PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2013 and for the Year Then Ended
Figures in tables are expressed in billions of rupiah, unless otherwise stated
114
44. FINANCIAL RISK MANAGEMENT continued
1. Financial risk management continued c. Interest rate risk continued
At reporting date, the interest rate profile of the Company and subsidiaries’ interest-bearing borrowings was as follows:
2013 2012
Fixed rate borrowings 9,591
7,025 Variable rate borrowings
10,665 12,250
Sensitivity analysis for variable rate borrowings
At December 31, 2013, a decrease increase by 25 basis points in interest rates of variable rate borrowings would have increased decreased equity and profit or loss by Rp27 billion,
respectively. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
d. Credit risk The following table presents the maximum exposure to credit risk of the Company and
subsidiaries’ financial assets:
2013 2012
Cash and cash equivalents 14,696
13,118 Other current financial assets
6,872 4,338
Trade and other receivables, net 6,421
5,409 Long-term investments
21 21
Advances and other non-current assets 685
614
Total 28,695
23,500
The Company and subsidiaries are exposed to credit risk primarily from trade receivables and other receivables. The credit risk is managed by continuous monitoring of outstanding
balances and collection.
Trade and other receivables do not have any major concentration risk whereas no customers. receivables balance exceeds 2 of trade receivables at December 31, 2013.
Management is confident in its ability to continue to control and sustain minimal exposure to credit risk given that the Company and subsidiaries have provided sufficient provision for
impairment of receivables to cover incurred loss arising from uncollectible receivables based on existing historical data on credit losses.
e. Liquidity risk Liquidity risk arises in situations where the Company and subsidiaries have difficulties in
fulfilling financial liabilities when they become due. Prudent liquidity risk management implies maintaining sufficient cash in order to meet the
Company and subsidiaries’ financial obligations. The Company and subsidiaries continuously perform an analysis to monitor financial position ratios, such as liquidity ratios, and debt equity
ratios, against debt covenant requirements.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2013 and for the Year Then Ended
Figures in tables are expressed in billions of rupiah, unless otherwise stated
115
44. FINANCIAL RISK MANAGEMENT continued
1. Financial risk management continued e. Liquidity risk continued
The following is the maturity profile of the Company and subsidiaries’ financial liabilities:
Carrying Contractual 2018 and
amount cash flows 2014
2015 2016
2017 thereafter
December 31, 2013 Trade and other payables
11,988 11,988
11,988 -
- -
- Accrued expenses
5,264 5,264
5,264 -
- -
- Loans and other borrowings
Bank loans 10,023
11,618 5,028
3,264 1,248
980 1,098
Obligations under finance leases
4,969 6,904
1,070 885
847 813
3,289 Two-step loans
1,915 2,308
292 285
278 271
1,182 Bonds and notes
3,349 4,817
582 1,311
215 203
2,506
Total 37,508
42,899 24,224
5,745 2,588
2,267 8,075
Carrying Contractual
2017 and amount
cash flows 2013
2014 2015
2016 thereafter
December 31, 2012
Trade and other payables 7,456
7,456 7,456
- -
- -
Accrued expenses 6,163
6,163 6,163
- -
- -
Loans and other borrowings Bank loans
11,295 12,585
5,118 3,869
2,518 602
478 Obligations under
finance leases 2,324
3,172 652
548 398
354 1,220
Two-step loans 1,987
2,462 283
277 270
263 1,369
Bonds and notes 3,669
5,462 757
505 1,287
203 2,710
Total 32,894
37,300 20,429
5,199 4,473
1,422 5,777
The difference between the carrying amount and the contractual cash flows is interest value. 2. Fair value of financial assets and financial liabilities
a. Fair value measurement Fair value is the amount for which an asset could be exchanged, or liability settled, between in
an arm’s length transaction. The Company and subsidiaries determined the fair value measurement for disclosure
purposes of each class of financial assets and financial liabilities based on the following methods and assumptions:
i The fair values of short-term financial assets and financial liabilities with maturities of one
year or less cash and cash equivalents, trade receivables, other receivables, other current assets, trade payables, other payables, dividend payable, accrued expenses,
advances from customers and suppliers and short-term bank loans are considered to approximate their carrying amounts as the impact of discounting is not significant .
