Financial Guarantee Contracts 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

e. Deferred Tax Assets

Deferred tax assets are recognized for all temporary differences between the financial statements’ carrying amounts of existing assets and liabilities and their respective taxes bases to the extent that it is probable that taxable profit will be available against which the temporary differences can be utilized. Significant management estimates are required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. The carrying value of deferred tax assets is disclosed in Note 48.

f. Impairment of Non-Financial Assets

Impairment review is performed when certain impairment indicators are present. Determining the fair value of assets requires the estimation of cash flows expected to be generated from the continued use and ultimate disposition of such assets. Any significant changes in the assumptions used in determining the fair value may materially affect the assessment of recoverable values and any resulting impairment loss could have a material impact on results of operations. The carrying value of these assets in form of investment in shares at acquisition cost, investment properties, property and equipment, and foreclosed properties are as disclosed in Notes 17, 18, 19 and 20.

4. Cash and Cash in Banks

These consist of: 2014 2013 Cash on hand Rupiah 324,054 347,327 Foreign currencies Note 51 49,244 30,897 Total - cash on hand 373,298 378,224 Cash in banks Third parties Rupiah PT Bank Mayapada Internasional Tbk 144,140 40 Standard Chartered Bank, Indonesia 97,133 723 PT Bank Central Asia Tbk 46,134 37,603 PT Bank International Indonesia Tbk - Sharia Division 21,793 46,575 PT Bank Negara Indonesia Persero Tbk 10,385 9,198 PT Bank CIMB Niaga Tbk 9,256 4,669 PT Bank Internasional Indonesia Tbk 7,943 15,773 PT Bank Permata Tbk 6,150 119,355 PT Bank CIMB Niaga Tbk - Sharia Division 4,745 5,181 PT Bank Mandiri Persero Tbk 3,667 6,350 PT Bank Mega Tbk 78 8,647 Others below Rp 5,000 each 15,243 17,493 Total 366,667 271,607 - 49 - 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 2014 2013 Cash in banks Third parties Foreign currencies Note 51 Bank of China, Australia 39,577 16,801 PT Bank Central Asia Tbk 39,468 22,002 Deutsche Bank Trust Company Americas, United States of Americ 26,859 21,556 PT Bank ICBC Indonesia 20,070 61 United Overseas Bank, Singapore 15,035 26,302 Bank of America, Merill Lynch, United States of America 15,010 13,172 PT Bank Mandiri Persero Tbk 14,849 38,687 Bank of China, Jakarta 13,059 12,274 Deutsche Bank AG, Germany 10,647 17,787 Bank International Ningbo, China 9,163 10,789 Wells Fargo Bank, N.A, England 8,583 8,863 OCBC, Singapore 7,722 6,811 Bank of China, China 7,341 8,235 Sumitomo Mitsui Banking Corporation, United States of America 6,565 105 PT Bank Internasional Indonesia Tbk 5,753 3,307 Others below Rp 5,000 each 14,249 17,046 Total 253,950 223,798 Total - Cash in banks 620,617 495,405 Demand deposits with Bank Indonesia Rupiah 1,174,543 1,043,323 Foreign currency Note 51 359,642 418,155 Total 1,534,185 1,461,478 Funds placed in securities companies Related party Foreign currency Note 51 15,439 10,887 Segregated funds net assets - Unit link Rupiah 57,984 36,687 Foreign currency Note 51 36,204 216,957 Total 94,188 253,644 Total 2,637,727 2,599,638 According to the regulation of Bank Indonesia, each bank in Indonesia is required to maintain a minimum liquidity reserve of a certain percentage of third party funds both in Rupiah and foreign currency. As of December 31, 2014 and 2013, the balance of primary minimum liquidity reserves of BS, a subsidiary, in Rupiah, amounted to Rp 1,078,761 and Rp 793,580, respectively, while the minimum liquidity reserves in foreign currency amounted to Rp 358,449 and Rp 417,270, respectively. As of December 31, 2014 and 2013, secondary minimum liquidity reserves of BS, in Rupiah, amounted to Rp 517,237 and Rp 387,219, respectively. The minimum liquidity reserves as of December 31, 2014 and 2013 were determined in accordance with Bank Indonesia Regulation. As of December 31, 2014 and 2013, no allowance for impairment losses was provided on cash and cash in banks as management believes that cash and cash in banks are collectible. - 50 - 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

5. Short-term Investments

2014 2013 Time deposits 3,767,547 1,950,998 Placements with Bank Indonesia and other banks 2,057,957 1,736,252 Segregated funds net assets - Unit link 1,727,537 2,418,851 Securities - net 17,641,482 18,435,875 Total Net 25,194,523 24,541,976

