Annual Report 2002

Contents
Vision, Mission and Motto 02

Company Overview 03
Words from the President Commissioner 05
Welcoming the Future 09
Control and Management 13
The Pillar of Change 27

New Board of Commissioners 27
New Board of Directors 27
Asset Re-evaluation 27
Electricity Subsidisation 28
The Java-Bali Trade Mechanism 29
The Problem of Private Electricity Providers 30
Future Targets and Strategies 33

Targets 33
Strategies 33
Business Achievements from the Year 1998 – 2002 37

Business Data 37
Quality and Reliability 41
Marketing and Servicing 42
Good Corporate Governance 43
Organisational and Human Resources Development 44
Investment Financing 45
Information System Development 46
Improvement in Efficiency 47
The Empowerment of Society 47
The Environment 49
Legal Action 51
Overview of Important Financial Data 55
General Management Discussions 59

Introduction 59
Financial Synergy 59
Business Prospects 64
Business Risks 64
Statements from the Board of Commissioners and Directors 67
Financial Report 69
In view of the Company’s values, which are: Mutual Trust, Integrity,
Care, and Readiness to Learn …
Sensitivity towards customers’ needs … A Continued effort to give

service, which satisfies customers’ needs quickly, accurately, and
appropriately.
Recognition of human dignity and pride… The giving of high es-

teem for human dignity and pride with all their strengths and weak-
nesses as well as to recognise and protect their rights in the conduct
of its business.
Integrity … The giving of high esteem for the values of honesty,

integrity, and objectivity in the management of its business.
Product Quality … The continuous and measured improvement of

the quality and reliability of its product as well as the maintenance of
the quality of the environment in the conduct of its business.
Opportunities for advancement … The giving of equal and exten-

sive opportunities for advancement for every member of the com-
pany to achieve and hold positions according to the criteria and the
level of competency established.
Innovations … The readiness to pass knowledge and experience to

members of the company, encouraging inquisitiveness as well as ac-
knowledge ideas and innovations.
Company Values …
Prioritising the company’s interests … Consistent in the preven-
tion of the occurrence of conflicting interests and the guarantee that
every decision made is in line with the company’s interests.
The Shareholders … Business decisions will be directed towards the

effort to increase the value of the shareholders’ investment.
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VISION
To be recognised as a world-class company that grows, expands, su-
perior and reliable, focussing on the human potentials.
MISSION
a. To conduct a business that provides electricity and other related
services, oriented towards customer, company member and share-
holder satisfaction.
Electricity for
b. To provide electricity as a way to increase the quality of life for
society. a Better Life
c. To strive for the provision of electric power as the stimulus for
economic activity.
d. To conduct an environmentally friendly business.
MOTTO
Electricity for a better life
Company Overview
Business Activity Unit 1999 2000 2001 2002

Sales GWh 71,332 79,165 84,520 87,089
Internal Production GWh 84,776 93,325 101,654 108,360
- Holding Company GWh 15,875 16,903 18,802 39,589
- Subsidiaries GWh 64,148 66,600 68,832 68,771
- Diesel Generation Rental GWh 473 687 720 1,225
- Electric Power Purchases GWh 4,279 9,135 13,299 19,067
Network Depreciation % 12.22 11.65 13.52 16.54
Connected Power MVA 36,215 38,834 41,585 43,666
Number of Customers Million Customers 27,524 28,595 29,827 30,953
Sales/Customers kWh/Customer 2,592 2,768 2,833 2,813
Villages with Electric Power Village 48,435 49,155 49,476 52,007
Installed Power MW 20,592 20,762 21,059 21,112
Length of Transmission kms 24,389 24,822 25,989 25,989
Length of Distribution TM kms 219,610 216,220 220,990 228,104
Length of Distribution TR kms 282,921 287,581 297,157 307,226
Main Station Capacity MVA 46,784 49,957 50,485 50,485
Distribution Station Capacity MVA 25,063 27,551 27,585 27,585
Financial Position
Total Assets Billion Rp 73,219 78,003 79,906 213,898
Net Fixed Assets Billion Rp 51,819 52,641 53,048 185,617
Work in Progress Billion Rp 13,481 14,227 12,340 9,587
Equity Billion Rp 12,693 18,625 19,198 152,084
Long-Term Liabilities Billion Rp 27,727 34,255 32,936 42,968
Short-Term Liabilities Billion Rp 29,722 21,887 24,270 14,846
Operating Revenue Billion Rp 15,997 22,556 35,359 44,183
Operating Profit (Loss) Billion Rp (5,505) (4,659) (3,420) (8,162)
Net Profit (Loss) Billion Rp (11,368) (24,611) 180 (6,059)
Ratios
Rate of Return on
Net Average Fixed Asset % (10.66) (8.92) (1.62) (1.71)
Operating Ratio % 134.41 120.66 90.33 118.47
Debt Equity Ratio %:% 78 : 22 75 : 25 75 : 25 28 : 72
Debt Service Coverage Times 0.48 2.46 1.03 2.02
Rentability % (18.61) (40.10) 0.90 (5.00)
Solvability % 78.46 71.97 71.59 27.03
Human Resources
Number of Employees Employees 53,076 50,310 49,637 48,238
Energy Sold Per Employee MWh/Employee 1,344 1,574 1,700 1,803.8
Customer per Employee Customer/
Employee 519 568 600 641
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Repositioning
Improvement in various aspects to create a new image,
which is more efficient, of better quality,
that still prioritises customer satisfaction
Creating
“A New PLN”
In line with the program for Restructuring in the Electric Power Sec-
tor and since Government Legislation Number 20 of the Year 2002
regarding Electric Power has been put into effect, PT PLN (Persero)
must immediately organise itself in order to face a changed environ-
ment. Competition in the provision of electric power in certain ar-
eas, which is a Government Legislation mandate, will be a new phe-
nomenon for which PT PLN (Persero) must take a position in order to
obtain a strategic role.
This is an inevitable consequence and PT PLN (Persero) as the largest

electric company in Indonesia today must reposition itself, which
involves not only a change in structure, policies, and corporate strat-
egies, but also a change in company culture. These steps must be
taken in order for PT PLN (Persero) to be able to take the first oppor-
tunity to obtain the maximum share in the new era for national elec-
tric power industry.
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Words from
the President
Commissioner
The obligation to meet the public’s needs for electricity, which con-
tinually increases within its business area, must be recognized as an
opportunity not a burden, such that the ability of the company to
accommodate the requirement for electricity must be improved. In
line with this fact, PT PLN (Persero) must explore every possibility
for the use of available types of primary energy and these must be
competitive in the generation of electric power, such that the cost
of fuel, which is the largest component of the cost for electric power
generation can be continually minimised.
In relation to this, efforts to develop non-petroleum electric power

generators must continually be made in various areas, whether in
meeting the increasing public need for electricity, or in the program
to replace petroleum generators, which are no longer suitable for
operation.
Aside from diversification in the use of primary energy for electric

power generation, improvement in the efficiency of every company
activity is required, including that which involves capital expendi-
ture as well as operational expenditure, such that PT PLN (Persero) is
able to provide a more competitive electric power. However, con-
tinuous efforts to improve efficiency in order to enhance the
company’s health must be made within the context of high quality
and reliability in the distribution electric power.
Henceforth, in the plan to boost the company’s image, there are

many aspects related to customer service that can be improved and
upgraded, such that there will be an increasing need for the exist-
ence PT PLN (Persero), gaining the public’s affection.
Words from
the President
Commissioner
The efficient management of the company, the provision quality and

reliable electric power, economically appropriate electricity rates,
as well as superior customer service are key factors in creating “A
New PLN”, which at the same time enhances the company’s value.
In relation to this, PT PLN (Persero) must progressively conduct Good

Corporate Governance in the management of the company, for the
above-mentioned reasons, and this may be a form of public account-
ability.
Bless us Lord, in our efforts. Amen.
Jakarta, 1st May 2003

The President Commissioner
Luluk Sumiarso
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The Use of
Advanced Technology
The use of computer technology for the service system.
Welcoming
the Future
The Era of Recovery … At the passing of a five-year difficult period, at last the time
for redemption is over, and PLN survives and electricity continues to flow, conditions
doubted by many people, in view of the immense surge experienced by PLN during
the time of crisis. However, with the faith of the management and all levels of PLN’s
operations, along with unwavering efforts, PLN now stands at the end of the dark
tunnel that widens into light of welcomed hope, seizing opportunities in its steps
towards recovery, a time that has been the yearning of many, a fertile field for all
levels of the PLN operations to take action in self-development, to compete in giving
the best to the company.
Restructuring in the Electric Power Sector … At this moment a restructuring pro-

cess in the electric power sector is being carried out, with the implementation of
Government Legislation No. 20 of the Year 2002 regarding Electric Power, which is
aimed to provide the basis for the implementers of the electric power business in
order to become good, efficient and independent business units that are able to take
up their roles and become competitive nationally as well as globally.
This directs the development of the electric power business closer towards competi-
tive markets, which becomes the consequence for the existence of PT PLN (Persero)
in the future. In the past the company has been a unit for the development and
provision of electricity for the public, however, today it is further recognised that PT
PLN (Persero) is a business unit complete with technology and capital.
As a company laden with technology and capital, PT PLN (Persero) must be given the
support of the appropriate management, business culture, business strategies, and
business plans that are in principle related to Human Resources of employees. There-
fore Human Resources is the primary support of the company such that these must be
prepared to become professionals in their fields.
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Forewords from
the President Director
Increase in the Basic Rate for Electricity … In the effort to improve the financial
condition of the company, increase in the Basic Rate for Electricity (TDL) cannot be
avoided. However, increase in the Basic Rate for Electricity is carried out while still
taking into account the financial capability of the customers; therefore this increase
is carried out in stages. As the result of the increase in rate, aside from increasing
PLN’s revenue, PLN will have to face an inevitable option, which is to accommodate
the public’s requirement to improve service, as the logical consequence for the in-
crease in the cost burden that has to be born by the public to acquire electricity in
order to enhance their lives. Also, in line with the increase in the Basic Rate for
Electricity, PLN is required to publish a quarterly Service Quality Level Indicator (TMP).
However, it must be acknowledged that within this era increasingly tight business
competition, customer service is a requirement that cannot be ignored. The cus-
tomer is an important part of the existence and the continuity of the company. There-
fore, customer service must be a continuous business strategy for the company and
must still be the a company commitment that cannot be left behind.
Customer Service … In line with the ever increasing standard of living for society,
PLN customers are not only concerned with the quality and the availability of the
electric power supply, but they are also concerned with the quality of the service
provided in relation to how they are treated as business partners.
The ever-increasing requirement to improve customer service must be met by PLN.

Volatility in the supply of electric power by PLN due to disturbances or rotational
power cuts due to shortage in supply, inaccuracy in meter reading and the negative
attitude of front liners in their interaction with customers are matters that become
the main topics of complaints from the customers lately. These must be the focus of
concern by all levels of PLN’s operations in their efforts to improve customer service.
Further, PLN must be sensitive in re-evaluating the business process that is the part
of the activity chain, mechanism, and procedures implemented within the process to
carry the product into the customers’ hands, and it must be more accurate in choos-
ing the technology used in the activities to improve customer service quality. The use
of advanced technology in the interest of customer service must be realised and
continually developed. Computerisation of the service system seems to be the inevi-
table choice.
Good Corporate Governance … Customer service is an important part of the effort

to implement the principles of Good Corporate Governance (GCG), which includes
fairness, transparency, accountability and responsibility. It is time for PT PLN (Persero)
to step forward towards company management based of the principles of GCG, which
specifies how to operate a company openly and free from political pressures, with
clear responsibilities. GCG is not merely a requirement but it is mandatory.
Forewords from
the President Director
By implanting the principles of GCG in the running of the company, it is expected that
the company will improve in their communication with stakeholders, it will be able to
increase the trust of its shareholders and investors, as well as able to maintain the
existence and the continuity of the company operations.
The commitment of the Board of Directors of PLN is shown in the General Sharehold-
ers’ Meeting of the company’s Subsidiaries, whereby each of the Subsidiary is asked
to implement Good Corporate Governance.
It is time for PLN to take off, to step forwards towards a more advanced, modern,
and independent PLN, such as the one that we all envision.
Step by step, PLN is moving closer towards that vision …..
Jakarta, April 2003

The President Director
Eddie Widiono S.

Control and
Management Formation
The Board of Commissioners and Directors are appointed and
dismissed by means of a General Shareholders’ Meeting.
Control and
Management
In accordance to the Article of Association of the Company, PLN is operated and run by
a Board of Directors, which is appointed and dismissed by means of a General Share-
holders’ Meeting (RUPS). The Board of Directors consists of one or more Directors
and is monitored by the Board of Commissioners. The Board of Directors is placed in
office for a period of 5 (five) years and, without mitigating the rights established
through RUPS, may be dismissed at any time.
The Board of Commissioners is also established through RUPS, and consists of one or
more Commissioners. The period of office for the Board of Commissioners is 3 (three)
years, and without mitigating the rights established through RUPS, may be dismissed
at any time.
At the date of the compilation of this Financial Report of PLN for the year 2002, the
structure of the Board of Commissioners and Directors of PLN as well as the back-
ground of each of the members are as follows:

Control and
Management
Luluk Sumiarso
An Indonesian citizen, holding the position of President Commissioner for PT PLN

(Persero) since the year 2002, based on the Decree of the Minister of State Owned
Businesses, Number: KEP-99/M-MBU/2002, dated 30th May 2002.
Born in Ponogoro on 11th May 1951, the gentleman who enjoys listening to traditional
hybrid music, has a high level of concern for PLN. He hopes that PLN can become a
benchmark and a market leader for the business of electric power supply in the coun-
try, especially in terms of efficiency and customer service. PLN must be managed
with transparency and responsibility.
A graduate in the field of Electrical Engineering from Institut Teknik Bandung in 1976,
with a Post Graduate degree in Instructional Technology from Syracuse University
U.S.A in 1979, he also completed a degree in Energy Management and Policy in 1988
from the University of Pennsylvania, U.S.A and acquired his Doctorate degree in the
same field in 1990.
His career began at the beginning of the year 1979 as a Sub-department Head in the
Directorate General of Energy, which then became the Directorate General of Elec-
tricity and the Utilisation of Energy. From 1990 to 1991, he held the position of Sub-
Division Head; then from 1991 to 1992 he was appointed Director of the Electricity
Development Program. For 6 years, from 1992 to 1998, he held the position of Head
of the Planning Bureau in the Department of Mining and Energy. In 1998, he returned
to the Directorate General of Electricity and the Utilisation of Energy as the Technical
Director for the Electricity department. Since 2001 until this day, he has been en-
trusted the position of Director General of Electricity and the Utilisation of Energy.
Aside from the structural position given to him, he was also entrusted to take the
position of Member of the Monitoring Committee/Commissioner in PT Gas Negara
(Persero) from 1994 to 2002. Then in 2002 up to this day, he holds the position of
President Commissioner for PT PLN (Persero).
Control and
Management
Komara Djaja
An Indonesian citizen holding the position of Commissioner for PT PLN (Persero) since
2002, based on the Decree of the Minister of State Owned Businesses, Number: KEP-
99/M-MBU/2002, dated 30th May 2002.
Born in Jakarta on 11th April 1951, he graduated in Economics from Universitas Indo-
nesia in 1979. He completed a post-graduate degree from the University of Birming-
ham, U.K. in 1984. In 1992, he acquired a Doctorate degree from Iowa State Univer-
sity, U.S.A.
His career began in 1976 as a Research Staff for LPEM-FEUI and in 1978 became a
lecturer for FEUI, and he still holds both these positions today. From 1992 to 1993, he
held the position of Assistant Director in the Instruction and Training Department,
LPEM-FEUI, and from 1993 to 1998, he became the Head of the Bureau of Interna-
tional Balance of Payments, BAPPENAS. For 3 years, from 1995 to 1998, he held the
position of Director for LPEM-FEUI.
From 1998 to 1999, he was the Specialist Staff for the Finance Department of the
Coordinating Ministry of Economy, Finance, and Industry, and from 1999 to 2001, he
became an Assistant in the Department of International Cooperation. From the year
2001 up to this day, he is entrusted the position of Coordinating Deputy in the Depart-
ment of Macro Economy and Finance in the Coordinating Ministry of Economy.

Control and
Management
Andung A. Nitimihardja
An Indonesian citizen, holding the position of Commissioner for PT PLN (Persero)

since 2002, based on the Decree of the Minister of State Owned Businesses, Number:
KEP-99/M-MBU/2002, dated 30th May 2002.
Born in Bandung on 4th April 1950, this hard working gentleman spends much of his
career in business development studies in private or BUMN sector.
He graduated from Institut Pertanian Bogor in 1975. He completed his Master’s de-
gree in Public and International Affairs (MPIA) from the University of Pittsburgh,
U.S.A in 1982. From the same university, he also acquired a Doctorate degree in
Development Studies in 1986.
His career began in 1981 as the Head of the Farming and Mining Department in the
Office of the Investment Coordination Body (BKPM). His term of office as the Head of
the Department of Information and Development for State Owned Businesses (BUMN)
in the State Finance Department ended in 1992; from 1992 to 1993, he held the
position of Director of Industrial Companies – the Directorate General of Develop-
ment for BUMN from 1992-1996, the State Department of Finance. From 1996 to
2000, he returned to the BKPM office and from 1999-2000, he was entrusted to hold
the position of Deputy for License of BKPM. Then he was entrusted the position of
Deputy Minister/Deputy Head of Investment and Development of BUMN in the De-
partment of the Development of National Businesses in the Office of the State Minis-
ter of Investment and the Development of BUMN. Formerly, he holds a position of
Expert Staff of BUMN minister in Investment and Local Autonomy. Aside from the
structural position he has held since 1991, he has been a member on the Boards of
Commissioners in various BUMN, such as PTP XII, PTP XXIV-XXV, PT Tambang Batu
Bara Bukit Asam. From 1996 to 1999, he was even given the position of President
Commissioner in PTP Nusantara II, and in the year of 1999-2002, he holds the posi-
tion of Commissioner in PT PLN (Persero) and President Commissioner in PT Rajawali
Nusantara Indonesia. Previously, he elected as Commissioner in PT Dirgantara Indo-
nesia (PT.DI).
Control and
Management
Yogo Pratomo
An Indonesian citizen, holding the position of Commissioner for PT PLN (Persero)

from the year 2002, based on the Decree of the Minister of State Owned Businesses,
Number: KEP-99/M-MBU/2002, dated 30th May 2002.
Born in Jakarta on 10th May 1957, the quiet gentleman began his career in the Direc-
torate General of Electricity and Energy Development and in the Secretariat General
of the Department of Energy and Mineral Resources. He has followed many training
courses and attended workshops within and outside the country in the field of Elec-
tricity. He is a graduate of Electrical Engineering from Institut Teknologi Bandung in
1981. He completed a post-graduate degree in Energy Economics from the University
of Wisconsin – Madison in 1984, and 4 years later, to be exact in 1988, he completed
his PhD in the same subject from the same university.
He started his career in 1990 as the Section Head for the Directorate General of
Electricity and Energy Development (1990-1992); he was Sub-Division Head for the
Directorate General of Electricity and Energy Development (1992-1998); Director of
the Development Program for Electric Power and Energy Development (1995-1998);
Head of the Bureau of Planning for the Secretariat General of the Department of
Mining and Energy (1998-1999), a Specialist Staff for the Minister of Mining and
Energy in the Department Electricity, the Secretariat General of the State Depart-
ment of Energy and Mineral Resources (1999-2001); a Specialist Staff for the Minis-
ter of Energy and Mineral Resources in the Department of Information and Communi-
cations, the Secretariat General of the State Department of Energy and Mineral Re-
sources (2001-to date). Then in 2002 up to this day, he holds the position of Commis-
sioner for PT PLN (Persero).

Control and
Management
Mohamad Ikhsan
An Indonesian citizen, holding the position of Independent Commissioner for PT PLN

(Persero) from the year 2002, based on the Decree of the Minister of State Owned
Businesses, Number: KEP-99/M-MBU/2002, dated 30th May 2002.
Born in Sigli, Aceh on 7th November 1964, this young and energetic gentleman spends
much of his career in education as a lecturer in the Economic Faculty of Universitas
Indonesia, from 1987 up to this day.
Aside from being a lecturer, his main occupation is as a researcher in LPEM-UI, and
became a Deputy Head in the department of Economic Research and Policies between
1999 and 2001.
He is an economic graduate from Universitas Indonesia in 1988, and graduated as

Master of Arts in Economics from Vanderbilt University, U.S.A. in 1991, then gradu-
ated as PhD in Economics from the University of Illinois, U.S.A. in 1998.
He began his career in 1987 as a lecturer in the Economic Faculty of Universitas

Indonesia; a lecturer for the FEUI Extension Program (1989-to date), a lecturer in the
University of Indonesia Business School (1999-to date), and a lecturer for a Master’s
Program in Public planning and Policies (MPKP UI) from 1999 to this day. He is also
active as a lecturer in Lemhanas (National Institute of Defence) and a member of the
Indonesian Maritime Committee. From December 2001. He became the Head of LPEM-
UI.
Then in the year 2002 up to this day, he holds the position of Independent Commis-
sioner for PT PLN (Persero).
Control and
Management
Eddie Widiono Suwondho
This friendly gentleman was born in Malang, East Java, on 15th May 1953 and has held
the position of President Director for PT PLN (Persero) from the year 2001, based on
the Decree of the State Minister of Finance of the Republic of Indonesia, Number:
108/KMK.05/2001, dated 2nd March 2001. He has then been appointed for the second
time as the President Director based on the Decree of the Minister of State Owned
Businesses, Number KEP-180/M-MBU/2003, dated 6th March 2003.
As the number one man in PT PLN (Persero), his place of career since 1977, he
continues to focus on giving the best service, employee and corporate satisfaction as
well as meeting the expectations of the shareholders.
An Electrical Engineering Graduate from Institut Teknologi Bandung in 1976, he com-

pleted a graduate program (MSc) in Systems Control from the University of London in
1989. He then completed a postgraduate degree in International Management from
ST Manajemen Prasetya Mulia (MM) in 1994.
His career began as the Head of the Unit for Operations and Network Logistics in the
Directorate of Businesses (1990-1995), then he became the Director of Development
and Trade for PT PLN PJB I (1995-1998), and Director of Marketing and Distribution
for PT PLN (Persero) in 1998 to 2001. Then in 2001 up to this day, he holds the
position of President Director of PT PLN (Persero).

Control and
Management
F. Parno Isworo
This tall gentleman was born in Solo, Central Java, on 15th July 1952. He has held the
position of Finance Director since 1988 based on the Decree of the State Minister of
the Utilisation of BUMN of the Republic of Indonesia, Number: Kep-33/M-PBUMN/
1998, dated 31st July 1998. He has then been a appointed as the Finance Director for
the second time based on the Decree of the Minister of State Owned Businesses,
Number: KEP-180/M-MBU/2003, dated 6th March 2003.
As a person of experience in the finance department, he admits that the financial

condition of PLN has been improving especially since the implementation of the pro-
gressive increase of the Basic Rate for Electricity (TDL) since the year 2000. As a
token of appreciation to its customers, it is time that PLN begins to make invest-
ment again to enhance customer service.
He graduated in Electrical Engineering from Institut Teknologi Bandung in 1977, and

completed a post-graduate program in Business Management (MBA) from Monash
University in 2001. In the same year, he also completed a post-graduate program in
other subjects (MM) from IPMI.
His career began in 1987 in the PLN Head Office, where he started as the Head of
Project I, the Unit of Project Administration (1982-1987), then became the Head of
the Unit for Project Reports in the Directorate of Development (1987-1992), and
Head of the Funding Planning Unit in the Directorate of Finance (1992-1995), then as
Head of the Funding Division in the Directorate of Finance (1995-1998). Finally, he
has held the position of Finance Director for PT PLN (Persero) from 1998 to this day.
Control and
Management
Ali Herman Ibrahim
This tall gentleman was born in Palembang on 23rd September 1954 and holds the
position of Director of Generators and Energy based on the Decree of the Minister of
State Owned Businesses, Number: KEP-180/M-MBU/2003, dated 6th March 2003.
The position he holds is a new position for him, however with a high level of self-
confidence, he will be ready to hold the position that has been entrusted to him.
There are tough challenges in the future, especially in areas where there is a crisis in
the supply of electricity. This simple and quiet gentleman is planning short-term and
long-term strategies to face the tough challenges especially in terms of the electric-
ity supply crisis in PLN units outside Java.
He graduated in Electrical Engineering from Institut Teknologi Bandung in 1978, and
completed a post-graduate program in other managerial fields (MM), from PPM in
1997.
His career began as the Head of the Technical Department for the Electricity Projects
of West Sumatra and Riau in 1983, then became the Head of the Electricity Projects
for West Nusa Tenggara (1985-1987), and Head of the Construction Operations in the
Construction Department (1987-1992), then as Head of the Tangerang Branch (1992-
1996), as Head Deputy in the Business Development Department in the Distribution
Area of Greater Jakarta and Tangerang (1996-1997), as Technical Assistant of Mar-
keting in PT PLN PJB I (1997-2000), as Head of PT PLN (Persero) in the Special Region
of Batam (2000-2003), and since 6th March 2003 has been entrusted the position of
Director of Generators and Energy up to this day.

Control and
Management
Herman Darnel Ibrahim
This tall, well-built gentleman was born in Payakumbuh on 15th April 1954, and holds
the position of Director of Transmissions and Distributions based on the Decree of
the Minister of State Owned Businesses, Number Kep-180/M-MBU/2003, dated 6th
March 2003.
This position is not new to him. Previously for almost 7 years, he held a position as
the Director of Development and Trade and Director of Human Resources for PT Indo-
nesia Power. This man of high principles has prepared a number of programs to face
the challenges in the department of Transmissions and Distributions, such as giving
priority to improving the Tension Quality of the repairs for SAIDI, SAIFI, and sup-
pressing the Technical Depreciation of the Transmission and Distribution Networks.
He graduated in Electrical Engineering from ITB in 1979, and completed a post-gradu-

ate program in Power System Analysis (MSc) from UMIST, Manchester in 1988.
He began his career as a Design Staff for the Central Transmission Relay Station and
as Design Staff for Distribution in the Network Design Unit for the PLN Head Office
(1979-1984), then became the Section Head for Protection and Telecommunication in
the Sub-Division of Network Distribution in the PLN Head Office (1984-1986), and as
Head of General Planning for PLN P2B throughout Java and Bali (1986-1987), as Head
of the Unit for Load Control in South Sumatra (1987-1990). As Head of the Tanjung
Karang Branch of PLN (1990), as the Deputy Head of PLN Business Development in
Region IV (1991-1994), as the Deputy Head of Planning for PLN in the East Java
Distribution areas (1994-1996), as the Manager of Corporate Planning in PT PLN PJB I
(1996-1998), as the Director of Development and Trade (1998-2000) and the Director
of Human Resources (2000-2003). Then from 6th March 2003, he has been entrusted
the position of Director of Transmissions and Distributions up to this day.
Control and
Management
Sunggu Anwar Aritonang
This tall gentleman was born in Sibolga on 4th May 1950, and holds the position of
Director of Trade and Customer Service based on the Decree of the Minister of State
Owned Businesses, Number: KEP-180/M-MBU/2003, dated 6th March 2003.
This is a new position for him. His previous position was related to the development
of Information and Technology, such that in his mind he continuously thinks of the
development of advanced technology especially in computers. This energetic man will
concentrate on customer service. “There has to be a change in the way of thinking
when serving the customers,” remarked the man who has been spending his career in
the PLN Head Office.
He graduated in Electrical Engineering, Institut Teknologi Bandung in 1975. His career

began as the Head of Consultancy Service Department in the PLN Head Office (1982-
1990), then he became the Head of the Unit for the Directorate of Planning (1990-
1995), then as the Division Head for Information Systems and Analysis and Evaluation
for the Directorate of Planning (1995-2001), as the Primary Specialist in Madya II for
Business Development for 4 months in 2001, and continued to hold the position of
Primary Specialist in PT PLN (Persero) Head Office (2001-2003). Then from 6th March
2003, he has been entrusted the position of the Director of Trade and Customer
Service up to this day.

