PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2004 and 2003 Expressed in rupiah, unless otherwise stated
9
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued b. Principles of Consolidation continued
On July 9, 2004, DAP and Indomix, subsidiaries, acquired at par value 1,000 shares of MBG, representing 100 share ownership from PT Total Galaxy and Mr. Freddysun, third parties,
respectively. As a result of this transaction, the accounts of MBG were consolidated in the accompanying consolidated financial statements for the nine months ended September 30, 2004.
As of September 30, 2004, MBG has not yet started commercial operations. DAP was established in 1998 and primarily acts as the Company’s main domestic distributor of
certain cement products. The Company also has five 5 other subsidiaries, all with effective percentages of ownership of
99.99. The total cost of investments in these entities amounted to Rp 20,000,000. Since these entities have no activities and the total cost of the investments in these subsidiaries is
immaterial, their accounts were no longer consolidated into the consolidated financial statements. Instead, the investments in these subsidiaries are presented as part of “Long-term Investments
and Advances to Associated Companies” in the consolidated balance sheets. The details of these subsidiaries are as follows:
Year of Country of
Total Assets as of Incorporation
Domicile September 30, 2004
PT Bhakti Sari Perkasa Abadi 1998
Indonesia 5,000,000
PT Lentera Abadi Sejahtera 1998
Indonesia 5,000,000
PT Mandiri Sejahtera Sentra 1998
Indonesia 5,000,000
PT Sari Bhakti Sejati 1998
Indonesia 5,000,000
PT Makmur Abadi Perkasa Mandiri 1998
Indonesia -
All significant intercompany accounts and transactions have been eliminated. Investments in associated companies in which the Company or its Subsidiaries have ownership
interests of at least 20 but not exceeding 50 are accounted for under the equity method, whereby the costs of such investments are increased or decreased by the Company’s or
Subsidiaries’ share in the net earnings losses of the investees since date of acquisition and are reduced by cash dividends received by the Company or Subsidiaries from the investees. The
share in net earnings losses of the investees are adjusted for the straight-line amortization, over a twenty-year period in view of the good future business prospects of the investees, of the
difference between the costs of such investments and the Company’s or Subsidiaries’ proportionate share in the book value of the underlying net assets of investees at date of
acquisition goodwill.
All other investments are carried at cost. In compliance with PSAK No. 38, “Accounting for Restructuring Transactions Among Entities under
Common Control”, the differences between the costproceeds of net assets acquireddisposed in connection with restructuring transactions among entities under common control compared to their
net book values are recorded and presented as “Differences Arising from Restructuring Transactions Among Entities under Common Control” under the Shareholders’ Equity section of
the consolidated balance sheets.
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2004 and 2003 Expressed in rupiah, unless otherwise stated
10
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued b. Principles of Consolidation continued
