PT Indosat Tbk and Subsidiaries
Consolidated financial statements
with independent auditors’ report
as of December 31, 2012, December 31, 2011 (restated)
and January 1, 2011 / December 31, 2010 (restated)
and for the years ended December 31, 2012
and 2011 (restated)
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
WITH INDEPENDENT AUDITORS’ REPORT
AS OF DECEMBER 31, 2012, DECEMBER 31, 2011 (RESTATED)
AND JANUARY 1, 2011 / DECEMBER 31, 2010 (RESTATED)
AND FOR THE YEARS ENDED DECEMBER 31, 2012 and 2011 (RESTATED)
Table of Contents
Page
Independent Auditors’ Report
Consolidated Statements of Financial Position
………………………………………………….…….
1 - 4
Consolidated Statements of Comprehensive Income
……………………………………………......
5 - 6
Consolidated Statements of Changes in Equity
…………………………………………………….…..
7
Consolidated Statements of Cash Flows
…………………………………………………………….….
8 - 9
Notes to the Consolidated Financial Statements
…………………………………………………..……
10 - 158
Notes to the Separate Financial Statements of the Parent Entity
….................................................
159 - 168
***************************
This report is originally issued in the Indonesian language.
Independent Auditors’ Report
Report No. RPC-3908/PSS/2013
The Stockholders and the Boards of Commissioners and Directors
PT Indosat Tbk.
We have audited the consolidated statements of financial position of PT Indosat Tbk (the “Company”) and its subsidiaries as of December 31, 2012 and 2011, and January 1, 2011/December 31, 2010, and the related consolidated statements of comprehensive income, changes in equity, and cash flows for the years ended December 31, 2012 and 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards established by the Indonesian Institute of Certified Public Accountants. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred above present fairly, in all material respects, the consolidated financial position of PT Indosat Tbk and its subsidiaries as of December 31, 2012 and 2011, and January 1, 2011/December 31, 2010, and the consolidated results of their operations and their cash flows for the years ended December 31, 2012 and 2011, in conformity with Indonesian Financial Accounting Standards.
As disclosed in Note 2v to the consolidated financial statements, effective January 1, 2012, the Company and its subsidiaries applied Indonesian Statement of Financial Accounting Standards No. 30 (Revised 2011), “Leases”, Indonesian Interpretation of Financial Accounting Standards (“ISAK”) No. 16, “Service Concession Arrangements”, and ISAK No. 22, “Service Concession Arrangements: Disclosures”, on a retrospective basis resulting in the restatement of the consolidated financial statements as of and for the year ended December 31, 2011 and statement of financial position as of January 1, 2011/December 31, 2010.
This report is originally issued in the Indonesian language.
Independent Auditors’ Report (continued)
Report No. RPC-3908/PSS/2013 (continued)
Our audit was conducted for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole. The separate financial statements of the parent entity as of December 31, 2012 and 2011, and for the years then ended, are presented for purposes of additional analysis and are not a required part of the basic consolidated financial statements in accordance with Indonesian Financial Accounting Standards. The separate financial statements of the parent entity referred to above have been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, are fairly stated in all material respects in relation to the consolidated financial statements taken as a whole.
Purwantono, Suherman & Surja
Roy Iman Wirahardja, CPA
Public Accountant Registration No. AP.0699
April 29, 2013
The accompanying financial statements are not intended to present the consolidated financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Indonesia. The standards, procedures, and practices to audit such consolidated financial statements are those generally accepted and applied in Indonesia.
The accompanying notes form an integral part of these consolidated financial statements.
1
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of December 31, 2012, December 31, 2011 (Restated) and
January 1, 2011/December 31, 2010 (Restated)
(Expressed in millions of rupiah, except share data)
December 31,
___________________________________
January 1, 2011 /
Notes
2012
2011
December 31, 2010
(Restated)
(Restated)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
2d,2n,2s,
4,21,31,38
3,917,236
2,224,206
2,075,270
Accounts receivable
2n
Trade
5,21,38
Related parties - net of
allowance for impairment
of Rp42,632 as of
December 31, 2012,
Rp47,107 as of
December 31, 2011
and Rp47,640 as of
January 1, 2011 /
December 31, 2010
2s,31
574,650
318,243
207,289
Third parties - net of
allowance for impairment
of Rp521,998 as of
December 31, 2012,
Rp489,544 as of
December 31, 2011
and Rp448,470 as of
January 1, 2011 /
December 31, 2010
1,464,069
1,181,853
1,328,987
Others - net of allowance
for impairment of
Rp18,748 as of
December 31, 2012,
Rp16,702 as of
December 31, 2011 and
Rp15,281 as of
January 1, 2011 /
December 31, 2010
38
22,441
5,660
10,031
Inventories - net of allowance
for obsolescence of
Rp14,613 as of
December 31, 2012,
Rp18,401 as of
December 31, 2011
and Rp13,961 as of
January 1, 2011 /
December 31, 2010
2e
52,556
75,890
105,885
Derivative assets
2n,20,21,38
69,654
159,349
69,334
Advances
33d,33f
36,057
40,485
28,166
Prepaid taxes
2p,6,42
294,343
30,695
49,903
Prepaid frequency fee and licenses
2f
1,528,215
1,353,819
1,202,009
Prepaid expenses - other
2f,2j,2m,2s,
30,31
335,815
351,833
325,245
Other current financial assets - net
2d,2n,2s,7,
21,31,38
13,382
24,790
53,119
Other current assets
2s
392
742
702
Total Current Assets
8,308,810
5,767,565
5,455,940
PT INDOSAT Tbk AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (continued)
As of December 31, 2012, December 31, 2011 (Restated) and
January 1, 2011/December 31, 2010 (Restated)
(Expressed in millions of rupiah, except share data)
December 31,
___________________________________
January 1, 2011 /
Notes
2012
2011
December 31, 2010
(Restated)
(Restated)
NON-CURRENT ASSETS
Due from related parties - net of
allowance for impairment
of Rp15 as of
December 31, 2012
and December 31, 2011
and Rp646 as of
January 1, 2011 /
December 31, 2010
2n,2s,21,31,38
10,358
10,654
8,421
Deferred tax assets - net
2p,16
100,693
113,812
94,659
Property and equipment - net
2h,2i,2j,2l,8,
18,26
41,964,793
43,505,698
44,062,036
Goodwill and other
intangible assets - net
2c,2i,9
1,373,707
1,366,853
1,374,060
Long-term prepaid rentals -
net of current portion
2f,2s,10
,31
755,237
766,349
750,472
Long-term prepaid licenses -
net of current portion
2f,3a
266,027
331,868
397,708
Long-term advances
2s,11,31,33d,33f
40,994
161,649
213,975
Long-term prepaid pension - net
of current portion
2m,2s,30,31
88,845
103,181
111,344
Long-term receivables
17,959
20,677
45,911
Other non-current financial
2d,2n,2s,12,
assets - net
21,31,33f,38
1,543,140
212,270
150,604
Other non-current assets - net
2g,2s,13,16,
31,42
754,498
872,436
659,998
Total Non-current Assets
46,916,251
47,465,447
47,869,188
TOTAL ASSETS
55,225,061
The accompanying notes form an integral part of these consolidated financial statements.
2
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (continued)
As of December 31, 2012, December 31, 2011 (Restated) and
January 1, 2011/December 31, 2010 (Restated)
(Expressed in millions of rupiah, except share data)
December 31,
___________________________________
January 1, 2011 /
Notes
2012
2011
December 31, 2010
(Restated)
(Restated)
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term loan
2n,2s,14,21
31,38
299,529
1,499,256
-
Accounts payable - trade
2n,2s,21,31,38
Related parties
22,650
23,581
22,260
Third parties
209,087
295,477
623,245
Procurement payable
2n,2s,15,21,
31,38
2,737,850
3,475,862
3,642,002
Taxes payable
2p,16
95,599
91,206
172,512
Accrued expenses
2n,2s,17,21,
31,38
1,961,285
1,895,613
1,796,335
Unearned income
2k,33d,33f,
33g
1,073,088
1,032,415
1,106,610
Deposits from customers
2n,21,38
43,825
37,265
50,279
Derivative liabilities
2n,20,21,38
81,241
138,189
215,403
Current maturities of:
Loans payable
2n,2s,18,21,
31,38
2,669,218
3,300,537
3,184,147
Bonds payable
2n,19,21,38
1,329,175
41,989
1,098,131
Other current financial
2j,2n,2s,21,
liabilities
31,33h,38
289,164
71,828
52,413
Other current liabilities
2s,31,38
204,040
64,849
61,612
Total Current Liabilities
11,015,751
11,968,067
12,024,949
NON-CURRENT LIABILITIES
Due to related parties
2n,2s,21,31,38
42,789
15,480
22,099
Obligations under finance lease
2j,2n,21,33h,38
3,101,910
770,081
416,587
Deferred tax liabilities - net
2j,2p,16
1,684,270
1,956,352
1,792,629
Loans payable - net of current
2n,2s,18,21,
maturities
31,38
Related parties
-
-
997,045
Third parties
3,703,822
6,425,779
6,669,759
Bonds payable - net of current
maturities
2n,19,21,38
13,986,507
12,138,353
12,114,104
Employee benefit obligations -
net of current portion
2m,22
926,224
787,313
872,407
Other non-current financial
2j,2n,2s,21,
liabilities
31,38
69,273
107,433
45,815
Other non-current liabilities
2s,29,31,33d,38
1,299,131
95,054
114,360
Total Non-current Liabilities
24,813,926
22,295,845
23,044,805
TOTAL LIABILITIES
35,829,677
34,263,912
35,069,754
The accompanying notes form an integral part of these consolidated financial statements.
3
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (continued)
As of December 31, 2012, December 31, 2011 (Restated) and
January 1, 2011/December 31, 2010 (Restated)
(Expressed in millions of rupiah, except share data)
December 31,
___________________________________
January 1, 2011 /
Notes
2012
2011
December 31, 2010
(Restated)
(Restated)
EQUITY
EQUITY ATTRIBUTABLE TO
OWNERS OF THE COMPANY
Capital stock - Rp100 par value
per A share and B share
Authorized - 1 A share and
19,999,999,999 B shares
Issued and fully paid - 1 A share
and 5,433,933,499 B shares
23
543,393
543,393
543,393
Premium on capital stock
1,546,587
1,546,587
1,546,587
Retained earnings
Appropriated
134,446
134,446
134,446
Unappropriated
2j
15,846,721
15,889,104
15,244,044
Difference in transactions of
equity changes in associated
companies/subsidiaries
2b,2g
404,104
404,104
404,104
Difference in foreign currency
translation
2b
(3,600)
(2,326
)
(2,727
)
Unrealized changes in fair value of
available-for-sale investment
12
389,718
-
-
Total Equity Attributable to:
Owners of the Company
18,861,369
18,515,308
17,869,847
Non-controlling interests
2b
534,015
453,792
385,527
TOTAL EQUITY
19,395,384
18,969,100
18,255,374
TOTAL LIABILITIES AND EQUITY
55,225,061
53,233,012
53,325,128
PT INDOSAT Tbk AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah, except share data)
Notes
2012
2011
(Restated)
REVENUES
2j,2k,2s,24,
31,35,36,37
Cellular
18,489,329
16,587,385
Multimedia, Data Communication,
Internet (“MIDI”)
2,908,033
2,691,925
Fixed Telecommunications
1,021,450
1,249,982
Total Revenues
22,418,812
20,529,292
EXPENSES
2s,31
Cost of services
2j,2k,25,
33h,33i,33l,35,42
8,905,736
7,547,407
Depreciation and amortization
2h,2j,8,9,37
8,272,824
6,558,177
Personnel
2l,2m,26,
30,42
1,427,194
1,912,647
Marketing
2k
920,296
855,686
General and administration
2k,27,33b,42
625,540
549,530
Gain on sale of towers
8,29,37
(1,183,963
)
-
Gain on foreign exchange - net
2n,20,5,37
(44,793
)
(90,919
)
Others - net
2j,8,12,13,16,
37
305,955
32,455
Net Expenses
19,228,789
17,364,983
OPERATING PROFIT
3,190,023
3,164,309
Interest income
2j,2s,31,37
133,544
92,646
Gain on change in fair value
of derivatives - net
2n,20,37
4,964
57,944
Financing cost
2j,2s,14,18,19,
28,31,37
(2,077,350
)
(1,929,354
)
Loss on foreign exchange - net
2n,2o,37
(789,438
)
(54,188)
Share of loss of associated
companies
(125
)
-
Other Expenses - Net
(2,728,405
)
(1,832,952
)
PROFIT BEFORE INCOME TAX
461,618
1,331,357
INCOME TAX BENEFIT (EXPENSE)
Current
2p,16,37
(234,429
)
(120,177
)
Deferred
2j
260,227
(144,436
)
Income Tax Benefit (Expense) - Net
25,798
(264,613
)
PROFIT FOR THE YEAR
487,416
1,066,744
The accompanying notes form an integral part of these consolidated financial statements.
4
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (continued)
Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah, except share data)
Notes
2012
2011
(Restated)
OTHER COMPREHENSIVE INCOME
Difference in foreign currency translation
2b
(36
)
534
Income tax effect
(1,238
)
(133
)
Unrealized changes in fair value of available-
for-sale
investment
12
389,718
-
Net
388,444
401
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR
875,860
1,067,145
PROFIT FOR THE YEAR
ATTRIBUTABLE TO:
Owners of the Company
375,106
968,653
Non-controlling interests
2b
112,310
98,091
Total
487,416
1,066,744
OTHER COMPREHENSIVE INCOME -
NET OF TAX ATTRIBUTABLE TO:
Owners of the Company 388,444 401
Non-controlling interests
2b
-
-
Total
388,444
401
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR ATTRIBUTABLE TO:
Owners of the Company
763,550
969,054
Non-controlling interests
112,310
98,091
Total
875,860
1,067,145
BASIC AND DILUTED EARNINGS PER SHARE
ATTRIBUTABLE TO OWNERS
OF THE COMPANY
2r,23
69.03
178.26
BASIC AND DILUTED EARNINGS PER ADS
(50 SHARES PER ADS)
ATTRIBUTABLE TO OWNERS
OF THE COMPANY
2r,23
3,451.51
8,913.00
The accompanying notes form an integral part of these consolidated financial statements.
7
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah)
|
|
|
|
| Equity Attributable to Owners of the Company |
|
|
|
| ||||||||||||||||
Description |
| Notes |
| Capital Stock - Issued and Fully Paid |
| Premium of Capital Stock |
| Retained Earnings |
| Difference in Transactions of Equity Changes in Associated Companies/Subsidiaries | Difference in Foreign Currency Translation | Total | Non-controlling Interests | Total Equity | |||||||||||
|
|
|
| Appropriated |
| Unappropriated |
|
| Unrealized Changes in Fair Value of Available-for- Sale investment |
|
|
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Balance as of January 1, 2011 (previously reported) |
|
|
| 543,393 |
| 1,546,587 |
| 134,446 |
| 15,224,843 |
| 404,104 |
| (2,727) | - |
| 17,850,646 |
| 385,840 |
| 18,236,486 | ||||
Retrospective application of new accounting policy | 2v | - | - | - | 19,201 | - | - | - | 19,201 | (313) | 18,888 | ||||||||||||||
Balance as of January 1, 2011 (restated) | 543,393 | 1,546,587 | 134,446 | 15,244,044 | 404,104 | (2,727) | - | 17,869,847 | 385,527 | 18,255,374 | |||||||||||||||
Difference in foreign currency translation arising from the translation of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| the financial statements of Indosat Finance Company B.V. and Indosat International Finance Company B.V. from euro, and Indosat Palapa Company B.V. and Indosat Singapore Pte. Ltd. from U.S. dollar to rupiah - net of applicable income tax benefit (expense) of Rp108, Rp38, Rp87 and (Rp366), respectively |
| 2b |
| - |
| - |
| - |
| - |
| - |
| 401 |
| - |
| 401 |
| - |
| 401 | ||
Resolution during the Annual Stockholders’ General Meeting on June 24, 2011 |
|
| |||||||||||||||||||||||
Declaration of cash dividend | 32 | - | - | - | (323,593)) | - | - | - | (323,593) | - | (323,593) | ||||||||||||||
Profit for the year |
|
|
| - |
| - |
| - |
| 968,653 |
| - |
| - | - |
| 968,653 |
| 98,091 |
| 1,066,744 | ||||
Changes in non-controlling interests |
|
|
| - |
| - |
| - |
| - |
| - |
| - | - |
| - |
| (29,826) |
| (29,826) | ||||
Balance as of December 31, 2011 (restated) |
|
|
| 543,393 |
| 1,546,587 |
| 134,446 |
| 15,889,104 |
| 404,104 |
| (2,326) | - |
| 18,515,308 |
| 453,792 |
| 18,969,100 | ||||
Balance as of January 1, 2012 (previously reported) |
|
|
| 543,393 |
| 1,546,587 |
| 134,446 |
| 15,736,227 |
| 404,104 |
| (2,326) | - | 18,362,431 |
| 453,542 |
| 18,815,973 | ||||
Retrospective application in applying new accounting policy | 2v | - | - | - | 152,877 | - | - | - | 152,877 | 250 | 153,127 | |||||||||||||
Balance as of January 1, 2012 (restated) | 543,393 | 1,546,587 | 134,446 | 15,889,104 | 404,104 | (2,326) | - | 18,515,308 | 453,792 | 18,969,100 | ||||||||||||||
Difference in foreign currency translation arising from the translation of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| the financial statements of Indosat Finance Company B.V. and Indosat International Finance Company B.V. from euro to rupiah - net of applicable income tax expense of Rp460 and Rp180, respectively, and Indosat Palapa Company B.V. and Indosat Singapore Pte. Ltd. from U.S. dollar to rupiah |
| 2b |
| - |
| - |
| - |
| - |
| - |
| (1,274) | - | (1,274) |
| - |
| (1,274) | |||
Unrealized changes in fair value of available-for-sale investment | 12 | - | - | - | - | - | - | 389,718 | 389,718 | - | 389,718 | |||||||||||||
Resolution during the Annual Stockholders’ General Meeting on May 14, 2012 |
| |||||||||||||||||||||||
Declaration of cash dividend | 32 | - | - | - | (417,489) | - | - | - | (417,489) | - | (417,489) | |||||||||||||
Profit for the year |
|
|
| - |
| - |
| - |
| 375,106 |
| - |
| - | - | 375,106 |
| 112,310 |
| 487,416 | ||||
Changes in non-controlling interests |
|
|
| - |
| - |
| - |
| - |
| - |
| - | - | - |
| (32,087) |
| (32,087) | ||||
Balance as of December 31, 2012 |
|
|
| 543,393 |
| 1,546,587 |
| 134,446 |
| 15,846,721 |
| 404,104 |
| (3,600) | 389,718 | 18,861,369 |
| 534,015 |
| 19,395,384 | ||||
The accompanying notes form an integral part of these consolidated financial statements.
8
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2012 and 2011
(Expressed in millions of rupiah)
Notes
2012
2011
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from:
Customers
21,960,377
20,620,790
Refunds of taxes
179,478
141,271
Interest income
131,804
81,336
Settlement from currency forward contracts
20ae-cj
116,147
55,371
Settlement from currency swap contracts
20a-k,z-ad
34,410
20,626
Cash paid to/for:
Authorities, other operators, suppliers and others
(11,607,302
)
(9,102,182
)
Financing cost
(2,026,450
)
(1,739,810
)
Employees
(1,252,470
)
(2,003,642)
Income taxes
(424,538
)
(563,320
)
Interest rate swap contracts
20q-ad
(82,306
)
(119,521)
Swap cost from cross currency swap contracts
20c-f,h-o
(39,697
)
(70,838)
Net Cash Provided by Operating Activities
6,989,453
7,320,081
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and equipment
8,29
3,100,109
6,708
Acquisitions of property and equipment
8
(5,765,942
)
(6,047,958)
Acquisitions of intangible assets
9
(23,073
)
(10,452
)
Cash dividend received from other long-term
investment
-
13,790
Net Cash Used in Investing Activities
(2,688,906)
(6,037,912
)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bonds payable
19
3,000,000
-
Proceeds from long-term loans
18
1,700,000
2,322,900
Proceeds from short-term loan
14
700,000
1,500,000
Repayment of long-term loans
18
(5,455,925
)
(3,505,063
)
Repayment of short-term loans
14
(1,900,000
)
-
Cash dividend paid by the Company
32
(417,489
)
(323,591
)
Repayment of bonds payable
19
(241,989
)
(1,100,000)
Cash dividend paid by subsidiaries
to non-controlling interests
(32,085
)
(29,692)
Net Cash Used in Financing Activities
(2,647,488
)
(1,135,446
)
Net Foreign Exchange Differences
from Cash and Cash Equivalents
39,971
2,213
NET INCREASE IN CASH AND CASH EQUIVALENTS
1,693,030
148,936
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR
2,224,206
2,075,270
CASH AND CASH EQUIVALENTS AT
END OF YEAR
4
3,917,236
2,224,206
The accompanying notes form an integral part of these consolidated financial statements.
9
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
Years Ended December 31, 2012 and 2011
(Expressed in millions of rupiah)
Notes
2012
2011
DETAILS OF CASH AND CASH EQUIVALENTS:
4
Time deposits with original maturities
of three months or less and deposits on call
3,493,467
1,919,227
Cash on hand and in banks
423,769
304,979
Cash and cash equivalents as stated in the
consolidated statement of financial position
3,917,236
2,224,206
10
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
1.
GENERAL
a.
Company’s Establishment
PT Indosat Tbk (“the Company”) was established in the Republic of Indonesia on November 10, 1967 within the framework of the Indonesian Foreign Investment Law No. 1 of 1967 based on the notarial deed No. 55 of Mohamad Said Tadjoedin, S.H. The deed of establishment was published in Supplement No. 24 of State Gazette No. 26 dated March 29, 1968 of the Republic of Indonesia. In 1980, the Company was sold by American Cable and Radio Corporation, an International Telephone & Telegraph subsidiary, to the Government of the Republic of Indonesia (“the Government”) and became a State-owned Company (Persero).
On February 7, 2003, the Company received the approval from the Capital Investment Coordinating Board (“BKPM”) in its letter No. 14/V/PMA/2003 for the change of its legal status from a State-owned Company (Persero) to a Foreign Capital Investment Company. Subsequently, on March 21, 2003, the Company received the approval from the Ministry of Justice and Human Rights of the Republic of Indonesia on the amendment of its Articles of Association to reflect the change in its legal status.
The Company’s Articles of Association has been amended from time to time. The latest amendment was covered by notarial deed No. 123 dated January 28, 2010 of Aulia Taufani, S.H. (as a substitute notary of Sutjipto, S.H.), as approved in the Stockholders’ Extraordinary General Meeting held on January 28, 2010, in order to comply with the Indonesian Capital Market and Financial Institutions Supervisory Agency (“BAPEPAM-LK”) Rule No. IX.J.1 dated May 14, 2008 on the Principles of Articles of Association of Limited Liability Companies that Conduct Public Offering of Equity Securities and Public Companies and Rule No. IX.E.1 on Affiliate Transactions and Certain Conflict of Interests Transactions. The latest amendment of the Company’s Articles of Association has been approved by, and reported to, the Ministry of Law and Human Rights of the Republic of Indonesia based on its letters No. AHU-09555.AH.01.02 Year 2010 dated February 22, 2010 and No. AHU-AH.01.10-04964 dated February 25, 2010. The amendments relate to, among other matters, the changes in the Company’s purposes, objectives and business activities, appointment of acting President Director if the incumbent President Director is unavailable and definition of conflict of interests.
According to article 3 of its Articles of Association, the Company’s purposes and objectives are
to provide telecommunications networks, telecommunications services as well as information technology and/or convergence technology services by carrying out the following main business activities:
a.
To provide telecommunications networks, telecommunications services as well as information technology and/or convergence technology services, including but not limited to providing basic telephony services, multimedia services, internet telephony services, network access point service, internet services, mobile telecommunications networks and fixed telecommunications networks; and
b.
To engage in payment transactions and money transfer services through telecommunications networks as well as information technology and/or convergence technology.
The Company can provide supporting business activities in order to achieve the purposes and objectives, and to support its main businesses, as follows:
a.
To plan, to procure, to modify, to build, to provide, to develop, to operate, to lease, to rent, and to maintain infrastructures/facilities including resources to support the Company’s business in providing telecommunications networks, telecommunications services as well as information technology and/or convergence technology services;
11
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
1.
GENERAL (continued)
a.
Company’s Establishment (continued)
b.
To conduct business and operating activities (including development, marketing and sales of telecommunications networks, telecommunications services as well as information technology and/or convergence technology services by the Company), including research, customer services, education and courses (both domestic and overseas); and
c.
To conduct other activities necessary to support and/or related to the provision of telecommunications networks, telecommunications services as well as information technology and/or convergence technology services including, but not limited to, electronic transactions and provision of hardware, software, content as well as telecommunications-managed services.
The Company started its commercial operations in 1969.
For the years ended December 31, 2010, 2011 and 2012, the Company had performed all main and supporting business activities as stated in its Articles of Association.
Based on Law No. 3 of 1989 on Telecommunications and pursuant to Government Regulation No. 77 of 1991, the Company had been re-confirmed as an Operating Body (“Badan Penyelenggara”) that provided international telecommunications services under the authority of the Government.
In 1999, the Government issued Law No. 36 on Telecommunications (“Telecommunications Law”) which took effect on September 8, 2000. Under the Telecommunications Law, telecommunications activities cover:
·
Telecommunications networks
·
Telecommunications services
·
Special telecommunications services
National state-owned companies, regional state-owned companies, privately-owned companies and cooperatives are allowed to provide telecommunications networks and services. Individuals, government institutions and legal entities, other than telecommunications networks and service providers, are allowed to render special telecommunications services.
The Telecommunications Law prohibits activities that result in monopolistic practices and unhealthy competition and expects to pave the way for market liberalization.
Based on the Telecommunications Law, the Company ceased as an Operating Body and has to obtain licenses from the Government for the Company to engage in the provision of specific telecommunications networks and services.
On August 14, 2000, the Government, through the Ministry of Communications (“MOC”), granted the Company an in-principle license as a nationwide Digital Communication System (“DCS”) 1800 telecommunications provider as compensation for the early termination effective August 1, 2003 of the exclusivity rights on international telecommunications services given to the Company prior to the granting of such license. On August 23, 2001, the Company obtained the operating license from the MOC. Subsequently, based on Decree No. KP.247 dated November 6, 2001 issued by the MOC, the operating license was transferred to the Company’s subsidiary, PT Indosat Multi Media Mobile (see “e” below).
12
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
1.
GENERAL (continued)
a.
Company’s Establishment (continued)
On September 7, 2000, the Government, through the MOC, also granted the Company in-principle licenses for local and domestic long-distance telecommunications services as compensation for the termination of its exclusivity rights on international telecommunications services. On the other hand, PT Telekomunikasi Indonesia Tbk (“Telkom”) was granted an in- principle license for international telecommunications services as compensation for the early termination of Telkom’s rights on local and domestic long-distance telecommunications services.
Based on a letter dated August 1, 2002 from the MOC, the Company was granted an operating license for fixed local telecommunications network covering Jakarta and Surabaya. This operating license was converted to become a national license on April 17, 2003 based on Decree No. KP.130 Year 2003 of the MOC. The values of the above licenses granted to Telkom and the Company on the termination of their exclusive rights on local/domestic and international telecommunications services, respectively, have been determined by an independent appraiser.
The following are operating licenses obtained by the Company and PT Indosat Mega Media,
a subsidiary:
License No. | Date Issued | Issuing Body | Period of License | Description |
19/KEP/M.KOMINFO/ 02/2006 and 29/KEP/M.KOMINFO/ 03/2006 | February 14, 2006 and March 27, 2006 | Ministry of Communications and Information Technology (“MOCIT”) | 10 years | Determination of the winner and operating license for IMT-2000 cellular network provider using 2.1 GHz radio frequency spectrum (a third generation [“3G”] mobile communications technology) for 1 block (2 x 5 Mhz) of frequency (*) |
504/KEP/M.KOMINFO/ 08/2012 | August 31, 2012 | MOCIT | Evaluated every 5 years | Amended Indosat’s Mobile Celluler License which allows Indosat to deploy 3rd Generation Partnership Project (3G system) at 900 MHz spectrum band. The Ministerial Decree replaces Indosat’s previous licenses No.252/KEP/M.KOMINFO/07/2011 and 102/KEP/M.KEMINFO/10/2006. |
252/KEP/ M.KOMINFO/07/2011 (previously 102/KEP/M.KOMINFO/ 10/2006) | July 6, 2011 | MOCIT | Evaluated every 5 years | Amended operating license for nationwide GSM cellular mobile network (including its basic telephony services and the rights and obligations relating to 3G services), which replaces the previous license No. 102/KEP/M.KOMINFO/10/2006 dated October 11, 2006 |
181/KEP/M.KOMINFO/ 12/2006 | December 12, 2006 | MOCIT | - | Allocation of two nationwide frequency channels, i.e., channels 589 and 630 in the 800 MHz spectrum for Local Fixed Wireless Network Services with Limited Mobility |
01/DIRJEN/2008 | January 7, 2008 | Directorate General of Post and Telecommunications (“DGPT”) | Evaluated every 5 years | Operating license as internet service provider |
51/DIRJEN/2008 | January 9, 2008 | DGPT | Evaluated every 5 years | Operating license for internet interconnection services (Network Access Point/NAP), which replaces the previous license given to |
(
(*) As one of the winners in the selection of IMT-2000 cellular providers, the Company was obliged to, among others, pay upfront fee of Rp320,000 (Note 3a) and radio frequency fee (Note 33i).
1.
GENERAL (continued)
a.
Company’s Establishment (continued)
License No. | Date Issued | Issuing Body | Period of License | Description |
52/DIRJEN/2008 | January 9, 2008 | DGPT | Evaluated every 5 years | Operating license for telephony internet services which replaces the previous license No. 823/DIRJEN/2002 for Voice over Internet Protocol Service with national coverage that expired in 2007 |
237/KEP/M.KOMINFO/7/2009 | July 27, 2009 | MOCIT | 10 years | Operating license for “Packet Switched” local fixed telecommunications network using 2.3 GHz radio frequency spectrum of Broadband Wireless Access (BWA) (**) |
268/KEP/M.KOMINFO/9/2009 | September 1, 2009 | MOCIT | 10 years | Operating license for one additional block (2 x 5 Mhz) of 3G frequency (***) |
198/KEP/M.KOMINFO/05/2010 | May 27, 2010 | MOCIT | Evaluated every 5 years | Amended operating license for nationwide closed fixed communications network (e.g.,VSAT, frame relay, etc.), which replaces the previous license No.KP.69/Thn 2004 given to the Company |
311/KEP/M.KOMINFO/8/2010 312/KEP/M.KOMINFO/8/2010 and 313/KEP/M.KOMINFO/8/2010 | August 24, 2010 | MOCIT | Evaluated every 5 years | Amended operating license for fixed network and basic telephony service which covers the provision of local, national long-distance, and international long-distance telephony services, which replaces the previous license No. KP.203/Thn 2004 given to the Company |
(**)
PT Indosat Mega Media was obliged to, among others, pay upfront fee of Rp18,408 (Note 3a) and radio frequency fee (Note 33i).
(***)
The Company was obliged to, among others, pay upfront fee of Rp320,000 (Note 3a) and radio frequency fee (Note 33i).
On January 9, 2008, based on letter No. 10/14/DASP from Bank Indonesia (Central Bank), the Company obtained approval for“Indosat m-wallet” prepaid cards as a new means of making payments to certain merchants. The Company was also appointed as a special principal and technical acquirer for such prepaid cards. On November 19, 2009, the Company launched“Indosat m-wallet”to the public.
On March 17, 2008, the MOCIT issued Ministerial Decree No. 02/PER/M.KOMINFO/2008 on the Guidelines of Construction and Utilization of Sharing Telecommunications Towers. Based on this Decree, the construction of telecommunications towers requires permits from the relevant governmental institution and the local government determines the placement of the towers and the location in which the towers can be constructed. Furthermore, a telecommunications provider or tower provider which owns telecommunications towers is obliged to allow other telecommunications operators to utilize its telecommunications towers without any discrimination. The Decree also mandates that each of the tower contractor, provider and owner be 100% locally owned companies.
On March 30, 2009, the Ministry of Domestic Affairs, Ministry of Public Works, MOCIT and Head of BKPM jointly issued Decrees No. 18 Year 2009, No. 07/PRT/M/2009, No. 19/PER/M.KOMINFO/03/09 and No. 3/P/2009 on the Detailed Guidelines of Construction and Utilization of Sharing Telecommunications Towers. The Decrees define the requirements and procedures for tower construction. A tower provider can be either a telecommunications operator or a non-telecommunications operator. If a tower provider is a non-telecommunications operator, it is required to be a 100% locally owned company.
1.
GENERAL (continued)
a.
Company’s Establishment (continued)
On September 3, 2010, based on letter No. 12/67/DASP/25 from Bank Indonesia (Central Bank), the Company obtained approval to become a “money remittance provider”to customers in the local and international markets.
On December 13, 2010, based on letter No. 2619/BSN/D3-d3/12/2010 from the Badan Standardisasi Nasional (National Standardization Bureau), the Company obtained Issuer Identification Number (IIN) on its applications for“Indosat m-wallet” and“money remittance”. On March 23, 2011, the President of the Republic of Indonesia issued Regulation orPeraturan Pemerintah (“PP”) No. 3 year 2011 regarding money remittance. This regulation becomes the operational guidance for the Company as a “money remittance provider”.
The Company is domiciled at Jalan Medan Merdeka Barat No. 21, Jakarta and has 2 regional offices located in Jakarta and Medan.
Qatar Telecom QSC, Qatar (“Qatar Telecom”) is the ultimate parent company of the Company and subsidiaries. The immediate parent company of the Group is Qatar Telecom (Qtel Asia) Pte. Ltd., Singapore.
b.
Company’s Public Offerings
On September 23, 1994, the Company obtained the effective statement from the Capital Market Supervisory Agency (“BAPEPAM”) to conduct the initial public offering in the Jakarta Stock Exchange through BAPEPAM Letter No S-1656/PM/1994 and in the New York Stock Exchange of its 362,425,000 B shares, consisting of 22,510,870 American Depositary Shares (ADS, each representing 10 B Shares) and 103,550,000 B shares from the divestment of the B shares owned by the Government. The Company’s B shares and ADS have been registered in the Indonesia Stock Exchange (new entity after the merger of the Jakarta Stock Exchange and the Surabaya Stock Exchange in November 2007) and New York Stock Exchange since October 19, 1994.
Based on a resolution at the Company’s Extraordinary General Meeting held on March 8, 2004, the stockholders approved to split the nominal value of the Company’s B shares from Rp500 to Rp100 resulting in the increase in the number of authorized shares from 4,000,000,000 to 20,000,000,000 shares and in the number of issued and fully paid shares from 1,035,500,000 to 5,177,500,000 shares.
During the period August 1, 2004 to December 31, 2006, the Company had issued additional 256,433,500 B shares in connection with the exercise of its Employee Stock Option Program (“ESOP”) Phase I and II. The ESOP program was approved in the Company’s Stockholders’ Annual General Meeting held on June 26, 2003.
As of December 31, 2012, the outstanding bonds issued to the public by the Company and a subsidiary are as follows:
Bond (Note 19) | Effective Date | Registered with and Traded on: |
1. Fifth Indosat Bonds in Year 2007 with Fixed Rates | May 29, 2007 | Indonesia Stock Exchange |
2. Indosat Sukuk Ijarah II in Year 2007 | May 29, 2007 | Indonesia Stock Exchange |
3. Sixth Indosat Bonds in Year 2008 with Fixed Rates | April 9, 2008 | Indonesia Stock Exchange |
4. Indosat Sukuk Ijarah III in Year 2008 | April 9, 2008 | Indonesia Stock Exchange |
5. Seventh Indosat Bonds in Year 2009 with Fixed Rates | December 8, 2009 | Indonesia Stock Exchange |
6. Indosat Sukuk Ijarah IV in Year 2009 | December 8, 2009 | Indonesia Stock Exchange |
7. Guaranteed Notes Due 2020 | July 29, 2010 | Singapore Exchange Securities Trading Limited |
8. Eighth Indosat Bonds in Year 2012 | June 27, 2012 | Indonesia Stock Exchange |
9. Indosat Sukuk Ijarah V in Year 2012 | June 27, 2012 | Indonesia Stock Exchange |
1.
GENERAL (continued)
c.
Directors, Commissioners and Audit Committee
Based on resolutions of the Stockholders’ Extraordinary General Meeting and the Stockholders’ Annual General Meetings held on September 17, 2012, May 14, 2012, June 24, 2011 and June 22, 2010 which are notarized under Deeds No. 5 and No. 72 of Aryanti Artisari S.H., M.Kn., and No. 148 and No. 164, respectively, of Aulia Taufani, S.H. (as substitute notary of Sutjipto, S.H.) on the same dates, the composition of the Company’s Board of Commissioners and Board of Directors as of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010, respectively, is as follows:
December 31, 2012 | December 31, 2011 | January 1, 2011 / December 31, 2010 | ||||
Board of Commissioners: | ||||||
President Commissioner | Abdulla Mohammed S.A Al Thani | Abdulla Mohammed S.A Al Thani | Abdulla Mohammed S.A Al Thani | |||
Commissioner | Dr. Nasser Mohd. A. Marafih | Dr. Nasser Mohd. A. Marafih | Dr. Nasser Mohd. A. Marafih | |||
Commissioner | Rachmad Gobel | Rachmad Gobel | Rachmad Gobel | |||
Commissioner | Richard Farnsworth Seney* | Richard Farnsworth Seney | Richard Farnsworth Seney | |||
Commissioner | Rionald Silaban | Rionald Silaban | Rionald Silaban | |||
Commissioner | Rudiantara* | Alexander Rusli* | Alexander Rusli* | |||
Commissioner | Chris Kanter* | Chris Kanter* | Chris Kanter* | |||
Commissioner | Thia Peng Heok George* | Thia Peng Heok George* | Thia Peng Heok George* | |||
Commissioner | Soeprapto* | Soeprapto* | Soeprapto* | |||
Commissioner | Beny Roelyawan | - | Jarman | |||
*
Independent Commissioner
13
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
1.
GENERAL (continued)
c.
Directors, Commissioners and Audit Committee (continued)
December 31, 2012 | December 31, 2011 | January 1, 2011/ December 31, 2010 | |||||||
Board of Directors: | |||||||||
President Director and Chief Executive Officer | Alexander Rusli | Harry Sasongko Tirtotjondro | Harry Sasongko Tirtotjondro | ||||||
Director and Chief Financial Officer | Curt Stefan Carlsson | Curt Stefan Carlsson | Peter Wladyslaw Kuncewicz | ||||||
Directorand Chief Commercial Officer | Frederik Johannes Meijer | Laszlo Imre Barta | Laszlo Imre Barta | ||||||
Directorand Chief Technology Officer | Hans Christiaan Moritz | Hans Christiaan Moritz | Stephen Edward Hobbs | ||||||
Directorand Chief Wholesale and Infrastructure Officer
| Fadzri Sentosa | Fadzri Sentosa | Fadzri Sentosa | ||||||
The composition of the Company’s Audit Committee as of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010 is as follows:
December 31, 2012 | December 31, 2011 and January 1, 2011 / December 31, 2010 | |||
Chairman | Thia Peng Heok George | Thia Peng Heok George | ||
Member | Chris Kanter | Chris Kanter | ||
Member | Richard Farnsworth Seney | Soeprapto | ||
Member | Unggul Saut Marupa Tampubolon | Unggul Saut Marupa Tampubolon | ||
Member | Kanaka Puradiredja | Kanaka Puradiredja |
The Company and subsidiaries (collectively referred to hereafter as “the Group”) have approximately 4,540, 4,461 and 6,694 employees (unaudited), including non-permanent employees, as of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010, respectively.
14
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
1.
GENERAL (continued)
d.
Structure of the Company’s Subsidiaries
As of December 31, 2012 and 2011 and January 1, 2011/December 31, 2010, the Company has direct and indirect ownership in the following subsidiaries:
Name of Subsidiary | Location | Principal Activity | Start of Commercial Operations | |||||||||||
Percentage of Ownership (%) December 31, 2012 and 2011 | Percentage of Ownership (%) January 1, 2011/ December 31, 2010 | |||||||||||||
Indosat Palapa Company B.V. (“IPBV”)(1) | Amsterdam | Finance | 2010 | 100.00 | 100.00 | |||||||||
Indosat Mentari Company B.V. (“IMBV”)(1) | Amsterdam | Finance | 2010 | 100.00 |
| 100.00 | ||||||||
Indosat Finance Company B.V. (“IFB”) | Amsterdam | Finance | 2003 | 100.00 | 100.00 | |||||||||
Indosat International Finance Company B.V. (“IIFB”) | Amsterdam | Finance | 2005 | 100.00 | 100.00 | |||||||||
Indosat Singapore Pte. Ltd. (“ISPL”) | Singapore | Telecommunication | 2005 | 100.00 | 100.00 | |||||||||
PT Indosat Mega Media (“IMM”) | Jakarta | Multimedia | 2001 | 99.85 | 99.85 | |||||||||
PT Interactive Vision Media (“IVM”)(2) | Jakarta | Pay TV | 2011 | 99.83 | - | |||||||||
PT Starone Mitra Telekomunikasi (“SMT”) | Semarang | Telecommunication | 2006 | 72.54 | 72.54 | |||||||||
PT Aplikanusa Lintasarta (“Lintasarta”) | Jakarta | Data Communication | 1989 | 72.36 | 72.36 | |||||||||
PT Lintas Media Danawa (“LMD”) (3) | Jakarta | Information and Communication Services | 2008 | 50.65 | 50.65 | |||||||||
PT Artajasa Pembayaran Elektronis (“APE”)(3) | Jakarta | Telecommunication | 2000 | 39.80 | 39.80 | |||||||||
Total Assets (Before Eliminations)
January 1, 2011/
December 31,
December 31,
December 31,
Name of Subsidiary
2012
2011
2010
IPBV(1)
6,442,367
6,015,894
5,966,764
IMBV(1)
6,436,524
6,010,359
5,946,885
IFB
21,963
20,923
21,876
IIFB
8,853
8,688
9,635
ISPL
99,519
78,264
54,353
IMM
813,308
746,404
815,130
IVM
(2)
5,448
5,198
-
SMT
250,856
209,651
155,297
Lintasarta
2,041,724
1,783,759
1,739,896
LMD(3)
4,026
5,199
2,671
APE(3)
371,603
258,745
221,297
(1)
IPBV and IMBV were incorporated in Amsterdam on April 28, 2010 to engage in treasury activities, to lend and borrow money, whether in the form of securities or otherwise, to finance enterprises and companies, and to grant security in respect of their respective obligations or those of their group companies and third parties.
(2)
IVM, a subsidiary of IMM, was established on April 21, 2009 to engage in Pay TV services. IMM made capital injections to IVM on March 9 and 30, 2011 totalling Rp4,999. On July 12, 2011, IVM obtained the license to conduct its Pay TV services. However, as of December 31, 2012, IVM has not started its commercial operations.
(3)
Lintasarta has direct 55% and 70% ownership in APE and LMD, respectively.
15
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
1.
GENERAL (continued)
e.
Merger of the Company, Satelindo, Bimagraha and IM3
Based on Merger Deed No. 57 dated November 20, 2003 (“merger date”) of Poerbaningsih Adi Warsito, S.H., the Company, Satelindo, PT Bimagraha Telekomindo (“Bimagraha”) and PT Indosat Multi Media Mobile (“IM3”) agreed to merge, with the Company as the surviving entity. All assets and liabilities owned by Satelindo, Bimagraha and IM3 were transferred to the Company on the merger date. These three companies were dissolved by operation of law without the need to undergo the regular liquidation process.
The names “Satelindo” and “IM3” in the following notes refer to these entities before they were merged with the Company, or as the entities that entered into contractual agreements that were taken over by the Company as a result of the merger.
f.
Approval and Authorization for the Issuance of Consolidated Financial Statements
The issuance of the consolidated financial statements of the Group as of December 31, 2012 and for the year then ended with comparative figures as of December 31, 2011 and January 1, 2011/ December 31, 2010 and for the year ended December 31, 2011 was approved and authorized by the Board of Directors on April 29, 2013, as reviewed and recommended for approval by the Audit Committee.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a.
Basis of Presentation of the Consolidated Financial Statements
The consolidated financial statements have been prepared in accordance with Indonesian Financial Accounting Standards which comprise the Statements and Interpretations issued by the Financial Accounting Standards Board of the Indonesian Institute of Accountants (“DSAK”) and the Regulations No. VIII.G.7 of the Guidelines on Financial Statement Presentation and Disclosures issued by the BAPEPAM-LK and Decision Letter No. KEP-347/BL/2012 of the Chief of the BAPEPAM-LK regarding “Financial Statements Presentation and Disclosure for Issuers or Public Companies”. As disclosed further in the relevant succeeding notes to the consolidated financial statements, several amended and new and published accounting standards and interpretations were adopted effective January 1, 2012.
The consolidated financial statements are prepared in accordance with Statement of Financial Accounting Standards (“PSAK”) 1 (Revised 2009), “Presentation of Financial Statements”.
The consolidated financial statements have been except for the consolidated statement of cash flows, are prepared on the accrual basis using the historical cost concept of accounting, except as disclosed in the relevant notes herein.
The consolidated statement of cash flows, which has been prepared using the direct method, presents receipts and disbursements of cash and cash equivalents classified into operating, investing and financing activities.
The reporting currency used in the consolidated financial statements is the Indonesian rupiah, which is the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
b.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and subsidiaries mentioned in Note 1d, in which the Company maintains (directly or indirectly) equity ownership of more than 50%.
All material intercompany transactions and account balances (including the related significant unrealized gains or losses) have been eliminated.
Subsidiaries are fully consolidated from the date of acquisitions, being the date on which the Group obtains control, and continue to be consolidated until the date such control ceases. Control is presumed to exist if the Company owns, directly or indirectly through another subsidiary, more than half of the voting power of an entity. Control also exists when the parent owns half or less of the voting power of an entity when there is:
a)
power over more than half of the voting rights by virtue of an agreement with other investors;
b)
power to govern the financial and operating policies of the entity under a statute or an agreement;
c)
power to appoint or remove the majority of the members of the board of directors or equivalent governing body and control of the entity is by that board or body; or
d)
power to cast the majority of votes at meetings of the board of directors or equivalent governing body and control of the entity is by that board or body.
NCI represent the portion of the profit or loss and net assets of the subsidiaries not attributable, directly or indirectly, to the Company, which are presented in the consolidated statement of comprehensive income and under the equity section of the consolidated statement of financial position, respectively, separately from the corresponding portion attributable to the equity holders of the parent company.
