UNITED STATES | ||
SECURITIES AND EXCHANGE COMMISSION | ||
Washington, D.C. 20549 | ||
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Form 6-K | ||
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REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13 a-16 OR 15d-16 | ||
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UNDER THE SECURITIES EXCHANGE ACT OF 1934 | ||
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For the month of April, 2014 | ||
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Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (Exact name of Registrant as specified in its charter) | ||
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Telecommunications Indonesia (A state-owned public limited liability Company) (Translation of registrant’s name into English) | ||
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Jl. Japati No. 1 Bandung 40133, Indonesia (Address of principal executive office) | ||
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Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: | ||
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Form 20-F þ |
Form 40-F |
¨ |
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Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): | ||
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Yes ¨ |
No þ |
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Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): | ||
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Yes ¨ |
No þ |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned, thereunto duly authorized.
Date April 30, 2014 |
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk
----------------------------------------------------- (Registrant)
By: /s/ Honesti Basyir ---------------------------------------------------- (Signature)
Honesti Basyir Chief of Financial Officer
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Perusahaan Perseroan (Persero)
PT Telekomunikasi Indonesia Tbk and its subsidiaries
Consolidated financial statements as of March 31, 2014
and for three months period ended (unaudited)
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2014 AND
FOR THREE MONTHS PERIOD ENDED (UNAUDITED)
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Page |
1-3 |
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4 |
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5-6 |
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7 |
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8-117 |
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As of March 31, 2014 (unaudited) and December 31, 2013 (audited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
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Notes |
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March 31, 2014 |
|
December 31, 2013 |
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ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents |
2c,2e,2u,4,37,44 |
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20,700 |
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14,696 |
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Other current financial assets |
2c,2d,2e,2u, 3,5,37,44 |
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2,655 |
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6,872 |
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Trade receivables - net of provision for impairment of receivables |
2g,2u,6,29,44, |
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Related parties |
2c,37 |
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953 |
|
900 |
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Third parties |
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5,590 |
|
5,126 |
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Other receivables - net of provision for impairment of receivables |
2g,2u,44 |
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251 |
|
395 |
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Inventories - net of provision for obsolescence |
2h,7,17,21 |
|
755 |
|
509 |
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Advances and prepaid expenses |
2c,2i,2t,8,31,37 |
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3,862 |
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3,947 |
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Prepaid taxes |
2t,31 |
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700 |
|
525 |
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Asset held for sale |
2j,9 |
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88 |
|
105 |
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Total Current Assets |
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35,554 |
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33,075 |
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NON-CURRENT ASSETS |
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Long-term investments |
2f,2u,10,44 |
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296 |
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304 |
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Property and equipment - net of accumulated depreciation |
2l,2m,11,17, 20,21,39 |
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87,108 |
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86,761 |
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Prepaid pension benefit costs |
2s,34 |
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935 |
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927 |
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Advances and other non-current assets |
2c,2i,2l,2n,2u, 12,37,41,44 |
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5,000 |
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5,294 |
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Intangible assets - net of accumulated amortization |
2d,2k,2n,13 |
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1,503 |
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1,508 |
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Deferred tax assets - net |
2t,31 |
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76 |
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82 |
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Total Non-current Assets |
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94,918 |
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94,876 |
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TOTAL ASSETS |
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130,472 |
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127,951 |
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The accompanying notes to the consolidated financial statements form an integral part ofthese consolidated financial statements taken as a whole.
1
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As of March 31, 2014 (unaudited) and December 31, 2013 (audited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
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Notes |
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March 31, 2014 |
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December 31, 2013 |
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LIABILITIES AND EQUITIES |
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CURRENT LIABILITIES |
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Trade payables |
2o,2r,2u,14,44 |
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Related parties |
2c,37 |
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480 |
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826 |
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Third parties |
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9,438 |
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10,774 |
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Other payables |
2u,44 |
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526 |
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388 |
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Taxes payable |
2t,31 |
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1,890 |
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1,698 |
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Accrued expenses |
2c,2r,2u,15, 27,34,37,44 |
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5,488 |
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5,264 |
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Unearned income |
2r,16 |
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2,659 |
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3,490 |
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Advances from customers and suppliers |
2c,37 |
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659 |
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472 |
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Short-term bank loans |
2c,2p,2u, 17,37,44 |
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477 |
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432 |
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Current maturities of long-term liabilities |
2c,2m,2p, 2u,18,37,44 |
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4,330 |
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5,093 |
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Total Current Liabilities |
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25,947 |
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28,437 |
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NON-CURRENT LIABILITIES |
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Deferred tax liabilities - net |
2t,31 |
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2,826 |
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3,004 |
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Other liabilities |
2r |
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406 |
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472 |
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Long service award provisions |
2s,35 |
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341 |
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336 |
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Post-retirement health care benefit costs provisions |
2s,36 |
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704 |
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752 |
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Retirement benefits obligation and other post-retirement benefits |
2s,34 |
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2,890 |
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2,795 |
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Long-term liabilities - net of current maturities |
2u,18,44 |
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Obligations under finance leases |
2m,11 |
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4,228 |
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4,321 |
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Two-step loans |
2c,2p,19,37 |
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1,614 |
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1,702 |
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Bonds and notes |
2c,2p,20,37 |
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3,061 |
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3,073 |
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Bank loans |
2c,2p,21,37 |
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5,928 |
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5,635 |
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Total Non-current Liabilities |
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21,998 |
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22,090 |
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TOTAL LIABILITIES |
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47,945 |
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50,527 |
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The accompanying notes to the consolidated financial statements form an integral part ofthese consolidated financial statements taken as a whole.
2
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As of March 31, 2014 (unaudited) and December 31, 2013 (audited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
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Notes |
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March 31, 2014 |
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December 31, 2013 |
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EQUITY |
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Capital stock - Rp50 par value per Series A |
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Dwiwarna share and Series B share |
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Authorized - 1 Series A Dwiwarna share and 399,999,999,999 Series B shares Issued and fully paid - 1 Series A Dwiwarna share and 100,799,996,399 Series B shares |
1c,23 |
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5,040 |
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5,040 |
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Additional paid-in capital |
2d,2v,24 |
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2,323 |
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2,323 |
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Treasury stock |
2v,25 |
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(5,805 |
) |
(5,805 |
) |
Effect of change in equity of associated companies |
2f |
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386 |
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386 |
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Unrealized holding gain on available-for-sale securities |
2u |
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42 |
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38 |
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Translation adjustment |
2f |
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305 |
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391 |
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Difference due to acquisition of non-controlling interests in subsidiaries |
1d,2d |
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(508 |
) |
(508 |
) |
Other reserves |
1d |
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49 |
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49 |
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Retained earnings |
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Appropriated |
33 |
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15,337 |
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15,337 |
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Unappropriated |
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46,940 |
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43,291 |
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Net Equity Attributable to Owners of the parent company |
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64,109 |
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60,542 |
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Non-controlling Interests |
2b,22 |
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18,418 |
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16,882 |
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TOTAL EQUITY |
|
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82,527 |
|
77,424 |
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TOTAL LIABILITIES AND EQUITY |
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130,472 |
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127,951 |
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The accompanying notes to the consolidated financial statements form an integral part ofthese consolidated financial statements taken as a whole.
3
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For Three Months Ended March 31, 2014 and 2013 (Unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
|
Notes |
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2014 |
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2013 |
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REVENUES |
2c,2r,26,37 |
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21,250 |
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19,547 |
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Operations, maintenance and telecommunication service expenses |
2c,2r,28,37 |
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(5,106 |
) |
(4,698 |
) |
Depreciation and amortization |
2k,2l,2m,2r, 11,12,13 |
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(3,948 |
) |
(3,462 |
) |
Personnel expenses |
2c,2r,2s,15,27, 34,35,36,37 |
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(2,242 |
) |
(2,331 |
) |
Interconnection expenses |
2c,2r,30,37 |
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(1,294 |
) |
(1,175 |
) |
General and administrative expenses |
2c,2g,2h,2r,2t, 6,7,29,37 |
|
(920 |
) |
(643 |
) |
Marketing expenses |
2r |
|
(697 |
) |
(651 |
) |
Loss on foreign exchange - net |
2q |
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(52 |
) |
91 |
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Other income |
2r,3,11c |
|
168 |
|
129 |
|
Other expenses |
2r,11c |
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(179 |
) |
(57 |
) |
OPERATING PROFIT |
|
|
6,980 |
|
6,750 |
|
Finance income |
2c,37 |
|
333 |
|
208 |
|
Finance costs |
2c,2r,37 |
|
(391 |
) |
(324 |
) |
Share of loss of associated companies |
2f,10 |
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(7 |
) |
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(3) |
PROFIT BEFORE INCOME TAX |
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|
6,915 |
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6,631 |
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INCOME TAX (EXPENSE) BENEFIT |
2t,31 |
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|
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Current |
|
|
(1,896 |
) |
(1,627 |
) |
Deferred |
|
|
170 |
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(19 |
) |
|
|
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(1,726 |
) |
(1,646 |
) |
PROFIT FOR THE YEAR |
|
|
5,189 |
|
4,985 |
|
OTHER COMPREHENSIVE (LOSS) INCOME |
|
|
|
|
|
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Foreign currency translation |
1d,2b,2f |
|
(86 |
) |
3 |
|
Change in fair value of available-for-sale financial assets |
2u |
|
4 |
|
11 |
|
Other Comprehensive (Loss) Income - net |
|
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(82 |
) |
14 |
|
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
|
|
5,107 |
|
4,999 |
|
Profit for the year attributable to: |
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|
|
|
|
|
Owners of the parent company |
2b,22 |
|
3,649 |
|
3,477 |
|
Non-controlling interests |
|
|
1,540 |
|
1,508 |
|
|
|
|
5,189 |
|
4,985 |
|
Total comprehensive income for the year attributable to: |
|
|
|
|
|
|
Owners of the parent company |
|
|
3,567 |
|
3,491 |
|
Non-controlling interests |
2b,22 |
|
1,540 |
|
1,508 |
|
|
|
|
5,107 |
|
4,999 |
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BASIC AND DILUTED EARNINGS PER SHARE |
|
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|
|
|
|
(in full amount) Net income per share |
2x,32 |
|
37.58 |
|
36.32 |
|
Net income per ADS (200 Series B shares per ADS) |
|
|
7,515.90 |
|
7,263.02 |
|
The accompanying notes to the consolidated financial statements form an integral part ofthese consolidated financial statements taken as a whole.
4
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For Three Months Ended March 31, 2014 and 2013 (Unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
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Attributable to owners of the parent company |
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Capital |
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Additional paid-in |
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Treasury |
|
Effect of change in equity of associated |
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Unrealized holding gain on available-for-sale |
|
Translation |
|
Difference due to acquisition of non-controlling interest in |
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Other |
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Retained earnings |
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Non-controlling |
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Total |
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Descriptions |
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Notes |
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stock |
|
capital |
|
stock |
|
companies |
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securities |
|
adjustment |
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subsidiaries |
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reserves |
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Appropriated |
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Unappropriated |
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Net |
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interests |
|
equity |
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Balance, December 31, 2013 |
|
|
|
5,040 |
|
2,323 |
|
(5,805 |
) |
386 |
|
38 |
|
391 |
|
(508 |
) |
49 |
|
15,337 |
|
43,291 |
|
60,542 |
|
16,882 |
|
77,424 |
|
Additional capital |
|
1d |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
17 |
|
17 |
|
Cash dividends |
|
1d,2w |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(21 |
) |
(21 |
) |
Comprehensive income |
|
1d,2b,2f, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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(loss) for the year |
|
2q,2u,10 |
|
- |
|
- |
|
- |
|
- |
|
4 |
|
(86 |
) |
- |
|
- |
|
- |
|
3,649 |
|
3,567 |
|
1,540 |
|
5,107 |
|
Balance, March 31, 2014 |
|
|
|
5,040 |
|
2,323 |
|
(5,805 |
) |
386 |
|
42 |
|
305 |
|
(508 |
) |
49 |
|
15,337 |
|
46,940 |
|
64,109 |
|
18,418 |
|
82,527 |
|
The accompanying notes to the consolidated financial statementsform an integral part ofthese consolidated financial statements taken as a whole.
5
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For Three Months Ended March 31, 2014 and 2013 (Unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
|
|
|
|
Attributable to owners of the parent company |
|
|
|
|
| ||||||||||||||||||||||
|
|
|
|
Capital |
|
Additional paid-in |
|
Treasury |
|
Difference due to restructuring and other transactions of entities under common |
|
Effect of change in equity of associated |
|
Unrealized holding gain (loss) on available-for-sale |
|
Translation |
|
Difference due to acquisition of non-controlling interest in |
|
Other |
|
Retained earnings |
|
|
|
Non-controlling |
|
Total |
| ||
Descriptions |
|
Notes |
|
stock |
|
capital |
|
stock |
|
control |
|
companies |
|
securities |
|
adjustment |
|
subsidiaries |
|
reserves |
|
Appropriated |
|
Unappropriated |
|
Net |
|
interests |
|
equity |
|
Balance, December 31, 2012 |
|
|
|
5,040 |
|
1,073 |
|
(8,067 |
) |
478 |
|
386 |
|
42 |
|
271 |
|
(508 |
) |
49 |
|
15,337 |
|
37,440 |
|
51,541 |
|
15,437 |
|
66,978 |
|
Adjustment in relation to implementation of Statement of Financial Accounting Standards (PSAK) No. 38 (Revised 2012) |
|
2d, 24 |
|
- |
|
478 |
|
- |
|
(478 |
) |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
Balance, January 1, 2013-after adjustment |
|
|
|
5,040 |
|
1,551 |
|
(8,067 |
) |
- |
|
386 |
|
42 |
|
271 |
|
(508 |
) |
49 |
|
15,337 |
|
37,440 |
|
51,541 |
|
15,437 |
|
66,978 |
|
Cash dividends |
|
1d,2w |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(10 |
) |
(10 |
) |
Comprehensive income (loss) for the year |
|
1d,2b,2f, 2q,2u,10 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
11 |
|
3 |
|
- |
|
- |
|
- |
|
3,477 |
|
3,491 |
|
1,508 |
|
4,999 |
|
Balance, March 31, 2013 |
|
|
|
5.040 |
|
1,551 |
|
(8.067 |
) |
- |
|
386 |
|
53 |
|
274 |
|
(508 |
) |
49 |
|
15.337 |
|
40.917 |
|
55.032 |
|
16.935 |
|
71.967 |
|
The accompanying notes to the consolidated financial statementsform an integral part ofthese consolidated financial statements taken as a whole.
6
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressedin billions of Rupiah, unlessotherwise stated)
|
|
Notes |
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
|
Cash receipts from: |
|
|
|
|
|
|
|
Customers |
|
|
|
18,830 |
|
18,042 |
|
Other operators |
|
|
|
769 |
|
876 |
|
Total cash receipts from revenues |
|
|
|
19,599 |
|
18,918 |
|
Interest income received |
|
|
|
305 |
|
205 |
|
Advance receipts from customers |
|
|
|
171 |
|
1 |
|
Cash receipts others- net |
|
|
|
157 |
|
- |
|
Cash payments for expenses |
|
|
|
(8,487 |
) |
(6,819 |
) |
Cash payments to employees |
|
|
|
(2,087 |
) |
(2,946 |
) |
Payments for income taxes |
|
|
|
(1,510 |
) |
(1,352 |
) |
Payments for interest costs |
|
|
|
(397 |
) |
(322 |
) |
Net cash provided by operating activities |
|
|
|
7,751 |
|
7,685 |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
Proceeds from sale of available-for-sale financial assets |
|
|
|
4,219 |
|
3,654 |
|
Increase (decrease) in advances and other non-current assets |
|
12 |
|
167 |
|
(22 |
) |
Increase (decrease) in advances for purchases of property and equipment |
|
11 |
|
16 |
|
(29 |
) |
Proceeds from insurance claims |
|
11 |
|
12 |
|
12 |
|
Proceeds from sale of property and equipment |
|
11 |
|
1 |
|
- |
|
Placement in time deposits |
|
5 |
|
- |
|
(255 |
) |
Acquisition of property and equipment |
|
11 |
|
(5,148 |
) |
(3,199 |
) |
Acquisition of intangible assets |
|
13 |
|
(157 |
) |
(80 |
) |
Net cash (used in) received from investing activities |
|
|
|
(890 |
) |
81 |
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
Proceeds from bank loans |
|
21 |
|
867 |
|
710 |
|
Proceeds from short-term bank loans |
|
17 |
|
347 |
|
147 |
|
Proceeds from promissory notes |
|
20 |
|
21 |
|
8 |
|
Capital contribution of non-controlling interests in subsidiaries |
|
1d |
|
17 |
|
- |
|
Repayments of medium-term notes |
|
20 |
|
- |
|
(8 |
) |
Repayments of two-step loans and bank loans |
|
19,21 |
|
(1,206 |
) |
(1,474 |
) |
Repayments of short-term bank loans |
|
17 |
|
(302 |
) |
(30 |
) |
Payments of obligations under finance leases |
|
11 |
|
(197 |
) |
(79 |
) |
Repayments of promissory notes |
|
20 |
|
(56 |
) |
(65 |
) |
Cash dividends paid to non-controlling interests of subsidiaries |
|
|
|
(21 |
) |
(10 |
) |
Net cash used in financing activities |
|
|
|
(530 |
) |
(801 |
) |
NET INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
|
6,331 |
|
6,965 |
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS |
|
|
|
(327 |
) |
29 |
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR |
|
4 |
|
14,696 |
|
13,118 |
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
|
4 |
|
20,700 |
|
20,112 |
|
The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements taken as a whole.
7
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressedin billions of Rupiah, unlessotherwise stated)
a. Establishment and general information
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (the “Company”) was originally part of “Post en Telegraafdienst”, which was established and operated commerciallyin 1884 under the framework of Decree No. 7 dated March 27, 1884 of the Governor General of the Dutch Indies and was published in State Gazette No. 52 dated April 3, 1884.
In 1991, the status of the Company was changed into a state-owned limited liability corporation (“Persero”) based on Government Regulation No. 25/1991. The ultimate parent of the Company is the Government of the Republic of Indonesia (the “Government”) (Notes 1c and 23).
The Company was established based on notarial deed No. 128 dated September 24, 1991 of Imas Fatimah, S.H. Its deed of establishment was approved by the Ministry of Justice of the Republic of Indonesia in its Decision Letter No. C2-6870.HT.01.01.Th.1991 dated November 19, 1991 and was published in State Gazette No. 5 dated January 17, 1992, Supplement No. 210. The Articles of Association has been amended several times, the latest amendment of which was about,among others, the change of capital structure through the Company’s 5-for-1 stock split whereby each share with par value of Rp250 would be split into Rp50 per share, and the Partnership and Community Development Programme (PKBL) was excluded from the Work Plan and Company Budgets, based on notarial deed No. 11 dated May8, 2013 of Ashoya Ratam, S.H., MKn. The latestamendment was accepted and approved by the Ministry of Law and Human Rights of the Republic of Indonesia (“MoLHR”) in its Letter No. AHU-AH.01.10-22500 dated June7, 2013.
In accordance with Article 3 of the Company’s Articles of Association, the scope of its activities is to provide telecommunication network and services and informatics, and to optimize the Company’s resources in accordance with prevailing regulations. To achieve this objective, the Company is involved in the following activities:
a. Main business:
i. Planning, building, providing, developing, operating, marketing or selling, leasing and maintaining telecommunications and information networks in accordance with prevailing regulations.
ii. Planning, developing, providing, marketing or selling and improving telecommunications and information services in accordance with prevailing regulations.
b. Supporting business:
i. Providing payment transactions and money transferring services through telecommunications and information networks.
ii. Performing activities and other undertakings in connection with the optimization of the Company's resources, which, among others, include the utilization of the Company's property and equipment and moving assets, information systems, education and training, and repairs and maintenance facilities.
The Company’s head office is located at Jalan Japati No. 1, Bandung, West Java.
The Company was granted several telecommunications licenses by the government of the Republic of Indonesiawhich are valid for an unlimited period of time as long as the Company complies with prevailing laws and telecommunications regulations and fulfills the obligation stated in thoselicenses. For every license, an evaluation is performed annually and an overall evaluation is performed every 5 (five) years.
8
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressedin billions of Rupiah, unlessotherwise stated)
1. GENERAL (continued)
a. Establishment and general information (continued)
The Company is obliged to submit reports of services annually to the Indonesian Directorate General of Post and Informatics (“DGPI”), which replaced the previous Indonesian Directorate General of Post and Telecommunications (“DGPT”). The reports comprise information such as network development progress, service quality standard achievement, total customers, license payment and universal service contribution, while for internet telephone services for public purpose (“ITKP”), there is additional information required such as operational performance, customer segmentation, traffic, and gross revenue.
Details of these licenses are as follows:
License |
|
License No. |
|
Type of services |
|
Grant date/latest renewal date |
|
License to operate local, fixed line and basic telephone services network |
|
381/KEP/ M.KOMINFO/ 10/2010 |
|
Local fixed line and basic telephone services network |
|
October 28, 2010 |
|
License to operate fixed domestic long distance and basic telephone services network |
|
382/KEP/ M.KOMINFO/ 10/2010 |
|
Fixed domestic long distance and basic telephone services network |
|
October 28, 2010 |
|
License to operate fixed international and basic telephone services network |
|
383/KEP/ M.KOMINFO/ 10/2010 |
|
Fixed international and basic telephone services network |
|
October 28, 2010 |
|
License to operate fixed closed network |
|
398/KEP/ M.KOMINFO/ 11/2010 |
|
Fixed closed network |
|
November 12, 2010 |
|
License to operate internet telephone services for public purpose |
|
384/KEP/DJPT/ M.KOMINFO/ 11/2010 |
|
ITKP |
|
November 29, 2010 |
|
License to operate as internet service provider |
|
83/KEP/DJPPI/ KOMINFO/ 4/2011 |
|
Internet service provider |
|
April 7, 2011 |
|
License to operate data communication system services |
|
169/KEP/DJPPI/ KOMINFO/ 6/2011 |
|
Data communication system services |
|
June 6, 2011 |
|
License to operate packet switched based local fixed line network |
|
331/KEP/ M.KOMINFO/ 07/2011 |
|
Packet switched based local fixed line network |
|
July 27, 2011 |
|
License to operate network access point |
|
331/KEP/ M.KOMINFO/ 09/2013 |
|
Network Access Point (“NAP”) |
|
September 24, 2013 |
|
9
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressedin billions of Rupiah, unlessotherwise stated)
1. GENERAL (continued)
b. Company’s Board of Commissioners, Board of Directors, Audit Committee, Corporate Secretary and employees
1. Boards of Commissioners and Directors
Based on resolutions made at the Annual General Meeting (“AGM”)of Stockholders of the Company held on May 11, 2012 as covered by notarial deed No. 14 of Ashoya Ratam, S.H., MKn.and the AGM of Stockholders of the Company held on May 8, 2013 as covered by notarial deed No. 11 of Ashoya Ratam, S.H., MKn., the composition of the Company’s Boards of Commissioners and Directors as of March 31, 2014 and December 31, 2013, respectively, was as follows:
|
March 31, 2014 |
|
December 31, 2013* |
|
President Commissioner |
Jusman Syafii Djamal |
|
Jusman Syafii Djamal |
|
Commissioner |
Parikesit Suprapto |
|
Parikesit Suprapto |
|
Commissioner |
Hadiyanto |
|
Hadiyanto |
|
Commissioner |
Gatot Trihargo |
|
Gatot Trihargo** |
|
Independent Commissioner |
Virano Gazi Nasution |
|
Virano Gazi Nasution |
|
Independent Commissioner |
Johnny Swandi Sjam |
|
Johnny Swandi Sjam |
|
President Director |
Arief Yahya |
|
Arief Yahya |
|
Director of Finance |
Honesti Basyir |
|
Honesti Basyir |
|
Director of Innovation and Strategic Portfolio |
Indra Utoyo |
|
Indra Utoyo |
|
Director of Enterprise and Business Service |
Muhamad Awaluddin |
|
Muhamad Awaluddin |
|
Director of Wholesale and International Services |
Ririek Adriansyah |
|
Ririek Adriansyah |
|
Director of Human Capital Management |
Priyantono Rudito |
|
Priyantono Rudito |
|
Director of Network, Information Technology and Solution |
Rizkan Chandra |
|
Rizkan Chandra |
|
Director of Consumer Services |
Sukardi Silalahi |
|
Sukardi Silalahi |
|
* The change of Director’s title is based on Director’s Regulation No.202.11/r.00/HK.200/COP-B0400000/2013 dated June 25, 2013 and Director’s Decree No. SK.2287/PS320/HCC-10/2013 dated June 28, 2013.
** Appointed in the General Meeting of Stockholders held on April 19, 2013
10
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressedin billions of Rupiah, unlessotherwise stated)
1. GENERAL (continued)
b. Company’s Board of Commissioners, Board of Directors, Audit Committee, Corporate Secretary and employees
2. Audit Committee and Corporate Secretary
The composition of the Company’s Audit Committee and the Corporate Secretary as of March 31, 2014 and December 31, 2013, were as follows:
|
March 31, 2014* |
|
December 31, 2013 |
|
Chair |
Johnny Swandi Sjam |
|
Johnny Swandi Sjam |
|
Secretary |
Tjatur Purwadi |
|
Agus Yulianto |
|
Member |
Parikesit Suprapto |
|
Parikesit Suprapto |
|
Member |
Agus Yulianto |
|
Sahat Pardede |
|
Member |
Virano Gazi Nasution |
|
Virano Gazi Nasution |
|
Corporate Secretary |
Honesti Basyir |
|
Honesti Basyir |
|
* The change of Audit Committee is based on Commissioner Regulation No.05/KEP/DK/2014 dated March 25, 2014.
3. Employees
As of March 31, 2014 and December 31, 2013, the Company and subsidiaries had 25,013 employees and 25,011 employees (unaudited), respectively.
c. Public offering of securities of the Company
The Company’s shares prior to its Initial Public Offering (“IPO”) totalled 8,400,000,000, consisting of 8,399,999,999 Series B shares and 1 Series A Dwiwarna share, and were 100%-owned by the Government of the Republic of Indonesia (the “Government”). On November 14, 1995, 933,333,000 new Series B shares and 233,334,000 Series B shares owned by the Government were offered to the public through an IPO and listed on the Indonesia Stock Exchange (“IDX”) (previously the Jakarta Stock Exchange and the Surabaya Stock Exchange) and 700,000,000 Series B shares owned by the Government were offered to the public and listed on the New York Stock Exchange (“NYSE”) and the London Stock Exchange (“LSE”), in the form of American Depositary Shares (“ADS”). There were 35,000,000 ADS and each ADS represented 20 Series B shares at that time.
In December 1996, the Government had a block sale of its 388,000,000 Series B shares, and in 1997, distributed 2,670,300 Series B shares as incentive to the Company’s stockholders who did not sell their shares within one year from the date of the IPO. In May 1999, the Government further sold 898,000,000 Series B shares.
To comply with Law No. 1/1995 on Limited Liability Companies, at the the Annual General Meeting (“AGM”) of Stockholders of the Company on April 16, 1999, the Company’s stockholders resolved to increase the Company’s issued share capital by the distribution of 746,666,640 bonus shares through the capitalization of certain additional paid-in capital, which were made to the Company’s stockholders in August 1999. On August 16, 2007, Law No. 1/1995 on Limited Liability Companies was amended by the issuance of Law No. 40/2007 on Limited Liability Companies which became effective on the same date. Law No. 40/2007 has no effect on the public offering of shares of the Company. The Company has complied with Law No. 40/2007.
11
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressedin billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
c. Public offering of securities of the Company (continued)
In December 2001, the Government had another block sale of 1,200,000,000 shares or 11.9% of the total outstanding Series B shares. In July 2002, the Government further sold a block of 312,000,000 shares or 3.1% of the total outstanding Series B shares.
At the AGM of Stockholders of the Company held on July 30, 2004, the minutes of which are covered by notarial deed No. 26 of A. Partomuan Pohan, S.H., LLM., the Company’s stockholders approved the Company’s 2-for-1 stock split for Series A Dwiwarna and Series B share. The Series A Dwiwarna share with par value of Rp500 per share was split into 1 Series A Dwiwarna share with par value of Rp250 per share and 1 Series B share with par value of Rp250 per share. The stock split resulted in an increase of the Company’s authorized capital stock from 1 Series A Dwiwarna share and 39,999,999,999 Series B shares to 1 Series A Dwiwarna share and 79,999,999,999 Series B shares, and the issued capital stock from 1 Series A Dwiwarna share and 10,079,999,639 Series B shares to 1 Series A Dwiwarna share and 20,159,999,279 Series B shares. After the stock split, each ADS represented 40 Series B shares.
During the Extraordinary General Meeting(“EGM”) held on December 21, 2005 and the AGM held on June 29, 2007, June 20, 2008, and May 19, 2011, the Company’s stockholders approved phase I, II, III and IV plan, respectively, of the Company’s program to repurchase its issued Series B shares (Note 25).
During the period December 21, 2005 to June 20, 2007, the Company had bought back 211,290,500 shares from the public (stock repurchase program phase I). On July 30, 2013, the Company has sold all such shares(Note 25).
On April 19, 2013, in the AGM held on April 19, 2013 as covered by notarial deedNo. 38 of Ashoya Ratam, S.H., MKn., dated April 19, 2013 the stockholders approved the changes to the Company’s plan on the treasury stock acquired under phase III (Notes 23 and 25).
At the AGM held on April 19, 2013, the minutes of which are covered by notarial deed No.38 of Ashoya Ratam, S.H, MKn, dated April 19, 2013 the Company’s stockholders approved the Company’s 5-for-1stock split for Series A Dwiwarna and Series B shares. Series A Dwiwarna share with par value of Rp250 per share was split into 1 Series A Dwiwarna share with par value of Rp50 per share and 4 Series B shares with par value Rp50 per share. The stock split resulted in an increase of the Company’s authorized capital stock from 1 Series A Dwiwarna and 79,999,999,999 Series B shares to 1 Series A Dwiwarna and 399,999,999,999 Series B shares, and the issued capital stock from 1 Series A Dwiwarna and 20,159,999,279 Series B shares to 1 Series A Dwiwarna and 100,799,996,399 Series B shares. After the stock split, each ADS represented 200 Series B shares (Notes 23 and 25).
As of March 31, 2014, all of the Company’s Series B shares are listed on the IDX and 49,719,063 ADS shares are listed on the NYSE and LSE (Note 23).
As of March 31, 2014, the Company’s outstanding rupiah bondsrepresents the second Rupiah bonds issued on June 25, 2010 with a nominal amount of Rp1,005 billion for a five-year period and Rp1,995 billion for a ten-year period for Series A and Series B, respectively, are listed on the IDX (Note 20a).
12
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
d. Subsidiaries
As of March 31, 2014 and December 31, 2013, the Company has consolidated the following directly or indirectly owned subsidiaries (Notes 2b and 2d):
(i) Direct subsidiaries:
|
|
Nature of business/date of incorporation |
|
Date of start of |
|
Percentage of ownership interest |
|
Total assets before elimination |
|
||||
Subsidiary/place of incorporation |
|
or acquisition by the Company |
|
commercial operations |
|
March 31, 2014 |
|
December 31, 2013 |
|
March 31, 2014 |
|
December 31, 2013 |
|
PT Telekomunikasi Selular (“Telkomsel”) Jakarta, Indonesia |
|
Telecommunication provides Telecommunication facilities and mobile cellular services using Global Systems for Mobile Communication (“GSM”) technology/May 26, 1995 |
|
1995 |
|
65 |
|
65 |
|
75,918 |
|
73,336 |
|
PT Dayamitra Telekomunikasi (“Dayamitra”), Jakarta, Indonesia |
|
Telecommunication/May 17, 2001 |
|
1995 |
|
100 |
|
100 |
|
7,830 |
|
7,363 |
|
PT Multimedia Nusantara (“Metra”), Jakarta, Indonesia |
|
Multimedia and line telecommunication services/May 9, 2003 |
|
1998 |
|
100 |
|
100 |
|
5,320 |
|
5,297 |
|
PT Telekomunikasi Indonesia International (“TII”), Jakarta, Indonesia |
|
Telecommunication/July 31, 2003 |
|
1995 |
|
100 |
|
100 |
|
4,037 |
|
3,804 |
|
PT Pramindo Ikat Nusantara (“Pramindo”), Jakarta, Indonesia |
|
Telecommunication construction and services/August 15, 2002 |
|
1995 |
|
100 |
|
100 |
|
1,443 |
|
1,365 |
|
PT Graha Sarana Duta (“GSD”), Jakarta, Indonesia |
|
Leasing of offices and providing building management and maintenance services, civil consultant and developer/ April 25, 2001 |
|
1982 |
|
99.99 |
|
99.99 |
|
1,685 |
|
1,574 |
|
PT Telkom Akses (“Telkom Akses”), Jakarta, Indonesia |
|
Construction, service and trade in the field of telecommunication/ November 26, 2012 |
|
2013 |
|
100 |
|
100 |
|
1,186 |
|
946 |
|
PT Patra Telekomunikasi Indonesia (“Patrakom”) Jakarta, Indonesia* |
|
Telecomunication provides fixed line communication system/ September 28, 1995 |
|
1996 |
|
100 |
|
100 |
|
287 |
|
255 |
|
PT Infrastruktur Telekomunikasi Indonesia (“Telkom Infratel”) Jakarta, Indonesia** |
|
Construction, service and trade in the field of telecommunication/ January 16, 2014 |
|
2014 |
|
100 |
|
- |
|
105 |
|
- |
|
PT Napsindo Primatel Internasional (“Napsindo”), Jakarta, Indonesia |
|
Telecommunication -provides Network Access Point (NAP), Voice Over Data (VOD) and other related services/ December 29, 1998 |
|
1999; ceased operations on January 13, 2006 |
|
60 |
|
60 |
|
5 |
|
5 |
|
* On September, 25 and November, 29, 2013, the Company acquired additional interest of 40% and 20%, respectively, of Patrakom (Note3).
**On January, 16, 2014 the Company established PT Infrastruktur Telekomunikasi Indonesia (“Telkom Infratel”) with interest of 100%.
13
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
d. Subsidiaries (continued)
(ii) Indirect subsidiaries:
|
|
Nature of business/date of incorporation |
|
Date of start of |
|
Percentage of ownership interest |
|
Total assets before elimination |
|
||||
Subsidiary/place of incorporation |
|
or acquisition by the Company |
|
commercial operations |
|
March 31, 2014 |
|
December 31, 2013 |
|
March 31, 2014 |
|
December 31, 2013 |
|
PT Sigma Cipta Caraka (“Sigma”), Tangerang, Indonesia |
|
Information technology service – system implementation and integration service, outsourcing and software license maintenance/ May 1,1987 |
|
1988 |
|
100 |
|
100 |
|
1,878 |
|
1,890 |
|
PT Infomedia Nusantara (“Infomedia”), Jakarta, Indonesia |
|
Data and information service – provides telecommunication information services and other information services in the form of print and electronic media and call center services/ September 22,1999 |
|
1984 |
|
100 |
|
100 |
|
1,221 |
|
1,223 |
|
Telekomunikasi Indonesia International (“TL”) S.A., Timor Leste |
|
Telecommunication/ September 11, 2012 |
|
2012 |
|
100 |
|
100 |
|
704 |
|
803 |
|
Telekomunikasi Indonesia International Pte. Ltd., Singapore |
|
Telecommunication/ December 6, 2007 |
|
2008 |
|
100 |
|
100 |
|
747 |
|
785 |
|
PT Metra Digital Media (“MDM”), Jakarta, Indonesia |
|
Telecommunication information services/ January 8, 2013 |
|
2013 |
|
100 |
|
100 |
|
684 |
|
692 |
|
PT Telkom Landmark Tower (“TLT”), Jakarta, Indonesia |
|
Service for property development and management/ February 1, 2012 |
|
2012 |
|
55 |
|
55 |
|
591 |
|
493 |
|
PT Finnet Indonesia (“Finnet”), Jakarta, Indonesia |
|
Banking data and communication/ October 31, 2005 |
|
2006 |
|
60 |
|
60 |
|
177 |
|
203 |
|
Telekomunikasi Indonesia International Ltd., Hong Kong |
|
Telecommunication/ December 8, 2010 |
|
2010 |
|
100 |
|
100 |
|
175 |
|
90 |
|
PT Administrasi Medika (“Ad Medika”), Jakarta, Indonesia |
|
Health insurance administration services/ February 25, 2010 |
|
2010 |
|
75 |
|
75 |
|
150 |
|
127 |
|
PT Metra Plasa (“Metra Plasa”), Jakarta, Indonesia |
|
Website services/ April 9, 2012 |
|
2012 |
|
60 |
|
60 |
|
80 |
|
86 |
|
PT Metra-Net (“Metra-Net”), Jakarta, Indonesia |
|
Multimedia portal service/April 17, 2009 |
|
2009 |
|
100 |
|
100 |
|
40 |
|
40 |
|
PT Graha Yasa Selaras (“GYS”) Jakarta, Indonesia |
|
Tourism service/ April 27, 2012 |
|
2013 |
|
51 |
|
51 |
|
29 |
|
32 |
|
PT Pojok Celebes Mandiri (“Pointer”) Jakarta, Indonesia |
|
Tour agent/bureau services/ August 30, 2013 |
|
2008 |
|
51 |
|
51 |
|
9 |
|
14 |
|
14
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
d. Subsidiaries (continued)
(ii) Indirect subsidiaries:(continued)
|
|
Nature of business/date of incorporation |
|
Date of start of |
|
Percentage of ownership interest |
|
Total assets before elimination |
|
||||
Subsidiary/place of incorporation |
|
or acquisition by the Company |
|
commercial operations |
|
March 31, 2014 |
|
December 31, 2013 |
|
March 31, 2014 |
|
December 31, 2013 |
|
Telekomunikasi Indonesia Internasional Pty Ltd. Australia |
|
Telecomunication/ January 9, 2013 |
|
2013 |
|
100 |
|
100 |
|
2 |
|
7 |
|
PT Satelit Multimedia Indonesia (“SMI”) Jakarta, Indonesia |
|
Commerce and providing network services, telecommunication satellite, and multimedia services/ March 25, 2013 |
|
2013 |
|
99.99 |
|
99.99 |
|
6 |
|
6 |
|
PT Metra Media (“MM”) Jakarta, Indonesia |
|
Trade service, construction leveransir/supplier, services, etc./ January 8, 2013 |
|
2013 |
|
99.83 |
|
99.83 |
|
0 |
|
0 |
|
Telekomunikasi Selular Finance Limited (“TSFL”), Mauritius* |
|
Finance – established to raise funds For the development of Telkomsel’s business through the issuance of debenture stock, bonds, mortgages or any other securities/ April 22, 2002 |
|
2002 |
|
65 |
|
65 |
|
- |
|
0 |
|
PT Metra TV (“Metra TV”) |
|
Pay TV services/ January 8, 2013 |
|
2013 |
|
99.83 |
|
99.83 |
|
- |
|
- |
|
Telekomunikasi Indonesia International (USA) Inc. USA |
|
Telecommunication/ December 11, 2012 |
|
2013 |
|
100 |
|
100 |
|
- |
|
- |
|
* Based on General Notice of Direction of Insolvency Service of Mauritus No.844 of 2014, effective March 20, 2014, TSFL was
liquidated.
