indosat eng 31 des 09 long form

8/15/2019 Indosat Eng 31 Des 09 Long Form

1/796


2/796


3/796

These consolidated financial statements are originally issued in Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

WITH INDEPENDENT AUDITORS’ REPORT

YEARS ENDED DECEMBER 31, 2008 AND 2009

Tab! "# C"$%!$%&

Pa#e

Independent $uditors’ %eport

Consolidated &alance 'heets (((((((((((((((((((((((((((()))

1 * +

Consolidated 'tatements of Income ((((((((((((((((((((((((((

* -

Consolidated 'tatements of Chan#es in 'tockholders’ ./uity (((((((((((((((

0

Consolidated 'tatements of Cash lows ((((((((((((((((((((((((

! * "

otes to Consolidated inancial 'tatements (((((((((((((((((((((()

1 * 13


4/796


5/796


6/796



CONSOLIDATED BALANCE SHEETS

D!'!(b!) 31, 2008 a$* 2009

+E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US *"a), !'!-% &a)! *a%a

2009

2008

2009

+N"%! 3


7/796

N"%!&

R-

R-

US

ASSETS


8/796

CURRENT ASSETS

Cash and cash e/ui4alents

2c,24,+,2

,030,!--

2,!3,"""

31,02

'hort*term in4estments * net of

allowance for decline in 4alue


9/796

of %p2,3" in 2! and 2"

2d

*

*

*

$ccounts recei4able

2e

Trade

,1


10/796

%elated parties * net of

allowance for doubtful

accounts of %p-",+++


11/796

in 2! and %p0,3!

in 2"

24,2

0-,0!

12,"12

13,3"

Third parties * net of allowance

for doubtful accounts of


12/796

%p+2-,01" in 2! and

%p++,202 in 2"

1,2-+,-2!

1,23,0!

13,"3+

5thers * net of allowance


13/796

for doubtful accounts of

%p1!,!-0 in 2! and

%p1-,++ in 2"

3a

1-,"1+

"3,2!0

-3,11-

In4entories * net of allowance for


14/796

obsolescence of %p3,3-! in 2!

and %p1,0-" in 2"

2f

2+1,""1

112,2-

11,"+2

Deri4ati4e assets

2/,20

--,"+

22+,0+3

23,""

$d4ances

3",11


15/796

3,103

3,0+2

Prepaid ta6es

-,13

"2,!!

!1!,32-

!0,-

Prepaid e6penses

2#,2k,2p,24,2+,

2,20p,3!

1,1",03

1,12,"1

11",-"1

5ther current assets

2c,24,2

+-,"!

3!,1

+,+!


16/796

Total Current $ssets

",-"1,003

0,13",-20

0",3


17/796

The accompanyin# notes form an inte#ral part of these consolidated financial statements)

1


18/796




D!'!(b!) 31, 2008 a$* 2009 +'"$%.$/!*

+E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US *"a), !'!-% &a)! *a%a

2009

2008

2009

+N"%! 3


19/796

N"%!&

R-

R-

US

NON4CURRENT ASSETS


20/796

Due from related parties * net of

allowance for doubtful

accounts of %p2,+1" in 2!


21/796

and %p1,1!2 in 2"

2e,24,2

+2,+"-

0,21

0-0

Deferred ta6 assets * net

2s,13

-!,++

!,!12

",12"

In4estments in associated


22/796

companies * net of allowance

for decline in 4alue of %p-,!-

in 2! and 2"

2h,0

0


23/796

+22

+

5ther lon#*term in4estments * net

of allowance for decline in 4alue of

%p"","00 in 2! and 2"

2h,!

2,03

2,03

2"


24/796

Property and e/uipment

2i,27,2o,

Cost

",1,21

-3,+0!,+11

0+,!1!,+2

0,"",+1

$ccumulated depreciation


25/796

82+,"!,0209

83,2"1,3+9

83,222,+9

Impairment in 4alue

8"!,-119

8"!,-119

81,+"19

et

3!,3"+,03

++,+2!,!0

+,02-,+-"


26/796

:oodwill and other

intan#ible assets * net

2l,1,3!

1,!33,3"2

1,!,!

1-!,"+

;on#*term prepaid licenses * net


27/796

of current portion

2k,3!

1"",2!"

+-3,+"

+",31+

;on#*term recei4ables

!1,2+

--,-11

0,!-

;on#*term prepaid pension * net


28/796

of current portion

2p,24,2+,2

1-","!-

1+0,3!

1,-0"

;on#*term ad4ances

24,11,2

+-,"3

2"+,3"1

31,31!

5thers

2c,2#,24

2

02,!22


29/796

!2+,!-3

!0,01

Total on*current $ssets

+2,1,

+0,"1,!-

,","+2


30/796

TOTAL ASSETS

51,693,323

55,071,78

5,855,7


31/796


2


32/796




D!'!(b!) 31, 2008 a$* 2009 +'"$%.$/!*

+E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US *"a), !'!-% &a)! *a%a

2009

2008

2009

+N"%! 3


33/796

N"%!&

R-

R-

US

LIABILITIES AND


34/796

STOCHOLDERS’ E:UITY

CURRENT LIABILITIES

$ccounts payable * trade


35/796

%elated parties

24,2

12,1"

3!,-0

+,11+

Third parties

"-,-+

+"!,!-

3,-+

Procurement payable

24,12,2

-,++-,30

,2!",0!2

-2,0+3

Ta6es payable

2s,13

2-!,!"1


36/796

1-1,!2

10,21

$ccrued e6penses

2p,24,1+,

2+,2

1,12,33

1,!3,032

1-!,+!2


37/796

22,+-3

2,3"

Deri4ati4e liabilities

2/,20

31,!--

2,22

21,2"!

Current maturities of=

;oans payable

2m,24,1,2

02,+-"

1,++,2"

13,21"

&onds payable


38/796

2m,1-

-,++2

2,!+,--2

32,1"!

5ther current liabilities

24,2

3!,!2-

,3

,303

Total Current ;iabilities

1,-0,2+

13,-!,122


39/796

1,3",22-

NON4CURRENT LIABILITIES

Due to related parties

24,2

1+,-""

13,0-+

1,+-+

Deferred ta6 liabilities * net


40/796

2s,13

1,3,1!

1,3,22

1-3,31"

;oans payable * net of current

maturities

2m,2r,1

%elated party

24,2

1,"-,1+2

2,1"2,+!"


41/796

233,2++

Third parties

",21-,1!

1,2!,!1"

1,12,!0

&onds payable * net of current

maturities

2m,1-

1,31,-1-

!,+02,10

"1,2"

5ther non*current liabilities


42/796

2p,24,10,

2+,2

!01,!"

"+2,-33

1,2!

Total on*current ;iabilities

23,31",1"

23,-!,!2


43/796

2,1",-!"

TOTAL LIABILITIES

33,997,67

36,53,207

3,909,915


44/796

MINORITY INTEREST

2b

288,938

330,593

35,169


45/796


3


46/796




D!'!(b!) 31, 2008 a$* 2009 +'"$%.$/!*

+E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US *"a), !'!-% &a)! *a%a

2009

2008

2009

+N"%! 3


47/796

N"%!&

R-

R-

US


Capital stock * %p1 par 4alue


48/796

per $ share and & share

$uthori>ed * 1 $ share and

1",""",""",""" & shares


49/796

Issued and fully paid * 1 $ share

and ,+33,"33,+"" & shares

1!

+3,3"3

+3,3"3

0,!!

Premium on capital stock

1!

1,+-,!0

1,+-,!0

1-+,3

Difference in transactions of e/uity


50/796

chan#es in associated

companies?subsidiaries

2h

++,1+

++,1+

+2,""

Difference in forei#n currency

translation

2b


51/796

13,2"1

2,3-"

22

%etained earnin#s

$ppropriated

1,-0!