Losses of a non-wholly owned subsidiary are attributed to the NCI even if the losses create an NCI deficit balance.
In case of loss of control over a subsidiary, the Group:
·
derecognizes the assets (including goodwill) and liabilities of the subsidiary;
·
derecognizes the carrying amount of any NCI;
·
derecognizes the cumulative translation differences, recorded in equity, if any;
·
recognizes the fair value of the consideration received;
·
recognizes the fair value of any investment retained;
·
recognizes any surplus or deficit in profit or loss; and
·
reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss or retained earnings, as appropriate.
16
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
c.
Business Combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition-date fair value and the amount of any NCI in the acquiree. For each business combination, the acquirer measures the NCI in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are directly expensed and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, the acquisition-date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognized in accordance with PSAK 55 (Revised 2006) either in profit or loss or as other comprehensive income. If the contingent consideration is classified as equity, it should not be remeasured until it is finally settled within equity.
At acquisition date, goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred and the amount recognized for NCI over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units (“CGUs”) that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those CGUs.
Where goodwill forms part of a CGU and part of the operations within that CGU is disposed of, the goodwill associated with the operations disposed of is included in the carrying amount of the operations when determining the gain or loss on disposal of the operations. Goodwill disposed of in this circumstance is measured based on the relative values of the operations disposed of and the portion of the CGU retained.
d.
Cash and Cash Equivalents
Cash and cash equivalents comprises cash on hand and in banks and all unrestricted time deposits (including deposits on call) with an original maturities of three months or less at the time of placement.
Time deposits which are pledged as collateral for bank guarantees are not classified as part of “Cash and Cash Equivalents”. These are presented as part of either “Other Current Financial Assets” or “Other Non-current Financial Assets”.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
e.
Inventories
Inventories, which mainly consist of Subscriber Identification Module (“SIM”) cards, starter packs, wireless broadband modems, cellular handsets and pulse reload vouchers are valued at the lower of cost or net realizable value. Cost is determined using the weighted average method.
In accordance with PSAK 14 (Revised 2008), the Group applies the guidance on the determination of inventory cost and its subsequent recognition as an expense, including any write-down to net realizable value, as well as guidance on the cost formula used to assign costs to inventories.
f.
Prepaid Frequency Fee and Licenses and Other Prepaid Expenses
Prepaid frequency fee and licenses and other prepaid expenses, which mainly consist of rentals, insurance and advertising, are expensed as the related asset is utilized. The non-current portions of prepaid rentals and upfront fee of 3G and BWA licenses are shown as part of “Long-term Prepaid Rentals - Net of Current Portion” and “Long-term Prepaid Licenses - Net of Current Portion”, respectively.
g.
Investments in Associated Companies
The Group’s investment in its associated company is accounted for using the equity method. An associated company is an entity in which the Group has significant influence. Under the equity method, the cost of investment is increased or decreased by the Group’s share in net earnings or losses of, and dividends received from, the associated company since the date of acquisition.
The consolidated statement of comprehensive income reflects the share of the results of operations of the associated company. Where there has been a change recognized directly in the equity of the associated company, the Group recognizes its share of any such changes and discloses this, when applicable, in the consolidated statement of changes in equity. Unrealized gains and losses resulting from transactions between the Group and the associated company are eliminated to the extent of the Group’s interest in the associated company.
The Group determines whether it is necessary to recognize an additional impairment loss on the Group’s investment in its associated company. The Group determines at each reporting date whether there is any objective evidence that the investment in the associated company is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the investment in associated company and its carrying value, and recognizes the amount in profit or loss.
h.
Property and Equipment
Effective January 1, 2012, the Group has implemented PSAK 16 (Revised 2011), “Fixed Assets”, which impacts recognition of the assets, the determination of their carrying amounts and the depreciation charges and impairment losses to be recognized in relation to them. The revised PSAK No. 16 also prescribes accounting for land and therefore, it also revoked PSAK No. 47, “Accounting the Land”. ISAK No. 25 which was effective on the same date, provides further guidance related to the treatments of certain landrights in Indonesia and the related costs.
Property and equipment are stated at cost (which includes certain capitalized borrowing costs incurred during the construction phase), less accumulated depreciation and impairment in value.
17
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
h.
Property and Equipment (continued)
In accordance with PSAK 16 (Revised 2011), the Group has chosen the cost model for the measurement of its property and equipment. Property and equipment, except land, are depreciated using the straight-line method, based on the estimated useful lives of the assets, as follows:
Years
Buildings
20 to 40
Information technology equipment
3 to 5
Office equipment
3 to 5
Building and leasehold improvements
3 to 25
Vehicles
3 to 5
Cellular technical equipment
8
Transmission and cross-connection equipment
3 to 15
Fixed Wireless Access (“FWA”) technical equipment
7
Operation and maintenance center and
measurement unit
3 to 5
Fixed access network equipment
3 to 10
The residual values, useful lives and methods of depreciation of property and equipment are
reviewed and adjusted prospectively, if appropriate, at each financial year end.
In accordance with its policy, the Group reviews the estimated useful lives on its property and equipment on an ongoing basis. Based on such review, the Group changed its estimate of the useful lives to better reflect the estimated period these assets remain in service. The Group changed its estimate of the useful lives of tower assets within Building and Leasehold Improvements from 15 years to 25 years. The Group changed its estimate of useful lives of buildings from 20 years to 40 years, and FWA technical equipment from 10 years to 7 years, effective January 1, 2012. In addition, the Group also changed its estimate of useful lives of cellular technical equipment from 10 years to 8 years, effective September 1, 2012.
Landrights, including the legal costs incurred at initial acquisition of landrights, are stated at cost and not amortized. Specific costs associated with the renewal or extension of land titles are deferred and amortized over the legal term of the landrights or economic life of the land, whichever is shorter.
The cost of maintenance and repairs is charged to income as incurred; significant renewals and betterments which enhance an asset’s condition on its initial performance are capitalized. When properties are retired or otherwise disposed of, their costs and the related accumulated depreciation are derecognized from the accounts, and any resulting gains or losses are recognized in profit or loss.
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 values unless:
(i)
the exchange transaction lacks commercial substance, or
(ii)
the fair value of neither the assets received nor the assets given up can be measured reliably.
The acquired assets are measured this way even if the Group cannot immediately derecognize the assets given up. If the acquired assets cannot be reliably measured at fair value, their value is measured at the carrying amount of the assets given up plus cash consideration.
18
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
h.
Property and Equipment (continued)
Properties under construction and installation are stated at cost. Effective January 1, 2012, the Group has implemented PSAK 26 (Revised 2011), “Borrowing Costs”. All borrowing costs, which include interest, finance charges in respect of finance leases recognized in accordance with PSAK 30 (Revised 2011) and foreign exchange differences (estimated quarterly to the extent that they are regarded as an adjustment to interest costs by capping the exchange differences taken as borrowing costs at the amount of borrowing costs on the functional currency equivalent borrowings) that can be attributed to qualifying assets, are capitalized to the cost of properties under construction and installation. Other borrowing costs are recognized as an expense in the period in which they are incurred. Capitalization of borrowing costs ceases when the construction or installation is completed and the constructed or installed asset is ready for its intended use.
i.
Impairment of Non-financial Assets
The Group assesses at each annual reporting period whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset (i.e., an intangible asset with an indefinite useful life, an intangible asset not yet available for use, or goodwill acquired in a business combination) is required, the Group makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of the asset’s or its CGU’s fair value less costs to sell and its value in use, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing the value in use, the estimated net future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used to determine the fair value of the asset. These calculations are corroborated by valuation multiples or other available fair value indicators.
Impairment losses of continuing operations, if any, are recognized in profit or loss under expense categories that are consistent with the functions of the impaired assets.
An assessment is made at each annual reporting period as to whether there is any indication that previously recognized impairment losses recognized for an asset other than goodwill may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss for an asset other than goodwill is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. If that is the case, the carrying amount of the asset is increased to its recoverable amount. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceeds the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior periods. Reversal of an impairment loss is recognized in profit or loss. After such a reversal, the depreciation charge on the said asset is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. Where the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
i.
Impairment of Non-financial Assets (continued)
In accordance with PSAK 19 (Revised 2010), software that is not an integral part of the related hardware is amortized using the straight-line method over 5 years and assessed for impairment whenever there is indication of impairment. The Company reviews the amortization period and the amortization method for the software at least at each financial year end. Residual value of software is assumed to be zero.
j.
Leases
Effective January 1, 2012, the Group has retrospectively implemented PSAK 30 (Revised 2011), “Leases”.
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date. The arrangement is assessed for whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
Group as a lessee
A finance lease that transfers to the Group substantially all the risks and benefits incidental to ownership of the leased item, is capitalized at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in financing cost in profit or loss.
A leased asset (presented as part of property and equipment) is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
The current portion of obligations under finance lease is presented as part of Other Current Financial Liabilities.
Operating lease payments are recognized as an operating expense in profit or loss on a straight-line basis over the lease term.
Group as a lessor
A lease in which the Group does not transfer substantially all the risks and benefits of the ownership of an asset is classified as an operating lease. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents, if any, are recognized as revenue in the year they are earned.
A lease in which the Group transfers substantially all the risks and benefits of the ownership of an asset is classified as a finance lease. The leased asset is recognized as asset held under a finance lease in the consolidated statement of financial position and is presented as a receivable at an amount equal to the net investment in the lease. Selling profit or loss is recognized during the year, in accordance with the policy followed by the Group for outright sales. Costs incurred by the Group in connection with negotiating and arranging a lease are recognized as an expense when the selling profit is recognized.
19
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
j.
Leases (continued)
Sale and leaseback transactions
When the Group enters into a sale and leaseback transaction, the Group analyzes if the leaseback arrangement meets the criteria of a finance lease or operating lease. Where the classification results in a finance lease, any excess of sales proceeds over the carrying value of the asset sold is deferred and amortised over the lease term. Where the transaction is classified as an operating lease and it is clear that the transaction is established at fair value, any profit or loss is recognised immediately.
k.
Revenue and Expense Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates and Value Added Taxes (“VAT”). The following specific recognition criteria must also be met before revenue is recognized:
Cellular
Cellular revenues arising from airtime and roaming calls are recognized based on the duration of successful calls made through the Company’s cellular network and presented on a gross basis.
For post-paid subscribers, monthly service fees are recognized as the service is provided.
The activation component of starter package sales is deferred and recognized as revenue over the expected average period of the customer relationship. Sales of initial/reload vouchers are recorded as unearned income and recognized as revenue upon usage of the airtime or upon expiration of the airtime.
Sales of wireless broadband and modems cellular handsets are recognized upon delivery to the customers.
Revenues from wireless broadband data communications are recognized based on the duration of usage or fixed monthly charges depending on the arrangement with the customers.
Cellular revenues are presented on a net basis, after compensation to value added service providers.
Customer Loyalty Program
The Company operates a customer loyalty program called“Poin Plus Plus”, which allows customers to accumulate points for every reload and payment by the Company’s prepaid and post-paid subscribers, respectively. The points can then be redeemed for free telecommunications and non-telecommunications products, subject to a minimum number of points being obtained. Starting July 29, 2011, the“Poin Plus Plus” program has been replaced with the“Indosat Senyum” program. Both programs have similarity in nature and scheme to redeem the points, except that under the new program, the Company no longer includes the subscription period as a variable item in calculating the points.
Customer loyalty credits are accounted for as a separate component of the sales transaction in which they are granted. The consideration received at the time of reload and payment by the Company’s prepaid and post-paid subscribers, respectively, is allocated between the cellular products sold and the points issued, with the consideration allocated to the points equal to their fair value. Fair value of the points issued is deferred and recognized as revenue when the points are redeemed or when the redemption period expires.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
k.
Revenue and Expense Recognition (continued)
Dealer Commissions
Consideration in the form of sales discount given by the Company to a dealer is recognized as a reduction of revenue.
If the Company receives, or will receive, an identifiable benefit in exchange for a consideration given by the Company to a dealer, and the fair value of such benefit can be reasonably estimated, the consideration will be recorded as a marketing expense.
Tower Leasing
Revenue from tower leasing classified as an operating lease is recognized on a straight-line basis over the lease term based on the amount stated in the agreement between the Company and the lessee.
MIDI
Internet
Revenues arising from installation services are deferred and recognized over the expected average period of the customer relationship. Revenues from monthly service fees are recognized as the services are provided. Revenues from usage charges are recognized monthly based on the duration of internet usage or based on the fixed amount of charges, depending on the arrangement with the customers.
Frame Net, World Link and Direct Link
Revenues arising from installation services are deferred and recognized over the expected average period of the customer relationship. Revenues from monthly service fees are recognized as the services are provided.
Satellite Operating Lease
Revenues are recognized on the straight-line basis over the lease term.
Revenues from other MIDI services are recognized when the services are rendered.
Fixed Telecommunications
International Calls
Revenue from outgoing international call traffic is reported on a gross basis.
Fixed Wireless
Fixed wireless revenues arising from usage charges are recognized based on the duration of successful calls made through the Company’s fixed network.
For post-paid subscribers, monthly service fees are recognized as the services are provided.
For prepaid subscriber, the activation component of starter package sales is deferred and recognized as revenue over the expected average period life of the customer relationship. Sale of initial/reload vouchers is recorded as unearned income and recognized as income upon usage of the airtime or upon expiration of the airtime.
Fixed Line
Revenues from fixed line installations are deferred and recognized as revenue over the expected average period of the customer relationship. Revenues from usage charges are recognized based on the duration of successful calls made through the Company’s fixed network.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
k.
Revenue and Expense Recognition (continued)
Interconnection Revenues
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.
Agency Relationships
Revenues from an agency relationship are recorded based on the gross amount billed to the customer when the Company and subsidiaries act as a principal in the sale of services.
When the Company and subsidiaries act as an agent and earn commission from the suppliers of the services, revenues are recorded based on the net amount retained (the amount paid by the customer less the amount paid to the suppliers).
Expenses
Interconnection Expenses
Expenses from network interconnection with other domestic and international telecommunications carriers are accounted for as operating expenses in the year these are incurred.
Other Expenses
Expenses are recognized when incurred.
l.
Personnel Costs
Personnel costs which are directly related to the development, construction and installation of property and equipment are capitalized as part of the cost of such assets.
m.
Pension Plan and Employee Benefits
Effective January 1, 2012, the Group has applied PSAK 24 (Revised 2010), “Employee Benefits”, which regulates the accounting and disclosure for employee benefits, both short-term (e.g., paid annual leave, paid sick leave) and long-term (e.g., long-service leave, post-employment medical benefits). The Group has chosen the 10% corridor method for the recognition of actuarial gains or losses. The Group also requires recognition of liability and expense when an employee has provided service and the entity consumes economic benefit arising from the service.
Pension costs under the Group’s defined benefit pension plans are determined by periodic actuarial calculation using the projected-unit-credit method and applying the assumptions on discount rate, expected return on plan assets and annual rate of increase in compensation.
Actuarial gains or losses from post-employment benefits are recognized as income or expense when the net cumulative unrecognized actuarial gains or losses for each individual plan at the end of the previous reporting year exceed the greater of 10% of the present value of the defined benefit obligation or 10% of the fair value of plan assets, at that date. These gains or losses in excess of the 10% corridor are recognized on a straight-line basis over the expected average remaining working lives of the employees. The past service costs from post-employment benefits are recognized as an expense on a straight-line basis over the average period until the benefits become vested. If the benefits have already vested, following the introduction of changes to a pension plan, past service costs are recognized immediately.
20
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
m.
Pension Plan and Employee Benefits (continued)
Actuarial gains or losses and past service costs from other long-term employee benefits are recognized immediately in the current year’s consolidated statement of comprehensive income within personnel expense.
The Group recognizes gains or losses on the curtailment of a defined benefit plan when the curtailment occurs (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 the 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). The gain or loss on curtailment consists of any resulting change in the fair value of plan assets, change in the present value of defined benefit obligation and any related actuarial gains or losses and past service cost that had not previously been recognized.
n.
Financial Instruments
Effective January 1, 2012, the Group has applied PSAK 50 (Revised 2010), “Financial Instruments: Presentation”, PSAK 55 (Revised 2011), “Financial Instruments: Recognition and Measurement”, and PSAK 60, “Financial Instruments: Disclosures”.
PSAK 50 (Revised 2010) contains the requirements for the presentation of financial instruments and identifies the information that should be disclosed. The presentation requirements apply to the classification of financial instruments, from the perspective of the issuer, into financial assets, financial liabilities and equity instruments; the classification of related interest, dividends, losses and gains; and the circumstances in which financial assets and financial liabilities should be offset. This PSAK requires the disclosure of, among others, information about factors that affect the amount, timing and certainty of an entity’s future cash flows relating to financial instruments and the accounting policies applied to those instruments.
PSAK 55 (Revised 2011) establishes the principles for recognizing and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This PSAK provides the definitions and characteristics of derivatives, the categories of financial instruments, recognition and measurement, hedge accounting and determination of hedging relationships, among others.
PSAK 60 requires disclosures of significance of financial instruments for financial position and performance, and the nature and extent of risks arising from financial instruments to which the Group is exposed during the year and at the end of the reporting period, and how the entity manages those risks.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
n.
Financial Instruments (continued)
n1.
Financial assets
Initial recognition
Financial assets within the scope of PSAK 55 (Revised 2011) are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate. The Group determines the classification of its financial assets at initial recognition.
All financial assets are recognized initially at fair value plus transaction costs, except in the case of financial assets which are recorded at fair value through profit or loss.
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 Group commits to purchase or sell the assets.
The Group’s financial assets include cash and cash equivalents, trade and other accounts receivable, due from related parties, derivative assets, and other current and non-current financial assets (quoted and unquoted financial instruments).
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
•
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss.
Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets at fair value through profit or loss are carried in the consolidated statement of financial position at fair value, with changes in fair value recognized in profit or loss.
Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value through profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognized in profit or loss. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required.
The Group’s financial assets classified at fair value through profit or loss consist of derivative assets.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
n.
Financial Instruments (continued)
n1.
Financial assets (continued)
Subsequent measurement (continued)
•
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (“EIR”) method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in profit or loss. The losses arising from impairment are also recognized in profit or loss.
The Group’s cash and cash equivalents, trade and other accounts receivable, due from related parties, other current financial assets, and other non-current financial assets are included in this category.
•
Held-to-maturity (HTM) investments
Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as HTM when the Group has the positive intention and ability to hold them to maturity. After initial measurement, HTM investments are measured at amortized cost using the EIR method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in profit or loss. The losses arising from impairment are recognized in profit or loss.
The Group did not have any HTM investments during the years ended December 31, 2012, 2011 and 2010.
•
Available-for-sale (AFS) financial assets
AFS financial assets are non-derivative financial assets that are designated as available for-sale or are not classified in any of the three preceding categories. After initial measurement, AFS financial assets are measured at fair value with unrealized gains or losses recognized in other comprehensive income until the investment is derecognized, at which time the cumulative gain or loss is recognized, or determined to be impaired, and is reclassified from other comprehensive income to profit or loss. Interest earned on AFS financial investments is reported as interest income using the EIR method.
The Group has the following investments classified as AFS:
-
Investments in shares of stock that do not have readily determinable fair value in which the equity interest is less than 20%. These are carried at cost less allowance for impairment.
-
Investments in equity shares that have readily determinable fair value in which the equity interest is less than 20% and which are classified as available-for-sale, are recorded at fair value.
21
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
n.
Financial Instruments (continued)
n2.
Financial liabilities
Initial recognition
Financial liabilities within the scope of PSAK 55 (Revised 2011) are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, inclusive of directly attributable transaction costs.
The Group’s financial liabilities include trade accounts payable, procurement payable, accrued expenses, deposits from customers, obligations under financial lease, loans and bonds payable, due to related parties, derivative liabilities and other current financial liabilities.
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows:
•
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. This category includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by PSAK 55 (Revised 2011). Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognized in profit or loss.
•
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. The EIR amortization is included in financing costs in profit or loss.
Gains or losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
n.
Financial Instruments (continued)
n3.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.
n4.
Fair value of financial instruments
The fair value of financial instruments that are traded in active market at each reporting date is determined by reference to quoted market prices or dealer price quotations (bid price for long position and ask price for short position), without any deduction for transaction costs. For financial instruments where there is no active market, fair value is determined using valuation techniques. Such techniques may include using recent arm’s length market transactions, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis, or other valuation models.
Credit risk adjustment
The Company adjusts the price in the more advantageous market to reflect any differences in counterparty credit risk between instruments traded in that market and the ones being valued for financial asset positions. In determining the fair value of financial liability positions, the Company's own credit risk associated with the instrument is taken into account.
n5.
Amortized cost of financial instruments
Amortized cost is computed using the EIR method less any allowance for impairment and principal repayment or reduction. The calculation takes into account any premium or discount on acquisition and includes transaction costs and fees that are an integral part of the EIR.
n6.
Impairment of financial assets
The Group assess at the end of each reporting period whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
n.
Financial Instruments (continued)
n6. Impairment of financial assets (continued)
•
Financial assets carried at amortized cost
For loans and receivables carried at amortized cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and the group is collectively assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss has occurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original EIR. If a loan or receivable has a variable interest rate, the discount rate for measuring impairment loss is the current EIR.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognized in profit or loss. Interest income continues to be accrued on the reduced carrying amount based on the rate of interest used to discount future cash flows for the purpose of measuring impairment loss. Loans and receivables, together with the associated allowance, are written off when there is no realistic prospect of future recovery and all collateral has been realized or has been transferred to the Group. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is recognized in profit or loss.
•
AFS financial assets
In the case of an equity investment classified as an AFS financial asset, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost.
Where there is objective evidence of impairment, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognized in profit or loss - is recycled from other comprehensive income to profit or loss. Impairment loss on equity investment is not reversed through the profit or loss; increase in its fair value after impairment is recognized in other comprehensive income.
In the case of a debt instrument classified as an AFS financial asset, impairment is assessed based on the same criteria as financial asset carried at amortized cost. Future interest income is based on the reduced carrying amount and is accrued based on the rate of interest used to discount future cash flows for the purpose of measuring impairment loss. Such accrual is recorded as part of the “Interest Income” account in profit or loss. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss is reversed through profit or loss.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
n.
Financial Instruments (continued)
n7.
Derecognition of financial assets and liabilities
Financial assets
A financial asset (or where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized when: (1) the rights to receive cash flows from the asset have expired; or (2) the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or has expired.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in profit or loss.
n8.
Derivative financial instruments
The Company enters into and engages in cross currency swaps, interest rate swaps and other permitted instruments, if considered necessary, for the purpose of managing its foreign exchange and interest rate exposures emanating from the Company’s loans and bonds payable in foreign currencies. These derivative financial instruments, while providing effective economic hedges of specific interest rate and foreign exchange risks under the Company’s financial risk management objectives and policies, do not meet the criteria for hedge accounting as provided in PSAK 55 (Revised 2011) and are initially recognized at fair value on the date the derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.
Any gains or losses arising from changes in fair value of derivatives during the year, which are entered into as economic hedges that do not qualify for hedge accounting, are taken directly to profit or loss.
Derivative assets and liabilities are presented under current assets and liabilities, respectively. Embedded derivative is presented with the host contract in the consolidated statement of financial position which represents an appropriate presentation of overall future cash flows for the instrument taken as a whole.
The net changes in fair value of derivative instruments, swap cost or income, termination cost or income, and settlement of derivative instruments are credited (charged) to “Gain (Loss) on Change in Fair Value of Derivatives - Net”, which is presented in the consolidated statement of comprehensive income.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
o.
Foreign Currency Transactions and Balances
Effective January 1, 2012, the Group has applied PSAK 10 (Revised 2010), “The Effects of Changes in Foreign Exchange Rates”, which describes how to include foreign currency transactions and foreign operations in the financial statements of an entity and translate financial statements into a presentation currency. The Group considers the primary indicators and other indicators in determining its functional currency and, if indicators are mixed and the functional currency is not obvious, management uses its judgment to determine the functional currency that most faithfully represents the economic effects of the underlying transactions, events and conditions.
The consolidated financial statements are presented in rupiah, which is the Company’s functional currency and the Group’s presentation currency. Transactions involving foreign currencies are recorded at the rates of exchange prevailing at the time the transactions are made. At consolidated statement of financial position date, monetary assets and liabilities denominated in foreign currencies are adjusted to reflect the prevailing exchange rates at such date and the resulting gains or losses are credited or charged to current operations, except for foreign exchange differentials that can be attributed to qualifying assets which are capitalized to properties under construction and installation.
The functional currency and presentation currency of IFB and IIFB are in Euro, while IPBV, IMBV and ISP are in U.S. dollar. As at the end of the reporting period, the assets and liabilities of these subsidiaries are translated into the presentation currency of the Company at the spot rate which is the exchange rate prevailing at the end of the reporting period and their statements of comprehensive income are translated at the average exchange rates during the period. The resulting differences arising from the translations of the financial statements of IPBV, IMBV, IFB, IIFB and ISP are included in other comprehensive income and presented as part of “Difference in Foreign Currency Translation” in the consolidated statements of changes in equity.
For December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010, the foreign exchange rates used (in full amounts) were Rp9,670, Rp9,068 and Rp8,991, respectively, per US$1 which are computed by taking the average of the buying and selling rates of bank notes last published by Bank Indonesia for the year.
p.
Income Tax
Effective January 1, 2012, the Group has applied PSAK 46 (Revised 2010), which requires the Group to account for the current and future tax consequences of the future recovery (settlement) of the carrying amount of assets (liabilities) that are recognized in the consolidated statement of financial position, and transactions and other events of the current year which are recognized in the consolidated financial statements. The revised PSAK also requires the Group to present interest and penalties for the underpayment / overpayment of income tax, if any, as part of “Income Tax Benefit (Expense) - Current” in the consolidated statement of comprehensive income. Prior to January 1, 2012, the Group presented interest and penalties for the underpayment of income tax, if any, as part of “Others - net” under Expenses in the consolidated statement of comprehensive income.
Current tax expense is provided based on the estimated taxable income for the year. Deferred tax assets and liabilities are recognized for temporary differences between the financial and the tax bases of assets and liabilities at each reporting date. Future tax benefits, such as the carryover of unused tax losses, are also recognized to the extent that realization of such benefits is probable. The tax effects for the year are allocated to current operations, except for the tax effects from transactions which are directly charged or credited to equity.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
p.
Income Tax (continued)
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in
the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the financial position date. Changes in the carrying amount of deferred tax assets and liabilities due to a change in tax rates are credited or charged to current operations, except to the extent that they relate to items previously charged or credited to equity.
The difference between the financial statement carrying amounts of existing assets and liabilities, and their respective final tax bases are not recognized as deferred tax assets or liabilities.
The amounts of additional tax principal and penalty imposed through a tax assessment letter (“SKP”) are recognized as income or expense of the current year in the consolidated statement of comprehensive income, unless further settlement is submitted. The amounts of tax principal and penalty imposed through SKP are deferred as long as they meet the asset recognition criteria.
For each of the consolidated entities, the tax effects of temporary differences and tax loss
carryover, which individually are either assets or liabilities, are shown at the applicable net amounts.
q.
Segment Reporting
Effective January 1, 2011, the Group has applied PSAK 5 (Revised 2009), “Operating Segments”. This revised PSAK requires disclosures that will enable users of financial statements to evaluate the nature and financial effects of business activities in which the entity engages and the economic environments in which it operates.
A segment is a distinguishable component of the Group that is engaged in providing certain products (business segment), which component is subject to risks and rewards that are different from those of other segments.
Segment revenue, expenses, results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis to that segment. They are determined before intra-group balances and intra-group transactions are eliminated.
r.
Basic and Diluted Earnings per Share/ADS
Effective January 1, 2012, the Group has applied PSAK 56 (Revised 2011), “Earnings Per Share” which prescribe principles for the determination and presentation of earnings per share.
The amount of basic earnings per share is computed by dividing profit for the year attributable to owners of the Company by the weighted-average number of shares outstanding during the year.
The amount of basic earnings per ADS attributable to owners of the Company is computed by multiplying basic earnings per share attributable to owners of the Company by 50, which is equal to the number of shares per ADS.
Diluted earnings per share is computed by dividing profit for the year attributable to ordinary owners of the Company (after adjusting for the profit or loss effect related to dilutive potential ordinary shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all potentially dilutive ordinary shares.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
s.
Transactions with Related Parties
The Group has transactions with related parties as defined under PSAK 7 (Revised 2010), “Related Party Disclosures”.
The details of the accounts and the significant transactions entered into with related parties are presented in Note 31.
t.
Concession Financial Assets
The Group constructs or upgrades infrastructure (construction or upgrade services) used to provide a public service and operates and maintains that infrastructure (operation services) for a specified period of time. These arrangements may include infrastructure used in a public-to-private service concession arrangement for its entire useful life.
These arrangements are accounted for based on the nature of the consideration. The financial asset model is used when the Group has an unconditional contractual right to receive cash or another financial asset from or at the direction of the grantor for the construction services.
In the financial asset model, the amount due from the grantor meets the definition of a receivable which is measured at fair value. It is subsequently measured at amortized cost. The amount initially recognized plus the cumulative interest on that amount is calculated using the effective interest method.
The consideration received or receivable is allocated by reference to the relative fair values of the services provided; typically a construction component and a service element for operating and maintenance services performed. Revenue from the concession arrangements earned under the financial asset model consists of the (i) fair value of the amount due from the grantor; and (ii) interest income related to the capital investment in the project.
Any asset carried under concession arrangements is derecognized on disposal or when no future economic benefits are expected from its future use or disposal or when the contractual rights to the financial asset expire.
u.
Adoption of Other Revised Accounting Standards and Interpretations
Other than the revised accounting standards previously mentioned above, the Group also adopted the following revised accounting standards and interpretations on January 1, 2012, which were considered relevant to the consolidated financial statements:
·
PSAK 53 (Revised 2010), “Share-Based Payment”
·
ISAK 20 (2010), “Income Taxes - Changes in the Tax Status of an Entity or its Shareholder”
·
ISAK 23 (2011), “Operating Leases - Incentives”
·
ISAK 24 (2011), “Evaluating the Substance of Transactions Involving the Legal Form of a Lease”
·
ISAK 26 (2011), “Reassessment of Embedded Derivatives”.
v.
Restatement of Consolidated Financial Statements
Effective January 1, 2012, the Group has retrospectively adopted PSAK 30 (Revised 2011), “Leases” - Note 2j, ISAK 16, “Service Concession Arrangements”, and ISAK 22, “Service Concession Arrangements: Disclosures”.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
v.
Restatement of Consolidated Financial Statements (continued)
Leases
Prior to January 1, 2012, there was no requirement to separately evaluate lease agreement that contained land and building elements. Accordingly, the Company accounted for the tower lease arrangements as operating leases, as it viewed these as a single package of land and buildings and treated the overall arrangement as a land lease.
Effective January 1, 2012, the Company has applied PSAK 30 (Revised 2011) retrospectively, which requires the Company to assess the classification of land and building elements of tower leasing arrangements separately whether as finance or an operating lease. As a result of the separate assessment made by the Company, taking into consideration comparison of the lease term with the economic life of the assets and comparison of the present value of the minimum lease payments and the fair value of the leased assets, each element might result in different lease classification. Accordingly, the Company determined that the majority of its historical lease transactions, where the Company is the lessee, were finance leases. The main impact of PSAK 30 (Revised 2011) is the recognition of finance lease assets and liabilities on the building element of tower slot leasing arrangements where the Company is the lessee. For the amended lease policy, see Note 2j.
Service Concession
Prior to January 1, 2012, there was no specific guidance on the accounting for service concession arrangement. The Group accounted for this arrangement as an executory contract. The infrastructure assets constructed under this arrangement were accounted for as property and equipment and depreciated over their estimated useful lives.
Effective January 1, 2012, the Group has retrospectively adopted ISAK 16, “Service Concession Arrangements”, and ISAK 22, “Service Concession Arrangements: Disclosures”, to account for its concession contract. Under ISAK 16, revenues relating to construction or upgrade services under a service concession arrangements 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 fair value of the services. The infrastructure assets constructed under this arrangement are not recognized as property and equipment because the contractual arrangement does not convey the right to control the use of the public service infrastructure assets to the Company. In its concession contract, the Company has contractual rights to receive considerations from the grantor. The Company recognizes a financial asset in the consolidated statements of financial position, in consideration for the services it provides. Such financial asset is recognized in the consolidated statements of financial position as a receivable, for the amount of the 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 interest income.
22
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
v.
Restatement of Consolidated Financial Statements (continued)
As a result of the retrospective application of PSAK 30 (Revised 2011), “Leases”, ISAK 16 “Service Concession Arrangements” and ISAK 22, “Service Concession Arrangements: Disclosures”, the following adjustments were made retrospectively to the consolidated financial statements:
As of January 1, 2011 / December 31, 2010:
January 1, 2011/ December 31, 2010 (Previously Reported) | Adjustments/ Reclassifications* | January 1, 2011/ December 31, 2010 (Restated) | |||
ASSETS | |||||
Accounts receivable - trade - net | 1,548,426 | (12,150) | 1,536,276 | ||
Advances | 67,273 | (39,107) | 28,166 | ||
Property and equipment - net | 43,571,010 | 491,026 | 44,062,036 | ||
Deferred tax assets - net | 95,018 | (359) | 94,659 | ||
Long-term advances | 216,643 | (2,668) | 213,975 | ||
Other non-current financial assets - net | 80,405 | 70,199 | 150,604 | ||
LIABILITIES | |||||
Procurement payable | 3,644,467 | (2,465) | 3,642,002 | ||
Taxes payable | 169,445 | 3,067 | 172,512 | ||
Accrued expenses | 1,710,885 | 85,450 | 1,796,335 | ||
Unearned income | 1,143,852 | (37,242) | 1,106,610 | ||
Other current financial liabilities | 23,127 | 29,286 | 52,413 | ||
Obligations under finance lease | - | 416,587 | 416,587 | ||
Deferred tax liabilities - net | 1,772,337 | 20,292 | 1,792,629 | ||
Other non-current financial liabilities | - | 45,815 | 45,815 | ||
Other non-current liabilities | 187,097 | (72,737) | 114,360 | ||
EQUITY | |||||
Retained earnings | |||||
Unappropriated | 15,224,843 | 19,201 | 15,244,044 | ||
As of December 31, 2011:
December 31, 2011 (Previously Reported) | Adjustments/ Reclassifications* | December 31, 2011 (Restated) | |||||
ASSETS | |||||||
Accounts receivable - trade - net | 1,441,069 | 59,027 | 126 | 1,500,096 | |||
Advances | 48,865 | (8,380) | 40,485 | ||||
Property and equipment - net | 42,573,369 | 932,329 | 43,505,698 | ||||
Deferred tax assets - net | 114,114 | (302) | 113,812 | ||||
Long-term advances | 209,798 | (48,149) | 161,649 | ||||
Other non-current financial assets - net | 90,416 | 121,854 | 212,270 | ||||
LIABILITIES | |||||||
Procurement payable | 3,429,921 | 45,941 | 3,475,862 | ||||
Taxes payable | 88,563 | 2,643 | 91,206 | ||||
Accrued expenses | 1,891,477 | 4,136 | 1,895,613 | ||||
Unearned income | 1,124,995 | (92,580) | 1,032,415 | ||||
Other current financial liabilities | 16,072 | 55,756 | 71,828 | ||||
Obligations under finance lease | - | 770,081 | 770,081 | ||||
Deferred tax liabilities - net | 1,920,787 | 35,565 | 1,956,352 | ||||
Other non-current financial liabilities | - | 107,433 | 107,433 | ||||
Other non-current liabilities | 116,455 | (21,401) | 95,054 | ||||
EQUITY | |||||||
Retained earnings | |||||||
Unappropriated | 15,736,227 | 152,877 | 15,889,104 | ||||
23
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
v.
Restatement of Consolidated Financial Statements (continued)
For the year ended December 31, 2011:
December 31, 2011 (Previously Reported) | Adjustments/ Reclassifications* | December 31, 2011 (Restated) | |||||||||
REVENUES
Cellular MIDI | 16,750,879 2,576,032 | (163,494) 115,893 | 163,495 | 16,587,385 2,691,925 | |||||||
EXPENSES | |||||||||||
Cost of services | 7,587,708 | (40,301) | 7,547,407 | ||||||||
Depreciation and amortization | 6,580,754 | (22,577) | 6,558,177 | ||||||||
Marketing | 1,023,698 | (168,012) | 855,686 | ||||||||
Interest income | 81,477 | 11,169 | 92,646 | ||||||||
Financing cost | (1,789,687) | (139,667) | (1,929,354) | ||||||||
INCOME TAX EXPENSE | |||||||||||
Deferred | (129,220) | (15,216) | (15,216) | (144,436) | |||||||
*
Including certain accounts which were reclassified in the prior years for consistency and comparability to December 31, 2012 (Note 42)
3.
MANAGEMENT’S USE OF JUDGMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the Group’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amounts of the assets or liabilities affected in future periods.
a.
Judgments
In the process of applying the Group’s accounting policies, management has made the following judgments, apart from those including estimations and assumptions, which have the most significant effect on the amounts recognized in the consolidated financial statements:
·
Determination of functional currency
The currency of each of the entities under the Group is the currency of the primary economic environment in which each entity operates. It is the currency that mainly influences the revenue and cost of rendering services.
·
Leases
The Group has various lease agreements whereas the Group acts as a lessor or a lessee in respect of certain property and equipment. The Group evaluates whether significant risks and rewards of ownership of the leased asset are transferred based on PSAK30 (Revised 2011),“Leases”, which requires the Group to make judgments and estimates of transfer of risks and rewards of ownership of the leased asset.
24
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
3.
MANAGEMENT’S USE OF JUDGMENTS, ESTIMATES AND ASSUMPTIONS (continued)
a.
Judgments (continued)
·
Leases (continued)
Tower leases
For tower leases, the unit of account is considered at the level of the slot or site space because the lease is dependent on the use of a specific space in the tower where the Company places its equipment.
Licenses
In 2006, the Company was granted a license to use 2.1 GHz radio frequency spectrum (a 3G mobile communications technology - Note 1a) by the MOCIT. The Company was obliged to, among others, pay upfront fee and annual radio frequency fee for 10 years (Note 33i). The upfront fee is recorded as part of Long-term Prepaid Licenses for the non-current portion and Prepaid Expenses for the current portion, and amortized over the 10-year license term using the straight-line method.
In 2009, the Company received additional 3G license (Note 1a), and IMM was granted an operating license for “Packet Switched” local telecommunications network using 2.3 GHz radio frequency spectrum of Broadband Wireless Access (“BWA”). The Company and IMM were obliged to, among others, pay upfront fee and annual radio frequency fee for 10 years (Note 33i). The upfront fee is recorded as part of Long-term Prepaid Licenses for the non-current portion and Prepaid Expenses for the current portion, and amortized over the 10-year license term using the straight-line method.
Management believes, as supported by written confirmation from the DGPT, that the 3G and BWA licenses may be returned at any time without any financial obligation to pay the remaining outstanding annual radio frequency fees (i.e., the license arrangement does not transfer substantially all the risks and rewards incidental to ownership). Accordingly, the Company and IMM recognize the annual radio frequency fee as prepaid operating lease expense, amortized using the straight-line method over the term of the rights to operate the 3G and BWA licenses. Management evaluates its plan to continue to use the licenses on an annual basis.
·
Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash-generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on available data from binding sales transactions in arm’s length transactions of similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash inflows and the growth rate used for extrapolation purposes.
25
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
3.
MANAGEMENT’S USE OF JUDGMENTS, ESTIMATES AND ASSUMPTIONS (continued)
a.
Judgments (continued)
·
Exchange of asset transactions
During 2010 to 2012, the Group entered into several contracts for exchanging of asset for certain of its existing cellular technical equipment with third party supplier. For the exchange of asset transactions, the Group evaluates whether the transactions contain commercial substance based on PSAK 16 (Revised 2011)“Property, Plant, and Equipment”, which requires the Group to make judgments and estimates of the future cash flow and the fair value of the asset received and given up as a result of the transactions. Management considers the exchange of asset transactions to have met the criteria of commercial substance; however, the fair value of neither the asset received nor the asset given up could be measured reliably, hence, their value was measured at the carrying amount of the asset given up plus cash consideration paid.
·
Sale-and-leaseback transactions
The Group classifies leases into finance leases or operating leases in accordance with the accounting policies stated in Note 2j. Determining whether a lease transaction is a finance lease or an operating lease is a complex issue and requires substantial judgement as to whether the lease agreement transfers substantially all the risks and rewards of ownership to or from the Group. Careful and considered judgment is required on various complex aspects that include, but are not limited to, the fair value of the leased asset, the economic life of the leased asset, whether renewal options are included in the lease term and determining an appropriate discount rate to calculate the present value of the minimum lease payments.
Classification as a finance lease or operating lease determines whether the leased asset is capitalized and recognized in the consolidated statement of financial position. In sale-and-leaseback transactions, the classification of the leaseback arrangements as described above determines how the gain or loss on the sale transaction is recognized. It is either deferred and amortized (finance lease) or recognized in the consolidated statement of comprehensive income immediately (operating lease).
·
Provision for legal contingency
The Group is currently involved in one significant legal proceeding. Management’s judgment of the probable cost for the resolution of the claim has been developed in consultation with the Company’s counsels handling the defense in this matter and is based upon their analysis of potential result. Management currently does not believe this proceeding could materially reduce the Company’s revenues and profitability. It is possible, however, that future financial performance could be materially affected by changes in their judgment or effectiveness of their strategy relating to this proceeding. See Note 33c - Significant Agreements, Commitments and Contingency.
·
Allowance for impairment of receivables
If there is objective evidence that an impairment loss has been incurred in trade receivables, the Group will recognize an allowance for impairment losses related to their trade receivables that are specifically identified as doubtful for collection.
In addition to specific allowance against individually significant receivables, the Group also assesses a collective impairment allowance against credit exposure of their debtors which are grouped based on common credit characteristics, which, although not specifically identified as requiring a specific allowance, have a greater risk of default than when the receivables were originally granted to debtors.
26
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
3.
MANAGEMENT’S USE OF JUDGMENTS, ESTIMATES AND ASSUMPTIONS (continued)
a.
Estimates and Assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below:
·
Determination of fair values of financial assets and financial liabilities
When the fair value of financial assets and financial liabilities recorded in the consolidated statement of financial position cannot be derived from active markets, their fair value is determined using valuation techniques, including the discounted cash flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair value. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 21 for further discussion.
·
Estimating useful lives of property and equipment and intangible assets
The Group estimates the useful lives of its property and equipment and intangible assets based on expected asset utilization as anchored on business plans and strategies that also consider expected future technological developments and market behavior. The estimation of the useful lives of property and equipment is based on the Group’s collective assessment of industry practice, internal technical evaluation and experience with similar assets. The estimated useful lives are reviewed 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. It is possible, however, that future results of operations could be materially affected by changes in the estimates brought about by changes in the factors mentioned above.
The amounts and timing of recorded expenses for any year will be affected by changes in these factors and circumstances. A reduction in the estimated useful lives of the Group’s property and equipment will increase the recorded operating expenses and decrease non-current assets. An extension in the estimated useful lives of the Group’s property and equipment will decrease the recorded operating expenses and increase non-current assets.
·
Goodwill and intangible assets
The consolidated financial statements reflect acquired businesses after the completion of the respective acquisition. The Company will account for the acquired businesses using the acquisition method starting January 1, 2011 and the purchase method for prior year acquisitions, which methods require extensive use of accounting estimates and judgments to allocate the purchase price to the fair market values of the acquiree’s identifiable assets and liabilities at the acquisition date. Any excess in the purchase price over the estimated fair market values of the net assets acquired is recorded as goodwill in the consolidated statement of financial position. Thus, the numerous judgments made in estimating the fair market value to be assigned to the acquiree’s assets and liabilities can materially affect the Company’s financial performance.
27
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
3.
MANAGEMENT’S USE OF JUDGMENTS, ESTIMATES AND ASSUMPTIONS (continued)
b.
Estimates and Assumptions (continued)
·
Recoverability of deferred income tax assets
The Group reviews the carrying amounts of deferred tax assets at the end of each reporting period and reduces these to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred tax assets to be utilized. The Group’s assessment on the recognition of deferred tax assets on deductible temporary differences is based on the level and timing of forecasted taxable income of the subsequent reporting periods. This forecast is based on the Group’s past results and future expectations on revenues and expenses as well as future tax planning strategies. However, there is no assurance that the Group will generate sufficient taxable income to allow all or part of the deferred tax assets to be utilized.
·
Estimating allowance for impairment loss on receivables
The level of a specific allowance is evaluated by management on the basis of factors that affect the collectibility of the accounts. In these cases, the Group uses judgment based on the best available facts and circumstances, including but not limited to, the length of the Group’s relationship with the customers and the customers’ credit status based on third-party credit reports and known market factors, to record specific reserves for customers against amounts due in order to reduce the Group’s receivables to amounts that they expect to collect. These specific reserves are re-evaluated and adjusted as additional information received affects the amounts estimated.
Any collective allowance recognized is based on historical loss experience using various factors such as historical performance of the debtors within the collective group and judgments on the effect of deterioration in the markets in which the debtors operate and identified structural weaknesses or deterioration in the cash flows of debtors.
·
Estimation of pension cost and other employee benefits
The cost of defined benefit plan and present value of the pension obligation are determined using the projected-unit-credit method. Actuarial valuation includes making various assumptions which consist of, among other others, discount rates, expected rates of return on plan assets, rates of compensation increases and mortality rates. Actual results that differ from the Group’s assumptions are recognized as income or expense when the net cumulative unrecognized actuarial gains and losses at the end of the previous reporting period exceed 10% of the higher of the present value of defined benefit obligation and the fair value of plan assets at that date. Due to the complexity of the valuation, the underlying assumptions and their long-term nature, a defined benefit obligation is highly sensitive to changes in assumptions.
While the Group believes that its assumptions are reasonable and appropriate, significant differences in the Group’s actual experience or significant changes in its assumptions may materially affect the costs and obligations of pension and other long-term employee benefits. All assumptions are reviewed at each reporting date.
28
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
3.
MANAGEMENT’S USE OF JUDGMENTS, ESTIMATES AND ASSUMPTIONS (continued)
b.
Estimates and Assumptions (continued)
·
Asset retirement obligations
Asset retirement obligations are recognized in the year in which they are incurred if a reasonable estimate of fair value can be made. The recognition of the obligations requires an estimation of the cost to restore/dismantle on a per location basis and is based on the best estimate of the expenditure required to settle the obligation at the future restoration/dismantlement date, discounted using a pre-tax rate that reflects the current market assessment of the time value of money and, where appropriate, the risk specific to the liability.
·
Revenue recognition
The Group’s revenue recognition policies require making use of estimates and assumptions that may affect the reported amounts of revenues and receivables.
