PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Six months ended June 30, 2006 and 2005 Expressed in rupiah, unless otherwise stated
46
23. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES continued
g. On June 9, 2004, the Company entered into a “Prototype Carbon Fund Emission Reductions Purchase Agreement” Agreement with the International Bank for Reconstruction and
Development, in its capacity as a trustee “Trustee” of the Prototype Carbon Fund PCF. The PCF is a World Bank-administered fund representing six 6 governments and seventeen 17
companies. As stated in the Agreement, the Company agreed to carry out a project which is expected to result
in the reduction of greenhouse gas emissions the Project. The Project is composed of two components as follows:
• Introduction of new type of cement which contains a higher proportion of additive materials.
• Use of alternative fuels in clinker burning.
Subject to the terms and conditions of the Agreement, the Company shall generate a minimum number of Greenhouse Gases GHG Reductions from the Project and transfer the Emission
Reductions ERs corresponding to these GHG Reductions to the Trustee with a total volume of 3 million tons at the price of US3.60 for each ER.
The Project was agreed to commence in January 2005 and shall be terminated in 2011 or upon full delivery of the ERs to be generated by the Project.
The Project should be implemented in a manner consistent with, or upon entry of, the Kyoto Protocol in accordance with the applicable International UNFCCCKyoto Protocol Rules.
The agreement will be effective after all the following precedent conditions are fulfilled:
• Indonesia has ratified the Kyoto Protocol on or before December 31, 2005.
• Receipt by the Trustee of a Letter of Approval for the Project on or before March 1, 2006 which
includes authorization of the Company’s and the Trustee’s participation in the Project, and in the reasonable opinion of the Trustee meets all other requirements of approval under the
International UNFCCCKyoto Protocol Rules.
As of June 30, 2006, the Project is still undergoing the final verification and certification process. h. In 2006 and 2005, the Company entered into one-year agreements with several land transporters
for the distribution of the Company’s cement in Indonesia. Transportation expenses incurred are recorded as part of “Delivery and Selling Expenses” in the consolidated statements of income, while
the unpaid transportation expenses amounting to Rp27,578,073,789 and Rp10,972,714,818 as of June 30, 2006 and 2005, respectively, are shown as part of “Other Payables to Third Parties” in the
consolidated balance sheets.
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Six months ended June 30, 2006 and 2005 Expressed in rupiah, unless otherwise stated
47
23. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES continued