Control and
Management
Ir. EDDIE WIDIONO SUWONDHO, M.Sc. MM
Sosok pria yang murah senyum ini yang dilahirkan di Malang, Jawa Timur pada
tanggal 15 Mei 1953 ini, telah menjabat sebagai Direktur Utama PT PLN
(Persero) sejak tahun 2001 berdasarkan Keputusan Menteri Negara Keuangan
Republik Indonesia Nomor : 108/KMK.05/2001 tanggal 2 Maret 2001. Yang
kemudian untuk keduakali diangkat sebagai Direktur Utama berdasarkan
Keputusan Menteri Badan Usaha Milik Negara Nomor : KEP-180/M-MBU/
2003, tanggal 6 Maret 2003.
Sebagai orang nomor satu di PT PLN (Persero) tempatnya berkarir sejak tahun 1977
ini senantiasa menekankan pada pelayanan yang terbaik, kepuasan pegawai
dan korporat serta memenuhi ekspektasi shareholder.
Lulus Sarjana Teknik Elektro, Institut Teknologi Bandung, tahun 1976, Lulus Pasca
Sarjana Sistem Kontrol, University London (MSc), tahun 1989. Lulus Pasca
Sarjana Manajemen Internasional ST Manajemen Prasetya Mulia (MM) tahun
1994.
Karir jabatannya dititinya dalam waktu 11 tahun untuk mencapai puncak jabatan di
PT PLN (Persero) ini, berawal sebagai Kepala Dinas Operasi dan Logistik
Jaringan Direktorat Pengusahaan (1990 – 1995), Direktur Pengembangan
dan Niaga PT PLN PJB I ( 1995 – 1998), Direktur Pemasaran dan Distribusi
PT PLN (Persero) pada tahun 1998 – 2001. Kemudian pada tahun 2001 –
sekarang menjabat sebagai Direktur Utama PT PLN (Persero).
Ir. F. PARNO ISWORO, MBA. MM
Sosok pria bertubuh tinggi ini, dilahirkan di Solo, Jawa Tengah pada tanggal 15 Juli
1952 ini, telah menjabat sebagai Direktur Keuangan PT PLN (Persero) sejak
tahun 1998 berdasarkan Keputusan Menteri Negara Pendayagunaan BUMN
Republik Indonesia Nomor : Kep-033/M-PBUMN/1998, tanggal 31 Juli 1998.
Yang kemudian untuk keduakalinya diangkat sebagai Direktur Keuangan
berdasarkan Keputusan Menteri Badan Usaha Milik Negara Nomor : KEP-
180/M-MBU/2003, tanggal 6 Maret 2003.
The Succession of
Leaders
The procedure for the progressive dismissal and
appointment of the board of directors
The Pillar of Change
A New Board of Commissioners … On 30th May 2002, the Minister of State Owned
Businesses of the Republic of Indonesia, by means of a General Shareholders Meeting
of Perseroan (Persero) PT Perusahaan Listrik Negara (PLN), based on Government
Regulation No. 89 of the Year 2000 and Government Regulation Number 64 of the Year
2001, issued the Decree No. KEP-99/M-MBU/2002, which establishes the dismissal
and appointment of the following members of the Board of Commissioners of PT PLN
(Persero):
• The honourable dismissal of:

1. Mr. Endro Utomo Notosudiryo from his position as the President Commissioner
2. Mr. Ermansyah Jamin from his position as Commissioner
3. Mr. Bambang Bintoro Soedjito from his position as Commissioner
4. Mr. Martiono Hadianto from his position as Commissioner
5. Mr. Sofyan A. Djalil from his position as Commissioner
• The appointment of:

1. Mr. Luluk Sumiarso - as President Commissioner
2. Mr. Yogo Pratomo - as Commissioner
3. Mr. Komara Djaja - as Commissioner
4. Mr. Andung A.Nitimiharja - as Commissioner
5. Mr. Mohamad Ikhsan - as Independent Commissioner
A New Board of Directors … On 6th March 2003, by means of the Decree No. KEP-180/
M-MBU/2003, the Minister of State Owned Businesses of the Republic of Indonesia,
also established the dismissal and the appointment of the following members of the
Board of Directors of PT PLN (Persero):
• The honourable dismissal of:

1. Mr. Eddie Widhiono Suwondho from his position as President Director
2. Mr. Hardiv Harris Situmeang from his position as the Director of Planning
3. Mr. Tunggono from his position as the Director of Marketing and Distribution
4. Mr. Bambang Hermiyanto Priyadi from his position as the Director of Operations
5. Mr. Parno Isworo from his position as the Director of Finance
6. Mr. Azwani Sjech Umar from his position as the Director of Human Resources
and Organisations
• The appointment of:

1. Mr. Eddie Widhiono Suwondho - as President Director
2. Mr. Ali Herman Ibrahim - as Director of Generators and Primary Energy
3. Mr. Parno Isworo - as Director of Finance
4. Mr. Sunggu Anwar Aritonang - as Director of Trade and Customer Service
5. Mr. Herman Darnel Ibrahim - as Director of Transmission and Distribution
6. Mr. Djuanda Nugraha Ibrahim - as Director of Human Resources and Organisations
The handing over of positions was carried out on 10th March 2003.
Asset Re-evaluation … Two important factors become the basis of the decision made
by the Management of PLN to re-evaluate assets, which are: 1) the large depreciation
value of the rupiah against other foreign currencies during the monetary crisis, and
2) the fact that foreign currencies are major components in the value of the total
assets that belong to PLN.

These two factors result in certain values in the PLN account books becoming very
small (understated), for example asset values and depreciation cost, such that the
resulting report becomes uninformative. The solution to this condition is to re-evalu-
ate assets by recalculating the normal value of the assets that belong to PLN and by
entering the results into the account books.
The benefits of asset re-evaluation for PLN are:
• Accumulated depreciation cost that is sufficient to exchange aged fixed assets

with those of the same capacity.
• It provides the right signal to the consumers and producers regarding the correct
basic cost of production for electricity.
• It provides a basis for the calculation of the level of economic rate.
• It prepares the implementation of competitive markets in the electricity sector to
meet the requirement of Government Legislation No. 20 of the Year 2002 regard-
ing Electricity.
From the recalculation, the fixed asset value for PLN’s operations as per 1st January
2002 increased from Rp 65,388.4 Billion to Rp 195,205.2 Billion (an increase by 3
times) and the debt ratio decreased from 70% to 30%. From the asset re-evaluation,
PLN is obliged to pay the difference in the PPh tax value of the fixed asset amounting
to Rp 137,719.2 Billion, whereby Rp 1.3 Trillion was paid in 2002, and the remaining
amount will be paid gradually within a five-year period based on the Decrees of the
Director General of Taxation, Numbers KEP37/PJ.42/2003, KEP38/PJ.42/2003 and
KEP39/PJ.42/2003.
Electricity Subsidisation … In 2002, the company received subsidy for electricity

from the Government amounting to Rp 4,739.1 Billion, which consists of the sub-
sidy for electricity budgeted within the State Budget (APBN) for 2002, amounting to
Rp 3,206.1 Billion, and the subsidy balance from 2001, amounting to Rp 1,533.0
Billion.
The use of the subsidy balance for 2001, amounting to Rp 1,230.8 Billion, will be
determined after the completion of the audit for electricity subsidy.
In the APBN of the year 2003, Rp 4,519 Billion is allocated for electricity subsidy,
directed at customers with installed power of <450 VA, and a maximum consumption
of 60 kWh of electricity. Therefore, within the scenario for the increase in rates, this
group of customers, which make up 70% of PLN’s customers, will still be subsidised in
the form of a lower electricity rate.
Increase in the Basic Rate of Electricity (TDL) … The depreciation of the Rupiah
against the US$, which occurred from mid 1997, created a heavy burden for PLN. One
of the major problems created by the Rupiah depreciation was the increase in the
cost for electric power supply, since a large portion of the cost was in other foreign
currencies. The cost to supply electric power became much higher than the selling
price or the rate that the public could afford. At the same time, the public’s purchas-
ing ability was impeded by the long economic crisis.
The Government’s ability to give subsidy, on the other hand, became increasingly
limited. Therefore, in the plan towards independence and in the effort to maintain
the continuity of the supply of electric power by PLN in the cities as well as the
villages, in addition to the effort to stimulate economic activities, from July 1st,
2001, the Government put into effect a new rate for the electricity supplied by PLN.
The decision for the new rate is established within the Decree of the President of the
Republic of Indonesia (Keppres), No. 83 of the Year 2001, dated 30th June 2001.
As the continuation of the program to gradually increase the Basic Rate of Electricity
towards a rate level that is in line with the targeted healthy market economy in 2005,
which reflects fairness and encourages electricity use for productive activities, on
31st December 2001, the Government published the Presidential Decree, Number 133
of the Year 2001, which establishes quarterly gradual increase in the Sales Price of
the Electricity supplied by PT PLN (Persero), expressed in the Basic Rate of Electricity
for 2002 (TDL 2002), and became effective from 1st January 2001.
With the application of TDL 2002, the actual average sales price for the electricity
supplied by PLN throughout Indonesia increased from Rp 334.20/kWh in 2001 to
Rp 446.62/kWh in 2002, the equivalent of 37.5% increase. This average sales price
is still lower than the average total cost for the supply of electricity for the year,
which amounted to Rp 533.85/kWh.
With TDL 2002, it is projected that PLN’s revenue will increase by Rp 5.4 Trillion or
the equivalent of 16 % in comparison to an unchanged rate.
Increases in TDL for 2001 and 2002, were not aimed at meeting the whole of the
production cost of electricity for PLN, but they were aimed at:
• Maintaining electricity supply up to the end of 2002; “to keep the lights on”
• Overcoming the limitation on subsidy funds through a restructuring of subsidies as

it is mandated by the People’s Representatives Committee (DPR)
The Java-Bali Trade Mechanism … In line with the Government’s policy to restruc-
ture the electric power sector, and in the plan to prepare the company to face the
market mechanism for electricity, PLN is working together with consultants from
Price Waterhouse and Cooper’s to carry out a Corporate Restructuring, which is aimed
at preparing PLN’s organisation and its trade mechanism to face a Single Buyer Mar-
ket system.
During the training process, before entering the real Single Buyer Market mecha-
nism, PLN has implemented the market system internally for the Java-Bali system
since mid 2000, with the creation of competition for generators in terms of variable
cost only.
In this case, the PLN Head Office acts as a Single Buyer for all the energy generated
by Generators owned by Subsidiaries as well as the Private Sector (IPP-Independent
Power Producers), based on contracts (PPA-Power Purchase Agreements) made for
each generator unit.
PP Agreements with Subsidiaries are made on an annual basis, while PP Agreements

with IP Producers are long-term contracts based on the results of renegotiations.

Distribution Business Unit and Load Control Centre for Java-Bali (PLN UBS P3B) carry
out bidding, settlement, the implementation of an operator system and transmission
management, while PLN UB Distribution purchases electricity from a Single Buyer and
provides distribution channels and services.
The two Business Units carry out their activities based on work contracts with the
PLN Head Office in the form of a transfer price.
Internally, PLN has also established the required regulations for the implementation
of the Single Buyer Market Mechanism, such as the grid code, bidding rules and
settlements.
In organising the competition for generators in 2001, all hydro-powered generators,

private generators, geothermal and thermal-fuelled generators are not included within
TOP contracts as competitors, hence from the total installed capacity of 18.6 GW
(including private generators), the capacity of competing generators makes up 46%
of the installed capacity, producing 43% of the energy.
The Problem of Private Electricity Providers … Finding the solution to the problem
of private electricity providers is very important for PLN, since the purchase price of
electricity from private providers directly affects the operational cost of PLN.
To assist PLN in finding the solution to this complex problem, the Government formed
a Restructuring and Rehabilitation Team for PLN, the latest of which was formed
based on the Presidential Decree No. 133 of the Year 2000. In the process to find the
solution to this problem, PLN acts as a negotiator.
The Government Policy for the solution of the problem of private providers of elec-
tricity involves a commercial approach, with the principle of obtaining an out of court
settlement. PLN follows the policy established by the Government with the following
understanding:
• Private Electricity Projects involve a number of parties, such as Export Credit Agen-
cies (members of the donor countries that make up the Paris Club), Political Insur-
ance Agencies (such as Hermes, MIGA, IFC, OPIC), and Sponsor Companies.
• In the plan to support investment in Indonesia, a good relationship with the above
agencies must be maintained.
• The efforts to maintain the relationship is made through renegotiations and as far
as possible legal disputes are avoided.
• The commercial approach taken will not waive any criminal law proceedings involv-
ing Corruption, Collusion, and Nepotism (KKN), on the basis that there is evidence
found by the authorities.
Contract renegotiations for private electricity providers include amendments of long-

term agreements and the settlement of PLN’s debt for the shortage in the payment
for the purchase of electricity or geothermal energy production that is already in
operation. Up to the end of the year 2002, the renegotiation process with private
electricity providers for Power Purchase Agreements and Energy Sales Contracts has
achieved the following results:
• Long-term agreements made with 13 providers.
• Contracts are ended for 6 providers.
• Renegotiations still in progress with 7 providers.
• Litigation with 1 provider.
Contract renegotiations with private electricity providers in 2002 resulted in an in-

credible profit amounting to Rp 2,333.0 Billion, which in turn was the result of the
elimination of part of PLN’s debt due to a lower, decreasing, negotiated electricity
sales price in comparison to the original contract price, such that the total amount of
debt for the company decreased. In addition, there was an accumulated long-term
savings, which resulted from the renegotiations with the private electricity suppli-
ers, amounting to USD 6.2 Billion (NPV, 10% Discount Rate for the term of the con-
tract), which in turn was the result of a decrease in the purchase price of electricity
from the original contract rate. With the above agreements reached, the savings
achieved out of the obligations specified in the contracts, amounted to at least around
26% (NPV, 10% Discount Rate for the term of the contract).

The Strategy to
Achieve Targets
Ensuring the achievement of the company’s targets by preparing

strategies as well as taking into consideration various developments
in order to create a company image that carries the principle of
Good Corporate Governance
Future Targets
and Strategies
Targets … After passing a difficult period, and looking at the conditions objectively,
the internal and the external situations affecting the company, especially with a lim-
ited ability to supply electricity, limited source of funds for investment and the appli-
cation of Government Legislation No.20 of the Year 2002 regarding Electricity, which
places the electric power supply business in a competitive market environment, the
company’s targets for the future are:
• The achievement of a national electricity rate that is in line with its economic
value, giving a rate of return of 8% in the year 2005.
• The maintenance of the minimum level of electric power supply reserve for Java-
Bali and solutions for other critical areas outside Java-Bali.
• To place the company as a market leader in changing the business environment.
Strategies … The strategies used by the company to achieve the above targets are
the same as the strategies, which have been implemented so far and by using the
principles of Good Corporate Governance in the effort to move towards good Com-
pany Management Organisation in line with the Best Organisational Practice Interna-
tionally.
Financial Restructuring … This is carried out to reduce the financial burden and to
take the company towards a more commercial orientation.
• A gradual increase in rates is carried out until its economic value is reached in
2005, including the application of non-uniformed rates.
• Government subsidy is proposed for certain groups of consumers in order to main-
tain the supply of electricity to the public for as long as the average sales price for
electricity is still below the cost of its production.
• Asset re-evaluation is conducted for the year 2002.
Corporate Restructuring … This is carried out to support the company’s recovery and
to anticipate changes in the business environment in relation to restructuring in the
electricity sector. The focus is on the decentralisation and empowerment of the units.
Corporate restructuring is carried out through the development of the program of
Good Corporate Governance, especially in matters relating to accountability, man-
ageability, and organisational efficiency.
Renegotiations of Special Contracts … Renegotiations are carried out by means of

the following programs:
• A rescheduling of the operations of private electricity providers in line with the
developing needs of PLN’s electric power system, where private electricity provid-
ers are situated.
• A decrease in the price by taking into account the development of international
market prices.
• Improvement in the contracts’ terms and conditions to reach a balance between
the interest of the buyer and the interest of the seller.
• Renegotiations by means of a commercial approach as well as showing mutual
respect and reaching an agreement for a publicly more acceptable and affordable
electricity price.

Future Targets and

Strategies
• Contract renegotiations are carried out, taking into account the following possi-
bilities:
- Transfer of ownership (buy-out), in full or in parts.
- Contract cancellations with or without compensation.
- Joint ventures.
- Joint operations.
- Relocation of projects to areas that require them most.
- A combination of any of the above possibilities.
Increase in Efficiency … This is to ensure that all the strength of the resources of
the company is utilised to increase income and curb costs.
Increase in efficiency is carried out through the programs to decrease network depre-
ciation, increase efficiency in investment (CAPEX, capital expenditure), improve the
maintenance system, increase the efficiency of production for generators by curbing
the consumption of generator fuels/SFC, decrease supply level and the billing cycle.
The Development of Electric Power Facilities … In the short run, in order to reduce
the peak load of the system, consumers are encouraged to use energy efficiently
through the demand side management program (DSM), while industrial consumers
are encouraged to shift electricity use from peak load time (WBP) to low load time
(LWBP). The effort to increase electricity supply is carried out through the repair of
generators, the relocation of generators and the rental of generators as well as the
purchase of electric power from captive providers.
Strengthening the Company’s Image … This is an important strategy, which is car-

ried out by:
• Increasing shareholder value by increasing the company’s efficiency and the prac-
tice of Good Corporate Governance.
• Increasing customer value through transparency in quality and reliable service,
gradual modernisation in the provision of service in line with the best practice
applied by modern electricity companies, empowerment of the consumer public in
order for them to be able to understand more about the electricity business, and
the implementation of community development for the communities around PLN’s
primary installations.
Primary Energy … The purchase of primary energy is a major expenses for the com-
pany, such that in order to strengthen the company’s position in the long run, the
company must use the following strategies:
• Geothermal power – Joint ventures in the development of geothermal power with
other related parties.
• Natural gas – Encouraging the development of natural gas sources and the trans-
mission of natural gas for PLN generator centres.
• Coal – Ensuring good quality and continued supply and entry into primary industry.
• Hydro-power – Continuing and re-evaluating the result of the past studies on hy-
dro-electric power to be developed by PLN itself or in a joint venture with private
investors and other partners.
Future Targets and
Strategies
Good Corporate Governance … PT PLN (Persero) is moving towards a good Company

Management Organisation based on the principles of Good Corporate Governance
(GCG) in line with the Best Practices Internationally, which is one of the managerial
aspects of a company that has been used as reference for many practitioners of
businesses, financial institutions and world government institutions in binding a re-
lationship. GCG has become a conditional factor in the relationship between the
Company and the investors/shareholders, and between the Debitor and its Creditor.
The scope of its implementation in PLN aims at achieving the applied standard or the
best-applied practices, which includes:
• The obligation to implement GCG consistently.
• The organisation of the management and work units of the company that involve
the shareholders, boards of commissioners and directors, the nomination process,
the decision process, evaluation of synergy, the remuneration system, etc.
• The organisation of the supporting management and work units, along with the
related committees, such as the Company’s Secretariat and the Audit Committee.
• The coordination of Vision, Mission, work culture and the ongoing practices.
• The systems for reporting, accountability and monitoring.
• The systems for planning and budgeting.
• The financial system.
• The risk management system.
• The systems of industrial relationship and employment policies.
• The supply and logistics systems.
• Relationship with stakeholders.
• Consumers, suppliers, competitors, the public, etc.
GCG implementation in PLN is at the following stage:
• Assessment, which involves the identification and evaluation of the present prac-
tices in order to assess the presence of any gaps between the actual practices and
the targeted standard or best practices.
• The required steps are taken to reduce or eliminate the gaps in order to implement
GCG effectively.
• Written guidelines are made for GCG, which is better known as the Code of Con-
duct/Code for Good Corporate Governance.
• The compilation of the framework for the implementation of GCG.
• The implementation of GCG as a gradual process.
PLN has taken the following steps:
• Introduce/diffuse information on GCG to all levels of the PLN organisation through
company meetings and lectures.
• As a Pilot Project, the Board of Directors of PLN through the General Shareholders’
Meeting has instructed the subsidiaries of PLN to implement GCG and so far, PT
Indonesia Power and PT PJB have shown sufficient progress.
• PLN has appointed AAJ Associates as a consultant to assist in the implementation
of GCG in PLN.

Quality and
Reliability
The effort to improve quality and reliability as well as all their
supporting factors in order to meet the needs of the consumers of
electricity, which increase every year.
Business
Achievements from
the Year 1998-2002
Production and Purchase of Electric Power … The growth in the need for electricity
is shown in the demand for electricity throughout all the regions in Indonesia, which
has the tendency to increase from year to year, in line with the improvement in the
living standards of the people, and the development and growth of industries in
Indonesia. However, the growth in the need for resources cannot be fully met by PLN
due to a limitation in funds for investment. As a result, several electricity systems
outside of Java-Bali experience shortages in the supply of resources at the end of
2002.
Although not all of the public’s demand has been met by PLN, the growth in produc-
tion for PLN increases annually in line with the rate of growth in the demand from the
public. In addition to the supply produced by PLN’s own Electric Power Generators,
PLN also rents Diesel Generators and purchases electricity from private providers.
The production and purchases of electricity for the past 5 years are as follows:
Table 1: Production and Purchases (GWh)

Year
1998 1999 2000 2001 2002
Own Production
Oil Fuel 13,977 14,747 17,561 19,225 24,198
Non-Oil Fuel
- Hydro-Power 9,649 9,370 9,110 10,651 8,834
- Coal 22,436 25,368 28,776 29,330 29,313
- Geothermal 2,616 2,728 2,649 2,982 3,187
- Natural Gas 25,743 27,810 25,408 25,447 22,538
Electric Power Purchases 3,482 4,279 9,135 13,299 19,067
Generator Rental - 473 687 720 1,225
Total Own Production,
Purchases and Generator Rental 77,903 84,776 93,325 101,654 108,360
The composition for the consumption of energy for production for the past 5 years is
specified in the following table.
Table 2: Consumption Composition of Energy (%)

Coal 33.3%
Year 27.5% Oil Fuel
1998 1999 2000 2001 2002
25.6%
Oil Fuel 18.8 18.4 21.0 21.9 27.5 Natural gas
10% Hydro-Power
Non Oil Fuel
- Hydro-Power 13.0 11.7 10.9 12.1 10.0 Geothermal 3.6%
- Coal 30.2 31.7 34.5 33.5 33.3
- Geothermal 3.5 3.4 3.2 3.4 3.6
- Natural gas 34.6 34.8 30.4 29.1 25.6 Energy Composition for the Year 2002
Total 100.0 100.0 100.0 100.0 100.0

Business
Achievements from
the Year 1998-2002
Sales and Sales Composition of Electricity … The level of growth and electricity
sales composition for the past 5 years, are shown in table 3 and table 4.
Table 3: The Growth in the Sale of Electric Power (GWh)

Year
1998 1999 2000 2001 2002
Sales (GWh) 65,261 71,332 79,165 84,520 87,089
Growth (GWh) 949 6,071 7,833 5,355 2,569
Growth (%) 1.5 9.3 11.0 6.7 3.9
39% Households
Table 4: The Sales Composition for Electric Power (GWh)

Industries 42.4%
Businesses
Year 13.6%
Rate Group 1998 1999 2000 2001 2002

General 5%
Households 24,866 26,884 30,564 33,340 33,994
Businesses 8,667 9,330 10,576 11,395 11,845
Industries 27,985 31,338 34,013 35,593 36,831 Sales Composition of Electric Power
for the Year 2002
General 3,743 3,780 4,012 4,192 4,419
Total 65,261 71,332 79,165 84,520 87,089
From the above tables, it can be seen that after the crisis of 1997, the sales of
electricity increases sharply in line with the growth in the public’s demand for elec-
tricity. However in the years 2001 and 2002, the rate of growth decreased since at
the time the company could not meet the growth in the public’s demand for electric-
ity, which is in line with the growth of the GDP. The limiting factor for the growth in
sales is the limitation in the supply capacity of generators, especially during peak
load (WBP). Even outside of Java-Bali, the company was only able increase growth to
meet the natural growth in demand, which is 3 – 4 % per annum.
One of the steps taken by the company to increase sales is by implementing the
Integrated Resources Planning Program (IRP) in order to ensure that the maximum
load is not exceeded and at the same time the load factor system is improved.
Integrated Resources Planning (IRP) … This is a plan to reduce the imbalance be-
tween the generators’ capability and the load demand, which consists of the follow-
ing programs:
• Demand Side Management (DSM), is a program to reduce or shift peak load through
an energy conversion mechanism, whereby the public is encouraged to save energy
by using energy saving lamps and the rate mechanism used is aimed at encourag-
ing industrial consumers and large commercial businesses to shift from Peak Load
Time (WBP) to Non-Peak Load Time (LWBP).
• Supply Side Management (SSM), is a program to buy electricity from captive pro-
viders, which is carried out mainly in order to increase the supply capacity for peak
load time by controlling the balance between commercial and operational uses.
Electric Power Sales Revenue … The revenue attained for the sale of electricity is in
the following table:
Business
Achievements from
the Year 1998-2002
Table 5: Electric Power Sales Revenue (Millions of Rupiah)

39,018,461
Year
Rate Group 1998 1999 2000 2001 2002 28,304,026
Households 4,580,280 5,208,212 6,330,942 8,448,021 13,352,473 22,161,068

Businesses 2,644,856 2,924,808 4,032,574 5,156,577 7,021,370
Industries 5,634,789 6,536,313 10,320,857 12,903,388 16,313,885 15,670,552
General 906,286 1,001,218 1,476,695 1,796,039 2,330,733

13,766,222
Total 13,766,222 15,670,552 22,161,068 28,304,026 39,018,461
Electric Power Sales Revenue

