controlling interest in subsidiaries
Business acquisition - net of acquired cash
Additional contribution on long-term investments
Purchase of other assets
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank loans and other borrowings
Proceeds from sale of treasury stock
Capital contribution of non-controlling interests in subsidiaries
Cash dividends paid to the Company’s stockholders
Repayments of bank loans and other borrowings
Cash dividends paid to non-controlling interests of subsidiaries
Net cash used in financing activities
NET INCREASE IN CASH AND CASH EQUIVALENTS
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS
9
9
8
9,39
11,39
1d
1d
8
15,16
20
28
15,16
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
3
3
117,719
7,392
125,111
1,431
(49,604 )
(11,739 )
(11,846 )
(3,133 )
(1,942 )
585
542
49,405
-
1,367
155
28
(32,294 )
(490 )
(508 )
(676 )
-
(243 )
(269 )
(77 )
113,288
2,828
116,116
1,736
(42,433 )
(11,207 )
(11,304 )
(3,455 )
(2,696 )
-
474
47,231
2,159
765
60
23
(26,787 )
(1,338 )
(1,098 )
(983 )
(138 )
(137 )
(43 )
(40 )
(33,007 )
(27,557 )
12,169
-
50
(11,627 )
(9,289 )
(12,355 )
(21,052 )
(4,654 )
32
29,767
25,145
7,479
3,259
183
(11,213 )
(10,555 )
(7,058 )
(17,905 )
1,769
(119 )
28,117
29,767
The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements
taken as a whole.
5
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, 2017 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. Decree No. 7 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 18).
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 amendments of which were about, among
others, in compliance with the Financial Services Authority Regulations and the Ministry of State-
Owned Enterprises Regulations and Circular Letters, addition of main and supporting business
activities of the Company, addition of special right of Series A Dwiwarna stockholder, revision
regarding the change in authority limitation of the Board of Directors which requires approval from
the Board of Commissioners in performing such managing activities of the Company as well as
improvement in the editorial and systematic of Articles of Association related to the addition of
Articles of Association substance based on notarial deed No. 16 dated May 16, 2017 of
Ashoya Ratam, S.H., MKn. The latest amendments were accepted and approved by the
Ministry of Law and Human Rights of
its
Letter No. AHU-AH.01.03-0146625 dated June 15, 2017 and MoLHR decision’s
No. AHU-0013024.AH.01.02 dated June 15, 2017.
the Republic of
(“MoLHR”)
Indonesia
in
In accordance with Article 3 of the Company’s Articles of Association, the scope of its activities is to
provide telecommunication network and telecommunication and information services, and to
optimize the Company’s resources in accordance with prevailing regulations. In regard to achieving
its objectives, the Company is involved in the following activities:
a. Main business:
i. Planning, building, providing, developing, operating, marketing or selling or leasing, and
maintaining telecommunications and information networks in a broad sense in accordance
with prevailing regulations.
ii. Planning, developing, providing, marketing/selling, and improving telecommunications and
information services in a broad sense in accordance with prevailing regulations.
iii. Investing including equity capital in other companies in line with achieving the purposes
and objectives of the Company.
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,
repairs and maintenance facilities.
iii. Collaborating with other parties in order to optimize the information, communication or
technology resources owned by other parties as service provider in information,
communication and technology industry as to achieve the purposes and objectives of the
Company.
The Company’s head office is located at Jalan Japati No. 1, Bandung, West Java.
6
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, 2017 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 was granted several networks and/or services licenses by the Government which
are valid for an unlimited period of time as long as the Company complies with prevailing laws and
fulfills the obligation stated in those licenses. For every license issued by the Ministry of
Communication and Information (“MoCI”), an evaluation is performed annually and an overall
evaluation is performed every 5 (five) years. The Company is obliged to submit reports of networks
and/or 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, numbers of customers, license payment and universal service contribution, while for
internet telephone services for public purpose, Internet Interconnection Service, and Internet
Access Service, there is additional information required such as operational performance,
customer segmentation, traffic, and gross revenue.
Details of these licenses are as follows:
License
License of electronic
money issuer
License of money
remittance
License to operate network
access point
License to operate internet
telephone services for
public purpose
License to operate fixed
domestic long distance
network
License No.
Bank Indonesia License
No. 11/432/DASP
Bank Indonesia License
No. 11/23/bd/8
331/KEP/DJPPI/
KOMINFO/09/2013
127/KEP/DJPPI/
KOMINFO/3/2016
839/KEP/
M.KOMINFO/05/2016
License to operate fixed
closed network
License to operate fixed
international network
844/KEP/
M.KOMINFO/05/2016
846/KEP/
M.KOMINFO/05/2016
License to operate circuit
switched based local
fixed line network
License to operate data
communication system
services
License to operate internet
service provider
License to operate content
service provider
948/KEP/
M.KOMINFO/05/2016
191/KEP/DJPPI/
KOMINFO/10/2016
2176/KEP/
M.KOMINFO/12/2016
1040/KEP/
M.KOMINFO/16/2017
7
Type of services
Electronic money
Grant date/latest
renewal date
July 3, 2009
Money remittance
service
August 5, 2009
Network access
September 24, 2013
point
Internet telephone
services for public
purpose
Fixed domestic long
distance and basic
telephone services
network
Fixed closed network
Fixed international
and basic telephone
services network
Circuit switched
based local fixed line
network
Data communication
system services
March 30, 2016
May 16, 2016
May 16, 2016
May 16, 2016
May 31, 2016
October 31, 2016
Internet service
provider
December 30, 2016
Content service
May 16, 2017
provider
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, 2017 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, Directors, Audit Committee, Corporate Secretary and
Employees
1. Board of Commissioners and Directors
Based on resolutions made at the Annual General Meeting (“AGM”) of Stockholders of the
Company as covered by notarial deed No. 28 of Ashoya Ratam., S.H., Mkn., dated
April 21, 2017 and notarial deed No. 50 of Ashoya Ratam., S.H., Mkn., dated April 22, 2016,
the composition of the Company’s Boards of Commissioners and Directors as of
December 31, 2017 and 2016, respectively, was as follows:
2017
Rinaldi Firmansyah
Hadiyanto
-
President Commissioner Hendri Saparini
Commissioner
Commissioner
Commissioner*
Independent Commissioner Margiyono Darsasumarja
Independent Commissioner Dolfie Othniel Fredric Palit
Independent Commissioner Pamiyati Pamela Johanna
Independent Commissioner Cahyana Ahmadjayadi
President Director
Alex Janangkih Sinaga
Director of Finance
Harry Mozarta Zen
Director of Digital and
Strategic Portfolio
David Bangun
2016
Hendri Saparini
Dolfie Othniel Fredric Palit
Hadiyanto
Pontas Tambunan
Rinaldi Firmansyah
Margiyono Darsasumarja
Pamiyati Pamela Johanna
-
Alex Janangkih Sinaga
Harry Mozarta Zen
Indra Utoyo
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
Dian Rachmawan
-
Abdus Somad Arief
Honesti Basyir
Herdy Rosadi Harman
Herdy Rosadi Harman
Zulhelfi Abidin
Abdus Somad Arief
Service
Mas’ud Khamid
Dian Rachmawan
* Based on the Board of Directors’ decision dated April 21, 2017, Devy Wildasari Suradji as Commissioner was appointed to replaces
Pontas Tambunan. On December 22, 2017, Devy Wildasari Suradji was appointed as Marketing Director of PT Angkasa Pura I based
on SK-289/MBU/12/2017 hence her position as Commissioner of the Company was ended by law.
2. Audit Committee and Corporate Secretary
The composition of the Company’s Audit Committee and the Corporate Secretary as of
December 31, 2017 and 2016, were as follows:
Chairman
Secretary
Member
Member
Member
Member
Corporate Secretary
2017*
Margiyono Darsasumarja
Tjatur Purwadi
Rinaldi Firmansyah
Dolfie Othniel Fredric Palit
Sarimin Mietra Sardi
Cahyana Ahmadjayadi
Andi Setiawan
2016
Rinaldi Firmansyah
Tjatur Purwadi
Margiyono Darsasumarja
Dolfie Othniel Fredric Palit
Sarimin Mietra Sardi
Pontas Tambunan
Andi Setiawan
*The changes of Audit Committee are based on Board of Commissioner’s Regulation No.05/KEP/DK/2017 dated April 28, 2017
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, 2017 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, Directors, Audit Committee, Corporate Secretary and
Employees (continued)
3. Employees
As of December 31, 2017 and 2016, the Company and subsidiaries (“Group”) had 24,065
employees and 23,876 employees (unaudited), respectively.
c. Public offering of securities of the Company
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 wholly-owned by 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”) and 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 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 was 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 stock from 1 Series A Dwiwarna
share and 39,999,999,999 Series B
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.
to 1 Series A Dwiwarna
shares
During the Extraodinary General Meeting (“EGM”) held on December 21, 2005 and the AGMs 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 20).
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, 2017 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 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 20).
At the AGM held on April 19, 2013 as covered by notarial deed No. 38 dated April 19, 2013 of
Ashoya Ratam, S.H., MKn., the stockholders approved the changes to the Company’s plan on the
treasury stock acquired under phase III (Note 20).
At the AGM held on April 19, 2013, the minutes of which were covered by notarial deed No. 38 of
Ashoya Ratam, S.H., MKn., the 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 of Rp50 per share. The stock split resulted in an increase of the Company’s
authorized capital stock from 1 Series A Dwiwarna and 79,999,999,999 Series B shares to 1
Series A Dwiwarna and 399,999,999,999 Series B shares. The issued capital stock increase 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. Effective from October 26, 2016, the Company change the ratio of Depositary Receipt from
1 ADS representing 200 series B shares to become 1 ADS representing 100 series B shares (Note
18). Profit per ADS information have been retrospectively adjusted to reflect the changes in the
ratio of ADS.
On May 16 and June 5, 2014, the Company deregistered from Tokyo Stock Exchange (“TSE”)
and delisted from the LSE, respectively.
As of December 31, 2017, all of the Company’s Series B shares are listed on the IDX and
60,783,743 ADS shares are listed on the NYSE (Note 18).
On June 25, 2010 the Company issued the second rupiah bonds with a nominal amount of
Rp1,005 billion for Series A, a five-year period and Rp1,995 billion for Series B, a ten-year period,
respectively, are listed on the IDX (Note 16b.i).
On June 16, 2015, the Company issued Continuous Bonds I Telkom Phase I 2015, with a nominal
amount Rp2,200 billion for Series A, a seven-year period, Rp2,100 billion for Series B, a ten-year
period, Rp1,200 billion for Series C, a fifteen-year period and Rp1,500 billion for Series D,
a thirty-year period, respectively which are listed on the IDX (Note 16b.i).
On December 21, 2015, the Company sold the remaining shares of treasury shares phase III
(Note 20).
On June 29, 2016, the Company sold the treasury shares phase IV (Note 20).
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
1. GENERAL (continued)
d. Subsidiaries
As of December 31, 2017 and 2016, the Company has consolidated the following directly or
indirectly owned subsidiaries (Notes 2b and 2d):
(i) Direct subsidiaries:
Nature of business/date of
incorporation or acquisition
by the Company
Telecommunication - provides
telecommunication facilities
and mobile cellular
services using Global
Systems for Mobile
Communication (“GSM”)
technology/
May 26, 1995
Telecommunication/
May 17, 2001
Year of start
of
commercial
operations
1995
Percentage of ownership
interest
Total assets before
elimination
2017
2016
2017
2016
65
65
85,748
89,781
1995
100
100
13,606
10,689
Network telecommunication
services and multimedia/
May 9, 2003
Telecommunication/
July 31, 2003
1998
100
100
13,275
10,020
1995
100
100
9,125
7,147
Subsidiary/place of
incorporation
PT Telekomunikasi
Selular
(“Telkomsel”),
Jakarta, Indonesia
PT Dayamitra
Telekomunikasi
(“Dayamitra”),
Jakarta, Indonesia
PT Multimedia
Nusantara
(“Metra”),
Jakarta, Indonesia
PT Telekomunikasi
Indonesia
International
(“TII”),
Jakarta, Indonesia
PT Telkom Akses
(“Telkom
Akses”),
Jakarta, Indonesia
Construction, service and
trade in the field of
Telecommunication/
November 26, 2012
PT Graha Sarana
Duta (“GSD”),
Jakarta, Indonesia
Leasing of offices and
providing building
management and
maintenance services, civil
consultant and developer/
April 25, 2001
2013
100
100
5,716
5,098
1982
99,99
99.99
5,641
4,333
PT PINS Indonesia
Telecommunication
1995
100
100
3,473
3,146
(“PINS”),
Jakarta, Indonesia
construction and services/
August 15, 2002
PT Infrastruktur
Telekomunikasi
Indonesia
(“Telkom
Infratel”),
Jakarta, Indonesia
Construction, service and
trade in the field of
telecommunication/
January 16, 2014
PT Patra
Telekomunikasi
Indonesia
(“Patrakom”),
Jakarta,Indonesia
Telecomunication - provides
satellite communication
system, services and
facilities/
September 28, 1995
2014
100
100
1,871
1,015
1996
100
100
576
472
PT Metranet
Multimedia portal service/
2009
100
100
524
370
(“Metranet”),
Jakarta, Indonesia
April 17, 2009
PT Jalin
Pembayaran
Nusantara
(“Jalin”),
Jakarta, Indonesia
Payment services - principal,
switching, clearing and
settlement activities/
November 3, 2016
2016
100
100
225
15
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, 2017 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
PT Napsindo
Primatel
Internasional
(“Napsindo”),
Jakarta, Indonesia
Nature of business/date of
incorporation or acquisition
by the Company
Telecommunication - provides
Network Access Point
(NAP), Voice Over Data
(VOD) and other related
services/
December 29, 1998
(ii) Indirect subsidiaries:
Subsidiary/place of
incorporation
PT Sigma Cipta
Caraka (“Sigma”),
Tangerang,
Indonesia
Telekomunikasi
Indonesia
International Pte.
Ltd.,
Singapore
PT Infomedia
Nusantara
(“Infomedia”),
Jakarta, Indonesia
Nature of business/date of
incorporation or
acquisition by the
Company
Information technology
service - system
implementation and
integration service,
outsourcing and software
license maintenance/
May 1,1987
Telecommunication/
December 6, 2007
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
PT Telkom Landmark
Tower (“TLT”),
Jakarta, Indonesia
Service for property
development and
management/
February 1, 2012
Percentage of ownership
interest
Total assets before
elimination
2017
2016
2017
2016
60
60
5
5
Year of start
of
commercial
operations
1999; ceased
operations on
January 13,
2006
Year of start
of
commercial
operations
1988
Percentage of ownership
interest
Total assets before
elimination
2017
2016
2017
2016
100
100
6,064
4,289
2008
100
100
3,048
2,566
1984
100
100
2,122
1,860
2012
55
55
2,009
1,683
PT Metra Digital Media
Directory information
2013
99,99
99.99
1,106
684
(“MD Media”),
Jakarta, Indonesia
services/
January 22, 2013
PT Finnet Indonesia
Information technology
2006
60
60
907
629
(“Finnet”),
Jakarta, Indonesia
services/
October 31, 2005
PT TS Global Network
Sdn. Bhd (“TSGN”),
Petaling Jaya,
Malaysia
Satellite services/
December 14, 2017
Telekomunikasi
Indonesia
International Ltd,
Hong Kong
PT Metra Digital
Investama (“MDI”),
Jakarta, Indonesia
Telecommunication/
December 8, 2010
Trading and/or providing
service related to
information and
tehnology multimedia,
entertainment and
investment/
January 8, 2013
1996
49
-
818
-
2010
100
100
710
441
2013
99,99
99.99
658
331
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, 2017 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):
Nature of business/date of
incorporation or
acquisition by the
Company
Telecommunication/
September 11, 2012
Year of start
of
commercial
operations
2012
Percentage of ownership
interest
Total assets before
elimination
2017
2016
2017
2016
100
100
639
755
Service and trading/
September 1, 2014
2014
99,99
99.99
303
227
Subsidiary/place of
incorporation
Telekomunikasi
Indonesia
International (“TL”)
S.A.,
Dili, Timor Leste
PT Nusantara Sukses
Investasi (“NSI”),
Jakarta, Indonesia
PT Administrasi
Health insurance
2002
100
100
273
204
Medika
(“Ad Medika”),
Jakarta, Indonesia
PT Melon (“Melon”)
Jakarta, Indonesia
administration services/
February 25, 2010
Digital content exchange
2010
100
100
231
178
hub services/
November 14, 2016
PT Metraplasa
Network & e-commerce
2012
60
60
203
325
(“Metraplasa”),
Jakarta, Indonesia
services/
April 9, 2012
PT Graha Yasa
Selaras (”GYS”),
Jakarta, Indonesia
Tourism service/
April 27, 2012
Telecommunication/
January 9, 2013
Telekomunikasi
Indonesia
International Pty Ltd,
(“Telkom
Australia”),
Sydney, Australia
2012
51
51
178
174
2013
100
100
123
161
PT Nutech Integrasi
System Integrator/
2001
60
-
December 13, 2017
Telecommunication/
December 11, 2013
2014
100
100
60
36
-
9
(“Nutech”),
Jakarta, Indonesia
Telekomunikasi
Indonesia
International
(“Telkom USA”),
Inc.,
Los Angeles, USA
PT Satelit Multimedia
Indonesia (“SMI”),
Jakarta, Indonesia
Satellite services/
March 25, 2013
2013
99,99
99.99
18
18
PT Nusantara Sukses
Sarana (“NSS”),
Jakarta, Indonesia
Building and hotel
management service and
other services/
September 1, 2014
PT Nusantara Sukses
Realti (”NSR”),
Jakarta, Indonesia
Service and trading/
September 1, 2014
-
-
99,99
99.99
99,99
99.99
PT Metra TV
Subscription-broadcasting
2013
99,83
99.83
(“Metra TV”),
Jakarta, Indonesia
services/
January 8, 2013
-
-
-
-
-
-
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, 2017 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
Based on notarial deed of Utiek Rochmuljati Abdurachman, S.H., M.LI, M.Kn., No. 10, 11, 12,
13 and 14 dated May 25, 2016, Metra purchased 2,000 shares of Ad Medika from the non-
controlling interest equivalent to 25% ownership amounting to Rp138 billion.
Based on notarial deed of Utiek Rochmuljati Abdurachman, S.H., M.LI, M.Kn., No. 10 and 11
dated December 13, 2017, Metra purchased 36,000 shares of PT Nutech Integrasi (“Nutech”)
(equivalent to 60% ownership) amounting to Rp24 billion. This is larger than the ownership
portion of net book value amounting to Rp13 billion. As of December 31, 2017, the difference,
amounting to Rp11 billion, is recorded as Goodwill (Note 11). As of the date of approval and
authorization
fair value
the
measurement is still in completion process.
financial statement,
these consolidated
issuance of
for
(b) Telin
On December 14, 2017, Telin purchased TSGN equivalent to 49% ownership amounting to
MYR66,150,000 (equivalent to Rp220 billion). TSGN is engaged in providing ICT (information
and communication technologies) systems for satellite communication services, satellite
bandwith services and VSAT services. Non-controlling interests of the acquiree are measured
at fair value. Based on Sale and Subscription Agreement, Telin owns the control over TSGN
through placing and replacing of 3 out of 5 key managements that controls the overall
business of TSGN.
This acquisition will enhance synergy and utilization of assets and resources between
companies in order to provide more innovative services to customers.
The fair values of the identifiable assets and liabilities acquired at acquisition date were:
Assets
Cash and cash equivalents
Trade receivables
Other current assets
Fixed assets (Note 9)
Other non-current assets
Liabilities
Current liabilities
Non-current liabilities
Fair value of identifiable net assets acquired
Fair value of non controlling interest
Goodwill (Note 11)
Fair value of consideration transferred
Total
21
18
57
711
14
(422 )
(140 )
259
(132 )
93
220
Net assets recognized in the consolidated financial statements of December 31, 2017 are
based on a provisional assessment of fair value of net assets. As of the issuance date of the
consolidated financial statements, fair value measurement is still in completion process.
From the date of acquisition until December 31, 2017, the total income and profit before tax of
TSGN included in the statements of profit or loss income and other comprehensive income
amounted to Rp13.5 billion and Rp12.1 billion, respectively.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
1. GENERAL (continued)
d. Subsidiaries (continued)
(c) Metranet
On November 10, 2016, Metranet increased its share capital from Rp244 billion to Rp325
billion by issuing 18,800,000 new shares which were wholly-owned by the Company.
Based on notarial deed of Utiek Rochmuljati Abdurachman, S.H., M.LI, M.Kn., No. 08 and 09
dated November 14, 2016, Metranet purchased 4,900,000 shares of Melon (equivalent to 49%
ownership) from SK Planet Co. and 300,000 shares of Melon (equivalent to 3% ownership)
from Metra amounting to US$13,000,000 or Rp170.4 billion and Rp13.2 billion, respectively.
As a result of this transaction, Metranet acquired 52% ownership in Melon and the remaining
shares are held by Metra.
(d) Jalin
On November 3, 2016, the Company established a wholly-owned subsidiary under the name
PT Jalin Pembayaran Nusantara (“Jalin”) which was approved by the MoLHR through its
Decision Letter No. AHU-0050800.AH.01.01 dated November 15, 2016. Jalin is engaged in
organizing ICT (Information and Communication Technology) business focusing on non cash
payment to support national payment gateway.
(e) Sigma
Based on notarial deed of Utiek Rochmuljati Abdurachman, S.H., M.LI, M.Kn., No. 15 dated
June 29, 2016, Sigma purchased 13,770 shares of PT Pojok Celebes Mandiri (“PCM”)
(equivalent to 51% ownership) from Metra amounting to Rp7.8 billion.
e. Authorization for the issuance of the consolidated financial statements
The consolidated financial statements were prepared and approved for issuance by the Board of
Directors on March 12, 2018.
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, 2017 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 (collectively referred to as “the
Group”) have been prepared in accordance with Financial Accounting Standards ("Standar Akuntansi
Keuangan” or “SAK") including Indonesian Statement of 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 the Financial
Accounting Standards Board of Institute of Indonesian Chartered Accountants and Regulation
No. VIII.G.7 of the Capital Market and Financial Institution Supervisory Agency (“Bapepam-LK”)
regarding the Presentation and Disclosure 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.
Accounting Standards Issued but not yet Effective
Effective January 1, 2018:
• Amendments to PSAK 2: Statement of Cash Flows on Disclosure Initiative
These amendments require the entity to provide disclosures that enable users of financial
statements to evaluate changes in liabilities arising from financing activities, including both
changes arising from cash flows and non-cash changes.
• Amendments to PSAK 13: Transfer of Investment Property
These amendments clarify that an entity shall transfer a property to, or from, investment
property when, and only when, there is a change in use. A change in use occurs when the
property meets, or ceases to meet, the definition of investment property and there is evidence of
the change in use. In isolation, a change in management’s intentions for the use of a property
does not provide evidence of a change in use.
• Amendments to PSAK 46: Income Taxes on Recognition of Deferred Tax Assets for Unrealised
Losses
These amendments:
- Add illustrative examples to clarify that the deductible temporary differences arise when the
carrying amount of debt instruments measured at fair value and the fair value is less than the
taxable base, regardless of whether the entity expects to recover the carrying amount of a
debt instrument by sale or by use, for example by holding it and collecting contractual cash
flows, or a combination of both.
- Clarify that in order to assess whether taxable profits will be available against which it can
utilise a deductible temporary difference, the assessment of that deductible temporary
difference carried out in accordance with tax law.
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, 2017 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)
a. Basis of preparation of financial statements (continued)
• Amendments to PSAK 46: Income Taxes on Recognition of Deferred Tax Assets for Unrealised
Losses
These amendments (continued):
- Clarify that tax reduction from the reversal of deferred tax assets is excluded from the
estimation of future taxable profit. The entity compares the deductible temporary differences
with future taxable profit that excludes tax deductions resulting from the reversal of those
deductible temporary differences to assess whether the entity has sufficient future taxable
profit.
- The estimate of probable future taxable profit may include the recovery of some of an entity’s
assets for more than their carrying amount if there is sufficient evidence that it is probable
that the entity will achieve this.
• Amendments to PSAK 53: Classification and Measurement of Shared-based Payment
Transactions
These amendments provide some additional accounting requirement for cash-settled share-
based payment transactions regarding treatment of vesting and non-vesting conditions, share-
based payment transactions with a net settlement feature for withholding tax obligations, and
modification of a share-based payment transaction that changes its classification from cash-
settled to equity-settled.
• PSAK 15 (Adjustment 2017): Investment in Associates and Joint Ventures
The standard clarifies that upon initial recognition, an entity may choose to measure its investee
at fair value on an investment-per-investment basis.
• PSAK 67 (Adjustment 2017): Disclosure of Interests in Other Entities
The standard clarifies that the disclosure requirements in PSAK 67, other than those described
in paragraph PP10-PP16, are also applied to any interest in an entity classified in accordance
with PSAK 58: Non-Current Assets Held for Sale and Discontinued Operations.
The following new or amended standards, that will be effective on January 1, 2018, are considered
to be not applicable to the Group’s consolidated financial statements:
• PSAK 69: Agriculture.
• Amendments to PSAK 16: Agriculture: Bearer Plants.
Effective January 1, 2019
•
ISAK 33: Foreign Currency Transactions and Advance Consideration
ISAK 33 defines that the date on which an entity initially recognizes the non-monetary asset or
non-monetary liability arising from the payment or receipt of advance consideration is the date
of the transaction for the purpose of determining the exchange rate to use on initial recognition
of the related asset, expense or income (or part of it) on the derecognition of a non-monetary
asset or non-monetary liability arising from the payment or receipt of advance consideration in a
foreign currency.
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, 2017 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)
a. Basis of preparation of financial statements (continued)
Effective January 1, 2020 (continued)
• PSAK 71: Financial Instruments
PSAK 71 includes revised guidance on the classification and measurement of financial
instruments, including a new expected credit loss model for calculating impairment on financial
assets and the new general hedge accounting requirements. It also carries forward the
guidance on recognition and derecognition of financial instruments from PSAK 55: Financial
Instruments: Recognition and Measurement. PSAK 71 replaces the existing guidance in PSAK
55: Financial Instruments: Recognition and Measurement.
• PSAK 72: Revenue from Contracts with Customers
PSAK 72 establishes a comprehensive framework to determine how, when and how much
revenue is to be recognized. The standard provides a single, principles-based five-step model
for the determination and recognition of revenue to be applied to all contracts with customers.
The standard also provides specific guidance requiring certain types of costs to obtain and/or
fulfil a contract to be capitalized and amortized on a systematic basis that is consistent with the
transfer to the customer of the goods or services to which the capitalized cost relates.
PSAK 72 replaces a number of existing revenue standards, including PSAK 23: Revenue,
PSAK 34: Construction Contracts and ISAK 10: Customer Loyalty Programmes.
• PSAK 73: Leases
PSAK 73 sets out the principles for the recognition, measurement, presentation and disclosure
of leases and requires lessees to account for all leases under a single on-balance sheet model
similar to the accounting for finance leases under PSAK 30. PSAK 73 includes two recognition
exemptions for lessees – leases of ’low-value’ assets and leases with a lease term of 12
months or less. At the commencement date of a lease, a lessee will recognize a liability to make
lease payments and an asset representing the right to use the underlying asset during the lease
term. Lessees will be required to separately recognize the interest expense on the lease liability
and the depreciation expense on the lease asset.
Lessor accounting under PSAK 73 is substantially unchanged from today’s accounting under
PSAK 30. Lessors will continue to classify all leases using the same classification principle as in
PSAK 30.
PSAK 73 replaces PSAK 30: Leases and ISAK 8: Determining whether an Arrangement
contains a Lease.
• Amendments to PSAK 15: Long-term Interests in Associates and Joint Ventures
These amendments require the entity to apply PSAK 71 to financial instruments in an associate
or joint venture to which the equity method is not applied. These include long-term interests
that, in substance, form part of the entity’s net investment in an associate or joint venture.
• Amendments to PSAK 71: Prepayment Features with Negative Compensation
These amendments provides that financial assets with prepayment features that may result in
negative compensation qualify as contractual cash flows that are solely payments of principal
and interest on the principal amount outstanding.
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, 2017 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)
a. Basis of preparation of financial statements (continued)
Effective January 1, 2020 (continued)
• Amendment to PSAK 62: Insurance Contract - Implementing PSAK 71: Financial Instruments
with PSAK 62: Insurance Contract will be effective January 1, 2022, but such amendments have
no impact on Group’s consolidated financial statements.
b. Principles of consolidation
The consolidated financial statements consist of the financial statements of the Company and the
subsidiaries over which it has control. Control is achieved when the Group is exposed or has rights
to variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee. Specifically, the Group controls an investee if and only if the
Group has the power over the investee, exposure or rights to variable returns from its involvement
with the investee and the ability to use its power over the investee to affect its returns.
The Group re-assesses whether it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control. Consolidation of a subsidiary
begins when the Group obtains control over the subsidiary and ceases when the Group loses
control over the subsidiary. Assets, liabilities, income and expenses, of a subsidiary acquired or
disposed of during the year are included in the consolidated financial statements from the date the
Group gain control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the
equity holders of the Company and to the non-controlling interests, even if this results in the non-
controlling interests having a deficit balance.
Intercompany balances and transactions have been eliminated in the consolidated financial
statements.
In case of loss of control over a subsidiary, the Group:
• derecognizes the assets (including goodwill) and liabilities of the subsidiary at the carrying
amounts on the date when it loses control;
• derecognizes the carrying amounts of any non-controlling 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 Group.
c. Transactions with related parties
The Group has 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.
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, 2017 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)
c. Transactions with related parties (continued)
Under the Regulation of Bapepam-LK No. VIII.G.7, a government-related entity is an entity that is
controlled, jointly controlled or significantly influenced by the government. Government in this
context is the Minister of Finance or the Local Government, as the shareholder of the entity.
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 Group. 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
control of the acquiree. 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. Acquisition-related costs are
expensed as incurred. The acquiree’s identifiable assets and liabilities are recognized at their fair
values at the acquisition date.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred and the amount recognized for non-controlling interests, and any previous interest
held, over the net identifiable assets acquired and liabilities assumed. If the fair value of net assets
acquired is in excess of the aggregate consideration transferred, the Group re-assess whether it
has correctly identified all of the assets acquired and all of the liabilities assumed, and reviews the
procedures used to measure the amounts to be recognized at the acquisition date. If the re-
assessment still results in an excess of the fair value of net assets acquired over the aggregate
consideration transferred, then the gain is recognized in profit and loss.
