PT TELEKOMUNIKASI INDONESIA

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13 a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE
ACT OF 1934

For the month of May , 20 09

Perusahaan Perseroan (Persero)
PT TELEKOMUNIKASI INDONESIA

(Translation of registrant’s name into English)

Jalan Japati No. 1 Bandung-40133 INDONESIA

(Address of principal executive office)

[Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.]

Form 20-F þ Form 40-F o

[Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934]

Yes o No þ

[If “yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ]

Enclosure: 2007 Annual Report of Perusahaan Perseroan (Persero) PT TELEKOMUNIKASI INDONESIA

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
MARCH 31, 2008 AND 2009
(Figures in tables are presented in millions of Rupiah and thousands of United States Dollars)


		2008		2009
	Notes	Rp.		Rp.		US$(Note 3)
ASSETS

CURRENT ASSETS
Cash and cash equivalents	2c,2e,5,43		9,830,473		6,509,704		563,367
Temporary investments	2c,2f,43		186,708		287,558		24,886
Trade receivables	2c,2g,6,36,43
Related parties — net of allowance for doubtful accounts of Rp.130,703 million in 2008 and Rp.114,447 million in 2009			399,786		770,121		66,648
Third parties — net of allowance for doubtful accounts of Rp.1,161,958 million in 2008 and Rp.1,174,383 million in 2009			2,658,133		3,003,901		259,965
Other receivables — net of allowance for doubtful accounts of Rp.10,719 million in 2008 and Rp.7,734 million in 2009	2c,2g,43		122,953		102,809		8,897
Inventories — net of allowance for obsolescence of Rp.56,868 million in 2008 and Rp.68,111 million in 2009	2h,7,36		253,898		493,683		42,725
Prepaid expenses	2c,2i,8,43		1,226,795		2,087,031		180,617
Claims for tax refund	37, 52		408,011		222,954		19,295
Prepaid taxes	37, 52		71,366		803,700		69,554
Other current assets	2c,9,43		75,686		43,201		3,739

Total Current Assets			15,233,809		14,324,662		1,239,693

NON-CURRENT ASSETS
Long-term investments — net	2f,10		140,261		170,184		14,728
Property, plant and equipment — net of accumulated depreciation of Rp.56,472,320 million in 2008 and Rp.64,853,338 million in 2009	2k,2l,4,11, 19,20,22,52		60,392,109		71,165,921		6,158,885
Property, plant and equipment under Revenue-Sharing Arrangements — net of accumulated depreciation of Rp.524,688 million in 2008 and Rp.272,514 million in 2009	2m,12,33,45		664,787		453,847		39,277
Prepaid pension benefit cost	2i,2r,40		557		176		15
Advances and other non-current assets	2c,2k,2o,13, 28,43,47		1,624,082		2,260,788		195,655
Goodwill and other intangible assets — net of accumulated amortization of Rp.5,389,667 million in 2008 and Rp.6,641,019 million in 2009	2d,2j,4, 14,36,52		3,743,962		2,873,087		248,644
Escrow accounts	2c,15,43		1,285		44,105		3,817

Total Non-current Assets			66,567,043		76,968,108		6,661,021

TOTAL ASSETS			81,800,852		91,292,770		7,900,714

See accompanying notes to consolidated financial statements, which form an integral part of the consolidated financial statements.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED) (continued)
MARCH 31, 2008 AND 2009
(Figures in tables are presented in millions of Rupiah and thousands of United States Dollars)


		2008		2009
	Notes	Rp.		Rp.		US$ (Note 3)
LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Trade payables	2c,16,43
Related parties			577,569		1,238,113		107,150
Third parties			4,845,103		8,954,257		774,925
Other payables			50,509		23,168		2,005
Taxes payable	2s,37		1,554,280		1,163,836		100,721
Accrued expenses	2c,17,34,43		3,069,501		3,383,731		292,837
Unearned income	2q,18		2,477,559		2,794,029		241,803
Advances from customers and suppliers			174,824		711,724		61,594
Short-term bank loans	2c,19,43		215,814		42,612		3,688
Current maturities of long-term liabilities	2c,2l,20,43		4,567,427		6,980,674		604,126

Total Current Liabilities			17,532,586		25,292,144		2,188,849

NON-CURRENT LIABILITIES
Deferred tax liabilities — net	2s,37		3,023,781		2,898,126		250,811
Unearned income on Revenue-Sharing Arrangements	2m,12,45		443,013		267,392		23,141
Accrued long service awards	2c,2r,41,43		76,806		108,722		9,409
Accrued post-retirement health care benefits	2c,2r,42,43		2,894,582		2,553,531		220,989
Accrued pension and other post-retirement benefits costs	2c,2r,40,43		1,324,308		1,057,509		91,520
Long-term liabilities — net of current maturities
Obligations under finance leases	2l,11,20		209,515		292,772		25,337
Two-step loans — related party	2c,20,21,43		3,688,710		3,874,738		335,330
Bank loans	2c,20,22,43		3,830,987		6,393,675		553,325
Deferred consideration for business combinations	20,23		2,117,166		1,179,701		102,095

Total Non-current Liabilities			17,608,868		18,626,166		1,611,957

MINORITY INTEREST	24		10,556,996		10,581,091		915,715

See accompanying notes to consolidated financial statements, which form an integral part of the consolidated financial statements.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED) (continued)
MARCH 31, 2008 AND 2009
(Figures in tables are presented in millions of Rupiah and thousands of United States Dollars)


		2008			2009
	Notes	Rp.			Rp.			US$ (Note 3)
STOCKHOLDERS’ EQUITY
Capital stock — Rp.250 par value per Series A Dwiwarna share and Series B share
Authorized — 1 Series A Dwiwarna share and 79,999,999,999 Series B shares
Issued and fully paid — 1 Series A Dwiwarna share and 20,159,999,279 Series B shares	1c,25		5,040,000			5,040,000			436,175
Additional paid-in capital	2u,26		1,073,333			1,073,333			92,889
Treasury stock — 337,293,000 shares in 2008 and 490,574,500 shares in 2009	2u,27		(3,030,368	)		(4,264,114	)		(369,028	)
Difference in value arising from restructuring transactions and other transactions between entities under common control	2d,28		270,000			360,000			31,155
Difference due to change of equity in associated companies	2f		385,595			385,595			33,370
Unrealized holding gain from available-for-sale securities	2f		12,586			1,653			143
Translation adjustment	2f		228,914			239,055			20,688
Retained earnings
Appropriated			6,700,879			10,557,985			913,716
Unappropriated			25,421,463			23,399,862			2,025,085

Total Stockholders’ Equity			36,102,402			36,793,369			3,184,193

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			81,800,852			91,292,770			7,900,714

See accompanying notes to consolidated financial statements, which form an integral part of the consolidated financial statements.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS PERIOD ENDED MARCH 31, 2008 AND 2009

(Figures in tables are presented in millions of Rupiah and thousands of United States Dollars,
except per share and per ADS data)


		2008			2009
	Notes	Rp.			Rp.			US$ (Note 3)
OPERATING REVENUES
Telephone	2q,29
Fixed lines			2,540,438			2,116,593			183,176
Cellular			5,966,083			6,517,451			564,037

Interconnection	2c,2q,30,43
Revenues			3,041,324			2,659,347			230,147
Expenses			(781,585	)		(743,834	)		(64,373	)

Net			2,259,739			1,915,513			165,774
Data, internet and information technology services	2q,31		3,944,676			3,715,768			321,572
Network	2c,2q,32,43		218,807			263,470			22,801
Revenue-Sharing Arrangements	2m,12,33,45		97,936			43,773			3,788
Other telecommunications services	2q		3,924			129,610			11,217

Total Operating Revenues			15,031,603			14,702,178			1,272,365

OPERATING EXPENSES
Depreciation	2k,2l,2m, 11,12,13,52		2,500,577			2,964,718			256,574
Personnel	2c,2r,17,34, 40,41,42,43		2,246,902			1,904,766			164,843
Operations, maintenance and telecommunication services	2c,2q,35,43		2,506,173			3,288,635			284,607
General and administrative	2g,2h,2q,6, 7,14,36,52		858,482			841,257			72,805
Marketing	2q		376,981			414,604			35,881

Total Operating Expenses			8,489,115			9,413,980			814,710

OPERATING INCOME			6,542,488			5,288,198			457,655

OTHER (EXPENSES) INCOME
Interest income	2c,43		174,205			138,451			11,982
Equity in net income (loss) of associated companies	2f,10		(874	)		931			81
Interest expense	2c,43		(263,146	)		(517,388	)		(44,776	)
Loss on foreign exchange — net	2p		(45,655	)		(211,718	)		(18,323	)
Others — net	52		102,916			56,371			4,878

Other expenses — net			(32,554	)		(533,353	)		(46,158	)

INCOME BEFORE TAX			6,509,934			4,754,845			411,497

TAX (EXPENSE) BENEFIT	2s,37
Current			(2,058,376	)		(1,405,610	)		(121,645	)
Deferred			5,363			6,747			584

			(2,053,013	)		(1,398,863	)		(121,061	)

INCOME BEFORE MINORITY INTEREST IN NET INCOME OF CONSOLIDATED SUBSIDIARIES			4,456,921			3,355,982			290,436

MINORITY INTEREST IN NET INCOME OF CONSOLIDATED SUBSIDIARIES — net	24		(1,249,587	)		(898,098	)		(77,724	)

NET INCOME			3,207,334			2,457,884			212,712

BASIC EARNINGS PER SHARE	2w,38
Net income per share			161.50			124.46			0.01
Net income per ADS (40 Series B shares per ADS)			6,460.00			4,978.40			0.40

