Bonds and notes Note 20

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2013 and for the Year Then Ended Figures in tables are expressed in billions of rupiah, unless otherwise stated 112

43. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES continued

2012 Rupiah U.S. dollar Japanese yen Others equivalent in millions in millions in millions in billions Liabilities Trade payables Related parties 1.49 - - 14 Third parties 320.34 - 2.41 3,120 Other payables 0.92 - 0.13 10 Accrued expenses 75.07 32.87 3.00 759 Short-term bank loans 0.42 - - 4 Advances from customers and suppliers 0.80 - 0.20 10 Current maturities of long-term liabilities 30.75 767.90 - 383 Promissory notes 68.62 - - 661 Long-term liabilities - net of current maturities 112.84 8,446.87 - 2,035 Total liabilities 611.25 9,247.64 5.74 6,996 Liabilities - net 96.38 9,246.31 1.14 1,964 Assets and liabilities denominated in other foreign currencies are presented as U.S. dollar equivalents using the buy and sell rates quoted by Reuters prevailing at the end of the reporting period. The Company and subsidiaries’ activities expose them to a variety of financial risks, including the effects of changes in debt and equity market prices, foreign currency exchange rates, and interest rates. If the Company and subsidiaries report monetary assets and liabilities in foreign currencies as of December 31, 2013 using the exchange rates on February 28, 2014, the unrealized foreign exchange gain will increase by Rp13 billion.

44. FINANCIAL RISK MANAGEMENT

1. Financial risk management The Company and subsidiaries activities expose them to a variety of financial risks such as market risks including foreign exchange risk and interest rate risk, credit risk and liquidity risk. Overall, the Company and subsidiaries’ financial risk management program is intended to minimize losses on the financial assets and financial liabilities arising from fluctuation of foreign currency exchange rates and the fluctuation of interest rates. Management has a written policy for foreign currency risk management mainly on time deposit placements and hedging to cover foreign currency risk exposures for periods ranging from 3 up to 12 months. Financial risk management is carried out by the Corporate Finance unit under policies approved by the Board of Directors. The Corporate Finance unit identifies, evaluates and hedges financial risks. a. Foreign exchange risk The Company and subsidiaries are exposed to foreign exchange risk on sales, purchases and borrowings that are denominated in foreign currencies. The foreign currency denominated transactions are primarily in U.S. dollar and Japanese yen. The Company and subsidiaries’ exposures to other foreign exchange rates are not material. Increasing risks of foreign currency exchange rates on the obligations of the Company and subsidiaries are expected to be offset by the effects of the exchange rates on time deposits and receivables in foreign currencies that are equal to at least 25 of the outstanding current liabilities.