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. Amounts classified as 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
adjustments are adjustments
the
measurement period, which cannot exceed one year from the acquisition date, about facts and
circumstances that existed at the acquisition date.
information obtained during
from additional
that arise
If the intial accounting for a business combination is incomplete by the end of the reporting period
in which the combination occurs, the Group shall report in its consolidated financial statements
provisional amounts for the items for which the accounting is incomplete. During the measurement
period, the Group shall retrospectively adjust the provisional amounts recognized at the acquisition
date to reflect new information obtained about facts and circumstances that existed as of the
acquisition date and, if known, would have affected the measurement of the amounts recognized
as of that date.
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, 2017 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)
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 for the Company or individual entity in the same group.
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 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.
e. Cash and cash equivalents
Cash and cash equivalents comprises cash on hand and in banks and all unrestricted time
deposits with original maturities 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 part of “Other Current Financial Assets” in the consolidated statement of financial position.
f.
Investments in associated companies
An associate is an entity over which the Group (as investor) has significant influence.
Significant influence is the power to participate in the financial and operating policy decisions of the
investee, but does not include control or joint control over those operating policies. The
considerations made in determining significant influence are similar to those necessary to
determine control over subsidiaries.
The Group’s investments in its associates are accounted for using the equity method.
Under the equity method, the investment in an associate is initially recognized at cost. The carrying
amount of the investment is adjusted to recognize changes in the investor’s share of the net assets
of the associate since the acquisition date. On acquisition of the investment, any difference
between the cost of the investment and the entity's share of the net fair value of the investee's
identifiable assets and liabilities is accounted for as follows:
a. Goodwill relating to an associate or a joint venture is included in the carrying amount of the
investment and is neither amortized nor individually tested for impairment.
b. Any excess of the entity's share of the net fair value of the investee's identifiable assets and
liabilities over the cost of the investment is included as income in the determination of the
entity's share of the associate or joint venture's profit or loss in the period in which the
investment is acquired.
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, 2017 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)
f.
Investments in associated companies (continued)
The consolidated statements of profit or loss and other comprehensive income reflect the Group’s
share of the results of operations of the associate. Any change in the other comprehensive income
of the associate is presented as part of other comprehensive income. In addition, when there has
been a change recognized directly in the equity of the associate, the Group recognizes it share of
the change in the consolidated statements of changes in equity. Unrealized gain and losses
resulting from transactions between the Group and the associate are eliminated to the extent of the
interest in the associate.
The Group determines at each reporting date whether there is any objective evidence that the
investments in associated companies are impaired. If there is, the Group calculates and
recognizes the amount of impairment as the difference between the recoverable amount of the
investments in the associated companies and their carrying value.
These assets are included in “Long-term Investments” in the consolidated statements of financial
position.
The functional currency of PT Citra Sari Makmur (“CSM”) is the United States dollar (“U.S.
dollars”), 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 statements 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 the outstanding amounts. Receivables are written
off in the year they are determined to be uncollectible.
h. Inventories
Inventories consist of components, which are subsequently expensed upon use. Components
represent telephone terminals, cables, and other spare parts. Inventories also include Subscriber
Identification Module (“SIM”) cards, handsets, wireless broadband modems and blank prepaid
vouchers, which are expensed upon sale.
The costs of inventories consist 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.
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
inventory items.
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, 2017 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)
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 mainly consist of software. Intangible assets are recognized if it is highly probable
that the expected future economic benefits that are attributable to each asset will flow to the Group,
and the cost of the asset can be reliably measured.
Intangible assets are stated at cost less accumulated amortization and impairment losses, if any.
Intangible assets are amortized over their estimated useful lives. The Group estimates the
recoverable value of its intangible assets. When the carrying amount of an intangible asset
exceeds its estimated recoverable amount, the asset is written down to its estimated recoverable
amount.
Intangible assets except goodwill are amortized using the straight-line method, based on the
estimated useful lives of the intangible assets as follows:
Software
License
Other intangible assets
Years
3-6
3-20
1-30
Intangible assets are derecognized on disposal, or 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 statements of profit
or loss and other comprehensive income.
l. Property and equipment
Property and equipment 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.
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, 2017 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 (continued)
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 telecommunication peripherals
Office equipment
Vehicles
Customer Premises Equipment (“CPE”) asset
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
4-5
2-5
Significant expenditures related to leasehold improvements are capitalized and depreciated over
the lease term.
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 Group would currently obtain from disposal of the asset, after deducting the
estimated costs of disposal, if the asset is already of the age and in the condition expected at the
end of its useful life.
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 measured.
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 statement of financial position and the
resulting gains or losses on the disposal or sale of the property and equipment are recognized in
the consolidated statements of profit or loss and other comprehensive income.
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 are charged to the consolidated statements of profit or loss
and other comprehensive income as incurred. Significant renewals and betterments are
capitalized.
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, 2017 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 (continued)
Property under construction is stated at cost until the construction is completed, at which time
it is reclassified to the 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.
m. Leases
In determining whether an arrangement is, or contains a lease, the Group performs 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 statements 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 Group 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.
Leased assets are depreciated using the same method and based on the useful lives as
estimated for directly acquired property and equipment. However, if there is no reasonable
certainty that the Group will obtain ownership by the end of the lease terms, the leased assets are
fully depreciated over the shorter of the lease terms and their economic useful lives.
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
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 using the straight-line method over the shorter of the legal term
of the land rights or the economic life of the land.
o. Trade payables
Trade payables are obligations to pay for goods or services that have been acquired from
suppliers in the ordinary course of business. Trade payables are classified as current liabilities if
the payment is due within one year or less. 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.
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, 2017 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)
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 statements of profit or loss and
other 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
Indonesia
International Pte. Ltd., Singapore, Telekomunikasi
The functional currency and the recording currency of the Group are both the Indonesian rupiah,
except for the functional currency of Telekomunikasi Indonesia International Pte. Ltd., Hong Kong,
Telekomunikasi
Indonesia
International Inc., USA and Telekomunikasi Indonesia International S.A., Timor Leste whose
functional currency is maintained in U.S. dollars and Telekomunikasi Indonesia International, Pty.
Ltd., Australia whose functional currency is maintained in Australian dollars. Transactions in foreign
currencies are translated into Indonesian rupiah at the rates of exchange prevailing at transaction
date. At the consolidated statements of financial position dates, monetary assets and liabilities
denominated in foreign currencies are translated into Indonesian rupiah based on the buy and sell
rates quoted by Reuters prevailing at the consolidated statements of financial position dates, as
follows (in full amount):
2017
Buy
Sell
U.S. dollar (“US$”) 1
Australian dollar (“AU$”) 1
Euro 1
Yen 1
Malaysian Ringgit (“MYR”) 1
13,565
10,592
16,231
120.48
3,520.35
13,570
10,598
16,242
120.55
3,525.97
2016
Buy
13,470
9,721
14,170
115.01
3,003.79
Sell
13,475
9,726
14,181
115.10
3,007.59
The resulting foreign exchange gains or losses, realized and unrealized, are credited or charged to
the consolidated statements of profit or loss and other 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).
r. Revenue and expense recognition
i. Cellular 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.
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, 2017 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)
i. Cellular revenues (continued)
Revenues from prepaid service, which consist of the sale of starter packs (also known as SIM
cards and start-up load vouchers) and pulse reload vouchers, are recognized initially as
unearned income and recognized as revenue based on 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.
ii. Fixed line telephone revenues
Revenues from usage charges are recognized as customers incur the charges. Monthly
subscription charges are recognized as revenues when incurred by subscribers.
Revenues from fixed line installations are deferred and recognized as revenue on the straight-
line basis over the expected term of the customer relationships. Based on reviews of historical
information and customer trends, the Company determined the term of the customer
relationships is 23 years.
iii. Interconnection revenues
from network
Revenues
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 Group’s subscribers (incoming) and calls between subscribers of other
operators through the Group’s network (transit).
interconnection with other domestic and
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.
v. Network revenues
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 revenues
Revenues from sales of peripherals or other telecommunications equipments are recognized
when delivered to customers.
Revenues from telecommunication tower leases are recognized on straight-line basis over the
lease period in accordance with the agreement with the customers.
Revenues from other services are recognized when services are rendered to customers.
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, 2017 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)
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 Group acts as principal in the sale of goods and services. Revenues are
recorded based on the net amount retained (the amount paid by the customer less amount paid
to the suppliers) when, in substance, the Group has acted as agent and earned commission
from the suppliers of the goods and services sold.
ix. Customer loyalty programme
The Group operates a loyalty programme, which allows customers to accumulate points for
every certain multiple of the telecommunication services usage. The points can be redeemed in
the future for free or discounted products or services, 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. 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 Group.
ii. Post-employment benefit plans and other long-term employee benefits
Post-employment benefit plans consist of funded and unfunded defined benefit pension plans,
defined contribution pension plan, other post-employment benefits, post-employment health
care benefit plan, defined contribution health care benefit plan and obligations under the Labor
Law.
Other long-term employee benefits consist of Long Service Awards (“LSA”), Long Service
Leave (“LSL”), and pre-retirement benefits.
The cost of providing benefits under post-employment benefit plans and other long-term
employee benefits calculation is performed by an independent actuary using the projected unit
credit 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, 2017 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. Post-employment benefit plans and other long-term employee benefits (continued)
The net obligations in respect of the defined pension benefit plans and post-retirement health
care benefit plans are calculated at the present value of estimated future benefits that the
employees have earned in return for their service in the current and prior periods less the fair
value of plan assets. The present value of the defined benefit obligation is determined by
discounting the estimated future cash outflows using interest rates of 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 are no deep markets for high quality corporate bonds.
Plan assets are assets owned by defined benefit pension plan and post-retirement health care
benefits plan as well as qualifying insurance policy. The assets are measured at their fair
value as of reporting dates. The fair value of qualifying insurance policy is deemed to be the
present value of the related obligations (subject to any reduction required if the amounts
receivable under the insurance policies are not recoverable in full).
Remeasurement, comprising of actuarial gain and losses, the effect of the asset ceiling
(excluding amounts included in net interest on the net defined benefit liability (asset)) and the
return on plan assets (excluding amounts included in net interest on the net defined benefit
liability (asset)) are recognized immediately in the consolidated statements of financial position
with a corresponding debit or credit to retained earnings through OCI in the period in which
they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognized immediately in profit or loss on the earlier of:
• The date of plan amendment or curtailment; and
• The date that the Group recognized restructuring-related costs.
Net interest is calculated by applying the discount rate to the net defined benefit liability or
assets.
Gain 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 as 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.
Gain or losses on settlement are recognized when there is a transaction that eliminates all
further legal or constructive obligation for part or all of the benefits provided under a defined
benefit plan (other than the payment of benefit in accordance with the program and included in
the actuarial assumptions).
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 “Personnel Expenses” as they
become payable.
iii. Share-based payments
The Company operates an equity-settled, share-based compensation plan. The fair value of
the employees’ services rendered which are compensated with the Company’s shares is
recognized as an expense in the consolidated statements of profit or loss and other
comprehensive income and credited to additional paid-in capital at the grant date.
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, 2017 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)
iv. Early retirement benefits
Early retirement benefits are accrued at the time the Company and subsidiaries 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.
t.
Income tax
Current and deferred income taxes are recognized as income or an expense and included in the
consolidated statements of profit or loss and other 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 Group recognizes deferred tax assets and liabilities for temporary differences between the
financial and tax bases of assets and liabilities at each reporting date. The Group also recognizes
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.
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 income 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 statements 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 taxation 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 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.
Indonesian tax regulations impose final tax on several types of transactions based on the gross
value of the transaction. Therefore, final tax which is charged based on the such transaction
remains subject to tax even though the tax payer incurred a loss on the transaction. Refer to PSAK
No. 46 revised, final tax is not required in scope of PSAK No. 46.
Final income tax on construction services and lease is presented as part of “Other Expenses”.
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, 2017 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 Group classifies 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 method in
accordance with their classification.
i.
Financial assets
The Group classifies its financial assets as (i) financial assets at fair value through profit or
loss, (ii) loans and receivables, (iii) held-to-maturity investment 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 Group commits to purchase or sell the
assets.
The Group’s financial assets include cash and cash equivalents, other current financial assets,
trade receivables and other receivables 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 statements of profit or loss and other comprehensive income in the period in
which they arise.
No financial assets were classified as financial assets at fair value through profit or loss as
of December 31, 2017 and 2016.
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, cash and cash equivalents, other current
financial assets, trade and other receivables, and other non-current assets (long-term trade
receivables and restricted cash).
These are initially recognized at fair value including transaction costs and subsequently
measured at amortized cost, using the effective interest 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, 2017 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)
c. Held-to-maturity financial assets
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturities on which management has the positive intention and ability
to hold to maturity, other than:
a)
b)
c)
those that the Group, upon initial recognition, designates as at fair value through profit
or loss;
those that the Group designates as available-for-sale; and
those that meet the definition of loans and receivables.
financial assets were classified as held-to-maturity
No
December 31, 2017 and 2016.
investments as of
d. Available-for-sale financial assets
Available-for-sale investments are non-derivative financial assets that are intended to be
held for indefinite periods 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 primarily consist of mutual funds, and corporate
and government bonds, which are recorded as part of “Other Current Financial Assets” in
the consolidated statements of financial position.
Available-for-sale securities are stated at fair value. Unrealized holding gain 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 gain or losses from the sale of available-for-sale
securities are recognized in the consolidated statements of profit or loss and other
comprehensive income, and are determined on the specific identification basis.
ii. Financial liabilities
The Group classifies its financial liabilities as (i) financial liabilities at fair value through profit or
loss or (ii) financial liabilities measured at amortized cost.
The Group’s financial liabilities include trade and other payables, accrued expenses, and
interest-bearing loans and other borrowings. Interest-bearing loans and other borrowings
consist of short-term bank loans, two-step loans, bonds and notes, long-term bank loans and
obligations under finance leases and other borrowings.
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 liability is classified as held for trading if it is incurred 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.
No financial liabilities were categorized as held for trading as of December 31, 2017 and
2016.
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, 2017 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)
ii. Financial liabilities (continued)
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 and other payables, accrued expenses, and interest-bearing loans
and other borrowings. Interest-bearing loans and other borrowings consist of short-term
bank loans, two-step loans, bonds and notes, long-term bank loans and obligations under
finance leases and other borrowings.
iii. Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the consolidated
statements of financial position when there is a legally enforceable right to offset the
recognized amounts and there is an intention to settle them on a net basis, or realize the
assets and settle the liabilities simultaneously. The right of set-off must not be contingent on a
future event and must be legally enforceable in all of the following circumstances:
a. the normal course of business;
b. the event of default; and
c. the event of insolvency or bankruptcy of the Group and all of the counterparties.
iv. Fair value of financial instruments
Fair value is the amount for which an asset could be exchanged, or liability settled, in an arm’s
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 transactions, reference to the current fair value of another instrument that is
substantially the same, a discounted cash flow analysis or other valuation models.
An analysis of fair values of financial instruments and further details as to how they are
measured are provided in Note 37.
v.
Impairment of financial assets
The Group assesses 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 assets.
Impairment is recognized when the loss can be reliably estimated. Losses expected as a
result of future events, no matter how likely, are not recognized.
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, 2017 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)
v.
Impairment of financial assets (continued)
For financial assets carried at amortized cost, the Group first assesses whether impairment
exists individually for financial assets that are individually significant, or collectively for
financial assets that are not individually significant. If the Group determines that no objective
evidence of impairment exists for an individually assessed financial asset, whether significant
or not, it includes the asset in a group of financial assets with similar credit risk characteristics
and collectively assesses them for impairment. Assets that are individually assessed for
impairment and for which an impairment loss is, or continues to be, recognized are not
included in the collective assessment of impairment.
The amount of any impairment loss identified is measured as the difference between the
asset’s carrying amount and the present value of estimated future cash flows (excluding future
expected credit losses that have not yet been incurred). The present value of the estimated
future cash flows is discounted at the financial asset’s original effective interest rate. The
carrying amount of the asset is reduced through the use of an allowance account and the loss
is recognized in profit or loss.
For available-for-sale financial assets, the Group assesses at each reporting date whether
there is objective evidence that an investment or a group of investments is impaired. 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 Group derecognizes a financial asset when the contractual rights to the cash flows from
the financial asset expire, or when the Group transfers substantially all the risks and rewards
of ownership of the financial asset.
The Group derecognizes a financial liability when the obligation specified in the contract is
discharged or cancelled or has 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 in equity. The cost of treasury stock
sold/transferred is accounted for using the weighted average method. The portion of treasury stock
transferred for employee stock ownership program is accounted for at its fair value at grant date.
The difference between the cost and the proceeds from the sale/transfer of treasury stock is
credited to “Additional Paid-in Capital”.
w. Dividends
Dividend for distribution to the stockholders is recognized as a liability in the consolidated financial
statements in the year in which the dividend is approved by the stockholders. The interim dividend
is recognized as a liability based on the Board of Directors’ decision supported by the approval
from the Board of Commissioners.
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, 2017 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)
x. Basic and diluted 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 the basic earnings per share by 100, the number of shares
represented by each ADS.
The Company does not have potentially dilutive financial investments.
y. Segment information
The Group's 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 Group’s chief operating decision maker i.e., the 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
Provisions are recognized when the Group has present obligations (legal or constructive) arising
from past events and it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligations and the amount can be measured reliably.
Provisions for onerous contracts are recognized when the contract becomes onerous for the lower
of the cost of fulfilling the contract and any compensation or penalties arising from failure to fulfill
the contract.
aa. Impairment of non-financial assets
At the end of each reporting period, the Group assesses whether there is an indication that an
asset may be impaired. If such indication exists, the recoverable amount is estimated for the
individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the
Group determines the recoverable amount of the Cash-Generating Unit (“CGU”) to which the asset
belongs (“the asset’s CGU”).
The recoverable amount of an asset (either individual asset or CGU) is the higher of the asset’s fair
value less costs to sell and its value in use (“VIU”). Where the carrying amount of the asset
exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing the value in use, the estimated net future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
In determining fair value less costs to sell, recent market transactions are taken into account, if
available. If no such transactions can be identified, the Group uses an appropriate valuation model
to determine the fair value of the asset. These calculations are corroborated by valuation multiples
or other available fair value indicators.
Impairment losses of continuing operations are recognized in profit or loss as part of “Depreciation
and Amortization” in the consolidated statements of profit or loss and other comprehensive income.
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, 2017 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. Impairment of non-financial assets (continued)
At the end of each reporting period, the Group assesses whether there is any indication that
previously recognized impairment losses for an asset, other than goodwill, may no longer exist or
may have decreased. If such indication exists, the recoverable amount is estimated. A previously
recognized impairment loss for an asset, other than goodwill, is reversed only if there has been a
change in the assumptions used to determine the asset’s recoverable amount since the last
impairment loss was recognized. The reversal is limited such that the carrying amount of the
asset does not exceed its recoverable amount, nor exceeds the carrying amount that would have
been determined, net of depreciation, had no impairment been recognized for the asset in prior
periods. Reversal of an impairment loss is recognized in profit or loss.
Goodwill is tested for impairment annually and when circumstances indicate that the carrying
value may be impaired. Impairment is determined for goodwill by assessing the recoverable
amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable
amount of the CGU is less than its carrying amount, an impairment loss is recognized.
Impairment loss relating to goodwill can not be reversed in future periods.
ab. Critical accounting judgements estimates and assumptions
Estimates and judgments 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.
Judgements
In the process of applying the Group's accounting policies, management has made the certain
judgements, which have the most significant effect on the amounts recognized in the consolidated
financial statements.
Segment information
For management purposes, the Group is organized into business units based on its group of
customers (namely called Customer Facing Units) and has five reportable segments as follows:
mobile, consumer, enterprise, wholesale and international business, and other segments. The
Group has determined the reportable segment reported based on, among others, the structure of
the organization as well as the components of the Group whose operating results are regularly
reviewed by the Group's Chief Operating Decision Maker (PKO). The Group has also determined
the Board of Directors as CODM since the Board monitors the operating results of the CFU
separately for the purpose of making decisions about resource allocations and performance
assessment of the CFU.
Estimates dan assumptions
The Group makes 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 and return on
investment (ROI). Any changes in these assumptions will impact the carrying amount of the
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, 2017 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)
ab. Critical accounting estimates and judgements (continued)
i. Retirement benefits (continued)
The Group determines 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 Group considers 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.
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 benefit obligations.
Other key assumptions for retirement benefit obligations are based in part on current market
conditions. Additional information is disclosed in Notes 29 and 30.
ii. Useful lives of property and equipment
The Group estimates the useful lives of its property and equipment 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 Group’s collective assessment of industry practice, internal technical evaluation and
experience with similar assets.
The Group reviews its estimates of useful lives at least each financial year-end and such
estimates are updated if expectations differ from previous estimates due to changes in
expectation of physical wear and tear, technical or commercial obsolescence and legal or
other limitations on the continuing use of the assets. The amounts 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 amounts of property and equipment are disclosed in Note 9.
iii. Provision for impairment of receivables
The Group assesses whether there is objective evidence that trade and other 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 provisions are adjusted periodically to reflect the actual
and anticipated experience. Details of the nature and carrying amounts of provision for
impairment of receivables are disclosed in Note 5.
iv. Income taxes
Significant judgment is required in determining the provision for income taxes. There are many
transactions and calculations for which the ultimate tax determination is uncertain. The Group
recognizes 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 amounts of income tax are disclosed in Note 26.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
3. CASH AND CASH EQUIVALENTS
Cash on hand
Cash in banks
Related parties
PT Bank Mandiri (Persero) Tbk
(“Bank Mandiri”)
PT Bank Negara Indonesia (Persero) Tbk (“BNI”)
PT Bank Rakyat Indonesia (Persero) Tbk (“BRI”)
Others
Sub-total
Third parties
PT Bank Permata Tbk (“Bank Permata”)
The Hongkong and Shanghai Banking
Corporation Ltd. (“HSBC”)
Standard Chartered Bank (“SCB”)
Development Bank of Singapore (“DBS”)
Others (each below Rp75 billion)
Sub-total
Total cash in banks
Time deposits
Related parties
BNI
BRI
PT Bank Tabungan Negara (Persero) Tbk
(“Bank BTN”)
Bank Mandiri
Sub-total
2017
Balance
2016
Balance
Original
currency
(in millions)
Rupiah
equivalent
-
12
Original
currency
(in millions)
Rupiah
equivalent
-
10
Currency
Rp
-
27
7
1
1
0
-
1
0
0
-
6
-
0
-
0
14
4
-
11
0
-
0
-
4
0
1
0
8
2
0
0
-
9
-
15
-
-
-
1,481
367
1
17
2
0
968
13
6
0
466
82
21
1
3,425
278
2
184
6
0
154
1
24
0
360
61
2
20
1
4
8
0
0
1,105
4,530
5,315
116
4,954
203
2,958
446
-
13,992
-
41
6
1
1
0
-
6
5
0
-
8
-
0
-
7
13
2
-
6
5
-
0
-
5
0
0
1
3
0
0
0
-
25
-
47
-
-
5
1,897
548
1
11
1
0
581
84
68
0
95
107
22
0
3,415
14
96
176
4
0
74
43
101
0
157
69
0
1
12
1
0
0
1
749
4,164
4,043
336
4,076
632
3,356
1,552
67
14,062
Rp
US$
JPY
EUR
HKD
AUD
Rp
US$
EUR
SGD
Rp
US$
Rp
US$
Rp
US$
US$
HKD
Rp
US$
SGD
Rp
US$
Rp
US$
SGD
EUR
AUD
TWD
MYR
HKD
MOP
Rp
US$
Rp
US$
Rp
Rp
US$
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
3. CASH AND CASH EQUIVALENTS (continued)
2017
Balance
2016
Balance
Original
currency
(in millions)
Rupiah
equivalent
Original
currency
(in millions)
Rupiah
equivalent
Currency
Time deposits (continued)
Third parties
PT Bank Pembangunan Daerah Jawa Barat
dan Banten Tbk (“BJB”)
PT Bank Mega Tbk (“Bank Mega”)
PT Bank OCBC NISP Tbk (“OCBC NISP”)
PT Bank Tabungan Pensiunan Nasional
Tbk (“BTPN”)
PT Bank CIMB Niaga Tbk
(“Bank CIMB Niaga”)
PT Bank UOB Indonesia (“UOB”)
SCB
PT Bank Muamalat Indonesia Tbk
PT Bank Bukopin Tbk (“Bank Bukopin”)
Bank Permata
PT Bank ANZ Indonesia (”ANZ”)
Others
Sub-total
Total time deposits
Grand Total
Rp
Rp
US$
Rp
US$
Rp
US$
Rp
US$
Rp
US$
US$
SGD
Rp
Rp
Rp
Rp
US$
Rp
MYR
-
-
-
-
-
-
30
-
2
-
20
10
-
-
-
-
-
5
-
14
1,726
1,243
-
1,200
-
676
401
600
31
-
263
136
-
91
22
-
5
73
97
47
6,611
20,603
25,145
-
-
14
-
10
-
-
-
-
-
-
-
18
15
-
-
-
-
-
-
-
2,020
1,226
185
1,550
134
461
-
2,025
-
1,345
-
242
139
305
148
1,492
200
-
59
-
11,531
25,593
29,767
Interest rates per annum on time deposits are as follows:
Rupiah
Foreign currencies
2017
2.85%-8.50%
0.40%-1.75%
2016
3.20%-10.00%
0.10%-2.00%
The related parties in which the Group places its funds are state-owned banks. The Group placed the
majority of its 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 31 for details of related parties transactions.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
4. OTHER CURRENT FINANCIAL ASSETS
2017
Balance
2016
Balance
Currency
Original
currency
(in millions)
Rupiah
equivalent
Original
currency
(in millions)
Rupiah
equivalent
Time deposits
Related parties
BRI
BNI
Third parties
UOB
SCB
Others
Total time deposits
Available-for-sale financial assets
Related parties
PT Bahana TCW Investment
Management (“Bahana TCW”)
PT Mandiri Manajemen Investasi
State-owned enterprises
Government
Others
Sub-total
Third parties
Total available-for-sale financial assets
Escrow accounts
Others
Total
Rp
Rp
US$
US$
Rp
Rp
Rp
US$
US$
Rp
Rp
Rp
US$
MYR
Rp
US$
MYR
AUD
-
-
14
8
-
-
-
-
-
-
-
-
6
5
-
0
0
0
2
-
191
109
23
325
360
711
-
-
80
1,151
17
1,168
318
78
15
263
6
0
0
2,173
-
-
1
-
-
-
-
4
2
-
-
-
2
-
-
-
-
0
-
63
13
-
-
76
559
500
55
27
-
1,141
17
1,158
112
22
-
98
-
-
5
1,471
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 31 for details of related parties transactions.
2017
6.00%-7.00%
1.38%-1.64%
2016
5.75%-6.00%
0.58%-1.64%
40
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
5. 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”)
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
b. By age
(i) Related parties
Up to 3 months
3 to 6 months
More than 6 months
Total
Provision for impairment of receivables
Net
(ii) Third parties
Up to 3 months
3 to 6 months
More than 6 months
Total
Provision for impairment of receivables
Net
41
2017
2016
721
465
372
670
2,228
(683 )
1,545
2017
2016
9,808
1,517
11,325
(3,648 )
7,677
2017
2016
1,405
100
723
2,228
(683 )
1,545
2017
2016
6,809
688
3,828
11,325
(3,648 )
7,677
151
431
370
348
1,300
(406 )
894
7,801
1,252
9,053
(2,584 )
6,469
690
39
571
1,300
(406 )
894
5,566
658
2,829
9,053
(2,584 )
6,469
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
5. TRADE RECEIVABLES (continued)
b. By age (continued)
(iii) Aging of total trade receivables
Not past due
Past due up to 3 months
Past due more than 3 to 6 months
Past due more than 6 months
Total
6,788
1,426
788
4,551
13,553
920
281
258
2,872
4,331
2017
Provision for
impairment of
receivables
Gross
Gross
2016
Provision for
impairment of
receivables
177
401
495
1,917
2,990
4,535
1,721
697
3,400
10,353
The Group has made provision for impairment of trade receivables based on the collective
assessment of historical impairment rates and individual assessment of its customers’ credit
history. The Group does not apply a distinction between related party and third party
receivables in assessing amounts past due. As of December 31, 2017 and 2016, the carrying
amounts of trade receivables of the Group considered past due but not impaired amounted to
Rp3,354 billion and Rp3,005 billion, respectively. Management believes 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
Others
Total
Provision for impairment of receivables
Net
(ii) Third parties
Rupiah
U.S. dollar
Australian dollar
Others
Total
Provision for impairment of receivables
Net
2017
2016
2,187
41
0
2,228
(683 )
1,545
2017
2016
10,300
968
19
38
11,325
(3,648 )
7,677
1,300
0
0
1,300
(406 )
894
7,565
1,437
40
11
9,053
(2,584 )
6,469
42
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
5. TRADE RECEIVABLES (continued)
d. Movements in the provision for impairment of receivables
Beginning balance
Provision recognized during the year (Note 25)
Receivables written off
Ending balance
2017
2016
2,990
1,494
(153 )
4,331
3,048
743
(801 )
2,990
The receivables written off relate to both 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.
As of December 31, 2017, certain
Rp6,888 billion have been pledged as collateral under lending agreements (Notes 15 and 16c).
the subsidiaries amounting
receivables of
trade
to
Refer to Note 31 for details of related parties transactions.
6.
INVENTORIES
Components
SIM cards and blank prepaid vouchers
Others
Total
Provision for obsolescence
Components
SIM cards and blank prepaid vouchers
Others
Total
Net
2017
2016
447
168
69
684
(24 )
(29 )
0
(53 )
631
Movements in the provision for obsolescence are as follows:
Beginning balance
Provision recognized during the period
Inventory written off
Ending balance
2017
2016
47
6
-
53
299
168
164
631
(18 )
(29 )
0
(47 )
584
41
11
(5 )
47
inventories
The
in operations, maintenance, and
telecommunication service expenses as of December 31, 2017 and 2016 amounted to Rp2,458 billion
and Rp2,105 billion, respectively (Note 24).
recognized as expense and
included
43
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
6.
INVENTORIES (continued)
Management believes that the provision is adequate to cover losses from decline in inventory value
due to obsolescence.
Certain inventories of the subsidiaries amounting to Rp231 billion have been pledged as collateral
under lending agreements (Notes 15, 16b and 16c).
As of December 31, 2017 and 2016, modules and components held by the Group with book value
amounting to Rp143 billion and Rp199 billion, respectively, have been insured against fire, theft, and
other specific risks. Modules are recorded as part of property and equipment. Total sum insured as of
December 31, 2017 and 2016 amounted to Rp256 billion and Rp220 billion, respectively.
