Retirement benefits SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued w. Dividends

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2013 UNAUDITED AND FOR NINE MONTHS PERIOD ENDED WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2012 AUDITED AND FOR NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2012 UNAUDITED Figures in tables are presented in billions of Rupiah, unless otherwise stated 37 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued aa. Critical Accounting Estimates and Judgements continued

v. Impairment of non-financial assets

The Company and subsidiaries annually assess whether goodwill is impaired. Other non- financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset exceeds its recoverable amount. The recoverable amount of an asset or a cash generating unit “CGU” is determined based on the higher of its fair value less costs to sell and its value in use, calculated on the basis of management’s assumptions and estimates. In determining value in use, the Company and subsidiaries apply management judgement in establishing forecasts of future operating performance, as well as the selection of growth rates and discount rates. These judgements are applied based on our understanding of historical information and expectations of future performance. Changing the key assumptions, including the discount rates or the growth rate assumptions in the cash flow projections, could materially affect the value in use calculations. For the year ended December 31, 2012 the Company recognized Rp247 billion of impairment loss on property and equipment in pertaining to the fixed wireless services. A 1 increase in the discount rate used would result in an increase in impairment loss of approximately Rp458 billion. However, the recoverable amount of the fixed wireless CGU is most sensitive to whether management will be able to implement its plans, including the cost efficiency plan, such that it generates positive cash flows and returns to profitability as projected. If the performance of the fixed wireless CGU continues to decline or if management’s initiatives are not performing as expected in the next financial year, analysis will be required to assess whether there will be further impairment next year Note 11b.

3. PATRAKOM ACQUISITON

On September 25, 2013, the Company entered into Sales Purchase Agreement SPA with PT ELNUSA Tbk for the 40 PT Patra Telekomunikasi Indonesia “Patrakom” ownership with acquisition cost amounting to Rp45.6 billion. This SPA results in the Company’s ownership in Patrakom increased, from 40 to 80. The acquisition of patrakom has been accounted for using the purchase method of accounting, where the purchase price was allocated to the fair value of the acquired assets and assumed liabilities. PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2013 UNAUDITED AND FOR NINE MONTHS PERIOD ENDED WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2012 AUDITED AND FOR NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2012 UNAUDITED Figures in tables are presented in billions of Rupiah, unless otherwise stated 38

4. CASH AND CASH EQUIVALENTS September 30, December 31,

2013 2012 Cash on hand 28 7 Cash in banks Related parties Rupiah PT Bank Mandiri Persero Tbk “Bank Mandiri” 733 913 PT Bank Negara Indonesia Persero Tbk “BNI” 339 284 PT Bank Rakyat Indonesia Persero Tbk “BRI” 125 87 Others 22 14 1,219 1,298 Foreign currencies BRI 878 - Bank Mandiri 648 222 BNI 111 20 Others - 2 1,637 244 Sub total 2,856 1,542 Third parties Rupiah Deutsche Bank AG “DB” 46 62 PT Bank CIMB Niaga Tbk ”Bank CIMB Niaga” 68 59 Others each below Rp50 billion 116 103 230 224 Foreign currencies PT Standard Chartered Bank “SCB” 195 112 Others each below Rp50 billion 81 65 276 177 Sub total 506 401 Total cash in banks 3,362 1,943 Time deposits Related parties Rupiah BNI 4,148 1,511 BRI 3,555 2,883 Bank Mandiri 1,308 312 PT Bank Tabungan Negara Persero Tbk “BTN” 343 401 Others each below Rp30 billion 28 43 9,382 5,150 Foreign currencies BRI 1,739 1,966 BNI 581 112 Bank Mandiri 7 222 2,327 2,300 Sub total 11,709 7,450