See accompanying notes to consolidated financial statements, which form an integral part of the consolidated financial statements.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)
THREE MONTHS PERIOD ENDED MARCH 31, 2008 AND 2009
(Figures in tables are presented in millions of Rupiah)


									Difference
									in value
									arising from
									restructuring
									transactions
									and other				Unrealized
									transactions		Difference		holding
									between		due to change		gain
				Additional					entities under		of equity		on available-
		Capital		paid-in		Treasury			common		in associated		for-sale		Translation			Retained earnings				Stockholders’
Descriptions	Notes	stock		capital		stock			control		companies		securities		adjustment			Appropriated		Unappropriated		equity
		Rp.		Rp.		Rp.			Rp.		Rp.		Rp.		Rp.			Rp.		Rp.		Rp.
Balance, January 1, 2008			5,040,000		1,073,333		(2,176,611	)		270,000		385,595		11,237		230,017			6,700,879		22,214,129		33,748,579

Unrealized holding gain on available-for-sale securities	2f		—		—		—			—		—		1,349		—			—		—		1,349

Foreign currency translation of associated company	2f,10		—		—		—			—		—		—		(1,103	)		—		—		(1,103	)

Treasury stock acquired — at cost	2u,27		—		—		(853,757	)		—		—		—		—			—		—		(853,757	)

Net income for the period			—		—		—			—		—		—		—			—		3,207,334		3,207,334

Balance, March 31, 2008			5,040,000		1,073,333		(3,030,368	)		270,000		385,595		12,586		228,914			6,700,879		25,421,463		36,102,402

See accompanying notes to consolidated financial statements, which form an integral part of the consolidated financial statements.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED) (continued)
THREE MONTHS PERIOD ENDED MARCH 31, 2008 AND 2009
(Figures in tables are presented in millions of Rupiah)


									Difference
									in value
									arising from
									restructuring
									transactions
									and other				Unrealized
									transactions		Difference		holding
									between		due to change		gain (loss)
				Additional					entities under		of equity		on available-
		Capital		paid-in		Treasury			common		in associated		for-sale			Translation		Retained earnings				Stockholders’
Descriptions	Notes	stock		capital		stock			control		companies		securities			adjustment		Appropriated		Unappropriated		equity
		Rp.		Rp.		Rp.			Rp.		Rp.		Rp.			Rp.		Rp.		Rp.		Rp.
Balance, January 1, 2009			5,040,000		1,073,333		(4,264,073	)		360,000		385,595		(19,066	)		238,319		10,557,985		20,941,978		34,314,071

Unrealized holding gain on available-for-sale securities	2f		—		—		—			—		—		20,719			—		—		—		20,719

Foreign currency translation of subsidiaries	1d,2b		—		—		—			—		—		—			736		—		—		736

Treasury stock acquired — at cost	2u,27		—		—		(41	)		—		—		—			—		—		—		(41	)

Net income for the period			—		—		—			—		—		—			—		—		2,457,884		2,457,884

Balance, March 31, 2009			5,040,000		1,073,333		(4,264,114	)		360,000		385,595		1,653			239,055		10,557,985		23,399,862		36,793,369

See accompanying notes to consolidated financial statements, which form an integral part of the consolidated financial statements.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

THREE MONTHS PERIOD ENDED MARCH 31, 2008 AND 2009
(Figures in tables are presented in millions of Rupiah and thousands of United States Dollars)


	2008			2009
	Rp.			Rp.			US$ (Note 3)
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from operating revenues
Telephone
Fixed lines		2,503,591			2,117,409			183,246
Cellular		6,045,820			6,609,813			572,031
Interconnection — net		2,376,289			1,676,398			145,080
Data, internet and information technology services		3,937,349			3,517,751			304,435
Other services		352,792			455,429			39,414

Total cash receipts from operating revenues		15,215,841			14,376,800			1,244,206
Cash payments for operating expenses		(5,820,282	)		(6,306,827	)		(545,809	)
Cash receipt from customers		33,328			569,313			49,270

Cash generated from operations		9,428,887			8,639,286			747,667

Interest received		174,829			151,759			13,134
Interest paid		(236,489	)		(571,434	)		(49,453	)
Income tax paid		(3,208,328	)		(966,307	)		(83,627	)

Net cash provided by operating activities		6,158,899			7,253,304			627,721


CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of temporary investments and maturity of time deposits		40,784			4,242			367
Purchases of temporary investments and placements in time deposits		(21,548	)		(4,036	)		(349	)
Proceeds from sale of property, plant and equipment		5,298			844			73
Acquisition of property, plant and equipment		(3,600,112	)		(5,031,228	)		(435,416	)
Increase in advances for purchases of property, plant and equipment		(169,857	)		(917,871	)		(79,435	)
Increase in advances and other assets		(33,885	)		(40,907	)		(3,540	)
Business combinations, net of cash paid		(323,541	)		—			—
Acquisition of intangible assets		—			(2,013	)		(174	)
Acquisition of long-term investments		(28,923	)					—
Cash dividends received		618			863			75
Increase in escrow accounts		—			6,745			584

Net cash used in investing activities		(4,131,166	)		(5,983,361	)		(517,815	)


CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings		11,312			5,713			494
Repayments of short-term borrowings		(371,763	)		(13,500	)		(1,168	)
Proceeds from long-term borrowings		—			304,399			26,343
Repayment of long-term borrowings		(993,484	)		(1,889,197	)		(163,496	)
Payment for purchases of treasury stock		(853,757	)		(41	)		(4	)
Repayment of promissory notes		(101,355	)		(123,927	)		(10,725	)
Repayment of obligations under finance leases		(3,980	)		(59,747	)		(5,171	)

Net cash used in financing activities		(2,313,027	)		(1,776,300	)		(153,727	)

See accompanying notes to consolidated financial statements, which form an integral part of the consolidated financial statements.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (continued)
THREE MONTHS PERIOD ENDED MARCH 31, 2008 AND 2009
(Figures in tables are presented in millions of Rupiah and thousands of United States Dollars)


	2008			2009
	Rp.			Rp.			US$ (Note 3)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(285,294	)		(506,357	)		(43,821	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		(25,024	)		126,116			10,914

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		10,140,791			6,889,945			596,274

CASH AND CASH EQUIVALENTS AT END OF PERIOD		9,830,473			6,509,704			563,367


SUPPLEMENTAL CASH FLOW INFORMATION

Non-cash investing and financing activities:

Acquisition of property, plant and equipment through incurrence of payables		4,263,679			6,988,865			604,835
Acquisition of property, plant and equipment through finance leases		19,829			82,001			7,097

See accompanying notes to consolidated financial statements, which form an integral part of the consolidated financial statements.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2008 AND 2009,
AND THREE MONTHS PERIOD ENDED MARCH 31, 2008 AND 2009
(Figures in tables are presented in millions of Rupiah, unless otherwise stated)


1.		GENERAL

	a.		Establishment and general information

			Perusahaan Perseroan (Persero) P.T. Telekomunikasi Indonesia Tbk (the “Company”) was originally part of “Post en Telegraafdienst”, which was established in 1884 under the framework of Decree No. 7 dated March 27, 1884 of the Governor General of the Dutch Indies and was published in State Gazette No. 52 dated April 3, 1884.

			In 1991, the status of the Company was changed into a state-owned limited liability corporation (“Persero”) based on the Government Regulation No. 25/1991.

			The Company was established based on notarial deed No. 128 dated September 24, 1991 of Imas Fatimah, S.H.. The deed of establishment was approved by the Minister of Justice of the Republic of Indonesia in his Decision Letter No. C2-6870.HT.01.01.Th.1991 dated November 19, 1991, and was published in No. 5 dated January 17, 1992, Supplement No. 210. The Articles of Association have been amended several times, the latest amendments were to comply with Law No. 40/2007 of the Limited Liability Companies, Law No. 19/2003 of the National State-owned Companies and Badan Pengawas Pasar Modal dan Lembaga Keuangan Indonesia (“BAPEPAM-LK”) Regulation No. IX.J.1 of Main Provisions of the Articles of Association of Company that Make an Equity Public Offering and Public Company and to add the Company’s purposes and objectives based on notarial deed No. 27 dated July 15, 2008 of A. Partomuan Pohan, S.H., LLM. and notification of this amendment was received by the Minister of Justice and Human Rights of the Republic of Indonesia (“MoJHR”) as in his Letter No. AHU.46312.AH.01.02/2008 dated July 31, 2008 and was published in State Gazette of the Republic of Indonesia No. 84 dated October 17, 2008, Supplement of the Republic of Indonesia No. 20155.

			In accordance with Article 3 of the Company’s Articles of Association, the scope of its activities is to provide telecommunication network and services, informatics and optimization of the Company’s resources in accordance with prevailing regulations. To achieve this objective, the Company is involved in the following activities:

	i.		Planning, building, providing, developing, operating, marketing or selling, leasing and maintaining telecommunications and information networks in accordance with prevailing regulations.

	ii.		Planning, developing, providing, marketing or selling and improving telecommunications and information services in accordance with prevailing regulations.

	iii.		Providing payment transactions and money transferring services through telecommunications and information networks.

	iv.		Performing activities and other undertakings in connection with optimization of the Company’s resources, among others the utilization of the Company’s property, plant and equipment and moving assets, information systems, education and training, and repairs and maintenance facilities.

