Prepaid Expenses Summary of Significant Accounting and Financial Reporting Policies

PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 2014 and 2013 Figures are Presented in Millions of Rupiah,unless Otherwise Stated The carrying value of the Group’s financial assets classified as held to maturity and loans and receivables as of December 31, 2014 and 2013 are as follows: 2014 2013 Held to Maturity Short-term investments - securities - bonds 69,726 - Loans and Receivables Cash and cash in banks 2,637,727 2,599,638 Securities purchased under agreements to resell - 139,211 Short-term investments - placements with other banks 308,569 593,813 Short-term investments - time deposits 3,767,547 1,950,998 Short-term investments - securities - export bill receivables 170,213 207,001 Consumer finance receivables - net 597,058 895,987 Factoring receivables - net 1,398,689 1,144,066 Receivables from brokers 263,426 378,544 Other receivables - net 2,105,313 623,751 Loans - net 12,519,290 9,924,090 Acceptance receivables 67,836 238,324 Other assets 33,264 25,940 Total 23,868,932 18,721,363

e. Impairment of AFS Equity Investments

The Group follows the guidance of PSAK No. 55 Revised 2011 to determine when an AFS equity investment is impaired. This determination requires significant judgment. In making this judgment, the Group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of and short-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow. If all of the decline in fair value below cost were considered significant or prolonged, the Group would suffer an additional loss in consolidated financial statements, being the transfer of the accumulated fair value adjustments recognized in equity on the impaired AFS financial assets to the profit or loss.

f. Lease Commitmens

Group as Lessee The Group has entered into various lease agreements for commercial spaces. The Group has determined that it is an operating lease since the Group does not bear substantially all the significant risks and rewards of ownership of the related assets. Group as Lessor The Group has entered into various commercial lease agreements. The Group has determined that it is an operating lease since the Group bears substantially all the significant risks and rewards of ownership of the related assets. - 46 -