108
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
DECEMBER 31, 2011 AND 2010, AND YEARS ENDED DECEMBER 31, 2011 AND 2010
Figures in tables are presented in billions of Rupiah, unless otherwise stated
109
45. CAPITAL MANAGEMENT continued
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for stockholders and benefits to other stockholders and
to maintain an optimum capital structure to minimize the cost of capital.
Periodically, the Company’s conducts debt valuation to assess possibilities of refinancing existing debts with the new ones which have more efficient cost that will lead to more optimize cost-of-debt.
In case of rich idle cash coupled with limited investment opportunities, the Company will consider of buying back its stocks or paying dividend to its stockholders.
In addition to complying with loan covenants, the Company also maintains its capital structure at the level it believes will not risk its credit rating and that is roughly equal 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 Company’s capital structure and review the effectiveness of the
Company’s debts. The Company monitors its debt levels to ensure the debt to equity ratio complies with or is below the ratio set out in its contractual borrowings and that such ratios are comparable or
better than other regional area entities in the telecommunications industry.
The Company debt to equity ratio as of December 31, 2011 and 2010 are as follows:
2011 2010
Total interest bearing debts 17,871
22,015 Less: Cash and cash equivalents
9,634 9,120
Net debts 8,237
12,895 Total equity attributable to owners
47,510 44,419
Net debt to equity ratio 17.34
29.03 As stated in Notes 18, 19, 20, the Company is required to maintain a certain debt to equity ratio and
debt service coverage ratio by the lenders. During the year ended December 31, 2011 and 2010, the Company has complied with the externally imposed capital requirements.
46. SUBSEQUENT EVENTS
a. Based on notarial deed No. 2 dated January 3, 2012 of Sjaaf De Carya Siregar, S.H., Infomedia’s stockholder issued 17,142,857 shares which amounted to Rp 9 billion. Metra, a stockholder of
Infomedia, bought all the newly issued shares. As a result, the Company’s ownership in Infomedia is diluted to 49.
b. On January 8, 2012, pursuant to the expiry of agreement with Apple Note 41c.iv, Telkomsel and Apple agreed to extend the agreement until March 30, 2012. As of the issuance date of the
consolidated financial statements, Telkomsel is in the process of obtaining another extension. c. On January 20, 2012, Telkomsel repaid US39 million of loans obtained from ICBC Note 20.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
DECEMBER 31, 2011 AND 2010, AND YEARS ENDED DECEMBER 31, 2011 AND 2010
Figures in tables are presented in billions of Rupiah, unless otherwise stated
110
46. SUBSEQUENT EVENTS continued
d. On February 2, 2012, Telkomsel repaid Rp.466 billion of loans obtained from OCBC NISP Note 20.
e. On March 12, 2012, Telkomsel received assessment letters as a result of tax audit for fiscal year 2010 by the Tax Authorities. Based on the letters, Telkomsel overpaid the Corporate Income Tax
and underpaid the Value Added Tax amounted to Rp.597.4 billion Note 31 and Rp.302.7 billion including a penalty of Rp.73.3 billion, respectively. Telkomsel accepted the overpayment of
Corporate Income Tax and Rp.12.1 billion of underpayment of Value Added Tax including a penalty of Rp.6.3 billion. Considering that the amount is insignificant, the accepted portion was
charged to the 2012 consolidated statement of comprehensive income. Telkomsel plans to file an objection to the Tax Authorities for underpayment of Value Added Tax of Rp.290.7 billion
including a penalty of Rp.67 billion.
f. As of March 29, 2012, the Company had repurchased 940,125,460 shares equivalent to 4.66 of
the issued and outstanding Series B shares, for a repurchase price of Rp.7,474 billion, including broker and custodian fees Notes 1c and 24.
47. ACCOUNTS RECLASSIFICATION
Certain accounts in the consolidated financial statement for the years period begining January 1, 2010 and ended December 31, 2009 and 2010 has been reclassified to conform with the presentation
of accounts of the consolidated financial statements for the years ended December 31, 2011, with details of significant accounts reclassification are as follows:
Before After
reclassification Reclassification
reclassification CONSOLIDATED STATEMENT
OF FINANCIAL POSITION JANUARY 1, 2010:
ASSETS NON-CURRENT ASSETS
Prepaid pension benefit cost 1
208 209
LIABILITIES NON-CURRENT LIABILITIES
Pension and other post- retirement benefits costs provisions
809 208
1,017
