Net Monetary Assets and Liabilities Denominated in Foreign Currencies

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 As of the end of the reporting period, the Group has the following floating rate loans, deposits and deposits from other banks and loans received. 2014 2013 Asset Loans 9,417,314 6,436,172 Liabilities Deposits and deposits from other banks 8,165,523 8,872,985 Loans received 485,650 469,692 The Group analyzes its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration refinancing, renewal of existing positions, alternative financing. For each simulation, the same interest rate is used for all currencies. Based on these scenarios, the Group calculates the impact on profit or loss of a defined interest rate shift. The scenarios are applied only for liabilities that represent the major interest-bearing positions. As of December 31, 2014 and 2013, if interest rates on loans, deposits and deposits from other banks and loans received had been 1 higherlower with all other variables held constant, post-tax profit for the year would have been higherlower amounting to Rp 575 and Rp 2,181, respectively, mainly as a result of higherlower interest income and interest expense on loans and loans received with floating interes rates. b. Foreign currency risk The Group is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the U.S. Dollar. Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities. Management has set up a policy to require Group to manage the foreign exchange risk against their functional currency. Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not the entity’s functional currency. The risk is measured using cash flow forecasts. As of December 31, 2014 and 2013, if the currency had weakenedstrengthened by 5, against the U.S. Dollar with all other variables held constant, post-tax profit for the year would have been higherlower amounting to Rp 7,984 and Rp 7,986, respectively, mainly as a result of foreign exchange gains losses on translation of financial assets and liabilities. c. Price risk The Group is exposed to equity and debt securities price risk because of investments held by the Group and classified on the consolidated statements of financial position either as available-for-sale or at fair value through profit or loss. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group. - 116 - 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 Group has investments in shares of other entities that are traded in stock exchange, investment in units of mutual funds, and investment in debt securities that would have an impact on the increasedecrease on post-tax profit for the period and other equity component. With assumption if FVPL equity and debt securities price assumption of being 1 higherlower with all other variables held constant, post-tax profit in 2014 and 2013 would have been higherlower amounting to Rp 77,839 and Rp 82,578, respectively, while if AFS’ equity and debt securities had been 1 higherlower with all other variables held constant, other equity component would have been higherlower amounting to Rp 93,208 and Rp 92,888 higherlower. Post-tax profit for the year would increasedecrease as a result of gains losses on equity securities classified as at fair value through profit or loss. Other components of equity would increasedecrease as a result of gains losses on equity securities classified as available-for-sale. To manage price risk arising from investments in debt securities, the Group performs an analysis of the offered interest rate of bonds and the required rate of return which is generally expected by the market. Liquidity Risk Liquidity risk is a risk arising when the cash flow position of the Group is not enough to cover the liabilities which become due. In the management of liquidity risk, management monitors and maintains a level of cash and cash equivalents deemed adequate to finance the Group’s operations and to mitigate the effects of fluctuation in cash flows. Management also regularly evaluates the projected and actual cash flows, including loan maturity profiles, and continuously assess conditions in the financial markets for opportunities to obtain optimal funding sources. The table below analyzes the Group’s financial liabilities into relevant maturity groupings based on the remaining period to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flow: 1 year 2 year Transaction 1 year to 2 year to 5 year 5 year Total cost Total Liabilities Deposits and deposits from other banks 17,165,314 - - - 17,165,314 - 17,165,314 Securities issued 800,000 - 500,000 - 1,300,000 6,546 1,293,454 Loans received 574,851 - - - 574,851 1,014 573,837 Acceptances payable 67,836 - - - 67,836 - 67,836 Payables to brokers 193,927 - - - 193,927 - 193,927 Accrued expenses 104,096 - - - 104,096 - 104,096 Other liabilities 260,270 - - - 260,270 - 260,270 Total liabilities 19,166,294 - 500,000 - 19,666,294 7,560 19,658,734 2014 1 year 2 year Transaction 1 year to 2 year to 5 year 5 year Total cost Total Liabilities Deposits and deposits from other banks 13,607,470 - - - 13,607,470 - 13,607,470 Acceptances payable 238,324 - - - 238,324 - 238,324 Securities issued - 800,000 500,000 - 1,300,000 9,096 1,290,904 Loans received 716,474 - - - 716,474 1,579 714,895 Payables to brokers 81,341 - - - 81,341 - 81,341 Accrued expenses 88,004 - - - 88,004 - 88,004 Other liabilities 366,369 - - - 366,369 - 366,369 Total liabilities 15,097,982 800,000 500,000 - 16,397,982 10,675 16,387,307 2013 - 117 -