Management believes that the insurance coverage is adequate to cover potential losses of inventories
arising from the insured risks.
7. OTHER CURRENT ASSETS
Frequency license (Note 34c.i)
Prepaid rental
Advances
Prepaid salaries
Advance to employee
Others
Total
2017
2016
3,760
1,349
1,156
227
35
656
7,183
3,056
1,234
389
229
32
306
5,246
Refer to Note 31 for details of related parties transactions.
8. LONG-TERM INVESTMENTS
The Group has investments in several entities as follows:
2017
Percentage
of
ownership
Beginning
balance
Additions
(deductions)
Share of net
profit (loss) Dividend
Share of other
comprehensive
income
Ending
balance
Long-term investments
in associated
companies:
Tiphonea
Indonusab
Teltranetc
PT Integrasi Logistik
24.00
20.00
51.00
Cipta Solusi (“ILCS”)e
49.00
45.00
25.00-49.00
PT Graha Sakura
Nusantara (“GSN”)g
Others f
Sub-total
Other long-term
investments
Total long-term
investments
1,488
221
38
42
-
-
1,789
58
1,847
80
-
(20 )
1
0
(0 )
61
-
61
(28 )
-
-
-
-
-
(28 )
-
(28 )
(1 )
-
-
-
-
(0 )
(1 )
-
(1 )
1,539
221
18
43
14
4
1,839
309
2,148
-
-
-
-
14
4
18
251
269
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
8. LONG-TERM INVESTMENTS (continued)
Summarized financial information of the Group’s investments accounted under the equity method for
2017:
Tiphone
Indonusa Teltranet
ILCS
GSN
Others
Statements of financial position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity (deficit)
Statements of profit or loss and other
comprehensive income
Revenues
Operating expenses
Other income (expenses) including finance
costs - net
Profit (loss) before tax
Income tax benefit (expense)
Profit (loss) for the year
Other comprehensive income (loss)
Total comprehensive income (loss)
for the year
8,084
994
(2,107 )
(3,255 )
3,716
27,914
(27,217 )
(246 )
451
(116 )
335
(3 )
332
174
101
(149 )
(90 )
36
145
32
(87 )
(2 )
88
1
185
(27 )
(129 )
30
190
606
(724 )
(1,882 )
(1,810 )
209
(255 )
122
(116 )
(5 )
(51 )
13
(38 )
(0 )
(38 )
(4 )
2
1
3
(0 )
3
0
(0 )
(0 )
0
-
0
-
0
106
(287 )
(19 )
(200 )
-
(200 )
-
(200 )
307
415
(877 )
(177 )
(332 )
692
(333 )
(364 )
(5 )
-
(5 )
-
(5 )
2016
Percentage of
ownership
Beginning
balance
Additions
(deductions)
Share of net
profit (loss)
Dividend
Share of other
comprehensive
income
Ending
balance
Long-term investments
in associated
companies:
Tiphonea
Indonusab
Teltranetc
PT Melon Indonesia
(“Melon”)d
PT Integrasi Logistik
Cipta Solusi (“ILCS”)e
Othersf
Sub-total
Other long-term
investments
Total long-term
investments
24.43
20.00
51.00
51.00
49.00
25.00-49.00
1,404
221
71
50
40
6
1,792
15
1,807
108
-
(33 )
17
2
(6 )
88
-
88
(23 )
-
-
-
-
-
(23 )
-
(23 )
(1 )
-
-
-
-
-
(1 )
-
1,488
221
38
-
42
-
1,789
58
(1 )
1,847
-
-
-
(67 )
-
-
(67 )
43
(24 )
45
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
8. LONG-TERM INVESTMENTS (continued)
Summarized financial information of the Group’s investments accounted under the equity method for
2016:
Tiphone
Indonusa
Teltranet
ILCS
Others
Statements of financial position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity (deficit)
Statements of profit or loss and other
comprehensive income
Revenues
Operating expenses
Other income (expenses) including finance
costs - net
Profit (loss) before tax
Income tax benefit (expense)
Profit (loss) for the year
Other comprehensive income (loss)
Total comprehensive income (loss)
for the year
7,709
743
(1,248 )
(3,762 )
3,442
27,310
(26,445 )
(231 )
634
(166 )
468
(5 )
463
170
444
(532 )
(405 )
(323 )
605
(583 )
(17 )
5
(33 )
(28 )
7
(21 )
66
88
(78 )
(2 )
74
131
29
(73 )
(1 )
86
66
(149 )
116
(112 )
(3 )
(86 )
21
(65 )
(0 )
(65 )
0
4
0
4
(0 )
4
170
771
(629 )
(1,212 )
(900 )
139
(264 )
(88 )
(213 )
-
(213 )
-
(213 )
a Tiphone was established on June 25, 2008 as PT Tiphone Mobile Indonesia Tbk. Tiphone is engaged in the
telecommunication equipment business, such as celullar phone including spare parts, accessories, pulse reload vouchers,
repair service and content provider through its subsidiaries. On September 18, 2014, the Company through PINS acquired
25% ownership in Tiphone for Rp1,395 billion.
As of December 31, 2017 and 2016, the fair value of the investment amounted to Rp1,755 billion and Rp1,500 billion,
respectively. The fair value was calculated by multiplying the number of shares by the published price quotation as of
December 31, 2017 and 2016 amounting to Rp1,000 and Rp855 per share, respectively.
Reconciliation of
information
December 31, 2017 and 2016 is as follows:
financial
to
the carrying amount of
long-term
investment
in Tiphone as of
Assets
Liabilities
Net assets
Group’s proportionate share of net assets (24.00% in 2017 and 24.43% in 2016)
Goodwill
Carrying amount of long-term investment
2017
2016
9,078
(5,362 )
3,716
892
647
1,539
8,452
(5,010 )
3,442
841
647
1,488
b
c
Indonusa had been a subsidiary of the Company until 2013 when the Company disposed 80% of its interest in Indonusa.
On May 14, 2014, based on the Circular Resolution of the Stockholders of Indonusa as covered by notarial deed No. 57
dated April 23, 2014 of FX Budi Santoso
its Letter
No. AHU-02078.40.20.2014 dated April 29, 2014, Indonusa’s stockholders approved an increase in its issued and fully paid
capital by Rp80 billion. The Company waived its right to own the new shares issued and transferred it to Metra, as the result,
Metra’s ownership in Indonusa increased to 4.33% and the Company’s ownership become 15.67%.
Investment in Teltranet is accounted for under the equity method, which covered by an agreement between Metra and Telstra
Holding Singapore Pte. Ltd. dated August 29, 2014. Teltranet is engaged in communication system services. Metra does not
have control to determine the financial and operating policies of Teltranet.
Isbandi, S.H., which was approved by
the MoLHR
in
d Melon previously was an associated company. In 2016, the Group purchased 49% shares in Melon through Metranet,
therefore Melon became a consolidated subsidiary (Note 1d).
e ILCS is engaged in providing E-trade logistic services and other related services.
f The unrecognized share of losses in other investments for the year ended December 31, 2017 is Rp435 billion.
g On August 31, 2017, NSI and third party established PT Graha Sakura Nusantara (“GSN”) which engaged in real estate and
residential and apartment marketing business.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
9. PROPERTY AND EQUIPMENT
January 1,
2017
Acquisitions
Additions
Deductions
Reclassifications/
Translations
December 31,
2017
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 telecommunication peripherals
Office equipment
Vehicles
Other equipment
Property under construction
Assets under finance lease
Transmission installation and equipment
Data processing equipment
Vehicles
Office equipment
CPE assets
Power supply
RSA assets
Total
1,417
7,837
1,116
20,490
1,586
121,552
8,445
44,791
15,022
12,515
700
1,453
387
100
4,550
5,354
84
135
76
22
215
252
248,099
40
39
-
69
-
-
573
-
-
-
-
11
-
-
-
-
-
-
-
-
-
-
732
62
211
34
556
-
2,420
1,233
5,715
222
715
966
327
65
-
20,110
228
-
290
-
-
-
-
33,154
-
(3 )
(25 )
(977 )
-
(4,489 )
(2,202 )
(694 )
(456 )
(602 )
(7 )
-
(13 )
-
(96 )
-
(1 )
(24 )
(84 )
-
-
-
(9,673 )
-
1,718
132
(1,675 )
(3 )
14,314
1,251
(2,657 )
1,491
666
-
(234 )
-
(3 )
(20,149 )
-
-
-
88
-
-
-
(5,061 )
1,519
9,802
1,257
18,463
1,583
133,797
9,300
47,155
16,279
13,294
1,659
1,557
439
97
4,415
5,582
83
401
80
22
215
252
267,251
January 1,
2017
Acquisitions
Additions
Deductions
Reclassifications/
Translations
December 31,
2017
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 telecommunication peripherals
Office equipment
Vehicles
Other equipment
Assets under finance lease
Transmission installation and equipment
Data processing equipment
Vehicles
Office equipment
CPE assets
Power supply
RSA assets
Total
Net book value
2,435
692
16,650
333
62,302
7,098
20,301
10,164
9,468
461
846
168
99
2,054
44
32
94
19
98
243
133,601
114,498
407
149
1,391
416
10,629
595
1,992
1,274
1,372
149
189
66
1
584
29
47
26
1
22
13
19,352
-
(23 )
(977 )
-
(3,642 )
(2,202 )
(693 )
(286 )
(581 )
(7 )
(9 )
(8 )
-
-
(1 )
(13 )
(56 )
-
-
-
(8,498 )
38
5
(2,511 )
53
(49 )
(1,157 )
(3,736 )
2
(23 )
(1 )
10
-
(4 )
-
4
-
16
-
-
(22 )
(7,375 )
2,880
823
14,553
802
69,240
4,334
17,864
11,154
10,236
602
1,036
226
96
2,638
76
66
80
20
120
234
137,080
130,171
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
9. 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 telecommunication peripherals
Office equipment
Vehicles
Other equipment
Property under construction
Assets under finance lease
Transmission installation and equipment
Data processing equipment
Vehicles
Office equipment
CPE assets
Power supply
RSA assets
Total
January 1,
2016
Acquisitions
Additions
Deductions
Reclassifications/
Translations
December
31, 2016
1,270
6,033
1,036
19,823
876
119,047
8,146
37,887
13,822
11,351
632
1,062
475
99
4,580
5,940
63
94
73
22
90
252
232,673
89
10
-
-
-
-
-
-
-
12
-
5
-
-
-
-
-
-
-
-
-
-
116
59
311
13
218
751
2,603
80
6,746
161
318
73
139
60
1
17,169
229
77
63
3
-
125
-
29,199
(1 )
(3 )
(37 )
(160 )
(41 )
(11,319 )
-
(302 )
(77 )
(82 )
-
(12 )
(147 )
-
-
(815 )
(56 )
(22 )
-
-
-
-
(13,074 )
-
1,486
104
609
-
11,221
219
460
1,116
916
(5 )
259
(1 )
-
(17,199 )
-
-
-
-
-
-
-
(815 )
1,417
7,837
1,116
20,490
1,586
121,552
8,445
44,791
15,022
12,515
700
1,453
387
100
4,550
5,354
84
135
76
22
215
252
248,099
January 1,
2016
Acquisitions
Additions
Deductions
Reclassifications/
Translations
December 31,
2016
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 telecommunication peripherals
Office equipment
Vehicles
Other equipment
Assets under finance lease
Transmission installation and equipment
Data processing equipment
Vehicles
Office equipment
CPE assets
Power supply
RSA assets
Total
Net book value
2,141
623
15,223
4
63,063
6,706
19,524
9,114
8,503
385
713
166
99
2,327
53
13
51
17
18
230
128,973
103,700
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
290
106
1,588
329
9,957
415
1,534
1,145
1,067
77
141
69
-
542
47
19
43
2
80
13
17,464
(2 )
(37 )
(160 )
-
(10,686 )
-
(302 )
(70 )
(62 )
-
(11 )
(66 )
-
(815 )
(56 )
-
-
-
-
-
(12,267 )
6
-
(1 )
-
(32 )
(23 )
(455 )
(25 )
(40 )
(1 )
3
(1 )
-
-
-
-
-
-
-
-
(569 )
2,435
692
16,650
333
62,302
7,098
20,301
10,164
9,468
461
846
168
99
2,054
44
32
94
19
98
243
133,601
114,498
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
2017
2016
1,367
(1,009 )
358
765
(152 )
613
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
9. PROPERTY AND EQUIPMENT (continued)
b. Asset impairment
In 2014, the Group decided to cease its fixed wireless business no later than December 14, 2015.
The Company assessed the recoverable amount to be Rp549 billion and determined that the
assets for fixed wireless CGU were further impaired by Rp805 billion. The recoverable amount has
been determined based on VIU calculation using the most recent cash flows projection approved
by management. The cash flows projection included cash inflows from the continuing use of the
assets during the remaining service period and projected net cash flows to be received for the
disposal of the assets for fixed wireless CGU at the end of service period. Projected net cash flows
to be received for the disposal of the assets were determined based on cost approach, adjusted for
physical, technological and economic obsolescence. Management applied a pre-tax discount rate
of 13.5% derived from the Company’s post-tax weighted average cost of capital and benchmarked
to externally available data. In addition, management also applied technological and economic
obsolescence rate of 30% based on the Company’s internal data, due to the lack of comparable
market data because of the nature of the assets. The determination of VIU calculation is most
sensitive to the technological and economic obsolescence rate assumption. An increase in
technological and economic obsolescence rate to 40% would result in a further impairment of
Rp70 billion.
Loss on impairment of assets is recognized as part of “Depreciation and Amortization” in the
consolidated statement of profit or loss and other comprehensive income.
In connection with the restructuring of fixed wireless business (Note 34c.i), the Company
accelerated the depreciation of its fixed wireless assets. As of December 31, 2015, all of the
Company’s fixed wireless assets have been fully depreciated.
In 2017 and 2016, the Company derecognized the fixed wireless asset which fully depreciated with
acquisition cost of Rp3,193 billion and Rp5,203 billion, respectively.
Management believes that there is no indication of impairment in the assets of other CGUs as of
December 31, 2017.
c. Others
(i)
to property under construction amounted
Interest capitalized
to Rp328 billion and
Rp444 billion for the years ended December 31, 2017 and 2016, respectively. The
capitalization rate used to determine the amount of borrowing costs eligible for capitalization
ranged from 8.15% to 11.00% and 10.20% to 11.00% for the years ended December 31, 2017
and 2016, respectively.
(ii) No foreign exchange loss was capitalized as part of property under construction for the years
ended December 31, 2017 and 2016.
(iii) In 2017 and 2016, the Group obtained proceeds from the insurance claim on lost and broken
property and equipment, with a total value of Rp155 billion and Rp77 billion, respectively, and
were recorded as part of “Other Income” in the consolidated statements of profit or loss and
other comprehensive income. In 2017 and 2016, the net carrying amount of those assets of
Rp7 billion and Rp19 billion, respectively, were charged to the consolidated statements of
profit or loss and other comprehensive income.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
9. PROPERTY AND EQUIPMENT (continued)
c. Others (continued)
(iv) Since 2015 until 2017, Telkomsel decided to replace certain equipment units with net carrying
amount of Rp3,115 billion, as part of its modernization program. Accordingly, Telkomsel
accelerated the depreciation of such equipment units. The impact of accelerated depreciation
was an increase in the depreciation expense for the year ended December 31, 2017
amounting to Rp459 billion. This modernization program will decrease profit before income tax
in 2018 amounting to Rp47 billion.
In 2014, the useful lives of Telkomsel’s buildings and transmissions were changed from 20
years to 40 years, and from 10 years to 15 and 20 years, respectively, to reflect the current
economic lives of the buildings and the transmissions. The impact of reduction in depreciation
expense for the year ended December 31, 2017 amounting to Rp198 billion. The impact of the
changes in the estimated useful lives of the buildings and transmissions in future periods is an
increase in the profit before income tax amounting to Rp135 billion.
In 2012, the useful lives of Telkomsel's towers changed from 10 years to 20 years, to reflect
their current economic lives of towers. The impact of reduction in depreciation expense for the
year ended December 31, 2017 amounting to Rp92 billion.
(v) Exchange of property and equipment
In 2012 and 2011, the Company entered into a Procurement and installation Agreement for
the Modernization of the Copper Cable Network through Optimalization of Asset Copper Cable
Network through Trade In/Trade Off method with PT Len Industri (“LEN”) and PT Industri
Telekomunikasi Indonesia (“INTI”), respectively.
In 2017 and 2016, the Company derecognized the copper cable network asset with net
carrying amount of Rp1 billion and Rp3 billion, respectively, and recorded the fiber optic
network asset from the exchange transaction of Rp506 billion and Rp801 billion, respectively.
In 2017 and 2016, Telkomsel’s certain equipment units with net carrying amount of
Rp816 billion and Rp636 billion, respectively, were exchanged with equipment from Ericsson
AB, PT Huawei Tech Investment (“Huawei”) and PT Nokia Solutions and Network Indonesia
(“PT NSN”). As of December 31, 2017, Telkomsel’s equipment units with net carrying amount
of Rp10 billion are going to be exchanged with equipment from Nokia Siemens Network Oy
(“NSN Oy”) and Huawei and, therefore, these equipment units were reclassified as “Non-
current assets held for sale”” in the consolidated statements of financial position.
(vi) The Group owns several pieces of land located throughout Indonesia with Building Use Rights
(“Hak Guna Bangunan” or “HGB”) for a period of 10-45 years which will expire between 2018
and 2053. Management believes that there will be no issue in obtaining the extension of the
land rights when they expire.
(vii) As of December 31, 2017, the Group’s property and equipment excluding land rights, with net
carrying amount of Rp118,198 billion were insured against fire, theft, earthquake and other
totalling
specified
Rp11,449 billion, US$64 million, HKD3 million, SGD211 million and MYR37 million and first
loss basis amounted to Rp2,760 billion. Management believes that the insurance coverage is
adequate to cover potential losses from the insured risks.
interruption, under blanket policies
including business
risks,
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
9. PROPERTY AND EQUIPMENT (continued)
c. Others (continued)
(viii) As of December 31, 2017, the percentage of completion of property under construction was
around 67.24% of the total contract value, with estimated dates of completion until
December 2018. The balance of property under construction mainly consists of buildings,
transmission installation and equipment, cable network and power supply. Management
believes that there is no impediment to the completion of the construction in progress.
(ix) All assets owned by the Company have been pledged as collateral for bonds (Notes 16b.i).
Certain property and equipment of the Company’s subsidiaries with cost amounting to
Rp9,721 billion have been pledged as collateral under
lending agreements
(Notes 15 and 16).
(x) As of December 31, 2017, the cost of fully depreciated property and equipment of the Group
that are still used in operations amounted to Rp53,407 billion. The Group is currently
performing modernization of network assets to replace the fully depreciated property and
equipment.
(xi) In 2017, the total fair values of land rights and buildings of the Group, which are determined
based on the sale value of the tax object (“Nilai Jual Objek Pajak” or “NJOP”) of the related
land rights and buildings, amounted to Rp30,344 billion.
(xii) On August 25, 2017 Telkom-1 Satellite experienced technical problems which impacted to
customer service disruptions. Therefore, the Company was migrating customers services to
the Company’s other satellites (Telkom-3S and Telkom-2), as well as to several third party
satellites. This customers services migration process has been completed on
September 10, 2017, and the costs incurred on this migration process are recognized in these
consolidated statements of profit or loss and other comprehensive income. As of December
31, 2017, the acquisition cost and accumulated depreciation of Telkom-1 Satellite amounting
to Rp1,165 billion is presented as part of disposal assets group and classified as “Other non-
current assets” in the consolidated statements of financial position.
(xiii) Telkomsel entered into several agreements with tower providers to lease spaces in
telecommunication towers (slot) and sites of the towers for a period of 10 years. Telkomsel
may extend the lease period based on mutual agreement with the relevant parties. In addition,
the Group also has lease commitments for transmission installation and equipment, data
processing
assets with
the option to purchase certain leased assets at the end of the lease terms.
and CPE
equipment,
equipment,
vehicles
office
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
9. PROPERTY AND EQUIPMENT (continued)
c. Others (continued)
Future minimum lease payments required for assets under finance lease are as follows:
Years
2017
2018
2019
2020
2021
2022
Thereafter
Total minimum lease payments
Interest
Net present value of minimum lease payments
Current maturities (Note 15b)
Long-term portion (Note 16)
2017
2016
-
1,083
969
866
778
605
384
4,685
(881 )
3,804
(794 )
3,010
987
892
816
771
740
590
364
5,160
(1,150 )
4,010
(658 )
3,352
The details of obligations under finance leases as of December 31, 2017 and 2016 are as follows:
2017
2016
PT Tower Bersama Infrastructure Tbk
PT Profesional Telekomunikasi Indonesia
PT Solusi Tunas Pratama
PT Mandiri Utama Finance
PT Putra Arga Binangun
PT Mitsubishi UFJ Lease and Finance Indonesia
PT Bali Towerindo Sentra
Others (each below Rp75 billion)
Total
10. OTHER NON-CURRENT ASSETS
1,293
1,120
212
198
189
135
100
557
3,804
The breakdown of other non-current assets as of December 31, 2017 and 2016 are as follows:
2017
2016
Claim for tax refund - net of current portion (Note 26)
Advances for purchases of property and equipment
Prepaid rental - net of current portion (Note 7)
Frequency license - net of current portion (Note 7)
Prepaid taxes - net of current portion (Note 26)
Deferred charges
Security deposit
Others
Total
3,085
2,869
2,688
2,019
753
413
116
327
12,270
1,465
1,295
241
-
217
21
112
659
4,010
1,428
5,276
2,280
320
1,228
387
144
445
11,508
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
10. OTHER NON-CURRENT ASSETS (continued)
Prepaid rental covers rent of leased line, telecommunication equipment, land and building under lease
agreements of the Group with remaining rental periods ranging from 1 to 40 years.
As of December 31, 2017 and 2016, deferred charges represent deferred Indefeasible Right of
Use (“IRU”) Agreement charges. Total amortization of deferred charges for the years ended
December 31, 2017 and 2016 amounted to Rp46 billion and Rp40 billion, respectively.
Refer to Note 31 for details of related parties transactions.
11. INTANGIBLE ASSETS
The details of intangible assets are as follows:
Gross carrying amount:
Balance, January 1, 2017
Additions
Acquisition
Deductions
Reclassifications/translations
Balance, December 31, 2017
Accumulated amortization and impairment
losses:
Balance, January 1, 2017
Amortization
Deductions
Reclassifications/translations
Balance, December 31, 2017
Net book value
Gross carrying amount:
Balance, January 1, 2016
Additions
Deductions
Reclassifications/translations
Acquisition
Balance, December 31, 2016
Accumulated amortization and impairment
losses:
Balance, January 1, 2016
Amortization
Deductions
Reclassifications/translations
Balance, December 31, 2016
Net book value
Goodwill
Software
License
Other intangible
assets
Total
449
-
232
(3 )
2
680
(29 )
-
-
-
(29 )
651
7,222
1,289
4
(122 )
(6 )
8,387
(4,776 )
(1,037 )
95
4
(5,714 )
2,673
75
3
-
-
6
84
(56 )
(9 )
-
(6 )
(71 )
13
607
21
-
(11
))))
18
635
(403 )
(48 )
11
(2 )
(442 )
193
8,353
1,313
236
(136 )
20
9,786
(5,264 )
(1,094 )
106
(4 )
(6,256 )
3,530
Goodwill
Software
License
Other intangible
assets
Total
336
-
-
(4 )
117
449
(29 )
-
-
-
(29 )
420
6,267
925
-
20
10
7,222
(3,748 )
(1,027 )
-
(1 )
(4,776 )
2,446
68
9
(2 )
-
-
75
(49 )
(7 )
-
-
(56 )
19
580
27
-
-
-
607
(369 )
(34 )
-
-
(403 )
204
7,251
961
(2 )
16
127
8,353
(4,195 )
(1,068 )
-
(1 )
(5,264 )
3,089
(i) Goodwill resulted from the acquisition of Sigma (2008), Admedika (2010), data center BDM
(2012), Contact Centres Australia Pty. Ltd. (2014), MNDG (2015), Melon (2016), GSDm (2016),
TSGN (2017) and Nutech (2017) (Note 1d).
(ii) The amortization is presented as part of “Depreciation and Amortization” in the consolidated
statements of profit or loss and other comprehensive income. The remaining amortization periods
of software range from 1-5 years.
(iii) As of December 31, 2017, the cost of fully amortized intangible assets that are still used in
operations amounted to Rp3,847 billion.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
12. TRADE PAYABLES
2017
2016
Related parties
Purchases of equipment, materials and services
Payables to other telecommunication providers
Sub-total
Third parties
Purchases of equipment, materials and services
Radio frequency usage charges, concession fees and
Universal Service Obligation (“USO”) charges
Payables to other telecommunication providers
Sub-total
Total
Trade payables by currency are as follows:
574
322
896
11,662
1,561
1,455
14,678
15,574
Rupiah
U.S. dollar
Others
Total
Refer to Note 31 for details of related parties transactions.
13. ACCRUED EXPENSES
Operation, maintenance and telecommunication services
General, administrative and marketing expenses
Salaries and benefits
Interest and bank charges
Total
Refer to Note 31 for details of related parties transactions.
14. UNEARNED INCOME
a. Current portion of unearned income
Prepaid pulse reload vouchers
Telecommunication tower leases
Other telecommunications services
Others
Total
b. Non-current portion of unearned income
Indefeasible Right of Use
Other telecommunications services
Total
54
2017
2016
13,344
2,167
63
15,574
2017
2016
7,093
2,684
2,664
189
12,630
2017
2016
4,800
300
148
179
5,427
2017
2016
205
319
524
1,223
324
1,547
9,434
1,256
1,281
11,971
13,518
11,270
2,196
52
13,518
6,165
1,914
2,993
211
11,283
4,959
199
189
216
5,563
169
256
425
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
15. SHORT-TERM BANK LOANS AND CURRENT MATURITIES OF LONG-TERM BORROWINGS
a. Short-term bank loans
Lenders
Related parties
BNI
Bank Mandiri
Sub-total
Third parties
UOB
PT Bank DBS Indonesia
Bank CIMB Niaga
SCB
PT Bank Sumitomo Mitsui Indonesia
(“Sumitomo”)
Others
Sub-total
Total
2017
Outstanding
2016
Outstanding
Currency
Original currency
(in millions)
Rupiah
equivalent
Original currency
(in millions)
Rupiah
equivalent
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp
-
-
-
-
-
-
-
-
-
1,252
45
1,297
400
408
83
-
80
21
992
2,289
-
-
-
-
-
-
-
-
-
143
-
143
269
95
143
90
-
171
768
911
Other significant information relating to short-term bank loans as of December 31, 2017 is as
follows:
Borrower
Currency
Total
facility
(in billions)
Maturity date
Interest
payment
period
Interest rate
per annum
Security
BNI
November 28, 2012h,c
Metra Rp
150 November 28, 2018 Monthly
March 13, 2013g
Sigma Rp
2,100
January 9, 2018 Monthly
January 10, 2014f
Sigma Rp
125
January 9, 2018 Monthly
May 15, 2017
Infomedia Rp
June 7, 2017
ISH Rp
250
150
May 14, 2018 Monthly
June 6, 2018 Monthly
June 19, 2017
Telkom Infra Rp
161
August 31, 2018 Monthly
September 28, 2017 Telkom Infra Rp
70
June 30, 2018 Monthly
November 8, 2017
GSD Rp
50
November 8, 2018 Monthly
December 19, 2017 Telkom Infra Rp
80 December 31, 2018 Monthly
None
1 month
JIBOR+2.95%
1 month
JIBOR+3.00%
1 month
JIBOR+3.00%
Trade receivables
(Note 5) and
property and
equipment
(Note 9)
Trade receivables
(Note 5) and
property and
equipment
(Note 9)
Trade receivables
(Note 5)
Trade receivables
(Note 5)
Trade receivables
(Note 5)
Trade receivables
(Note 5)
9.00% Trade receivables
(Note 5)
Trade receivables
(Note 5)
1 month
JIBOR+3.00%
1 month
JIBOR+3.00%
1 month
JIBOR+3.35%
1 month
JIBOR+3.35%
1 month
JIBOR+3.35%
GSD Rp
55 September 11, 2018 Monthly
Finnet Rp
400 December 19, 2018 Monthly
9.00% Trade receivables
(Note 5)
1 month
JIBOR+2.25%
None
Bank Mandiri
October 11, 2017
UOB
December 20, 2016d
PT Bank DBS
Indonesia
April 12, 2016e,b
Sigma US$
March 27, 2017
Metra Rp
0.02
250
July 31, 2018
Semi-
annually
July 31, 2018 Monthly
3.25% (US$) /
10.75% (Rp)
1 month
JIBOR+2.15%
Trade receivables
(Note 5)
None
Bank CIMB Niaga
April 28, 2013a,c
GSD Rp
85
January 1, 2018
Monthly
Sumitomo
December 21, 2017
Metra Rp
300
January 27, 2018 Monthly
10.90%-
11.50%
Trade receivables
(Note 5) and
property and
equipment
(Note 9)
1 month
JIBOR+1.50%
None
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
15. SHORT-TERM BANK LOANS AND CURRENT MATURITIES OF LONG-TERM BORROWINGS
a. Short-term bank loans (continued)
The credit facilities were obtained by the Company’s subsidiaries for working capital purposes.
a Based on the latest amendment dated November 11, 2014.
b Facility in USD. Withdrawal can be executed in USD and IDR.
c Unsettled loan will be automatically extended.
d Based on the latest amendment dated June 2, 2017.
e Based on the latest amendment dated October 25, 2017.
f Based on the latest amendment dated November 29, 2017.
g Based on the latest amendment dated December 21, 2017.
h Based on the latest amendment dated March 21, 2017.
b. Current maturities of long-term borrowings
Two-step loans
Bonds and notes
Bank loans
Other borrowings
Obligations under finance leases
Total
Notes
16a
16b
16c
16d
9c.xiii
2017
2016
206
-
4,110
99
794
5,209
16. LONG-TERM LOANS AND OTHER BORROWINGS
Two-step loans
Bonds and notes
Bank loans
Other borrowings
Obligations under finance leases
Total
Notes
16a
16b
16c
16d
9c.xiii
2017
2016
892
8,982
13,894
1,196
3,010
27,974
Scheduled principal payments as of December 31, 2017 are as follows:
225
1
3,637
-
658
4,521
1,067
9,322
11,929
697
3,352
26,367
Notes
16a
16b
16c
16d
9c.xiii
Two-step loans
Bonds and notes
Bank loans
Other borrowings
Obligations under
finance leases
Total
a. Two-step loans
Total
2019
2020
Year
2021
2022
892
8,982
13,894
1,196
3,010
27,974
187
-
4,138
199
744
5,268
187
1,995
3,350
199
699
6,430
171
-
2,222
199
668
3,260
Thereafter
212
4,791
2,441
400
135
2,196
1,743
199
548
4,821
351
8,195
Two-step loans are unsecured loans obtained by the Government from overseas banks which are
then re-loaned to the Company. Loans obtained up to July 1994 are payable in rupiah based on
the exchange rate at the date of drawdown. Loans obtained after July 1994 are payable in their
original currencies and any resulting foreign exchange gain or loss is borne by the Company.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
16. LONG-TERM LOANS AND OTHER BORROWINGS (continued)
a. Two-step loans (continued)
Lenders
Overseas banks
Total
Current maturities (Note 15b)
Long-term portion
Lenders
Overseas banks
2017
Outstanding
2016
Outstanding
Currency
Original currency
(in millions)
Yen
US$
Rp
5,375
17
-
Rupiah
equivalent
648
237
213
1,098
(206 )
892
Original currency
(in millions)
Rupiah
equivalent
6,143
22
-
707
295
290
1,292
(225
))))
1,067
Principal payment
Currency
Yen
US$
Rp
schedule
Semi-annually
Semi-annually
Semi-annually
Interest payment
period
Semi-annually
Semi-annually
Semi-annually
Interest rate per
annum
2.95%
3.85%
8.25%
The loans were intended for the development of telecommunications infrastructure and supporting
telecommunications equipment. The loans will be settled semi-annually and due on various dates
through 2024.
