PT XL AXIATA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2007, 2008 AND 2009; AND 31 MARCH 2009 AND 2010
Expressed in millions of Rupiah, unless otherwise stated
Page 56
28. DERIVATIVE INSTRUMENTS continued
Cross Currency Swap Contracts
Hedging of the payment of the principal and interest of long-term loans in USD
Notional Exchange
amount Swap
Exchange Fixed interest
rate Interest rate
USD Period
amount period
rate paid per USD
received
Standard Chartered 65,000,000
18 April 2007- Rp 90.88 billion monthly,
9.65 - Rp 9,000 - 3 months’ SIBOR
Bank 17 December full amount
quarterly 10.98
Rp 9,940 + 1.05 margin,
2010 - Rp 198. 8 billion
1-3 months’ LIBOR full amount
+ 1 - 1.75 margin
PT DBS Bank 15,00 0,000
9 May 2007- Rp 135 billion
quarterly 8.20
Rp 9,000 3 months’ LIBOR
Indonesia 26 April 2010
full amount + 1.00 margin
J.P.Morgan 30.000.000
14 September Rp 99.3 billion monthly
10. 59 Rp 9,930
1 months’ LIBOR Securities
2009- full amount
+ 1.00 margin S.E.A. Ltd.
6 September Rp 198.6 billion
2010 full amount
Interest Rate Swap Contracts
Notional amount
Exchange Fixed interest
Fixed interest USD
Period period
rate paid rate received
Standard Chartered Bank 359.028.222
7 January 2008- quarterly and
2.323 3 months’ SIBOR
1 October 2015 semiannually
- 4.73 + 1.05 margin,
1 months’ LIBOR + 1.00 margin,
6 months’ LIBOR
29. CONTINGENCY
On 1 November and 14 December 2007, the Indonesia Business Competition Supervisory Commission “KPPU” issued decisions regarding a preliminary and a second stage continued
investigation into the Company and seven other telecommunications companies based on allegations of SMS price-fixing cartel, which is a breach of Article 5 of the Anti-Monopoly Law Law No. 51999.
In the event that the Company is found liable for SMS price-fixing, the KPPU may order the Company to pay fines up to Rp 25 billion full amount and require the Company to revise its SMS charges. In
the event that the KPPUs decision stipulates that the alleged price fixing has caused consumer loss, the Company may also be exposed to consumer class action suits. Each of these decisions could
have a material adverse effect on the Company’s business, reputation and profitability.
On 18 June 2008, KPPU in one of its decisions assessed a penalty amounting to Rp 25 billion full amount to the Company. On 9 July 2008, the Company submitted an appeal letter regarding KPPU’s
decision to South Jakarta District Court. Due to different jurisdiction domicile, the Company along with other operators, as requested by KPPU, filed an application to the Supreme Court to determine which
Court will hear the proceedings. Up to the issue date of the consolidated financial statements, the Company has not received any response from both institutions.
PT XL AXIATA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2007, 2008 AND 2009; AND 31 MARCH 2009 AND 2010
Expressed in millions of Rupiah, unless otherwise stated
Page 57
30. TARIFF SYSTEM
In January 2007, the government implemented Decree No.08PERM.KOMINFO022006 of the Minister of Communication and Information Technology regarding Interconnection. By this Decree, a
tariff system was implemented based on KM No. 09PERM.KOMINFO042008 regarding Terms and Conditions for Rate Determination of the Cellular Mobile Network Telecommunications Service, which
has applied to all operators since 7 April 2008.
Based on KM No. 09PERM.KOMINFO042008 the tariff structure is as follows: Activation fees
Monthly charges Usage charges
Value added service charges The calculation tariff formula for a postpaid or prepaid subscriber is based on the decree using the
folowing formula: Retail tariff = Network Element Cost + Retail Activation Cost + Profit Margin
Notes: a.
Network element cost is calculated using the Long Run Incremental Cost “LRIC” Bottom Up method as stated in Decree No.08PERM.KOMINFO022006 of the Minister of Communication
and Information Technology regarding Interconnection.
b. Activation cost is calculated using retail activation cost. The cost is distributed to all subscribers
with the following formula: Activation cost =
Total activation cost Projected subscribers number
Note: Total activation cost = Total activation cost of basic telephony service
c. Profit margin is income used by the Company to calculate the tariff.
Interconnection Tariff
The Company entered into several bilateral agreements with other domestic telecommunications operators regarding interconnection tariff sharing for each interconnection call. These agreements are
in accordance with the prevailing regulations.
Based on Decree No.08PERM.KOMINFO022006 of the Minister of Communication and Information Technology dated 8 February 2006, the interconnection tariff will be charged based on cost, which is
offered in the Documents of Interconnection Offer from each operator and effective from the date the Decree was signed. All operators have to apply a cost allocation principle in calculating the
interconnection cost as soon as this is approved by the government. During the transition period, bilateral interconnection agreements are technically still valid as long as they are approved by both
parties and aligned with this Decree. Since 1 January 2007, the Regulation has applied to all operators.
On 5 February 2008, Badan Regulasi Telekomunikasi Indonesia “BRTI” announced that the new interconnection tariff must be implemented by 1 April 2008 at the latest.
