CONTINGENCIES continued FS TLKM Q2 2013 English

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 UNAUDITED AND FOR SIX MONTHS PERIOD ENDED WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2012 AUDITED AND FOR SIX MONTHS PERIOD ENDED JUNE 30, 2012 UNAUDITED Figures in tables are presented in billions of Rupiah, unless otherwise stated 111

44. FINANCIAL RISK MANAGEMENT continued

1. Financial risk management continued b. Market price risk The Company and subsidiaries are exposed to changes in debt and equity market prices related to available-for-sale investments carried at fair value. Gains and losses arising from changes in the fair value of available-for-sale investments are recognized in equity. The performance of the Company and subsidiaries available-for-sale investments are monitored periodically, together with a regular assesment of their relevance to the Company and subsidiaries long-term strategic plans. As of June 30, 2013, management considered the price risk for its available-for-sale investments to be immaterial in terms of the possible impact on profit or loss and total equity from a reasonably possible change in fair value. c. Interest rate risk Interest rate fluctuation is monitored to minimize any negative impact to financial position. Borrowings at variable interest rates expose the Company and subsidiaries to interest rate risk Notes 16, 17, 18, 19 and 20. To measure market risk pertaining to fluctuations in interest rates, the Company and subsidiaries primarily use interest margin and maturity profile of the financial assets and liabilities based on changing schedule of the interest rate. At reporting date, the interest rate profile of the Company and subsidiaries interest-bearing borrowings was as follows: Juni 30, December 31, 2013 2012 Fixed rate borrowings 12,070 7,025 Variable rate borrowings 7,797 12,250 Sensitivity analysis for variable rate borrowings At June 30, 2013, a change of 25 basis points in interest rates of variable rate borrowings would have increased decreased equity and profit or loss by Rp30 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: Juni 30, December 31, 2013 2012 Cash and cash equivalents 11,551 13,118 Other current financial assets 696 4,338 Trade and other receivables, net 7,139 5,409 Long-term investments 21 21 Advances and other non-current assets 455 614 Total 19,862 23,500