Employee benefits SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

F-28 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

r. Employee benefits

i. Short-term employee benefits All short-term employee benefits which consist of salaries and related benefits, vacation pay, incentives and other benefits are recognized as expense on undiscounted basis when employees have rendered service to the Group. ii. Pension and post-retirement health care benefit plans The Company provides a funded defined benefit pension plan for its employees with permanent status prior to July 1, 2002, which calculation is based on the participating employees’ latest basic salary at retirement and the number of years of their service. Defined contribution pension plan is provided for its employees with permanent status on or after July 1, 2002. The Company also provides a funded defined post-employment health care benefit plan for its employees hired before November 1, 1995. Defined contribution post- employement health care benefit plan is provided for its employees with permanent status on or after November 1, 1995. Telkomsel provides a funded defined benefit pension plan to its employees, which benefit is calculated based on their latest basic salary or take-home pay and the number of years of their service. Under Law No. 13 Year 2003, the Group is required to provide minimum pension benefits, if not covered yet by the sponsored pension plans, to its employees upon retirement age. iii. Long Service Awards “LSA” and Long Service Leave “LSL” Employees of Telkomsel are entitled to receive certain cash awards or certain numbers of days leave benefits based on length of service requirements. LSA are either paid at the time the employees reach certain anniversary dates during employment, or at the time of termination. LSL is either a certain number of days leave benefit or cash, subject to approval by management, provided to employees who have met the requisite number of years of service and with a certain minimum age. The obligation with respect to LSA and LSL is calculated by an independent actuary using the projected unit credit method. iv. Early retirement benefits Early retirement benefits are accrued at the time the Company makes a commitment to provide early retirement benefits as a result of an offer made in order to encourage voluntary redundancy. A commitment to a termination arises when, and only when, a detailed formal plan for the early retirement cannot be withdrawn. F-29 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

r. Employee benefits continued