Financial Risk Management Objectives and Policies

PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2012 and 2011 and January 1, 2011December 31, 2010 and For the Years then Ended December 31, 2012 and 2011 Figures are Presented in Millions of Rupiah, unless Otherwise Stated - 132 - c. On March 28, 2013, SMF obtained the Notice of Effectivity from the Chief Executive of the Capital Market Supervisory of Financial Services Authority OJK through his letter No. S-63D.042013 for offering Bonds of Sinar Mas Multifinance II Year 2013 with a fixed interest rate amounting to Rp 500,000 for a period of 5 five years. These bonds are scriptless and offered at 100 one hundred percent of the principal amount. Bond interest of 10.75 per annum and payable every 3 three months from the date of issuance. The bonds are secured by SMF’s receivables on consumer financing receivables, net investment in finance lease and factoring receivables.

61. Other Information

a. Transfer of Regulating and Monitoring Functions on Financial Services Activities to the Financial Services Authority OJK Starting December 31, 2012, the functions, duties and authorities of regulating and monitoring on financial service activities in capital market sector, insurance, pension fund, multifinance, and other financial services were transferred from the Minister of Finance and the Capital Market and Financial Institution Supervisory Agency Bapepam-LK to the Financial Services Authority OJK.

b. Other financial information

BS The Capital Adequacy Ratio CAR of BS were calculated in accordance with Bank Indonesia Regulation. Calculation of CAR is as follows: December 31, December 31, 2012 2011 I. Capital Stock Components A. Total Core Capital 1,692,498 1,287,028 B. Supplementary Capital 97,637 95,598 II. Total Core and Supplementary Capital 1,790,135 1,382,626 III. Risk Weighted Assets Credit risk after considering specific risk 8,615,340 9,056,263 Market risk 184,023 81,980 Operational risk 1,097,724 749,015 Total risk weight assets for credit, market and operational risk 9,897,087 9,887,258 IV. Capital Adequacy Ratio CAR CAR with credit risk 20.78 15.27 CAR with credit and market risk 20.34 15.13 CAR with credit and operational risk 18.43 14.10 CAR with credit, operational and market risk 18.09 13.98 V. Minimum Capital Adequacy Ratio 8 8 Excludes deferred taxes PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2012 and 2011 and January 1, 2011December 31, 2010 and For the Years then Ended December 31, 2012 and 2011 Figures are Presented in Millions of Rupiah, unless Otherwise Stated - 133 - AJSM and ASM Calculation of solvency margin is as follows: AJSM December 31, December 31, 2012 2011 Admitted Assets 18,063,062 15,937,391 Liabilities except subordinated loan 10,582,699 7,884,770 Total Solvency Margin 7,480,363 8,052,621 Total Minimum Solvency Margin 1,367,877 874,944 Excess of Solvency Margin 6,112,486 7,177,677 Solvency Ratio Attained 546.86 920.36 ASM December 31, December 31, 2012 2011 Admitted Assets 3,581,622 3,285,919 Liabilities except subordinated loan 1,872,350 1,890,795 Total Solvency Margin 1,709,272 1,395,124 Total Minimum Solvency Margin 569,446 425,295 Excess of Solvency Margin 1,139,826 969,829 Solvency Ratio Attained 300.16 328.04 SMS Calculation of Adjusted Net Working Capital is as follows: December 31, December 31, 2012 2011 Net Working Capital Total Current Assets 864,834 1,056,791 Total Liabilities 164,732 425,729 Total Account Liabilities 3,025 - Working Capital 697,077 631,062 Adjustment Related Parties - 1,047 Adjusted Gross Working Capital 697,077 630,015 Risk Adjustment Equity in shares recorded in BEI 122,272 49,496 Other in shares recorded in Bapepam - 15 Adjusted Net Working Capital 574,805 580,504 Adjusted Net Working Capital Compulsory 25,200 25,200 Excess Adjusted Net Working Capital 549,605 555,304 PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2012 and 2011 and January 1, 2011December 31, 2010 and For the Years then Ended December 31, 2012 and 2011 Figures are Presented in Millions of Rupiah, unless Otherwise Stated - 134 -

