CONTINGENCIES continued ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2016 and For the Six Months Period Then Ended unaudited Figures in tables are expressed in billions of rupiah, unless otherwise stated 113

38. FINANCIAL RISK MANAGEMENT continued

1. Fair value of financial assets and financial liabilities continued a. Classification continued ii. Financial liabilites June 30, December 31, 2016 2015 ii. Financial liabilities measured at amortised cost Trade payables and other payables 14,167 14.284 Accrued expenses 9,978 8.247 Loans and other borrowings Short-term bank loans 686 602 Two-step loans 1,485 1.520 Bonds and notes 9,513 9.548 Long-term bank loans 17,755 18.362 Obligation under finance lease 4,552 4.580 Total financial liabilities 58,136 57.143 b. Fair value Fair value measurement at reporting date using Quoted prices in active markets Significant for identical other Significant assets or observable unobservable Carrying liabilities inputs inputs June 30, 2016 amount Fair Value level 1 level 2 level 3 Financial assets Available-for-sale securities 161 161 60 101 - Fair value through profit or loss 172 172 - - 172 Total 333 333 60 101 172 Financial liabilities for which fair value are disclosed Liabilities Two-step loans 1,485 1,521 - - 1,521 Bonds and notes 9,513 9,953 9,405 - 548 Long-term bank loans 17,755 17,785 - - 17,785 Obligation under finance lease 4,552 4,552 - - 4,552 Total 33,305 33,811 9,405 - 24,406 PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2016 and For the Six Months Period Then Ended unaudited Figures in tables are expressed in billions of rupiah, unless otherwise stated 114

38. FINANCIAL RISK MANAGEMENT continued

1. Fair value of financial assets and financial liabilities continued b. Fair value continued Fair value measurement at reporting date using Quoted prices in active markets Significant for identical other Significant assets or observable unobservable Carrying liabilities inputs inputs December 31, 2015 amount Fair Value level 1 level 2 level 3 Financial assets Available-for-sale securities 160 160 55 105 - Fair value through profit or loss 172 172 - - 172 Total 332 332 55 105 172 Financial liabilities for which fair value are disclosed Liabilities Two-step loans 1.520 1.538 - - 1.538 Bonds and notes 9.548 9.541 8.972 - 569 Long-term bank loans 18.362 18.314 - - 18.314 Obligation under finance lease 4.580 4.580 - - 4.580 Total 34.010 33.973 8.972 - 25.001 Available-for-sale financial assets primarily consist of mutual funds, and Corporate and Government bonds. Corporate and Government bonds are stated at fair value by reference to prices of similar securities at the reporting date. As they are not actively traded in an established market, these securities are classified as level 2. Financial asset at fair value through profit or loss represents the Put Option on the 20 remaining ownership in Indonusa which was received as part of the divestment considerations. Since the fair value is not observable and valuation technique is used to determine the fair value, this financial asset is classified as level 3. Reconciliations of the beginning and ending balances for items measured at fair value using significant unobservable inputs level 3 as of June 30, 2016 and 2015 are as follows: 2016 2015 Beginning balance 172 290 Unrealized loss - recognized in consolidated statement of profit or loss and other comprehensive income - - Ending balance 172 290