PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2011 and 2010 and For the Years then Ended
- 19 - As of December 31, 2011 and 2010, the Company’s Audit Committee based on Notarial
Deed No. 141 dated June 17, 2008 of Sutjipto, S.H., public notary in Jakarta, consists of the following:
Chairman : Sunarto
Members : Rusli
Prakarsa Pande Putu Raka
The form of the Company’s Audit Committee complies with Regulation No. IX.I.5 concerning the “Form and Orientation of the Audit Committee Working Implementation”.
As of December 31, 2011 and 2010, the Company’s internal audit committee, consists of the following:
Chairman : Edy
Tjandra Members :
Linda Widjaya
The form of the Company’s internal audit committee complies with Regulation No. KEP-496BL2008 dated November 28, 2008.
As of December 31, 2011 and 2010, the Company has a total number of employees unaudited of 10 and 8, respectively. As of December 31, 2011 and 2010, the Group have a
total number of employees unaudited of 12,841 and 7,853, respectively. The aggregate salaries and benefits paid by the Group to all commissioners and directors
for the years ended December 31, 2011 and 2010 amounted to Rp 37,707 million and Rp 33,605 million, respectively.
The consolidated financial statements of PT Sinar Mas Multiartha Tbk and its subsidiaries for the year ended December 31, 2011 were completed and authorized for issue by the Company’s
Directors on March 30, 2012 and are responsible for the consolidated financial statements.
2. Summary of Significant Accounting and Financial Reporting Policies
a. Basis of Consolidated Financial Statements Preparation and Measurement
The consolidated financial statements have been prepared in accordance with Indonesian Financial Accounting Standards “SAK”, which comprise the statements and interpretations
issued by the Board of Financial Accounting Standards of the Indonesian Institute of Accountants and Regulation No. VIII.G.7. regarding “Financial Statements Presentation
Guidelines” included in the Appendix of the Decree of the Chairman of the Capital Market and Financial Institution Supervisory Agency Bapepam – LK No. KEP-06PM2000 dated
March 13, 2000 and Circular Letter No. SE-02PM2002 regarding “Guideliness on Preparation and Presentation of Financial Statements of Issuers or Public Listed Companies
in Investment Industry”, as reaffirmed with Circular Letter No. SE-03BL2011 regarding “Guideliness on Preparation and Presentation of Financial Statements of Issuers or Publicly
Listed Companies”. As disclosed further in relevant suceeding notes, several amended and published accounting standards were adopted effective January 1, 2011.
The consolidated financial statements for the year ended December 31, 2011 are in accordance with the Statements of Financial Accounting Standard “PSAK” No. 1 Revised
2009, “Presentation of Financial Statements” adopted on January 1, 2011. The said adoption of PSAK No. 1 Revised 2009 has significant impact on the related
presentation and disclosures in the consolidated financial statements.
PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2011 and 2010 and For the Years then Ended
- 20 - The accounting policies adopted in the preparation of the consolidated financial statements
are consistent with those made in preparation of the consolidated financial statements for the year ended December 31, 2010, except for the adoption of several amended PSAK
effective January 1, 2011 as disclosed in this Note. The measurement basis used is the historical cost, except for certain accounts which are
measured on the bases described in the related accounting policies. The consolidated financial statements, except for the consolidated statements of cash flows, are prepared
under the accrual basis of accounting.
The consolidated statement of cash flows are prepared using the modified direct method with classifications of cash flows into operating, investing, and financing activities. For the
purpose of the consolidated statements of cash flows, cash and cash equivalents include cash, demand deposits with Bank Indonesia, demand deposits with other banks, and
placement with other banks with original maturity of three 3 months or less from the acquisition date.
The reporting currency used in the preparation of the consolidated financial statements is the Indonesian Rupiah Rupiah which is the functional currency of The Group, except for Sinar
Mas Insurance, a subsidiary of ASM, which has adopted the United States U.S. Dollar as its functional, reporting and recording currency since May 2011. Management believes that
having the United Stated U.S Dollar as the reporting and recording currency is appropriate since Sinar Mas Insurance main transactions and balances are denominated in U.S. Dollars.
For consolidation purposes, the accounts of Sinar Mas Insurance were translated into Rupiah amounts on the following basis:
Consolidated statements of financial position accounts:
The prevailing rates of exchange as at the last banking day of the year Rp 9,068 per US1 as of December 31, 2011.
Consolidated statement of comprehensive income accounts: The prevailing exchange rates at the date of transactions. For practical reasons, average
rates during the year of Rp 8,773.25 per US 1, for the year ended December 31, 2011 was used.
Gains or losses arising from translation of consolidated statements of financial position and consolidated statement of comprehensive income accounts are presented as “Other Equity
component – share in translation adjustmentof a subsidiary” in the equity section of the consolidated statement of financial position.
