In enhancing our GCG practices, we aim to improve both the structure and the implementation process and ensure that the principles of transparency, accountability, responsibility, independence and fairness are applied at each level of the Company. This is aimed at mitigating the risk of conflict of interest in the execution of the duties, functions and responsibilities of our BoC, BoD, management and employees.
Internally, our policy on GCG is articulated in BoD Decree No.29 year 2007, which sets out an integrated operational framework for GCG. This incorporates certain management systems that are prerequisites for the Company to ensure that every transaction, whether internal or external, is conducted in an ethical manner and in accordance with best corporate governance practices. Every year we evaluate the effectiveness of our implementation of this policy. This is done independently and comprehensively to safeguard our integrity in the eyes of both the authorities and the general public. Our corporate governance structure consists of:
General Meeting of Shareholders (“GMS”) Subject to our Articles of Association, the GMS, Annual GMS (“AGMS”) and Extraordinary GMS (“EGMS”) constitute our highest governance body and are the primary forums through which shareholders exercise their rights and authority over the management of our management. The AGMS must be held once a year, while an EGMS may be convened at any time, as needed. At the AGMS and EGMS, shareholders are entitled to equal treatment and standing, particularly in expressing their opinions and contributing to the process of taking important and strategic decisions in relation to:
a. The election and termination of the BoC and the BoD;
b. Setting the amount of remuneration and benefits of members of the BoC and BoD;
c. Evaluating the Company’s performance during the year under review;
d. D eciding on the use of the Company’s profits, including dividends; and
e. Amendments to the Articles of Association. The AGMS also has the authority to approve the Annual Report.
The Government of Indonesia, as our controlling shareholder, is required to be aware of its responsibility when exercising its influence over management in voting sessions or on other matters. The Government has exclusive rights to approve mergers, acquisitions and divestment, or to liquidate our Company based on decisions of the AGMS or EGMS. The mechanism for exercising voting rights by shareholders during an AGMS or EGMS provides for shareholders to exercise their right to vote either in person or through their legal proxy.
Telkom held an AGM on 19 May, 2011 in Jakarta, at which time we considered and decided the following matters:
Agenda 1: Approve the Company’s Annual Report as presented by the BoD, on the Company’s condition and operation for the 2010 Financial Year, including the Board of Commissioners’ Supervision Duty Report for the 2010 Financial Year, with notes for the Directors to:
Review all of the provisions of the Company’s Articles of Association to enhance the effectiveness of the Company’s governance in accordance to the rules and regulations, and to report the review result and propose amendments to the BoC no later than December 2011;
Review and amend the shareholder agreement and Articles of Association of the Company’s major subsidiary, Telkomsel to enhance the effectiveness of the Company’s governance in accordance to the rules and regulations;
Support and commit to optimize domestic goods and services without forfeiting the standard procurement quality and procedure applicable to the Company;
Improve disclosure practices in line with global corporate governance and business ethic principles, particularly in implementing corporate actions. Each member of the BoC and BoD is requested to provide a report to the shareholders of Series A Dwiwarna at least every 3 (three) months regarding the performance of the Company and its subsidiary as well as future corporate action, in the form of investments, acquisitions and other matters that may affect corporate performance, both at the parent and subsidiary companies;
Maintaining, optimizing and improving the performance and value of the Company, including its subsidiaries, in order to provide optimal results for the benefit of the shareholders. As for Telkomsel, to prepare an assessment for a buy-back of shares and report the action plan to the shareholders of Dwiwarna Series A Share; and
To give priority and more attention, both in the implementation of investment, the synergies between its subsidiaries and its holding, as well as improve the competence of its human capital in anticipation of the business transformation of PT Telkom Tbk in entering the TIME business to increase value-added enterprise and customer service orientation.
The Company’s Financial Statements which include Balance Sheet and Profit and Loss Statement (Consolidated) for the Financial Year 2010 Audited by the public accounting firm KAP Tanudiredja, Wibisana & Rekan (a member firm of PricewaterhouseCoopers) according to its report A110329002/DC2/CAW/II/2011. A dated 29 March 2011 with an opinion “present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of 31 December 2010 and 2009, and the consolidated results of their operation and their cash flows for the years ending 31 December 2010, 2009 and 2008 in conformity with generally accepted accounting principles in Indonesia.
Partnership and Community Development Annual Report for the 2010 Financial Year, as prepared based on the Minister of State-owned Enterprise regulation as the basis for the comprehensive accounting in addition to the Indonesian principle accounting standard, audited by the Public Accounting Firm Prof. Abdi Ichjar, BAP & Partners according to its report No.019-LAI/KAP-AR/11 dated March 28, 2011 with an unqualified opinion to the financial statement through our report No.018-LAI/KAP-AR/11 dated March 28, 2011.