11",+-+

12,0"


52/796

TOTAL STOCHOLDERS’ E:UITY

1,709,621

1,95,690

1,910,393

TOTAL LIABILITIES AND


53/796


51,693,323

55,071,78

5,855,7


54/796



55/796

+


56/796



CONSOLIDATED STATEMENTS OF INCOME

Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009

+E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US *"a), !'!-% &a)! *a%a

2009

2008

2009


57/796

+N"%! 3

N"%!&

R-

R-

US3


58/796


59/796

@ultimedia, Data

Communication,

Internet 8A@IDIB9


60/796

2,03,+"

2,02,"!+

2!",+--

i6ed telecommunication

1,0++,01-

1,0+3,+3

1!,+01


61/796

T"%a O-!)a%.$= R!>!$/!&

18,659,133

18,393,016

1,956,07

OPERATIN; E?PENSES

2n


62/796

Cost of ser4ices

2k,24,

2,2,2!#,3,3!

-,0,+1+

-,--,-!

0!,10

Depreciation and amorti>ation

2i,2l,",1,3!

+,,!"1


63/796

,-1,3"

"1,-3!

Personnel

2o,2p,24

21,2+,2

1,-3!,""3

1,+1,-

1+,+21

@arketin#


64/796

"1!,12+

!1-,"3+

!-,"!

:eneral and administration

24,22,2

030,+32

-"3,+30

03,00

T"%a O-!)a%.$= E-!$&!&


65/796

13,925,857

15,180,001

1,617,897

OPERATIN; INCOME

7,33,29

3,213,015


66/796

371,810

OTHER INCOME +E?PENSES

2n

:ain 8loss9 on forei#n


67/796

e6chan#e * net

2/,2r,

8!!,02"9

1,--,+0

10-,213

Interest income

24,2

+-,!"

13!,"1

1+,0!2

inancin# cost

2m,24,1,1-,


68/796


69/796

8,09

$morti>ation of #oodwill

2l,1

8220,3109

823,+29

82,++9

5thers * net

-,",13

833,1-9

81,33!9

81,""39

O%!) E-!$&!& 4 N!%


70/796

+2,708,167

+981,022

+107,367

INCOME BEFORE INCOME TA?

2,325,115

2,231,993

23,776

INCOME TA? BENEFIT


71/796

+E?PENSE

2s,13


72/796

Current

80",0239

8+-,"039

8+",3"9

Deferred

1",!"3

821-,2"29

823,19


73/796

I$'"(! Ta E-!$&! 4 N!%

+719,830

+6,265

+2,079


74/796



75/796


CONSOLIDATED STATEMENTS OF INCOME

Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +'"$%.$/!*

+E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US *"a), !'!-% &a)! *a%a

2009

2008

2009

+N"%! 3


76/796

N"%!&

R-

R-

US3

INCOME BEFORE MINORITY


77/796

INTEREST IN NET INCOME OF

SUBSIDIARIES

1,",2!

1,+,02!

1-,3"0

MINORITY INTEREST IN NET


78/796

INCOME OF SUBSIDIARIES

2b

82-,0-39

8-,+!39

8-,"9

NET INCOME

1,88,522

1,798,275

159,388


79/796

BASIC EARNIN;S PER SHARE

2u,1!

3750

252

003

BASIC EARNIN;S


80/796

PER ADS 8 & shares per $D'9

2u,1!

1,28510


81/796

13,8601

17


82/796


83/796


-


84/796


PT INDOSAT Tbk AND SUBSIDIA CONSOLIDATED STATEMENTS OF CHAN;ES IN ST Y!a)& E$*!*D!'!(b!) 31, 2008 a$ +E-)!&&!* .$ (.."$& "# )/-.a

Ca-.%a S%"'k


85/796

I&&/!* a$*

P)!(./( "

D!&').-%."$

N"%!&

F/@ Pa.*

Ca-.%a S%"

Baa$'! a& "# a$/a)@ 1, 2008

573,393

1,5

Increase in difference in forei#n currency translation arisin# from the translation of the financial


86/796

statements of Indosat inance Company &)) and Indosat International inance

Company &)) from euro, and Indosat 'in#apore Pte) ;td) from


87/796

%esolution durin# the $nnual 'tockholders’ :eneral @eetin# on une , 2!

2-

Declaration of cash di4idend

*

$ppropriation for reser4e fund

*

et income for the year

*

Baa$'! a& "# D!'!(b!) 31, 2008


88/796

573,393

1,5

Decrease in difference in forei#n currency translation arisin# from the translation of the financial

statements of Indosat inance Company &)) and Indosat International inance

Company &)) from euro, and Indosat 'in#apore Pte) ;td) from


89/796

Declaration of cash di4idend

*

$ppropriation for reser4e fund

*

et income for the year

*

Baa$'! a& "# D!'!(b!) 31, 2009


90/796

573,393

1,5


91/796

The accompanyin# notes form an inte#ral part of these consolid

0


92/796



CONSOLIDATED STATEMENTS OF CASH FLOWS

Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US

*"a)

2009

2008

2009

+N"%! 3


93/796

N"%!&

R-

R-

US

CASH FLOWS FROM OPERATIN;


94/796

ACTI


95/796

1!,33-,"1+

1!,+1,!"

1,"",130

Interest income

+-,2

1+-,!2-

1,-2

%efund of ta6es

-

201,321

!+,-

",

'ettlement from deri4ati4e


96/796

contract

20a

!,30

*

*

Cash paid to?for=

'uppliers and others

80,""2,-"39

81,11-,1!39

81,0-,1"9


97/796

inancin# cost

81,00-,"3+9

81,03,1+"9

81!+,!9

.mployees

81,0!,10+9

81,3",!109

81++,--19

Ta6es

8!"0,1-19

8!0!,1309

8"3,+1"9

;on#*term prepaid licenses

1a,2k

*

833!,+!9

83-,19

'wap cost from cross currency


98/796

swap contracts

20a,20c*20p

823,"019

812,0+!9

813,3009

Interest rate swap contracts

paid

204*20ai

82,+329

8+0,019

8,0-9


99/796

N!% Ca& P)">.*!* b@ O-!)a%.$=

A'%.>.%.!&

6,513,265

7,051,209

730,980


100/796

CASH FLOWS FROM IN


101/796

Di4idend income recei4ed

!

2-,3+!

2-,00+

2,!+!

Proceeds from sale of property

and e/uipment

"

1,131

2,23

2+

$c/uisitions of property and


102/796

e/uipment

"

81,30,"329

81,-!+,-"9

81,13-,--"9

$c/uisition of intan#ible assets

1

8-,"29

81,++9

81,-9

Proceeds from sale of short*term

in4estment


103/796

1,2

*

*

Purchase of in4estment in associated

company

0

809

*

*


104/796

N!% Ca& U&!* .$ I$>!&%.$= A'%.>.%.!&

+10,286,855

+10,60,0

+1,135,181


105/796


!


PT INDOSAT Tbk AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH

FLOWS

Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +'"$%.$/!* +E-)!&&!* .$ (.."$& "#

)/-.a a$* %"/&a$*& "# US *"a)

2008

2009

N"%!&

R-

R-

CASH

FLOWS

FROM

FINANCIN;

ACTI


106/796

Proceeds from lon#*term loans

1

,12-,0

3,!"2,0!-

Proceeds from bonds payable

1-

1,-,

1,,

Cash di4idend paid

2-

81,21,309

8"3",29

%epayment of lon#*term loans

1

8-,229

8-32,!1+9

'wap cost from cross currency

swap contract

20b

8-+,"9

8+,11-9

Decrease

8increase9 in

restricted

cash and cash

e/ui4alents

+,2

81!,2-9

%epayment of

bonds payable

1-

83,!2!,!209

81+,+39


107/796

Cash di4idend paid by subsidiaries

to minority interest

811,32-9

8",2"19

'ettlement from deri4ati4e contract

20b

1",""

*

N!% Ca& P)">.*!* b@

F.$a$'.$=

A'%.>.%.!&

1,758,750

3,27,651

NET

DECREASE

IN CASH


108/796

AND CASH E:UI


109/796

2,835,999

DETAILS OF CASH AND CASH

E:UI


110/796

22+,+0

Ca& a$* 'a& !/.>a!$%& a&

&%a%!* .$ %! '"$&".*a%!*

baa$'! &!!%&

5,3,866

2,835,999

SUPPLEMEN

TAL CASH

FLOW

INFORMATIO

N


111/796

Transactions not affectin# cash flows=

$c/uisitions of property and

e/uipment credited to=

;on#*term loans payable

1,1-,3+

023,112

;on#*term

ad4ances

1","-

1-1,02

Procurement

payable

20+,2+!