Number of Consumers … The number of PLN customers at the end of 2002 reached
30,953,919, which represents an increase of 3.78% in comparison to the previous
year. Consumers for the Household rate group make up for the largest portion, which
is 93.37% of the total number of PLN consumers, and this can be seen in the following 93.4% Households
table:
Businesses 4%
2.4% General
Table 6: Number of Consumers (Consumers) Industries 0.2%
Year
Rate Group 1998 1999 2000 2001 2002
Number of Consumers in the Year 2002
Households 24,903,376 25,833,618 26,796,675 27,885,612 28,903,325
Businesses 847,940 982,281 1,062,955 1,172,247 1,245,709
Industries 43,088 42,575 44,337 46,014 46,824
General 639,085 666,138 691,418 723,855 758,061
Total 26,433,489 27,524,552 28,595,385 29,827,728 30,953,919
Installed Power … The growth in the amount of power installed for every rate group
is shown in table 7:
Table 7: Installed Power (MVA)

43,666.2
Year
Rate Group 1998 1999 2000 2001 2002 41,585.1
Households 15,887.5 17,046.2 18,588.7 20,250.4 21,342.1 38,833.9

Businesses 5,665.0 5,966.8 6,449.0 6,919.9 7,337.4
Industries 10,698.9 10,819.0 11,390.4 11,903.2 12,284.2 36,215.4
General 2,344.4 2,383.4 2,405.8 2,511.6 2,702.5

34,595.8
Total 34,595.8 36,215.4 38,833.9 41,585.1 43,666.2
Installed Power

Business
Achievements from
the Year 1998-2002
Electric Power Supply Facilities … To meet the demand for electricity, PLN owns and
manages facilities for the supply of electricity, which include generators, transmis-
sion networks and distribution networks, with the following development:
21,112
Table 8: Generator Capacity (MW)
Year 21,059
1998 1999 2000 2001 2002

20,762
PLTA 3,006 3,014 3,015 3,106 3,155
PLTD 2,535 2,650 2,550 2,585 2,589 20,592
PLTG 1,347 1,516 * 1,203 * 1,225 1,225

20,581
PLTGU 6,561 6,282 * 6,863 6,863 6,863
PLTP 360 360 360 380 380
PLTU 6,771 6,770 6,770 6,900 9,900
Total 20,581 20,592 20,762 21,059 21,112 Generator Capacity
Table 9: Channelling 25,989
Year 25,989
1998 1999 2000 2001 2002
24,822
Transmission (kms) 23,573 24,389 24,822 25,989 25,989
Main Relay Station (MVA) 45,361 46,964 49,957 50,485 50,485 24,389
23,573
Table 10: Distribution

Year
1998 1999 2000 2001 2002 Transmission (kms)
JTM (kms) 198,486 207,615 * 216,220 222,990 228,104

JTR (kms) 260,926 277,995 287,531 297,157 307,226
Relay Station (MVA) 24,710 * 26,029 27,551 27,585 27,585
The Development of Electric Power Facilities … Due to the financial burden that the
company faced, in 2001 PLN could not make any investment in line with the need to
develop generators. The development activities carried out were continuations of
ongoing projects. At the end of 2002, PLN’s ongoing projects are specified below:
Table 11: Ongoing Projects

Generator Facility Capacity
- PLTA 1,444.9 MW
- PLTU 920 MW
- PLTD 64 MW
Channelling Facility
- Transmission 4,250.6 kms
- Main Relay Station 3,473.5 MVA
Business
Achievements from
the Year 1998-2002
Quality and Reliability … With the application of the Government Legislation for the
Protection of Consumer Rights in the year 2000, PLN is required to improve the
quality and reliability of the electricity produced.
The quality of electricity is measured by using a quality standard, which is a range of

technical limits established for every region according to the local situation. Reliabil-
ity is measured by using the SAIFI indicator (System’s Average Interruption Frequency
Index) and SAIDI (System’s Average Interruption Duration Index).
The company’s programs to gradually improve quality and reliability are as follows:
• The establishment of service standards according to the local conditions

• Improvement in the physical maintenance of distribution networks
• Improvement in the readiness and reliability of generator units
• The formation of a data base for network assets
Another factor that affects the quality and the reliability is the sufficiency of the
supply of electricity. Shortages in supply in several electricity systems is remedied by
the rental of equipment in the short run and by making new investments in the
medium and long run, which can be done by PLN or by private electricity providers.
The achievement of SAIDI and SAIFI for Indonesia in the past 5 years can be seen in
table 12:
Table 12: SAIDI and SAIFI

Year
1998 1999 2000 2001 2002
SAIFI (times/consumer/annum) 18.68 18.58 15.12 18.24 14.17
SAIDI (hour/consumer/annum) 15.58 14.06 13.24 17.48 14.35

Business
Achievements from
the Year 1998-2002
Improving Reliability … This is done by carrying out activities that support electric-
ity production especially in terms of production facilities, such as:
• Revitalisation of generator units with lowering in rating.
• Repair of severely damaged generator units, in order for them to be able to oper-
ate normally again.
• Relocation of generator units which do not operate from over-supplied systems to
under-supplied systems.
• Re-operation of aged generator units that can still be operated and are still finan-
cially favourable.
• Rescheduling of the inspection program for a number of generator units to antici-
pate shortage in supply in 2003.
• Optimisation of maintenance through the implementation of predictive mainte-
nance (condition based), which is still combined with Time-based maintenance.
Network Depreciation … The realisation of transmission and distribution networks

depreciation in 2002 reached 16.54%, which consists of transmission depreciation of
2.58% and distribution depreciation of 13.96%. The high depreciation is caused by
the increase in the technical depreciation due to the following:
• The realisation of additional consumer segments and additional connected MVA is
dominated by consumers for medium tension capacity, which reached 78.93%.
• A limited amount of funds for investment to improve network capacity.
• The service provided for Medium and Low Tension consumers is below standard,
since the peak load for the Main Relay Station is 150/20 kV, which is less than 90%
of the capacity.
• There is limited generator capacity, such that tension is often lowered/ exhausted,
which can result in the loss of High and Medium Tension consumers.
On the other hand, non-technical depreciation also increased due to:
• The effect of the change in the pattern for meter reading, since there is a change
in the month stated in the billing.
• Illegal use of electricity with the increase in unofficial Public Road Lighting (PJU),
increase in electricity theft due to the increase in the basic rates, and the increase
in illegal consumers due to limited new connections as the result of a shortage in
supply.
Marketing Control … Due to a limited supply in electricity, PLN must implement

control in marketing, which includes the following:
• Selective marketing to increase revenue and anticipate an electricity crisis.
• Joint ventures with generator owners who are captive power providers of medium
and low tension capacities, in order to overcome an electricity crisis.
• Limitation and shifting of load from the peak load time.
Improvement in Service … In anticipation of the application of the Government

Legislation for the protection of consumer rights, gradual improvement in the quality
Business
Achievements from
the Year 1998-2002
of service is carried out according to the financial capability of the company through
the following programs:
• The development of transparency in the information regarding the quality of ser-
vice for the public.
• The classification of the level of service quality domestically and,
• Using the level of service quality as the turning point for the compilation of invest-
ment activities.
Good Corporate Governance … In the year 2002, in line with the instruction given by
the Minister of State Owned Businesses, BPKP implemented a measure and test for
the practice of Good Corporate Governance (GCG) in PT PLN (Persero), which were
taken for aspects of governance that are related to the following:
• The commitment to practice Good Corporate Governance (GCG).
• The structure, process and the roles of the primary units of Good Corporate Gov-
ernance (GCG) (Shareholders/General Shareholders’ Meeting, Board of Commis-
sioners, Board of Directors) and the supporting units of Good Corporate Gover-
nance (GCG).
From the result of the measurement and the test, it can be concluded overall that
there is sufficient practice of Good Corporate Governance on the various aspects and
units of PT PLN (Persero). This can be seen in the number of points achieved, which
is 73.674 from a target of 100 points (best practice), and hence there is still room to
improve by 23.326 points in order to reach the ideal level of Good Corporate Gover-
nance (GCG).
Remuneration … In line with the decision made in the General Meeting of Sharehold-
ers, on 8th October 2002, regarding the approval of the Annual Report and the Valida-
tion of the Annual Records as well as the Validation of the Report for the Realisation of
the Program to Coordinate Small Businesses and the Cooperatives of PT PLN (Persero)
for the accounting period of 2001, it is decided that the salaries for the members of
the Board of Directors should range from Rp 36 Million to Rp 40 Million, while the
members of the Board of Commissioners and the Secretary of the Board of Commis-
sioners should receive between Rp 6 Million and Rp 16 Million.

Business
Achievements from
the Year 1998-2002
Aside from the above remuneration, the Board of Directors and the Board of Commis-
sioners as well as the Secretary of the Board of Commissioners will attain other
benefits in line with the prevailing regulations.
Regular Meetings … A Board of Directors’ Meeting is held regularly, 4 times every

month, i.e. every Tuesday, and is attended by members of the Board of Directors and
the level 1 officials, with high attendance record by the members of the Board of
Directors. The number of meetings may increase at the occurrence of urgent matters
that require immediate decisions.
Meanwhile the Board of Commissioners does not hold regular meetings, although the
statistics report shows that an internal meeting of the Board of Commissioners is
held between 1–4 times every month.
Consultation meetings between the Board of Commissioners and the Board of Direc-
tors are held only when there are certain matters to be discussed, and statistically it
can be seen that these meetings are held between once or twice every month.
Organisational Development … In line with organisational coordination in anticipat-

ing changes in the business environment and the company’s internal environment,
the organisational development carried out by PLN involves the following programs:
• The delegation of more authorities from the head office to the units, such that the
head office only handles the making of policies, strategies, and the control of
implementation at unit level, in addition, the Board of Directors becomes an insti-
tution that is responsible in terms of strategies, policies and operational synergy.
• The empowerment of the regional level units to become Strategic Business Units
with investment centre level of accountability, followed by the empowerment of
the lower levels to become profit centres as well as cost and/or revenue centres.
• The formation of a single buyer group to manage the Java-Bali market to antici-
pate and adapt to the implementation of competitive market mechanism.
• The formation of IPP Trader groups to bridge the gap between IPP (Independent
Power Producers) and long term contracts and the market.
• The formation of service units that include the provision of engineering services,
technical services, training, construction management, production, information
technology and accounting administration.
• To upgrade mature Strategic Business Units into Subsidiaries to strengthen the
existence of the company’s business.
The Development of Human Resources … In the effort to consolidate the Human
Resources Management System with the system to increase productivity, the devel-
opment of Human Resources is carried out by taking the following steps:
• Improvement of the quality of recruits by changing the orientation towards educa-
tional background, productivity ratio as the basis of competency and the long-term
requirement of the company.
• Improvement of the system for synergy evaluation by developing an incentive sys-
tem based on performance that is gradual and continuous.
• Enhancement of the system for employee career development through the clarifica-
tion of the system of postings, the training system and the official voting system.
Business
Achievements from
the Year 1998-2002
Human Resources consist of employees from the PLN Holding and the PLN subsidiar-
ies, which can be seen in the following table 13.
Table 13: Human Resources Composition (employee)

Year
1999 2000 2001 2002
PLN Holding 46,970 44,212 43,507 41,968
- Head Office 1,539 860 1,108 621
- Operation Unit 45,431 43,352 42,399 41,347
PLN Subsidiaries 6,106 6,098 6,130 6,270
- PT Indonesia Power *) 3,709 3,709 3,777 3,624
- PT PJB *) 2,397 2,389 2,353 2,308
- PT PLN Batam - - - 240
- ICON+ - - - 46
Education and Welfare Institutions - - - 52
Notes: *) unit employees + PLN employees
Capitalisation … To improve the company’s capability, PLN increases the number of

electricity supply facilities by using funds from various sources. From the beginning
of 1992, PLN has been utilising the funds acquired from the Stock Market by issuing
bonds, and up to the end of the year 2000 has made 6 (six) public offerings with a
total nominal value of Rp 3,498,430,000,000.00 (three trillion, four hundred and
ninety-eight billion, four hundred and thirty million rupiah).
From the bonds issued, the following amounts have not yet matured:
Name of Bond Date of Issue Interest Nominal Value

(Rp 000)
PLN VI of 12th August 1997 Fixed and/ 600,000,000
the year 1997 or Floating

Business
Achievements from
the Year 1998-2002
All the funds collected from the public offerings have been used for the expansion of
the company as it is specified in table 14 below.
Table 14: Use of Funds (In Millions of Rp)

Type Result Cost of Net Project Total
of Bond of Public Offering Amount
Offering
PLN I 300,000 9,192 290,808 - Suralaya – Cilegon Transmission 29,081

of the - Large Consumer Transmission 107,599
year - Large Consumer Medium Tension
1992 Networks 63,978
- Distribution in Java 90,150
PLN II 600,000 17,397 582,603 - Gas Installation for PLTU

of the M, Karang & Priok 58,260
year - PJava-Bali System Transmission
1993 Expansion 332,084
- Java Distribution System Expansion 192,259
PLN III 318,430 9,371 309,059 - Conversion of PLTU M.Karang

of the from BBM to BBG 64,902
year - Transmission & Large Consumer GI 157,620
1995 - Java Distribution System Expansion 86,537
PLN IV 680,000 20,210 659,790 - Transmission & Large Consumer GI 191,339

of the - Java, Bali, Sumatra, Sulawesi and
year Kalimantan Distribution Systems
PLN V 1,000,000 28,679 971,321 - Transmission & Large Consumer GI 481,066

of the - Java, Bali, Sumatra, Sulawesi and
year Kalimantan Distribution Systems
PLN VI 600,000 17,430 582,570 - Distribution Projects in Greater

of the Jakarta, West Java, Central Java
year and East Java 466,056
1997 - Transmission and Large Consumer
GI in Greater Jakarta, West Java,
Central Java and East Java 116,514
The Development of an Information System … The program to develop an informa-

tion system for PLN prioritises corporate implementation, which is aimed at revenue
protection, income generation, cash-flow improvement, and the formation of an ex-
ecutive information system.
The activities that are being carried out by the company at present are:
• Preparation for the implementation of a coordinated Service Information System
(CIS).
• Preparation for the implementation of coordinated Financial Information System
(FIS).
Business
Achievements from
the Year 1998-2002
• Preparation for the implementation of Executive Information System (EIS), which

involves the application of EIS, data Warehousing, Corporate Portal and Office
Automation.
• Implementation of Customer Information and Billing System (CIBS).
Improvement in Efficiency … The effort to improve efficiency has been carried our
since 1999 as it is recommended by the audit result for efficiency in operations and
efficiency in investment; this was done by an independent auditor using internation-
ally best practices as the basis. The implementation of the program to improve effi-
ciency is done in the form of an Efficiency Drive Program (EDP), which is aimed at
saving operational cost, increasing income and improving system reliability through
improvement in the efficiency of generators, channelling, distribution and electricity
retail as well as improvement in the efficiency of supporting functions, such as Hu-
man resources, finance and management information system. The results achieved
through EDP are in tangible and intangible forms.
Overall, the EDP program includes Operational Expenditure Efficiency Drive (OPEX),
Capital Expenditure Efficiency Drive (CAPEX), and Efficiency Drive Integration (EDI)
programs applied in the management of Human Resources, Finance, and Information
System.
The results achieved by the EDP program in tangible form (savings) show an improve-
ment from one year to the next, i.e. there were savings amounting to Rp 765 Billion
and Rp 972.8 Billion in the year 2000 and the year 2001, respectively, and in the year
2002 the amount of saving achieved reached Rp 1.56 Trillion.
Meanwhile the results achieved by the EDP program in intangible form can be seen in
the change in the company’s culture, such as the rise in the desire to cut cost/budget
without reducing the benefit that can be gained, the rise in the perception to under-
take a business/commercial approach in finding the solution to problems in the field,
and the rise in innovative and competitive spirits in contributing to the company.
The Empowerment of Society … As a part of the Indonesian nation, the existence of

PLN cannot be separated as part of the society and the nation as a whole. In order to
achieve collective growth and prosperity, PLN asks all aspects of the nation to show
responsibility to society through legitimate activities. PLN’s activities in the man-
agement of the environment, whether in the implementation of development or in
the operation of electricity supply facilities, are legitimate proofs of PLN’s concern
on society. In addition, in its concern to advance and empower the whole of society,
PLN continues to develop its Regional Electricity program and the Coordination of
Small Businesses and Cooperatives (PUKK).
Regional Electricity … In line with the rules of the prevailing regulations, PLN is a
Business Institution that is owned by the State and it is authorised to Conduct Busi-
ness in the Electricity Sector. Therefore, PLN is not yet able to conduct its business in
a purely commercial way, since it must also carry out other duties, which are to be the
primary supplier of electricity for social use as well as to be the initiator in the
development of welfare and prosperity for society in a fair and equal manner, and to
boost economic activities. In 2002, these social activities were carried out by means
of the Regional Electricity programs and the Coordination of Small Businesses and
Cooperatives.

Business
Achievements from
the Year 1998-2002
Increase in the number of villages that have electricity in the year 2002 reached
2,531, with 623,422 additional customers. With the increase in the number of vil-
lages with electricity, by the end of 2002, 52,007 villages have electricity or 78.55% of
the total number of villages have electricity, with the number of customers totalling
to 20,031,297.
Financially, some of the villages, which now have electricity, cannot yet meet the
criteria. However, in its concern for the nation as a whole, PLN takes responsibility in
the advancement of the whole of Indonesian society, whether this concerns the cities
or the villages. In addition, with electricity, the villages will be able to grow, and their
society’s standard will improve and in turn become a potential market for PLN in the
future.
The Coordination of Small Businesses and Cooperatives (PUKK)

In addition to its role as a supplier of electricity, PLN is instructed by the Government
to empower Small Businesses and Cooperatives, as it is established within the Decree
of the Minister of Finance, No. 316/KMK.016/1994, regarding the Coordination of
Small Businesses and Cooperatives (PUKK). In 1999, this instruction was substituted
by the Partnership and Environmental Coordination Programs, however in the year
2000, in line with the circulated Document of the Minister of Finance, No. 31/MK.1/
2000, the PUKK program was reactivated.
Since 1991, PLN has carried out Coordination programs for Small Businesses and
Cooperatives through the PLN units distributed throughout Indonesia. The funds used
for the program comes from the Government portion that make up 3-5% of the
company’s profit after tax, while the funds used to implement PUKK becomes part of
the company’s operational budget. Therefore, in view of the loss shown in PLN’s
Financial Report in 1997, from 1998, PLN only extended funds that originate from
loan repayment made by coordinated partners.
Assistance for PUKK may be given in the form of a Loan to boost Working Capital,
which is to be repaid gradually, or it can be in the form of a Bequest for education/
training, improvement of production quality or marketing. The targets for coordina-
tion by PLN are Individually-owned Businesses, Cooperatives, or Regional Unit Coop-
eratives, including PLN’s Employee Cooperatives, with certain limitations. Priority is
given to those who have not yet developed in reputation and are located around the
areas of PLN’s activities. The assistance provided by PLN for Small Businesses and
Cooperatives is distributed throughout Indonesia. During 2002, PLN extended assis-
tance in the form of funds amounting to Rp 9,164,417,078,-, which consists of:
- Loan amounting to Rp 7,555,187,267,-
- Bequest amounting to Rp 1,609,229,881,-
- Other expenses amounting to Rp 964,737,135,-
The Government’s instruction to extend assistance to Maluku and North Maluku was
given via BRI (Bank Rakyat Indonesia) in the form of a loan for Small Businesses and
Cooperatives amounting to Rp 520,000,000,-, which is included as other expenses.
The PUKK program is carried out optimally as far as possible, taking into account that
there is a need to selective, effective and efficient.
Matters that have arisen in the implementation of the program:

• Coordinated partners are located in various places, such that sufficient facilities
and infrastructure are needed for coordination and monitoring.
Business
Achievements from
the Year 1998-2002
• The assisted Small Businesses are those who are not yet reputable, hence there is
a risk involved.
• In general the coordinated partners do not possess marketing strength and are not
used to compiling reports, and hence monitoring and development are not easy.
The positive side of the Government’s instruction that can benefit in terms of the
company’s advancement are:
• The company can show responsibility to the public by showing their concern for the
economic conditions faced by the community around them.
• When a coordinated partner becomes successful, the company’s image is strength-
ened.
• In certain conditions, this can be the means to settle unrest in society.
The Environment … To be consistent in one of its missions to conduct environmen-

tally friendly business activities, in 2002, PLN conducted activities related to envi-
ronmental concerns, which included the compilation of general policies for the com-
pany that relates to the environment, participation in a national program on changes
in the global climate, environmental studies, environmental management and moni-
toring for generators and channels.
Community Development … As a company that supplies electricity for the public’s

interest in sufficient quantity and quality, PLN carries out development activities and
operates installations which are distributed all over Indonesia. The community around
the areas of PLN installations must attain indirect benefits from the existence of the
installations through community development programs implemented by PLN, by as-
sisting the community around the installation areas in the improvement of their
welfare, education, public facilities, and by training the community so that they will
participate in monitoring the safety of the installations, and feel that the installa-
tions belong to the community.
Other targets for its community development programs are communities that have
suffered from disasters that are related to the existence of PLN installations.
Community development programs have been implemented in PLTA Maninjau, PLTA

Singkarak nad PLTA Koto Panjang, which involve fish farming in lakes, the repair of
mosques, the provision of scholarships to students of high achievements living around
the lake area, the building of wells for the residents who were relocated to the Koto
Panjang lake, etc.
In Jakarta, assistance has been given in the form of food, with a value that amounted
to Rp 300 Million, for people that have been evacuated from flooded areas.
Priority for assistance is given to communities around the installation areas outside
Java, in geothermal installation areas outside Java, Extra High Tension Installations
(SUTET), High Tension Installations (SUTT), Main Relay Stations, Service Offices,
Warehouses, and Medium Tension Installations (SUTM) situated in troubled areas, in
the form of facilities for religious worship, reforestation in the areas around lake
Tondano, and scholarships for underprivileged children of high achievements.

The Legal Obligations

of PT PLN (Persero)
The steps taken to settle a number of legal obligations by PLN.
Legal Actions
LIST OF CASES/THIRD PARTY CLAIMS
DAFTAR PERKARA/GUGATAN PIHAK KETIGA
No. NAMA DAN NOMOR PERKARA NILAI PERKARA/GUGATAN PENGACARA/

KUASA HUKUM KONDISI TERAKHIR
1. Perkara gugatan Sdr. Abdul Kohar,(No. 14/Pdt.G//1996/PN.KRW)
Konsultan Hukum/Pengacara dari PT PLN (Persero) —- Pada tingkat PN,
PLN menangPada tingkat PT, putusan PT menguatkan putusan PN.Saat ini dalam proses pemeriksaan Kasasi di MA.
— Perkara gugatan terhadap
tanah yang bersangkutan yang di atasnya didirikan tapak tower 500 kV di daerah Karawang-Jawa BaratPihak-pihak
yang berperkara:Penggugat : Sdr. Abdul KoharTergugat I : PT PLN (Persero)Tergugat II : Asea Brown
BoveriTergugat III : PT Balfour Bratty Sakti Indonesia (PT. BBS)
2. Perkara gugatan PT Yorkshire(No. 58/Pdt.G/1995/PN. Bale Bandung)

Rp 50 juta dan pengembalian tanah yang dipergunakan PLN seluas 3320 M2. Konsultan Hukum/Pengacara dari
PT PLN (Persero — Pada tingkat PN gugatan Penggugat dikabulkan sebagian.Pada tingkat PT, putusan
PN dibatalkan.Saat ini dalam proses pemeriksaan Kasasi di MA.
— Perkara gugatan terhadap
sebagian tanah yang dipergunakan untuk pembangunan Gardu Induk Cikancung, dimana sebagian tanah + 3000 M2
yang telah dibayar PLN kepada H. Kama ternyata merupakan tanah HGB PT Yorkshire.Proses pembebasan tanah ini
dilakukan pada tanggal 6 Oktober 1993.Pihak-pihak yang berperkara:Penggugat : PT YorkshireTergugat I : PT PLN
(Persero)Tergugat II : H. Kama

3. Perkara gugatan Sdr. Atok Sukandar(No. 53/Pdt.G/1997/PN.Bdg)Perkara mengenai rumah atau bangunan yang
dilintasi jaringan transmisi 150 kV di daerah Buah Batu BandungPihak-pihak yang berperkara:Penggugat : Sdr. Atok
SukandarTergugat I : Dept. P & E cq. PT PLN (Persero) cq. Pring Jabar Jaya.Tergugat II : Dept.
Dagri cq. Pemda Jawa Barat cq. Pemda Kotamadya BandungTergugat III : Bappenas cq. Bapeda
Rp 1 Milyar dan minta dipindah-kan dari rumah yang saat ini ditempatkan. Konsultan Hukum/
Pengacara dari PT PLN (Persero) —- Pada tingkat PN,
PLN berhasil memenang-kan perkaraPada tingkat PT, putusan PT menguatkan putusan PN.Saat ini dalam proses
pemeriksaan Kasasi di MA.
4. Perkara gugatan Sdr. Toto Fadilah(No. 54/Pdt.G/1998/PN. Bale
Bandung)Perkara ganti rugi tanah seluas + 710 M2 yang digunakan sebagai jalan masuk menuju GI Cibabat
Rancaekek Bandung sejak tahun 1995. Perkara ini menjadi gugatan yang diajukan ke PN Bale Bandung sejak 1 Juni
1998.Pihak-pihak yang berperkara:Penggugat : Sdr. Toto FadilahTergugat I : Bpk. YatmanTergugat II : Bpk.
Drs. H. Taufik IsmailTergugat III : Bpk. H. MunahRp 1,3 Milyar. Konsultan Hukum/
Pengacara dari PT PLN (Persero) Pada tingkat PN, PLN kalah
(putusan PN tanggal 19 Oktober 1998).Pada tingkat PT, putusan PT menguatkan putusan PN.Pada saat ini telah
dilakukan perdamaian dengan Akta Notaris yang disahkan oleh PN Bale Bandung bernilai Rp 275 juta.