15
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
d. Subsidiaries (continued)
(a) Metra
On January 8, 2013, based on notarial deed No. 02 dated January 8, 2013 of Utiek R. Abdurachman, S.H., MLI., MKn., which was approved by the MoLHR through its Letter No. AHU-03276.AH.01.01/2013 dated January 29, 2013, Metra established a subsidiary, PT Metra Media (“MM”), and obtained 99.83% ownership. MM is engaged in providing trade, construction, advertising and other services.
On January 8, 2013, based on notarial deed No. 03 dated January 8, 2013 of Utiek R. Abdurachman, SH., MLI., MKn., which was approved by the MoLHR through its Letter No. AHU-03261.AH.01.01/2013 dated January 29, 2013, Metra established a subsidiary, PT Metra TV (“Metra TV”), and obtained 99.83% ownership. Metra TV is engaged in providing subscription-broadcasting services.
On January 22, 2013, based on notarial deed No. 28 dated January 22, 2013 of N.M. Dipo Nusantara Pua Upa, S.H., MKn., which was approved by the MoLHR through its Letter No. AHU-03084.AH.01.01/2013 dated January 28, 2013; Metra established a subsidiary, PT Metra Digital Media (“MDM”), and obtained 99.83% ownership. MDM is engaged in providing telecommunication information and other services.
On March 25, 2013, based on notarial deed No. 38 dated March 25, 2013 of N.M. Dipo Nusantara Pua Upa, S.H., MKn., which was approved by the MoLHR in its Letter No. AHU-20566.AH.01.01/2013 dated April 17, 2013,Metra established PT Satelit Multimedia Indonesia (“SMI”) and obtained 99.99% ownership. SMI is engaged in commerce and providing network services, telecommunication, satellite, and multimedia devices.
On August 16, 2013, based on notarial deed No. 5 dated August 16, 2013 of N.M. Dipo Nusantara Pua Upa, S.H., MKn. which was approved by the MoLHR in its Letter No. AHU-0081886.AH.01.09/2013 dated August 30, 2013, Metra changed the ownership of PT Pojok Celebes Mandiri (“Pointer”) after the signing of Sales and Purchase of Shares Agreement dated June 12, 2013 regarding the purchase of Pointer’s shares of 2,550 shares equivalent to Rp255 million or 51% ownership.
(b) TII
On January 9, 2013, based on the Circular Resolution of the Stockholders of TII dated January 9, 2013, as covered by notarial deed No. 04 dated February 6, 2013 of Siti Safarijah, S.H., TII’s stockholders agreed to establish a subsidiary, Telekomunikasi Indonesia Internasional Australia Pty. Ltd. (“Telkom Australia”). Telkom Australia is engaged in providing telecommunication services and IT-based services.
On May 13, 2013, TII through Telekomunikasi Indonesia International (Hong Kong) Ltd. established a subsidiary in Macauunder the name Telkom Macau Ltd, (“Telkom Macau”).Telkom Macau is engaged in providing telecommunication services.
On June 3, 2013, TII through Telekomunikasi Indonesia International (Hong Kong) Ltd. established a subsidiary inTaiwanunder the name Telkom Macau Ltd, (“Telkom Taiwan”). Telkom Taiwan is engaged in providing telecommunication services.
On December 11, 2013, TII established a subsidiary in the United States of America, Telekomunikasi Indonesia International (USA), Inc. Ltd. (“Telkom USA”). Telkom USA will be engaged in providing telecommunication services. As of the release date of this financial statement, Telkom USA had no financial and operational activities yet.
16
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
1. GENERAL (continued)
d. Subsidiaries (continued)
(c) Sigma
On January 17, 2013, Sigma signed a shares sale and transfer and loan assignment agreement with Landeskreditbank Baden-Wuttemberg-Forderbank (“L-Bank”), and Step Stuttgarter Engineering Park Gmbh. (“STEP”) as stockholders of PT German Center Indonesia (“GCI”). Based on the agreement, Sigma agreed to buy all the shares of GCI owned by L-Bank and STEP and take over L-Bank’s stockholders’ loan at a purchase price of US$17.8 million (equivalent to Rp170 billion). The closing of this transaction was held on April 30, 2013 (Note 3a).
(d) Infomedia
Based on notarial deed No. 04 dated March 7, 2013 of Sjaaf De Carya Siregar, S.H.,Infomedia’s stockholders agreed to distribute dividend which was returned as the increment of issued and fully paid capital amounting to Rp44 billion.
Based on notarial deed No. 18 dated July 24, 2013 of Zulkifli Harahap, S.H., Infomedia’sstockholders approved an increase in its paid-in capital by 88,529,790 shares, amounting to Rp44 billion.
On November 20, 2013, Infomedia had an agreement on business transfer of its Telephone Directory Management business to MD Media.
(e) Dayamitra
On April 5, 2013, based on notarial deed No.002 dated April 5, 2013 of Andi Fatma Hasiah, S.H.,M.Kn., Dayamitra’s stockholders agreed to distribute dividend which was returned as increment of issued and fully paid capital amounting to Rp31 billion.
(f) Telkom Infratel
On January 16, 2014 the Company established a wholly owned subsidiary under the name PT Telkom Infrastruktur Telekomunikas Indonesia (“Telkom Infratel”) which was approved by the MoLHR through its Decision Letter No. AHU-03196.AH.01.01 - Year 2014 Dated on January 16, 2014, the Company established a wholly owned subsidiary. Telkom Infratel is engaged in providing construction service and trade in the field of telecommunication.
e. Authorization for the issuance of the consolidated financial statements
The consolidated financial statements were prepared and approved to be issued by the Board of Directors on April 25, 2014.
17
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements of the Company and subsidiaries have been prepared in accordance with Financial Accounting Standards (“Standar Akuntansi Keuangan” or “SAK”) including Indonesian Financial Accounting Standards (“Pernyataan Standar Akuntansi Keuangan” or “PSAK”) and Interpretation of Financial Accounting Standards (“Interpretasi Standar Akuntansi Keuangan” or “ISAK”) in Indonesia published by Financial Accounting Standard Board of Indonesian Institute of Accountants and Regulation No. VIII.G.7 of the Capital Market and Financial Institution Supervisory Agency (“Bapepam-LK”) regarding the Presentationand Disclosures of Financial Statements of Issuers or Public Companies, enclosed in the decision letter KEP- 347/BL/2012.
a. Basis of preparation of financial statements
The consolidated financial statements, except for the consolidated statements of cash flows, are prepared on the accrual basis. The measurement basis used is historical cost, except for certain accounts, which are measured using the basis mentioned in the relevant notesherein.
The consolidated statements of cash flows are prepared using the direct method and present the changes in cash and cash equivalents from operating, investing and financing activities.
Figures in the consolidated financial statements are presented and rounded to billions of Indonesian rupiah (“Rp”), unless otherwise stated.
Changes to the statements of financial accounting standards (PSAKs) and interpretations of statements of financial accounting standards (“Interpretasi Standar Akuntansi Keuangan” or “ISAKs”)
On January 1, 2014, the Company and subsidiaries adopted new and revised PSAKs, which were effective in 2014. Changes to the Company and subsidiaries’ accounting policies have been made as required in accordance with the transitional provisions in the respective standards and interpretations.
The adoption ofthese new/revised standards and interpretations had no material effect to the consolidated financial statements:
· ISAK 27, “Transfer of Assets from Customers”
· ISAK 28, “Extinguishing Financial Liabilities with Equity Instruments”
Several PSAKs and ISAKs have been issued by the Indonesian Financial Accounting Standards Board (DSAK) that are considered relevant to the financial reporting of the Company and its subsidiaries but are effective only for financial statements covering the periods beginning on or after either January 1, 2015.
Effective beginning on or after January 1, 2015
· PSAK 1 (2013), “Presentation of Financial Statements”, adopted from International Accounting Standards (IAS) 1
· PSAK 4 (2013), “Separate Financial Statements”, adopted from IAS 4
· PSAK 15 (2013), “Investments in Associates and Joint Ventures”, adopted from IAS 28
· PSAK 24 (2013), “Employee Benefits”, adopted from IAS 19
· PSAK 65, “Consolidated Financial Statements”, adopted from International Financial Reporting Standards (IFRS) 10
· PSAK 66, “Joint Arrangements”, adopted from IFRS 11
· PSAK 67, “Disclosure of Interest in Other Entities”, adopted from IFRS 12
· PSAK 68, “Fair Value Measurement”, adopted from IFRS 13
The Company is currently evaluating and has not yet determined the effects of these accounting standards and intrepretations on the consolidated financial statements.
18
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
b. Principles of consolidation
The consolidated financial statements include the assets and liabilities of the Company and subsidiaries in which the Company, directly or indirectly has ownership of more than half of the voting power and has the ability to govern the financial and operating policies of the entity unless, in exceptional circumstances, it can be clearly demonstrated that such ownership does not constitute control, or the Company has the ability to control the entity, even though the ownership is less than or equal to half of the voting power. Subsidiaries are consolidated from the date on which effective control is obtained and are no longer consolidated from the date control ceases.
Non-controlling interest represents the portion of the profit and loss and net assets of the subsidiaries not attributable, directly or indirectly, to the Company. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests proportionally in accordance with their ownership in the subsidiaries. Non-controlling interests are presented under the equity section of the consolidated statement of financial position, separately from the owners of the Company’s equity. In the consolidated statement of compherensive income, total profit or loss and total comprehensive income that can be attributed to the owners of the Company and to the non-controlling interests are presented separately, and not presented as income or expense.
Intercompany balances and transactions have been eliminated in the consolidated financial statements.
c. Transactions with related parties
The Company and subsidiaries have transactions with related parties. The definition of related parties used is in accordance with the Bapepam-LK’s Regulation No. VIII.G.7 regarding the Presentations and Disclosures of Financial Statements of Issuers or Public companies, enclosed in the decision letter No. KEP-347/BL/2012.The party which is considered as a related party is a person or entity that is related to the entity that is preparing its financial statements.
Under the Regulation of Bapepam-LK No.VIII.G.7 regarding the Presentations and Disclosures of Financial Statements of Issuers or Public companies, enclosed in the decision letter No.KEP-347/BL/2012, a government-related entity is an entity that is controlled, jointly controlled or significantly influenced by a government. Government in this context is the Minister of Finance or the Local Government, as the shareholder of the entity. Formerly, the Company and subsidiaries in its disclosure applied the definition of related party used based on PSAK 7 “Related Party”.
Key management personnel are identified as the persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of the Company and subsidiaries. The related-party status extends to the key management of the subsidiaries to the extent they direct the operations of subsidiaries with minimal involvement from the Company’s management.
d. Business combinations
Business combination is accounted for using the acquisition method. The consideration transferred is measured at fair value, which is the aggregate of the fair value of the assets transferred, liabilities incurred or assumed and the equity instruments issued in exchange for control of the acquiree. Acquisition-related costs are expensed as incurred. The acquiree’s identifiable assets and liabilities are recognized at their fair values at the acquisition date.
Goodwill arising on acquisition is recognized as an asset and measured at cost representing the excess of the aggregate of the consideration transferred and the amount of any non-controlling interests in the acquiree’s net identifiable assets acquired and liabilities assumed. For each business combination, non-controlling interest is measured at fair value or at the proportionate share of the acquiree’s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis.
19
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
d. Business combinations (continued)
The excess of the fair value of identifiable assets acquired and the liabilities assumed at the date of acquisitionover the aggregate fair value of consideration transferred and non-controlling interest in the acquireeat the acquisition date is a bargain purchase and recognized as gain in profit or loss at the acquisition date. Such gain is attributed to the acquirer.
When the determination of consideration from a business combination includes contingent consideration, it is measured at its fair value on acquisition date. Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognized in profit or loss when adjustments are recorded outside the measurement period. Changes in the fair value of the contingent consideration that qualify as measurement-period adjustments are adjusted retrospectively, with corresponding adjustments made against goodwill. Measurement-period adjustments are adjustments that arise from additional information obtained during the measurement period, which cannot exceed one year from the acquisition date, about facts and circumstances that existed at the acquisition date.
In case of loss of control over a subsidiary, the Company:
· derecognizes the assets (including goodwill) and liabilities of the subsidiary at the carrying amounts when its loses of control;
· derecognizes the carrying amounts of any non-controling interests of its former subsidiary on the date when it loses control;
· recognizes the fair value of the consideration received (if any) from the transaction, events, or condition that caused the loss of control;
· recognizes the fair value of any investment retained in the subsidiary at fair value on the date of loss of control;
· recognizes any surplus or deficit in profit or loss that is attributable to the Company.
In a business combination achieved in stages, the acquirer remeasures its previously held equity interest in theacquiree at its acquisition-date fair value and recognizes the resulting gain or loss, if any, in profit or loss.
Based on PSAK 38 (Revised 2012), “Common Control Business Combination”, the transfer of assets, liabilities, shares or other ownership instruments among the companies under common control would not result in a gain or loss. Since the restructuring transaction between entities under common control does not result in a change of the economic substance of the ownership of assets, liabilities, shares or other instruments of ownership, which are exchanged, assets or liabilities transferred are recorded at book value using the pooling-of-interests method. In applying the pooling-of-interests method, the components of the financial statements for the period during which the restructuring occurred must be presented in such a manner as if the restructuring has occurred since the beginning of the earliest period presented. The excess of consideration paid or received over the carrying value of interest acquired, net of income tax, is directly recognized to equity and presented as “Additional Paid-in Capital” under the equity section of the consolidated statement of financial position.
At the initial application of PSAK 38 (Revised 2012), all balances of the Difference In Value of Restructuring Transactions of Entities under Common Control was reclassified to “Additional Paid-in Capital” in the consolidated statement of financial position.
20
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
e. Cash and cash equivalents
Cash and cash equivalents comprises cash on hand and in banks and all unrestricted time deposits with an original maturity of three months or less at the time of placement.
Time deposits with maturities of more than three months but not more than one year are presented as other current financial assets.
f. Investments in associated companies
Investments in companies where the Company and subsidiarieshave 20% to 50% of the voting rights, and through which the Company and subsidiariesexert significant influence, but not control, over the financial and operating policies are accounted for using the equity method. Under this method, the Companyand subsidiariesrecognize their proportionate share in the income or loss of the associated companies from the date that significant influence commences until the date that significant influence ceases. When the Company and subsidiaries’ share of loss exceeds the carrying amount of the investments in associated companies, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Company and subsidiaries have incurred legal or constructive obligations or made payments on behalf of the associated companies.
Investment in a joint venture is accounted for using the equity method whereby the participation in a joint venture is initially recorded at cost and subsequently adjusted for changes that occur after the acquisition in the share of the venturer of the joint venture’s net assets.
The Company and subsidiaries determine at each reporting date whether there is any objective evidence that the investments in the associated companies are impaired. If there is, the Company and subsidiaries calculate and recognize the amount of impairment as the difference between the recoverable amount of the investments in associated companies and their carrying value.
These assets are included in long-term investment in the consolidated statement of financial position.
The functional currency of PT Pasifik Satelit Nusantara (“PSN”) and PT Citra Sari Makmur (“CSM”) is the United States dollar (“U.S. dollars”) and the functional currency of Telin Malaysia is the Malaysian ringgit (“MYR”). For the purpose of reporting these investments using the equity method, the assets and liabilities of these companies as of the statement of financial position date are translated into Indonesian rupiah using the rate of exchange prevailing at that date, while revenues and expenses are translated into Indonesian rupiah at the average rates of exchange for the year. The resulting translation adjustments are reported as part of translation adjustment in the equity section of the consolidated statement of financial position.
g. Trade and other receivables
Trade and other receivables are recognized initially at fair value and subsequently measured at amortized cost, less provision for impairment. This provision for impairment is made based on management’s evaluation of the collectibility of outstanding amounts. Receivables are written off in the year during which they are determined to be uncollectible.
h. Inventories
Inventories consist of components, which are subsequently expensed or transferred to property and equipment upon use. Components represent telephone terminals, cables, and other spare parts. Inventories also include Subscriber Identification Module (“SIM”) cards, Removable User Identity Module (“RUIM”) cards, handsets, set top box, wireless broadband modems, and blank prepaid vouchers, which are expensed upon sale.
21
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
h. Inventories (continued)
The costs of inventories comprise of the purchase price, import duties, other taxes, transport, handling, and other costs directly attributable to their acquisition. Inventories are recognized at the lower of cost and net realizable value. Net realizable value is the estimate of selling price less the costs to sell.
Cost is determined using the weighted average method for components, SIM cards, RUIM cards, handsets, set top box, wireless broadband modem, and blank prepaid voucher.
The amounts of any write-down of inventories below cost to net realizable value and all losses of inventories are recognized as expense in the period in which the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realizable value, is recognized as a reduction in the amount of general and administrative expenses in the year in which the reversal occurs.
Provision for obsolescence is primarily based on the estimated forecast of future usage of these items.
i. Prepaid expenses
Prepaid expenses are amortized over their future beneficial periods using the straight-line method.
j. Assets held for sale
Assets (or disposal groups) are classified as held for sale when their carrying amount is to be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell.
Assets that meet the criteria to be classified as held for sale are reclassified from property and equipment and depreciation on such assets is ceased.
k. Intangible assets
Intangible assets consist of goodwill arisingfrombusiness acquisitions, license and software. Intangible assets are recognized if it is probable that the expected future economic benefits that are attributable to each asset will flow to the Company orsubsidiaries,and the cost of the asset can be reliably measured.
Intangible assets are stated at cost less accumulated amortization and impairment, if any. Intangible assets are amortized over their useful lives. The Company and subsidiaries estimate the recoverable value of their intangible assets. When the carrying amount of an asset exceeds its estimated recoverable amount, the asset is writtendown to its estimated recoverable amount.
Intangible assets are amortized using the straight-line method, based on the estimated useful lives of the assets as follows:
|
Years |
Software |
3-20 |
License |
3-20 |
Other intangible assets |
1-30 |
Intangible assets are derecognized when no further economic benefits are expected, either from further use or from disposal. The difference between the carrying amount and the net proceeds received from disposal is recognized in the consolidated statement of comprehensive income.
22
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
l. Property and equipment - direct acquisitions
Property and equipment directly acquired are stated at costless accumulated depreciation and impairment losses.
The cost of an item of property and equipment includes: (a) purchase price, (b) any costs directly attributable to bringing the asset to its location and condition and (c) the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Each part of an item of property and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.
Property and equipment, except landrights, are depreciated using the straight-line method based on the estimated useful lives of the assets as follows:
|
Years |
Buildings |
15-40 |
Leasehold improvements |
2-15 |
Switching equipment |
3-15 |
Telegraph, telex and data communication equipment |
5-15 |
Transmission installation and equipment |
3-25 |
Satellite, earth station and equipment |
3-20 |
Cable network |
5-25 |
Power supply |
3-20 |
Data processing equipment |
3-20 |
Other telecommunications peripherals |
5 |
Office equipment |
2-5 |
Vehicles |
4-8 |
Asset Customer Premise Equipment (“CPE”) |
10 |
Other equipment |
2-5 |
The depreciation method, useful life and residual value of an asset are reviewed at least at each financial year-end and adjusted, if appropriate. The residual value of an asset is the estimated amount that the Company and subsidiaries would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.
The Company and subsidiaries periodically evaluate their property and equipment for impairment, whenever events and circumstances indicate that the carrying amount of the assets may not be recoverable. When the carrying amount of an asset exceeds its estimated recoverable amount, the asset is written down to its estimated recoverable amount, which is determined based on the higher of its fair value less cost to sell or value-in-use.
Property and equipment acquired in exchange for a non-monetary asset or for a combination of monetary and non-monetary assets are measured at fair value unless (i) the exchange transaction lacks commercial substance; or (ii) the fair value of neither the asset received nor the asset given up is reliably measurable.
Major spare parts and standbyequipment that are expected to be used for more than 12 months are recorded as part of property and equipment.
When assets are retired or otherwise disposed of, their cost and the related accumulated depreciation are derecognized from the consolidated statements of financial position and the resulting gains or losses on the disposal or sale of the property and equipment are recognized in the consolidated statement of comprehensive income.
23
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
l. Propertyand equipment - direct acquisitions (continued)
Certain computer hardware can not be used without the availability of certain computer software. In such circumstance, the computer software is recorded as part of the computer hardware. If the computer software is independent from its computer hardware, it is recorded as part of intangible assets.
The cost of maintenance and repairs is charged to the consolidated statements of comprehensive income as incurred. Significant renewals and betterments are capitalized.
Property under construction is stated at cost until construction is completed, at which time it is reclassified to the specific property and equipment account to which it relates. During the construction period until the property is ready for its intended use or sale, borrowing costs, which include interest expense and foreign currency exchange differences incurred on loans obtained to finance the construction of the asset, as long as it meets the definition of a qualifying asset are capitalized in proportion to the average amount of accumulated expenditures during the period. Capitalization of borrowing cost ceases when the construction is completed and the asset is ready for its intended use.
Equipment temporarily unused is reclassified to equipment not used in operations and depreciated over its estimated useful life using the straight-line method.
m. Leases
In determining whether an arrangement is, or contains a lease, the Company and subsidiaries perform an evaluation over the substance of the arrangement.A lease is classified as a finance lease or operating lease based on the substance, not the form, of the contract. Finance lease is recognized if the lease transfers substantially all the risks and rewards incidental to the ownership of the leased asset.
Assets and liabilities under a finance lease are recognized in the consolidated statement of financial position at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Any initial direct costs of the Company and subsidiaries are added to the amount recognized as assets.
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent rents are charged as expenses in the year in which they are incurred.
Leased assets are depreciated using the same method and based on the useful lives as estimated for directly acquired property and equipment. However, if there is no reasonable certainty that the Company and subsidiaries will obtain ownership by the end of the lease term, the leased assets are fully depreciated over the shorter of the lease term and their economic useful lives.
Lease arrangements that do not meet the above criteria are accounted for as operating leases for which payments are charged as an expense on the straight-line basis over the lease period.
n. Deferred charges-land rights
Costs incurred to process the initial legal land rights are recognized as part of the property and equipment and are not amortized. Costs incurred to process the extension or renewal of legal land rights are deferred and amortized over the shorter of the term of the land rights or the economic life of the land.
24
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
o. Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business, if this period is longer). If not, they are presented as non-current liabilities.
Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest rate method.
p. Borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the consolidated statement of comprehensive income over the period of the borrowings using the effective interest method.
Fees paid on obtaining loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facilities will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facilities will be drawn down, the fee is capitalized as a pre-payment for liquidity services and amortized over the period of the facilities to which it relates.
q. Foreign currency translations
The functional currency and the recording currency of the Company and subsidiaries are both the Indonesian rupiah, except for the functional currency of Telekomunikasi Indonesia International Pte. Ltd., Hong Kong, Telekomunikasi Indonesia International Pte., Singapore, and Telekomunikasi Indonesia International S.A., Timor Leste whose accounting records are maintained in U.S. dollars. Transactions in foreign currencies are translated into Indonesian rupiah at the rates of exchange prevailing at transaction date. At the consolidated statement of financial position date, monetary assetsand liabilitiesdenominated in foreign currencies are translated into Indonesian rupiah based on the buy and sell rates quoted by Reuters prevailing at the consolidated statement of financial position date,as follows:
|
March 31, 2014 |
|
December 31, 2013 |
|
||||
|
Buy |
|
Sell |
|
Buy |
|
Sell |
|
United States dollar (“US$”) 1 |
11,355 |
|
11,365 |
|
12,160 |
|
12,180 |
|
Euro 1 |
15,564 |
|
15,581 |
|
16,744 |
|
16,774 |
|
Yen 1 |
111.15 |
|
111.26 |
|
115.67 |
|
115.87 |
|
The resulting foreign exchange gains or losses, realized and unrealized, are credited or charged to the consolidated statement of comprehensive income of the current year, except for foreign exchange differences incurred on borrowings during the construction of qualifying assets which are capitalized to the extent that the borrowings can be attributed to the construction of those qualifying assets (Note 2l).
25
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
r. Revenue and expense recognition
i. Fixed line telephone revenues
Revenues from fixed line installations, including incremental costs, are deferred and recognized as revenue and costs over the expected term of the customer relationships. Based on reviews of historical information and customer trends, the Company determined the expected term of the customer relationships in 2014 and 2013 to be 18 years, respectively. Revenues from usage charges are recognized as customers incur the charges. Monthly subscription charges are recognized as revenues when incurred by subscribers.
ii. Cellular and fixed wireless telephone revenues
Revenues from postpaid service, which consist of usage and monthly charges, are recognized as follows:
· Airtime and charges for value added services are recognized based on usage by subscribers.
· Monthly subscription charges are recognized as revenues when incurred by subscribers.
Revenues from prepaid card subscribers, which consist of the sale of starter packs (also known as SIM cards in the case of cellular and RUIM in the case of fixed wireless telephone and start-up load vouchers) and pulse reload vouchers, are recognized as follows:
· Sales of SIM and RUIM cards are recognized as revenue upon delivery of the starter packs to distributors, dealers or directly to customers.
· Sales of pulse reload vouchers (either bundled in starter packs or sold as separate items) are recognized initially as unearned income and recognized proportionately as usage revenue based on duration and total of successful calls made and the value added services used by the subscribers or the expiration of the unused stored value of the voucher.
· Unutilized promotional credits are netted against unearned income.
iii. Interconnection revenues
The revenues from network interconnection with other domestic and international telecommunications carriers are recognized monthly on the basis of the actual recorded traffic for the month. Interconnection revenues consist of revenues derived from other operators’ subscriber calls to the Company and subsidiaries’subscribers (incoming) and calls between subscribers of other operators through the Company and subsidiaries’ network (transit).
iv. Data, internet and information technology service revenues
Revenues from data communication and internet are recognized based on service activity and performance which are measured by the duration of internet usage or based on the fixed amount of charges depending on the arrangements with customers.
Revenues from sales, installation and implementation of computer software and hardware, computer data network installation service and installation are recognized when the goods are delivered to customers or the installation takes place.
Revenue from computer software development service is recognized using the percentage-of-completion method.
26
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
r. Revenue and expense recognition (continued)
v. Revenues from network
Revenues from network consist of revenues from leased lines and satellite transponder leases which are recognized over the period in which the services are rendered.
vi. Other telecommunications service revenues
Revenues from other telecommunications services consist of Revenue-Sharing Arrangements (“RSA”) and sales of other telecommunication services or goods.
The RSA are recorded in a manner similar to capital leases where the property and equipment and obligation under RSA are reflected in the consolidated statement of financial position. All revenues generated from the RSA are recorded as a component of revenues, while a portion of the investors’ share of the revenues from the RSA is recorded as finance costs with the balance treated as a reduction of the obligation under RSA.
Universal Service Obligation (“USO”) compensation from construction activities to design, build and finance assets for the grantor is recognized on thestage of completion basis. Revenues from operating and maintenance activities in respect of the assets under the concession are recognized when the servicesare rendered.
In concession contract under USO, the Company and subsidiaries have contractual rights to receive considerations from the grantor. The Company and subsidiaries recognize a financial asset in their consolidated statement of financial position, in consideration for the services they provide (designing, building, operation or maintenance of assets under concession). Such financial assets are recognized in the consolidated statement of financial position as Accounts Receivable, for the amount of fair value of the infrastructure on initial recognition and subsequently at amortized cost. The receivable is settled by means of the grantor’s payments received. The financial income calculated on the basis of the effective interest rate is recognized as finance income.
Revenues from sales of other telecommunication services or goods are recognized upon completion of services and or delivery of goods to customers.
vii. Multiple-element arrangements
Where two or more revenue-generating activities or deliverables are sold under a single arrangement, each deliverable that is considered to be a separate unit of accounting is accounted for separately. The total revenue is allocated to each separately identifiable component based on the relative fair value of each component and the appropriate revenue recognition criteria are applied to each component as described above.
viii. Agency relationship
Revenues from an agency relationship are recorded based on the gross amount billed to the customers when the Company and subsidiaries act as principal in the sale of goods and services. Revenues are recorded based on the net amount retained (the amount paid by the customer less amount paid to the suppliers) because in substance, the Company and subsidiaries act as agents and earned commission from the suppliers of the goods and services sold.
27
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
r. Revenue and expense recognition (continued)
ix. Customer loyalty programme
The Company and subsidiaries operate a loyalty point programme, which allows customers to accumulate points for every certain multiple of the usage of telecommunication services. The points can then be redeemed in the future for free or discounted products, provided other qualifying conditions are achieved.
Consideration received is allocated between the telecommunication services and the points issued, with the consideration allocated to the points equal to their fair value. Fair value of the points is determined based on historical information about redemption rate of award points, Fair value of the points issued is deferred and recognized as revenue when the points are redeemed or expired.
x. Service concession arrangements
Revenues relating to construction or upgrade services under a service concession arrangement are recognized based on the stage of completion of the work performed. Operation or service revenue is recognized in the period in which the service is provided. When more than one service is provided in the service concession arrangements, the consideration received is allocated by reference to the relative value of the services.
Further, the developed infrastructure assets under these arrangements are not recognized as propertyand equipment of the operator, because the contractual arrangements do not convey the right to control the use of the public services infrastructure assets to the operator.
xi. Expenses
Expenses are recognized as they are incurred.
s. Employee benefits
i. Short-term employee benefits
All short-term employee benefits which consist of salaries and related benefits, vacation pay, incentives and other short-term benefits are recognized as expense on undiscounted basis when employees have rendered service to the Company and subsidiaries.
ii. Pension and post-retirement health care benefit plans
The net obligations in respect of the defined pension benefit and post-retirement health care benefit plans are calculated at the present value of estimated future benefits that the employees have earned in return for their service in the current and prior periods, less the fair value of plan assets and as adjusted for unrecognized actuarial gains or losses and unrecognized past service cost. The calculation is performed by an independent actuary using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of government bonds that are denominated in the currencies in which the benefits will be paid and that have terms to maturity approximating the terms of the related retirement benefit obligation. Government bonds are used as there is no deep market for high quality corporate bonds.
28
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
s. Employee benefits (continued)
ii. Pension and post-retirement health care benefit plans (continued)
Plan assets are assets that are held by the pension and post-retirement health care benefit plans. These assets are measured at fair value at the end of the reporting period, which is based on the securities’ quoted market price information. The amount of prepaid pension costs that can be recognized is limited to the total of any unrecognized past service costs, unrecognized actuarial losses and the present value of economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.
Actuarial gains or losses arising from experience adjustments and changes in actuarial assumptions, when exceeding the greaterof 10% of the present value of defined benefit obligation or 10% of the fair value of plan assets, are charged or credited to the consolidated statements of comprehensive income over the average remaining service lives of the relevant employees. Prior service cost is recognized immediately if vested or amortized over the vesting period.
For defined contribution plans, the regular contributions constitute net periodic costs for the period in which they are due and as such are included in staff costs when they become payable.
iii. Long Service Awards (“LSA”) and Long Service Leave (“LSL”)
Employees of Telkomsel are entitled to receive certain cash awards or certain numbers of days leave benefits based on length of service requirements. LSA are either paid at the time the employees reach certain anniversary dates during employment, or at the time of termination. LSL is either a certain number of days leave benefit or cash, subject to approval by management, provided to employees who have met the requisite number of years of service and with a certain minimum age.
Actuarial gains or losses arising from experience and changes in actuarial assumptions are charged immediately to the consolidated statements of comprehensive income.
The obligation with respect to LSA and LSL is calculated by an independent actuary using the projected unit credit method.
iv. Early retirement benefits
Early retirement benefits are accrued at the time the Company makes a commitment to provide early retirement benefits as a result of an offer made in order to encourage voluntary redundancy. A commitment to a termination arises when, and only when a detailed formal plan for the early retirement cannot be withdrawn.
v. Pre-retirement benefits
Employees of the Company are entitled to a benefit during a pre-retirement period in which they are inactive for 6 months prior to their normal retirement age of 56 years. During the pre-retirement period, the employees still receive benefits provided to active employees, which include, but are not limited to regular salary, health care, annual leave, bonus and other benefits. Benefits provided to employees who enter pre-retirement period are calculated by an independent actuary using the projected unit credit method.
vi. Other post-retirement benefits
Employees are entitled to home leave passage benefits and final housing facility benefits to their retirement age of 56 years. Those benefits are calculated by an independent actuary using the projected unit credit method.
29
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
s. Employee benefits (continued)
vii. Share-based payments
The Company operates an equity-settled, share-based compensation plan. The fair value of the employees’ services rendered which compensated with the Company’s shares is recognized as an expense in the consolidated statement of comprehensive income and credited to additional paid-in capital at the grant date.
Gains or losses on curtailment are recognized when there is a commitment to make a material reduction in the number of employees covered by a plan or when there is an amendment of defined benefit plan terms such that a material element of future services to be provided by current employees will no longer qualify for benefits, or will qualify only for reduced benefits.
Gains or losses on settlement are recognized when there is a transaction that eliminates all further legal or constructive obligations for part or all of the benefits provided under a defined benefit plan.
t. Income tax
Current and deferred income taxesare recognized as income or an expense and included in the consolidated statement of comprehensive income, except to the extent that the tax arises from a transaction or event which is recognized directly in equity, in which case, the tax is recognized directly in equity.
Current tax assets and liabilities are measured at the amounts expected to be recovered or paid using the tax rates and tax laws that have been enacted at each reporting date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. Where appropriate, management establishes provisions based on the amounts expected to be paid to the tax authorities.
The Company and subsidiaries recognize deferred tax assets and liabilities for temporary differences between the financial and tax bases of assets and liabilities at each reporting date. The Company and subsidiaries also recognize deferred tax assets resulting from the recognition of future tax benefits, such as the benefit of tax losses carried forward to the extent their future realization is probable. Deferred tax assets and liabilities are measured using enacted or substantively enacted tax rates and tax laws at each reporting date which are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled, such as tax rates and tax laws which have been enacted or substantially enacted at each reporting date.
The carrying amount of deferred tax asset is reviewed at the end of each reporting period and reducedto the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized.
Deferred tax assets and liabilities are offset in the consolidated statement of financial position, except if these are for different legal entities, in the same manner the current tax assets and liabilities are presented.
Amendment to tax obligation is recorded when an assessment letter (“Surat Ketetapan Pajak” or “SKP”) is received or if appealed against, when the results of the appeal are determined. The additional taxes and penalty imposed through an SKP are recognized as income or expense in the current yearprofit or loss, unless objection/appeal is taken. The additional taxes and penalty imposed through the SKP are deferred as long as they meet the asset recognition criteria.