The Company had used all facilities under the two-step loans program since 2008.
Under the loan covenants, 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
originating from Asian Development Bank (“ADB”).
b. 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, 2017, the Company has complied with the above-mentioned ratios.
b. Bonds and notes
Bonds and notes
Currency
Original currency
(in millions)
Rupiah
equivalent
Original currency
(in millions)
Rupiah
equivalent
2017
Outstanding
2016
Outstanding
Bonds
2010
Series B
2015
Series A
Series B
Series C
Series D
Medium Term Notes (“MTN”)
GSD
Series A
Series B
Promissory notes
PT ZTE Indonesia (“ZTE”)
Total
Unamortized debt issuance cost
Total
Current maturities (Note 15b)
Long-term portion
Rp
Rp
Rp
Rp
Rp
Rp
Rp
US$
57
-
-
-
-
-
-
-
-
1,995
2,200
2,100
1,200
1,500
-
-
-
8,995
(13 )
8,982
-
8,982
-
-
-
-
-
-
-
0
1,995
2,200
2,100
1,200
1,500
220
120
1
9,336
(13 )
9,323
(1 )
9,322
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
16. LONG-TERM LOANS AND OTHER BORROWINGS (continued)
b. Bonds and notes (continued)
i. Bonds
2010
Bonds
Principal
Series B
1,995
Issuer
The Company
Listed
on
IDX
Issuance
date
Maturity date
June 25, 2010 July 6, 2020
Interest
payment period
Quarterly
Interest rate
per annum
10.20%
The bonds are not secured by specific security but by all of the Company’s assets, movable or
non-movable, either existing or in the future (Note 9c.ix). The underwriters of the bonds are PT
Bahana Securities (“Bahana”), PT Danareksa Sekuritas, and PT Mandiri Sekuritas and the
trustee is Bank CIMB Niaga.
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, were used to finance
capital expenditures which consisted of wave broadband (bandwidth, softswitching, datacom,
information technology and others) and infrastructure (backbone, metro network, regional metro
junction, internet protocol, and satellite system) and to optimize legacy and supporting facilities
(fixed wireline and wireless).
As of December 31, 2017, 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 at least 125%.
As of December 31, 2017 the Company has complied with the above-mentioned ratios.
2015
Bonds
Principal
Issuer
Series A
Series B
Series C
Series D
Total
2,200 The Company
2,100 The Company
1,200 The Company
1,500 The Company
7,000
Listed
on
IDX
IDX
IDX
IDX
Issuance
date
Maturity date
June 23, 2015 June 23, 2022
June 23, 2015 June 23, 2025
June 23, 2015 June 23, 2030
June 23, 2015 June 23, 2045
Interest
payment period
Quarterly
Quarterly
Quarterly
Quarterly
Interest rate
per annum
9.93%
10.25%
10.60%
11.00%
The bonds are secured by all of the Company’s assets, movable or non-movable, either existing
or in the future (Note 9c.ix). The underwriters of the bonds are Bahana, PT Danareksa
Sekuritas, PT Mandiri Sekuritas, and PT Trimegah Sekuritas and the trustee is Bank Permata.
The Company received the proceeds from the issuance of bonds on June 23, 2015.
The funds received from the public offering of bonds net of issuance costs, were used to finance
capital expenditures which consisted of wave broadband, backbone, metro network, regional
metro junction, information technology application and support, and merger and acquisition of
some domestic and international entities.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
16. LONG-TERM LOANS AND OTHER BORROWINGS (continued)
b. Bonds and notes (continued)
i. Bonds (continued)
As of December 31, 2017, the rating of the bonds issued by 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 4:1.
3. Debt service coverage is at least 125%.
As of December 31, 2017, the Company has complied with the above-mentioned ratios.
ii. MTN
GSD
Notes
Currency
Principal
Series A
Series B
Total
Rp
Rp
220
120
340
Issuance date
November 14, 2014
March 6, 2015
Interest
payment
period
Maturity date
November 14, 2019 Semi-annually
March 6, 2020 Semi-annually
Interest rate
per annum
11%
11%
Based on Agreement of Issuance and Appointment of Monitoring and Insurance Agents of
Medium Term Notes (MTN) PT Graha Sarana Duta Year 2014 dated November 13, 2014 as
covered by notarial deed No. 30 of Arry Supratno, S.H., GSD will issue MTN with the principle
amount up to Rp500 billion in series.
On June 12, 2017, GSD has been fully paid for MTN series A amounted to Rp220 billion and
series B amounted to Rp120 billion to PT Mandiri Sekuritas as an Arranger.
iii. Promissory Notes
Supplier
Currency
PT Huaweia
ZTEb,c
US$
US$
Principal*
(in billions) Issuance date
April 30, 2013
0.2
Principal payment
schedule
-
Interest
payment period
Semi-annually
0.1 August 20, 2009
February 4, 2017
Semi-annually
Interest rate
per annum
6 months
LIBOR+1.5%
6 months
LIBOR+1.5%s
*In original currency
aHas been fully paid on July 30, 2016
bHas been fully paid on February 4, 2017
cBased on the latest amendment on August 15, 2011
Based on Agreement of Frame Supply and Deferred Payment Arrangement between the
Company, 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.
59
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
16. LONG-TERM LOANS AND OTHER BORROWINGS (continued)
c. Bank loans
Lenders
Related parties
BNI
BRI
Bank Mandiri
Sub-total
Third parties
Syndication of banks
The Bank of Tokyo-Mitsubishi-UFJ, Ltd.
Bank CIMB Niaga
PT Bank Central Asia Tbk
Sumitomo
United Overseas Bank Limited
(“UOB Singapore”)
UOB
ANZ
PT Bank ICBC Indonesia (“ICBC”)
PT Bank DBS Indonesia
Japan Bank for International
Cooperation (“JBIC”)
Exim Bank of Malaysia Berhad
Others
Sub-total
Total
Unamortized debt issuance cost
Current maturities (Note 15b)
Long-term portion
2017
Outstanding
2016
Outstanding
Currency
Original
currency
(in millions)
Rupiah
equivalent
Original
currency
(in millions)
Rupiah
equivalent
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp
US$
Rp
Rp
Rp
Rp
US$
MYR
Rp
MYR
-
-
-
-
-
-
-
-
49
-
-
-
-
9
37
-
15
4,603
2,166
1,126
7,895
2,250
1,944
1,726
1,100
804
664
500
440
249
144
128
124
26
50
10,149
18,044
))))
(40
18,004
))))
(4,110
13,894
-
-
-
-
-
-
-
-
36
-
-
-
-
16
-
-
-
3,222
1,871
1,232
fg
6,325
3,650
2,361
1,162
-
647
484
500
240
-
-
211
-
37
-
9,292
15,617
(51 )
15,566
(3,637 )
11,929
Other significant information relating to bank loans as of December 31, 2017 is as follows:
Borrower
Currency
Total
facility*
(in billions)
Current
period
payment
(in billions)
Principal
payment
schedule
Interest
payment
period
Interest rate
per annum
Security
BNI
March 13, 2013h
Sigma
Rp
2,100
116
Monthly
(2016-2022)
Monthly
1 month
JIBOR+3.00%
375 Semi-annually
(2015-2018)
Monthly
(2016-2022)
41
Quarterly
Monthly
3 months
JIBOR+2.0%
1 month
JIBOR+3.00%
186
Quarterly
(2015-2019)
15 Semi-annually
(2015-2018)
Monthly
Monthly
1 month
JIBOR+3.35%
1 month
JIBOR+2.95%
Trade receivables
(Note 5) and
property and
equipment
(Note 9)
None
Trade receivables
(Note 5) and
property and
equipment
(Note 9)
Trade receivables
(Note 5)
Trade receivables
(Note 5) and
property and
equipment
(Note 9)
November 20, 2013j The Company
Rp
January 10, 2014h
Sigma
Rp
November 3, 2014c
June 10, 2015
Telkom
Infratel
Metra
Rp
Rp
1,500
247
1,050
44
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
16. LONG-TERM LOANS AND OTHER BORROWINGS (continued)
c. Bank loans (continued)
Other significant information relating to bank loans as of December 31, 2017 is as follows:
Borrower
Currency
Total
facility*
(in billions)
Current
period
payment
(in billions)
Principal
payment
schedule
Interest
payment
period
Interest rate
per annum
Security
BNI (continued)
October 12, 2015
Telkom Akses
Rp
1,400
350 Semi-annually
(2016-2019)
Quarterly
March 24, 2017e&g
Dayamitra
Rp
1,005
March 24, 2017e
GSD
Rp
March 24, 2017e
The Company
Rp
November 13, 2017 Telkom Akses
Rp
150
650
400
-
- Semi-annually
(2019-2024)
Quarterly
(2019-2024)
- Semi-annually
(2019-2024)
Monthly
(2018-2021)
-
Quarterly
Quarterly
Quarterly
Monthly
BRI
October 30, 2013
GSD Rp
70
10
Monthly
(2014-2021)
Monthly
October 30, 2013
GSD Rp
34
5
Monthly
(2014-2021)
Monthly
3 months
JIBOR+2.90%
3 months
JIBOR+1.85%
3 months
JIBOR+1.85%
3 months
JIBOR+1.85%
3 months
JIBOR+2.50%
Trade receivables
(Note 5),
inventories
(Note 6), and
property and
equipment
(Note 9)
None
None
None
Trade receivables
(Note 5),
inventories
(Note 6), and
property and
equipment
(Note 9)
10.00% Trade receivables
(Note 5), property
and equipment
(Note 9) and lease
agreement
10.00% Trade receivables
(Note 5), property
and equipment
(Note 9) and lease
agreement
None
375 Semi-annually
(2015-2018)
75 Semi-annualy
(2017-2020)
- Semi-annualy
(2019-2024)
- Semi-annualy
(2019-2024)
375 Semi-annually
(2015-2018)
375 Semi-annually
(2015-2018)
Quarterly
(2017-2019)
9
- Semi-annually
(2019-2024)
- Semi-annualy
(2019-2024)
Quarterly
Quarterly
3 months
JIBOR+2.65%
3 months
JIBOR+2.70%
Quarterly
Quarterly
Quarterly
3 months
JIBOR+1.85%
3 months
JIBOR+1.85%
3 months
JIBOR+2.65%
Quarterly
3 months
JIBOR+2.65%
Monthly
Quarterly
Quarterly
3 months
JIBOR+1.85%
3 months
JIBOR+1.85%
483 Semi-annually
(2016-2022)
17 Semi-annually
(2016-2022)
Quarterly
Quarterly
3 months
JIBOR+2.00%
3 months
JIBOR+2.00%
Property and
equipment
(Note 9)
None
None
None
None
None
All assets
All assets
9.50% Trade receivables
(Note 5) and
property and
equipment
(Note 9)
None
November 20, 2013 The Company Rp
December 18, 2015
Dayamitra Rp
March 24, 2017e
The Company Rp
March 24, 2017e
Dayamitra Rp
1,500
800
500
500
November 20, 2013 The Company Rp
1,500
Bank Mandiri
November 20, 2013 The Company Rp
1,500
September 27, 2016
Patrakom Rp
70
March 24, 2017e
Dayamitra Rp
March 24, 2017e
TII Rp
500
195
Syndication of banks
March 13, 2015
The Company
Rp
2,900
(BNI dan BCA)d,k
March 13, 2015
(BNI dan BCA)d,k
GSD
Rp
100
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
16. LONG-TERM LOANS AND OTHER BORROWINGS (continued)
c. Bank loans (continued)
Borrower
Currency
Total
facility*
(in billions)
Current
period
payment
(in billions)
Principal
payment
schedule
Interest
payment
period
Interest rate
per annum
Security
The Bank of Tokyo -
Mitsubishi UFJ, Ltd.
(continued)
October 9, 2014
Dayamitra
Rp
600
160
Quarterly
(2016-2019)
Quarterly
March 13, 2015d
Metra
Rp
March 13, 2015d
Infomedia
Rp
March 13, 2015d
Dayamitra
Rp
November 2, 2015
Dayamitra
Rp
400
250
100
400
68
28
17
80
Quartely
(2016-2020)
Quartely
(2016-2020)
Quarterly
(2016-2020)
Quarterly
(2017-2020)
Quartely
Quartely
Quarterly
Quarterly
3 months
JIBOR+2.40%
3 months
JIBOR+1.50%
3 months
JIBOR+1.50%
3 months
JIBOR+2.15%
3 months
JIBOR+2.60%
October 3, 2016
Dayamitra
Rp
500
March 30, 2017f
Dayamitra Rp
97.5
March 30, 2017f
GSD Rp
202.5
March 30, 2017f
Metra Rp
100
-
Semi-
annually
(2019-2024)
Quarterly
3 months
JIBOR+2.25%
- Quarterly
(2018-2024)
- Quarterly
(2018-2022)
- Quarterly
(2018-2022)
Quarterly
Quarterly
Quarterly
3 months
JIBOR+1.50%
3 months
JIBOR+1.50%
3 months
JIBOR+1.50%
Bank CIMB Niaga
March 31, 2011
GSD Rp
24
3
Monthly
(2011-2020)
Monthly
March 31, 2011
GSD Rp
13
September 9, 2011
GSD Rp
41
2
Monthly
(2011-2019)
Monthly
4
Monthly
(2011-2021)
Monthly
September 20, 2012 i
TLT Rp
1,200
13
Monthly
(2015-2030)
Quarterly
3 months
JIBOR+3.45%
September 20, 2012
TLT Rp
118
1
Monthly
(2015-2030)
Monthly
9.00%
September 20, 2012 i
TLT Rp
March 30, 2017
GSD Rp
March 30, 2017f
Metra Rp
100
200
295
BCA
March 30, 2017f
Metra Rp
170
May 5, 2017a
Telkomsel Rp
3,000
Sumitomo
March 13, 2015 d
Metra Rp
March 13, 2015 d
Infomedia Rp
March 13, 2015d
Dayamitra Rp
400
250
100
62
1
-
-
Monthly
(2017-2030)
Monthly
(2018-2024)
Monthly
(2018-2022)
-
-
Quartely
(2018-2022)
Monthly
(2017-2019)
68
28
17
Quartely
(2016-2020)
Quartely
(2016-2020)
Quartely
(2016-2020)
Monthly
Quartely
Quartely
3 months
JIBOR+3.45%
3 months
JIBOR+1.50%
3 months
JIBOR+1.50%
Quartely
Quartely
3 months
JIBOR+1.50%
3 months
JIBOR+1.00%
Quarterly
Quarterly
Quarterly
3 months
JIBOR+2.15%
3 months
JIBOR+2.15%
3 months
JIBOR+2.15%
Trade receivables
(Note 5) and
property and
equipment
(Note 9)
None
None
None
Trade receivables
(Note 5) and
property and
equipment (Note
9)
Property and
equipment
(Note 9) and lease
agreement
None
None
None
9.75%
9.75%
9.75%
Property and
equipment
(Note 9) and lease
agreement
Property and
equipment
(Note 9) and lease
agreement
Property and
equipment
(Note 9) and lease
agreement
Property and
equipment
(Note 9)
Property and
equipment
(Note9)
Property and
equipment (Note9)
None
None
None
None
None
None
None
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
16. LONG-TERM LOANS AND OTHER BORROWINGS (continued)
d. Bank loans (continued)
Borrower
Currency
Total
facility*
(in billions)
Current
period
payment
(in billions)
Principal
payment
schedule
Interest
payment
period
Interest rate
per annum
Security
Sumitomo
(continued)
March 30, 2017f
Dayamitra Rp
97.5
March 30, 2017f
GSD Rp
202.5
March 30, 2017f
Metra Rp
100
UOB Singapore
September 9, 2016
TII US$
0.06
UOB
September 22, 2016
Dayamitra Rp
500
ANZ
March 13, 2015d
GSD Rp
249.5
March 13, 2017d
PINS Rp
500
-
-
-
Quartely
(2018-2022)
Quartely
(2018-2022)
Quartely
(2018-2022)
-
Semi-
annually
(2019-2022)
-
Semi-
annually
(2018-2024)
Quarterly
Quarterly
Quarterly
3 months
JIBOR+1.50%
3 months
JIBOR+1.50%
3 months
JIBOR+1.50%
Quarterly
3 months
LIBOR+1.50%
Quarterly
3 months
JIBOR+2.20%
-
-
June 13,
2020
May 31,
2022
Quarterly
Quarterly
3 months
JIBOR+2.00%
3 months
JIBOR+2.00%
ICBC
April 5, 2017
GSD Rp
272
23
Quartely
(2019-2024)
Quarterly
3 months
JIBOR+2.36%
None
None
None
None
Property and
equipment
(Note 9)
None
None
Trade receivables
(Note 5) and
property and
equipment
(Note 9)
DBS
December 23, 2016
Nutech Rp
6
1
Monthly
(2017-2021)
Monthly
13.00% Trade receivables
(Note 5) and
property and
equipment
(Note 9)
None
3 months
JIBOR+1.50%
Quarterly
7.50%
None
March 30, 2017f
Dayamitra Rp
March 30, 2017f
Patrakom Rp
100
130
-
-
Quartely
(2018-2022)
Quartely
(2018-2022)
Quarterly
JBIC
March 28, 2013b
Exim Bank of
Malaysia Berhad
March 23, 2016
The Company US$
0.03
0.006
Semi-
annually
(2014-2019)
Semi-
annually
2.18% and
6 months
LIBOR+1.20%
None
TSGN MYR
0.06
0.01
Monthly
(2016-2020)
Monthly
ECOF+1.89% Trade receivables
(Note 5)
As stated in the agreements, the Group is required to comply with all covenants or restrictions
such as dividend distribution, obtaining new
ratios.
As of December 31, 2017, the Group has complied with all covenants or restrictions, except for
certain loans. As of December 31, 2017, the Group obtained waiver from lenders to not demand
the loan payment as consequence of the breach of covenants.
loans, and maintaining
financial
The credit facilities were obtained by the Group for working capital purposes.
* In original currency
a 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 covenants and negative covenants 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, 2017 Telkomsel
has complied with the above covenants.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
16. LONG-TERM LOANS AND OTHER BORROWINGS (continued)
c. Bank loans (continued)
b 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 facilities A and B amounting to US$18.8 million
and US$12.5 million, respectively.
c Based on the latest amendment on May 30, 2017.
d On March 13, 2015, the Company, GSD, Metra and Infomedia entered into several credit facilities agreements with
PT Bank Sumitomo Mitsui Indonesia, The Bank of Tokyo - Mitsubishi UFJ, Ltd., ANZ and syndication of banks (BCA and
BNI) amounting to Rp750 billion, Rp750 billion, Rp500 billion, and Rp3,000 billion, respectively. As of December 31, 2017
the unused facilities for PT Bank Sumitomo Mitsui Indonesia, The Bank of Tokyo - Mitsubishi UFJ, Ltd. and ANZ
amounted to Rp82.5 billion, Rp82.5 billion dan Rp60 billion, respectively.
e On March, 24, 2017, the Company, Dayamitra, Sigma, GSD and Telin entered several credit agreements with BRI, BNI,
and Bank Mandiri amounting to Rp1,000 billion, Rp1,500 billion and Rp1,500 billion, respectively. As of December
31,2017, the unused facilities for BNI and Bank Mandiri amounted to Rp200 billion and Rp805 billion, respectively.
f On March 30, 2017, The Company, GSD, Metra, Dayamitra, PINS, and Patrakom entered into several credit agreements
with The Bank of Tokyo - Mitsubishi UFJ Ltd, PT Bank Sumitomo Mitsui Indonesia, PT Bank DBS Indonesia, Bank CIMB
Niaga, and BCA amounting to Rp800 billion, Rp800 billion, Rp900 billion, Rp495 billion and Rp850 billion, respectively.
As of December 31, 2017, the unused facilities for The Bank of Tokyo - Mitsubishi UFJ Ltd, PT Bank Sumitomo Mitsui
Indonesia, PT Bank DBS Indonesia, Bank CIMB Niaga, and BCA amounted to Rp529 billion, Rp529 billion, Rp759 billion,
Rp195 billion and Rp750 billion, respectively.
g Based on the latest amendment on September 26, 2017.
h Based on the latest amendment on December 21, 2017.
i Based on the latest amendment on October 20, 2016.
j Based on the latest amendment on April 10, 2017
k Based on the latest amendment on May 9, 2017.
d. Other borrowing
Borrower Currency
PT Sarana Multi
Infrastruktur
October 12, 2016
Dayamitra
Rp
March 29, 2017
Dayamitra
Rp
Total facility
(in billions)
Current period
payment
(in billions)
Principal
payment
schedule
Interest
payment
period
Interest rate
per annum
Security
700
600
- Semi-annually
(2018-2024)
Quarterly
3 months
JIBOR+2.20%
- Semi-annually
(2018-2024)
Quarterly
3 months
JIBOR+2.20%
Property and
equipment
(Note 9)
Property and
equipment
(Note 9)
Under the agreement, Dayamitra is required to comply with all covenants or restrictions, including
maintaining financial ratios as follows :
1. Debt to equity ratio should not exceed 5:1.
2. Net debt to EBITDA ratio should not exceed 4:1.
3. Minimal debt service coverage at least 100%.
As of December 31, 2017, Dayamitra has complied with the above-mentioned ratios.
64
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
17. NON-CONTROLLING INTERESTS
The details of non-controlling interests are as follows:
Non-controlling interests in net assets of subsidiaries:
Telkomsel
GSD
Metra
TII
Total
2017
2016
18,944
186
115
172
19,417
Non-controlling interests in net income (loss)
2017
2016
of subsidiaries:
Telkomsel
Metra
TII
GSD
Total
Material partly-owned subsidiary
10,637
(82 )
6
(5 )
10,556
20,778
141
208
33
21,160
9,867
(39 )
(3 )
(5 )
9,820
As of December 31, 2017 and 2016, the non-controlling interest holds 35% ownership interest in
Telkomsel which is considered material to the company (Note 1d).
The summarized financial information of Telkomsel below is provided based on amounts before
elimination of inter-company balances and transactions.
Summarized statements of financial position
2017
2016
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Total equity
Attributable to:
Equity holders of parent company
Non-controlling interest
21,098
64,650
(23,031 )
(8,587 )
54,130
35,186
18,944
Summarized statements of profit or loss and other comprehensive income
2017
2016
Revenues
Operating expenses
Other income - net
Profit before income tax
Income tax expense - net
Profit for the year from continuing operations
Other comprehensive income - net
Net comprehensive income for the year
Profit for the year attributable to non-controlling interest
Dividend paid to non-controlling interest
93,217
(53,183 )
380
40,414
(10,018 )
30,396
(392 )
30,004
10,637
12,334
65
28,818
60,963
(21,891 )
(8,520 )
59,370
38,592
20,778
86,725
(49,751 )
483
37,457
(9,263 )
28,194
(222 )
27,972
9,867
7,036
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
17. NON-CONTROLLING INTERESTS (continued)
Summarized statements of cash flows
Operating activities
Investing activities
Financing activities
Net increase (decrease) in cash and cash
equivalents
18. CAPITAL STOCK
Description
Series A Dwiwarna share
Government
Series B shares
Government
The Bank of New York Mellon Corporation*
Commissioners (Note 1b):
Hendri Saparini
Hadiyanto
Rinaldi Firmansyah
Directors (Note 1b):
Alex Janangkih Sinaga
Herdy Rosadi Harman
Abdus Somad Arief
Dian Rachmawan
Public (individually less than 5%)
Total
Treasury stock (Note 20)
Total
Description
Series A Dwiwarna share
Government
Series B shares
Government
The Bank of New York Mellon Corporation*
Commissioners (Note 1b):
Hendri Saparini
Dolfie Othniel Fredric Palit
Hadiyanto
Directors (Note 1b):
Alex Janangkih Sinaga
Indra Utoyo
Honesti Basyir
Herdy Rosadi Harman
Abdus Somad Arief
Dian Rachmawan
Public (individually less than 5%)
Total
Treasury stock (Note 20)
Total
2017
2016
39,564
(13,984 )
(34,720 )
(9,140 )
42,827
(12,794 )
(24,132 )
5,901
Number of shares
2017
Percentage of
ownership
Total paid-in
capital
1
51,602,353,560
6,078,374,280
414,157
875,297
147,100
920,349
828,012
828,314
888,854
41,376,586,676
99,062,216,600
1,737,779,800
100,799,996,400
0
52.09
6.14
0
0
0
0
0
0
0
41.77
100.00
0
100.00
0
2,580
304
0
0
0
0
0
0
0
2,069
4,953
87
5,040
Number of shares
2016
Percentage of
ownership
Total paid-in
capital
1
51,602,353,559
7,000,589,980
414,157
372,741
875,297
920,349
1,972,644
1,945,644
828,012
828,314
888,854
40,450,227,048
99,062,216,600
1,737,779,800
100,799,996,400
0
52.09
7.07
0
0
0
0
0
0
0
0
0
40.84
100.00
0
100.00
0
2,580
350
0
0
0
0
0
0
0
0
0
2,023
4,953
87
5,040
* The Bank of New York Mellon Corporation serves as the Depositary of the registered ADS holders for the Company’s ADSs.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
18. CAPITAL STOCK (continued)
The Company issued only 1 Series A Dwiwarna share which is held by the Government and can not
be transferred to any party, and has a veto in the General Meeting of Stockholders of the Company
with respect to election and removal of the Boards of Commissioners and Directors, issuance of
new shares, and amendments of the Company’s Articles of Association.
19. 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 215,000,000 shares
under the treasury stock plan phase II (Note 20)
Excess of value over cost of selling 211,290,500 shares
under the treasury stock plan phase I (Note 20)
Difference in value arising from restructuring transactions
between entities under common control (Note 20)
Excess of value over cost of treasury stock transferred to
employee stock ownership program (Note 20)
Excess of value over cost of selling 22,363,000 shares
under the treasury stock plan phase III (Note 20)
Excess of value over cost of selling 864,000,000 shares
under the treasury stock plan phase IV (Note 20)
Capitalization into 746,666,640 Series B shares in 1999
Net
2017
2016
1,446
1,446
576
544
478
228
36
1,996
(373 )
4,931
576
544
478
228
36
1,996
(373 )
4,931
Difference in value arising from restructuring 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
the development of
telecommunication infrastructure. As of December 31, 2017 and 2016, the accumulated development
of the related infrastructure amounting to Rp537 billion, respectively.
this compensation
funds received
to use
from
the
for
20. TREASURY STOCK
Phase
I
II
III
-
IV
Basis
EGM
AGM
AGM
BAPEPAM - LK
AGM
Period
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
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
Maximum Purchase
Movements in treasury stock as a result of the repurchase of shares are as follows:
2017
2016
Beginning balance
Sale of treasury stock
Ending balance
Number of
shares
1,737,779,800
-
1,737,779,800
%
Rp
Number of
shares
%
Rp
1.72
-
1.72
2,541 2,601,779,800
(864,000,000 )
2,541 1,737,779,800
-
2.58
(0.86 )
1.72
3,804
(1,263 )
2,541
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
20. TREASURY STOCK (continued)
Pursuant to the AGM of Stockholders of the Company held on June 11, 2010, the stockholders
approved the change in the Company’s plan for treasury stock phases I, II, and III to become: (i) for
reissuance inside or outside stock exchange, (ii) for retirement of the stock by deducting from equity,
(iii) for equity stock conversion and (iv) for funding purposes.
Pursuant to the AGM of Stockholders of the Company held on May 19, 2011, the stockholders
approved to execute the repurchase plan for treasury stock phase IV.
In 2012, the Company bought back 237,270,500 shares (equivalent to 1,186,352,500 shares after
stock split) from the public (part of stock repurchase program phase IV) for Rp1,744 billion.
In the AGM 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 July 30, 2013, the Company resold 211,290,500 shares (equivalent to 1,056,452,500 shares after
stock split) of treasury stock phase I with fair value amounting to Rp2,368 billion (net of related costs
to sell the shares). The excess amounting to Rp544 billion in value of the treasury shares sold over
their acquisition cost was recorded as additional paid-in capital (Note 19).
On June 13, 2014, the Company resold 215,000,000 shares (equivalent to 1,075,000,000 shares after
stock split) of treasury stock phase II with fair value amounting to Rp2,541 billion (net of related costs
to sell the shares). The excess amounting to Rp576 billion in value of the treasury stock sold over their
acquisition cost was recorded as additional paid-in capital (Note 19).
On December 21, 2015, the Company resold 4,472,600 shares (equivalent to 22,363,000 shares after
stock split) of treasury stock phase III with fair value amounting to Rp68 billion (net of related costs to
sell the shares). The excess amounting to Rp36 billion in value of the treasury stock sold over their
acquisition cost was recorded as additional paid-in capital (Note 19).
On June 29, 2016, the Company resold 172,800,000 shares (equivalent to 864,000,000 shares after
stock split) of treasury stock phase IV with fair value of Rp3,259 billion (net of related costs to sell the
shares). The excess amounting to Rp1,996 billion in value of the treasury stock sold over their
acquisition cost was recorded as additional paid-in capital (Note 19).
