PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005 and 2004 Expressed in rupiah, unless otherwise stated
50
23. DERIVATIVE INSTRUMENTS continued
b. Forward exchange contracts with Standard Chartered Bank, Jakarta Branch, JPMorgan Chase Bank N.A., Jakarta Branch JPMorgan and ABN-AMRO Bank N.V., Jakarta Branch, with notional
amounts aggregating to JP¥2,160 million and US10 million which will mature in various dates in 2006, at fixed exchange rates ranging from Rp82.61 to Rp97.84 for every JP¥1 and from Rp9,782
to Rp10,279 for every US1.
c. Structured currency option contracts with Standard Chartered for the purchase of a total of US3,000,000 with the following terms:
· If USDIDR spot rate is or above Rp11,500, the Company has the right to buy USD at the rate
of USDIDR spot rate minus Rp810 on the settlement date. ·
If USDIDR spot rate is above Rp10,690 but below Rp11,500, the Company has the right to buy USD at the rate of Rp10,690 on the settlement date.
· If USDIDR spot rate is below Rp10,690, the Company is obliged to buy USD at the rate of
Rp10,690 on the settlement date. These contracts have no premium and will be settled in various dates in 2006.
d. Structured currency option contracts with Standard Chartered for the purchase of a total of US3,000,000 with the following terms:
· If USDIDR spot rate is or above Rp11,000, the Company has the right to buy USD at the rate
of USDIDR spot rate minus Rp750 on the settlement date. ·
If USDIDR spot rate is above Rp10,250 but below Rp11,000, the Company has the right to buy USD at the rate of Rp10,250 on the settlement date.
· If USDIDR spot rate is below Rp10,250, the Company is obliged to buy USD at the rate of
Rp10,250 on the settlement date. These contracts have premium at US16,000 and will be settled in various dates in 2006.
e. Structured currency option contracts with JP Morgan for the purchase of a total of US 3,000,000 with the following terms:
· If USDIDR spot rate is or above Rp11,500, the Company will buy USD at the rate of USDIDR
spot rate minus Rp1,000 on the settlement date. ·
If USDIDR spot rate is above Rp10,500 but below Rp11,500, the Company will buy USD at the rate of Rp10,500 on the settlement date.
· If USDIDR spot rate is above Rp10,250 but below Rp10,500, the Company will buy USD at the
spot rate on the settlement date. ·
If USDIDR spot rate is below Rp10,250, the Company will buy USD at the rate of Rp10,250 on the settlement date.
These contracts have upfront fee at US60,000 and will be settled in various dates in 2006. The derivative instruments as mentioned in items b, c, d, and e above can not be designated as
hedge activities for accounting purposes and accordingly, changes in the fair value of such instruments are recorded directly to earnings. As of December 31, 2005, the Company recognized
the net liabilities on the above derivative instruments at market value of Rp14,030,194,787, which is presented as part of “Derivatives Liabilities - Net” in the 2005 consolidated balance sheet.
The loss arising from the derivative transactions during the year amounted to Rp17,241,599,685 and was recorded as part of “Foreign Exchange Gain - Net” presented in the 2005 consolidated
statement of income.
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2005 and 2004 Expressed in rupiah, unless otherwise stated
51
24. LITIGATION