30
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
u. Financial instruments
The Company and subsidiaries classify financial instruments into financial assets and financial liabilities. Financial assets and liabilities are recognized initially at fair value including transaction costs. These are subsequently measured either at fair value or amortized cost using the effective interest rate method in accordance with their classification.
i. Financial assets
The Company and subsidiaries classify their financial assets as (i) financial assets at fair value through profit or loss, (ii) loans and receivables, (iii) held-to-maturity financial assets or (iv) available-for-sale financial assets. The classification depends on the purpose for which the financial assets are acquired. Management determines the classification of financial assets at initial recognition.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the trade date, i.e., the date that the Company and subsidiaries commit to purchase or sell the assets.
The Company’s financial assets include cash and cash equivalents, other current financial assets, trade receivables and other receivables, long-term investments, advances and other non-current financial assets.
a. Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets classified as held for trading. A financial asset is classified as held for trading if it is acquired principally for the purpose of selling or repurchasing it in the near term and for which there is evidence of a recent actual pattern of short-term profit taking. Gains or losses arising from changes in fair value of the trading securities are presented as other (expenses)/income in consolidated statement of comprehensive income in the period in which they arise.Financial asset measured at fair value through profit loss consists of derivative asset-put option which is recognized as part of other current financial assets.
b. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables consist of, among other things, cash and cash equivalents, trade receivables, other receivables, other current financial assets and other non-current financial assets.
These are initially recognized at fair value including transaction costs and subsequently measured at amortized cost, using the effective interest method.
c. Held-to-maturity financial assets
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that management has the positive intention and ability to hold to maturity, other than:
a) those that the Company upon initial recognition designates as assets at fair value through profit or loss;
b) those that the Company designates as available for sale; and
c) those that meet the definition of loans and receivables.
No financial assets were classified as held-to-maturity financial assets as of March 31, 2014 and December 31, 2013.
31
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
u. Financial instruments (continued)
i. Financial assets (continued)
d. Available-for-sale financial assets
Available-for-sale investments are non-derivative financial assets that are intended to be held for indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or that are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss. Available-for-sale financial assets consist of bonds and mutual funds which are recorded as other current financial assets.
Available-for-sale securities are stated at fair value. Unrealized holding gains or losses on available-for-sale securities are excluded from income of the current period and are reported as a separate component in the equity section of the consolidated statements of financial position until realized. Realized gains or losses from the sale of available-for-sale securities are recognized in the consolidated statements of comprehensive income, and are determined on the specific identification basis. A decline in the fair value of any available-for-sale securities below cost that is deemed to be other than temporary is charged to the consolidated statement of comprehensive income.
ii. Financial liabilities
The Company and subsidiaries classify their financial liabilities as (i) financial liabilities at fair value through profit or loss or (ii) financial liabilities measured at amortized cost.
The Company and subsidiaries’ financial liabilities include trade payables and other payables, accrued expenses, loans and other borrowings which consist of short-term bank loans, obligations under capital lease, two step loans, bonds and notes, and bank loans.
a. Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss are financial liabilities classified as held for trading. A financial liability is classified as held for trading if it is incurred principally for the purpose of selling or repurchasing them in the near term and for which there is evidence of a recent actual pattern of short-term profit taking.
No financial liabilities were categorized as held for trading as of March 31, 2014 and December 31, 2013.
b. Financial liabilities measured at amortized cost
Financial liabilities that are not classified as liabilities at fair value through profit or loss fall into this category and are measured at amortized cost. Financial liabilities measured at amortized cost aretrade payables, other payables, accrued expenses, loans, bonds and notes.
iii. Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the consolidated statementof financial position when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the assets and settle the liabilities simultaneously.
32
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
u. Financial instruments (continued)
iv. Fair value of financial instruments
Fair value is the amount for which an asset could be exchanged, or liability settled, in an arms’ length transaction.
The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices, without any deduction for transaction costs.
For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may includeusing recent arm’s length market transactions, reference to the current fair value of another instrument that is substantially the same,a discounted cash flow analysis or other valuation models.
An analysis of fair values of financial instruments and further details as to how they are measured are provided in Note 44.
v. Impairment of financial assets
The Company and subsidiaries assess the impairment of financial assets if there is objective evidence that a loss event has a negative impact on the estimated future cash flows of the financial asset. Impairment is recognized when the loss event can be reliably estimated. Losses expected as a result of future events, no matter how likely, are not recognized.
Impairment loss on financial assets carried at cost is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.
When a decline in the fair value of an available-for-sale financial asset has been recognized in other comprehensive income and there is objective evidence that the asset is impaired, the cumulative loss that had been recognized in other comprehensive income is recognized in profit or loss as an impairment loss. The amount of the cumulative loss is the difference between the acquisition cost (net of any principal repayment and amortization) and current fair value, less any impairment loss on that financial asset previously recognized.
vi. Derecognition of financial instrument
The Company and subsidiaries derecognize a financial asset when the contractual rights to the cash flows from the financial asset expire, or when the Company and subsidiaries transfer substantially all the risks and rewards of ownership of the financial asset.
The Company and subsidiaries derecognize a financial liability when the obligation specified in the contract is discharged or cancelled or expired.
v. Treasury stock
Reacquired Companyshares of stock are accounted for at their reacquisition cost and classified as “Treasury Stock” and presented as a deduction to equity. The cost of treasury stock sold/transferred is accounted for using the weighted average method. The portion of treasury stock transferred for employees ownership program is accounted for at its fair value. The difference between the cost and the proceeds from the sale/transfer value of treasury stock is credited to “Additional Paid-in Capital”.
33
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
w. Dividends
Dividend distribution to the Company’s stockholders is recognized as a liability in the Company’s consolidated financial statements in the year in which the dividend is approved by the Company’s stockholders. The Company recognizes interim dividend as a liability based on the Board of Directors’ decision with the approval from the Board of Commissioners.
x. Basic earnings per share and earnings per ADS
Basic earnings pershare is computed by dividing profit for the year attributable to owners of the parent company by the weighted average number of shares outstanding during the year. Income per ADS is computed by multiplying basic earnings per share by 200, the number of shares represented by each ADS.
The Company does not have potentially dilutive financial investments.
y. Segment information
The Company and subsidiaries' segment information is presented based upon identified operating segments. An operating segment is a component of an entity: a) that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity); b) whose operating results are regularly reviewed by the Company and subsidiaries' chief operating decision maker i.e., Directors, to make decisions about resources to be allocated to the segment and assess its performance, and c) for which discrete financial information is available.
z. Provision
Provisionis recognized when the Company and subsidiaries have a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the obligation.
aa. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Company and subsidiaries make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.
i. Retirement benefits
The present value of the retirement benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of retirement benefit obligations.
The Company and subsidiaries determine the appropriate discount rate at the end of each reporting period. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the obligations. In determining the appropriate discount rate, the Company and subsidiaries consider the interest rates of government bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related retirement benefit obligations.
34
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
aa. Critical Accounting Estimates and Judgements (continued)
i. Retirement benefits (continued)
If there is an improvement in the ratings of such government bonds or a decrease in interest rates as a result of improving economic conditions, there could be a material impact on the discount rate used in determining the post-employment benefits obligations.
Other key assumptions for retirement benefit obligations are based in part on current market conditions. Additional information is disclosed in Notes 34, 35 and 36.
ii. Estimating useful lives of property and equipment and intangible assets
The Company and subsidiaries estimate the useful lives of their property and equipment and intangible assets based on expected asset utilization, considering strategic business plans, expected future technological developments and market behavior.The estimates of useful lives of property and equipment are based on the Company and subsidiaries’ collective assessment of industry practice, internal technical evaluation and experience with similar assets.
The Company and subsidiaries review estimates of useful lives at least each financial year end and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limitations on the use of the assets. The amounts and timing of recorded expenses for any year will be affected by changes in these factors and circumstances. A change in the estimated useful lives of the property and equipment is a change in accounting estimates and is applied prospectively in profit or loss in the period of the change and future periods.
Details of the nature and carrying amount of property and equipment are disclosed in Note 11 and intangible assets in Note 13.
iii. Provision for impairment of receivables
The Company and subsidiaries assess whether there is objective evidence that trade receivables have been impaired at the end of each reporting period. Provision for impairment of receivables is calculated based on a review of the current status of existing receivables and historical collection experience. Such provisionis adjusted periodically to reflect the actual and anticipated experience. Details of the nature and carrying amount of provision for impairment of receivables are disclosed in Note 6.
iv. Income taxes
Significant judgement is required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain. The Company and subsidiaries recognize liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the year in which such determination is made. Details of the nature and carrying amount of income tax are disclosed in Note 31.
v. Impairment of non-financial assets
The Company and subsidiaries annually assess whether goodwill is impaired. Other non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset exceeds its recoverable amount. The recoverable amount of an asset or a cash-generating unit (“CGU”) is determined based on the higher of its fair value less costs to sell and its value in use, calculated on the basis of management’s assumptions and estimations.
35
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
aa. Critical Accounting Estimates and Judgements (continued)
v. Impairment of non-financial assets (continued)
In determining value in use, the Company and subsidiaries apply management judgement in establishing forecasts of future operating performance, as well as the selection of growth rates and discount rates. These judgements are applied based on our understanding of historical information and expectations of future performance. Changing the key assumptions, including the discount rates or the growth rate assumptions in the cash flow projections, could materially affect the value in use calculations.
For the years ended December 31, 2013, the Company recognized Rp596 billion of impairment loss on property and equipment pertaining to the fixed wireless services. A 1% increase in the discount rate used would result in an increase in impairment loss of approximately Rp703 billion in 2013. However, the recoverable amount of the fixed wireless CGU is most sensitive to whether management will be able to implement its plans, including the cost efficiency plan, such that it generates positive cash flows and returns to profitability as projected. If the performance of the fixed wireless CGU continues to decline or if management’s initiatives are not performing as expected in the next financial year, analysis will be required to assess whether there will be further impairment next year (Note 11b).
vi. Fair value of put option and investment in PT Indonusa Telemedia
Indetermining the fair value, the Company uses management’s judgment to determine future projected operational performance, growth rate and discount rate. These considerations are applied on the basis ofmanagement’s understanding of historical information and expectation of future operational performance. Detail of the nature and recorded amount of Put Option and investment in Indonusa is disclosed in Notes 3,5 and 10.
3. BUSINESS COMBINATIONS
a. Acquisitions
Acquisition of PT German Center Indonesia
On January 17, 2013, Sigma signed a sales and purchase of sharesagreement and transfer of debt with Landeskreditbank Baden-Wurttemberg-Forderbank (“L-Bank”) and Step Stuttgarter Engineering Park Gmbh (“STEP”) as the shareholders of PT German Centre Indonesia (“GCI”). Based on the agreement, on April 30, 2013, Sigmahas bought shares owned by L-Bank and STEP in GCI.Through the acquisition, Sigma enlarged its data center capacity that can be offered its customers.
Acquisition of Patrakom
On September 25, 2013, based on notarial deed No. 22 of Ashoya Ratam, S.H.,M.Kn, the Company entered into a Sales and Purchase Agreement (SPA) with PT ELNUSA Tbk for the Company’s acquisition of the 40% ownership in PT Patra Telekomunikasi Indonesia (“Patrakom”) for Rp45.6 billion. This SPA results in the Company’s ownership in Patrakom to increase from 40% to 80% (Note 10).
Subsequently, onNovember 29, 2013, based on notarial deed No. 54 of Ashoya Ratam, S.H., M.Kn., dated November 29, 2013 the Company has signed a SPA with PT Tanjung MustikaTbk for the Company’s acquisition of the remaining of 20% ownershipin Patrakomfor Rp24.8 billion.
36
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
3. BUSINESS COMBINATIONS (continued)
a. Acquisitions (continued)
Acquisition of Patrakom(continued)
Patrakom is a satellite-based closed fixed telecommunications network operator and as provider of communications solutions and network with a permit as Operator of Micro Earth StationsCommunications Systems (“SKSBM”) in partnership with manufacturers of telecommunications equipment to serve various companies.Through the acquisition of Patrakom, the Company canintegrate Patrakom’s business activities in accordance with the Company’s business development plan.
The fair values of the assets acquired and liability transferred at the acquisition datesare as follows:
|
GCI |
|
Patrakom |
|
Total |
|
Cash and equivalents |
3 |
|
39 |
|
42 |
|
Other current assets |
18 |
|
122 |
|
140 |
|
Property and equipment (Note 11) |
225 |
|
171 |
|
396 |
|
Current liabilities |
(15 |
) |
(171 |
) |
(186 |
) |
Non-current liabilities |
(16 |
) |
(45 |
) |
(61 |
) |
Fair value of the identifiable net assets acquired |
215 |
|
116 |
|
331 |
|
Bargain purchase |
(42 |
) |
- |
|
(42 |
) |
Fair value of previously held equity interests |
- |
|
(46 |
) |
(46 |
) |
Fair value of the consideration transferred |
173 |
|
70 |
|
243 |
|
The excess of fair value of the identifiable net assetsacquiredover thefair value of the consideration transferred, amounting Rp42 billion, wasrecorded as other income in the consolidated statement of comprehensive income of the current year. Cost related to the acquisition amountingto Rp4.3 billion was incurred in the current period.
Since the acquisition dates, GCI and Patrakom has generated operating revenue amountingto Rp23billion.
The business combination transactions mentioned above complied to the related Bapepam-LK Regulations.
b. Disposal of Indonusa
On October 8, 2013, the Company sold 80% of its ownership in Indonusa to PT Trans Corpora and PT Trans Media Corpora for Rp926 billion. Further, on the same date, the Company, Metra and PT Trans Corpora signed a Shareholders Agreement that establishes mutual relationship among the shareholders of Indonusa, including the grant of the right to the Company and Metra to sell their 20% remaining ownership in Indonusa to PT Trans Corpora at any time in 24 months after the second year ofthe closing transaction at a certain price (Put Option).
The Company had received the full payment for the sale transaction.
37
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
3. BUSINESS COMBINATION (continued)
b. Disposal of Indonusa (continued)
The Company recognized the gain on sale of Indonusa shares in the consolidated statement of comprehensive income of thecurrent year as follows:
|
Amount |
Fair value of considerations received: |
|
Cash |
926 |
Put Option |
289 |
Fair value of interest retainedin Indonusa (Note 10) |
182 |
Carrying amount of assets and liabilities of Indonusa |
(14) |
Gain on sale of shares |
1,383 |
4. CASH AND CASH EQUIVALENTS
|
March 31, 2014 |
|
December 31, 2013 |
|
Cash on hand |
30 |
|
7 |
|
Cash in banks |
|
|
|
|
Related parties |
|
|
|
|
Rupiah |
|
|
|
|
PT Bank Mandiri (Persero) Tbk (“Bank Mandiri”) |
923 |
|
804 |
|
PT Bank Negara Indonesia (Persero) Tbk (“BNI”) |
227 |
|
409 |
|
PT Bank Rakyat Indonesia (Persero) Tbk (“BRI”) |
68 |
|
70 |
|
PT Bank Tabungan Negara (Persero) Tbk (“BTN”) |
0 |
|
50 |
|
Others |
7 |
|
6 |
|
|
1,225 |
|
1,339 |
|
Foreign currencies |
|
|
|
|
Bank Mandiri |
748 |
|
458 |
|
BNI |
147 |
|
224 |
|
BRI |
22 |
|
75 |
|
|
917 |
|
757 |
|
Sub-total |
2,142 |
|
2,096 |
|
Third parties |
|
|
|
|
Rupiah |
|
|
|
|
Deutsche Bank AG (“DB”) |
129 |
|
62 |
|
PT Bank Central Asia Tbk (“BCA”) |
62 |
|
34 |
|
PT Bank CIMB Niaga Tbk (“Bank CIMB Niaga”) |
54 |
|
32 |
|
Others (each below Rp50 billion) |
77 |
|
97 |
|
|
322 |
|
225 |
|
Foreign currencies |
|
|
|
|
Standard Chartered Bank (“SCB”) |
289 |
|
313 |
|
|
86 |
|
66 |
|
Others |
33 |
|
36 |
|
|
408 |
|
415 |
|
Sub-total |
730 |
|
640 |
|
Total cash in banks |
2,872 |
|
2,736 |
|
38
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
4. CASH AND CASH EQUIVALENTS (continued)
|
March 31, 2014 |
|
December 31, 2013 |
|
Time deposits |
|
|
|
|
Related parties |
|
|
|
|
Rupiah |
|
|
|
|
BNI |
3,969 |
|
1,975 |
|
BRI |
3,501 |
|
2,445 |
|
Bank Mandiri |
908 |
|
1,271 |
|
BTN |
295 |
|
375 |
|
PT Bank Syariah Mandiri (”BSM”) |
51 |
|
50 |
|
|
8,724 |
|
6,116 |
|
Foreign currencies |
|
|
|
|
BRI |
2,480 |
|
3,260 |
|
BNI |
281 |
|
264 |
|
|
2,761 |
|
3,524 |
|
Sub-total |
11,485 |
|
9,640 |
|
Third parties |
|
|
|
|
Rupiah |
|
|
|
|
Bank CIMB Niaga |
1,880 |
|
83 |
|
BCA |
1,366 |
|
599 |
|
PT Bank OCBC NISP Tbk (“OCBC NISP”) |
1,000 |
|
- |
|
SCB |
750 |
|
- |
|
PT Bank Muamalat Indonesia Tbk |
143 |
|
150 |
|
PT Bank Pembangunan Daerah Jawa Barat dan Banten Tbk (“BJB”) |
130 |
|
245 |
|
PT Bank Ekonomi Raharja Tbk (“Bank Ekonomi”) |
115 |
|
73 |
|
PT Bank Internasional Indonesia Tbk (“BII”) |
113 |
|
126 |
|
PT Bank Mega Tbk (“Bank Mega”) |
95 |
|
275 |
|
Deutsche Bank |
56 |
|
6 |
|
PT Bank Yudha Bhakti |
- |
|
145 |
|
PT Bank Tabungan Pensiunan Nasional Tbk |
- |
|
136 |
|
PT Bank Panin Tbk |
- |
|
70 |
|
Others (each below Rp50 billion) |
122 |
|
161 |
|
|
5,770 |
|
2,069 |
|
Foreign currencies |
|
|
|
|
OCBC NISP |
534 |
|
244 |
|
Others |
9 |
|
- |
|
|
543 |
|
244 |
|
Sub-total |
6,313 |
|
2,313 |
|
Total time deposits |
17,798 |
|
11,953 |
|
Grand Total |
20,700 |
|
14,696 |
|
39
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
4. CASH AND CASH EQUIVALENTS (continued)
Interest rates per annum on time deposits are as follows:
|
March 31, 2014 |
|
December 31, 2013 |
|
Rupiah |
2.47%-11.50% |
|
1.00% - 11.50% |
|
Foreign currencies |
0.03%-2.70% |
|
0.03%-3.00% |
|
The related parties in which the Company and subsidiaries place their funds are state-owned banks. The Company and subsidiaries placed a majority of their cash and cash equivalents in these banks because they have the most extensive branch networks in Indonesia and are considered to be financially sound banks, as they are owned by the State.
Refer to Note 37 for details of related party transactions.
5. OTHER CURRENT FINANCIAL ASSETS
|
March 31, 2014 |
|
December 31, 2013 |
|
Time deposits |
|
|
|
|
Related parties |
|
|
|
|
BRI |
400 |
|
1,000 |
|
Others |
20 |
|
19 |
|
Sub-total |
420 |
|
1,019 |
|
Third parties |
|
|
|
|
CIMB Niaga |
700 |
|
1,800 |
|
OCBC NISP |
600 |
|
1,600 |
|
SCB |
355 |
|
1,859 |
|
Others |
12 |
|
10 |
|
Sub-total |
1,667 |
|
5,269 |
|
Total time deposits |
2,087 |
|
6,288 |
|
Available-for-sale financial assets |
|
|
|
|
Related parties |
|
|
|
|
Government |
131 |
|
133 |
|
State-owned enterprises |
72 |
|
74 |
|
Sub-total |
203 |
|
207 |
|
Third parties |
67 |
|
65 |
|
Total available-for-sale financial assets |
270 |
|
272 |
|
Derivative asset - Put Option |
297 |
|
297 |
|
Others |
1 |
|
15 |
|
Total |
2,655 |
|
6,872 |
|
As of March 31, 2014 and December 31, 2013, time deposits denominated in foreign currency amounted to Rp55 billion and Rp59 billion, respectively.
The time deposits have maturities of more than three months but not more than one year, with interest rates as follows:
|
March 31, 2014 |
|
December 31, 2013 |
|
Rupiah |
1.60% - 10.50% |
|
1.60% - 10.50% |
|
Foreign currency |
0.10% - 1.10% |
|
1.00% -1.10% |
|
Refer to Note 37 for details of related party transactions.
40
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
6. TRADE RECEIVABLES
Trade receivables arise from services provided to both retail and non-retail customers, with details as follows:
a. By debtor
(i) Related parties
|
March 31, 2014 |
|
December 31, 2013 |
|
State-owned enterprises |
937 |
|
877 |
|
PT Indosat Tbk (“Indosat”) |
207 |
|
48 |
|
Indonusa |
93 |
|
180 |
|
CSM |
56 |
|
45 |
|
Others |
210 |
|
241 |
|
Total |
1,503 |
|
1,391 |
|
Provision for impairment of receivables |
(550 |
) |
(491 |
) |
Net |
953 |
|
900 |
|
(ii) Third parties
|
March 31, 2014 |
|
December 31, 2013 |
|
Individual and business subscribers |
7,810 |
|
7,010 |
|
Overseas international carriers |
406 |
|
497 |
|
Total |
8,217 |
|
7,507 |
|
Provision for impairment of receivables |
(2,626 |
) |
(2,381 |
) |
Net |
5,590 |
|
5,126 |
|
Trade receivables from certain parties are presented net of the Company and subsidiaries’ liabilities to such parties due to the existence of a legal right of set-off in accordance with the agreements with those parties.
b. By age
(i) Related parties
|
March 31, 2014 |
|
December 31, 2013 |
|
Up to 6 months |
711 |
|
836 |
|
7 to 12 months |
313 |
|
223 |
|
More than 12 months |
479 |
|
332 |
|
Total |
1,503 |
|
1,391 |
|
Provision for impairment of receivables |
(550 |
) |
(491 |
) |
Net |
953 |
|
900 |
|
41
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
6. TRADE RECEIVABLES (continued)
b. By age (continued)
(ii) Third parties
|
March 31, 2014 |
|
December 31, 2013 |
|
Up to 3 months |
4,586 |
|
4,526 |
|
More than 3 months |
3,630 |
|
2,981 |
|
Total |
8,216 |
|
7,507 |
|
Provision for impairment of receivables |
(2,626 |
) |
(2,381 |
) |
Net |
5,590 |
|
5,126 |
|
(iii) Aging of total trade receivables
|
March 31, 2014 |
|
December 31, 2013 |
|
||||
|
Gross |
|
Provision for Impairment of receivables |
|
Gross |
|
Provision for Impairment of receivables |
|
Not past due |
2,888 |
|
127 |
|
3,618 |
|
10 |
|
Past due up to 3 months |
1,894 |
|
192 |
|
1,525 |
|
401 |
|
Past due more than 3 to 6 months |
866 |
|
194 |
|
703 |
|
321 |
|
Past due more than 6 months |
4,071 |
|
2,663 |
|
3,052 |
|
2,140 |
|
Total |
9,719 |
|
3,176 |
|
8,898 |
|
2,872 |
|
The Company and subsidiaries have made provision for impairment of trade receivables based on the collective assessment of historical impairment rates and individual assessment of their customers’ credit history. The Company and subsidiaries do not apply a distinction between related party and third party receivables in assessing amounts past due. As of March 31, 2014 and December 31, 2013, the carrying amount of trade receivables of the Company and subsidiaries considered past due but not impaired amounted to Rp3,780 billion and Rp2,418 billion, respectively. Management has concluded that receivables past due but not impaired, along with trade receivables that are neither past due nor impaired, are due from customers with good credit history and are expected to be recoverable.
c. By currency
(i) Related parties
|
March 31, 2014 |
|
December 31, 2013 |
|
Rupiah |
1,478 |
|
1,361 |
|
U.S.dollar |
25 |
|
30 |
|
Total |
1,503 |
|
1,391 |
|
Provision for impairment of receivables |
(550 |
) |
(491 |
) |
Net |
953 |
|
900 |
|
42
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
6. TRADE RECEIVABLES (continued)
c. By currency (continued)
(ii) Third parties
|
March 31, 2014 |
|
December 31, 2013 |
|
Rupiah |
7,447 |
|
6,699 |
|
U.S.dollar |
766 |
|
806 |
|
Euro |
2 |
|
1 |
|
Hong Kong dollar |
1 |
|
1 |
|
Total |
8,216 |
|
7,507 |
|
Provision for impairment of receivables |
(2,626 |
) |
(2,381 |
) |
Net |
5,590 |
|
5,126 |
|
d. Movements in the provision for impairment of receivables
|
March 31, 2014 |
|
December 31, 2013 |
|
Beginning balance |
2,872 |
|
2,047 |
|
Provision recognized during the year (Note 29) |
304 |
|
1,589 |
|
Receivables written-off |
0 |
|
(622 |
) |
Acquisition |
- |
|
1 |
|
Disposal (Note 3) |
- |
|
(158 |
) |
Reclassification |
0 |
|
15 |
|
Ending balance |
3,176 |
|
2,872 |
|
The receivables written off are related-party and third-party trade receivables.
Management believes that the provision for impairment of trade receivables is adequate to cover losses on uncollectible trade receivables.
Certain trade receivables of the subsidiaries amounting to Rp1,721 billion have been pledged as collateral under lending agreements (Notes 17 and 21).
Refer to Note 37 for details of related party transactions.
7. INVENTORIES
|
March 31, 2014 |
|
December 31, 2013 |
|
Components |
459 |
|
272 |
|
SIM cards, RUIM cards, set top box, and blank prepaid vouchers |
127 |
|
102 |
|
Others |
191 |
|
157 |
|
Total |
777 |
|
531 |
|
Provision for obsolescence |
|
|
|
|
Components |
(21 |
) |
(21 |
) |
SIM cards, RUIM cards, set top box, and blank prepaid vouchers |
(1 |
) |
(1 |
) |
Total |
(22 |
) |
(22 |
) |
Net |
755 |
|
509 |
|
43
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
7. INVENTORIES (continued)
Movements in the provisionfor obsolescence are as follows:
|
March 31, 2014 |
|
December 31, 2013 |
|
Beginning balance |
22 |
|
148 |
|
Divestment |
- |
|
(1 |
) |
Provision (reversal)recognized during the year |
- |
|
(29 |
) |
Reclassification |
- |
|
(96 |
) |
Ending balance |
22 |
|
22 |
|
The inventories recognized as expense and included in operations, maintenance, and telecommunication service expenses (Note 28) as of March 31, 2014 and December 31, 2013 amounted to Rp213 billion and Rp752 billion, respectively.
Management believes that the provision is adequate to cover losses from declines in inventory value due to obsolescence.
Certain inventories of the Company’s subsidiaries amounting to Rp35 billion have been pledged as collateral under lending agreements (Notes 17 and 21).
As of March 31, 2014 and December 31, 2013, modules and components held by the Company and subsidiaries have been insured against fire, theft, and other specific risks with book value amounting to Rp64 billion and Rp280 billion, respectively. Modules are recorded as part of property and equipment.Total sum insured as of March 31, 2014 and December 31, 2013 amounted to Rp251 billion and Rp261 billion, respectively.
Management believes that the insurance coverage is adequate to cover potential losses of certain inventories which happens to the Company and subsidiaries.
8. ADVANCES AND PREPAID EXPENSES
|
March 31, 2014 |
|
December 31, 2013 |
|
Frequency license (Notes 41c.i and 41c.ii) |
2,048 |
|
2,330 |
|
Prepaid rental |
616 |
|
744 |
|
Salaries |
449 |
|
209 |
|
Advances |
328 |
|
297 |
|
Deferred expense |
97 |
|
124 |
|
Insurance |
83 |
|
84 |
|
Others (each below Rp50 billion) |
241 |
|
159 |
|
Total |
3,862 |
|
3,947 |
|
Refer to Note 37 for details of related party transactions.
44
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
9. ASSET HELD FOR SALE
This account represents the carrying amount of Telkomsel’s equipment to be exchanged with equipment of Nokia Siemens Network Oy (“NSN Oy”) and PT Huawei Tech Investment (“PT Huawei”). The equipment will be used as part of the settlement for the exchanges of equipment from these companies.
In 2014, Telkomsel’s equipment with net carrying amount of Rp88 billion is reclassified to asset held for sale (Note 11c.vi).
Asset held for sale is presented under personal segment (Note 38).
10. LONG-TERM INVESTMENTS
|
March 31, 2014 |
|
||||||||
|
Percentage of ownership |
|
Beginning balance |
|
Share of net (loss) profit of associated company |
|
Translation adjustment |
|
Ending balance |
|
Long-term investments in associated companies: |
|
|
|
|
|
|
|
|
|
|
Indonusaa |
20.00 |
|
189 |
|
- |
|
- |
|
189 |
|
PT Melon Indonesia (“Melon”)b |
51.00 |
|
39 |
|
1 |
|
- |
|
40 |
|
ILCSc |
49.00 |
|
37 |
|
(3 |
) |
- |
|
34 |
|
Telin Malaysiad |
49.00 |
|
18 |
|
(5 |
) |
(1 |
) |
12 |
|
CSMe |
25.00 |
|
- |
|
- |
|
- |
|
|
|
PSNf |
22.38 |
|
- |
|
- |
|
- |
|
- |
|
Sub-total |
|
|
283 |
|
7 |
|
(1 |
) |
275 |
|
Other long-term investments |
|
|
21 |
|
- |
|
- |
|
21 |
|
Total long-term investments |
|
|
304 |
|
7 |
|
(1 |
) |
296 |
|
|
March 31, 2014 |
|
||||||
|
Assets |
|
Liabilities |
|
Revenue |
|
Gain (Loss) |
|
Long-term investments in associated companies: |
|
|
|
|
|
|
|
|
Indonusaa |
376 |
|
297 |
|
93 |
|
4 |
|
Melonb |
122 |
|
44 |
|
28 |
|
2 |
|
ILCSc |
96 |
|
27 |
|
28 |
|
(6 |
) |
Telin Malaysiad |
25 |
|
1 |
|
4 |
|
(10 |
) |
CSMe |
1,273 |
|
1,387 |
|
77 |
|
(45 |
) |
PSNf |
817 |
|
2,148 |
|
116 |
|
(14 |
) |
Total |
2,709 |
|
3,904 |
|
346 |
|
(69 |
) |
45
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
10. LONG-TERM INVESTMENTS (continued)
|
December 31, 2013 |
|
||||||||||||
|
Percentage of ownership |
|
Beginning balance |
|
Addition (Deduction) |
|
Share of net (loss) profit of associated company |
|
Dividend |
|
Translation adjustment |
|
Ending balance |
|
Long-term investments in associated companies: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indonusaa |
20.00 |
|
- |
|
182 |
|
7 |
|
- |
|
- |
|
189 |
|
PT Melon Indonesia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(“Melon”)b |
51.00 |
|
42 |
|
- |
|
(3 |
) |
- |
|
- |
|
39 |
|
ILCSc |
49.00 |
|
48 |
|
- |
|
(11 |
) |
- |
|
- |
|
37 |
|
Telin Malaysiad |
49.00 |
|
- |
|
20 |
|
(6 |
) |
- |
|
4 |
|
18 |
|
CSMe |
25.00 |
|
20 |
|
- |
|
(20 |
) |
- |
|
- |
|
- |
|
PSNf |
22.38 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
Patrakomg |
40.00 |
|
46 |
|
(46 |
) |
2 |
|
(2 |
) |
- |
|
- |
|
Scicomh |
29.71 |
|
98 |
|
(88 |
) |
2 |
|
(3 |
) |
(9 |
) |
- |
|
Sub-total |
|
|
254 |
|
68 |
|
(29 |
) |
(5 |
) |
(5 |
) |
283 |
|
Other long-term investments |
|
|
21 |
|
- |
|
- |
|
- |
|
- |
|
21 |
|
Total long-term investments |
|
|
275 |
|
68 |
|
(29 |
) |
(5 |
) |
(5 |
) |
304 |
|
|
December 31, 2013 |
|
||||||
|
Assets |
|
Liabilities |
|
Revenue |
|
Loss |
|
Long-term investments in associated companies: |
|
|
|
|
|
|
|
|
Indonusaa |
655 |
|
669 |
|
363 |
|
(124 |
) |
Melonb |
90 |
|
22 |
|
73 |
|
(6 |
) |
ILCSc |
88 |
|
13 |
|
4 |
|
(22 |
) |
Telin Malaysiad |
37 |
|
1 |
|
0 |
|
(11 |
) |
CSM |
1,273 |
|
1,387 |
|
306 |
|
(181 |
) |
PSNf |
817 |
|
2,148 |
|
462 |
|
(55 |
) |
Total |
2,960 |
|
4,240 |
|
1,208 |
|
(399 |
) |
a Indonusa had been the Company’s subsidiary until 2013 when the Company disposed 80% of its interest in Indonusa
(Notes 3).
b Melon is engaged in providing Digital Content Exchange Hub services (“DCEH”). As a result of the existence of substantive participating rights held by the other venturer over the significant financial and operating policies of Melon, Metra does not have control over Melon.
c ILCS is engaged in providing E-trade logistic services and other related services.
d Telin Malaysia is engaged in telecommunication services in Malaysia.
e CSM is engaged in providing Very Small Aperture Terminal (“VSAT”), network application services and consulting services on telecommunications technology and related facilities.
f PSN is engaged in providing satellite transponder leasing and satellite-based communication services in the Asia-Pacific Region. The Company’s share in losses of PSN has exceeded the carrying amount of its investment since 2001; accordingly, the investment value has been reduced to Rp nil. The unrecognized share of losses of PSN for three months period ended March 31, 2014 and 2013 are Rp353 and Rp298 billion, respectively.
g Patrakom has been engaged in providing satellite communication system services, related services and facilities to companies in the petroleum industry. Starting in 2013, Patrakom has been consolidated (Notes 1d and 3).
h Scicom is engaged in providing call center services in Malaysia. On September 19, 2013, the Company sold its investment in Scicom (MSC) Berhad-Malaysia (Scicom), with the proceeds of disposal and the carrying amount of the investment on the date of disposal amounting to Rp153 billion and Rp88 billion, respectively, resulting in a gain of Rp65 billion.
