Fixed assets and depreciation continued

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 19

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

n. Taxation continued

Amendments to taxation obligations are recorded when an assessment is received or, if appealed against, when the results of the appeal are determined.

o. Employee benefits Short-term employee benefits

Short-term employee benefits are recognised when they accrue to the employees. Post-employment benefits Post-employment benefits such as retirement, severance and service payments are calculated based on Labour Law No. 132003 “Law 132003”. In relation to pension benefits, in April 2002 the Company entered into a defined contributions pension plan organised by PT Asuransi Jiwa Manulife Indonesia. This programme is provided to all permanent employees who were under 50 years of age at the commencement of the programme in April 2002. Contributions to the plan are 10 of the net base salary, comprising 7 from the Company and 3 from the employee. Employees are entitled to benefits from the pension plan, comprising pension fund contributions and accumulated interest, on retirement, disability or death. In accordance with Law 132003, the Company has further payment obligations if the benefits provided by the existing plan do not adequately cover the obligations under Law 132003. The liabilities recognised in the consolidated balance sheets are the present values of the defined benefit obligations as at the balance sheet date in accordance with Law 132003 or the Company’s regulations whichever is higher, less the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit obligation is calculated by an independent actuary using the projected unit credit method. In calculating post-employment benefits, the independent actuary has considered the contribution made by the Company to PT Asuransi Jiwa Manulife Indonesia. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using the interest rates of Government Bonds con sidering currently there is no deep market for high-quality corporate Bonds that are denominated in Rupiah, in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability. Actuarial gains and losses arising from experience adjustments, changes in actuarial assumptions and amendments to pension plans in excess of 10 of the fair value of plan assets or 10 of the present value of the defined benefit obligations are charged or credited to con solidated statements of income over the employees’ expected average remaining service lives. Past-service costs are recognised immediately in the consolidated statements of income, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time the vesting period. In this case, the past-service costs are amortised on a straight-line basis over the vesting period. 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 20

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued