PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2015 and for the Six Months Period Then Ended Unaudited
Figures in tables are expressed in billions of Rupiah, unless otherwise stated
128
42. FINANCIAL RISK MANAGEMENT continued
2. Fair value of financial assets and financial liabilities continued b. Classification and fair value continued
December 31, 2014 Other
Total Loans and Available for financial
carrying Fair
Trading receivables sale liabilities
amount value
Trade and other payables -
- -
12,476 12,476
12,476 Accrued expenses
- -
- 5,211
5,211 5,211
Loans and other borrowings Short-term bank loans
- -
- 1,810
1,810 1,810
Long-term bank loans -
- -
11,930 11,930
11,787 Obligation under finance lease
- -
- 4,789
4,789 4,789
Bonds and notes -
- -
3,308 3,308
3,355 Two-step loans
- -
- 1,615
1,615 1,650
Total financial liabilities -
- -
41,139 41,139
41,078
c. Fair value hierarchy The table below presents the recorded amount of financial assets measured at fair value and
limited mutual funds participation unit for debt-based securities where the Net Asset Value
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2015 and for the Six Months Period Then Ended Unaudited
Figures in tables are expressed in billions of Rupiah, unless otherwise stated
129
42. FINANCIAL RISK MANAGEMENT continued
2. Fair value of financial assets and financial liabilities continued c. Fair value hierarchy continued
Available-for-sale financial assets primarily consist of mutual funds and Corporate and Government bonds. Corporate and Government bonds are stated at fair value by reference to
prices of similar securities at the reporting date. As they are not actively traded in an established market, these securities are classified as level 2.
Financial asset at fair value through profit or loss represens the Put Option on the 20 remaining ownership in Indonusa which was received as part of the divestment considerations.
Since the fair value is not observable and valuation technique is used to determine the fair value, this financial asset is classified as level 3.
Mutual funds actively traded in an established market are stated at fair value using quoted market price and classified within level 1. The valuation of the mutual funds invested in
Corporate and Government bonds and put option require significant management judgment due to the absence of quoted market prices, the inherent lack of liquidity and the long-term nature of
such assets. As these investments are subject to restrictions on redemption such as transfer restrictions and initial lock-up periods and observable activity for the investments is limited,
these investments are therefore classified within level 3 of the fair value hierarchy. Management considers among other assumptions, the valuation and quoted price of the arrangement of the
mutual funds. Reconciliations of the beginning and ending balances for items measured at fair value using
significant unobservable inputs level 3 as of June 30, 2015 and 2014 are as follows:
2015 2014
Balance at January 1 290
297 Purchases
- -
Included in consolidated statement of comprehensive Income
- -
Realized loss - recognized in profit or loss -
- Unrealized loss - recognized in other
comprehensive income -
- Redemption
- -
Balance at June 30 290
297
43. CAPITAL MANAGEMENT
The capital structure of the Group is as follows:
December 31, 2014 June 30, 2015
Restated Amount
Portion Amount
Portion
Short-term debts 1,541
1.49 1,810
1.98 Long-term debts
35,109 34.03
21,642 23.72
Total debts 36,650
35.51 23,452
25.70 Equity attributable to owners
66,547 64.49
67,816 74.30
Total 103,197
100.00 91,268
100.00
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2015 and for the Six Months Period Then Ended Unaudited
Figures in tables are expressed in billions of Rupiah, unless otherwise stated
130
43. CAPITAL MANAGEMENT continued
The Group objectives when managing capital are to safeguard the Group ability to continue as a going concern in order to provide returns for stockholders and benefits to other stakeholders and to maintain
an optimum capital structure to minimize the cost of capital. Periodically, the Group conducts debt valuation to assess possibilities of refinancing existing debts with
new ones, which have more efficient cost that will lead to more optimized cost-of-debt. In case of idle cash with limited investment opportunities, the Group will consider buying back its shares of stock or
paying dividend to its stockholders. In addition to complying with loan covenants, the Group also maintains its capital structure at the level it
believes will not risk its credit rating and which is comparable with its competitors.
Debt-to-equity ratio comparing net interest-bearing debt to total equity is a ratio, which is monitored by management to evaluate the Group capital structure and review the effectiveness of the Group
