PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2010 AUDITED AND SEPTEMBER 30, 2011 UNAUDITED AND
NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2010 AND 2011 UNAUDITED Figures in tables are presented in millions of Rupiah, unless otherwise stated
132
50. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES continued
If the Company and its subsidiaries report monetary assets and liabilities in foreign currencies as of September 30, 2011 using the rates on October 27, 2011, the unrealized foreign exchange loss will
increase by the amount of Rp.60,336 million.
51. FINANCIAL ASSETS AND LIABILITIES
1. Financial risk management The Company and its subsidiaries’ activities expose it to a variety of financial risks such as
market risks including foreign exchange risk and interest rate risk, credit risk and liquidity risk. Overall, the Company and subsidiaries’ financial risk management programme is intended for
minimizing lossess on the financial assets and liabilities arising from fluctuation of foreign currency exchange rate and the fluctuation of interest rate. Management provides written policy
for foreign currency risk management mainly through time deposits placements and hedging to cover foreign currency risk exposures for the time range of 3 up to 12 months.
Financial risk management is carried out by the Treasury Management unit under policies approved by the Board of Directors. The Treasury Management unit identifies, evaluates and
hedges financial risks.
a. Foreign exchange risk The Company and its subsidiaries have significant receivables, payables and liabilities
balance denominated in foreign currencies which include the United States Dollar, Japanese Yen, Euro, Singapore Dollar and Great Britain Pound sterling. Increasing risks of foreign
currency exchange rates on the obligations of the Company and its subsidiaries are expected to be offset by time deposits and receivables in foreign currencies are set at least 25 of the
liabilities and will mature in less than 1 one year with respect to the tendency of changes exchange rates in the future.
b. Interest rate risk Interest rate fluctuation is monitored to minimize any negative impact to financial position.
Borrowings at variable interest rates expose the Company and its subsidiaries to interest rate risk Notes 18,20,21 and 22. To measure market risk fluctuations in interest rates, the
Company and its subsidiaries primarily use interest margin and maturity profile of the financial assets and liabilities based on changing schedule of the interest rate.
The following table represents a breakdown of the Company and subsidiaries’ financial assets and liabilities which are impacted by interest rates.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2010 AUDITED AND SEPTEMBER 30, 2011 UNAUDITED AND
NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2010 AND 2011 UNAUDITED Figures in tables are presented in millions of Rupiah, unless otherwise stated
133
51. FINANCIAL ASSETS AND LIABILITIES continued
1. Financial risk management continued
b. Interest rate risk continued
September 30, 2011 Non
One year More than
interest or less
one year bearing
Total Assets
Cash and cash equivalents 9,340,186
- 24,735
9,364,921 Temporary investments
267,865 -
92,925 360,790
Other current assets 1,014,280
- -
1,014,280 Other non-current assets
- 164,620
55,466 220,086
Total financial assets 10,622,331
164,620 173,126
10,960,077 Liabilities
Short-term bank loans 127,143
- -
127,143 Two-step loans
746,326 2,083,892
- 2,830,218
Bonds and notes 644,277
3,019,700 -
3,663,977 Bank loans
10,619,063 299,570
- 10,918,633
Total financial liabilities 12,136,809
5,403,162 -
17,539,971 Total interest repricing gap
1,514,478 5,238,542
6,579,894
c. Credit risks The Company and its subsidiaries are exposed to credit risk primarily from trade receivables
and other receivables. Credit risk is managed by continuous monitoring outstanding balance and collection of trade and other receivables.
The following table sets out the maximum exposure of credit risk and concentration risk of the Company and its subsidiaries :
Credit risk concentration Maximum
Corporate Others
exposure
Trade receivables 3,903,171
3,122,052 7,025,223
Other receivables 147,188
46,466 193,654
4,050,359 3,168,518
7,218,877
Management is confident in its ability to continue to control and sustain minimal exposure of credit risk given that the Company and its subsidiaries have provided sufficient allowance for
doubtful accounts to cover incurred loss arising from uncollectible receivables based on existing historical loss.