The Company’s agreements with domestic and foreign carriers for inbound and outbound traffic subject to settlements require traffic reconciliations before actual settlement is done, which may not be the actual volume of traffic as measured by the Company. Initial recognition of revenues is based on observed traffic adjusted by the normal experience adjustments, which historically are not material to the consolidated statement of comprehensive income. Differences between the amounts initially recognized and the actual settlements are taken up in the account upon reconciliation. However, there is no assurance that the use of such estimates will not result in material adjustments in future periods.
The Group recognizes revenues from installation and activation-related fees and the corresponding costs over the expected average periods of customer relationship for cellular, MIDI and fixed telecommunications services. The Group estimates the expected average period of customer relationship based on the most recent churn-rate analysis.
·
Uncertain tax exposure
In certain circumstances, the Group may not be able to determine the exact amount of its current or future tax liabilities due to ongoing investigations by, or discussions with, the taxation authority. Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. In determining the amount to be recognized in respect of an uncertain tax liability, the Group applies similar considerations as it would use in determining the amount of a provision to be recognized in accordance with PSAK 57 (Revised 2009), “Provisions, Contingent Liabilities and Contingent Assets”.The Group makes an analysis of all tax positions related to income taxes to determine if a tax liability for uncertain tax benefit should be recognized.
As of December 31, 2012, the Company is subject to tax audit for fiscal year 2011.
29
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
4.
CASH AND CASH EQUIVALENTS
This account consists of the following:
January 1,
December 31,
2011/
December 31,
2012
2011
2010
Cash on hand
Rupiah
1,837
1,465
1,682
U.S. dollar (US$13 in 2011 and US$12 in 2010)
-
115
110
1,837
1,580
1,792
Cash in banks
Related parties (Note 31)
Rupiah
PT Bank Mandiri (Persero) Tbk (“Mandiri”)
74,373
45,441
45,792
PT Bank Pembangunan Daerah DKI Jakarta
2,996
1,110
935
PT Bank Pembangunan Daerah Sumatera Selatan
2,231
-
-
PT Bank Tabungan Negara (Persero) Tbk (“BTN”)
1,924
500
1,270
PT Bank Pembangunan Daerah Jawa Timur
1,326
743
20
PT Bank Negara Indonesia (Persero) Tbk (“BNI”)
1,279
3,022
4,461
PT Bank Pembangunan Daerah Nusa Tenggara Timur
1,234
1,033
4,476
PT Bank Rakyat Indonesia (Persero) Tbk (“BRI”)
1,178
1,409
11,345
PT Bank Pembangunan Daerah Yogyakarta
(“BPD - Yogyakarta”)
685
1,473
256
PT Bank Syariah Mandiri (“Mandiri Syariah”)
538
719
1,215
PT Bank Pembangunan Daerah Papua
293
299
2,473
PT Bank Pembangunan Daerah Sumatera Utara
12
1,134
662
Others (each below Rp1,000)
1,009
2,491
700
U.S. dollar
Mandiri (US$2,746 in 2012, US$3,793 in 2011 and
US$4,606 in 2010)
26,557
34,397
41,412
Others (US$8 in 2012, US$12 in 2011 and
US$120 in 2010)
72
109
1,090
Third parties
Rupiah
PT Bank Central Asia Tbk (“BCA”)
159,969
13,247
2,284
PT Bank CIMB Niaga Tbk (“CIMB Niaga”)
17,678
4,828
21,845
HSBC
14,076
2,414
592
Citibank N.A., Jakarta Branch (“Citibank”)
3,429
52,768
2,848
PT Bank Bukopin Tbk (“Bukopin”)
2,325
1,242
9,308
Others (each below Rp5,000)
8,838
12,545
12,867
U.S. dollar
Fortis Bank N.V., The Netherlands (US$5,258 in 2012,
US$6,220 in 2011 and US$6,960 in 2010)
50,846
56,405
62,577
Citibank N.A., Singapore Branch
(US$3,411 in 2012, US$5,256 in 2011 and
US$4,945 in 2010)
32,983
47,660
44,464
Citibank (US$801 in 2012, US$790 in 2011 and
US$677 in 2010)
7,750
7,164
6,087
DB (US$728 in 2012, US$305 in 2011 and
US$137 in 2010)
7,042
2,763
1,235
30
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
4.
CASH AND CASH EQUIVALENTS (continued)
January 1,
December 31,
2011/
December 31,
2012
2011
2010
Cash in banks (continued)
Third parties (continued)
U.S. dollar (continued)
Bukopin (US$59 in 2012 and US$78 in 2011)
569
707
-
CIMB Niaga (US$25 in 2012, US$697 in 2011 and
US$160 in 2010)
243
6,323
1,435
HSBC (US$14 in 2012 and US$151 in 2011)
132
1,369
-
Others (US$36 in 2012, US$9 in 2011 and
US$6 in 2010)
345
84
46
421,932
303,399
281,695
Time deposits and deposits on call
Related parties (Note 31)
Rupiah
Mandiri
198,800
245,820
421,400
BTN
169,372
180,400
88,500
BNI
138,320
143,720
141,185
BRI
71,500
145,000
68,500
PT Bank BRI Syariah
47,500
7,500
5,000
PT Bank Pembangunan Daerah Jawa Barat and
Banten Tbk (“BPD - Jawa Barat”)
34,850
24,850
8,350
Mandiri Syariah
34,000
35,000
31,000
BPD - Yogyakarta
1,000
1,000
1,000
Others
20,000
-
-
U.S. dollar
BRI (US$60,000 in 2012, US$5,000 in 2011 and
US$80,000 in 2010)
580,200
45,340
719,280
PT Bank QNB Kesawan Tbk (US$10,000)
96,700
-
-
Mandiri (US$2,701 in 2012, US$3,040 in 2011 and
US$1,540 in 2010)
26,119
27,566
13,845
Mandiri Syariah (US$3,000)
-
27,204
-
BPD - Jawa Barat (US$75 in 2011 and US$165
in 2010)
-
680
1,484
Third parties
Rupiah
PT Bank Syariah Muamalat Indonesia Tbk
(“Muamalat”)
96,800
249,894
48,500
Bukopin
88,500
27,500
21,400
PT Bank Tabungan Pensiunan Nasional Tbk
82,500
34,500
12,000
Citibank
50,000
-
3,495
PT Bank Saudara Tbk
(previously PT Bank Himpunan Saudara 1906 Tbk)
48,000
32,100
15,400
DB
42,485
79,354
5,232
31
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
4.
CASH AND CASH EQUIVALENTS (continued)
January 1,
December 31,
2011/
December 31,
2012
2011
2010
Time deposits and deposits on call (continued)
Third parties (continued)
Rupiah (continued)
PT Bank Mega Tbk
27,250
5,000
3,000
Mega Syariah
25,500
17,750
13,250
BII (including BII Syariah)
13,500
12,500
13,000
PT Bank ICB Bumiputera Tbk
11,500
9,500
-
CIMB Niaga (including CIMB Niaga Syariah)
4,000
55,000
22,500
PT Bank Danamon Indonesia Tbk
2,000
33,000
15,900
BCA
-
200,000
4,080
DBS
-
50,000
-
Others (each below Rp5,000)
2,100
3,100
2,505
U.S. dollar
DBS (US$55,000)
531,850
-
-
CIMB Niaga (US$50,000 in 2012 and
US$2,000 in 2010)
483,500
-
17,984
DB (US$19,752 in 2012, US$17,917 in 2011 and
US$5,454 in 2010)
191,005
162,473
49,038
PT Bank UOB Buana Indonesia (US$15,000)
145,050
-
-
Permata Syariah (US$15,000)
145,050
-
-
Standchart (US$5,000)
48,350
-
-
Fortis Bank N.V., The Netherlands (USD$3,740)
36,166
-
-
Muamalat (US$7,000 in 2011 and
US$5,000 in 2010)
-
63,476
44,955
3,493,467
1,919,227
1,791,783
Total
3,917,236
2,224,206
2,075,270
Time deposits and deposits on call denominated in rupiah earned interest at annual rates ranging from 2.00% to 9.50% in 2012, from 2.50% to 9.75% in 2011 and from 2.50% to 10.00% in 2010, while those denominated in U.S. dollar earned interest at annual rates ranging from 0.01% to 3.00% in 2012, from 0.01% to 2.75% in 2011 and from 0.05% to 4.75% in 2010.
32
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
5.
ACCOUNTS RECEIVABLE - TRADE
This account consists of the following:
January 1,
December 31,
2011/
December 31,
2012
2011
2010
(Restated)
(Restated)
Related parties (Note 31)
Telkom (including US$436 in 2012, US$51
in 2011 and US$55 in 2010)
73,835
19,977
56,108
Others (including US$7,318 in 2012, US$8,085
in 2011 and US$7,764 in 2010)
543,447
345,373
198,821
Sub-total
617,282
365,350
254,929
Less allowance for impairment
42,632
47,107
47,640
Net
574,650
318,243
207,289
Third parties
Local companies (including US$24,583 in 2012,
US$16,593 in 2011 and US$13,956 in 2010)
902,013
791,178
631,291
Overseas international carriers (US$79,275 in 2012,
US$66,532 in 2011 and US$93,755 in 2010)
766,070
603,309
842,954
Post-paid subscribers from:
Cellular
297,721
254,565
255,973
Fixed telecommunications
20,263
22,345
47,239
Sub-total
1,986,067
1,671,397
1,777,457
Less allowance for impairment
521,998
489,544
448,470
Net
1,464,069
1,181,853
1,328,987
Total
2,038,719
1,500,096
1,536,276
5.
ACCOUNTS RECEIVABLE - TRADE (continued)
The aging schedule of the accounts receivable - trade is as follows:
January 1, 2011/
December 31,
December 31,
December 31,
2012
2011
2010
(Restated)
(Restated)
Number of
Percentage
Percentage
Percentage
Months Outstanding
Amount
(%)
Amount
(%)
Amount
(%)
Related parties
0 - 6 months
477,272
77.32
257,348
70.44
186,039
72.98
7 - 12 months
52,246
8.46
35,252
9.65
47,973
18.82
13 - 24 months
30,390
4.92
64,498
17.65
6,913
2.71
Over 24 months
57,374
9.30
8,252
2.26
14,004
5.49
Total
617,282
100.00
365,350
100.00
254,929
100.00
Third parties
0 - 6 months
1,036,438
52.19
945,410
56.56
790,938
44.50
7 - 12 months
235,844
11.87
208,218
12.46
279,806
15.74
13 - 24 months
259,715
13.08
255,648
15.30
308,808
17.37
Over 24 months
454,070
22.86
262,121
15.68
397,905
22.39
Total
1,986,067
100.00
1,671,397
100.00
1,777,457
100.00
The changes in the allowance for impairment of accounts receivable - trade are as follows:
Related
Third
Total
Parties
Parties
December 31, 2012
Balance at beginning of year
536,651
47,107
489,544
Provision (reversal) - net (Note 27)
56,163
(6,567
)
62,730
Net effect of foreign exchange adjustment
7,802
2,092
5,710
Write-offs
(35,986
)
-
(35,986)
Balance at end of year
564,630
42,632
521,998
Individual impairment
208,208
37,852
170,356
Collective impairment
356,422
4,780
351,642
Total
564,630
42,632
521,998
Gross amount of receivables, individually impaired,
before deducting any individually assessed
341,363
111,124
230,239
impairment allowance
December 31, 2011
Balance at beginning of year
496,110
47,640
448,470
Provision (reversal) - net (Note 27)
41,051
(1,509
)
42,560
Net effect of foreign exchange adjustment
105
976
(871)
Write-offs
(615
)
-
(615)
Balance at end of year
536,651
47,107
489,544
Individual impairment
189,486
44,086
145,400
Collective impairment
347,165
3,021
344,144
Total
536,651
47,107
489,544
33
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
5.
ACCOUNTS RECEIVABLE - TRADE (continued)
Related
Third
Total
Parties
Parties
Gross amount of receivables, individually impaired,
before deducting any individually assessed
impairment allowance
309,556
117,572
191,984
January 1, 2011 / December 31, 2010
Balance at beginning of year
461,810
57,538
404,272
Provision (reversal) - net
67,041
(9,712
)
76,753
Write-offs
(23,586
)
-
(23,586)
Net effect of foreign exchange adjustment
(9,155
)
(186
)
(8,969)
Balance at end of year
496,110
47,640
448,470
Individual impairment
182,175
37,576
144,599
Collective impairment
313,935
10,064
303,871
Total
496,110
47,640
448,470
Gross amount of receivables, individually impaired,
before deducting any individually assessed
impairment allowance
405,926
118,486
287,440
The net effect of foreign exchange adjustment was due to the strengthening or weakening of the rupiah vis-à-vis the U.S. dollar in relation to U.S. dollar accounts previously provided with allowance and was credited or charged to “Gain on Foreign Exchange - Net”.
There are no significant concentrations of credit risk.
Management believes the established allowance is sufficient to cover impairment losses from uncollectible accounts receivable.
6.
PREPAID TAXES
This account consists of the following:
January 1,
December 31,
2011/
December 31,
2012
2011
2010
Claims for tax refund
167,216
-
-
VAT - net
124,642
29,677
47,701
Others
2,485
1,018
2,202
Total
294,343
30,695
49,903
34
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
6.
PREPAID TAXES (continued)
On September 17, 2010, the Company received Tax Collection Letters (“STPs”) from the Directorate General of Taxation (“DGT”) for the underpayment of the Company’s 2008 and 2009 article 26 tax totalling Rp80,018 (including interest). On October 13, 2010, the Company submitted cancellation letters to the Tax Office regarding these STPs. Subsequently, on November 16, 2010, the Company was required to pay a certain portion of these STPs which was performed through an offset against the approved tax refund received on the Company’s corporate income tax for the fiscal year 2005 amounting to Rp38,155. On January 7, 2011, the Company paid the remaining amount of Rp41,863 on the underpayment of the Company’s 2008 and 2009 income tax article 26. On April 11, 2011, the Company received a letter from the Tax Office which declined the request for cancellation of such STPs. On May 5, 2011, the Company submitted an appeal letter to the Tax Court concerning these STPs. On July 30, 2012, the Company received the Tax Court’s Decision Letter accepting the Company’s appeal to the cancellation of the underpayment of the Company’s 2008 and 2009 income tax article 26 totalling Rp80,018 (including interest). On September 11, 2012, the Company submitted a request of restitution to the Tax Office to transfer the tax overpayment related to these STPs. On December 26, 2012, the Company received a copy of a Memorandum for Reconsideration Request (Memori Permohonan Peninjauan Kembali)from the Tax Court to the Supreme Court on the Tax Court’s Decision Letter dated July 30, 2012 for the underpayment of the Company’s 2008 and 2009 article 26 tax. On February 6, 2013, the Company submitted a Counter-Memorandum for Reconsideration Request to the Supreme Court. As of April 29, 2013, the restitution has not yet been received.
On October 12, 2010, the Company submitted appeal letters to the Tax Court concerning the Company’s objection to the correction of Satelindo’s 2002 and 2003 article 26 tax. On November 6, 2012, the Company received the Decision Letter from the Tax Court accepting the Company’s appeal on Satelindo’s 2002 and 2003 income tax article 26 amounting to Rp87,198, which is lower than the amount recognized by the Company in its financial statements. The Company accepted the corrections amounting to Rp4,655, which was charged to current operations as part of “Expenses - Others - Net”. On January 28, 2013, the Company has received the restitution.
7.
OTHER CURRENT FINANCIAL ASSETS - NET
This account consists of the following:
January 1,
December 31,
2011/
December 31,
2012
2011
2010
Short-term investments
25,395
25,395
25,395
Less allowance for impairment
25,395
25,395
25,395
Net
-
-
-
Restricted cash and cash equivalents (including
US$231 on December 31, 2012, US$168 on
December 31, 2011 and US$1,645 on
January 1, 2011/December 31, 2010)
5,483
18,830
48,165
Others (including US$257 on December 31, 2012,
US$10 on December 31, 2011 and US$70
on January 1, 2011/December 31, 2010)
7,899
5,960
4,954
Total
13,382
24,790
53,119
35
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
8.
PROPERTY AND EQUIPMENT
The details of property and equipment are as follows:
December 31, 2012
Balance
Transactions during the Year
Balance
at Beginning
at End
of Year
Additions
Derecognitions
Reclassifications
of Year
Cost
Direct ownership
Landrights
543,062
2,437
-
-
545,499
Buildings
867,712
-
-
3,462
871,174
Information technology equipment
3,395,355
66
-
254,372
3,649,793
Office equipment
1,242,130
7,958
(36,963)
288
1,213,413
Building and leasehold
improvements
12,213,728
-
(2,386,031)
585,399
10,413,096
Vehicles
23,794
2,597
(3,754)
-
22,637
Cellular technical equipment
37,413,004
273,665
(585,293)
2,852,513
39,953,889
Transmission and cross-
connection equipment
19,684,883
186,914
(77)
1,293,090
21,164,810
FWA technical equipment
1,345,306
-
-
-
1,345,306
Operation and maintenance
center and measurement unit
1,452,593
-
-
25,715
1,478,308
Fixed access network
equipment
1,167,401
-
-
23,535
1,190,936
Properties under
construction and
installation
2,808,976
5,195,859 *
-
(5,038,374)
2,966,461
Assets under finance lease
Building and leasehold
improvements (Note 2j)
898,293
2,653,360
-
-
3,551,653
Information technology equipment
-
50,670
-
-
50,670
Total
83,056,237
8,373,526
(3,012,118)
-
88,417,645
Accumulated Depreciation
Direct ownership
Buildings
348,244
17,450
-
-
365,694
Information technology
equipment
2,718,609
320,920
-
-
3,039,529
Office equipment
972,372
41,868
(36,596)
-
977,644
Building and leasehold
improvements
5,443,328
856,369
(1,002,737)
-
5,296,960
Vehicles
20,431
1,977
(3,254)
-
19,154
Cellular technical equipment
17,535,524
4,627,878
(311,628)
-
21,851,774
Transmission and cross-
connection equipment
9,479,255
1,751,961
(77)
-
11,231,139
FWA technical equipment
657,696
274,212
-
-
931,908
Operation and maintenance
center and measurement unit
1,219,365
82,374
-
-
1,301,739
Fixed access network equipment
909,355
65,796
-
-
975,151
Assets under finance lease
Building and leasehold
improvements (Note 2j)
147,749
215,800
-
-
363,549
Total
39,451,928
8,256,605
(1,354,292
)
-
46,354,241
Less Impairment in Value
98,611
-
-
-
98,611
Net Book Value
43,505,698
41,964,793
*including additional property and equipment purchased from Lintasarta amounting to Rp1,345 (net of intercompany profit of Rp384)
36
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
8.
PROPERTY AND EQUIPMENT (continued)
December 31, 2011 (Restated)
Balance
Transactions during the Year
Balance
at Beginning
at End
of Year
Additions
Derecognitions
Reclassifications
of Year
Cost
Direct ownership
Landrights
541,087
-
-
1,975
543,062
Buildings
814,191
2,518
-
51,003
867,712
Information technology equipment
3,046,084
16
(42,816)
392,071
3,395,355
Office equipment
1,239,609
37,596
(37,171)
2,096
1,242,130
Building and leasehold
improvements
11,974,442
-
(101,426)
340,712
12,213,728
Vehicles
24,700
160
(1,066)
-
23,794
Cellular technical equipment
34,850,044
400,956
(1,709,433
)
3,871,437
37,413,004
Transmission and cross-
connection equipment
18,287,587
114,475
(90,488)
1,373,309
19,684,883
FWA technical equipment
1,345,157
-
-
149
1,345,306
Operation and maintenance
center and measurement unit
1,355,263
-
(22)
97,352
1,452,593
Fixed access network
equipment
1,126,614
-
-
40,787
1,167,401
Properties under
construction and
installation
3,461,884
5,517,983
*
-
(6,170,891
)
2,808,976
Assets under finance lease
Building and leasehold
improvements (Note 2j)
471,051
427,242
-
-
898,293
Total
78,537,713
6,500,946
(1,982,422)
-
83,056,237
Accumulated Depreciation
Direct ownership
Buildings
313,721
34,523
-
-
348,244
Information technology
equipment
2,349,288
412,137
(42,816)
-
2,718,609
Office equipment
958,324
51,219
(37,171)
-
972,372
Building and leasehold
improvements
4,694,662
850,015
(101,349
)
-
5,443,328
Vehicles
18,646
2,852
(1,067
)
-
20,431
Cellular technical equipment
15,488,516
3,250,203
(1,203,195
)
-
17,535,524
Transmission and cross-
connection equipment
8,032,100
1,527,191
(80,036
)
-
9,479,255
FWA technical equipment
534,842
122,854
-
-
657,696
Operation and maintenance
center and measurement unit
1,093,598
125,789
(22
)
-
1,219,365
Fixed access network equipment
842,092
67,263
-
-
909,355
Assets under finance lease
Building and leasehold
improvements (Note 2j)
51,277
96,472
-
-
147,749
Total
34,377,066
6,540,518
(1,465,656
)
-
39,451,928
Less Impairment in Value
98,611
-
-
-
98,611
Net Book Value
44,062,036
43,505,698
*including additional property and equipment purchased from Lintasarta amounting to Rp88,371 (net of intercompany profit of Rp27,578)
37
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
8.
PROPERTY AND EQUIPMENT (continued)
January 1, 2011/December 31, 2010 (Restated)
Balance
Transactions during the Year
Balance
at Beginning
at End
of Year
Additions
Derecognitions
Reclassifications
of Year
Cost
Direct ownership
Landrights
504,620
15,977
-
20,490
541,087
Buildings
652,677
4,088
-
157,426
814,191
Information technology equipment
2,663,672
114
(14,159)
396,457
3,046,084
Office equipment
1,181,738
58,004
(14,998)
14,865
1,239,609
Building and leasehold
improvements
10,924,318
-
(70,589
)
1,120,713
11,974,442
Vehicles
24,389
635
(1,500)
1,176
24,700
Cellular technical equipment
31,170,449
158,285
(1,741,072)
5,262,382
34,850,044
Transmission and cross-
connection equipment
16,349,982
164,216
(324,912)
2,098,301
18,287,587
FWA technical equipment
1,284,431
-
(22,070)
82,796
1,345,157
Operation and maintenance
center and measurement unit
1,286,658
-
(1,315)
69,920
1,355,263
Fixed access network
equipment
1,069,005
-
(1,851)
59,460
1,126,614
Properties under
construction and
installation
7,706,513
5,039,357*
-
(9,283,986
)
3,461,884
Assets under finance lease
Building and leasehold
improvements (Note 2j)
-
471,051
-
-
471,051
Total
74,818,452
5,911,727
(2,192,466
)
-
78,537,713
Accumulated Depreciation
Direct ownership
Buildings
283,781
29,940
-
-
313,721
Information technology
equipment
1,983,438
379,995
(14,145)
-
2,349,288
Office equipment
912,383
60,931
(14,990)
-
958,324
Building and leasehold
improvements
3,952,460
812,768
(70,566)
-
4,694,662
Vehicles
15,761
3,588
(703
)
-
18,646
Cellular technical equipment
14,044,917
3,026,386
(1,582,787
)
-
15,488,516
Transmission and cross-
connection equipment
6,925,779
1,431,233
(324,912
)
-
8,032,100
FWA technical equipment
434,990
121,922
(22,070
)
-
534,842
Operation and maintenance
center and measurement unit
959,924
134,989
(1,315
)
-
1,093,598
Fixed access network equipment
777,601
66,342
(1,851)
-
842,092
Assets under finance lease
Building and leasehold
improvements (Note 2j)
-
51,277
-
-
51,277
Total
30,291,034
6,119,371
(2,033,339
)
-
34,377,066
Less Impairment in Value
98,611
-
-
-
98,611
Net Book Value
44,428,807
44,062,036
*including additional property and equipment purchased from Lintasarta amounting to Rp71,423 (net of intercompany loss of Rp11,683)
38
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
8.
PROPERTY AND EQUIPMENT (continued)
Submarine cables (presented as part of transmission and cross-connection equipment) represent the Company’s proportionate investment in submarine cable circuits jointly constructed, operated, maintained and owned with other countries, based on the respective contracts and/or the construction and maintenance agreements.
Depreciation expense charged to profit or loss amounted to Rp8,256,605 and Rp6,540,518 for the years ended December 31, 2012 and 2011, respectively.
Management believes that there is no impairment in asset value or recovery of the impairment reserve as contemplated in PSAK 48 (Revised 2009) for the current year.
On August 31, 2009, the Company launched its Satellite Palapa-D. The Satellite experienced an under-performance of the launch vehicle during the Satellite’s placement to its intended orbital position. Consequently, its orbital lifetime has been reduced. The insurance claim for the partial loss of the Satellite has been made and is recorded as a reduction of the cost of the Satellite. The Satellite has been in operation since November 2009 after going through the process of testing and arranging its orbital position in September and October 2009. On January 4 and 19, 2010, the Company collected the Palapa-D Satellite insurance claim amounting to US$58,008 (equivalent to Rp537,657) as a loss compensation for the decrease in the Satellite’s useful life from 15 years to 10.77 years due to the under-performance of the launch vehicle in the Satellite’s orbital process.
As of December 31, 2012, the Group has no property and equipment pledged as collateral to any credit facilities.
As of December 31, 2012, the Group insured its property and equipment (except submarine cables and landrights) for US$218,481 and Rp35,504,158 including insurance amounting to US$117,700 on the Company‘s satellite. Management believes that the sum insured is sufficient to cover possible losses arising from fire, explosion, lightning, aircraft damage and other natural disasters.
As of December 31, 2012, the Group has property and equipment with total cost amounting to Rp2,966,002, which have been fully depreciated but are still being used.
As of December 31, 2012, the fair value of the Group’s property and equipment determined under the income approach amounted to Rp77,592,149.
The details of the Group’s properties under construction and installation as of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010 are as follows:
Percentage of
Estimated Date
Completion
Cost
of Completion
December 31, 2012
Cellular technical equipment
9 - 99
1,944,855
January - March 2013
Transmission and cross-connection equipment
7 - 99
491,131
January - March 2013
Building and leasehold improvements
10 - 96
279,435
January - March 2013
Information technology equipment
18 - 95
202,740
January - September 2013
Others (each below Rp50,000)
30 - 80
48,300
January - December 2013
Total
2,966,461
39
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
8.
PROPERTY AND EQUIPMENT (continued)
Percentage of
Estimated Date
Completion
Cost
of Completion
December 31, 2011
Cellular technical equipment
17 - 90
1,775,032
January - June 2012
Transmission and cross-connection equipment
18 - 98
799,321
January - June 2012
Building and leasehold improvements
20 - 95
141,022
January - June 2012
Information technology equipment
40 - 80
91,182
January 2012 -
January 2013
Others
40 - 90
2,419
January - September 2012
Total
2,808,976
January 1, 2011 / December 31, 2010
Cellular technical equipment
5 - 99
2,170,612
January - December 2011
Transmission and cross-connection equipment
5 - 99
955,425
January - December 2011
Building and leasehold improvements
6 - 95
242,194
January - December 2011
Others (each below Rp50,000)
5 - 95
93,653
January - December 2011
Total
3,461,884
Borrowing costs capitalized to properties under construction and installation for the years ended December 31, 2012 and 2011 amounted to Rp nil and Rp2,933, respectively.
For the years ended December 31, 2012 and 2011, exchanges and sales of certain property and equipment were made as follows:
2012
2011
Exchanges of Assets
Kalimantan Project
Carrying amount of assets received
-
400,956
Carrying amount of assets given up
-
(400,956
)
Sumatra and Java Project (Note 33e)
Carrying amount of assets received
273,665
115,734
Carrying amount of assets given up
(273,665
)
(115,734
)
Sales of 2,500 Towers (Note 29)
Proceeds
3,870,600
-
Net book value
(1,372,674
)
-
Excess of selling price over carrying amount
2,497,926
-
Deferred gain
(1,318,923
)
-
Recognized gain
1,179,003
-
Sales of Assets
Proceeds
7,215
6,708
Net book value
(11,487
)
(76
)
Gain
1,174,731
6,632
In the above exchange of asset transactions, the fair values of neither the assets received nor the assets given up could be measured reliably, hence, their values were measured at the carrying amounts of the assets given up plus cash consideration.
40
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
8.
PROPERTY AND EQUIPMENT (continued)
In accordance with its policy, the Company reviews the estimated useful lives of its fixed assets on an ongoing basis. As a result, effective January 1, 2010, the Company changed its estimate of the useful lives of its towers to better reflect the estimated periods during which these assets will remain in service. The towers that previously averaged 15 years were increased to an average of 25 years. The effect of this change in estimate was to reduce depreciation expense by Rp108,086 in 2010 and by Rp108,807 in 2011.
Effective September 1, 2012, the Company changed its estimate of the useful lives of its cellular technical equipment from 10 years to 8 years. The changes was made mainly due to the Company’s plan to change its network with new updated equipment that will enable the Company to fully utilize its 900 MHz frequency channel for 3G services. The effect of this change in estimate was to increase 2012 depreciation expense by Rp1,256,941.
The effect of the change in the useful lives of these assets were to increase (decrease) income before income tax as follows:
Period
Amount
Year ended December 31, 2013
(1,323,176
)
Year ended December 31, 2014
(624,964
)
Year ended December 31, 2015
(358,302
)
Year ended December 31, 2016
(206,442
)
Year ended December 31, 2017
667,750
9.
GOODWILL AND OTHER INTANGIBLE ASSETS
The changes in goodwill and other intangible assets, including non-integrated software, for the years ended December 31, 2012, 2011 and 2010 are as follows:
Non-integrated software | Other intangible assets | Goodwill | Total | ||||
Cost | |||||||
At January 1, 2010 | 235,577 | 597,448 | 2,944,362 | 3,777,387 | |||
Additions | 40,052 | - | - | 40,052 | |||
At December 31, 2010 | 275,629 | 597,448 | 2,944,362 | 3,817,439 | |||
Additions | 10,340 | 112 | - | 10,452 | |||
At December 31, 2011 | 285,969 | 597,560 | 2,944,362 | 3,827,891 | |||
Additions | 23,055 | 18 | - | 23,073 | |||
At December 31, 2012 | 309,024 | 597,578 | 2,944,362 | 3,850,964 | |||
Accumulated Amortization | |||||||
At January 1, 2010 | 215,357 | 588,351 | 1,393,599 | 2,197,307 | |||
Amortization | 10,595 | 9,097 | 226,380 | 246,072 | |||
At December 31, 2010 | 225,952 | 597,448 | 1,619,979 | 2,443,379 | |||
Amortization | 17,608 | 51 | - | 17,659 | |||
At December 31, 2011 | 243,560 | 597,499 | 1,619,979 | 2,461,038 | |||
Amortization | 16,210 | 9 | - | 16,219 | |||
At December 31, 2012 | 259,770 | 597,508 | 1,619,979 | 2,477,257 | |||
41
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
9.
GOODWILL AND OTHER INTANGIBLE ASSETS (continued)
Non-integrated software | Other intangible assets | Goodwill | Total | ||||
Net Book Value: | |||||||
At January 1, 2011/ December 31, 2010 | 49,677 | - | 1,324,383 | 1,374,060 | |||
At December 31, 2011 | 42,409 | 61 | 1,324,383 | 1,366,853 | |||
At December 31, 2012 | 49,254 | 70 | 1,324,383 | 1,373,707 | |||
Goodwill arose from the acquisition of ownership in Bimagraha and Satelindo in 2001 and 2002, respectively, and from the acquisition of additional ownership in Lintasarta in 2005, in SMT in 2008 and in LMD in 2010.
The details of the other intangible assets arising from the acquisition of Satelindo in 2002 are as follows:
Amount
Spectrum license
222,922
Customer base
- Post-paid
154,220
- Prepaid
73,128
Brand
147,178
Total
597,448
Goodwill acquired through business combination has been allocated to the cellular business unit, which is also considered as one of the Group’s operating segments.
Goodwill is tested for impairment annually (as at December 31) and when circumstances indicate the carrying value may be impaired. The Company considers the relationship between its market capitalization and its book value, among other factors, when reviewing for indicators of impairment. As of December 31, 2012, the market capitalization of the Company was above the book value of its equity. The recoverable amount of the cellular business unit has been determined based on fair values less cost to sell (“FVLCTS”) calculation that uses the Income Approach (a Discounted Cash Flows Method) and the Market Approach (a Guideline Public Company Method).
Key assumptions used in the FVLCTS calculation at December 31, 2012:
Discount rates - The Company has chosen to use weighted average cost of capital (“WACC”) as the discount rate for the discounted cash flow. The estimated WACC applied in determining the recoverable amount of the cellular business unit is between 11% and 12%.
Compounded Annual Growth Rate (“CAGR”) - The CAGR projection for the 5-year budget period of the cellular business unit’s revenue based on the market analysts’ forecast is between 5.6% and 7.8%.
Cost to Sell - As the recoverable amount of the cellular business unit is determined using FVLCTS, the estimated cost to sell the business is based on a certain percentage of the equity value. The estimated cost to sell used for this calculation is at approximately 1.0% of the enterprise value.
As a result of the impairment testing, management did not identify an impairment for the cellular business unit to which goodwill of Rp1,324,383 is allocated.
42
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
10.
LONG-TERM PREPAID RENTALS - NET OF CURRENT PORTION
This account represents mainly the long-term portion of prepaid rentals on sites.
11.
LONG-TERM ADVANCES
This account represents advances to suppliers and contractors for the purchase and construction/ installation of property and equipment which will be reclassified to the related property and equipment accounts upon the receipt of the property and equipment purchased or after the construction/installation of the property and equipment has reached a certain percentage of completion.
12.
OTHER NON-CURRENT FINANCIAL ASSETS - NET
This account consists of the following:
January 1,
2011/
December 31,
December 31,
2012
2011
2010
(Restated)
(Restated)
Other long-term investments
1,483,317
116,307
102,707
Less allowance for impairment
113,577
113,577
99,977
Net
1,369,740
2,730
2,730
Restrictedcash and cash equivalents
(including US$140 on December 31, 2012,
US$290 on December 31, 2011 and
US$155 on January 1, 2011 / December 31, 2010)
83,232
50,826
39,595
Employee loans receivable
11,025
13,515
15,679
Others (including US$1,010 on December 31, 2012,
US$1,288 on December 31, 2011 and US$1,272
on January 1, 2011 / December 31, 2010)
79,143
145,199
92,600
Sub-total
173,400
209,540
147,874
Total
1,543,140
212,270
150,604
Other long-term investments - net consist of the following:
a.
Investments in shares of stock accounted under available for sale:
Location | Principal Activity | Ownership (%) | Cost | Unrealized changes in fair value | Carrying Value | ||||||||
PT Tower Bersama Infrastructure Tbk (“Tower Bersama”) (Note 29) | Indonesia | Telecommunication infrastructure services |
5.00 | 977,292 |
389,718 | 1,367,010 |
On August 2, 2012, the Company received 5% ownership in Tower Bersama as part of compensation from sale-and-leaseback transaction of telecommunication towers (Note 29).
43
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
12.
OTHER NON-CURRENT FINANCIAL ASSETS - NET (continued)
b.
Investments in shares of stock accounted under the cost method:
December 31, 2012 and 2011
Location | Principal Activity | Ownership (%) | Cost/Carrying Value | ||||||||||||
PT First Media Tbk | Indonesia | Cable television and internet network service provider | 1.07 | 50,000 | |||||||||||
Pendrell Corporation [previously ICO Global Communication (Holdings) Limited*] | United States of America | Intellectual property investment, advisory and asset management | 0.0067 | 49,977 | |||||||||||
Asean Cableship Pte. Ltd. (“ACPL”)** | Singapore | Repairs and maintenance of submarine cables | 16.67 | 1,265 | |||||||||||
Others | 12.80 - 18.89 | 14,966 | |||||||||||||
Total | 116,208 | ||||||||||||||
Less allowance for impairment | 113,577 | ||||||||||||||
Net | 2,631 | ||||||||||||||
January 1, 2011/December 31, 2010
Location | Principal Activity | Ownership (%) | Cost/Carrying Value | |||||
PT First Media Tbk | Indonesia | Cable television and internet network service provider | 1.07 | 50,000 | ||||
ICO Global Communication (Holdings) Limited * | United States of America | Intellectual property investment, advisory and asset management | 0.0087 | 49,977 | ||||
ACPL** | Singapore | Repairs and maintenance of submarine cables | 16.67 | 1,265 | ||||
Others | 12.80 – 14.29 | 1,366 | ||||||
Total | 102,608 | |||||||
Less allowance for impairment | 99,977 | |||||||
Net | 2,631 | |||||||
*
On March 15, 2011, the Company’s ownership in ICO Global Communication (Holdings) Limited was diluted to 0.0068% since the Company did not exercise its right in relation to a right issue conducted by ICO Global Communication (Holdings) Limited. On July 21, 2011, ICO Global Communication changed its name to Pendrell Corporation. Furthermore, as of December 31, 2012 and 2011, the Company’s ownership in Pendrell has been diluted to 0.0067%.
**
The Company received dividend income from its investment in ACPL totaling US$ nil, US$1,574 (equivalent to Rp13,790) and US$2,140 (equivalent to Rp19,281) for the years ended December 31, 2012, 2011 and 2010, respectively.
The Company has provided allowance for impairment of its investments in shares of stock accounted for under the cost method amounting to Rp113,577 as of December 31, 2012 and 2011, and Rp99,977 as of January 1 / December 31, 2010, which the Company believes is adequate to cover impairment losses on the investments.
a.
Equity securities from BNI of Rp89 and Telkom of Rp10 are both classified as available for sale as of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010.
44
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
13.
OTHER NON-CURRENT ASSETS - NET
As of December 31, 2012 and 2011 and January 1, 2011/December 31, 2010, this account consists of the following:
January 1,
2011/
December 31,
December 31,
2012
2011
2010
Investment in an associated company (i)
57,174
56,300
56,300
Less allowance for impairment
56,300
56,300
56,300
Net
874
-
-
Claims for tax refund
Corporate income tax
Current year (Note 16)
162,647
181,717
163,562
Previous years (ii)
248,509
333,217
317,013
VAT and others (iii)
339,995
351,909
171,872
751,151
866,843
652,447
Others
2,473
5,593
7,551
Total
754,498
872,436
659,998
(i)
Investment in an associated company - equity accounted
Location | Principal Activity | Ownership (%) | Cost | Accumulated Equity in Undistributed Net Loss | Carrying Value | ||||||||
PT Citra Bakti Indonesia | Indonesia | Certification service company for chip-based ATM/debit card and related devices and infrastructures |
33.33 | 1,000 |
126 | 874 |
(ii)
The claims for tax refund with respect to corporate income tax for previous years include the following:
·
Satelindo’s 2002 corporate income tax
On July 15, 2010, the Company received Decision Letter No. KEP-357/WPJ.19/BD.05/2010 from the DGT declining the Company’s objection to the correction on Satelindo’s corporate income tax for fiscal year 2002 amounting to Rp105,809 (including penalties and interest). On October 14, 2010, the Company submitted an appeal letter to the Tax Court concerning the Company’s objection to the correction on Satelindo’s corporate income tax for fiscal year 2002. On June 25, 2012, the Company received the Decision Letter from the Tax Court rejecting the Company’s appeal on Satelindo’s corporate income tax for fiscal year 2002. The Company charged the related claim for tax refund amounting to Rp103,163 to current operations as part of “Current Income Tax Expense” (Note 16).
45
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
13.
OTHER NON-CURRENT ASSETS - NET (continued)
·
The Company and IMM’s 2009 corporate income tax
On April 21, 2011, the Company received the assessment letter on tax overpayment (“SKPLB”) from the DGT for the Company’s 2009 corporate income tax amounting to Rp29,272, which is lower than the amount recognized by the Company in its financial statements. The Company accepted a part of the corrections amounting to Rp836, which was charged to current operations. On May 31, 2011, the Company received the tax refund of its claim for 2009 corporate income tax amounting to Rp23,695, after being offset with the accepted amount of tax correction of VAT for the period January - December 2009 (iii). On July 20, 2011, the Company submitted an objection letter to the Tax Office regarding the remaining correction on the Company’s 2009 corporate income tax. On June 29, 2012, the Company received the Decision Letter from the DGT which declined the Company’s objection. On September 21, 2012, the Company submitted an appeal letter to the Tax Court concerning the Company’s objection to the correction on corporate income tax for fiscal year 2009. As of April 29, 2013, the Company has not received any decision from the Tax Court on such appeal.
On April 25, 2011, IMM received SKPLB from the Tax Office for IMM’s 2009 corporate income tax amounting to Rp34,950, which is lower than the amount recognized by IMM in its financial statements. IMM charged the unapproved 2009 claim for tax refund amounting to Rp597 to current operations. On the same date, IMM also received the assessment letters on tax underpayment (“SKPKBs”) for IMM’s 2009 income tax articles 21, 23 and 26 and VAT totalling Rp4,512 (including penalties and interest). On May 26, 2011, IMM received the refund of its claim for 2009 corporate income tax amounting to Rp30,438, after being offset with above underpayment of IMM’s 2009 income tax articles 21, 23 and 26 and VAT.
·
The Company’s 2006 corporate income tax
On April 26, 2011, the Company received the Tax Court’s Decision Letter which accepted the Company’s appeal on the remaining correction of the 2006 corporate income tax. On June 21, 2011, the Company received the tax refund amounting to Rp82,626. On August 22, 2011, the Company received a copy of a Memorandum for Reconsideration Request (Memori Permohonan Peninjauan Kembali) from the Tax Court to the Supreme Court on the Tax Court’s Decision Letter dated April 26, 2011 for the 2006 corporate income tax. On September 21, 2011, the Company submitted a Counter-Memorandum for Reconsideration Request to the Supreme Court. As of April 29, 2013, the Company has not received any decision from the Supreme Court on such request.
·
The Company and IMM’s 2010 corporate income tax
On April 26, 2012, IMM received SKPLB from the Tax Office for IMM’s 2010 corporate income tax amounting to Rp68,657, which is lower than the amount recognized by IMM in its financial statements. IMM charged the unapproved 2010 claim for tax refund amounting to Rp6,422 to current operations as part of current income tax expense (Note 16). On the same date, IMM also received SKPKBs for its 2010 income tax articles 21, 23 and 26 and VAT totalling Rp11,132 (including penalties and interest). On June 22, 2012, IMM received the refund of its claim for 2010 corporate income tax amounting to Rp57,525, after being offset with above underpayment of its 2010 income tax articles 21, 23 and 26 and VAT.
On July 3, 2012, the Company received SKPLB from the DGT for the Company’s 2010 corporate income tax amounting to Rp89,381, which is lower than the amount recognized by the Company in its financial statements. The Company accepted all of the corrections amounting to Rp61, which was charged to current operations (Note 16). On August 24, 2012, the Company received the tax refund of its claim for 2010 corporate income tax amounting to Rp89,381. Based on this SKPLB, the tax loss carry forward was adjusted to became amounting to Rp1,040,083, which is lower than the amount recognized by the Company in its financial statements. The Company accepted all of the corrections amounting to Rp101,978.
46
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
13.
OTHER NON-CURRENT ASSETS - NET (continued)
(i)
The claims for tax refund with respect to VAT and others include the following:
·
The Company’s 2010 and 2011 VAT
On April 21, 2011, the Company received SKPKB from the DGT for the Company’s VAT for the period January - December 2009 totalling Rp182,800 (including penalties). The Company accepted a part of the corrections amounting to Rp4,160 which was charged to current operations (Note 13). On July 15, 2011, the Company paid the remaining underpayment amounting to Rp178,640 of the VAT for the period January - December 2009. On July 19, 2011, the Company submitted an objection letter to the Tax Office regarding the remaining correction on the Company’s VAT for the period January - December 2009. On June 4, 2012, the Company received the decision letter from the DGT that declined the Company’s objection and, based on its audit, the DGT charged the Company for additional underpayment for the period January, March, April, June, August - December 2009 totalling Rp57,166 and overpayment for the period February, May and July 2009 totalling Rp4,027. On July 4, 2012, the Company paid the additional underpayment amounting to Rp57,166. On August 24, 2012 and August 31, 2012, the Company received the overpayment amounting to Rp3,839 and Rp188, respectively. On September 3, 2012, the Company submitted an appeal letter to the Tax Court regarding the remaining correction on the Company’s VAT for the period January - December 2009. As of
April 29, 2013, the Company has not received any decision from the Tax Court on such appeal.
On July 3, 2012, the Company received SKPLB from the DGT for the Company’s VAT for the period March 2010 amounting to Rp28,545, whichis lower than the amount recognized by the Company in its financial statements, and SKPKBs for the Company’s VAT for the period January, February and April - December 2010 totalling Rp98,011 (including penalties). On August 2, 2012, the Company paid the underpayment amounting to Rp98,011. On August 24, 2012, the Company received the overpayment amounting to Rp28,545 from the DGT. On October 1 and 2, 2012, the Company submitted objection letters to the Tax Office regarding SKPLB and SKPKBs on the Company’s VAT for the period January - December 2010 totalling Rp106,619. As of April 29, 2013, the Company has not received any decision from the Tax Office on such objections.
·
As of January 1, 2011 and December 31, 2011, this included the claims for tax refund from the Company’s 2008 and 2009 income tax article 26 and Satelindo’s 2002 and 2003 income tax article 26 which were classified as part of “Other Current Assets” as of December 31, 2012 (Note 6).
14.
SHORT-TERM LOAN
The balance of this account amounting to Rp299,529 and Rp1,499,256 as of December 31, 2012 and 2011 (net of unamortized loan issuance cost of Rp471 in 2012 and Rp744 in 2011), respectively represents an unsecured loan from Mandiri, a related party (Note 31).
On June 21, 2011, the Company entered into a Revolving Time Loan Facility agreement with Mandiri covering a maximum amount of Rp1,000,000 to finance the Company’s operational working capital, capital expenditure and/or refinancing requirements. This facility is available from June 21, 2011 to June 20, 2014 and drawdowns bear interest at 1-month Jakarta Inter-Bank Offered Rate (“JIBOR”) plus 1.4% per annum. Each drawdown matures 3 months from the drawdown date and can be extended for further 3-month periods by submitting a written request for such extension to Mandiri.
47
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
14.
SHORT-TERM LOAN (continued)
Subsequently, on December 5, 2011, the Company entered into an amendment of this agreement to cover the increase of the facility amount up to Rp1,500,000 and the change of the interest rate to 1-month JIBOR plus 1.25% per annum.
On August 2 and December 14, 2011, and March 28, June 21, December 12 and 26, 2012, the Company has made several drawdowns to this loan facility totaling Rp2,200,000.
On February 2, May 14, June 29, July 5 and August 2, 2012, the Company repaid the drawdowns made previously totalling Rp1,900,000.
