Employee benefits Short-term employee benefits

PT XL AXIATA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2007, 2008 AND 2009; AND 31 MARCH 2009 AND 2010 Expressed in millions of Rupiah, unless otherwise stated Page 22

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

p. Financial assets and liabilities continued Financial liabilities continued

There are no financial liabilities categorised as held for trading except for derivative payables. Gain and losses arising from changes in the fair value of derivatives that are managed in conjunction with designated financial liabilities are included in “foreign exchange gainloss”. ii Financial liabilities measured at amortised cost Financial liabilities that are not classified as at fair value through profit and loss fall into this category and are measured at amortised cost. Financial liabilities measured at amortised cost are other payables, accrued expenses, loans and bonds. Fair value estimation The fair value of financial instruments traded in active markets is determined based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Company is the current bid price. While for financial liabilities it uses offer price. The fair value of financial instruments that are not traded in active markets is determined by using valuation technique. The Company uses discounted cashflows methods and makes assumptions that are based on market conditions existing at each balance sheet date which are used to determine fair value for the remaining financial instruments.

q. Earningloss per share

Basic earningloss per share is calculated by dividing net incomeloss by the weighted average number of ordinary shares outstanding during the year. Diluted earningloss per share is calculated by dividing net incomeloss by the weighted average number of ordinary shares outstanding during the year, adjusted to assume conversion of all potential dilutive ordinary shares.

r. Dividends

Dividend distribution to the Company’s shareholders is recognised as a liability in the consolidated financial statements in the period in which the dividends are approved by the Company’s shareholders.

s. Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in Indonesia requires the management to use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. PT XL AXIATA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2007, 2008 AND 2009; AND 31 MARCH 2009 AND 2010 Expressed in millions of Rupiah, unless otherwise stated Page 23

3. CORRECTION OF THE CONSOLIDATED FINANCIAL STATEMENTS AS AT AND FOR THE

THREE-MONTH PERIOD ENDED 31 MARCH 2009 The consolidated financial statements as at and for the three-month period ended 31 March 2009 were restated to reflect the adjustments to the accounting for the finance lease transactions. Due to misinterpretation of facts, gain on finance lease transactions for the three-month period ended 31 March 2009 was understated by Rp 115 billion. This misinterpretation had the effect of understating and overstating of the following line items in the consolidated financial statements as at and for the three-month period ended 31 March 2009. 31032009 Before After Restatement Restatement Difference Consolidated balance sheets Other assets - current 80,279 105,552 25,273 Other assets - non current 1,733,576 1,826,766 93,190 Deferred tax liabilities 454,545 484,161 29,616 Consolidated statements of income Gain on finance lease transaction 333,149 448,475 115,326 Other expensesincome 46,623 49,760 3,137 Income tax expensebenefit 99,084 69,468 29,616 Net incomeloss 306,068 217,221 88,847 Earningloss per share Basic 43 31 12 Diluted 43 31 12

4. CASH AND CASH EQUIVALENTS

31122007 31122008 31122009 31032009 3103 2010 Cash on hand 1,463 1,583 1,434 1,468 1,185 Cash in bank Rupiah - PT Bank Permata Tbk 927 3,331 3,834 50,752 276,467 - Standard Chartered Bank - 30 4,049 - 173,059 - PT Bank Central Asia Tbk 28,979 18,837 12,068 13,710 32,481 - J .P.Morgan Chase Bank, N.A. 46,541 28,684 12,559 21,942 21,960 - Deutsche Bank AG 5,038 3,177 5,297 224,034 19,145 - PT Bank Mandiri Persero Tbk 4,764 1,832 3,625 1,315 2,836 - PT Bank Negara Indonesia Persero Tbk 4,853 1,603 1,800 616 1,639 - PT Bank Bukopin Tbk 539 1,411 189 4,009 291 - Others individual amount less than Rp 3,000 6,516 3,700 1,779 3,599 3,880 US Dollar - J .P.Morgan Chase Bank, N.A. 7,458 3,033 18,045 70,344 40,139 - Standard Chartered Bank 54 74 57,277 53 139 - PT Bank Mandiri Persero Tbk - - 9 - 9 105,669 65,712 120,531 390,374 572,045 Time deposits maturing within three months Rupiah - PT Bank UOB Indonesia 100,000 - 100,000 - 400,000 - PT Bank OCBC NISP Tbk formerly PT Bank NISP Tbk - - - 200,000 - - Deutsche Bank AG 67,000 53,000 50,000 - - - PT Bank DBS Indonesia 180,000 - - - - - PT Bank Central Asia Tbk - 113,908 - - -