PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2014 and for the Year Then Ended
Figures in tables are expressedin billions of Rupiah, unless otherwise stated
120
44. FINANCIAL RISK MANAGEMENT continued
1. Financial risk management continued d. Credit risk
The following table presents the maximum exposure to credit risk of the Group’s financial assets:
2014 2013
Cash and cash equivalents 17,672
14,696 Other current financial assets
2,797 6,872
Trade and other receivables, net 6,848
6,421 Long-term investments
16 21
Advances and other non-current assets 546
685
Total 27,879
28,695
The Group is exposed to credit risk primarily from trade 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 customer receivable balances exceed 4 of trade receivables of December 31, 2014.
Management is confident in its ability to continue to control and sustain minimal exposure to credit risk given that the Group has recognized 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 Group has difficulties in fulfilling financial liabilities
when they become due. Prudent liquidity risk management implies maintaining sufficient cash in order to meet the
Group’s financial obligations. The Group continuously performs an analysis to monitor financial position ratios, such as liquidity ratios and debt-to-equity ratios, against debt
covenant requirements.
The following is the maturity profile of the Group’s financial liabilities:
Carrying Contractual 2019 and
amount cash flows 2015
2016 2017
2018 thereafter December 31, 2014
Trade and other payables 11,944
11,944 11,944 -
- -
- Accrued expenses
5,211 5,211
5,211 -
- -
- Loans and other borrowings
Bank loans 13,740
16,468 6,830
3,172 2,552
2,099 1,815
Obligations under finance leases
4,789 6,535
975 927
898 830
2,905 Bonds and notes
3,308 4,673
1,370 251
229 228
2,595 Two-step loans
1,615 1,944
282 274
264 230
894
Total 40,607
46,775 26,612 4,624
3,943 3,387
8,209
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2014 and for the Year Then Ended
Figures in tables are expressedin billions of Rupiah, unless otherwise stated
121
44. FINANCIAL RISK MANAGEMENT continued
1. Financial risk management continued e. Liquidity risk continued
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
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, in an
arm’s length transaction. The Group 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, accrued expenses, and short-term bank
loans, long-term investments, advances and other non-current assets are considered to approximate their carrying amounts as the impact of discounting is not significant.
ii Available-for-sale financial assets primarily consist of shares, mutual funds and Corporate and Government bonds. Shares and mutual funds actively traded in an established market
are stated at fair value using quoted market price or, if unquoted, determined using a valuation technique. Corporate and Government bonds are stated at fair value by
reference to prices of similar securities at the reporting date.