*

5ther non*

current

liabilities

+,11

*


112/796

2009 +N"%! 3

US

+1+,12-

1",0

8"","219

8-0,3219

8,009

81,"309

81,3!9

8"!!9

*

396,239

+30,962

-1,+11

80+09

301,02

200,!22

23,!!

301,02

0-,"20

10,22

*

*


113/796


"


114/796



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a

;ENERAL

a C"(-a$@’& E&%ab.&(!$%

PT Indosat Tbk 8Athe CompanyB9 was established in the %epublic of Indonesia on o4ember 1, 1"-0

within the framework of the Indonesian orei#n In4estment ;aw o) 1 of 1"-0 based on the notarial deed

o) of @ohamad 'aid Tad7oedin, ')E) The deed of establishment was published in 'upplement o) 2+

of 'tate :a>ette o) 2- dated @arch 2", 1"-! of the %epublic of Indonesia) In 1"!, the Company was

sold by $merican Cable and %adio Corporation, an International Telephone F Tele#raph subsidiary, to the

:o4ernment of the %epublic of Indonesia 8Athe :o4ernmentB9 and became a 'tate*owned Company8Persero9)

5n ebruary 0, 23, the Company recei4ed the appro4al from the Capital In4estment Coordinatin# &oard

8&GP@9 in its letter o) 1+??P@$?23 for the chan#e of its le#al status from a 'tate*owned Company

8Persero9 to a orei#n Capital In4estment Company) 'ubse/uently, on @arch 21, 23, the Company

recei4ed the appro4al from the @inistry of ustice and Euman %i#hts of the %epublic of Indonesia on the

amendment of its $rticles of $ssociation to reflect the chan#e in its le#al status)

The Company’s $rticles of $ssociation has been amended from time to time) The latest amendment was

co4ered by notarial deed o) 11! dated une 11, 2" of $ulia Taufani, ')E) 8as a substitute notary of

'ut7ipto, ')E)9 as appro4ed in the 'tockholders’ :eneral @eetin# held on une 11, 2", in order to comply

with the Indonesian Capital @arket and inancial Institutions 'uper4isory $#ency 8&$P.P$@*;G9 %ule o)

IH))1 dated @ay 1+, 2! on the Principles of $rticles of $ssociation of ;imited ;iability Companies that

Conduct Public 5fferin# of ./uity 'ecurities and Public Companies) The latest amendment of the

Company’s $rticles of $ssociation has been appro4ed by and reported to the @inistry of ;aw and Euman

%i#hts of the %epublic of Indonesia based on its letters o) $E


115/796

$ccordin# to article 3 of its $rticles of $ssociation, the Company shall en#a#e in pro4idin#

telecommunications networks and?or ser4ices as well as information technolo#y business by conductin#

the followin# acti4ities=

Pro4ision of telecommunications networks and?or ser4ices and information technolo#y ser4ices

Plannin# of ser4ices, construction of infrastructure and pro4ision of telecommunications and information

technolo#y facilities, includin# supportin# resources

Carryin# out operational ser4ices 8comprisin# the marketin# and sale of telecommunications networks

and?or ser4ices and information technolo#y ser4ices pro4ided by the Company9, maintenance, research

and de4elopment of telecommunications and information technolo#y infrastructure and?or facilities, and

pro4idin# education and trainin# 8both locally and o4erseas9

.n#a#in# in ser4ices which are rele4ant to the de4elopment of telecommunications networks and?or

ser4ices and information technolo#y

.n#a#in# in payment transactions and money transfer ser4ice throu#h telecommunications and information

technolo#y networks)

The Company started its commercial operations in 1"-")

&ased on ;aw o) 3 of 1"!" on Telecommunications and pursuant to :o4ernment %e#ulation o) 00 of

1""1, the Company had been re*confirmed as an 5peratin# &ody 8A&adan Penyelen##araB9 that pro4ided

international telecommunications ser4ice under the authority of the :o4ernment)

1


116/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a

;ENERAL +'"$%.$/!*

C"(-a$@’& E&%ab.&(!$% +'"$%.$/!*

In 1""", the :o4ernment issued ;aw o) 3- on Telecommunications 8ATelecommunications ;awB9 which

took effect on 'eptember !, 2)


117/796

5n $u#ust 1+, 2, the :o4ernment, throu#h the @inistry of Communications 8A@5CB9, #ranted the

Company an in* principle license as a nationwide Di#ital Communication 'ystem 8ADC'B9 1!

telecommunications pro4ider as compensation for the early termination effecti4e $u#ust 1, 23 of the

e6clusi4ity ri#hts on international telecommunications ser4ices #i4en to the Company prior to the #rantin#

of such license) 5n $u#ust 23, 21, the Company obtained the operatin# license from the @5C)

'ubse/uently, based on Decree o) GP)2+0 dated o4ember -, 21 issued by the @5C, the operatin#

license was transferred to the Company’s subsidiary, PT Indosat @ulti @edia @obile 8see AeB below9)

5n 'eptember 0, 2, the :o4ernment, throu#h the @5C, also #ranted the Company in*principle licenses

for local and domestic lon#*distance telecommunications ser4ices as compensation for the termination of

its e6clusi4ity ri#hts on international telecommunications ser4ices) 5n the other hand, PT Telekomunikasi

Indonesia Tbk 8ATelkomB9 was #ranted an in*principle license for international telecommunications ser4ices

as compensation for the early termination of Telkom’s ri#hts on local and domestic lon#*distance

telecommunications ser4ices)

&ased on a letter dated $u#ust 1, 22 from the @5C, the Company was #ranted an operatin# license for

fi6ed local telecommunications network co4erin# akarta and 'urabaya) This operatin# license was

con4erted to become a national license on $pril 10, 23 based on Decree o) GP)13 ear 23 of the

@5C) The 4alues of the abo4e licenses #ranted to Telkom and the Company on the termination of their

e6clusi4e ri#hts on local?domestic and international telecommunications ser4ices, respecti4ely, ha4e been

determined by an independent appraiser)

11


118/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a

;ENERAL +'"$%.$/!*

a C"(-a$@’& E&%ab.&(!$% +'"$%.$/!*

The followin# are operatin# licenses obtained by the Company and its subsidiary=

P!)."* "#


119/796

L.'!$&! N"1

Da%! I&&/!*

I&&/.$= B"*@

L.'!$&!

D!&').-%."$

GP)-"?Thn 2+

@arch 1,

@5C

.4aluated

5peratin#

license

for

nationwide

2+

e4ery years

closed

fi6ed

communications

network 8e)#), '$T, frame relay,


120/796

etc)9

GP)23?Thn 2+

@ay 21, 2+

@5C

.4aluated

5peratin# license for fi6ed network

e4ery years

and

basic

telephony

ser4ices

which co4ers the pro4ision of local,


121/796

national

lon#*distance,

and international lon#*

distance telephony ser4ices

1"?G.P?@)G5@I5?2?2-

ebruary 1+,

@inistry of

1 years

Determination of the winner and

and

2- and

Communications and


122/796

operatin# license for I@T*2

2"?G.P?@)G5@I5?3?2-

@arch 20,

Information and

cellular

network

pro4ider

usin#

2-

Technolo#y

2)1 :E> radio fre/uency spectrum

8A@5CITB9

8a third #eneration JA3:BK mobile

communications technolo#y9 for 1

block 82 6 @h>9 of fre/uency 89

12?G.P?@)G5@I5?1?2-

5ctober 11,

@5CIT

.4aluated

$mended


123/796

operatin#

license for

2-

e4ery year

nationwide

:'@

cellular

mobile

network

8includin#

its

basic

telephony ser4ices and the ri#hts

and obli#ations of 3: ser4ices9

1!1?G.P?@)G5@I5?12?2-

December 12,

@5CIT


124/796

*

$llocation

of

two

nationwide

2-

fre/uency channels, i)e), channels

!" and -3 in the ! @E>

spectrum for ;ocal i6ed Lireless

etwork

'er4ices

with

;imited


125/796

@obility

1?DI%.?2!

anuary 0,

Directorate :eneral

.4aluated

5peratin#

license

as

internet

2!

of Post and

e4ery years

ser4ice pro4ider


126/796

Telecommunications

8AD:PTB9


127/796

1?DI%.?2!

