PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2004 AND 2005 Figures in tables are presented in millions of Rupiah, unless otherwise stated
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44. POST-RETIREMENT HEALTH CARE BENEFITS continued
A 1 increase in the cost trend rate would result in service cost and interest cost, and accumulated post-retirement health care benefit obligation as of December 31, 2004 and 2005 as follows:
2004 2005
Service cost and interest cost 723,941
872,159 Accumulated post-retirement health care benefit obligation
5,597,965 6,718,434
45. RELATED PARTY INFORMATION
In the normal course of business, the Company and its subsidiaries entered into transactions with related parties. It is the Companys policy that the pricing of these transactions be the same as those of
arms-length transactions.
The following are significant agreementstransactions with related parties:
a. Government of the Republic of Indonesia
i. The Company obtained “two-step loans” from the Government of the Republic of Indonesia,
the Companys majority stockholder. Interest expense for two-step loans amounted to Rp489,220 million and Rp324,652 million
in 2004 and 2005, respectively. Interest expense for two-step loan reflected 38.5 and 27.6 of total interest expense in 2004 and 2005, respectively.
ii. The Company and its subsidiaries pay concession fees for telecommunications services provided and radio frequency usage charges to the Ministry of Communications formerly,
Ministry of Tourism, Post and Telecommunications of the Republic of Indonesia. Concession fees amounted to Rp314,741 million and Rp558,485 million in 2004 and 2005,
respectively. Concession fees reflected 1.6 and 2.3 of total operating expenses in 2004 and 2005, respectively. Radio frequency usage charges amounted to Rp492,568 million and
Rp548,186 million in 2004 and 2005, respectively. Radio frequency usage charges reflected 2.5 and 2.2 of total operating expenses in 2004 and 2005, respectively.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2004 AND 2005 Figures in tables are presented in millions of Rupiah, unless otherwise stated
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45. RELATED PARTY INFORMATION continued
a. Government of the Republic of Indonesia continued
iii. Beginning in 2005, the Company and its subsidiaries pay Universal Service Obligation
“USO” charges to the Ministry of Communications and Information “MoCI” of the Republic of Indonesia pursuant to the MoCI Regulation No.15PERM.KOMINFO92005
of September 30, 2005.
USO charges amounted to Rp307,705 million in 2005, which reflected 1.2 of total operating expenses in 2005.
b. Commissioners and Directors Remuneration
i. The Company and its subsidiaries provide honorarium and facilities to support the operational duties of the Board of Commissioners. The total of such benefits amounted to
Rp22,700 million and Rp19,707 million in 2004 and 2005, respectively, which reflected 0.1 and 0.1 of total operating expenses in 2004 and 2005, respectively.
ii. The Company and its subsidiaries provide salaries and facilities to support the operational
duties of the Board of Directors. The total of such benefits amounted to Rp50,327 million and Rp52,147 million in 2004 and 2005, respectively, which reflected 0.3 and 0.2 of
total operating expenses in 2004 and 2005, respectively.
c. Indosat
Through December 19, 2002, the Government was the majority and controlling shareholder of Indosat and therefore, Indosat was under the same common control as the Company. Following
the sale of the Government’s 41.94 ownership interest in Indosat on December 20, 2002 Note 29, the Government’s ownership interest in Indosat was reduced to approximately 15. The
Company still considers Indosat as a related party because the Government can exert significant influence over the financial and operating policies of Indosat by virtue of its right to appoint one
director and one commissioner of Indosat.
Following the merger of Indosat, PT Indosat Multimedia Mobile “IM3”, Satelindo and PT Bimagraha Telekomindo on November 20, 2003, all rights and obligations arising from the
agreements entered by the Company with IM3 and Satelindo were transferred to Indosat.
The Company has an agreement with Indosat for the provision of international telecommunications services to the public.