46
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
11. PROPERTY AND EQUIPMENT
|
January 1, 2014 |
|
Additions |
|
Deductions |
|
Reclassifications/ Translations |
|
March 31, 2014 |
|
At cost: |
|
|
|
|
|
|
|
|
|
|
Directly acquired assets |
|
|
|
|
|
|
|
|
|
|
Land rights |
1,098 |
|
4 |
|
- |
|
- |
|
1,102 |
|
Buildings |
4,224 |
|
17 |
|
(16 |
) |
8 |
|
4,233 |
|
Leasehold improvements |
812 |
|
4 |
|
(29 |
) |
7 |
|
794 |
|
Switching equipment |
18,705 |
|
82 |
|
(42 |
) |
232 |
|
18,977 |
|
Telegraph, telex and data communication equipment |
6 |
|
- |
|
- |
|
- |
|
6 |
|
Transmission installation and equipment |
95,853 |
|
313 |
|
(39 |
) |
2,346 |
|
98,473 |
|
Satellite, earth station and equipment |
7,456 |
|
38 |
|
- |
|
365 |
|
7,859 |
|
Cable network |
28,987 |
|
253 |
|
- |
|
29 |
|
29,269 |
|
Power supply |
11,755 |
|
20 |
|
(10 |
) |
228 |
|
11,993 |
|
Data processing equipment |
9,230 |
|
61 |
|
(45 |
) |
79 |
|
9,325 |
|
Other telecommunications peripherals |
500 |
|
80 |
|
- |
|
- |
|
580 |
|
Office equipment |
770 |
|
14 |
|
- |
|
5 |
|
789 |
|
Vehicles |
332 |
|
- |
|
(1 |
) |
29 |
|
360 |
|
Other equipment |
104 |
|
- |
|
- |
|
- |
|
104 |
|
Property under construction |
1,971 |
|
3,309 |
|
- |
|
(3,248 |
) |
2,032 |
|
Assets under finance lease |
|
|
|
|
|
|
|
|
|
|
Transmission installation and equipment |
5,683 |
|
94 |
|
(7 |
) |
- |
|
5,770 |
|
Data processing equipment |
123 |
|
- |
|
- |
|
- |
|
123 |
|
Office equipment |
7 |
|
12 |
|
- |
|
- |
|
19 |
|
Vehicles |
26 |
|
- |
|
- |
|
(26 |
) |
- |
|
CPE assets |
22 |
|
- |
|
- |
|
- |
|
22 |
|
RSA assets |
459 |
|
- |
|
- |
|
- |
|
459 |
|
Total |
188,123 |
|
4,301 |
|
(189 |
) |
54 |
|
192,289 |
|
|
January 1, 2014 |
|
Additions |
|
Impairment |
|
Deductions |
|
Reclassifications/ Translations |
|
March 31, 2014 |
|
Accumulated depreciation and impairment losses: |
|
|
|
|
|
|
|
|
|
|
|
|
Directly acquired assets |
|
|
|
|
|
|
|
|
|
|
|
|
Buildings |
1,840 |
|
37 |
|
- |
|
(16 |
) |
37 |
|
1,898 |
|
Leasehold improvements |
649 |
|
17 |
|
- |
|
(29 |
) |
- |
|
637 |
|
Switching equipment |
12,903 |
|
397 |
|
- |
|
(42 |
) |
(7 |
) |
13,251 |
|
Telegraph, telex and datacommunication equipment |
3 |
|
- |
|
- |
|
- |
|
- |
|
3 |
|
Transmission installation and equipment |
46,665 |
|
2,149 |
|
16 |
|
(33 |
) |
(55 |
) |
48,742 |
|
Satellite, earth station and equipment |
5,190 |
|
143 |
|
12 |
|
- |
|
256 |
|
5,601 |
|
Cable network |
17,758 |
|
254 |
|
2 |
|
- |
|
1 |
|
18,015 |
|
Power supply |
6,794 |
|
312 |
|
- |
|
(8 |
) |
(25 |
) |
7,073 |
|
Data processing equipment |
6,823 |
|
211 |
|
- |
|
(45 |
) |
(5 |
) |
6,984 |
|
Other telecommunications peripherals |
267 |
|
15 |
|
- |
|
- |
|
0 |
|
282 |
|
Office equipment |
564 |
|
22 |
|
- |
|
- |
|
11 |
|
597 |
|
Vehicles |
68 |
|
13 |
|
- |
|
(1 |
) |
1 |
|
81 |
|
Other equipment |
100 |
|
1 |
|
- |
|
- |
|
- |
|
101 |
|
Assets under finance lease |
|
|
|
|
|
|
|
|
|
|
|
|
Transmission installation and equipment |
1,345 |
|
167 |
|
- |
|
(7 |
) |
1 |
|
1,505 |
|
Data processing equipment |
83 |
|
6 |
|
- |
|
- |
|
- |
|
89 |
|
Office equipment |
2 |
|
1 |
|
- |
|
- |
|
- |
|
3 |
|
Vehicles |
1 |
|
- |
|
- |
|
- |
|
(1 |
) |
- |
|
CPE asets |
13 |
|
1 |
|
- |
|
- |
|
- |
|
14 |
|
RSA assets |
294 |
|
10 |
|
- |
|
- |
|
1 |
|
305 |
|
Total |
101,362 |
|
3,756 |
|
30 |
|
(181 |
) |
214 |
|
105,181 |
|
Net Book Value |
86,761 |
|
|
|
|
|
|
|
|
|
87,108 |
|
47
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
11. PROPERTY AND EQUIPMENT (continued)
|
January 1, 2013 |
|
Business acquisition |
|
Divestment |
|
Additions |
|
Deductions |
|
Reclassifications/ Translations |
|
December 31, 2013 |
|
At cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directly acquired assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land rights |
977 |
|
110 |
|
- |
|
13 |
|
- |
|
(2 |
) |
1,098 |
|
Buildings |
3,787 |
|
120 |
|
- |
|
98 |
|
(1 |
) |
220 |
|
4,224 |
|
Leasehold improvements |
783 |
|
- |
|
- |
|
24 |
|
(27 |
) |
32 |
|
812 |
|
Switching equipment |
23,750 |
|
- |
|
- |
|
428 |
|
(2,896 |
) |
(2,577 |
) |
18,705 |
|
Telegraph, telex and data communication equipment |
19 |
|
- |
|
- |
|
- |
|
- |
|
(13 |
) |
6 |
|
Transmission installation and equipment |
85,289 |
|
- |
|
- |
|
1,777 |
|
(1,311 |
) |
10,098 |
|
95,853 |
|
Satellite, earth station and equipment |
7,267 |
|
158 |
|
(110 |
) |
56 |
|
(2 |
) |
87 |
|
7,456 |
|
Cable network |
27,658 |
|
- |
|
(601 |
) |
2,084 |
|
(117 |
) |
(37 |
) |
28,987 |
|
Power supply |
10,434 |
|
3 |
|
(0 |
) |
253 |
|
(71 |
) |
1,136 |
|
11,755 |
|
Data processing equipment |
8,196 |
|
- |
|
(1 |
) |
968 |
|
(62 |
) |
129 |
|
9,230 |
|
Other telecommunications peripherals |
280 |
|
- |
|
- |
|
230 |
|
- |
|
(10 |
) |
500 |
|
Office equipment |
680 |
|
5 |
|
(11 |
) |
138 |
|
(1 |
) |
(41 |
) |
770 |
|
Vehicles |
71 |
|
0 |
|
(1 |
) |
279 |
|
(1 |
) |
(16 |
) |
332 |
|
Other equipment |
111 |
|
- |
|
(2 |
) |
- |
|
- |
|
(5 |
) |
104 |
|
Property under construction |
1,312 |
|
- |
|
- |
|
15,349 |
|
- |
|
(14,690 |
) |
1,971 |
|
Assets under finance lease |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transmission installation and equipment |
2,873 |
|
- |
|
(30 |
) |
3,170 |
|
(330 |
) |
- |
|
5,683 |
|
Data processing equipment |
339 |
|
- |
|
- |
|
5 |
|
(221 |
) |
- |
|
123 |
|
Office equipment |
15 |
|
- |
|
- |
|
- |
|
(8 |
) |
- |
|
7 |
|
Vehicles |
- |
|
- |
|
- |
|
26 |
|
(0 |
) |
- |
|
26 |
|
CPE assets |
22 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
22 |
|
RSA assets |
459 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
459 |
|
Total |
174,322 |
|
396 |
|
(756 |
) |
24,898 |
|
(5,048 |
) |
(5,689 |
) |
188,123 |
|
|
January 1, 2013 |
|
Business acquisition |
|
Divestment |
|
Additions |
|
Impairment |
|
Deductions |
|
Reclassifications/ Translations |
|
December 31, 2013 |
|
Accumulated depreciation and impairment losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directly acquired assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buildings |
1,739 |
|
- |
|
- |
|
163 |
|
- |
|
(0 |
) |
(62 |
) |
1,840 |
|
Leasehold improvements |
609 |
|
- |
|
- |
|
67 |
|
- |
|
(27 |
) |
- |
|
649 |
|
Switching equipment |
17,105 |
|
- |
|
- |
|
1,982 |
|
- |
|
(2,718 |
) |
(3,466 |
) |
12,903 |
|
Telegraph, telex and data communication equipment |
16 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(13 |
) |
3 |
|
Transmission installation and equipment |
41,210 |
|
- |
|
- |
|
7,609 |
|
321 |
|
(1,205 |
) |
(1,269 |
) |
46,666 |
|
Satellite, earth station and equipment |
4,684 |
|
- |
|
(142 |
) |
663 |
|
226 |
|
(2 |
) |
(239 |
) |
5,190 |
|
Cable network |
17,291 |
|
- |
|
(181 |
) |
1,022 |
|
49 |
|
(106 |
) |
(317 |
) |
17,758 |
|
Power supply |
5,982 |
|
- |
|
(0 |
) |
1,171 |
|
- |
|
(67 |
) |
(292 |
) |
6,794 |
|
Data processing equipment |
6,355 |
|
- |
|
(1 |
) |
738 |
|
- |
|
(49 |
) |
(221 |
) |
6,822 |
|
Other telecommunications peripherals |
259 |
|
- |
|
- |
|
18 |
|
- |
|
- |
|
(10 |
) |
267 |
|
Office equipment |
548 |
|
- |
|
(6 |
) |
72 |
|
- |
|
(1 |
) |
(49 |
) |
564 |
|
Vehicles |
61 |
|
- |
|
(1 |
) |
25 |
|
- |
|
(1 |
) |
(16 |
) |
68 |
|
Other equipment |
102 |
|
- |
|
(1 |
) |
4 |
|
- |
|
- |
|
(5 |
) |
100 |
|
Assets under finance lease |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transmission installation and equipment |
782 |
|
- |
|
(3 |
) |
896 |
|
- |
|
(330 |
) |
- |
|
1,345 |
|
Data processing equipment |
261 |
|
- |
|
- |
|
37 |
|
- |
|
(215 |
) |
- |
|
83 |
|
Office equipment |
7 |
|
- |
|
- |
|
1 |
|
- |
|
(6 |
) |
- |
|
2 |
|
Vehicles |
- |
|
- |
|
- |
|
1 |
|
- |
|
(0 |
) |
- |
|
1 |
|
CPE asets |
11 |
|
- |
|
- |
|
2 |
|
- |
|
- |
|
- |
|
13 |
|
RSA assets |
253 |
|
- |
|
- |
|
41 |
|
- |
|
- |
|
- |
|
294 |
|
Total |
97,275 |
|
- |
|
(335 |
) |
14,512 |
|
596 |
|
(4,727 |
) |
(5,959 |
) |
101,362 |
|
Net Book Value |
77,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
86,761 |
|
48
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
11. PROPERTY AND EQUIPMENT (continued)
a. Gain on disposal or sale of property and equipment
|
2014 |
|
2013 |
|
Proceeds from sale of property and equipment |
1 |
|
- |
|
Net book value |
- |
|
- |
|
Gain on disposal or sale of property and equipment |
1 |
|
- |
|
b. Assets impairment
(i) As of December 31, 2013, the CGUs that independently generate cash inflows were fixed wireline, fixed wireless, cellular and others. As of December 31, 2013, there were indications of impairment in the fixed wireless CGU (presented as part of personal segment), which were mainly due to increased competition in the fixed wireless market that resulted in lower average tariffs, declining active customers and declining Average Revenue Per User (“ARPU”). The Company assessed the recoverable value of the assets in the CGU and determined that assets for the fixed wireless CGU were impaired by Rp596 billion and Rp30 billion as at December 31, 2013 and March 31, 2014, which is recognized in the consolidated statement of comprehensive income under “Depreciation and amortization”. The recoverable amount has been determined based on value-in-use (VIU) calculations. These calculations used pre-tax cash flow projections approved by management covering a five-year period and with cash flows beyond the five-year period extrapolated using a perpetuity growth rate. The cash flow projections reflect management’s expectations of revenue, Earnings Before Interest, Tax, Depreciation and Amortization (“EBITDA”) growth and operating cash flows on the basis that the fixed wireless CGU generates positive net cash flows starting from 2014. Management’s cash flow projection also incorporates management’s reasonable expectations for developments in macro economic conditions and market expectations for the Indonesian telecommunications industry. As of December 31, 2013, management applied a pre-tax discount rate of 13.5% derived from the Company’s post-tax weighted average cost of capital and benchmarked to externally available data. As of December 31, 2013, the perpetuity growth rate used of 0%, assumes that subscriber numbers and average revenue per user may continue to decrease after five years.
If the performance of the fixed wireless CGU continues to decline or if management’s initiatives are not performing as expected in the next financial year, analysis will be required to assess whether there will be further impairment next year.
(ii) Management believes that there is no indication of impairment in the value of other CGUs as of December 31, 2013.
c. Others
(i) Interest capitalized to property under construction amounted Rp9 billion and Rp100 billion for three months period ended March 31, 2014 and for the year ended December 31, 2013, respectively. The capitalization rate used to determine the amount of borrowing costs eligible for capitalization ranges from 9.75% to 13.07% and from 9.75% to 13.07% for three months period ended March 31, 2014 and for the year ended December 31, 2013, respectively.
(ii) No foreign exchange loss was capitalized as part of property under construction for for three months period ended March 31, 2014 and for the year ended December 31, 2013.
49
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
11. PROPERTY AND EQUIPMENT (continued)
c. Others (continued)
(iii) In 2012, Telkomsel decided to replace certain equipment units with net carrying amount of Rp1,037 billion, as part of a modernization program. Accordingly, Telkomsel changed the estimated useful lives of such equipment. In 2014, the effect of additional depreciation expense amounted to Rp29 billion.
The impact of the change in the estimated useful lives of the equipment for the year ended December 31, 2014 is to decrease the profit before income tax by Rp84 billion.
(iv) In 2012, the useful lives of Telkomsel’s towers were changed from 10 years to 20 years to reflect their current economic lives. The impact is a reduction of depreciation expense for the three months period ended March 31, 2014 is Rp146 billion.
The impact of the change in the estimated useful lives of the towers in future periods is to increase the profit before income tax as follows:
Years |
Amount |
2014 (9 months) |
419 |
2015 |
469 |
2016 |
301 |
2017 |
92 |
(v) Exchange of property and equipment
· In 2011, the Company and PT Industri Telekomunikasi Indonesia (“INTI”) signed Purchase Orders of Procurement and Installation Agreement for the Modernization of the Copper Cable Network through Optimization of Asset Copper Cable Network with Trade In/Trade Off with total procurement value amounting to Rp1,499 billion up to December 31, 2013.
In 2013, the Company derecognized the copper cable network asset with net carrying value of Rp1.6 billion, respectively, and recorded the fiber optic network asset from the exchange transaction of Rp203 billion.
· In 2014 and 2013, certain equipment units of Telkomsel with net carrying amount of Rp966 million and Rp54,640 million were exchanged with equipment from NSN Oy and PT Huawei. As of March 31, 2014, Telkomsel’s equipment with net carrying amount of Rp37 billion and Rp130 billion are going to be exchanged with equipment from NSN Oy and PT Huawei; therefore,Telkomsel’s equipment units were reclassified as assets held for sale (Note 9).
50
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
11. PROPERTY AND EQUIPMENT (continued)
c. Others (continued)
(vi) The Company and subsidiaries own several pieces of land rights located throughout Indonesia with Building Use Rights (“Hak Guna Bangunan” or “HGB”) for a period of 0 – 45 years which will expire between 2014 and 2052. Management believes that there will be no issue in obtaining the extension of the land rights when they expire.
(vii) As of March 31, 2014, the Company and subsidiaries’ property and equipment except land rights, with net carrying amount of Rp75,281 billion were insured against fire, theft, earthquake and other specified risks, with a maximum loss claim of Rp4,397 billion, US$52 million, EURO0.63 million, SGD21.55 million and HKD8.44 million, and on a first loss basis of Rp6,815 billion including business recovery of Rp324 billion with the Automatic Reinstatement of Loss Clause. In addition, Telkom-1 and Telkom-2 were insured separately for US$3.41 million and US$28.55 million, respectively. Management believes that the insurance coverage is adequate to cover potential losses from the insured risks.
(viii) As of March 31, 2014, the percentage of completion of property under construction was around 36.18% of the total contract value, with estimated dates of completion between April 2014 and December 2015. The balance of property under construction mainly consists of buildings, transmission installation and equipment, cable network and power supply. Management believes that there is no impediment to the completion of the construction in progress.
(ix) All assets owned by the Company have been pledged as collateral for bonds (Note 20a). Certain property and equipment of the Company’s subsidiaries with gross carrying value amounting to Rp6,205 billion have been pledged as collateral under lending agreements (Notes 17 and 21).
(x) As of March 31, 2014 and December 31, 2013 the cost of fully depreciated property and equipment of the Company and subsidiaries that are still used in operations amounted to Rp37,556 billion and Rp40,791 billion. The Company and subsidiaries are currently performing modernization of network assets to replace the fully depreciated property and equipment.
51
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
11. PROPERTY AND EQUIPMENT (continued)
c. Others (continued)
(xi) The Company and Telkomsel entered into several agreements with PT Profesional Telekomunikasi Indonesia, PT Tower Bersama Infrastructure Tbk, PT Solusindo Kreasi Pratama, PT Prima Media Selaras, PT Naragita Dinamika Komunika and other tower providers to lease spaces in telecommunication towers (slot) and sites of the towers for a period of 10 years. The Company and Telkomsel may extend the lease period based on the agreement by both parties. In addition, the Company and subsidiaries also have lease commitments for property and equipment under RSA, transmission installation and equipment, data processing equipment, office equipment, vehicles and CPE assets with the option to purchase certain leased assets at the end of the lease terms. Future minimum lease payments for assets under finance lease are as follows:
Year |
|
March 31, 2014 |
|
December 31, 2013 |
|
2014 |
|
1,027 |
|
1,070 |
|
2015 |
|
667 |
|
885 |
|
2016 |
|
851 |
|
847 |
|
2017 |
|
820 |
|
813 |
|
2018 |
|
757 |
|
754 |
|
Thereafter |
|
2,542 |
|
2,535 |
|
Total minimum lease payments |
|
6,664 |
|
6,904 |
|
Interest |
|
(1,817 |
) |
(1,935 |
) |
Net present value of minimum lease payments |
|
4,847 |
|
4,969 |
|
Current maturities (Note 18a) |
|
(619 |
) |
(648 |
) |
Long-term portion (Note 18b) |
|
4,228 |
|
4,321 |
|
12. ADVANCES AND OTHER NON-CURRENT ASSETS
Advances and other non-current assets as of March 31, 2014 and December 31, 2013 consist of:
|
March 31, 2014 |
|
December 31, 2013 |
|
Advances for purchase of property and equipment |
1,532 |
|
1,550 |
|
Prepaid rental - net of current portion (Note 8) |
1,316 |
|
1,403 |
|
Frequency license - net of current portion (Note 8) |
587 |
|
619 |
|
Deferred charges |
534 |
|
529 |
|
Long-term trade receivables - net of current portion (Note 6) |
477 |
|
558 |
|
Claim for tax refund - net of current portion (Note 8) |
463 |
|
499 |
|
Security deposits |
84 |
|
73 |
|
Restricted cash |
2 |
|
54 |
|
Others |
5 |
|
9 |
|
Total |
5,000 |
|
5,294 |
|
Prepaid rental covers rent of leased line and telecommunication equipment and land and building under lease agreements of the Company and subsidiaries with rental periods ranging from 1 to 39 years.
As of March 31, 2014 and December 31, 2013, deferred charges represent deferred Revenue-Sharing Arrangement (“RSA”) charges and deferred Indefeasible Right of Use (“IRU”) Agreement charges. Total amortization of deferred charges for three months period ended March 31, 2014 and 2013 amounted to Rp24 billion and Rp91 billion, respectively.
52
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
12. ADVANCES AND OTHER NON-CURRENT ASSETS (continued)
Long-term trade receivables are measured at amortized cost using the effective interest ratemethod payable in installments over 4 years, and arose from providing telecommunication access and services in rural areas (USO) (Note 41c.v).
As of March 31, 2014 and December 31, 2013, restricted cash represents time deposits with original maturities of more than one year and cash pledged as collateral for bank guarantees for the USO contract (Note 41c.v) and other contracts.
As of March 31, 2014 and December 31, 2013, the carrying amount of the Company and subsidiaries’ temporarily idle property and equipment amounted to Rp0 billion, respectively.
Refer to Note 37 for details of related party transactions.
13. INTANGIBLE ASSETS
(i) The changes in the carrying amount of goodwill, software, license and other intangible assets for three months period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:
|
Goodwill |
|
Software |
|
License |
|
Other intangible assets |
|
Total |
|
Gross carrying amount: |
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2013 |
270 |
|
3,432 |
|
67 |
|
401 |
|
4,170 |
|
Additions |
- |
|
140 |
|
- |
|
17 |
|
157 |
|
Reclassifications/ translations |
- |
|
(7 |
) |
- |
|
(6 |
) |
(13 |
) |
Balance, March 31, 2014 |
270 |
|
3,565 |
|
67 |
|
412 |
|
4,314 |
|
Accumulated amortization: |
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2013 |
(29 |
) |
(2,278 |
) |
(37 |
) |
(318 |
) |
(2,662 |
) |
Amortization expense during the year |
- |
|
(118 |
) |
(1 |
) |
(12 |
) |
(131 |
) |
Reclassifications/ translations |
- |
|
1 |
|
- |
|
(19 |
) |
(18 |
) |
Balance, March 31, 2014 |
(29 |
) |
(2,395 |
) |
(38 |
) |
(349 |
) |
(2,811 |
) |
Net Book Value |
241 |
|
1,170 |
|
29 |
|
63 |
|
1,503 |
|
Weighted-average amortization period |
|
|
7.30 years |
|
11.30 years |
|
17.79 years |
|
|
|
|
Goodwill |
|
Software |
|
License |
|
Other intangible assets |
|
Total |
|
Gross carrying amount: |
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2012 |
269 |
|
2,909 |
|
66 |
|
400 |
|
3,644 |
|
Additions |
1 |
|
521 |
|
1 |
|
114 |
|
637 |
|
Deductions |
- |
|
(8 |
) |
- |
|
(112 |
) |
(120 |
) |
Reclassifications/ translations |
- |
|
10 |
|
- |
|
(1 |
) |
9 |
|
Balance, December 31, 2013 |
270 |
|
3,432 |
|
67 |
|
401 |
|
4,170 |
|
53
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
13. INTANGIBLE ASSETS (continued)
|
Goodwill |
|
Software |
|
License |
|
Other intangible assets |
|
Total |
|
Accumulated amortization: |
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2012 |
(29 |
) |
(1,825 |
) |
(31 |
) |
(316 |
) |
(2,201 |
) |
Amortization expense during the year |
- |
|
(458 |
) |
(6 |
) |
(114 |
) |
(578 |
) |
Deductions |
- |
|
8 |
|
- |
|
112 |
|
120 |
|
Reclassifications/ translations |
- |
|
(3 |
) |
- |
|
- |
|
(3 |
) |
Balance, December 31, 2013 |
(29 |
) |
(2,278 |
) |
(37 |
) |
(318 |
) |
(2,662 |
) |
Net Book Value |
241 |
|
1,154 |
|
30 |
|
83 |
|
1,508 |
|
Weighted-average amortization period |
|
|
7.51 years |
|
11.30 years |
|
3.63 years |
|
|
|
(ii) Goodwill resulted from sales-purchase transaction of Data Center Business between Sigma and BDM in 2012 (Note 1d), acquisitions of Ad Medika in 2010 and Sigma in 2008.
(iii) The estimated annual amortization expense of intangible assets from April 1, 2014 is approximately Rp522 billion. The remaining amortization periods of intangible assets, excluding land rights, range from 1 to 20 years.
(iv) The aggregate amounts of goodwill allocated to each CGU are as follows:
|
December 31, 2013 |
Sigma |
88 |
Ad Medika |
82 |
Total |
170 |
Metra performed its annual impairment tests on those CGUs based on fair value less cost to sell using discounted cash flow projections. The impairment tests used management-approved cash flow projections covering a five-year period. Key assumptions used in the impairment tests are as follows:
|
December 31, 2013 |
|
||
|
Sigma |
|
Ad Medika |
|
Discount rate |
11.0% |
|
14.0% |
|
Perpetuity growth rate |
4.5% |
|
4.5% |
|
As of December 31, 2013, no impairment charge was required for goodwill on acquisition of subsidiaries, with any reasonably possible changes to the key assumptions applied not likely to cause the carrying amounts of the CGUs to exceed their recoverable amounts.
(v) As of March 31, 2014 the cost of fully amortized intangible assets that are still used in operations amounted to Rp950 billion.
14. TRADE PAYABLES
|
March 31, 2014 |
|
December 31, 2013 |
|
Related parties |
|
|
|
|
Purchase of equipment, materials and services |
460 |
|
805 |
|
Payables to other telecommunications providers |
20 |
|
21 |
|
Sub-total |
480 |
|
826 |
|
54
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
14. TRADE PAYABLES (continued)
|
March 31, 2014 |
|
December 31, 2013 |
|
Third parties |
|
|
|
|
Purchase of equipment, materials and services |
8,548 |
|
9,758 |
|
Radio frequency usage charges, concession fees and Universal Service Obligation charges |
527 |
|
960 |
|
Payables to other telecommunications providers |
363 |
|
56 |
|
Sub-total |
9,438 |
|
10,774 |
|
Total |
9,918 |
|
11,600 |
|
Trade payables by currency are as follows:
|
March 31, 2014 |
|
December 31, 2013 |
|
Rupiah |
6,656 |
|
8,174 |
|
U.S. dollar |
3,232 |
|
3,373 |
|
Others |
30 |
|
53 |
|
Total |
9,918 |
|
11,600 |
|
Refer to Note 37 for details of related party transactions.
15. ACCRUED EXPENSES
|
March 31, 2014 |
|
December 31, 2013 |
|
Operations, maintenance and telecommunications services |
2,513 |
|
2,504 |
|
Salaries and benefits |
1,595 |
|
1,453 |
|
General, administrative and marketing expenses |
1,191 |
|
1,126 |
|
Interest and bank charges |
189 |
|
181 |
|
Total |
5,488 |
|
5,264 |
|
Refer to Note 37 for details of related party transactions.
16. UNEARNED INCOME
|
March 31, 2014 |
|
December 31, 2013 |
|
Prepaid pulse reload vouchers |
2,407 |
|
3,117 |
|
Other telecommunications services |
79 |
|
46 |
|
Others |
173 |
|
327 |
|
Total |
2,659 |
|
3,490 |
|
55
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
17. SHORT-TERM BANK LOANS
|
|
|
|
March31, 2014 |
|
December 31, 2013 |
|
||||
|
|
|
|
Outstanding |
|
Outstanding |
|
||||
Lenders |
|
Currency |
|
Original currency (in millions) |
|
Rupiah equivalent |
|
Original currency (in millions) |
|
Rupiah equivalent |
|
Bank CIMB Niaga |
|
Rp |
|
|
- |
177 |
|
- |
|
155 |
|
Bank UOB |
|
Rp |
|
|
- |
200 |
|
- |
|
130 |
|
Bank Danamon |
|
Rp |
|
|
- |
80 |
|
- |
|
80 |
|
BRI |
|
Rp |
|
|
- |
- |
|
- |
|
50 |
|
Others |
|
Rp |
|
|
- |
20 |
|
- |
|
17 |
|
Total |
|
|
|
|
|
477 |
|
|
|
432 |
|
Refer to Note 37 for details of related party transactions.
Other significant information relating to short-term bank loans as at March 31, 2014 is as follows:
|
Borrower |
|
Currency |
|
Total facility (in billions) |
|
Maturity date |
|
Interest payment period |
|
Interest rate per annum |
|
Security |
|
Bank CIMB Niaga |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 25, 2005 a |
Balebat |
|
Rp |
|
12 |
|
October 18, 2014 |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11), inventories (Note 7), and trade receivables (Note 6) |
|
April 29, 2008 a |
Balebat |
|
Rp |
|
10 |
|
October 18,2014 |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11), inventories (Note 7), and trade receivables (Note 6) |
|
March 21, 2013 |
Infomedia |
|
Rp |
|
38 |
|
October 18, 2014 |
|
Monthly |
|
10.00% |
|
Trade receivables (Note 6) |
|
March 25, 2013 |
Infomedia |
|
Rp |
|
38 |
|
October 18,2014 |
|
Monthly |
|
10.00% |
|
Trade receivables (Note 6) |
|
March 27, 2013 |
Infomedia |
|
Rp |
|
24 |
|
October 18,2014 |
|
Monthly |
|
10.25% |
|
Trade receivables (Note 6) |
|
April 28, 2013 |
GSD |
|
Rp |
|
85 |
|
August 18, 2014 |
|
Monthly |
|
9.75% |
|
Property and equipment (Note 11) |
|
September 30, 2013 |
GSD |
|
Rp |
|
50 |
|
August 18,2014 |
|
Monthly |
|
9.75% |
|
Property and equipment (Note 11) |
|
BRI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 14, 2013 |
Infomedia |
|
Rp |
|
50 |
|
March 14,2014 |
|
Monthly |
|
10.00% |
|
Trade receivables (Note 6) |
|
Bank Danamon |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August 23, 2013 |
Infomedia |
|
Rp |
|
80 |
|
August 23,2014 |
|
Monthly |
|
10.25% |
|
Trade receivables (Note 6) |
|
Bank UOB |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 22, 2013 |
Infomedia |
|
Rp |
|
200 |
|
November 22,2014 |
|
Monthly |
|
10.60% |
|
Trade receivables (Note 6) |
|
The credit facilities obtained by the Company’s subsidiaries are used for working capital purposes.
a based on the latest amendment on October 10, 2012
56
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
18. CURRENT MATURITIES OF LONG-TERM LIABILITIES
a. Current maturities
|
Notes |
|
March 31, 2014 |
|
December 31, 2013 |
|
Bank loans |
21 |
|
3,274 |
|
3,956 |
|
Obligations under finance leases |
11 |
|
619 |
|
648 |
|
Bonds and notes |
20 |
|
232 |
|
276 |
|
Two-step loans |
19 |
|
206 |
|
213 |
|
Total |
|
|
4,330 |
|
5,093 |
|
Refer to Note 37 for details of related party transactions.
b. Long-term portion
Scheduled principal payments as of March 31, 2014 are as follows:
|
|
|
|
|
Year |
|
||||||||
|
Notes |
|
Total |
|
2015 |
|
2016 |
|
2017 |
|
2018 |
|
Thereafter |
|
Bank loans |
21 |
|
5,928 |
|
2,570 |
|
1,110 |
|
756 |
|
563 |
|
929 |
|
Bonds and notes |
20 |
|
3,061 |
|
1,025 |
|
41 |
|
- |
|
- |
|
1,995 |
|
Two-step loans |
19 |
|
1,614 |
|
181 |
|
211 |
|
213 |
|
189 |
|
820 |
|
Obligations under finance leases |
11 |
|
4,228 |
|
400 |
|
540 |
|
561 |
|
551 |
|
2,176 |
|
Total |
|
|
14,831 |
|
4,176 |
|
1,902 |
|
1,530 |
|
1,303 |
|
5,920 |
|
19. TWO-STEP LOANS
Two-step loans are unsecured loans obtained by the Government which are then re-loaned to the Company. The loans entered into up to July 1994 were recorded and payable in rupiah based on the exchange rate at the date of drawdown. Loans entered into after July 1994 are payable in their original currencies and any resulting foreign exchange gain or loss is borne by the Company.
|
|
|
|
March 31, 2014 |
|
December 31, 2013 |
|
||||
|
|
|
|
Outstanding |
|
Outstanding |
|
||||
Lenders |
|
Currency |
|
Original currency (in millions) |
|
Rupiah equivalent |
|
Original currency (in millions) |
|
Rupiah equivalent |
|
Overseas banks |
|
Yen |
|
8,447 |
|
940 |
|
8,447 |
|
979 |
|
|
|
US$ |
|
33 |
|
375 |
|
35 |
|
429 |
|
|
|
Rp |
|
- |
|
505 |
|
- |
|
507 |
|
Total |
|
|
|
|
|
1,820 |
|
|
|
1,915 |
|
Current maturities (Note 18a) |
|
|
|
|
|
(206 |
) |
|
|
(213 |
) |
Long-term portion (Note 18b) |
|
|
|
|
|
1,614 |
|
|
|
1,702 |
|
Lenders |
|
Currency |
|
Payment schedule |
|
Interest Payment period |
|
Interest rate per annum |
|
Overseas banks |
|
US$ |
|
Semi-annually |
|
Semi-annually |
|
4.00% |
|
|
|
Rp |
|
Semi-annually |
|
Semi-annually |
|
6.79% |
|
|
|
Yen |
|
Semi-annually |
|
Semi-annually |
|
3.10% |
|
57
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
19. TWO-STEP LOANS (continued)
The loans are intended for the development of telecommunications infrastructure and supporting telecommunication equipment. The loans are payable in semi-annual installments and are due on various dates through 2024.
Since 2008, the Company has used all facilities under the two-step loans program and the drawdown period for the two-step loans has expired.
The Company is required to maintain financial ratios as follows:
a. Projected net revenue to projected debt service ratio should exceed 1.2:1 for the two-step loans originating from the Asian Development Bank (“ADB”).
b. Internal financing (earnings before depreciation and finance costs) should exceed 20% compared to annual average capital expenditures for loans originating from the ADB.
As of March 31, 2014, the Company complied with the above-mentioned ratios.
Refer to Note 37 for details of related party transactions.
20. BONDS AND NOTES
|
|
|
|
March 31, 2014 |
|
December 31, 2013 |
|
||||
|
|
|
|
Outstanding |
|
Outstanding |
|
||||
Bonds and notes |
|
Currency |
|
Original currency (in millions) |
|
Rupiah equivalent |
|
Original currency (in millions) |
|
Rupiah equivalent |
|
Bonds |
|
|
|
|
|
|
|
|
|
|
|
Series A |
|
Rp |
|
|
- |
1,005 |
|
|
- |
1,005 |
|
Series B |
|
Rp |
|
|
- |
1,995 |
|
|
- |
1,995 |
|
Promissory Notes |
|
|
|
|
|
|
|
|
|
|
|
PT Huawei |
|
US$ |
|
14 |
|
163 |
|
18 |
|
213 |
|
PT ZTE Indonesia (“ZTE”) |
|
US$ |
|
11 |
|
129 |
|
11 |
|
136 |
|
Total |
|
|
|
|
|
3,292 |
|
|
|
3,349 |
|
Current maturities (Note 18a) |
|
|
|
|
|
(232 |
) |
|
|
(276 |
) |
Long-term portion (Note 18b) |
|
|
|
|
|
3,061 |
|
|
|
3,073 |
|
a. Bonds
Bonds |
|
Principal |
|
Issuer |
|
Listed on |
|
Issuance date |
|
Maturity date |
|
Interest payment period |
|
Interest rate per annum |
|
Series A |
|
1,005 |
|
The Company |
|
IDX |
|
June 25, 2010 |
|
July 6, 2015 |
|
Quarterly |
|
9.60% |
|
Series B |
|
1,995 |
|
The Company |
|
IDX |
|
June 25, 2010 |
|
July 6, 2020 |
|
Quarterly |
|
10.20% |
|
Total |
|
3,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
58
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
20. BONDS AND NOTES (continued)
a. Bonds (continued)
The bonds are secured by all of the Company’s assets, movable or non-movable, either existing or in the future (Note 11c.x). The underwriters of the bonds are Bahana, PT Danareksa Sekuritas and PT Mandiri Sekuritas and the trustee is PT CIMB Niaga Tbk.
The Company received the proceeds from the issuance of bonds on July 6, 2010.
The funds received from the public offering of bonds net of issuance costs, are to be used for increasing capital expenditure which consisted of: wave broadband (bandwidth, softswitching, datacom, information technology and others), infrastructure (backbone, metro network, regional metro junction, internet protocol, and satellite system) and optimizing legacy and supporting facilities (fixed wireline and wireless).
As of March 31, 2014, the rating of the bonds issued by PT Pemeringkat Efek Indonesia (Pefindo) is idAAA (stable outlook).
Based on the indenture trusts agreement, the Company is required to comply with all covenants or restrictions, including maintaining financial ratios as follows:
1. Debt to equity ratio should not exceed 2:1.
2. EBITDA to finance costs ratio should not be less than 5:1.
3. Debt service coverage is 125%.
As of March 31, 2014, the Company has complied with the above mentioned ratios.
b. Promissory Notes
Supplier |
|
Currency |
|
Principal |
|
Issuance date |
|
Payment schedule |
|
Interest payment period |
|
Interest rate per annum |
|
PT Huawei |
|
US$ |
|
0.3 |
|
June 19, 2009 |
|
Semi-annually (January 11, 2014 – June 23, 2016) |
|
Semi-annually |
|
6 month LIBOR+2.5% |
|
PT ZTE Indonesia (“ZTE”) |
|
US$ |
|
0.1 |
|
August 20, 2009 |
|
Semi-annually (February 11, 2014 - June 15, 2016) |
|
Semi-annually |
|
6 month LIBOR+1.5% 6 month LIBOR+2.5% |
|
Based on Agreement of Frame Supply and Deferred Payment Arrangement between the Company and ZTE and PT Huawei, the promissory notes issued by the Company to ZTE and PT Huawei are vendor financing facilities with no collateral covering 85% of Hand-over Report (“Berita Acara Serah Terima”) projects with ZTE and PT Huawei.
