Page 134 - ar2012

Notes to the Financial Statements
For the fnancial year ended 31 December 2012
34. Fair value of financial instruments and their classification (cont’d)
The fair value of fnancial assets and liabilities by classes that are not carried at fair value and whose carrying amounts are not
reasonable approximation of fair value are as follows:
Group Company
2012 2011 2012 2011
Rp million Rp million Rp million Rp million
Classifcation of fnancial instruments
Financial assets:
Other non-current receivables 567,625 576,028 21 20
Trade and other receivables 1,042,394 960,238 9,159 3,253
Cash and cash equivalents 5,082,296 6,535,204 1,633,171 1,488,759
6,692,315 8,071,470 1,642,351 1,492,032
Financial liabilities:
Trade and other payables and accruals 1,605,682 1,237,955 11,311 7,524
Interest-bearing loans and borrowings 6,780,217 7,260,324 – –
Amounts due to related parties and other payables 348,674 304,560 – –
8,734,573 8,802,839 11,311 7,524
35. Financial risk management objectives and policies
The Group and the Company is exposed to fnancial risks arising from its operations and the use of fnancial instruments. The key
fnancial risks include interest rate risk, market risk (including currency risk and commodity price risk), credit risk and liquidity
risk. The audit committee provides independent oversight to the effectiveness of the risk management process. It is, and has been
throughout the current and previous fnancial year, the Group’s policy that no trading in fnancial instruments shall be undertaken.
The following sections provide details regarding the Group and Company’s exposure to the above mentioned fnancial risks and
the objectives, policies and processes for the management of these risks.
There has been no change to the Group’s exposure to these fnancial risks or the manner in which it manages and measures the risks.
(a) Interest rate risk
Interest rate risk is the risk that the fair value or future cash fows of the Group’s and the Company’s fnancial instruments
will fuctuate because of changes in market interest rates. The Group’s and the Company’s exposure to interest rate risk
mainly arises from loans and borrowings for working capital and investment purposes. There are no loans and borrowings
of the Group at fxed interest rates.
For working capital loans and borrowings, the Group may seek to mitigate its interest rate risk by passing it on to its customers.
Sensitivity analysis for interest rate risk
As at 31 December 2012, had the interest rates of the loans and borrowings been 50 basis points higher/lower (2011: 50
basis points) with all other variables held constant, proft before tax for the year ended 31 December 2012 would have been
Rp2.5 billion (2011: Rp1.5 billion) lower/higher accordingly, mainly as a result of higher/lower interest charge on the loans
and borrowings with foating interest rates.
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