CONTINGENCIES continued Telekomunikasi Indonesia Eng

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND FOR THE YEAR THEN ENDED WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2011 AND FOR THE YEAR THEN ENDED AND AS OF JANUARY 1, 2011 Figures in tables are presented in billions of Rupiah, unless otherwise stated 114

44. FINANCIAL RISK MANAGEMENT continued

1. Financial risk management continued b. Market price risk The Company and subsidiaries are exposed to changes in debt and equity market prices related to available-for-sale investments carried at fair value. Gains and losses arising from changes in the fair value of available-for-sale investments are recognized in equity. The performance of the Company and subsidiaries’ available-for-sale investments are monitored periodically, together with a regular assesment of their relevance to the Company and subsidiaries’ long-term strategic plans. As of December 31, 2012, management considered the price risk for its available-for-sale investments to be immaterial in terms of the possible impact on profit or loss and total equity from a reasonably possible change in fair value. c. Interest rate risk Interest rate fluctuation is monitored to minimize any negative impact to financial position. Borrowings at variable interest rates expose the Company and subsidiaries to interest rate risk Notes 16, 17, 18, 19 and 20. To measure market risk pertaining to fluctuations in interest rates, the Company and subsidiaries primarily use interest margin and maturity profile of the financial assets and liabilities based on changing schedule of the interest rate. At reporting date, the interest rate profile of the Company and subsidiaries’ interest-bearing borrowings was as follows: 2012 2011 Fixed rate borrowings 7,025 5,409 Variable rate borrowings 12,250 12,462 Sensitivity analysis for variable rate borrowings At December 31, 2012, a change of 25 basis points in interest rates of variable rate borrowings would have increased decreased equity and profit or loss by Rp31 billion, respectively. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.