Income tax SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued r. Employee benefits continued

PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued SEPTEMBER 30, 2007 AND 2008, AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2007 AND 2008 Figures in tables are presented in millions of Rupiah, unless otherwise stated 29

3. TRANSLATION OF RUPIAH INTO UNITED STATES DOLLARS

The consolidated financial statements are stated in Indonesian Rupiah “Rupiah”. The translations of Indonesian Rupiah amounts into U.S. Dollars are included solely for the convenience of the readers and have been made using the average of the market buy and sell rates of Rp.9,430 to US1 as published by Reuters on September 30, 2008. The convenience translations should not be construed as representations that the Indonesian Rupiah amounts have been, could have been, or could in the future be, converted into United States Dollars at this or any other rate of exchange.

4. ACQUISITIONS OF SIGMA

On February 21, 2008, Metra and Sigma’s stockholders, PT Sigma Citra Harmoni and Trozenin Management Plc signed an Amendment to the Sales and Purchase of Shares Agreement which authorized Metra to acquire 80 of the outstanding common stock of Sigma for US35.2 million or equivalent to Rp.331,052 million. The acquisition of Sigma has been accounted for using the purchase method of accounting, which purchase price were allocated to fair value of the acquired assets and assumed liabilities. The allocation of the acquisition cost was as follows: Rp. Purchase consideration 331,052 Fair value of net assets acquired: - Current assets 120,369 - Fixed assets 65,511 - Goodwill 37,924 - Intangible assets 256,354 - Other non-current assets 30,935 - Current liabilities 64,172 - Long-term liabilities 30,308 - Deferred tax liabilities 85,561 Fair value of net assets as at February 22, 2008 331,052 The fair value of acquired assets and recognized liabilities was determined by an independent appraisal. The intangible assets represent long-term contract, software and trademark Note 14. The Company’s consolidated results of operations has included the operating results of Sigma since March 1, 2008 being the nearest convenient consolidated balance sheet date. PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued SEPTEMBER 30, 2007 AND 2008, AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2007 AND 2008 Figures in tables are presented in millions of Rupiah, unless otherwise stated 30

5. CASH AND CASH EQUIVALENTS 2007

2008 Cash on hand 35,895 37,212 Cash in banks Related parties Rupiah PT Bank Negara Indonesia Persero Tbk “BNI” 98,413 149,229 PT Bank Mandiri Persero Tbk “Bank Mandiri” 171,009 142,741 PT Bank Rakyat Indonesia Persero Tbk “BRI” 28,007 10,183 PT Bank Pos Nusantara 1,367 132 PT Bank Syariah Mandiri ”BSM” - 34 PT Bank Tabungan Negara Persero Tbk “BTN” - 15 298,796 302,334 Foreign currencies Bank Mandiri 38,971 65,251 BNI 18,778 18,483 BRI 621 682 BSM - 30 58,370 84,446 Sub-total 357,166 386,780 Third parties Rupiah ABN AMRO Bank “AAB“ 78,798 94,416 Deutsche Bank AG “DB” 17,786 40,876 PT Bank Central Asia Tbk “BCA” 14,529 22,993 Citibank, N.A. “Citibank” 6,349 11,636 PT Bank Bukopin Tbk “Bank Bukopin” 6,412 7,085 PT Bank Ekonomi Raharja Tbk ”Bank Ekonomi” - 3,790 PT Bank Niaga Tbk ”Bank Niaga” 1,698 2,987 PT Bank Lippo Tbk ”Bank Lippo” 2,683 2,235 PT Bank DKI - 2,077 Others each below Rp.1 billion 2,481 1,721 130,736 189,816 Foreign currencies AAB 9,316 42,368 DB 12,061 12,979 Citibank 10,368 8,878 Bank Ekonomi - 3,137 Others each below Rp.1 billion 240 556 31,985 67,918 Sub-total 162,721 257,734 Total cash in banks 519,887 644,514