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a. To plan, build, deliver, develop, operate, marketselllease, and maintain telecommunications and information networks in the
broadest sense with respect to provisions of laws and regulations. b.
To plan, develop, deliver, marketsell and improve telecommunications and information services in the broadest sense with respect to provisions of laws and regulations.
2. Supporting Business
a. To provide payment transaction and remittance services via telecommunications and information networks.
b. To carry out activities and other undertakings in respect of optimizing our resources, among others the utilization of our property
and equipment and moveable assets, information system facilities, education and training facilities, and maintenance and repair facilities.
In accordance with the Company Law, we have a Board of Commissioners and a Board of Directors. The two Boards are separate and no individual may be a member of both Boards. Each Director receives a bonus if we surpass certain financial and operating targets,
the amounts of which are determined by the shareholders at the AGMS. The Articles state that any transaction involving a conflict of interest between our Company and our Directors, Commissioners and
shareholders should be approved by a shareholders meeting, where approval is required from more than half of the votes of the independent shareholders.
A member of the Board of Directors shall have no right to represent the Company if such member has a conflict of interest with the Company. To take any legal actions in the form of transactions containing conflict of interests between the personal economic interest
of members of the Board of Directors, Board of Commissioners or shareholders and the Company’s economic interest, the Board of Directors requires the approval of a General Meeting of Shareholders. Such General Meeting of Shareholders must be attended by
independent shareholders i.e. those shareholders having no conflict of interest who hold more than one-half of the total number of shares with valid voting rights held by all independent shareholders and the resolution must be passed by the affirmative votes of
independent shareholders holding more than one-half of the total number of shares with valid voting rights. In passing any resolutions, the main shareholders, members of the Board of Directors and members of the Board of Commissioners with conflicts of interests
with the transaction that is being decided shall not be entitled to give any recommendation or opinion. Any resolution passed by independent shareholders shall be confirmed by the whole meeting quorum to be followed by all shareholders present in the meeting,
including those with conflicts of interest.
Compensation of members of the Board of Directors is decided at a General Meeting of Shareholders, although the authority may be delegated to the Board of Commissioners, in which case compensation shall be determined based on a resolution of the Board of
Commissioners. Our Article of Association is not arrange borrowing power exercisable by Board of Director and how such borrowing power can be
varied. The Board of Directors is responsible for leading and managing our Company in accordance with our objectives and purposes and to
control, preserve and manage the assets of our Company. The Articles do not contain any requirement for the Directors to: i retire by a specified age, or ii to own any or a specified number
of shares of our Company. The rights, preferences and restrictions attaching to each class of the shares of our Company in respect of specified matters are set forth below:
Dividend rights
. Dividends are to be paid based upon our financial condition and in accordance with the resolution of the shareholders in a general meeting, which will also determine the form of and time for payment of the dividend;
Voting rights
. The holder of each voting share is entitled to one vote at a GMS;
Rights to share in our Company’s profits . See dividend rights;
Rights to share in any surplus in the event of liquidation
. Stockholders are entitled to surplus in the event of liquidation in accordance with their proportion of shareholding, provided the nominal value of the common stock that they hold is fully paid-up;
Redemption provisions
. There are no stock redemption provisions in our Articles. However, based on Article 37 of the Company Law, we may buy back up to 10 of our issued and outstanding shares;
Reserved fund provisions
. Retained earnings up to a minimum of 20 of our issued capital are to be set aside to cover potential losses suffered by us. If the amount in the reserved fund exceeds 20 of our issued capital, a GMS may authorize us to utilize
such excess funds for the purposes of our Company;
Liability for further capital calls . Our shareholders may be asked to subscribe for new shares in our Company from time to time.
Such rights are to be offered to shareholders prior to being offered to third parties and may be transferred at the option of the shareholder. The Board of Directors is authorized to offer the new shares to third parties in the event that an existing shareholder
is unable or unwilling to subscribe for such new shares; and
Provisions discriminating against any existing or prospective holder of such securities because of such shareholder owning a substantial number of shares
. The Articles do not contain any such provision. In order to change the rights of shareholders, an amendment to the relevant provisions of the Articles would be required. Any
amendment to the Articles requires the holder of the Series A Dwiwarna Share and the other shareholders or their authorized proxies jointly representing at least two thirds 23 of the total number of votes cast in the meeting.
- 93 - Any GMS may only be convened upon the issuance of the requisite notice by us. In addition, the Board of Directors may issue such
Stockholders may vote by proxy. All resolutions are to be passed by consensus. If consensus cannot be reached, resolutions are passed by simple majority, unless a larger majority is required by the Articles. The Articles do not contain any limitations on the right of any
person, to own our shares or to exercise their right to vote. Indonesian capital market regulations do not contain any limitation on the right of any person, whether local or foreign, to own shares in a company listed on the IDX.
Any takeover of our Company is required to be approved by the holder of the Series A Dwiwarna Share and a majority constituting at least three fourths of the total number of shares at a GMS that must be attended by the holder of the Series A Dwiwarna Share. There
are no other provisions in the Articles that would have the effect of delaying, deferring or preventing a change in control of our Company.
Each Director and Commissioner has an obligation to report to OJK with regard to their ownership and any changes in their ownership of our Company, and this obligation also applies to shareholders who have an ownership stake of 5 or more in our paid up capital.
We believe that the Articles are not significantly different from those generally prevailing in Indonesia in respect of companies listed on the IDX other than with respect to provisions and rights relating to the Dwiwarna Share, which are common for SOEs listed on the
IDX. We also believe that the provisions in the Articles relating to changes in our capital are not more stringent than that required by Indonesian law.
MATERIAL CONTRACTS
In 2013 and 2012, we did not enter into any new material contracts nor did we amend any existing material contracts, other than contracts entered into or amended in the ordinary course of business as disclosed in Note 38 of our Consolidated Financial
Statements.
D. EXCHANGE CONTROLS
