PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2004 and 2003 Expressed in rupiah, unless otherwise stated
43
20. RETIREMENT BENEFITS continued
Employee benefits of Subsidiaries are determined based on internal calculations. The total provisions made by the Subsidiaries amounted to Rp 1,189,705,973 presented as part of “Long-term Liabilities -
Others” in the 2004 consolidated balance sheet as of September 30, 2004.
As of September 30, 2003 the total provisions made by the Company and Subsidiaries for their employees who did not join the pension plan amounted to Rp 1,611,208,601, which is recorded as part
of “Accrued Expenses” account in the 2003 consolidated balance sheet. For the employees who joined the pension plan, management believes that the contributions to the retirement plan are enough to
cover the payments of such employees’ benefits.
21. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES a. On October 20, 2003, the Company, Koperasi Gabindo Developer and PT Indotek Engico
Contractor entered into an agreement for the construction of the Griya Indotarjun Indah Housing Project which is intended for the Company’s employees at the Tarjun site. To assist in the
development of the housing project, the Developer entered into three 3 agreements with the Contractor for the latter to construct 596 units of houses including the infrastructure and the
facilities for a total contract value of Rp 31.6 billion excluding value added tax. The housing construction is divided into three phases. The estimated completion date for the first phase
consisting of 250 units is at the end of year 2004. The completion dates for the second and the third phases will be determined at a later date.
b. In the EGMS held on March 29, 2001, the independent shareholders approved the exclusive export distribution agreement between the Company and HCT Services Asia Pte., Ltd., an HC
subsidiary, under the following terms and conditions, among others see Note 17: •
HCT Services Asia Pte., Ltd. HCT will act as the Company’s exclusive export distributor.
• The Company shall invoice HCT at a net price equivalent to the U.S. dollar FOB sales price
invoiced by HCT to its customers, less: -
5.5 on the first one million tons shipments per year. -
3.0 on shipments in excess of one million tons per year. •
The term of the export distribution agreement is twenty 20 years. c. The Company advanced funds in 2001 amounting to US 11,678,711 equivalent to
Rp 65,452,904,196 to finance PERTAMINA’s development of its natural gas production facility in Bojongroong, Tanjung Sari, West Java in exchange for the Company’s future purchases of natural
gas. The Company’s natural gas consumption started in May 2001 and the advance has been fully utilized as of August 31, 2003.
d. The Company has an outstanding agreement with PT Rabana Gasindo Usama Rabana whereby Rabana will build and own the distribution and receiving facilities of natural gas at Tegal Gede -
Citeureup with a capacity of 18 MMSCFD. The Company will pay compensation of US 0.45 per MMBTU natural gas delivered as gas transportation fee and US 0.02 per MMBTU natural gas
as technical fee. The agreement also provides for a minimum annual delivery of natural gas by the Company. If the Company is unable to utilize the minimum volume as stated in the agreement,
Rabana will claim from the Company payment of gas transportation fee for the unconsumed volume. Such amount claimed should be agreed to by both parties within one month after the end
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2004 and 2003 Expressed in rupiah, unless otherwise stated
44
21. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES continued