Voluntary early repayment is permitted subject to 3 days’ prior written notice. The Company may early repay the whole or any part of the loan.
Based on the facility agreement, the Company is required to comply with certain covenants such as maintaining financial ratios.
The amortization of the loan issuance cost for the years ended December 31, 2012 and 2011 amounted to Rp321 and Rp1,656, respectively (Note 28).
As of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010, the Group has complied with all financial ratios required to be maintained under the loan agreements.
15.
PROCUREMENT PAYABLE
This account consists of amounts due for capital and operating expenditures procured from the following:
January 1,
2011/
December 31,
December 31,
2012
2011
2010
(Restated)
(Restated)
Related parties (Note 31) (including US$78
on December 31, 2012, US$114 on December 31,
2011 and US$404 on January 1, 2011/
December 31, 2010)
43,783
36,073
68,681
Third parties (including US$141,024 on December 31,
2012, US$220,674 on December 31, 2011 and
US$246,211 on January 1, 2011/December 31,
2010)
2,694,067
3,439,789
3,573,321
Total
2,737,850
3,475,862
3,642,002
The billed amount of procurement payable amounted to Rp531,799, Rp555,065 and Rp360,508 as of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010, respectively. The unbilled amount of procurement payable amounted to Rp2,206,051, Rp2,920,797 and Rp3,281,494 as of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010, respectively.
48
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
16.
TAXES PAYABLE
This account consists of the following:
January 1,
2011/
December 31,
December 31,
2012
2011
2010
(Restated)
(Restated)
Estimated corporate income tax payable,
less tax prepayments of Rp97,715 in 2012,
Rp106,847 in 2011 and Rp123,281 in 2010
26,137
13,330
4,890
Income tax:
Article 4(2)
16,676
10,624
14,299
Article 21
25,661
15,366
14,032
Article 23
9,942
4,107
9,177
Article 25
7,888
14,964
18,899
Article 26
8,962
18,863
88,787
VAT
317
13,765
21,174
Others
16
187
1,254
Total
95,599
91,206
172,512
The reconciliation between profit before income tax and estimated taxable income (tax loss) of the Company for the years ended December 31, 2012 and 2011 is as follows:
2012
2011
(Restated)
Profit before income tax
461,618
1,331,357
Company’s equity in Subsidiries’ income before income tax and
reversal of
inter-company consolidation eliminations
(256,634
)
(198,899
)
Profit before income tax of the Company
204,984
1,132,458
Positive adjustments
Depreciation - net
856,483
-
5% final tax on sale of towers
185,339
-
Accrual of employee benefits - net
166,539
-
Charges from leasing transaction
134,934
49,190
Gain on sale and exchange of property and equipment
124,595
217,393
Employee benefits
58,571
52,719
Transaction cost for sale of towers subjected to final tax
56,446
-
Write-off of accounts receivable (provision for impairment of
receivables) - net
49,983
27,509
Provision for termination, gratuity and compensation benefits
of employees
47,926
927
Amortization of debt and bonds issuance costs,
consent solicitation fees and discount (Notes 18 and 19)
25,238
14,679
Donations
10,479
30,788
Assessments for income taxes and VAT (including penalties)
9,485
5,359
Tax expense
8,772
3,386
Amortization of long-term prepaid licenses
3,433
-
Representation and entertainment
2,619
5,516
Others
73,060
20,557
16.
TAXES PAYABLE (continued)
2012
2011
(Restated)
Negative adjustments
Gain on tower sale - net already subjected to final tax (Note 29)
(1,183,963
)
-
Equity in net income of investees
(234,930
)
(145,007
)
Amortization of other intangible assets
(150,515
)(173,331)
Interest income already subjected to final tax
(69,817
)(42,008)
Net periodic pension cost
(2,241
)(15,387)
Depreciation - net
-
(1,228,414
)
Realization of accrual of employee benefits - net
-
(115,677)
Amortization of long-term prepaid licenses
-
(13,255)
Other
(1,719
)(94,326
)
Estimated taxable income (tax loss) of the Company - current year
375,701
(266,924
)
Tax losses carry-forward at beginning of year
(1,408,985
)(1,142,061)
Adjustment on tax loss carry-forward due to tax audit
of 2010 corporate income made in 2012
166,147
-
Tax losses carry-forward at end of year
(867,137
)
(1,408,985)
The computation of the income tax expense for the years ended December 31, 2012 and 2011 is as follows:
2012
2011
Income tax expense (benefit) - current (at statutory tax rates)
Company
Income tax expense - current
-
-
Tax correction from previous year paid during the year
103,224
-
Subsidiaries
Income tax expense - current
123,852
120,177
Tax correction from previous year paid during the year
7,353
-
Income tax expense - current - net
234,429
120,177
49
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
16.
TAXES PAYABLE (continued)
2012
2011
(Restated)
Income tax expense (benefit) - deferred - effect
of temporary differences at applicable tax rate
Company
Utilization of tax loss (gain) carry-forward
93,925
(66,731)
Equity in net income of investees
46,796
33,341
Amortization of other intangible assets
37,629
43,333
Adjustment due to tax audit
(Note 13)
824
-
Net periodic pension cost
560
3,847
Depreciation - net
(214,121
)
307,104
Reversal of deferred tax liabilities
from tower sale transactions (Note 29)
(91,938
)
-
Payments of accrual of employee benefits - net
(41,635
)
28,919
Charges from leasing transaction
(33,733
)
(12,298
)
Gain on sale and exchange of property and equipment - net
(31,149
)
(54,348)
Write-off of accounts receivable (provision for impairment of
receivables) - net
(12,496
)
(6,877)
Accrual of provision for termination, gratuity
and compensation benefits of
employees - net
(11,981
)
(232
)
Amortization of debt and bonds issuance costs,
consent solicitation fees and discount (Notes 18 and 19)
(6,310
)
(3,670)
Amortization of long-term prepaid licenses
(858
)
3,314
Others
(8,858
)
(800
)
Net
(273,345
)
274,902
Deferred income tax benefit - net resulting from the reversal of
deferred tax liabilities (DTL) on investment in IMM, ISPL
and IPBV
-
(111,097)
(273,345
)163,805
Subsidiaries
13,118
(19,369
)
Net income tax expense (benefit) - deferred
(260,227
)
144,436
Income tax expense (benefit) - net
(25,798
)
264,613
50
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
16. TAXES PAYABLE (continued)
The computation of the estimated income tax payable for the years ended December 31, 2012 and 2011 is as follows:
2012
2011
Income tax expense (benefit) - current
Company
Income tax expense - current
-
-
Tax correction from previous year paid during the year
103,224
-
Subsidiaries
Income tax expense - current
123,852
120,177
Tax correction from previous year paid during the year
7,353
-
Income tax expense - current - net
234,429
120,177
Less prepayments of income tax of the Company
Article 22
110,523
80,935
Article 23
18,563
14,275
Total prepayments of income tax of the Company
129,086
95,210
Less prepayments of income tax of Subsidiaries
Article 23
6,368
5,880
Article 25
124,908
187,474
Total prepayments of income tax Subsidiaries
131,276
193,354
Total prepayments of income tax
260,362
288,564
Estimated income tax payable
Subsidiaries
26,137
13,330
Total estimated income tax payable
26,137
13,330
Claims for tax refund (Note 13)
The Company
129,086
95,210
Subsidiaries
33,561
86,507
Total
claim for tax refund
162,647
181,717
51
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
16. TAXES PAYABLE (continued)
The reconciliation between the income tax expense (benefit) calculated by applying the applicable tax rate of 25% to the profit before income tax and the income tax expense (benefit) as shown in the consolidated statement of comprehensive income for the years ended December 31, 2012 and 2011 is as follows:
2012
2011
(Restated)
Profit before income tax per consolidated statement
of comprehensive income
461,618
1,331,357
Income tax expense at the applicable tax rate
115,404
332,839
Company’s equity in Subsidiaries’ income before income tax
and reversal of
inter-company consolidation eliminations
58,938
43,854
Tax effect on permanent differences
5% final tax on sale of towers
46,335
-
Employee benefits
21,070
18,501
Transaction costs for sale of towers subjected to final tax
14,112
-
Unrecognized deferred tax asset on current fiscal loss
13,278
-
Assessment for income taxes and VAT (including penalties)
6,359
3,300
Donation
6,037
9,116
Representation and entertainment
1,679
2,218
Gain on tower sale - net already subjected to final tax (Note 29)
(387,928
)
-
Interest income already subjected to final tax
(28,362
)
(21,162)
Others
(4,121
)
(22,870)
Adjustment due to tax audit and others
824
9,914
Tax expense from tax correction on Satelindo’s corporate
income tax for fiscal year 2002 (Note 13)
103,163
-
Deferred income tax benefit from the reversal of DTL
on investments in IMM, ISPL and IPBV
-
(111,097)
Tax correction from previous year paid during the year
7,414
-
Income tax expense (benefit) - net per consolidated statement
of
comprehensive income
(25,798
)
264,613
16.
TAXES PAYABLE (continued)
The tax effects of significant temporary differences between financial and tax reporting of the Company which are outstanding as of December 31, 2012 and 2011 and January 1, 2011/ December 31, 2010 are as follows:
January 1,
2011/
December 31,
December 31,
2012
2011
2010
(Restated)
(Restated)
Deferred tax assets
Accrual of employee benefits - net
260,033
206,416
235,104
Tax loss
216,784
352,246
285,515
Allowance for impairment of receivables
137,568
125,073
118,195
Charges from leasing transaction
52,556
18,823
6,525
Allowance for decline in value of investment in
associated company and
other long-term investments
42,469
42,469
39,069
Pension cost
17,736
18,296
22,143
Allowance for decline in value of short-term investments
6,349
6,349
6,349
Others
345
1,549
3,300
Total
733,840
771,221
716,200
Deferred tax liabilities
Property and equipment
2,122,016
2,499,935
2,247,180
Investments in subsidiaries/associated
company - net of amortization of goodwill
and other intangible assets
271,388
195,595
229,034
Long-term prepaid licenses
16,018
16,876
13,562
Difference in transactions of equity changes in an
associated company
1,460
1,460
1,460
Deferred debt and bonds issuance costs,
consent solicitation fees and discount
547
6,856
10,526
Others
463
659
659
Total
2,411,892
2,721,381
2,502,421
Deferred tax liabilities - net
1,678,052
1,950,160
1,786,221
16.
TAXES PAYABLE (continued)
The breakdown by entity of the deferred tax assets and liabilities outstanding as of December 31, 2012 and 2011 and January 1, 2011/December 31, 2010 is as follows:
December 31,
December 31,
January 1, 2011/
2012
2011
December 31, 2010
(Restated)
(Restated)
Deferred Tax
Deferred Tax
Deferred Tax
Deferred Tax
Deferred Tax
Deferred Tax
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Company
-
1,678,052
-
1,950,160
-
1,786,221
Subsidiaries
Lintasarta
78,593
-
80,094
-
77,396
-
IMM
22,100
-
33,718
-
17,263
-
APE
-
5,438
-
5,165
-
4,383
ISPL
-
780
-
1,027
-
428
SMT
-
-
-
-
-
1,597
Total
100,693
1,684,270
113,812
1,956,352
94,659
1,792,629
The deferred tax assets of Lintasarta relate mainly to the deferred tax on the temporary difference in the recognition of depreciation on property and equipment.
The significant temporary differences on which deferred tax assets have been computed are not deductible for income tax purposes until the accrued employee benefits are paid, the allowance for impairment of receivables is realized upon the write-off of the receivables after fulfilling certain requirements under the Income Tax Law, the allowance for impairment of investments in associated company and other long-term investments is realized upon sale of the investments and the pension cost is paid.
The significant deferred tax liabilities relate to the differences in the book and tax bases of property and equipment, investments in subsidiaries / associated company, long-term prepaid licenses, debt and bonds issuance costs, consent solicitation fees and discount.
Prior to 2011, the Company provided for deferred tax liabilities and deferred tax assets relating to the book-versus-tax-basis differences in its investments in subsidiaries as the Company believed that it was probable the investments for certain subsidiaries would be recovered through the sale of the shares which is a taxable transaction, and for certain subsidiaries the differences would be deductible from ordinary income as a result of a merger. In 2011, the Company re-evaluated its investment strategy including the accounting treatment on the recognition of deferred tax liabilities and deferred tax assets relating to the book-versus-tax-basis differences in investments in subsidiaries and the evaluation of “forseeable future” and the “more likely than not” judgements. Based on the Company’s evaluation, the deferred tax liabilities are not recognized for temporary differences between the tax and book bases of investments in certain subsidiaries (IMM, ISPL and IPBV) since the Company believed the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reversed in the foreseeable future. Hence, the balance of the deferred tax liabilities on the taxable temporary differences on the investments in IMM, ISPL and IPBV as of January 1, 2011 totalling Rp111,097 was reversed and credited to current deferred income tax benefit.
16. TAXES PAYABLE (continued)
On March 5, 2012, the Company received the Tax Court’s Decision Letter accepting the Company’s request for interest compensation related to the issuance of 2004 SKPLB amounting to Rp60,674. Based on the Company’s evaluation, the realization of income related with the interest compensation was only probable, instead of virtually certain. Therefore, the interest compensation was not recognized in the Company’s financial statements. On June 29, 2012, the Company received a copy of a Memorandum for Reconsideration Request (Memori Permohonan Peninjauan Kembali) from the Tax Court to the Supreme Court on the Tax Court’s Decision Letter dated March 5, 2012 for the interest compensation related to the issuance of 2004 SKPLB. On July 27, 2012, the Company submitted a Counter-Memorandum for Reconsideration Request to the Supreme Court. As of April 29, 2013, the Company has not received any decision from the Supreme Court on such request.
The tax losses carryover of SMT, IMM and the Company as of December 31, 2012 can be carried forward through 2017 based on the following schedule:
Year of Expiration
Amount
2013
26,660
2014
31,901
2015
715,153
2016
289,695
2017
53,106
Total
1,116,515
The Company will submit the corporate income tax calculation above on Annual corporate income tax return (Surat Pemberitahuan Tahunan [“SPT”]) for fiscal year 2012 to the Tax Office and reported based on the applicable Indonesia tax regulation. Annual corporate income tax return of the Company for fiscal year 2011 and 2010 has been submitted based on the Company’s estimated taxable income above.
17.
ACCRUED EXPENSES
This account consists of the following:
January 1,
2011/
December 31,
December 31,
2012
2011
2010
(Restated)
(Restated)
Interest
331,101
319,880
339,957
Marketing
235,957
214,907
120,092
Network repairs and maintenance
229,921
288,731
265,428
Radio frequency fee (Note 35)
214,653
283,588
195,686
Employee benefits (Notes 22 and 30)
200,033
180,441
216,732
Dealer incentives (Note 2k)
170,115
82,615
125,836
Rental
95,200
59,929
28,090
Universal Service Obligation (“USO”) (Note 35)
92,916
59,716
59,899
Utilities
87,669
58,609
85,650
Link
60,646
55,593
31,111
Blackberry access fee
48,666
79,627
20,679
Consultancy fees
44,331
35,309
65,288
Concession fee (Note 35)
41,277
39,507
123,455
General and administration
34,772
31,119
27,706
Others (each below Rp20,000)
74,028
106,042
90,726
Total
1,961,285
1,895,613
1,796,335
52
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
18.
LOANS PAYABLE
This account consists of the following:
January 1,
2011/
December 31,
December 31,
2012
2011
2010
Third parties - net*
6,373,040
8,727,473
9,553,906
Related party (Note 31)
Mandiri - net**
-
998,843
1,297,045
Total loans payable
6,373,040
9,726,316
10,850,951
Less current maturities - net***
Third parties
2,669,218
2,301,694
2,884,147
Related party
-
998,843
300,000
Total current maturities
2,669,218
3,300,537
3,184,147
Long-term portion
Third parties
3,703,822
6,425,779
6,669,759
Related party
-
-
997,045
Total long-term portion
3,703,822
6,425,779
7,666,804
*
net of unamortized debt issuance cost and consent
solicitation fee of Rp111,333 on December 31, 2012, Rp146,511 on December 31, 2011 and Rp189,979 on January 1, 2011 / December 31, 2010; and unamortized debt discount of Rp3,682 on December 31, 2012, Rp11,891 on December 31, 2011 and Rp19,267 on January 1, 2011 / December 31, 2010
**
net of unamortized debt issuance cost and consent solicitation fee of Rp1,157 on December 31, 2011 and Rp2,955 on January 1, 2011 / December 31, 2010
*** net of unamortized debt issuance cost and consent solicitation fees of Rp6,415 on December 31, 2012, Rp2,295 on December 31, 2011 and Rp373 on January 1, 2011 / December 31, 2010
53
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
18.
LOANS PAYABLE (continued)
The loans from third parties consist of the following:
January 1,
2011/
December 31,
December 31,
2012
2011
2010
AB Svensk Exportkredit (“SEK”), Sweden with
Guarantee
from Exportkreditnamnden (“EKN”) - net
of unamortized debt issuance cost of Rp21,351
in 2012, Rp26,434 in 2011 and Rp27,593 in 2010
1,840,124
2,127,216
1,972,905
Syndicated U.S. Dollar Loan Facility - net
of unamortized debt issuance cost and consent
solicitation fees of Rp2,733 in 2012, Rp11,621
in 2011
and Rp27,122 in 2010
1,520,292
2,069,484
4,018,828
HSBC France - net of unamortized debt issuance cost
and consent solicitation fees of Rp84,315 in 2012,
Rp104,536 in 2011 and Rp129,167 in 2010
1,278,872
1,356,403
1,500,434
BCA Revolving Time Loan - net of unamortized debt
issuance cost of Rp413 in 2012 and Rp736 in 2011
999,587
1,499,264
-
Goldman Sachs International (“GSI”)
Principal, net of unamortized debt discount
of Rp3,682 in 2012, Rp11,891 in 2011
and Rp19,267 in 2010
479,818
422,409
415,033
Foreign Exchange (FX) Conversion Option
-
49,518
54,595
9-Year Commercial Loan - net of unamortized
debt issuance cost and consent solicitation fees
of Rp1,550 in 2012, Rp2,046 in 2011
and Rp2,821 in 2010
155,318
181,834
203,805
Bank Sumitomo Mitsui Indonesia (“BSMI”)
Revolving Time Loan - net of unamortized debt
issuance cost of Rp971
99,029
-
-
BCA - net of unamortized debt issuance cost
and consent solicitation fees of Rp1,138 in 2011
and Rp2,903 in 2010
-
998,862
1,297,097
Investment Credit Facility 6 from CIMB Niaga
-
22,483
52,483
Finnish Export Credit Ltd. - net of unamortized
debt issuance cost and consent solicitation
fees of Rp373
-
-
33,793
Investment Credit Facility 5 from CIMB Niaga
-
-
4,933
Total
6,373,040
8,727,473
9,553,906
Less current maturities (net of unamortized debt
issuance costs and consent solicitation fees
totaling Rp6,415 in 2012, Rp2,295 in 2011
and Rp373 in 2010)
2,669,218
2,301,694
2,884,147
Long-term portion
3,703,822
6,425,779
6,669,759
18. LOANS PAYABLE (continued)
The details of the loans from the related party and third parties are as follows:
Counterparties | Loan Type | Maturity | Amount | Interest Structure | Remarks |
a. Mandiri* | § 5-year unsecured credit facility 1 § Loan drawdowns are payable annually | September 18, 2012 | Rp2,000,000 | § Year 1: 9.75% p.a. § Year 2: 10.5% p.a. § Years 3-5: Average 3-month JIBOR + 1.5% p.a. § Payable quarterly | § Without penalty if the repayment is made after the 24th month after the agreement date subject to 7 days’ prior written notice § With penalty of 2% of the prepaid amount for repayment prior to the 24th month after the agreement date § On June 21, 2012, the Company obtained the consent letter from Mandiri for the sale of asset transaction (Note 29). § On September 14, 2012, the Company paid the remaining outstanding Mandiri Loan, amounting to Rp1,000,000. |
b. SEK Sweden with Guarantee from EKN | § Credit facilities consisting of Facilities A, B and C with maximum amounts of US$100,000, US$155,000 and US$60,000, respectively § Loan drawdowns are payable semi-annually | May 31, 2016 for Facility A, February 28, 2017 for Facility B and November 30, 2017 for Facility C | US$315,000 | § Facility A: Margin of 0.25%, LIBOR, SEK Funding Cost of 1.05% and EKN Premium Margin of 1.57% § Facility B: Margin of 0.05%, Commercial Interest Reference Rate (“CIRR”) and EKN Premium Margin of 1.61% § Facility C: Margin of 0.05%, CIRR and EKN Premium Margin of 1.59% § Payable semi-annually | § Permitted only in proportionate amount for each of Facilities A, B and C, after the last day of the availability period and on a repayment date subject to 20 days’ prior written notice § In minimum amount of US$5,000 and in an amount divisible by US$500 § Any repayment shall satisfy the obligations of loan repayment in inverse chronological order § On June 18, 2012, the Company amended its credit facility agreement with HSBC Bank Plc, as facility agent. The amendment included changes in definition of certain terms related to sale of asset transactions (Note 29). |
* Related party (Note 31)
18. LOANS PAYABLE (continued)
Counterparties | Loan Type | Maturity | Amount | Interest Structure | Remarks |
c. Syndicated U.S. Dollar Loan Facility - 12 Financial Institutions** Syndicated U.S. Dollar Loan Facility - 12 Financial Institutions** | § 5-year unsecured credit facility § Loan drawdowns are payable semi-annually | June 12, 2013 | US$450,000 | § USD London Inter-Bank Offered Rate (“LIBOR”) + 1.9% p.a. (onshore lenders); USD LIBOR + 1.85% p.a. (offshore lenders) § Payable semi-annually | § Permitted only after the 6th month from the date of loan agreement subject to 15 days’ prior written notice (in the minimum amount of US$10,000 and in an amount divisible by US$1,000) § On June 19, 2012, the Company amended its credit facility agreement with PT Bank DBS Indonesia, as facility agent. The amendment included changes in definition of certain terms related to sale of asset transactions (Note 29). |
d. HSBC France | § 12 year - COFACE term facility § Payable in twenty semi-annual installments | September 30, 2019 | US$157,243 | § 5.69% p.a. § Payable semi-annually | § Permitted with a corresponding proportionate voluntary prepayment under the SINOSURE Facility after the last day of the availability period and on a repayment date subject to 30 days’ prior written notice § In minimum amount of US$10,000 and in an amount divisible by US$1,000 § Any repayment shall satisfy the obligations of loan repayment in inverse chronological order § On June 18, 2012, the Company amended its COFACE credit facility agreement with HSBC France, as facility agent. The amendment included changes in definition of certain terms related to sale of asset transactions (Note 29). |
**
On October 14, 2011, PT Bank UOB Indonesia (one of lenders under the Syndicated U.S. Dollar Loan Facility) transferred its portion of the loan to UOB Limited (another lender under the Syndicated U.S. Dollar Loan Facility), hence the number of lenders became 12.
54
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
18. LOANS PAYABLE (continued)
Counterparties | Loan Type | Maturity | Amount | Interest Structure | Remarks |
d. HSBC France (continued) | § 12 year - SINOSURE term facility § Payable in twenty semi-annual installments | September 30, 2019 | US$44,200 | § USD LIBOR + 0.35% p.a. § Payable semi-annually | § Permitted with a corresponding proportionate voluntary prepayment under the COFACE Facility after the last day of the availability period and on a repayment date subject to 30 days’ prior written notice § In minimum amount of US$10,000 and in an amount divisible by US$1,000 § Any repayment shall satisfy the obligations of loan repayment in inverse chronological order § On July 23, 2012, the Company amended its SINOSURE credit facility agreement with HSBC France, as facility agent. The Amendment included changes in definition of certain terms related to sale of asset transaction (Note 29). |
e. BCA | § The revolving time loan with maximum amount of Rp1,000,000 § Each drawdown matures 1 month from the drawdown date. Subsequently, on August 9, 2011, the Company obtained an approval from BCA to amend the maturity date of each drawdown to become at the latest on February 10, 2014 § On December 1, 2011, the facility was amended to increase the facility amount up to Rp1,500,000 and change the interest rate | February 10, 2014 | Rp1,500,000 | § JIBOR + 1.4% p.a. However, starting December 1, 2011, JIBOR + 1.25% p.a. § Payable monthly | § Permitted subject to 1 day prior written notice. The Company may repay the whole or any part of the loan § On June 11, 2012, the Company obtained the consent letter from BCA for the sale of asset transaction (Note 29). § On December 19, 2012, the Company amended its credit facility agreement with BCA. The Amendment included changes in definition of certain terms related to sale of asset transaction (Note 29). |
55
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
18. LOANS PAYABLE (continued)
Counterparties | Loan Type | Maturity | Amount | Interest Structure | Remarks |
f. GSI*** | § Investment loan § Provides an “FX Conversion Option” for GSI to convert the loan payable into U.S. dollar loan of US$50,000 on May 30, 2012 (“FX Conversion Option”) § Fair value of FX Conversion Option as of December 31, 2011 and December 31, 2010 amounting to US$5,460.78 (equivalent to Rp49,518) and US$6,072.20 (equivalent to Rp54,595), respectively (Note 20) | May 30, 2013 | US$50,000 | § 8.75% p.a. § Payable quarterly § If GSI takes FX Conversion Option, starting May 30, 2012, the loan will bear interest at the fixed annual rate of 6.45% applied on the US$50,000 principal | § Certain changes affecting withholding taxes in the United Kingdom or Indonesia § Default under Guaranteed Notes due 2012 § Default under the Company’s USD Notes and IDR Bonds § Redemption, purchase or cancellation of the Guaranteed Notes Due 2012 and there are no USD Indosat Notes outstanding upon such redemption, purchase or cancellation § Change of control in the Company. |
g. HSBC Jakarta Branch, CIMB Niaga and Bank of China Limited Jakarta Branch | § 9-year unsecured commercial facility § Payable in fifteen semi-annual payments after 24 months from the date of loan agreement. For the 1st five installments: US$1,351.85 each; and US$2,027.78 each for the remaining installments thereafter | November 28, 2016 | US$27,037 | § USD LIBOR + 1.45% p.a. § Payable semi-annually | § Permitted only on each repayment date after the first repayment date subject to 30 days’ prior written notice § In minimum amount of US$5,000 and in an amount divisible by US$1,000 § Any prepayment shall satisfy the obligations of loan repayment proportionately § On June 20, 2012, the Company amended its credit facility agreement with HSBC Ltd, as facility agent. The amendment included changes in definition of certain terms related to sale of asset transactions (Note 29). |
***
On May 30, 2012, GSI exercised the FX conversion option to convert the loan into U.S. dollar loan of US$50,000. The Company earned gain from the exercise amounting to Rp5,319 and charged the gain to Gain (Loss) on Change in Fair Value of Derivatives - Net.
56
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
18.
LOANS PAYABLE (continued)
Counterparties | Loan Type | Maturity | Amount | Interest Structure | Remarks |
h. BSMI | § The revolving time loan with maximum amount of Rp650,000 § Each drawdown matures maximum 36 months from the drawdown date, but not exceeds December 31, 2015. | December 31, 2015 | Rp650,000 | § JIBOR + 1.25% p.a. § Payable monthly, quarterly or semi-annually | § Permitted subject to 5 days’ prior written notice. The Company may repay the whole or any part of the loan |
i. BCA | § 5-year unsecured credit facility 1 § Loan drawdowns are payable annually | September 27, 2012 | Rp2,000,000 | § Year 1: 9.75% p.a. § Year 2: 10.5% p.a. § Years 3-5: 3-month JIBOR + 1.5% p.a. § Payable quarterly | § Without penalty if the repayment is made after the 24th month after the agreement date subject to 7 days’ prior written notice § With penalty of 2% of the prepaid amount for repayment prior to the 24th month after the agreement date § On June 11, 2012, the Company obtained the consent letter from BCA for the sale of asset transaction (Note 29) § On September 27, 2012, the Company paid the remaining outstanding BCA Loan, amounting to Rp1,000,000. |
j. CIMB Niaga | § Investment credit facility 6 obtained by Lintasarta § Payable quarterly | August 24, 2012 | Rp75,000 | § 14.5% p.a., subject to change by CIMB Niaga depending on the market condition § Payable quarterly | § Permitted only on interest payment date subject to 15 days’ prior written notice. Lintasarta may repay the whole or any part of the loan before the due date only by using the fund from Lintasarta’s operational activities. Repayment using the fund from loans obtained from other parties is allowed with penalty determined by CIMB Niaga. § The loan is collateralized by all equipment (Note 8) purchased from the proceeds of credit facility. § In April 2012, this loan was fully paid. |
18.
LOANS PAYABLE (continued)
Counterparties | Loan Type | Maturity | Amount | Interest Structure | Remarks |
k. Finnish Export Credit Ltd. | § 5-year credit facility § Paid semi-annually | May 12, 2011 | US$38,000 | § 4.15% p.a. § Paid semi-annually | § Permitted only after 60 days of the loan agreement subject to 15 days’ prior written notice (in the minimum amount of US$10,000 and in an amount divisible by US$1,000) § In May 2011, this loan was fully paid. |
l. CIMB Niaga | § Investment credit facility 5 obtained by Lintasarta § Paid quarterly | January 10, 2011 | Rp50,000 | § 1-month SBI + 2.25% p.a. § Paid quarterly | § Permitted only on interest payment date subject to 13 days’ prior written notice. Lintasarta may repay the whole or any part of the loan before the due date only by using the fund from Lintasarta’s operational activities. Repayment using the fund from loans obtained from other parties was allowed with 1% penalty of the early repaid amount. § In January 2011, this loan was fully paid. |
The scheduled principal payments from 2013 of all the loans payable as of December 31, 2012 are as follows:
Twelve months ending December 31,
2017 and
2013
2014
2015
2016
thereafter Total
In rupiah
BCA - revolving
time loan
-
1,000,000
-
-
-1,000,000
BSMI - revolving
time loan
-
-
100,000
-
-
100,000
Sub-total
-
1,000,000
100,000
-
-1,100,000
In U.S. dollar
SEK, Sweden
(US$192,500)
435,150
435,150
435,150
366,079189,9461,861,475
Syndicated U.S. Dollar
Loan Facility
(US$157,500)
1,523,025
-
-
-
-1,523,025
HSBC France
(US$140,970.68)
194,741
194,741
194,741
194,741584,2231,363,187
GSI (US$50,000)
483,500
-
-
-
-483,500
9-Year Commercial
Facility
(US$16,222.20)
39,217
39,217
39,217
39,217-156,868
Sub-total
2,675,633
669,108
669,108
600,037774,1695,388,055
Total
2,675,633
1,669,108
769,108
600,037
774,1696,488,055
Less:
- unamortized debt issuance costs and consent solicitation fees
(111,333
)
- unamortized debt discount
(3,682
)
Net
6,373,040
18.
LOANS PAYABLE (continued)
All loans are neither collateralized by any specific Group assets nor guaranteed by other parties, except for the assets that have been specifically used as security in Note 18j.
The total amortization of debt issuance, discount and consent solicitation fees on the loans for the years ended December 31, 2012 and 2011 amounted to Rp65,269 and Rp63,731, respectively (Note 28).
As of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010, the Group has complied with all financial ratios required to be maintained under the loan agreements.
19.
BONDS PAYABLE
This account consists of the following:
January 1,
2011/
December 31,
December 31,
2012
2011
2010
a. Guaranteed Notes Due 2020 - net of unamortized
notes issuance cost of Rp73,454 in 2012,
Rp58,420 in 2011 and Rp64,885 in 2010 and
discount of Rp23,154 in 2012,
Rp26,208 in 2011 and Rp29,666 in 2010
6,188,892
5,809,572
5,749,599
b. Eighth Indosat Bonds in Year 2012 with Fixed Rates
- net of unamortized bonds issuance cost and
consent solicitation fees of Rp8,478
2,691,522
-
-
c. Fifth Indosat Bonds in Year 2007 with Fixed Rates
- net of unamortized bonds issuance cost and
consent solicitation fees of Rp7,061 in 2012,
Rp9,102 in 2011 and Rp11,041 in 2010
2,592,939
2,590,898
2,588,959
d. Seventh Indosat Bonds in Year 2009 with Fixed Rates
- net of unamortized bonds issuance cost of
Rp3,454 in 2012, Rp4,442 in 2011 and
Rp5,362 in 2010
1,296,546
1,295,558
1,294,638
e. Sixth Indosat Bonds in Year 2008 with Fixed Rates
- net of unamortized bonds issuance cost and
consent solicitation fees of Rp1,609 in 2012,
Rp3,603 in 2011 and Rp5,414 in 2010
1,078,391
1,076,397
1,074,586
f. Indosat Sukuk Ijarah III in Year 2008 - net of
unamortized bonds issuance cost and consent
solicitation fees of Rp353 in 2012, Rp1,545
in 2011 and Rp2,625 in 2010
569,647
568,455
567,375
g. Indosat Sukuk Ijarah II in Year 2007 - net of
unamortized bonds issuance cost and consent
solicitation fees of Rp698 in 2012, Rp1,124 in 2011
and Rp1,517 in 2010
399,302
398,876
398,483
h. Indosat Sukuk Ijarah V in Year 2012 - net of
unamortized bonds issuance cost and consent
solicitation fees of Rp930
299,070
-
-
i. Indosat Sukuk Ijarah IV in Year 2009 - net of
unamortized bonds issuance cost of
Rp627 in 2012, Rp754 in 2011 and Rp873 in 2010
199,373
199,246
199,127
j. Second Indosat Bonds in Year 2002 with Fixed and
Floating Rates - net of unamortized consent
solicitation fees of Rp649 in 2011
and Rp652 in 2010
-
199,351
199,348
57
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
19. BONDS PAYABLE (continued)
This account consists of the following (continued):
January 1,
2011/
December 31,
December 31,
2012
2011
2010
k. Limited Bonds II issued by Lintasarta*
-
25,000
25,000
l. Limited Bonds I issued by Lintasarta**
-
16,989
16,989
m. Fourth Indosat Bonds in Year 2005 with Fixed Rate -
net of unamortized bonds issuance cost
and consent solicitation fees of Rp1,382
-
-
813,618
n. Indosat Syari’ah Ijarah Bonds in Year 2005 -
net of unamortized bonds issuance cost and
consent solicitation fees of Rp487
-
-
284,513
Total bonds payable
15,315,682
12,180,342
13,212,235
Less current maturities (net of unamortized bonds
issuance cost and consent solicitation fees totalling
Rp825 in 2012 and Rp1,869 in 2010)
1,329,175
41,989
1,098,131
Long-term portion
13,986,507
12,138,353
12,114,104
* After elimination of Limited Bonds II amounting to Rp35,000 issued to the Company on January 1, 2010 and December 31, 2010. Lintasarta made early repayment of such amount on December 29, 2011.
**After elimination of Limited Bonds I amounting to Rp9,564 issued to the Company on January 1, 2010 and December 31, 2010. Lintasarta made early repayment of such amount on December 29, 2011.
Bond | Nominal Amount | Interest | Maturity | Remarks |
a. Guaranteed Notes Due 2020 | US$650,000 | § 7.375% p.a. § Payable semi-annually | July 29, 2020 | The notes are redeemable at the option of IPBV: § Prior to July 29, 2013, the Issuer may redeem up to a maximum of 35% of the original aggregate Notes issued with the proceeds of one or more Public Offerings at a redemption price equal to 107.375% of the principal amount. § Prior to July 29, 2015, the Issuer will be entitled at its option to redeem all or any portion of the Notes at a redemption price equal to 100% of the principal amount of the Notes plus the Applicable Premium. § On and after July 29, 2015, the issuer may redeem the Notes in whole or in part at any time and from time to time at the certain redemption prices. |
58
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
19. BONDS PAYABLE (continued)
Bond | Nominal Amount | Interest | Maturity | Remarks | ||
§ At any time, upon not less than 30 days’ nor more than 60 days’ prior notice, the Issuer may redeem the Notes at a price equal to 100% of the principal amount thereof, plus any accrued and unpaid interest to (but not including) the redemption date and any additional amounts, in the event of certain changes affecting withholding taxes in Indonesia and the Netherlands. § Upon a change in control of IPBV, the holder of the notes has the right to require IPBV to repurchase all or any part of such holder’s notes. § Based on latest rating reports (released in July, February and April��2012), the notes have BB+ (stable outlook), Ba1 (stable outlook) and BBB (stable outlook) ratings from Standard & Poor’s (“S&P”), Moody’s Investors Service (“Moody’s) and Fitch Ratings (“Fitch”), respectively. | ||||||
a. Eighth Indosat Bonds in Year 2012 | ||||||
§ Series A | Rp1,200,000 | § 8.625% p.a. § Payable quarterly | June 27, 2019 | § The Company can buy back part or all of the bonds, after the 1st anniversary of the bonds, at market price temporarily or as an early settlement. § Based on the latest rating report released in June 2012, the bonds haveidAA+ rating from PT Pemeringkat Efek Indonesia (“Pefindo”). | ||
§ Series B | Rp1,500,000 | § 8.875% p.a. § Payable quarterly | June 27, 2022 | |||
a. Fifth Indosat Bonds in Year 2007 | ||||||
§ Series A | Rp1,230,000 | § 10.20% p.a. § Payable quarterly | May 29, 2014 | § The Company can buy back part or all of the bonds, after the 1st anniversary of the bonds, at market price temporarily or as an early settlement. § Based on the latest rating report released in June 2012, the bonds haveidAA+ rating from Pefindo. | ||
§ Series B | Rp1,370,000 | § 10.65% p.a. § Payable quarterly | May 29, 2017 | |||
59
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
19.
BONDS PAYABLE (continued)
Bond | Nominal Amount | Interest | Maturity | Remarks | |
a. Seventh Indosat Bonds in Year 2009 | |||||
§ Series A | Rp700,000 | § 11.25% p.a. § Payable quarterly | December 8, 2014 | § The Company can buy back part or all of the bonds, after the 1st anniversary of the bonds, at market price temporarily or as an early settlement. § Based on the latest rating report released in June 2012, the bonds haveidAA+ rating from Pefindo. | |
§ Series B | Rp600,000 | § 11.75% p.a. § Payable quarterly | December 8, 2016 | ||
e. Sixth Indosat Bonds in Year 2008 | |||||
§ Series A | Rp760,000 | § 10.25% p.a. § Payable quarterly | April 9, 2013 | § The Company can buy back part or all of the bonds, after the 1st anniversary of the bonds, at market price temporarily or as an early settlement. § Based on the latest rating report released in December 2012, the bonds haveidAA+ rating from Pefindo. | |
§ Series B | Rp320,000 | § 10.80% p.a. § Payable quarterly | April 9, 2015 | ||
e. Indosat Sukuk Ijarah III in Year 2008 (“Sukuk Ijarah III”) | Rp570,000 | § Bondholders are entitled to annual fixed Ijarah return (“Cicilan Imbalan Ijarah”) totalling Rp58,425, payable on a quarterly basis starting July 9, 2008 up to April 9, 2013. | April 9, 2013 | § The Company can buy back part or all of the bonds, after the 1st anniversary of the bonds, at market price. § Based on the latest rating report released in December 2012, the bonds haveidAA+ (sy) (stable outlook) rating from Pefindo. | |
e. Indosat Sukuk Ijarah II in Year 2007 (“Sukuk Ijarah II”) | Rp400,000 | § Bondholders are entitled to annual fixed Ijarah return (“Cicilan Imbalan Ijarah”) totalling Rp40,800, payable on a quarterly basis starting August 29, 2007 up to May 29, 2014. | May 29, 2014 | § The Company can buy back part or all of the bonds, after the 1st anniversary of the bonds, at market price. § Based on the latest rating report released in June 2012, the bonds haveidAA+ (sy) rating from Pefindo. | |
e. Indosat Sukuk Ijarah V in Year 2012 (“Sukuk Ijarah V”) | Rp300,000 | § Bondholders are entitled to annual fixed Ijarah return (“Cicilan Imbalan Ijarah”) totalling Rp25,875, payable on a quarterly basis starting September 27, 2012 up to June 27, 2019. | June 27, 2019 | § The Company can buy back part or all of the bonds, after the 1st anniversary of the bonds, at market price. § Based on the latest rating report released in June 2012, the bonds haveidAA+ (sy) rating from Pefindo. | |
60
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
19. BONDS PAYABLE (continued)
Bond | Nominal Amount | Interest | Maturity | Remarks |
e. Indosat Sukuk Ijarah IV in Year 2009 (“Sukuk Ijarah IV”) | ||||
§ Series A | Rp28,000 | § Bondholders are entitled to annual fixed ijarah return (“Cicilan Imbalan Ijarah”) totalling Rp3,150, payable on a quarterly basis starting March 8, 2010 up to December 8, 2014. | December 8, 2014 | § The Company can buy back part or all of the bonds, after the 1st anniversary of the bonds, at market price. § Based on the latest rating report released in June 2012, the bonds haveidAA+(sy) rating from Pefindo. |
§ Series B | Rp172,000 | § Bondholders are entitled to annual fixed ijarah return (“Cicilan Imbalan Ijarah”) totalling Rp20,210, payable on a quarterly basis starting March 8, 2010 up to December 8, 2016. | December 8, 2016 | |
Rp200,000 | § 16% p.a. § Payable quarterly | November 6, 2032 | § The Company had call option on the 10th, 15th, 20th and 25th anniversaries of the bonds at 101% of the bonds’ nominal value and the bondholder had sell option if the rating of the bonds decreased toidAA- or lower or on the 15th, 20th and 25th anniversaries of the bonds. § Based on the latest rating report released in June 2012, the bonds hadidAA+rating from Pefindo. § On November 6, 2012, the Company exercised the right to redeem in full the remaining outstanding of Second Indosat Bonds at 101% price. | |
k. Limited Bonds II issued by Lintasarta (amended on August 25, 2009) | Rp66,150, with the remaining amount of Rp60,000 since June 14, 2009 | § Average 3-month rupiah time deposit rates with Mandiri, BNI, BRI and BTN, plus a fixed premium of 3% (The maximum limit of floating rates was 19% and the minimum limit was 11% p.a. and starting June 14, 2009, the minimum limit increased to 12.75%.) § Payable quarterly | June 14, 2009 extended to June 14, 2012 | § On February 29, 2012, Lintasarta paid these bonds in full. |
61
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
19. BONDS PAYABLE (continued)
Bond | Nominal Amount | Interest | Maturity | Remarks | ||
l. Limited Bonds I issued by Lintasarta (amended on August 25, 2009) | Rp34,856, with the remaining amount of Rp26,553 since June 2, 2009 | § Average 3-month rupiah time deposit rates with Mandiri, BNI, BRI and BTN, plus a fixed premium of 3% (The maximum limit of floating rates was 19% and the minimum limit was 11% p.a. and starting June 14, 2009, the minimum limit increased to 12.75%.) § Payable quarterly | June 2, 2009 extended to June 2, 2012 | § On January 31, 2012, Lintasarta paid these bonds in full. | ||
m.Fourth Indosat Bonds in Year 2005 | Rp815,000 | § 12% p.a. § Paid quarterly | June 21, 2011 | § The Company had call option on the 4th anniversary of the bonds at 100% of the bonds’ nominal value and could buy back part or all of the bonds after the 1st anniversary of the bonds at market price. § On June 21, 2011, the Company paid these bonds in full. | ||
n. Indosat Syari’ah Ijarah Bonds in Year 2005 (“Syari’ah Ijarah Bonds”) | Rp285,000 | § Bondholders were entitled to annual fixed Ijarah return (“Cicilan Imbalan Ijarah”) totalling Rp34,200, paid on a quarterly basis starting September 21, 2005 up to June 21, 2011. | June 21, 2011 | § The Company had call option on the 4th anniversary of the bonds at 100% of the bonds’ nominal value and could buy back part or all of the bonds after the 1st anniversary of the bonds at market price. § On June 21, 2011, the Company paid these bonds in full. | ||
The scheduled principal payments of all the bonds payable outstanding as of December 31, 2012 are as follows:
Twelve months ending December 31,
2017 and
2013
2014
2015
2016
thereafter*
Total
In U.S. dollar
Guaranteed Notes
Due 2020*
(US$650,000)
-
-
-
-
6,285,500
6,285,500
In Rupiah
Eighth Indosat Bonds*
-
-
-
-
2,700,000
2,700,000
Fifth Indosat Bonds*
-
1,230,000
-
-
1,370,0002,600,000
Seventh Indosat
Bonds*
-
700,000
-
600,000
-
1,300,000
Sixth Indosat Bonds*
760,000
-
320,000
-
-1,080,000
Sukuk Ijarah III*
570,000
-
-
-
-
570,000
Sukuk Ijarah II*
-
400,000
-
-
-
400,000
62
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
19. BONDS PAYABLE (continued)
Twelve months ending December 31,
2017 and
2013
2014
2015
2016
thereafter*
Total
Sukuk Ijarah V*
-
-
-
-
300,000
300,000
Sukuk Ijarah IV*
-
28,000
-
172,000
-200,000
Sub-total
1,330,000
2,358,000
320,000
772,000
4,370,0009,150,000
Total
1,330,000
2,358,000
320,000
772,000
10,655,50015,435,500
Less:
-
unamortized notes issuance cost
(73,454
)
-
unamortized bonds issuance costs and consent solicitation fees
(23,210
)
-
unamortized notes discount
(23,154)
Net
15,315,682
*
Refer to previous discussion on early repayment options for each bond/note.
All bonds are neither collateralized by any specific Group assets nor guaranteed by other parties. All of the Group’s assets, except for the assets that have been specifically used as security (Note 18j) to its other creditors, are used as pari-passu security to all of the Group’s other liabilities including the bonds.
On June 5, 2012, the Company and IPBV entered into a supplemental indenture with Bank of New York Mellon, as a trustee, for the IPBV Guaranteed Notes Due 2020 based on the consent letter received on May 21, 2012 representing 93.21% of the notesholders. The supplemental indenture included the amendment of certain definition under the previous Guaranteed Notes Due 2020 indentures and the approval for the sale of asset transaction (Note 29).
On June 8, 2012, the Company received the consent letter from BRI, as a trustee, for the Eighth Indosat Bonds, Seventh Indosat Bonds, Sixth Indosat Bonds, Fifth Indosat Bonds, Second Indosat Bonds and Sukuk Ijarah V, IV, III and II regarding the Company’s sale of asset transaction (Note 29).
The total amortization of bonds issuance cost, consent solicitation fees, notes issuance cost and discount for the years ended December 31, 2012 and 2011 amounted to Rp23,288 and Rp18,057, respectively (Note 28).
As of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010, the Group has complied with all financial ratios required to be maintained under the Notes Indenture and Trustee Agreements.
63
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
20. DERIVATIVES
The Company entered into several swap and forward contracts. Listed below is information related to the contracts and their fair values (net of credit risk adjustment) as of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010:
Fair Value (Rp)
December 31,
January 1, 2011 /
Notional
2012
2011
December 31, 2010
Amount
(US$)
Receivable
Payable
Receivable
Payable
ReceivablePayable
Cross Currency Swap Contracts:
a.