21. OTHER EQUITY
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 equity components
Total
386
58
527
(637 )
53
387
386
38
503
(637 )
49
339
2017
2016
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
22. REVENUES
Telephone revenues
Cellular
Usage charges
Monthly subscription charges
Fixed lines
Monthly subscription charges
Usage charges
Call center
Others
Total telephone revenues
Interconnection revenues
Data, internet, and information technology service
revenues
Celullar internet and data
Internet, data communication and information
technology services
Short Messaging Services (“SMS”)
Pay TV
Others
Total data, internet, and information technology
service revenues
Network revenues
Other revenues
Sales of peripherals
Call center service
Telecommunication tower leases
Power supply
CPE and terminal
E-payment
E-health
Others
Total other revenues
Total revenues
2017
2016
37,176
70
37,246
3,260
3,032
290
83
6,665
43,911
5,175
37,961
15,085
13,192
1,944
353
68,535
1,873
2,292
970
796
560
536
505
470
2,633
8,762
38,238
259
38,497
3,311
3,847
290
94
7,542
46,039
4,151
28,308
13,073
15,980
1,546
64
58,971
1,444
1,490
678
733
29
192
424
415
1,767
5,728
128,256
116,333
The detail of net revenues received by the Group from agency relationships for the years ended
December 31, 2017 and 2016 are as follows:
Gross revenues
Compensation to value added service providers
Net revenues
Refer to Note 31 for details of related parties transactions.
69
2017
2016
39,111
(1,150 )
37,961
29,319
(1,011 )
28,308
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
23. PERSONNEL EXPENSES
The breakdown of personnel expenses is as follows:
Salaries and related benefits
Vacation pay, incentives and other benefits
Pension benefit cost (Note 29)
Net periodic post-employment health care
benefit cost (Note 29)
Long Service Awards (“LSA”) expense (Note 30)
Other employee benefit cost (Note 29)
Other post-employment benefit cost (Note 29)
Early retirement program
Others
Total
2017
2016
7,821
3,339
1,700
276
255
62
42
-
34
13,529
7,476
3,865
1,068
163
237
82
48
628
45
13,612
Refer to Note 31 for details of related parties transactions.
24. OPERATION, MAINTENANCE AND TELECOMMUNICATION SERVICE EXPENSES
The breakdown of operation, maintenance and telecommunication service expenses is as follows:
2017
2016
Operation and maintenance
Radio frequency usage charges (Note 34c.i)
Cost of IT services
Leased lines and CPE
Concession fees and USO charges
Cost of sales of handset (Note 6)
Electricity, gas and water
Cost of SIM cards and vouchers (Note 6)
Tower leases
Vehicles rental and supporting facilities
Insurance
Others
Total
19,929
4,276
2,648
2,607
2,249
1,544
1,037
914
472
301
294
332
36,603
Refer to Note 31 for details of related parties transactions.
25. GENERAL AND ADMINISTRATIVE EXPENSES
The breakdown of general and administrative expenses is as follows:
2017
2016
Provision for impairment of receivables (Note 5d)
General expenses
Training, education and recruitment
Professional fees
Travelling
Meeting
Social contribution
Collection expenses
Others
Total
Refer to Note 31 for details of related parties transactions.
70
1,494
1,449
531
498
475
241
197
135
240
5,260
17,047
3,687
1,563
2,578
2,217
1,481
960
624
322
367
256
161
31,263
743
1,626
399
594
436
207
134
152
319
4,610
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
26. TAXATION
a. Claims for tax refund
The Company
Corporate income tax
Value Added Tax (“VAT”)
Subsidiaries
Corporate income tax
VAT
Total claims for tax refund
Current portion
Non-current portion (Note 10)
b. Prepaid taxes
The Company
Income tax
2017
2016
610
1,338
174
1,871
3,993
(908 )
3,085
2017
2016
Article 19 - Revaluation of fixed assets (Note 26f)
Article 22 - Withholding tax on goods delivery and
imports
Article 23 - Withholding tax on services
VAT
Subsidiaries
Corporate income tax
Income tax
Article 23 - Withholding tax on services
VAT
Total prepaid taxes
Current portion
Non-current portion (Note 10)
-
1
44
629
1
17
2,008
2,700
(1,947 )
753
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 services
Article 25 - Installment of corporate income tax
Article 26 - Withholding tax on non-resident
income
VAT
VAT - Tax collector
2017
2016
26
81
3
29
1
1
372
513
71
473
335
66
1,146
2,020
(592 )
1,428
538
-
-
1,075
62
52
1,639
3,366
(2,138 )
1,228
29
141
2
42
-
136
297
647
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
26. TAXATION
c. Taxes payable (continued)
Subsidiaries
Income taxes
2017
2016
Article 4 (2) - Final tax
Article 21 - Individual income tax
Article 22 - Withholding tax on goods delivery and
imports
Article 23 - Withholding tax on services
Article 25 - Installment of corporate income tax
Article 26 - Withholding tax on non-resident income
Article 29 - Corporate income tax
VAT
Total Taxes Payable
85
129
3
115
37
303
763
842
2,277
2,790
d. The components of income tax expense (benefit) are as follows:
Current
The Company
Subsidiaries
Deferred
The Company
Subsidiaries
Net income tax expense
2017
2016
586
10,771
11,357
(1,603 )
204
(1,399 )
9,958
63
121
2
93
136
16
1,100
776
2,307
2,954
671
10,067
10,738
(844 )
(877 )
(1,721 )
9,017
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 statements of profit or loss and other comprehensive
income is as follows:
2017
2016
Profit before income tax
Less: income subject to final tax - net
Income tax expense 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 expense
Deffered tax assets that cannot be utilized - net
Deffered tax assets on fixed asset revaluation
for tax purpose
Others
Net income tax expense - net
72
42,659
(1,491 )
41,168
8,234
2,046
761
591
(6 )
(1,796 )
128
9,958
38,189
(1,684 )
36,505
7,301
1,904
491
345
56
(1,415 )
335
9,017
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
26. 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, 2017 and 2016 is as follows:
2017
2016
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
Net periodic pension and other post-retirement
benefits costs
Provision for personnel expenses
Valuation of fair value of put option and long-term
investment
Provision for onerous contracts
Depreciation and gain on sale of property and
equipment
Provision for impairment of assets
Deferred installation fee
Finance leases
Other provisions
Net temporary differences
Permanent differences:
Net periodic post-retirement health care benefit costs
Employee benefits
Donations
Gain on transfer business to under common
control entities
Trade receivables written-off
Equity in net income of associates and subsidiaries
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
73
42,659
21,445
64,104
(43,702 )
20,402
(462 )
19,940
1,030
985
188
-
-
(3,120 )
(1,012 )
(4 )
(3 )
(76 )
(2,012 )
276
264
194
86
-
(20,635 )
1,026
(18,789 )
(861 )
-
586
586
10,771
11,357
38,189
24,613
62,802
(40,166 )
22,636
(670 )
21,966
(43 )
513
560
172
(547 )
(1,880 )
(1,186 )
50
(337 )
(106 )
(2,804 )
163
302
162
-
590
(19,445 )
769
(17,459 )
1,703
340
331
671
10,067
10,738
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
26. TAXATION (continued)
d. The components of income tax expense (benefit) are as follows (continued):
Tax Law No. 36/2008 which is futher regulated in Government Regulation No. 81/2007 as
amended by Government Regulation No. 77/2013 and lastly by Government Regulation
No.56/2015 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 the purpose of calculating income tax expense
and liabilities for the financial reporting the years ended December 31, 2017 and 2016, the
Company has reduced the applicable tax rate by 5%.
The Company applied the tax rate of 20% for the years ended December 31, 2017 and 2016.
The subsidiaries applied the tax rate of 25% for the years ended December 31, 2017 and 2016.
The Company will submit the above corporate income tax computation in its income tax return
(“Surat Pemberitahuan Tahunan” or Annual Tax Return) for fiscal year 2017 that will be reported to
the tax office based on prevailing regulations. The amount of corporate income tax for the year
ended December 31, 2016 agreed with what was reported in the annual tax return.
e. Tax assessment
(i) The Company
On November 15, 2013, the Company received Tax Underpayment Assessment Letters
(“SKPKBs”) for VAT for the period January to September and November 2007 amounting to
Rp142 billion. On January 20, 2014, the Company filed its objection to the Tax Authorities, and
in December 2014, Tax Authorities issued a decision which rejected the objections. The
Company accepted the assessment on the underpayment of VAT amounting to Rp22 billion
(including penalty of Rp10 billion). The accepted portion was charged to the 2014 consolidated
statement of profit or loss and other comprehensive income. The portion of Interconnection
VAT amounting to Rp120 billion (including penalty of Rp39 billion) is recognized as claim for
tax refund. On March 12, 2015, the Company has filed an appeal to the Tax Court.
On August 1 and 2, 2017, the Tax Court issued a verdict regarding to VAT international
incoming call interconnection appeal process. The verdict stated that the international incoming
call interconnection is the taxable services and categorized as export service that subject to
0% tariff rate and granted all the Company’s appeal. In September 2017, the Company
received tax refund amounting to Rp115 billion and for remaining balance amounting to
Rp5 billion has been compensated to withholding tax article 21 tax collection letters.
On October 26 and November 23, 2017, the Company received a notification from Tax Court
that Tax Authorities filed a request for judicial review. On November 23 and December 21,
2017, the Company has sent an answer regarding contra memorandum for judicial review of
VAT international incoming call interconnection and as of the date approval and authorization
for the of issuance of these financial statements, the judicial review is still in process.
74
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
26. TAXATION (continued)
e. Tax assessment (continued)
(i) The Company (continued)
In November, 2014, the Company received SKPKBs from the Tax Authorities for fiscal year
2011. Based on the letters, the Company received VAT underpayment assessment for the tax
period January to December 2011 amounting to Rp182.5 billion (including penalty of
Rp60 billion) and corporate income tax underpayment amounting to Rp2.8 billion (including
penalty of Rp929 million). The accepted portion amounting to Rp4.7 billion (including penalty of
Rp2 billion) was charged to the 2014 consolidated financial statement of profit or loss and
other comprehensive income and the portion of VAT international incoming call interconnection
amounting to Rp178 billion (including penalty of Rp58 billion) is recognized as claim for tax
refund. On January 7, 2015, the Company filed an objection and on October 20, 2015, Tax
Authorities issued a rejection regarding this objection. On January 20, 2016, the Company filed
an appeal on the decision of its objection.
the Company’s appeal
On 4 and 5 April, 2017, the Tax Court issued verdict regarding this appeal. The verdict stated
that the international incoming call interconnection is the taxable services from outside the
Indonesia customs teritory and categorized as export service that subject to 0% tariff rate and
to
the
granted all
December 2007. Tax Court rejected the Company’s appeal for the tax period February to
August 2011 since the Company did not meet the administrative requirement. Regarding this
rejection, on June 19 and 21, 2017, the Company filed the request for judicial review. As of the
date of approval and authorization for the issuance of these consolidated financial statements,
the judicial review is still in process.
tax period January and September
for
On May 3, 2016, the Tax Authorities issued Field Tax Audit Notification Letter for tax period
January to December 2012. Based on the letters, the Company received underpayment
assessment of corporate income tax amounting to Rp991.6 billion (including penalty of
Rp321.6 billion), VAT underpayment amounting to Rp467 billion (including penalty of Rp153.5
billion), self-assessed offshore VAT underpayment amounting to Rp1.2 billion (including
penalty of Rp392 million), VAT underpayment on tax collected amounting to Rp57 billion
(including penalty of Rp18.5 billion), tax collection letter (“STP”) for VAT amounting to Rp37.5
billion, withholding tax article 21 underpayment amounting to Rp16.2 billion (including penalty
of Rp5.3 billion), final withholding tax article 21 underpayment amounting to Rp1.2 billion
(including penalty of Rp407 million), withholding tax article 23 underpayment amounting to
Rp63.5 billion (including penalty of Rp20.6 billion), withholding tax article 4(2) underpayment
amounting to Rp25 billion (including penalty of Rp8.1 billion) and withholding tax article 26
underpayment amounting to Rp197.6 billion (including penalty of Rp64 billion). The Company
has agreed to the recalculation of input tax credit on international incoming call interconnection
services amounting to Rp35 billion, corporate income tax amounting to Rp613 million
and withholding tax article 26 amounting to Rp311.5 million that have been charged
in the consolidated statement of profit or loss and other comprehensive income for fiscal
year 2016. The Company filed an objection regarding to the remaining assessments on
November 16, 2016.
On March 1, 2017 and May 9, 2017, the Company received the Decision Letter of the Director
General of Taxes for the underpayment of self-assessed offshore VAT amounting to
Rp1.8 million (including penalty of Rp0.6 million) and the underpayment of VAT on tax
collected amounting to Rp4.4 billion (including penalty of Rp1.4 billion). The Company decided
to accept the decision.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
26. TAXATION (continued)
e. Tax assessment (continued)
(i) The Company (continued)
On October 19, 2017, the Tax Authorities issued Objection Decision Letter regarding to
underpayment of withholding tax article 21 Rp20.7 billion (including penalty of Rp6.7 billion),
underpayment of final withholding tax article 21 amounting to Rp23.8 billion (including penalty
of Rp7.7 billion), underpayment of withholding tax article 23 amounting to Rp115.7 billion
(including penalty of Rp37.5 billion), underpayment of withholding tax article 4(2) amounting to
Rp25 billion (including penalty of Rp8.1 billion), underpayment of wihtholding tax article 26
amounting to Rp197.6 billion (including penalty of Rp64.1 billion) and underpayment of
corporate income tax amounting to Rp496.4 billion (including penalty of Rp161 billion). On
October 30 dan 31, 2017, the Tax Authorities issued Objection Decision Letter for VAT from
the tax period January to December 2012 with total of Rp429.3 billion (including penalty of
Rp141.2 billion). On January 17 and 26, 2018, the Company filed an appeal on the rejection of
its objection. As of the date of approval and authorization for the issuance of these
consolidated financial statements, the appeal is still in process.
On August 23, 2016, the Tax Authority issued Field Tax Audit Notification Letter for tax period
January to December 2015 regarding overpayment of corporate income tax amounting to
Rp414 billion. Based on audit result, on April 25, 2017, the Tax Authorities issued Tax
Overpayment Assessment Letter (“SKPLB”) for overpayment of corporate income tax
amounting to Rp147 billion, underpayment of VAT amounting to Rp13 billion (including penalty
of Rp4 billion), underpayment of VAT on tax collected amounting to Rp6 billion (including
penalty of Rp1.5 billion), underpayment of self-assessed offshore VAT amounting to
Rp55 billion (including penalty of Rp17 billion), including tax collection of VAT amounting to
Rp34 billion, VAT on tax collected amounting to Rp7 billion and self-assessed offshore VAT
amounting to Rp8 billion.
The Company accepted tax audit decision amounting to Rp17 billion for corporate income tax,
to transfer tax calculation on realisation compensation of Flexi migration amounting to Rp42
billion in Annual Tax Return of Corporate Income Tax Fiscal Year 2016, SKPKBs and Tax
Collection Letter of VAT amounting to Rp26 billion. The accepted portion was charged to the
consolidated financial statement of profit or loss and other comprehensive income.
On 24 July, 2017, the Company filed Objection Letter to the Tax Authorities for corporate
income tax amounting to Rp210.5 billion and self-assessed offshore VAT amounting to Rp55
billion. As of the date of approval and authorization for the issuance of these consolidated
financial statements, the objection is still in process.
On August 25, 2017, the Tax Authority issued Field Tax Audit Notification Letter for tax periods
January to December 2016 for all taxes. This audit is related to claim for tax refund of
overpayment corporate income tax fiscal year 2016. As of the date of approval and
authorization for the issuance of these consolidated financial statements, the audit is still in
process.
On September 11, 2017 and January 9, 2018, the Tax Authorities issued Field Tax Audit
Notification Letter for tax period December 2014 regarding claim for tax refund overpayment of
VAT correction for tax period November and December 2014 amounting to Rp129 billion and
Rp86.7 billion, respectively. As of the date of approval and authorization for the issuance of
these consolidated financial statements, the audit 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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
26. TAXATION (continued)
e. Tax assessment (continued)
(ii) Telkomsel
In December 2013, the Tax Court accepted Telkomsel’s appeal on the 2006 VAT and
withholding taxes totaling Rp116 billion. In February 2014, Telkomsel received the refund.
On July 3, 2015, in response to Telkomsel’s letter claiming for interest income related to
favorable 2006 VAT and withholding tax verdicts, the Tax Authorities informed Telkomsel that
the claim cannot be granted since the Tax Authorities filed a request for judicial review to the
Supreme Court (“SC”). On August 19, 2016, Telkomsel received a notification from the Tax
Court that the Tax Authorities filed a request for judicial review to SC for the VAT case
amounting to Rp108 billion. Telkomsel filed a contra memorandum for judicial review to the
SC on September 14, 2016. In April 2017, Tax Authority has granted Telkomsel’s claim on
interest income will be compensate against corporate income tax installment for the period of
April 2017. As of the date of approval and authorization for issuance of these consolidated
financial statements, the judicial review is still in process.
In 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 Rp8.4 billion). In May 2010, Telkomsel filed a contra memorandum for judicial review
to the SC. On March 2, 2017, the Company received the official verdict from the SC which
accept the Tax Authorities request. The penalty was paid in June 2017.
In May and June 2012, Telkomsel received the refund of the penalty on the 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 request for judicial review to the SC on the Tax
Court’s Verdict. On September 14, 2012, Telkomsel filed a contra memorandum for judicial
review to the SC. In July 2016, conservatively, Telkomsel recognized the tax penalty of
Rp15.7 billion. As of the date of approval and authorization for issuance of these consolidated
financial statements, the judicial review is still on process.
On May 24, 2012, Telkomsel filed an objection to the Tax Authorities for the 2010
underpayment of VAT of Rp290.6 billion (including penalty of Rp67 billion) and recorded it as
a claim for tax refund. On May 9, 2017, Telkomsel received the official verdict from the SC
which rejected Telkomsel’s request,
the underpayment on
July 10, 2017. On July 19, 2017, Telkomsel filed the second judicial review to contest against
the SC’s verdict. As of the date of approval and authorization for issuance of these financial
statements, the second judicial review is still in process.
therein Telkomsel paid
On February 15, 2016, Telkomsel filed an appeal to the Tax Authorities for the 2011
underpayment of corporate income tax of Rp250 billion (including penalty of Rp81.1 billion).
Subsequently, on March 17, 2016, Telkomsel also filed an appeal to the Tax Court for the
underpayment of VAT amounting to Rp1.2 billion (including penalty of Rp392 million).
On February 6, 2017, Telkomsel received the Tax Court’s verdict for VAT cases of
Rp1.2 billion in favor of Telkomsel. In March and June 2017 Telkomsel received the tax
refund. On March 2, 2017 Telkomsel received the Tax Court’s Verdict for the 2011
underpayment of corporate income tax which partially accepted Telkomsel’s appeal
amounting to Rp247.6 billion and on August 31, 2017, Telkomsel received the tax refund.
77
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
26. TAXATION (continued)
e. Tax assessment (continued)
(ii) Telkomsel (continued)
In July and October 2017, Telkomsel received notifications that the Tax Authorities had filed
judicial reviews to the SC for cases relating to corporate income tax and VAT amounting to
Rp62 billion and Rp1.2 billion respectively. Telkomsel submitted its contra memorandums for
judicial review in August and November 2017. As of the date of approval and authorization for
issuance of these consolidated financial statements, the judicial review is still in process.
On July 28, 2016 and in April 2017, Telkomsel received the tax audit instruction letter for
compliance of fiscal year 2014 and 2015, respectively. As of the date of approval and
authorization for issuance of these consolidated financial statements, the tax audit is still in
progress.
f. Tax incentives
In December 2015, the Company took advantage of the Economic Policy Package V in the form of
tax incentives for fixed assets revaluation as stipulated in the Ministry of Finance Regulation
juncto PMK No.
(“PMK”) No. 191/PMK.010/2015
29/PMK.03/2016. In accordance with the PMK, the Company is allowed to revalue its fixed assets
for tax purposes and will obtain lower income tax when the application of the revaluation is
submitted to DGT during the period between the effective date of PMK and December 31, 2016.
The final income tax is determined at a rate ranging from 3%-6% on the excess of the revalued
amount of fixed assets over its original net book value depending on the timing of submission of
application to the DGT.
juncto PMK No. 233/PMK.03/2015
On December 29, 2015, the Company filed an application for fixed assets revaluation using self-
assessed revaluation amount and has paid the related final income tax amounting to Rp750 billion.
Based on the PMK, the self-assessed revaluation amount should be evaluated by a Public
Independent Appraiser (“KJPP”) or valuation specialist, which is registered with the Government
before December 31, 2016. Upon verification of the completeness and accuracy of the application,
the DGT may issue approval letter within 30 days after the receipt of complete application. The
Company has appointed a KJPP to perform fixed assets revaluation of the Company.
The Company submitted the fixed asset revaluation documents phase 1 to DGT on September 29,
2016. On November 10, 2016, DGT issued approval regarding fixed assets revaluation amounting
to Rp7,078 billion with related final income tax amounting to Rp212 billion.
On December 15, 2016, the Company submitted its fixed assets revaluation application for Phase
2 to DGT and expects to be eligible for 6% tax rate. In its application, the Company estimated a
revaluation increment of Rp8,960 billion with estimated final income tax of Rp538 billion.
The Company received fixed asset revaluation report from KJPP. Based on the report, the value of
fixed asset increased amounting to Rp8,982 billion with related final income tax amounting to
Rp540 billion. The Company has paid final income tax amounting to Rp 2 billion as addition on
September 22, 2017 and November 15, 2017. On November 21, 2017, DGT issued approval
regarding fixed assets revaluation amounting to Rp8,982 billion with related final income tax
amounting to Rp540 billion.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
26. TAXATION (continued)
f. Tax incentives (continued)
The fixed assets revaluation for tax purpose resulting a deductible temporary difference that
originated from higher tax base of fixed assets’s accounting book value. The temporary difference
creates deffered tax assets because there will be future economics benefits that flow to the
Company when the carrying amount of assets has been recovered.
In 2016, the Company recognized deferred tax assets amounting to Rp1,415 billion on the
revaluation increment on fixed assets, as approved by the DGT. In 2017, based on DGT’s
approval, The Company recognized deferred tax asset amounting to Rp1,796 billion on the
revaluation increment on fixed assets.
g. Deferred tax assets and liabilities
The details of the Group's deferred tax assets and liabilities are as follows:
December 31,
2016
(Charged)
credited to
profit or loss
(Charged)
credited to
other
comprehensive
income
(Charged)
credited to
equity and
reclassification
December 31,
2017
The Company
Deferred tax assets:
Net periodic pension and other post-
employment benefit costs
Provision for impairment of receivables
Provision for employee benefits
Difference between accounting and tax bases
of property and equipment
Fiscal loss
Deferred installation fee
Accrued expenses and provision for inventory
obsolescence
Finance leases
Total deferred tax assets
Deferred tax liabilities:
Valuation of long-term investment
Land rights, intangible assets and others
Total deferred tax liabilities
Deferred tax assets (liabilities)
of the Company - net
Deferred tax assets of the other
Subsidiaries - net
Telkomsel
Deferred tax assets:
Provision for employee benefits
Provision for impairment of receivables
Total deferred tax assets
Deferred tax liabilities:
Finance leases
Difference between accounting and tax bases
of property and equipment
Intangible assets
Total deferred tax liabilities
Deferred tax liabilities of Telkomsel - net
Deferred tax liabilities of the other
subsidiaries - net
Deferred tax liabilities - net
Deferred tax assets - net
342
-
-
-
-
-
-
-
342
-
-
-
342
9
131
-
131
-
-
-
-
131
12
143
351
-
-
-
-
-
-
-
-
-
-
-
-
-
96
-
-
-
-
(125 )
-
(125 )
(125 )
(17 )
(142 )
96
1,102
594
247
240
172
74
43
1
2,473
(11 )
(1 )
(12 )
2,461
343
677
184
861
(561 )
(552 )
(225 )
(1,338 )
(477 )
(456 )
(933 )
2,804
197
206
38
1,012
172
(1 )
(26 )
(0 )
1,598
-
10
10
1,608
(20 )
68
41
109
(12 )
55
(177 )
(134 )
(25 )
(164 )
(189 )
1,588
563
388
209
(772 )
-
75
69
1
533
(11 )
(11 )
(22 )
511
258
478
143
621
(549 )
(482 )
(48 )
(1,079 )
(458 )
(287 )
(745 )
769
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
26. TAXATION (continued)
g. Deferred tax assets and liabilities (continued)
The details of the Group's deferred tax assets and liabilities are as follows (continued):
December 31,
2015
(Charged)
credited to
profit or loss
(Charged)
credited to
other
comprehensive
income
(Charged)
credited and
reclassification
December 31,
2016
The Company
Deferred tax assets:
Net periodic pension and other post-
employment benefit costs
Provision for impairment of receivables
Provision for employee benefits
Deferred installation fee
Accrued expenses and provision for inventory
obsolescence
Finance leases
Total deferred tax assets
Deferred tax liabilities:
Difference between accounting and tax bases
of property and equipment
Valuation of long-term investment
Land rights, intangible assets and others
Total deferred tax assets
Deferred tax assets (liabilities) of the
Company - net
Deferred tax assets of the other
Subsidiaries - net
Telkomsel
Deferred tax assets:
Provision for employee benefits
Provision for impairment of receivables
Total deferred tax assets
Deferred tax liabilities:
Finance leases
Difference between accounting and tax bases
of property and equipment
Intangible Assets
Total deferred tax liabilities
Deferred tax liabilities of Telkomsel - net
Deferred tax liabilities of the other
subsidiaries - net
Deferred tax liabilities - net
Deferred tax assets - net
335
429
97
65
211
69
1,206
(1,597 )
(45 )
(23 )
(1,665 )
(459 )
201
349
138
487
(385 )
(1,395 )
(52 )
(1,832 )
(1,345 )
(306 )
(2,110 )
201
102
(41 )
112
10
(142 )
(68 )
(27 )
825
34
12
871
844
50
55
5
60
(164 )
913
4
753
813
14
1,286
435
126
-
-
-
-
-
126
-
-
-
-
126
3
74
-
74
-
-
-
-
74
5
79
129
-
-
-
-
-
-
-
-
-
-
-
-
4
-
-
-
-
-
-
-
-
-
-
4
563
388
209
75
69
1
1,305
(772 )
(11 )
(11 )
(794 )
511
258
478
143
621
(549 )
(482 )
(48 )
(1,079 )
(458 )
(287 )
(745 )
769
As of December 31, 2017 and 2016, the aggregate amounts of temporary differences associated
with investments in subsidiaries and associated companies, for which deferred tax liabilities have
not been recognized were Rp31,928 billion and Rp34,568 billion, respectively.
Realization of the deferred tax assets is dependent upon the Group’s capability in generating
future profitable operations. Although realization is not assured, the Group believes 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 can be reduced if actual future taxable income is lower than estimates.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
26. TAXATION (continued)
h. Administration
From 2008 to 2016, 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 as
amended by Government Regulation No. 77/2013 and the latest by Government Regulation
No. 56/2015 in conjunction with PMK No. 238/PMK.03/2008. On the basis of historical data, for the
year ended December 31, 2017, the Company calculates the deferred tax using the tax rate of
20%.
The taxation laws of Indonesia require that the Company and its local subsidiaries submit to
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, the period is
within ten years from the time the tax became due, but not later than 2013, while for fiscal years
2008 and onwards, the period is within five years from the time the tax became due.
The Ministry of Finance of the Republic of Indonesia has issued Regulation No. 85/PMK.03/2012
dated June 6, 2012 as amended by PMK No. 136 - PMK.03/2012 dated August 16, 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 Ministry of Finance of the Republic of
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 as amended by PMK
No. 16/PMK.010/2016 dated February 3, 2016. The Company has withheld, deposited, and
reported the VAT, PPnBM and also income tax article 22 in accordance with the Regulations.
27. BASIC EARNINGS PER SHARE
Basic earnings per share is computed by dividing profit for the year attributable to owners of the parent
company amounting to Rp22,145 billion and Rp19,352 billion by the weighted average number of
shares outstanding during the period totaling 99,062,216,600 shares and 98,638,501,532 shares after
stock split for the years ended December 31, 2017 and 2016, respectively. The weighted average
number of shares takes into account the weighted average effect of changes in treasury stock
transaction during the year.
Basic earnings per share amounting to Rp223.55 and Rp196.19 (in full amount) for the years ended
December 31, 2017 and 2016, respectively.
The Company does not have potentially dilutive financial investments for the years ended
December 31, 2017 and 2016.
28. CASH DIVIDENDS AND GENERAL RESERVE
Pursuant to the AGM of Stockholders of the Company as stated in notarial deed No. 50 dated
April 22, 2016 of Ashoya Ratam, S.H., MKn., the Company’s stockholders approved the distribution of
cash dividend and special cash dividend for 2015 amounting to Rp7,744 billion (Rp78.86 per share)
and Rp1,549 billion (Rp15.77 per share), respectively. On May 26, 2016, the Company paid the cash
dividend and special cash dividend totalling Rp9,293 billion.
Pursuant to the AGM of Stockholders of the Company as stated in notarial deed No. 28 dated
April 21, 2017 of Ashoya Ratam, S.H., MKn., the Company’s stockholders approved the distribution of
cash dividend and special cash dividend for 2016 amounting to Rp11,611 billion (Rp117.21 per share)
and Rp1,935 billion (Rp19.54 per share), respectively.
On December 27, 2016, the Company had paid an interim dividend amounting to Rp1,920 billion or
totalling Rp19.38 per share.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
28. 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, 2017 and
2016 amounting to Rp15,337 billion, respectively.