Unless otherwise stated, all figures presented in the consolidated financial statements are stated in millions of Rupiah.
b. Adoption of Revised Statements of Financial Accounting Standards Effective January 1, 2011
The Group have adopted the following Financial Accounting Standards PSAKs and Interpretations ISAKs effective January 1, 2011:
PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2011 and 2010 and For the Years then Ended
- 21 - 1 PSAK No. 1 Revised 2009, “Presentation of Financial Statements”, regulates the
presentation of financial statements as to, among others, the objective, component of financial statements, fair presentation, materiality and aggregate, offsetting, distinction
between current and non-current assets and short term and long-term liabilities, comparative information and consistency and introduces new disclosures such as,
among others, key estimations and judgments, capital management, other comprehensive income, departures from accounting standards and statement of
compliance. This standard introduces a statement of comprehensive income that combines all items of income and expenses recognized in the profit and loss together
with “other comprehensive income”. The entities may choose to present all items in one statement, or to present two linked statements, a separate statement of income and a
statement of comprehensive income. The Group have elected to present a single statement and have presented its prior periods’ consolidated financial statements in
conformity with this PSAK to be comparative with the December 31, 2011 consolidated financial statements.
2 PSAK No. 4 Revised 2009, “Consolidated and Separate Financial Statements”, provides for the preparation and presentation of the consolidated financial statements
for a group of entities under the control of The Company, and the accounting for investments in subsidiaries, jointly controlled, entities and associated entities when
separate financial statements are prepared as additional information.
In accordance with this provision of PSAK No. 4, the Company has recorded its investments in subsidiaries at cost in the Parent Company Financial Statements.
3 PSAK No. 5 Revised 2009, “Operating Segments”, requires reporting information of each operating segment to be in accordance with the information which are regularly
reported to the decision maker in operations to make decisions on resources that will be allocated to the segment and to value its performance. This PSAK has improved the
definition of segment information using the same basis as in the internal reporting. The Group have presented prior period’s segment information in accordance with this PSAK
to be comparative with the consolidated financial statements for the year ended December 31, 2011.
4 PSAK No. 7 Revised 2010, “Related Party Disclosures”, requires disclosures of related party relationships, transactions and outstanding balances, including
commitments, in the financial statements. 5 PSAK No. 15 Revised 2009, “Investments in Associates”, prescribes the accounting
for investments in associates as to determination of significant influence, accounting method to be applied, impairment in value of investments and separate financial
statements. The adoption this revised PSAK has no significant impact on the Group’ consolidated financial statements.
6 PSAK No. 22 Revised 2010 “Business Combinations” stipulates the nature of transaction or other event that meets the definition of a business combination to
improve the relevance, reliability and comparability of the information that a reporting entity provides in its financial statements about a business combination and its effects.
The Group prospectively adopted PSAK No. 22 Revised 2010, “Business Combinations”, applicable for business combinations that occur on or after the
beginning of a financial yearperiod commencing on or after January 1, 2011.
PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2011 and 2010 and For the Years then Ended
- 22 - In accordance with the transitional provisions of PSAK No. 22 Revised 2010, starting
January 1, 2011, the Group: • ceased the goodwill amortization;
• eliminated the carrying amount of the related accumulated amortization of goodwill; and
• performed an impairment test of goodwill in accordance with PSAK No. 48 Revised 2009, “Impairment of Assets”.
Further, the balance of negative goodwill which is recognized before January 1, 2011 amounting to Rp 129,806 million was adjusted to retained earnings as of the beginning
of the fiscal year, January 1, 2011 Note 34. 7 PSAK No. 25 Revised 2009, Accounting Policies, Changes in Accounting Estimates
and Errors. Estimated losses on commitment and contingencies
Starting from January 1, 2011, BS determines estimated losses on commitments and contingencies of bank guarantees, letters of credit and unused loan facilities based on
the difference between the amortised amount carrying amount and the present value of any expected payment when a payment under the guarantee has become
probable. Prior to January 1, 2011, BS assesses the estimated losses on commitments and
contingencies allowance based on Bank Indonesia Regulation No. 72PBI2005 dated January 20, 2005 and in accordance ith Letter from Bank Indonesia
No. 12516DPNPIDPnP dated September 21, 2010. Determination of estimated losses on commitments and contingencies are classified
into five 5 categories with the minimum percentage of allowance for possible losses as follows:
Classification Pass
Minimum 1
Special mention Minimum
5 Substandard
Minimum 15
Doubtful Minimum
50 Loss
100 Percentage of
Losses Allowance for Possible
The above percentages are applied to commitments and contingencies unused committed loan facilities, letter of credits and bank guarantee, less collateral value,
except for commitments and contingencies categorised as pass, where the rates are applied directly to the outstanding balance of commitment and contingencies.
Allowance for possible losses on non-productive Starting from January 1, 2011, BS determines allowance for possible losses on non
productive asstes consisting of foreclosed properties, fixed asstes are not used, the administrative account and supense accounts at the lower of the carrying amount and
fair value less costs to sell.