GSI(1)
100,000
-
-
-
-
--
b.
GSI(1)
25,000
-
-
-
-
--
c.
GSI(1)
75,000
-
-
-
-
50,866-
d.
Standard Chartered
(“StandChart”)(7)
25,000
-
-
-
6,981
-12,055
e.
StandChart(8)
25,000
-
-
1,620
-
-1,731
f.
StandChart(9)
25,000
-
-
12,608
-
9,443-
g.
HSBC, Jakarta Branch(2)
25,000
-
-
-
-
--
h.
Merrill Lynch International
Bank Limited,
London Branch (“MLIB”)(2)
50,000
-
-
-
-
-2,234
i.
MLIB(6)
25,000 with
decreasing amount
7,919
-
3,639
-
2,154-
j.
MLIB(3)
25,000
-
-
-
-
3,778-
k.
DBS(6)
25,000 with
decreasing amount
7,962
-
4,271
-
3,093-
l.
HSBC, Jakarta Branch
10,000
2,631
-
-
-
--
m.
Barclays Bank PLC
(“Barclays“)
14,500
3,295
-
-
-
--
n.
HSBC, Jakarta Branch
14,000
4,338
-
-
-
--
o.
HSBC, Jakarta Branch
11,000
3,762
-
-
-
--
p.
GSI(3)
84,000
-
-
-
-
--
Sub-total
29,907
-
22,138
6,981
69,33416,020
Interest Rate Swap Contracts:
q.
HSBC, Jakarta Branch
27,037 with
decreasing amount
-
11,613
-
13,254
-13,100
r.
HSBC, Jakarta Branch
44,200 with
decreasing amount
-
38,260
-
35,370
-29,027
s.
GSI
100,000
-
25,287
-
60,869
-90,273
t.
DBS
25,000 with
decreasing amount
-
1,391
-
4,174
-9,238
u.
DBS
25,000 with
decreasing amount
-
1,244
-
3,678
-9,343
v.
Bank of Tokyo MUFJ
25,000 with
(“BTMUFJ”)
decreasing amount
-
894
-
2,649
-6,656
w.
BTMUFJ
25,000 with
decreasing amount
-
804
-
2,347
-5,885
x.
BTMUFJ
25,000 with
decreasing amount
-
735
-
2,118
-5,297
y.
StandChart
40,000 with
decreasing amount
-
1,013
-
2,692
-6,814
z.
DBS(11)
26,000 with
decreasing amount
-
-
-
1,486
-4,966
aa.
DBS(12)
26,000 with
decreasing amount
-
-
-
1,282
-4,303
ab.
BTMUFJ(10)
36,500 with
decreasing amount
-
-
-
1,289
-7,347
ac.
International Netherlands
Group (“ING”)
25,000 with
Bank N.V. (5)
decreasing amount
-
-
-
-
-4,014
ad.
ING Bank N.V.(4)
33,500
-
-
-
-
-3,120
Sub-total
-
81,241
-
131,208
-199,383
(1)
contract entered into in August 2005 and terminated in June 2011
(2)
contract entered into in August 2008 and terminated in June 2011
(3)
contract entered into in September 2008 and terminated in June 2011
(4)
contract entered into in April 2009 and settled in June 2011
(5)
contract entered into in March 2009 and settled in December 2011
(6)
In June 2012 and December 2011, the Company used the option to exercise US$2,000 in June 2012 and US$6,000 in December 2011 of the contract amount.
(7)
contract entered into in January 2006 and settled in June 2012
(8)
contract entered into in March 2006 and settled in June 2012
(9)
contract entered into in May 2006 and settled in June 2012
(10)
contract entered into in March 2009 and settled in June 2012
(11)
contract entered into in December 2008 and settled in December 2012
(12)
contract entered into in January 2009 and settled in December 2012
64
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
20. DERIVATIVES (continued)
Fair Value (Rp)
December 31,
January 1, 2011 /
Notional
2012
2011
December 31, 2010
Amount
(US$)
Receivable
Payable
Receivable
Payable
ReceivablePayable
Currency Forward Contracts:
ae.
JP Morgan(13)
10,000
-
-
-
-
--
af.
DBS(13)
20,000
-
-
-
-
--
ag.
Deutsche Bank(13)
20,000
-
-
-
-
--
ah.
Deutsche Bank(13)
10,000
-
-
-
-
--
ai.
JP Morgan(13)
10,000
-
-
-
-
--
aj.
StandChart(13)
5,000
-
-
-
-
--
ak.
JP Morgan(13)
10,000
-
-
-
-
--
al.
PT Danareksa (Persero)
(“Danareksa”) (13)
5,000
-
-
-
-
--
am.
JP Morgan(13)
5,000
-
-
-
-
--
an.
StandChart(13)
5,000
-
-
-
-
--
ao.
JP Morgan(13)
5,000
-
-
-
-
--
ap.
HSBC, Jakarta Branch(14)
5,000
-
-
-
-
--
aq.
HSBC, Jakarta Branch(15)
5,000
-
-
-
-
--
ar.
JP Morgan(14)
5,000
-
-
-
-
--
as.
HSBC, Jakarta Branch(14)
1,000
-
-
-
-
--
at.
HSBC, Jakarta Branch(14)
3,000
-
-
-
-
--
au.
HSBC, Jakarta Branch(16)
10,000
-
-
5,231
-
--
av.
JP Morgan(16)
2,000
-
-
1,011
-
--
aw.
StandChart(16)
7,000
-
-
3,902
-
--
ax.
JP Morgan(16)
9,500
-
-
4,832
-
--
ay.
HSBC, Jakarta Branch(17)
6,000
-
-
3,222
-
--
az.
HSBC, Jakarta Branch(17)
7,500
-
-
4,021
-
--
ba.
JP Morgan(18)
13,750
-
-
6,771
-
--
bb.
StandChart(19)
8,000
-
-
4,542
-
--
bc.
StandChart(19)
6,600
-
-
3,666
-
--
bd.
StandChart(20)
3,000
-
-
1,486
-
--
be.
DBS(16)
10,000
-
-
5,010
-
--
bf.
ING(16)
7,000
-
-
3,538
---
bg.
DBS(16)
7,000
-
-
3,528
-
--
bh.
DBS(20)
10,000
-
-
5,497
-
--
bi.
JP Morgan(20)
10,000
-
-
5,523
-
--
bj.
HSBC, Jakarta branch(20)
10,000
-
-
4,909
-
--
bk.
ING(16)
10,000
-
-
5,330
---
bl.
ING(16)
13,000
-
-
6,960
---
bm.
DBS(17)
13,000
-
-
6,859
-
--
bn.
ING(18)
13,500
-
-
7,386
---
bo.
ING(16)
10,000
-
-
5,478
---
bp.
ING(16)
10,000
-
-
5,508
---
bq.
GSI(16)
8,000
-
-
4,558
---
br.
GSI(16)
13,000
-
-
7,550
---
bs.
Royal Bank of Scotland (“RBS”)(17)
12,000
-
-
6,370
-
--
bt.
GSI(17)
12,000
-
-
7,185
---
bu.
GSI(17)
12,500
-
-
7,338
---
bv.
HSBC(21)
2,000
-
-
-
-
--
bw.
HSBC(21)
14,000
-
-
-
-
--
bx.
StandChart(22)
20,000
-
-
-
-
--
by.
HSBC(22)
18,500
-
-
-
-
--
bz.
DBS(21)
2,000
-
-
-
-
--
ca.
BNP Paribas(22)
2,000
-
-
-
-
--
cb.
GSI(22)
5,000
-
-
-
---
cc.
ING(22)
5,000
-
-
-
---
cd.
Barclays(23)
10,000
-
-
-
-
--
ce.
Barclays(23)
20,000
-
-
-
-
--
cf.
BNP Paribas(23)
20,000
-
-
-
-
--
cg.
ING
23,000
4,137
-
-
-
--
ch.
GSI
13,000
3,278
-
-
-
--
ci.
JP Morgan(23)
10,000
-
-
-
-
--
cj.
JP Morgan(24)
10,000
-
-
-
-
--
ck.
BNP Paribas
20,000
2,981
-
-
-
--
cl.
Barclays
20,000
3,254
-
-
-
--
(13)
Contracts entered into in July 2011 and settled in December 2011
(14)
Contracts entered into in August 2011 and settled in November 2011
(15)
Contract entered into in August 2011 and settled in December 2011
(16)
Contracts entered into in August 2011 and settled in January 2012
(17)
Contracts entered into in August 2011 and settled in February 2012
(18)
Contracts entered into in August 2011 and settled in March 2012
(19)
Contracts entered into in August 2011 and settled in May 2012
(20)
Contracts entered into in August 2011 and settled in June 2012
(21)
Contracts entered into in August 2012 and settled in November 2012
(22)
Contracts entered into in August 2012 and settled in December 2012
(23)
Contracts entered into in September 2012 and settled in December 2012
(24)
Contracts entered into in October 2012 and settled in December 2012
65
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
20. DERIVATIVES (continued)
Fair Value (Rp)
December 31,
January 1, 2011/
Notional
2012
2011
December 31, 2010
Amount
(US$)
Receivable
Payable
Receivable
Payable
ReceivablePayable
Currency Forward Contracts (continued) :
cm.
BNP Paribas
20,000
3,675
-
-
-
--
cn.
JP Morgan
20,000
4,427
-
-
-
--
co.
ING
15,000
2,956
-
-
-
--
cp.
Barclays
15,000
2,166
-
-
-
--
cq.
DBS
15,000
1,983
-
-
-
--
cr.
DBS
20,000
2,621
-
-
-
--
cs.
JP Morgan
25,000
77
-
-
-
--
ct.
DBS
15,000
140
-
-
-
--
cu.
Barclays
26,000
1,850
-
-
-
--
cv.
JP Morgan
30,000
2,231
-
-
-
--
cw.
BNP Paribas
25,000
2,356
-
-
-
--
cx.
ING
15,000
1,615
-
-
-
--
Sub-total
39,747
-
137,211
---
Total
69,654
81,241
159,349
138,189
69,334215,403
The net changes in fair value of the swap contracts, currency forward contracts and embedded derivative (Note 18g), totalling Rp4,964 and Rp57,944 in 2012 and 2011, respectively, were credited or charged to “Gain (Loss) on Change in Fair Value of Derivatives - Net”, which is presented under Other Income (Expenses) in the consolidated statements of comprehensive income.
The following are the details of the contracts:
Cross Currency Swap Contracts
No. | Counter-parties | Contract Period and Swap Amount | Annual Swap Premium Rate | Swap Premium Payment Date | Amount of Swap Premium Paid / Amortized (Rp) | |
2012 | 2011 | |||||
a. | GSI(1) | May 13, 2005 - November 5, 2010 Swap Rp832,250 for US$100,000 | (i) Fixed rate of 6.96% per annum for US$50,000 and (ii) 6-month U.S. dollar LIBOR plus 2.62% per annum for US$50,000, netted with (a) 6-month U.S. dollar LIBOR per annum multiplied by US$11,750 during the period May 13, 2005 through May 13, 2008 and (b) the amount of US$11,750 on May 13, 2008. On May 14, 2008, the Company received from GSI the fixed amount of US$11,750 (equivalent to Rp109,099) related to the cross currency swap contract. | Every May 5 and November 5 | - | - |
b. | GSI(2) | May 13, 2005 - November 5, 2010 Swap Rp245,000 for US$25,000 | 4.30% of US$25,000 | Every May 5 and November 5 | - | - |
c. | GSI(4) | August 22, 2005 - June 22, 2012 The Company will swap the following: · US$75,000 which is equal to US$75,000 multiplied by the lowest IDR/USD exchange rate within the period of August 22, 2005 - June 22, 2012 if the IDR/USD spot rate at termination date is less than or equal to the lowest of IDR/USD exchange rate mentioned above plus Rp4,300 (in full amounts) · US$75,000 which is equal to US$75,000 multiplied by IDR/USD spot rate at termination date minus Rp4,300 (in full amount) if IDR/USD spot rate at termination date is greater than the lowest of IDR/USD exchange rate mentioned above plus Rp4,300 (in full amounts) | 3.28% of US$75,000 | Every June 22 and December 22 | - | 10,689 |
d. | StandChart(6) | January 11, 2006 - June 22, 2012 Swap Rp236,250 for US$25,000 | 4.78% of US$25,000 | Every June 22 and December 22 | 5,754 | 10,672 |
(1)
On November 5, 2010, this contract expired and the Company received settlement gain on the cross currency swap amounting to Rp59,925.
(2)
On November 5, 2010, this contract expired and the Company paid settlement loss on the cross currency swap amounting to (Rp21,881).
(4)
On June 28, 2011, this contract was terminated and the Company received settlement gain on the cross currency swap amounting to US$3,650 or equivalent to Rp31,379 on July 1, 2011.
(6)
On June 22, 2012, this contract expired and the Company received settlement gain on the cross currency swap amounting to Rp575.
66
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
20. DERIVATIVES (continued)
Cross Currency Swap Contracts (continued)
No. | Counter-parties | Contract Period and Swap Amount | Annual Swap Premium Rate | Swap Premium Payment Date | Amount of Swap Premium Paid / Amortized (Rp) | |||
2012 | 2011 | |||||||
e. | StandChart(7) | March 15, 2006 - June 22, 2012 Swap Rp228,550 for US$25,000 | 3.75% of US$25,000 | Every June 22 and December 22 | 4,515 | 8,372 | ||
f. | StandChart(8) | May 12, 2006 - June 22, 2012 Swap Rp217,500 for US$25,000 | 3.45% of US$25,000 | Every June 22 and December 22 | 4,153 | 7,702 | ||
g. | HSBC(3) | August 8, 2006 - November 5, 2010 Swap Rp225,000 for US$25,000 | 4.00% of US$25,000 | Every May 5 and November 5 | - | - | ||
h. | MLIB(5) | August 8, 2008 - June 22, 2012 The Company will receive the following: · zero amount if the IDR/USD spot rate at termination date is less than or equal to Rp8,950 to US$1 (in full amounts) · certain U.S. dollar amount which is equal to US$50,000 multiplied by (1 - Rp8,950 divided by IDR/USD spot rate) (in full amounts) if the IDR/USD spot rate at termination date is greater than Rp8,950 but is less than or equal to Rp11,000 to US$1 (in full amounts) · certain U.S. dollar amount which is equal to US$50,000 multiplied by (Rp11,000 - Rp8,950) divided by IDR/USD spot rate (in full amounts) if the IDR/USD spot rate at termination date is greater than Rp11,000 to US$1 (in full amounts) | 4.22% of US$50,000 | Every June 22 and December 22 | - | 11,326 | ||
i. | MLIB(9)(10)(11) | September 2, 2008 - June 12, 2013 The Company will receive the following: · zero amount if the IDR/USD spot rate at termination date is less than or equal to Rp8,800 to US$1 (in full amounts) · certain U.S. dollar amount as arranged in the contract multiplied by (IDR/USD spot rate - Rp8,800) divided by IDR/USD spot rate (in full amount) if the IDR/USD spot rate at termination date is greater than Rp8,800 but is less than or equal to Rp12,000 to US$1 (in full amounts) · certain U.S. dollar amount as arranged in the contract multiplied by (Rp3,200 divided by IDR/USD spot rate) (in full amount) if the IDR/USD spot rate at termination date is greater than Rp12,000 to US$1 (in full amounts) | 4.10% of US$25,000 up to June 12, 2011, and 4.10% of decreasing U.S. dollar amount as arranged in the contract up to June 12, 2013 | Every June 12 and December 12 | 5,806 | 9,968 | ||
j. | MLIB(12) | September 8, 2008 - June 22, 2012 The Company will receive the following: · zero amount if the IDR/USD spot rate at termination date is less than or equal to Rp9,000 to US$1 (in full amounts) · certain U.S. dollar amount which is equal to US$25,000 multiplied by (1 - Rp9,000 divided by IDR/USD spot rate) (in full amounts) if the IDR/USD spot rate at termination date is greater than Rp9,000 but is less than or equal to Rp11,000 to US$1 (in full amounts) · certain U.S. dollar amount which is equal to US$25,000 multiplied by (Rp11,000 - Rp9,000) divided by IDR/USD spot rate (in full amounts) if the IDR/USD spot rate at termination date is greater than Rp11,000 to US$1 (in full amounts) | 2.52% of US$25,000 | Every June 22 and December 22 | - | 3,382 | ||
(3)
On November 5, 2010, this contract expired and the Company paid settlement loss on the cross currency swap amounting to (Rp2,550).
(5)
On June 28, 2011, this contract was terminated and the Company paid settlement loss on the cross currency swap amounting to (US$1,456) or equivalent to (Rp12,519) on July 1, 2011.
(7)
On June 22, 2012, this contract expired and the Company received settlement gain on the cross currency swap amounting to Rp8,275.
(8)
On June 22, 2012, this contract expired and the Company received settlement gain on the cross currency swap amounting to Rp19,325.
(9)
On December 12, 2011, the Company used the option to exercise US$6,000 of the contract amount, and received settlement gain on the cross currency swap amounting to US$189 or equivalent to Rp1,716.
(10) On June 12, 2012, this contract expired and the Company received zero settlement.
(11) On December 12, 2012, these contracts expired and the Company received zero settlement.
(12) On June 28, 2011, this contract was terminated and the Company paid settlement loss on the cross currency swap amounting to (US$194) or equivalent to (Rp1,666) on July 1, 2011.
20. DERIVATIVES (continued)
Cross Currency Swap Contracts (continued)
No. | Counter-parties | Contract Period and Swap Amount | Annual Swap Premium Rate | Swap Premium Payment Date | Amount of Swap Premium Paid / Amortized (Rp) | |
2012 | 2011 | |||||
k. | DBS(13)(14)(15) | September 10, 2008 - June 12, 2013 The Company will receive the following: · zero amount if the IDR/USD spot rate at the scheduled settlement date is at or less than Rp8,800 to US$1 (in full amounts) · certain U.S. dollar amount which is equal to U.S. dollar amount at scheduled settlement date multiplied by (IDR/USD spot rate - Rp8,800) divided by IDR/USD spot rate (in full amount) if the IDR/USD spot rate at settlement date is greater than Rp8,800 and is at or less than Rp12,000 to US$1 (in full amounts) · certain U.S. dollar amount which is equal to U.S. dollar amount at scheduled settlement date multiplied by (Rp12,000 - Rp8,800) divided by IDR/USD spot rate (in full amounts) if the IDR/USD spot rate at settlement date is greater than Rp12,000 to US$1 (in full amounts) | 3.945% of US$25,000 up to June 12, 2011, and 3.945% of decreasing U.S. dollar amount as arranged in the contract up to June 12, 2013 | Every June 12 and December 12 | 4,440 | 8,727 |
l. | HSBC | August 23, 2012 - January 23, 2013 Swap Rp96,000 for US$10,000 | 3.00% of US$10,000 | Upfront premium of US$300 (equivalent to Rp2,851) which was fully paid on August 27, 2012. The premium is amortized over the contract period. | 2,423 | - |
m. | Barclays | August 23, 2012 - January 23, 2013 Swap Rp139,200 for US$14,500 | 2.94% of US$14,500 | Upfront premium of US$426 (equivalent to Rp4,052) which was fully paid on August 27, 2012. The premium is amortized over the contract period. | 3,443 | - |
(13)
On December 12, 2011, the Company used the option to exercise US$6,000 of the contract amount and received settlement gain on the cross currency swap amounting US$189 or equivalent to Rp1,716
(14)
On June 12, 2012 , the Company used the option to exercise US$2,000 of the contract amount and received settlement gain from the exercise amounting to US$140 or equivalent to Rp1,324.
(15)
On December 12, 2012, the Company used the option to exercise US$2,000 of the contract amount and received settlement gain from the exercise amounting to US$186 or equivalent to Rp1,793.
20. DERIVATIVES (continued)
Cross Currency Swap Contracts (continued)
No. | Counter-parties | Contract Period and Swap Amount | Annual Swap Premium Rate | Swap Premium Payment Date | Amount of Swap Premium Paid / Amortized (Rp) | |
2012 | 2011 | |||||
n. | HSBC | August 23, 2012 - February 25, 2013 Swap Rp134,400 for US$14,000 | 3.20% of US$14,000 | Upfront premium of US$448 (equivalent to Rp4,258) which was fully paid on August 27, 2012. The premium is amortized over the contract period. | 2,976 | - |
o. | HSBC | August 23, 2012 - March 25, 2013 Swap Rp105,600 for US$11,000 | 3.70% of US$11,000 | Upfront premium of US$407 (equivalent to Rp3,868) which was fully paid on August 27, 2012. The premium is amortized over the contract period. | 2,350 | - |
p. | GSI(16) | December 16, 2008 - November 5, 2010 The Company will receive the following: · zero amount if the IDR/USD spot rate at termination date is less than or equal to Rp11,500 to US$1 (in full amounts) · certain U.S. dollar amount which is equal to US$84,000 multiplied by (IDR/USD spot rate - Rp11,500 divided by IDR/USD spot rate) (in full amounts) if the IDR/USD spot rate at termination date is greater than Rp11,500 but is less than or equal to Rp15,000 to US$1 (in full amounts) · certain U.S. dollar amount which is equal to US$84,000 multiplied by (Rp3,500 divided by IDR/USD spot rate) (in full amounts) if the IDR/USD spot rate at termination date is greater than Rp15,000 to US$1 (in full amounts) | Upfront premium of US$9,500 (equivalent to Rp105,212) which was fully paid on December 19, 2008. The premium is amortized over the contract period. | - | - | - |
Total | 35,860 | 70,838 | ||||
(16)
On November 5, 2010, this contract expired and the Company received zero settlement on the cross currency swap.
Cross currency swap contract with GSI (contract No. a, b and c) are structured to include credit-linkage with the Company as the reference entity and with the Company’s (i) bankruptcy, (ii) failure to pay on certain debt obligations or (iii) restructuring of certain debt obligations as the relevant credit events. Upon the occurrence of any of these credit events, the Company’s obligations and those of GSI under these swap contracts will be terminated without any further payments or settlements being made by or owed to either party, including a payment by either party of any marked-to-market value of the swap contracts.
67
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
20.
DERIVATIVES (continued)
Interest Rate Swap Contracts
No. | Counter-parties | Contract Period | Annual Interest Swap Rate | Swap Income (Expense) Receipt (Payment) Date | Amount of Swap Expense Paid (Rp) | |
2012 | 2011 | |||||
q. | HSBC | April 23, 2008 - November 27, 2016 | 5.42% of US$27,037, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.45% per annum | Every April 1 and October 1 up to October 2009, and every May 27 and November 27 up to termination date | 5,949 | 7,034 |
r. | HSBC | April 23, 2008 -September 29, 2019 | 4.82% of US$44,200, the notional amount of which will decrease based on predetermined schedule, in exchange for U.S. dollar LIBOR plus 0.35% per annum | Every January 28 and July 28 up to July 2009, and every March 29 and September 29 up to termination date | 12,439 | 13,799 |
s. | GSI | September 2, 2008 - June 12, 2013 | (8.10% - underlyer return) of US$100,000 per annum, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum | Every June 10 and December 10 up to June 2011, and every June 12 and December 12 up to termination date | 45,178 | 38,978 |
t. | DBS | September 5, 2008 - June 12, 2013 | 5.625% of US$25,000 per annum, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum | Every June 10 and December 10 up to December 2010, and every June 12 and December 12 up to termination date | 3,405 | 7,463 |
u. | DBS | October 23, 2008 - June 12, 2013 | 5.28% of US$25,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum | Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date | 3,017 | 8,426 |
v. | BTMUFJ | December 1, 2008 - June 12, 2013 | 4.46% of US$25,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum | Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date | 2,094 | 5,052 |
w. | BTMUFJ | December 4, 2008 - June 12, 2013 | 4.25% of US$25,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum | Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date | 1,858 | 5,000 |
x. | BTMUFJ | December 12, 2008 - June 12, 2013 | 4.09% of US$25,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum | Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date | 1,678 | 4,381 |
y. | StandChart | December 19, 2008 - June 12, 2013 | 3.85% of US$40,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum | Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date | 2,252 | 6,066 |
z. | DBS(10) | December 22, 2008 - December 12, 2012 | 4.02% of US$26,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum | Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date | 1,663 | 5,068 |
aa. | DBS(18) | January 21, 2009 - December 12, 2012 | 3.83% of US$26,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum | Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date | 1,452 | 4,510 |
ab. | BTMUFJ(17) | March 2, 2009 - June 12, 2012 | 4.10% of US$36,500, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum | Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date | 1,321 | 6,432 |
ac. | ING Bank N.V. | March 3, 2009 - December 12, 2011 | 4.0094% of US$25,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum | Every March 25 and September 25 up to every June 12 and December 12 up to termination date | - | 4,185 |
ad. | ING Bank N.V. | April 14, 2009 - June 12, 2011 | 3.75% of US$33,500, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum | Every March 25 and September 25 up to June 12, 2011 | - | 3,127 |
Total | 82,306 | 119,521 | ||||
(17) On June 12, 2012, this contract expired and the Company received zero settlement.
(18) On December 12, 2012, these contracts expired and the Company received zero settlement.
20.
DERIVATIVES (continued)
Currency Forward Contracts
No. | Counter-parties | Contract Period | IDR/USD Fixing Rate (in full amounts) | Amount of Settlement Gain / (Loss) (Rp) | |
2012 | 2011 | ||||
ae. | JP Morgan | July 14, 2011 - December 12, 2011 | Rp8,699 to US$1 | - | 3,860 |
af. | DBS | July 19, 2011 - December 12, 2011 | Rp8,699 to US$1 | - | 7,720 |
ag. | Deutsche Bank | July 19, 2011 - December 12, 2011 | Rp8,714 to US$1 | - | 7,420 |
ah. | Deutsche Bank | July 21, 2011 - December 12, 2011 | Rp8,665 to US$1 | - | 4,200 |
ai. | JP Morgan | July 21, 2011 - December 12, 2011 | Rp8,665 to US$1 | - | 4,200 |
aj. | StandChart | July 22, 2011 - December 12, 2011 | Rp8,623 to US$1 | - | 2,310 |
ak. | JP Morgan | July 22, 2011 - December 12, 2011 | Rp8,637 to US$1 | - | 4,480 |
al. | Danareksa | July 26, 2011 - December 12, 2011 | Rp8,604 to US$1 | - | 2,405 |
am. | JP Morgan | July 26, 2011 - December 12, 2011 | Rp8,614 to US$1 | - | 2,355 |
an. | StandChart | July 26, 2011 - December 12, 2011 | Rp8,614 to US$1 | - | 2,355 |
ao. | JP Morgan | July 29, 2011 - December 12, 2011 | Rp8,568 to US$1 | - | 2,585 |
ap. | HSBC | August 1, 2011 - November 30, 2011 | Rp8,533 to US$1 | - | 3,185 |
aq. | HSBC | August 1, 2011 - December 12, 2011 | Rp8,541 to US$1 | - | 2,720 |
ar. | JP Morgan | August 2, 2011 - November 30, 2011 | Rp8,538 to US$1 | - | 3,160 |
as. | HSBC | August 4, 2011 - November 28, 2011 | Rp8,547 to US$1 | - | 553 |
at. | HSBC | August 4, 2011 - November 30, 2011 | Rp8,549 to US$1 | - | 1,863 |
au. | HSBC | August 10, 2011 - January 24, 2012 | Rp8,698 to US$1 | 3,200 | - |
av. | JP Morgan | August 10, 2011 - January 24, 2012 | Rp8,696 to US$1 | 578 | - |
aw. | StandChart | August 10, 2011 - January 24, 2012 | Rp8,696 to US$1 | 966 | - |
ax. | JP Morgan | August 11, 2011 - January 24, 2012 | Rp8,693 to US$1 | 2,774 | - |
ay. | HSBC | August 11, 2011 - February 28, 2012 | Rp8,714 to US$1 | 2,226 | - |
az. | HSBC | August 11, 2011 - February 28, 2012 | Rp8,715 to US$1 | 2,775 | - |
ba. | JP Morgan | August 12, 2011 - March 29, 2012 | Rp8,764 to US$1 | 5,830 | - |
bb. | StandChart | August 15, 2011 - May 30, 2012 | Rp8,785 to US$1 | 5,495 | - |
bc. | StandChart | August 15, 2011 - May 30, 2012 | Rp8,787 to US$1 | 5,168 | - |
bd. | StandChart | August 16, 2011 - June 12, 2012 | Rp8,788 to US$1 | 5,280 | - |
be. | DBS | August 19, 2011 - January 27, 2012 | Rp8,708 to US$1 | 3,173 | - |
bf. | ING | August 19, 2011 - January 27, 2012 | Rp8,706 to US$1 | 2,235 | - |
68
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
20.
DERIVATIVES (continued)
Currency Forward Contracts (continued)
No. | Counter-parties | Contract Period | IDR/USD Fixing Rate (in full amounts) | Amount of Settlement Gain / (Loss) (Rp) | |
2012 | 2011 | ||||
bg. | DBS | August 19, 2011 - January 27, 2012 | Rp8,705 to US$1 | 2,242 | - |
bh. | DBS | August 19, 2011 - June 12, 2012 | Rp8,819 to US$1 | 6,430 | - |
bi. | JP Morgan | August 19, 2011 - June 12, 2012 | Rp8,826 to US$1 | 6,365 | - |
bj. | HSBC | August 19, 2011 - June 12, 2012 | Rp8,832 to US$1 | 6,160 | - |
bk. | ING | August 22, 2011 - January 12, 2012 | Rp8,662 to US$1 | 5,405 | - |
bl. | ING | August 22, 2011 - January 30, 2012 | Rp8,679 to US$1 | 4,053 | - |
bm. | DBS | August 22, 2011 - February 28, 2012 | Rp8,715 to US$1 | 4,786 | - |
bn. | ING | August 22, 2011 - March 28, 2012 | Rp8,737 to US$1 | 6,070 | - |
bo. | ING | August 23, 2011 - January 12, 2012 | Rp8,644 to US$1 | 5,585 | - |
bp. | ING | August 23, 2011 - January 12, 2012 | Rp8,647 to US$1 | 5,555 | - |
bq. | GSI | August 23, 2011 - January 12, 2012 | Rp8,640 to US$1 | 4,500 | - |
br. | GSI | August 24, 2011 - January 27, 2012 | Rp8,645 to US$1 | 4,940 | - |
bs. | RBS | August 24, 2011 - February 10, 2012 | Rp8,666 to US$1 | 3,901 | - |
bt. | GSI | August 24, 2011 - February 29, 2012 | Rp8,663 to US$1 | 6,005 | - |
bu. | GSI | August 24, 2011 - February 29, 2012 | Rp8,675 to US$1 | 6,107 | - |
bv. | HSBC | August 16, 2012 - November 23, 2012 | Rp9,647 to US$1 | (38) | - |
bw. | HSBC | August 16, 2012 - November 28, 2012 | Rp9,654 to US$1 | (644) | - |
bx. | StandChart | August 16, 2012 - December 10, 2012 | Rp9,681 to US$1 | (560) | - |
by. | HSBC | August 16, 2012 - December 10, 2012 | Rp9,670 to US$1 | (407) | - |
bz. | DBS | August 23, 2012 - November 26, 2012 | Rp9,616 to US$1 | 62 | - |
ca. | BNP Paribas | August 24, 2012 - December 21, 2012 | Rp9,690 to US$1 | 46 | - |
cb. | GSI | August 24, 2012 - December 21, 2012 | Rp9,694 to US$1 | 95 | - |
cc. | ING | August 24, 2012 - December 21, 2012 | Rp9,695 to US$1 | 90 | - |
cd. | Barclays | September 6, 2012 - December 5, 2012 | Rp9,695 to US$1 | (890) | - |
ce. | Barclays | September 7, 2012 - December 5, 2012 | Rp9,694 to US$1 | (1,760) | - |
cf. | BNP Paribas | September 12, 2012 - December 13, 2012 | Rp9,653 to US$1 | 1,112 | - |
cg. | ING | September 14, 2012 - January 11, 2013 | Rp9,631 to US$1 | - | - |
ch. | GSI | September 17, 2012 - January 11, 2013 | Rp9,560 to US$1 | - | - |
ci. | JP Morgan | September 28, 2012 - December 21, 2012 | Rp9,660 to US$1 | 619 | - |
cj. | JP Morgan | October 5, 2012 - December 21, 2012 | Rp9,642 to US$1 | 618 | - |
ck. | BNP Paribas | November 14, 2012 - February 8, 2013 | Rp9,683 to US$1 | - | - |
cl. | Barclays | November 29, 2012 - March 4, 2013 | Rp9,697 to US$1 | - | - |
cm. | BNP Paribas | November 30, 2012 - March 4, 2013 | Rp9,669 to US$1 | - | - |
cn. | JP Morgan | December 3, 2012 - March 5, 2013 | Rp9,638 to US$1 | - | - |
co. | ING | December 4, 2012 - March 6, 2013 | Rp9,666 to US$1 | - | - |
cp. | Barclays | December 5, 2012 - February 5, 2013 | Rp9,690 to US$1 | - | - |
cq. | DBS | December 5, 2012 - February 5, 2013 | Rp9,695 to US$1 | - | - |
cr. | DBS | December 7, 2012 - February 11, 2013 | Rp9,702 to US$1 | - | - |
20.
DERIVATIVES (continued)
Currency Forward Contracts (continued)
No. | Counter-parties | Contract Period | IDR/USD Fixing Rate (in full amounts) | Amount of Settlement Gain/ (Loss) (Rp) | |
2012 | 2011 | ||||
cs. | JP Morgan | December 10, 2012 - March 13, 2013 | Rp9,865 to US$1 | - | - |
ct. | DBS | December 10, 2012 - March 12, 2013 | Rp9,853 to US$1 | - | - |
cu. | Barclays | December 12, 2012 - February 11, 2013 | Rp9,770 to US$1 | - | - |
cv. | JP Morgan | December 12, 2012 - February 11, 2013 | Rp9,765 to US$1 | - | - |
cw. | BNP Paribas | December 17, 2012 - March 20, 2013 | Rp9,775 to US$1 | - | - |
cx. | ING | December 18, 2012 - March 20, 2013 | Rp9,770 to US$1 | - | - |
Total | 116,147 | 55,371 | |||
21.
FINANCIAL ASSETS AND LIABILITIES
The Group has various financial assets such as trade and other accounts receivable, cash and cash equivalents and short-term investments, which arise directly from the Group’s operations. The Group’s principal financial liabilities, other than derivatives, consist of loans and bonds payable, procurement payable, and trade and other accounts payable. The main purpose of these financial liabilities is to finance the Group’s operations. The Company also enters into derivative transactions, primarily cross currency swaps and interest rate swaps, for the purpose of managing its foreign exchange and interest rate exposures emanating from the Company’s loans and bonds payable in foreign currencies.
The following table sets forth the Group’s financial assets and financial liabilities as of December 31, 2012 and 2011 and January 1, 2011/December 31, 2010:
December 31,
January 1, 2011/
December 31,
2012
2011
2010
(Restated)
(Restated)
Financial Assets
Held for trading
Derivative assets
69,654
159,349
69,334
Loans and receivables
Cash and cash equivalents
3,917,236
2,224,206
2,075,270
Accounts receivable - trade and others - net
2,061,160
1,505,756
1,546,307
Other current financial assets - net
13,382
24,790
53,119
Due from related parties - net
10,358
10,654
8,421
Other non-current financial assets - others
173,400
209,540
147,874
Available for sale
Other current financial assets - short-term
investments - net
-
-
-
Other non-current financial assets - other
long-term investments - net
1,369,740
2,730
2,730
Total Financial Assets
7,614,930
4,137,025
3,903,055
69
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
21.
FINANCIAL ASSETS AND LIABILITIES (continued)
December 31,
January 1, 2011/
December 31,
2012
2011
2010
(Restated)
(Restated)
Financial Liabilities
Held for trading
Derivative liabilities
81,241
138,189
215,403
Liabilities at amortized cost
Short-term loan
299,529
1,499,256
-
Accounts payable - trade231,737319,058645,505
Procurement payable
2,737,850
3,475,862
3,642,002
Accrued expenses
1,961,285
1,895,613
1,796,335
Deposits from customers
43,825
37,265
50,279
Loans payable - current maturities
2,669,218
3,300,537
3,184,147
Bonds payable - current maturities
1,329,175
41,989
1,098,131
Other current financial liabilities
289,164
71,828
52,413
Due to related parties
42,789
15,480
22,099
Obligation under finance lease
3,101,910
770,081
416,587
Loans payable - net of current maturities
3,703,822
6,425,779
7,666,804
Bonds payable - net of current maturities
13,986,507
12,138,353
12,114,104
Other non-current financial liabilities
69,273
107,433
45,815
Total Financial Liabilities
30,547,325
30,236,723
30,949,624
The following table sets forth the carrying values and estimated fair values of the Group financial instruments that are carried in the consolidated statements of financial position:
Carrying Amount
Fair Value
December 31,
January 1,
December 31,
January 1,
2011 /
2011/
December 31,
December 31,
2012
2011
2010
2012
20112010
(Restated)
(Restated)
(Restated)(Restated)
Current Financial Assets
Cash and cash equivalents
3,917,236
2,224,206
2,075,270
3,917,236
2,224,2062,075,270
Accounts receivable - trade
and others - net
2,061,160
1,505,756
1,546,307
2,061,1601,505,7561,546,307
Derivative assets
69,654
159,349
69,334
69,654 159,34969,334
Other current financial
assets - net
13,382
24,790
53,119
13,382
24,790
53,119
Total current financial
assets
6,061,432
3,914,101
3,744,030
6,061,432
3,914,1013,744,030
Non-current Financial Assets
Due from related parties
10,358
10,654
8,421
9,5398,9677,176
Other long-term
Investments - net
1,369,740
2,730
2,730
1,369,7402,7302,730
Other non-current
financial assets - net
173,400
209,540
147,874
171,648
205,261141,380
Total non-current
financial assets
1,553,498
222,924
159,025
1,550,927
216,958151,286
Total Financial Assets
7,614,930
4,137,025
3,903,055
7,612,359
4,131,0593,895,316
70
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
21.
FINANCIAL ASSETS AND LIABILITIES (continued)
Carrying Amount
Fair Value
December 31,
January 1,
December 31,
January 1,
2011/
2011/
December 31,
December 31,
2012
2011
2010
2012
20112010
(Restated)
(Restated)
(Restated)(Restated)
Current Financial
Liabilities
Short-term loan
299,529
1,499,256
-
299,529
1,499,256-
Accounts payable - trade
231,737
319,058
645,505
231,737 319,058645,505
Procurement payable
2,737,850
3,475,862
3,642,002
2,737,8503,475,8623,642,001
Accrued expenses
1,961,285
1,895,613
1,796,335
1,961,285
1,895,6131,796,335
Deposits from customers
43,825
37,265
50,279
43,825
37,26550,279
Derivative liabilities
81,241
138,189
215,403
81,241138,189215,403
Loans payable - current
maturities
2,669,218
3,300,537
3,184,147
2,791,1473,927,0623,155,634
Bonds payable - current
maturities
1,329,175
41,989
1,098,131
1,343,20543,1371,110,737
Other current financial
liabilities
289,164
71,828
52,413
289,16471,82852,413
Total current financial
liabilities
9,643,024
10,779,597
10,684,215
9,778,98311,407,27010,668,307
Non-current Financial
Liabilities
Due to related parties
42,789
15,480
22,099
39,40513,03018,833
Obligations under finance
lease
3,101,910
770,081
416,587
3,101,910770,081416,587
Loans payable -
non-current portion
3,703,822
6,425,779
7,666,804
3,331,132
5,864,3547,510,510
Bonds payable -
non-current portion
13,986,507
12,138,353
12,114,104
15,318,67613,334,90313,228,171
Other non-current financial
liabilities
69,273
107,433
45,815
66,433101,06843,281
Total non-current
financial liabilities
20,904,301
19,457,126
20,265,409
21,857,55620,083,43621,217,382
Total Financial Liabilities
30,547,325
30,236,723
30,949,624
31,636,53931,490,70631,885,689
The fair values of the financial assets and liabilities are presented at the amounts at which the instruments could be exchanged in current transaction between willing parties, other than in a forced sale or liquidation.
The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate such value:
Short-term financial assets and liabilities:
·
Short-term financial instruments with remaining maturities of one year or less (cash and cash equivalents, trade and other accounts receivable, other current financial assets, short-term loan, trade accounts payable, procurement payable, accrued expenses, deposits from customers and other current financial liabilities).
71
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
21.
FINANCIAL ASSETS AND LIABILITIES (continued)
These financial instruments approximate their carrying amounts largely due to their short-term maturities.
·
Derivative financial instruments
Cross currency swap contracts (including bifurcated embedded derivative)
These derivatives are measured at their fair values using internal valuation techniques as no quoted market prices exist for such instruments. The principal technique used to value these instruments is the use of discounted cash flows. The key inputs include interest rate yield curves, foreign exchange rates, Credit Default Spread (“CDS”), and the spot price of the underlying instruments.
Interest rate swap contracts
These derivatives are measured at their fair values, computed using discounted cash flows based on observable market inputs which include interest rate yield curves and payment dates.
Currency forward contracts
These derivatives are measured at their fair values, computed using discounted cash flows based on observable market inputs which include foreign exchange rates, payment dates and the spot price of the underlying instruments.
Long-term financial assets and liabilities:
·
Long-term fixed-rate and variable-rate financial liabilities (unquoted loans and bonds payable)
The fair value of these financial liabilities is determined by discounting future cash flows using applicable rates from observable current market transactions for instruments with similar terms, credit risk and remaining maturities.
·
Other long-term financial assets and liabilities (due from/to related parties, finance lease receivable/ obligation under finance lease, other long-term investments and other non-current financial assets)
Estimated fair value is based on discounted value of future cash flows adjusted to reflect counterparty risk (for financial assets) and the Group’s own credit risk (for financial liabilities) and using risk-free rates for similar instruments.
·
Financial instruments quoted in an active market
The fair value of the bonds issued by the Company which are traded in an active market is determined with reference to their quoted market prices.
For equity investments classified as available-for-sale, the fair value is determined based on the latest market quotation as published by the Indonesia Stock Exchange as of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010.
Fair Value Hierarchy
Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. The assessment of the significance of a particular input to the fair value measurements requires judgment, and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.
72
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
21.
FINANCIAL ASSETS AND LIABILITIES (continued)
Fair Value Hierarchy (continued)
The best evidence of fair value is quoted prices in an active market. If the market for a financial instrument is not active, an entity establishes fair value by using a valuation technique. The objective of using a valuation technique is to establish what the transaction price would have been on the measurement date in an arm's length exchange motivated by normal business considerations. Valuation techniques include using recent arm's length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. If there is a valuation technique commonly used by market participants to price the instrument and that technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions, the entity uses that technique. The chosen valuation technique makes maximum use of market inputs and relies as little as possible on entity-specific inputs. It incorporates all factors that market participants would consider in setting a price and is consistent with accepted economic methodologies for pricing financial instruments. Periodically, the Company calibrates the valuation technique and tests it for validity using prices from any observable current market transactions in the same instrument (i.e., without modification or repackaging) or based on any available observable market data.
The Company’s fair value hierarchy as of December 31, 2012 and 2011 and January 1, 2011/ December 31, 2010 are as follows:
December 31, 2012
Quoted prices
Significant
in active
and
markets for
observable
identical
inputs,
Significant
assets or
directly or
unobservable
liabilities
indirectly
inputs
Total
(Level 1)
(Level 2)
(Level 3)
Current Financial Assets
Derivative assets
69,654
-
69,654
-
Non-Current Financial Assets
Other non-current financial assets - net
1,367,010
1,367,010
-
-
Total Financial Assets
1,436,664
1,367,010
69,654
-
Current Financial Liabilities
Derivative liabilities
81,241
-
81,241
-
Total Financial Liabilities
81,241
-
81,241
-
73
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
21. FINANCIAL ASSETS AND LIABILITIES (continued)
Fair Value Hierarchy (continued)
December 31, 2011
Quoted prices
Significant
in active
and
markets for
observable
identical
inputs,
Significant
assets or
directly or
unobservable
liabilities
indirectly
inputs
Total
(Level 1)
(Level 2)
(Level 3)
Current Financial Assets
Derivative assets
159,349
-
159,349
-
Total Financial Assets
159,349
-
159,349
-
Current Financial Liabilities
Derivative liabilities
138,189
-
138,189
-
Embedded derivatives
49,518
-
49,518
-
Total Financial Liabilities
187,707
-
187,707
-
January 1, 2011 /
December 31, 2010
Quoted prices
Significant
in active
and
markets for
observable
identical
inputs,
Significant
assets or
directly or
unobservable
liabilities
indirectly
inputs
Total
(Level 1)
(Level 2)
(Level 3)
Current Financial Assets
Derivative assets
69,334
-
69,334
-
Total Financial Assets
69,334
-
69,334
-
Current Financial Liabilities
Derivative liabilities
215,403
-
215,403
-
Embedded derivatives
54,595
-
54,595
-
Total Financial Liabilities
269,998
-
269,998
-
During the years ended December 31, 2012, 2011 and 2010, there were no transfers between Level 1 and Level 2 fair value measurements.
22.
EMPLOYEE BENEFIT OBLIGATIONS
This account consists of the non-current portions of employee benefit obligations as follows:
December 31,
January 1,
2011 /
December 31,
2012
2011
2010
Post-retirement healthcare (Note 17 and 30)
632,735
555,752
639,271
Labor Law 13 (Note 17 and 30)
249,313
194,329
187,944
Service award (Note 17)
41,479
35,071
43,058
Accumulated leave benefits
2,697
2,161
2,134
Total
926,224
787,313
872,407
23. CAPITAL STOCK
The Company’s capital stock ownership as of December 31, 2012 and 2011 and January 1, 2011/ December 31, 2010 are as follows:
Number of
Percentage
Shares Issued
of Ownership
Stockholders
and Fully Paid
Amount
(%)
December 31, 2012
A Share
Government
1
-
-
B Shares
Qatar Telecom (Qtel Asia) Pte. Ltd.
3,532,056,600
353,206
65.00
Government
776,624,999
77,662
14.29
SKAGEN Funds (SKAGEN AS)
299,382,400
29,938
5.51
Director:
Fadzri Sentosa
10,000
1
0.00
Others (each holding below 5%)
825,859,500
82,586
15.20
Total
5,433,933,500
543,393
100.00
December 31, 2011
A Share
Government
1
-
-
B Shares
Qatar Telecom (Qtel Asia) Pte. Ltd.
