ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of September 30, 2014 and for the Nine months Period Then Ended unaudited Figures in tables are expressed in billions of rupiah, unless otherwise stated 118

44. FINANCIAL RISK MANAGEMENT continued

1. Financial risk management continued c. Interest rate risk continued At reporting date, the interest rate profile of the Company and subsidiaries’ interest-bearing borrowings was as follows: September 30, December 31, 2014 2013 Fixed rate borrowings 9,948 9,591 Variable rate borrowings 14,942 10,665 Sensitivity analysis for variable rate borrowings At September 30, 2014, a decrease increase by 25 basis points in interest rates of variable rate borrowings would have increased decreased equity and profit or loss by Rp37 billion, respectively. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. d. Credit risk The following table presents the maximum exposure to credit risk of the Company and subsidiaries’ financial assets: September 30, December 31, 2014 2013 Cash and cash equivalents 17,834 14,696 Other current financial assets 1,584 6,872 Trade and other receivables, net 8,060 6,421 Long-term investments 21 21 Advances and other non-current assets 641 685 Total 28,140 28,695 The Company and subsidiaries are exposed to credit risk primarily from trade receivables and other receivables. The credit risk is managed by continuous monitoring of outstanding balances and collection. Trade and other receivables do not have any major concentration risk whereas no customers’ receivables balance exceeds 1 of trade receivables at September 30, 2014. Management is confident in its ability to continue to control and sustain minimal exposure to credit risk given that the Company and subsidiaries have provided sufficient provision for impairment of receivables to cover incurred loss arising from uncollectible receivables based on existing historical data on credit losses. e. Liquidity risk Liquidity risk arises in situations where the Company and subsidiaries have difficulties in fulfilling financial liabilities when they become due. Prudent liquidity risk management implies maintaining sufficient cash in order to meet the Company and subsidiaries’ financial obligations. The Company andsubsidiaries continuously perform an analysis to monitor financial position ratios, such as liquidity ratios, and debt equity ratios, against debt covenant requirements. PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of September 30, 2014 and for the Nine months Period Then Ended unaudited Figures in tables are expressed in billions of rupiah, unless otherwise stated 119

44. FINANCIAL RISK MANAGEMENT continued

1. Financial risk management continued e. Liquidity risk continued The following is the maturity profile of the Company and subsidiaries’ financial liabilities: Carrying Contractual 2014 2015 2016 2017 2018 and amount cash flows thereafter September 30, 2014 Trade and other payables 12,468 12,468 12,468 - - - - Accrued expenses 6,598 6,598 6,598 - - - - Loans and other borrowings Bank loans 15,209 18,106 7,140 1,769 2,944 2,947 3,306 Obligations under finance leases 4,779 6,527 993 240 895 862 3,537 Bonds and notes 3,159 4,409 1,410 61 228 203 2,507 Two-step loans 1,743 2,114 291 106 281 270 1,166 Total 43,956 50,222 28,900 2,176 4,348 4,282 10,516 Carrying Contractual 2018 and amount cash flows 2014 2015 2016 2017 thereafter December 31, 2013 Trade and other payables 11,988 11,988 11,988 - - - - Accrued expenses 5,264 5,264 5,264 - - - - Loans and other borrowings Bank loans 10,023 11,618 5,028 3,264 1,248 980 1,098 Obligations under finance leases 4,969 6,904 1,070 885 847 813 3,289 Two-step loans 1,915 2,308 292 285 278 271 1,182 Bonds and notes 3,349 4,817 582 1,311 215 203 2,506 Total 37,508 42,899 24,224 5,745 2,588 2,267 8,075 The difference between the carrying amount and the contractual cash flows is interest value. 2. Fair value of financial assets and financial liabilities a. Fair value measurement Fair value is the amount for which an asset could be exchanged, or liability settled, between in an arm’s length transaction. The Company and subsidiaries determined the fair value measurement for disclosure purposes of each class of financial assets and financial liabilities based on the following methods and assumptions: i The fair values of short-term financial assets and financial liabilities with maturities of one year or less cash and cash equivalents, trade receivables, other receivables, other current assets, trade payables, other payables, dividend payable, accrued expenses, advances from customers and suppliers and short-term bank loans are considered to approximate their carrying amounts as the impact of discounting is not significant .