anuary ",

D:PT

.4aluated

5peratin#

license

for

internet

2!

e4ery years

interconnection

ser4ices

8etwork

$ccess

Point?$P9,

which

replaces the pre4ious license #i4en


128/796

to 'atelindo

2?DI%.?2!

anuary ",

D:PT

.4aluated

5peratin#

license for

telephony

2!

e4ery years

internet

ser4ices

which

replaces

the


129/796

pre4ious

;icense

o) !23?DI%.?22

for

oice

o4er Internet Protocol 'er4ice with

national co4era#e that e6pired in

20


130/796

230?G.P?@)G5@I5?0?2"

uly 20, 2"

@5CIT

1 years

5peratin#

license

for

APacket

'witchedB

local

fi6ed

telecommunication

network

usin#


131/796

2)3 :E> radio fre/uency spectrum

of

&roadband

Lireless

$ccess

8&L$9 89

2-!?G.P?@)G5@I5?"?2"

'eptember 1,

@5CIT

1 years

5peratin#

license


132/796

for

one

2"

additional block 82 6 @h>9 of

3: fre/uency 89

$s one of the winners in the selection of I@T*2 cellular pro4iders, the Company was obli#ed, amon# others, to pay upfront fee of %p32, 8otes 2k

and 309 and radio fre/uency fee 8ote 2!d9)

PT Indosat @e#a @edia was obli#ed, amon# others, to pay upfront fee of %p1!,+! 8ote 2k9 and radio fre/uency fee 8ote 2!d9)

The Company was obli#ed, amon# others, to pay upfront fee of %p32, 8ote 2k9 and radio fre/uency fee 8ote 2!d9)

12


133/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a

;ENERAL +'"$%.$/!*

a C"(-a$@’& E&%ab.&(!$% +'"$%.$/!*

5n anuary ", 2!, based on letter o) 1?1+?D$'P from &ank Indonesia 8Central &ank9, the Company

obtained appro4al for “Indosat m-wallet” prepaid cards as a new means of payment) The Company was

also appointed as a special principal and technical ac/uirer for such prepaid cards) 5n o4ember 1", 2",

the Company launched “Indosat m-wallet” to the public)

5n @arch 10, 2!, @5CIT issued @inisterial Decree o) 2?P.%?@)G5@I5?2! on the :uidelines of

Construction and ation of 'harin# Telecommunication Towers) &ased on this Decree, the construction

of telecommunication towers re/uires permits from the rele4ant #o4ernmental institution and the local

#o4ernment determines the placement of the towers and the location in which the towers can be

constructed) urthermore, a telecommunication pro4ider or tower pro4ider which owns telecommunication

towers is obli#ed to allow other telecommunication operators to utili>e its telecommunication towers without

any discrimination) The Decree also mandated that each of the tower contractor, pro4ider and owner be

1M locally*owned companies)

5n @arch 3, 2", the @inistry of Domestic $ffairs, @inistry of Public Lorks, @5CIT and the Eead of

&GP@ 7ointly issued Decrees o) 1! ear 2", o) 0?P%T?@?2", o) 1"?P.%?@)G5@I5?3?" and

o) 3?P?2" on the Detailed :uidelines of Construction and ation of 'harin# Telecommunication

Towers) The Decrees define the re/uirements and procedures for tower construction) $ tower pro4ider can

be either a telecommunications operator or a non*telecommunications operator) If a tower pro4ider is a

non*telecommunications operator, it is re/uired to be a 1M locally*owned company)

The Company is domiciled at alan @edan @erdeka &arat o) 21, akarta and has ! re#ional offices

located in akarta, &andun#, 'emaran#, 'urabaya, @edan, Palemban#, &alikpapan and @akassar)

C"(-a$@’& P/b.' O##!).$=&


134/796

$ll of the Company’s & shares ha4e been re#istered with and traded on the Indonesia 'tock .6chan#e

8new entity after the mer#er of akarta 'tock .6chan#e and 'urabaya 'tock .6chan#e in o4ember 209

since 1""+) The Company’s $merican Depositary 'hares 8$D', each representin# & shares9 ha4e also

been traded on the ew ork 'tock .6chan#e since 1""+)

$s of December 31, 2", the Companies’ outstandin# bonds issued to the public are as follows=

B"$* +N"%! 16

E##!'%.>! Da%!

R!=.&%!)!* .% a$* T)a*!* "$

1)

'econd Indosat &onds series & in ear 22

o4ember -, 22

Indonesia 'tock .6chan#e

with i6ed %ate

2)

Third Indosat &onds series & in ear 23

5ctober 22, 23


with i6ed %ate

3)

:uaranteed otes Due 21

o4ember , 23

;u6embour# 'tock .6chan#e and 'in#apore

.6chan#e 'ecurities Tradin# ;imited

+)


135/796

ourth Indosat &onds in ear 2 with i6ed

une 21, 2


%ate

)

Indosat 'yari’ah I7arah &onds in ear 2

une 21, 2


-)

:uaranteed otes Due 212

une 22, 2

'in#apore .6chan#e 'ecurities Tradin# ;imited

0)

ifth Indosat &onds in ear 20 with i6ed

@ay 2", 20


%ates

!)

Indosat 'ukuk I7arah II in ear 20

@ay 2", 20


")

'i6th Indosat &onds in ear 2! with i6ed

$pril ", 2!


%ates

1) Indosat 'ukuk I7arah III in ear 2!

$pril ", 2!


136/796


11) 'e4enth Indosat &onds in ear 2" with

December !, 2"


i6ed %ates

12) Indosat 'ukuk I7arah I in ear 2"

December !, 2"


13


137/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a

;ENERAL +'"$%.$/!*

E(-"@!!&, D.)!'%")&, C"((.&&."$!)& a$* A/*.% C"((.%%!!

&ased on resolutions of the $nnual 'tockholders’ :eneral @eetin#s held on une , 2! and une 11,

2" which are notari>ed under Deeds o) 3 and o) 11!, respecti4ely, of $ulia Taufani, ')E) 8as a

substitute notary of 'ut7ipto, ')E)9 on the same dates and a resolution of the .6traordinary 'tockholders’

@eetin# held on $u#ust 2, 2! which is notari>ed under Deed o) 3+3 of $ulia Taufani, ')E) 8as

substitute notary of 'ut7ipto, ')E)9 on the same date, the composition of the Company’s &oard of

Commissioners and &oard of Directors as of December 31, 2! and 2", respecti4ely, is as follows8ote 3b9=

&oard of Commissioners=

2008

2009

NNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN


138/796

President Commissioner

$bdulla @ohammed

$bdulla @ohammed

')$ $l Thani

')$ $l Thani

Commissioner

Dr) asser @ohd) $)

Dr) asser @ohd) $

@arafih

@arafih

Commissioner

%achmad :obel

%achmad :obel

Commissioner

'heikh @ohammed


139/796

%ichard arnsworth

&in 'uhaim

'eney

Eamad $l Thani

Commissioner

arman

arman

Commissioner

%ionald 'ilaban

%ionald 'ilaban

Commissioner

'etyanto Prawira

'etyanto Prawira


140/796

'antosa

'antosa

Commissioner

@ichael rancis

@ichael rancis

;atimer

;atimer

Commissioner

Thia Pen# Eeok

Thia Pen# Eeok

:eor#e

:eor#e

Commissioner

'oeprapto


141/796

'oeprapto

Independent commissioner

&oard of Directors=

2008

2009

President Director and

Chief .6ecuti4e 5fficer


142/796

ohnny 'wandi '7am

Earry 'ason#ko Tirtot7ondro

Deputy President Director

Gai>ad &omi Eeer7ee

*

Director and Chief inance

5fficer

Lon# Eean# Tuck

Peter Lladyslaw Guncewic>

Corporate 'er4ices Director

Lahyu Li7ayadi

*

Information Technolo#y


143/796

Director

%oy Gannan

*

abotabek and Corporate

'ales Director

ad>ri 'entosa

*

%e#ional 'ales Director

'yakieb $hmad 'un#kar

*

@arketin# Director

:untur 'oaloon 'iboro

*

etwork Director

%aymond Tan Gim @en#

*


144/796

Director and Chief

Commercial 5fficer

*

Gai>ad &omi Eeer7ee

Director and Chief

Technolo#y 5fficer

*

'tephen .dward Eobbs

Director and Chief Lholesale

and Infrastructure 5fficer

*


145/796

ad>ri 'entosa

This position no lon#er e6ists startin# une 11, 2" due to the new or#ani>ational structure)

