Fiber optics lease agreement

PT XL AXIATA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2007, 2008 AND 2009; AND 31 MARCH 2009 AND 2010 Expressed in millions of Rupiah, unless otherwise stated Page 65

36. FINANCIAL ASSETS AND LIABILITIES continued

Interest rate risk Interest rate exposure is monitored to minimise any negative impact to the Company. Borrowings issued at variable rates expose the Company to cash flow interest rate risk. To measure market risk fluctuations in interest rates, the Company primarily uses interest margin and spread analysis, and enters into cross currency and interest rate swap contracts to hedge the foreign currency interest loans from interest rate uncertainty. The following table represents a breakdown of the Company’s financial asset and financial liabilities which are impacted by interest rates. 31032010 Floating rate Fixed Rate Non Less than More than Less than More than interest one year one year one year one year bearing Total Asset Cash and cash equivalents 1,383,405 - - - - 1,383,405 Trade receivables - - - - 696,482 696,482 Other receivables - - - - 17,101 17,101 Derivative receivables - - - 50,125 - 50,125 Other assets - - 36,036 296,568 - 332,604 Total financial assets 1,383,405 - 36,036 346,693 713,583 2,479,717 Liabilities Trade payables - - - - 2,167,645 2,167,645 Accrued expenses - - - - 567,755 567,755 Derivative payables - - 151,062 106,811 - 257,873 Long-term l oans 3,081,980 8,526,796 - - - 11,608,776 Long-term bonds - - - 1,496,723 - 1,496,723 Total financial liabilites 3,081,980 8,526,796 151,062 1,603,534 2,735,400 16,098,772 Total interest repricing gap 1,698,575 8,526,796 115,026 1,256,841 - 11,597,238 Credit risk Credit risk arises from favourable derivatives financial instruments with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables. For banks, only independent parties with a good rating are accepted. The compliance with a credit limits by customers is regularly monitored by line management. Sales to retailers are required to be settled in cash. For derivative financial instruments, management has established criteria such that, only independent parties with a good rating are accepted.