Legal Actions
No. CASE NAME AND NUMBER CASE VALUE/ ATTORNEY/LEGAL STATUS

CLAIM REPRESENTATIVE
Charged III :
Mr. H. Munah Notarial Document
Charged IV :
Mr. Beli legalised by the State
Charged V :
Mr. Alakarim Court of Bale Bandung.
Charged VI :
The Government of RI c.q. Minister of
Internal Affairs, c.q. Governor of KDH
Level I, East Java c.q. Bandung Region
c.q. Sub-district Head of Cimahi.
c.q. Head of the Households of Melong
Charged VII : The Government of RI c.q. Minister of
Internal Affairs c.q. Governor of KDH
Level I, East Java c.q. Regional Head
of KDH Level II c.q. Bandung Region
c.q. Sub-district Head of South Cimahi.
Charged VIII: The Government of RI c.q. Department
of Mining and Energy.
5. The case of the heir of Emad bin Uci Rp 163 Billion and Legal Consultant/ - At State Court level,
(No. 39/Pdt.G/1998/PN. Pwk). return of land of Attorney from PLN won.
88.5 Ha. PT PLN (Persero).
- A claim for compensation by the heir of Emad bin - At High Court Level, the
Uci (a resident of the Sub-district of Manis, in the plaintiff’s claim could not
Region of Purwakarta for land within a forest used be accepted, and the
as entrance to the Powerhouse of PLTA Cirata and court stated that the
a Disposal Area of + 90 Ha, in Mount Cantayam Timur, parties involved will not
acquired by PLN from Unit III of West Java Perhutani disturb the operations of
by means of exchange, based on the approval given PLTA Cirata.
by the Director General of Forestry, the Department
of Farming (Document No. 3307/DJ/I/1981, dated
21st September 1981) or a building, in the path of a - At present, undergoing
150 kV transmission network, in Buah Batu Bandung. appeal in the Supreme
Court.
- The heir of Emad bin Uci forwarded claim in 1999
through the State Court of Purwakarta.
- Parties involved :
Plaintiff : The heir of Emad bin Uci
Charged I : Perum Perhutani
Charged II : PLN PI Kitring Jabar Jaya
Charged III : PT PLN PJB II
Charged IV : BPN Purwakarta
6. The case of the bag maker, whose factory is within the Rp 33 Billion. Legal Consultant/ - At State Court level, the
path of a 500 kV transmission network in the Paiton- Attorney from plaintiff’s claim was partly
Kediri line (No. 802,803,804/Pdt.G/1999/PN.Sby). PT PLN (Persero). granted.
- Parties involved: - At High Court Level, the de-
Plaintiff : Bag Maker cision affirmed the decision
Charged : PT PLN (Persero) made in the State Court.
- PLN won after an appeal
was made for case
No.802,803,804/Pdt.G/1999/
PN.Surabaya.
7. The case of Bukaka Teknik Utama Legal Consultant/ - At PTUN, PLN lost.
(No.083/G.TUN/2000/PTUN/JKT). Attorney from PT PLN
(Persero) for PTUN - At PT TUN, the decision
- A claim from PT Bukaka Teknik Utama against the issue (Commercial Court) affirmed the decision
of a document from PT PLN (Persero), Number 279/ and at PTUN (Higher made in the PTUN.
612/DITOP/2000-R, dated 11th May 2000, whereby a Commercial Court),
Notification of Award is cancelled for a tender won by the appeal is handled - A peaceful settlement was
PT Bukaka Teknik Utama. by the Office of the reached between PT.
Attorneys Maiyasyak, Bukakka Teknik Utama
Rahardjo & Partners and PT. PLN (Persero).
Legal Actions
No. CASE NAME AND NUMBER CASE VALUE/ ATTORNEY/LEGAL STATUS

CLAIM REPRESENTATIVE
Parties involved:
Plaintiff : PT Bukaka Teknik Utama
Charged I : PT PLN (Persero)
8. Objection to the execution of a ruling in the case In line with the Internal/In-house - In the State Court of North
involving “PT ENICO” (No. 154/Pdt/Bth/1999/PN. ruling PK No. 573. Attorney of PLN. Jakarta PLN won. The ruling
Jkt.Ut. jo.No. 870/Pdt/1999/PT. DKI). PK/PDT/1997, the was to halt execution
Charged Party must and PLN’s confiscated
In the main case (dispute in the development of fly ash pay the Plaintiff funds, amounting to
disposal, PLTU Suralaya) between PT Enico (the Plaintiff) the following: Rp 2.085 Billion, was to
and the Government (Charged Party), PT Enico’s claim be returned to PLN.
was granted by the Court (ruling No. 573. PK/PDT/1997). Rp 2,185,089,704.60
with accumulated - In the High Court of
In the execution of the ruling, the asset to be confis- interest of 3% per Jakarta PLN won (Affirm-
cated belongs to PLN. month from 23rd May ing the State Court ruling).
1991, and an enfor-
PLN could not accept the execution of the cement fund of - In the Supreme Court PLN
confiscation and forwarded its Objection. Rp 500,000,- per day lost.
Party in Objection: PT PLN (Persero) (PT. ENICO claims - A friendly settlement is

Charged I : PT ENICO (Gunawan Purnama) that the total amount carried out through a
Charged II : The Government of RI accumulated reached Notarial Document
Rp 91 Billion in 2001). legalised by the State
Court of North Jakarta,
amounting to Rp 13 Billion.
9. The case of the damaged underwater cable due to the PLN claims Internal/In-house - At State Court level, PLN
ship “Ocean Competence” US$ 10 Million. Attorney from lost.
(No. 195/Pdt.G/1996/PN.Jkt. Pst jo. PLN.
No. 759/Pdt/1997/PT.DKI jo. No. 703 K/Pdt/1999). - At High Court Level, PLN
lost.
On 6th October 1994, the anchor of the ship MV Ocean
Competence caught a 150 kV cable in the Java-Madura sea, - At Supreme Court, PLN
such that the cable is damaged and must be exchanged. lostUndergoing a review
in the Supreme Court.
PLN forwarded a claim to the ship for compensation.
Plaintiff : PT PLN (Persero) P3B

Charged I : Wing Tak Investment (Owner)
Charged II : Mr. Wong Hei Fat (Skipper)
Charged III : PT. Newship NB. Surabaya Branch
Charged IV : PT. Newship NB Jakarta Head Office
Charged V : M.O. Ship Management, Tokyo
Charged VI : U.K. P&I Club, London
10. The case of the damaged underwater cable due to PLN claims Office of the - At State Court level, PLN
the ship “KOTA INDAH” Rp 154 Billion. Attorney General lost (claim refused).
(No. 279/Pdt.G/1999/PN. Sby. Jo. c.q. District
No. 20/Pdt/2001/PT.Sby). Attorney of - At High Court Level, PLN
Surabaya as the won (claim granted partly
On 19th October 1999, the anchor of the ship MV Kota State Attorney (US$ 5.7 million + Rp 15,8
Indah caught a 150 kV cable in the Java-Madura sea, (JPN). Billion).
such that the cable is damaged and must be exchanged.
- Undergoing appeal in the
PLN forwarded a claim to the ship for compensation. Supreme Court.
Plaintiff : PT PLN (Persero) P3B

Charged I : Advance Container Lines (Owner)
Charged II : Pacific International Lines
Charged III : Shaukat Ali Akhtar (Skipper)
Charged IV : P & I Club/Insurance
Charged V : PT. Pelayaran Samudera Selatan

An Overview of
the Financial Data of
PT PLN (Persero)
An overview of the financial data based on the reports audited
by the Financial Review Body (BPK) of the Republic of Indonesia.
An Overview
of Important
Financial Data
The following is an Overview of the Main Financial Data as per December 31st, 2002
(consolidated statement), 31st December 2001 (consolidated statement), 31st Decem-
ber 2000 (consolidated statements, 31st December 1999 (consolidated statement),
31st December 1998 (consolidated statement), and 31st December 1997 (consolidated
statement, based on the Financial Report audited by the Financial Review Body of the
Republic of Indonesia (BPK-RI) for the year 2002, by the Public Accountants’ Office of
Prasetio Utomo & Co. for the year 2001 and by the Public Accountants’ Office of Hans
Tuanakotta & Mustofa (HTM) for theyears 1998, 1999, and 2000, with the Opinion of
“Acceptable without Exception”.
THE BALANCE SHEET

(in millions of rupiah)
PT PLN (Persero)
Details 31 Dec '02 31 Dec '01 31st Dec '00 31st Dec '99 31st Dec '98
st st
Net Fixed Asset 185,617,938 53,048,330 52,641,089 51,819,420 51,394,967
Work in Progress 9,587,301 12,340,035 14,227,264 13,481,256 14,291,320
Fixed Asset 195,205,239 65,388,365 66,868,353 65,300,676 65,686,287
Share Investment 289,886 32,774 26,157 29,219 57,080
Net Deferred Tax 10,191 20,811 4,055
Other Assets 5,499,980 3,101,405 2,364,115 1,432,878 1,731,969
Current Assets 12,893,307 11,363,162 8,740,512 6,456,711 6,985,014
Cash and Other Liquid Assets 7,218,517 6,142,461 4,645,442 2,929,692 4,013,967
Provision 2,104,459 1,394,162 915,414 844,021 770,596
Receivables 2,053,296 2,893,599 2,721,180 1,728,766 1,597,750
Other Current Assets 1,517,035 932,940 458,476 954,232 602,701
Total Assets 213,898,603 79,906,517 78,003,192 73,219,484 74,460,350
Equity 152,084,320 19,198,001 18,625,103 12,692,692 22,095,520
Deferred Income 3,998,868 3,502,134 3,234,451 3,076,638 2,972,169
Long-Term Liability 42,968,624 32,936,219 34,255,802 27,727,899 31,558,947
Short-Term Liability 14,846,791 24,270,163 21,887,836 29,722,255 17,833,714
Total Equity and Liabilities 213,898,603 79,906,517 78,003,192 73,219,484 74,460,350

An Overview
of Important
Financial Data
IKHTISAR DATA KEUANGAN PENTING
"Berikut ini disajikan ikhtisar Data Keuangan Pokok per 31 Desember 2002 (konsolodasi), 31
Desember 2001 (konsolidasi), 31 Desember 2000 (konsolidasi), 31 Desember 1999
(konsolidasi), 31 Desember 1998 (konsolidasi) dan 31 Desember 1997 (konsolidasi),
berdaasarkan Laporan Keuangan yang telah diperiksa oleh Badan Pemeriksa Keuangan RI (BPK-
RI) untuk tahun 2002, Kantor Akuntan Publik Prasetio, Utomo & Co untuk Tahun Buku 2001 dan
Kantor Akuntan Publik Hans Tuanakotta & Mustofa (HTM) untuk Tahun Buku 1998, 1999 dan
2000 dengan Pendapat ""Wajar Tanpa Pengecualian""."
"AKTIVA, EKUITAS DAN KEWAJIBAN"
(dalam jutaan rupiah)
PT.PLN (Persero)
Uraian 31 Des '02 % 31 Des '01 31 Des '00

DEVIASI 31 Des '99 DEVIASI 31 Des '98 DEVIASI
DEVIASI 31 Des '96
Aktiva Tetap Bersih 249.90 " 132,569,608 " " 185,617,938 "
249.90 " 53,048,330 " " 52,641,089 " 2 " 51,819,420 " 1
" 51,394,967 " #REF! #REF! 29839075
#DIV/0!
#DIV/0! #REF! #REF!
Pekerjaan Dalam Pelaksanaan (PDP) (22.31) " (2,752,734)" " 9,587,301 "
(22.31) " 12,340,035 " " 14,227,264 " 6 " 13,481,256 "
(6) " 14,291,320 " #REF! #REF! 18209388
#DIV/0!
#DIV/0! #REF! #REF!
Aktiva Tetap 198.53 " 129,816,874 " " 195,205,239 " 198.53
" 65,388,365 " " 66,868,353 " 2 " 65,300,676 " (1) "
65,686,287 " #REF! #REF! 48048463
#DIV/0!
#DIV/0! #REF! #REF!
An Overview
of Important
Financial Data
FINANCIAL RATIOS
PT PLN (Persero)
1st Jan '02 1st Jan '01 1st Jan '00 1st Jan '99 1st Jan '98
Details to to to to to
31st Dec '02 31st Dec '01 31st Dec '00 31st Dec '99 31st Dec '98
Liquidity*) 86.84 46.82 39.96 21.73 39.17
Cash Ratio 62.79 31.05 33.66 0.10 0.23
Material Turnover 1.37 1.55 1.89 2.08 1.57
Fixed Asset Turnover 0.30 0.41 0.34 0.30 0.29
Solvability 27.03 71.59 71.97 78.46 66.33
Debt Equity Ratio 28 : 72 75 : 25 75 : 25 78 : 22 66 : 34
Rentability *) (5.00) 0.90 (40.10) (18.61) (17.62)
Operating Ratio 118.47 90.33 120.66 134.41 119.75
Rate of Return on
Net Average Fixed Assets (1.71) 1.62 (8.92) (10.66) (5.90)
Self Financing Ratio 86.17 101.66 46.90 8.63 56.64
Turnover of Receivables from Customers 19.00 9.77 8.78 9.65 9.52
Length of Costumer Receivables 19 37 42 38 38
Debt Service Coverage **) 2.02 1.03 2.46 0.48 0.11
Liquidity Ratio 0.87 0.47 0.40 0.22 0.39
Generator Rate (in Rupiah) per kWh 300.30 183.64 161.04 96.35 125.98
Production Cost per kWh of Production 533.85 325.74 516.71 318.50 298.00
Cost Efficiency *) 0.0017 0.0026 0.0017 0.0023 0.0028
Times Interest Earned ***) 2.51 (0.22) 1.76 (0.15) (0.58)
Equity Asset Ratio 71.10 24.03 23.88 21.54 33.67
Net Fixed Asset Equity Ratio 81.93 36.19 35.38 30.43 48.77
Gross Fixed Asset Long-

Term Liability Ratio 165.70 216.17 196.96 229.29 190.39
*) In accordance to the calculation in the Decree of the Minister of Finance No. 826/KMK.013/1992, dated
24th July 1992
**) In line with the Decree of the Minister of Mining and Energy, No. 75-12/40/600.1/1991
***) Meaning (Profit before Tax plus Loan Interest Rate) divide by Loan Interest Cost

The Synergy of the

Management
An analysis and general discussion on the result of the synergy of
the management, of finance, income, as well as the obligations
that must be taken by PT PLN (Persero).
General Management
Discussions
Introduction … In 2002, the financial condition of PLN began to show an improve-

ment due to the support given by the Government to save the company through the
provision of subsidy and gradual rate increase, as well as a re-evaluation of fixed
assets, which was carried out by the company.
The Synergy of the Management … The financial condition of PLN was classified as
unhealthy due to an operational loss that reached Rp 8,162 Billion. Although the Basic
Electricity Rate for 2002 had already been approved, the average sale price that
reached Rp 448.03/kWh was still below the cost for production or below its economic
value.
The operational side was classified as having a High Potential for Growth, which was
shown by the increase in a number of indicators, such as asset productivity, employee
productivity, increase in electricity sales and the growth in material turnover.
A high classification was given in terms of the Benefit to Society, shown by the indi-
cator that reflects the satisfaction of the customers, given a “B” grade, while in
terms of environmental awareness and government instruction, an “A” grade was
received.
Profit and Loss … The company’s loss for the period in session amounts to
Rp 6,059.6 Billion, in comparison to the budgeted Rp 808.7 Billion, which is due to:
• An operational income of Rp 44,183.4 Billion or 99.05% of the budgeted amount,

due mainly to the receipt of government subsidy, as well as an increase in the Basic
Rate for Electricity since the beginning of 2002
• Operational cost amounting to Rp 52,345.6 Billion or 125.66% of the budgeted
amount, due to the re-evaluation of fixed assets in the year 2002, such that depre-
ciation has reached 399.57% from the budget, and the cost of the purchase of
electricity is Rp 10,924.6 Billion or 122.37% of the budget
Cash Flow … The cash balance as per 31st December 2002 was Rp 7,218.5 Billion,
which is an increase of Rp 1,076.1 Billion in comparison to the cash balance at the
beginning of 2002, which was Rp 6,142.5 Billion. This is due to:
• Income from operations increases to Rp 4,321.4 Billion as the result of the in-
crease in income by 102.09% and a decrease in operational cost of 55.37% from the
budget
• Investment cost has increased by 102.27% from the budget
• Cost of funds has decreased by 55.37% from the budget
Financial Synergy …
Assets … The total assets of PLN continues to increase from Rp 74,460 Billion on
31st December 1998, although it showed a decrease on 31st December 1999 by 1.67%
to Rp 73,219, it increased by 31st December 2000 by 6.52% to Rp 77,995 Billion and in
2001 it increased by 2.44% to Rp 79,906 Billion and in 2002 it increased by 167.69% to
Rp 213,899 Billion, due to the company’s growth and the re-evaluation of fixed
assets, which was carried out on 1st January 2002 for the fixed asset position of
31st December 2001.

General Management
Discussions
Fixed Assets …
1. Operating Assets
The provision of electricity is a business that requires sufficient investment. There-
fore, the value of fixed asset becomes the major component of the asset value of
the company. With the increase in PLN’s installations, PLN’s net fixed asset value
continues to increase.
On 31st December 1998, PLN’s net fixed asset value amounted to Rp 51,395 Billion,
and increased by 0.83% to Rp 51,819 Billion on 31st December 1999. On 31st December
2000, it increased by 1.59% to Rp 52,641 Billion and on 31st December 2001, it in-
creased by 0.77% to Rp 53,048 Billion. Finally on 31st December 2002, it increased by
249.90% to Rp 185,618 Billion.
In meeting the increasing public demand for electricity, PLN continues to increase its
capacity, by adding the number of electric power centres, transmission networks, as
well as distribution networks. This increase in capacity is reflected in the increase in
fixed operating asset value, especially after a re-evaluation of the value of fixed
assets.
2. Work in Progress
Work in Progress becomes part of fixed assets. The value of Work in Progress as per
31st December 1998 amounted to Rp 14,291 Billion, but it decreased on 31st December
1999 by 5.67% to Rp 13,481 Billion. On 31st December 2000, the value increased by
5.53% to Rp 14,227 Billion and decreased again on 31st December 2001 by 22.31% to
Rp 9,587 Billion, due to a limited amount of funds available for investment from the
Government, from PLN internally, as well as borrowings in addition to Work in Progress
that had been completed in 2002.
3. Current Assets
In line with the increase in business activities, there have been changes in the value
of the current assets of PLN. On 31st December 1998, the value reached Rp 6,985
Billion, but it decreased by 7.60% to Rp 6,457 Billion on 31st December 1999. On 31st
December 2000, it increased by 30.01% to Rp 11,363 Billion, and on 31st December
2002, it increased by 13.46% to Rp 12,893 Billion, due to the receipt of subsidy from
the Government, and an increase in internal source of funds from the sale of elec-
tricity.
Liabilities …
1. Equity
Capital is used to fund the company’s business activities, but on 31st December
1999, equity decreased by 42.56% from Rp 22,096 Billion on 31st December 1998, to
Rp 12,693 Billion. This decrease is seen in the value of the owner’s equity (the
Government of RI) as well as in the undistributed profit balance, since the company
experienced a significant loss. However on 31st December 2000, the value increased
by 46.73% to Rp 18,625 Billion, although the company experienced a net loss due to a
financial restructuring, which was approved by the shareholders, in the form of a
redefinition of the cumulated interest and the loan penalty due into capital injection
(equity), and on 31st December 2001, the value increased again by 3.08% to Rp 19,198
Billion, due to an increase in the actual budgeted (APBN) amount for the year 2001,
General Management
Discussions
and in the company’s profit in 2001. On 31st December 2001, the equity value in-
creased by 692.19% to Rp 152,084 Billion due to the re-evaluation of fixed assets,
which was carried out on 1st January 2002 for the fixed asset value as per 31st Decem-
ber 2001.
2. Deferred Income
Deferred Income comes from the receipt of payment for connections from custom-
ers, which will be acknowledged as income that is to be amortised for a period of 20
years. On 31st December 1998, the amount of deferred income reached Rp 2,972
Billion. On 31st December 1999, it increased by 3.53% to Rp 3,077 Billion. On 31st
December 2000, it increased by 5.13% to Rp 3,234 Billion. On 31st December, it in-
creased by 8.28% to Rp 3,502 Billion, and on 31st December 2002, it increased again
by 14.18% to Rp 3,999 Billion, due to an increase in the number of customers in 2002.
3. Long-Term Liabilities
Aside from the funding that originates from the Government of RI, the company also
acquires loans from a number of parties locally and from abroad, in the form of
extended loan. The Long-Term Liability balance on 31st December 1998 reached Rp
31,559 Billion. In 1999, it decreased by 12.14% to Rp 27,728 Billion. On 31 st December
2000, it increased by 23.53% to Rp 34,252 Billion, but it decreased on 31st December
2001 by 3.85% to Rp 32,936 Billion, although it increased again by 31st December 2002
by 30.46% to Rp 42,969 Billion, due to the redefinition of the short-term loan from
the purchase of electricity from private electricity providers (IPP) into long-term
loan, in line with the contract amendment that has been applicable since 2002. In
addition, there is a tax amount to be paid for the re-evaluation of fixed assets, which
are not yet due.
4. Short-Term Liabilities
The amount of Short-Term Liabilities reached Rp 17,834 Billion by 31st December
1998. On 31st December 1999, it increased by Rp 11,888 Billion to Rp 29,722 Billion,
and it decreased on 31st December 2000 by Rp 7,833 Billion to Rp 21,884 Billion.
On 31 st December 2001, it increased by Rp 2,386 Billion to Rp 24,270 Billion, and

General Management
Discussions
on 31st December 2002, it decreased by Rp 9,423 Billion to Rp 14,847 Billion, due to

the redefinition of the short-term loan from the purchase of electricity from private
electricity producers into long-term loan, in line with the contract amendment, which
has been applicable since 2002. In addition, there was a significant amount of repay-
ment made for short-term obligations.
Profit and Loss …
1. Company Profits
PLN’s profit comes from the sale of electricity, the payment made by the custom-
ers for Connections, and other incomes. Within the last five years, the company’s
profit has been increasing, that is to say that in 1998, it reached Rp 14,036 Billion.
In 1999 it increased by 13.97% to Rp 15,997 Billion, in 2000 it increased again by
41.00% to Rp 22,557 Billion, and in 2001 it increased by 56.76% to Rp 35,360
Billion. Then in 2002, it increased by 24.95% to Rp 44,183 Billion. The increase in
PLN’s profit is due to the increase in the sales revenue for electricity caused by the
increase in the basic rate of electricity in 2002, in addition to an increase in the
natural sales volume for electricity (kWh).
2. Company Expenses
The company’s expenses in 1998 reached Rp 16,809 Billion and on 31st December
1999 it increased by Rp 4,694 Billion or 27.93% to Rp 21,503 Billion. In 2000, it
increased by Rp 5,713 Billion or 26.57% to Rp 27,216 Billion, and in 2001, it in-
creased by Rp 4,714 Billion or 17.36% to Rp 31,939 Billion, then in 2002, it in-
creased by Rp 20,407 Billion or 63.89% to Rp 52,346 Billion. The increase in opera-
tional expenses in 2002 is due to the increase in production, which is followed by
an increase in the physical use of gas fuel, geothermal fuel, and petroleum. In
addition, there was an increase in the price of petroleum in July 2002, as well as
the fact that the cost of gas and geothermal fuels had to be paid in US Dollars. In
the meantime, the largest expense comes from the cost of the depreciation of
fixed assets, due to the re-evaluation of fixed assets in 2002.
3. Other Income/(Expenses)
Other expenses in 1998 reached a negative Rp 6,383 Billion and on 31st December
1999, it decreased by 16.21% to negative Rp 5,348 Billion. On 31st December 2000,
it increased by 261.46% to negative Rp 19,331 Billion, and on 31st December 2001,
it decreased by 85.23% to negative Rp 2,854 Billion, then on 31st December 2002,
it increased by 155.51% to Rp 1,584 Billion, due to the increase in other income/
(loss) for 2002, especially as the result of the decrease in the interest burden and
the gain in the exchange rate caused by the strengthening of the rupiah.
4. Profit/(Loss)
The profit/(loss) position after tax (PPh) on 31st December 1998 is a loss of Rp
9,546 Billion. On 31st December 1999, it increased by 19.09% to a loss of Rp 11,368
Billion, on 31st December 2000, it increased again by 116.49% to a loss of Rp
24,611 Billion, and on 31st December 2001, it increased by 100.73% to a profit
position of Rp 180 Billion, then on 31st December 2002, it decreased by 3,464.20%
to a loss of Rp 6,060 Billion, due to the reasons already stated.
General Management
Discussions
Rentability … Rentability is the difference between Profit before Tax and Average
Net Fixed Asset, plus the average current asset. The company’s rentability on 31st
December 1998 was a negative 17.62%. On 31st December 1999, it decreased to
negative 18.61%. On 31st December 2000, it decreased again to negative 40.10% and
31st December 2001, it increased to a positive 0.90%, and then on 31st December
2002, it decreased to a negative 5.00%. The decrease in rentability is due to the
increase in the company’s loss in relation to the increase in the cost of depreciation,
on the one hand, and on the other, the increase in the value of fixed assets, due to
the re-evaluation of fixed assets on 1st January 2002 for the fixed asset position as
per 31st December 2001.
Liquidity … Liquidity is the difference between current assets and short-term loans.
On 31st December 1998, the liquidity position was 39.17%. On 31st December 1999, it
decreased to 21.73%, on 31st December 2000, it increased to 39.96% and on 31st
December 2001, it increased to 46.82%. Then on 31st December 2002, it increased to
86.84% due to the receipt of Government Subsidy and the increase in internal source
of funds from the increased sale of electricity on the one hand, and on the other, the
redefinition of the short-term loan from the purchase of electricity from private
providers into long-term loan.
Solvability (in line with the Decree of the State Minister of State Owned Busi-
nesses, No. KEP-210/M-PBUMN/1999) … Solvability is the difference between total
obligations and the total fixed assets and on 31st December 1998 it reached 63.33%.
On 31st December 1999 it increased to 78.46%, on 31st December 2000, it decreased
again to 71.97%, and on 31st December 2001, it decreased to 71.59%. Then on 31st
December 2002, it decreased to 27.03%. The decrease in solvability is due to the
increase in long-term loans being smaller than the increase in total fixed assets, in
relation to the re-evaluation of fixed assets on 1st January 2002 for the position as
per 31st December 2001.
Return on Equity … Return on Equity is the difference between operating profit/

(loss) and equity, which in 1998 reached a negative 11.84%. On 31st December 1999,
it reached a negative 43.38%, on 31st December 2000, it reached a negative 25.02%,
and on 31st December 2001, it became a negative 17.27%. Then on 31st December
2002, it decreased to a negative 3.98%. The decrease in the Return on Equity is due
to the increase in operating loss due to the increase in depreciation cost on the one
hand, and on the other, to the increase in equity as the result of the difference in the
fixed asset re-evaluation.
Return on Investment … Return on Investment is the difference between operating

profit/(loss) and total assets, which in 1998 reached a negative 3.72%. In 1999 it
decreased to negative 7.52%, in 2000 it increased again to negative 5.97% and in
2001, it increased to negative 4.15%. Then in 2002, it decreased to negative 2.88%.
The decrease in the Return on Investment is due to the increase in operating loss as
the result of the increase in depreciation cost on the one hand, and on the other, the
increase in the value of fixed assets in relation to the re-evaluation of fixed assets
on 1st January 2002 for the value of fixed assets as per 31st December 2001.