59
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
21. BANK LOANS
|
|
|
|
March 31, 2014 |
|
December 31, 2013 |
| ||||
|
|
|
|
Outstanding |
|
Outstanding |
| ||||
Lenders |
|
Currency |
|
Original currency (in millions) |
|
Rupiah equivalent |
|
Original currency (in millions) |
|
Rupiah equivalent |
|
| |||||||||||
BRI |
|
Rp |
|
- |
|
2,963 |
|
- |
|
3,035 |
|
Syndication of banks |
|
Rp |
|
- |
|
2,538 |
|
- |
|
2,426 |
|
BNI |
|
Rp |
|
- |
|
1,277 |
|
- |
|
1,305 |
|
ABN Amro Bank N.V. Stockholm (“AAB Stockholm”) and Standard Chartered Bank |
|
US$ |
|
51 |
|
585 |
|
55 |
|
673 |
|
Japan Bank for International Cooperation (“JBIC”) |
|
US$ |
|
48 |
|
549 |
|
18 |
|
219 |
|
BCA |
|
Rp |
|
- |
|
524 |
|
- |
|
858 |
|
Bank CIMB Niaga |
|
Rp |
|
- |
|
424 |
|
- |
|
365 |
|
Bank Mandiri |
|
Rp |
|
- |
|
375 |
|
- |
|
722 |
|
Bank Bukopin |
|
Rp |
|
- |
|
26 |
|
- |
|
31 |
|
|
|
US$ |
|
1 |
|
10 |
|
1 |
|
12 |
|
Others |
|
Rp |
|
- |
|
1 |
|
- |
|
1 |
|
Total |
|
|
|
|
|
9,272 |
|
|
|
9,647 |
|
Unamortized debt issuance cost |
|
|
|
|
|
(70 |
) |
|
|
(56 |
) |
|
|
|
|
|
|
9,202 |
|
|
|
9,591 |
|
Current maturities (Note 18a) |
|
|
|
|
|
(3,274 |
) |
|
|
(3,956 |
) |
Long-term portion (Note 18b) |
|
|
|
|
|
5,928 |
|
|
|
5,635 |
|
Refer to Note 37 for details of related party transactions.
Other significant information relating to bank loans as of March 31, 2014 is as follows:
|
Borrower |
|
Currency |
|
Total facility (in billions) |
|
Current period payment |
|
Payment schedule |
|
Interest payment period |
|
Interest rate per annum |
|
Security |
|
Syndication of banks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 29, 2008a (BNI, BRI and BJB) |
The Company |
|
Rp |
|
2,400 |
|
- |
|
Semi-annually (2010-2013) |
|
Quarterly |
|
3 months JIBOR+1.20% |
|
None |
|
June 16, 2009a (BNI and BRI) |
The Company |
|
Rp |
|
2,700 |
|
338 |
|
Semi-annually (2011-2014) |
|
Quarterly |
|
3 months JIBOR+2.45% |
|
None |
|
December 19, 2012 (BNI, BRI and Bank Mandiri) k |
Dayamitra |
|
Rp |
|
2,500 |
|
- |
|
Semi annually (2014-2020) |
|
Quarterly |
|
3 months JIBOR+3.00% |
|
Property and equipment (Note 11) and trade receivables (Note 6) |
|
BCA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 9, 2009b&c and July 5, 2010b&c |
Telkomsel |
|
Rp |
|
4,000 |
|
333 |
|
Semi-annually (2009-2016) |
|
Quarterly |
|
3 months JIBOR+1.00% |
|
None |
|
December 16, 2010a |
TII |
|
Rp |
|
200 |
|
- |
|
Semi-annually (2011-2015) |
|
Quarterly |
|
3 months JIBOR+1.25% |
|
None |
|
Bank Mandiri |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 9, 2009b&c and July 5, 2010b&c |
Telkomsel |
|
Rp |
|
5,000 |
|
347 |
|
Semi-annually (2009-2016) |
|
Quarterly |
|
3 months JIBOR+1.00% |
|
None |
|
BRI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 13, 2010a |
The Company |
|
Rp |
|
3,000 |
|
- |
|
Semi-annually (2013-2015) |
|
Quarterly |
|
3 months JIBOR+1.25% |
|
None |
|
July 20, 2011a |
Dayamitra |
|
Rp |
|
1,000 |
|
80 |
|
Semi-annually (2011-2017) |
|
Quarterly |
|
3 months JIBOR+1.40% |
|
Property and equipment (Note 11) |
|
60
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
21. BANK LOANS (continued)
|
Borrower |
|
Currency |
|
Total facility (in billions) |
|
Current period payment |
|
Payment schedule |
|
Interest payment period |
|
Interest rate per annum |
|
Security |
|
BRI (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 26, 2013 |
GSD |
|
Rp |
|
141 |
|
- |
|
Monthly (2014-2018) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11) and lease agreement |
|
October 30, 2013 |
GSD |
|
Rp |
|
70 |
|
- |
|
Monthly (2014-2021) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11) and trade receivables, (Note 6) and lease agreement |
|
October 30, 2013 |
GSD |
|
Rp |
|
34 |
|
- |
|
Monthly (2014-2021) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11) and trade receivables, (Note 6) and lease agreement |
|
ABN Amro Bank N.V. Stockholm Branch (“AAB Stockholm”) and Standard Chartered Bank December 30, 2009b&d |
Telkomsel |
|
US$ |
|
0.3 |
|
0.004 |
|
Semi-annually (2011-2016) |
|
Semi-annually |
|
6 months LIBOR+0.82% |
|
None |
|
BNI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 13, 2010a |
The Company |
|
Rp |
|
1,000 |
|
- |
|
Semi-annually (2013-2015) |
|
Quarterly |
|
3 months JIBOR+1.25% |
|
None |
|
December 23, 2011 a |
PIN |
|
Rp |
|
500 |
|
- |
|
Semi-annually (2013-2016) |
|
Quarterly |
|
3 months JIBOR+1.50% |
|
Inventories (Note 7) and trade receivables (Note 6) |
|
November 28, 2012a |
Metra |
|
Rp |
|
44 |
|
9 |
|
Annually (2013-2015) |
|
Monthly |
|
10.25% |
|
Property and equipment (Note 11) and trade receivables (Note 6) |
|
March 13, 2013a&h |
Sigma |
|
Rp |
|
300 |
|
10 |
|
Monthly (2013-2015) |
|
Monthly |
|
1 month JIBOR+3.35% |
|
Property and equpment (Note 11) and trade receivables (Note 6) |
|
March 26, 2013a |
Metra |
|
Rp |
|
60 |
|
5 |
|
Quarterly (2013-2016) |
|
Quarterly |
|
10.25% |
|
Property and equpment (Note 11) and trade receivables (Note 6) |
|
May 2, 2013a |
Sigma |
|
Rp |
|
312 |
|
- |
|
Monthly (2015-2021) |
|
Monthly |
|
1 month JIBOR+3.35% |
|
Property and equpment (Note 11) and trade receivables (Note 6) |
|
61
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
21. BANK LOANS (continued)
|
Borrower |
|
Currency |
|
Total facility (in billions) |
|
Current period payment |
|
Payment schedule |
|
Interest payment period |
|
Interest rate per annum |
|
Security |
|
BNI (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 25, 2013a |
Metra |
|
Rp |
|
90 |
|
8 |
|
Quarterly (2013-2016) |
|
Monthly |
|
10.25% |
|
Property and equpment (Note 11) and trade receivables (Note 6) |
|
Japan Bank for International Cooperation (“JBIC”) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 26, 2010a&e |
The Company |
|
US$ |
|
0.06 |
|
0 |
|
Semi-annually (2010-2015) |
|
Semi-annually |
|
4.56% and 6 months LIBOR+0.70%
|
|
None |
|
March 28, 2013a&h |
The Company |
|
US$ |
|
0.03 |
|
- |
|
Semi-annually |
|
Semi-annually |
|
2.18% and 6 months LIBOR+1.20% |
|
None |
|
Bank CIMB Niaga |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 21, 2007f |
GSD |
|
Rp |
|
21 |
|
1 |
|
Quarterly (2007-2015) |
|
Monthly |
|
9.75% |
|
Property and equipment (Note 11) |
|
July 28, 2009g |
Balebat |
|
Rp |
|
2 |
|
0.2 |
|
Monthly (2010-2015) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11), inventories (Note 7), and trade receivables (Note 6) |
|
May 24, 2010 g |
Balebat |
|
Rp |
|
1 |
|
0.1 |
|
Monthly (2010-2015) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11), inventories (Note 7), and trade receivables (Note 6) |
|
March 31, 2011 |
GSD |
|
Rp |
|
24 |
|
0.7 |
|
Monthly (2011-2020) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11) and lease agreement |
|
March 31, 2011 |
GSD |
|
Rp |
|
13 |
|
0.4 |
|
Monthly (2011-2019) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11) and lease agreement |
|
March 31, 2011 |
GSD |
|
Rp |
|
12 |
|
0.5 |
|
Monthly (2011-2016) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11) and lease agreement |
|
September 9, 2011 |
GSD |
|
Rp |
|
41 |
|
1 |
|
Monthly (2011-2021) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11) and lease agreement |
|
September 9, 2011 |
GSD |
|
Rp |
|
11 |
|
0.8 |
|
Monthly (2011-2015) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11) and lease agreement |
|
62
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
21. BANK LOANS (continued)
|
Borrower |
|
Currency |
|
Total facility (in billions) |
|
Current period payment |
|
Payment schedule |
|
Interest payment period |
|
Interest rate per annum |
|
Security |
|
Bank CIMB Niaga (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August 2, 2012g |
Balebat |
|
Rp |
|
4 |
|
0.3 |
|
Monthly (2012-2015) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11), Inventories (Note 7), and trade receivables (Note 6) |
|
September 20, 2012a |
TLT |
|
Rp |
|
1,150 |
|
- |
|
Monthly (2015-2030) |
|
Monthly |
|
3 Month JIBOR+3.45% |
|
Property and equipment (Note 11) |
|
September 20, 2012a |
TLT |
|
Rp |
|
118 |
|
- |
|
Monthly (2015-2030) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11) |
|
October 10, 2012g |
Balebat |
|
Rp |
|
1 |
|
0.1 |
|
Monthly (2012-2015) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11), inventories (Note 7), and trade receivables (Note 6) |
|
August 26, 2013 |
Balebat |
|
Rp |
|
3.5 |
|
0.2 |
|
Monthly (2013-2018) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11), inventories (Note 7), and trade receivables (Note 6) |
|
Bank Bukopin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August 4, 2011 h |
Patrakom |
|
Rp |
|
9 |
|
0 |
|
Monthly (2012-2015) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11) and trade receivables (Note 6) |
|
June 28, 2013 |
Patrakom |
|
Rp |
|
35 |
|
2 |
|
Monthly (2013-2016) |
|
Monthly |
|
11.00% |
|
Property and equipment (Note 11) |
|
December 18, 2012 |
Patrakom |
|
US$ |
|
0.013 |
|
0.0001 |
|
Monthly (2013-2016) |
|
Monthly |
|
6.50% |
|
Property and equipment (Note 11) |
|
The credit facilities obtained by the Company and subsidiaries are used for working capital purposes.
a As stated in the agreements, the Company and subsidiaries are required to comply with all covenants or restrictions such as on dividend distribution, obtaining new loans, including maintaining financial ratios. As of March 31, 2014, the Company and subsidiaries have complied with the ratios.
b Telkomsel has no collateral for its bank loans, or other credit facilities. The terms of the various agreements with Telkomsel’s lenders and financiers require compliance with a number of pledges and negative pledges as well as financial and other covenants, which include, among other things, certain restrictions on the amount of dividends and other profit distributions which could adversely affect Telkomsel’s capacity to comply with its obligation under the facility. The terms of the relevant agreements also contain default and cross default clauses. As of March 31, 2014, Telkomsel has complied with the above covenants.
63
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
21. BANK LOANS (continued)
c In January 2012, the availability periods of the facilities from BCA and Bank Mandiri expired.
d Pursuant to the agreements with PT Ericsson Indonesia (“Ericsson Indonesia”) and Ericsson AB (Note 41a.ii), Telkomsel entered into an EKN-Backed Facility Agreement (“facility”) with ABN Amro Bank N.V. Stockholm branch (as “the original lender”) and Standard Chartered Bank (as “the original lender” , “the arranger”, “the facility agent” and “the EKN agent”), and ABN Amro Bank N.V., Hong Kong (as “the arranger”) for the purchase of Ericsson telecommunication equipment and services. The facilities consist of facility 1, 2 and 3 amounting to US$117 million, US$106 million, and US$95 million, respectively. The availability period of facility 1, 2 and 3 expired in July 2010, March 2011 and November 2011, respectively. In October 2011, EKN agreed to reduce the premium on the unused facility by US$3 million through a cash refund.
e In connection with the agreement with NSW-Fujitsu Consortium, the Company entered into a loan agreement with JBIC, the international arm of Japan Finance Corporation, for the purchase of NSW-Fujitsu Consortium telecommunication equipment and services. The facilities consist of facility A and B amounting to US$36 million and US$24 million, respectively.
f Based on the latest amendment on March 31, 2011
g Based on the latest amendment in 2013
h In August 2013, the bank loan was rescheduled up to February 2015
i In connection with the agreement with NEC Corporation Consortium and TE SubCom, the Company entered into a loan agreement with JBIC, for the procurement of goods and services from NEC Corporation Consortium and TE SubCom for the Southeast Asia Japan Cable System project. The facilities consist of facility A and facility B amounting to US$18.8 million and US$12.5 million, respectively
22. NON-CONTROLLING INTERESTS
|
March 31, 2014 |
|
December 31, 2013 |
|
Non-controlling interests in net assets of subsidiaries: |
|
|
|
|
Telkomsel |
18,273 |
|
16,735 |
|
Metra |
73 |
|
87 |
|
GSD |
72 |
|
58 |
|
Patrakom |
- |
|
2 |
|
Napsindo |
- |
|
- |
|
Total |
18,418 |
|
16,882 |
|
|
2014 |
|
2013 |
|
Non-controlling interests in total comprehensive income (loss) of subsidiaries: |
|
|
|
|
Telkomsel |
1,537 |
|
1,505 |
|
Metra |
4 |
|
4 |
|
Patrakom |
- |
|
- |
|
Napsindo |
- |
|
- |
|
GSD |
(2 |
) |
(1 |
) |
Total |
1,540 |
|
1,508 |
|
64
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
23. CAPITAL STOCK
|
March 31, 2014 |
|
||||
Description |
Number of shares |
|
Percentage of ownership |
|
Total paid-up capital |
|
Series A Dwiwarna share |
|
|
|
|
|
|
Government |
1 |
|
- |
|
0 |
|
Series B shares |
|
|
|
|
|
|
Government |
51,602,353,559 |
|
53.14 |
|
2,580 |
|
The Bank of New York Mellon Corporation* |
9,943,812,580 |
|
10.24 |
|
497 |
|
Directors (Note 1b): |
|
|
|
|
|
|
Indra Utoyo |
27,540 |
|
- |
|
0 |
|
Honesti Basyir |
540 |
|
- |
|
0 |
|
Priyantono Rudito |
540 |
|
- |
|
0 |
|
Sukardi Silalahi |
540 |
|
- |
|
0 |
|
Public (individually less than 5%) |
35,554,658,300 |
|
36.62 |
|
1,778 |
|
Total |
97,100,853,600 |
|
100 |
|
4,855 |
|
Treasury stock (Note 25) |
3,699,142,800 |
|
- |
|
185 |
|
Total |
100,799,996,400 |
|
100 |
|
5,040 |
|
*The Bank of New York Mellon Corporation serves as the Depositary of registered ADS holders for the Company’s ADSs.
|
December 31, 2013 |
|
||||
Description |
Number of shares |
|
Percentage of ownership |
|
Total paid-up capital |
|
Series A Dwiwarna share |
|
|
|
|
|
|
Government |
1 |
|
- |
|
0 |
|
Series B shares |
|
|
|
|
|
|
Government |
51,602,353,559 |
|
53.14 |
|
2,580 |
|
The Bank of New York Mellon Corporation* |
10,031,129,780 |
|
10.33 |
|
502 |
|
Directors (Note 1b): |
|
|
|
|
|
|
Indra Utoyo |
27,540 |
|
- |
|
0 |
|
Honesti Basyir |
540 |
|
- |
|
0 |
|
Priyantono Rudito |
540 |
|
- |
|
0 |
|
Sukardi Silalahi |
540 |
|
- |
|
0 |
|
Public (individually less than 5%) |
35,467,341,100 |
|
36.53 |
|
1,773 |
|
Total |
97,100,853,600 |
|
100.00 |
|
4,855 |
|
Treasury stock (Note 25) |
3,699,142,800 |
|
- |
|
185 |
|
Total |
100,799,996,400 |
|
100.00 |
|
5,040 |
|
* The Bank of New York Mellon Corporation serves as the Depositary of registered ADS holders for the Company’s ADSs.
The Company issued only 1 Series A Dwiwarna share which is held by the Government and cannot be transferred to any party, and has a veto in the General Meeting of Stockholders of the Company with respect to election and removal from the Boards of Commissioners and Directors, issuance of new shares, and amendments of the Company’s Articles of Association.
65
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
24. ADDITIONAL PAID-IN CAPITAL
|
March 31, 2014 |
|
December 31, 2013 |
|
Proceeds from sale of 933,333,000 shares in excess of par value through IPO in 1995 |
1,446 |
|
1,446 |
|
Excess of value over cost of selling 211,290,500 shares treasury stock phase I (Note 25) |
544 |
|
544 |
|
Difference in value arising from restructuring transactions and other transactions between entities under common control |
478 |
|
478 |
|
Excess of value over cost of treasury stock transferred to employee stock ownership program (Note 25) |
228 |
|
228 |
|
Capitalization into 746,666,640 Series B shares in 1999 |
(373 |
) |
(373 |
) |
Net |
2,323 |
|
2,323 |
|
Difference in value arising from restructuring transactions and other transactions of entities under common control amounting Rp478 billion arose from the early termination of the Company’s exclusive rights to provide local and inter-local fixed line telecommunication services, for which the Company is required by the Government to use the funds received from this compensation for the development of telecommunication infrastructure. As of March 31, 2014 and December 31, 2013, the accumulated development of the related infrastructure amounted to Rp537 billion.
25. TREASURY STOCK
|
|
|
|
|
|
Maximum Purchase |
|
||
Phase |
|
Basis |
|
Period |
|
Number of Shares |
|
Amount |
|
I |
|
EGM |
|
December 21, 2005 - June 20, 2007 |
|
1,007,999,964 |
|
Rp5,250 |
|
II |
|
AGM |
|
June 29, 2007 - December, 28, 2008 |
|
215,000,000 |
|
Rp2,000 |
|
III |
|
AGM |
|
June 20, 2008 - December 20, 2009 |
|
339,443,313 |
|
Rp3,000 |
|
- |
|
BAPEPAM - LK |
|
October 13, 2008 - January 12, 2009 |
|
4,031,999,856 |
|
Rp3,000 |
|
IV |
|
AGM |
|
May 19, 2011 - November 20, 2012 |
|
645,161,290 |
|
Rp5,000 |
|
Movements in treasury stock as a result of the repurchase of shares are as follows:
|
March 31, 2014 |
|
December 31, 2013 |
|
||||||||
|
Number of shares |
|
% |
|
Rp |
|
Number of shares |
|
% |
|
Rp |
|
Beginning balance |
3,699,142,800 |
|
3.67 |
|
5,805 |
|
5,054,652,300 |
|
5.01 |
|
8,067 |
|
Transfer to employees ownership programme |
- |
|
- |
|
- |
|
(299,057,000 |
) |
(0.29 |
) |
(433 |
) |
Proceeds from sale of treasury stock |
- |
|
- |
|
- |
|
(1,056,452,500 |
) |
(1.05 |
) |
(1,829 |
) |
Ending balance |
3,699,142,800 |
|
3.67 |
|
5.805 |
|
3,699,142,800 |
|
3.67 |
|
5,805 |
|
Pursuant to the AGM of Stockholders of the Company held on June 11, 2010, the stockholders approved the changes to the Company’s plan for the treasury stock as a result of the Share Buyback I, II and III, as follows: (i) sold, through or outside stock exchange; (ii) cancellation by deduct its equity; (iii) implementation of equity stock conversion and (iv) funding.
66
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
25. TREASURY STOCK (continued)
Based on the Annual General Meeting of the Company on April 19, 2013, the Company's stockholders approved the change to the plan for the treasury stock phase III, which was decided to be used for the implementation of the Employee Stock Ownership Program (“ESOP”) for the year 2013.
On May 31, 2013, the Company offered all its eligible employees and those of its subsidiaries (collectively referred to as the “participants”), the right to purchase a fixed number of its shares at a certain price. The shares have become an entitlement of the employees on the transaction dates and are no longer conditional on the satisfaction of any vesting conditions. Shares which are held by employees through the ESOP have a lock-up period that varies from 0 up to 12 months, depending on the position of the employee.
In the lock-up period, participants may not transfer shares or have shares transactions either through or outside the stock exchange.
Price per share offered was Rp10,714 and each participant received allowance (discount) of Rp5,575 per share. At the closing of this program, the Company had transferred a part of the treasury stock phase III to employees totaling 59,811,400 shares (equivalent to 299,057,000 shares after the stock split) with fair value amounting to Rp661 billion. The excess in value of treasury stock recovered over acquisition cost of the stock amounting to Rp228 billion was recorded as additional paid-in capital (Note 24).
The difference between the fair value of treasury stock and amount paid by the participants amounting to Rp353 billion is recorded in the consolidated statement of comprehensive income (Note 27).
On July 30, 2013, the Company resold 211,290,500 shares (equal to 1,056,452,500 shares after the stock split) for the repurchase of shares of treasury stock phase I with fair value amounting to Rp2,409 billion. The excess in value of the treasury stock sold over their acquisition cost amounting to Rp544 billion was recorded as additional paid-in capital (net of related costs to sell the shares) (Note 24).
67
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
26. REVENUES
|
2014 |
|
2013 |
|
Telephone Revenues |
|
|
|
|
Cellular |
|
|
|
|
Usage charges |
7,708 |
|
7,228 |
|
Features |
176 |
|
160 |
|
Monthly subscription charges |
153 |
|
190 |
|
|
8,037 |
|
7,578 |
|
Fixed lines |
|
|
|
|
Usage charges |
1,470 |
|
1,655 |
|
Monthly subscription charges |
657 |
|
683 |
|
Call center |
103 |
|
74 |
|
Others |
80 |
|
82 |
|
|
2,310 |
|
2,494 |
|
Total Telephone Revenues |
10,347 |
|
10,072 |
|
Interconnection Revenues |
|
|
|
|
Domestic interconnection and transit |
729 |
|
705 |
|
International interconnection |
489 |
|
440 |
|
Total Interconnection Revenues |
1,218 |
|
1,145 |
|
Data, Internet, and Information Technology Service Revenues |
|
|
|
|
Internet, data communication and information technology services |
5,157 |
|
4,142 |
|
Short Messaging Services (“SMS”) |
3,174 |
|
3,159 |
|
Voice over Internet Protocol (“VoIP”) |
40 |
|
27 |
|
E-business |
28 |
|
19 |
|
Total Data, Internet, and Information Technology Service Revenues |
8,399 |
|
7,347 |
|
Network Revenues |
|
|
|
|
Leased lines |
233 |
|
212 |
|
Satellite transponder lease |
138 |
|
120 |
|
Total Network Revenues |
371 |
|
332 |
|
Other Telecommunications Service Revenues |
|
|
|
|
Customer Premise Equipment (“CPE”) and terminal |
539 |
|
271 |
|
Leases |
190 |
|
134 |
|
USO compensation |
19 |
|
68 |
|
Others |
167 |
|
178 |
|
Total Other Telecommunications Service Revenues |
915 |
|
651 |
|
TOTAL REVENUES |
21,250 |
|
19,547 |
|
68
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
26. REVENUES (continued)
The details of net revenues received by the Company and subsidiaries from agency relationships for three months period ended March 31, 2014 and 2013 are as follows:
|
2014 |
|
2013 |
|
Gross revenues |
5,255 |
|
4,198 |
|
Compensation to value added service providers |
(98 |
) |
(56 |
) |
Net revenues |
5,157 |
|
4,142 |
|
Refer to Note 37 for details of related party transactions.
27. PERSONNEL EXPENSES
|
2014 |
|
2013 |
|
Salaries and related benefits |
878 |
|
812 |
|
Vacation pay, incentives and other benefits |
820 |
|
844 |
|
Employees’ income tax |
254 |
|
225 |
|
Net periodic pension costs (Note 34) |
118 |
|
220 |
|
Housing |
56 |
|
54 |
|
Net periodic post-retirement health care benefit costs (Note 36) |
19 |
|
93 |
|
Others |
97 |
|
83 |
|
Total |
2,242 |
|
2,331 |
|
Refer to Note 37 for details of related party transactions.
28. OPERATIONS, MAINTENANCE AND TELECOMMUNICATION SERVICE EXPENSES
|
2014 |
|
2013 |
|
Operations and maintenance |
2,846 |
|
2,881 |
|
Radio frequency usage charges (Notes 41c.i and 41c.ii) |
785 |
|
731 |
|
Concession fees and Universal Service Obligation charges |
396 |
|
353 |
|
Electricity, gas and water |
271 |
|
233 |
|
Cost of phone, set top box, SIM and RUIM cards |
213 |
|
137 |
|
Cost of IT services |
141 |
|
3 |
|
Insurance |
136 |
|
96 |
|
Vehicles rental and supporting facilities |
135 |
|
89 |
|
Leased lines and CPE |
130 |
|
117 |
|
Others |
53 |
|
58 |
|
Total |
5,106 |
|
4,698 |
|
Refer to Note 37 for details of related party transactions.
69
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
29. GENERAL AND ADMINISTRATIVE EXPENSES
|
2014 |
|
2013 |
|
Provision for impairment of receivables (Notes 6d) |
304 |
|
187 |
|
General expenses |
170 |
|
110 |
|
Collection expenses |
95 |
|
77 |
|
Training, education and recruitment |
85 |
|
50 |
|
Travelling |
78 |
|
71 |
|
Professional fees |
51 |
|
42 |
|
Others |
137 |
|
106 |
|
Total |
920 |
|
643 |
|
Refer to Note 37 for details of related party transactions.
30. INTERCONNECTION EXPENSES
|
2014 |
|
2013 |
|
Domestic interconnection and transit |
967 |
|
862 |
|
International interconnection |
327 |
|
313 |
|
Total |
1,294 |
|
1,175 |
|
Refer to Note 37 for details of related party transactions.
31. TAXATION
a. Claims for tax refund
|
March 31, 2014 |
|
December 31, 2013 |
|
|
|
|
|
|
The Company |
|
|
|
|
Value added tax (“VAT”) |
107 |
|
142 |
|
Subsidiaries |
|
|
|
|
Value added tax (“VAT”) |
331 |
|
306 |
|
Corporate income tax |
25 |
|
38 |
|
Import duties |
8 |
|
10 |
|
Income tax |
|
|
|
|
Article 23 - Withholding tax on service delivery |
- |
|
13 |
|
Total claims for tax refund |
471 |
|
509 |
|
Short-term portion |
(8 |
) |
(10 |
) |
Long-termportion |
463 |
|
499 |
|
70
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION
b. Prepaid taxes
|
March 31, 2014 |
|
December 31, 2013 |
|
Subsidiaries |
|
|
|
|
Corporate income tax |
42 |
|
58 |
|
VAT |
620 |
|
445 |
|
Income tax |
|
|
|
|
Article 23 - Withholding tax on service delivery |
37 |
|
22 |
|
|
699 |
|
525 |
|
c. Taxes payable
|
March 31, 2014 |
|
December 31, 2013 |
|
The Company |
|
|
|
|
Income taxes |
|
|
|
|
Article 4 (2) - Final tax |
9 |
|
11 |
|
Article 21- Individual income tax |
54 |
|
34 |
|
Article 22- Withholding tax on goods delivery and imports |
3 |
|
5 |
|
Article 23- Withholding tax on service delivery |
10 |
|
12 |
|
Article 25- Installment of corporate income tax |
- |
|
53 |
|
Article 26- Withholding tax on non-resident income |
0 |
|
1 |
|
Article 29- Corporate income tax |
347 |
|
165 |
|
VAT |
390 |
|
441 |
|
|
|
|
|
|
|
813 |
|
722 |
|
Subsidiaries |
|
|
|
|
Income taxes |
|
|
|
|
Article 4 (2) - Final tax |
25 |
|
48 |
|
Article 21- Individual income tax |
72 |
|
82 |
|
Article 23- Withholding tax on service delivery |
47 |
|
34 |
|
Article 25- Installment of corporate income tax |
443 |
|
440 |
|
Article 26- Withholding tax on non-resident income |
5 |
|
16 |
|
Article 29- Corporate income tax |
485 |
|
284 |
|
VAT |
- |
|
72 |
|
|
1,077 |
|
976 |
|
|
1,890 |
|
1,698 |
|
71
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION (continued)
d. The components of income tax expense (benefit) are as follows:
|
2014 |
|
2013 |
|
Current |
|
|
|
|
The Company |
318 |
|
144 |
|
Subsidiaries |
1,578 |
|
1.483 |
|
|
1,896 |
|
1,627 |
|
Deferred |
|
|
|
|
The Company |
(84 |
) |
31 |
|
Subsidiaries |
(86 |
) |
(12 |
) |
|
(170 |
) |
19 |
|
|
1,726 |
|
1,646 |
|
The reconciliation between the income tax expense calculated by applying the applicable tax rate of 20% to the profit before income tax less income subject to final tax, and the net income tax expense as shown in the consolidated statement of comprehensive income is as follows:
|
2014 |
|
2013 |
|
Profit before income tax |
6,914 |
|
6,631 |
|
Less income subject to final tax |
549 |
|
255 |
|
|
6,365 |
|
6,376 |
|
Tax calculated at the Company’s applicable statutory tax rate of 20% |
1,273 |
|
1,275 |
|
Difference in applicable statutory tax rate for subsidiaries |
290 |
|
291 |
|
Non-deductible expenses |
148 |
|
78 |
|
Final income tax expenses |
15 |
|
11 |
|
Others |
- |
|
(10) |
|
Net income tax expense |
1,726 |
|
1,646 |
|
72
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION (continued)
d. The components of income tax expense (benefit) are as follows: (continued)
The reconciliation between the profit before income tax and the estimated taxable income of the Company for the three months period ended March 31, 2014 and 2013 is as follows:
|
2014 |
|
2013 |
|
Profit before income tax |
6,914 |
|
6,631 |
|
Add back consolidation eliminations |
2,967 |
|
2,929 |
|
Consolidated profit before income tax and eliminations |
9,882 |
|
9,560 |
|
Less profit before income tax of the subsidiaries |
(5,950 |
) |
(5,919 |
) |
Profit before income tax attributable to the Company |
3,932 |
|
3,641 |
|
Less income subject to final tax |
(127 |
) |
(89 |
) |
|
3,805 |
|
3,552 |
|
Temporary differences: |
|
|
|
|
Provision for impairment and trade receivables written-off |
223 |
|
129 |
|
Net periodic pension and other post-retirement |
|
|
|
|
Provision for personnel expenses |
111 |
|
104 |
|
benefits costs |
64 |
|
54 |
|
Provision for impairment of assets |
30 |
|
- |
|
Deferred installation fee |
2 |
|
(11 |
) |
Payment of provision for early retirement program |
- |
|
(699 |
) |
Depreciation and gain on sale of property and equipment |
(31 |
) |
208 |
|
Finance lease |
(3 |
) |
(7 |
) |
Other provisions |
26 |
|
20 |
|
Net temporary differences |
422 |
|
(202 |
) |
Permanent differences: |
|
|
|
|
Donations |
65 |
|
27 |
|
Employee benefits |
51 |
|
43 |
|
Net periodic post-retirement health care benefit costs |
19 |
|
94 |
|
Equity in net income of associates and subsidiaries |
(2,970 |
) |
(2,923 |
) |
Others |
121 |
|
77 |
|
Net permanent differences |
(2,714 |
) |
(2,682 |
) |
Taxable income of the Company |
1,513 |
|
668 |
|
Current corporate income tax expense |
303 |
|
133 |
|
Final income tax expense |
15 |
|
11 |
|
Total current income tax expense of the Company |
318 |
|
144 |
|
Current income tax expense of the subsidiaries |
1,578 |
|
1,483 |
|
Total current income tax expense |
1,896 |
|
1,627 |
|
73
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION (continued)
d. The components of income tax expense (benefit) are as follows: (continued)
Tax Law No. 36/2008 which futher regulated in Government Regulation No. 77/2013 stipulates a reduction of 5% from the top rate applicable to qualifying listed companies, for those whose stocks are traded in the IDX which meet the prescribed criteria that the public owns 40% or more of the total fully paid and traded shares, and such shares are owned by at least 300 parties, with each party owning less than 5% of the total paid-up shares. These requirements must be met by a company for a period of 183 days in one tax year. The Company has met all of the required criteria; therefore, for purposes of calculating income tax expense and liabilities for the financial reporting periods of March 31, 2014 and December 31, 2013, the Company has reduced the applicable tax rate by 5%.
The Company applied a tax rate of 20% for the three months period ended March 31, 2014 and for the year ended December 31, 2013. The subsidiaries applied a tax rate of 25% for the three months period ended March 31, 2014 and for the year ended December 31, 2013.
e. Tax assessment
(i) The Company
The Directorate General of Tax (“DGT”) assessed the Company forValue Added Tax, withholding income taxes and corporate income tax for fiscal year 2011. Tax assessment for the fiscal year 2008 has been completed with the issuance ofTax Assessment Letter (SKP) No. SPHP-2/WPJ.19/KP.03/2014 regarding notice of workup with no correction for Income Tax Article 21/22/23/26 and 4 (2).
In November 2013, the Company received SKPKBs No. 00056/207/07/093/13 to No. 00065/207/07/093/13 dated November 15, 2013, for the underpayment of Value Added Tax (VAT) for the fiscal year January - September and November 2007 of Rp142 billion. On January 2014, the Company filed an objection to the Tax Authorities regarding the underpayment of VAT. As of the issuance date of the consolidated financial statements, the Tax Authorities have not yet issued their decision on the objection.
As of January 20, 2014, the Company submitted the objection letter for SKPKB of underpayment of VAT year 2007 which was received by the Company on November 2013.
(ii) Telkomsel
On February 25, 2009, the Tax Authorities filed a judicial review request to the Indonesian Supreme Court (“SC”) for the Tax Court’s acceptance of Telkomsel’s appeal on 2002 withholding tax amounting to Rp 115 billion. On April 3, 2009, Telkomsel filed a contra-appeal to the SC. In November 2012 Telkomsel received a favorable verdict from the SC which accepted Telkomsel’s contra-appeal.
On April 21, 2010, the Tax Authorities filed a judicial review request to the SC for the Tax Court’s acceptance of Telkomsel’s request to cancel the Tax Collection Letter (STP) for the underpayment of December 2008 Income Tax Article 25 amounting to Rp429 billion (including a penalty of Rp8 billion). In May 2010, Telkomsel field a contra-appeal to the SC. As of the date of approval and authorization for issuance of these consolidated financial statements, the judicial review is still in process.
On August 10, 2010, the Tax Authorities filed a judicial review request to the SC for the Tax Court’s acceptance of Telkomsel’s appeal on 2004 and 2005 VAT totaling Rp215 billion. In September 2010, Telkomsel filed a contra-appeal to the SC. As of the date of approval and authorization for issuance of these consolidated financial statements, the judicial review is still in process.
74
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION (continued)
e. Tax assessment (continued)
(ii) Telkomsel
In May and June 2012, Telkomsel received the refund of penalty of 2010 Income Tax Article 25 underpayment amounting to Rp15.7 billion based on the Tax Court’s verdict. On July 17, 2012, the Tax Authorities filed a judicial review request to the SC on the Tax Court’s verdict. On September 14, 2012, Telkomsel filed a contra-appeal to the SC. As of the date of approval and authorization for issuance of these consolidated financial statements, the judicial review is still in process.
In August 2012, the Tax Authorities accepted Telkomsel’s objection and refunded the whole claim for 2008 underpayment of VAT amounting to Rp232 billion (including penalty of Rp81.9 billion).
On March 12, 2012, Telkomsel received assessment letters as a result of a tax audit for the fiscal year 2010 by the Tax Authorities. Based on the letters, Telkomsel overpaid corporate income tax and underpaid VAT amounting to Rp597.4 billion and Rp302.7 billion (including penalty of Rp73.3 billion), respectively. Telkomsel accepted the assessment on the overpayment of corporate income tax and Rp12.1 billion of the underpayment of the VAT (including penalty of Rp6.3 billion). The accepted portion was charged to the 2012 consolidated statement of comprehensive income. On April 5, 2012, Telkomsel received a refund for the overpayment of corporate income tax for fiscal year 2010 amounting to Rp294.7 billion, net of underpayment of VAT. On May 24, 2012, Telkomsel filed an objection to the Tax Authorities for the underpayment of VAT of Rp290.6 billion (including penalty of Rp67 billion) and recorded it as a claim for tax refund. On May 1, 2013, the Tax Authorities rejected Telkomsel’s objection. Subsequently, on July 29, 2013, Telkomsel filed an appeal to the Tax Court. As of the date of approval and authorization for the issuance of these consolidated financial statements, the appeal is still in process.
