Based on decisions taken during the General Meeting of Shareholders of the Company, as recorded in notarial deed No. 38 of Ashoya Ratam, S.H., M.Kn., the shareholders approved the 5-for-1 share split of the Company for Series A Dwiwarna and Series B shares .
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) a. Basis of preparation of financial statements (continued)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) d. Business combinations and goodwill
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) d. Business combinations and goodwill (continued)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) f. Investments in associates (continued)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) h. Inventories (continued)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) k. Property and equipment (continued)
The lease term corresponds to the non-cancelable period of each contract, except in cases where the Group is reasonably certain of the exercise of renewal options provided contractually. The Group applies the definition of a lease and related guidelines as set out in PSAK 73 to all leases entered into or amended on or after 1 January 2020.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) l. Leases (continued)
The initial direct costs incurred in negotiating and concluding an operating lease are added to the carrying amount of the fixed assets and recognized on the same basis as the rental income over the lease period. The initial direct costs incurred in negotiating and concluding operating lease agreements are added to the carrying amount of the underlying assets and recognized on the same basis as the rental income over the lease period.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) p. Foreign currency translations
All these services are recognized on the basis of the exit method using the basis of the actual traffic recorded for the month. Revenue from landline installations is deferred and recognized as revenue on a straight-line basis over the expected term of the customer relationship.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) r. Employee benefits
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) s. Taxes (continued)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) t. Financial instruments
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) t. Financial instruments (continued)
Purchases or sales of financial assets that require the delivery of funds within a time frame determined by regulations or market conventions (ordinary transactions) are recognized on the trade date, i.e. the date on which the Group undertakes to purchase or sell the assets. The right to offset must not depend on an event in the future and must be legally enforceable in all the following circumstances: a) normal course of business;.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) y. Segment information
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) ab. Current and non current classifications
On the transition date of PSAK 72, the application of variable remuneration and the timing of the recognition principle result in the Group having recognized an increase in retained earnings, as the amount of revenue recognized for the completed performance obligation under PSAK 72 is greater than the revenue recognized under the previous revenue standard. In return, the group recognizes contract assets as the group's right to remuneration in return for the completed performance obligation. The group also recognizes the capitalization of additional costs for obtaining and fulfilling contracts with customers.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) ac. Changes in accounting policy and disclosures (continued)
The Group determines the appropriate margin based on historical performance. f) Impairment test of long-term assets and goodwill. The Group has made a provision for expected credit losses based on the collective assessment of historical impairment rates and the individual assessment of the credit history of its customers. As of December 31, 2020 and 2019, the carrying amounts of the Group's trade receivables considered overdue but not impaired amounted to Rp 4,217 billion and Rp 3,942 billion, respectively.
INVENTORIES
Management believes that the provision for expected credit losses is adequate to cover losses from uncollectible contract assets.
CONTRACT COST
LONG-TERM INVESTMENTS IN FINANCIAL INSTRUMENT
LONG-TERM INVESTMENTS IN FINANCIAL INSTRUMENT (continued)
LONG-TERM INVESTMENTS IN ASSOCIATES
LONG-TERM INVESTMENTS IN ASSOCIATES (Continued)
As of December 31, 2020 and 2019, LGUs that independently generate cash flows are fixed, mobile and other. No foreign exchange losses were capitalized as part of property under construction for the years ended December 31, 2020 and 2019. iv). The impact of the reduction in depreciation expense for the year ended December 31, 2020 and 2019 amounts to Rp. 266 billion and Rp. 637 billion, respectively.
RIGHT OF USE ASSETS
The group is currently modernizing network assets to replace fully depreciated property and equipment. In 2020, the total fair values of the Group's land rights and buildings, which are determined based on the value of the sale of the tax object (Nilai Jual Objek Pajak or "NJOP") of the land rights and the respective buildings, reached at 41 Rp. 984 billion.
OTHER NON-CURRENT ASSETS
The carrying amounts of the lease liabilities and the details of the transfers are as follows: The remaining amortization periods for software for the year ended December 31, 2020 and 2019 are 1-6 years and 1-5 years, respectively. IV). As of December 31, 2020 and 2019, the cost of fully amortized intangible assets still used in business operations amounted to Rp7,077 billion and Rp5,526 billion, respectively.
ACCRUED EXPENSES
The Group's trade payables bear no interest and are usually settled over a 1-year term.
SHORT-TERM BANK LOANS AND CURRENT MATURITIES OF LONG-TERM BORROWINGS (continued)
On 19 August 2020, the company and GSD entered into changes in credit agreements with MUFG Bank of DKK 900 billion. Rs. On 23 October 2020, the company entered into credit agreements with the Bank of China of DKK 1,000 billion. Rs. On November 16, 2020, the company entered into changes in credit agreements with Bank Mandiri amounting to Rp 4,400 billion.
LONG-TERM LOANS AND OTHER BORROWINGS
The Company has availed all facilities under the two-step loan program since 2008 and the drawdown period for the two-step loan has expired. The expected ratio of net income to expected debt service should be higher than 1.2:1 for the two-step loans originating from the Asian Development Bank (“ADB”). The bonds are not secured by specific securities, but by all assets of the Company, movable or non-movable, existing or future (Note 12b.ix).