General Management
Discussions
Business Prospects … The national economic growth that is not back to normal has a
heavy impact on the electricity sector, however, in line with the plan to restructure
the electricity sector, and after the economic crisis is over, the growth in the electric-
ity business is expected to return to normal.
Since the ratio of electricity installation and electricity consumption per capita is still
low, and Indonesia is still at the early stages of industrialisation, there is still a large
opportunity for PLN to increase its business potential in the household and industrial
markets.
The steps taken by PLN to increase its business potentials include:
• The expansion of the interconnection system, such that the management of the
electricity system becomes more efficient, which means that there is a potential
to supply an increasingly cheaper electricity that is more reliable and is able to
reach the load centres, which have so far been unreachable.
• The take over of captive power providers to increase the number of customers.
• Taking opportunity in the implementation of the government’s plan to advance and
provide transport facilities in the form of railways within the city and inter-cities,
especially in Java, and the modernisation of agriculture, as well as the accelera-
tion of development in the Eastern Regions of Indonesia.
• Creating subsidiaries, which will become the access to PLN’s income.
Business Risk …
Business Competition … By giving exclusive rights to industrial areas to have their

own generators and to be able to sell their electricity production to PLN, a competi-
tive arena will be created that will reduce market share and the role of PLN and its
affiliations.
IPP (Independent Power Producers) … The production of electricity from Private

electricity providers or Independent Power Producers that is sold to PLN based on a
take or pay contract, will create a high market risk for PLN and will decrease PLN’s
competitive ability in the electricity business.
Government Policies … Government Policies that instruct PLN to become the agent
and the instrument for energy diversification will place PLN in a difficult position
competition wise.
• Development Agent
In line with the Government Legislation No. 15/85, PLN as a development agent is
instructed to implement the program to install electricity in the villages, and to
initiate the development of electricity.
• Energy Diversification
As the result of the government’s policy in energy, PLN as the buyer of petroleum
fuel from Pertamina, becomes an instrument for energy diversification, since all
of the development cost becomes part of the sale price, such that the price be-
comes increasingly high. Implicitly, this means that the cost to develop energy or
the cost for energy diversification becomes the burden of PLN.
General Management
Discussions
Exchange Rate Fluctuations … The domination of foreign currencies, especially the

US Dollar, is found in a major portion of PLN’s business activities, such as invest-
ment, whereby imported goods become its components, the repayment of loans and
interest rates, the purchase of gas and geothermal fuels by PLN from Pertamina, the
purchase of electricity from IPP, and the payment of imported components of the
spare parts used for the maintenance of PLN’s electric power facilities.
The above factors result in an adjustment in the exchange rate value of the Rupiah
against other foreign currencies, which cannot be avoided, and the exchange rate
fluctuations very much affect the profitability as well as the synergy of the company.
Fuel Supply … Around 45% of PLN’s company expenses comprise of the cost of petro-
leum fuel, natural gas, coal, and geothermal fuel. The dependency of PLN on Pertamina,
and the cost that result from the supply of fuel from Pertamina, can affect PLN’s
production operation and company expenses, which eventually will affect the conti-
nuity of the company as a whole.
Electric Power Losses … Electric power losses occur due to losses that occur in the
networks and electricity theft. To cut losses that result from technical problems,
repairs are carried out and distribution networks are built, which will require quite a
large amount of funds. Meanwhile, electricity theft by customers or non-customers,
results in a lower income for PLN.
Environmental Effect … The public demand is especially aimed at the question of the
effect of extra high tension (500 kV) and high-tension (150 kV) transmission projects
on the environment, which leads to the question of legal action and the request for
compensation. If the public’s demand is granted by the courts, PLN’s income will
decrease and project cost will increase.

Accountability Report
Covering Annual Reports, Financial Reports, and Consolidated
Financial Reports, Management Report, Overview of Important
Financial Data, Analysis, and General Management Discussions.
Statements from the Board
of Commissioners and
the Board of Directors
We, the members of the Board of Commissioners and the Board of Directors of
PT PLN (Persero) state that:
1. The Annual Report of PLN for the Year 2002 includes:
a. The Financial Reports
b. The Management Report
c. An Overview of Important Financial Data
d. Management Analysis and Discussions
2. The Consolidated Financial Reports of the Company as per 31st December 2002 and
as per 31st December 2001 are presented in accordance to the prevailing general
accounting principles, and both have been audited.
3. The Management Report presents open information regarding the condition and the
activities of the company during the year 2002, in comparison to the previous years.
4. The Overview of Important Financial Data presents information regarding the in-
dicators of the financial condition of the company for the past 5 years.
5. The Management Analysis and Discussions discuss and analyse the financial re-
ports and other information, especially those in relation to the material changes
that have occurred since the previous Annual Report.
Jakarta, May 2003
The Commissioners The Directors
Luluk Sumiarso Eddie Widiono Suwondho

President Commissioner President Director
Yogo Pratomo Ali Herman Ibrahim

Commissioner Director of Generator and Primary Energy
Komara Djaja F. Parno Isworo

Commissioner Director of Finance
Andung A. Nitimiharja Sunggu Anwar Aritonang

Commissioner Director of Trade and Customer Service
Mohamad Ikhsan Herman Darnel Ibrahim

Independent Commissioner Director of Transmissions and Distributions
Djuanda Nugraha Ibrahim

Director of Human Resources and Organisations

Financial Report
The Efficiency Drive Program has succeeded in cutting the overall
cost of operations, investment, and supporting functions.
Financial Report

Financial Report
INDEPENDENT AUDITORS’ REPORT

Financial Report

Financial Report
Financial Report
BASIS OF THE ENGAGEMENT

AND
SCOPE OF AUDIT

Financial Report
BASIS OF THE ENGAGEMENT AND SCOPE OF AUDIT
1. Basis of the Engagement
a. The third amendment of the 1945 Constitution article 23 E, 23 F and 23 G;

b. Laws of the Republic of Indonesia No. 5 Year 1973, regarding the Audit Board and other existing laws
and regulations;
c. Engagement Letter of the Audit Board No.63/ST/VII-XV.1/12/2002 dated December 13, 2002, regard-
ing the engagement for the audit of PT Perusahaan Listrik Negara (Persero)’s financial statements for
the year 2002 at the Head Office and Regional Business Units.
2. Scope of Audit
This audit is a general audit of the consolidated financial statements of PT Perusahaan Listrik Negara
(Persero) for the year ended December 31, 2002. The audit is conducted in accordance with the Govern-
ment Auditing Standards issued by the Audit Board. This Standard requires that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstate-
ment.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the finan-
cial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. In addition, an audit
also includes tests of the Company’s compliance with contracts, grants and certain provisions of laws and
regulations as well as compliance with internal controls.
Certain provision of laws and regulations which we tested, include :

a. Law No. 1 Year 1995 regarding Limited Liability Company
b. Government Regulation No. 12 year 1998 regarding Stated Owned Companies
c. Government Regulation No. 64 year 2001 regarding the Transfer of Position, Duty and Authority of the
Ministry of Finance in state owned limited liability company, Public Service Enterprise (Perum), Bureau
Company (Perjan) to the Ministry of State Owned Companies
d. Decree of the President of the Republic of Indonesia No. 133 Year 2001 dated December 31, 2001
regarding the Selling Price of Electricity Provided by State Owned Limited Liability Company (Persero)
PT Perusahaan Listrik Negara
e. Decree of the Ministry of Energy and Mineral Sources No.3032.K/46/MEM/2001 dated December 31,
2001 regarding the Implementation Rules of the Selling Price of Electricity Provided by PT PLN (Persero)
BPK - RI/AUDITAMA V
Financial Report
f. Decree of the Ministry of Energy and Mineral Sources No.2038.K/40/MEM/2001 dated August 24,
2001 regarding the Connection Expense of Electricity Provided by PT PLN (Persero)
g. PT PLN (Persero)’s Articles of Association
h. Decision of the Board of Director No.038.K/920/DIR/1998 dated June 3, 1998 regarding the procure-
ment of goods and services
i. Decision of PLN’s Board of Directors No.256.3.K/010/DIR/2001 dated December 31, 2001
j. Decision of the Board of Directors No.021.K/05999/DIR/1995 dated May 23, 1995 regarding the Guide-
lines and Instructions of Customer Administration
k. Decision of the Board of Directors of PT PLN (Persero) No.078.K/010/DIR/1999 dated April 20, 1999
regarding the Amendment/Completation of the Explanations of the Board of Directors Circular Letter
No.009.A.E/82/DIR/1994 regarding the Limitation of Operating Expense and Investment Cost
l. Decision of the Board of Directors of PT PLN (Persero) No.256-8.K/010/DIR/2001 dated December
31, 2001 regarding the Selling Price Regulation and Electricity Services Expense related to TDL
m. Board of Directors Circulars Letter No.010.E/012/DIR/2002 dated June 28, 2002 regarding the Flow of
Fund Receipts
n. Guidelines and Accounting Policy of PT PLN (Persero)
We did not audit the financial statements of PLN’s Subsidiaries, namely PT Indonesia Power, PT
Pembangkitan Jawa Bali, PT Indonesia Comnets Plus, and PT PLN Batam, which are wholly owned by the
Company, which statements reflect total assets amounting to Rp93,065,948.89 million and Rp27,618,231.31
million as of December 31, 2002 and 2001, respectively, and total income amounting to Rp1,496,074.41
million and Rp638,407.92 million for the years then ended, respectively. The financial statements of these
Subsidiaries were audited by other independent auditors whose reports which expressed unqualified opinion
have been furnished to us and our opinion, insofar as it relates to the amounts included for these Subsidiar-
ies, is based solely on the reports of the other independent auditors.
We believed that our audit provides a reasonable basis for our opinion. The audit fieldwork was conducted
starting from November 11, 2002 up to March 31, 2003.
THE AUDIT BOARD OF

THE REPUBLIC OF INDONESIA
BPK - RI/AUDITAMA V

Financial Report
FINANCIAL STATEMENTS
Financial Report
PT PERUSAHAAN LISTRIK NEGARA (PERSERO) AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In Rupiah)
Notes December 31, 2002 December 31, 2001

ASSETS
NON-CURRENT ASSETS
Property, plant and equipment

Carrying value 2e, 3, 34 201,318,266,900,547 71,199,098,692,321
Accumulated depreciation (15,700,329,132,406) (18,150,768,918,803)
Net book value 185,617,937,768,141 53,048,329,773,518
Assets not used in operations 2f, 5 4,360,877,837,263 2,338,753,654,625
Construction in progress 2g, 4 9,587,301,107,735 12,340,034,835,533
Investment in shares of stock 2i, 6 289,885,727,553 32,774,557,224
Deferred tax assets - net 15 10,190,872,725 20,810,898,410
Other assets
Non-operational assets 2h, 7 494,305,845,507 235,915,348,361
Deferred charges - net 2l, 9 402,267,576,242 328,644,214,050
Other receivables 8 169,747,189,320 141,202,768,154
Prepaid expenses and advance payments 10 45,105,960,039 38,297,293,970
Claims for tax refund 15 27,676,382,853 18,591,874,586
Total other assets 1,139,102,953,961 762,651,499,121
Total non-current assets 201,005,296,267,378 68,543,355,218,431
CURRENT ASSETS
Cash and cash equivalents 2n, 11 7,218,517,205,010 6,142,460,790,375
Temporary investments 12 641,463,304,515 684,669,245,639
Accounts receivable
Trade – net of allowance for doubtfull
accounts of Rp 70,610,667,961
in 2002 and Rp 79,914,150,481 in 2001 2m, 13 2,053,296,077,372 2,893,599,572,582
Others 8 456,113,004,034 89,740,647,814
Inventories 2k, 14 2,104,458,838,627 1,394,161,798,338
Prepaid taxes 15 2,012,401,825 802,159,289
Prepaid expenses and advance payments 10 417,446,570,867 157,727,746,029
Total current assets 12,893,307,402,250 11,363,161,960,066
TOTALASSETS 213,898,603,669,628 79,906,517,178,497

Financial Report

CONSOLIDATED BALANCE SHEETS (continued)
(In Rupiah)

STOCKHOLDERS’EQUITYAND LIABILITIES
STOCKHOLDERS’ EQUITY
Capital stock - Rp 1,000,000 nominal value per share
Authorized - 63,000,000 shares
Subscribed and fully paid - 46,107,154 shares in 2002
and 46,107,154 shares in 2001 16a 46,107,154,000,000 46,107,154,000,000
Other capital 16b 18,917,340,432,152 17,571,443,391,657
Revaluation increment in property, plant and equipment 16b 137,599,980,268,685 -
Retained earnings (deficit)

Appropriated 1,894,148,569,355 1,894,148,569,355
Unappropriated (52,434,302,877,397) (46,374,744,670,626)
Total stockholders’ equity - net 152,084,320,392,795 19,198,001,290,386
MINORITY INTEREST IN NETASSETS -

OF CONSOLIDATED SUBSIDIARIES 3,909,507,599 -
DEFFERED INCOME - NET 2r, 17 3,998,868,453,251 3,502,133,701,213
NON-CURRENT LIABILITIES
Deferred tax liabilities - net 15 776,740,773,943 3,020,649,688,460

Long-term debts - net of current maturities
Two-step loans 2q, 20a 16,763,996,027,692 20,146,895,425,575
Government loans 21 5,326,456,446,377 5,742,525,455,507
Bank loans 18 140,319,552,645 210,308,777,000
Bonds payable 19 600,000,000,000 600,000,000,000
Due to independent power producers 22 7,149,588,377,537 -
Total long-term debts 29,980,360,404,251 26,699,729,658,082
Other payables 23 9,023,016,401,451 104,202,414,573
Customers’ security deposits 24 2,633,024,822,467 2,363,026,311,746
Projects payable 25 551,572,274,747 748,610,998,175
Total non-current liabilities 42,964,714,676,859 32,936,219,071,036

Financial Report

CONSOLIDATED BALANCE SHEETS (continued)
(In Rupiah)
CURRENT LIABILITIES
Accounts payable
Trade 26 9,554,282,075,852 19,930,391,663,127
Others 23 403,199,873,622 306,505,267,288
Taxes payable 15 1,038,689,238,672 108,987,000,193
Accrued expenses 27 854,297,514,521 951,619,666,744
Current maturities of long-term debts
Two-step loans 2q, 20b 2,509,633,306,450 2,463,201,798,509
Government loans 21 416,650,631,986 439,766,497,001
Bank loans 18 70,037,998,021 69,691,223,000
Bonds payable 19 - -
Total current liabilities 14,846,790,639,124 24,270,163,115,862
TOTAL STOCKHOLDERS’ EQUITY AND LIABILITIES 213,898,603,669,628 79,906,517,178,497
See accompanying Notes to the Consolidated Financial Statements which are an integral part of the consolidated financial statements.

Financial Report

CONSOLIDATED STATEMENTS OF INCOME
(In Rupiah)
For The Years Ended

OPERATINGREVENUES
Electric power sales 2o, 28 39,018,461,721,493 28,275,982,649,678
Connection fees 2o, 29 302,307,820,340 265,857,730,605
Electricity subsidy 2p, 30 4,739,073,653,216 6,735,209,866,886
Others 31 123,510,049,750 82,907,269,363
Total operating revenues 44,183,353,244,799 35,359,957,516,532
OPERATING EXPENSES
Fuel 2o, 32 17,957,261,628,798 14,007,295,529,403
Electric power purchases 33 11,168,842,948,716 8,717,140,537,841
Depreciation of property, plant and equipment 2e, 34 15,626,762,571,070 3,404,113,925,841
Maintenance 35 3,588,827,620,484 2,630,359,602,830
Personnel 36 2,583,289,595,495 2,086,329,980,623
Others 37 1,420,607,273,725 1,094,147,262,141
Total operating expenses 52,345,591,638,288 31,939,386,838,679
LOSS FROM OPERATIONS (8,162,238,393,489) 3,420,570,677,853
OTHER INCOME (CHARGES)

Interest income - 665,414,275,826 363,856,350,535
Interest and financing charges 39 (2,152,231,840,512) (2,619,507,159,806)
Gain on foreign exchange - net 40 2,725,596,125,676 (458,948,280,287)
Others - net 345,645,823,538 (139,826,909,462)
Other income (charges) - net 1,584,424,384,528 (2,854,425,999,020)
INCOME (LOSS) BEFORE TAX (6,577,814,008,961) 566,144,678,833
TAX EXPENSES 2s, 15

Current (5,853,854,766) (3,222,665,833)
Deferred (1,808,931,417,764) (566,197,243,723)
Total tax expenses (1,814,785,272,530) (569,419,909,556)
LOSS BEFORE EXTRAORDINARY INCOME (8,392,599,281,491) (3,275,230,723)
EXTRAORDINARY INCOME (LOSS) 41 2,333,041,074,720 183,393,988,135

NET INCOME (LOSS) (6,059,558,206,771) 180,118,757,412
NET INCOME (LOSS) PER SHARE (131,423) 7,967
See accompanying Notes to the Consolidated Financial Statements which are an integral part of the consolidated financial statements,
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In Rupiah)
For The Years Ended December 31, 2002 and 2001
Retained Earnings (Deficit)
Subscribed and Other Stockholders’
Notes Fully Paid Capital Appropriated Unappropriated Equity -
Capital Stock Net
Balance, January 1, 2001 17,325,800,000,000 45,960,017,746,172 1,894,148,569,355 (46,554,863,428,038) 18,625,102,887,489

Reclassifications from Other Capital 28,781,354,000,000 (28,781,354,000,000) 0 0 0
Other capital 0 392,779,645,485 0 0 392,779,645,485
Net Income 0 0 0 180,118,757,412 180,118,757,412
Balance, December 31, 2001 46,107,154,000,000 17,571,443,391,657 1,894,148,569,355 (46,374,744,670,626) 19,198,001,290,386
Other capital 12 0 1,345,897,040,495 0 0 1,345,897,040,495
Revaluation increment in property,
plant and equipment 3, 16b 0 137,599,980,268,685 0 0 137,599,980,268,685
Net loss 0 0 0 (6,059,558,206,771) (6,059,558,206,771)
Balance, December 31, 2002 46,107,154,000,000 156,517,320,700,837 1,894,148,569,355 (52,434,302,877,397) 152,084,320,392,795

Financial Report
See accompanying Notes to the Consolidated Financial Statements which are an integral part of the consolidated financial statements.
Financial Report

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Rupiah)
For The Years Ended

CASH FLOWS FROM OPERATINGACTIVITIES
Cash receipts from customers 41,155,376,332,501 28,996,958,218,591

Cash receipts for interest income and current accounts 664,089,964,992 374,133,047,948
Cash payments to suppliers and employees (34,868,772,165,881) (24,792,031,301,828)
Cash payments for other operating expenses (1,296,638,631,996) (1,471,103,326,246)
Cash received from Government subsidy 4,404,896,667,583 6,735,209,866,886
Cash receipts from operations 10,058,952,167,199 9,843,166,505,351
Payments for
Interest and finance charges (2,134,652,750,479) (2,603,288,784,955)
Taxes (1,318,245,048,691) (15,654,629,534)
Cash receipts for taxes (13,991,461,947) 3,639,642,868
Net Cash Provided by Operating Activities 6,592,062,906,082 7,227,862,733,730
CASH FLOWS FROM INVESTINGACTIVITIES
Cash receipts from sale of property, plant and equipment 30,955,050,441 15,686,193,806
Cash payments for acquisition of property, plant and equipment (2,517,779,753,367) (1,404,205,353,343)
Cash payments for investment in shares of stock (257,111,170,329) (6,617,783,096)
Net Cash Used in Investing Activities (2,743,935,873,255) (1,395,136,942,633)
CASH FLOWS FROM FINANCINGACTIVITIES
Cash payments for two-step loans (2,262,793,294,713) (2,578,618,537,319)

Cash payments for bonds payable (1,000,000,000,000)
Cash payments for Government loans (236,800,487,145) (691,838,669,233)
Cash payments for bank loans (70,092,449,334) (65,250,000,000)
Cash payments for dividends (202,384,387,000)
Net Cash Provided by (Used in) Financing Activities (2,772,070,618,192) (4,335,707,206,552)
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,076,056,414,635 1,497,018,584,545
CASHAND CASH EQUIVALENTSAT BEGINNING OF YEAR 6,142,460,790,375 4,645,442,205,830
CASH AND CASH EQUIVALENTS AT END OF YEAR 7,218,517,205,010 6,142,460,790,375
See accompanying Notes to the Consolidated Financial Statements which are an integral part of the consolidated financial statements,
Financial Report
PT PLN (PERSERO) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002 and 2001
(In Rupiah)
1. GENERAL
The Company’s Establishment and Other General Information

Perusahaan Umum Listrik Negara was established in 1961 when the Government of the Republic of
Indonesia took over the Dutch’s electricity companies, among others: NV OGEM, NV ANIEM, NV GEBEO
and other electricity companies.
Previously, Perusahaan Umum Listrik Negara is one of the units of the Ministry of Energy and Public
Works. Based on the Government Regulation No. 19 year 1965, the status of Perusahaan Listrik Negara
was changed to that of a legal entity after some of the Regional Electricity Companies were granted to
Perusahaan Listrik Negara.
In 1970, Perusahaan Listrik Negara was converted into a public service enterprise (Perum), based on the
Government Regulation No. 30 year 1970. Furthermore, the status and function of Perusahaan Umum
Listrik Negara was amended by the Government Regulation No. 18 year 1972.
Based on the Presidential Decree No. 59/M year 1978, Perusahaan Umum Listrik Negara was put under
the supervision of the Department of Mineral and Energy.
Based on the Notarial Deed No. 169 of Sutjipto, S.H., Notary in Jakarta, dated July 30, 1994, the Limited
Company was established under the name PT Perusahaan Listrik Negara (Persero), shorthened to PT
PLN (Persero).
The deed of establishment has been approved by the Ministry of Justice in its Decision Letter No. C-2-
11.519 HT.01.04.Th.94 dated August 1, 1994. Based on PT PLN (Persero)’s Articles of Association, the
purpose and objective of PLN is to engage in the business of providing electricity for the benefit of the
public and gain profit based on the Company’s management principles.
On October 3, 1995, PT PLN (Persero) established PT PLN Pembangkitan Tenaga Listrik Jawa Bali I
(PT PLN PJB I) which subsequently changed its name to PT Indonesia Power, located in Jakarta, and
PT PLN Pembangkitan Tenaga Listrik Jawa Bali II (PT PLN PJB II), which subsequently changed its
name to PT PJB, located in Surabaya. Both of the subsidiaries are enggaged in electric power generation.
On October 3, 1995, PT PLN (Persero) established PT Perusahaan Listrik Nasional-Batam (PT PLN -
Batam), which is located in Batam Island and engages in providing the public electricity in Batam Island,
Rampang Island, Galang Island and the surrounding areas. Moreover, PT Indonesia Comnets Plus, which is
located in Jakarta and engages in the telecommunication business for the electricity sector and public
benefit utility, was also established.

Financial Report

(In Rupiah)
The Board of Directors and Commissioners
Year 2002
Board of Commissioners:
Based on the Decision Letter of the Ministry of State-Owned Companies No. KEP-99/M-MBU/2002 dated
May 30, 2002, the composition of the board of commissioners of PLN are as follows:
President Commissioner : Luluk Sumiarsono
Commissioners : Yogo Pratomo
Komara Djaja
Andung Nitimiharja
Mohammad Ikhsan
Directors:
President Director : Eddie Widiono Suwondho
Director of Planning : Hardiv Situmeang
Director of Marketing and Distribution : Tunggono
Director of Operations : Bambang Hermiyanto Priyadi
Director of Finance : F. Parno Isworo
Director of Human Resources and Organization : Azwani Sjech Umar
Year 2003
Based on the Decision Letter of the Ministry of State-Owned Companies No. KEP-180/M-MBU/2003 dated
March 6, 2003, regarding the termination and appointment of the Company’s board of directors, the composition
of the board of directors of PLN is as follows:
President Director : Eddie Widiono Suwondho
Director of Power Plant and Prime Energy : Ali Herman Ibrahim
Director of Business and Customer Services : Sunggu Anwar Aritonang
Director of Transmission and Distribution : Herman Darnel
Director of Finance : F. Parno Isworo
Director of Human Resources and Organization : Djuanda Nugraha Ibrahim
2. SUMMARY OF ACCOUNTING POLICIES
The summary of the Company’s accounting policies are as follows:
a. Financial Statements
The financial statements have been prepared in accordance with the generally accepted accounting
principles and practices in Indonesia using the historical cost basis, and the amounts in the financial
statements have been rounded off and stated in full Rupiah amounts.
Financial Report

(In Rupiah)
The financial statements have been prepared consistently with previous years and represent combined
balance sheets and statements of income accounts of the Company and Subsidiaries as one business entity.
The consolidated statements of cash flows were prepared based on the direct method by classifying cash
flows into operating, investing and financing activities.
b. Principles of Consolidation
The consolidated financial statements include the accounts of the Company and Subsidiaries, which the
Company directly or indirectly control through ownership of more than 50% voting rights.
Intercompany balances and transactions between the Company and Subsidiaries have been eliminated to
reflect the financial position as well as the results of operations of the Company and its Subsidiaries as one
business entity.
c. Transactions with Related Parties
In accordance with Statement of Financial Accounting Standards (PSAK) No. 7, related party relationships
are described as follows:
(1) enterprises that, through one or more intermediaries, control, or are controlled by, or are under common
control with, the reporting enterprise (this includes holding companies, subsidiaries and fellow subsidiaries);
(2) associated companies;
(3) individuals owning, directly or indirectly, an interest in the voting rights of the reporting enterprise that
gives them significant influence over the enterprise, and close members of the family of any such indi-
vidual (close members of the family of an individual are those that may be expected to influence, or be
influenced by, that person in their dealings with the reporting enterprise);
(4) key management personnel, that is, those persons having authority and responsibility for planning, direct-
ing and controlling the activities of the reporting enterprise, including board of commissioners, directors
and managers of companies and close members of the families of such individuals; and,
(5) enterprises in which a substantial interest in the voting rights is owned, directly or indirectly, by a person
described in (3) or (4), or over which such a person is able to exercise significant influence. This includes
enterprises owned by commissioners, directors or major shareholders of the reporting enterprise and
enterprises that have a member of key management in common with the reporting enterprise.