The Company’s head office is located at Jalan Japati No. 1, Bandung, West Java.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
MARCH 31, 2008 AND 2009,
AND THREE MONTHS PERIOD ENDED MARCH 31, 2008 AND 2009
(Figures in tables are presented in millions of Rupiah, unless otherwise stated)


1.		GENERAL (continued)

	a.		Establishment and general information (continued)

			Pursuant to Law No. 3/1989 on Telecommunications (effective on April 1, 1989), Indonesian legal entities are allowed to provide basic telecommunications services in cooperation with the Company as the domestic telecommunications organizing body (or “badan penyelenggara”). The Government Regulation No. 8/1993 relating to the provision of the telecommunications services regulates that cooperation to provide basic telecommunications services can be in the form of a joint venture, joint operation or contractual arrangement and that the entities cooperating with the domestic telecommunications organizing body must use the organizing body’s telecommunications networks. If the telecommunications networks are not available, the Government Regulation requires that the cooperation be in the form of a joint venture that is capable of constructing the necessary networks. The Minister of Tourism, Post and Telecommunication of the Republic of Indonesia (“MTPT”) reaffirmed the status of the Company as the organizing body for the provision of domestic telecommunication services through two Decision Letters both dated August 14, 1995.

			The provision of domestic telecommunications services of the Company, includes telephone, telex, telegram, satellite, leased lines, electronic mail, mobile communication and cellular services. Pursuant to this, in 1995, the Company entered into agreements with investors to develop, manage and operate telecommunications facilities in five of the Company’s seven regional divisions (“Divre”) under Joint Operation Schemes (known as “Kerja Sama Operasi” or “KSO”), in order to:

	(1)		accelerate the construction of telecommunication facilities,

	(2)		make the Company a world-class operator, and

	(3)		increase the technology as well as knowledge and skills of its employees.

			Historically, the Company had exclusive right to provide local wireline and fixed wireless services for a minimum period of 15 years and the exclusive right to provide domestic long-distance (“Sambungan Langsung Jarak Jauh” or “SLJJ”) telecommunications services for a minimum period of 10 years, effective January 1, 1996. Such exclusive rights also applied to telecommunications services provided for and on behalf of the Company through a KSO. This grant of rights did not affect the Company’s right to provide other domestic telecommunications services.

			In 1999, the Government of the Republic of Indonesia (the “Government”) passed Telecommunications Law No. 36, which took effect in September 2000. This Law states that the telecommunication activities cover:

	(1)		Telecommunications networks,

	(2)		Telecommunications services, and

	(3)		Special telecommunications.

National state-owned companies (“Badan Usaha Milik Negara” or “BUMN”), regional state-owned companies, privately-owned companies and cooperatives are allowed to provide telecommunications networks and services. Special telecommunications can be provided by individuals, Government Agencies and legal entities other than telecommunications networks and service providers. The Telecommunications Law prohibits activities that result in monopolistic practices and unfair competition, and expects to pave the way for market liberalization. In connection with this Law, Government Regulation No. 52/2000 was issued, which provides that interconnection fees shall be charged to originating telecommunications network operators where telecommunications service is provided by two or more telecommunications network operators.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

MARCH 31, 2008 AND 2009,
AND THREE MONTHS PERIOD ENDED MARCH 31, 2008 AND 2009
(Figures in tables are presented in millions of Rupiah, unless otherwise stated)


1.		GENERAL (continued)

	a.		Establishment and general information (continued)

			On press release No. 05/HMS/JP/VIII/2000 dated August 1, 2000 of the Directorate General of Post and Telecommunications (“DGPT”), as corrected by No. 1718/UM/VIII/2000 dated August 2, 2000, the period for exclusive rights granted to the Company to provide local and SLJJ fixed-line telecommunications services, were shortened from the expiration period of December 2010 to August 2002 and from December 2005 to August 2003. In return, the Government was required to pay compensation to the Company (Notes 13 and 28). Further, on press release of the Coordinating Minister of Economics of the Republic of Indonesia dated July 31, 2002, the Government terminated the Company’s exclusive right as a network provider for local and SLJJ services effective August 1, 2002. On August 1, 2002, PT Indonesian Satellite Corporation Tbk (“Indosat”) was granted a license to provide local and SLJJ telecommunications services.

			The Company has a commercial license to provide International Direct Dialing (“IDD”) services based on the Minister of Communications of the Republic of Indonesia (“MoC”) Decree No. KP. 162/2004 dated May 13, 2004.

Company’s Board of Commissioners, Directors and employees

	1.		Board of Commissioners and Directors

			Based on resolutions made at (i) the Extraordinary General Meeting (“EGM”) of Stockholders of the Company dated February 28, 2007 as covered by notarial deed No. 16 of A. Partomuan Pohan, S. H., LLM., as amended through the Annual General Meeting (“AGM”) of Stockholders of the Company dated June 29, 2007 as covered by notarial deed No. 58 of the same notary; and (ii) EGM of Stockholders of the Company dated September 19, 2008 as covered by notarial deed No. 16 of the same notary, the composition of the Company’s Board of Commissioners and Directors as of March 31, 2008 and 2009, respectively, were as follows:


	2008	2009
President Commissioner	Tanri Abeng	Tanri Abeng
Commissioner	Anggito Abimanyu	Bobby A.A Nazief
Commissioner	Mahmuddin Yasin	Mahmuddin Yasin
Independent Commissioner	Arif Arryman	Arif Arryman
Independent Commissioner	Petrus Sartono	Petrus Sartono
President Director	Rinaldi Firmansyah	Rinaldi Firmansyah
Vice President Director/ Chief Operating Officer (“COO”)	** (see Note below)	* (see Note below)
Director of Finance	Sudiro Asno	Sudiro Asno
Director of Network and Solution	Ermady Dahlan	Ermady Dahlan
Director of Enterprise and Wholesale	Arief Yahya	Arief Yahya
Director of Consumer	I Nyoman Gede Wiryanata	I Nyoman Gede Wiryanata
Director of Compliance and Risk Management	Prasetio	Prasetio
Chief Information Technology Officer	Indra Utoyo	Indra Utoyo
Director of Human Capital and General Affairs	Faisal Syam	Faisal Syam


*		COO is held by Director of Network and Solution in 2009

**		Position is vacant in 2008

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


1.		GENERAL (continued)

Company’s Board of Commissioners, Directors and employees (continued)

	1.		Board of Commissioners and Directors (continued)

			Based on AGM of Stockholders of the Company dated June 29, 2007, the Company’s stockholders agreed to replace Gatot Trihargo as the Company’s Commissioner to Mahmuddin Yasin.

			Based on Board of Commissioners’ Decision Letter dated February 15, 2008, the Board of Commissioners agreed to appoint Ermady Dahlan as Director of Network and Solution and I Nyoman Gede Wiryanata as Director of Consumer effective from March 1, 2008.

			Based on Letter No. S-584/KF/2008 dated June 20, 2008, Anggito Abimanyu resigned from his position as a member of Company’s Board of Commissioners effective from August 20, 2008.

			Based on Board of Commissioners‘ Letter to the President Director No. 125/SRT/DK/2008/RHS dated July 25, 2008, the Board of Commissioners agreed to proceed the appointment of COO, including the role of its position as Director of Network and Solution.

			Based on the EGM of Stockholders of the Company dated September 19, 2008, the Company’s stockholders agreed to appoint Bobby A.A. Nazief as a member of the Company’s Board of Commissioners for filling in the vacant position with a five year term and to extend the term of service of the Company’s Board of Commissioners whose members were elected in the EGM of Stockholders of the Company dated March 10, 2004, which should expire on March 10, 2009, to be extended on the date of the AGM of Stockholders of the Company in 2009.

	2.		Employees

			As of March 31, 2008 and 2009, the Company and its subsidiaries had 33,438 and 30,288 employees, respectively.

	c.		Public offering of shares of the Company

			The Company’s shares prior to its Initial Public Offering (“IPO”) totaled 8,400,000,000, consisting of 8,399,999,999 Series B shares and 1 Series A Dwiwarna share, and were 100%-owned by the Government. On November 14, 1995, 933,333,000 new Series B shares and 233,334,000 Series B shares owned by the Government were offered to public through IPO at the Indonesia Stock Exchange (“IDX”) (previously the Jakarta Stock Exchange and the Surabaya Stock Exchange) and 700,000,000 Series B shares owned by the Government were offered to the public and listed on the New York Stock Exchange (“NYSE”) and the London Stock Exchange (“LSE”), in the form of American Depositary Shares (“ADS”). There are 35,000,000 ADS and each ADS represents 20 Series B shares at that time.

			In December 1996, the Government had a block sale of its 388,000,000 Series B shares, and in 1997, had distributed 2,670,300 Series B shares as incentive to the Company’s stockholders who did not sell their shares within one year from the date of the IPO. In May 1999, the Government further sold 898,000,000 Series B shares.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


1.		GENERAL (continued)

	c.		Public offering of shares of the Company (continued)

			To comply with Law No. 1/1995 of the Limited Liability Companies, at the AGM of Stockholders of the Company on April 16, 1999, the Company’s stockholders resolved to increase the Company’s issued share capital by distribution of 746,666,640 bonus shares through the capitalization of certain additional paid-in capital, which were distributed to the Company’s stockholders in August 1999. On August 16, 2007, the Law No. 1/1995 of the Limited Liability Companies has been amended by the issuing of Law No. 40/2007 of the Limited Liability Companies which become effective at the same date. The Law No. 40/2007 has no effect to the public offering of shares of the Company. The Company has complied with Law No. 40/2007.

			In December 2001, the Government had another block sale of 1,200,000,000 shares or 11.9% of the total outstanding Series B shares. In July 2002, the Government had sold 312,000,000 shares or 3.1% of the total outstanding Series B shares.