1+


146/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a

;ENERAL +'"$%.$/!*

' E(-"@!!&, D.)!'%")&, C"((.&&."$!)& a$* A/*.% C"((.%%!! +'"$%.$/!*

The composition of

the Company’s $udit

Committee as of

December 31, 2! and 2"

is as follows=

2008

2009


147/796

NNNNNNNNNNNNNNNNN

NNNNNNNN

Chairman

Thia Pen# Eeok :eor#e

Thia Pen# Eeok :eor#e

@ember

@ichael rancis ;atimer

@ichael rancis ;atimer

@ember

'oeprapto

'oeprapto

@ember


148/796

'ubse/uently on anuary 2", 21, the &oard of Commissioner replaced @ichael rancis ;atimer with Chris Ganter effecti4e on the same date 8ote

3c9)

The Company and subsidiaries 8collecti4ely referred to hereafter as Athe CompaniesB9 ha4e appro6imately

0,0 and 0,12- employees 8unaudited9, includin# non*permanent employees, as of December 31, 2!

and 2", respecti4ely)

S%)/'%/)! "# %! C"(-a$@’& S/b&.*.a).!&

$s of December 31, 2! and 2", the Company has direct and indirect ownership in the followin#

subsidiaries=

S%a)% "#

P!)'!$%a=! "# O$!)&.- +

C"((!)'.a


149/796

Na(! "# S/b&.*.a)@

L"'a%."$

P).$'.-a A'%.>.%@

O-!)a%."$&

2008

2009


150/796

Indosat inance Company &))

8AI&B9829

$msterdam

inance

23

1)

1)

Indosat International inance


151/796

Company &)) 8AII&B9839

$msterdam

inance

2

1)

1)

Indosat 'in#apore Pte) ;td) 8AI'PB9

'in#apore

Telecommunication

2

1)

1)

PT Indosat @e#a @edia 8AI@@B9

akarta

@ultimedia

21

"")!

"")!

PT 'tarone @itra Telekomunikasi


152/796

8B'@TB9

'emaran#

Telecommunication

2-

02)+

02)+

PT $plikanusa ;intasarta


153/796

8A;intasartaB9

akarta

Data Communication

1"!"

02)3-

02)3-

PT $rta7asa Pembayaran .lektronis

8A$P.B9 8ote 2b9

akarta

Telecommunication

2

3")!

3")!


154/796

PT 'atelindo @ulti @edia 8A'@@B9819

akarta

@ultimedia

1"""

"")-

*

T"%a A&&!%& +B!#")! E.(.$a%."$&

Na(! "# S/b&.*.a)@

2008

2009

I&829


155/796

2,-30,0+

2,2-1,22-

II&839

1,23,!1-

1,++,10+

I'P

21,1-0

2!,00"

I@@

0+1,!-

0+,2+

'@T

1+0,!-+

13","3

;intasarta

1,33!,01

1,+1","

$P.

133,2+1

10",-!1

'@@ 819

1,-"

*

;i/uidated on une 3, 2")

&ased on an I& shareholder’s resolution dated o4ember -, 2!, I& decided to refund capital in7ection amountin# to .


156/796

1


157/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a

;ENERAL +'"$%.$/!*

* S%)/'%/)! "# %! C"(-a$@’& S/b&.*.a).!& +'"$%.$/!*

'@T was established on une 1, 2- in 'emaran#, Central a4a by the Company, PT 'arana

Pemban#unan awa Ten#ah, PT Dawamiba .n#ineerin# and PT Trikomsel @ultimedia to en#a#e in

construction and operation of fi6ed wireless access network usin# Code Di4ision @ultiple $ccess 8CD@$9

2*16 technolo#y for Central a4a and its surroundin# areas)

&ased on an amendment dated $u#ust 23, 2- to '@T’s $rticles of $ssociation, in $u#ust 2- the

Company contributed %p,00" cash as part of the capital of '@T) '@T started its business operations in

anuary 20)

urthermore, based on the latest amendment dated $pril 2+, 20 to '@T’s $rticles of $ssociation, in @ay

20, the Company made additional cash capital in7ection amountin# to %p+",02! and in*kind contribution

of %p+,23 in the form of telecommunications e/uipment) &ased on such $rticles of $ssociation, the

Company has 1)M ownership in '@T) Eowe4er, one of the stockholders decided not to make its capital

in7ection as re/uired) $s a result, the Company’s ownership increased to )3-M) This increase wasappro4ed by '@T’s stockholders based on the minutes of a stockholders’ meetin# held on uly 3, 20)

5n o4ember 20, 2!, the Company entered into a 'ale and Purchase $#reement with PT 'arana

Pemban#unan awa Ten#ah 8A'PTB9 to purchase the 10)1!M ownership of 'PT in '@T for %p33,-!)

'uch purchase, which resulted in the reco#nition of #oodwill amountin# to %p",02+ 8ote 19, increased

the Company’s ownership in '@T from )3-M to 02)+M) 5n December 3, 2!, the Company fully paid

'PT for the purchase)

M!)=!) "# %! C"(-a$@, Sa%!.$*", B.(a=)aa a$* IM3


158/796

&ased on @er#er Deed o) 0 dated o4ember 2, 23 8Amer#er dateB9 of Poerbanin#sih $di Larsito,

')E), the Company, PT 'atelit Palapa Indonesia 8A'atelindoB9, PT &ima#raha Telekomindo 8A&ima#rahaB9

and PT Indosat @ulti @edia @obile 8AI@3B9 a#reed to mer#e, with the Company as the sur4i4in# entity) $ll

assets and liabilities owned by 'atelindo, &ima#raha and I@3 were transferred to the Company on the

mer#er date) These three companies were dissol4ed by operation of law without the need to under#o the

re#ular li/uidation process)

The names A'atelindoB and AI@3B in the followin# notes refer to these entities before they were mer#ed withthe Company, or as the entities that entered into contractual a#reements that were taken o4er by the

Company as a result of the mer#er)

SUMMARY OF SI;NIFICANT ACCOUNTIN; POLICIES

The accountin# and reportin# policies adopted by the Companies conform with #enerally accepted

accountin# principles in Indonesia) The si#nificant accountin# policies applied consistently in the

preparation of the consolidated financial statements for the years ended December 31, 2! and 2" areas follows=

Ba&.& "# C"$&".*a%!* F.$a$'.a S%a%!(!$%&

The consolidated financial statements are presented usin# the historical cost basis of accountin#, e6cept

for in4entories which are stated at the lower of cost or net reali>able 4alue, deri4ati4e instruments which are

stated at fair 4alue and certain in4estments which are stated at fair 4alue)

1-


159/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a

SUMMARY OF SI;NIFICANT ACCOUNTIN; POLICIES +'"$%.$/!*

Ba&.& "# C"$&".*a%!* F.$a$'.a S%a%!(!$%& +'"$%.$/!*

The consolidated statements of cash flows classify cash receipts and payments into operatin#, in4estin#

and financin# acti4ities) The cash flows from operatin# acti4ities are presented usin# the direct method)

The reportin# currency used in the consolidated financial statements is the Indonesian rupiah)

P).$'.-!& "# C"$&".*a%."$

The consolidated financial statements include the Company’s accounts and those of its subsidiaries 8ote

1d9)

The consolidated financial statements also include the accounts of $P. 8;intasarta’s M*owned

subsidiary9) The accounts of $P. in 2! and 2" were consolidated because its financial and operatin#

policies were controlled by ;intasarta)

The accounts of I&, II&, and I'P were translated into rupiah amounts at the middle rates of e6chan#e

pre4ailin# at balance sheet date for balance sheet accounts and the a4era#e rates durin# the year for profit

and loss accounts) The resultin# differences arisin# from the translations of the financial statements of I&,

II&, and I'P are presented as ADifference in orei#n Currency TranslationB under the 'tockholders’ ./uity

section of the consolidated balance sheets)


160/796

@inority interest in subsidiaries represents the minority stockholders’ proportionate share in the e/uity