2. Consequently, by the approval of the Company’s Annual Report for the 2010 Financial Year and Annual Report on Partnership and Community Development Program for the 2010 financial year 2010, the AGMS hereby gives a full acquittal and discharge (volledig acquit et decharge) to all members of the BoC and BoD for their management and supervision and for their management and supervision of the Partnership and Community Development Program performed during the 2010 Financial Year, to the extent are reflected in the Company’s Annual Report, Financial Statements for 2010 Financial Year and Annual Report of Partnership and Community Development for the 2010 financial year above and the actions do not contradict the prevailing laws and regulations.
- Approve the appropriation of the Company’s net profit for the 2010 financial year with the amount of 11,536,999,390,576 which will be distributed as follows:
- Cash dividend 55% of the net profit or in the amount of Rp6,345,349,664,817.- including the amount of interim dividend (interim dividend) that has been distributed to the shareholders on January 11, 2011 based on resolution of a Board of Directors Meeting as approved by the Board of Commissioners Meeting dated January 11, 2011 in the amount of Rp526,157,112,865 (five hundred twenty six billion, one hundred fifty seven million, one hundred and twelve thousand, eight hundred and sixty five Rupiah) or Rp26.75 (twenty six point seventy five Rupiah) per share, so that the total final dividend that is still payable to the shareholders amounts to Rp5,819,192,551,952.- or at least of Rp295.84 per share based on the number of shares issued (not including the shares bought back by the Company as of the Meeting date of 490.574.500 shares);
- Recorded as Retained Earnings in the amount of Rp5.191.649.725.759,- which will be used for the
- Those who are entitled to receive cash dividends are shareholders whose names are recorded in the Company’s Register of Shareholders on June 16, 2011 at 16:00 PM Western Indonesia Standard Time;
- The cash dividend should be paid in one lump sum on July 1, 2011 taking into account the interim dividend was paid on January 11, 2011.
a. Partnership Program of Rp115,369,993,906 equal to 1% of the Company’s net profit for the 2010 financial year; and
b. Environment Building of Rp115,369,993,906 equal to 1% of the Company’s net profit for the 2010 financial year.
The implementation of the Partnership and Community Development Program may be combined with other SoE and in coordination with the Dwiwarna Series A Shareholder.
Agenda 4: Grant authority to the BoC, with prior consultation with the holder of the Dwiwarna Series A share, to determine the remuneration (tantiem, salary/honorarium, facilities and allowances) for members of the BoC and BoD.
- Approve the reappointment of public accounting firm KAP Tanudiredja, Wibisana & Rekan (a member firm of cewaterhouseCoopers) to conduct an integrated audit of the Company for the 2011 financial year Consolidated Financial tatements, which audit will consist of the audit of the Consolidated Financial Statements of the Company, internal control on financial reporting for the financial year 2011.
- Approve the appointment of the public accounting firm Zainal, Juhana & Partners, to conduct an audit the appropriation of funds for the Partnership and Community Development Program for the 2011 financial year.
- Grant authority to the BoC to determine an appropriate audit fee and other terms and conditions of appointment of the relevant Public Accounting Firm.
- Grant authority to the BoC to appoint an alternate public accounting firm as well as to determine the terms and conditions of its appointment; in the event the appointed public accounting firm can not perform or continue its engagement, including a potential non-agreement regarding the amount of service rendered for the audit service.
- To approve the Company’s Share Buyback Program IV on the terms and allocate fund amounting to p5,000,000,000,000,- (five trillion Rupiah) reserved , over a maximum period of 18 months following the date of the GMS and other conditions as specified in Disclosure of Information dated 19 and 20 May 2011.
- To grant authority to the BoD to:
- Conduct all action necessary for the implementation of the Shares Buy Back IV for a maximum of 645,161,290 shares (with price assumption of Rp7,750,- per share) or equivalent 3.20% of the total shares issued by the Company, and according to the prevailing laws and regulations;
- Provide additional information in relation to the change in the fund allocation to fund the Share Buy Back IV from Rp3,000,000,000,000 (three trillion Rupiah) to Rp5,000,000,000,000 (five trillion Rupiah) as required by point 2 b 3) , 4) and 8) Bapepam-LK Regulation No. XI.B.2 and announced it through 1 daily newspaper in Indonesian and 1 daily newspaper in English, both with national circulation;
- Share Buy Back IV will be conducted through share purchase in IDX and NYSE; and
- Report the execution of the Share Buy Back IV in the next GMS.