PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2013 UNAUDITED AND FOR NINE MONTHS PERIOD ENDED
WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2012 AUDITED AND FOR NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2012 UNAUDITED
Figures in tables are presented in billions of Rupiah, unless otherwise stated
112
44. FINANCIAL RISK MANAGEMENT continued
1. Financial risk management continued Financial risk management is carried out by the Corporate Finance unit under policies approved
by the Board of Directors. The Corporate Finance identifies, evaluates and hedges financial risks.
a. Foreign exchange risk The Company and subsidiaries are exposed to foreign exchange risk on sales, purchases and
borrowings that are denominated in foreign currencies. The foreign currency denominated transactions are primarily in U.S. Dollars and Japanese Yen. The Company and subsidiaries
exposure to other foreign exchange rates are not material.
Increasing risks of foreign currency exchange rates on the obligations of the Company and subsidiaries are expected to be offset by time deposits and receivables in foreign currencies
that are equal to at least 25 of the outstanding current liabilities.
The following table presents the Company and subsidiaries’ financial assets and financial liabilities exposure to foreign currency risk:
September 30, 2013 December 31, 2012
U.S. Dollars Japanese Yen U.S. Dollars Japanese Yen
in billions in billions in billions in billions
Financial assets 0.46
0.51 0.00
Financial liabilities 0.59
8.93 0.61
9.25
Net exposure 0.13
8.93 0.10
9.25
Sensitivity analysis
A strengthening of the U.S. Dollars and Japanese Yen, as indicated below, against the Rupiah at September 30, 2013 would have decreased equity and profit or loss by the
amounts shown below. This analysis is based on foreign currency exchange rate variances that the Company and subsidiaries considered to be reasonably possible at the reporting
date. The analysis assumes that all other variables, in particular interest rates, remain constant.
Equityprofit loss September 30, 2013
14 U.S. Dollars 1 strengthening
45 Japanese Yen 5 strengthening
A weakening of the U.S. Dollars and Japanese Yen against the Rupiah at September 30, 2013 would have had an equal but opposite effect on the above currencies to
the amounts shown above, on the basis that all other variables remain constant.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2013 UNAUDITED AND FOR NINE MONTHS PERIOD ENDED
WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2012 AUDITED AND FOR NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2012 UNAUDITED
Figures in tables are presented in billions of Rupiah, unless otherwise stated
113
44. FINANCIAL RISK MANAGEMENT continued
1. Financial risk management continued b. Market price risk
The Company and subsidiaries are exposed to changes in debt and equity market prices related to available-for-sale investments carried at fair value. Gains and losses arising from
changes in the fair value of available-for-sale investments are recognized in equity. The performance of the Company and subsidiaries’ available-for-sale investments are
monitored periodically, together with a regular assesment of their relevance to the Company and subsidiaries’ long-term strategic plans.
As of September 30, 2013, management considered the price risk for its available-for-sale investments to be immaterial in terms of the possible impact on profit or loss and total equity
from a reasonably possible change in fair value.
c. 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 subsidiaries to interest rate risk Notes 17, 18, 19, 20 and 21. To measure market risk pertaining to fluctuations in
interest rates, the Company and subsidiaries primarily use interest margin and maturity profile of the financial assets and liabilities based on changing schedule of the interest rate.
At reporting date, the interest rate profile of the Company and subsidiaries’ interest-bearing borrowings was as follows:
September 30, December 31, 2013
2012
Fixed rate borrowings 8,963
7,025 Variable rate borrowings
10,951 12,250
Sensitivity analysis for variable rate borrowings At September 30, 2013, a change of 25 basis points in interest rates of variable rate
borrowings would have increased decreased equity and profit or loss by Rp27 billion, respectively. This analysis assumes that all other variables, in particular foreign currency
rates, remain constant.
d. Credit risk The following table presents the maximum exposure to credit risk of the Company and
subsidiaries’ financial assets:
September 30, December 31, 2013
2012
Cash and cash equivalents 17,662
13,118 Other current financial assets
411 4,338
Trade and other receivables, net 7,675
5,409 Long-term investments
21 21
Advances and other non-current assets 419
614
Total 26,188
23,500