8includin# net income9 of the subsidiaries which are not wholly owned) $ll inter*company transactions and

balances are eliminated in consolidation)

Ca& a$* Ca& E/.>a!$%&

Time deposits with ori#inal maturities of three months or less at the time of placement and deposits on call

are considered as ACash ./ui4alentsB)

Cash in banks and time deposits which are pled#ed as collateral for bank #uarantees and time deposits

with ori#inal maturities of more than three months are not classified as part of ACash and Cash

./ui4alentsB) These are presented as part of either A5ther Current $ssetsB or Aon*current $ssets *

5thersB)

S")%4%!)( I$>!&%(!$%&

@utual fund

@utual fund, which is classified as tradin# security under 'tatement of inancial $ccountin# 'tandards

8A'$GB9 , A$ccountin# for In4estments in Certain 'ecuritiesB, is stated at its net assets 4alue at balance

sheet date) ed #ain or loss from the chan#e in net assets 4alue at balance sheet date is credited or

char#ed to current operations)

Time deposits with ori#inal maturities of more than three months at the time of placement are recorded at

historical 4alue)

A"a$'! #") D"/b%#/ A''"/$%&

$llowance for doubtful accounts is pro4ided based on mana#ementOs e4aluation of the collectibility of theaccounts at the end of the year)

10


161/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a


I$>!$%").!&

In4entories, which mainly consist of 'I@ cards, starter packs, pulse reload 4ouchers, broadband modems

and cellular handsets, are 4alued at the lower of cost or net reali>able 4alue) Cost is determined usin# the

wei#hted a4era#e method)

.ffecti4e anuary 1, 2", the Companies ha4e applied '$G 1+ 8%e4ised 2!9, AIn4entoriesB, which

supersedes '$G 1+ 81""+9) This re4ised '$G pro4ides #uidance on the determination of in4entory cost

and its subse/uent reco#nition as an e6pense, includin# any write*down to net reali>able 4alue, as well as

#uidance on the cost formula used to assi#n costs to in4entories) The adoption of this re4ised '$G did not

ha4e si#nificant effect to the Companies’ consolidated financial statements)

P)!-a.* E-!$&!&

Prepaid e6penses, which mainly consist of fre/uency fee, rentals, upfront premium for cross currency swap

8ote 20p9, and ad4ertisin#, are e6pensed as the related asset is utili>ed) The non*current portion of

prepaid e6penses is shown as part of Aon*current $ssets * 5thersB)

I$>!&%(!$%&

In4estments consist of=

In4estments in associated companies


162/796

In4estments in shares of stock wherein the Companies ha4e e/uity interests of at least 2M but not

e6ceedin# M are accounted for under the e/uity method, whereby the in4estment cost is increased or

decreased by the Companies’ share of the net earnin#s or losses of the in4estees since the date of

ac/uisition and decreased by di4idends recei4ed) ./uity in net earnin#s 8losses9 is bein# ad7usted for the

strai#ht*line amorti>ation o4er fifteen years of the difference between the cost of such in4estment and the

Companies’ proportionate share in the underlyin# fair 4alue of the net assets at date of ac/uisition

8#oodwill9)

If the Companies’ share in the e/uity of an in4estee, subse/uent to transactions resultin# in a chan#e in the

e/uity of the in4estee, is different from the Companies’ share in the e/uity of the in4estee prior to such

transactions, the difference is reco#ni>ed by a credit or char#e to ADifference in Transactions of ./uity

Chan#es in $ssociated Companies?'ubsidiariesB, net of applicable income ta6, after ad7ustin# their e/uity

in the in4estee to conform with the former’s accountin# policies)

In4estments in shares of stock that do not ha4e readily determinable fair 4alue in which the e/uity interest

is less than 2M, and other lon#*term in4estments are carried at cost)

In4estments in e/uity shares that ha4e readily determinable fair 4alue in which the e/uity interest is less

than 2M and which are classified as a4ailable*for*sale, are recorded at fair 4alue, in accordance with '$G

)

P)"-!)%@ a$* E/.-(!$%

Property and e/uipment are stated at cost 8which includes certain capitali>ed borrowin# costs incurred

durin# the construction phase9, less accumulated depreciation and impairment in 4alue) Depreciation of

property and e/uipment is computed usin# the strai#ht*line method based on the estimated useful li4es of

the assets)

In accordance with '$G 1- 8%e4ised 209, the Companies ha4e chosen the cost model for the

measurement of their property and e/uipment) The Company re#rouped certain property and

1!


163/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a


P)"-!)%@ a$* E/.-(!$% +'"$%.$/!*

e/uipment startin# anuary 1, 2! based on its periodic re4iew and assessment of the economic useful

li4es of the assets) The remainin# useful li4es under the new #roupin#s were ad7usted accordin#ly) &elow

are the estimated useful li4es 8in years9 startin# anuary 1, 2!)

S%a)%.$=

a$/a)@ 1, 2008

&uildin#s

2

Information technolo#y e/uipment

3 to

5ffice e/uipment

3 to

&uildin# and leasehold impro4ements

3 to 1

ehicles


164/796

Cellular technical e/uipment

1

Transmission and cross*connection e/uipment

1 to 1

i6ed Lireless $ccess 8AL$B9 technical e/uipment

1

5peration and maintenance center and

measurement unit

3 to

i6ed access network e/uipment

1

;andri#hts are stated at cost)

The cost of maintenance and repairs is char#ed to income as incurred si#nificant renewals and

betterments which enhance an asset’s condition on its initial performance, are capitali>ed) Lhen properties

are retired or otherwise disposed of, their costs and the related accumulated depreciation are dereco#ni>ed

from the accounts, and any resultin# #ains or losses are reco#ni>ed in the consolidated statement of

income for the year)

Properties under construction and installation are stated at cost) $ll borrowin# costs, which include interest,

amorti>ation of ancillary costs 8otes 1d and 1h9 and forei#n e6chan#e differentials 8estimated /uarterly

to the e6tent that they are re#arded as an ad7ustment to interest costs by cappin# the e6chan#e differences

taken as borrowin# costs at the amount of borrowin# costs on the functional currency e/ui4alent

borrowin#s9 that can be attributed to /ualifyin# assets, are capitali>ed to the cost of properties under

construction and installation) Capitali>ation of borrowin# costs ceases when the construction or installation

is completed and the constructed or installed asset is ready for its intended use)

The residual 4alues, useful li4es and methods of depreciation of property and e/uipment are re4iewed, and

ad7usted prospecti4ely, if appropriate, at each financial year end)

I(-a.)(!$% "# A&&!%&


165/796

1"


166/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a


L!a&!&

.ffecti4e anuary 1, 2!, the Companies ha4e applied '$G 3 8%e4ised 209, A;easesB, which

supersedes '$G 3 81""9, A$ccountin# for ;easesB) radio fre/uency spectrum of

&roadband Lireless $ccess 8A&L$B9) The Company and I@@ were obli#ed to, amon# others, pay upfront

fee, and annual radio fre/uency fee for 1 years 8ote 2!d9)


167/796

&ased on mana#ement’s interpretation of the conditions of the 3: and &L$ licenses and the written

confirmation from the D:PT, the licenses may be returned at any time without any financial obli#ation to

pay the remainin# outstandin# annual radio fre/uency fees 8i)e), the license arran#ement does not transfer

substantially all the risks and rewards incidental to ownership9)

$ccordin#ly, the Company and I@@ reco#ni>e the annual radio fre/uency fee as operatin# lease e6pense

amorti>ed usin# strai#ht*line method o4er the term of the ri#hts to operate the 3: and &L$ licenses)

@ana#ement e4aluates its plan to continue to use the licenses on an annual basis)

;""*. a$* O%!) I$%a$=.b! A&&!%&

$t the time the Company ac/uires a subsidiary which is not an entity under common control, any e6cess of

the ac/uisition cost o4er the Company’s interest in the fair 4alue of the subsidiary’s identifiable assets, net

of liabilities, as of ac/uisition date is reco#ni>ed as #oodwill)

$c/uisitions of minority interest in a subsidiary by the Company are accounted for usin# the parent entity

e6tension method) ed usin# the strai#ht*line method o4er 1 years)

2


168/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a

SUMMARY OF SI;NIFICANT ACCOUNTIN; POLICIES +'"$%.$/!* ;""*. a$* O%!) I$%a$=.b!