Financial Report

(In Rupiah)
The nature and amount of transactions with parties wherein the Company has control or with parties
wherein the Company has a special arrangements, or significant transactions, and also whether or not the
transactions are conducted under terms and conditions similar to those with third parties are disclosed in the
notes to financial statements. Transactions with state-owned enterprises and or regional-owned enterprises
are not disclosed as transactions with related parties (see Note 42).
d. Foreign Currency Transactions and Balances
The Company’s reporting currency used is Rupiah. Transactions involving foreign currencies are recorded
at the rates of exchange prevailing at the time the transactions are made. At balance sheet date, monetary
assets and liabilities denominated in foreign currencies are adjusted to reflect the selling rates for assets and
buying rates for liabilities published by Bank Indonesia. The resulting gains or losses are credited or charged
to current operations, except for foreign exchange differences incurred on loans obtained to finance the
acquisition and development of ongoing projects, which are capitalized as part of the cost of the related
projects.
e . Property, Plant, and Equipment
Property, plant, and equipment as of December 31, 2001 were revalued based on the Decision Letter of the
Ministry of State-Owned Companies No. S-819/M-MBU/2002 dated December 23, 2002 regarding the
Principal Approval of Revaluation of Property, Plant and Equipment and Decision Letter of the Ministry of
Finance of the Republic of Indonesia No. 486/KMK.03/2002 dated November 28, 2002 regarding the
Revaluation of the Company’s Property, Plant and Equipment for Taxation Purposes.
The purposes of the revaluation are to reflect the real value of the Company’s assets and match expenses
against revenues in the statements of income.
The revaluation of property, plant, and equipment as of January 1, 2002 was conducted by PT Sucofindo
Appraisal Utama, an independent appraiser registered in the Department of Finance.
The revaluation was conducted by using the market value or the revalued amount based on the new re-
placement cost after deducting with the accumulated depreciation since the assets were acquired until
revaluation was performed by, and considering the physical condition of those assets.
Property, plant and equipment of the Company and Subsidiaries are stated at cost or revalued amounts for
certain assets in accordance with the government regulation, less accumulated depreciation. Property, plant
and equipment include spare parts which are used to ensure the continuity and stability of the power plant
operations and electric installations in producing and distributing electricity. Spare parts are depreciated
based on the useful lives of the related property, plant and equipment.
Assets are retired or disposed if the physical condition/affectivity/economic considerations are no longer
beneficial or if there is a replacement. The carrying values of the assets retired and the related accumulated
depreciation are reclassified to assets not used in operations.
Financial Report

(In Rupiah)
Property, plant and equipment (except landrights which are not depreciated) are depreciated using the
straight-line method based on the estimated economic useful lives of the assets as follows:
Useful Lives
No Type (Years)
1 Buildings 10 – 25
2 Power plant installations 12.5 – 25
3 Transmission equipment 25
4 Distribution equipment 10 – 25
5 General equipment 5
6 Motor vehicles and mobile equipment 5
7 Spare parts 10 – 25
8 Other equipment 10
The revalued property, plant and equipment are depreciated based on fixed percentage of revalued amount
using the useful lives which have been determined by the independent appraiser.
f. Assets not Used in Operations
This account represents property, plant and equipment which are ready for their intended use but not yet
used in operations, because these assets are in the testing stage or these assets could not be used in
operations individually.
g. Construction in Progress
Construction in progress is stated at cost based on the percentage completed using the physical progress.
The accumulated costs will be reclassified to the appropriate property, plant and equipment account when
the assets are substantially completed and the assets are ready for their intended use.
Interest expense incurred on loans obtained to finance the acquisition of the assets and depreciation ex-
penses of property, plant and equipment that are used for development of assets are capitalized during their
constructions periods.
h. Non-Operational Assets
Property, plant and equipment which are temporarily not used due to technical/effectiveness/economic
conditions are classified as non-operational assets. Non-operational assets are not depreciated until they
are used again. If these assets will no longer be used, these will be classified as obsolete assets which will
be disposed and stated at the lower of cost or net realizable value. The resulting gains or losses from sale or
disposal of these assets are credited or charged to current operations.
Assets which reused are classified as property, plant and equipment and depreciated again.

Financial Report

(In Rupiah)
i. Investment in Shares of Stock
Investment in shares of stock wherein the Company has direct or indirect ownership interest of at least
20% but not exceeding 50% is stated at cost and adjusted for the Company’s share of the earnings or losses
of the associated company in proportion to the ownership interest and reduced by dividends received
(equity method).
Investment wherein the Company has an ownership interest off less than 20% is stated at cost.
If there is a permanent decline in the investment value, an allowance for impairment in value is provided.
j. Advances for Purchase of Gas
At the end of the year, the excess of amount paid to Pertamina when the actual gas usage is less than the
annual minimum gas purchase quantity as stated in the gas purchase agreements with Pertamina is re-
corded as advances for purchase of gas. At the end of year, the balance of this amount is evaluated and
adjusted to the actual gas used on the current year.
k. Inventories
Inventories are stated at cost using the moving average method. Obsolete inventories are removed from the
books based on its cost.
Allowance for decline in value due to damage/obsolescence is determined at 1% of the average gross amount
of the beginning and ending inventories.
l. Deferred Charges
Significant expenditures incurred with beneficial periods of more than one year are deferred and amortized
using the straight-line method over the estimated period benefited.
m. Allowance for Doubtful Accounts
To cover possible losses from uncollectible accounts receivable, the Company provides allowance for
doubtful accounts at 3% of the average balance of accounts receivable of public, state-owned compa-
nies, other receivables and doubtful receivables based on the Decision Letter of the Ministry of Finance
No. 1460/MK.04/1981 dated December 23, 1981.
n. Cash and Cash Equivalents
Cash on hand and in banks and short-term investments with original maturity period of three months or less
are classified as cash or cash equivalents.
Financial Report

(In Rupiah)
o. Revenue and Expense Recognition
Revenue from sale of electricity is recognized based on the billings for electricity usage (kWh) for the month.
Expenses are recognized when incurred (accrual basis).
p. Electricity Subsidy
Electricity subsidy is intended to cover some of the Company and Subsidiaries’ expenses and recognized as
income on the accrual basis.
q. Two-Step Loans
- Two-step loans are recognized based on the Withdrawal Authorization (WA) or other equivalent docu-
ments received by the Company from lenders.
- Two-step loans in Rupiah are recognized in Rupiah based on the exchange rates at the issuance of WA.
Payment to the Government of the Republic of Indonesia in Rupiah is based on the amount with drawn.
Two-step loans in foreign currencies are recognized in Rupiah based on the exchange rates at the
issuance of WA and adjusted at the reporting date. Payment to the Government of the Republic of
Indonesia in foreign currencies is based on the amount withdrawn.
r. Deferred Income
Connection fees received from customers are deferred and amortized at the rate of 5% per year. Fees
received from customers for connections not yet installed are not yet recorded as income.
s. Tax Expense
Tax expense is computed based on the estimated taxable income for the year. Deferred tax income or
expense is provided to reflect the tax effects of the temporary differences between financial reporting and
income tax purposes, and accumulated fiscal losses based on PSAK No. 46 regarding “Accounting for
Income Tax”.
t. Pension Plan
The pension plan available for all of the Company’s permanent employees is a defined benefit pension plan.
The Company’s contributions to the pension fund are charged to operations upon payment or when recog-
nized as payable.

Financial Report

(In Rupiah)
3. PROPERTY, PLANT AND EQUIPMENT
The details of property, plant and equipment as of December 31, 2002 after revaluation are as follows:
Year 2002
Reclassifications/
Balance Corrections of Balance
No. Description January 1, 2002 Additions Deductions Functions December 31, 2002
Cost
1 Land 6,939,776,910,000 45,232,492,722 5,959,724,800 (1,491,878,900) 6,977,557,799,021

2 Buildings 22,289,785,500,000 326,415,465,757 14,206,629,445 3,969,094,468 22,605,963,430,780
3 Power plant installations 80,084,568,632,000 1,477,756,322,823 34,009,609,452 (4,109,028,004) 81,524,206,317,367
4 Transmission equipment 34,275,574,318,000 1,399,192,943,178 79,131,344,378 5,071,577,881 35,600,707,494,681
5 Distribution equipment 50,649,042,954,000 1,019,049,531,634 63,089,922,885 (2,329,984,356) 51,602,672,578,392
6 General equipment 1,371,992,315,000 204,556,385,246 20,161,214,355 (17,505,881,826) 1,538,881,604,065
7 Vehicles 399,954,971,000 21,918,429,094 28,046,508,262 6,933,924,000 400,760,815,832
8 Spare parts 218,519,395,000 136,102,926,160 2,915,795,293 (95,506,007,985) 256,200,517,883
9 Others 723,474,031,000 90,113,710,264 1,893,333,333 (378,065,404) 811,316,342,527
Total Cost 196,952,689,026,000 4,720,338,206,877 249,414,082,203 (105,346,250,127) 201,318,266,900,547

Accumulated Depreciation
1 Land
2 Buildings - 1,603,370,381,079 3,366,815,172 1,029,801,674 1,601,033,367,581
3 Power plant installations - 6,825,706,557,231 5,645,720,288 690,322,207 6,820,751,159,150
4 Transmission equipment - 1,593,035,376,484 2,319,392,767 14,409,395,949 1,605,125,379,666
5 Distribution equipment - 4,613,744,543,695 6,857,268,284 278,714,927 4,607,165,990,338
6 General equipment - 562,828,762,637 16,768,801,575 4,429,093,889 550,489,054,951
7 Vehicle - 189,551,368,478 7,863,462,061 7,620,402,909 189,308,309,326
8 Spare parts - 72,142,009,398 100,977,263 (9,771,995,511) 62,269,036,624
9 Others - 267,676,688,727 1,189,438,903 (2,300,415,054) 264,186,834,770
Total Accumulated
Depreciation - 15,728,055,687,729 44,111,876,313 16,385,320,990 15,700,329,132,406
Net Book Value 196,952,689,026,000 (11,007,717,480,852) 205,302,205,890 (121,731,571,117) 185,617,937,768,141

Financial Report

(In Rupiah)
Year 2001
Reclassifications/
Balance Corrections of Balance
No. Description January 1, 2001 Additions Deductions Functions December 31, 2001
Cost
1 Land 937,465,116,493 137,651,334,631 682,246,680 (96,860,384,900) 977,593,819,544
2 Buildings 8,610,983,973,469 840,838,081,170 18,672,537,331 535,939,659,290 9,969,089,176,598
3 Power plant installations 28,460,924,558,669 866,482,194,184 32,412,631,305 (567,193,968,889) 28,727,800,152,659
4 Transmission equipment 11,814,355,414,627 922,516,802,952 52,542,802,793 182,377,215,330 12,866,706,630,116
5 Distribution equipment 14,584,258,735,642 936,017,008,084 15,348,727,879 53,820,949,083 15,558,747,964,930
7 Vehicles 193,045,465,493 26,050,971,497 1,525,295,556 13,562,754,017 231,133,895,451
8 Spare parts 278,117,538,422 20,880,065,962 8,739,083,330 (98,131,927,752) 192,126,593,302
9 Others 689,679,970,188 111,447,651,279 10,153,392,280 13,389,886,841 804,364,116,028
Total Cost 67,461,766,997,892 3,966,461,079,416 153,739,884,982 (75,389,500,005) 71,199,098,692,321
Accumulated Depreciation
1 Land
2 Buildings 1,624,933,757,972 411,541,799,425 4,570,745,783 (1,337,646,933) 2,030,567,164,681
3 Power plant installations 5,473,554,909,313 1,391,041,652,357 20,256,277,798 (5,209,120,085) 6,839,131,163,787
4 Transmission equipment 2,095,057,104,000 541,438,248,944 38,552,349,046 2,009,449,873 2,599,952,453,771
5 Distribution equipment 3,712,209,861,729 835,984,274,257 8,119,606,061 179,433,981 4,540,253,963,906
7 Vehicles 154,658,460,589 20,928,235,366 1,622,388,482 (287,062,826) 173,677,244,648
8 Spare parts 42,041,140,658 9,740,220,820 5,479,938,095 (3,366,717,131) 42,934,706,252
9 Others 335,053,530,959 70,164,726,532 9,496,873,060 (1,020,919,693) 394,700,464,739
Total Accumulated Depreciation 14,820,678,045,381 3,442,762,782,832 101,579,547,033 (11,092,362,377) 18,150,768,918,803
Net Book Value 52,641,088,952,511 523,698,296,584 52,160,337,949 (64,297,137,628) 53,048,329,773,518
The net book value of property, plant and equipment as of December 31, 2002, amounted to
Rp 185,617,937,768,141.00. The 2002 net book value increased as compared to the 2001 net book value which
is amounting to Rp 53,048,329,773,518.00. The increase is mainly due to the revaluation of property, plant and
equipment wherein the revaluation increment amounting to Rp 137,599,980,268,685.00 is presented as “Revalu-
ation Increment in Property, Plant and Equipment” under the stockholders’ equity section (see Note 16b).
Accumulated Depreciation of Property, Plant and Equipment

Due to the revaluation of property, plant and equipment as of January 1, 2002, the acquisition cost and
accumulated depreciation of the 2001 property, plant and equipment amounting to Rp 18,150,768,918,803.00
each, were written-off, while the accumulated depreciation as of December 31, 2002 amounting to
Rp 15,700,329,132,406.00 represents depreciation expense for the current year after the revaluation of
property, plant and equipment.

Financial Report

(In Rupiah)
The landrights which are used as collateral to PLN Bonds V series A, B, C year 1996 and VI series A, B,
C year 1997 are as follows:
- HGB No. 77, which is located in Kayu Putih, Jakarta
- HGB No. 670, which is located in East Kuningan, Jakarta
- HGB No. 1289, which is located in East Kuningan, Jakarta
- HGB No. 348, which is located in Kota Bambu, Jakarta
- HGB No. 1083, which is located in Kebayoran Baru, Jakarta
- Land, which is located in Gambir, Jakarta.
These collaterals are covered in the following agreements:
- The pari Pasu Security Sharing Agreement No. 101 dated May 17, 1996, by powers of attorney to
mortgage No. 103 -108 dated May 17, 1996, and Cessie Security Sharing Agreement No. 102 dated
May 17, 1996.
- The Pari Pasu Security Sharing Agreements No. 63 dated May 19, 1997, by powers of attorney to
mortgage No. 65 – 70 dated May 19, 1997 and Cessie Security Sharing Agreement No. 64 dated May
17, 1997.
4. CONSTRUCTION IN PROGRESS
Construction in progress consists of costs incurred in relation to the construction of electricity facilities and
infrastructure as follows:
December 31, 2002 December 31, 2001
Rp Rp
- Power plant 1,921,725,991,124 2,564,575,551,417
- Transmission 6,759,347,129,982 8,854,508,805,330
- Distribution 895,427,811,132 824,512,870,125
- Others 10,800,175,497 96,437,608,661
9,587,301,107,735 12,340,034,835,533
In this account included material PDP in relation to the construction of electricity Infrastructure as follows :

Rp Rp
- Power plant 5,994,585,999 16,806,743,466
- Transmission 581,422,600,381 672,817,714,246
- Distribution 518,424,725,734 579,680,793,692
- Others 122,695,132 476,140,132
1,105,964,607,246 1,269,781,391,536
Financial Report

(In Rupiah)
5. ASSETS NOT USED IN OPERATIONS

As of December 31, 2002 and 2001, assets not used in operations amounted to Rp 4,360,877,837,263.00 and
Rp 2,338,753,654,625.00, respectively. Assets not used in operations mainly consist of transmission equip-
ment.
6. INVESTMENTS IN SHARES OF STOCK

The Company has investment in shares of stock. The carrying value of these investments are as follows:

Rp Rp
- PT Geo Dipa Energi 248,556,374,039 -
- PT Prima Layanan Nasional Enjinering 3,725,000,000 -
- PT Indonusa Lappi 384,161,100 -
- PT Unelec Indonesia (Unindo) - -
- PT Bajradaya Sentranusa 19,598,822,090 18,441,355,034
- CBE Consorsium 13,821,510,324 13,983,342,190
- KSO KSPM 349,860,000 -
- PT Bukit Asam 3,450,000,000 -
- PT Mesa Inti Kebun - 349,860,000
289,885,727,553 32,774,557,224
Further explanations regarding the investments in shares of stock are as follows:

Activities Shares % Shares %
PT Geo Dipa Energi Electricity supplier 21,847,557 33.00 0 0

PT Prima Layanan
Enjinering Engineering & Contribution 3,725,000 99.33 0 0
PT Indonusa Lappi Electricity supplier Development stage
PT Unelec Indonesia
(Unindo) Electricity support 18,340 44.36 18,340 44.36
PT Bajradaya Sentranusa Electricity supplier 19,000 25.00 19,000 25.00
CBE Consorsium Electricity supplier 0 0 Development stage
PT Bukit Asam Coal Mining 6,000,000 1.00 - 0
PT Mesa Inti Kebun Plantation 72,275 49.00 - 0

Financial Report

(In Rupiah)
Investment in shares of stock at PT Geo Dipa Energi (GDE) amounting to Rp 248,556,374,039.00 consists
of cash payment amounting to Rp 218,475,570,000.00 and transfer of PLTP Dieng’s assets amounting to
Rp 30,080,804,039.00 which represents the revaluation of property, plant and equipment performed by
PT Sucofindo Appraisal Utama.
Investment in shares of stock at PT Unelec Indonesia (Unindo) amounting to Rp 14,980,248,632.00 is based

on the Government Regulation of the Republic Indonesia No. 2/1998 dated January 7, 1998. This invest-
ment is recorded using the equity method.
In 2001, the investment in shares of stock at Unindo was nil, because the Company’s accumulated equity in
net loss of Unindo exceeded the carrying value of its investment. In 2002, the retained earnings of Unindo
still has a negative balance.
Based on the Presidential Decree No. 47 year 1997 dated November 1, 1997 and No. 5 year 1998 dated
January 10, 1998, the project of PT Bajradaya Sentranusa was reviewed/postponed. This company is under
development stage.
Based on the Cooperation Agreement No. 010/MOU/CDB/2000 dated January 21, 2000. PT Cogindo
Daya Bersama (a subsidiary of PT Indonesia Power), Bukaka and Emitraco agreed to establish a Diesel
Power Plant (PLTD) in Batam. During the development stage, PT Cogindo has disbursed funds amounting
to Rp 13,821,510,324.00, which will be considered as paid-in capital in the company to be established.
7. NON-OPERATIONAL ASSETS
Rp Rp
- Cost 1,227,476,037,898 948,473,837,703

- Accumulated depreciation (733,170,192,391) (712,558,489,342)
494,305,845,507 235,915,348,361
Non-operational assets consist of assets which will be disposed, relocated and repaired, and PDP materials
which will be disposed.
These assets are not depreciated. The balance of accumulated depreciation represents the accumulated
depreciation prior to the reclassification to the non-operational assets account.
Financial Report

(In Rupiah)
8. OTHER RECEIVABLES

Rp Rp
Non-current portion
Third parties 557,887,868 640,485,934
Related parties
- Staff housing loans and others 169,189,301,452 140,562,282,220
169,747,189,320 141,202,768,154
Current portion
Third parties
- Stamp duty receivables - 10,221,000
- Interest receivables 3,671,977,146 1,122,945,760
- Others 33,684,920,155 1,703,282,429
37,356,897,301 2,836,449,189
Related parties
- Staff housing loans and others 418,756,106,733 84,313,539,386
- Interest receivables - 2,429,250,608
- Receivables from DP-PLN - 161,408,631
418,756,106,733 86,904,198,625
456,113,004,034 89,740,647,814
Dana Pensiun PT PLN (DP-PLN) has been approved by the Ministry of Finance of the Republic of
Indonesia in its Decision Letter No. KEP-284/KM-17/1997 dated May 15, 1997 and was published in the
State Gazette RI No. 52 dated July 1, 1997.
The funds come from the Company’s and employees’ contributions. For the years ended 2002 and 2001,
receivables from DP-PLN consist of:

Rp Rp
- Payable of the Company’s contributions - (838,640,563)

- Payable of the employee’s contributions (902,794,496) (3,044,815,830)
(902,794,496) (3,883,456,393)
- Receivable from payment of pension benefits - 4,044,865,024
(902,794,496) 161,408,631
The negative balance of receivables from DP-PLN amounting to Rp 902,794,496.00 is recorded as payable
to DP-PLN under account Other payables – Short – Term.

Financial Report

(In Rupiah)
9. DEFERRED CHARGES
This account represents deferred charges net of accumulated amortization as follows :

Rp Rp
Research 373,219,166,010 307,658,555,130
System, procedures and others 29,048,410,232 20,985,658,920
402,267,576,242 328,644,214,050
10. PREPAID EXPENSES AND ADVANCE PAYMENTS

Rp Rp
Non-current portions
Third parties
- Rent of land, building and others 35,751,623,085 5,674,343,870
Related parties
- Rent of land, building and others 9,354,336,954 32,622,950,100
45,105,960,039 38,297,293,970
Current portions
Third parties
- Advance for purchase of goods 196,743,732,802 8,185,921,527
- Advance for expenses and others 106,605,795,229 33,012,970,232
303,349,528,031 41,198,891,759
Related parties
- Advance for salaries 110,977,797,508 91,554,488,483
- Advance for expenses and others 3,119,245,328 24,974,365,787
114,097,042,836 116,528,854,270
417,446,570,867 157,727,746,029
Financial Report

(In Rupiah)
11. CASH AND CASH EQUIVALENTS

Rp Rp
Cash 82,587,491,934 49,299,343,275

Cash in banks
PT Bank Pembangunan Daerah 35,299,760,618 36,921,495,810
PT Bank Central Asia 152,791,347,747 196,710,572,839
PT Pan Indonesia Bank 16,611,377,732 17,136,396,160
PT Bank Bali 11,247,921,893 -
PT Bank Buana 16,440,920,305 29,792,903,668
PT Bank Artha Graha 29,506,424,362 23,686,309,221
PT Lippo Bank 5,750,304,764 4,335,578,113
PT Bank Bukopin 353,962,480,496 344,693,099,883
PT Bank International Indonesia 20,727,865,426 22,612,289,841
PT Bank Danamon (Inc,Ex Bank Duta Jaya Nusa etc) 100,674,574,201 8,075,034,894
PT Bank Muamalat/City Bank/PTBank IFI 10,232,708,559 4,212,184,080
PT Bank BNI’ 46 1,927,404,683,307 725,594,882,389
PT Bank BRI 2,666,071,636,530 582,826,313,641
PT Bank Mandiri 1,606,207,046,356 3,767,039,718,725
PT Bank BTN 22,617,601,276 21,900,219,442
PT Pos dan Giro 1,383,091,704 1,213,233,052
Total Cash in Banks 6,976,929,745,276 5,786,750,231,758
Time deposits with maturity periods of less than 3 months

PT Bank Internasional Indonesia - 6,000,000,000
PT Bank BUKOPIN 44,500,000,000 209,000,000,000
PT Bank Pembangunan Daerah 15,000,000,000 -
PT Bank Muamalat /City Bank/PT Bank IFI 10,000,000,000 22,000,000,000
PT Bank BNI’ 46 37,500,000,000 45,513,956,384
PT Bank Mandiri 36,999,967,800 23,855,258,958
PT Bank Indonesia - 42,000,000
PT Bank BRI 15,000,000,000 -
Total Time Deposits 158,999,967,800 306,411,215,342
Total Cash and Cash Equivalents 7,218,517,205,010 6,142,460,790,375
Time deposits denominated in Rupiah and foreign currencies with maturity periods of 3 months or less,
earned average annual interest rates as follows :
- in Rupiah currency 12.30% - 17.87%
- in Foreign currencies 2.50% - 4.59%
Cash and cash equivalents include balance in foreign currencies (see Note 43).

Financial Report

(In Rupiah)
Fund Reserve from Electricity Subsidy
Current accounts in Bank Mandiri, Melawai Branch and Bank BNI 46, Kebayoran, Jakarta Branch
include funds amounting to Rp 615,405,000,000.00 each or totaling Rp 1,230,810,000,000.00, which
represents reserve fund from electricity subsidy. This fund was requested by the Board of Director in
its Letter No. 07563/530/DITKEU/2002 dated December 19, 2002 and has been approved by the
Ministry of Finance in its Letter No. 1094/KM.3-43/SKOR/2002 dated December 27, 2002. This fund
was intended for the 2002 electricity subsidy fund, which in PLN’s calculations still has remaining balance
amounting to Rp 334,176,985,632.00, as follows:
- Subsidy requested from January to December 2002 Rp 3,206,066,985,632.00
- Subsidy received as of December 31, 2002 Rp 2,871,000,000,000.00
- Remaining balance of subsidy receivable as of December 31,2002 Rp 334,176,985,632.00
Up to the end of 2002, the subsidy fund amounting to Rp 1,230,810,000,000.00 is not included in the current
accounts presented in the financial statements.
12. TEMPORARY INVESTMENTS

Rp Rp
Time Deposits
- PT Bank BUKOPIN 25,000,000,000 -
- PT Bank Internasional Indonesia 12,682,000,000 10,000,000,000
- PT Bank Muamalat 10,500,000,000 -
- PT Bank Mandiri (Formerly Bank Exim) 104,837,000,000 69,656,300,000
- PT Bank Negara Indonesia 108,940,000,000 135,400,000,000
- PT Bank BRI 75,000,000,000 35,000,000,000
336,959,000,000 250,056,300,000
Notes receivable
- PT Bahana Pembinaan Usaha Indonesia 6,055,169,303 5,597,067,936
- PT Dana Reksa (Persero) 298,449,135,212 429,015,877,703
304,504,304,515 434,612,945,639
Total Temporary Investments 641,463,304,515 684,669,245,639
Temporary investments consist of notes receivable and time deposits in Rupiah and foreign currencies with
maturity periods of more than 3 (three) months and less than 1 (one) year and earned average annual
interest rates as follows:
- In Rupiah currency 12.30% - 17.87%
- In Foreign currencies 2.50% - 4.59%
- Notes receivable 16.54% - 18.41%
Temporary investments include balances in foreign currencies (see Note 43).

Financial Report

(In Rupiah)
13. ACCOUNTS RECEIVABLE
As of December 31, 2002, accounts receivable amounting to Rp 2,053,296,077,372.00 decreased as com-

pared to the balance as of December 31 amounting to Rp 2,893,599,572,582.00.