3,532,056,600
353,206
65.00
Government
776,624,999
77,662
14.29
SKAGEN Funds (SKAGEN AS)
305,498,450
30,550
5.62
Director:
Fadzri Sentosa
10,000
1
0.00
Others (each holding below 5%)
819,743,450
81,974
15.09
Total
5,433,933,500
543,393
100.00
January 1, 2011 / December 31, 2010
A Share
Government
1
-
-
B Shares
Qatar Telecom (Qtel Asia) Pte. Ltd.
3,532,056,600
353,206
65.00
Government
776,624,999
77,662
14.29
SKAGEN Funds (SKAGEN AS)
277,824,400
27,782
5.11
Director:
Fadzri Sentosa
10,000
1
0.00
Others (each holding below 5%)
847,417,500
84,742
15.60
Total
5,433,933,500
543,393
100.00
The “A” share is a special share held by the Government and has special voting rights. The material rights and restrictions which are applicable to the “B” shares are also applicable to the “A” share, except that the Government may not transfer the “A” share, which has a veto right with respect to (i) amendment to the objective and purposes of the Company; (ii) increase of capital without pre-emptive rights; (iii) merger, consolidation, acquisition and demerger; (iv) amendment to the provisions regarding the rights of “A” share as stipulated in the Articles of Association; and (v) dissolution, bankruptcy and liquidation of the Company. The “A” share also has the right to appoint one director and one commissioner of the Company.
24.
REVENUES
This account consists of the following:
2012
2011
(Restated)
Cellular
Usage charges
8,629,697
8,203,788
Value-added services
7,868,391
7,502,140
Interconnection services (Note 36)
2,174,964
1,182,384
Tower leasing (Note 33g)
504,857
419,720
Monthly subscription charges
136,429
134,032
Connection fee
12,588
14,217
Sale of Blackberry handsets
233
1,706
Upfront discount and customer loyalty program (Note 2k)
(1,022,262
)
(1,116,470)
Others
184,432
245,868
Sub-total
18,489,329
16,587,385
MIDI
Internet Protocol Virtual Private Network (IP VPN)
711,427
695,947
Internet
422,099
375,743
World link and direct link
314,878
294,956
Multiprotocol Label Switching (MPLS)
304,868
89,937
Application services
251,893
192,562
Satellite lease
213,052
150,894
Value-added services
173,940
264,570
Leased line
148,635
261,376
Frame net
135,761
123,249
Digital data network
112,597
103,098
TV link
6,016
6,127
Others
112,867
133,466
Sub-total
2,908,033
2,691,925
Fixed Telecommunications
International Calls
801,442
934,021
Fixed Line
121,735
123,185
Fixed Wireless
98,273
192,776
Sub-total
1,021,450
1,249,982
Total
22,418,812
20,529,292
The details of net revenues received from agency relationships consist of the following:
2012
2011
Gross revenues
7,966,505
8,081,500
Compensation to value added service providers
(98,114)
(579,360)
Net revenues
7,868,391
7,502,140
24.
REVENUES (continued)
The revenues from related parties amounted to Rp1,812,619 and Rp1,554,780 for the years ended December 31, 2012 and 2011, respectively. These amounts represent 8.09% and 7.57% of the total revenues in 2012 and 2011, respectively (Note 31).
The revenues from interconnection services are presented on a gross basis (Note 2k).
25.
COST OF SERVICES
The balance of this account for the years ended December 31, 2012 and 2011 consists of the following:
2012
2011
(Restated)
Interconnection (Note 36)
2,557,775
1,706,521
Radio frequency fee (Notes 33h and 35)
1,961,377
1,755,852
Utilities
842,963
822,784
Maintenance
829,757
921,990
Rent
726,872
612,348
Blackberry access fee
519,611
371,229
Leased circuits (Note 33l)
349,114
331,390
USO (Note 35)
273,943
228,693
Cost of SIM cards and pulse reload vouchers
234,239
285,812
Installation
169,440
141,420
Concession fee (Note 35)
141,111
122,178
Delivery and transportation
122,348
83,073
License
54,177
32,225
Communication network
53,956
6,221
Billing and collection
41,767
57,780
Cost of handsets and modems
12,392
12,500
Others
14,894
55,391
Total
8,905,736
7,547,407
Interconnection relates to the expenses for the interconnection between the Company’s telecommunications networks and those owned by Telkom or other telecommunications carriers (Note 2k).
26. PERSONNEL
The balance of this account for the years ended December 31, 2012 and 2011 consists of the following:
2012
2011
Salaries
547,923
472,826
Incentives and other employee benefits (Note 42)
325,312
282,860
Employee income tax
167,205
260,104
Bonuses
127,746
199,043
Post-retirement healthcare benefits (Note 30)
92,656
(74,253
)
Separation, appreciation and compensation expense
under Labor Law No.13/2003 (Note 30)
57,758
10,344
Medical expense
56,782
60,819
Pension (Note 30)
24,719
15,943
Severance benefits under Voluntary Separation Scheme (“VSS”)*
6,330
579,301
Early retirement**
1,210
15,170
Others
19,553
90,490
Total
1,427,194
1,912,647
*
On January 20, 2011 and January 2, 2012, the Company’s and Lintasarta’s Boards of Directors issued Directors’ Decree No. 003/Direksi/2011 and Directors’ Decree No. 015/Direksi/40000/2012, regarding the Organizational Restructuring Program through an offering scheme on the basis of mutual agreement between the Company / Lintasarta and certain employees (VSS), that became effective on the same date. For the year ended December 31, 2011, there were 994 employees of the Company and 54 employees of Lintasarta who availed themselves of the scheme, and the benefits paid amounted to Rp566,034 and Rp13,267, respectively. For the year ended December 31, 2012, there were 24 employees of Lintasarta who availed themselves of the scheme and the benefits paid amounted to Rp6,330.
**On June 27, 2006, the Company’s Directors issued Decree No. 051/DIREKSI/2006, “Additional Benefits for Voluntarily Resigned Employees”. Under this decree, employees qualified for early retirement and who voluntarily resigned after the approval from the Board of Directors were given benefits of additional remuneration, traveling and training package. For the year ended December 31, 2011, there were 9 employees who took the option.
The personnel expenses capitalized to properties under construction and installation for the years ended December 31, 2012 and 2011 amounted to Rp52,339 and Rp46,575, respectively.
27.
GENERAL AND ADMINISTRATION
The balance of this account for the years ended December 31, 2012 and 2011 consists of the following:
2012
2011
Professional fees (Note 33b)
186,886
109,523
Rent
117,845
113,277
Transportation
61,231
65,807
Provision for impairment of receivables - net
56,163
41,051
Insurance
37,582
44,539
Office
28,705
34,956
Social activities
27,683
16,620
Training, education and research
26,443
23,371
Utilities (Note 42)
14,636
14,068
Public relations
13,084
9,262
Communications
7,589
10,433
Others (each below Rp5,000)
47,693
66,623
Total
625,540
549,530
28.
FINANCING COST
The balance of this account for the years ended December 31, 2012 and 2011 consists of the following:
2012
2011
(Restated)
Interest on loans
1,709,946
1,700,091
Finance charges under finance lease
261,458
133,322
Amortization of debt and bonds issuance
costs, consent solicitation fees and discount (Notes 14, 18 and 19)
88,878
83,444
Interest expense from Lintasarta’s USO Project
11,256
6,345
Bank charges
5,812
6,152
Total
2,077,350
1,929,354
29.
GAIN ON SALE OF TOWERS
On February 7, 2012, the Company entered into an Asset Sale Agreement with PT Tower Bersama Infrastructure Tbk and its subsidiary, PT Solusi Menara Bersama (collectively referred to as “Tower Bersama”), whereby the Company agreed to sell 2,500 of its telecommunication towers to Tower Bersama for a total consideration of US$518,500, consisting of US$406,000 to be paid upfront and a maximum potential deferred payment of US$112,500. The upfront payment includes PT Tower Bersama Infrastructure Tbk's shares of not less than 5% of the increase in its capital stock (upon the Rights Issue of PT Tower Bersama Infrastructure Tbk). Based on the agreement, the Company also agreed to lease back the spaces in the 2,500 telecommunication towers for 10 years period with fixed monthly lease rate of US$1,300 per tower slot (in full amount). The leases have an option to be renewed for a further 10 years.
29.
GAIN ON SALE OF TOWERS (continued)
On August 2, 2012, the Company and Tower Bersama closed the sale and leaseback transaction of 2,500 telecommunication towers. On the closing date of such transaction, the Company received cash amounting to US$326,289 (equal to Rp3,092,894) and obtained 5% ownership (equal to 239,826,310 shares) in Tower Bersama with the value of US$103,101 (equal to Rp977,292) (Note 12).
The total consideration of US$429,390 (equal to Rp4,070,187) is allocated to the sales of property and equipment amounting to Rp3,870,600 and the remainder is allocated to prepaid land lease and existing tower lease contracts from the 2,500 towers. The total carrying amount of the separately identifiable components of the transaction is Rp1,534,494 which includes the carrying amount of property and equipment amounting to Rp1,372,674. As of closing date, the Company recorded the excess of the selling price over the carrying amounts amounting to Rp2,535,693 (including the Rp2,497,926 from the sale of property and equipments) as “Gain on Sale of Towers” of Rp1,125,192, and “Deferred Gain on Sales and Leaseback” of Rp1,410,501. As of December 31, 2012, the Company recognized total “Gain on Sale of Towers” of Rp1,183,963, which includes the amortization of the “Deferred Gain on Sales and Leaseback” whose outstanding balance as of December 31, 2012 is Rp1,351,730. The deferred gain will be amortized over the term of the lease, being 10 years.
30.
PENSION PLAN
The Company, Satelindo and Lintasarta have defined benefit and defined contribution pension plans covering substantially all of their respective qualified permanent employees.
Defined Benefit Pension Plan
The Company, Satelindo and Lintasarta provide defined benefit pension plans to their respective employees under which pension benefits to be paid upon retirement are based on the employees’ most recent basic salary and number of years of service. PT Asuransi Jiwasraya (“Jiwasraya”), a state-owned life insurance company, manages the plans. Pension contributions are determined by periodic actuarial calculations performed by Jiwasraya.
Based on an amendment dated December 22, 2000 of the Company’s pension plan, which was further amended on March 29, 2001, the benefits and the premium payment pattern were changed.
Before the amendment, the premium was regularly paid annually until the plan would be fully funded and the benefits consisted of retirement benefit (regular monthly or lump-sum pension) and death insurance. In conjunction with the amendment, the plan would be fully funded after making installment payments up to January 2002 of the required amount to fully fund the plan determined as of September 1, 2000. The amendment also includes an additional benefit in the form of thirteenth-month retirement benefit, which is payable annually 14 days before Idul Fitri (“Moslem Holiday”).
The amendment covers employees registered as participants of the pension plan as of
September 1, 2000 and includes an increase in basic salary pension by 9% compounded annually starting from September 1, 2001. The amendment also stipulates that there will be no increase in the premium even in cases of mass employee terminations or changes in marital status.
The total premium installments based on the amendment amounted to Rp355,000 and were paid on due dates.
74
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
30.
PENSION PLAN (continued)
Defined Benefit Pension Plan (continued)
On March 1, 2007, the Company entered into an agreement with Jiwasraya to provide defined death insurance plan to 1,276 employees as of January 1, 2007, who are not covered by the defined benefit pension plan as stated above. Based on the agreement, a participating employee will receive:
·
Expiration benefit equivalent to the cash value at the normal retirement age, or
·
Death benefit not due to accident equivalent to 100% of insurance money plus cash value when the employee dies not due to accident, or
·
Death benefit due to accident equivalent to 200% of insurance money plus cash value when the employee dies due to accident.
The premium of Rp7,600 was fully paid on March 29, 2007. Subsequently, in August 2007, February to December 2008, January to December 2009, January to December 2010, January to December 2011 and January to December 2012, the Company made payments for additional premium of Rp275 for additional 55 employees, Rp805 for additional 161 employees, Rp415 for additional 81 employees, Rp120 for additional 14 employees, Rp378 for additional 41 employees and Rp883 for additional 140 employees, respectively.
On June 25, 2003, Satelindo entered into an agreement with Jiwasraya to amend the benefits and premium payment pattern of the former’s pension plan. The amendment covers employees registered as participants of the pension plan as of December 25, 2002 up to June 25, 2003. Other new conditions include the following:
·
An increase in pension basic salary at 6% compounded annually starting from December 25, 2002
·
Thirteenth-month retirement benefit, which is payable annually 14 days before Idul Fitri
·
An increase in periodic payment of retirement benefit at 6% compounded annually starting one year after receiving periodic retirement benefit for the first time
·
If the average annual interest rate of time deposits of government banks exceeds 15%, the participants’ retirement benefit will be increased by a certain percentage in accordance with the formula agreed by both parties.
On April 15, 2005, Lintasarta entered into an agreement with Jiwasraya to replace their existing agreement. Based on the new agreement, the benefits and the premium payment pattern were changed. This agreement is effective starting January 1, 2005. The total premium installments based on the agreement amounted to Rp61,623, which is payable in 10 annual installments starting 2005 until 2015.
The new agreement covers employees registered as participants of the pension plan as of
April 1, 2003. The conditions under the new agreement include the following:
·
An increase in pension basic salary by 3% (previously was estimated at 8%) compounded annually starting April 1, 2003
·
An increase in periodic payment of retirement benefit at 5% compounded annually starting one year after receiving periodic retirement benefit for the first time
·
If the average annual interest rate of time deposits of government banks exceeds 15%, the participants’ retirement benefit will be increased by a certain percentage in accordance with the formula agreed by both parties.
On May 2, 2005, Lintasarta entered into an agreement with Jiwasraya to amend the above agreement. The amendment covers employees registered as participants of the pension plan as of April 1, 2003 up to November 30, 2004 with additional 10 annual premium installments totalling Rp1,653 which are payable starting 2005 until 2015.
75
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
30.
PENSION PLAN (continued)
Defined Benefit Pension Plan (continued)
The contributions made by Lintasarta to Jiwasraya amounted to Rp9,653 each for the years ended December 31, 2012 and 2011, respectively.
Lintasarta expects to contribute Rp9,653 to its defined benefit pension plan for the year ending December 31, 2013.
The net periodic pension cost for the pension plans of the Company and Lintasarta for the years ended December 31, 2012 and 2011 was calculated based on actuarial valuations as of December 31, 2012 and 2011, respectively. The actuarial valuations were prepared by an independent actuary, using the projected-unit-credit method and applying the following assumptions:
2012
2011
Annual discount rate
6.0%
7.0 - 7.5%
Expected annual rate of return on plan assets
4.5 - 8.0%
4.5 - 9.0%
Annual rate of increase in compensation
3.0 - 9.0%
3.0 - 9.0%
Mortality rate (Indonesian Mortality Table - TMI)
TMI 2011
TMI 1999
a.
The composition of the net periodic pension cost for the years ended December 31, 2012 and 2011 is as follows:
December 31, 2012
The Company
Lintasarta
Total
Interest cost
28,346
3,590
31,936
Service cost
25,617
3,219
28,836
Amortization of unrecognized actuarial loss
-
1,185
1,185
Return on plan assets
(37,479
)
(3,607
)
(41,086)
Curtailment loss
-
1,441
1,441
Settlement loss
-
2,407
2,407
Net periodic pension cost (Note 26)
16,484
8,235
24,719
December 31, 2011
The Company
Lintasarta
Total
Interest cost
43,786
4,189
47,975
Service cost
27,167
3,839
31,006
Amortization of unrecognized actuarial loss
-
1,194
1,194
Return on plan assets
(47,175
)
(5,038
)
(52,213)
Curtailment loss (gain)
(18,998
)
2,324
(16,674)
Settlement loss
1,107
3,548
4,655
Net periodic pension cost (Note 26)
5,887
10,056
15,943
76
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
30.
PENSION PLAN (continued)
Defined Benefit Pension Plan (continued)
b.
The funded status of the plans as of December 31, 2012 and 2011 and January 1, 2011/ December 31, 2010 is as follows:
December 31,
January 1, 2011/
December 31,
2012
2011
2010
Plan assets at fair value
576,335
538,902
852,958
Projected benefit obligation
(554,209
)
(463,074
)*
(750,625)
Excess of plan assets over projected
benefit obligation
22,126
75,828
102,333
Unrecognized actuarial loss
68,175
29,464
10,928
Total prepaid pension cost
90,301
105,292
113,261
* net of curtailment effect during 2011 due to VSS (Note 26)
c.
Movements in the fair value of plan assets for the years ended December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010 are as follows:
December 31, 2012
The Company
Lintasarta
Total
Fair value of plan assets
at beginning of year
476,890
62,012
538,902
Expected return on plan assets
37,479
3,607
41,086
Actuarial gain (loss) on plan assets
7,815
(3,175
)
4,640
Contributions
883
9,653
10,536
Actual benefits paid
(9,751) (9,078) (18,829)
Fair value of plan assets at end of year
513,316
63,019
576,335
December 31, 2011
The Company
Lintasarta
Total
Fair value of plan assets
at beginning of year
793,664
59,294
852,958
Expected return on plan assets
47,175
5,038
52,213
Actuarial gain (loss) on plan assets
14,651
(610
)
14,041
Contributions
378
9,653
10,031
Actual benefits paid
(378,978
)
(11,363
)
(390,341)
Fair value of plan assets at end of year
476,890
62,012
538,902
30.
PENSION PLAN (continued)
Defined Benefit Pension Plan (continued)
January 1, 2011/December 31, 2010
The Company
Lintasarta
Total
Fair value of plan assets
at beginning of year
763,244
50,344
813,588
Expected return on plan assets67,149
4,320
71,469
Contributions
120
9,653
9,773
Actuarial loss on plan assets
(12,283
)
(2,677
)
(14,960)
Actual benefits paid
(24,566
)
(2,346
)
(26,912)
Fair value of plan assets at end of year
793,664
59,294
852,958
d.
Movements in the present value of the defined benefit obligation for the years ended December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010 are as follows:
December 31, 2012
The Company
Lintasarta
Total
Defined benefit obligation at beginning of year
409,808
53,266
463,074
Interest cost
28,346
3,590
31,936
Current service cost
25,617
3,219
28,836
Actuarial loss on obligation
2,434
7,632
10,066
Effect of settlement
-
(4,360
)
(4,360
)
Actual benefit paid
(9,751)
(3,909
)
(13,660
)
Effect of curtailment
-
917
917
Effect of changes in actuarial assumptions
37,400
-
37,400
Defined benefit obligation at end of year
493,854
60,355
554,209
December 31, 2011
The Company
Lintasarta
Total
Defined benefit obligation at beginning of year
700,410
50,215
750,625
Interest cost
43,786
4,189
47,975
Current service cost
27,167
3,839
31,006
Actuarial loss (gain) on obligation
(12,066
)
4,315
(7,751
)
Effect of settlement
(358,597
)
(9,080
)
(367,677
)
Actual benefits paid
(18,750
)
(1,857
)
(20,607)
Effect of curtailment
(18,886
)
1,645
(17,241
)
Effect of changes in actuarial assumptions
46,744
-
46,744
Defined benefit obligation at end of year
409,808
53,266
463,074
30.
PENSION PLAN (continued)
Defined Benefit Pension Plan (continued)
January 1, 2011/December 31, 2010
The Company
Lintasarta
Total
Defined benefit obligation at beginning of year
684,611
41,816
726,427
Interest cost
70,279
4,279
74,558
Current service cost
38,375
3,374
41,749
Actuarial loss (gain) on obligation
(156,345
)
2,912
(153,433
)
Actual benefits paid
(24,102
)
(2,166
)
(26,268)
Effect of changes in actuarial assumptions
87,592
-
87,592
Defined benefit obligation at end of year
700,410
50,215
750,625
e.
Movements in the prepaid pension cost for the years ended December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010 are as follows:
December 31, 2012
The Company
Lintasarta
Total
Prepaid pension cost at beginning of year
75,731
29,561
105,292
Contribution to Jiwasraya
883
9,653
10,536
Net periodic pension cost
(16,484
)
(8,235
)
(24,719
)
Refund from Jiwasraya
- (808)
(808)
Prepaid pension cost at end of year
60,130
30,171
90,301
December 31, 2011
The Company
Lintasarta
Total
Prepaid pension cost at beginning of year
82,871
30,390
113,261
Contribution to Jiwasraya
378
9,653
10,031
Net periodic pension cost
(5,887
)
(10,056
)
(15,943
)
Refund from Jiwasraya
(1,631
)
(426
)
(2,057
)
Prepaid pension cost at end of year
75,731
29,561
105,292
January 1, 2011/December 31, 2010
The Company
Lintasarta
Total
Prepaid pension cost at beginning of year
124,720
25,100
149,820
Contribution to Jiwasraya
120
9,653
9,773
Net periodic pension cost
(41,505
)
(4,183
)
(45,688
)
Refund from Jiwasraya
(464
)
(180
)
(644
)
Prepaid pension cost at end of year
82,871
30,390
113,261
30.
PENSION PLAN (continued)
Defined Benefit Pension Plan (continued)
f. Prepaid pension cost consists of:
December 31,
January 1, 2011/
December 31,
2012
2011
2010
Current portion (presented as part of
“Prepaid expenses”)
Company
1,224
1,730
1,401
Lintasarta
232
381
516
1,456
2,111
1,917
Long-term portion (presented as “Long-term
prepaid pension - net of current portion”)
Company58,906
74,00181,470
Lintasarta
29,939
29,180
29,874
88,845
103,181
111,344
Total prepaid pension cost
90,301
105,292
113,261
The major categories of plan assets as a percentage of the fair value of total plan assets as of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010 are as follows:
December 31,
January 1, 2011/
December 31,
2012
2011
2010
Investment in mutual fund
75.34%
78.11%
78.90%
Investment in time deposits
12.13%
12.50%
12.16%
Investment in shares and properties
7.10%
4.19%
3.87%
Investment in debt securities
5.43%
5.19%
5.06%
Other investments
0.00%
0.01%
0.01%
The overall expected rate of return on assets is determined based on the market expectations prevailing on that date, applicable to the period over which the obligation is to be settled. There has been a significant change in the expected rate of return on assets due to the improved stock market scenario.
77
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
30.
PENSION PLAN (continued)
Defined Contribution Pension Plan
In May 2001 and January 2003, the Company and Satelindo assisted their employees in establishing their respective employees’ defined contribution pension plans, in addition to the defined benefit pension plan as mentioned above. Starting June 2004, the Company also assisted ex-IM3 employees in establishing their defined contribution pension plan. Under the defined contribution pension plan, the employees contribute 10% - 20% of their basic salaries, while the Company does not contribute to the plans. Total contributions of employees for the years ended December 31, 2012 and 2011 amounted to Rp49,836 and Rp43,709, respectively. The plan assets are being administered and managed by seven financial institutions appointed by the Company and Satelindo, based on the choice of the employees.
Labor Law No. 13/2003
The Company, Lintasarta and IMM also accrue benefits under Labor Law No. 13/2003 (“Labor Law”) dated March 25, 2003. Their employees will receive the benefits which are higher under either this law or the defined benefit pension plan.
The net periodic pension cost of the Company and the subsidiaries under the Labor Law for the years ended December 31, 2012 and 2011 was calculated based on actuarial valuations as of December 31, 2012 and 2011, respectively. The actuarial valuations were prepared by an independent actuary, using the projected-unit-credit method and applying the following assumptions:
2012
2011
Annual discount rate
6.0 -
6.5%
7.5%
Annual rate of increase in compensation
8.0 - 8.5%
8.0 - 9.0%
a.
The composition of the periodic pension cost under the Labor Law for the years ended December 31, 2012 and 2011 is as follows:
December 31, 2012
The Company
Lintasarta
IMM
Total
Service cost
25,711
3,289
2,632
31,632
Interest cost
18,776
1,775
1,166
21,717
Amortization of unrecognized
actuarial loss (gain)
4,729
(237
)
110
4,602
Amortization of unrecognized
past service cost
-
653
28
681
Immediate recognition of
past service cost
-
-
(523
)(523)
Curtailment gain
-
(351
)
-
(351
)
Net periodic pension
cost under the Labor
Law (Note 26)
49,216
5,129
3,413
57,758
78
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
30.
PENSION PLAN (continued)
Labor Law No. 13/2003 (continued)
December 31, 2011
The Company
Lintasarta
IMM
Total
Service cost
24,740
2,003
2,612
29,355
Interest cost
12,855
2,064
969
15,888
Amortization of unrecognized
actuarial loss
-
(10
)
28
18
Amortization of unrecognized
past service cost
-
688
28
716
Curtailment gain
(34,841
)
(792
)
-
(35,633)
Net periodic pension
cost under the Labor
Law (Note 26)
2,754
3,953
3,637
10,344
b.
The composition of the accrued pension cost under the Labor Law as of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010 is as follows:
December 31,
January 1, 2011/
December 31,
2012
2011
2010
Projected benefit obligation
367,641
291,135
*
217,754
Unrecognized actuarial loss
(105,413
)
(83,494
)
(17,245
)
Unrecognized past service cost
(7,795
)
(8,612
)
(9,632)
Net accrued pension cost under the Labor Law
254,433
199,029
190,877
* net of curtailment effect during 2011 due to VSS (Note 26)
c.
Movements in the present value of pension cost obligation under the Labor Law for the years ended December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010 are as follows:
December 31, 2012
The Company
Lintasarta
IMM
Total
Benefit obligation
at beginning of year
250,988
24,160
15,987
291,135
Current service cost
25,711
3,289
2,632
31,632
Interest cost
18,776
1,775
1,166
21,717
Actuarial loss (gain)
on obligation
(889
)
16,734
57
15,902
Actual benefits paid
(1,290
)
(186
)
(878
)
(2,354
)
Effects of curtailment
-
(395
)
-
(395)
Immediate recognition of
past service cost
-
-
(523
)(523)
Effects of changes in
actuarial assumptions
6,114
3,112
1,301
10,527
Benefit obligation
at end of year
299,410
48,489
19,742
367,641
79
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
30.
PENSION PLAN (continued)
Labor Law No. 13/2003 (continued)
December 31, 2011
The Company
Lintasarta
IMM
Total
Benefit obligation
at beginning of year
182,572
24,340
10,842
217,754
Current service cost
24,740
2,003
2,612
29,355
Interest cost
12,855
2,064
969
15,888
Actuarial loss (gain) on
obligation
75,163
(5,182
)
(1,442
)
68,539
Actual benefits paid
(1,826
)
(111
)
(255
)(2,192)
Effect of curtailment
(38,828
)
(890
)
-
(39,718)
Effect of changes in
actuarial assumptions
(3,688
)
1,936
3,261
1,509
Benefit obligation
at end of year
250,988
24,160
15,987
291,135
January 1, 2011/December 31, 2010
The Company
Lintasarta
IMM
Total
Benefit obligation
at beginning of year
159,055
22,173
6,660
187,888
Current service cost
17,661
1,967
2,119
21,747
Interest cost
16,574
2,319
693
19,586
Actuarial loss (gain) on
obligation
1,166
(890
)
804
1,080
Actual benefits paid
(2,150
)
(97
)
(102
)(2,349
)
Effect of changes in
actuarial assumptions
(9,734
)
(1,132
)
668
(10,198
)
Benefit obligation
at end of year
182,572
24,340
10,842
217,754
d.
Movements in the accrued pension cost under the Labor Law for the years ended December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010 are as follows:
December 31, 2012
The Company
Lintasarta
IMM
Total
Accrued pension cost under
the Labor Law at beginning
of year
165,213
21,489
12,327
199,029
Periodic Labor Law cost
49,216
5,129
3,413
57,758
Benefit payment
(1,290
)
(186
)
(878
)
(2,354
)
Accrued pension cost under
the Labor Law at end
of year
213,139
26,432
14,862
254,433
30.
PENSION PLAN (continued)
Labor Law No. 13/2003 (continued)
December 31, 2011
The Company
Lintasarta
IMM
Total
Accrued pension cost under
the Labor Law at beginning
of year
164,285
17,648
8,944
190,877
Periodic Labor Law cost
2,754
3,952
3,638
10,344
Benefit payment
(1,826
)
(111
)
(255
)
(2,192)
Accrued pension cost under
the Labor Law at end
of year
165,213
21,489
12,327
199,029
January 1, 2011 / December 31, 2010
The Company
Lintasarta
IMM
Total
Accrued pension cost under
the Labor Law at beginning
of year
131,416
12,771
6,206
150,393
Periodic Labor Law cost
35,019
4,974
2,840
42,833
Benefit payment
(2,150
)
(97
)
(102
)
(2,349
)
Accrued pension cost under
the Labor Law at end
of year
164,285
17,648
8,944
190,877
The current portion of pension cost under the Labor Law included in accrued expenses (Note 17) amounted to Rp5,120, Rp4,700 and Rp2,933 as of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010, respectively. The non-current portion included in employee benefit obligations amounted to Rp249,313, Rp194,329 and Rp187,944 (Note 22) as of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010, respectively.
Post-retirement Healthcare
The Company provides post-retirement healthcare benefits to its employees who leave the Company after the employees fulfill the early retirement requirement. The spouse and children who have been officially registered in the administration records of the Company are also eligible to receive benefits. If the employees die, the spouse and children are still eligible for the post-retirement healthcare until the spouse dies or remarries and the children reach the age of 25 or get married.
The utilization of post-retirement healthcare is limited to an annual maximum ceiling that refers to monthly pension from Jiwasraya as follows:
·
16 times the Jiwasraya monthly pension for a pensioner who receives monthly pension from Jiwasraya
·
16 times the equality monthly pension for a pensioner who became permanent employee after September 1, 2000
·
16 times the last monthly pension for a pensioner who retired after July 1, 2003 and does not receive Jiwasraya monthly pension.
30.
PENSION PLAN (continued)
Post-retirement Healthcare (continued)
The net periodic post-retirement healthcare cost for the years ended December 31, 2012 and 2011 was calculated based on actuarial valuations as of December 31, 2012 and 2011, respectively. The actuarial valuations were prepared by an independent actuary, using the projected-unit-credit method and applying the following assumptions:
2012
2011
Annual discount rate
7.0%
8.0%
Ultimate cost trend rate
6.0%
6.0%
Next year trend rate
10.0%
12.0%
Period to reach ultimate cost trend rate
2 years
3 years
a.
The composition of the periodic post-retirement healthcare cost - net for the years ended December 31, 2012 and 2011 is as follows:
2012
2011
Interest cost
54,484
68,955
Service cost
27,712
24,149
Amortization of unrecognized past service cost
7,740
9,096
Amortization of unrecognized actuarial loss
2,720
5,369
Curtailment gain
-
(181,822)
Net periodic post-retirement healthcare cost - net (Note 26)
92,656
(74,253)
a.
The composition of the accrued post-retirement healthcare cost as of December 31, 2012 and 2011 and January 1, 2011/December 31, 2010 is as follows:
December 31,
January 1, 2011/
December 31,
2012
2011
2010
Projected benefit obligation
1,017,673
687,789
*
846,636
Unrecognized actuarial loss
(362,116
)
(103,679
)
(161,443)
Unrecognized past service cost
(7,662
)
(15,401
)
(31,253)
Net accrued post-retirement healthcare cost
647,895
568,709
653,940
* net of curtailment effect during 2011 due to VSS (Note 26)
80
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
30.
PENSION PLAN (continued)
Post-retirement Healthcare (continued)
b.
Movements in the present value of defined benefit obligation during the years ended December 31, 2012, 2011 and 2010 are as follows:
2012
2011
2010
Balance at beginning of year
687,789
846,636
605,660
Interest cost
54,484
68,955
65,919
Service cost
27,712
24,149
28,229
Actual benefits paid
(13,470
)
(10,978
)
(12,465)
Effect of changes in actuarial assumptions
239,705
150,330
197,867
Effect of curtailment
-
(230,600
)
-
Actuarial gain (loss) on obligation
21,453
(160,703
)
(38,574)
Balance at end of year
1,017,673
687,789
846,636
c.
Movements in the accrued post-retirement healthcare cost during the years ended December 31, 2012, 2011 and 2010 are as follows:
2012
2011
2010
Balance at beginning of year
568,709
653,940
561,805
Net periodic post-retirement healthcare cost (income)
92,656
(74,253
)
104,600
Benefit payment
(13,470
)
(10,978
)
(12,465
)
Balance at end of year
647,895
568,709
653,940
The current portion of post-retirement healthcare cost included in accrued expenses amounted to Rp15,160, Rp12,957 and Rp14,669 as of December 31, 2012 and 2011 and January 1, 2011/ December 31, 2010, respectively. The non-current portion included in employee benefit obligations amounted to Rp632,735, Rp555,752 and Rp639,271 as of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010, respectively (Note 22).
d.
The effect of a one percentage point change in assumed post-retirement healthcare cost trend rate would result in aggregate service and interest costs for the years ended December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010 and in accumulated post-retirement healthcare benefit obligation as of December 31, 2012 and 2011 and January 1, 2011 / December 31, 2010 as follows:
December 31,
January 1, 2011/
December 31,
2012
2011
2010
Increase
Service and interest costs
82,196
118,454
116,581
Accumulated post-retirement healthcare benefit
obligation
1,270,669
844,612
1,030,938
Decrease
Service and interest costs
82,196
73,626
76,868
Accumulated post-retirement healthcare benefit
obligation
824,853
566,627
702,632
81
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
30.
PENSION PLAN (continued)
Post-retirement Healthcare (continued)
Amounts of employee benefits for the current year and previous four annual periods:
Defined Benefit Pension Plan
January 1, 2011/
December 31,
December 31,
December 31,
December 31,
December 31,
2012
2011
2010
2009
2008
The Company
Plan assets
513,316
476,890
793,664
763,244
763,700
Projected benefit obligation
(493,854
)
(409,808
)
(700,410
)
(684,611)(512,513)
Excess of plan assets over
projected benefit obligation
19,462
67,082
93,254
78,633
251,187
Experience gain (loss) adjustments
arising on plan liabilities
(2,434)
12,066
156,345
(624)
10,588
Experience loss (gain) adjustments
arising on plan assets
(7,815)
(14,651)
12,283
(37,546)
11,209
Lintasarta
Plan assets
63,019
62,012
59,294
50,344
41,499
Projected benefit obligation
(60,355
)
(53,266
)
(50,215
)
(41,816)(28,726)
Excess of plan assets over projected
benefit obligation
2,664
8,746
9,079
8,528
12,773
Experience gain (loss) adjustments
arising on plan liabilities
(7,632)
(4,315)
(2,912)
(7,808)
8,144
Experience loss (gain) adjustments
arising on plan assets
3,175
610
2,677
1,632
2,026
Labor Law No. 13/2003
January 1, 2011/
December 31,
December 31,
December 31,
December 31,
December 31,
2012
2011
2010
2009
2008
The Company
Projected benefit obligation
(299,410
)
(250,988
)
(182,572
)
(159,055)(141,316)
Experience gain (loss) adjustments
arising on plan liabilities
889
(75,163)
(1,166)
3,316
(27,284)
Net
(298,521
)
(326,151
)
(183,738
)
(155,739)(168,600
)
Lintasarta
Projected benefit obligation
(48,489
)
(24,160
)
(24,340
)
(22,173)(11,464)
Experience gain (loss) adjustments
arising on plan liabilities
(16,734)
5,182
890
78
(2,285)
Net
(65,223
)
(18,978)
(23,450
)
(22,095
)(13,749
)
IMM
Projected benefit obligation
(19,742
)
(15,987
)
(10,842
)
(6,660)(3,674)
Experience gain (loss) adjustments
arising on plan liabilities
(57)
1,442
(804)
368
666
Net
(19,799
)
(14,545)
(11,646
)
(6,292
)(3,008)
Post-retirement Healthcare
January 1, 2011/
December 31,
December 31,
December 31,
December 31,
December 31,
2012
2011
2010
2009
2008
The Company
Projected benefit obligation
(1,017,673
)
(687,789
)
(846,636
)
(605,660)(492,615)
Experience gain (loss) adjustments
arising on plan liabilities
(21,453)
160,703
38,574
37,176
150,730
82
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
31.
ACCOUNTS AND TRANSACTIONS WITH RELATED PARTIES
The details of the accounts and the significant transactions entered into with related parties are as follows:
Amount
Percentage to Total Assets/Liabilities (%)
December 31,
January 1, 2011 /
December 31,
January 1, 2011 /
December 31,
December 31,
2012
2011
2010
2012
2011
2010
Cash and cash equivalents
(Note 4)
Government-related entities:
State-owned banks
1,534,068
977,960
1,615,651
2.78
1.84
3.03
Accounts receivable - trade
(Note 5)
Government-related entities:
State-owned companies
593,773
358,423
252,102
1.08
0.68
0.47
Ultimate parent company:
Qatar Telecom
23,509
6,927
2,827
0.04
0.01
0.01
Total
617,282
365,350
254,929
1.12
0.69
0.48
Less allowance for
impairment of
receivables
42,632
47,107
47,640
0.08
0.09
0.09
Net
574,650
318,243
207,289
1.04
0.60
0.39
Prepaid frequency fee
and licenses and others
Government-related entities:
State-owned companies
6,543
8,222
11,683
0.01
0.01
0.02
Governmental departments
84
205
-
0.00
0.00
-
Entity under common significant
influence:
Kopindosat
2,579
3,681
3,294
0.01
0.01
0.01
Total
9,206
12,108
14,977
0.02
0.02
0.03
Other current and non-current
assets - financial and
non-financial
Government-related entities:
State-owned banks
162,071
193,679
161,430
0.36
0.36
0.30
Governmental departments
87
87
87
0.00
0.00
0.00
Total
162,158
193,766
161,517
0.36
0.36
0.30
Due from related parties
Entity under common significant
influence:
Kopindosat
6,188
6,012
5,958
0.01
0.01
0.01
Government-related entities:
State-owned companies
1,870
1,583
1,693
0.01
0.00
0.01
Key management personnel:
Senior management
1,621
3,020
1,362
0.00
0.01
0.00
Ultimate parent company:
Qatar Telecom
694
54
54
0.00
0.00
0.00
Total
10,373
10,669
9,067
0.02
0.02
0.02
Less allowance for
impairment of
receivables
15
15
646
0.00
0.00
0.00
Net
10,358
10,654
8,421
0.02
0.02
0.02
83
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
31.
ACCOUNTS AND TRANSACTIONS WITH RELATED PARTIES (continued)
Amount
Percentage to Total Assets/Liabilities (%)
December 31,
January 1, 2011 /
December 31,
January 1, 2011 /
December 31,
December 31,
2012
2011
2010
2012
2011
2010
Long-term prepaid rentals
- net of current portion
Government-related
entities:
State-owned companies
21,346
21,587
24,672
0.04
0.04
0.05
Entity under common
significant influence:
Kopindosat
4,275
9,962
12,817
0.01
0.02
0.02
Total
25,621
31,549
37,489
0.05
0.06
0.07
Advance andlong-term advances
Entities under common
significant influence:
PT Personel Alih Daya
-
12,148
-
-
0.02
-
Kopindosat
-
-
1,016
-
-
0.00
Government-related entities:
State-owned companies
-
44
3,705
-
0.00
0.01
Total
-
12,192
4,721
-
0.02
0.01
Long-term prepaid pension - net
of current portion (Note 30)
Government-related entities:
State-owned companies
88,845
103,181
111,344
0.16
0.19
0.21
Short-term loan (Note 14)
Government-related entity:
State-owned bank
299,529
1,499,256
-
0.84
4.38
-
Accounts payable - trade
Government-related entities:
State-owned companies
22,614
23,233
22,260
0.06
0.07
0.06
Ultimate parent company
Qatar Telecom
36
348
-
0.00
0.00
-
Total
22,650
23,581
22,260
0.06
0.07
0.06
Procurement payable (Note 15)
Entities under common significant
influence:
PT Personel Alih Daya
17,993
16,319
13,210
0.05
0.05
0.04
Kopindosat
11,875
9,872
22,123
0.03
0.03
0.06
Government-related entities:
State-owned companies
13,915
9,882
33,348
0.04
0.03
0.10
Total
43,783
36,073
68,681
0.12
0.11
0.20
Accrued expenses
Government-related entities:
State-owned companies
56,590
66,399
82,641
0.15
0.19
0.23
Entities under common significant
influence:
PT Personel Alih Daya
40,420
18,222
16,906
0.12
0.05
0.05
Kopindosat
10,265
5,817
13,838
0.03
0.02
0.04
Key management personnel:
Senior management
43,610
37,851
33,553
0.12
0.11
0.10
Total
150,885
128,289
146,938
0.42
0.37
0.42
Due to related parties
Ultimate parent company:
Qatar Telecom
25,968
552
-
0.07
0.00
-
Government-related entities:
State-owned companies
16,821
14,928
20,609
0.05
0.05
0.06
Entity under common significant
influence:
Kopindosat
-
-
1,490
-
-
0.00
Total
42,789
15,480
22,099
0.12
0.05
0.06
31.
ACCOUNTS AND TRANSACTIONS WITH RELATED PARTIES (continued)
Amount
Percentage to Total Assets/Liabilities (%)
December 31,
January 1, 2011 /
December 31,
January 1, 2011 /
December 31,
December 31,
2012
2011
2010
2012
2011
2010
Other current and non-current
liabilities - financial
and non-financial
Government-related entities:
Governmental departments
4,131
2,141
3,895
0.01
0.01
0.01
State-owned companies
-
6,455
8,118
-
0.02
0.02
Total
4,131
8,596
12,013
0.01
0.03
0.03
Loan payable (including current
maturities) (Note 18)
Government-related entity:
State-owned bank
-
998,843
1,297,045
-
2.92
3.70
Percentage to Total Revenue (%)
Amount
or Expenses (%)
2012
2011
2012
2011
Revenues (Note 24)
Government-related entities:
State-owned companies
1,509,179
1,459,979
6.74
7.11
Governmental departments
224,219
24,823
1.00
0.12
Ultimate parent company:
Qatar Telecom
78,672
69,978
0.35
0.34
Entity under common significant
influence:
Kopindosat
549
-
0.00
-
Total
1,812,619
1,554,780
8.09
7.57
Expenses
Cost of services
Government-related entities:
State-owned companies
1,810,335
1,567,294
9.41
9.03
Entities under common significant
influence:
PT Personel Alih Daya
70,967
93,190
0.37
0.54
Kopindosat
24,298
121,456
0.13
0.70
Ultimate parent company:
Qatar Telecom
52,737
66,619
0.27
0.38
Total
1,958,337
1,848,559
10.18
10.65
Personnel
Key management personnel:
Senior management
Short-term employee benefits
147,439
102,156
0.76
0.59
Termination benefits
1,210
46,316
0.01
0.27
Other long-term benefits
14,860
16,481
0.08
0.09
Sub-total
163,509
164,953
0.85
0.95
Government-related entities:
State-owned companies
24,719
22,185
0.13
0.13
Entity under common significant
influence:
PT Personel Alih Daya
-
21,028
-
0.12
Total
188,228
208,166
0.98
1.20
Marketing
Entities under common significant
influence:
PT Personel Alih Daya
88,688
75,905
0.46
0.44
Kopindosat
21,230
15,953
0.11
0.09
Government-related entities:
State-owned companies
2
62
0.00
0.00
Total
109,920
91,920
0.57
0.53
31.
ACCOUNTS AND TRANSACTIONS WITH RELATED PARTIES (continued)
Percentage to Total Revenue (%)
Amount
or Expenses (%)
2012
2011
2012
2011
General and administration
Entities under common significant
influence:
Kopindosat
22,676
24,294
0.12
0.14
PT Personel Alih Daya
14,838
17,971
0.08
0.10
Government-related entities:
State-owned companies
31,023
100,234
0.16
0.58
Total
68,537
142,499
0.36
0.82
Interest income (financing cost) - net
Government-related entities:
State-owned banks
(20,491)
(53,281
)
(0.75)
(2.91)
The relationship and nature of account balances/transactions with related parties are as follows:
No. | Related Parties | Relationship | Nature of Account Balances/Transactions | |||
1. | State-owned banks | Government- related entities | Cash and cash equivalents, other current and non-current financial and non-financial assets, short-term loan, loan payable and other income (expenses) - net | |||
2. | State-owned companies | Government- related entities | Accounts receivable - trade, prepaid expenses, due from related parties, long-term prepaid rentals, advances and long-term advances, long-term prepaid pension, accounts payable - trade, procurement payable, accrued expenses, due to related parties, other current and non-current financial and non-financial liabilities, operating revenues, operating expenses - cost of services, operating expenses - personnel, operating expenses - marketing and operating expenses - general and administration | |||
84
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
31.
ACCOUNTS AND TRANSACTIONS WITH RELATED PARTIES (continued)
No. | Related Parties | Relationship | Nature of Account Balances/Transactions |
3. | Qatar Telecom | Ultimate parent company | Accounts receivable - trade, due from related parties, accounts payable - trade, due to related parties, revenues - fixed telecommunications and cellular and operating expenses - cost of services | |||
4. | Governmental departments | Government- related entities | Prepaid expenses, other current and non-current financial and non-financial assets, other current and non-current financial and non-financial liabilities, revenues - MIDI | |||
5. | Kopindosat | Entity under common significant influence | Prepaid expenses, due from related parties, long-term prepaid rentals, advances and long-term advances, procurement payable, accrued expenses, due to related parties, revenues, operating expenses - cost of services, operating expenses - marketing and operating expenses - general and administration | |||
6. | Senior management (consists of members of the Boards of Directors and Commissioners and those directly reporting to the Board of Directors) | Key management personnel | Due from related parties, accrued expenses and operating expenses - personnel | |||
7. | PT Personel Alih Daya | Entity under common significant influence | Advances and long-term advances, procurement payable, accrued expenses, operating expenses - cost of services, operating expenses - personnel, operating expenses - marketing and operating expenses - general and administration |
85
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
32.
DISTRIBUTION OF PROFIT AND APPROPRIATION OF RETAINED EARNINGS
At the Company’s Annual Stockholders’ General Meeting (“ASGM”), the stockholders approved, among others, the appropriation of annual profit for cash dividend distribution, as follows, and the utilization of the remaining amount for reinvestment and working capital:
ASGM Date | Dividend per Share (Rp) | Dividend Payment Date | |||||||
2010 Profit | |||||||||
June 24, 2011 | 59.55 | August 5, 2011* | |||||||
2011 Profit | |||||||||
May 14, 2012 | 76.83 | June 26, 2012** | |||||||
*
Dividend for the Government was paid in accordance with the prevailing laws and regulations in Indonesia. On July 22 and August 5, 2011, the Company paid dividend amounting to Rp46,248 and Rp277,343, respectively, to the Government and other stockholders for the dividend declared on June 24, 2011.
**
Dividend for the Government was paid in accordance with the prevailing laws and regulations in Indonesia. On June 11 and June 26, 2012, the Company paid dividend amounting to Rp59,668 and Rp357,821, respectively, to the Government and other stockholders for the dividend declared on May 14, 2012.
33.
SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCY
a.
