CONTINGENCIES continued AR TELKOM 2015 ENG.1

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2015 and for the Year Then Ended Figures in tables are expressed in billions of Rupiah, unless otherwise stated 129

42. FINANCIAL RISK MANAGEMENT continued

2. Fair value of financial assets and financial liabilities continued a. Fair value measurement continued ii The fair values of long-term financial asssets and financial liabilities other non-current assets long-term receivables and restricted cash and liabilities approximate their carrying amounts as they were measured based on the discounted future contractual cash flows. iii Available-for-sale financial assets primarily consist of mutual funds, Corporate and Government bonds. Mutual funds actively traded in an established market are stated at fair value using quoted market price or, if unquoted, determined using a valuation technique. Corporate and Government bonds are stated at fair value by reference to prices of similar securities at the reporting date. iv The fair values of long-term financial liabilities are estimated by discounting the future contractual cash flows of each liability at rates offered to the Group for similar liabilities of comparable maturities by the bankers of the Group, except for bonds which are based on market prices. The fair value estimates are inherently judgmental and involve various limitations, including: a. Fair values presented do not take into consideration the effect of future currency fluctuations. b. Estimated fair values are not necessarily indicative of the amounts that the Group would record upon disposaltermination of the financial assets and liabilities. b. Classification and fair value The following table presents the carrying value and estimated fair values of the Groups financial assets and liabilities based on their classifications, other than those with carrying amounts that are reasonable approximation of fair values: December 31, 2015 Other Total Loans and Available for financial carrying Fair Trading receivables sale liabilities amount value Cash and cash equivalents - 28,117 - - 28,117 28,117 Other current financial assets - 2,658 160 - 2,818 2,818 Trade and other receivables, net - 7,872 - - 7,872 7,872 Other non-current assets - 379 - - 379 379 Total financial assets - 39,026 160 - 39,186 39,186 Trade and other payables - - - 14,284 14,284 14,284 Accrued expenses - - - 8,247 8,247 8,247 Loans and other borrowings Short-term bank loans - - - 602 602 602 -- Long-term bank loans - - - 18,362 18,362 18,314 Bond and notes - - - 9,548 9,548 9,541 Obligation under finance lease - - - 4,580 4,580 4,580 Two-step loans - - - 1,520 1,520 1,538 Total financial liabilities - - - 57,143 57,143 57,106 December 31, 2014 As restated Other Total Loans and Available for financial carrying Fair Trading receivables sale liabilities amount value Cash and cash equivalents - 17,672 - - 17,672 17,672 Other current financial assets - 2,543 254 - 2,797 2,797 Trade and other receivables, net - 7,380 - - 7,380 7,380 Other non-current assets - 546 - - 546 546 Total financial assets - 28,141 254 - 28,395 28,395 PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2015 and for the Year Then Ended Figures in tables are expressed in billions of Rupiah, unless otherwise stated 130

42. FINANCIAL RISK MANAGEMENT continued

2. Fair value of financial assets and financial liabilities continued b. Classification and fair value continued December 31, 2014 Other Total Loans and Available for financial carrying Fair Trading receivables sale liabilities amount value Trade and other payables - - - 12,476 12,476 12,476 Accrued expenses - - - 5,211 5,211 5,211 Loans and other borrowings Short-term bank loans - - - 1,810 1,810 1,810 Long-term bank loans - - - 11,930 11,930 11,787 Obligation under finance lease - - - 4,789 4,789 4,789 Bonds and notes - - - 3,308 3,308 3,355 Two-step loans - - - 1,615 1,615 1,650 Total financial liabilities - - - 41,139 41,139 41,078 c. Fair value hierarchy The table below presents the recorded amount of financial assets measured at fair value and limited mutual funds participation unit for debt-based securities where the Net Asset Value