GENERAL continued Changes in Capital Structure of the Subsidiaries continued

PT SUMMARECON AGUNG Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2013 AND DECEMBER 31, 2012, 2011 AND 2010 AND FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012 UNAUDITED AND YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010 Expressed in thousands of rupiah, unless otherwise stated 42 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued t. Foreign currency transactions and balances The Company and Subsidiaries have adopted PSAK No. 10 Revised 2010, “The Effects of Changes in Foreign Exchange Rates”. Transactions involving foreign currencies are recorded at the rates of exchange prevailing at the time the transactions are made. At the end of the reporting period, monetary assets and liabilities denominated in foreign currencies are adjusted to reflect the average of the selling and buying rates of exchange prevailing at the last banking transaction date of the year, as published by Bank Indonesia, and the resulting gains or losses are credited or charged to current operations. As of June 30, 2013 and December 31, 2012, 2011 and 2010, the rates of exchange used were as follows: December 31, June 30, 2013 2012 2011 2010 Full amounts Full amounts Full amounts Full amounts 1 European euro Euro 12,977 12,810 11,739 11,956 1 United States dollar US 9,929 9,670 9,068 8,991 1 Singapore dollar Sin 7,841 7,907 6,974 6,981 Transactions in other foreign currencies are considered not significant.

u. Provisions

Provisions are recognized when the Company and Subsidiaries have a present obligation legal or constructive where, as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

v. Income tax

The Company and Subsidiaries have applied PSAK No. 46 Revised 2010, “Income Taxes”. The revised PSAK No.46 prescribes the accounting treatment for income taxes to account for current and future taxes consequences of the future recovery settlement of the carrying amount of assets liabilities that are recognized in the consolidated statements of financial position; and transactions and other events of the current period that are recognized in the consolidated financial statements. Based on Government Regulation No. 5 dated March 23, 2002, income from shopping center rental is subject to a final tax of 10, except for income on rental contracts signed prior to such regulation which is subject to 6. On November 4, 2008, the President of the Republic of Indonesia and the Minister of Law and Human Rights signed Government Regulation No. 712008 PP No. 712008 on “the third changes on PP No. 481994 regarding payment of income tax on income from transfer of rights on land andor building”. This regulation provides that, effective January 1, 2009, the income of a taxpayer from transactions of transferring rights on land andor building, will be subjected to final tax of 5.