a. Time deposits

2014 2013 Third parties Rupiah Banks PT Bank Rakyat Indonesia Persero Tbk 659,690 55,640 PT Bank Bukopin Tbk 500,200 360,200 PT Bank OCBC NISP Tbk 384,680 42,000 PT Bank Victoria International Tbk 299,300 260,100 PT Bank Permata Tbk 298,832 25,000 PT Bank Mandiri Persero Tbk 251,300 11,000 PT Bank Internasional Indonesia Tbk 187,560 355,876 PT Bank CIMB Niaga Tbk 176,000 25,550 PT Bank Mayapada Internasional Tbk 164,254 2,600 PT BPD Sumatera Utara 100,000 - PT BPD Jawa Barat dan Banten Tbk 75,800 500 PT Bank Danamon Indonesia Tbk 50,000 - PT Bank Artha Graha Internasional Tbk 50,000 25 PT Bank CIMB Niaga Tbk - Sharia Divison 49,750 15,250 PT Bank Permata Tbk - Sharia Division 37,450 25,950 PT Bank Tabungan Pensiun Nasional Tbk 37,000 220,000 PT BRI Syariah 31,100 38,850 PT Bank Mutiara Tbk 31,000 75,200 PT BPR Modern Express 30,000 100,000 PT Bank Muamalat Indonesia Tbk 26,200 9,500 PT BPD Jawa Barat dan Banten Tbk - Sharia Division 21,000 1,000 PT Bank Mega Tbk 20,000 50,000 PT Bank Syariah Mandiri 17,810 20,310 PT BNI Syariah 14,250 14,000 PT Bank Syariah Bukopin 14,050 15,050 PT Bank DKI Syariah 13,150 5,400 PT Bank Internasional Indonesia Tbk - Sharia Division 12,300 11,300 PT Bank OCBC NISP Tbk - Sharia Division 11,950 12,450 PT Bank Dinar 10,110 25,610 PT BCA Syariah 7,600 7,100 PT Bank Victoria Syariah 5,300 3,300 PT Bank Syariah Mega Indonesia - Sharia 5,250 6,250 PT Bank Tabungan Negara Persero Tbk 5,100 5,750 PT Bank Capital Indonesia Tbk 5,000 5,000 PT Bank Negara Indonesia Persero Tbk 1,250 7,900 PT Bank ICB Bumiputera Indonesia Tbk 1,100 7,100 PT Bank Windu Kentjana International Tbk 550 6,300 PT Bank Central Asia Tbk - 24,171 Others below Rp 5,000 each 16,774 12,700 Total 3,622,660 1,863,932 - 51 - 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 2014 2013 Third parties Rupiah Foreign currencies Note 51 PT Bank Permata Tbk 68,420 - PT Bank Internasional Indonesia Tbk 31,869 49,065 PT Bank OCBC NISP Tbk 24,461 - PT Bank Mandiri Persero Tbk 14,743 7,916 PT Bank Central Asia Tbk - 23,281 Others below Rp 5,000 each 669 2,377 Total 140,162 82,639 PT Kliring Berjangka Indonesia 3,626 3,406 PT Kliring Penjaminan Efek Indonesia 1,099 1,021 Total 4,725 4,427 Total 3,767,547 1,950,998 The interest rates per annum on time deposits are as follows: 2014 2013 Rupiah 4.25 - 13.50 5.50 - 15.00 Foreign currency 0.15 - 3.00 0.40 - 3.00 Short-term Investments in the form of time deposits included time deposits with maturities of more than three 3 months and guarantee deposits, in compliance with the regulation of the Minister of Finance of the Republic of Indonesia under the name of the Minister of Finance on behalf of the subsidiary and time deposits of SMS and SF, subsidiaries, placed with PT Kliring Penjaminan Efek Indonesia and PT Kliring Berjangka Indonesia, respectively. As of December 31, 2014 and 2013, no allowance for impairment losses was provided on time deposits as management believes that all such time deposits are collectible.

b. Placements with Bank Indonesia and other banks

2014 2013 Bank Indonesia 1,749,388 1,142,439 Other banks 308,569 593,813 Total 2,057,957 1,736,252 As of December 31, 2014 and 2013, placements with Bank Indonesia are classified as available for sale financial assets, whereas placements with other banks are classified as financial assets in loans and receivables category. - 52 - 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 Placements with other banks as of December 31, 2014 and 2013, represent placements by BS, a subsidiary, with details as follows: 2014 2013 Rupiah Negotiable Certificates of Deposits 42,900 - Call money 20,000 - Time deposits - 40,000 Total 62,900 40,000 Foreign currencies Note 51 Call money 243,851 432,113 Deposito on call 1,818 - Time deposits - 121,700 Total 245,669 553,813 Total 308,569 593,813 The interest rates per annum on placements with Bank Indonesia and other banks are as follows: 2014 2013 Rupiah 5.75 - 9.50 5.75 - 8.50 Foreign currency 0.03 - 1.00 0.12 - 2.50 As of December 31, 2014 and 2013, the details of Rupiah call money, NCD, and time deposits are as follows: 2014 2013 PT Bank Tabungan Negara Persero Tbk 24,079 - PT Bank Ekspor Indonesia 20,000 20,000 PT Bank Commonwealth 18,821 - PT Bank Pundi - 20,000 Total 62,900 40,000 Nama of Bank As of December 31, 2014 and 2013, details of call money, NCD, and time deposits in foreign currencies are as follows: 2014 2013 Standard Chartered Bank, New York, USA 120,001 85,268 Well Fargo Bank, National Association, New York, USA 86,695 298,165 PT Bank Capital Indonesia Tbk 37,155 48,680 UBS AG, Singapore 1,818 - PT Bank Muamalat Indonesia Tbk - 121,700 245,669 553,813 Name of Bank As of December 31, 2014 and 2013, no allowance for impairment losses was provided on placement with other banks as management believes that all placements with Bank Indonesia and other banks are collectible. - 53 -