			At the AGM of Stockholders of the Company dated July 30, 2004, as covered by notarial deed No. 26 of A. Partomuan Pohan, S.H., LLM., the Company’s stockholders approved the Company’s 2-for-1 stock split for Series A Dwiwarna and Series B. For Series A Dwiwarna share with par value of Rp.500, the split was into 1 Series A Dwiwarna share with par value of Rp.250 per share and 1 Series B share with par value of Rp.250 per share. The stock split resulted to an increase of the Company’s authorized capital stock from 1 Series A Dwiwarna share and 39,999,999,999 Series B shares into 1 Series A Dwiwarna share and 79,999,999,999 Series B shares, and the issued capital stock from 1 Series A Dwiwarna share and 10,079,999,639 Series B shares into 1 Series A Dwiwarna share and 20,159,999,279 Series B shares. After the stock split, each ADS represented 40 Series B shares.

			Based on EGM of Stockholders of the Company on December 21, 2005, AGM of Stockholders of the Company on June 29, 2007 and AGM of Stockholders of the Company on June 20, 2008, the Company’s stockholders approved the phase I, II and III plan, respectively, to repurchase the Company’s issued Series B shares (Note 27).

			As of March 31, 2009, all of the Company’s Series B shares were listed on the IDX and 51,767,700 ADS shares were listed on the NYSE and LSE.

	d.		Subsidiaries

			As of March 31, 2008 and 2009, the Company has consolidated the following direct or indirectly owned subsidiaries which it controls as a result of majority ownership (Notes 2b and 2d):

			*(i)* *Direct subsidiaries:*

Nature of business/

Percentage of

date of incorporation

Date of

effective

Total assets

Subsidiary/place of

or acquisition by

commercial

ownership interest

before elimination

incorporation

the Company

operation

2008

2009

2008

2009

PT Pramindo Ikat Nusantara (“Pramindo”), Medan, Indonesia

Telecommunication construction and services/August 15, 2002

1995

100

1,222,583

1,146,543

PT Telekomunikasi Indonesia International (“TII”) (formerly PT Aria West International (“AWI”)), Jakarta, Indonesia

Telecommunication/July 31, 2003

1995

100

626,059

659,251

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


1.		GENERAL (continued)

	d.		Subsidiaries (continued)

			*(i)* *Direct subsidiaries:* (continued)


	Nature of business/			Percentage of
	date of incorporation	Date of		effective				Total assets
Subsidiary/place of	or acquisition by	commercial		ownership interest				before elimination
incorporation	the Company	operation		2008		2009		2008		2009
PT Multimedia Nusantara (“Metra”), Jakarta, Indonesia	Multimedia telecommunication services/May 9, 2003		1998		100		100		649,451		837,616

PT Graha Sarana Duta (“GSD”), Jakarta, Indonesia	Leasing of offices and providing building management and maintenance services, civil consultant and developer/April 25, 2001		1982		99.99		99.99		153,866		170,329

PT Dayamitra Telekomunikasi (“Dayamitra”), Jakarta, Indonesia	Telecommunication/May 17, 2001		1995		100		100		437,253		411,503

PT Indonusa Telemedia (“Indonusa”), Jakarta, Indonesia	Pay television and content services/May 7, 1997		1997		98.75	100 (including through 1.25% ownership by Metra)			135,220		131,318

PT Telekomunikasi Selular (“Telkomsel”), Jakarta, Indonesia	Telecommunication — provides telecommunication facilities and mobile cellular services using Global System for Mobile Communication (“GSM”) technology/May 26, 1995		1995		65		65		43,133,467		52,945,199

PT Napsindo Primatel Internasional (“Napsindo”), Jakarta, Indonesia	Telecommunication — provides Network Access Point (NAP), Voice Over Data (VOD) and other related services/ December 29, 1998	1999; ceased operation on January 13, 2006			60		60		4,910		4,910

PT Infomedia Nusantara (“Infomedia”), Jakarta, Indonesia	Data and information service — provides telecommunication information services and other information services in the form of print and electronic media and call center services/September 22,1999		1984		51		51		500,645		578,689

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


1.		GENERAL (continued)

	d.		Subsidiaries (continued)

			*(ii)* *Indirect subsidiaries:*

Nature of business/

Percentage of

date of incorporation

Date of

effective

Total assets

Subsidiary/place of

or acquisition by

commercial

ownership interest

before elimination

incorporation

subsidiary

operation

2008

2009

2008

2009

Aria West International Finance B.V. (“AWI BV”), The Netherlands

Established to engaged in rendering services in the field of trade and finance services/June 3, 1996

1996; ceased operation on July 31, 2003

100 (through
100%
ownership by
TII)

1,848

1,642

Telekomunikasi Selular Finance Limited (“TSFL”), Mauritius

Finance — establish to raise funds for the development of Telkomsel ’s business through the issuance of debenture stock, bonds, mortgages or any other securities/April 22, 2002

2002

65 (through
100%
ownership by
Telkomsel)

PT Balebat Dedikasi Prima (“Balebat”), Bogor, Indonesia

Printing/October 1, 2003

2000

33.15 (through 65% ownership by Infomedia)

50,168

93,490

Telkomsel Finance B.V., (“TFBV”), Amsterdam, The Netherlands

Finance — establish in 2005 for the purpose of borrowing, lending and raising funds including issuance of bonds, promissory notes or debts/
February 7, 2005

2005

65 (through
100%
ownership by
Telkomsel)

8,489

10,638

PT Finnet Indonesia (“Finnet”), Jakarta, Indonesia

Banking data and communication/
October 31, 2005

2006

60
(through
60%
ownership
by Metra)

18,764

24,676

PT Telekomunikasi Indonesia International Pte. Ltd., Singapura

Finance/December 6, 2007

2008

100 (through
100%
ownership
by TII)

—

98,225

PT Sigma Cipta Caraka (“Sigma”), Tangerang, Indonesia

Information technology service — system implementation and integration service, outsourcing and software license maintenance/May 1, 1987

1988

80
(through
80%
ownership
by Metra)

266,613

353,593

	(a)		TII

			On March 6, 2007, based on notarial deed No. 3 of Titien Suwartini, S.H. and as approved by the MoJHR in its Decision Letter No. W8-00573.HT.01.04-TH.2007 dated March 14, 2007 and the Capital Investment Coordinating Board in its Decision Letter No. 20/III/PMDN/2007 dated March 1, 2007, PT Aria West International has changed its name to PT Telekomunikasi Indonesia International and its business operation has been expanded to include international businesses.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

GENERAL (continued)

Subsidiaries (continued)

	(a)		TII (continued)

			On December 31, 2008, pursuant to Third Amendment to Cooperation Agreement between the Company and TII No. K.Tel.665/HK.820/UTA-00/2008 regarding Management and Development of International Business, the Company has agreed to amend the transfer of international telecommunications business from the Company to become management and development of international business in the form of service operator partnership scheme.

	(b)		Metra

			Based on the Circular Meeting of Stockholders of Metra on December 13, 2007, Metra’s stockholders agreed as follows: (1) increase its authorized capital from Rp.200,000 million to Rp.1,000,000 million with a par value of Rp.10,000 per share; (2) increase its issued and fully paid capital from Rp.62,250 million to Rp.412,250 million by issuing 35,000,000 new shares; (3) to limit the maximum additions to issued capital for funding the acquisition of Sigma amounting to Rp.335,000 million, and for the acquisition cost as well as Metra’s business development amounting to a maximum of Rp.15,000 million; (4) approve a total of 35,000,000 new shares to be issued and fully paid by the Company; and (5) approval of the on acquisition of a maximum 80% ownership interest in Sigma, a company engaged in providing information system services.

			On December 18, 2007, Metra entered into a Conditional Sales and Purchase Agreement (“CSPA”) with Sigma’s stockholders for the acquisition (Note 4).

			On January 21, 2008, the Company paid Rp.350,000 million for additional capital to Metra pursuant to Circular Meeting of Stockholders of Metra on December 13, 2007. The acquisition of Sigma’s transaction was completed through the signing of an Amendment to the Sales and Purchase of Shares Agreement on February 21, 2008 which became effective from February 22, 2008 (the “closing date”).

			On July 3, 2008, based on notarial deed No. 6 of Wahyu Nurani, S.H. dated July 3, 2008, Metra entered into a Commitment of Sales and Purchase of Shares Agreement (“Perjanjian Pengikatan Jual Beli Saham” or PPJB) to purchase 6,000,000 Indonusa’s shares or equivalent to 1.25% of Indonusa’s total ownership with a transaction value of Rp.6,600 million from PT Datakom Asia (“Datakom”).

			On July 17, 2008, based on notarial deed No. 133 of Sutjipto, S.H., M.Kn. dated July 17, 2008, Metra obtained funding for the purchase through equity call from the addition of Metra’s issued capital from Rp.412,250 million to Rp.418,850 million. On July 17, 2008, based on notarial deed No. 134 of Sutjipto, S.H., M.Kn. dated July 17, 2008, Metra exercised the sales and purchase of share transaction (Note 1d.c).