Rp Rp
Third parties 2,104,958,152,219 2,857,241,502,678

Related parties 18,948,593,114 116,272,220,385
2,123,906,745,333 2,973,513,723,063
Allowance for doubtful accounts (70,610,667,961) (79,914,150,481)
2,053,296,077,372 2,893,599,572,582
The changes in the allowance for doubtful accounts are as follows:

- Balance at beginning of year (79,914,150,481) (62,134,422,014)
- Additions during the year 7,682,913,872 (45,319,904,383)
- Accounts receivable written-off 1,620,568,648 27,540 ,175,916
(70,610,667,961) (79,914,150,481)
Based on the Agreement No. 99 dated May 17, 1996 and No. 63 dated May 19, 1997, between PT Bank
Mandiri (formerly BDN), the Trustee and PLN, the accounts receivable – trade are used as collateral to the
PLN Bonds V series A, B, C year 1996 and PLN Bonds VI series A, B, C year 1997. These receivables are
also used as collateral to loans obtained from several banks (see Notes 18 and 19).
14. INVENTORIES
Rp Rp
Fuel and lubricants 1,422,116,091,181 699,727,070,155
Transformers 22,101,230,855 20,975,833,142
Switchgear and transmission 37,213,905,102 35,556,731,712
Wire 30,704,767,519 30,196,128,079
Measurement, divider and control equipment 47,788,774,518 31,899,747,626
General supplies and others 562,327,920,662 587,456,069,958
2,122,252,689,837 1,405,811,580,672
Allowance for inventory obsolescence (17,793,851,210) (11,649,782,334)
2,104,458,838,627 1,394,161,798,338
The changes in the allowance for inventory obsolescence are as follows:

Beginning balance (11,649,782,334) (8,993,061,683)
Additions - (2,976,846,200)
Inventory written-off (6,144,068,876) 320,125,549
Ending balance (17,793,851,210) (11,649,782,334)

Financial Report

(In Rupiah)
As of December 31, 2002, inventories amounting to Rp 2,104,458,838,627.00 increased significantly as

compared to the balance as of December 31, 2001 which amounted to Rp 1,394,161,798,338.00. This is
caused by the increase in the price and volume of fuel and lubricants.
The increase in inventory volume is mainly caused by the decreasing supply of natural gas for power plants
in East Java which was replaced by fuel oil.
15. TAXATION

Rp Rp
a. Prepayment of Income Taxes
- Income tax article 22 22,500,422,309 9,955,973,813
- Income tax article 25 - 1,772,091,437
- Income tax article 21 - -
- Value - added tax - output 2,012,401,825 802,159,289
29,688,784,678 19,394,033,875
b. Taxes payable
- Value-added tax – input 28,137,517,392 78,205,548,624
- Stamp duty 194,267,727 4,232,099,937
- Tax on land and building - 228,472,308
- Tax on revaluation increment in property,
plant and equipment 927,917,087,208 -
1,038,689,238,672 108,987,000,193
c. Income Tax
Tax expenses of the Company and Subsidiaries consist of :
Current tax expense (5,853,854,766) 3,222,665,833
- Parent company - -
- Subsidiaries (5,853,854,766) 3,222,665,833
Deferred income tax (1,808,931,417,764) 566,197,243,723
- Parent company (1,178,074,766,727) 285,968,936,482
- Subsidiaries (630,856,651,037) 280,228,307,241
Financial Report

(In Rupiah)
CURRENT TAX EXPENSE
A reconciliation between loss before tax, as shown in the consolidated statements of income, and accumu-
lated fiscal loss is as follows:
Rp Rp
Loss before income tax per
consolidated statements of income (4,156,822,755,416) 750,480,243,626
Income before income tax of Subsidiaries (2,136,287,029,655) (945,682,426,296)
Loss before income tax of Company (6,293,109,785,071) (195,202,182,670)
Temporary differences
Amortization of electrical connection - -
fee 1977-1995
Income from electrical connection fee 485,412,566,145 253,718,282,997
Difference of depreciation between
commercial and fiscal (4,412,328,455,236) (973,215,732,116)
Amortization of loss on foreign exchange - (233,732,339,154)
(3,926,915,889,091) (953,229,788,273)
Permanent differences
Employees’ benefits 254,589,039,068 201,195,352,958
No-deductible expenses 343,272,773,348 260,015,508,680
Provision for doubtful accounts and
inventory obsolescence 343,699,844 60,155,523,868
Depreciation 7,200,718,052 5,081,630,765
Interest income on current accounts and
time deposits (588,593,030,332) (301,120,796,527)
Total 16,813,199,980 225,327,219,744
Fiscal loss current year (10,203,212,474,182) (923,104,751,199)
Last year correction from tax office - -
(10,203,212,474,182) (923,104,751,199)
Compensation of fiscal loss up to last year (50,654,367,130,750) (49,991,252,104,875)
Fiscal loss in 1995 not allowed
to be compensated 518,834,880,530 259,989,725,324
Accumulated fiscal loss up to last year (50,135,532,250,220) (49,731,262,379,551)
Fiscal loss compensation for asset revaluation

increment in property, plant and equipment (50,135,532,250,220) (49,731,262,379,551)
Accumulated fiscal loss to be compensated

Parent company (51,981,294,786,900) (50,654,367,130,750)
Subsidiaries (1,883,638,129,945) (1,326,927,656,150)
Consolidated (53,864,932,916,845) (51,981,294,786,900)

Financial Report

(In Rupiah)
Current and deferred taxes of Subsidiaries are in accordance with the Subsidiaries’ audited financial state-
ments for the years 2002 and 2001.
As of the auditors’ report date, the Tax Assessment Letter on Overpayment of Corporate Income Tax
(SKPLB) for the year 2001 has not yet been issued by the tax office, while for the year 2000 income
tax, the SKPLB No. 00117/406/051/2002 dated December 20, 2002 has been issued. The SKPLB
stated that the accumulated fiscal loss is Rp 25,546,119,492,621.00 lower than the Company’s calculation of
Rp 12,668,692,825,326.00. The overpayment of 2000 income tax amounting to Rp 876,820,106.00 from the
claims for tax refund submitted amounting to Rp 889,820,106.00 has been received by the Company in
2001.
Based on the Tax Regulations in Indonesia, the companies should calculate, decide and pay the tax payable.
Before January 1, 1995, the Tax Office can decide or change the tax payable within 5 years from the date
the tax is payable. The correction of the Company’s tax payable will be recorded at the time the decision
letter is received or at the time objection letter is received if the Company filed an appeal.
DEFERRED TAX
Deferred tax is computed based on the effects of temporary differences between assets and liabilities for
financial reporting and income tax purposes.
The details of deferred tax assets and liabilities of the Company and Subsidiaries for the years ended
December 31, 2002 and 2001 are as follows:

Rp Rp
Parent company
Deferred tax liabilities
Installation fee 1,013,962,026,506 868,338,256,661

Difference in foreign exchange - -
Correction from tax office 163,322,819,854 163,322,879,854
Total 1,177,284,846,360 1,031,661,136,515
Depreciation of property, plant
and equipment (4,297,183,143,221) (2,973,484,606,650)
Parent company – net (3,119,898,236,861) (1,941,823,470,135)
Correction of deferred tax due to
revaluation 2,973,484,606,650 -
(146,413,630,211) (1,941,823,470,135)
Financial Report

(In Rupiah)

Rp Rp
Subsidiaries – net (620,136,271,007) (1,058,015,319,916)
Consolidated (766,549,900,218) (2,999,838,790,050)
Tax Payable on Revaluation Increment in Property, Plant and Equipment
The tax payable for the revaluation increment in property, plant and equipment amounted to Rp 11,035,286,578,990.00
and payment made in December 2002 amounted to Rp 1,300,052,771,211.00. The remaining balance amounting
to Rp 9,735,233,807,779.00 will be paid in 5 (five) years and classified as long-term liability.
Reconciliation of Tax Expense
A reconciliation of tax expense between financial reporting and income tax purposes is as follows :
Rp Rp
Loss before tax expense
per consolidated statements of income (4,156,822,755,416) 750,480,243,626
Income before tax expense – Subsidiaries (2,136,287,029,655) (945,682,426,296)
Loss before tax expense – Parent company (6,293,109,785,071) (195,202,182,670)
The maximum tax rate
30 % x (Rp 6,293,109,785,071) in 2002
and Rp 195,202,182,670 in 2001 (1,887,932,935,521) (58,560,654,801)
Tax effects on non-deductible
income (expense)
Fiscal loss current year 704,814,208,801 276,931,425,360
Employee’s benefits 76,376,711,720 60,358,605,887
Non-deductible expenses 102,981,832,004 78,004,652,604
Depreciation expense 2,160,215,416 1,524,489,230
Interest income on current accounts and
time deposits (176,577,909,100) (90,336,238,958)
Provision for doubtful accounts and
inventory obsolescence 103,109,953 18,046,657,160
Correction from tax office - -
Total 709,858,168,794 344,529,591,283
Tax expense of Parent Company (1,178,074,766,727) 285,968,936,482
Tax expense of Subsidiaries (630,856,651,037) 280,228,307,241
Tax expense-consolidated (1,808,931,417,764) 566,197,243,723

Financial Report

(In Rupiah)
16. STOCKHOLDERS’ EQUITY

Rp Rp
- Subcribed and fully paid
capital stock 46,107,154,000,000 46,107,154,000,000
- Other capital 18,917,340,432,152 17,571,443,391,657
- Revaluation increment in property,
plant and equipment 137,599,980,268,685 -
- Retained earnings (deficit) (50,540,154,308,042) (44,480,596,101,271)
Total 152,084,320,392,795 19,198,001,290,386
a. Capital Stock
The Company is wholly owned by the Government of the Republic of Indonesia, represented by the
Ministry of Finance.
Based on the Notarial Deed No. 169 of Sujipto, S.H. dated July 30, 1994, regarding the
Company’s establishment, which was approved by the Ministry of Justice in its Decision Let-
ter No. C2-11.519.HT.01.01. Year 1994 dated August 1, 1994, the authorized capital stock amounted
to Rp 63,000,000,000,000.00 divided into 63,000,000 shares, which consisted of 13,000,000 priority shares
and 50,000,000 common stock with a par value of Rp 1,000,000 per share. The subscribed and fully paid
capital stock amounted to Rp 13,000,000,000,000.00 divided into 13,000,000 priority shares.
Based on the minutes of the General Extraordinary Stockholder’s Meeting held on January 16,
1998, which was notarized by Notarial Deed No. 70 dated January 27, 1998 of Indah Fatmawati,
S.H. and approved by the Ministry of Justice of the Republic of Indonesia in its Decision Letter
No. C2-547.HT.01.04.TH.98 dated February 5, 1998, the stockholder agreed, among others, to:
- Change the 13,000,000 priority shares to become common shares with a par value of Rp 1,000,000.00
per share.
- Increase the subscribed and fully paid capital of the Company amounting to Rp 13,000,000,000,000.00
to become Rp 17,325,800,000,000.00 divided into 17,325,800 shares with a par value of Rp 1,000,000.00
per share.
Based on the minutes of the General Extraordinary Stockholder’s Meeting held on July 18, 2001, which
was notarized by Notarial Deed No. 43 of Haryanto,S.H., dated October 26, 2001 and approved by the
Ministry of Justice of the Republic of Indonesia in its Decision Letter No.C-1763.HT.03.02p Th 1999
dated September 8, 1999, the stockholder agreed, among others, to :
- Compensate the Government’s receivable arising from overdue interest and penalty on two-step
loans amounting to Rp 15,744,405,955,300.00 and Rp 13,036,948,834,152.00, respectively, into the
Government Equity Investment amounting to Rp 28,781,354,000,000.00 which has been approved by
the Ministry of Finance of the Republic of Indonesia in its Letter No. S-352/MK.06/2001 dated June
20, 2001 and notarized by Notarial Deed No. 43 of Haryanto, SH., dated October 26, 2001.
Financial Report

(In Rupiah)
- Increase the subscribed and fully paid capital of the Company of Rp 28,781,354,000,000.00 di-
vided into 28,781,354 shares, which originally amounted to Rp 17,325,800,000,000.00, to become
Rp 46,107,154,000,000.00 divided into 46,107,154 shares.
- The difference between the compensation of the Government’s receivables with the increase in
subscribed and fully paid capital amounting to Rp 789,452.00 is classified as other capital.
b. Other Capital
Other capital represents Government participations which were received by the Company as of Decem-
ber 31, 2002 but the status have not yet been decided, the details are as follows :
Rp Rp
- DIP Rupiah Fund 6,283,506,899,663 5,716,371,776,731
- Project aid 12,180,083,089,850 12,510,820,980,428
- Reclassifications from previous year - (683,936,198,209)
18,463,589,989,513 17,543,256,558,950
- Financial restructuring - 789,452
- Regional government aid and others 453,750,442,639 28,186,043,255
- Revaluation increment in property,
plant and equipment 137,599,980,268,685 -
156,517,320,700,837 17,571,443,391,657
The computation of revaluation increment in property, plant and equipment as of December 31, 2002
amounting to Rp 137,599,980,268,685 represents the difference of the increment property, plant and
equipment as of January 1, 2002, after considering the following items :
Description Rp
Market Value (NP) 196,952,689,026,000

Net Book Value :
Cost 73,757,151,606,162
Accumulated Depreciation (20,824,502,172,704)
Net Book Value (NB) 52,932,649,433,458
Revaluation Increment (NP-NB) 144,020,039,592,542
Add (deduct):
Tax on revaluation (11,035,286,578,989)
Compensation of deferred tax 4,048,747,010,107
Correction of tax on revaluation 13,883,637,299
Charged to expense (PSAK No.48) 24,487,182,567
Revaluation of year 2001/2000 (Batam,Comnet) 551,457,865,485
Minority interest and others (23,348,440,326)
Total (6,300,839,735,693)
Revaluation Increment (Net) 137,599,980,268,685

Financial Report

(In Rupiah)
17. DEFERRED INCOME
Deferred income represents amounts received from customers for electrical connections (BP) and upgrad-
ing of electrical power.
Deferred income are stated at the amounts received for electrical connections less amortization which is
recognized as revenue in the statements of income.
The details of deferred income are as follows :

Rp Rp
BP received
- Beginning balance 5,678,873,278,106 5,145,593,787,493
Correction of beginning balance*) (6,963,882,647) -
- Amount received during the year 803,480,591,786 533,279,490,613
6,475,389,987,245 5,678,873,278,106
Amortization
- Beginning balance 2,176,739,576,893 1,911,142,991,855
Correction of beginning balance *) (2,525,863,239) -
Correction from last year - (261,145,567)
- Amortization during the year 302,307,820,340 265,857,730,605
2,476,521,533,994 2,176,739,576,893
Deferred Income (net) 3,998,868,453,251 3,502,133,701,213
*) Correction of beginning balance is to reduce the BP of Dili Branch which has been transferred to PLN
Head Office as Deferred Charges and awaiting approval from the Government of RI (see Note 29).
Financial Report

(In Rupiah)
18. BANK LOANS

Bank Loans Annual Due
(Rp) Interest Rates Dates
2002
Long-term portions
PT Bank Bukopin 4,319,552,645 Interest rate of 18 % 10/08/2005
PT Bank Negara Indonesia 21,000,000,000 Deposit rate of 6 months + 1.75 % 22/12/2005
PT Bank Rakyat Indonesia 55,000,000,000 Deposit rate of 6 months + 2 % 28/12/2005
PT Mandiri (BBD) 60,000,000,000 Deposit rate of 6 months + 2.5% 23/12/2005
140,319,552,645
Short-term portions
70,037,998,021
2001
Long-term portions
210,308,777,000
Short-term portions
69,691,223,000
The repayment and collaterals of the above credit facilities are as follows (see Notes 3 and 13):
- Credit facility obtained from PT Bank Negara Indonesia : payment in semi-annual installments amount-
ing to Rp 5,250.00 million each and is secured by promissory notes with the same amount of semi-annual
installments.
- Credit facility obtained from PT Bank Rakyat Indonesia: payment in semi-annual installments amounting
to Rp 13,750.00 million each and is secured by accounts receivable and promissory notes.
- Credit facility obtained from PT Bank Mandiri (BBD): payment in semi-annual installments amounting
to Rp 15,000.00 million each and is secured by accounts receivable-trade or land and building if the
Company cannot provide accounts receivable-trade.

Financial Report

(In Rupiah)
- Credit facility obtained from Bank Bukopin amounting to Rp 8 billion for CDB, a subsidiary of PT
Indonesia Power, bears annual interest rate at 18% and is secured by fiduciary guarantee of CDB’s
receivable from PT Para Bandung Propertindo amounting to Rp 2,000.00 million, receivable from
PT Indonesia Power and PT Lirik Petroleum amounting to Rp 1,000.00 million each, and several prop-
erties belonging to CDB.
The loan will be paid in 44 (forty-four) installments and will be due on August 10, 2005.
For the loan facilities, the banks have not imposed special restrictions to the Company.
19. BONDS PAYABLE
Due
December 31, 2002 December 31, 2001 Term Date
Rp Rp
PLN Bonds VI/1997-nominal value 600,000,000,000 600,000,000,000 10 years 08/08/2007
600,000,000,000 600,000,000,000
Current maturity - -
Long-term portion 600,000,000,000 600,000,000,000
The issuance of bonds was based on the Indenture Agreement between the Company and PT Bank Mandiri
(formerly PT Bank Dagang Negara (Persero)), as the Trustee, the bonds are secured by several landrights
and accounts receivable. Interest on bonds is paid quarterly (see Notes 3 and 13).
PLN Bonds VI Series A, B and C Year 1997
These bonds are stated at nominal value and were issued on August 8, 1997 and will be due in 10 (ten)
years.
a. Bonds-Series A, bear fixed interest rate which is calculated based on the 10 (ten) years Asean Interest
Rate Swap from Reuter page EROT plus premium of 1.4%.
b. Bonds-Series B, bear floating interest rate based on the average interest rates for 6 (six) months of time
deposits at PT Bank Negara Indonesia (Persero) Tbk, PT Bank Tabungan Negara (Persero), PT Bank
Mandiri (formerly PT Bank Ekspor Impor Indonesia (Persero)), PT Bank Niaga Tbk and PT Bank Bali
Tbk, which are calculated for 5 (five) working days before the date of the bonds interest rate determina-
tion, plus fixed premium of 1%.
c. Bonds-Series C, bear floating interest rate based on the average for 6 (six) months of IRSOR and
calculated 5 (five) working days before the date of the bonds interest rate determination, plus fixed
premium of 1.4%.
Financial Report

(In Rupiah)
Interest of bonds is paid semi-annually as stated in the coupon interest. The first coupon was paid on
January 20, 1998. These bonds will be due on August 8, 2007.
20. TWO-STEP LOANS
This account represents long-term overseas loans of the Government of the Republic of Indonesia which
are re-loaned the Company. There are no collaterals for these loans.
a. Long-term portions
Source of Interest rates

December 31, 2002 December 31, 2001 Periods
funds %
Rp Rp
Rupiah
IBRD 2,200,283,084,574 2,588,901,635,876 IBRD + (0.75 - 3.25) 17 - 25

ADB 2,340,966,443,232 2,518,603,242,343 ADB + (1.00 - 3.50) 18.5 - 25
KFW Jerman 865,826,797,615 1,048,656,547,669 KFW + 0.75 15 - 25
USAID 4,936,252,821 5,676,577,838 3 30
CDC Inggris - 920,599,952 10.50 20
Swiss Conf. 28,715,894,597 43,073,841,897 4.75 20
US Exim Bank 96,668,456,946 130,879,954,096 7.75 or SBI + 0.75 12
Japan Exim Bank 58,936,365,900 91,453,523,394 SBI + 0.75 12
Meespierson NV 6,357,715,186 21,088,470,193 SBI + 0.75 9.5
Gen. Bank Barclay 33,032,323,314 41,520,447,681 6.95 or SBI + 0.75 12
Midland Bank 277,645,327,791 293,266,960,049 SBI + 0.75 25
Kons.Bank Swiss 386,125,194,582 536,918,560,604 SBI + 0.75 12
Banque Paribas 43,764,707,344 57,559,852,398 SBI + 0.75 12
Roshin Int. 64,362,912,179 73,431,758,142 SBI + 0.75 10
Austria 24,573,356,167 31,594,315,071 SBI + 0.75 12
China 9,031,070,178 11,009,819,022 SBI + 0.75 10
6,441,225,902,426 7,494,556,106,225
USD
IBRD 4,506,186,536,125 5,394,695,867,858 IBRD + 0.35 20
ADB 1,797,906,857,769 2,003,403,560,342 ADB + 0.35 20
Sumisho Leasing 174,137,202,323 275,736,558,491 LIBOR + 1.05 10
Nebula Leasing 374,157,080,807 521,035,635,984 LIBOR + 1.05 12
Mitsui Leasing 37,671,604,475 52,586,793,539 LIBOR + 1.05 12
Islamic Dev-901 38,138,234,341 64,753,775,031 7.85 7.5
US Exim Bank 210,876,727,159 304,231,792,853 6.89 - 6.95 10
7,139,074,242,999 8,616,443,984,098
DEM
KFW Jerman 55,382,300,895 68,247,868,494 1.1 - 2.35 12 - 25
GBP
Merchant Bank 215,140,255,357 245,674,503,529 6.30 12.67

Financial Report

(In Rupiah)

December 31, 2002 December 31, 2001 Periods
funds %
Rp Rp
Bank Paribas 283,623,240,947 304,361,907,768 3.693

498,763,496,304 550,036,411,297
FFR
Bank National 17,224,543,431 23,654,504,832 7.18 10
NLG
ABN AMRO 667,849,832,688 799,127,565,095 6.95 12.75
BEF
Gen. Bank Barcley 8,990,608,236 10,779,077,055 6.95 12
YEN
Japan Exim Bank 1,693,328,547,458 2,342,517,060,511 4.55 - 4.65 10 - 12
ATS
Austria 109,920,442,163 102,904,472,295 3.85 17 - 18.5
AU $
Efic Australia 132,236,111,092 138,628,375,673 3.85 25
Total 16,763,996,027,692 20,146,895,425,575
b) Short-Term Portions

funds %
Rp Rp
Rupiah
IBRD 400,261,084,045 348,720,758,236 IBRD + (0.75 - 3.25)
ADB 181,922,959,557 133,191,853,794 ADB + 91.00 - 3.50)
Kuwait 697,522,556 697,522,556 4
Midland Bank 17,713,114,792 2,777,396,451 SBI + 0.75
KFW Jerman 209,205,228,833 193,776,393,520 KFW + 0.75
USAID 42,802,462 21,082,621 3
CD C Inggris 936,945,542 1,399,794,854 10.5
Swiss Conf. 14,312,852,051 14,312,852,049 4.75
US Exim Bank 26,800,965,125 33,902,803,931 7.75 or SBI + 0.75
Japan Exim 71,305,642,511 71,305,642,501 SBI + 0.75
Meespierson NV 9,064,373,224 2,119,238,397 SBI + 0.75
Gen.Bank Barclay 9,437,850,080 10,387,575,793 6.95 or SBI + 0.75
Kons.Bank Swiss 110,321,484,166 70,047,573,508 SBI + 0.75
Baque Paribas 13,865,507,355 14,111,037,286 SBI + 0.75
Roshin Int. 13,394,907,324 17,076,114,560 SBI + 0.75
Austria 7,066,081,153 7,066,054,153 SBI + 0.75
China 862,674,042 862,674,042 SBI + 0.75
1,087,211,994,818 921,776,368,252
USD
IBRD 275,827,318,495 372,800,421,039 IBRD + 0.35
ADB 76,945,555,292 65,985,247,614 ADB + 0.35
Sumisho Leasing 62,898,099,811 73,167,605,923 LIBOR + 1.05
Financial Report

(In Rupiah)

funds %
Rp Rp
Nebula Leasing 102,667,478,969 119,430,215,950 LIBOR + 1.05

Mitsui Leasing 11,301,480,803 13,146,697,692 LIBOR + 1.05
Islamic Dev. Bank - 901 12,811,649,053 2,728,051,443 7.85
US Exim 70,902,610,047 93,545,570,092 6.89 - 6.95
613,354,192,470 740,803,809,753
DEM
KFW Jerman 35,261,731,285 34,230,490,944 1.1 - 2.35
GBP
Merchant Bank 34,666,382,174 36,469,081,172 6.30
Baque Paribus 8,056,684,193 7,903,061,339 3.693
42,723,066,367 44,372,142,511
FRF
Bank Indosuez - - 6.95
Bank National 6,918,318,698 6,758,428,150 7.18
6,918,318,698 6,758,428,150
NLG
ABN AMRO 153,604,654,972 141,401,700,746 6.95
BEF
Gen.Bank Barclay 2,012,048,219 1,956,783,099 6.95
ATS
Austria 27,469,271,733 35,242,568,437 3.85
YEN
Japan Exim Bank 541,078,027,888 536,659,506,617 3.85
Total 2,509,633,306,450 2,463,201,798,509
21. GOVERNMENT LOANS

Rp Rp
Long-term portions
- Dividends Semesta Development Funds - -
- Development of PLTGU Muara Tawar 103,500,000,000 126,500,000,000
- Rescheduled installments of two-step loans 228,481,581,163 327,757,951,163
- Financial restructuring (RDI VI) 4,994,474,865,214 5,288,267,504,344
5,326,456,446,377 5,742,525,455,507
Short-term portions
- Dividends Semesta Development Funds - 202,384,387,000
- Development of PLTGU Muara Tawar 316,792,639,130 23,000,000,000
- Rescheduled installments of two-step loans 99,857,992,856 214,382,110,001
416,650,631,986 439,766,497,001

Financial Report

(In Rupiah)
Dividends/Semesta Development Funds (DPS)

This represents the Company’s obligation to the Government of the Republic of Indonesia as a result of
distribution of dividends when the Company was still a Perum. Based on the letter from the Ministry of
Finance No. S-625/MK/017/1996 dated November 18, 1996, DPS payable has been rescheduled and will
be paid in annual installments for 10 (ten) years starting from 1996/1997 up to 2005/2006. The loan is non
interest bearing.
Export Prepayment Fund for Development of PLTGU Muara Tawar

This represents the loan facility obtained by the Company from the Department of Finance of the Republic
of Indonesia with a maximum amount of Rp 230,000,000,000.00. This facility has a term of 12 (twelve)
years which will be due on March 13, 2008. This facility bears annual interest rate at 9% for the first 6 (six)
years. The seventh up to twelve installments bear interest at the rate of 3 (three) months Certificate of
Bank Indonesia, 6 (six) months prior to the date of the interest rate determination.
Rescheduled Installments of Two-step Loans

This loan represents overdue principal and interest on two-step loans up to June 30, 1996 in which the
payment has been rescheduled based on a letter from the Directorate General of Financial Institution No.
B-1998/MK.17/1996. The overdue principal amounting to Rp 712,342,879,333.00 will be paid in semi-an-
nual installments up to July 15, 2001 and bears annual interest rate at 14.5%. The overdue interest during
grace period amounting to Rp 801,897,742,538 will be paid annually starting from January 15, 1997 up to
July 15, 2004.
Financial Restructuring
This loan represents the Company’s obligation to the Government/Department Finance for overdue princi-
pal on two-step loans amounting to Rp 5,288,267,504,344.00 based on a letter from the Ministry of Finance
of the Republic of Indonesia No. S-352/MK.06/2001 dated June 20, 2001. The loan has a term of 20
(twenty) years including grace period of 2 (two) years and with administration fee of 4% per year. As of
December 31, 2002, the remaining balance of overdue principal amounting to Rp 4,994,474,865,214.00 will
be paid in semi-annual installments up to July 15, 2001 and bears annual interest rate at 14.5%. The overdue
interest during grace period amounting to Rp 801,897,742,538 will be paid annually starting from January 15,
1997 up to July 15, 2004.
22. DUE TO INDEPENDENT POWER PRODUCERS
This account represents due to independent power producers (IPP) for arrears in electric power purchases
determined in the restructuring covered in the Long-Term Agreement (LTA), which became effective
since 2002. Total long-term liabilities electric power purchases arrears arising from the restructuring amounted
Financial Report

(In Rupiah)
to Rp 7,149,588,377,537.85. This amount represents the transfer of trade payable balances for electrical
purchasing from Paiton I and Paiton II.
Based on the LTA, PLN obtained a hair-cut for the outstanding balance of electric purchases arrears as of
December 31, 2001. Realized hair-cut are recorded as deduction of the balance, while unrealized hair-cut
are not recognized as deductions and do not affect the outstanding balances of the arrears.
23. OTHER PAYABLES

Rp Rp
Long-term portion :
Third parties 9,022,668,397,016 103,861,085,693
Related parties
Social fund, education and other payables 348,004,436 341,328,880
9,023,016,401,452 104,202,414,573
Short-term portion :
Third parties 369,828,667,564 273,764,676,695
Related parties
Employees and others 32,468,411,562 32,740,590,593
DP-PLN 902,794,496 -
33,371,206,058 32,740,590,593
403,199,873,622 306,505,267,288
24. CUSTOMERS’ SECURITY DEPOSITS
This account represents security deposits from customers which are calculated based on the connected
power supply and the rate of electricity used. Customer deposits will be refunded, net of unpaid electricity
bills, when customers stop subscribing for electricity.
25. PROJECT PAYABLES
This account represents payables to contractors/suppliers arising from purchases of goods and services
which will be financed by two-step loans, but as of December 31, 2002 and 2001 the payment is still in
process or the Withdrawal Authorization (WA) has not yet been issued.

