DCS1800” (Digital Communication System) is a mobile cellular system using GSM technology operating in the 1800 MHz frequency band. VoIP” (Voice over Internet Protocol) is a means of sending voice information using the Internet Protocol.
B/E] BOM
U92750 [B/E] BOM
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
OFFER STATISTICS AND EXPECTED TIMETABLE
KEY INFORMATION A. Selected financial data
- Capitalization and Indebtedness Not applicable
- Reason for the Offer and Use of Proceeds Not applicable
- Risk Factors
The Government’s exchange rate policies and any future changes in the value of the Rupiah against the US Dollar or other currencies could adversely affect TELKOM’s financial condition and results of operations. However, there can be no assurance that the activities of employee unions will not materially and adversely affect TELKOM’s business, financial condition and prospects.
INFORMATION ON THE COMPANY A. History and Development of the Company
- Fixed Wireline Network Development
- Fixed Wireless Network Development
- Business and Organizational Structure
- Property, Plants and Equipment
As of the date of this Annual Report, the fees for interconnection within TELKOM’s fixed line network are set forth in Decree No. As of December 31, 2001, TELKOM’s share of losses in PSN has exceeded the carrying amount of the investment.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
- Operating Results Overview
- Liquidity and Capital Resources
- Research and Development and Intellectual Property
- Trend Information
- Off-Balance Sheet Arrangements
- Tabular Disclosure of Contractual Obligations
In 2005, TELKOM recognized loss on foreign exchange of Rp.516.8 billion primarily due to foreign exchange losses on its US Dollar borrowings. Other interconnection revenues increased by Rp.7.0 billion, or 3.6%, from Rp.195.2 billion in 2004 to Rp.202.2 billion in 2005, primarily due to the growth of fixed wireless subscribers of Indosat and PT Bakrie Telecom. The increase in fixed wireless segment expense was primarily due to a write-down of assets of Rp.616.8 billion, loss on procurement.
The increase in cellular revenues was primarily due to the increase in cellular telephone revenues by Rp.1,962.5 billion as well as cellular SMS revenues by. The increase in other segment revenues was primarily due to the increase in Informedia’s directory assistance service revenues by Rp.64.5 billion. This increase was partially offset by a decrease of Rp.4,011.0 billion in repayments of long-term borrowings.
Rp.693.7 billion (US$70.6 million) (including current maturities) in acquisition indebtedness relating to TELKOM’s acquisition of 100% equity interest in AriaWest (after discount);.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management
- Compensation
- Board practices
- Employees
- Share ownership
In carrying out its supervisory activities, the Board of Commissioners is accountable to the stockholders of the Company. Pursuant to the Articles, meetings of the Board of Commissioners are presided over by the President Commissioner. In the performance of its duties, the Board of Directors must act in the interests of the Company.
Commissioners or a member of the Board of Commissioners chosen by the Commissioners in the issues causing such conflict. For further information on the composition and terms of the Board of Directors, see Item 6.
- Related party transactions
- Interest of experts and counsel Not applicable
The Company and its subsidiaries pay concession fees for telecommunication services provided and radio frequency usage charges to the MoCI. The Company has an agreement with Indosat for the provision of international telecommunication services to the public. The Company receives compensation for the services, based on the interconnection tariff determined by the Minister of Communications of the Republic of Indonesia;.
The Company and its subsidiaries maintain current accounts and time deposits in several state-owned banks. The Company (a) leases buildings, (b) purchases materials and construction services and (c) utilizes maintenance and cleaning services from Dana Pensiun Telkom and PT Sandhy Putra Makmur, a subsidiary of Yayasan Sandikara Putra Telkom (a foundation managed by Dharma Wanita Telkom).
FINANCIAL INFORMATION
- Consolidated statements and other financial information
- Significant changes
The Company has also seconded a number of its employees to related parties to assist them in operating their business. In addition, the Company provides certain of its related parties with the right to use its buildings free of charge. The Company filed an appeal to the Bandung District Court which on December 7, 2004 issued its verdicts in favor of the Company.
The Company does not believe that these proceedings presently pending will have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity. See Note 53 to the Company’s consolidated financial statements in Item 18 for information relating to material subsequent events occurring after December 31, 2005.
- Plan of distribution Not applicable
- Markets
- Selling Stockholders Not applicable
- Dilution Not applicable
- Expenses of the issue Not applicable
TELKOM’s Common Stock is listed on the Jakarta Stock Exchange (“JSX”) and the Surabaya Stock Exchange (“SSX”). Trading rules on the JSX are, at present, generated in the form of decisions by the JSX. Transactions on the JSX cash market are required to be settled on the trading day of the transactions.
In order for a trade (except a block trade) to be made on the JSX, both the cash and securities settlement must be conducted through the facilities of the JSX. The JSX may suspend trading of certain securities or suspend certain members of the stock exchange.
- Memorandum and articles of association
- Material contracts Acquisition of Pramindo
- Exchange controls
- Taxation
- Dividends and paying agents Not applicable
- Statement by experts Not applicable
- Documents on display
- Subsidiary Information Not applicable
- Disclosure About Market Risk General
The Articles do not contain any limitations on the right of any person, to own shares of the Company. Although the Company Law is silent as to the composition of the BoC, Listing Regulation No. The Company Law does not require Indonesian public companies to form any of the committees described in the NYSE listing standards.