			Based on Circular Meeting of Stockholders of Metra on March 23, 2009, as covered by notarial deed No. 64 of Sutjipto, S.H., M.Kn., dated April 16, 2009, Metra’s stockholders agreed increase its authorized capital from Rp.418,850 million to Rp.485,679 million with a par value of Rp.10,000 per share. The authorized capital of Rp.34,829 million was paid by conversion on the Company’s receivable to Metra.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

GENERAL (continued)

Subsidiaries (continued)

	(c)		Indonusa

			At the EGM of Stockholders of Indonusa on May 9, 2007, Indonusa’s stockholders resolved to: (1) stock split of Indonusa’s shares par value from Rp.10,000 to Rp.500 per share; (2) increase its issued capital from Rp.200,000 million consisting of 20,000,000 shares to Rp.700,000 million consisting of 1,400,000,000 shares, as amended by the Decision of Circular Meeting of Stockholders of Indonusa on December 28, 2007. The change increased Company’s paid-in capital from Rp.66,500 million to Rp.237,713 million through payment and a debt to equity swap, as follows:

	—		The Company had paid for the increase in share capital phase I to Indonusa on June 5, 2007 and August 13, 2007 amounting to Rp.21,624 million and Rp.976.3 million, respectively.

	—		A payment for the increase in share capital for phase II was made on November 26, 2007 amounting to Rp.65,986 million.

	—		On December 19, 2007, Indonusa’s debt to the Company amounting to Rp.82,627 million was converted into ownership of shares of stock of Indonusa.

			Pursuant to the payment for the additional share capital and the debt swap to equity, the Company’s ownership in Indonusa has increased from 95.68% to 98.75%.

			Based on Circular Meeting of Stockholders of Indonusa on July 17, 2008 as covered by notarial deed No. 64 of Dr. Wiratni Ahmadi, S.H. dated August 25, 2008, Indonusa’s stockholders has agreed to transfer Datakom’s ownership in Indonusa of 6,000,000 shares to Metra (Note 1d.b).

			Pursuant to the transfer of the ownership, the Company’s ownership in Indonusa has increased to 100% (including through 1.25% ownership by Metra).

	(d)		Telkomsel

			On February 14, 2006, Telkomsel was granted the International Mobile Telecommunications-2000 (“IMT-2000”) or 3^rd Generation technology (“3G”) license in the 2.1 Gigahertz (“GHz”) frequency bandwidth for a 10 year period by the Minister of Communication and Information Technology of the Republic of Indonesia (“MoCI”), based on its Decision Letter No. 19/KEP/M.KOMINFO/2/2006. The license is extendable subject to evaluation (Notes 14 and 47c.ii). Telkomsel started its commercial services for 3G in September 2006.

			On October 11, 2006, Telkomsel’s operating licenses were updated by MoCI based on Decision Letter No. 101/KEP/M.KOMINFO/10/2006, granting Telkomsel the rights to provide: (i) Mobile telecommunication services with radio frequency bandwidth in the 900 Megahertz (“MHz”) and 1800 MHz bands; (ii) Mobile telecommunication services IMT-2000 with radio frequency bandwidth in the 2.1 GHz bands (3G); and (iii) Basic telecommunication services.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

GENERAL (continued)

Subsidiaries (continued)

	(d)		Telkomsel (continued)

			Based on Decision Letter No. 213/DIRJEN/2008 dated August 4, 2008, the Ministry of Communication and Information Technology through the DGPT granted Telkomsel a principle license to provide Internet Telephony Services (Voice over Internet Protocol or “VoIP”) which provision is subject to an operation acceptance test within one year.

			Based on Bank Indonesia’s (“BI”) letter No. 10/632/DASP dated August 12, 2008, Telkomsel has been registered as a Money Remitter with register No. 10/12/DASP/10 dated August 12, 2008 to provide remittance service.

	e.		Authorization of the consolidated financial statements

			The consolidated financial statements were authorized for issue by the Board of Directors on May 8, 2009.

2.		SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

		The consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with generally accepted accounting principles in Indonesia (“Indonesian GAAP”).

	a.		Basis of preparation of financial statements

			The consolidated financial statements, except for the consolidated statements of cash flows, are prepared on the accrual basis of accounting. The measurement basis used is historical cost, except for certain accounts recorded on the basis described in the related accounting policies.

			The consolidated statements of cash flows are prepared using the direct method and present the changes in cash and cash equivalents from operating, investing and financing activities.

			Figures in the consolidated financial statements are rounded to and presented in millions of Indonesian Rupiah (“Rp.”), unless otherwise stated.

	b.		Principles of consolidation

			The consolidated financial statements include the financial statements of the Company and its subsidiaries in which the Company, directly or indirectly has ownership of more than 50%, or the Company has the ability to control the entity, even though the ownership is less than or equal to 50%. Subsidiaries are consolidated from the date on which effective control is obtained and are no longer consolidated from the date of disposal.

			All significant inter-company balances and transactions have been eliminated on the consolidated financial statements.

	c.		Transactions with related parties

			The Company and its subsidiaries have transactions with related parties. The definition of related parties used is in accordance with Indonesian Statement of Financial Accounting Standards (Pernyataan Standar Akuntansi Keuangan or “PSAK”) 7, “Related Party Disclosures”.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

	d.		Acquisitions of subsidiaries

			The acquisition of a subsidiary from a third party is accounted for using the purchase method of accounting. The cost of an acquisition is allocated to the identifiable assets and liabilities recognized using as reference, their fair values at the date of the transaction. The excess of the acquisition cost over the Company’s interest in the fair value of identifiable assets acquired and liabilities assumed is recorded as goodwill and amortized using the straight-line method over a period of not more than five years.

			The Company continually assesses whether events or changes in circumstances have occurred that would require revision of the remaining estimated useful life of intangible assets and goodwill, or whether there is any indication of impairment. If any indication of impairment exists, the recoverable amount of intangible assets and goodwill is estimated based on the expected future cash flows which are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

			In July 2004, the Indonesian Financial Accounting Standard Board (“Dewan Standar Akuntansi Keuangan di Indonesia” or “DSAK”) issued PSAK 38 (Revised 2004), “Accounting for Restructuring Transactions between Entities under Common Control”, (“PSAK 38R”). Under PSAK 38R, the acquisition transaction with entities under common control is accounted for using book value, in a manner similar to that in pooling of interests accounting (carryover basis). The difference between the consideration paid or received and the related historical carrying amount, after considering income tax effects, is recognized directly in equity and reported as “Difference in value arising from restructuring transactions and other transactions between entities under common control” in the stockholders’ equity section.

			The balance of “Difference in value arising from restructuring transactions and other transactions between entities under common control” is charged to consolidated statement of income when the common control relationship has ceased.

	e.		Cash and cash equivalents

			Cash and cash equivalents consist of cash on hand and in banks and all unrestricted time deposits with maturities of not more than three months from the date of placement.

Investments

	i.		Time deposits

			Time deposits with maturities of more than three months but not more than one year, are presented as temporary investments.

	ii.		Investments in securities

			Investments in available-for-sale securities are stated at fair value. Unrealized holding gains or losses on available-for-sale securities are excluded from income of the current period and are reported as a separate component in the stockholders’ equity section until realized. Realized gains or losses from the sale of available-for-sale securities are recognized in the consolidated statements of income, and are determined on a specific-identification basis. A decline in the fair value of any available-for-sale securities below cost that is deemed to be other-than-temporary is charged to the consolidated statements of income.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Investments (continued)

	iii.		Investments in associated companies

			Investments in companies where the Company has 20% to 50% of the voting rights, and through which the Company exerts significant influence, but not control, over the financial and operating policies are accounted for using the equity method. Under this method, the Company recognizes the Company’s proportionate share in the income or loss of the associated company from the date that significant influence commences until the date that significant influence ceases. When the Company’s share of loss exceeds the carrying amount of the associated company, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Company has guaranteed obligations of the associated company or committed to provide further financial support to the associated company.

			On a continuous basis, but no less frequently than at the end of each year, the Company and its subsidiaries evaluate the carrying amount of their ownership interests in associated companies for possible impairment. Factors considered in assessing whether an indication of other-than-temporary impairment exists include the achievement of business plan objectives and milestones including cash flow projections and the results of planned financing activities, the financial condition and prospects of each associated company, the fair value of the ownership interest relative to the carrying amount of the investment, the period of time the fair value of the ownership interest has been below the carrying amount of the investment and other relevant factors. Impairment to be recognized is measured based on the amount by which the carrying amount of the investment exceeds the fair value of the investment. Fair value is determined based on quoted market prices (if any) and projected discounted cash flows, whichever is lower or other valuation techniques as appropriate.

			Changes in the value of investments due to changes in the equity of associated companies arising from capital transactions of such associated companies with other parties are recognized directly in equity and are reported as “Difference due to change of equity in associated companies” in the stockholders’ equity section. Differences previously credited directly to equity as a result of equity transactions in associated companies are released to the consolidated statements of income upon the sale of an interest in the associate in proportion to percentage of the interests sold.

			The functional currency of PT Pasifik Satelit Nusantara (“PSN”) and PT Citra Sari Makmur (“CSM”) is the United States Dollars (“U.S. Dollars”). For the purpose of reporting these investments using the equity method, the assets and liabilities of these companies as of the balance sheet date are translated into Indonesian Rupiah using the rates of exchange prevailing at that date, while revenues and expenses are translated into Indonesian Rupiah at the average rates of exchange for the year. The resulting translation adjustments are reported as part of “Translation adjustment” in the stockholders’ equity section.

	iv.		Other investments

			Investments in companies where ownership interests of less than 20% that do not have readily determinable fair values and are held for long-term are carried at cost and are adjusted only for other-than-temporary decline in the value of individual investments. Any write-down is charged directly to income of the current period.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

	g.		Trade and other accounts receivable

			Trade and other accounts receivable are recorded net of allowance for doubtful accounts, based upon a review of the collectibility of the outstanding amounts. Accounts are written-off against the allowance during the period in which they are determined to be not collectible.