In December 2013, the Tax Court accepted Telkomsel’s appeal on 2006 VAT and withholding taxes totaling Rp116 billion. The amount which was previously presented as part of claims for tax refund is reclassified to advances and other non-current assets.
On January 22, 2014, Telkomsel received appeal from Tax Court related to tax claim for Import VAT. Based on the decision, Tax Court accepted the tax claim of Telkomsel partially. As of the date of the release of this consolidated financial statement, Telkomsel has planned to disburse the portion that was receibed from the claim amounted to Rp8.5 billion.
f. Deferred tax assets and liabilities
The details of the Company and subsidiaries' deferred tax assets and liabilities are as follows:
|
|
December 31, 2013 |
|
(Charged) credited to the consolidated comprehensive income |
|
March 31, 2014 |
|
The Company |
|
|
|
|
|
|
|
Deferred tax assets: |
|
|
|
|
|
|
|
Provision for impairment of receivables |
|
446 |
|
45 |
|
491 |
|
Net periodic pension and other post-retirement |
|
|
|
|
|
|
|
benefits costs |
|
213 |
|
13 |
|
226 |
|
Employee benefit provisions |
|
143 |
|
22 |
|
165 |
|
Deferred connection fee |
|
70 |
|
0 |
|
70 |
|
Accrued expenses and provision for inventory obsolescence |
|
27 |
|
1 |
|
28 |
|
Total deferred tax assets |
|
899 |
|
81 |
|
980 |
|
75
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION (continued)
f. Deferred tax assets and liabilities (continued)
|
December 31, 2013 |
|
(Charged) credited to the consolidated statements of comprehensive income |
|
March 31, 2014 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
Finance leases |
9 |
|
(1 |
) |
8 |
|
Land rights, intangible assets, and others |
(11 |
) |
4 |
|
(7 |
) |
Valuation of long-term investment |
(70 |
) |
- |
|
(70 |
) |
Difference between accounting and tax bases of property and equipment |
(1,543 |
) |
0 |
|
(1,543 |
) |
Total deferred tax liabilities |
(1,615 |
) |
3 |
|
(1,612 |
) |
Deferred tax liabilities of the Company - net |
(716 |
) |
84 |
|
(632 |
) |
Telkomsel |
|
|
|
|
|
|
Deferred tax assets: |
|
|
|
|
|
|
Employee benefit provisions |
254 |
|
8 |
|
262 |
|
Provision for impairment of receivables |
122 |
|
17 |
|
139 |
|
Total deferred tax assets |
376 |
|
25 |
|
401 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
Recognition of interest under USO arrangements |
0 |
|
(2 |
) |
(2 |
) |
Intangible assets |
(62 |
) |
0 |
|
(62 |
) |
Finance leases |
(121 |
) |
(37 |
) |
(158 |
) |
Difference between accounting and tax bases of property and equipment |
(2,268 |
) |
114 |
|
(2,154 |
) |
Total deferred tax liabilities |
(2,451 |
) |
75 |
|
(2,376 |
) |
Deferred tax liabilities of Telkomsel - net |
(2,075 |
) |
100 |
|
(1,975 |
) |
Deferred tax liabilities of other subsidiaries - net |
(213 |
) |
(6 |
) |
(219 |
) |
Deferred tax liabilities - net |
(3,004 |
) |
178 |
|
2,826 |
|
Deferred tax assets - net |
82 |
|
(6 |
) |
76 |
|
|
December 31, 2012 |
|
(Charged) credited to the consolidated statements of comprehensive income |
|
Acquisition/ divestment of subsidiaries |
|
December 31, 2013 |
|
The Company |
|
|
|
|
|
|
|
|
Deferred tax assets: |
|
|
|
|
|
|
|
|
Provision for impairment of receivables |
276 |
|
170 |
|
- |
|
446 |
|
Net periodic pension and other post-retirement |
|
|
|
|
|
|
|
|
benefits costs |
129 |
|
84 |
|
- |
|
213 |
|
Employee benefit provisions |
173 |
|
(30 |
) |
- |
|
143 |
|
Deferred connection fee |
54 |
|
16 |
|
- |
|
70 |
|
Accrued expenses and provision for inventory obsolescence |
22 |
|
5 |
|
- |
|
27 |
|
Provision for early retirement expense |
140 |
|
(140 |
) |
- |
|
- |
|
Total deferred tax assets |
794 |
|
105 |
|
- |
|
899 |
|
76
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION (continued)
f. Deferred tax assets and liabilities (continued)
|
December 31, 2012 |
|
(Charged) credited to the consolidated statements of comprehensive income |
|
Acquisition/divestment of subsidiaries |
|
December 31, 2013 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
|
|
Finance leases |
(64 |
) |
73 |
|
- |
|
9 |
|
Land rights, intangible assets, and others |
(14 |
) |
3 |
|
- |
|
(11 |
) |
Valuation of long-term investment |
0 |
|
(70 |
) |
- |
|
(70 |
) |
Difference between accounting and tax bases of property and equipment |
(1,581 |
) |
38 |
|
- |
|
(1,543 |
) |
Total deferred tax liabilities |
(1,659 |
) |
44 |
|
- |
|
(1,615 |
) |
Deferred tax liabilities of the Company - net |
(865 |
) |
149 |
|
- |
|
(716 |
) |
Telkomsel |
|
|
|
|
|
|
|
|
Deferred tax assets: |
|
|
|
|
|
|
|
|
Employee benefit provisions |
206 |
|
48 |
|
- |
|
254 |
|
Provision for impairment of receivables |
118 |
|
4 |
|
- |
|
122 |
|
Recognition of interest under USO arrangements |
6 |
|
(6 |
) |
- |
|
0 |
|
Total deferred tax assets |
330 |
|
46 |
|
- |
|
376 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
|
|
Intangible assets |
(44 |
) |
(18 |
) |
- |
|
(62 |
) |
Finance leases |
(22 |
) |
(99 |
) |
- |
|
(121 |
) |
Difference between accounting and tax bases of property and equipment |
(2,363 |
) |
95 |
|
- |
|
(2,268 |
) |
Total deferred tax liabilities |
(2,429 |
) |
(22 |
) |
- |
|
(2,451 |
) |
Deferred tax liabilities of Telkomsel - net |
(2,099 |
) |
24 |
|
- |
|
(2,075 |
) |
Deferred tax liabilities of other subsidiaries - net |
(95 |
) |
(109 |
) |
(9 |
) |
(213 |
) |
Deferred tax liabilities - net |
(3,059 |
) |
64 |
|
(9 |
) |
(3,004 |
) |
Deferred tax assets - net |
89 |
|
71 |
|
(78 |
) |
82 |
|
As of March 31, 2014 and December 31, 2013, the aggregate amounts of temporary differences associated with investments in subsidiaries and associated companies, for which deferred tax liabilities have not been recognized were Rp26,433 billion and Rp24,252 billion, respectively.
Realization of the deferred tax assets is dependent upon the Company and subsidiary’s capability in generating future profitable operations. Although realization is not assured, the Company and subsidiaries believe that it is probable that these deferred tax assets will be realized through reduction of future taxable income when temporary differences reverse. The amount of deferred tax assets is considered realizable; however, it could be reduced if actual future taxable income is lower than estimates.
g. Administration
Since 2008 to 2012, the Company has been consecutively entitled to income tax rate reduction of 5% for meeting the requirements in accordance with the Government Regulation No. 81/2007 in conjunction with the Ministry of Finance Regulation No. 238/PMK.03/2008. On the basis of historical data, for the year 2013, the Company calculates the deferred tax using the tax rate of 20%.
The taxation laws of Indonesia require that the Company and subsidiaries submit individual tax returns on the basis of self-assessment. Under prevailing regulations, the DGT may assess or amend taxes within a certain period. For fiscal years 2007 and earlier, this period is within ten years of the time the tax became due, but not later than 2013, while for fiscal years 2008 and onwards, the period is within five years of the time the tax became due.
77
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
31. TAXATION (continued)
g. Administration (continued)
The Minister of Finance of the Republic of Indonesia has issued Regulation No.85/PMK.03/2012 dated June 6, 2012 concerning the appointment of State-Owned Enterprises ("SOEs") to withhold, deposit and report VAT and Sales Tax on Luxury Goods ("PPnBM") according to the procedures outlined in the Regulation which is effective from July 1, 2012. The Minister of Finance of the Republic Indonesia also has issued Regulation No.224/PMK.011/2012 dated December 26, 2012 concerning the appointment of SOEs to withhold income tax article 22 which is effective from February 23, 2013. The Company has withheld, deposited, and reported the VAT and PPnBM or VAT and also income tax article 22 in accordance with the Regulation.
No tax audit has been conducted for fiscal years 2003, 2005, 2006, 2007, 2009, and 2010 on the Company. Tax audits have been completed for all other fiscal years, except for fiscal year 2011.
The Company received a certificate of tax audit exemption from the DGT for fiscal years 2007, 2008, 2009 and 2010, 2012 which is valid unless the Company files for corporate income tax overpayment, in which case a tax audit will be performed.
32. BASIC AND DILUTED EARNINGS PER SHARE
Basic earnings per share is computed by dividing profit for the year attributable to owners of the parent company amounting to Rp3,649 billion and Rp3,477 billion by the weighted average number of shares outstanding during the period totaling 97,100,853,600 and 97,745,344,100 (after stock split) for three months period ended March 31, 2014 and for the year ended 2013, respectively.
Basic earnings per share amounted to Rp37.57 and Rp36.32 (in full amount) for three months period ended March 31, 2014 and for the year ended 2013, respectively.
The calculation of basic earning per share for three months period ended March 31, 2014 has been retrospectively adjusted in connection with the Company’s stock split (Note 1c).
No diluted earnings per share is computed because the Company does not have potentially dilutive financial investments for three months period ended March 31, 2014 and for the year ended December 31, 2013.
33. CASH DIVIDENDS AND GENERAL RESERVE
In the AGM of Stockholders of the Company as stated in notarial deed No. 14 dated May 11, 2012 of Ashoya Ratam,S.H.,MKn., the Company’s stockholders agreed on the distribution of cash dividend and special cash dividend for 2011 amounting to Rp6,031 billion and Rp1,096 billion, respectively. On June 22, 2012, the Company paid the cash dividend and special cash dividend totalling Rp7,127 billion.
In the AGM of Stockholders of the Company as stated in notarial deed No. 38 dated April 19, 2013 of Ashoya Ratam,S.H.,MKn., the Company’s stockholders agreed on the distribution of cash dividend and special cash dividend for 2012 amounting to Rp7,068 billion and Rp1,285 billion, respectively. On June 18, 2013, the Company paid the cash dividend and special cash dividend totalling Rp8,354 billion.
78
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
33. CASH DIVIDENDS AND GENERAL RESERVE (continued)
Appropriation of Retained Earnings
Under the Limited Liability Company Law, the Company is required to establish a statutory reserve amounting to at least 20% of its issued and paid-up capital.
The balance of the appropriated retained earnings of the Company as of March 31, 2014 and December 31, 2013 amounted to Rp15,337 billion.
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS
|
March 31, 2014 |
|
December 31, 2013 |
|
Prepaid pension benefit costs |
|
|
|
|
The Company |
934 |
|
927 |
|
Infomedia |
0 |
|
- |
|
Prepaid pension benefit costs |
934 |
|
927 |
|
Pension benefit costs provision and other post-employment benefit |
|
|
|
|
Pension |
|
|
|
|
The Company |
1,706 |
|
1,644 |
|
Telkomsel |
641 |
|
613 |
|
Pension benefit costs provisions |
2,347 |
|
2,257 |
|
Other post-retirement benefits |
358 |
|
349 |
|
Obligation under the Labor Law |
185 |
|
189 |
|
Pension benefit costs provision and other post-employment benefits |
2,890 |
|
2,795 |
|
Net periodic pension costs |
|
|
|
|
The Company |
90 |
|
678 |
|
Telkomsel |
28 |
|
194 |
|
Infomedia |
0 |
|
1 |
|
Net periodic pension costs (Note 27) |
118 |
|
873 |
|
Other post-retirement benefit costs (Note 27) |
15 |
|
66 |
|
Employee benefit costs under the Labor Law |
10 |
|
17 |
|
a. Prepaid pension benefit costs
The Company sponsors a defined benefit pension plan to employees with permanent status prior to July 1, 2002. The pension benefits are paid based on the participating employees’ latest basic salary at retirement and the number of years of their service. The plan is managed by Telkom Pension Fund (“Dana Pensiun Telkom” or “Dapen”). The participating employees contribute 18% (before March 2003: 8.4%) of their basic salaries to the pension fund. The Company’s contributions to the pension fund for three months period ended March 31, 2014 and for the year ended December 31, 2013 amounted to Rpnil billion and Rp182 billion, respectively.
The following table presents the change in projected pension benefits obligation, change in pension plan assets, funded status of the pension plan and net amount recognized in the Company’s consolidated statement of financial position for three months period ended March 31, 2014 and for the year ended December 31, 2013 for its defined benefit pension plan:
79
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS (continued)
a. Prepaid pension benefit costs (continued)
|
March 31, 2014 |
|
December 31, 2013 |
|
Change in projected pension benefits obligation |
|
|
|
|
Projected pension benefits obligation at beginning of period |
14,883 |
|
19,249 |
|
Service costs |
48 |
|
450 |
|
Interest costs |
327 |
|
1,183 |
|
Pension plan participants' contributions |
11 |
|
44 |
|
Actuarial (gains) losses |
796 |
|
(5,387 |
) |
Expected pension benefits paid |
(176 |
) |
(656 |
) |
Projected pension benefits obligation at end of period |
15,889 |
|
14,883 |
|
Change in pension plan assets |
|
|
|
|
Fair value of pension plan assets at beginning of period |
16,803 |
|
18,222 |
|
Expected return on pension plan assets |
402 |
|
1,485 |
|
Employer’s contributions |
- |
|
182 |
|
Pension plan participants' contributions |
11 |
|
44 |
|
Actuarial gains (losses) |
796 |
|
(2,474 |
) |
Expected pension benefits paid |
(176 |
) |
(656 |
) |
Fair value of pension plan assets at end of period |
17,836 |
|
16,803 |
|
Funded status |
1,948 |
|
1,920 |
|
Unrecognized prior service costs |
58 |
|
78 |
|
Unrecognized net actuarial (gains) losses |
(1,071 |
) |
(1,071 |
) |
Prepaid pension benefit costs |
935 |
|
927 |
|
The expected return is determined based on market expectation for returns over the entire life of the obligation by considering the portfolio mix of the plan assets. The actual return on plan assets was Rp1,198 billion and (Rp989) billion for three months period ended March 31, 2014 and for the year ended December 31, 2013, respectively. Based on the Company’s regulation issued on January 14, 2014 regarding Dapen’s Funding Policy, the Company will not give contribution to Dapen when Dapen’s Funding Sufficiency Ratio (FSR) is above 105%. Therefore, the Company expects no contribution to defined benefit pension plan in 2014.
The movements of the prepaid pension benefit costs during three months period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:
|
March31, 2014 |
|
December 31, 2013 |
|
Prepaid pension benefit costs at beginning of period |
(927 |
) |
(1,031 |
) |
Net periodic pension costs less amounts charged to subsidiaries |
(7 |
) |
265 |
|
Amounts charged to subsidiaries under contractual agreement |
- |
|
21 |
|
Employer’s contributions |
- |
|
(182 |
) |
Prepaid pension benefit costs at end of period |
(934 |
) |
(927 |
) |
80
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS (continued)
a. Prepaid pension benefit costs (continued)
As of March 31, 2014 and December 31, 2013, pension plan assets mainly consisted of :
|
March 31, 2014 |
|
December 31, 2013 |
|
Government bonds |
38.72% |
|
40.30% |
|
Indonesian equity securities |
23.42% |
|
21.97% |
|
Corporate bonds |
19.65% |
|
21.19% |
|
Others |
18.21% |
|
16.54% |
|
Total |
100.00% |
|
100.00% |
|
Pension plan assets also include Series B shares issued by the Company with fair values totaling Rp339 billion and Rp336 billion, representing 1.90% and 2.00% of total plan assets as of March 31, 2014 and December 31, 2013, respectively, and bonds issued by the Company with fair values totaling Rp151 billion and Rp151 billion representing 0.85% and 0.90% of total plan assets as of March 31, 2014 and December 31, 2013, respectively.
The actuarial valuation for the defined benefit pension plan and the other post-retirement benefits (Notes 34b and 34c) was performed based on the measurement date as of December 31, 2013 and 2012, with reports dated February 28, 2014 and February 28, 2013, respectively, by PT Towers Watson Purbajaga (“TWP”), an independent actuary in association with Towers Watson (“TW”) (formerly Watson Wyatt Worldwide). The principal actuarial assumptions used by the independent actuary as of December 31, 2013 and 2012 are as follows:
|
December 31, 2013 |
|
December 31, 2012 |
|
Discount rate |
9.00% |
|
6.25% |
|
Expected long-term return on pension plan assets |
9.75% |
|
8.25% |
|
Rate of compensation increases |
8.00% |
|
8.00% |
|
The components of net periodic pension costs are as follows:
|
March 31, 2014 |
|
December 31, 2013 |
|
Service costs |
48 |
|
450 |
|
Interest costs |
327 |
|
1,183 |
|
Expected return on pension plan assets |
(402 |
) |
(1,485 |
) |
Amortization of prior service costs |
20 |
|
139 |
|
Net periodic pension costs |
(7 |
) |
287 |
|
Amount charged to subsidiaries under contractual agreements |
- |
|
(21 |
) |
Net periodic pension costs less amounts charged to subsidiaries (Note 27) |
(7 |
) |
266 |
|
81
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS (continued)
b. Pension benefit costs provisions
(i) The Company
The Company sponsors unfunded defined benefit pension plans and a defined contribution pension plan for its employees.
The defined contribution pension plan is provided to employees hired with permanent status on or after July 1, 2002. The plan is managed by Financial Institutions Pension Fund (“Dana Pensiun Lembaga Keuangan” or “DPLK”). The Company’s contribution to DPLK is determined based on a certain percentage of the participants’ salaries and amounted to Rp1 billion and Rp6 billion for three months period ended March 31, 2014 and for the year ended December 31, 2013, respectively.
Since 2007, the Company has provided pension benefit based on uniformulation for both participants prior to and from April 20, 1992 effective for employees retiring beginning February 1, 2009. The change in benefit had increased the Company’s obligations by Rp699 billion, which is amortized over 9.9 years until 2016. In 2010, the Company replaced the uniformulation with Manfaat Pensiun Sekaligus (“MPS”). MPS is given to those employees reaching retirement age, upon death or upon being disabled starting from February 1, 2009. The change in benefit had increased the Company’s obligations by Rp435 billion, which is amortized over 8.63 years until 2018.
The Company also provides benefits to employees during a pre-retirement period in which they are inactive for 6 months prior to their normal retirement age of 56 years, known as pre-retirement benefits (“Masa Persiapan Pensiun” or “MPP”). During the pre-retirement period, the employees still receive benefits provided to active employees, which include, but are not limited to, regular salary, health care, annual leave, bonus and other benefits. Since 2012, the Company has issued a new requirement for MPP effective for employees retiring beginning April 1, 2012, whereby the employee is required to file a request for MPP and if the employee does not file the request, he or she is required to work until the retirement date.
The following table presents the change in projected benefits obligation of MPS and MPP for for three months period ended March 31, 2014 and for the year ended December 31, 2013:
|
March 31, 2014 |
|
December 31, 2013 |
|
Change in projected benefits obligation |
|
|
|
|
Unfunded projected benefits obligation at beginning of year |
2,200 |
|
2,436 |
|
Service costs |
20 |
|
97 |
|
Interest costs |
49 |
|
150 |
|
Actuarial gains |
(12 |
) |
(342 |
) |
Benefits paid by employer |
(22 |
) |
(141 |
) |
Unfunded projected benefits obligation at end of year |
2,235 |
|
2,200 |
|
Unrecognized prior service costs |
(473 |
) |
(506 |
) |
Unrecognized net actuarial losses |
(56 |
) |
(50 |
) |
Pension benefit costs provisions at end of period |
1,706 |
|
1,644 |
|
82
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS (continued)
b. Pension benefit cost provisions (continued)
(i) The Company (continued)
Movements of the pension benefit costs provisions during three months period ended March 31, 2014 and for the year ended December 31, 2013:
|
March 31, 2014 |
|
December 31, 2013 |
|
Pension benefit costs provisions at beginning of year |
1,644 |
|
1,373 |
|
Total periodic pension costs |
97 |
|
412 |
|
Employer’s contributions |
(35 |
) |
(141 |
) |
Pension benefit costs provisions at end of period |
1,706 |
|
1,644 |
|
The principal actuarial assumptions used by the independent actuary based on the measurement date as of March 31, 2014 and December 31, 2013 are as follow:
|
December 31, 2013 |
|
December 31, 2012 |
|
Discount rate |
9.00% |
|
6.25% |
|
Rate of compensation |
8.00% |
|
8.00% |
|
The components of total periodic pension costs are as follows:
|
March 31, 2014 |
|
December 31, 2013 |
|
Service costs |
20 |
|
97 |
|
Interest costs |
49 |
|
150 |
|
Amortization of prior service costs |
33 |
|
132 |
|
Recognized actuarial (gains) losses |
(5 |
) |
33 |
|
Total periodic pension costs (Note 27) |
97 |
|
412 |
|
(ii) Telkomsel
Telkomsel provides a defined benefit pension plan to its employees. Under this plan, employees are entitled to pension benefits based on their latest basic salary or take-home pay and the number of years of their service. PT Asuransi Jiwasraya (“Jiwasraya”), a state-owned life insurance company, manages the plan under an annuity insurance contract. Until 2004, the employees contributed 5% of their monthly salaries to the plan and Telkomsel contributed any remaining amount required to fund the plan. Starting 2005, the entire contributions are fully made by Telkomsel.
83
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS (continued)
b. Pension benefit costs provisions (continued)
(ii) Telkomsel (continued)
The following table presents the change in projected pension benefits obligation, change in pension plan assets, funded status of the pension plan and net amount recognized in the Company’s consolidated statement of financial position for three month period ended March 31, 2014 and for the year ended December 31, 2013 of its defined benefit pension plan:
|
March 31, 2014 |
|
December 31, 2013 |
|
Change in projected pension benefits obligation |
|
|
|
|
Projected pension benefits obligation at beginning of year |
899 |
|
1,472 |
|
Service cost |
19 |
|
130 |
|
Interest cost |
20 |
|
88 |
|
Actuarial gains |
- |
|
(789 |
) |
Expected pension benefits paid |
- |
|
(2 |
) |
Projected pension benefits obligation at end of year |
938 |
|
899 |
|
Changes in pension plan asset |
|
|
|
|
Fair value of pension plan assets at beginning of year |
439 |
|
666 |
|
Expected return on pension plan assets |
- |
|
40 |
|
Actuarial losses |
- |
|
(265 |
) |
Expected pension benefits paid |
- |
|
(2 |
) |
Fair value of pension plan assets at end of year |
439 |
|
439 |
|
Funded status |
(499 |
) |
(460 |
) |
Unrecognized items in the consolidated statement of financial position: |
|
|
|
|
Prior service costs |
0 |
|
0 |
|
Net actuarial gain |
(142 |
) |
(153 |
) |
Pension benefit costs provisions |
(641 |
) |
(613 |
) |
The components of the net periodic pension costs are as follows:
|
March 31, 2014 |
|
December 31, 2013 |
|
Service costs |
19 |
|
130 |
|
Interest costs |
20 |
|
88 |
|
Expected return on pension plan assets |
(10 |
) |
(40 |
) |
Amortization of past service costs |
0 |
|
1 |
|
Recognized actuarial (gain) losses |
(1 |
) |
15 |
|
Net periodic pension costs (Note 27) |
28 |
|
194 |
|
84
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS (continued)
b. Pension benefit costs provisions (continued)
(ii) Telkomsel (continued)
The net periodic pension costs for the pension plan was calculated based on actuary measurement date as of December 31, 2013 and 2012, with reports dated February 20, 2014 and February 12, 2013, respectively, by TWP, an independent actuary in association with TW. The principal actuarial assumptions used by the independent actuary based on the measurement date as of December 31, 2013 and 2012, are as follows:
|
December 31, 2013 |
|
December 31, 2012 |
|
Discount rate |
9.00% |
|
6.00% |
|
Expected long-term return on plan assets |
9.00% |
|
6.00% |
|
Rate of compensation increases |
6.50% |
|
6.50% |
|
c. Other post-retirement benefits
The Company provides other post-retirement benefits in the form of cash paid to employees on their retirement or termination. These benefits consist of last housing allowance (“Biaya Fasilitas Perumahan Terakhir” or “BFPT”) and home passage leave (“Biaya Perjalanan Pensiun dan Purnabhakti” or “BPP”).
Movements of the other post-retirement benefit costs provisions for three months period ended March 31, 2014 and for the year ended December 31, 2013:
|
March 31, 2014 |
|
Desember 31, 2013 |
|
Other post-retirement benefit costs provisions at beginning of year |
349 |
|
310 |
|
Other post-retirement benefit costs |
15 |
|
66 |
|
Other post-retirement benefits paid by the Company |
(6 |
) |
(27 |
) |
Net other post-retirement benefit costs provisions at end of period |
358 |
|
349 |
|
85
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS (continued)
c. Other post-retirement benefits (continued)
The principal actuarial assumptions used by the independent actuary as of December 31, 2013 and 2012 are as follows:
|
December 31, 2013 |
|
December 31, 2012 |
|
Discount rate |
9.00% |
|
6.25% |
|
Rate of compensation |
8.00% |
|
8.00% |
|
Components of the total periodic other post-retirement benefit costs for three months period ended March 31, 2014 and for the year ended December 31, 2013:
|
March31, 2014 |
|
December 31, 2013 |
|
Service costs |
2 |
|
11 |
|
Interest costs |
9 |
|
30 |
|
Amortization of past service costs |
2 |
|
7 |
|
Recognized actuarial losses |
2 |
|
18 |
|
Other post-retirement benefit costs (Note 27) |
15 |
|
66 |
|
d. Obligation under the Labor Law
Under Law No. 13 Year 2003, the Company and subsidiaries are required to provide minimum pension benefit, if not covered yet by the sponsored pension plans, to their employees upon retirement age. The total related obligation recognized as of March 31, 2014 and December 31, 2013 amounted to Rp185 billion and Rp189 billion, respectively. The related employee benefit costs charged to expense amounted to Rp10 billion and Rp17 billion for three months period ended March 31, 2014 and for the year ended December 31, 2013, respectively.
35. LONG SERVICE AWARDS (“LSA”)
Telkomsel provides certain cash awards or certain number of days leave benefits to its employees based on the employees’ length of service requirements, including LSA and LSL. LSA are either paid at the time the employees reach certain years during employment, or at the time of termination. LSL are either certain number of days leave benefit or cash, subject to approval by management, provided to employees who meet the requisite number of years of service and with a certain minimum age.
The obligation with respect to these awards was determined based on an actuarial valuation using the Projected Unit Credit method, and amounted to Rp341 billion and Rp336 billion as of March 31, 2014 and December 31, 2013, respectively. The related benefit costs charged to expense amounted to Rp16 billion and Rp19 billion for three months ended March 31, 2014 and for the year ended December 31, 2013, respectively (Note 27).
86
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
36. POST-RETIREMENT HEALTH CARE BENEFITS
The Company provides a post-retirement health care plan to all of its employees hired before November 1, 1995 who have worked for the Company for 20 years or more when they retire, and to their eligible dependents. The requirement to work for 20 years does not apply to employees who retired prior to June 3, 1995. The employees hired by the Company starting from November 1, 1995 are no longer entitled to this plan. The plan is managed by Yakes.
The defined contribution post-retirement health care plan is provided to employees hired with permanent status on or after November 1, 1995 or employees with terms of service less than 20 years at the time of retirement. The Company’s contribution amounted to Rp15 billion and Rp17 billion for three months period ended March 31, 2014 and for the year ended December 31, 2013, respectively.
The following table presents the change in the projected post-retirement health care benefits obligation, change in post-retirement health care benefits plan assets, funded status of the post-retirements health care benefits plan and net amount recognized in the Company’s consolidated statement of financial position as of March 31, 2014 and December 31, 2013:
|
March 31, 2014 |
|
December 31, 2013 |
|
Change in projected post-retirement health care benefits obligation |
|
|
|
|
Projected post-retirement health care benefits obligation at beginning of year |
10,653 |
|
13,162 |
|
Service costs |
11 |
|
70 |
|
Interest costs |
236 |
|
813 |
|
Actuarial losses (gains) |
549 |
|
(3,099 |
) |
Expected post-retirement health care benefits paid |
(93 |
) |
(293 |
) |
Projected post-retirement health care benefits obligation at end of period |
11,356 |
|
10,653 |
|
Change in post-retirement health care benefits plan assets |
|
|
|
|
Fair value of plan assets at beginning of year |
9,661 |
|
9,913 |
|
Expected return on plan assets |
228 |
|
744 |
|
Employer’s contributions |
68 |
|
302 |
|
Actuarial gains (losses) |
549 |
|
(1,005 |
) |
Expected post-retirement health care paid |
(93 |
) |
(293 |
) |
Fair value of plan assets at end of period |
10,413 |
|
9,661 |
|
Funded status |
(943 |
) |
(992 |
) |
Unrecognized net actuarial losses |
240 |
|
240 |
|
Post-retirement health care benefit costs provisions |
(703 |
) |
(752 |
) |
87
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
36. POST-RETIREMENT HEALTH CARE BENEFITS (continued)
As of March 31, 2014 and December 31, 2013, plan assets mainly consisted of:
|
March31, 2014 |
|
December 31, 2013 |
|
Mutual funds |
79.34% |
|
81.80% |
|
Equity securities |
14.38% |
|
13.14% |
|
Time deposits |
4.93% |
|
3.68% |
|
Others |
1.35% |
|
1.38% |
|
Total assets |
100.00% |
|
100.00% |
|
Yakes plan assets also include Series B shares issued by the Company with fair values totaling Rp106 billion and Rp120 billion representing 1.02% and 1.25% of total plan assets as of March 31, 2014 and December 31, 2013, respectively.
The expected return is determined based on market expectation for returns over the entire life of the obligation by considering the portfolio mix of the plan assets. The actual return on plan assets was Rp777 billion and (Rp261 billion) for three months period ended March 31, 2014 and for the year ended December 31, 2013, respectively.
The components of net periodic post-retirement health care benefit costs are as follows:
|
March 31, 2014 |
|
December 31, 2013 |
|
Service costs |
11 |
|
70 |
|
Interest costs |
236 |
|
813 |
|
Expected return on plan assets |
(228 |
) |
(744 |
) |
Recognized actuarial losses |
- |
|
236 |
|
Net periodic post-retirement benefit costs |
19 |
|
375 |
|
Amounts charged to subsidiaries under contractual agreements |
- |
|
(1 |
) |
Net periodic post-retirement health care benefit costs less amounts charged to subsidiaries (Note 27) |
19 |
|
374 |
|
The movements of the projected post-retirement health care benefit costs provisions for three months period ended March 31, 2014 and for the year ended December 31, 2013, are as follows:
|
March 31, 2014 |
|
December 31, 2013 |
|
Projected post-retirement health care benefit costs provisions at beginning of year |
752 |
|
679 |
|
Net periodic post-retirement health care benefits costs less amounts charged to subsidiaries (Note 27) |
19 |
|
374 |
|
Amounts charged to subsidiaries under contractual agreements |
- |
|
1 |
|
Employer’s contributions |
(68 |
) |
(302 |
) |
Projected post-retirement health care benefit costs provisions at end of period |
703 |
|
752 |
|
88
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
36. POST-RETIREMENT HEALTH CARE BENEFITS (continued)
The actuarial valuation for the post-retirement health care benefits was performed based on the measurement date as of December 31, 2013 and 2012, with reports dated February 28, 2014 and February 28, 2013, respectively, by TWP, an independent actuary in association with TW. The principal actuarial assumptions used by the independent actuary as of December 31, 2013 and 2012 are as follows:
|
December 31, 2013 |
|
December 31, 2012 |
|
|
|
|
|
|
Discount rate |
9.00% |
|
6.25% |
|
Expected long-term return on plan assets |
9.50% |
|
7.50% |
|
Health care costs trend rate assumed for next year |
7.00% |
|
7.00% |
|
37. RELATED PARTY TRANSACTIONS
In the normal course of its business, the Company and subsidiaries entered into transactions with related parties. It is the Company's policy that the pricing of these transactions be the same as those of arm’s length transactions.
a. Nature of relationships and accounts/transactions with related parties
Details of the nature of relationships and transactions/accounts with significant related parties are as follows:
Related parties |
|
Nature of relationships with related parties |
|
Nature of transactions/accounts |
|
The Government Ministry of Finance |
|
Majority stockholder |
|
Finance costs and investment in financial instruments |
|
State-owned enterprises |
|
Entity under common control |
|
Operation expenses, purchase of property and equipment, construction and installation services, insurance expense, finance income, finance costs, investment in financial instruments |
|
Indosat |
|
Entity under common control |
|
Interconnection revenues, interconnection expenses, telecommunications facilities usage, operating and maintenance cost, leased lines revenue, satellite transponders usage revenues, usage of data communication network system expenses and lease revenues |
|
PT Aplikanusa Lintasarta (“Lintasarta”) |
|
Entity under common control |
|
Network revenues, usage of data communication network system expenses and leased lines expenses |
|
Indosat Mega Media |
|
Entity under common control |
|
Network revenues |
|
CSM |
|
Associated company |
|
Satellite transponders usage revenues, leased lines revenues, transmission lease expenses |
|
89
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
37. RELATED PARTY TRANSACTIONS (continued)
a. Nature of relationships and accounts/transactions with related parties (continued)
Details of the nature of relationships and transactions/accounts with significant related parties are as follows:
Related parties |
|
Nature of relationships with related parties |
|
Nature of transactions/accounts |
|
Patrakom* |
|
Associated company |
|
Satellite transponders usage revenues, leased lines revenues, transmission lease expenses |
|
PSN |
|
Associated company |
|
Satellite transponders usage revenues, leased lines revenues, transmission lease expenses, interconnection revenues and interconnection expense |
|
Indonusa** |
|
Associated company |
|
Leased line revenues, telecommunication services revenue, data telecommunication expense |
|
PT Industri Telekomunikasi Indonesia (“INTI”) |
|
Entity under common control |
|
Purchase of property and equipment |
|
PT Asuransi Jasa Indonesia (“Jasindo”) |
|
Entity under common control |
|
Insurance of property and equipment |
|
PT Jaminan Sosial Tenaga Kerja (“Jamsostek”) |
|
Entity under common control |
|
Insurance for employees |
|
PT Perusahaan Listrik Negara (Persero) (“PLN”) |
|
Entity under common control |
|
Electricity expenses |
|
PT Pos Indonesia |
|
Entity under common control |
|
Cost of SIM cards |
|
State-owned banks |
|
Entity under common control |
|
Finance income and finance costs |
|
BNI |
|
Entity under common control |
|
Finance income and finance costs |
|
Bank Mandiri |
|
Entity under common control |
|
Finance income and finance costs |
|
BRI |
|
Entity under common control |
|
Finance income and finance costs |
|
BTN |
|
Entity under common control |
|
Finance income and finance costs |
|
BSM |
|
Entity under common control |
|
Finance costs |
|
PT Bank BRI Syariah (“BRI Syariah”) |
|
Entity under common control |
|
Finance costs |
|
Bahana |
|
Entity under common control |
|
Available-for-sale financial assets, bonds and notes |
|
Koperasi Pegawai Telkom (“Kopegtel”) |
|
Entity under common control |
|
Purchase of property and equipment, construction and installation services, leases of buildings, leases of vehicles, purchases of materials and construction services, utilities maintenance and cleaning services and RSA revenues |
|
PT Sandhy Putra Makmur (“SPM”) |
|
Entity under common control |
|
Leases of buildings, leases of vehicles, purchase of materials and construction services, utilities maintenance and cleaning services |
|
Koperasi Pegawai Telkomsel (“Kisel”) |
|
Entity under common control |
|
Leases of vehicles, printing and distribution of customer bills, collection fee, and other services fee, distribution of SIM cards and pulse reload vouchers |
|
PT Graha Informatika Nusantara (“Gratika”) |
|
Entity under common control |
|
Leased lines revenues, purchase of property and equipment, installation expense, and maintenance expense |
|
Directors and commissioners |
|
Key management personnel |
|
Honorarium and facilities |
|
Yakes |
|
Entity under significant influence |
|
Medical expenses |
|
* Patrakom became a subsidiary on September 25, 2013 (Note 3).
