Basis of preparation of the financial statements Principles of consolidation

F-18 PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of January 1, 2012 Restated, December 31, 2012 Restated and December 31, 2013 and for the years ended December 31, 2011 Restated, 2012 Restated and 2013 Figures in tables are presented in billions of rupiah, unless otherwise stated 1. GENERAL continued

d. Subsidiaries continued

g Dayamitra On April 5, 2013, based on notarial deed No.002 dated April 5, 2013 of Andi Fatma Hasiah, S.H.,M.Kn., Dayamitra’s stockholders agreed to distribute dividend amounting to Rp31 billion which was returned as increment of issued and fully paid capital.

e. Authorization for the issuance of the consolidated financial statements

The consolidated financial statements were prepared and approved for issuance by the Board of Directors on March 25, 2014.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards “IFRS” as issued by the International Accounting Standards Board “IASB”.

a. Basis of preparation of the financial statements

The consolidated financial statements, except for the consolidated statements of cash flows, are prepared on the accrual basis. The measurement basis used is historical cost, except for certain accounts which are measured using the basis mentioned in the relevant notes herein. The consolidated statements of cash flows are prepared using the direct method and present the changes in cash and cash equivalents from operating, investing and financing activities. The consolidated financial statements provide comparative information in respect of the previous period. In addition, the Group presents an additional statement of financial position at the beginning of the earliest period presented when there is a retrospective application of an accounting policy, a retrospective restatement, or a reclassification of items in the financial statements. An additional statement of financial position as of January 1, 2012 is presented in these consolidated financial statements due to the retrospective application of IAS 19, Employee Benefits Revised 2011 Note 2aa.

b. Principles of consolidation

The consolidated financial statements consist of the financial statements of the Group. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has the power over the investee, exposure, or rights, to variable returns from its involvement with the investee, and the ability to use its power over the investee to affect its returns. F-19 PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of January 1, 2012 Restated, December 31, 2012 Restated and December 31, 2013 and for the years ended December 31, 2011 Restated, 2012 Restated and 2013 Figures in tables are presented in billions of rupiah, unless otherwise stated 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

b. Principles of consolidation continued