			The allowance for doubtful accounts is the Company and its subsidiaries’ best estimate of the probable credit losses in the accounts receivable. The amount of the allowance is recognized in the consolidated statement of income within operating expenses — general and administrative. The Company and its subsidiaries determine the allowance based on historical write-off experience. The Company and its subsidiaries review the allowance for doubtful accounts every month. Past due balances over 90 days for retail customers are fully provided, and past due balance for non-retail customers over a specified amount are reviewed individually for collectibility. Account balances are written-off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

	h.		Inventories

			Since January 1, 2009, the Company and its subsidiaries has adopted PSAK 14 (Revised 2008), “Inventories” (PSAK 14R), which became effective for financial statement periods beginning on or after January 1, 2009 and is applied prospectively.

			Inventories consist of components and modules, which are expensed or transferred to property, plant and equipment upon use. Inventories also include Subscriber Identification Module (“SIM”) cards, Removable User Identity Module (“RUIM”) cards and prepaid voucher blanks, which are expensed upon sale. Inventories are stated at the lower of costs or net realizable value.

			Cost is determined using the weighted average method for components, SIM card, RUIM card and prepaid voucher blanks, and the specific-identification method for modules.

			The amount of any write-down of inventories to net realizable value and all losses of inventories shall be recognized as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realizable value, shall be recognized as a reduction in the amount of inventories recognized as an expense in the period in which the reversal occurs.

			Allowance for obsolescence is primarily based on the estimated forecast of future usage of these items.

	i.		Prepaid expenses

			Prepaid expenses are amortized over their future beneficial periods using the straight-line method.

	j.		Intangible assets

			Intangible assets comprised of intangible assets from subsidiaries or business acquisition, licenses and computer software. Intangible assets shall be recognized if it is probable that the expected future economic benefits that are attributable to each asset will flow to the Company and its subsidiaries and the cost of the asset can be reliably measured.

			Intangible assets are stated at cost less accumulated amortization and impairment, if any. Intangible assets are amortized over their useful lives. The Company and its subsidiaries shall estimate the recoverable value of their intangible asset. When the carrying amount of an asset exceeds its estimated recoverable amount, the asset is written-down to its estimated recoverable amount.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

	j.		Intangible assets (continued)

			In 2006, Telkomsel was granted the right to operate the 3G license (Note 14.iii). Telkomsel is required to pay an up-front fee and annual rights of usage (“Biaya Hak Penggunaan” or “BHP”) fee for the next ten years (Note 47c.ii). The up-front fee is recorded as intangible asset and amortized using the straight-line method over the term of the right to operate the 3G license (10 years). Amortization commenced in 2006 when the assets attributable to the provision of the related services became available for use.

			Based on management interpretation of the license conditions and the written confirmation from the DGPT, the license may be returned at any time without any financial obligation to pay the remaining outstanding annual BHP fees. Accordingly, Telkomsel recognizes the annual BHP fees as expense when incurred. Management evaluates its plan to continue to use the license on an annual basis.

	k.		Property, plant and equipment — direct acquisitions

			Since January 1, 2008, the Company and its subsidiaries has adopted PSAK 16 (Revised 2007), “Property, Plant and Equipment” (“PSAK 16R”), which became effective for financial statement periods beginning on or after January 1, 2008 and is applied prospectively.

			According to PSAK 16R, an entity should choose either the cost model or the revaluation model in measuring the costs of the assets. The Company has decided to use the cost model. Further, the cost of the assets include: (a) purchase price, (b) any costs directly attributable to bringing the asset to its location and condition and (c) the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately. The residual value and the useful life of an asset should be reviewed at least at each financial year-end.

			Property, plant and equipment directly acquired are stated at cost, less accumulated depreciation and impairment losses.

			Property, plant and equipment, except land, are depreciated using the straight-line method, based on the estimated useful lives of the assets as follows:


	Years
Buildings		20
Leasehold improvements		3-7
Switching equipment		5-15
Telegraph, telex and data communication equipment		5-15
Transmission installation and equipment		5-20
Satellite, earth station and equipment		3-15
Cable network		5-25
Power supply		3-10
Data processing equipment		3-10
Other telecommunications peripherals		5
Office equipment		2-5
Vehicles		5-8
Other equipment		5

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

	k.		Property, plant and equipment — direct acquisitions (continued)

			Pursuant to PSAK 16R, starting January 1, 2008, the Company has changed the estimated useful lives of fiber optic (included in cable network assets) from 15 years to 25 years. The Company charged the impact of the changes in the estimated useful lives to the current period consolidated financial statements as it is not considered material.

			When the carrying amount of an asset exceeds its estimated recoverable amount, the asset is written-down to its estimated recoverable amount, which is determined based upon the greater of its net selling price or value in use.

			Spare parts and servicing equipment are carried as inventory and recognized in profit or loss as consumed. Major spare parts and stand-by equipment that are expected to be used more than 12 months are recorded as part of property, plant and equipment.

			When assets are retired or otherwise disposed of, their cost and the related accumulated depreciation are eliminated from the consolidated financial statements, and the resulting gains or losses on the disposal or sale of property, plant and equipment are recognized in the consolidated statement of income.

			Certain computer hardware can not be used without the availability of certain computer software. In such circumstance, the computer software is recorded as part of the computer hardware. If any computer software is independent from its computer hardware, it shall be recorded as part of intangible assets.

			The cost of maintenance and repairs is charged to statements of income as incurred, significant renewals and betterments are capitalized.

			Property under construction is stated at cost until construction is completed, at which time it is reclassified to the specific property, plant and equipment account to which it relates. During the construction period, borrowing costs, which include interest expense and foreign currency exchange differences incurred to finance the construction of the asset, are capitalized in proportion to the average amount of accumulated expenditures during the period. Capitalization of borrowing cost ceases when the construction has been completed and the asset is ready for its intended use.

			Equipment temporarily unused are reclassified into equipment not used in operation and depreciated over their estimated useful life using straight-line method.

	l.		Property, plant and equipment under finance leases

			Since January 1, 2008, the Company and its subsidiaries has adopted PSAK 30 (Revised 2007), “Lease” (“PSAK 30R”), which became effective for financial statement periods beginning on or after January 1, 2008.

			Based on PSAK 30R, a lease is classified into finance lease or operating lease based on the substance not the form of the contract. Property, plant and equipment under finance lease is recognized if the lease transfers substantially all the risks and rewards incidental to ownership. Statement of Financial Accounting Standards Interpretation (Interpretasi Pernyataan Standar Akuntansi Keuangan or “ISAK”) 8, “Determining Whether an Arrangement Contains a Lease and Further Discussion on Transitional Provisions of PSAK 30 (Revised 2007)”, requires the Company and its subsidiaries to apply PSAK 30R retrospectively to all lease transactions since the commencing dates of the related agreement or prospectively as if the standard applied since the beginning of reporting periods. The Company has decided to select the prospective application.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

	l.		Property, plant and equipment under finance leases (continued)

			Considering that the impact of application of the standard to 2006 and 2007 is insignificant, the Company charged the cumulative effect to the 2008 financial statements.

			Finance leases shall be recognized as assets and liabilities in the balance sheets as the amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. Any initial direct costs of the Company and its subsidiaries are added to the amount recognized as an assets.

			Minimum lease payments shall be apportioned between the finance charge and the reduction of the outstanding liability. The finance charge shall be allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent rents shall be charged as expenses in the periods in which they are incurred.

			Leased assets are depreciated using the same method over the shorter of the lease term and their economic useful life.

			Leasing arrangements that do not meet the above criteria are accounted for as operating leases for which payments are charged as an expense on the straight-line basis over the period of expected benefit.

	m.		Revenue-Sharing Arrangements (“RSA”)

			Revenues from RSA are recognized based on the Company’s share as agreed upon in the contracts.

			The Company records assets under RSA as “Property, plant and equipment under RSA” (with a corresponding initial credit to “Unearned income on RSA” presented in the liabilities section of the consolidated balance sheet) based on the costs incurred by the investors as agreed upon in the contracts entered into between the Company and the investors. Property, plant and equipment are depreciated over their estimated useful lives using the straight-line method (Note 2k).

			Unearned income related to the acquisition of the property, plant and equipment under RSA is amortized over the revenue-sharing period using the straight-line method.

			At the end of the revenue-sharing period, the property, plant and equipment under RSA is reclassified to the “Property, plant and equipment” account.

	n.		KSO

			Revenues from KSO include amortization of unearned initial investor payments, Minimum Telkom Revenues (“MTR”) and the Company’s share of Distributable KSO Revenues (“DKSOR”).

			Unearned initial investor payments received are recorded net of all direct costs incurred in connection with the KSO agreement and amortized using the straight-line method over the KSO period of 15 years starting from January 1, 1996.

			MTR are recognized on a monthly basis based on the contracted MTR amount for the current period.

			The Company’s share of DKSOR is recognized on the basis of the Company’s percentage share of the KSO revenues, net of MTR and operational expenses of the KSO Units, as provided in the KSO agreements.