** On October 8, 2013, the Company sold its 80% ownership in Indonusa (Notes 3 and 10).
90
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
37. RELATED PARTY TRANSACTIONS (continued)
b. Transactions with related parties
The following are significant transactions with related parties:
|
2014 |
|
2013 |
|
||||
|
Amount |
|
% of total revenues |
|
Amount |
|
% of total revenues |
|
REVENUES |
|
|
|
|
|
|
|
|
Entity under common control |
|
|
|
|
|
|
|
|
Kisel |
647 |
|
3.04 |
|
612 |
|
3.13 |
|
Indosat |
243 |
|
1.14 |
|
262 |
|
1.34 |
|
Gratika |
74 |
|
0.35 |
|
- |
|
- |
|
Lintasarta |
15 |
|
0.07 |
|
17 |
|
0.09 |
|
Sub-total |
979 |
|
4.60 |
|
891 |
|
4.56 |
|
Associated companies |
|
|
|
|
|
|
|
|
Indonusa** |
12 |
|
0.06 |
|
- |
|
- |
|
CSM |
7 |
|
0.03 |
|
8 |
|
0.04 |
|
Patrakom* |
- |
|
- |
|
23 |
|
0,12 |
|
Sub total |
19 |
|
0.09 |
|
31 |
|
0.16 |
|
Other (each below Rp30 billion) |
15 |
|
0.39 |
|
80 |
|
0.41 |
|
Jumlah |
1,013 |
|
5.87 |
|
1,002 |
|
5.13 |
|
|
2014 |
|
2013 |
|
||||
|
Amount |
|
% of total expenses |
|
Amount |
|
% of total expenses |
|
EXPENSES |
|
|
|
|
|
|
|
|
Entity under common control |
|
|
|
|
|
|
|
|
Kisel |
241 |
|
1.70 |
|
183 |
|
1.41 |
|
Indosat |
236 |
|
1.66 |
|
259 |
|
2.00 |
|
Kopegtel |
157 |
|
1.11 |
|
148 |
|
1.14 |
|
PLN |
139 |
|
0.98 |
|
187 |
|
1.44 |
|
Jasindo |
78 |
|
0.55 |
|
87 |
|
0.67 |
|
PT Pos Indonesia |
19 |
|
0.13 |
|
18 |
|
0.14 |
|
Jamsostek |
10 |
|
0.07 |
|
11 |
|
0.08 |
|
SPM |
7 |
|
0.05 |
|
3 |
|
0.02 |
|
Sub-total |
887 |
|
6.25 |
|
896 |
|
6.90 |
|
Entity under significant influence |
|
|
|
|
|
|
|
|
Yakes |
36 |
|
0.25 |
|
33 |
|
0.25 |
|
Associated companies |
|
|
|
|
|
|
|
|
PSN |
55 |
|
0.39 |
|
42 |
|
0.32 |
|
CSM |
13 |
|
0.09 |
|
23 |
|
0.18 |
|
Patrakom* |
- |
|
- |
|
22 |
|
0,17 |
|
Sub-total |
68 |
|
0.48 |
|
87 |
|
0.67 |
|
Others |
23 |
|
0.15 |
|
12 |
|
0.09 |
|
Total |
1.014 |
|
7.13 |
|
1,028 |
|
7.91 |
|
* Patrakom became a subsidiary on September 25, 2013 (Note 3).
** On October 8, 2013, the Company sold its 80% ownership in Indonusa (Notes 3 and 10).
91
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
37. RELATED PARTY TRANSACTIONS (continued)
b. Transactions with related parties (continued)
|
2014 |
|
2013 |
|
||||
|
Amount |
|
% of total finance income |
|
Amount |
|
% of total finance income |
|
|
||||||||
FINANCE INCOME |
|
|
|
|
|
|
|
|
Entity under common control |
|
|
|
|
|
|
|
|
State-owned banks |
162 |
|
48.65 |
|
110 |
|
52.88 |
|
|
2014 |
|
2013 |
|
||||
|
Amount |
|
% of total finance costs |
|
Amount |
|
% of total finance costs |
|
FINANCE COSTS |
|
|
|
|
|
|
|
|
Majority stockholder |
|
|
|
|
|
|
|
|
The Government |
21 |
|
5.37 |
|
20 |
|
6.17 |
|
Entity under common control |
|
|
|
|
|
|
|
|
State-owned banks |
166 |
|
42.46 |
|
116 |
|
35.80 |
|
Total |
187 |
|
47.83 |
|
136 |
|
41.97 |
|
|
2014 |
|
2013 |
|
||||
|
Amount |
|
% of total fixed assets purchased |
|
Amount |
|
% of total fixed assets purchased |
|
Purchase of property and equipment (Note 11) |
|
|
|
|
|
|
|
|
Entity under common control |
|
|
|
|
|
|
|
|
State-owned enterprises |
24 |
|
0.56 |
|
13 |
|
0.39 |
|
Kopegtel |
12 |
|
0.28 |
|
60 |
|
1.80 |
|
Sub-total |
36 |
|
0.84 |
|
73 |
|
2.19 |
|
Others |
1 |
|
0.02 |
|
10 |
|
0.30 |
|
Total |
37 |
|
0.86 |
|
83 |
|
2.49 |
|
Presented below are balances of accounts with related parties
|
|
March 31, 2014 |
|
December 31, 2013 |
|
||||
|
|
Amount |
|
% of total assets |
|
Amount |
|
% of total assets |
|
a. |
Cash and cash equivalents (Note 4) |
13,627 |
|
10.44 |
|
11,736 |
|
9.17 |
|
b. |
Other current financial assets (Note 5) |
623 |
|
0.48 |
|
1,226 |
|
0.95 |
|
c. |
Trade receivables - net (Note 6) |
953 |
|
0.73 |
|
900 |
|
0.70 |
|
d. |
Advances and prepaid expenses (Note 8) |
|
|
|
|
|
|
|
|
|
Others |
80 |
|
0.06 |
|
82 |
|
0.06 |
|
e. |
Advances and other non-current assets (Note 12) |
|
|
|
|
|
|
|
|
|
Entity under common control |
|
|
|
|
|
|
|
|
|
BNI |
- |
|
- |
|
52 |
|
0.04 |
|
|
Others |
3 |
|
0.00 |
|
3 |
|
0.00 |
|
|
Total |
3 |
|
0.00 |
|
55 |
|
0.04 |
|
92
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
37. RELATED PARTY TRANSACTIONS (continued)
b. Transactions with related parties (continued)
|
|
March 31, 2014 |
|
December 31, 2013 |
|
||||
|
|
Amount |
|
% of total liabilities |
|
Amount |
|
% of total liabilities |
|
f. |
Trade payables (Note 14) |
|
|
|
|
|
|
|
|
|
Entity under common control |
|
|
|
|
|
|
|
|
|
INTI |
110 |
|
0.23 |
|
115 |
|
0.23 |
|
|
Kopegtel |
49 |
|
0.10 |
|
82 |
|
0.16 |
|
|
Indosat |
16 |
|
0.03 |
|
17 |
|
0.03 |
|
|
State-owned enterprises |
1 |
|
0.00 |
|
1 |
|
0.00 |
|
|
Sub-total |
176 |
|
0.36 |
|
215 |
|
0.42 |
|
|
Entity under significant influence |
|
|
|
|
|
|
|
|
|
Yakes |
14 |
|
0.03 |
|
43 |
|
0.09 |
|
|
Others |
290 |
|
0.60 |
|
568 |
|
1.12 |
|
|
Total |
480 |
|
0.99 |
|
826 |
|
1.63 |
|
g. |
Accrued expenses (Note 15) |
|
|
|
|
|
|
|
|
|
Majority stockholder |
|
|
|
|
|
|
|
|
|
The Government |
29 |
|
0.06 |
|
17 |
|
0.04 |
|
|
Entity under common control |
|
|
|
|
|
|
|
|
|
State-owned banks |
46 |
|
0.10 |
|
53 |
|
0.10 |
|
|
Total |
75 |
|
0.16 |
|
70 |
|
0.14 |
|
h. |
Advances from customers and suppliers |
|
|
|
|
|
|
|
|
|
Majority stockholder |
|
|
|
|
|
|
|
|
|
The Government |
20 |
|
0.04 |
|
19 |
|
0.04 |
|
i. |
Short-term bank loans (Note 17) |
|
|
|
|
|
|
|
|
|
Entity under common control |
|
|
|
|
|
|
|
|
|
BSM |
14 |
|
0.03 |
|
14 |
|
0.03 |
|
|
BRI Syariah |
4 |
|
0.01 |
|
3 |
|
0.01 |
|
|
Mandiri |
2 |
|
0.00 |
|
- |
|
- |
|
|
BRI |
- |
|
- |
|
50 |
|
0.09 |
|
|
Total |
20 |
|
0.04 |
|
67 |
|
0.13 |
|
j. |
Two-step loans (Note 19) |
|
|
|
|
|
|
|
|
|
Majority stockholder |
|
|
|
|
|
|
|
|
|
The Government |
1,820 |
|
3.80 |
|
1,915 |
|
3.79 |
|
k. |
Bonds and notes (Note 20) |
|
|
|
|
|
|
|
|
|
Entity under common control |
|
|
|
|
|
|
|
|
|
Bahana |
- |
|
- |
|
- |
|
- |
|
l. |
Long-term bank loans (Note 21) |
|
|
|
|
|
|
|
|
|
Entity under common control |
|
|
|
|
|
|
|
|
|
BRI |
5,214 |
|
10.88 |
|
4,043 |
|
8.00 |
|
|
BNI |
1,611 |
|
3.36 |
|
2,351 |
|
4.65 |
|
|
Bank Mandiri |
375 |
|
0.78 |
|
1,069 |
|
2.12 |
|
|
Total |
7,200 |
|
15.02 |
|
7,643 |
|
14.77 |
|
93
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
37. RELATED PARTY TRANSACTIONS (continued)
c. Significant agreements with related parties
i. The Government
The Company obtained two-step loans from the Government (Note 19).
ii. Indosat
The Company has an agreement with Indosat for the provision of international telecommunications services to the public.
The Company has also entered into an interconnection agreement between the Company’s fixed line network (Public Switched Telephone Network or “PSTN”) and Indosat’s GSM mobile cellular telecommunications network in connection with the implementation of the Indosat Multimedia Mobile services and the settlement of the related interconnection rights and obligations.
The Company also has an agreement with Indosat for the interconnection of Indosat's GSM mobile cellular telecommunications network with the Company's PSTN, enabling each party’s customers to make domestic calls between Indosat’s GSM mobile network and the Company’s fixed line network and allowing Indosat’s mobile customers to access the Company’s IDD service by dialing “007”.
The Company has been handling customer billings and collections for Indosat. Indosat is gradually taking over the activities and performing its own direct billing and collection. The Company receives compensation from Indosat computed at 1% of the collections made by the Company beginning January 1, 1995, plus the billing process expenses which are fixed at a certain amount per record. On December 11, 2008, the Company and Indosat agreed to implement IDD service charge tariff which already takes into account the compensation for billing and collection. The agreement is valid and effective starting on January to December 2012, and can be applied until a new agreement becomes available.
On December 28, 2006, the Company and Indosat signed amendments to the interconnection agreements for the fixed line networks (local, SLJJ and international) and mobile network for the implementation of the cost-based tariff obligations under the MoCI Regulations No. 8/Year 2006 (Note 40). These amendments took effect on January 1, 2007.
Telkomsel also entered into an agreement with Indosat for the provision of international telecommunications services to its GSM mobile cellular customers.
The Company provides leased lines to Indosat and subsidiaries, namely PT Indosat Mega Media and Lintasarta. The leased lines can be used by these companies for telephone, telegraph, data, telex, facsimile or other telecommunication services.
iii. Others
The Company has entered into agreements with associated companies, namely CSM, PSN and Gratika for the utilization of the Company's satellite transponders or frequency channels and leased lines.
Telkomsel has an agreement with PSN for the lease of PSN’s transmission link. Based on the
agreement, which was made on March 14, 2001, the minimum lease period is 2 years since the operation of the transmission link and is extendable subject to agreement by both parties.
As of the issuance date of the consolidated financial statements, the extension is still in process.
94
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
37. RELATED PARTY TRANSACTIONS (continued)
c. Significant agreements with related parties (continued)
iii. Others (continued)
Koperasi Pegawai Telkomsel (“Kisel”) is a cooperative that was established by Telkomsel’s employees to engage in car rental services, printing and distribution of customer bills, collection and other services principally for the benefit of Telkomsel. Telkomsel also has dealership agreements with Kisel for distribution of SIM cards and pulse reload vouchers.
d. Key management personnel remuneration
Key management personnel consists of the Boards of Commissioners and Directors of the Company and its subsidiaries.
The Company and subsidiaries provide honorarium and facilities to support the operational duties of the Board of Commissionersand short-term employment benefits in the form of salaries and facilities to support the operational duties of the Board of Directors. The total of such benefits is as follows:
|
2014 |
|
2013 |
|
||||
|
Amount |
|
% of total expenses |
|
Amount |
|
% of total expenses |
|
Board of Directors |
94 |
|
0.66% |
|
58 |
|
0.45% |
|
Board of Commissioners |
30 |
|
0.21% |
|
14 |
|
0.11% |
|
38. SEGMENT INFORMATION
Management manages the Company's business portfolios using the customer-centric approach, as part of the Company’s strategy to provide one-stop solution to customers.
The Company and subsidiaries have four main operating segments, namely personal, home, corporate and others. The personal segment provides mobile cellular and fixed wireless telecommunications services to individual customers. The home segment provides fixed wireline telecommunications services, pay TV, data and internet services to home customers. The corporate segment provides telecommunications services, including interconnection, leased lines, satellite, VSAT, contact center, broadband access, information technology services, data and internet services to companies and institutions. Operating segments that are not monitored separately by the Chief Operation Decision Maker are presented as "Others", which provides building management services.
Management monitors the operating results of the business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the consolidated financial statements.
However, the financing activities and income taxes are not separately monitored and are not allocated to operating segments.
95
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
38. SEGMENT INFORMATION (continued)
Segment revenues and expenses include transactions between operating segments and are accounted atmarket prices.
|
2014 |
|
||||||||||||
|
Corporate |
|
Home |
|
Personal |
|
Others |
|
Total before elimination |
|
Elimination |
|
Total consolidated |
|
Segment results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External revenues |
4,604 |
|
1,684 |
|
14,913 |
|
49 |
|
21,250 |
|
- |
|
21,250 |
|
Inter-segment revenues |
2,619 |
|
648 |
|
658 |
|
330 |
|
4,255 |
|
(4,255 |
) |
- |
|
Total segment revenues |
7,223 |
|
2,332 |
|
15,571 |
|
379 |
|
25,505 |
|
(4,255 |
) |
21,250 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External expenses |
(4,003 |
) |
(1,210 |
) |
(8,720 |
) |
(338 |
) |
(14,271 |
) |
- |
|
(14,271 |
) |
Inter-segment expenses |
(1,556 |
) |
(774 |
) |
(1,912 |
) |
(13 |
) |
(4,255 |
) |
4,255 |
|
- |
|
Total segment expenses |
(5,559 |
) |
(1,984 |
) |
(10,632 |
) |
(351 |
) |
(18,526 |
) |
4,255 |
|
(14,271 |
) |
Segment results |
1,664 |
|
348 |
|
4,939 |
|
28 |
|
6,979 |
|
- |
|
6,979 |
|
Other information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets |
41,373 |
|
19,526 |
|
78,108 |
|
1,655 |
|
140,662 |
|
(10,574 |
) |
130,088 |
|
Asset held-for-sale |
- |
|
- |
|
88 |
|
- |
|
88 |
|
- |
|
88 |
|
Long-term investments |
86 |
|
189 |
|
21 |
|
- |
|
296 |
|
- |
|
296 |
|
Total consolidated assets |
|
|
|
|
|
|
|
|
|
|
|
|
130,472 |
|
Capital expenditures |
(892 |
) |
(376 |
) |
(3,033 |
) |
- |
|
(4,301 |
) |
- |
|
(4,301 |
) |
Depreciation and amortization |
(613 |
) |
(339 |
) |
(2,952 |
) |
(14 |
) |
(3,918 |
) |
- |
|
(3,918 |
) |
Impairment of assets |
- |
|
- |
|
(30 |
) |
- |
|
(30 |
) |
- |
|
(30 |
) |
Provision for impairment of receivables and inventory obsolescence |
(164 |
) |
(68 |
) |
(72 |
) |
- |
|
(304 |
) |
- |
|
(304 |
) |
|
2013 |
|
||||||||||||
|
Corporate |
|
Home |
|
Personal |
|
Others |
|
Total before elimination |
|
Elimination |
|
Total consolidated |
|
Segment results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External revenues |
3.618 |
|
2.146 |
|
13.754 |
|
29 |
|
19.547 |
|
- |
|
19.547 |
|
Inter-segment revenues |
2.048 |
|
252 |
|
538 |
|
178 |
|
3.016 |
|
(3.016) |
|
- |
|
Total segment revenues |
5.666 |
|
2.398 |
|
14.292 |
|
207 |
|
22.563 |
|
(3.016) |
|
19.547 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External expenses |
(3.273 |
) |
(1.741 |
) |
(7.598 |
) |
(185 |
) |
(12.797 |
) |
- |
|
(12.797 |
) |
Inter-segment expenses |
(1.211 |
(1.211) |
(466 |
) |
(1.339 |
) |
- |
|
(3.016 |
) |
3.016 |
|
- |
|
Total segment expenses |
(4.484 |
) |
(2.207 |
) |
(8.937 |
) |
(185 |
) |
(15.813 |
) |
3.016 |
|
(12.797 |
) |
Segment results |
1.182 |
|
191 |
|
5.355 |
|
22 |
|
6.750 |
|
- |
|
6.750 |
|
Other information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets |
31.506 |
|
17.493 |
|
71.450 |
|
703 |
|
121.152 |
|
(5.450 |
) |
115.702 |
|
Asset available for sale |
|
- |
|
- |
130 |
|
- |
|
130 |
|
|
- |
130 |
|
Long-term investments |
252 |
|
|
- |
20 |
|
- |
|
272 |
|
- |
|
272 |
|
Total consolidated assets |
|
|
|
|
|
|
|
|
|
|
|
|
116.104 |
|
Capital expenditures |
(612 |
) |
(182 |
) |
(2.512 |
) |
(1 |
) |
(3.307 |
) |
- |
|
(3.307 |
) |
Depreciation and amortization |
(591 |
) |
(393 |
) |
(2.475 |
) |
(5 |
) |
(3.464 |
) |
2 |
|
(3.462 |
) |
Impairment of assets |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
Provision for impairment of receivables and inventory obsolescence |
(67 |
) |
(80 |
) |
(39 |
) |
(1 |
) |
(187 |
) |
- |
|
(187 |
) |
The Company predominantly generates revenue and profit within Indonesia. Revenue with respect to international interconnections and assets held by geographical location are disclosed in Note 26 and Note 1, respectively.
96
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
39. REVENUE-SHARING ARRANGEMENTS (“RSA”)
The Company has entered into separate agreements with several investors under RSA to develop fixed lines, public card-phone booths, data and internet network, and related supporting telecommunications facilities.
As of March 31, 2014, the Company has 4 RSA’s with 4 investors. The RSA’s are located in East Java, Makassar, Pare-pare, Manado, Denpasar, Mataram and Kupang, with concession periods ranging from 129 to 148 months.
Under the RSA, the investors finance the costs incurred in developing the telecommunications facilities and the Company manages and operates the telecommunications facilities upon the completion of the construction. Repairs and maintenance costs during RSA period are borne jointly by the Company and investors. The investors legally retain the rights to the property and equipment constructed by them during the RSA periods. At the end of the RSA period, the investors transfer the ownership of the telecommunications facilities to the Company at a nominal price.
Generally, the revenues earned in the form of line installation charges, outgoing telephone pulses and monthly subscription charges are shared between the Company and investors based on certain agreed amount and/or ratio.
40. TELECOMMUNICATIONS SERVICE TARIFFS
Under Law No. 36 Year 1999 and Government Regulation No. 52 Year 2000, tariffs for operating telecommunications network and/or services are determined by providers based on the tariff type, structure and with respect to the price cap formula set by the Government.
a. Fixed line telephone tariffs
The Government has issued a new adjustment tariff formula which is stipulated in the Decree No. 15/PER/M.KOMINFO/4/2008 dated April 30, 2008 of the Ministry of Communication and Information (“MoCI”) concerning “Procedure for Tariff Determination for Basic Telephony Services Connected through Fixed Line Network”.
Under the Decree, tariff structure for basic telephony services connected through fixed line network consists of the following:
· Activation fee
· Monthly subscription charges
· Usage charges
· Additional facilities fee.
b. Mobile cellular telephone tariffs
On April 7, 2008, the MoCI issued Decree No. 09/PER/M.KOMINFO/04/2008 regarding “Mechanism to Determine Tariff of Telecommunication Services Connected through Mobile Cellular Network” which provides guidelines to determine cellular tariffs with a formula consisting of network element cost and retail services activity cost. This Decree replaced the previous Decree No. 12/PER/M.KOMINFO/02/2006.
97
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
40. TELECOMMUNICATIONS SERVICE TARIFFS (continued)
b. Mobile cellular telephone tariffs (continued)
Under MoCI Decree No. 09/PER/M.KOMINFO/04/2008 dated April 7, 2008, the cellular tariffs of operating telecommunication services connected through mobile cellular network consist of the following:
· Basic telephony services tariff
· Roaming tariff, and/or
· Multimedia services tariff,
with the following traffic structure:
· Activation fee
· Monthly subscription charges
· Usage charges
· Additional facilities fee.
c. Interconnection tariffs
The Indonesian Telecommunication Regulatory Body (“ITRB”), in its letter No. 227/BRTI/XII/2010 dated December 31, 2010, decided to implement new interconnection tariffs effective from January 1, 2011 for cellular mobile network, satellite mobile network and fixed local network, and effective from July 1, 2011 for fixed wireless local network with a limited mobility.
Based on Decree No. 201/KEP/DJPPI/KOMINFO/7/2011 dated July 29, 2011 of the Director General of Post and Informatics, ITRB approved the Company’s revision of Reference Interconnection Offer (“RIO”) regarding the interconnection tariff.
ITRB, in its letter No. 262/BRTI/XII/2011 dated December 12, 2011, decided to change the basis for interconnection SMS tariff to cost basis with a maximum tariff of Rp23 per SMS effective from June 1, 2012, for all telecommunication provider operators.
ITRB, in its letter No. 118/KOMINFO/DJPPI/PI.02.04/2014 dated January 31, 2014, decided to change the basis for new interconnection tariff effective from February 2014 to December 2016 that will be evaluated each year.
d. Network lease tariffs
Through MoCI Decree No. 03/PER/M.KOMINFO/1/2007 dated January 26, 2007 concerning “Network Lease”, the Government regulated the form, type, tariff structure, and tariff formula for services of network lease. Pursuant to the MoCI Decree, the Director General of Post and Telecommunication issued its Letter No. 115 Year 2008 dated March 24, 2008 which stated “The Agreement on Network Lease Service Type Document, Network Lease Service Tariff, Available Capacity of Network Lease Service, Quality of Network Lease Service, and Provision Procedure of Network Lease Service in 2008 Owned by Dominant Network Lease Service Provider”, in conformity with the Company’s proposal.
e. Tariff for other services
The tariffs for satellite lease, telephony services, and other multimedia are determined by the service provider by taking into account the expenditures and market price. The Government only determines the tariff formula for basic telephony services. There is no stipulation for the tariff of other services.
98
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS
a. Capital expenditures
As of March 31, 2014, capital expenditures committed under the contractual arrangements, principally relating to procurement and installation of switching equipment, transmission equipment and cable network are as follows:
|
|
Amounts in foreign currencies |
|
Equivalent |
|
Currencies |
|
(in millions) |
|
in rupiah |
|
Rupiah |
|
- |
|
11,874 |
|
U.S. dollar |
|
670 |
|
7,634 |
|
Euro |
|
0.3 |
|
5 |
|
Total |
|
|
|
19,513 |
|
The above balance includes the following significant agreements:
(i) The Company
Contracting parties |
|
Initial date of agreement |
|
Significant provisions of the agreement |
|
The Company and Sansaine Huawei Consortium |
|
August 3, 2009 |
|
Procurement and installation agreement for softswitch and modernization of MSAN Divre I, Divre II, Divre III and Divre IV |
|
The Company and PT ZTE Indonesia |
|
September 4, 2009 |
|
Procurement and installation agreement for modernization of MSAN softswitch Divre VI and Divre VII |
|
The Company and PT ZTE Indonesia |
|
October 6, 2010 |
|
Procurement and installation agreement for Gigabit Capable Passive Optical Network (G-PON) |
|
The Company and PT Industri Telekomunikasi Indonesia |
|
December 30, 2010 |
|
Procurement and installation agreement for copper wire access modernization through Trade In/Trade Off method |
|
The Company and PT Lintas Teknologi Indonesia |
|
June 8, 2011 |
|
Procurement and installation agreement for DWDM Alcatel Lucent (ALU) |
|
The Company and G-Pas Consortium |
|
June 14, 2011 |
|
Procurement and installation agreement for Outside Plant Fiber Optic (OSP-FO) Access and RMJ GPAS |
|
The Company and Mandiri Maju Consortium |
|
June 14, 2011 |
|
Procurement and installation agreement for OSP-FO Access and RMJ |
|
The Company and PT QDC Technologies |
|
June 14, 2011 |
|
Procurement and installation agreement for OSP-FO Access and RMJ |
|
The Company and TEKKEN-DMT Consortium |
|
June 14, 2011 |
|
Procurement and installation agreement for OSP-FO Access and RMJ |
|
The Company and DJAFa Consortium |
|
June 14, 2011 |
|
Procurement and installation agreement for OSP-FO Access and RMJ |
|
The Company and PT Telekomindo Primakarya |
|
June 14, 2011 |
|
Procurement and installation agreement for OSP-FO Access and RMJ |
|
The Company and PT Nasio Karya Pratama |
|
June 14, 2011 |
|
Procurement and installation agreement for OSP-FO Access and RMJ |
|
The Company and Jembo Kabel-Tridayasa Consortium |
|
June 14, 2011 |
|
Procurement and installation agreement for OSP-FO Access and RMJ |
|
The Company and Pancamas Consortium |
|
June 14, 2011 |
|
Procurement and installation agreement for OSP-FO Access and RMJ |
|
99
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
a. Capital expenditures (continued)
(i) The Company (continued)
Contracting parties |
|
Initial date of agreement |
|
Significant provisions of the agreement |
|
The Company and PT Ardhinusa Mitratel |
|
June 14, 2011 |
|
Procurement and installation agreement for OSP-FO Access and RMJ |
|
The Company and PT Karya Mitra Nugraha |
|
June 14, 2011 |
|
Procurement and installation agreement for OSP-FO Access and RMJ |
|
The Company and PT Merbau Prima Sakti |
|
June 14, 2011 |
|
Procurement and installation agreement for OSP-FO Access and RMJ |
|
The Company and PT Huawei Tech Investment |
|
October 11, 2011 |
|
Procurement and installation agreement for IMS (IP-Multimedia System) |
|
The Company and PT Bina Nusantara Perkasa |
|
December 9, 2011 |
|
Procurement and installation agreement for “Sistem Komunikasi Kabel Laut” (“SKKL”) Sumatera-Bangka (SBCS) and SKKL Tarakan-Tanjung Selor (TSCS) |
|
The Company and PT Huawei Tech Investment |
|
January 5, 2012 |
|
Procurement and installation agreement for ISP WDM SBCS JASUKA |
|
The Company and PT Ericsson Indonesia-PT Infracell Nusatama |
|
February 8, 2012 |
|
Procurement and installation agreement for IMS |
|
The Company and PT Len Industri (Persero) |
|
March 29, 2012 |
|
Procurement and installation agreement for copper wire access modernization through Trade In/Trade Off method |
|
The Company and PT Sisindokom Lintasbuana |
|
July 4, 2012 |
|
Procurement and installation agreement for managed WIFI for Program of Indonesia WIFI Package-1 |
|
The Company and PT Ketrosden Triasmitra - PT Nautic Maritime Salvage Consortium |
|
August 30, 2012 |
|
Procurement and installation agreement for SKKL Luwuk-Tutuyan Cable System (LTCS) |
|
The Company and Furukawa and Partners Consortium |
|
November 14, 2012 |
|
Procurement and installation of Outside Plant Fiber To The Home (OSP FTTH) DIVA Regional V and VII |
|
The Company and INTI-Huawei Consortium |
|
November 14, 2012 |
|
Procurement and installation of OSP FTTH DIVA Regional III, IV and VI |
|
The Company and JF DJAFA Consortium |
|
November 14, 2012 |
|
Procurement and installation agreement of OSP FTTH DIVA Regional II |
|
The Company and PT Mastersystem Infotama |
|
December 5, 2012 |
|
Procurement and installation agreement for IP Backbone (IPBB) System |
|
The Company and Binainfo Lokatara Consortium |
|
December 7, 2012 |
|
Procurement and installation agreement for Wireless Access Gateway (WAG), Policy and Charging Enforcement Function (PCEF) and Policy and Chargingrule Function (PCRF) Platform Ericsson |
|
The Company and PT Huawei Tech Investment |
|
December 20, 2012 |
|
Procurement and installation agreement for WAG, PCEF and PCRF Huawei |
|
The Company and PT Infra Karya Pratama |
|
December 28, 2012 |
|
Procurement and installation agreement for managed WIFI for Program of Indonesia WIFI Package-2 |
|
The Company and ASN-PT Lintas Consortium |
|
May 6, 2013 |
|
Procurement and installation agreement of Sulawesi Maluku Papua Cable System (SMPCS) project |
|
The Company and PT Sisindokom Lintasbuana |
|
May 8, 2013 |
|
Procurement and installation agreement for expansion of PE-VPN CISCO |
|
The Company and NEC Corp-PT NEC Indonesia Consortium |
|
May 28, 2013 |
|
Procurement and installation of SMPCS package-2 |
|
100
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
a. Capital expenditures (continued)
(i) The Company (continued)
Contracting parties |
|
Initial date of agreement |
|
Significant provisions of the agreement |
|
The Company and PT Huawei Tech Investment |
|
June 3, 2013 |
|
Procurement and installation agreement for expansion of Metro Ethernet Platform Huawei |
|
The Company and PT Datacomm Diangraha |
|
June 26, 2013 |
|
Procurement and installation agreement for expansion of Maintenance Support (MS) Service for Metro Ethernet Platform ALU |
|
The Company and PT Lintas Teknologi Indonesia |
|
July 22, 2013 |
|
Procurement and installation agreement for expansion of DWDN platform ALU |
|
The Company and NEC Corporation |
|
October 2, 2013 |
|
Procurement and installation agreement for expansion of Ring Capacity of Surabaya-Ujung Pandang-Banjarmasin Backbone |
|
The Company and PT ZTE Indonesia |
|
October 2, 2013 |
|
Procurement and installation agreement of OLT and ONT |
|
The Company and PT Wahana Ciptasinatria |
|
November 7, 2013 |
|
Procurement and installation agreement for Policy Control Equipment and Enforcement Function (PCEF) |
|
The Company and PT Cisco Technologies Indonesia |
|
November 14, 2013 |
|
The partnership for procurement and installation agreement of WIFI CISCO |
|
The Company and PT NEC Indonesia |
|
November 29, 2013 |
|
Procurement and installation agreement for IP Radio Equipment for Backhaul Node-B Telkomsel Package-3 Platform NEC |
|
The Company and PT Huawei Tech Investment |
|
December 6, 2013 |
|
Procurement and installation agreement for IP Radio Equipment for Backhaul Node-B Telkomsel Package-2 Platform Huawei |
|
The Company and PT Huawei Tech Investment |
|
December 6, 2013 |
|
Procurement and installation agreement for 10 Gigabyte of Capable Passive Optical Network (XGPON) Platform Huawei |
|
The Company and PT ASB-PT ALU Indonesia-PT GBN-PT Lintas Consortium |
|
December 6, 2013 |
|
Procurement and installation agreement for XGPON Platform ALU |
|
(ii) Telkomsel
Contracting parties |
|
Initial date of agreement |
|
Significant provisions of the agreement |
|
Telkomsel, PT Ericsson Indonesia, Ericsson AB, PT Nokia Siemens Networks, NSN Oy and Nokia Siemens Network GmbH & Co. KG |
|
April 17, 2008 |
|
The combined 2G and 3G CS Core Network Rollout Agreements |
|
Telkomsel, PT Ericsson Indonesia and PT Nokia Siemens Networks |
|
April 17, 2008 |
|
Technical Service Agreement (TSA) for combined 2G and 3G CS Core Network |
|
Telkomsel, PT Ericsson Indonesia, Ericsson AB, PT Nokia Siemens Networks, NSN Oy, Huawei International Pte. Ltd., PT Huawei and PT ZTE Indonesia |
|
March and June 2009 |
|
2G BSS and 3G UTRAN Rollout agreement for the provision of 2G GSM BSS and 3G UMTS Radio Access Network |
|
Telkomsel, PT Packet Systems Indonesia and PT Huawei |
|
February 3, 2010 |
|
Maintenance and procurement of equipment and related service agreement for Next Generation Convergence IP RAN Rollout and Technical Support |
|
101
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
a. Capital expenditures (continued)
(ii) Telkomsel (continued)
Contracting parties |
|
Initial date of agreement |
|
Significant provisions of the agreement |
|
Telkomsel, PT Datacraft Indonesia and PT Huawei |
|
February 3, 2010 |
|
Maintenance and procurement of equipment and related service agreement for Next Generation Convergence Core Transport Rollout and Technical Support |
|
Telkomsel, Amdocs Software Solutions Limited Liability Company and PT Application Solutions |
|
February 8, 2010 |
|
Online Charging System (“OCS”) and Service Control Points (“SCP”) System Solution Development Agreement |
|
Telkomsel and PT Application Solutions |
|
February 8, 2010 |
|
Technical Support Agreement to provide technical support services for the OCS and SCP |
|
Telkomsel, PT Nokia Siemens Networks and NSN Oy |
|
January 27, 2011 |
|
Soft HLR Rollout Agreement |
|
Telkomsel and PT Nokia Siemens Networks |
|
January 27, 2011 |
|
Soft HLR Technical Support Agreement |
|
Telkomsel, Amdocs Software Solutions Limited Liability Company and PT Application Solutions |
|
July 5, 2011 |
|
Development and Rollout agreement for Customer Relationship Management and Contact Center solutions |
|
Telkomsel and PT Ericsson Indonesia |
|
December 21, 2011 |
|
Development and Rollout Operating Support System (“OSS”) agreement |
|
Telkomsel, Apple South Asia Pte. Ltd. and PT Mitra Telekomunikasi Selular (“MTS”) |
|
July 16, 2012 |
|
Purchasing of iPhone products and provision of cellular network service |
|
Telkomsel and Huawei International Pte. Ltd. and PT Huawei |
|
July 17, 2012 |
|
CS Core System Rollout and CS Core System Technical Support agreement |
|
Telkomsel and PT Ericsson Indonesia |
|
March 25, 2013 |
|
Technical Support Agreement (TSA) for the procurement of Gateway GPRS Support Node (“GGSN”) Service Complex agreement |
|
Telkomsel and Wipro Limited, Wipro Singapore Pte. Ltd. and PT WT Indonesia |
|
April 23, 2013 |
|
Development and procurement of OSDSS Solution agreement |
|
Telkomsel and PT Ericsson Indonesia |
|
October 22, 2013 |
|
Procurement of GGSN Service Complex Rollout agreement |
|
(iii) GSD
Contracting parties |
|
Initial date of agreement |
|
Significant provisions of the agreement |
|
TLT and PT Adhi Karya |
|
November 6, 2012 |
|
Service arrangement structure and main contractor architecture for Telkom Landmark Tower Building development project |
|
TLT and PT Indalex |
|
February 11, 2013 |
|
Procurement agreement for the Façade construction phase I unitized system Tower I and Tower II of Telkom Landmark Tower Building |
|
GSD and PT Pembangunan Perumahan (Persero) |
|
March 5, 2013 |
|
Development of Telkomsel’s building agreement |
|
TLT and PT Jaya Kencana |
|
May 14, 2013 |
|
Procurement and installation agreement for electrical construction of Telkom Landmark Tower Building |
|
102
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
a. Capital expenditures (continued)
(iv) DMT
Contracting parties |
|
Initial date of agreement |
|
Significant provisions of the agreement |
|
DMT and PT M Jusuf & Sons |
|
December 20, 2012 |
|
Telecommunication tower development agreement |
|
(v) TII
Contracting parties |
|
Initial date of agreement |
|
Significant provisions of the agreement |
|
TL and Digicel (TL) LDA (Digicel) |
|
August 28, 2012 |
|
Trading tower location agreement |
|
TL, Ericsson AB and PT Ericsson Indonesia |
|
November 2, 2012 |
|
Operational Supporting System (OSS), Base Sub Station (BSS) and Value Added System (VAS) System Rollout and Radio Access Network (RAN) and Core System Rollout agreement |
|
TL, Ericsson AB and PT Ericsson Indonesia |
|
February 1, 2013 |
|
Management service agreement for end-to-end mobile network |
|
TL and PT Cascadiant Indonesia |
|
December 31, 2012
Desember 31, 2012
November 20, 2013 |
|
Installation and maintenance service agreement
Purchase of equipment phase I agreement
Purchase of equipment phase II agreement |
|
b. Borrowings and other credit facilities
(i) As of March 31, 2014, the Company has bank guarantee facilities for tender bond, performance bond, maintenance bond, deposit guarantee and advance payment bond for various projects of the Company, as follows:
|
|
|
|
|
|
|
|
Facility utilized |
|
||
Lenders |
|
Total facility |
|
Maturity |
|
Currency |
|
Original currency (in millions) |
|
Rupiah equivalent |
|
BRI |
|
350 |
|
March 14, 2016 |
|
Rp |
|
- |
|
141 |
|
|
|
|
|
|
|
US$ |
|
0 |
|
3 |
|
BNI |
|
250 |
|
March 31, 2014 |
|
Rp |
|
- |
|
65 |
|
|
|
|
|
|
|
US$ |
|
0 |
|
3 |
|
Bank Mandiri |
|
150 |
|
December 23, 2014 |
|
Rp |
|
- |
|
58 |
|
|
|
|
|
|
|
US$ |
|
0 |
|
4 |
|
Total |
|
750 |
|
|
|
|
|
|
|
274 |
|
(ii) Telkomsel has a US$3 million bond and bank guarantee and standby letter of credit facilities with SCB, Jakarta. The facilities expire on July 31, 2014. Under these facilities, as of March 31, 2014, Telkomsel has issued a bank guarantee of Rp20 billion (equivalent to US$1.6 million) for a 3G performance bond (Note 41c.i). The bank guarantee is valid until March 24, 2014.