Financial Report

(In Rupiah)
26. ACCOUNTS PAYABLE-TRADE
This account represents payables arising from purchases of electricity, fuel and goods and services, as
follows :

Rp Rp
Third parties
- Independent Power Producers 5,964,961,780,246 15,900,556,184,041
- Pertamina 2,249,560,706,097 1,720,291,010,733
- PT Tambang Batubara Bukit Asam 331,818,070,266 381,243,515,010
- Unocoal of Geothermal Indonesia,, Ltd. 156,651,533,907 1,116,923,414,913
- PT Kideco Jaya Agung 101,275,058,015 53,533,241,091
- PT Adaro Indonesia 96,032,918,884 168,721,655,970
- PT Bukaka Teknik Utama 34,038,160,290 37,382,080,754
- PT Dwipangga Sakti 30,215,580,978 34,932,309,568
- PT Expan Kalimantan 27,571,686,798 56,133,939,521
- PT Berau Coal 12,806,542,816 50,809,099,384
- Others 517,898,464,945 386,600,797,452
9,522,830,503,242 19,907,127,248,437
Related parties
- Employee Cooperative 12,786,300,059 6,446,225,816
- Others 18,665,272,551 16,818,188,874
31,451,572,610 23,264,414,690
9,554,282,075,852 19,930,391,663,127
Accounts payable include balances in foreign currencies (see Note 43).
Accounts payable to third parties mainly represent short-term debts to Independent Power Producers
(IPP) for electric power purchases and the calculated arrears as stated in the Long Term Agreements
(LTA) which amended the Power Purchase Agreements (PPA). The LTAs which effective in 2002, were
issued to determine the tariff of electric power purchases in the future and also to finalize the restructuring
of overdue debts to IPP as of December 31, 2001.
Based on the restructuring of the arrears in electric power purchases, the total long-term liabilities amounted
to Rp 7,149,588,377,538.00 and recorded as long-term debts under due to independent power producers
account (see Note 22).
Financial Report

(In Rupiah)
27. ACCRUED EXPENSES
This account consists of :

Rp Rp
Third parties :
- Interest of bond payables 40,016,992,018 37,412,403,930

- Accrued expenses 24,024,028,154 37,179,314,670
64,041,020,172 74,591,718,600
Related parties
- Interest of two-step loans 650,694,562,512 721,676,804,869

- Interest of bank loans 131,355,000 200,865,000
- Interest of Government loans 93,935,258,852 99,629,443,523
- Other accrued expenses 45,495,317,985 55,520,834,752
790,256,494,349 877,027,948,144
854,297,514,521 951,619,666,744
Accrued expenses-interest of two-step loans include balances in foreign currencies (see Note 43).
28. ELECTRICITY SALES
Electricity sales by tariff classifications are as follows :
2002 2001
Rp Rp
Group of tariff
- Household 13,352,473,316,509 8,456,684,111,548
- Business 7,021,370,257,141 5,149,643,177,293
- Industry 16,313,884,749,707 12,872,974,817,856
- Offices/Government/Public 2,330,733,398,136 1,796,680,542,981
Total 39,018,461,721,493 28,275,982,649,678
Revenue from electricity sales is calculated based on basic electricity tariff determined by the Government.

Financial Report

(In Rupiah)
29. CUSTOMER CONNECTION FEES
2002 2001
Rp Rp
Customer connection fees 302,307,820,340 265,857,730,605
Customer connection fees represent amortization of connection fees received from customers which have
been installed as of December 31, 2002 and 2001 (see Note 17).
30. ELECTRICITY SUBSIDY
Electricity subsidy from the Government in 2002 of Rp 4,739,073,653,216.00 consists of the 2002
electricity subsidy amounting to Rp 3,206,066,985,633.00, and 2001 electricity subsidy which was re-
ceived in 2002 amounting to Rp 1,533,006,667,583.00, due to the change of subsidy recognition method
from cash basis to accrual basis. The Company already received the 2002 electricity subsidy amounting
to Rp 2,871,890,000,000.00 from the total of Rp 3,206,066,985,633.00 and the remaining balance is waiting
for the verification from the auditor which has been appointed by the Ministry of Finance.
Electricity subsidy from the Government is recorded in the statements of income as operating revenue
because the subsidy was given to customers below or the same with 450 VA, which selling price is under
the cost of production.
31. OTHER OPERATING REVENUE

2002 2001
Rp Rp
- Upgrading of electrical connections 21,743,098,111 18,034,255,184
- Rent of trafo 49,278,405,450 46,288,129,751
- Services and others 52,488,546,189 18,584,884,428
Total 123,510,049,750 82,907,269,363
Services and others mainly consist of revenue from other operating revenues of Subsidiaries.
Financial Report

(In Rupiah)
32. FUEL AND LUBRICANTS

2002 2001
Rp Rp
Fuel Oil
- HSD 6,507,147,686,674 3,135,079,254,586
- IDO 54,178,602,278 24,157,048,647
- Residu / M F O 2,592,903,757,935 1,179,892,176,670
- Others 17,284,371,429 14,280,955,247
9,171,514,418,316 4,353,409,435,150
Non-Fuel Oil
- Natural gas 4,533,183,365,958 5,801,689,790,285
- Coal 3,088,502,087,194 2,798,124,987,378
- Geothermal 959,081,399,811 884,311,441,979
- Lubricants 173,015,861,836 152,942,715,927
- Water 31,964,495,683 16,817,158,684
8,785,747,210,482 9,653,886,094,253
17,957,261,628,798 14,007,295,529,403
33. ELECTRICITY PURCHASES
This account represents purchases of electricity from the Independent Power Producers (IPP) with the
details as follows :
2002 2001
Rp Rp
Purchases/Rents from
PT Paiton Energy Company 4,170,286,830,910 2,865,376,736,887
PT Jawa Power 4,003,251,012,731 2,126,513,911,076
PT Unocal (UGI) 840,525,662,705 1,295,691,221,559
PT Magma Nusantara 756,040,817,485 805,712,839,981
PT Energi Sengkang 415,062,453,332 483,574,288,802
PT Makassar Power 143,755,268,909 137,115,040,654
PT Cikarang Listrindo 247,401,995,235 519,525,301,191
PO Jatiluhur and others 127,298,511,784 90,516,578,907
PT Amoseas (Drajat) 200,629,258,336 276,989,309,045
Geodipa 20,383,986,603 -
Rents of generator 244,207,150,686 116,125,309,739
11,168,842,948,716 8,717,140,537,841
Since 2002, electric power purchases from independent power producers are based on the tariff stated in
the Long-Term Agreements (LTA) which amended the Power Purchase Agreements (PPA).

Financial Report

(In Rupiah)
34. DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT

2002 2001
Rp Rp
15,626,762,571,070 3,404,113,925,841
Depreciation expenses in 2002 increased significantly as compared to the balance in 2001 due to the revalu-
ation of property, plant and equipment as of January 1, 2002.
35. MAINTENANCE EXPENSES
This account represents spare parts usage and contractor fees for maintenance purposes. Maintenance
expenses for the years ended 2002 and 2001 amounted to Rp 3,588,827,620,484 and Rp 2,630,359,602,830,
respectively.
36. PERSONNEL
The details of personnel expenses are as follows :
2002 2001
Rp Rp
Salaries and wages 931,901,357,266 842,232,791,518
Housing, transportation and TKK 587,219,219,431 379,953,355,018
Other benefits 598,110,585,926 503,737,996,901
Religious and production benefits 333,894,703,198 263,254,854,143
Company’s contributions and THT 132,163,729,674 97,150,983,043
2,583,289,595,495 2,086,329,980,623
Personnel expenses in 2002 amounting to Rp 496,959,614,872 increased as compared to the balance of 2001.
37. OTHER OPERATING EXPENSES

2002 2001
Rp Rp
- Data processing and billing expenses 236,392,122,197 187,115,314,031
- Meals 81,228,469,694 57,674,293,357
- Transportation 179,836,620,746 124,121,970,131
- Postage, telephone and telegram 60,043,646,776 60,020,551,870
- Gas, electricity and water 98,002,561,213 75,891,016,198
- Rent of buildings/land and others 55,247,320,586 37,992,358,466
- Stationeries 69,974,721,386 65,906,158,964
Financial Report

(In Rupiah)
2002 2001
Rp Rp
- Printed materials 67,833,381,063 79,279,560,085
- Insurance 110,631,900,849 44,408,664,178
- Others 461,416,529,215 361,737,374,861
1,420,607,273,725 1,094,147,262,141
38. OTHER INCOME (CHARGES)

2002 2001
Rp Rp
- Services income 44,093,049,058 35,231,042,023
- Penalty income - opal 752,978,006 5,425,195,073
- PPJU premium 18,541,760,116 4,786,689,590
- PFK income 15,114,763,683 12,685,055,140
- Penalty on delay in billing payment 109,418,431,106 78,936,314,811
- Other penalties 22,947,305,076 4,925,189,165
- Receipt of receivables which have been written-off 652,178,040 1,046,932,899
- Gain on sale of property, plant and equipment 30,955,050,441 16,348,663,716
- BBM differences (5,296,112,744) (1,886,651,745)
- Research and development (12,583,958,062) (87,935,840,922)
- Lost on property, plant and equipment written off (78,220,416,316) (106,498,403,840)
- Loss on materials written-off (8,451,062,843) (18,351,039,179)
- Amortization of deferred charges (4,779,256,133) (2,359,217,572)
- Other income ( charges ) 212,582,698,406 (82,175,838,621)
345,645,823,538 (139,821,909,462)
39. INTEREST AND FINANCING CHARGES
This account represents financing cost charged to income/loss of current period with details as follows :
2002 2001
Rp Rp
- Two-step loans 1,808,793,028,318 2,042,989,258,129
- Penalty (20,536,894,110) 75,537,123,508
1,788,256,134,208 2,118,526,381,637
- Bank loans 47,167,177,637 63,959,319,916
- Government loans 221,887,316,894 238,879,954,217
- Bonds 89,930,798,988 198,141,504,036
- Independent power producers 4,990,412,785 -
363,975,706,304 500,980,778,169
2,152,231,840,512 2,619,507,159,806

Financial Report

(In Rupiah)
40. GAIN (LOSS) ON FOREIGN EXCHANGE
This account represents gain (loss) on foreign currency transactions and adjustments on foreign exchange
rates for 2002 and 2001. At the end of year, assets and liabilities denominated in foreign currencies are
adjusted using the selling rates for liabilities and buying rates for assets. For December 31, 2002 and 2001,
the Company used the exchange rates published by Bank Indonesia (Rp 8,895 for buying rate and Rp 8,985
for selling rate in 2002 and Rp 9,547 for buying rate and Rp 9,643 for selling rate in 2001).
41. EXTRAORDINARY INCOME (LOSS)
2002 2001
Rp Rp
2,333,041,074,720 183,393,988,135
In 2002, the Company has extraordinary income arising from the hair-cut of PLN’s payables as a result of
the renegotiation with independent power producers as follows :
- Gunung Salak and Unocal 1,2,3 – UGI amounting to Rp 1,178,733,030,225.00
- Independent Power Producers (IPP) Unocal 4,5,6 amounting to Rp 1,154,308,044,495.00
42. RELATED PARTY TRANSACTIONS
In the normal course of business, the Company and its Subsidiaries entered into certain transactions with
related parties as follows (see Note 2c):
a. Employees
The Company and its Subsidiaries granted non-interest bearing housing loans to their employees. The
outstanding receivables arising from these transactions are presented as part of “Accounts Receivable-
Others” in the consolidated balance sheets.
b. PLN Pension Fund

Dana Pensiun PLN was established to manage the fund contribution of employees and the Company
and the payment of the retirement benefits of the Company and Subsidiaries ‘employees’.
c. Employees’ Cooperative
Transactions between the Company and Employees’ Cooperative (Koperasi Karyawan) mainly consist
of car rentals, collections of electricity bills, payment of car insurance and building and yard maintenance
services.
Financial Report

(In Rupiah)
43. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

Amount in foreign Equipment in Amount in foreign Equivalent in
CRY currencies Rupiah currencies Rupiah
ASSETS
Cash and cash equivalents CHF 809,633.22 5,191,157,731 801,355.99 5,001,062,406
EUR 6,897,588.08 64,292,901,286 - -
GBP 10,833.87 154,495,970 306,038.31 4,639,094,028
JPY 346,294,041.05 25,972,053,079 58,213,345.72 4,631,896,207
USD 25,241,498.37 225,872,897,187 22,181,403.84 231,543,298,315
321,483,505,253 245,815,350,956
Temporary investments EURO 38,665.12 353,321,903
USD 500,000.00 4,470,000,000 3,078,341.96 31,919,752,384
4,470,000,000 32,273,074,287
Other receivables USD 234,715.40 2,098,355,676 234,715.40 2,441,040,160
TOTAL ASSETS 328,051,860,929 280,529,465,403
LIABILITIES
Accrued expenses ATS 64,819.45 44,364,931 - -
Interest on two-step loans AUD 533,094.23 2,762,313,073 636,634.35 3,398,914,398
BEF 595,872.70 139,117,271 790,455.75 181,030,175
DEM 5,973.02 28,762,421 - -
FRF 836,148.33 1,200,522,576 - -
GBP 336,193.46 4,844,292,250 1,476,070.27 22,375,070,300
JPY 620,633,809.18 47,038,332,905 613,625,992.35 48,824,747,509
NLG 1,161,706.64 4,964,830,247 6,633,896.13 27,811,150,050
USD 22,878,866.99 205,566,619,919 25,257,468.97 263,991,065,673
266,589,155,593 366,581,978,105
Two-step loans ATS 200,733,448.87 137,389,713,896 205,762,732.14 138,147,040,732
AUD 25,520,028.54 132,236,111,093 25,965,815.99 138,628,375,673
BEF 47,127,021.77 11,002,656,455 55,610,253.05 12,735,860,154
DEM 18,823,827.94 90,644,032,180 21,694,740.18 102,478,359,438
FRF 16,815,188.89 24,142,862,129 21,593,959.80 30,412,932,982
GBP 37,579,120.25 541,486,562,671 39,212,783.94 594,408,553,808
JPY 29,481,237,503.05 2,234,406,575,346 36,185,288,573.84 2,879,176,567,128
NLG 192,209,820.79 821,454,487,659 224,347,915.32 940,529,265,841
CAD
USD 862,818,968.89 7,752,428,435,469 895,259,069.45 9,357,247,793,851
11,745,191,436,898 14,193,764,749,607
Project payables ATS 28,847,118.41 19,744,121,723 40,904,289.15 27,462,730,693
(loan in process) EURO 1,188,162.11 11,190,205,762 247,170.50 2,283,489,608
SFR 3,645,299.45 23,617,676,417 3,866,156.23 24,127,714,492
CAD 222,273.32 1,267,549,181 335,338.64 2,206,042,010
CHF 307,356.26 1,991,342,767 879,402.67 5,488,132,240
DEM 1,804,739.48 8,690,524,457 25,655,079.01 121,185,613,986
FRF 35,945,797.94 51,610,257,762 43,568,516.22 61,361,898,245
GBP 1,629,494.41 24,286,375,697 1,706,833.36 25,873,101,772
ITL 11,948,770.99 58,071,027 0 0
JPY 1,604,045,906.30 121,570,639,238 1,600,818,167.16 127,373,259,597
NGL 3,407,031.18 14,560,765,456 3,407,032.48 14,283,234,137
USD 23,458,332.03 210,773,113,257 27,964,304.77 292,282,913,490
489,360,642,744 703,928,130,270
Accounts payable USD 1,415,067,840.90 12,709,692,483,837 1,505,999,213.80 15,917,297,796,644
12,709,692,483,837 15,917,297,796,644
TOTAL LIABILITIES 25,210,833,719,072 31,181,572,654,626

Financial Report

(In Rupiah)
44. BUSINESS SEGMENT INFORMATION
The summary of the financial statements of the Company’s group is as follows :

December 31, 2002 (in million Rupiah)
PT PLN PT IND PT PJB PT PLN PT ICON Consolidated Total-

(Parent) POWER BATAM PLUS Elimination net
Total assets 213,658,782 52,373,409 39,313,316 1,268,168 111,055 (92,826,127) 213,898,603

Total liabilities 57,280,349 9,650,877 6,428,386 596,808 38,710 (16,183,625) 57,811,505
Total operating income 40,635,834 11,928,710 9,976,535 361,042 31,354 (23,404,080) 39,529,395
Income (loss) from
operations (13,638,247) 1,517,677 785,543 14,368 1,202 (1,496,741) (12,816,198)
Net income (loss) (6,059,558) 943,448 529,972 22,392 263 (1,496,075) (6,059,558)
December 31, 2001 (in million Rupiah)
PT PLN PT IND PT PJB PT PLN PT ICON Consolidated Total-

(Parent) POWER BATAM PLUS Elimination net
Total assets 80,958,026 15,443,549 10,631,706 866,273 5,688 (29,909,112) 77,996,130

Total liabilities 58,251,698 6,863,247 4,595,265 359,992 135 14,182,811 55,768,453
Total operating income 22,826,161 6,825,045 5,156,568 41,482 1,108 (12,293,701) 22,556,663
Income (loss) from
operations (6,266,885) 1,415,923 611,171 (14,468) (22) (404,877) (4,659,158)
Net income (loss) (25,563,095) 358,245 56,182 (10,134) 53 404,346 (25,563,095)
45. SIGNIFICANT COMMITMENTS
a. The Company entered into fuel supply agreements, with details as follows :
1) Coal
Suppliers Contract No. Total (tons) Periods
PT Adaro Indonesia 055.PJ/061//1996 5,400 2000 - 2002
PT Multi Harapan Utama 059,PJ/061//1996 576,000 2000 - 2002
PT Benala COAL Mining 060,PJ/061//1996 1,020,000 2000 - 2002
PT Batubara Bukit Asam 020,PJ/9220/PJB I/1997 20,100,000 1997 - 2002
PT Allied Indo Coal 041,A,PJNP/9220/1997/M 850,000 1997 - 2001
PT Jorong Barutama Greaston 050,PJNP/9212/1997/M 1,940,000 1999 - 2004
2) Gas
Sector Suppliers No. Agreements Periods Quantity
(BSCF)
Muara Karang and Tjg Priok Pertamina 055PJ/9221/199 1994-2004 1,045.33
Gresik Pertamina/Arco PJ-291/PST/89 1993-2012 1,392.00
Gresik Pertamina/Kodeco PJ.246/PST/87 1994-2004 158.40
Paya Pasir Belawan Pertamina PJB.175/PST/88 1987-2001 262.50
Financial Report

(In Rupiah)
b. The Company entered into electricity power purchase agreements with independent power producers as
follows :
1) Commenced Operations
No Company’s Name Name of Projects Fuel Capacity AF**) Purchases Periods

(MW) (%)
1. PT Cikarang Listrindo Cikarang - West Java Gas 150 72 0 1996 - 2016

2. PT Energi Sengkang Sengkang - South Sulawesi Gas 135 80 56 1997/1998-
2028/2031
3. PT Nusamba UNOCAL Salak - West Java Geothermal 165 85 0 1997/1998-
2028/2031
4. PT Makasar Power Co. Pare-pare, South Sulawesi MFO/Gas 60 80 0 1998-2016
5. PT Paiton Energy Co. Paiton I - East Java Coal 1,230 83 0 1998-2018
6. PT Jawa Power Paiton II – East Java Coal 1,220 80 0 2000-2028/2030
7. PT. Prasarana Nusantara Drajat, West Java Geothermal 275 95 2000-2030/2040
Jaya Chevron. Texaco
8 PT Magma Nusantara, Ltd Wayang Windu, West Java Geothermal 220 100 1998/1999-
2008/2029
Total 3,455
2) Not yet in Operations
Capacity AF
No Company’s Name Name of Projects Fuel Minimum Periods
(MW) (%)
1 PT Tenaga Listrik Amurang *) Amurang-North Sulawesi Coal 110 80 0 1998-2028

2 PT Daya Listrik Pratama Cilegon – West Java Coal 400 80 0 -
3 PT Tenaga Listrik Sibolga *) Sibolga-North Sumatera Coal 200 80 0 1998-2028
4 PT CEPA Indonesia Tanjung Jati B-Middle Java Coal 1,320 80 0 2000-2030
5 PT Asrigita Prasarana *) Sulawesi Gas 130 80 56 1999-2019
6 PT East Jawa Power Pasuruan-East Java Gas 500 85 56 -
7 PT Pandanwangi Sekartaji,
California energy Bedugul-Bali Geothermal 220 95 0 1998-2028
8 PT Yala Teknosa
Geothema *) Cibumi-West Java Geothermal 10 80 0 1998-2028
9 PT Himpuma California Dieng-Middle Java Geothermal 150 100 1996/2000-
Energy Ltd *) 2026/2030
10 PT Lakota Trimas Bina
Energy, Asia Power *) Kamojang-West Java Geothermal 60 60 0 1998-2028
11 Karaha Bodas Co, LLC Karaha-West Java Geothermal 220 100 0 1998-2028
12 Patuha Power Ltd Patuha-West Java Geothermal 220 100 0 1998/2028
13 PT Parama Nusamba 1998/2001-
UNOCAL*) Sarulla-North Sumatera Geothermal 330 80 0 2029/2032
14 PT Dizamantra Powerindo 1999/2002-
Enserch *) Sibayak N-Sumatera Geothermal 120 95 0 2029/2032
15 PT Bajradaya Sentanusa *) Asahan I-North Sumatera Water 180 1175 **) 0 2000/2030
16 PT Power Jawa Barat Serang-West Java Coal 450 83 0 2000-2030
17 PT CEPA Insonesia *) Tanjung Jati C-Middle Java 1,320 80 0 2003-2033
Total 5,940

Financial Report

(In Rupiah)
Description :
*) Periods based on contracts
**) AF = Power supplier factor which should be absorbed by the Company
***) In GWh
The Company has also power purchase agreements with small scale independent power producers. Based
on the Presidential Decree No. 5 year 1998 dated January 10, 1998, 17 of the other 24 IPPs above will be
reviewed/postponed. Management is of the opinion that the postponement of these projects will not affect
the national electricity needs.
c) Development and Management of the Company’s Waste
On May 6, 1996, the Company entered into cooperative agreements with third parties regarding the deve-
lopment and management of the waste factories for several PLTP. These agreements will end in 30 years
after the PLTPs are operated. The Company has a commitment to provide the location of the factories,
waste and electricity as needed. Moreover, the Company has an obligation to provide utilities during the
construction period and when the factories are operated. All of the operational expenses of the development
of the factories are paid by third parties. If the factories are already operating and producing, the Company
can make available its capital.
d) Development and Establishment of Power Plants
The Company has several Memorandum of Understanding regarding the development and establishment of
power plants. Several analytical studies are ongoing and if the results are beneficial, the cooperative agree-
ments will be made.
In the short term, the Company do not anticipate the possibility of significant commitments in those analyti-
cal studies.
e ) As of December 31, 2002, the Company has Bank Guarantee facilities (stand by letter of credit) as follows:
Issuing bank Facilities amount Due date
PT Bank Mandiri (Eks. BDN) US$ 223,399,000 March 31, 2002

PT Bank Negara Indonesia US$ 232,505,000 March 31, 2002
These facilities are used as guarantees for the payment of gas to Pertamina by the Subsidiaries.

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Annual Report 2002

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Contents

Vision, Mission and Motto 02

The Pillar of Change 27

Future Targets and Strategies 33

Business Achievements from the Year 1998 – 2002 37

General Management Discussions 59

Statements from the Board of Commissioners and Directors 67

Sensitivity towards customers’ needs … A Continued effort to give

Recognition of human dignity and pride… The giving of high es-

Integrity … The giving of high esteem for the values of honesty,

Product Quality … The continuous and measured improvement of

Opportunities for advancement … The giving of equal and exten-

Innovations … The readiness to pass knowledge and experience to

The Shareholders … Business decisions will be directed towards the

Annual Report 2002 I 01

d. To conduct an environmentally friendly business.

Business Activity Unit 1999 2000 2001 2002

This is an inevitable consequence and PT PLN (Persero) as the largest

In relation to this, efforts to develop non-petroleum electric power

Aside from diversification in the use of primary energy for electric

Henceforth, in the plan to boost the company’s image, there are

The efficient management of the company, the provision quality and

In relation to this, PT PLN (Persero) must progressively conduct Good

Bless us Lord, in our efforts. Amen.

Jakarta, 1st May 2003

Restructuring in the Electric Power Sector … At this moment a restructuring pro-

The ever-increasing requirement to improve customer service must be met by PLN.

Good Corporate Governance … Customer service is an important part of the effort

Step by step, PLN is moving closer towards that vision …..

Jakarta, April 2003

Annual Report 2002 I 11

Annual Report 2002 I 13

An Indonesian citizen, holding the position of President Commissioner for PT PLN

Annual Report 2002 I 15

An Indonesian citizen, holding the position of Commissioner for PT PLN (Persero)

An Indonesian citizen, holding the position of Commissioner for PT PLN (Persero)

Annual Report 2002 I 17

An Indonesian citizen, holding the position of Independent Commissioner for PT PLN

He is an economic graduate from Universitas Indonesia in 1988, and graduated as

He began his career in 1987 as a lecturer in the Economic Faculty of Universitas

Eddie Widiono Suwondho

An Electrical Engineering Graduate from Institut Teknologi Bandung in 1976, he com-

Annual Report 2002 I 19

As a person of experience in the finance department, he admits that the financial

He graduated in Electrical Engineering from Institut Teknologi Bandung in 1977, and

Ali Herman Ibrahim

Annual Report 2002 I 21

Herman Darnel Ibrahim

He graduated in Electrical Engineering from ITB in 1979, and completed a post-gradu-

Sunggu Anwar Aritonang

He graduated in Electrical Engineering, Institut Teknologi Bandung in 1975. His career

Annual Report 2002 I 23

Ir. EDDIE WIDIONO SUWONDHO, M.Sc. MM

Ir. F. PARNO ISWORO, MBA. MM

• The honourable dismissal of:

• The appointment of:

• The honourable dismissal of:

• The appointment of:

Annual Report 2002 I 27

The Pillar of Change