PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND FOR THE YEAR THEN ENDED
WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2011 AND FOR THE YEAR THEN ENDED AND AS OF JANUARY 1, 2011
Figures in tables are presented in billions of Rupiah, unless otherwise stated
113
44. FINANCIAL RISK MANAGEMENT continued
1. Financial risk management continued Financial risk management is carried out by the Treasury Management unit under policies
approved by the Board of Directors. The Treasury Management unit identifies, evaluates and hedges financial risks.
a. Foreign exchange risk The Company and subsidiaries are exposed to foreign exchange risk on sales, purchases
and borrowings that are denominated in foreign currencies. The foreign currency denominated transactions are primarily in U.S. Dollars and Japanese Yen. The Company and
subsidiaries exposure to other foreign exchange rates are not material.
Increasing risks of foreign currency exchange rates on the obligations of the Company and subsidiaries are expected to be offset by time deposits and receivables in foreign currencies
that are equal to at least 25 of the outstanding current liabilities.
The following table presents the Company and subsidiaries’ financial assets and financial liabilities exposure to foreign currency risk:
2012 2011
U.S. Dollars Japanese Yen U.S. Dollars Japanese Yen
in billions in billions in billions
in billions
Financial assets 0.51
0.00 0.28
0.00 Financial liabilities
0.61 9.25
0.77 10.02
Net exposure 0.10
9.25 0.49
10.02
Sensitivity analysis
A strengthening of the U.S. Dollars and Japanese Yen, as indicated below, against the Rupiah at December 31, 2012 would have decreased equity and profit or loss by the
amounts shown below. This analysis is based on foreign currency exchange rate variances that the Company and subsidiaries considered to be reasonably possible at the reporting
date. The analysis assumes that all other variables, in particular interest rates, remain constant.
Equityprofit loss December 31, 2012
U.S. Dollars 1 strengthening 10
Japanese Yen 5 strengthening 52
A weakening of the U.S. Dollars and Japanese Yen against the Rupiah at December 31, 2012 would have had an equal but opposite effect on the above currencies to
the amounts shown above, on the basis that all other variables remain constant.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND FOR THE YEAR THEN ENDED
WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2011 AND FOR THE YEAR THEN ENDED AND AS OF JANUARY 1, 2011
Figures in tables are presented in billions of Rupiah, unless otherwise stated
114
44. FINANCIAL RISK MANAGEMENT continued
1. Financial risk management continued b. Market price risk
The Company and subsidiaries are exposed to changes in debt and equity market prices related to available-for-sale investments carried at fair value. Gains and losses arising from
changes in the fair value of available-for-sale investments are recognized in equity. The performance of the Company and subsidiaries’ available-for-sale investments are
monitored periodically, together with a regular assesment of their relevance to the Company and subsidiaries’ long-term strategic plans.
As of December 31, 2012, management considered the price risk for its available-for-sale investments to be immaterial in terms of the possible impact on profit or loss and total equity
from a reasonably possible change in fair value.
c. Interest rate risk Interest rate fluctuation is monitored to minimize any negative impact to financial position.
Borrowings at variable interest rates expose the Company and subsidiaries to interest rate risk Notes 16, 17, 18, 19 and 20. To measure market risk pertaining to fluctuations in
interest rates, the Company and subsidiaries primarily use interest margin and maturity profile of the financial assets and liabilities based on changing schedule of the interest rate.
At reporting date, the interest rate profile of the Company and subsidiaries’ interest-bearing borrowings was as follows:
2012 2011
Fixed rate borrowings 7,025
5,409 Variable rate borrowings
12,250 12,462
Sensitivity analysis for variable rate borrowings At December 31, 2012, a change of 25 basis points in interest rates of variable rate
borrowings would have increased decreased equity and profit or loss by Rp31 billion, respectively. This analysis assumes that all other variables, in particular foreign currency
rates, remain constant.