Telkomsel has a Rp200 billion bank guarantee facilitiy with BRI. The facility will expire on September 25, 2014. Under the facility, as of March 31, 2014, Telkomsel has issued a bank guarantee of Rp20 billion (equivalent to USD1.6 million) as a 3G performance bond (Note 41c.i) valid until May 31, 2014 and Rp177 billion (equivalent to USD15.52 million) as payment commitment guarantee for annual right of usage fee valid until March 31, 2014.
Telkomsel also has a Rp100 billion bank guarantee with BNI. The bank guarantee is valid until December 11, 2014. Telkomsel was using this facility to replace the time deposit used guaranty for the USO program amounting to Rp56.2 billion.
(iii) TII has a US$15 million bank guarantee from Bank Mandiri. The facility expires on December 19, 2014. As of March 31, 2014, TII has not issued a bank guarantee.
103
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
c. Others
(i) 3G license
With reference to the Decision Letters No. 07/PER/M.KOMINFO/2/2006, No. 268/KEP/M.KOMINFO/9/2009 and No. 191 year 2013 of the MoCI (Note 2i), Telkomsel is required, among other things, to:
1. Pay an annual BHP fee which is calculated based on a certain formula over the license term (10 years) as set forth in the Decision Letters. The BHP is payable upon receipt of the notification letter (“Surat Pemberitahuan Pembayaran”) from the DGPI. The BHP fee is payable annually up to the expiry date of the license.
2. Provide roaming access for the existing other 3G operators.
3. Contribute to USO development.
4. Construct a 3G network which covers at least 14 provinces by the sixth year of holding the 3G license.
5. Issue a performance bond each year amounting to Rp20 billion or 5% of the annual fee to be paid for the subsequent year, whichever is higher.
(ii) Radio Frequency Usage
Based on the Decree No. 76 dated December 15, 2010 of the Government of the Republic of Indonesia, which amended Decree No. 7 dated January 16, 2009, the annual frequency usage fees for bandwidths of 800 Megahertz (“MHz”), 900 MHz and 1800 MHz are determined using a formula set forth in the Decree. The Decree is applicable for 5 years unless further amended.
As an implementation of the above Decree, the Company and Telkomsel paid the first year and second year annual frequency usage fees in 2010 and 2011, respectively.
Based on Decision Letters No. 495 dated August 29, 2012 and No. 491 dated August 29, 2012, the MoCI determined that the third year (Y3), 2012, annual frequency usage fees of the Company and Telkomsel were Rp174 billion and Rp1,718 billion, respectively. The fees were paid in December 2012.
Based on Decision Letters No. 881 dated September 10, 2013 and No. 884 dated September 10, 2013, the MoCI determined that the fourth year (Y4), 2013, annual frequency usage fees of the Company and Telkomsel were Rp213 billion and Rp1,649 billion, respectively. The fees were paid in December 2013 (Note 2i).
(iii) Apple, Inc
On January 9 and July 16, 2009, Telkomsel entered into agreements with Apple, Inc for the purchase of iPhone products, marketing it to customers using third parties (PT Trikomsel OKE and PT Mitra Telekomunikasi Selular) and providing cellular network services over a 3-year term. Subsequently, on July 16, 2012, Telkomsel replaced the agreements with a new agreement. Cumulative minimum iPhone units to be purchased up to June 2015 are at least 500,000 units.
104
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
c. Others (continued)
(iv) Future Minimum Lease Payments of Operating Lease
The Company and subsidiaries entered into non-cancelable lease agreements with both third and related parties. The lease agreements cover leased lines, telecommunication equipment and land and building with terms ranging from 1 to 10 years and with expiry dates between 2014 and 2023.
Future minimum lease payments under the operating lease agreements as of March 31, 2014 are as follows:
|
Total |
|
Less than 1 year |
|
1-5 years |
|
More than 5 years |
|
As lessee |
33,178 |
|
4,264 |
|
27,831 |
|
1,083 |
|
As lessor |
14,461 |
|
2,225 |
|
7,253 |
|
4,983 |
|
(v) USO
The MoCI issued Regulation No. 15/PER/M.KOMINFO/9/2005 dated September 30, 2005, which sets forth the basic policies underlying the USO program and requires telecommunications operators in Indonesia to contribute 0.75% of their gross revenues (with due consideration for bad debts and interconnection charges) for USO development. Based on the Government’s Decree No. 7/2009 dated January 16, 2009, the contribution was changed to 1.25% of gross revenues, net of bad debts and/or interconnection charges and/or connection charges. Subsequently, in December 2012, Decree No. 05/PER/M.KOMINFO/2/2007 was replaced by Decree No. 45 year 2012 of the MoCi which was effective from January 22, 2013. The Decree stipulates, among other things, the exclusion of certain revenues that are not considered as part of gross revenues as a basis to calculate the USO charged, and changed the payment period which was previously on a quarterly basis to become quarterly or semi-annually.
Based on MoCI Decree No. 32/PER/M.KOMINFO/10/2008 dated October 10, 2008 which replaced MoCI Decree No. 11/PER/M.KOMINFO/04/2007 dated April 13, 2007 and MoCI Decree No. 38/PER/M.KOMINFO/9/2007 dated September 20, 2007, it is stipulated that, among others, in providing telecommunication access and services in rural areas (USO Program), the provider is determined through a selection process by Balai Telekomunikasi dan Informatika Pedesaan (“BTIP”) which was established based on MoCI Decree No. 35/PER/M.KOMINFO/11/2006 dated November 30, 2006. Subsequently, based on Decree No. 18/PER/M.KOMINFO/11/2010 dated November 19, 2010 of MoCI, BTIP was changedto Balai Penyedia dan Pengelola Pembiayaan Telekomunikasi dan Informatika (“BPPPTI”).
105
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
c. Others (continued)
(v) USO (continued)
a. Company
On March 12, 2010, the Company was selected in a tender by the Government through BTIP to provide internet access service centers for USO sub-districts for a total amount of Rp322 billion, covering Nanggroe Aceh Darussalam, Sumatera Utara, Sulawesi Utara, Gorontalo, Sulawesi Tengah, Sulawesi Barat, Sulawesi Selatan and Sulawesi Tenggara.
On December 23, 2010, the Company was selected in a tender by the Government through BTIP to provide mobile internet access service centers for USO sub-districts for a total amount of Rp528 billion, covering Jambi, Riau, Kepulauan Riau, Sulawesi Utara, Sulawesi Tengah, Gorontalo, Sulawesi Barat, Sulawesi Tenggara, Kalimantan Tengah, Sulawesi Selatan, Papua and Irian Jaya Barat.
b. Telkomsel
On January 16 and 23, 2009, Telkomsel was selected in a tender by the Government through BTIP to provide telecommunication access and services in rural areas (USO Program) for a total amount of Rp1.66 trillion, covering all Indonesian territories except Sulawesi, Maluku and Papua. Telkomsel will obtain local fixed-line licenses and the right to use radio frequency in the 2390 MHz - 2400 MHz bandwith.
Subsequently, in 2010 and 2011, the agreements with BTIP were amended, which amendments cover, among other things, changing the price to Rp1.76 trillion and changing the term of payment from quarterly to monthly or quarterly.
In January 2010, the MoCI granted Telkomsel operating licenses to provide local fixed-line services under the USO program.
On March 31, 2014, USO Program for 1,2,3,6 and 7 packages are ceased.
On December 27, 2011, Telkomsel (on behalf of Konsorsium Telkomsel, a consortium which was established with Dayamitra on December 9, 2011) was selected by BPPPTI as a provider of the USO Program in the border areas for all packages (package 1 to package 13) with a total price of Rp830 billion. On such date, Telkomsel was also selected by BPPPTI as a provider of the USO Program (upgrading) of “Desa Pinter” or “Desa Punya Internet” for 1, 2 and 3 packages with a total price of Rp261 billion.
106
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
41. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued)
c. Others (continued)
(v) USO (continued)
For three months period ended March 31, 2014 and 2013, the Company and Telkomsel recognized the following amounts:
|
2014 |
|
2013 |
|
Revenues |
|
|
|
|
Construction |
0 |
|
- |
|
Operation of telecommunication service centre |
0 |
|
- |
|
Profits |
|
|
|
|
Construction |
35 |
|
78 |
|
Operation of telecommunication service centre |
(57 |
) |
(8 |
) |
As of March 31, 2014, the Company’s and Telkomsel’s trade receivables from the USO programs which are measured at amortized cost using the effective interest ratemethod amount to Rp727 billion (Notes 6 and 12).
42. CONTINGENCIES
In the ordinary course of business, the Company and subsidiaries have been named as defendants in various legal actions in relation with land disputes, monopolistic practice and unfair business competition and SMS cartel practices. Based on management's estimate of the probable outcomes of these matters, the Company and subsidiaries have recognized provision for losses amounting to Rp47 billion as of March 31, 2014.
a. The Company, Telkomsel and seven other local operators are being investigated by The Commission for the Supervision of Business Competition (“Komisi Pengawasan Persaingan Usaha” or “KPPU”) for allegations of SMS cartel practices. As a result of the investigations on June 17, 2008, KPPU found that the Company, Telkomsel and certain other local operators had violated Law No. 5 year 1999 article 5 and charged the Company and Telkomsel penalty in the amounts of Rp18 billion and Rp25 billion, respectively.
Management believes that there are no such cartel practices that led to a breach of prevailing regulations. Accordingly, the Company and Telkomsel filed an appeal with the Bandung District Court and South Jakarta District Court on July 14, 2008 and July 11, 2008, respectively.
107
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
42. CONTINGENCIES (continued)
a. (continued)
Due to the filing of case by operators in various courts, the KPPU subsequently requested the Supreme Court (SC) to consolidate the cases into the Central Jakarta District Court. Based on the SC’s decision letter dated April 12, 2011, the SC appointed the Central Jakarta District Court to investigate and resolve the case.
As of the issuance date of the consolidated financial statements, there has not been any notification on the case from the court.
b. The Company is a defendant in a case filed in Makassar District Court by Andi Jindar Pakki and his affiliates over a landproperty on Jl. A.P. Pettarani. On May 8, 2013, the court pronounced its verdict and ordered the Company to pay fair compensation or to vacate and surrender the disputed land to the plaintiffs.
On May 20, 2013 the Company filed an appeal to the Makassar High Court, objecting to the District Court’s ruling. In December 2013, the Makassar High Court pronounced its verdict that is favorable to the plaintiffs and the Company filed an appeal to the Supreme Court. As of the issuance date of the consolidated financial statements, no decision has been reached on the appeal.
43. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES
Assets and liabilities denominated in foreign currencies are as follows:
|
March 31, 2014 |
|
||||||
|
U.S. dollar (in millions) |
|
Japanese yen (in millions) |
|
Others* (in millions) |
|
Rupiah equivalent (in billions) |
|
Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
395.86 |
|
1.30 |
|
10.94 |
|
4,629 |
|
Temporary investment |
11.78 |
|
0.00 |
|
0.06 |
|
134 |
|
Trade receivables |
|
|
|
|
|
|
|
|
Related parties |
2.21 |
|
0.00 |
|
0.00 |
|
25 |
|
Third parties |
67.45 |
|
0.00 |
|
0.27 |
|
769 |
|
Other receivables |
0.87 |
|
0.00 |
|
0.41 |
|
11 |
|
Advances and other non-current assets |
7.05 |
|
0.00 |
|
0.00 |
|
80 |
|
Total assets |
485.22 |
|
1.30 |
|
11.68 |
|
5,648 |
|
Liabilities |
|
|
|
|
|
|
|
|
Trade payables |
|
|
|
|
|
|
|
|
Related parties |
8.02 |
|
0.00 |
|
0.17 |
|
94 |
|
Third parties |
263.36 |
|
7.83 |
|
2.36 |
|
3,168 |
|
Other payables |
7.85 |
|
0.00 |
|
0.17 |
|
90 |
|
Accrued expenses |
72.30 |
|
624.31 |
|
0.29 |
|
838 |
|
Advances from customers and suppliers |
1.79 |
|
0.00 |
|
0.02 |
|
20 |
|
Current maturities of long-term liabilities |
40.40 |
|
767.90 |
|
0.00 |
|
545 |
|
Promissory notes |
25.71 |
|
0.00 |
|
0.00 |
|
292 |
|
Long-term liabilities - net of current maturities |
95.22 |
|
7,678.98 |
|
0.00 |
|
1,938 |
|
Total liabilities |
514.65 |
|
9,079.02 |
|
3.01 |
|
6,985 |
|
Liabilities - net |
(29.43 |
) |
(9,077.72 |
) |
8.67 |
|
(1,337 |
) |
|
December 31, 2013 |
|
||||||
|
U.S. dollar (in millions) |
|
Japanese yen (in millions) |
|
Others* (in millions) |
|
Rupiah equivalent (in billions) |
|
Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
394.30 |
|
1.23 |
|
11.42 |
|
4,940 |
|
Other current financial assets |
10.78 |
|
- |
|
- |
|
131 |
|
Trade receivables |
|
|
|
|
|
|
|
|
Related parties |
2.44 |
|
- |
|
- |
|
30 |
|
Third parties |
66.27 |
|
- |
|
0.17 |
|
808 |
|
Other receivables |
0.68 |
|
- |
|
0.13 |
|
10 |
|
Advances and other non-current assets |
5.76 |
|
- |
|
- |
|
70 |
|
Total assets |
480.23 |
|
1.23 |
|
11.72 |
|
5,989 |
|
* Assets and liabilities denominated in other foreign currencies are presented as U.S. dollar equivalents using the buy and sell rates quoted by Reuters prevailing at the end of the reporting period.
108
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
43. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES (continued)
|
December 31, 2013 |
|
||||||
|
U.S. dollar (in millions) |
|
Japanese yen (in millions) |
|
Others* (in millions) |
|
Rupiah equivalent (in billions) |
|
Liabilities |
|
|
|
|
|
|
|
|
Trade payables |
|
|
|
|
|
|
|
|
Related parties |
(1.40 |
) |
- |
|
- |
|
(17 |
) |
Third parties |
(275.35 |
) |
- |
|
(4.33 |
) |
(3,409 |
) |
Other payables |
(7.62 |
) |
- |
|
(0.09 |
) |
(94 |
) |
Accrued expenses |
(51.41 |
) |
(18.63 |
) |
(0.01 |
) |
(629 |
) |
Short-term bank loan |
- |
|
- |
|
- |
|
- |
|
Advances from customers and suppliers |
(1.60 |
) |
- |
|
(0.01 |
) |
(20 |
) |
Current maturities of long-term liabilities |
(34.85 |
) |
(767.90 |
) |
- |
|
(514 |
) |
Promissory notes |
(28.67 |
) |
- |
|
- |
|
(349 |
) |
Long-term liabilities - net of current maturities |
(78.82 |
) |
(7,678.98 |
) |
- |
|
(1,850 |
) |
Total liabilities |
(479.72 |
) |
(8,465.51 |
) |
(4.44 |
) |
(6,882 |
) |
Liabilities - net |
0.51 |
|
(8,464.28 |
) |
7.28 |
|
(893 |
) |
* Assets and liabilities denominated in other foreign currencies are presented as U.S. dollar equivalents using the buy and sell rates quoted by Reuters prevailing at the end of the reporting period.
The Company and subsidiaries’ activities expose them to a variety of financial risks, including the effects of changes in debt and equity market prices, foreign currency exchange rates, and interest rates.
If the Company and subsidiaries report monetary assets and liabilities in foreign currencies as of March 31, 2014 using the exchange rates on April 25, 2014, the unrealized foreign exchange gain will increase by Rp63 billion.
44. FINANCIAL RISK MANAGEMENT
1. Financial risk management
The Company and subsidiaries activities expose them 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 program is intended to minimize losses on the financial assets and financial liabilities arising from fluctuation of foreign currency exchange rates and the fluctuation of interest rates. Management has a written policy for foreign currency risk management mainly on time deposit placements and hedging to cover foreign currency risk exposures for periods ranging from 3 up to 12 months.
Financial risk management is carried out by the Corporate Finance unit under policies approved by the Board of Directors. The Corporate Finance unit 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. dollar and Japanese yen. The Company and subsidiaries’ exposures 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 the effects of the exchange rates on time deposits and receivables in foreign currencies that are equal to at least 25% of the outstanding current liabilities.
109
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
44. FINANCIAL RISK MANAGEMENT (continued)
1. Financial risk management (continued)
a. Foreign exchange risk (continued)
The following table presents the Company and subsidiaries’ financial assets and financial liabilities exposure to foreign currency risk:
|
March 31, 2014 |
|
December 31, 2013 |
|
||||
|
U.S. dollar (in billions) |
|
Japanese yen (in billions) |
|
U.S. dollar (in billions) |
|
Japanese yen (in billions) |
|
Financial assets |
0.49 |
|
0.00 |
|
0.48 |
|
0.00 |
|
Financial liabilities |
(0.51 |
) |
(9.08 |
) |
(0.48 |
) |
(8.47 |
) |
Net exposure |
(0.02 |
) |
(9.08 |
) |
0.00 |
|
(8.47 |
) |
Sensitivity analysis
A strengthening of the U.S.dollar and Japanese yen, as indicated below, against the rupiah at March 31, 2014 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.
|
Equity/loss |
|
March 31, 2014 |
|
|
U.S. dollar (1% strengthening) |
(3 |
) |
Japanese yen (5% strengthening) |
(51 |
) |
A weakening of the U.S.dollar and Japanese yen against the rupiah at March 31, 2014 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.
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 andsubsidiaries’ available-for-sale investments is monitored periodically, together with a regular assessment of their relevance to the Company and subsidiaries’ long-term strategic plans.
As of March 31, 2014, management considered the price risk for the Company’s 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.
110
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
44. FINANCIAL RISK MANAGEMENT (continued)
1. Financial risk management (continued)
c. Interest rate risk (continued)
At reporting date, the interest rate profile of the Company and subsidiaries’ interest-bearing borrowings was as follows:
|
March 31, 2014 |
|
December 31, 2013 |
|
Fixed rate borrowings |
(9,557) |
|
(9,591 |
) |
Variable rate borrowings |
(10,081 |
) |
(10,665 |
) |
Sensitivity analysis for variable rate borrowings
At March 31, 2014, a decrease (increase) by 25 basis points in interest rates of variable rate borrowings would have increased (decreased) equity and profit or loss by Rp25 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:
|
March 31, 2014 |
|
December 31, 2013 |
|
Cash and cash equivalents |
20,700 |
|
14,696 |
|
Other current financial assets |
2,655 |
|
6,872 |
|
Trade and other receivables, net |
6,794 |
|
6,421 |
|
Long-term investments |
21 |
|
21 |
|
Advances and other non-current assets |
563 |
|
685 |
|
Total |
30,733 |
|
28,695 |
|
The Company and subsidiaries are exposed to credit risk primarily from trade receivables and other receivables. The credit risk is managed by continuous monitoring of outstanding balances and collection.
Trade and other receivables do not have any major concentration risk whereas no customers. receivablesbalance exceeds 1% of trade receivables at March 31, 2014.
Management is confident in its ability to continue to control and sustain minimal exposure to credit risk given that the Company and subsidiaries have provided sufficient provision for impairment of receivables to cover incurred loss arising from uncollectible receivables based on existing historical data on credit losses.
e. Liquidity risk
Liquidity risk arises in situations where the Company and subsidiaries have difficulties in fulfilling financial liabilities when they become due.
Prudent liquidity risk management implies maintaining sufficient cash in order to meet the Company and subsidiaries’ financial obligations. The Company andsubsidiaries continuously perform an analysis to monitor financial position ratios, such as liquidity ratios, and debt equity ratios, against debt covenant requirements.
111
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
44. FINANCIAL RISK MANAGEMENT (continued)
1. Financial risk management (continued)
e. Liquidity risk (continued)
The following is the maturity profile of the Company and subsidiaries’ financial liabilities:
|
Carrying amount |
|
Contractual cash flows |
|
2014 |
|
2015 |
|
2016 |
|
2017 |
|
2018 and thereafter |
|
March 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
10,444 |
|
(10,444 |
) |
(10,444 |
) |
- |
|
- |
|
- |
|
- |
|
Accrued expenses |
5,488 |
|
(5,488 |
) |
(5,488 |
) |
- |
|
- |
|
- |
|
- |
|
Loans and other borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loans |
9,679 |
|
(11,017 |
) |
(3,609 |
) |
(2,835 |
) |
(1,477 |
) |
(1,170 |
) |
(1,926 |
) |
Obligations under finance leases |
4,847 |
|
(6,664 |
) |
(1,027 |
) |
(667 |
) |
(850 |
) |
(820 |
) |
(3,300 |
) |
Two-step loans |
1,820 |
|
(2,221 |
) |
(289 |
) |
(246 |
) |
(274 |
) |
(265 |
) |
(1,147 |
) |
Bonds and notes |
3,293 |
|
(4,434 |
) |
(536 |
) |
(1,279 |
) |
(218 |
) |
(203 |
) |
(2,198 |
) |
Total |
35,571 |
|
(40,268 |
) |
(21,393 |
) |
(5,027 |
) |
(2,819 |
) |
(2,458 |
) |
(8,571 |
) |
|
Carrying amount |
|
Contractual cash flows |
|
2014 |
|
2015 |
|
2016 |
|
2017 |
|
2018 and thereafter |
|
December 31, 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
11,988 |
|
(11,988 |
) |
(11,988 |
) |
- |
|
- |
|
- |
|
- |
|
Accrued expenses |
5,264 |
|
(5,264 |
) |
(5,264 |
) |
- |
|
- |
|
- |
|
- |
|
Loans and other borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loans |
10,023 |
|
(11,618 |
) |
(5,028 |
) |
(3,264 |
) |
(1,248 |
) |
(980 |
) |
(1,098 |
) |
Obligations under finance leases |
4,969 |
|
(6,904 |
) |
(1,070 |
) |
(885 |
) |
(847 |
) |
(813 |
) |
(3,289 |
) |
Two-step loans |
1,915 |
|
(2,308 |
) |
(292 |
) |
(285 |
) |
(278 |
) |
(271 |
) |
(1,182 |
) |
Bonds and notes |
3,349 |
|
(4,817 |
) |
(582 |
) |
(1,311 |
) |
(215 |
) |
(203 |
) |
(2,506 |
) |
Total |
37,508 |
|
(42,899 |
) |
(24,224 |
) |
(5,745 |
) |
(2,588 |
) |
(2,267 |
) |
(8,075 |
) |
The difference between the carrying amount and the contractual cash flows is interest value.
2. Fair value of financial assets and financial liabilities
a. Fair value measurement
Fair value is the amount for which an asset could be exchanged, or liability settled, between in an arm’s length transaction.
The Company and subsidiaries determined the fair value measurement for disclosure purposes of each class of financial assets and financial liabilities based on the following methods and assumptions:
(i) The fair values of short-term financial assets and financial liabilities with maturities of one year or less (cash and cash equivalents, trade receivables, other receivables, other current assets, trade payables, other payables, dividend payable, accrued expenses, advances from customers and suppliers and short-term bank loans) are considered to approximate their carrying amounts as the impact of discounting is not significant .
112
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
44. FINANCIAL RISK MANAGEMENT (continued)
2. Fair value of financial assets and financial liabilities (continued)
a. Fair value measurement (continued)
(ii) Available-for-sale financial assets primarily consist of shares, mutual funds and Corporate and Government bonds. Shares and mutual funds actively traded in an established market are stated at fair value using quoted market price or, if unquoted, determined using a valuation technique. Corporate and Government bonds are stated at fair value by reference to prices of similar securities at the reporting date.
(iii) The fair values of long-term financial liabilities are estimated by discounting the future contractual cash flows of each liability at rates offered to the Company and subsidiaries for similar liabilities of comparable maturities by the bankers of the Company and subsidiaries, except for bonds which are based on market prices.
The fair value estimates are inherently judgmental and involve various limitations, including:
a. Fair values presented do not take into consideration the effect of future currency fluctuations.
b. Estimated fair values are not necessarily indicative of the amounts that the Company and subsidiaries would record upon disposal/termination of the financial assets and liabilities.
b. Classification and fair value
The following table presents the carrying value and estimated fair values of the Company and subsidiaries' financial assets and liabilities based on their classifications:
|
March 31, 2014 |
| ||||||||||
|
Trading |
|
Loans and receivables |
|
Available for sale |
|
Other financial liabilities |
|
Total carrying amount |
|
Fair value |
|
Cash and cash equivalents |
- |
|
20,700 |
|
- |
|
- |
|
20,700 |
|
20,700 |
|
Other current financial assets |
- |
|
2,385 |
|
- |
|
270 |
|
2,655 |
|
2,655 |
|
Trade and other receivables, net |
- |
|
6,794 |
|
- |
|
- |
|
6,794 |
|
6,794 |
|
Long-term investments |
- |
|
- |
|
21 |
|
- |
|
21 |
|
21 |
|
Advances and other non-current assets |
- |
|
563 |
|
- |
|
- |
|
563 |
|
563 |
|
Total financial assets |
- |
|
30,442 |
|
21 |
|
270 |
|
30,733 |
|
30,733 |
|
Trade and other payables |
- |
|
- |
|
- |
|
10,443 |
|
10,443 |
|
10,443 |
|
Accrued expenses |
- |
|
- |
|
- |
|
5,488 |
|
5,488 |
|
5,488 |
|
Loans and other borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
Short-term bank loans |
- |
|
- |
|
- |
|
477 |
|
477 |
|
477 |
|
Obligations under finance leases |
- |
|
- |
|
- |
|
4,847 |
|
4,847 |
|
4,847 |
|
Two-step loans |
- |
|
- |
|
- |
|
1,820 |
|
1,820 |
|
1,837 |
|
Bonds and notes |
- |
|
- |
|
- |
|
3,292 |
|
3,292 |
|
3,301 |
|
Long-term bank loans |
- |
|
- |
|
- |
|
9,202 |
|
9,202 |
|
9,097 |
|
Total financial liabilities |
- |
|
- |
|
- |
|
35,569 |
|
35,569 |
|
35,490 |
|
|
December 31, 2013 |
| ||||||||||
|
Trading |
|
Loans and receivables |
|
Available for sale |
|
Other financial liabilities |
|
Total carrying amount |
|
Fair value |
|
Cash and cash equivalents |
- |
|
14,696 |
|
- |
|
|
- |
14,696 |
|
14,696 |
|
Other current financial assets |
- |
|
6,600 |
|
272 |
|
|
- |
6,872 |
|
6,872 |
|
Trade and other receivables, net |
- |
|
6,421 |
|
- |
|
|
- |
6,421 |
|
6,421 |
|
Long-term investments |
- |
|
- |
|
21 |
|
|
- |
21 |
|
21 |
|
Advances and other non-current assets |
- |
|
685 |
|
- |
|
|
- |
685 |
|
685 |
|
Total financial assets |
- |
|
28,402 |
|
293 |
|
|
- |
28,695 |
|
28,695 |
|
113
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
44. FINANCIAL RISK MANAGEMENT (continued)
2. Fair value of financial assets and financial liabilities (continued)
b. Classification and fair value (continued)
|
December 31, 2013 |
| ||||||||||
|
Trading |
|
Loans and receivables |
|
Available for sale |
|
Other financial liabilities |
|
Total carrying amount |
|
Fair value |
|
Trade and other payables |
- |
|
- |
|
- |
|
(11,988 |
) |
(11,988 |
) |
(11,988 |
) |
Accrued expenses |
- |
|
- |
|
- |
|
(5,264 |
) |
(5,264 |
) |
(5,264 |
) |
Loans and other borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
Short-term bank loans |
- |
|
- |
|
- |
|
(432 |
) |
(432 |
) |
(432 |
) |
Obligations under finance leases |
- |
|
- |
|
- |
|
(4,969 |
) |
(4,969 |
) |
(4,969 |
) |
Two-step loans |
- |
|
- |
|
- |
|
(1,915 |
) |
(1,915 |
) |
(1,921 |
) |
Bonds and notes |
- |
|
- |
|
- |
|
(3,349 |
) |
(3,349 |
) |
(3,490 |
) |
Long-term bank loans |
- |
|
- |
|
- |
|
(9,591 |
) |
(9,591 |
) |
(9,474 |
) |
Total financial liabilities |
- |
|
- |
|
- |
|
(37,508 |
) |
(37,508 |
) |
(37,538 |
) |
c. Fair value hierarchy
The table below presents the recorded amount of financial assets measured at fair value and limited mutual funds participation unit for debt-based securities where the Net Asset Value (“NAV”) per share of the investments information is not published as explained below:
|
March 31, 2014 |
| ||||||
|
|
|
Fair value measurement at reporting date using |
| ||||
|
Balance |
|
Quoted prices in active markets for identical assets or liabilities (level 1) |
|
Significant other observable inputs (level 2) |
|
Significant unobservable inputs (level 3) |
|
Financial assets |
|
|
|
|
|
|
|
|
Available-for-sale securities |
270 |
|
50 |
|
220 |
|
- |
|
Fair value to profit or loss securities (Note 3) |
297 |
|
- |
|
- |
|
297 |
|
Total |
567 |
|
50 |
|
220 |
|
297 |
|
|
December 31, 2013 |
| ||||||
|
|
|
Fair value measurement at reporting date using |
| ||||
|
Balance |
|
Quoted prices in active markets for identical assets or liabilities (level 1) |
|
Significant other observable inputs (level 2) |
|
Significant unobservable inputs (level 3) |
|
Financial assets |
|
|
|
|
|
|
|
|
Available-for-sale securities |
272 |
|
48 |
|
224 |
|
0 |
|
Fair value to profit or loss securities (Note 3) |
297 |
|
- |
|
- |
|
297 |
|
Total |
569 |
|
48 |
|
224 |
|
297 |
|
114
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
44. FINANCIAL RISK MANAGEMENT (continued)
2. Fair value of financial assets and financial liabilities (continued)
c. Fair value hierarchy (continued)
Available-for-sale financial assets primarily consist of shares, mutual funds and Corporate and Government bonds. Corporate and Government bonds are stated at fair value by reference to prices of similar securities at the reporting date. As they are not actively traded in an established market, these securities are classified as level 2.
Shares and mutual funds actively traded in an established market are stated at fair value using quoted market price and classified within level 1. The valuation of the mutual funds invested in Corporate and Government bonds requires significant management judgment due to the absence of quoted market prices, the inherent lack of liquidity and the long-term nature of such assets. As these investments are subject to restrictions on redemption (such as transfer restrictions and initial lock-up periods) and observable activity for the investments is limited, these investments are therefore classified within level 3 of the fair value hierarchy.
Management considers among other assumptions, the valuation and quoted price of the arrangement of the mutual funds.
Reconciliations of the beginning and ending balance for investment measured at fair value using significant unobservable inputs (level 3) as of March 31, 2014 and 2013 are as follows:
|
2014 |
|
2013 |
|
Balance at January 1 Included in consolidated statement of comprehensive income |
297 |
|
48 |
|
Unrealized loss - recognized in other comprehensive income |
- |
|
(0 |
) |
Balance at March 31 |
297 |
|
48 |
|
45. CAPITAL MANAGEMENT
The capital structure of the Company and subsidiaries is as follows:
|
March 31, 2014 |
|
December 31, 2013 |
| ||||
|
Amount |
|
Portion |
|
Amount |
|
Portion |
|
Short-term debts |
477 |
|
0.57% |
|
432 |
|
0.53% |
|
Long-term debts |
19,161 |
|
22.88% |
|
19,824 |
|
24.54% |
|
Total debts |
19,638 |
|
23,45% |
|
20,256 |
|
25.07% |
|
Equity attributable to owners |
64,109 |
|
76,55% |
|
60,542 |
|
74.93% |
|
Total |
83,747 |
|
100% |
|
80,798 |
|
100.00% |
|
115
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
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 stakeholders and to maintain an optimum capital structure to minimize the cost of capital.
Periodically, the Company conducts debt valuation to assess possibilities of refinancing existing debts with new ones which have more efficient cost that will lead to more optimized cost-of-debt. In case of idle cash with limited investment opportunities, the Company will consider buying back its shares of stock 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 is comparable 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 those of regional area entities in the telecommunications industry.
The Company’s debt to equity ratio as of March 31, 2014 and December 31, 2013 is as follows:
|
March 31, 2014 |
|
December 31, 2013 |
|
Total interest-bearing debts |
19,638 |
|
20,256 |
|
Less cash and cash equivalents |
(20,700 |
) |
(14,696 |
) |
Net debts |
(1,062 |
) |
5,560 |
|
Total equity attributable to owners |
64,019 |
|
60,542 |
|
Net debt to equity ratio |
(1.66%) |
|
9.18% |
|
As stated in Note 19, 20 and 21, the Company is required to maintain a certain debt to equity ratio and debt service coverage ratio by the lenders. During three months period ended March 31, 2014 and for the year ended December 31, 2013, the Company has complied with the externally imposed capital requirements.
46. SUPPLEMENTAL CASH FLOWS INFORMATION
The non-cash investing activities for three months period ended March 31, 2014 and 2013 are as follows:
|
2014 |
|
2013 |
|
Acquisition of property and equipment credited to: |
|
|
|
|
Trade payables |
6,277 |
|
4,776 |
|
Obligations under finance leases |
106 |
|
150 |
|
Non-monetary exchange |
- |
|
40 |
|
Reclassification of fix asset to asset available for sale |
88 |
|
130 |
|
116
These consolidated financial statements are originally issued in Indonesian language.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of March 31, 2014 and for three months period then ended (unaudited)
(Figures in tables are expressed in billions of rupiah, unless otherwise stated)
47. SUBSEQUENT EVENTS
a. Based on Telkom’s Annual General Meeting of shareholders dated April 4, 2014 that stated in notarial resume No. 169 dated April 4, 2014 of Ashoya Ratam, S.H.., MKn., the shareholders resolved amongst other things, to:
i. Declare 2013 cash dividend of Rp7,813 billion or Rp80.5 per share.
ii. Declare special cash dividend of Rp2,131 billion or Rp21.9 per share.
iii. Determination of general reserve of Rp4,261 billion.
iv. Determination of Imam Apriyanto Putro as commissioner.
b. On April 15, 2014, Telkomsel enters into agreement with BCA for bank guarantee facility of Rp150 billion. The facilities will expire on April 15, 2015.
c. On April 15, 2014, Telkomsel amends the loan agreement with BCA which entered in year 2010 for providing additional facility in term of short-term loan revolving facility of Rp1 trillion. The loan facility is fully drawn on April 23, 2014. Borrowing under the facility bears interest at a rate equal to the average rate of the three-month JIBOR plus 2% per annum, which becomes due quarterly in arrears.
On April 22, 2014, Telkomsel enters into short-term loan revolving facility agreement with Citibank for a loan facility of USD100 million. Borrowing under the facility bears interest at a rate equal to LIBOR plus 1.2% per annum, which rate is defined at the draw down date.
117