29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS
The details of pension and other post-employment benefit liabilities are as follows:
Notes
2017
2016
Prepaid pension benefit cost
The Company - funded
MDM
Infomedia
Total prepaid pension benefit cost
Pension benefit and other post-employment
benefit obligations
Pension benefit
The Company - funded
Defined pension benefit obligation
Additional pension benefit obligation
The Company - unfunded
Telkomsel
Patrakom
MDM
Infomedia
29a.i.a
29a.i.a.i
29a.i.a.ii
29a.i.b
29a.ii
Total pension benefit
Net periodic post-employment health care
benefit
Other post-employment benefit
Obligation under the Labor Law
29b
29c
29d
Total
-
-
-
-
1,540
1,076
2,384
1,839
0
0
0
6,839
2,419
510
427
10,195
197
1
1
199
-
-
2,507
1,193
0
0
0
3,700
1,592
502
332
6,126
The details of net benefit expense recognized in the consolidated statements of profit or loss and other
comprehensive income is as follows:
Notes
2017
2016
Pension benefit cost
The Company - funded
Defined pension benefit obligation
Additional pension benefit obligation
The Company - unfunded
Telkomsel
MDM
Infomedia
Patrakom
Total pension benefit cost
Net-periodic post-employment health care
benefit cost
Other post-employment benefit cost
Obligation under the Labor Law
Total
29a.i.a
29a.i.a.i
29a.i.a.ii
29a.i.b
29a.ii
23
23,29b
23,29c
23,29d
82
557
657
239
247
0
0
0
1,700
276
42
62
2,080
608
-
279
181
0
0
0
1,068
163
48
82
1,361
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued)
The details of the net benefit expense recognized in the consolidated statements of profit or loss and
other comprehensive income is as follows (continued):
Notes
2017
2016
Defined benefit plan actuarial gain (losses)
The Company - funded
Defined pension benefit obligation
Additional pension benefit obligation
The Company - unfunded
Telkomsel
Infomedia
Patrakom
MDM
Post-employment health care benefit
Other post-employment benefit
Obligation under the Labor Law
Sub-total
Deferred tax effect at the applicable tax rates
Defined benefit plan actuarial losses - net
29a.i.a
29a.i.a.i
29a.i.a.ii
29a.i.b
29a.ii
29b
29c
29d
26g
a. Pension benefit costs
i. The Company
a. Funded pension plan
i. Defined pension benefit obligation
(1,154 )
(419 )
(100 )
(530 )
(1 )
0
(2 )
(551 )
(40 )
(72 )
(2,869 )
494
(2,375 )
(492 )
-
(119 )
(292 )
0
0
(1 )
(1,309 )
(20 )
(33 )
(2,266 )
208
(2,058 )
The Company sponsors a defined benefit pension plan for 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 governed by the pension laws in Indonesia and 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 did not make
contributions to the pension fund for the years ended December 31, 2017 and 2016.
The following table presents the changes in projected pension benefit obligations, changes
in pension benefit plan assets, funded status of the pension plan and net amount
recognized in the consolidated statements of financial position as of December 31, 2017
and 2016, under the defined benefit pension plan:
Changes in projected pension benefit obligations
Projected Pension benefit obligations at
beginning of year
Charged to profit or loss:
Service costs
Past service cost - plan amendments
Interest costs
Pension plan participants’ contributions
Actuarial losses recognized in OCI
Pension benefits paid
Projected pension benefit obligations at end of year
2017
2016
18,849
16,505
366
94
1,454
41
2,862
(1,312 )
22,354
363
245
1,444
44
1,680
(1,432 )
18,849
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued)
a. Pension benefit costs (continued)
i. The Company (continued)
a. Funded pension plan (continued)
i. Defined pension benefit obligation (continued)
Changes in pension benefit plan assets
Fair value of pension plan assets at
beginning of year
Interest income
Return on plan assets (excluding amount included in net
interest expense)
Pension plan participants’ contributions
Pension benefits paid
Plan administration cost
Fair value of pension plan assets at end of year
Funded status
Effect of asset ceiling
(Projected pension benefit obligations) prepaid
pension benefit cost at end of year
As of December 31, 2017 and 2016, plan assets consist of:
2017
2016
19,046
1,387
1,709
41
(1,312 )
(57 )
20,814
(1,540 )
-
(1,540 )
17,834
1,458
1,188
44
(1,432 )
(46 )
19,046
197
-
197
2017
2016
Quoted in active
market
Unquoted
Quoted in active
market
Unquoted
-
-
-
-
-
-
-
-
-
-
-
5,428
-
-
237
188
314
6,167
1,064
1,039
1,206
536
577
130
216
62
71
361
1,296
-
7,978
30
-
-
-
14,566
-
-
-
-
-
-
-
-
-
-
-
3,817
-
-
174
188
301
4,480
Cash and cash equivalents
Equity instruments:
Finance
Consumer goods
Infrastructure, utilities and
transportation
Construction, property and real
estate
Basic industry and chemical
Trading, service and investment
Mining
Agriculture
Miscellaneous industries
Equity-based mutual fund
Fixed income instruments:
Corporate bonds
Government bonds
Mutual funds
Non-public equity:
Direct placement
Property
Others
Total
1,481
1,463
1,411
656
363
115
388
92
46
377
1,233
-
6,968
54
-
-
-
14,647
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued)
a. Pension benefit costs (continued)
i. The Company (continued)
a. Funded pension plan (continued)
i. Defined pension benefit obligation (continued)
Pension plan assets include Series B shares issued by the Company with fair values
totalling to Rp469 billion and Rp395 billion, representing 2.25% and 2.07% of total plan
assets as of December 31, 2017 and 2016, respectively, and bonds issued by the
Company with fair value totalling to Rp340 billion and Rp311 billion representing 1.64%
and 1.63% of total plan assets as of December 31, 2017 and 2016, 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 Rp3,039 billion and Rp2,600 billion for the years ended December 31,
2017 and 2016, respectively. Based on the Company’s policy issued on January 14, 2014
regarding Dapen’s Funding Policy, the Company will not contribute to Dapen when
Dapen’s Funding Sufficiency Ratio (FSR) is above 105%. Based on Dapen’s financial
statement as of December 31, 2017, Dapen’s FSR is above 105%. Therefore, the
Company did not contributed to the defined benefit pension plan in 2017.
Based on the Company’s policy issued on June 24, 2016 regarding Pension Regulation by
Dana Pensiun Telkom, widow/widower or the children of participants who enrolled
before April 20, 1992, will receive increase in monthly pension benefits from 60% to
75% of pension benefits received by
the pensioners with effective date since
January 1, 2016. In addition, the Company provided other benefits to enhance the
pensioners’ welfare which were provided only in 2016. Such other benefits consist of
Rp6 million to monthly pension beneficiaries who retired before end of June 2002 and other
benefit of Rp3 million to monthly pension beneficiaries who retired starting from the end of
June 2002 until the end of May 2016.
Based on the company's policy issued on June 7, 2017 regarding Pension Regulation by
Dana Pensiun Telkom, the Company provided other benefits amounted to Rp4.5 million to
monthly pension beneficiaries who retired before end of June 2002 and Rp2.25 million to
monthly pension beneficiaries who retired starting from the end of June 2002 until the end
of April 2017.
The movement at the projected pension benefit obligations for the years ended December
31, 2017 and 2016 are as follows:
2017
2016
Prepaid pension benefit cost at
beginning of year
Net periodic pension benefit cost
Actuarial losses recognized in OCI
Return on plan assets
(excluding amount included in net interest
expense)
(Projected pension benefit obligations)
prepaid pension benefit cost at end of year
197
(583 )
(2,862 )
1,708
(1,540 )
1,329
(640 )
(1,680 )
1,188
197
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued)
a. Pension benefit costs (continued)
i. The Company (continued)
a. Funded pension plan (continued)
i. Defined pension benefit obligation (continued)
The components of net periodic pension benefit cost for the years ended December 31,
2017 and 2016 are as follows:
2017
2016
Service costs
Past service cost - plan amendments
Plan administration cost
Net interest cost
Net periodic pension benefit cost
Amount charged to subsidiaries under
contractual agreements
Net periodic pension benefit cost less
amount charged to subsidiaries
Amounts recognized in OCI are as follows:
Actuarial losses recognized during
the year due to:
Experience adjustments
Changes in demographic assumptions
Changes in financial assumptions
Return on plan assets (excluding amount
included in net interest expense)
Net
366
94
57
66
583
(26 )
557
2017
2016
163
-
2,699
(1,708 )
1,154
363
245
46
(14 )
640
(32 )
608
70
140
1,470
(1,188 )
492
The actuarial valuation for the defined benefit pension plan was performed based on the
measurement date as of December 31, 2017 and 2016, with reports dated February 27,
2018 and February 22, 2017, respectively, by PT Towers Watson Purbajaga (“TWP”), an
independent actuary in association with Willis Towers Watson (“WTW”) (formerly Towers
Watson). The principal actuarial assumptions used by the independent actuary as of
December 31, 2017 and 2016 are as follows:
Discount rate
Rate of compensation increases
Indonesian mortality table
2017
2016
6.75%
8.00%
2011
8.00%
8.00%
2011
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued)
a. Pension benefit costs (continued)
i. The Company (continued)
a. Funded pension plan (continued)
ii. Additional pension benefit obligation
Based on the Company’s policy issued on June 7, 2017 regarding Pension Regulation by
Dana Pensiun Telkom, the Company established additional benefit fund at maximum 10%
of surplus of defined benefit plan, when FSR is above 105% and return on investment is
above actuarial discount rate of pension fund.
Changes in pension benefit obligations
Pension benefit obligations at beginning of year
Charged to profit or loss:
Service cost
Past service cost
Interest cost
Actuarial loss recognized in OCI
Pension benefit obligation at end of year
2017
-
-
657
-
419
1,076
Changes in additional pension benefit obligation for the year ended December 31, 2017 is
as follow:
Additional pension benefit obligation at beginning of year
Past service cost
Actuarial loss recognized in OCI
Projected additional pension benefit obligation at end of year
2017
-
657
419
1,076
The components of additional pension benefit cost for the years ended December 31, 2017
is as follows:
Service cost
Past service cost
Plan administration cost
Interest cost
Pension benefit cost
Amounts recognized in OCI are as follows:
Actuarial losses recognized during
the year due to:
Experience adjustment
Changes in demographic assumption
Changes in financial assumption
Total
87
2017
2017
-
657
-
-
657
-
-
419
419
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued)
a. Pension benefit costs (continued)
i. The Company (continued)
a. Funded pension plan (continued)
ii. Additional pension benefits obligation (continued)
The actuarial valuation for the additional pension benefit plan was performed based on
the measurement date as of December 31, 2017, with
report dated
February 27, 2018, by TWP, an independent actuary in association with WTW. The
principal actuarial assumptions used by the independent actuary for the year ended
December 31, 2017 is as follows:
Rate of return on investment
Discount rate
Actuarial discount rate of pension fund
Rate of compensation increases
Indonesian mortality table
b. Unfunded pension plan
2017
9.50% - 10.25%
6.75%
9.25% - 9.50%
8.00%
2011
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 with permanent status hired
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 based on a certain percentage of the participants’ salaries and amounted to
Rp10 billion and Rp9 billion for the years ended December 31, 2017 and 2016, respectively.
Since 2007, the Company has provided pension benefit based on uniformization for both
participants prior to and from April 20, 1992 effective for employees retiring beginning
February 1, 2009. In 2010, the Company replaced the uniformization with Manfaat Pensiun
Sekaligus (“MPS”). MPS is given to those employees reaching retirement age, upon death or
upon becoming disabled starting from February 1, 2009.
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 since
April 1, 2012, whereby the employee is required to file a request for MPP and if the
employee does not file the request, such employee is required to work until the retirement
date.
88
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued)
a. Pension benefit costs (continued)
i. The Company (continued)
b. Unfunded pension plan (continued)
The following table presents the changes in the unfunded projected pension benefit
obligations for MPS and MPP for the years ended December 31, 2017 and 2016:
Unfunded projected pension benefit obligations
at beginning of year
Service costs
Net Interest costs
Actuarial losses recognized in OCI
Benefits paid by employer
Unfunded projected pension benefit
obligations at end of year
2017
2016
2,507
51
188
100
(462 )
2,384
2,500
64
215
119
(391 )
2,507
The components of total periodic pension benefit cost for the years ended December 31,
2017 and 2016 are as follows:
2017
2016
Service costs
Net interest costs
Total
Amounts recognized in OCI are as follows:
Actuarial (gain) losses recognized during
the year due to:
Experience adjustments
Changes in demographic assumptions
Changes in financial assumptions
Net
51
188
239
2017
2016
19
-
81
100
64
215
279
(9 )
30
98
119
The actuarial valuation for the defined benefit pension plan was performed, based on the
measurement date as of December 31, 2017 and 2016, with
reports dated
February 27, 2018 and February 22, 2017, respectively, by TWP, an independent actuary in
association with WTW. The principal actuarial assumptions used by the independent actuary
for the years ended December 31, 2017 and 2016 are as follows:
Discount rate
Rate of compensation increases
Indonesian mortality table
2017
6.00% - 6.75%
6.10% - 8.00%
2011
2016
7.75% - 8.00%
6.10% - 8.00%
2011
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued)
a. Pension benefit costs (continued)
ii. Telkomsel
Telkomsel sponsors 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 have been
fully made by Telkomsel.
Telkomsel’s contributions to Jiwasraya amounted to Rp131 billion and Rp83 billion for
the years ended December 31, 2017 and 2016, respectively.
The following table presents the changes in projected pension benefit obligation, changes in
pension benefit plan assets, funded status of the pension plan and net amount recognized in
the consolidated statement of financial position for the years ended December 31, 2017 and
2016, under Telkomsel’s defined benefit pension plan:
Changes in projected pension benefit
obligation
Projected pension benefit obligation at beginning
of year
Charged to profit or loss:
Service costs
Interest costs
Actuarial losses recognized in OCI
Benefits paid
Projected pension benefit obligation at
end of year
Changes in pension benefit plan assets
Fair value of plan assets at beginning of year
Interest income
Return on plan assets (excluding amount
included in net interest expense)
Employer’s contributions
Benefits paid
Fair value of plan assets at end of year
Funded status
Pension benefit obligation at end of year
2017
2016
2,034
1,415
149
167
584
(6 )
2,928
841
69
54
131
(6 )
1,089
(1,839 )
(1,839 )
107
130
392
(10 )
2,034
612
56
100
83
(10 )
841
(1,193 )
(1,193 )
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued)
a. Pension benefit costs (continued)
ii. Telkomsel (continued)
Movements of the pension benefit obligation for the years ended December 31, 2017 and
2016:
Pension benefit obligation at
beginning of year
Periodic pension benefit cost
Actuarial losses recognized in OCI
Return on plan assets (excluding amount included in
net interest expense)
Employer contributions
Pension benefit obligation at end of year
2017
2016
1,193
247
584
(54 )
(131 )
1,839
803
181
392
(100 )
(83 )
1,193
The components of the periodic pension benefit cost for the years ended December 31, 2017
and 2016 are as follows:
Service costs
Net interest cost
Total
Amounts recognized in OCI are as follows:
Actuarial (gain) losses recognized during
the year due to:
Experience adjustments
Changes in financial assumptions
Return on plan assets (excluding amount included in
net interest expense)
Net
2017
2016
149
98
247
2017
2016
(77 )
661
(54 )
530
107
74
181
32
360
(100 )
292
The actuarial valuation for the defined benefit pension plan was performed based on the
measurement date as of December 31, 2017 and 2016, with reports dated February 8, 2018
and February 7, 2017 respectively, by TWP, an independent actuary in association with WTW.
The principal actuarial assumptions used by the independent actuary as of December 31, 2017
and 2016, are as follows:
Discount rate
Rate of compensation increases
Indonesian mortality table
2017
2016
7.00%
8.00%
2011
8.25%
8.00%
2011
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued)
b. Post-employment health care benefit cost
The Company provides post-employment health care benefits 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 Yayasan Kesehatan Telkom
(“Yakes”).
The defined contribution post-employment health care benefit plan is provided to employees with
permanent status hired on or after November 1, 1995 or employees with terms of service less than
20 years at the time of retirement. The Company did not make contributions to Yakes for the years
ended December 31, 2017 and 2016.
The following table presents the changes in projected post-employment health care benefit
provision, changes in post-employment health care benefit plan assets, funded status of the post-
employment health care benefit plan and net amount recognized in the Company’s consolidated
statement of financial position as of December 31, 2017 and 2016:
2017
2016
Changes in projected post-employment health care benefit
obligation
Projected post-employment health care benefit obligation at
beginning of year
Charged to profit or loss:
Service costs
Interest costs
Actuarial losses recognized in OCI
Post-employment health care benefits paid
Projected post-employment health care benefit obligation
at end of period
Changes in post-employment health care benefit plan
assets
Fair value of plan assets at beginning of year
Interest income
Return on plan assets (excluding amount included in net
interest expense)
Post-employment health care benefits paid
Plan administration cost
Fair value of plan assets at end of year
Funded status
Provision for post-employment health care benefit
13,357
10,942
-
1,115
1,460
(484 )
9
994
1,828
(416 )
15,448
13,357
11,765
979
909
(484 )
(140 )
13,029
(2,419 )
(2,419 )
10,824
982
519
(416 )
(144 )
11,765
(1,592 )
(1,592 )
92
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued)
b. Post-employment health care benefit cost (continued)
As of December 31, 2017 and 2016, plan assets consists of:
2017
Quoted in
active market
1,354
Unquoted
2016
Quoted in
active market
894
Unquoted
Cash and cash equivalents
Equity instruments:
Manufacturing and consumer
Finance industries
Construction
Infrastructure and telecommunication
Wholesale
Mining
Other Industries:
Services
Agriculture
Biotechnology and Pharma Industry
Others
Equity-based mutual funds
Fixed income instruments:
Fixed income mutual funds
Unlisted shares:
Private placement
Total
835
840
254
350
137
65
38
35
68
1
1,113
7,642
-
12,732
-
-
-
-
-
-
-
-
-
-
-
-
-
297
297
754
540
351
245
101
27
17
44
6
2
1,311
7,241
-
11,533
-
-
-
-
-
-
-
-
-
-
-
-
-
232
232
Yakes plan assets also include Series B shares issued by the Company with fair value totalling
Rp265 billion and Rp217 billion, representing 2.04% and 1.84% of total plan assets as of
December 31, 2017 and 2016, respectively.
The expected return is determined based on market expectation for the returns over the entire life
of the obligation by considering the portfolio mix of the plan assets. The actual return on plan
assets was Rp1,748 billion and Rp1,357 billion for the years ended December 31, 2017 and 2016,
respectively.
The movements of the projected post-employment health care benefit obligation for the years
ended December 31, 2017 and 2016 are as follows:
Projected post-employment health care benefit
obligations at beginning of year
Net periodic post-employment health care benefit
Actuarial losses recognized in OCI
Return on plan assets (excluding amount included in
net interest expense)
Projected post-employment health care benefit
obligation at end of year
2017
2016
1,592
276
1,460
(909 )
2,419
118
165
1,828
(519 )
1,592
93
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued)
b. Post-employment health care benefit cost (continued)
The components of net periodic post-employment health care benefit cost for the years ended
December 31, 2017 and 2016 are as follows:
Service costs
Plan administration costs
Net interest costs
Periodic post-employment health care benefit cost
Amount charged to subsidiaries under contractual agreement
Net periodic post-employment health care benefit cost
less amount charged to subsidiaries
Amounts recognized in OCI are as follows:
Actuarial (gain) losses recognized during the year due to:
Experience adjustments
Changes in demographic assumptions
Changes in financial assumptions
Return on plan assets (excluding amount included in net
interest expense)
Net
2017
2016
-
141
135
276
-
276
9
144
12
165
(2 )
163
2017
2016
(1,198)
-
2,658
(909)
551
26
66
1,736
(519 )
1,309
The actuarial valuation for the post-employment health care benefits plan was performed based on
the measurement date as of December 31, 2017 and 2016, with reports dated February 27, 2018
and February 22, 2017 respectively, by TWP, an independent actuary in association with WTW.
The principal actuarial assumptions used by the independent actuary as of December 31, 2017
and 2016 are as follows:
Discount rate
Health care costs trend rate assumed for the next year
Ultimate health care costs trend rate
Year that the rate reaches the ultimate trend rate
Indonesian mortality table
c. Other post-employment benefits provisions
2017
2016
7.25%
7.00%
7.00%
2018
2011
8.50%
7.00%
7.00%
2017
2011
The Company provides other post-employment benefits in the form of cash paid to employees on
their retirement or termination. These benefits consist of final housing allowance (Biaya Fasilitas
Perumahan Terakhir or “BFPT”) and home passage leave (Biaya Perjalanan Pensiun dan
Purnabhakti or “BPP”).
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued)
c. Other post-employment benefits provisions (continued)
The movements of the unfunded projected other post-employment benefit obligations for
the years ended December 31, 2017 and 2016 are as follows:
Projected other post-employment
benefit obligations at beginning of year
Charged to profit or loss:
Service costs
Net interest costs
Actuarial losses recognized in OCI
Benefits paid by employer
Projected other post-employment benefits
obligations at end of year
2017
2016
502
6
36
40
(74 )
510
497
7
41
20
(63 )
502
The components of the projected other post-employment benefit cost for the years ended
December 31, 2017 and 2016 are as follows:
Service costs
Net interest costs
Total
Amounts recognized in OCI are as follows:
Actuarial losses recognized during
the year due to:
Experience adjustments
Changes in demographic assumptions
Changes in financial assumptions
Total
2017
2016
6
36
42
2017
2016
10
-
30
40
7
41
48
2
0
18
20
The actuarial valuation for the other post-employment benefits plan was performed based on
measurement date as of December 31, 2017 and 2016, with reports dated February 27, 2018 and
February 22, 2017 respectively, by TWP, an independent actuary in association with WTW.
independent actuary as of
The principal actuarial assumptions used by
December 31, 2017 and 2016, are as follows:
the
Discount rate
Indonesian mortality table
d. Obligation under the Labor Law
2017
5.75%
2011
2016
7.75%
2011
Under Law No. 13 Year 2003, the Group is required to provide minimum pension benefits, if not
covered yet by the sponsored pension plans, to its employees upon retirement. Total obligation
recognized as of
to Rp427 billion and
Rp332 billion, respectively. The related pension benefits cost charged to expense amounted to
Rp62 billion and Rp82 billion for the years ended December 31, 2017 and 2016, respectively
(Note 23). The actuarial losses recognized in OCI amounted to Rp72 billion and Rp33 billion for the
years ended December 31, 2017 and 2016, respectively.
December 31, 2017 and 2016 amounted
95
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued)
e. Maturity Profile of Defined Benefit Obligation (“DBO”)
The timing of benefits payments and weighted average duration of DBO for 2017 are as follows:
Expected Benefits Payment
The Company
Funded
Defined
pension benefit
obligation
Additional
pension benefit
obligation
Unfunded
Telkomsel
Post-employment
health care
benefits
Other post-
employment
benefits
17,864
21,667
18,911
12,971
2,917
182
6
0
602
937
628
72
22
17
-
-
2,614
261
42
10
-
-
-
-
2,450
7,997
6,763
1,509
-
-
-
-
6,579
9,995
9,692
3,710
343
440
7
-
539
124
45
2
-
-
-
-
9.52 years
4.4 years 11.77 years
17.64 years 3.62 years
Time Period
Within next 10 years
Within 10-20 years
Within 20-30 years
Within 30-40 years
Within 40-50 years
Within 50-60 years
Within 60-70 years
Within 70-80 years
Weighted average
duration of DBO
f. Sensitivity Analysis
1% change in discount rate and rate of compensation would have effect on DBO, as follows :
Sensitivity
Funded
Defined pension benefit obligation
Additional pension benefit obligation
Unfunded
Telkomsel
Post-employment health care benefits
Other post-employment benefits
Discount Rate
Rate of Compensation
1% Decrease
1% Increase
Increase (decrease) in amounts
1% Increase
Increase (decrease) in amounts
1% Decrease
(2,028 )
(72 )
(60 )
(290 )
(2,197 )
(17 )
2,409
83
64
331
2,965
18
397
N/A
63
170
1,356
-
(413 )
N/A
(63 )
(159 )
(1,150 )
-
The sensitivity analysis has been determined based on a method that extrapolates the impact on
DBO as a result of reasonable changes in key assumptions occurring at the end of the reporting
period.
The sensitivity results above determine the individual impact on the Plan’s DBO at the end of the
year. In reality, the Plan is subject to multiple external experience items which may move the DBO
in similar or opposite directions, and the Plan’s sensitivity to such changes can vary over time.
There are no changes in the methods and assumptions used in preparing the sensitivity analysis
from the previous period.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
30. LSA PROVISIONS
Telkomsel and Patrakom provide certain cash awards or certain number of days leave benefits to their
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 of 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 reach a certain
minimum age.
The obligation with respect to these awards which was determined based on an actuarial valuation
using the Projected Unit Credit method, amounted to Rp758 billion and Rp613 billion as of
December 31, 2017 and 2016, respectively. The related benefit costs charged to expense amounted
to Rp255 billion and Rp237 billion for the years ended December 31, 2017 and 2016, respectively
(Note 23).
31. RELATED PARTIES TRANSACTIONS
a. Nature of relationships and accounts/transactions with related parties
Details of the nature of relationships and accounts/transactions with significant related parties are
as follows:
Related parties
The Government
Ministry of Finance
Nature of relationships parties
Majority stockholder
Nature of accounts/transactions
Internet and data service revenues, other
telecommunication service revenues, finance income,
finance costs, and investment in financial instruments
State-owned enterprises
Entity under common control
Internet and data service revenues, other
Indosat
Entity under common control
Interconnection revenues, leased lines revenues,
telecommunication services revenues, operating
expenses and purchase of property and equipment
PT Aplikanusa Lintasarta
Entity under common control
(“Lintasarta”)
satellite transponder usage revenues, interconnection
expenses, telecommunication facilities usage expenses,
operating and maintenance expenses, usage of data
communication network system expenses
Network service revenues, leased lines expenses, and
usage of communication network system expenses
PT Perusahaan Listrik Negara
Entity under common control
Electricity expenses, finance income, finance costs, and
(“PLN”)
investment in financial instrument
PT Pertamina (Persero)
Entity under common control
Internet and data service revenues and other
(“Pertamina”)
telecommunication service revenues
PT Kereta Api Indonesia
Entity under common control
Internet and data service revenues and other
(“KAI”)
PT Pegadaian
Entity under common control
Internet and data service revenues and other
telecommunication service revenues
telecommunication service revenues
PT Garuda Indonesia
Entity under common control
Internet and data service revenues, other
PT Indonesia Comnet Plus
Entity under common control
Internet and data service revenues, other
telecommunication service revenues
(“ICON Plus”)
telecommunication service revenues, interconnection
revenues, network revenues, and interconnection
expenses
PT Asuransi Jasa Indonesia
Entity under common control
Satellite insurance expenses and vehicle insurance
(“Jasindo”)
PT Adhi Karya Tbk
(“Adhi Karya”)
INTI
LEN
Entity under common control
Purchase of materials and construction services
expenses
Entity under common control
Purchase of property and equipment and construction
Entity under common control
Purchase of property and equipment and construction
services
services
State-owned banks
BNI
Entity under common control
Entity under common control
Finance income and finance costs
Internet and data service revenues, other
telecommunication service revenues, finance income,
and finance costs
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
31. RELATED PARTIES TRANSACTIONS (continued)
a. Nature of relationships and accounts/transactions with related parties (continued)
Details of the nature of relationships and accounts/transactions with significant related parties are
as follows (continued):
Related parties
Bank Mandiri
BRI
BTN
Nature of relationships parties
Entity under common control
Nature of accounts/transactions
Internet and data service revenues, other
telecommunication service revenues, finance income,
and finance costs
Entity under common control
Internet and data service revenues, other
telecommunication service revenues, finance income,
and finance costs
Entity under common control
Internet and data service revenues, other
telecommunication service revenues, finance income,
and finance costs
PT Bank Syariah Mandiri
Entity under common control
Internet and data service revenues, other
(“BSM”)
telecommunication service revenues, and finance costs
PT Mandiri Manajemen
Entity under common control
Available-for-sale financial assets
Investasi
Bahana TCW
PT Sarana Multi Infrastruktur
PT Pembangunan Perumahan
(“Pembangunan
Perumahan”)
PT Pos Indonesia
(“Pos Indonesia”)
PT Semen Indonesia
(“Semen Indonesia”)
PT Pelabuhan Indonesia
(“Pelindo”)
PT Kimia Farma
(“Kimia Farma”)
Entity under common control
Entity under common control
Entity under common control
Available-for-sale financial assets, bonds and notes
Finance costs
Internet and data service revenues, and other
telecommunication service revenues
Entity under common control
Internet and data service revenues and other
Entity under common control
Internet and data service revenues and other
telecommunication service revenues
Entity under common control
Internet and data service revenues and other
telecommunication service revenues
telecommunication service revenues
Entity under common control
Internet and data service revenues and other
telecommunication service revenues
PT Asuransi Jiwasraya
Entity under common control
Internet and data service revenues and other
(“Jiwasraya”)
CSM
Associated company
Satelite transponder usage revenues, network service
revenues, and transmission lease expenses
telecommunication service revenues
Indonusa
Associated company
Network service revenues and data communication
ILCS
Teltranet
Tiphone
PT Poin Multi Media Nusantara
Associated company
Associated company
Associated company
Other related entities
(“POIN”)
expenses
CPE Expenses
CPE Expenses
Distribution of SIM cards and pulse reload voucher
Purchase of handset
PT Perdana Mulia Makmur
Other related entities
Purchase of handset
(“PMM”)
Yakes
Koperasi Pegawai Telkom
Other related entities
Other related entities
(“Kopegtel”)
Medical expenses
Purchase of property and equipment, construction and
installation services, leases of buildings expenses,
lease of vehicles expenses, purchases of vehicles, and
purchases of materials and construction service,
maintenance and cleaning service expenses, and RSA
revenues
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
31. RELATED PARTIES TRANSACTIONS (continued)
a. Nature of relationships and accounts/transactions with related parties (continued)
Related parties
PT Sandhy Putra Makmur
(“SPM”)
Nature of relationships parties
Other related entities
Nature of accounts/transactions
Leases of buildings expenses, leases of vehicles
expenses, purchase of materials and construction
services, utilities of maintenance and cleaning services
Koperasi Pegawai Telkomsel
Other related entities
Internet and data service revenues, other
(“Kisel”)
telecommunication service revenues, leases of vehicles
expenses, printing and distribution of customer bills
expenses, collection fee, other services fee, distribution
of SIM cards, and pulse reload voucher and purchase of
property and equipment
PT Graha Informatika
Nusantara (“Gratika”)
Other related entities
Network service revenues, installation expenses,
maintenance expenses, and purchase of property and
equipment
PT Pembangunan
Other related entities
Purchase of property and equipment
Telekomunikasi Indonesia
(“Bangtelindo”)
Directors
Commissioners
Key management personnel
Supervisory Personnel
Honorarium and facilities
Honorarium and facilities
The outstanding balances of trade receivables and payables at year-end are unsecured and
interest free and settlement occurs in cash. There have been no guarantees provided or received
for any related party receivables or payables. As of December 31, 2017, the Group recorded
impairment of receivables from related parties of Rp276 billion. Impairment assessment is
undertaken each financial year through examining the current status of existing receivables and
historical collection experience.