As of December 31, 2012, commitments on capital expenditures which are contractual agreements not yet realized relate to the procurement and installation of property and equipment amounting to US$142,195 (Note 40) and Rp881,274.
The significant commitments on capital expenditures are as follows:
Contract Date | Contract Description | Vendor | Amount of Contract/Purchase Orders (“POs”) Already Issued | Amount of Contract/POs Not Yet Served |
October 1, 2010 & December 10, 2012 | Procurement of Telecom-munications Equipment and Related Services | PT Ericsson Indonesia and Ericsson AB | US$415,288 and Rp1,361,320 | US$72,781 and Rp275,225 |
June 16, 2010 & December 10,2012 | Procurement of Telecommunications Infrastructure | PT Nokia Siemens Networks and Nokia Siemens Networks Oy | US$359,648 and Rp1,480,234 | US$17,863 and Rp141,150 |
August 2,2010 & December 21, 2012 | Procurement of Telecommunications Infrastructure | PT Huawei Tech Investment | US$87,186 and Rp204,746 | US$25,673 and Rp92,460 |
86
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
33. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCY (continued)
b.
In 2012, the Company and Qatar Telecom Q.S.C, the Group’s ultimate parent company, entered into a cooperation agreement, whereby Qatar Telecom agreed to provide the Group with several professional experts to work in the Company, and the professional experts will provide the Group with their experience and knowledge to increase the effectiveness of the Group’s operational and business activities. The agreement covers a 10-year period. For the year ended December 31, 2012, the Company recorded the cost for the provision of the professional experts totaling Rp76,596 as part of “Expenses - General and Administration Expenses”.
c.
On January 18, 2012, the Company and IMM, a subsidiary, were investigated by the Attorney General’s Office in connection with the cooperation agreement between the Company and IMM to provide 3G based broadband internet services. IMM had been accused of illegally using the Company’s 3G license (Note 1a) without paying annual frequency fee, concession fee and tender upfront fee. The MOCIT, as well as the Indonesian Regulatory Body (BRTI), has made a public statement that IMM has not breached any laws / prevailing rules; nevertheless, the case is still being continued to be investigated by the State Attorney General (Note 40).
As of December 31, 2012, the Company did not accrue any liabilities related to the legal case because the Company believes, as supported by the MOCIT, that the cooperation agreement with IMM does not breach any laws.
d.
On December 30, 2011, Lintasarta, a subsidiary, entered into agreements with MOCIT-Balai Penyedia dan Pengelola Pembiayaan Telekomunikasi dan Informatika (MOCIT-BPPPTI), whereby Lintasarta agreed to provide Public Access Services for Wireless Fidelity (WiFi) Internet inKewajiban Pelayanan Umum/ Universal Service Obligation (KPU/USO) Regencies (Kabupaten) (Penyediaan Jasa Akses Publik Layanan Internet WiFi Kabupaten KPU/USO) for Work Packages (Paket Pekerjaan) 3 and 6 that cover the provinces of West Kalimantan, South Kalimantan, Central Kalimantan, East Kalimantan, Bali, West Nusa Tenggara and East Nusa Tenggara. The agreements cover four years concession period and have contract values of Rp71,992 and Rp44,422 for Work Packages 3 and 6, respectively. In accordance with the contract, advance payments representing 15% of the contract value. Fixed payment for services is received on a quarterly basis based on performance evaluation. At the end of the concession period, assets subject to the concession agreement back to the local government.
Subsequently on January 10, 2012, Lintasarta, also entered into an agreement with MOCIT-BPPPTI for the provision of Public Access Services for Wireless Fidelity (WiFi) Internet in KPU/USO Regencies (Kabupaten KPU/USO) (Penyediaan Jasa Akses Publik Layanan Internet WiFi Kabupaten KPU/USO) for Work Package (Paket Pekerjaan) 4 that covers the provinces of Gorontalo, West Sulawesi, South Sulawesi, Central Sulawesi, South East Sulawesi and North Sulawesi with contract value of Rp91,491. The terms and conditions for this are consistent to the earlier agreement above.
The consideration received or receivable in exchange for Lintasarta’s infrastructure construction services or its acquisition of infrastructure to be used in the arrangements was recognized as a financial asset to the extent that Lintasarta has an unconditional contractual right to receive cash or other financial asset for its construction services from or at the direction of the grantor. As of December 31, 2012, the long-term portion of the outstanding receivables arising from this service concession arrangement amounted to Rp8,974 and was classified as part of “Other Non-current Financial Assets”. Revenue from construction services earned by Lintasarta for the year ended December 31, 2012 amounted to Rp37,175 and is classified as part of “Revenues from MIDI services”.
On February 8, 2012, Lintasarta entered into an agreement with PT Widtech Indonesia, for the procurement of equipment and infrastructure required for the construction of WiFi, as agreed with the MOCIT-BTIP above, with total contract value amounting to Rp121,927.
87
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
33. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCY (continued)
e.
In May 2011 to March 2012, the Company had issued several POs to PT Nokia Siemens Network and Nokia Siemens Network OY with total amount of US$34,829 and Rp208,948 for the procurement of cellular technical equipment in the Sumatra and Java Areas. Based on the POs, the Company agreed to exchange certain existing cellular equipment with new equipment units and pay US$11,462 and Rp171,844 to Nokia for the installation services and additional equipment. For the year ended December 31, 2012, the carrying amount of the cellular technical equipment units given up amounted to Rp273,665 and the accumulated carrying amount of such equipment up to December 31, 2012 amounted to Rp389,399 (Note 8).
f.
On April 15, 2010, Lintasarta, a subsidiary, entered into agreements with MOCIT-BTIP, whereby Lintasarta agreed to providePusat Layanan Jasa Akses Internet Kecamatan (Center for Internet Access and Services in Rural Areas) (PLIK) for Work Packages (Paket Pekerjaan) 7, 8 and 9 that cover the provinces of Bali, West Nusa Tenggara, East Nusa Tenggara, West Kalimantan, South Kalimantan, East Kalimantan, Central Kalimantan, Maluku and Papua. On December 22, 2010, the agreements were amended to increase the contract value. The agreements are non-cancellable and cover four years starting from October 15, 2010 with contract value amounting to Rp91,895, Rp143,668 and Rp116,721 for Work Packages 7, 8 and 9, respectively. In accordance with the agreements, Lintasarta placed its time deposits totalling Rp18,200 as a performance bond for the four-year contract period, which deposits are classified as part of other non-current financial assets. In accordance with the agreements, Lintasarta received advance payments representing 20% of contract value. Fixed payment for services is received on a quarterly basis based on performance evaluation. At the end of the agreement, Lintasarta and MOCIT BTIP plan to renegotiate the terms and conditions of any new arrangements.
On December 12, 2010, Lintasarta entered into agreements with MOCIT-BTIP to providePusat Layanan Jasa Akses Internet Kecamatan Bergerak (Mobile Center for Internet Access and Services in Rural Areas) (PLIKB) for Work Packages 2, 3, 11, 15, 16 and 18 that cover the provinces of North Sumatra, West Sumatra, East Nusa Tenggara, West Kalimantan, South Kalimantan and East Kalimantan. The agreements are non-cancellable and cover four years starting on September 22, 2011 with contract values amounting to Rp79,533, Rp92,003, Rp60,149, Rp71,879, Rp84,583 and Rp69,830 for Work Packages 2, 3, 11, 15, 16 and 18, respectively. On October 19, 2011, the agreements were amended to change the work starting date from September 22, 2011 to December 22, 2011. In accordance with the agreements, Lintasarta received advance payments representing 15% of contract value. Fixed payment for services is received on a quarterly basis based on performance evaluation. At the end of the concession period, Lintasarta must transfer all assets subject to the concession agreement to the local government.
On May 6, 2010, Lintasarta entered into an agreement with PT Wira Eka Bhakti (WEB), for the procurement of equipment and infrastructure required for the construction of PLIK, as agreed with the MOCIT-BTIP above, with total contract value amounting to Rp189,704. The agreement has been amended several times, with the latest amendment dated March 9, 2011 increasing the contract value to become Rp208,361.
On March 23, 2011, Lintasarta entered into agreements with WEB and PT Personel Alih Daya (a related party), for the procurement of equipment and infrastructure required for the construction of PLIKB, as agreed with MOCIT-BTIP above, with total contract values amounting to Rp276,274 and Rp60,739, respectively.
As of December 31, 2012, 2011, and 2010 the current portions of outstanding receivables amounting to Rp283,945, Rp91,113, and Rp nil respectively, are classified as part of “Trade Receivables - Related Parties” while the long-term portions amounting to Rp70,199, Rp121,854, and Rp45,097, respectively, are classified as part of “Other Non-current Financial Assets”. For the years ended December 31, 2012, 2011 and 2010, revenue from construction services, are included under Revenue from MIDI services, amounted to Rp33,439, Rp163,264 and Rp128,490, respectively.
88
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
33. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCY (continued)
g.
On January 29, April 15, May 24 and June 3 in 2010, and February 4 and 10 in 2011, the Company agreed to lease part of its telecommunications towers and sites to PT Hutchison CP Telecommunications (“Hutchison”) for a period of 12 years, PT Natrindo Telepon Selular (“NTS”) for a period of 10 years, PT XL Axiata Tbk (“XL Axiata”) for a period of 10 years, PT Berca Global Access (“Berca”) for a period of 10 years, PT Dayamitra Telekomunikasi (“Mitratel”) for a period of 10 years and PT First Media Tbk (“FM”) for a period of 5 years, respectively. Hutchison, NTS, and XL Axiata (on annual basis), Berca and Mitratel (on quarterly basis) and FM (on semi-annual basis) are required to pay the lease and maintenance fees in advance, which are recorded as part of unearned income.
On August 18, 2011, the Company and Hutchison amended their tower leasing agreement covering changes in certain arrangements with respect to, among others, amount of compensation paid to landlords or residents around the leased site shouldered by the Company, penalty charged for overdue payments and effective lease period.
Future minimum lease receivables under the agreements as at December 31, 2012 and 2011 and January 1, 2011/December 31, 2010 are as follows:
December 31,
January 1, 2011
2012
2011
December 31, 2010
Within one year
655,894
471,284
370,780
After one year but not more than five years
2,597,263
1,874,860
1,481,461
More than five years
2,211,422
1,817,218
1,792,424
Total
5,464,579
4,163,362
3,644,665
h.
During 2008-2012, the Company entered into several agreements with PT Solusi Menara Indonesia, PT Professional Telekomunikasi Indonesia (“Protelindo”), XL Axiata, PT Solusindo Kreasi Pratama, PT Dayamitra Telekomunikasi, PT Bit Teknologi Nusantara, PT Batavia Towerindo, PT Mitrayasa Sarana Informasi, PT Gihon Telekomunikasi Indonesia and Tower Bersama (Note 29) for the Company to lease part of spaces in their telecommunication towers and sites for an initial period of 10 years. The Company may extend the lease period for another 10 years, with additional lease fees based on the inflation rates in Indonesia.
Future minimum rentals payable under the finance lease agreements as at December 31, 2012 are as follows:
Minimum
Present value
payments
of payments
Within one year
622,020
240,349
After one year but not more than five years
2,488,022
1,323,315
More than five years
2,205,538
1,778,595
Total
5,315,580
3,342,259
Less amount representing finance charge
1,973,321
-
Present value of minimum lease payments
3,342,259
3,342,259
Current portion (presented as part of Other Current Financial Liabilities)
240,349
Long-term portion (presented as Obligations under Finance Lease)
3,101,910
Total
3,342,259
89
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
33.
SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCY (continued)
i.
The Company and IMM have committed to pay annual radio frequency fee over the 3G and BWA licenses period, provided the Company and IMM hold the 3G and BWA licenses. The amount of annual payment is based on the payment scheme set out in Regulations
No. 7/PER/M.KOMINFO/2/2006, No. 268/KEP/M.KOMINFO/9/2009 and No. 237/KEP/ M.KOMINFO/7/2009 dated February 8, 2006, September 1, 2009 and July 27, 2009, respectively, of the MOCIT. The Company and IMM paid the annual frequency fee for the 3G and BWA licenses totaling Rp548,154 and Rp442,511 for the years ended December 31, 2012 and 2011, respectively.
j.
On July 20, 2005, the Company obtained facilities from HSBC to fund the Company’s short-term working capital needs. The facilities agreement has been amended several times. On September 20, 2011, the expiration date of the facilities was extended up to April 30, 2012 and the interest rate and certain provisions of the agreement were changed as follows:
·
Overdraft facility amounting to US$2,000 (including overdraft facility denominated in rupiah amounting to Rp17,000). Interest is charged on daily balances at 3.75% per annum and 6% per annum below the HSBC Best Lending Rate for the loan portions denominated in rupiah and U.S. dollar, respectively.
·
Revolving loan facility amounting to US$30,000 (including revolving loan denominated in rupiah amounting to Rp255,000). The loan matures within a maximum period of 180 days and can be drawn in tranches with minimum amounts of US$500 and Rp500 for loans denominated in U.S. dollar and rupiah, respectively. Interest is charged on daily balances at 2.25% per annum above the HSBC Cost of Fund Rate for the loans denominated either in rupiah or U.S. dollar.
·
The facilities are considered uncommitted facility based on guidelines No.12/516/DPNP/DPnP dated September 21, 2010 issued by the Central Bank of Indonesia; consequently, these facilities can be automatically cancelled by HSBC in the event that the Company’s credit collectibility declines to either substandard, doubtful or loss based on HSBC’s assessment pursuant to the general criteria set out by the Central Bank of Indonesia.
On March 27, 2012, the Company received the letter from HSBC to extend these facilities up to April 30, 2013.
g.
In 1994, the Company was appointed as a Financial Administrator (“FA”) by a consortium which was established to build and sell/lease Asia Pacific Cable Network (“APCN”) submarine cable in countries in the Asia-Pacific Region. As an FA, the Company collected and distributed funds from the sale of APCN’s Indefeasible Right of Use (“IRU”), Defined Underwritten Capacity (“DUC”) and Occasional Commercial Use (“OCU”).
The funds received from the sale of IRU, DUC and OCU and for upgrading the APCN cable did not belong to the Company and, therefore, were not recorded in the Company’s books. However, the Company managed these funds in separate accounts.
As of December 31, 2012, the balance of the funds (including interest earned) which are under the Company’s custody amounted to US$5,276. Besides receiving their share of the funds from the sale of IRU, DUC and OCU, the members of the consortium also received their share of the interest earned by the above funds.
90
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
33.
SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCY (continued)
h.
Other agreements made with Telkom are as follows:
·
Under a cooperation agreement, the compensation to Telkom relating to leased circuit/channel services, such as world link and bit link, is calculated at 15% of the Company’s collected revenues from such services.
The Company and Satelindo also lease circuits from Telkom to link Jakarta, Medan and Surabaya.
·
In 1994, Satelindo entered into a land transfer agreement for the transfer of Telkom’s rights to use a 134,925-square meter land property located at Daan Mogot, West Jakarta, where Satelindo’s earth control station is currently situated. The land transfer agreement enables Satelindo to use the land for a period of 30 years from the date of the agreement, for a price equivalent to US$40,000 less Rp43,220. The term of the agreement may be extended based on mutual agreement.
The agreement was subsequently superseded by a land rental agreement dated December 6, 2001, generally under the same terms as those of the land transfer agreement.
·
In 1999, Lintasarta entered into an agreement with Telkom, whereby Telkom agreed to lease transponder to Lintasarta. This agreement has been amended several times, the latest amendment of which is based on the ninth amendment agreement dated May 24, 2010. Transponder lease expense charged to operations amounting to Rp27,371 for the year ended December 31, 2012 is presented as part of “Operating Expenses - Cost of Services” in the consolidated statement of comprehensive income.
34.
TARIFF SYSTEM
a.
International telecommunications services
The service rates (“tariffs”) for overseas exchange carriers are set based on the international telecommunications regulations established by the International Telecommunications Union (“ITU”).
These regulations require the international telecommunications administrations to establish and revise, under mutual agreement, accounting rates to be applied among them, taking into account the cost of providing specific telecommunications services and relevant recommendations from the Consultative Committee on International Telegraph and Telephone (“CCITT”). The rates are divided into terminal shares payable to the administrations of terminal countries and, where appropriate, into transit shares payable to the administrations of transit countries.
The ITU also regulates that the monetary unit to be used, in the absence of special arrangements, shall be the Special Drawing Right (“SDR”) or the Gold Franc, which is equivalent to 1/3.061SDR. Each administration shall, subject to applicable national law, establish the charges to be collected from its customers.
The tariffs billed to domestic subscribers for international calls originating in Indonesia, also known as collection rates, are established in a decision letter of the MOC, which rates are generally higher than the accounting rates. During the period 1996 to 1998, the MOC made tariff changes effective January 1, 1997, March 15, 1998 and November 15, 1998.
Based on Decision Letter No. 09/PER/M.KOMINFO/02/06 dated February 28, 2006 of the MOCIT, the collection rates are set by tariff formula known as price cap formula which already considers customer price index starting January 1, 2007.
34. TARIFF SYSTEM (continued)
b.
Cellular services
The basic telephony tariffs for cellular mobile network service are set on the basis of Regulation No. 12/PER/M.KOMINFO/02/2006 dated February 28, 2006 of the MOCIT. Under this regulation, the cellular tariffs consist of the following:
·
Connection fee
·
Monthly charges
·
Usage charges
·
Additional facilities fee
Cellular providers should implement the new tariffs referred to as “floor price”. For usage charges, the floor price should be the originating fee plus termination fee (total interconnection fee), while for connection fee and monthly charges, the floor price depends on the cost structure of each cellular provider.
In April 2008, the MOCIT issued Ministerial Decree No. 09/PER/M.KOMINFO/04/2008 about guidelines on calculating basic telephony service tariffs through cellular mobile network. Under this new Decree, the cellular providers should implement the new tariffs referred to as “price cap”. The types of tariffs for telecommunications services through cellular network consist of the following:
·
Tariff for basic telephony services
·
Tariff for roaming
·
Tariff for multimedia services
The retail tariffs should be calculated based on Network Element Cost, Activation Cost of Retail Services and Profit Margin.
The implementation of the new tariffs for a dominant operator has to be approved by the Government. A dominant operator is an operator that has revenue of more than 25% of the total industry revenue for a certain segment.
Starting May 2008, the Company has fully adopted the new cellular tariff system.
c.
Fixed telecommunications services
In February 2006, the MOCIT released Regulation No. 09/PER/M.KOMINFO/02/2006 regarding basic telephony tariffs for fixed network service.
In April 2008, the MOCIT issued Ministerial Decree No. 15/PER/M.KOMINFO/04/2008 about the guidelines on calculating basic telephony service tariffs through fixed network. This Decree also applies to fixed wireless access (FWA) network.
Under this new decree, the tariffs for basic telephony services and SMS (short message service) must be calculated based on the formula stated in the Decree. The fixed network providers should implement the new tariffs referred to as “price cap”.
Starting May 2008, the Company has fully adopted the new fixed telecommunications tariff system.
91
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
35.
INTERCONNECTION TARIFFS, USO, SPECTRUM FREQUENCY FEES AND REVENUE SHARING
Interconnection tariffs among domestic telecommunications operators are regulated by the MOC through its Decree No. KM.108/PR.301/MPPT-94 dated December 28, 1994. The Decree was updated several times with the latest update being Decree No. KM.37 Year 1999 (“Decree No. 37”) dated June 11, 1999. This Decree, along with Decree No. KM.46/PR.301/MPPT-98 (“Decree No. 46”) dated February 27, 1998, prescribed interconnection tariff structures between mobile cellular telecommunications network and Public Switched Telephone Network (“PSTN”), mobile cellular telecommunications network and international telecommunications network, mobile cellular telecommunications network and other domestic mobile cellular telecommunications network, international telecommunications network and PSTN, and between two domestic PSTNs.
Based on the Decree of the MOC, the interconnection tariff arrangements are as follows:
1.
Structure of Interconnection Tariffs
a. Between international and domestic PSTN
Based on Decree No. 37 dated June 11, 1999, the interconnection tariffs are as follows:
Tariff
Basis
Access charge
Rp850 per call
Number of successful outgoing
and incoming calls
Usage charge
Rp550 per paid minute
Duration of successful outgoing
and incoming calls
b.
Between domestic PSTN and another domestic PSTN
Interconnection charges for domestic telecommunications traffic (local and SLJJ) between a domestic PSTN and another domestic PSTN are based on agreements made by those domestic PSTN telecommunications carriers.
c.
Between cellular telecommunications network and domestic PSTN
Based on Decree No. 46 dated February 27, 1998 which became effective starting April 1, 1998, the interconnection tariffs are as follows:
(1)
Local Calls
For local calls from a cellular telecommunications network to a PSTN subscriber,
the cellular operator pays the PSTN operator 50% of the prevailing tariffs for local calls.
For local calls from the PSTN to a cellular subscriber, the cellular operator receives
the airtime charged by the PSTN operator to its subscribers.
(2)
SLJJ
For SLJJ which originates from the PSTN to a cellular subscriber, the cellular operator receives a portion of the prevailing SLJJ tariffs, which portion ranges from 15% of
the prevailing SLJJ tariffs plus the airtime charges in cases where the entire long-distance portion is not carried by the cellular operator, to 60% of the tariffs plus the airtime charges in cases where the entire long-distance portion is carried by the cellular operator.
92
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
35.
INTERCONNECTION TARIFFS, USO, SPECTRUM FREQUENCY FEES AND REVENUE SHARING (continued)
1.
Structure of Interconnection Tariffs (continued)
c.
Between cellular telecommunications network and domestic PSTN (continued)
(2)
SLJJ (continued)
For SLJJ which originates from a cellular telecommunications network to a PSTN subscriber, the cellular operator is entitled to retain a portion of the prevailing SLJJ tariffs, which portion ranges from 15% of the tariffs in cases where the entire long-distance portion is not carried by the cellular operator, to 60% of the tariffs in cases where the entire long-distance portion is carried by the cellular operator.
d.
Between cellular telecommunications network and another cellular telecommunications network
Based on Decree No. 46, the interconnection tariffs are as follows:
(1)
Local Calls
For local calls from a cellular telecommunications network to another, the “origin” cellular operator pays the airtime to the “destination” cellular operator. If the call is carried by
a PSTN, the “origin” cellular operator pays the PSTN operator 50% of the prevailing tariffs for local calls.
(2)
SLJJ
For SLJJ which originates from a cellular telecommunications network, the cellular operator is entitled to retain a portion of the prevailing SLJJ tariffs, which portion ranges from 15% of the tariffs in cases where the entire long-distance portion is not carried by
the cellular operator, to 85% of the tariffs in cases where the entire long-distance portion is carried by the cellular operator and the call is delivered to another cellular operator, and to 100% if the call is delivered to the same cellular operator.
e.
Between international PSTN and cellular telecommunications network
Starting in 1998, the interconnection tariffs for international cellular call traffic to/from overseas from/to domestic cellular subscribers, regardless of whether the traffic is made through domestic PSTN or not, is based on the same tariffs applied to traffic made through domestic PSTN as discussed in “a” above. However, as agreed mutually with the cellular telecommunications operators, the Company (including Satelindo until it was merged -
Note 1e) still applied the original contractual sharing agreements regarding the interconnection tariffs until December 31, 2006 (Note36).
f.
Between international gateway exchanges
Interconnection charges for international telecommunications traffic between international gateway exchanges are based on agreements between international telecommunications carriers and international telecommunications joint ventures.
93
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
35.
INTERCONNECTION TARIFFS, USO, SPECTRUM FREQUENCY FEES AND REVENUE SHARING (continued)
1.
Structure of Interconnection Tariffs (continued)
Decree No. 37 and Decree No. 46 were subsequently superseded by Decree No. 32 Year 2004 of the MOC which provides cost-based interconnection to replace the current revenue-sharing arrangement. Under the new Decree, the operator of the network on which calls terminate determines the interconnection charge to be received by it based on a formula mandated by the Government, which is intended to have the effect of requiring that operators charge for calls based on the cost of carrying such calls.
The effective date of the new Decree, which was originally set to start on January 1, 2005, was subsequently postponed until January 1, 2007 based on Regulation No. 08/PER/M.KOMINFO/02/2006 dated February 8, 2006 of the MOCIT (Note 36).
The implementation of interconnection billing between operators starts from the time they sign their interconnection agreements. All interconnection agreements are based on Reference Interconnection Offer (“RIO”). All operators have to publish their RIO and a dominant operator is required to obtain an approval of its RIO from the Government.
In August 2006, the DGPT issued Decree No. 278/DIRJEN/2006, which approved the RIO of the Company and two other dominant telecommunications operators (Telkom and Telkomsel). This decree was implemented since January 2007 as agreed by all operators and approved by the Government. On April 11, 2008, the DGPT approved the new RIO for dominant operators (Telkom, Telkomsel and the Company). The DGPT requires all domestic operators to amend their interconnection agreements in line with the approved new RIO starting April 1, 2008. On April 1, 2008, the Company implemented the new interconnection tariffs based on the approved RIO.
However, on December 31, 2010, theBadan Regulasi Telekomunikasi Indonesia (BRTI or Indonesian Telecommunications Regulatory Bureau) issued letter No. 227/BRTI/XII/2010 regarding the implementation of new interconnection tariffs based on the implementation of cost-based interconnection fees, which would be used by all telecommunications operators effective January 1, 2011. The Company has adopted the new tariffs starting January 1, 2011.
On June 27, 2011, the MOCIT issued Regulation No.16/PER/M.KOMINFO/06/2011 regarding the amendment of the Ministry of Transportation Decree No. 35 Year 2004 on implementation of local fixed wireless network with limited mobility, which encouraged the implementation of cost-based tariffs by all telecommunications operators effective July 1, 2011.
Prior to 2012, the interconnection for Short Message Services ("SMS") applied the "Senders Keep All" scheme. Under this old scheme, the telecommunication operators may keep all of the revenue received from their subscribers from services of sending SMS to other operators without any interconnection cost paid to other operators. Starting June 1, 2012, the Indonesian Telecommunication Regulation Body (Badan Regulasi Telekomunikasi Indonesia or "BRTI") issued letter No. 262/BRTI/XII/2011 replacing the previous "Senders Keep All" scheme with the new cost-based scheme. Under the new scheme, the telecommunication operators are obliged to pay interconnection cost with maximum amount of Rp23 (in full amount) for every SMS sent to other telecommunication operators.
Effective June 1, 2012, the Company has applied this new regulation.
94
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
35.
INTERCONNECTION TARIFFS, USO, SPECTRUM FREQUENCY FEES AND REVENUE SHARING (continued)
2.
USO and Spectrum Frequency Fees
On January 16, 2009, the Government issued Regulation No. 7 Year 2009 increasing the USO development contribution from 0.75% to 1.25% and decreasing the concession fee from 1% to 0.50% of annual gross revenue (after deducting bad debts and interconnection charges) effective January 1, 2009.
On December 13, 2010, the President of the Republic of Indonesia issued PP No.76/2010 regarding the amendment of PP No.7/2009 on types and tariffs of non-tax state income imposed by the MOCIT. This regulation affects the computation method and payment of the spectrum fee allocated to the Company (800 Mhz, 900 Mhz and 1,800 Mhz frequency bands).
3.
RevenueSharing
Revenue from access and usage charges from international telecommunications traffic with telecommunications networks owned by more than one domestic telecommunications carrier which is not regulated by Decree No. 08/PER/M.KOMINFO/02.2006, is to be proportionally shared with each carrier, which proportion is to be bilaterally arranged between the carriers.
36.
INTERCONNECTION AGREEMENTS
The Company (including Satelindo and IM3 until they were merged - Note 1e) has interconnection arrangements with domestic and overseas operators. Some significant interconnection agreements are as follows:
1.
Telkom
The following are significant interconnection agreements/transactions with Telkom:
a.
Fixed telecommunications services
On September 23, 2005, the Company and Telkom signed an agreement regarding the interconnection of local, long-distance and international fixed networks. The principal matters covered by the agreement are as follows:
·
Interconnection between the Company’s and Telkom’s local, long-distance and international fixed networks enables the Company’s fixed telecommunications service subscribers to make or receive calls to or from Telkom’s subscribers or international gateways.
·
The Company’s and Telkom’s international services are accessible and continuously open to each other’s fixed networks.
·
The Company and Telkom are responsible for their respective telecommunications facilities.
·
The compensation arrangement for the services provided is based on interconnection tariffs determined by both parties.
95
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
36.
INTERCONNECTION AGREEMENTS (continued)
1.
Telkom (continued)
a.
Fixed telecommunications services (continued)
·
Each party handles subscriber billing and collection for the other party’s international calls service used by the other party’s subscribers. Each party has to pay the other party 1% of the collections made by the other party, plus the billing process expenses which are fixed at Rp82 per record of outgoing call as compensation for billing processing. However, the collection and billing process expense was changed to “service charge”, which was computed at Rp1,250 per minute of outgoing call starting April 1, 2008. Based on the latest agreement, the service charge rate has been reduced to Rp1,200 per minute of outgoing call starting January 1, 2009.
On December 28, 2006, the Company entered into a memorandum of understanding
with Telkom applying the new interconnection rates under cost-based regime that were
effective starting January 1, 2007. This memorandum of understanding was replaced by an agreement dated December 18, 2007. This agreement was amended several times. The
latest amendment was dated December 20, 2011 to meet the requirement in the BRTI letter
No. 227/BRTI/XII/2010 dated December 31, 2010 regarding the implementation of the new interconnection tariffs in 2011. The Company has adopted the new tariffs starting January 1, 2011.
b.
Cellular services
On December 1, 2005, the Company and Telkom signed an agreement regarding the interconnection between the Company’s cellular telecommunications network and Telkom’s fixed telecommunications network. Under this agreement, the interconnection between the Company’s cellular telecommunications network and Telkom’s fixed telecommunications network enables the Company’s cellular subscribers to make or receive calls to or from Telkom’s fixed telecommunications subscribers.
On December 28, 2006, the Company entered into a memorandum of understanding
with Telkom applying the new interconnection rates under cost-based regime that are effective starting January 1, 2007. This memorandum of understanding was replaced by an agreement dated December 18, 2007. This agreement was amended several times. The latest amendment was dated December 20, 2011 to meet the requirement in the BRTI letter No. 227/BRTI/XII/2010 dated December 31, 2010 regarding the implementation of new interconnection tariffs in 2011. The Company has adopted the new tariffs starting January 1, 2011.
On May 30, 2012, the Company and Telkom signed “Berita Acara Kesepakatan” to meet the requirement in the BRTI letter No. 262/BRTI/XII/2011 dated December 12, 2011 (Note 35) regarding the implementation of the new cost-based scheme for SMS interconnection for fixed telecommunications and cellular services effective June 1, 2012.
2.
XL Axiata, PT Smartfren Telecom Tbk (previously PT Mobile-8 Telecom Tbk) (“Smartfren”) and Telkomsel
The principal matters covered by the agreements with these operators are as follows:
·
The Company’s and Satelindo’s international gateway exchanges are interconnected with the mobile cellular telecommunications operators’ networks to make outgoing or receive incoming international calls through the Company’s and Satelindo’s international gateway exchanges.
96
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
36.
INTERCONNECTION AGREEMENTS (continued)
2.
XL Axiata, PT Smartfren Telecom Tbk (previously PT Mobile-8 Telecom Tbk) (“Smartfren”) and Telkomsel (continued)
·
The Company and Satelindo receive, as compensation for the interconnection, a portion of
the cellular telecommunications operators’ revenues from the related services that are made through the Company’s and Satelindo’s international gateway exchanges.
·
Satelindo and IM3 also have an agreement with the above operators for the interconnection of Satelindo’s and IM3’s GSM mobile cellular telecommunications network with the above operators’ network, enabling the above operators’ customers to make calls/send SMS to or receive calls/SMS from Satelindo’s and IM3’s customers.
·
The agreements are renewable annually.
The Company (including Satelindo and IM3 until they were merged) and the above operators still continue their business under the agreements by applying the original compensation formula, except for interconnection fee.
On December 8, 27 and 28, 2006, the Company entered into a memorandum of understanding with each of Telkomsel, Smartfren and XL Axiata, respectively, applying the new interconnection rates under cost-based scheme effective January 1, 2007 to comply with Regulation No. 08/PER/M.KOMINFO/02/2006 of the MOCIT. The memorandum of understanding with Smartfren, XL Axiata and Telkomsel were subsequently replaced by agreements dated September 14 and December 17 and 19, 2007, respectively. The agreements with Smartfren and XL Axiata were amended on March 31, 2008, while the agreement with Telkomsel was amended on February 18, 2008. Subsequently, the agreements with Smartfren and XL Axiata were further amended on March 15, 2011 and March 3, 2011, respectively, while the agreement with Telkomsel was further amended on July 19, 2011, to meet the requirement in the BRTI letter No. 227/BRTI/XII/2010 dated December 31, 2010 regarding the implementation of new interconnection tariffs in 2011. The Company has adopted the new tariffs starting January 1, 2011.
On May 28, 2012, the Company amended the agreement with Telkomsel to meet the requirement in the BRTI letter No. 262/BRTI/XII/2011 dated December 12, 2011 (Note 35) regarding the implementation of the new cost-based scheme for SMS interconnection effective June 1, 2012.
2.
PT Bakrie Telecom Tbk (“Bakrie Telecom”)
The principal matters covered by the latest amendment of the agreement dated June 10, 2009 are related to interconnection of the Company’s mobile cellular network and international gateway exchanges to Bakrie Telecom’s network, including SLI 009 network. Subsequently, the agreement with Bakrie Telecom was further amended on February 9, 2011 to meet the requirement in the BRTI letter No. 227/BRTI/XII/2010 dated December 31, 2010 regarding the implementation of new interconnection tariffs in 2011. The Company has adopted the new tariffs starting January 1, 2011.
On May 31, 2012, the Company and Bakrie Telecom signed “Berita Acara Kesepakatan” to meet the requirement in the BRTI letter No. 262/BRTI/XII/2011 dated December 12, 2011 (Note 35) regarding the implementation of the new cost-based scheme for SMS interconnection effective June 1, 2012.
97
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
36.
INTERCONNECTION AGREEMENTS (continued)
Net interconnection revenues (charges) from (to) major operators for the years ended December 31, 2012 and 2011 are as follows:
2012
2011
Telkom
71,434
134,324
Smartfren
10,255
11,564
Telkomsel
(97,723
)
(120,488)
XL Axiata
(81,665
)
(117,369)
Bakrie Telecom
(7,382
)
(5,137)
Net charges
(105,081
)
(97,106)
37.
SEGMENT INFORMATION
The Group manages and evaluates its operations in three major reportable segments: cellular, fixed telecommunications and MIDI. The operating segments are managed separately because each offers different services/products and serves different markets. The Group operates in one geographical area only, so no geographical information on segments is presented.
The cellular segment currently provides the network coverage in all major cities and population centers across Indonesia by using GSM 900 and GSM 1800 technology. Its primary service is the provision of voice and data transfer which is sold through post-paid and prepaid plans.
The fixed telecommunication segment is the provider of international long-distance services, fixed wireless services, DLD services and local fixed telephony services.
The MIDI segment offers products and services which include internet, high-speed point-to-point international and domestic digital leased line broadband and narrowband services, a high-performance packet-switching service and satellite transponder leasing and broadcasting services.
Refer to Notes 2k and 24 for the description of type of products and services under each reporting segment.
No operating segments have been aggregated to form the above reportable operating segments.
Segment results and assets include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Expenditures for segment assets represent the total costs incurred during the year to acquire segment assets that are expected to be used for more than one year.
Management monitors the operating results of its 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 which in certain respects, as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. The Group’s financing (including finance costs and finance income) and income taxes are managed on a group basis and are not allocated to operating segments.
Operating segments are reported based on financial information determined in conformity with IFAS, which is also consistent with the internal reporting provided to the chief operational decision maker. The chief operational decision maker is responsible for allocating resources and assessing performance of the operating segments, and has been identified as a steering committee that makes strategic decisions.
37.
SEGMENT INFORMATION (continued)
Consolidated information by industry segment follows:
Major Segments
Fixed
Segment
Cellular
Telecommunications
MIDI
Total
December 31, 2012
Revenues
Revenues from external customers
18,489,329
1,021,450
2,908,033
22,418,812
Inter-segment revenues
-
-
597,914
597,914
Total revenues
18,489,329
1,021,450
3,505,947
23,016,726
Inter-segment revenues elimination
(597,914)
Revenues - net
22,418,812
Expenses
16,473,013
1,296,127
2,382,450
20,151,590
Operating profit (loss)
2,016,316
(274,677)
525,583
2,267,222
Gain on tower sale
1,183,963
Gain on foreign exchange - net
44,793
Others - net
(305,955
)
Income before financing activities
3,190,023
Interest income
133,544
Income tax benefit - net
25,798
Gain on change in fair value of derivatives - net
4,964
Financing cost
(2,077,350
)
Loss on foreign exchange - net
(789,438
)
Equity in net loss of associated companies
(125)
Profit for the year
487,416
Depreciation and amortization
7,078,187
415,410
779,227
8,272,824
As of December 31, 2012
Other Information
Segment assets
51,599,983
1,417,859
8,460,772
61,478,614
Unallocated assets
2,219,928
Inter-segment assets elimination
(8,473,481)
Assets - net
55,225,061
Segment liabilities
29,495,438
448,908
2,521,525
32,465,871
Unallocated liabilities
10,004,614
Inter-segment liabilities elimination
(6,640,808)
Liabilities - net
35,829,677
Capital expenditures
7,449,614
123,983
822,984
8,396,581
37.
SEGMENT INFORMATION (continued)
Major Segments
Fixed
Segment
Cellular
Telecommunications
MIDI
Total
December 31, 2011 (Restated)
Revenues
Revenues from external customers
16,587,385
1,249,982
2,691,925
20,529,292
Inter-segment revenues
-
-
609,497609,497
Total revenues
16,587,385
1,249,982
3,301,422
21,138,789
Inter-segment revenues elimination
(609,497)
Revenues - net
20,529,292
Expenses
13,785,603
1,338,073
2,299,771
17,423,447
Operating profit (loss)
2,801,782
(88,091
)
392,154
3,105,845
Gain on foreign exchange - net
90,919
Others - net
(32,455
)
Income before financing activities
3,164,309
Interest income
92,646
Gain on change in fair value of derivatives - net
57,944
Financing cost
(1,929,354
)
Income tax expense - net
(264,613
)
Loss on foreign exchange - net
(54,188)
Profit for the year
1,066,744
Depreciation and amortization
5,418,955
292,140
847,082
6,558,177
As of December 31, 2011 (Restated)
Other Information
Segment assets
48,913,656
2,068,759
8,185,387
59,167,802
Unallocated assets
1,994,640
Inter-segment assets elimination
(7,929,430)
Assets - net
53,233,012
Segment liabilities
27,073,313
742,444
3,042,387
30,858,144
Unallocated liabilities
9,674,836
Inter-segment liabilities elimination
(6,269,068)
Liabilities - net
34,263,912
Capital expenditures
5,576,208
228,834
706,244
6,511,286
98
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
37.
SEGMENT INFORMATION (continued)
Major Segments
Fixed
Segment
Cellular
Telecommunications
MIDI
Total
As of January 1, 2011 / December 31, 2010
Other Information
Segment assets
48,795,807
2,111,239
8,264,175
59,171,221
Unallocated assets
1,955,636
Inter-segment assets elimination
(7,801,729)
Assets - net
53,325,128
Segment liabilities
27,933,214
629,741
3,205,273
31,768,228
Unallocated liabilities
9,521,051
Inter-segment liabilities elimination
(6,219,525)
Liabilities - net
35,069,754
Capital expenditures
4,965,191
209,100
777,488
5,951,779
38.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
a.
Risk Management
The main risks arising from the Group’s financial instruments are interest rate risk, foreign exchange rate risk, equity price risk, credit risk and liquidity risk. The importance of managing these risks has significantly increased in light of the considerable change and volatility in both Indonesian and international financial markets. The Company’s Board of Directors reviews and approves the policies for managing these risks which are summarized below.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to their loans and bonds payable with fixed and floating interest rates.
The Company’s policies relating to interest rate risk are as follows:
(1)
Manage interest cost through a mix of fixed and variable rate debts. The Company evaluates the fixed to floating rate ratio of its loans and bonds payable in line with movements of relevant interest rates in the financial markets. Based on management’s assessment, new financing will be priced either on a fixed or floating rate basis, and
(2)
Manage interest rate exposure on its loans and bonds payable by entering into interest rate swap contracts.
As of December 31, 2012 and 2011 and January 1, 2011/December 31, 2010, more than 82%, 65% and 60%, respectively, of the Group’s debts are fixed-rate.
Several interest rate swap contracts are entered into to hedge floating rate U.S. dollar debts. These contracts are accounted for as transactions not designated as hedges, wherein the changes in the fair value are credited or charged directly to profit or loss for the year.
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the Group’s profit or loss for the year ended December 31, 2012 (through the impact on floating rate borrowings which is based on LIBOR for U.S. dollar borrowings and on JIBOR for rupiah borrowings).
2012 | 2011 | 2010 | ||||
Increase or (decrease) in basis points: U.S. dollar Rupiah | (18) (19) | 33 2 | 31 41 |
99
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
38.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
a.
Risk Management (continued)
Interest rate risk (continued)
2012 | 2011 | 2010 | ||||
Effect on profit for the year U.S. dollar Rupiah | USD437 (equivalent to Rp4,229) Rp4,535 | USD(1,298) (equivalent to Rp(11,774 Rp(432) | ) | USD(1,445) (equivalent to Rp(12,994)) Rp(9,490) |
Management conducted a survey among the Group’s banks to determine the outlook of the LIBOR and JIBOR interest rates until the Group’s next reporting dates of March 31, 2013. The outlook is that the LIBOR and JIBOR interest rates may move 18 basis points lower and 33 and 31 basis points higher and 19 basis point lower and 2 and 41 basis point higher respectively, as compared to the year-end interest rates of 2012, 2011 and 2010, respectively.
If LIBOR interest rates were 18 basis point lower and 33 and 31 basis points higher than the market levels for the years ended December 31, 2012, 2011 and 2010, respectively, with all other variables held constant, the Group’s profit or loss for the years then ended and the consolidated equity would be Rp767,779, Rp957,288 and Rp653,380 and Rp18,865,598, Rp18,503,534 and Rp17,856,853, respectively, which are higher, lower and lower than the actual results for the years ended December 31, 2012, 2011 and 2010, respectively, mainly due to the lower, higher and higher interest expense on floating rate borrowings.
If JIBOR interest rates were 19 basis point lower and 2 and 41 basis points higher than the market levels for the years ended December 31, 2012, 2011 and 2010, respectively, with all other variables held constant, the Group’s profit or loss for the years then ended and the consolidated equity would be Rp768,085, Rp968,622 and Rp656,884 and Rp18,865,904, Rp18,514,876 and Rp17,860,357, respectively, which are higher, lower and lower than the actual results for the years ended December 31, 2012, 2011 and 2010, respectively, mainly due to the lower, higher and higher interest expense on floating rate borrowings.
Foreign exchange rate risk
Foreign exchange rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group’s exposure to exchange rate fluctuations results primarily from U.S. dollar-denominated loans and bonds payable, accounts receivable, accounts payable and procurement payable.
To manage foreign exchange rate risks, the Company entered into several cross currency swap and currency forward contracts and other permitted instruments. These contracts are accounted for as transactions not designated as hedges, wherein the changes in the fair value are credited or charged directly to profit or loss for the year.
The Group’s accounts payable are primarily foreign currency net settlement payables to foreign telecommunications operators, while most of the Group’s accounts receivable are Indonesian rupiah-denominated amounts due from domestic operators.
To the extent the Indonesian rupiah depreciated further from the exchange rates in effect at
December 31, 2012 and 2011 and January 1, 2011/December 31, 2010, the Group’s obligations under such loans and bonds payable, accounts payable and procurement payable would increase in Indonesian rupiah terms. However, the increases in these obligations would be offset in part by increases in the values of foreign currency-denominated time deposits and accounts receivable. As of December 31, 2012 and 2011 and January 1, 2011/December 31, 2010, 31.81%, 27.33% and 17.90%, respectively, of the Group’s U.S. dollar-denominated debts were protected from exchange rate risk by entering into several cross currency swap and currency forward contracts.
100
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
38.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
a.
Risk Management (continued)
Foreign exchange rate risk (continued)
The following table shows the Group’s consolidated U.S. dollar-denominated assets and liabilities as of December 31, 2012 and 2011 and January 1, 2011/December 31, 2010:
January 1, 2011
December 31, 2012
December 31, 2011
December 31, 2010
(Restated)
(Restated)
U.S. Dollar
Rupiah *
U.S. Dollar
Rupiah *
U.S. Dollar
Rupiah *
Assets:
Cash and cash equivalents
249,279
2,410,529
53,356
483,835
111,7821,005,042
Accounts receivable
Trade
111,612
1,079,285
91,260
827,553
115,530
1,038,726
Others
-
-
-
-
5444,893
Derivative assets
7,203
69,654
17,573
159,349
7,71169,334
Other current financial
assets - net
488
4,719
178
1,613
1,715
15,418
Other current assets
-
-
15
138
-
-
Due from related parties
106
1,028
317
2,871
1171,047
Other non-current financial
assets - net
1,150
11,121
1,578
14,306
1,427
12,833
Total assets
369,838
3,576,336
164,277
1,489,665
238,826
2,147,293
Liabilities:
Accounts payable - trade
9,343
90,347
13,010
117,971
32,788294,797
Procurement payable
141,102
1,364,458
220,788
2,002,110
246,615
2,217,320
Accrued expenses
46,424
448,918
45,156
409,476
46,263
415,953
Deposits from customers
2,478
23,962
1,834
16,629
1,47713,275
Derivative liabilities
8,401
81,241
15,239
138,189
23,958
215,403
Other current financial
liabilities
16,676
161,255
41
371
67602
Due to related parties
2,685
25,968
9
83
-
-
Loans payable (including
current maturities)
557,193
5,388,055
653,848
5,929,093
886,6027,971,436
Bonds payable (including
current maturities)
650,000
6,285,500
650,000
5,894,200
650,0005,844,150
Obligation under finance
lease
212,757
2,057,362
-
-
--
Total liabilities
1,647,059
15,927,066
1,599,925
14,508,122
1,887,77016,972,936
Net liabilities position
1,277,221
12,350,730
1,435,648
13,018,457
1,648,944
14,825,643
*
The exchange rates used to translate the U.S. dollar amounts into rupiah were Rp9,670 to US$1.00 (in full amounts), Rp9,068 to US$1.00 (in full amounts) and Rp8,991 to US$1.00 (in full amounts) as published by the Indonesian Central Bank as of December 31, 2012 and 2011 and January 1, 2011/December 31, 2010, respectively.