LONG-TERM LOANS AND OTHER BORROWINGS (continued) b. Bonds and notes (continued)
Telkom Year 2018
Telkom Year 2018 (continued)
LONG-TERM LOANS AND OTHER BORROWINGS (continued) c. Bank loans
LONG-TERM LOANS AND OTHER BORROWINGS (continued) c. Bank loans (continued)
On February 26, 2018, the company and TII entered into a credit agreement with Bank Mandiri with total facilities worth Rp775 billion respectively. On August 18, 2020, the company entered into a credit agreement with BCA for a total amount of Rp4,000 billion. On December 4, 2020, the company and Admedika entered into a credit agreement with BTPN for a total amount of Rp 1,500 billion.
CAPITAL STOCK
REVENUES
Management expects that the majority of the transaction price allocated to the unfulfilled contracts per 31 December 2020 will be recognized as revenue in the next reporting periods. Unfulfilled performance obligations per December 31, 2020, which management expects to be realized within one year is Rp8.070 billion and more than one year Rp9.585 billion. There is no revenue from major customers that exceeds 10% of total revenue for the year ended December 31, 2020.
PERSONNEL EXPENSES
All rental agreements include a clause that allows an upward revision of the rental price on an annual basis, depending on the prevailing market conditions.
OPERATION, MAINTENANCE, AND TELECOMMUNICATION SERVICE EXPENSES
TAXATION a. Prepaid taxes
On September 9, 2020, the company received a tax refund for the additional overpayment of corporate income tax in the amount of Rp. 90.9 billion. On 15 February 2016, Telkomsel filed a complaint with the tax authorities for underpayment of corporate income tax for 2011 in the amount of Rp 250 billion (including a penalty of Rp 81.1 billion). Later, on August 23, 2019, Telkomsel filed an objection with the tax authorities in the amount of Rp. 134.1 billion.
BASIC EARNINGS PER SHARE
Based on the list of KLU in the attachment PMK-86/2020, the Company KLU is included as the recipient of the incentive PPh 21 for state-sponsored employees (DTP). Pursuant to the AGM of Shareholders of the Company as stated in notarial deed No. The balance of the allocated retained earnings of the Company on December 31, 2020 and 2019 amounted to Rp15.337 billion, respectively.
PENSION AND OTHER POST-EMPLOYMENT BENEFITS
Pursuant to the Companies Act, the Company is obliged to create a statutory reserve of at least 20% of its issued and paid-up capital.
PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued)
PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued) a. Pension benefit costs (continued)
The components of total periodic pension benefit costs for the years ended 31 December 2020 and 2019 are as follows. The company did not make contributions to Yakes Telkom for the years ended 31 December 2020 and 2019. The components of the projected other post-service benefit costs for the years ended December 31, 2020 and 2019 are as follows.
PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued) d. Long service employee benefits
PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued) g. Sensitivity Analysis
BTN Entity under common control Income from internet and data services, income from other telecommunications services and financial income. Entity under common control Revenue from internet and data services, and other revenue from telecommunications services PT Pos Indonesia (Persero). Entity under common control Revenues from internet and data services, and other revenues from telecommunications services, and electricity costs.
TELECOMMUNICATIONS SERVICE TARIFFS
TELECOMMUNICATIONS SERVICE TARIFFS (continued) c. Interconnection tariffs
SIGNIFICANT COMMITMENTS AND AGREEMENTS a. Capital expenditures
SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued) a. Capital expenditures (continued)
Agreement parties Initial date of agreement Significant provisions of the agreement Telin Hongkong and Measat Global. As of December, the Company has bank guarantee facilities for tender guarantee, performance guarantee, maintenance guarantee, deposit guarantee and advance payment guarantee for various projects of the Company as follows:. Bank guarantee facility with BRI and BNI mainly for performance guarantee and secure binding of radio frequency (note 36c.i). iii) TII has a bank guarantee of USD 15 million or equal to Rp 211 billion. from Bank Mandiri and has been renewed in accordance with Appendix IX (nine) on December 23, 2020 with a maximum credit limit of USD 25 million or equal to Rp353 billion.
SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued) c. Others
SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued) c. Others (continued)
ALBANIAN ASSETS AND LIABILITIES IN CURRENCY Assets and liabilities in foreign currencies are as follows:
ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES Assets and liabilities denominated in foreign currencies are as follows
The 1-year exit time would result in an increase (decrease) of Rp 6 billion in the value of the investment. Exit time 1 -3 years Increase (decrease) in 1 year exit time would result in an increase (decrease) Rp0 billion in investment value. The Group determined the fair value measurement for disclosure purposes for each class of financial assets and liabilities based on the following methods and assumptions:.
CAPITAL MANAGEMENT
The debt-to-equity ratio (comparing net interest-bearing debt to total equity) is a ratio monitored by management to evaluate the Group's capital structure and assess the effectiveness of the Group's debt. The Group monitors its debt levels to ensure that the debt/equity ratio is in line with or lower than the ratio set out in the contractual loan agreements and that such ratio is comparable to or better than that of regional entities in the telecommunications industry. As mentioned in Note 20, the Group is required to maintain a certain debt-to-equity ratio and a certain debt service coverage ratio from the lenders.
SUPPLEMENTAL CASH FLOWS INFORMATION
In the case of idle cash with limited investment opportunities, the Group will consider buying back its shares or paying dividends to its shareholders. In addition to meeting loan covenants, the Group also maintains its capital structure at the level it believes will not risk its credit rating and which is comparable to its competitors. For the years ended 31 December 2019 and 2020, the Group complied with externally imposed capital requirements with the exception for certain entities in the Group (Note 20).
SUPPLEMENTAL CASH FLOWS INFORMATION (continued)
SUBSEQUENT EVENT
SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)
SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”) (continued)