62. Restatements of Consolidated Financial Statements and Reclassification of Accounts

PT Asuransi Jiwa Sinarmas MSIG formerly PT Asuransi Jiwa Sinarmas and PT Asuransi Sinar Mas and its subsidiaries, subsidiaries of the Company, adopted Statements of Financial Accounting Standard PSAK No. 62, Insurance Contracts, effective January 1, 2012. In relation to adoption of this PSAK No. 62, PT Asuransi Sinar Mas and its subsidiaries had restated their consolidated financial statements as of and for the year ended December 31, 2011 and their consolidated statements of financial position as of January 1, 2011December 31, 2010. Accordingly, the Group’s consolidated financial statements as of and for the year ended December 31, 2011 and the consolidated statements of financial position as of January 1, 2011December 31, 2010 of PT Sinar Mas Multiartha Tbk and its subsidiaries have been restated from the amounts previously reported to reflect the impact of the aforementioned restatement adjustments as follows: December 31, 2011 After 31 Desember 2011 December 31, 2011 Reclassification and After Before Before Reclassification and Reclassification Reclassification Restatement Restatement Restatement CONSILIDATED STATEMENT OF FINANCIAL POSITIONS ASSETS Cash and cash equivalents 8,523,794 28,851 8,552,645 - 8,552,645 Short-term investments 15,728,859 84,676 15,813,535 - 15,813,535 Segregated funds net assets - Unit link 5,296,407 802,145 4,494,262 54,157 4,548,419 Segregated funds net assets - Sharia 116,721 116,721 - - - Premiums and reisurance receivables 406,947 2,165 409,112 - 409,112 Other receivables - net 762,746 690 763,436 - 763,436 Insurance assets - - - 1,434,475 1,434,475 Investment in shares 660,047 - 660,047 1,390 658,657 Property and equipment - net 1,138,182 115,539 1,253,721 - 1,253,721 Assets for lease - net 47,738 47,738 - - - Property under build, operate and transfer agreement 67,462 67,462 - - - Other assets 424,567 802,145 1,226,712 19,370 1,246,082 LIABILITIES Deposits and deposit from other banks 14,578,756 - 14,578,756 54,157 14,632,913 Accounts payable 303,064 303,064 - - - Insurance payable - 301,427 301,427 - 301,427 Premium received in advance 699,129 - 699,129 415,707 1,114,836 Securities agent payable 92,879 861 93,740 - 93,740 Segregated funds contract liabilities - sharia 60,962 60,962 - - - Insurance contract liabilities - - - 40,586 40,586 Unearned premium and estimated claim liabilities 814,762 - 814,762 1,038,138 1,852,900 Deferred tax liabilities 55,156 - 55,156 11,335 43,821 Other liabilities 356,096 61,738 417,834 - 417,834 EQUITY Other equity components 2,830,517 - 2,830,517 32 2,830,549 Retained earning 3,985,818 - 3,985,818 30,673 3,955,145 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME INCOME Other Income 162,169 4,225 157,944 1,422 156,522 EXPENSES Insurance underwriting expenses 14,557,919 - 14,557,919 40,586 14,598,505 Provision for impairment losses on financial assets and non-financial assets - net 68,748 4,225 64,523 - 64,523 Other financial charges 1,439 1,439 - - - Other expense 110,292 1,439 111,731 - 111,731 TAX EXPENSE Deferred 683 - 683 11,335 10,652 PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2012 and 2011 and January 1, 2011December 31, 2010 and For the Years then Ended December 31, 2012 and 2011 Figures are Presented in Millions of Rupiah, unless Otherwise Stated - 135 - January 1, 2011 January 1, 2011 January 1, 2011 December 31, 2010 31 Desember 2010 December 31, 2010 After Reclassification After Before and Before Reclassification and Reclassification Reclassification Restatement Restatement Restatement CONSILIDATED STATEMENT OF FINANCIAL POSITIONS ASSETS Cash and cash equivalents 1,980,945 7,599 1,988,544 - 1,988,544 Short-term investments 8,044,459 62,004 8,106,463 - 8,106,463 Segregated funds net assets - Unit link 7,032,319 380,077 6,652,242 402,468 7,054,710 Segregated funds net assets - Sharia 71,338 71,338 - - - Premiums and reisurance receivables 353,167 1,210 354,377 - 354,377 Other receivables - net 542,356 504 542,860 - 542,860 Reinsurance assets - - - 1,271,337 1,271,337 Property and equipment - net 738,093 104,861 842,954 - 842,954 Assets for lease - net 33,624 33,624 - - - Property under build, operate and transfer agreement 71,216 71,216 - - - Other assets 159,807 380,077 539,884 - 539,884 LIABILITIES Deposits and deposit from other banks 9,604,110 - 9,604,110 402,468 10,006,578 Accounts payable 198,852 198,852 - - - Insurance payable - 196,737 196,737 - 196,737 Securities agent payable 415,650 1,940 417,590 - 417,590 Liability for future policy benefits 2,481,280 - 2,481,280 - 2,481,280 Segregated funds contract liabilities - sharia 33,307 33,307 - - - Premiums received in advance 770,687 - 770,687 391,391 1,162,078 Unearned premium and estimated claim liabilities 674,369 - 674,369 879,946 1,554,315 Other liabilities 613,899 33,482 647,381 - 647,381

63. Impacts of Initial Adoption of PSAK

PSAK No. 50 Revised 2006 and PSAK No. 55 Revised 2006 Effective January 1, 2010, the Company and its subsidiaries adopted PSAK No. 50 Revised 2006, “Financial Instruments: Presentation and Disclosures” and PSAK No. 55 Revised 2006, “Financial Instruments: Recognition and Measurement”. In adopting the above new standards, the Company and its subsidiaries have identified the following transition adjustments in accordance with the Technical Bulletin No. 4 concerning the Transition Provisions for the First Adoption of PSAK No. 50 Revised 2006 and PSAK No. 55 Revised 2006 as issued by the Indonesian Institute of Accountants. The effect of the transition to PSAK No. 50 Revised 2006 and PSAK No. 55 Revised 2006 to the Company and its subsidiaries consolidated statement of financial position as of January 1, 2010 is set out in the following table: As reported Transition As adjusted January 1, 2010 Adjustments January 1, 2010 Assets Cash and cash equivalents 1,754,227 886 1,755,113 Short-term investments Placement with other banks 273,277 2,760 276,037 Securities 6,086,273 1,107 6,087,380 Net investment in finance lease 107,867 2,479 110,346 Factoring receivables 70,497 317 70,180 Loans 5,322,975 4,316 5,318,659 Total 13,615,116 2,599 13,617,715 Equity Retained earnings 3,597,391 2,599 3,599,990