A&&!%& +'"$%.$/!*

$t the time of ac/uisition of a subsidiary, any intan#ible assets reco#ni>ed are amorti>ed usin# the strai#ht*

line method based on the estimated useful li4es of the assets as follows=

Y!a)&

Customer base

*

Prepaid

-

*

Post*paid


169/796

'pectrum license

&rand

!

'oftware that is not an inte#ral part of the related hardware is amorti>ed usin# the strai#ht*line method o4er

years)

The Company re4iews the carryin# amount of #oodwill and other intan#ible assets whene4er e4ents or

circumstances indicate that their 4alue is impaired) Impairment loss is reco#ni>ed as a char#e to currentoperations)

D!b% a$* B"$*& I&&/a$'! C"&%& a$* C"$&!$% S".'.%a%."$ F!!&

.6penses incurred in connection with the issuance of debt and bonds are deducted from the proceeds

thereof) The difference between the net proceeds and the nominal 4alue of the debt or bonds is reco#ni>ed

as premium or discount that should be amorti>ed o4er the term of the debt or bonds) Consent solicitation

fees resultin# from the amendments of certain terms under the debt facility a#reement and trusteea#reement, which are not accounted for as an e6tin#uishment, are reco#ni>ed as ad7ustment to the

carryin# amount of the debt or bonds and are amorti>ed o4er the remainin# term of the debt or bonds)

R!>!$/! a$* E-!$&! R!'"=$.%."$

Cellular

Cellular re4enues arisin# from airtime and roamin# calls are reco#ni>ed based on the duration of

successful calls made throu#h the Company’s cellular network)

or post*paid subscribers, monthly ser4ice fees are reco#ni>ed as the ser4ice is pro4ided)

or prepaid subscribers, the acti4ation component of starter packa#e sales is reco#ni>ed upon acti4ation

by end*customers) 'ales of initial?reload 4ouchers are recorded as unearned re4enue and reco#ni>ed asre4enue upon usa#e of the airtime or upon e6piration of the airtime)


170/796

'ales of wireless broadband modems and cellular handsets are reco#ni>ed upon deli4ery to the

customers)

%e4enues from wireless broadband data communications are reco#ni>ed based on the duration of usa#e

or fi6ed monthly char#es dependin# on the arran#ement with the customers)

Cellular re4enues are presented on a net basis, after compensation to 4alue added ser4ice pro4iders)

21


171/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a


R!>!$/! a$* E-!$&! R!'"=$.%."$ +'"$%.$/!*

Customer Loyalty Program

The Company operates a customer loyalty pro#ram called APoin Plus PlusB, which allows customers to

accumulate points for e4ery reload and payment by the Company’s prepaid and post*paid subscribers,respecti4ely) The points can then be redeemed for free telecommunication and non*telecommunication

products, sub7ect to a minimum number of points bein# obtained)

Customer loyalty credits are accounted for as a separate component of the sales transaction in which they

are #ranted) The Company records a liability at the time of reload and payment by its prepaid and post*paid

subscribers, respecti4ely, based on the fair 4alue e6pected to be incurred to supply products in the future)

The consideration recei4ed is allocated between the cellular products sold and the points issued, with the

consideration allocated to the points e/ual to their fair 4alue) air 4alue of the points issued is deferred and

reco#ni>ed as re4enue when the points are redeemed or when the redemption period e6pires)

@ultimedia, Data Communication, Internet 8A@IDIB9

Internet

%e4enues arisin# from installation ser4ice are reco#ni>ed at the time the installations are placed in ser4ice)

%e4enues from monthly ser4ice fees are reco#ni>ed as the ser4ices are pro4ided) %e4enues from usa#echar#es are reco#ni>ed monthly based on the duration of internet usa#e or based on the fi6ed amount of

char#es dependin# on the arran#ement with the customers)


172/796

Frame Net, orld Lin! and "irect Lin!

%e4enues arisin# from installation ser4ice are reco#ni>ed upon the completion of the installation of

e/uipment used for network connection purposes in the customers’ premises) %e4enues from monthly

ser4ice fees are reco#ni>ed as the ser4ices are pro4ided)

#atellite Lease

%e4enues are reco#ni>ed on the strai#ht*line basis o4er the lease term)

%e4enues from other @IDI ser4ices are reco#ni>ed when the ser4ices are rendered)

i6ed Telecommunication

International Calls

%e4enues from out#oin# international call traffic are reco#ni>ed on the basis of the actual recorded traffic

for the year and are reported on a net basis, after allocations to o4erseas international carriers)

Fi$ed ireless

i6ed wireless re4enues arisin# from usa#e char#es are reco#ni>ed based on the duration of successful

calls made throu#h the Company’s fi6ed network)

or post*paid subscribers, acti4ation fees are reco#ni>ed upon acti4ation of new subscribers in the

Company’s fi6ed network while monthly ser4ice fees are reco#ni>ed as the ser4ice is pro4ided)

or prepaid subscribers, the acti4ation component of starter packa#e sales is reco#ni>ed upon acti4ation

by end*customers) 'ale of initial?reload 4ouchers is recorded as unearned income and reco#ni>ed as

income upon usa#e of the airtime or upon e6piration of the airtime)

22


173/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a

2 SUMMARY OF SI;NIFICANT ACCOUNTIN; POLICIES +'"$%.$/!*

R!>!$/! a$* E-!$&! R!'"=$.%."$ +'"$%.$/!*

i6ed Telecommunication 8continued9

Fi$ed Line

%e4enues from fi6ed line installations are reco#ni>ed at the time the installations are placed in ser4ice)

%e4enues from usa#e char#es are reco#ni>ed based on the duration of successful calls made throu#h the

Company’s fi6ed network)

Interconnection %e4enue

%e4enues from network interconnection with other domestic and international telecommunications carriers

are reco#ni>ed monthly on the basis of the actual recorded traffic for the month)

5peratin# re4enues for interconnection ser4ices under interconnection a#reements based on re4enue*

sharin# arran#ement 8ote 319 are reported on a net basis, after interconnection e6penses?char#es)

5peratin# re4enues for interconnections that are not made under contractual sharin# a#reements, i)e),

based on tariff as stipulated by the :o4ernment 8ote 39, are reported on a #ross basis, before

interconnection e6penses?char#es 8ote 29) These interconnection e6penses?char#es are accounted for

as operatin# e6penses in the year these are incurred)

.6penses


174/796

.6penses are reco#ni>ed when incurred)

P!)&"$$! C"&%&

Personnel costs which are directly related to the de4elopment, construction and installation of property and

e/uipment are capitali>ed as part of the cost of such assets)

P!$&."$ Pa$ a$* E(-"@!! B!$!#.%&

Pension costs under the Companies’ defined benefit pension plans are determined by periodic actuarial

calculation usin# the pro7ected*unit*credit method and applyin# the assumptions on discount rate, e6pected

return on plan assets and annual rate of increase in compensation) $ctuarial #ains or losses are

reco#ni>ed as income or e6pense when the net cumulati4e unreco#ni>ed actuarial #ains or losses for each

indi4idual plan at the end of the pre4ious reportin# year e6ceed 1M of the present 4alue of the defined

benefit obli#ation or fair 4alue of plan assets, whiche4er is #reater, at that date) These #ains or losses in

e6cess of the 1M corridor are reco#ni>ed on a strai#ht*line basis o4er the e6pected a4era#e remainin#

workin# li4es of the employees) Past ser4ice cost is reco#ni>ed o4er the estimated a4era#e remainin#

ser4ice periods of the employees)

The Companies follow '$G 2+ 8%e4ised 2+9, A.mployee &enefitsB, which re#ulates the accountin# and

disclosure for employee benefits, both short*term 8e)#), paid annual lea4e, paid sick lea4e9 and lon#*term

8e)#), lon#*ser4ice lea4e, post*employment medical benefits9)

23


175/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a


D!).>a%.>!&

The Company enters into and en#a#es in cross currency swap, interest rate swap and currency forward

contracts?transactions for the purpose of mana#in# its forei#n e6chan#e and interest rate e6posures

emanatin# from the Company’s loans and bonds payable in forei#n currencies)