			Under PSAK 39, “Accounting for Joint Operation Schemes”, which supersedes paragraph 14 of PSAK 35, “Accounting for Telecommunications Services Revenue”, the assets built by the

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

	n.		KSO (continued)

			KSO partners under the KSO were recorded in the books of the KSO partners which operate the assets and would be transferred to the Company at the end of the KSO period or upon termination of the KSO agreement.

	o.		Deferred charges for land rights

			Costs incurred to process and extend land rights are deferred and amortized using the straight-line method over the term of the land rights.

	p.		Foreign currency translation

			The functional currency of the Company and its subsidiaries is the Indonesian Rupiah and the books of accounts of the Company and its subsidiaries are maintained in Indonesian Rupiah. Transactions in foreign currencies are translated into Indonesian Rupiah at the rates of exchange prevailing at transaction date. At the consolidated balance sheet date, monetary assets and monetary liabilities balances denominated in foreign currencies are translated into Indonesian Rupiah based on the buy and sell rates quoted by Reuters prevailing at the consolidated balance sheet date as follows:


	The Company and its subsidiaries
	2008				2009
	Buy		Sell		Buy		Sell
United States Dollars (“US$”) 1		9,210		9,220		11,535		11,575
Euro1		14,549		14,567		15,307		15,364
Yen1		92.68		92.80		117.33		117.81

The resulting foreign exchange gains or losses, realized and unrealized, are credited or charged to consolidated statement of income of the current period, except for foreign exchange differences incurred on borrowings during the construction of qualifying assets which are capitalized to the extent that the borrowings can be attributed to the construction of those qualifying assets (Note 2k).

Revenue and expense recognition

	i.		Fixed line telephone revenues

			Revenues from fixed line installations are recognized at the time the installations are placed in service and ready for use. Revenues from usage charges are recognized as customers incur the charges. Monthly subscription charges are recognized as revenues when incurred by subscribers.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


2.		SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue and expense recognition (continued)

	ii.		Cellular and fixed wireless telephone revenues

			Revenues from postpaid service, which consist of connection fee as well as usage and monthly charges, are recognized as follows:

	•		Connection fees for service connection are recognized as revenues at the time the connection occurs.

	•		Airtime and charges for value added services are recognized based on usage by subscribers.

	•		Monthly subscription charges are recognized as revenues when incurred by subscribers.

Revenues from prepaid card subscribers, which consist of the sale of starter packs (also known as SIM cards in the case of cellular and RUIM in the case of fixed wireless telephone and start-up load vouchers) and pulse reload vouchers, are recognized as follows:

	•		Sale of SIM and RUIM card is recognized as revenue upon delivery of the starter packs to distributors, dealers or directly to customers.

	•		Sale of pulse reload vouchers (either bundled in starter packs or sold as separate items) is recognized initially as unearned income and recognized proportionately as usage revenue based on duration and total of successful calls made and the value added services used by the subscribers or the expiration of the unused stored value of the voucher.

	iii.		Interconnection revenues

			Revenues from network interconnection with other domestic and international telecommunications carriers are recognized as earned in accordance with agreement and are presented net of interconnection expenses.

	iv.		Data, internet and information technology services revenues

			Revenues from installations (set-up) of internet, data communication and e-Business are recognized upon the completion of installations. Revenues from data communication and internet are recognized based on usage the installation.

			Revenues from sales, installation and implementation of computer software and hardware, computer data network installation service and installation are recognized when the goods rendered to customers or installation takes place.

			Revenue from computer software development service is recognised using the percentage of completion method.

	v.		Revenues from network

			Revenues from network consist of revenues from leased lines and satellite transponder leases. Revenues are recognized based on subscription fees as specified in the agreements.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


2.		SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue and expense recognition (continued)

	vi.		Other telecommunications services revenues

			Revenues from other telecommunications services consist of sales of other telecommunication services or goods. Revenues are recognized upon completion of services or delivery of goods to customers.

	vii.		Expenses

			Expenses are recognized on accrual basis. Unutilized promotional credits are netted against unearned income.

Employee benefits

	i.		Pension and post-retirement health care benefit plans

			The net obligations in respect of the defined pension benefit and post-retirement health care benefit plans are calculated at the present value of estimated future benefits that the employees have earned in return for their service in the current and prior periods, less fair value of plan assets and as adjusted for unrecognized actuarial gains or losses and unrecognized past service cost. The calculation is performed by an independent actuary using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using government bond interest rates considering currently there is no deep market for high quality corporate bonds that have terms to maturity approximating the terms of the related liability.

			Actuarial gains or losses arising from experience adjustments and changes in actuarial assumptions, when exceeding the greater of 10% of present value defined benefit obligation or 10% of fair value of plan assets, are charged or credited to the consolidated statements of income over the average remaining service lives of the relevant employees. Prior service cost is recognized immediately if vested or amortized over the vesting period.

			For defined contribution plans, the regular contributions constitute net periodic costs for the year in which they are due and as such are included in staff costs.

	ii.		Long Service Awards (“LSA”) and Long Service Leave (“LSL”)

			Employees 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 certain number of days leave benefit or cash, subject to approval by management, provided to employee who has met the requisite number of years of service and with a certain minimum age.

			Actuarial gains or losses arising from experience and changes in actuarial assumptions are charged immediately to the consolidated statements of income.

			The obligation with respect to LSA and LSL is calculated by an independent actuary using the projected unit credit method.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


2.		SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Employee benefits (continued)

	iii.		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.

	iv.		Pre-retirement benefits

			Employees of the Company are entitled to a benefit during a pre-retirement period in which they are inactive for 6 months prior to their normal retirement age of 56 years. During the pre-retirement period, the employees still receive benefits provided to active employees, which include, but are not limited to regular salary, health care, annual leave, bonus and other benefits. Benefits provided to employees which enter pre-retirement period are calculated by an independent actuary using the projected unit credit method.

	v.		Other post-retirement benefits

			Employees are entitled to home leave passage benefits and final housing facility benefits to their retirement age of 56 years. Those benefits are calculated by an independent actuary using the projected unit credit method.

			Gains or losses on curtailment are recognized when there is a commitment to make a material reduction in the number of employees covered by a plan or when there is an amendment of a defined benefit plan terms such as that a material element of future services to be provided by current employees will no longer qualify for benefits, or will qualify only for reduced benefits.

			Gains or losses on settlement are recognized when there is a transaction that eliminates all further legal or constructive obligation for part or all of the benefits provided under a defined benefit plan.

	s.		Income tax

			The Company and its subsidiaries recognize deferred tax assets and liabilities for temporary differences between the financial and tax bases of assets and liabilities at each reporting date. The Company and its subsidiaries also recognize deferred tax assets resulting from the recognition of future tax benefits, such as the benefit of tax loss carry forward, to the extent their future realization is probable. Deferred tax assets and liabilities are measured using enacted tax rates and tax laws at each reporting date which are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

			Income tax is charged or credited to the consolidated statement of income, except to the extent that it relates to items recognized directly in equity, such as the difference in value arising from restructuring transactions and other transactions between entities under common control and the effect of foreign currency translation adjustment for certain investments in associated companies, in which case income tax is also charged or credited directly to equity.

			Current tax assets and liabilities are measured at the amount expected to be recovered or paid using the tax rates and tax laws that have been enacted at each reporting date.

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

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


2.		SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

	t.		Derivative instruments

			Derivative transactions are accounted for in accordance with PSAK 55, “Accounting for Derivative Instruments and Hedging Activities” which requires that all derivative instruments be recognized in the financial statements at fair value. To qualify for hedge accounting, PSAK 55 requires certain criteria to be met, including formal documentations at the inception of the hedge.

			Changes in the fair values of derivative instruments that do not qualify for hedge accounting are recognized in the consolidated statements of income. If a derivative instrument is designated and qualifies for hedge accounting the assets or liabilities shall be adjusted. The changes in fair values of derivative instruments are recognized in the consolidated statements of income or consolidated statement of changes in stockholder’s equity depending on the type and effectiveness of hedge transaction.

	u.		Treasury Stock

			Reacquired Company’s stock is accounted for at its reacquisition cost and classified as “Treasury Stock” and presented as deduction in stockholders’ equity. The cost of treasury stock sold is accounted for using the weighted average method. The difference resulting from the cost and the proceeds from the sale of treasury stock is credited to “Paid-in Capital”.

	v.		Dividends

			Dividend distribution to the Company’s stockholders is recognized as liability in the Company’s consolidated financial statements in the period in which the dividends are approved by the Company’s stockholders. For interim dividends, the Company recognized it as liability based on the Board of Director’s decision with the approval from the Board of Commissioners.

	w.		Earnings per share and earnings per ADS

			Basic earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the period. Net income per ADS is computed by multiplying basic earnings per share by 40, the number of shares represented by each ADS.

	x.		Segment information

			The Company and its subsidiaries’ segment information is presented based upon identified business segments. A business segment is a distinguishable unit that provides different products and services and is managed separately. Business segment information is consistent with operating information routinely reported to the Company’s chief operating decision maker.

	y.		Use of estimates

			The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the carrying amount of property, plant and equipment and intangible assets, the valuation allowance for receivables and obligations related to employee benefits. Actual results could differ from those estimates.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


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.11,555 to US$1 as published by Reuters on March 31, 2009. 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 (“SCH”) 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 US$35.2 million or equivalent to Rp.331,052 million, which became effective from February 22, 2008 (the “closing date”) (Note 1d.b).

		Sigma is an Information Technology (“IT”) Services company that provides software for banking, multi finance and manufacturing companies. Through the acquisition, the Company started to broaden its services to adjacent industries especially IT services by combining Sigma’s expertise and the Company’s corporate customer base. Goodwill in respect of the acquisition comprises principally the fair value of the skills and expertise of the acquired company’s workforce.

		Metra and SCH have agreed to support Sigma in achieving an IPO in 24 months from closing date. Pursuant to the agreement, SCH, which holds the remaining 20% ownership in Sigma, has an put option requiring Metra to purchase the minority. The option price is the higher of the transacted price per share indexed to interest rates and fair value based on an independent appraisal. The option is valid for 24 months or sooner if an IPO takes place.

