Hibra

Client Update: Mandatory to Submit Company’s Annual Financial Report

According to the issuance of regulation No. 25 of 2020 by the Ministry of Trade on annual company financial report (“MOT 25/2020”), the Ministry is trying to optimize the utilization of corporate financial reports and facilitate business as regards their obligation to submit the annual financial report.

Please see below information for the summary of the said regulation:

  1. General Information

Under this regulation, the company’s annual financial report (“LKTP”) reporting obligations apply  to          corporations  that have one of the criteria mentioned below:

  1. Limited liability company with one of the following criteria:
  2. public company;
  3. having business sectors related to the mobilization of public funds;
  4. having issued a letter of indebtedness;
  5. having a capital in the minimum of IDR 25,000,000,000 (twenty-five billion Rupiah); or
  6. a debtor whose annual financial statements are required by the bank to be audited.
  7. Foreign companies domiciled and operating in the territory of the Republic of Indonesia according to the provisions of the legislation, including branch offices, sub-offices, subsidiaries and agents and representatives of these companies that have the authority to enter into agreements; or
  8. Corporate Companies (PERSERO), Public Companies (PERUM), and Regional Companies.

      LKTP must be submitted by the companies no later than six months of the end of the company accounting year.

  1. Submission Procedure

MOT 25/2020, regulates the procedure for the submission of company LKTP using an online system called the  SIPT (Sistem Informasi Perizinan Terpadu) managed by the Ministry of Trade. The companies should obtain the business identification number from the OSS before it can access the SIPT, companies will need the username and  password obtained at the time of activation of the OSS account,

Furthermore, if the companies have submitted LKTP to the following parties:

    1. Regulator;
    2. the governing authority regarding the submission of financial statements;
    3. Minister of State-Owned Enterprises; or
    4. Minister of Finance.

the obligation to submit LKTP is deemed done. The companies will still need to provide evidence of the submission to the Director-General of Domestic Trade, through the SIPT.

The Director-General of Domestic Trade, issues the STP-LKTP in the form of electronic documents that are listed in the Quick Response Code, no later than 5 (five) working days after the LKTP is submitted completely and correctly.

  1. Sanction

Every company that does not submit LKTP or does not submit LKTP within the time limit as referred to in the MOT 25/2020, is subject to administrative sanctions.

Any violation to MOT 25/2020, may carry the administrative sanction of:

    1. a written sanction;
    2. revocation of business licenses and/or operational/commercial licenses of companies that carry out business activities in the field of trade; and/or
    3. recommendation for revocation of business license and/or operational/commercial permit for companies that carry out business activities other than trading.

A written sanction may be given 3 (three) times with a minimum period of 14 (fourteen) days for each written sanction.

While for the companies who wrongly submitted the LKTP, is subject to the following sanction:

    1. a written sanction;
    2. revocation of STP-LKTP;
    3. revocation of business licenses and/or operational/commercial licenses of companies that carry out business activities in the field of trade; and/or
    4. recommendation for revocation of business license and/or operational/commercial permit for companies that carry out business activities other than trading.

The companies may submit LKTP manually to the Directorate of Business Development and Distribution Performers for a maximum period of 6 (six) months from the date this Ministerial Regulation comes into force.

To avoid the above-mentioned sanction, we can help you to prepare and submit the LKTP report to the Ministry of Trade, please do not hesitate to contact us at hibra@hibraconsulting.com for further queries.

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