FEDERAL TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF ADSs OR SHARES OF COMMON STOCK. Holder, as defined below, of the purchase, ownership and disposition of the ADSs or shares of Common Stock.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company is exposed to market risks primarily from changes in foreign currency exchange rates, changes in interest rates and equity price risk on the value of its long-term investments. To the extent interest rates in Indonesia fluctuate significantly, the Company’s interest obligations under its long-term debt could increase. The table below provides information about the Company’s material financial instruments, some of which are sensitive to changes in interest rates.
For a description of the Company’s foreign currency assets and liabilities, see Note 52 to the Company’s consolidated financial statements. The Company’s long-term investments consist primarily of minority investments in the equity of private Indonesian companies.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
The disclosure committee’s role is to support TELKOM’s management in designing and evaluating TELKOM’s disclosure controls and procedures and participating in the disclosure process. Since its formal establishment, the disclosure committee has established internal work procedures relating to the preparation of various disclosure materials for quarterly and annual reporting, including TELKOM’s annual report on Form 20-F. TELKOM’s principal executive officer and principal financial officer carried out an evaluation of the effectiveness of TELKOM’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of December 31, 2005.
TELKOM’s principal executive officer and principal financial officer concluded, based on their evaluation, as of December 31, 2005, that the design and operation of TELKOM’s disclosure controls and procedures were not effective to ensure that information required to be disclosed in the reports TELKOM files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required, and is. In connection with the audit of our financial statements, reportable conditions (as defined under standards established by the American Institute of Certified Public Accountants) relating to TELKOM’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) were identified and communicated by PwC in their report dated January 9, 2004 and delivered to.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
With respect to the Indonesian companies in which the Company has investments, the financial performance of such companies may be affected by the fluctuation of macro economic and social conditions such as the level of economic activity, Rupiah exchange rates against other currencies, inflation and interest rates. TELKOM has a disclosure committee comprised of 14 senior members from various departments and chaired by the Director of Finance. The establishment of the disclosure committee formalized the previous disclosure process where designated senior employees from various departments were responsible for assisting with the necessary disclosures, while the department heads were responsible for reviewing of such disclosure materials.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
CONTROL AND PROCEDURES
GAAP accounting principles and financial reporting responsibilities across all business units through intensive and continuing education and training and proactive consultations with advisors on technical matters as they relate to TELKOM’s financial reporting; and (v) modification of the mandate of TELKOM’s internal audit function to place greater emphasis on the adequacy of, and compliance with, procedures relating to internal control over financial reporting. In connection with the improvement of the oversight function, TELKOM’s senior management directed the addition of a new oversight function to its accounting organization structure to improve the assessment of critical, significant and judgmental accounting issues by establishing a new unit dedicated to the on-going review and monitoring of TELKOM’s internal control over financial reporting. The Finance Center is a unit which directly reports to Finance Director and acts as a centralized decision making and execution body in relation to TELKOM’s financial reporting for all the business units.
Following the issuance of the revised accounting and financial reporting policies and the supplements, TELKOM is updating its accounting manuals and work procedures as operating guidelines for implementation of the new policies. Each of these units is responsible for ensuring TELKOM’s compliance with various internal and external rules and regulations in respect of financial reporting and minimizing TELKOM’s regulatory and business risks which may arise in conducting its accounting and financial reporting functions.
RESERVED
- Audit Fees
- Audit-Related Fees None
- Tax Fees
- All Other Fees
- Audit Committee Pre-Approval Policies and Procedures
TELKOM has adopted pre-approval policies and procedures under which all non-audit services provided by its independent public accounting firm must be pre-approved by TELKOM’s audit committee as set forth in the audit committee’s charter. TELKOM’s audit committee is composed of seven members and is chaired by an Independent Commissioner. TELKOM believes that its reliance on the exemption would not materially adversely affect the ability of the audit committee to act independently.
The JSX Audit Committee Rule requires that each member of the audit committee be independent. TELKOM therefore believes that the standard established by the JSX Audit Committee Rule is at least equally effective in ensuring the ability of the audit committee to act independently.
The JSX Audit Committee Rule goes on to require that at least two of the members, the external independent members, in effect be independent not only of the management but also of the Board of Commissioners and Board of Directors and the Company as a whole.
EXHIBITS
- T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES TABLE OF CONTENTS
1 to the Development Contract PSTN Excellence Regional Junction Divre-II between TELKOM and the Olex-Lucent-Brimbun consortium, dated August 22, 2002. 3 to the Development Contract PSTN Excellence Regional Junction Divre-II between TELKOM and the Olex-Lucent-Brimbun consortium, dated December 20, 2002. 4 to the Development Contract PSTN Excellence Regional Junction Divre-II between TELKOM and the Olex-Lucent-Brimbun consortium, dated March 20, 2003.
5 to the Development Contract PSTN Excellence Regional Junction Divre-II between TELKOM and the Olex-Lucent-Brimbun consortium, dated June 26, 2003. 7 to the Development Contract PSTN Excellence Regional Junction Divre-II between TELKOM and the Olex-Lucent-Brimbun consortium, dated December 4, 2003.