The Company applies '$G 8%e4ised 1"""9, A$ccountin# for Deri4ati4e Instruments and Eed#in#

$cti4itiesB) '$G 8%e4ised 1"""9 sets forth the accountin# and reportin# standards for deri4ati4e

transactions and hed#in# acti4ities, which re/uire that e4ery deri4ati4e instrument 8includin# embedded

deri4ati4es9 be reco#ni>ed as either asset or liability based on the fair 4alue of each contract) air 4alue is a

computation of present 4alue by usin# data and assumptions which are commonly used) &ased on the

specific re/uirements for hed#e accountin# under '$G 8%e4ised 1"""9, the Company’s instruments do

not /ualify and are not desi#nated as hed#e acti4ities for accountin# purposes) The chan#es in the fair

4alue of such deri4ati4e instruments are recorded directly as a char#e or credit to current operations)

Deri4ati4e assets and liabilities are presented under current assets and liabilities, respecti4ely) .mbeddedderi4ati4e is presented with the host contract on the balance sheet which represents an appropriate

presentation of o4erall future cash flows for the instrument taken as a whole)

The net chan#es in fair 4alue of deri4ati4e instruments, swap income or cost, termination income or cost,

and settlement of deri4ati4e instruments are credited 8char#ed9 to A:ain 8;oss9 on Chan#e in air alue of

Deri4ati4es * etB, which is presented under 5ther Income 8.6penses9 in the consolidated statements of

income)

F")!.=$ C/))!$'@ T)a$&a'%."$& a$* Baa$'!&


176/796

Transactions in4ol4in# forei#n currencies are recorded at the rates of e6chan#e pre4ailin# at the time the

transactions are made) $t balance sheet date, monetary assets and liabilities denominated in forei#n

currencies are ad7usted to reflect the pre4ailin# e6chan#e rates at such date and the resultin# #ains or

losses are credited or char#ed to current operations, e6cept for forei#n e6chan#e differentials that can be

attributed to /ualifyin# assets which are capitali>ed to assets under construction and installation)

or December 31, 2! and 2", the forei#n e6chan#e rates used 8in full amounts9 were %p1," and

%p",+, respecti4ely, per


177/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a


I$'"(! Ta +'"$%.$/!*

$mendment to ta6 obli#ations is recorded when an assessment is recei4ed or, if appealed, when the result

of the appeal is determined)

or each of the consolidated entities, the ta6 effects of temporary differences and ta6 loss carryo4er, whichindi4idually are either assets or liabilities, are shown at the applicable net amounts)

S!=(!$% R!-")%.$=

The Companies follow '$G 8%e4ised 29, A'e#ment %eportin#B, in the presentation of se#ment

reportin# in their financial statements) '$G 8%e4ised 29 pro4ides more detailed #uidance for

identifyin# reportable business se#ments and #eo#raphical se#ments) The financial information which is

used by mana#ement for e4aluatin# the se#ment performance is presented in ote 33)

Ba&.' Ea)$.$=& -!) Sa)! ADS

In accordance with '$G -, A.arnin#s per 'hareB, the amount of basic earnin#s per share is computed by

di4idin# net income by the wei#hted*a4era#e number of shares outstandin# durin# the year)

The amount of basic earnin#s per $D' is computed by multiplyin# basic earnin#s per share by , which is

e/ual to the number of shares per $D')


178/796

T)a$&a'%."$& .% R!a%!* Pa)%.!&

The Companies account for transactions with related parties as described in '$G 0, ATransactions with

%elated PartiesB)

The details of the accounts and the si#nificant transactions entered into with related parties are presentedin ote 2)

U&! "# E&%.(a%!&

The preparation of consolidated financial statements in conformity with #enerally accepted accountin#

principles re/uires the mana#ement to make estimates and assumptions that affect the reported amounts

of assets and liabilities and disclosure of contin#ent assets and liabilities at the date of the financial

statements and the reported amounts of re4enues and e6penses durin# the reportin# period) $ctual resultscould differ from those estimates)

TRANSLATIONS OF RUPIAH INTO UNITED STATES DOLLAR

The consolidated financial statements are stated in rupiah) The translations of the rupiah into


179/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a

7 CASH AND CASH E:UI


180/796

%upiah

1,1!

1,!1


181/796

%elated parties 8ote 29

%upiah

PT &ank @andiri 8Persero9 Tbk 8A@andiriB9

1,+!

2!,0

PT &ank e#ara Indonesia 8Persero9 Tbk 8A&IB9

2,3"!

1,!00

PT &ank Pemban#unan Daerah DGI akarta

+,1!

+,-2


182/796

PT &ank 'yariah @andiri 8A@andiri 'yariahB9

1,0!-

2,31

PT &ank Pemban#unan Daerah o#yakarta 8A&PD * DIB9

1,10

!"-

5thers 8each below %p1,9

3,3+!

3,2-+


183/796

%upiah

PT &ank Central $sia Tbk 8A&C$B9

0,!+

11,"--

PT CI@& ia#a Tbk 8formerly PT &ank ia#a Tbk9

8ACI@& ia#aB9

1,2-+

1,01

Citibank )$), akarta &ranch 8ACitibankA9

1,1!!

3,12

Deutsche &ank $:, akarta &ranch 8AD&B9

",00+

1,3-

The Eon#kon# and 'han#hai &ankin# Corporation


184/796

;imited, akarta &ranch 8AE'&CB9

",02

+!

5thers 8each below %p,9

11,"+3

11,--"


185/796


186/796

2-


187/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a

7 CASH AND CASH E:UI


188/796

%elated parties 8ote 29

%upiah

@andiri

---,!"

1,30","

&I

0,3"

1",!2

&%I

1-,

101,

PT &ank Tabun#an e#ara 8Persero9 8A&TB9

-",+

110,


189/796

@andiri 'yariah

21,

1,

PT &ank Pemban#unan Daerah awa Ten#ah

1,

3,

&PD*DI

1,

1,


190/796

%upiah

PT &ank @uamalat Indonesia Tbk 8A@uamalatB9

-1,

12,

PT &ank D&' Indonesia 8AD&'B9

1,

1,

CI@& ia#a

13,

!1,

D&

3,1"!

+,2"

PT &ank Danamon Indonesia Tbk 8ADanamonB9

0",3

22,!


191/796

PT &ank &ukopin Tbk

22,2

1!,"

PT &ank Tabun#an Pensiunan asional Tbk

1-,

1!,

PT &ank 'yariah @e#a Indonesia

+,

,2

PT &ank @e#a Tbk

*

3,

&ank Permata 'yariah

,

2,

PT &ank Internasional Indonesia Tbk

*

2,

&C$

,2!!

*

5thers

,"!1


192/796

2,


193/796

,+-",3"

2,-11,2"

T"%a

5,3,866

2,835,999

no lon#er a related party since une -, 2! 8ote 1!9


194/796

Time deposits and deposits on call denominated in rupiah earned interest at annual rates ran#in# from

1)2M to 1+)M in 2! and from 2)M to 1+)M in 2", while those denominated in


195/796




Y!a)& E$*!* D!'!(b!) 31, 2008 a$* 2009 +E-)!&&!* .$ (.."$& "# )/-.a a$* %"/&a$*& "# US*"a),

!'!-% &a)! a$* %a).## *a%a

5 ACCOUNTS RECEI


196/796

Telkom 8includin#


197/796

;ess allowance for doubtful accounts

-",+++

0,3!

et

6,08

125,912

Third parties

54erseas international carriers 8


198/796

and


199/796

i6ed wireless

11,-+0

1+,013

Total

1,-"1,3+0

1,-3,0

;ess allowance for doubtful accounts

+2-,01"

++,202

et

1,267,628

1,230,85


200/796

T"%a

1,370,06

1,356,69

The a#in# schedule of the accounts recei4able * trade is as follows=


201/796

2008

2009

N/(b!) "#

P!)'!$%a=!

P!)'!$%a=!

M"$%& O/%&%a$*.$=

A("/$%


202/796

+

A("/$%

+

R!a%!* -a)%.!&

* - months

!2,+"

-)-"

121,22

--)2+


203/796

0

* 12 months

1,1""

0)1

20,20

1+)!3

indosat eng 31 des 09 long form

Documents