The following table demonstrates the sensitivity to a reasonably possible change in the U.S. dollar exchange rate, with all other variables held constant, of the Group’s consolidated profit for the years ended December 31, 2012, 2011 and 2010:
2012 | 2011 | 2010 | ||||
Change in U.S. dollar exchange rate | 1.83% | 1.24% | -3% | |||
Effect on consolidated profit for the year | (169,551) | (122,342) | 336,582 |
Management conducted a survey among the Group’s banks to determine the outlook of the U.S. dollar exchange rate until the Group’s next reporting date of March 31, 2013, 2012 and 2011. The outlook is that the U.S. dollar exchange rate may strengthen by 1.83% and 1.24% as compared to the exchange rate at December 31, 2012 and 2011, respectively, and weaken by 3% as compared to the exchange rate as of December 31, 2010.
101
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
38.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
a.
Risk Management (continued)
Foreign exchange rate risk (continued)
If the U.S. dollar exchange rate strenghtened by 1.83% and 1.24% as compared to the exchange rate at as of December 31, 2012 and 2011, respectively, and weakened by 3% as compared to the exchange rate as of December 31, 2010, with all other variables held constant, the Group’s profit for the years then ended and the consolidated equity would be Rp593,999, Rp846,712 and Rp1,002,956 and Rp18,691,818, Rp18,392,966 and Rp18,206,428, respectively, which are lower, lower and higher than the actual results as of December 31, 2012 and 2011 and January 1, 2011/
December 31, 2010, respectively, mainly due to the consolidated foreign exchange gain and loss on the translation of U.S. dollar-denominated net liabilities.
Equity price risk
The Group’s long-term investments consist primarily of minority investment in the equity of private Indonesian entities and equity of foreign entities. With respect to the Indonesian entities in which the Group has investments, the financial performance of such entities may be adversely affected by the economic conditions in Indonesia.
Credit risk
Credit risk is the risk that the Group will incur a loss arising from their customers, clients or counterparties that fail to discharge their contractual obligations. There are no significant concentrations of credit risk. The Group manage and control this credit risk by setting limits on the amount of risk they are willing to accept for individual or collective customers and by monitoring exposures in relation to such limits.
The Group trade only with recognized and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis to reduce the exposure to bad debts. The Company and subsidiaries place their cash and cash equivalents in a number of different financial institutions, including state-owned and internationally recognized banks because they have the most extensive branch networks in Indonesia and are considered to be financially sound banks.
The table below shows the maximum exposure to credit risk for the components of the consolidated statement of financial position:
Maximum Exposure (1)
January 1,
2011/
December 31,
December 31,
December 31,
2012
2011
2010
(Restated)
(Restated)
Loans and receivables:
Cash and cash equivalents
3,917,236
2,224,206
2,075,270
Accounts receivable
Trade - net
2,038,719
1,500,096
1,536,276
Others - net
22,441
5,660
10,031
Other current financial assets - net
13,382
24,790
53,119
Due from related parties - net
10,358
10,654
8,421
Other non-current financial assets – net
173,400
209,540
147,874
Held-for-trading:
Cross currency swaps
29,907
22,138
69,334
Currency forward
39,747
137,211
-
Available-for-sale investments:
Other non-current financial assets -
other long-term investments - net
1,369,740
2,730
2,730
Total
7,614,930
4,137,025
3,903,055
(1) There are no collaterals held or other credit enhancements or offsetting arrangements that affect this maximum exposure.
102
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
38.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
a.
Risk Management (continued)
Liquidity risk
The liquidity risk is defined as a risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.
The Group’s liquidity requirements have historically arisen from the need to finance investments and capital expenditures related to the expansion of their telecommunications business. The Group’s telecommunications business requires substantial capital to construct and expand mobile and data network infrastructure and to fund operations, particularly during the network development stage. Although the Group have substantial existing network infrastructure, the Group expect to incur additional capital expenditures primarily in order to focus cellular network development in areas they anticipate will be high-growth areas, as well as to enhance the quality and coverage of their existing network.
In the management of liquidity risk, the Group monitor and maintain a level of cash and cash equivalents deemed adequate to finance the Group’s operations and to mitigate the effects of fluctuation in cash flows. The Group also regularly evaluate the projected and actual cash flows, including their loan maturity profiles, and continuously assess conditions in the financial markets for opportunities to pursue fund-raising initiatives. These activities may include bank loans, debt capital and equity market issues.
The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments.
Expected maturity as of December 31,
Total
2017 and
contractual
InterestCarrying
2013
2014
2015
2016
thereafter
cash flows
valueamount
December 31, 2012
Short-term loan
315,736
-
-
-
-
315,736
(16,207)299,529
Accounts payable - trade
231,737
-
-
-
-
231,737
-231,737
Procurement payables
2,737,850
-
-
-
-
2,737,850
-2,737,850
Accrued expenses
1,961,285
-
-
-
-
1,961,285
- 1,961,285
Deposits from customers
43,825
-
-
-
-
43,825
-43,825
Derivative liabilities
81,241
-
-
-
-
81,241
-81,241
Other current financial
liabilities
670,834
-
-
-
-
670,834(381,670)289,164
Due to related parties
-
42,789
-
-
-
42,789
-42,789
Obligation under financial
lease
-
622,020
622,020
622,020
2,827,500
4,693,560
(1,591,650)3,101,910
Other non-current
financial liabilities
-
71,592
4,588
-
-
76,180
(6,907)69,273
Loans payable
2,924,722
1,793,139
856,839
654,973
830,089
7,059,762
(686,722)6,373,040
Bonds payable
2,643,553
3,520,261
1,299,951
1,734,671
13,638,300
22,836,736
(7,521,054)15,315,682
Total
11,610,783
6,049,801
2,783,398
3,011,664
17,295,889
40,751,535
(10,204,210)30,547,325
Expected maturity as of December 31,
Total
2016 and
contractual
InterestCarrying
2012
2013
2014
2015
thereafter
cash flows
valueamount
December 31, 2011
Short-term loan
1,579,092
-
-
-
-
1,579,092
(79,836)1,499,256
Accounts payable - trade
319,058
-
-
-
-
319,058
-319,058
Procurement payables
3,475,862
-
-
-
-
3,475,862
-3,475,862
Accrued expenses
1,895,613
-
-
-
-
1,895,613
- 1,895,613
Deposits from customers
37,265
-
-
-
-
37,265
-37,265
Derivative liabilities
138,189
-
-
-
-
138,189
-138,189
Other current financial
liabilities
196,675
-
-
-
-
196,675(124,847)71,828
Due to related parties
-
15,480
-
-
-
15,480
-15,480
Obligation under financial
lease
-
180,602
180,602
180,602
696,670
1,238,476
(468,395)770,081
Other non-current
financial liabilities
-
84,186
34,631
-
-
118,817
(11, 384)107,433
Loans payable
3,732,456
2,774,662
2,245,335
706,241
1,396,047
10,854,741
(1,128,425)9,726,316
Bonds payable
1,167,023
2,384,195
3,260,902
1,040,592
11,263,104
19,115,816
(6,935,474)12,180,342
Total
12,541,233
5,439,125
5,721,470
1,927,435
13,355,821
38,985,084
(8,748,361)30,236,723
103
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
38.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
a.
Risk Management (continued)
Liquidity risk (continued)
Expected maturity as of January 1,
Total
2015 and
contractual
InterestCarrying
2011
2012
2013
2014
thereafter
cash flows
valueamount
January 1, 2011
Accounts payable - trade
645,505
-
-
-
-
645,505
-645,505
Procurement payables
3,642,002
-
-
-
-
3,642,002
-3,642,002
Accrued expenses
1,796,335
-
-
-
-
1,796,335
-1,796,335
Deposits from customers
50,279
-
-
-
-
50,279
-50,279
Derivative liabilities
215,403
-
-
-
-
215,403
-215,403
Other current financial
liabilities
113,270
-
-
-
-
113,270(60,857)52,413
Due to related parties
-
22,099
-
-
-
22,099
-22,099
Obligation under financial
lease
-
90,143
90,143
90,143
378,337
648,766
(232,179)416,587
Other non-current
financial liabilities
-
47,916
3,444
-
-
51,360
(5,545)45,815
Loans payable
3,692,378
3,533,927
2,619,642
647,505
1,866,778
12,360,230
(1,509,279)10,850,951
Bonds payable
2,290,020
1,163,332
2,380,454
3,257,211
12,231,499
21,322,516
(8,110,281)13,212,235
Total
12,445,192
4,857,417
5,093,683
3,994,859
14,476,614
40,867,765
(9,918,141)30,949,624
b.
Capital Management
The Group aim to achieve an optimal capital structure in pursuit of their business objectives, which include maintaining healthy capital ratios and strong credit ratings, and maximizing stockholder value.
Some of the Group’s debt instruments contain covenants that impose maximum leverage ratios. In addition, the Group’s credit ratings from the international credit ratings agencies are based on its ability to remain within certain leverage ratios. The Group have complied with all externally imposed capital requirements.
Management monitors capital using several financial leverage measurements such as debt-to-equity ratio. The Group’s objective is to maintain its debt-to-equity ratio at a maximum of 2.50 each as of December 31, 2012 and 2011 and January 1, 2011/December 31, 2010.
The Group continue to manage their debt covenants and capital structure based on financial information determined under IFAS.
As of December 31, 2012 and 2011 and January 1, 2011/December 31, 2010, the Group’s debt-to-equity ratio accounts are as follows:
January 1, 2011/
December 31, 2012
December 31, 2011 (Restated)
December 31, 2010 (Restated)
Loans and
Guaranteed
Loans and
Guaranteed
Loans and
Guaranteed
Bonds Payable
Notes Due 2020
Bonds Payable
Notes Due 2020
Bonds Payable Notes Due 2020
Short-term loan - gross
300,000
300,000
1,500,000
1,500,000
--
Loans and bonds payable-
including current
maturities - gross
21,923,555
21,923,555
22,172,064
22,172,064
24,399,291
24,399,291
Obligation under finance
lease
-
3,374,139
-
825,836
-445,874
Total debts
22,223,555
25,597,694
23,672,064
24,497,900
24,399,291
24,845,165
Total equity
19,395,384
19,395,384
18,969,100
18,969,100
18,255,374
18,255,374
Debt to equity ratio
1.15
1.32
1.25
1.29
1.34
1.36
104
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
38.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
c.
Collateral
The loans of Lintasarta, a subsidiary, which were obtained from CIMB Niaga, are collateralized by all equipment (Notes 8, 18j and 18l) purchased by Lintasarta from the proceeds of the credit facilities. There are no other significant terms and conditions associated with the use of collateral.
The Company did not hold any collateral as of December 31, 2012 and 2011 and January 1, 2011/ December 31, 2010.
39. RECONCILIATION BETWEEN IFAS AND IFRS
Reconciliation /
Notes
IFAS
Reclassification
IFRS
CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
As of December 31, 2012
ASSETS
CURRENT ASSETS
Cash and cash equivalents
3,917,236
-
3,917,236
Accounts receivable
Trade
Related parties - net of
allowance for impairment
574,650
-
574,650
Third parties - net of
allowance for impairment
1,464,069
-
1,464,069
Others - net of allowance
for impairment
22,441
-
22,441Inventories - net of allowance
for obsolescence
52,556
-
52,556
Derivative assets
69,654
-
69,654
Advances
36,057
-
36,057
Prepaid taxes
2
294,343
(294,343
)
-
Prepaid frequency fee and licenses
1,528,215
-
1,528,215
Prepaid expenses
335,815
-
335,815
Other current financial assets - net
13,382
-
13,382
Other current assets
2
392
294,343
294,735
Total Current Assets
8,308,810
-
8,308,810
105
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
39. RECONCILIATION BETWEEN IFAS AND IFRS (continued)
Reconciliation /
Notes
IFAS
Reclassification
IFRS
NON-CURRENT ASSETS
Due from related parties - net of
allowance for impairment
10,358
-
10,358
Deferred tax assets - net
100,693
-
100,693
Property and equipment - net
1a
41,964,793
(103,947
)
41,860,846
Goodwill and other
intangible assets - net
1b
1,373,707
689,118
2,062,825
Long-term prepaid rentals -
net of current portion
755,237
-
755,237
Long-term prepaid licenses -
net of current portion
266,027
-
266,027
Long-term advances
40,994
-
40,994
Long-term prepaid pension - net
of current portion
88,845
-
88,845
Long-term receivables
17,959
-
17,959
Other non-current financial
assets - net
1,543,140
-
1,543,140
Other non-current assets - net
754,498
-
754,498
Total Non-current Assets
46,916,251
585,171
47,501,422
TOTAL ASSETS
55,225,061
585,171
55,810,232
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term loan
299,529
-
299,529
Accounts payable - trade
Related parties
22,650
-
22,650
Third parties
209,087
-
209,087
Procurement payable
2,737,850
-
2,737,850
Taxes payable
2
95,599
(61,574
)
34,025
Accrued expenses
1,961,285
-
1,961,285
Unearned income
1c
1,073,088
618
1,073,706
Deposits from customers
43,825
-
43,825
Derivative liabilities
81,241
-
81,241
Current maturities of:
Loans payable
2,669,218
-
2,669,218Bonds payable1,329,175
-1,329,175
Other current financial
liabilities
289,164
-
289,164
Other current liabilities
2
204,040
61,574
265,614
Total Current Liabilities
11,015,751
618
11,016,369
106
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
39. RECONCILIATION BETWEEN IFAS AND IFRS (continued)
Reconciliation /
Notes
IFAS
Reclassification
IFRS
NON-CURRENT LIABILITIES
Due to related parties
42,789
-
42,789
Obligations under finance lease
3,101,910
-
3,101,910
Deferred tax liabilities - net
1b,1c
1,684,270
170,859
1,855,129
Loans payable - net of current
maturities
3,703,822
-
3,703,822
Bonds payable - net of current
maturities
13,986,507
-
13,986,507
Employee benefit obligations -
net of current portion
926,224
-
926,224
Other non-current financial liabilities
69,273
-
69,273
Other non-current liabilities 1,299,131
-1,299,131
Total Non-current Liabilities
24,813,926
170,859
24,984,785
TOTAL LIABILITIES
35,829,677
171,477
36,001,154
EQUITY
EQUITY ATTRIBUTABLE TO
OWNERS OF THE COMPANY
Capital stock - Rp100 par value
per A share and B share
Authorized - 1 A share and
19,999,999,999 B shares
Issued and fully paid - 1 A share
and 5,433,933,499 B shares
543,393
-
543,393Premium on capital stock1,546,587
-
1,546,587
Retained earnings
Appropriated
134,446
-
134,446
Unappropriated
15,846,721
415,640
16,262,361
Difference in transactions of
equity changes in associated
companies/subsidiaries
404,104
-
404,104
Difference in foreign currency
translation
(3,600
)
-
(3,600)
Unrealized changes in fair value of
available-for-sale investment
389,718
-
389,718
Total Equity Attributable to:
Owners of the Company
18,861,369
415,640
19,277,009
Non-controlling interests
534,015
(1,946
)
532,069
TOTAL EQUITY
19,395,384
413,694
19,809,078
TOTAL LIABILITIES AND EQUITY
55,225,061
585,171
55,810,232
107
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
39. RECONCILIATION BETWEEN IFAS AND IFRS (continued)
Reconciliation/
Notes
IFAS
Reclassification
IFRS
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
Year Ended December 31, 2012
REVENUES
Cellular
18,489,329
-
18,489,329
MIDI
1c
2,908,033
1,765
2,909,798
Fixed Telecommunications
1,021,450
-
1,021,450
Total Revenues
22,418,812
1,765
22,420,577
EXPENSES
Cost of services
8,905,736
-
8,905,736
Depreciation and amortization
1a
8,272,824
11,188
8,284,012
Personnel
1,427,194
-
1,427,194
Marketing
920,296
-
920,296
General and administration
625,540
-
625,540
Gain on sale of towers
(1,183,963
)
-
(1,183,963)
Gain on foreign exchange - net
(44,793)
-
(44,793
)
Others - net
305,955
-
305,955
Net Expenses
19,228,789
11,188
19,239,977
OPERATING PROFIT
3,190,023
(9,423
)
3,180,600
FINANCE INCOME (EXPENSES)
Interest income
133,544
-
133,544
Gain on change in fair value of
derivatives - net
4,964
-
4,964
Financing cost
(2,077,350
)
-
(2,077,350
)
Loss on foreign exchange - net
(789,438
)
-
(789,438
)
Equity in net loss of associated
companies
(125
)
-
(125
)
Other Expenses - Net
(2,728,405)
-
(2,728,405
)
PROFIT BEFORE INCOME TAX
461,618
(9,423
)
452,195
INCOME TAX BENEFIT (EXPENSE)
Current
(234,429
)
-
(234,429
)
Deferred
1a,1c
260,227
(280)
259,947
Income Tax Benefit (Expense)
- Net
25,798
(280
)
25,518
PROFIT FOR THE YEAR
487,416
(9,703
)
477,713
39. RECONCILIATION BETWEEN IFAS AND IFRS (continued)
Reconciliation/
Notes
IFAS
Reclassification
IFRS
OTHER COMPREHENSIVE
INCOME
Difference in foreign currency
Translation
(36)
-
(36
)
Income tax effect
(1,238)
-
(1,238
)
Unrealized changes in fair value
of available-for-sale investment
389,718
-
389,718
Net
388,444
-
388,444
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR
875,860
(9,703
)
866,157
PROFIT FOR THE YEAR
ATTRIBUTABLE TO:
Owners of the Company
375,106
(9,457
)
365,649
Non-controlling interests
112,310
(246
)
112,064
Total
487,416
(9,703
)
477,713
OTHER COMPREHENSIVE
INCOME -NET OF TAX
ATTRIBUTABLE TO:
Owners of the Company
388,444
-
388,444
Non-controlling interests
-
-
-
Total
388,444
-
388,444
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR
ATTRIBUTABLE TO:
Owners of the Company
763,550
(9,457
)
754,093
Non-controlling interests
112,310
(246
)
112,064
Total
875,860
(9,703
)
866,157
The reconciliation between IFAS and IFRS has not had a material impact on the consolidated statements of cash flows.
1.
Reconciliation:
a.
Landrights
Under IFAS, landrights are stated at cost. Other expenses associated with the acquisition of the government permit to use the land (i.e., notary fee, tax, etc.) should be amortized over the period the holder is expected to retain the landrights which, in the case of the Group, is an initial period ranging from approximately 20 to 30 years.
Before January 1, 2010, under IFRS as issued by IASB, the costs to acquire the landrights as well as other expenses associated with the acquisition were capitalized as prepaid landrights lease, and were amortized over the period of the right to use the land obtained from the Government, which ranged from 20 to 30 years.
Based on amendment to IAS 17, “Leases”, (as part of the Improvements Project), starting January 1, 2010, the Group classifies land leases as finance leases and presents them in the consolidated financial statements as part of property and equipment. The Group applied retrospectively IAS 17 amendment and amortized land leases over 50 years (i.e., over the initial lease term of 30 years plus one extension of 20 years).
39. RECONCILIATION BETWEEN IFAS AND IFRS (Continued)
1.
Reconciliation (continued):
a.
Goodwill
Before January 1, 2011, under IFAS, goodwill was amortized using the straight-line method over the useful life of the goodwill. Starting January 1, 2011, goodwill is no longer amortized but is tested for impairment annually (as at December 31) and when circumstances indicate the carrying value may be impaired. The change in accounting policy resulted from the revision of PSAK 22, “Business Combinations”, which is applied prospectively.
Under IFRS as issued by IASB, goodwill is not amortized but subjected to annual impairment test under IAS 36, “Impairment of Assets”. The carrying amount of goodwill in the opening financial position as of January 1, 2008 is stated as the carrying amount under IFAS as of that date.
c.
Revenue Recognition
Under IFAS, up to December 31, 2009 revenue from service connection is recognized as income at the time the connection takes place (for post-paid service) or at the time of activation of starter packs by customers (for prepaid service). Starting January 1, 2010, the activation component of starter package sales has been deferred and recognized as revenue over the expected average period of the customer relationship. The change in accounting policy resulted from the revocation of PSAK 35, “Accounting for Revenues from Telecommunication Services”, which was applied prospectively.
Under IFRS as issued by IASB, revenue from service connection should be deferred and recognized over the expected term of the customer relationship. Starting January 1, 2010, there is no reconciliation adjustment for such service connection, except for the recognition from the outstanding balance as of December 31, 2009.
1.
Reclassification:
Certain accounts were reclassified to conform with IFRS presentation requirements in the 2012 consolidated financial statements. The following discusses the significant reclassifications:
Under IFAS, prepaid taxes and taxes payable consist of receivables and payables related to Corporate Income Tax, VAT and Other Income Tax.
Under IFRS as issued by IASB, prepaid taxes and taxes payable include only domestic and foreign taxes which are based on taxable profits and withholding taxes, which are payable by a subsidiary, associate or joint venture on distributions to the reporting entity. All other taxes receivable or payable are recorded under other current assets or other current liabilities.
40.
EVENTS AFTER REPORTING PERIOD
a.
On January 3, 2013, as the continuation of the investigation from the General Attorney Office (AGO) in regard to the allegation of frequency 2.1 Ghz misuse by the Company and IMM due to cooperation agreement on broadband internet services, the AGO released the warrant investigation No.Prin-01/F.2/Fd.1/01/2013 (for the Company) and No.Prin-02/F.2/Fd.1/01/2013 (for IMM) since both of the Company and IMM were determined as suspects in this legal case. Subsequently, on January 10, 2013, the AGO released the letter calling for the witnesses from the Company and IMM in order to come to the AGO on January 14 - 17, 2013.
b.
On January 15, 2013, the Company repaid partially the Revolving Time Loan facility from Mandiri amounting to Rp100,000 (Note 14).
c.
On January 22, 2013, the Company entered into 2 currency forward contracts with Standard Chartered and BTMU Ltd with total notional amount of US$25,000.
d.
On January 28, 2013, the Company repaid partially the Revolving Time Loan facility from BCA amounting to Rp300,000.
e.
On January 28, 2013, the Company received the claim for tax refund on Satelindo's 2002 and 2003 income tax article 26 amounting to Rp87,198 (Note 6).
f.
On February 4, 6, 8, 11, 21, 25, 27 and 28, 2013, the Company entered into 1 currency forward contract each with Standard Chartered, CIMB, BNP, ING and Barclay, 2 forward currency contracts with DBS and 3 forward currency contracts with BTUMFJ with total notional amount of US$162,000.
g.
On February 19, 2013, the Company repaid partially the Revolving Time Loan facility from BCA amounting to Rp300,000.
h.
On February 28, 2013, the Company paid the sixth installment of SEK credit facility B amounting to US$11,071.43.
i.
On March 6, 11, 13, 14, 15, 19, 20, 22, 26 and 27, the Company entered into 17 currency forward contracts with JP Morgan, Stanchard, DBS Indonesia, BNP Paribas, Barclays, ING, Natixis, CIMB Niaga and Danareksa with total notional amount of US$284,750.
j.
On March 7, 2013, the Company’s major stockholder - Qatar Telecom (Qtel Asia) Pte. Ltd officially changed its name into Ooredoo Asia Pte. Ltd (Note 23).
k.
On March 27, 2013, the Company drew an amount of Rp300,000 from its Revolving Time Loan with BSMI.
l.
On March 27, 2013, the Company paid the seventh semi-annual installment of its COFACE and SINOSURE facilities from HSBC France amounting to US$7,859.34 and US$2,210, respectively.
m.
On April 5, 2013, the Company drew an amount of Rp500,000 from its Revolving Time Loan with BCA and Rp250,000 each from the Loan with Mandiri and BSMI, respectively.
n.
On April 8, 2013, the Company fully repaid IDR Bond VI Year 2008 Seri A including Sukuk Ijarah III Year 2008 totaling IDR1,330,000.
o.
On April 9, 10 and 25, 2013, the Company entered into 3 currency forward contracts with Merrill Lynch International with notional amount of US$12,000, US$14,500 and US$12,000, respectively.
108
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
40.
EVENTS AFTER REPORTING PERIOD (continued)
p.
On April 22, 2013, the Company made public release on the Company's plan of delisting from New York Stock Exchange (NYSE). Such delisting has obtained approval from the Board of Commissioners and Directors on April 18 and 17, 2013, respectively.
q.
On April 25 and 26, 2013, the Company entered into 1 currency forward contract each with Merrill Lynch International and DBS with total notional amount of US$12,000 and US$25,000.
r.
As of April 25, 2013, after going through several changes in its ownership in the Company, SKAGEN Funds owns 5.41% ownership in the Company as stated in its letter dated on the same date which was sent to the BAPEPAM (Note 23).
s.
As of April 29, 2013, the prevailing exchange rate of the rupiah to U.S. dollar is Rp9,721 to US$1 (in full amounts), while as of December 31, 2012, the prevailing exchange rate was Rp9,670 to US$1 (in full amounts). Using the exchange rate as of April 29, 2013, the Group suffered from exchange loss amounting to approximately Rp65,138 (excluding the effect of revaluing derivative contracts on April 29, 2013) on the foreign currency liabilities, net of foreign currency assets, as of December 31, 2012 (Note 38).
The translation of the foreign currency liabilities, net of foreign currency assets, should not be construed as a representation that these foreign currency liabilities and assets have been, could have been, or could in the future be, converted into rupiah at the prevailing exchange rate of the rupiah to U.S. dollar as of December 31, 2012 or at any other rate of exchange.
The commitments for the capital expenditures denominated in foreign currencies as of December 31, 2012 as disclosed in Note 33a are approximately Rp1,382,278 if translated at the prevailing exchange rate as of April 29, 2013.
41.
RECENT DEVELOPMENT AFFECTING ACCOUNTING STANDARDS
On October 19, 2012, DSAK issued a revision to PSAK 60 (Revised 2010), “Financial Instrument: Disclosure”, which is effective for financial statements period beginning on or after January 1, 2013. Early adoption is permitted. Management believes that the impact of the revision is not significant to the consolidated financial statements of the Group.
109
These consolidated financial statements are originally issued in the Indonesian language.
PT INDOSAT Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011/December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)
42.
RECLASSIFICATION OF ACCOUNTS
Following are the accounts in the consolidated statement of comprehensive income for the year ended December 31, 2011 and the consolidated statements of financial position as of December 31, 2011 and January 1, 2011/December 31, 2010 which were reclassified in accordance with the BAPEPAM-LK Regulation No VIII.G.7:
As Previously Reported | As Reclassified | Amount | Reason | |||
December 31, 2011 Operating expenses - general and administration | Expenses - cost of services | 92,457 | Reclassification to conform with the 2012 presentation | |||
Expenses - personnel | 20,707 | Reclassification to conform with the 2012 presentation | ||||
Other income (expenses) - Gain on foreign exchange - net | Expenses - Gain on foreign exchange - net | 90,919 | Reclassification to conform with the 2012 presentation | |||
Other income (expenses) - Others - net | Expenses - Others - net | 34,664 | Reclassification to conform with the 2012 presentation | |||
Prepaid expenses | Prepaid frequency fee and licenses | 1,353,819 | Reclassification to conform with the 2012 presentation | |||
Prepaid taxes | Other non-current assets | 866,843 | Reclassification to conform with the 2012 presentation | |||
January 1, 2011 / December 31, 2010 Account receivable - Trade - Third parties Prepaid expenses Prepaid taxes | Prepaid taxes Prepaid frequency fee and licenses Other non-current assets | 4,322 1,202,009 651,657 | Reclassification to conform with the 2012 presentation Reclassification to conform with the 2012 presentation Reclassification to conform with the 2012 presentation |
110
PT INDOSAT Tbk
STATEMENTS OF FINANCIAL POSITION
PARENT ENTITY
December 31, 2012, December 31, 2011 (Restated) and
January 1, 2011 / December 31, 2010 (Restated)
(Expressed in millions of rupiah, except share data)
The following information is the separate financial statements of PT Indosat Tbk, the Parent Entity, which is additional information to the consolidated financial statements of PT Indosat Tbk and subsidiaries as of December 31, 2012 and 2011, and January 1, 2011/December 31, 2010 and for the years ended December 31, 2012 and 2011.
December 31,
January 1, 2011/
December 31,
2012
2011
2010
(Restated)
(Restated)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
2,803,689
1,304,453
1,195,387
Accounts receivable
Trade
Related parties - net of allowance for
impairment of Rp38,030 as of
December 31, 2012, Rp46,094 as of
December 31, 2011 and Rp46,960 as of
January 1, 2011 / December 31, 2010
223,238
172,576
115,506
Third parties - net of allowance for
impairment of Rp493,480 as of
December 31, 2012, Rp437,479 as of
December 31, 2011 and Rp409,893 as of
January 1, 2011 / December 31, 2010
1,297,460
1,009,733
1,177,882
Others - net of allowance for impairment of
Rp18,748 as of December 31, 2012,
Rp16,702 as of December 31, 2011 and
Rp15,281 as of January 1, 2011 /
December 31, 2010
19,643
3,720
6,873
Inventories - net of allowance for obsolescence of
Rp1,378 as of December 31, 2012, Rp3,098
as of December 31, 2011 and Rp9,564 as of
January 1, 2011 / December 31, 2010
51,192
74,196
93,585
Derivative assets
69,654
159,349
69,334
Advances
33,278
24,449
19,819
Prepaid taxes
284,671
29,079
43,548
Prepaid frequency fee and licenses
1,509,739
1,335,343
1,184,828
Prepaid expenses - other
305,624
314,532
290,937
Other current financial assets - net
5,058
2,010
25,493
Other current assets
244
244
244
Total Current Assets
6,603,490
4,429,684
4,223,436
111
PT INDOSAT Tbk
STATEMENTS OF FINANCIAL POSITION (continued)
PARENT ENTITY
December 31, 2012, December 31, 2011 (Restated) and
January 1, 2011/December 31, 2010 (Restated)
(Expressed in millions of rupiah, except share data)
December 31,
January 1, 2011/
December 31,
2012
2011
2010
(Restated)
(Restated)
NON-CURRENT ASSETS
Due from related parties - net of allowance for
Impairment of Rp15 as of December 31,
2012 and 2011, and Rp646 as of
January 1, 2011 / December 31, 2010
37,019
32,717
72,095
Property and equipment - net
41,017,251
42,656,981
43,030,290
Goodwill and other
intangible assets - net
1,345,164
1,355,165
1,365,362
Long-term prepaid rentals -
net of current portion
751,046
761,938
749,512
Long-term prepaid licenses -
net of current portion
255,289
319,289
383,289
Long-term advances
31,607
154,515
211,434
Long-term prepaid pension - net
of current portion
58,905
74,001
81,470
Long-term receivables
17,959
20,677
44,824
Other non-current financial
assets - net
1,453,343
53,075
86,185
Other non-current assets - net
1,651,617
1,724,860
1,565,238
Total Non-current Assets
46,619,200
47,153,218
47,589,699
TOTAL ASSETS
53,222,690
51,582,902
51,813,135
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term loan
299,529
1,499,256
-
Accounts payable - trade
Related parties
48,966
66,519
57,388
Third parties
200,394
296,512
583,634
Procurement payable
2,590,857
3,419,671
3,653,372
Taxes payable
50,296
41,108
123,225
Accrued expenses
1,643,884
1,574,523
1,447,792
Unearned income
875,891
882,679
955,396
Deposits from customers
43,825
37,265
47,766
Derivative liabilities
81,242
138,189
215,403
Current maturities of:
Loans payable
2,669,218
3,278,054
3,149,213
Bonds payable
1,329,175
-
1,098,131
Other current financial
liabilities
252,619
70,333
49,679
Other current liabilities
200,893
62,553
61,494
Total Current Liabilities
10,286,789
11,366,662
11,442,493
112
PT INDOSAT Tbk
STATEMENTS OF FINANCIAL POSITION (continued)
PARENT ENTITY
December 31, 2012, December 31, 2011 (Restated) and
January 1, 2011/December 31, 2010 (Restated)
(Expressed in millions of rupiah, except share data)
December 31,
January 1, 2011/
December 31,
2012
2011
2010
(Restated)
(Restated)
NON-CURRENT LIABILITIES
Due to related parties
6,429,464
6,003,374
5,958,009
Obligations under finance lease
3,101,910
770,081
416,588
Deferred tax liabilities - net
1,476,999
1,788,510
1,547,563
Loans payable - net of current
maturities
3,703,822
6,425,779
7,644,322
Bonds payable - net of current
maturities
7,775,774
6,328,782
6,322,516
Employee benefit obligations -
net of current portion
882,520
751,534
843,823
Other non-current liabilities
1,299,233
95,537
103,054
Total Non-current Liabilities
24,669,722
22,163,597
22,835,875
TOTAL LIABILITIES
34,956,511
33,530,259
34,278,368
EQUITY
Capital stock - Rp100 par value
per A share and B share
Authorized - 1 A share and
19,999,999,999 B shares
Issued and fully paid - 1 A share
and 5,433,933,499 B shares
543,393
543,393
543,393
Premium on capital stock
1,546,587
1,546,587
1,546,587
Retained earnings
Appropriated
134,446
134,446
134,446
Unappropriated
15,247,530
15,423,712
14,905,836
Difference in transactions of
equity changes in associated
companies/subsidiaries
404,104
404,104
404,104
Difference in foreign currency
translation
(619
)
(619
)
(619)
Unrealized changes in fair value of
available-for-sale investment
389,718
-
-
Difference in transactions under
common control
1,020
1,020
1,020
TOTAL EQUITY
18,266,179
18,052,643
17,534,767
TOTAL LIABILITIES AND EQUITY
53,222,690
51,582,902
51,813,135
113
PT INDOSAT Tbk
STATEMENTS OF COMPREHENSIVE INCOME
PARENT ENTITY
Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah, except share data)
2012
2011
(Restated)
REVENUES
Cellular
18,535,365
16,464,109
Multimedia, Data Communication, Internet (“MIDI”)
1,484,649
1,258,004
Fixed telecommunications
1,001,552
1,214,892
Total Revenues
21,021,566
18,937,005
EXPENSES
Cost of services
8,633,393
7,124,729
Depreciation and amortization
8,017,048
6,184,049
Personnel
1,158,733
1,629,910
Marketing
875,224
793,310
General and administration
500,044
422,082
Gain on sale of towers
(1,183,963
)
-
Gain on foreign exchange - net
(44,934
)
(93,340)
Others - net
252,118
(68,985
)
Net Expenses
18,207,663
15,991,755
OPERATING PROFIT
2,813,903
2,945,250
Interest income
69,817
47,738
Gain on change in fair value of derivatives - net
4,963
57,943
Financing cost
(2,066,224
)
(1,914,331)
Loss on foreign exchange - net
(789,438
)
(54,187
)
Other Expenses - Net
(2,780,882
)
(1,862,837)
PROFIT BEFORE INCOME TAX
33,021
1,082,413
INCOME TAX BENEFIT (EXPENSE)
Current
(103,224
)
-
Deferred
311,510
(240,946
)
Income Tax Benefit (Expense) - Net
208,286
(240,946)
PROFIT FOR THE YEAR
241,307
841,467
114
PT INDOSAT Tbk
STATEMENTS OF COMPREHENSIVE INCOME (continued)
PARENT ENTITY
Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah, except share data)
2012
2011
(Restated)
OTHER COMPREHENSIVE INCOME
Unrealized changes in fair value of available-for-
sale investment
389,718
-
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
631,025
841,467
PROFIT FOR THE YEAR ATTRIBUTABLE TO
OWNERS OF THE COMPANY
241,307
841,467
OTHER COMPREHENSIVE INCOME - NET OF TAX
ATTRIBUTABLE TO OWNERS OF THE COMPANY
389,718
-
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
ATTRIBUTABLE TO OWNERS OF THE COMPANY
631,025
841,467
BASIC AND DILUTED EARNINGS PER SHARE
ATTRIBUTABLE TO OWNERS OF THE COMPANY
44.41
154.85
BASIC AND DILUTED EARNINGS PER ADS
(50 SHARES PER ADS) ATTRIBUTABLE TO
OWNERS OF THE COMPANY
2,220.37
7,742.71
164
.
PT INDOSAT Tbk
STATEMENTS OF CHANGES IN EQUITY
PARENT ENTITY
Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah)
Description |
|
| Capital Stock - Issued and Fully Paid |
| Premium of Capital Stock |
| Retained Earnings |
| Difference in Transactions of Equity Changes in Associated Companies/Subsidiaries |
| Difference in Foreign Currency Translation |
| Difference in Transactions under Common Control |
| Total |
| ||||||||||
|
|
|
| Appropriated |
| Unappropriated |
|
| Unrealized Changes in Fair Value of Available-for-Sale Investment |
|
|
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Balance as of January 1, 2011 (previously reported) |
|
| 543,393 |
| 1,546,587 |
| 134,446 |
| 14,885,817 |
| 404,104 |
| (619) | - |
| 1,020 |
| 17,514,748 |
| |||||||
Retrospective application in applying new accounting policy | - | - | - | 20,019 | - | - | - | 20,019 | ||||||||||||||||||
Balance as of January 1, 2011 (restated) | 543,393 | 1,546,587 | 134,446 | 14,905,836 | 404,104 | (619) | - | 1,020 | 17,534,767 | |||||||||||||||||
Resolution during the Annual Stockholders’ General Meeting on June 24, 2011 |
|
| ||||||||||||||||||||||||
Declaration of cash dividend | - | - | - | (323,591) | - | - | - | - | (323,591) | |||||||||||||||||
Profit for the year |
|
| - |
| - |
| - |
| 841,467 |
| - |
| - | - |
| - |
| 841,467 |
| |||||||
Balance as of December 31, 2011 (restated) |
|
| 543,393 |
| 1,546,587 |
| 134,446 |
| 15,423,712 |
| 404,104 |
| (619) | - |
| 1,020 |
| 18,052,643 |
| |||||||
Balance as of January 1, 2012 (previously reported) |
|
| 543,393 |
| 1,546,587 |
| 134,446 |
| 15,271,490 |
| 404,104 |
| (619) | - | 1,020 |
| 17,900,421 |
| |||
Retrospective application of new accounting policy | - | - | - | 152,222 | - | - | - | - | 152,222 | ||||||||||||
Balance as of January 1, 2012 (restated) | 543,393 | 1,546,587 | 134,446 | 15,423,712 | 404,104 | (619) | - | 1,020 | 18,052,643 | ||||||||||||
Unrealized changes in fair value of available-for-sale investment | - | - | - | - | - | - | 389,718 | - | 389,718 | ||||||||||||
Resolution during the Annual Stockholders’ General Meeting on May 14, 2012 |
| ||||||||||||||||||||
Declaration of cash dividend | - | - | - | (417,489) | - | - | - | - | (417,489) | ||||||||||||
Profit for the year |
|
|
| �� - |
| - |
| 241,307 |
| - |
| - | - | - |
| 241,307 |
| ||||
Balance as of December 31, 2012 |
|
| 543,393 |
| 1,546,587 |
| 134,446 |
| 15,247,530 |
| 404,104 |
| (619) | 389,718 | 1,020 |
| 18,266,179 |
|
165
PT INDOSAT Tbk
STATEMENTS OF CASH FLOWS
PARENT ENTITY
Years Ended December 31, 2012 and 2011
(Expressed in millions of rupiah)
2012
2011
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from:
Customers
20,635,014
19,101,410
Refunds of taxes
121,953
141,271
Settlement from currency forward contracts
116,147
55,371
Interest income
70,464
47,777
Settlement from currency swap contracts
30,212
20,626
Cash paid to/for:
Authorities, other operators, suppliers and others
(9,360,781
)
(8,391,927
)
Financing cost
(2,035,630
)
(1,741,941
)
Employees
(977,154
)
(1,737,906)
Income taxes
(342,748
)
(385,965
)
Interest rate swap contracts
(82,305
)
(119,519)
Swap cost from cross currency swap contract
(35,858
)
(70,838)
Net Cash Provided by Operating Activities
8,139,314
6,918,359
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and equipment
3,004,639
6,689
Acquisitions of property and equipment
(6,499,034
)
(5,803,806)
Purchase of short-term/long-term investments
(624,679
)
-
Acquisitions of intangible assets
(576
)
(1,923
)
Proceeds from sale of other long-term investment
-
44,565
Cash dividend received from other long-term investment
-
13,790
Net Cash Used in Investing Activities
(4,119,650
)
(5,740,685
)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bonds payable
3,000,000
-
Proceeds from long-term loans
1,700,000
2,322,900
Proceeds from short-term loan
700,000
1,500,000
Settlement of derivatives contract
361
-
Repayment of long-term loans
(5,433,443
)
(3,470,130
)
Repayment of short-term loans
(1,900,000
)
-
Cash dividend paid by the Company
(417,489
)
(323,591)
Repayment of bonds payable
(200,000
)
(1,100,000)
Net Cash Used in Financing Activities
(2,550,571
)
(1,070,821
)
Net Foreign Exchange Differences from
Cash and Cash Equivalents
30,143
2,213
NET INCREASE IN CASH AND CASH EQUIVALENTS
1,499,236
109,066
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
1,304,453
1,195,387
CASH AND CASH EQUIVALENTS AT END OF YEAR
2,803,689
1,304,453
DETAILS OF CASH AND CASH EQUIVALENTS:
Time deposits with original maturities
of three months or less
and deposits on call
2,554,577
1,184,709
Cash on hand and in banks
249,112
119,744
Cash and cash equivalents as stated in the statement of
financial position
2,803,689
1,304,453
166
PT INDOSAT Tbk
NOTES TO SEPARATE FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011 / December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah, except share data)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation of Separate Financial Statements of the Parent Entity
The separate financial statements of the Parent Entity have been prepared in accordance with PSAK 4 (Revised 2009), "Consolidated and Separate Financial Statements", adopted on January 1, 2011.
PSAK 4 (Revised 2009) provides that an entity choosing to present the separate Parent Entity financial statements can only present such financial statements as additional information to the consolidated financial statements. The separate financial statements are the financial statements prepared by the Parent Entity to record its investments in subsidiaries, associated entities and jointly controlled entities through direct equity ownership and not to report on the results of operations and net assets of the investee.
The accounting policies adopted in the preparation of the separate financial statements of the Parent Entity are consistent with those made in the preparation of the Group’s consolidated financial statements as disclosed in Note 2 to the consolidated financial statements, except for investments in subsidiaries and associated entities.
Starting January 1, 2012, based on PSAK 30 (Revised 2011), when a lease includes both land and building elements, an entity should assess the classification of each element separately whether as a finance or an operating lease. As a result of the separate assessment made by the Company, taking into consideration comparison of the lease term with the reassessed economic life of the respective element and other relevant factors, each element might result in different lease classification.
As a result of the retrospective application of the PSAK 30 (Revised 2011), the Company restated its separate financial statements previously reported and disclosed an additional separate statement of financial position at the earliest comparative period as of January 1, 2011 / December 31, 2010 as required by PSAK 1 (Revised 2009):
As of January 1, 2011 / December 31, 2010:
Previously
Reported
Restated
ASSETS
Accounts receivable - trade - net
1,174,814
1,177,881
Property and equipment - net
42,502,431
43,030,290
Other non-current assets - net
1,024,169
1,565,238*
LIABILITIES
Taxes payable
120,158
123,225
Accrued expenses
1,364,450
1,447,792
Unearned income
997,063
955,396
Other current financial liabilities
20,393
49,679
Obligations under finance lease
-
416,588
Deferred tax liabilities - net
1,527,272
1,547,563
EQUITY
Retained earnings
Unappropriated
14,885,817
14,905,836
* including reclassification
167
PT INDOSAT Tbk
NOTES TO SEPARATE FINANCIAL STATEMENTS
As of December 31, 2012, December 31, 2011 (Restated)
and January 1, 2011 / December 31, 2010 (Restated)
and for the Years Ended December 31, 2012 and 2011 (Restated)
(Expressed in millions of rupiah, except share data)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
As of December 31, 2011:
Previously
Reported
Restated
ASSETS
Accounts receivable - trade - net
1,183,988
1,182,309
Property and equipment - net
41,689,543
42,656,981
Other non-current assets - net
1,019,564
1,724,860
*
LIABILITIES
Taxes payable
38,465
41,108
Unearned income
928,863
882,679
Other current financial liabilities
14,578
70,333
Obligations under finance lease
-
770,081
Deferred tax liabilities - net
1,752,946
1,788,510
EQUITY
Retained earnings
Unappropriated
15,271,490
15,423,712
For the Year Ended December 31, 2011:
REVENUES
Cellular
16,627,604
16,464,109
EXPENSES
Cost of services
7,296,216
7,124,729*
Depreciation and amortization
6,196,385
6,184,049
Marketing
961,322
793,310
General and administration
535,245
422,082
Financing cost
(1,781,009
)
(1,914,331
)
INCOME TAX EXPENSE
Deferred
(225,673
)
(240,946
)
* including reclassification
Investments in shares of subsidiaries and associated entity are recorded at cost. The Parent Entity recognizes dividends from subsidiaries and associated entities in the separate statement of comprehensive income when the right to receive the dividend is determined.
2. INVESTMENTS IN SHARES OF SUBSIDIARIES AND ASSOCIATED ENTITY
The information regarding the Company's associated entity is disclosed in Note 13 to the consolidated financial statements.
.
As of December 31, 2012 and 2011, and January 1, 2011 / December 31, 2010, the Parent Entity has investments in shares in the following subsidiaries and associated entity:
December 31, 2012 and 2011
Cost
Cost
Percentage
Acquisition
Acquisition
of
January 1,
December 31,
Entity Name
Ownership
2012
Increase
Decrease
2012
Subsidiaries
IPBV
100.00%
23,862
-
-
23,862
IFB
100.00%
22,377
-
-
22,377
IIFB
100.00%
10,447
-
-
10,447
ISPL
100.00%
5,962
-
-
5,962
IMM
99.85%
277,974
-
-
277,974
SMT
72.54%
134,709
-
-
134,709
Lintasarta
72.36%
543,296
-
-
543,296
Associated Entity
PT Multi Media Asia (“M2A”)
26.67%
56,513
-
-
56,513
Allowance for impairment
(56,513)
-
-
(56,513)
Total
1,018,627
-
-
1,018,627
January 1, 2011 / December 31, 2010
Cost
Cost
Percentage
Acquisition
Acquisition
of
January 1,
December 31,
Entity Name
Ownership
2010
Increase
Decrease
2010
Subsidiaries
IPBV
100.00%
-
23,862
-
23,862
IFB
100.00%
22,377
-
-
22,377
IIFB
100.00%
10,447
-
-
10,447
ISPL
100.00%
5,962
-
-
5,962
IMM
99.85%
277,974
-
-
277,974
SMT
72.54%
134,709
-
-
134,709
Lintasarta
72.36%
543,296
-
-
543,296
Associated Entity
PT Multi Media Asia (“M2A”)
26.67%
56,513
-
-
56,513
Allowance for impairment
(56,513
)
-
-
(56,513)
Total
994,765
23,862
-
1,018,627
168