b. Transactions with related parties
The following are significant transactions with related parties:
2017
Amount
% of total revenues
Amount
2016
% of total revenues
REVENUES
Majority Stockholder
Government
Entities under common control
Indosat
BRI
Bank Mandiri
BTN
Pegadaian
BNI
Lintasarta
Pertamina
Garuda Indonesia
ICON Plus
KAI
Others
Sub-total
Other related entities
Associated companies
Teltranet
Others
Sub-total
Total
0.22
1.39
0.18
0.12
0.10
0.09
0.08
0.08
0.07
0.04
0.05
0.01
0.41
1.89
0,02
0.04
0.01
0.05
3.17
207
2,167
181
161
107
93
136
99
64
75
56
68
451
3,658
253
23
175
198
4,316
0.18
1.86
0.16
0.14
0.09
0.08
0.12
0.09
0.06
0.06
0.05
0.06
0.38
3.15
0.22
0.02
0.15
0.17
3.72
280
1,789
237
157
129
115
105
97
94
55
62
18
523
3,818
31
46
19
65
4,084
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
31. RELATED PARTIES TRANSACTIONS (continued)
b. Transactions with related parties (continued)
The following are significant transactions with related parties (continued):
EXPENSES
Entities under common control
PLN
Indosat
Jasindo
Others
Sub-total
Other related entities
Kisel
Kopegtel
POIN
PMM
Yakes
Others
Sub-total
Associated companies
Indonusa
Teltranet
ILCS
Others
Sub-total
Total
FINANCE INCOME
Majority stockholder
Government
Entity under common control
State-owned banks
Others
Total
FINANCE COSTS
Majority stockholder
Government
Entities under common control
State-owned banks
Sarana Multi Infrastruktur
Total
2017
Amount
% of total expenses
Amount
2016
% of total expenses
2,269
890
168
68
3,395
813
713
405
404
139
81
2,555
264
123
34
4
425
6,375
2.69
1.06
0.20
0.08
4.03
0.96
0.85
0.48
0.48
0.16
0.10
3.03
0.31
0.15
0.04
0.00
0.50
7.56
1,037
939
267
136
2,379
771
533
1,459
-
-
206
2,969
145
49
4
5
203
5.551
1.38
1.25
0.35
0.18
3.16
1.02
0.71
1.94
-
-
0.26
3.93
0.19
0.07
0.01
0.01
0.28
7.37
2017
2016
Amount
% of total
finance income
Amount
% of total
finance income
0.00
59.27
2.44
61.72
0
850
35
885
2017
0.12
52.16
0.29
52.57
2
895
5
902
2016
Amount
% of total
finance costs
Amount
% of total
finance costs
54
819
94
967
1.95
29.58
3.39
34.92
64
1,228
-
1,292
2.28
43.72
-
46.00
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
31. RELATED PARTIES TRANSACTIONS (continued)
b. Transactions with related parties (continued)
The following are significant transactions with related parties (continued):
PURCHASE OF PROPERTY AND
EQUIPMENTS (Note 9)
Entities under common control
INTI
LEN
Others
Sub-total
Other related entities
Kopegtel
Kisel
Bangtelindo
SPM
Others
Sub-total
Total
DISTRIBUTION OF SIM CARD AND
VOUCHER
Other related entities
Kisel
Tiphone
Gratika
Total
2017
% of total
purchases
Amount
2016
% of total
purchases
Amount
203
67
26
296
130
73
64
57
59
359
655
0.79
0.23
0.10
1.02
0.41
0.23
0.20
0.18
0.23
1.25
2.27
374
114
39
527
198
66
84
73
45
466
993
1.42
0.43
0.15
2.00
0.68
0.23
0.29
0.25
0.15
1.60
3.60
2017
Amount
% of total revenues
Amount
2016
% of total revenues
4,181
3,888
408
8,477
3.26
3.03
0.32
6.61
4,600
3,441
408
8,449
3.95
2.96
0.35
7.26
Presented below are balances of accounts with related parties:
a. Cash and cash equivalents
(Note 3)
b. Other current financial assets
(Note 4)
c. Trade receivables - net
(Note 5)
d. Other current assets
e. Other non - current assets
(Note 10)
2017
2016
Amount
% of total assets
Amount
% of total assets
17,417
1,153
1,545
126
55
8.78
0.58
0.78
0.06
0.03
17,477
1,204
894
93
310
9.73
0.67
0.50
0.05
0.17
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
31. RELATED PARTIES TRANSACTIONS (continued)
b. Transactions with related parties (continued)
The following are significant transactions with related parties (continued):
f. Trade payables (Note 12)
Majority stockholder
Ministry of Finance
Entities under common control
Indosat
State-owned enterprises
Sub-total
Other related entities
Kopegtel
Yakes
Kisel
Bangtelindo
SPM
Others
Sub-total
Total
g. Accrued expenses (Note 13)
Majority stockholder
Government
Entities under common control
State-owned enterprises
State-owned banks
Sub-total
Other related entities
Kisel
Others
Total
h. Advances from customers and
suppliers
Majority stockholder
Government
Entitiy under common control
PLN
Total
i. Short-term bank loans (Note 15)
j. Two-step loans (Note 16a)
k. Long-term bank loans
(Note 16c)
I. Other borrowing (Note 16d)
2017
2016
Amount
% of total liabilities
Amount
% of total liabilities
29
225
102
327
209
55
51
36
36
151
538
869
0.03
0.26
0.12
0.38
0.24
0.04
0.04
0.06
0.06
0.18
0.62
1.00
-
275
903
1,178
170
47
18
26
26
80
367
314
-
0.37
1.22
1.59
0.23
0.06
0.02
0.04
0.04
0.11
0.17
0.43
2017
Amount
% of total liabilities
Amount
2016
% of total liabilities
0.01
0.13
0.04
0.17
0.27
0.00
0.46
0.02
0.01
0.03
1.50
1.27
9.14
1.50
12
127
52
179
118
5
314
19
12
31
143
1,292
6,325
697
0.02
0.17
0.07
0.24
0.16
0.01
0.43
0.03
0.02
0.05
0.19
1.74
8.54
0.94
9
113
36
149
235
1
394
19
11
30
1,297
1,098
7,895
1,295
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
31. RELATED PARTIES TRANSACTIONS (continued)
c. Significant agreements with related parties
i.
The Government
The Company obtained two-step loans from the Government (Note 16a).
ii.
Indosat
The Company has an agreement with Indosat to provide international telecommunications
services to the public.
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 Indosat
Multimedia Mobile services and the settlement of 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, which enable each
party’s customers to make domestic calls between Indosat’s GSM mobile network and the
Company’s fixed line network, as well as 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 has received compensation from Indosat computed at 1% of the collections made
by the Company starting from January 1, 1995, as well as 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 took into account the
compensation for billing and collection. The agreement is valid and effective starting from
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 implementation of the cost-based tariff obligations under the MoCI Regulation No.8/Year
2006. These amendments took effect starting on January 1, 2007.
Telkomsel also entered into an agreement with Indosat for the provision of international
telecommunications services to its GSM mobile cellular customers.
The Company provides leased lines to Indosat and its 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.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
31. RELATED PARTIES TRANSACTIONS (continued)
c. Significant agreements with related parties (continued)
iii. Others
Kisel is a co-operative 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. Remuneration of key management and supervisory personnel
Key management personnel consists of the Directors of the Company and supervisory personnel
consists of Board of Commissioners.
The Company provides remuneration in the form of salaries/honorarium and facilities to support the
governance and oversight duties of the Board of Commissioners and the leadership and
management duties of the Board of Directors. The total of such remuneration is as follows:
Board of Directors
Board of Commissioners
Amount
2017
175
65
% of total
expenses
Amount
0.21%
0.08%
2016
427
121
% of total
expenses
0.57%
0.16%
The amounts disclosed in the table are the amounts recognized as an expense during the reporting
periods.
32. OPERATING SEGMENT
In 2017, management rearranged the way it manages the Group's business portfolios from a
customer-centric approach to a Customer Facing Units (“CFU”) approach that allow the Group to
focus on more specific customer markets. This was followed by a change in the Group’s
organizational structure to accommodate decision making and assessing performance based on the
CFU approach. The change in the way of managing the Company’s business portfolios and the
change in the Company's organizational structure led management, as the Company's Chief
Operation Decision Maker, to change the presentation of the Group’s segment information previously
presented in the consolidated financial statements for the years ended December 31, 2016.
Accordingly, the segment financial information in the consolidated financial statements for the years
ended December 31, 2016 has been restated to conform with the presentation of segment information
in the consolidated financial statements for the years ended December 31, 2017.
The Group has five primary reportable segments, namely mobile, consumer, enterprise, wholesale
and international business (“WIB”), and others. The mobile segment provides mobile voice, SMS,
value added services and mobile broadband. The consumer segment provides fixed wireline
telecommunications services, pay TV, data, internet and other telecommunication services to home
customers. The enterprise segment provides end-to-end solution to corporate and institutions. The
WIB segment provides interconnection services, leased lines, satellite, VSAT, broadband access,
information technology services, data and internet services to Other Licensed Operator companies
and institutions. Digital service segment does not meet the disclosure requirements for a reportable
segment.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
32. OPERATING SEGMENT (continued)
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, the financing activities and income taxes are managed on
a group basis and not separately monitored and allocated to operating segments.
Segment revenues dan expenses include transactions between operating segments and are
accounted at prices that management believes represent market prices.
Mobile
Consumer
Enterprise
WIB
Others
Total segment
Adjustment
and
elimination
Total
consolidated
2017
90,073
11,105
19,130
7,439
3,086
93,159
287
11,392
16,801
35,931
15,305
22,744
(39,452 )
(14,382 )
(53,834 )
39,325
(10,360 )
(1,563 )
(11,923 )
(531 )
(20,653 )
(15,027 )
(35,680 )
252
(12,333 )
(5,611 )
(17,944 )
4,800
(15,134 )
(6,544 )
(3,637 )
(7,120 )
(13,560 )
(2,839 )
(2,136 )
(2,382 )
(291 )
(385 )
(668 )
(127 )
126
602
728
(979 )
(70 )
(1,049 )
(321 )
(11 )
(22 )
(2 )
127,873
383
128,256
36,081
163,954
(36,081 )
(35,698 )
-
128,256
(83,777 )
(36,653 )
(120,430 )
43,525
(572 )
36,653
36,081
382
(84,349 )
-
(84,349 )
43,907
(32,447)
(709 )
(33,156 )
(20,940)
494
(20,446 )
(1,473)
(8 )
(1,481 )
Mobile
Consumer
Enterprise
WIB
Others
Total segment
Adjustment
and
elimination
Total
consolidated
2016
83,998
2,724
86,722
(37,814 )
(12,547 )
(50,361 )
36,361
10,410
1,877
12,287
(11,024 )
(2,793 )
(13,817 )
(1,530 )
15,816
12,877
28,693
(17,813 )
(9,647 )
(27,460 )
1,233
5,866
14,451
20,317
(10,451 )
(4,805 )
(15,256 )
5,061
(12,568 )
(7,085 )
(3,036 )
(5,729 )
(12,808 )
(2,881 )
(1,386 )
(1,715 )
(221 )
(392 )
119
(238 )
19
209
228
(417 )
(12 )
(429 )
(201 )
(1 )
(19 )
(1 )
116,109
32,138
148,247
(77,519 )
(29,804 )
(107,323 )
40,924
(224 )
(32,138 )
(31,914 )
381
29,804
30,185
(1,729 )
116,333
-
116,333
(77,138 )
-
(77,138 )
39,195
(28,419 )
(778 )
(29,197 )
(18,809 )
277
(18,532 )
(733 )
)
(10
(743 )
Segment results
Revenues
External revenues
Inter-segment revenues
Total segment revenues
Expenses
External expenses
Inter-segment expenses
Total segment expenses
Segment results
Other information
Capital expenditures
Depreciation and
amortization
Provision recognized in
current period
Segment results
Revenues
External revenues
Inter-segment revenues
Total segment revenues
Expenses
External expenses
Inter-segment expenses
Total segment expenses
Segment results
Other information
Capital expenditures
Depreciation and
amortization
Provision recognized in
current period
Adjustment and elimination:
Segment result
Operating loss of operating business
Other elimination and adjustment
Consolidated operating income
2017
2016
43,525
(786 )
1,168
43,907
40,924
(339 )
(1,390 )
39,195
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
32. OPERATING SEGMENT (continued)
Geographic information:
External revenues
Indonesia
Foreign countries
Total
2017
2016
125,970
2,286
128,256
114,093
2,240
116,333
The revenue information above is based on the location of the customers.
Non-current operating assets
Indonesia
Foreign countries
Total
2017
2016
126,938
3,233
130,171
115,216
2,371
117,587
Non-current operating assets for this purpose consist of property and equipment and intangible
assets.
33. 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 MoCI concerning “Mechanism to
Determine Tariff of Basic Telephony Services Connected through Fixed Line Network”. This
Decree replaced the previous Decree No. 09/PER/M.KOMINFO/02/2006.
Under the Decree, tariff structure for basic telephony services connected through fixed line network
consists of the following:
• Activation fee
• Monthly subscription charges
• Usage charges
• Additional facilities fee.
b. Mobile cellular telephone tariffs
the MoCI
issued Decree No. 09/PER/M.KOMINFO/04/2008 regarding
On April 7, 2008,
“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.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
33. TELECOMMUNICATIONS SERVICE TARIFFS (continued)
b. Mobile cellular telephone tariffs (continued)
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:
• Basic telephony services tariff
• Roaming tariff, and/or
• Multimedia services tariff
with the following traffic structure:
• Activation fee
• Monthly subscription charges
• Usage charges
• Additional facilities fee.
c. Interconnection tariffs
The Indonesian Telecommunication Regulatory Body (“ITRB”), in its letter No. 262/BRTI/XII/2011
dated December 12, 2011, decided to change the basis for SMS interconnection tariff to cost basis
with a maximum tariff of Rp23 per SMS effective from June 1, 2012, for all telecommunication
provider operators.
Based on letter No.118/KOMINFO/DJPPI/PI.02.04/01/2014 dated January 30, 2014 of the Director
General of Post and Informatics, the Director General of Post and Informatics decided to
implement new interconnection tariff effective from February 1, 2014 until December 31, 2016,
subject to evaluation on an annual basis. Pursuant to the Director General of Post and Informatics
letter, the Company and Telkomsel are required to submit the Reference Interconnection Offer
(“RIO”) proposal to ITRB to be evaluated.
ITRB
Subsequently,
letters No. 60/BRTI/III/2014 dated March 10, 2014 and
No. 125/BRTI/IV/2014 dated April 24, 2014 approved Telkomsel and the Company’s revision of
RIO regarding the interconnection tariff. Based on the letter, ITRB also approved the changes to
the SMS interconnection tariff to Rp24 per SMS.
its
in
On January 18, 2017, ITRB in its letters No. 20/BRTI/DPI/I/2017 and No. 21/BRTI/DPI/I/2017,
decided to use the interconnection tariff based on the Company and Telkomsel’s RIO in 2014 until
the new interconnection tariff is set.
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.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
34. SIGNIFICANT COMMITMENTS AND AGREEMENTS
a. Capital expenditures
As of December 31, 2017, capital expenditures committed under the contractual arrangements,
principally relating to procurement and installation of data, internet and information technology,
cellular, transmission equipment and cable network are as follows:
Currencies
Rupiah
U.S. dollar
Euro
Total
Amounts in foreign currencies
(in millions)
Equivalent in Rupiah
-
192
0.21
6,737
2,604
3
9,344
The above balance includes the following significant agreements:
(i) The Company
Contracting parties
Initial date of agreement
Significant provisions of the agreement
The Company and Consortium NEC
Corporation and PT NEC Indonesia
The Company and PT Industri
Telekomunikasi Indonesia
May 28, 2013
May 5, 2014
Procurement Agreement of Sulawesi Maluku
Papua Cable System (“SMPCS”) Package-2
Procurement and installation agreement of
Outside Plant Optic (“OSP-FO”) Access
The Company and PT Lintas Teknologi
Indonesia
November 17, 2015
Procurement and installation agreement of
DWDM Platform ALCATEL
The Company and PT Sisindokom Lintas
Buana
November 23, 2015
Procurement and installation agreement of
Expand PE VPN Cisco
The Company and PT Datacomm Diangraha
November 20, 2015
Procurement and installation agreement of
Metro Ethernet Platform ALU
The Company and Space System/Loral, LLC
February 29, 2016
Procurement of Telkom 4 Satellite System
The Company and NEC Corporation
May 12, 2016
The Company and NEC Corporation
July 18, 2016
The Company and PT Huawei Tech
Investment
October 10, 2016
Procurement and installation agreement of
Sistem Komunikasi Kabel Laut (“SKKL”)
Indonesia Global Gateway
Procurement and installation agreement of
Radio IP Backhaul Node-B Telkomsel Platform
NEC
Procurement and installation agreement of 10
Gigabyte Capable Passive Optical Network
(“XGPON”) Platform Huawei
The Company and PT Huawei Tech
Investment
November 25, 2016
Procurement and installation agreement of
DWDM Platform Huawei
The Company and PT Fiberhome
Technologies Indonesia and PT Abhimata
Citra Abadi
December 6, 2016
Procurement and installation agreement of
XGPON Platform Fiber-home
The Company and PT ZTE Indonesia
May 31, 2017
Procurement agreement for Set Top Box (STB)
Platform ZTE
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
34. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
a. Capital expenditures (continued)
(i) The Company (continued)
Contracting parties
Initial date of agreement
Significant provisions of the agreement
The Company and PT Asuransi Jasa
Indonesia
October 31, 2017
The Company and PT ZTE Indonesia
November 1, 2017
The Company and Consortium Bisnis
Submarine Cable
November 10, 2017
The Company and PT ZTE Indonesia
December 22, 2017
The Company and PT Lancs Arche
Consumma
December 22, 2017
Procurement agreement for Telkom 4 Satellite
Launch Insurance Services
Procurement and installation agreement of
STB 4K and ONT Enterprise Platform ZTE
Procurement and installation agreement of
Sistem Komunikasi Kabel Laut (“SKKL”)
Sabang-Lhoksemawe-Medan
Procurement for ONT Retail Platform ZTE
Procurement and installation agreement of
Expand Capacity of Network Capacity DWDM
Platform Coriant for NARU 2017
(ii) Telkomsel
Contracting parties
Telkomsel, PT Ericsson Indonesia, Ericsson
AB, PT Nokia Siemens Networks, NSN Oy
and Nokia Siemens Network GmbH & Co.
KG
Initial date of agreement
Significant provisions of the agreement
April 17, 2008
The combined 2G and 3G CS Core Network
Rollout Agreement
Telkomsel, PT Ericsson Indonesia and PT
Nokia Siemens Networks
April 17, 2008
Technical Service Agreement (“TSA”) for
combined 2G and 3G CS Core Network
Telkomsel, PT Ericsson Indonesia, Ericsson
AB, PT Nokia Siemens Networks, NSN Oy,
Huawei International Pte. Ltd., PT Huawei
and PT ZTE Indonesia
March and June 2009
2G BSS and 3G UTRAN Rollout agreement for
the provision of 2G GSM BSS and 3G UMTS
Radio Access Network
Telkomsel, PT Dimension Data Indonesia
and PT Huawei
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, Amdocs Software Solutions
Limited Liability Company and PT Application
Solutions
July 5, 2011
Telkomsel and PT Huawei
March 25, 2013
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
Development and Rollout agreement for
Customer Relationship Management and
Contact Center Solutions
Technical Support Agreement for the
procurement of Gateway GPRS Support Node
(“GGSN”) Service Complex
Telkomsel and Wipro Limited, Wipro
Singapore Pte. Ltd. and PT WT Indonesia
April 23, 2013
Development and procurement of OSDSS
Solution Agreement
Telkomsel and PT Ericsson Indonesia
October 22, 2013
Telkomsel and PT Dimension Data Indonesia
May 25, 2016
Procurement of GGSN Service Complex
Rollout Agreement
Maintenance and Procurement of Equipment
and Related Service Agreement for Next
Generation Convergence RAN Transport
Rollout
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
34. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
b. Borrowings and other credit facilities
(i) As of December 31, 2017, 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
Total facility
Maturity
BRI
BNI
500 March 14, 2018
500 March 31, 2018
Bank Mandiri
500 December 23, 2019
Currency
Rp
Rp
US$
Rp
US$
Total
1,500
Facility utilized
Original
currency
(in millions)
Rupiah
equivalent
-
-
0
-
0
306
291
1
390
1
989
(ii) Telkomsel has US$3 million bond, bank guarantee and standby letter of credit facility with
SCB, Jakarta. The facilities will expire on July 31, 2018. Telkomsel has issued a bank
guarantee amounting to Rp20 billion (equivalent to US$1.5 million) as a frequency
performance bond valid until March 24, 2016. As the date of approval and authorization for
the issuance of these financial statement the bank guarantee is not extended.
Telkomsel has a Rp500 billion bank guarantee facility with BRI. The facility will expire on
March 25, 2019. Under this facility, as of December 31, 2017, Telkomsel has issued a bank
guarantee amounting to Rp472 billion (equivalent to US$35 million) as payment commitment
guarantee for annual right of usage fee valid until April 1, 2018 and Rp20 billion (equivalent to
US$1.5 million) as frequency performance bond valid until May 31, 2018 (Noteb34c.i).
Telkomsel has a Rp150 billion bank guarantee facility with BCA. The facility will expire
on April 15, 2018.
Telkomsel also has a Rp2,100 billion bank guarantee facility with BNI. The facility will expire
on December 11, 2018. Telkomsel uses this facility to replace the time deposits which were
pledged as collateral for bank guarantees required for the USO program amounting to Rp52.2
billion (Note 34c.iii) and for surety bond of 2.3 Ghz radio frequency amounting to Rp1,030
billion (Note 34c.i)
(iii) TII has a US$15 million bank guarantee from Bank Mandiri and has been renewed in
accordance with the ammendment V (five) on December 18, 2017 with a maximum credit limit
of US$10 million. The facility will expire on December 18, 2018.
(iv) On December 31, 2017, Sigma has a Rp350 billion bank guarantee from BNI.
c. Others
(i) Radio Frequency Usage
Based on Decree No. 8 dated November 2, 2015 of the Government of the Republic of
Indonesia which replaced Decree No. 76 dated December 15, 2010, Telkomsel is required to
pay the annual frequency usage fees for the 800 MHz, 900 MHz and 1800 MHz bandwidths
using the formula set out in the decree.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
34. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
c. Others
(i) Radio Frequency Usage (continued)
As an implementation of the above decree, the Company and Telkomsel paid annual
frequency usage fees since 2010.
In 2017, the Government through the MoCI established Telkomsel as the winner of the
spectrum auction for a frequency of 2.3 GHz as wide as 30 MHz, at a price of Rp1.01 trillion.
Based on Decision letter No. 1987 Year 2017 dated November 15, 2017, which amended
Decree No. 42 Year 2014 dated January 29, 2014, whereby the MoCI granted Telkomsel the
rights to provide:
(i) Mobile telecommunication services with radio frequency bandwidth in the 800 MHz, 900
MHz, 1800 MHz, 2.1 GHz and 2.3 GHz; and
(ii) Basic telecommunication services.
With reference to Decision Letters No. 268/KEP/M.KOMINFO/9/2009, No. 509 Year 2016 and
No. 1896 year 2017 of the MoCI, Telkomsel is required, among other things, to:
1. Pay an annual right of usage (BHP) over the license term (10 years) as set forth in the
decision letters. The BHP is payable upon receipt of Surat Pemberitahuan Pembayaran
(notification letter) from the DGPI. The BHP fee is payable annually up to the expiry
period of the license.
2. Issue a performance bond each year amounting to Rp20 billion for spectrum 2.1 GHz and
a surety bond each year amounting Rp1.03 trillion for spectrum 2.3 GHz.
Conditional Business Transfer Agreement (“CBTA”)
In order to maximize business opportunities within the group synergy, the Company
restructured its fixed wireless business unit by transferring its fixed wireless business and
subscribers to Telkomsel. On June 27, 2014, the Company signed a CBTA with Telkomsel to
transfer such business and subscribers to Telkomsel (Notes 4, 9b, 31).
Based on Decision Letter No. 934 dated September 26, 2014, the MoCI approved the transfer
of the Company’s frequency usage license on radio frequency spectrum of 800 MHz,
specifically on spectrum of 880 - 887.5 MHz paired with 925 - 932.5 MHz, to Telkomsel.
Telkomsel can use the radio frequency spectrum since the date the Decision Letter was
issued.
During the transition period, the Company is still able to use the radio frequency spectrum of
880 - 887.5 MHz paired with 925 - 932.5 MHz at the latest until December 14, 2014.
Based on MoCI Decision
letter No. 807/KOMINFO/OJ-SOPI.4/SP.03.03/10/2016 dated
October 13, 2016, the migration process of frequency spectrum of 800 MHz has been
completed and Telkomsel is able to use the frequency spectrum nationwide.
Accordingly, the Company and Telkomsel agreed that the CBTA has been completed on
October 21, 2016.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
34. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
c. Others (continued)
(ii) Future minimum lease payments under operating lease
The Group 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 2018 and 2027. Periods
may be extended based on the agreement by both parties.
Future minimum
agreements as of December 31, 2017 are as follows :
lease payments/receivables under non-cancelable operating
lease
As lessee
As lessor
Total
Less than 1
year
31,218
2,362
4,038
737
1-5 years
15,915
1,475
More than 5
years
11,265
150
In connection with the restructuring of its fixed wireless business (Note 34c.ii), the Company is
undertaking a negotiation to early terminate its operating lease arrangements, and has
recorded provisions for early termination amounting to Rp202 billion and Rp666 billion which
are presented as “Other Expense” in 2016 and 2015, respectively, outstanding liabilities
balance of operating lease agreements due to early termination amounted to Rp300 billion has
been fully paid in 2017.
(iii) USO
The MoCI issued Regulation No. 17 year 2016 dated September 26, 2016 which replaced
Decree No. 45 year 2012 and other previous regulations regarding policies underlying the
USO program. The regulation requires telecommunications operators in Indonesia to
contribute 1.25% of their gross revenues (with due consideration for bad debts and/or
interconnection charges and/or revenues which not accounted as gross revenue of
telecommunication providers) for USO development.
Based on MoCI Decree No. 32/PER/M.KOMINFO/10/2008 dated October 10, 2008 (as
amended by Decree No. 03/PER/M.KOMINFO/2/2010 dated February 1, 2010) 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,
among others, in providing telecommunication access and services in rural areas (USO
Program), the provider is determined through a selection process by 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”).
a. The 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, North Sumatra, North Sulawesi,
Gorontalo, Central Sulawesi, West Sulawesi, South Sulawesi and South East Sulawesi.
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, North Sulawesi,
Central Sulawesi, Gorontalo, West Sulawesi, South East Sulawesi, Central Kalimantan,
South Sulawesi, Papua and West Irian Jaya.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
34. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
c. Others (continued)
(iii) USO (continued)
a. The Company (continued)
In 2015, the program was ceased. On September 8, 2015, the Company filed an arbitration
claim to the Indonesia National Board of Arbitration (“BANI”) for the settlement of the
outstanding receivables of USO-PLIK and USO-MPLIK. On September 22, 2016, BANI
decided that BPPPTI should pay the underpayment to the Company for USO-PLIK and
USO-MPLIK project amounting to Rp127 billion and Rp342 billion, respectively.
As of the date of the issuance of these consolidated financial statements, the Company
has received payment from BPPPTI amounting to Rp278 billion.
b. Telkomsel
On January 16 and 23, 2009, Telkomsel was selected in a tender by the Government
through BTIP to provide and operate 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. Accordingly, Telkomsel obtained local fixed-line
licenses and the right to use radio frequency in the 2,390 MHz - 2,400 MHz bandwidth.
Subsequently, in 2010 and 2011, the agreements with BTIP were amended, which
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 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 - 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
packages 1, 2 and 3 with a total price of Rp261 billion.
On March 31, 2014, the USO program for packages 1, 2, 3, 6 and 7 were ceased.
As of September 18, 2014, Telkomsel filed an arbitration claim to BANI for the settlement
of the outstanding receivable from BPPPTI. On October 23, 2015, BANI decided that
Telkomsel should pay the overpayment by BPPPTI for the USO program amounting to
Rp94.2 billion. Telkomsel accepted
in
December 2015. On October 29, 2015, BPPPTI informed that operational license for USO
program of “Desa Pinter” could not be issued. In January 2016, Telkomsel filed an
arbitration claim to BANI for terminating the USO program.
the decision and paid
the overpayment
On June 22, 2017, Telkomsel received decision letter of BANI No.792/1/ARB-BANI/2016
requesting BPPPTI to pay compensation to Telkomsel amounting to Rp217 billion, and as
of the date of the issuance of these consolidated financial statements, Telkomsel has not
received the compensation yet.
As of December 31, 2017 and 2016, the Company’s and Telkomsel’s net carrying amount
of trade receivables for the USO programs which are measured at amortized cost using the
effective interest method amounted to Rp146 billion and Rp178 billion, respectively.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
35. CONTINGENCIES
The Company, Telkomsel and seven other
investigated by
The Commission for the Supervision of Business Competition (Komisi Pengawasan Persaingan
Usaha or “KPPU”)
in case
No. 26/KPPU-L/2007, the Company, Telkomsel and seven other local operators were investigated. As
a result of the investigations, KPPU stated that the Company, Telkomsel and five other local operators
had violated Law No. 5 year 1999 article 5 and charged the Company and Telkomsel the amounts of
Rp18 billion and Rp25 billion, respectively.
for allegations of SMS cartel practices. On June 17, 2008,
local operators are being
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.
Seven other local operators also filed an appeal in various courts. In relation to the case, the KPPU
requested the 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. On May 27, 2015, the Central Jakarta District Court in case No.
03/KPPU/208/PN.JKT.PST decided that the Company, Telkomsel and seven other local operators
won the case.
On July 23, 2015, KPPU filed an appeal to the SC regarding the case of SMS cartel practices.
On February 29, 2016, the SC in case No. 9 K/Pdt.Sus-KPPU/2016 decided on the case in favor of
KPPU, therefore the Company and Telkomsel have to pay the penalty charged by KPPU amounting to
Rp18 billion and Rp25 billion, respectively. The Company and Telkomsel have paid the penalty to the
treasury fund in January 2017.
36. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES
Assets and liabilities denominated in foreign currencies are as follows:
U.S. dollar
(in millions)
Japanese yen
(in millions)
Others*
(in millions)
Rupiah equivalent
(in billions)
2017
Assets
Cash and cash equivalents
Other current financial assets
Trade receivables
Related parties
Third parties
Other receivables
Other current assets
Other non-current assets
Total assets
Liabilities
Trade payables
Related parties
Third parties
Other payables
Accrued expenses
Advances from customers and suppliers
Current maturities of long-term borrowings
Other liabilities
Long-term borrowings - net of current maturities
Total liabilities
Assets (liabilities) - net
7.47
-
-
-
-
-
-
7.47
-
(19.57
)))))
-
(18.28
)))))
-
(767.90
)))))
-
)))))
(4,607.39
(5,413.14
) ) )
)))))
(5,405.67
8.37
1.14
-
4.24
0.01
72.33
0.06
87.09
-
(7.41 )
(7.41 )
(1.05 )
-
-
-
-
(15.87 )
71.22
2,201
399
41
1,025
2
18
59
3,745
(3 )
(2,227 )
(149 )
(584 )
(7 )
(292 )
(296 )
(1,557 )
(5,115 )
(1,370 )
154.07
28.34
3.02
71.38
0.15
0.10
4.27
317.12
(0.22 )
(159.65 )
(4.12 )
(42.20 )
(0.48 )
(10.59 )
(21.83 )
(65.22 )
(304.31 )
))))
12.81
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
36. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES (continued)
Assets and liabilities denominated in foreign currencies are as follows (continued):
Assets
Cash and cash equivalents
Other current financial assets
Trade receivables
Related parties
Third parties
Other receivables
Other current assets
Other non-current assets
Total assets
Liabilities
Trade payables
Related parties
Third parties
Other payables
Accrued expenses
Advances from customers and suppliers
Current maturities of long-term borrowings
Other liabilities
Promissory notes
Long-term borrowings - net of current maturities
Total liabilities
Assets (liabilities) - net
U.S. dollar
(in millions)
Japanese yen
(in millions)
Others*
(in millions)
Rupiah equivalent
(in billions)
2016
204.34
8.81
0
106.70
0.44
-
4.09
324.38
(0.18 )
(163.09 )
(5.40 )
(27.99 )
(0.48 )
(10.88 )
-
(0.10 )
(64.14 )
(272.26 )
52.12
5.99
-
-
-
-
-
-
5.99
-
) ) )
(4.83
-
(20.96
) ) )
-
(767.90
) ) )
-
-
(5.375.28
) ) )
(6.168.97
) ) )
) ) )
(6.162.98
20.94
0.35
0
3.88
0.10
-
-
25.27
(0.01
) ) )
(6.21 )
(1.18 )
(0.18 )
-
-
-
-
-
(7.58
) ) )
17.69
3.032
122
0
1.488
7
-
56
4.705
(2 )
(2.246 )
(88 )
(381 )
(7 )
(235 )
-
(1 )
(1,482 )
(4.442 )
263
*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 Group’s 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 Group reports monetary assets and liabilities in foreign currencies as of December 31, 2017
using the exchange rates on March 12, 2018 the unrealized foreign exchange loss amounted to
Rp67 billion.
37. FINANCIAL RISK MANAGEMENT
1. Fair value of financial assets and financial liabilities
a. Classification
i. Financial Asset
Loans and receivables
Cash and cash equivalents
Trade and other receivables, net
Other current financial assets
Other non-current assets
Available-for-sale financial assets
Available-for-sale investment
Total financial asset
2017
2016
25,145
9,564
1,005
183
1,541
37,438
29,767
7,900
313
210
1,158
39,348
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
37. FINANCIAL RISK MANAGEMENT (continued)
1. Fair value of financial assets and financial liabilities (continued)
a. Classification (continued)
ii. Financial Liabilities
Financial liabilities measured at amortized cost
Trade and other payables
Accrued expenses
Interest-bearing loans and other borrowings
Short-term bank loans
Two-step loans
Bonds and notes
Long-term bank loans
Obligation under finance lease
Other borrowings
Total financial liabilities
b. Fair Value
2017
2016
15,791
12,630
2,289
1,098
8,982
18,004
3,804
1,295
63,893
13,690
11,283
911
1,292
9,323
15,566
4,010
697
56,772
2017
Financial assets measured at fair value
Available-for-sale investment
Total
Financial liabilities for which
fair values are disclosed
Interest-bearing loans and other borrowings:
Two-step loans
Bonds and notes
Long-term bank loans
Obligation under finance lease
Other borrowings
Other liabilities
Total
2016
Financial assets measured at fair value
Available-for-sale investment
Total
Financial liabilities for which
fair values are disclosed
Interest-bearing loans and other borrowings:
Two-step loans
Bonds and notes
Long-term bank loans
Obligation under finance lease
Other borrowings
Total
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)
Carrying
value
Fair Value
1,541
1,541
1,541
1,541
1,151
1,151
17
17
373
373
1,098
8,982
18,004
3,804
1,295
296
33,479
1,116
10,038
18,108
3,804
1,370
296
34,732
-
10,038
-
-
-
-
10,038
-
-
-
-
-
-
-
1,116
-
18,108
3,804
1,370
296
24,694
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)
Carrying
value
Fair Value
1,158
1,158
1,158
1,158
1,058
1,058
100
100
-
-
1,292
9,323
15,566
4,010
697
30,888
1,312
9,684
15,404
4,010
689
31,099
-
9,342
-
-
-
9,342
-
-
-
-
-
-
1,312
342
15,404
4,010
689
21,757
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
37. FINANCIAL RISK MANAGEMENT (continued)
1. Fair value of financial assets and financial liabilities (continued)
b. Fair value (continued)
There is no gain or loss on fair value measurement recognized in consolidated statements of
profit or loss and other comprehensive income in 2017. There is no movement between fair
value hierarchy during 2017.
c. Fair value measurement
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
parties in an arm's length transaction.
The Group determined the fair value measurement for disclosure purposes of each class of
financial assets and financial liabilities based on the following methods and assumptions:
(i) the fair values of short-term financial assets and financial liabilities with maturities of one
year or less (cash and cash equivalents, trade and other receivables, other current financial
assets, trade and other payables, accrued expenses, and short-term bank loans) and other
non-current assets are considered to approximate their carrying amounts as the impact of
discounting is not significant;
(ii) the fair values of long-term financial assets and financial liabilities (other non-current assets
(long-term trade receivables and restricted cash) and liabilities) approximate their carrying
amounts as they were measured based on the discounted future contractual cash flows;
(iii) available-for-sale financial assets primarily consist of stocks, mutual funds, corporate and
government bonds and convertible bonds. Stocks 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. The fair value of convertible bonds are determined
using valuation technique. Corporate and government bonds are stated at fair value by
reference to prices of similar securities at the reporting date;
(iv) 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 Group for similar liabilities of
comparable maturities by the bankers of the Group, except for bonds which are based on
market price.
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 Group would
record upon disposal/termination of the financial assets and liabilities.
2. Financial risk management
The Group’s activities expose it to a variety of financial risks such as market risks (including foreign
exchange risk, market price risk and interest rate risk), credit risk and liquidity risk. Overall, the
Group’s 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 on 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.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
37. FINANCIAL RISK MANAGEMENT (continued)
2. Financial risk management (continued)
Financial risk management is carried out by the Corporate Finance and Financial Policy unit under
policies approved by the Board of Directors. The Corporate Finance and Financial Policy unit
identifies, evaluates and hedges financial risks.
a. Foreign exchange risk
The Group is 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. dollars and Japanese yen. The Group’s exposures to other foreign exchange
rates are not material.
Increasing risks of foreign currency exchange rates on the obligations of the Group are
expected to be partly 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
foreign currency liabilities.
The following table presents the Group’s financial assets and financial liabilities exposure to
foreign currency risk:
2017
2016
U.S. dollar
(in billions)
Japanese yen
(in billions)
U.S. dollar
(in billions)
Japanese yen
(in billions)
0.26
(0.31 )
0.05
0.01
(5.41 )
(5.40 )
0.32
(0.27 )
0.05
0.01
(6.17 )
(6.16 )
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, 2017 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 Group
considered to be reasonably possible at the reporting date. The analysis assumes that all
other variables, in particular interest rates, remain constant.
December 31, 2017
U.S. dollar (1% strengthening)
Japanese yen (5% strengthening)
Equity/profit (loss)
(6 )
(33 )
A weakening of the U.S.dollar and Japanese yen against the rupiah at December 31, 2017
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 Group is 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 Group’s available-for-sale investments is monitored periodically,
together with a regular assessment of their relevance to the Group’s long-term strategic plans.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
37. FINANCIAL RISK MANAGEMENT (continued)
2. Financial risk management (continued)
b. Market price risk (continued)
As of December 31, 2017, management considered the price risk for the Group’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 performance.
Borrowings at variable interest rates expose the Group to interest rate risk (Notes 15 and 16).
To measure market risk pertaining to fluctuations in interest rates, the Group primarily uses
interest margin and maturity profile of the financial assets and liabilities based on changing
schedule of the interest rate.
At reporting date, the interest rate profile of the Group’s interest-bearing borrowings was as
follows:
Fixed rate borrowings
Variable rate borrowings
Sensitivity analysis for variable rate borrowings
2017
2016
(14,204 )
(21,267 )
(16,383 )
(15,416 )
As of December 31, 2017, a decrease (increase) by 25 basis points in interest rates of
variable rate borrowings would have increased (decreased) equity and profit or loss by
Rp53 billion, respectively. The 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 the Group’s financial
assets:
Cash and cash equivalents
Other current financial assets
Trade and other receivable, net
Advances and other non-current assets
Total
2017
2016
25,145
2,173
9,564
183
37,065
29,767
1,471
7,900
210
39,348
The Group is exposed to credit risk primarily from cash and cash equivalents and trade and
other receivables. The credit risk is controlled by continuous monitoring of outstanding
balance and collection.
Credit risk from balances with banks and financial institutions is managed by the Group’s
Corporate Finance and Financial Policy Unit in accordance with the Group’s written policy.
The Group placed the majority of its cash and cash equivalents in state-owned 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. Therefore, it is intended to minimize
financial loss through banks and financial institutions’ potential failure to make payments.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
37. FINANCIAL RISK MANAGEMENT (continued)
2. Financial risk management (continued)
d. Credit risk
The customer credit risk is managed by continuous monitoring of outstanding balances and
collection. Trade and other receivables do not have any major concentration of risk whereas
no customer receivable balance exceeds 5% of trade receivables as of December 31, 2017.
Management is confident in its ability to continue to control and sustain minimal exposure to
the customer credit risk given that the Group has recognized 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 Group has difficulties in fulfilling financial liabilities
when they become due.
Prudent liquidity risk management implies maintaining sufficient cash in order to meet the
Group’s financial obligations. The Group continuously performs an analysis to monitor
financial position ratios, such as liquidity ratios and debt-to-equity ratios, against debt
covenant requirements.
The following is the maturity profile of the Group’s financial liabilities based on contractual
undiscounted payments:
December 31, 2017
Trade and other payables
Accrued expenses
Interest bearing loans and
other borrowings
Bank loans
Bonds and notes
Obligations under
finance leases
Other borrowings
Two-step loans
Other liabilities
Total
December 31, 2016
Trade and other payables
Accrued expenses
Interest bearing loans and
other borrowings
Bank loans
Bonds and notes
Obligations under
finance leases
Two-step loans
Other borrowings
Total
Carrying
amount
Contractual
cash flows
2018
2019
2020
2021
2022 and
thereafter
15,791
12,630
(15,791 )
(12,630 )
(15,791 )
(12,630 )
-
-
-
-
-
-
-
-
20,293
8,982
(24,378 )
(18,278 )
(7,655 )
(929 )
3,804
1,295
1,098
296
64,189
(4,685 )
(1,759 )
(1,243 )
(355)
(79,119 )
(1,083 )
(220 )
(250 )
(17 )
(38,575 )
(5,078 )
(929 )
(969 )
(303 )
(222 )
(34 )
(7,535 )
(4,006 )
(2,873 )
(866 )
(285 )
(214 )
(34 )
(8,278 )
(2,660 )
(726 )
(778 )
(266 )
(189 )
(135 )
(4,754 )
(4,979 )
(12,821 )
(989 )
(685 )
(368 )
(135 )
(19,977 )
Carrying
amount
Contractual
cash flows
2017
2018
2019
2020
2021 and
thereafter
13,690
11,283
(13,690 )
(11,283 )
(13,690 )
(11,283 )
-
-
-
-
-
-
-
-
16,477
9,323
(20,421 )
(19,670 )
(5,875 )
(969 )
4,010
1,292
697
56,772
(5,160 )
(1,487 )
(1,007 )
(72,718 )
(987 )
(279 )
(60 )
(33,143 )
(5,635 )
(967 )
(892 )
(244 )
(118 )
(7,856 )
(2,883 )
(1,187 )
(816 )
(216 )
(164 )
(5,266 )
(2,565 )
(3,000 )
(771 )
(209 )
(153 )
(6,698 )
(3,463 )
(13,547 )
(1,694 )
(539 )
(512 )
(19,755 )
The difference between the carrying amount and the contractual cash flows is interest value.
The interest value of variable-rate borrowings are determined based on the interest rates
effective as of reporting date.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
38. CAPITAL MANAGEMENT
The capital structure of the Group is as follows:
Short-term debts
Long-term debts
Total debts
Equity attributable to owners
of the parent company
Total
2017
2016
Amount
Portion
Amount
Portion
2,289
33,183
35,472
92,713
128,185
1
1.78%
25.89%
27.67%
72.33%
100%
911
30,888
31,799
84,384
116,183
0.78%
26.59%
27.37%
72.63%
100%
The Group’s objectives when managing capital are to safeguard the Group’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 Group 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 Group will consider buying back its shares of stock
or paying dividend to its stockholders.
In addition to complying with loan covenants, the Group also maintains its capital structure at the level
it believes will not risk its credit rating and which 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 Group’s capital structure and review the effectiveness of the Group’s
debts. The Group monitors its debt levels to ensure the debt-to-equity ratio complies with or is below
the ratio set out in its contractual borrowings arrangements and that such ratio is comparable or better
than that of regional area entities in the telecommunications industry.
The Group’s debt-to-equity ratio as of December 31, 2017 and 2016 is as follows:
Total interest-bearing debts
Less: cash and cash equivalents
Net debts
Total equity attributable to owners of the parent company
Net debt-to-equity ratio
2017
2016
35,472
(25,145 )
10,327
92,713
11.14%
31,799
(29,767 )
2,032
84,384
2.41%
As stated in Notes 16, the Group is required to maintain a certain debt-to-equity ratio and debt service
coverage ratio by the lenders, For the years ended December 31, 2017 and 2016, the Group has
complied with the externally imposed capital requirements.
121
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
39. SUPPLEMENTAL CASH FLOWS INFORMATION
The non-cash investing activities for the years ended December 31, 2017 and 2016 are as follows:
Acquisition of property and equipment:
Credited to trade payables
Non-monetary exchange
Credited to obligations under finance lease
Interest capitalization
Acquisition of intangible assets:
Credited to trade payables
40. SUBSEQUENT EVENTS
2017
2016
5,525
816
518
328
846
6,199
636
368
188
41
1. On January 30, 2018, the Company, through Metranet, entered into a conditional shares
subscription agreement with Cellum Global Zrt. ("Cellum") through two stages. In the first phase,
Metranet will enclose new shares amounting to USD4,000,000 (equivalent to 20.4% ownership)
and second phase at USD2,000,000 so the ownership of Metranet will be equivalent to 30.4%
ownership. Cellum is mobile payment and commerce services solutions provider. These new
shares are expected to strengthen TIMES portfolio, particularly strengthening the Fin-Tech Telkom
Group's business ecosystem.
2. Up to the date of issuance of these consolidated financial statements, the Company and its
subsidiaries have drawn down and entered into a credit facility agreement:
a. On January 4, 2018 and February 13, 2018, GSD withdrew loans from 2017's facility
agreement with BNI and Bank Mandiri amounting to Rp68 billion and Rp150 billion,
respectively.
b. On February 9, 2018, Telin entered into a credit facilities agreements with Bank of Tokyo
Mitsubishi UFJ amounting to USD10 billion.
c. On January 10, 2018, Telkomsel amended the overdraft agreement with Deutsche Bank,
dated April 8, 2015, for total facilities up to Rp750 billion for the purpose of financing
Telkomsel’s working capital.
d. On February 26, 2018, Telkom Infra, Infomedia and the Company entered into several Joint
Borrowing credit facilities agreements with Bank DBS amounting to Rp325 billion, Rp275
billion, and Rp50 billion, respectively.
e. On February 26, 2018, the Company and Telin entered into several Joint Borrowing credit
facilities agreements with Bank Mandiri amounting to Rp775 billion and Rp50 billion,
respectively.
f. On February 26, 2018, the Company entered into a Joint Borrowing credit facilities
agreements with BNI amounting to Rp825 billion.
g. On February 26, 2018, Telin entered into a special credit facilities agreements with Bank
Mandiri amounting to Rp50 billion.
3. On February 27, 2018, The Minister of Communications and Multimedia Malaysia (“MCM”) has
issued approvals for foreign 70% ownership of TSGN, through licensing amendments.
4. On February 28, 2018, Metra signed a Conditional Sales Purchase Agreement with shareholders
of PT Swadharma Sarana Informatika (“Swadharma”) for 36.5% share ownership amounting to
Rp219 billion and new share purchase through an increase of share capital valued at Rp178 billion
so that ownership of Metra became 51%. Swadharma is a company engaged in the management
of computer technology facilities, especially in the banking sector. These new investments are
expected to strengthen the Company business portfolio.
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
41. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND
INTERNATIONAL
FINANCIAL REPORTING STANDARDS (“IFRS”)
The following tables set forth a reconciliation of the consolidated statement of financial position as of
December 31, 2017 and consolidated statements of profit or loss and other comprehensive income for
the year ended December 31, 2017, in each case between PSAK and IFRS.
PSAK
RECONCILIATION
IFRS
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
Assets held for sale
Prepaid taxes
Claim for tax refund
Other current assets
Total Current Assets
NON-CURRENT ASSETS
Long-term investments
Property and equipment - net of accumulated
depreciation
Intangible assets - net of accumulated amortization
Deferred tax assets - net
Other non-current assets
Total Non-current Assets
TOTAL ASSETS
25,145
2,173
1,545
7,677
342
631
10
1,947
908
7,183
47,561
2,148
130,171
3,530
2,804
12,270
150,923
198,484
-
-
25,145
2,173
319
(319 )
-
-
-
-
-
-
-
-
1,864
7,358
342
631
10
1,947
908
7,183
47,561
2,148
(299 )
-
-
-
129,872
3,530
2,804
12,270
(299 ) 150,624
(299 ) 198,185
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
41. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND
INTERNATIONAL
FINANCIAL REPORTING STANDARDS (“IFRS”) (continued)
PSAK
RECONCILIATION
IFRS
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade payables
Related parties
Third parties
Other payables
Taxes payable
Accrued expenses
Unearned income
Advances from customers
Short-term bank loans
Current maturities of long-term borrowings
Total Current Liabilities
NON-CURRENT LIABILITIES
Deferred tax liabilities - net
Unearned income
Long service award provisions
Pension benefits and other post-employment benefits
obligations
Long-term borrowings - net of current maturities
Other liabilities
Total Non-current Liabilities
TOTAL LIABILITIES
EQUITY
Capital stock
Additional paid-in capital
Treasury stock
Other equity
Retained earnings
Net equity attributable to:
Owners of the Parent Company
Non-controlling Interests
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
896
14,678
217
2,790
12,630
5,427
1,240
2,289
5,209
45,376
933
524
758
10,195
27,974
594
40,978
86,354
5,040
4,931
(2,541 )
387
84,896
92,713
19,417
112,130
198,484
2,460
1,564
13,114
(1,564 )
217
-
-
2,790
- 12,630
5,427
-
1,240
-
2,289
-
-
5,209
- 45,376
-
-
-
933
524
758
10,195
-
- 27,974
-
594
- 40,978
- 86,354
-
(478 )
-
(157 )
389
5,040
4,453
(2,541 )
230
85,285
92,467
(246 )
19,364
(53 )
(299 ) 111,831
(299 ) 198,185
124
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
41. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND
INTERNATIONAL
FINANCIAL REPORTING STANDARDS (“IFRS”) (continued)
PSAK
RECONCILIATION
IFRS
REVENUES
Operation, maintenance and telecommunication
service expenses
Depreciation and amortization expenses
Personnel expenses
Interconnection expenses
General and administrative expenses
Marketing expenses
Gain on foreign exchange - net
Other income
Other expenses
OPERATING PROFIT
Finance income
Finance costs
Share of profit of associated companies
PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE
PROFIT FOR THE YEAR
OTHER COMPREHENSIVE INCOME
Other comprehensive income to be reclassified to
profit or loss in subsequent periods:
Foreign currency translation
Change in fair value of available-for-sale financial
assets
Share of other comprehensive income of associated
companies
Other comprehensive income not to be reclassified
to profit or loss in subsequent periods:
Defined benefit plan actuarial (loss) gain - net
Other comprehensive income - net
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 (100 Series B shares
per ADS)
128,256
(36,603 )
(20,446 )
(13,529 )
(2,987 )
(5,260 )
(5,268 )
51
1,039
(1,320 )
43,933
1,434
(2,769 )
61
42,659
(9,958 )
32,701
24
20
(1 )
(2,375 )
(2,332 )
30,369
22,145
10,556
32,701
19,952
10,417
30,369
-
-
(31 )
-
-
-
-
-
-
-
(31 )
-
-
-
(31 )
-
(31 )
-
-
-
-
-
(31 )
(25 )
(6 )
(31 )
(25 )
(6 )
(31 )
128,256
(36,603 )
(20,477 )
(13,529 )
(2,987 )
(5,260 )
(5,268 )
51
1,039
(1,320 )
43,902
1,434
(2,769 )
61
42,628
(9,958 )
32,670
24
20
(1 )
(2,375 )
(2,332 )
30,338
22,120
10,550
32,670
19,927
10,411
30,338
223.55
22,354.64
(0.25 )
223.30
)
(25.24
22,329.40
125
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, 2017 and For the Year Then Ended
(Figures in tables are expressed in billions of Rupiah, unless otherwise stated)
41. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND
INTERNATIONAL
FINANCIAL REPORTING STANDARDS (“IFRS”) (continued)
a. 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.
b. 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.
Under IFRS, a government-related entity is an entity that is controlled, jointly controlled or
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.
126
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email : investor@telkom.co.id
www.telkom.co.id
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DATA CONTRIBUTORS
A. Hartono
A. Winahyo Pratomo
Abbas Paul Ricardo Girsang
Achmad Sulkom
Adam Saksono
Adhela Kurniartha Sekar Arum
Adim Kusmadani
Agung Kertioso
Agung Nugroho
Agung Prasetyo Budi
Agus Kayanto
Agus Priyatna
Agus Wachid
Agustinus Budi Wibowo
Ahmad Hidayat
Ahmad Zaki Fairuzzi
Ahmed Yasser
Akhmad Aryandi
Amir Syarifuddin
Andar Jan Pieter H Manurung
Andri Herawan Sasoko
Anggi Vidya Ristyanti
Anggia Permatasari
Anggoro Kurnianto Widiawan
Anka Januar
Annisa Arnizanthya
Anton Widaryanto
Ardhi Mutiarto
Ardi Desento
Ardya Prahasta
Ari Nugroho
Arief Hamdani Gunawan
Arieyanto
Ariwiati
Ariyanto
Arri Kunrat
Arya Satriananta
Aryandi
Asbon Tanjung
Asti Hapsari
Audrey Adyuta Putri
Aunur Rofiq
Badrun Najib
Bagus Wahyu Hidayat
Bambang Wahyu Samudra
Bayu Aji Wijaya
Bayu Vidya Arta
Beny Solifin Hutasuhut
Brahmandi
Buddy Restiady
Budi Harta Rahayu Yuda Librata
Budi Rahayu
Chairudin Mirza
Chintia Febrianti Soepardi
Cholis Safrudin
Dadan Gumbira Pramudia
Dahrin Effendi
Dani Subandrijo
Dea Anandya Rahardjo
Dedi Sugandi
Dedy Mardhianto
Dendi Feriandi
Dessy Sandra
Desti Virgani
Dianti Mellisa
Didi Haryadi
Didi Muharwoko
Didik Ariadi
Didit Dwiantoro
Donny Kertaputra Widjaja
Edie Kurniawan
Edy Siswanto
Elysabeth Damayanti
Endang Trisia
Endang Susilowati
Ening Susilo
Era Azura
Ermono Liman Prabowo
Fadjrul Falah
Febrina Indiastuti
Fiandis Susanto
Fikri Akhmadi
Fitriansyah Nasution
Fopo Rahmat Fauzi
Friandy Parulian
Frihastuti Mardijaningsih
Frisda Nurafni
FX. Ali Sartono
Gideon Octora
H. Mohamad Rahmat Yusuf
Hadi Lestari
Hadi Purwantoro
Handrianus Eddy Sunaryo
Haris Widjanarko
Harjono
Haryadi Hamonangan L Tobing
Hatta Perdana
Hendra Gunawan
Hendra Marta Mulyana
Hendri Purnaratman
Hepta Yuniarita
Hery Saepul Azis
Hery Sudarmaji
Hery Susanto
Hindiarto Restihono
I Gusti Agung Ayu Triana Dewi
I Made Mariasa
I Wayan Sukerata
Ichwan Muttaqin
Ida Widayani
Imam Rijanto
Indrama Yusuf Muda Purba
Irwan Andriyanto Nugroho
Iwan Setiawan
Januar Setyo Widodo
Jarot Widyatmoko
Jenny Verdiana Dyah Vitriany
Johansyah Benhar Putra
Junainah
Junitia Priandriwijayanti
Karno Budiono
Kenny Nazar
Khoirus Soleh
Kurnia Rimadani
Kurniawan Widi Pramana
Lady Lestari
Lara Rifana Soraya
Leni Triwanti
Lidya Sari
Lila Fitria
Liza Puspitasari
Maju Sinaga
Malikoeswara
Mamet Santosa
Mario Bettega
Mario Holasan Lubis
Markus Ferriek Kristianto
Marthen Tanga Rantesalu
Melani Muchlis Moechtar
Merry Arizona
Moch. Ahadi Widjaya
Mochamad Riza Rosadi
Moh Ahmad
Mohamad Abdul Muqtadir
Mohamad Nurcahyono
Mohammad Faried Abidin
Muhamad Patria Narotama Widjaja
Muhamad Wahyudi
Muhammad Nur Hidayat
Muhammad Nursalim
Muhammad Rizal Nurjaman
Muhammad Rofik
Muhammad Suny Arifianto
Mukhamad Arif Hidayat
Mukhammad Atiqurrakhman
Mustakim Wahyudi
Nadia Eka Herdiana
Naila Vellayati
Nike Yosephine
Nizar
Notje Rosanti
Novangga Ilmawan
Novy Kartikayanti
Nur Firman Yudhi Wirawan
Nurcholis Feri Ahmadi
Nurul Fatmawati
Pra Setiawan
Pradipta Wismaya Albi
Pradita Puti Arstianti
Prakoso Imam Santoso
Prasasta Arisanti
Prayudi Nugroho
Prayudi Utomo
Pujo Pramono
Puspita Sulistyaningrum
Putranto
Putriana Dyah Rahmatika
Raden Ayu Sherly Friska Dewi
Raden Riharso
Rahmadi Fajar Aji H
Rama Sugiharto
Rani Siesaria
Rangga Suma Aji
Ratri Natarini
Reine Deborah Elizabeth
Retno Dyah Arumsari
Ristianto
Rizal Ahmad fauzi
Rizal Akbar
Rizqi Akbar Akomiba
Rockbert Marnakkok
Romles Simanjuntak
Ronny Rahmat Hidayat
Rusman Nadeak
Salamet Subarna
Sang Kompiang Muliartawan
Santi Indrawati
Sasmito
Sekar Mutaqina
Shera Aulia
Sigit Primasatya
Silahuddin Sumantri
Sinai Handayani
Sisgiyanto
Sri Safitri
Sri Saptadi
Steffi Susyati Fransiska Hutasoit
Sudaryadi
Suhartono
Sukirno
Sukma Nandini
Sumarno
Suroso Yulianto
Susilo Budi Utomo
Sutrisno
Syukri
T. Hercules
Tantang Yudha Santoso
Tia Indrawati
Tia Sri Utari
Toto Rudiarto
Utami Saritidar
Valian Kusumawardhana
Wahyudi Handriyanto
Wartono Purwanto
Wawan Anwar Ahmad
Widhiowati
Winarta
Winda Susliani
Wintoko M Pribadi
Wuryanto
Yadi Ruslannurzaman
Yanti Lestari
Yanti Rukmayanti
Yantito Simanjuntak
Yoga Maharseto Iskandar
Yoke Yuni Karnida
Yota Yoedi Goestinnenda
Yoyok Teguh Supriyono
Yozar Albar
Yudha Bestari
Yudi Nandar
Yunita Setyaningsih
Yuli Purwanti
Yudi Nandar
Yunita Setyaningsih
Yuli Purwanti
MODEL/TALENT
Aditya Nurahman Asno
Annisa Rahmania
Annisa Zaskia Putri
Arief Rachman Amaluddin
Asri Anggraeni
Bella Lailatus Saadah
Chintia Febrianti Soepardi
Dimas Prasstyo
Diva Terry Anona
Fachrian
Fajar Ramadhan
Isabella Niyssa Amelia
Jandika Triindra Burhan
Jessica Adelaide Gusti
Joviano Rinaldi Elan Pahitbang
Millati Nazhifa
Muhammad Afary
Salsabila Risti Runisa
Septiana Puspitasari
PRODUCTION TEAM
Andi Setiawan
Dewi
Erni Ambarsari
Hendra Priatna
Heti Triaswati
Merna
Mohammad Izzatullah
Uwes Qorni
Candri Yuniar Roisy
Filda Trya Winalda
Nisrinatul Jinan
Nunu Fauzan Helwah
Thalia Isavani
Muhammad Faqih B
Joko Susilo
Albert Geovani
DESIGN
PT Desain Nindya Amarta (DNA Komunika)
www.dnakomunika.com
COPYWRITER
Semerdanta Pusaka
Zahratul Mirza
Danang Purwadi
PRINTING
PT Metra Digital Media (MD MEDIA)
PHOTOGRAPHY
Mike Marcus
TRANSLATOR
PT Trimars Perkasa Abadi (INVESTINDO)
2017 Annual Report
PT Telkom Indonesia (Persero) Tbk
Investor Relations
Telkom Landmark Tower, 39th Floor
Jl. Jend Gatot Subroto Kav 52
Jakarta - 12710 , Indonesia
Phone : +62 21 5215109
Fax : +62 21 5220500
email : investor@telkom.co.id