Schedule 512 PT BAYAN RESOURCES AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 MARCH 2008 AND 2007 AND 31 DECEMBER 2007, 2006 AND 2005
Expressed in million Indonesian Rupiah, unless otherwise stated
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued a. Basis of preparation of the consolidated financial statements
The consolidated financial statements have been prepared using historical costs, unless otherwise stated. The reporting currency used in the preparation of the consolidated financial statements is the Indonesian Rupiah
“Rupiah” or “Rp”. The consolidated statements of cash flows have been prepared based on the direct method by classifying
cash flows on the basis of operating, investing and financing activities. For the purpose of the consolidated statements of cash flows, cash and cash equivalents include cash on hand, cash in banks and deposits with a
maturity of three months or less, net of overdrafts.
Restructuring transactions for entities under common control are accounted for using the pooling of interests method. The difference between the transfer price and the book value is recorded under the account
“Difference in Value from Restructuring Transactions of Entities under Common Control” and presented under the equity section of the consolidated balance sheets.
b. Principles of consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries in which the Company directly or indirectly has ownership of more than 50 of voting rights, or if equal to or less than
50, the Company has the ability to control the entity. Subsidiaries are consolidated from the date on which effective control is transferred to the Company and are no longer consolidated from the date of disposal.
The effect of all transactions and balances between companies in the Group has been eliminated in preparing the consolidated financial statements.
The proportionate share of minority shareholders in the net assets of subsidiaries is presented as “minority interest” in the consolidated balance sheets.
A minority interest is not recognised in respect of subsidiaries with a deficit in equity unless the minority shareholder has a contractual obligation to contribute to fund the deficit.
Transactions with minority interests are accounted for under the economic entity method, with any excess on acquisition of minority interests over the share of net assets acquired being recorded in equity.
The accounting policies adopted in preparing the consolidated financial statements have been consistently applied by the subsidiaries unless otherwise stated.
The accounts of DPP and KOTR which are reported in a foreign currency, are translated into Rupiah using the following rates:
‰ Assets and liabilities: Bank Indonesia’s middle rate as at the balance sheets date, except for fixed assets which used historical rates.
‰ Equity accounts: historical rates. ‰ Profit and loss accounts: average rate of exchange throughout the year.
The difference resulting from the translation of balance sheets and profit and loss accounts is presented as “Exchange Difference from Financial Statements Translation” under the equity section of the consolidated
balance sheets.
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Schedule 513 PT BAYAN RESOURCES AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 MARCH 2008 AND 2007 AND 31 DECEMBER 2007, 2006 AND 2005
Expressed in million Indonesian Rupiah, unless otherwise stated
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued c. Foreign currency translation
Transactions denominated in currencies other than Rupiah are converted into Rupiah at the exchange rate prevailing at the date of the transaction. At the balance sheets date, monetary assets and liabilities in
currencies other than Rupiah are translated into Rupiah at the exchange rate prevailing at that date. Exchange gains and losses arising on the translation of monetary assets and liabilities in currencies other than Rupiah are
recognised in the consolidated statements of income.
The rates of exchange, based on the Bank Indonesia middle rate, used at the balance sheet dates were as follows full amount:
31 March 31 December
2008 2007
2007 2006
2005 Unaudited
Restated Restated
United States Dollar “US” equivalent to Rp . . . . . . . . . . . . . 9,217
9,118 9,419
9,020 9,830
Euro “EUR” equivalent to Rp . . . . . . . . . . . . . . . . . . . . . . . . . 14,559
12,154 13,760
11,858 11,660
Australian Dollar “AUD” equivalent to Rp . . . . . . . . . . . . . . . 8,450
7,364 8,229
7,133 7,207
100 Japanese Yen “JPY” equivalent to Rp . . . . . . . . . . . . . . . 9,227
7,758 8,307
7,580 8,342
Singapore Dollar “SGD” equivalent to Rp . . . . . . . . . . . . . . . 6,683
6,011 6,502
5,879 5,907
Great Britain Pound Sterling “£” equivalent to Rp . . . . . . . . . 18,391
17,894 18,804
17,697 16,947
Malaysian Ringgit “MYR” equivalent to Rp . . . . . . . . . . . . . 2,893
2,638 2,828
2,554 2,601
d. Transactions with related parties
The Group has entered into transactions with certain related parties as defined under the Statement of Financial Accounting Standards “SFAS” No. 7, “Related Party Disclosures”.
e. Receivables
Receivables are presented at their estimated recoverable value after providing allowance for doubtful accounts based on management’s review of the status of each account at the end of the financial periodyear.
Receivables are written-off during the period in which they are determined to be not collectible.
f. Inventories
Coal inventories represent the Group’s entitlement to coal on hand and are valued at the lower of cost or net realisable value. Cost is determined by moving average basis which includes an appropriate allocation of
materials, labour, depreciation and overheads related to mining activities. Net realisable value is the estimated sales amount in the ordinary course of business, less the estimated costs of completion and estimated selling
expenses.
Spare parts and materials are valued at cost, determined on a moving average basis, less allowance for obsolete inventory. Spare parts and materials are charged to production costs in the period they are used.
Allowance for obsolete inventory is determined on the basis of estimated future usage or sale of individual inventory items.
g. Prepaid expenses
Prepaid expenses are amortised over the periods benefited using the straight-line method. F-30