		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.
The assets and liabilities arising from the acquisition are as follows:

Current assets		120,369
Property, plant and equipments		65,511
Other non-current assets		30,935
Intangible assets		256,354
Current liabilities		(64,172	)
Long-term liabilities		(30,308	)
Deferred tax liabilities		(85,561	)

Fair value of net assets acquired		293,128
Goodwill		37,924

Total purchase consideration		331,052
Less:
Cash and cash equivalents in subsidiary acquired		(43,649	)

Cash outflow from acquisition		287,403

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


4.		ACQUISITIONS OF SIGMA (continued)

Metra acquired control of Sigma on February 22, 2008 and the valuation was performed by an independent appraisal using the balance as of February 28, 2008, being the nearest convenient balance sheet date. The Company’s consolidated results of operations have included the operating results of Sigma since March 1, 2008. The intangible assets represent long-term customer contracts and relationships, software and trademark (Note 14).


5.		CASH AND CASH EQUIVALENTS


	2008		2009
Cash on hand		35,959		34,666

Cash in banks
Related parties
Rupiah
PT Bank Negara Indonesia (Persero) Tbk (“BNI”)		128,390		383,120
PT Bank Mandiri (Persero) Tbk (“Bank Mandiri”)		190,446		161,801
PT Bank Rakyat Indonesia (Persero) Tbk (“BRI”)		12,780		80,604
PT Bank Pos Nusantara		240		105
PT Bank Tabungan Negara (Persero) (“BTN”)		19		18

		331,875		625,648

Foreign currencies
Bank Mandiri		64,621		215,144
BNI		27,839		29,454
BRI		663		653
PT Bank Syariah Mega Indonesia (“Bank Syariah Mega”)		165		81

		93,288		245,332

Sub-total		425,163		870,980

Third parties
Rupiah
ABN AMRO Bank (“AAB“)		92,499		85,544
PT Bank Central Asia Tbk (“BCA”)		17,718		11,459
Deutsche Bank AG (“DB”)		28,451		8,486
PT Bank Bukopin Tbk (“Bank Bukopin”)		5,593		4,834
Bank Syariah Mega		85		3,846
PT Bank Ekonomi Raharja Tbk (“Bank Ekonomi”)		1,815		2,296
PT Bank CIMB Niaga Tbk (”Bank CIMB Niaga”) (formerly PT Bank Niaga Tbk and PT Bank Lippo Tbk)		3,637		2,200
Others (each below Rp.1 billion)		3,269		2,553

		153,067		121,218

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


5.		CASH AND CASH EQUIVALENTS (continued)


	2008		2009
Cash in banks (continued)
Third parties (continued)
Foreign currencies
DB		10,021		11,732
Citibank		8,673		8,807
Bank Ekonomi		3,603		5,935
The Hongkong and Shanghai Banking Corporation Ltd. (“HSBC”)		—		1,717
Others (each below Rp.1 billion)		1,234		1,192

		23,531		29,383

Sub-total		176,598		150,601

Total cash in banks		601,761		1,021,581

Time deposits
Related parties
Rupiah
Bank Mandiri		245,818		555,831
BRI		1,425,300		520,915
BNI		792,449		483,448
BTN		250,725		375,725

		2,714,292		1,935,919

Foreign currencies
BNI		382,287		1,283,308
BRI		—		176,486
Bank Mandiri		69,870		2,311

		452,157		1,462,105

Sub-total		3,166,449		3,398,024

Third parties
Rupiah
PT Bank Pembangunan Daerah Jawa Barat dan Banten (“Bank Jabar”)		354,400		345,560
Bank Bukopin		329,510		184,895
PT Bank Mega Tbk (“Bank Mega”)		127,945		105,000
PT Bank Muamalat Indonesia (“Bank Muamalat”)		28,000		78,550
PT Bank Danamon Indonesia Tbk (“Bank Danamon”)		199,315		69,315
PT Bank Internasional Indonesia Tbk		191,500		60,000
PT Bank Century Tbk		45,000		40,000
DB		1,696,035		31,670
Bank CIMB Niaga		316,063		6,600
PT Pan Indonesia Bank Tbk		35,000		5,000
PT Bank Tabungan Pensiunan Nasional Tbk		32,053		5,000
PT Bank Yudha Bhakti		14,250		2,019

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


5.		CASH AND CASH EQUIVALENTS (continued)


	2008		2009
Time deposits (continued)
Third parties (continued)
Rupiah (continued)
Standard Chartered Bank (“SCB”)		575,000		—
PT Bank Victoria International Tbk		70,000		—
PT Bank Bumiputera Indonesia Tbk		35,000		—
Bank Ekonomi		19,250		—
PT Bank Artha Graha Internasional Tbk		10,000		—
PT Bank Nusantara Parahyangan Tbk		1,000		—

		4,079,321		933,609

Foreign currencies
BCA		—		542,091
SCB		493,340		541,662
Bank Muamalat		147,360		34,605
Bank CIMB Niaga		—		3,466
DB		1,168,582		—
HSBC		112,831		—
Bank Jabar		18,420		—
Bank Bukopin		4,607		—
Bank Mega		1,843		—

		1,946,983		1,121,824

Sub-total		6,026,304		2,055,433

Total time deposits		9,192,753		5,453,457

Grand Total		9,830,473		6,509,704

Interest rates per annum on time deposits are as follows:


	2008			2009
Rupiah		2.25% - 10.00	%		6.25% - 13.50	%
Foreign currencies		1.00% - 4.80	%		0.25% - 4.75	%

		The related parties which the Company and its subsidiaries place their funds are Government-owned banks. The Company and its subsidiaries placed a majority of their cash and cash equivalents in these banks because they have the most extensive branch network in Indonesia and are considered to be financially sound banks as they are owned by the Government.

		Refer to Note 43 for details of related party transactions.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

6.		TRADE RECEIVABLES

		Trade receivables arose from services provided to both retail and non-retail customers, with details as follows:

By debtor

(i)

Related parties


	2008			2009
Government Agencies		451,114			752,242
Indosat		—			49,084
CSM		52,084			46,908
PT Aplikanusa Lintasarta (“Lintasarta”)		4,237			12,088
PSN		—			7,286
PT Graha Informatika Nusantara (“Gratika”)		—			4,254
Koperasi Pegawai Telkom (“Kopegtel”)		966			1,145
PT Patra Telekomunikasi Indonesia (“Patrakom”)		17,623			—
Others		4,465			11,561

Total		530,489			884,568
Allowance for doubtful accounts		(130,703	)		(114,447	)

Net		399,786			770,121

			Trade receivables from certain related parties are presented net of the Company and its subsidiaries’ liabilities to such parties due to legal right of offset in accordance with agreements with those parties.

	(ii)		Third parties


	2008			2009
Residential and business subscribers		3,559,353			3,738,103
Overseas international carriers		260,738			440,181

Total		3,820,091			4,178,284
Allowance for doubtful accounts		(1,161,958	)		(1,174,383	)

Net		2,658,133			3,003,901

By age

(i)

Related parties


	2008			2009
Up to 6 months		486,997			803,900
7 to 12 months		19,902			33,326
13 to 24 months		12,813			23,129
More than 24 months		10,777			24,213

Total		530,489			884,568
Allowance for doubtful accounts		(130,703	)		(114,447	)

Net		399,786			770,121

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

TRADE RECEIVABLES (continued)

By age (continued)

(ii)

Third parties


	2008			2009
Up to 3 months		2,133,065			2,120,094
More than 3 months		1,687,026			2,058,190

Total		3,820,091			4,178,284
Allowance for doubtful accounts		(1,161,958	)		(1,174,383	)

Net		2,658,133			3,003,901

By currency

(i)

Related parties


	2008			2009
Rupiah		459,961			857,535
U.S. Dollars		70,528			27,033

Total		530,489			884,568
Allowance for doubtful accounts		(130,703	)		(114,447	)

Net		399,786			770,121

(ii)

Third parties


	2008			2009
Rupiah		3,512,594			3,411,931
U.S. Dollars		307,497			766,353

Total		3,820,091			4,178,284
Allowance for doubtful accounts		(1,161,958	)		(1,174,383	)

Net		2,658,133			3,003,901

Movements in the allowance for doubtful accounts


	2008			2009
Beginning balance		1,100,456			1,203,905
Additions (Note 36)		192,651			123,029
Bad debts write-off		(446	)		(38,104	)

Ending balance		1,292,661			1,288,830

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

TRADE RECEIVABLES (continued)

	d.		Movements in the allowance for doubtful accounts (continued)

			Management believes that the allowance for doubtful accounts is adequate to cover probable losses on non-collection of the accounts receivable.

			Except for the amounts receivable from the Government Agencies, management believes that there were no significant concentrations of credit risk on these receivables. The Company and its subsidiaries do not have any off-balance sheet credit exposures related to their customers.

			Certain trade receivables of the Company’s subsidiaries have been pledged as collateral for lending agreements (Notes 19 and 22).

			Refer to Note 43 for details of related party transactions.

INVENTORIES


	2008			2009
SIM cards, RUIM cards and prepaid voucher blanks		122,019			206,106
Modules		132,620			183,629
Components		56,127			172,059

Total		310,766			561,794

Allowance for obsolescence
SIM cards, RUIM cards and prepaid voucher blanks		(369	)		—
Modules		(50,557	)		(61,439	)
Components		(5,942	)		(6,672	)

Total		(56,868	)		(68,111	)

Net		253,898			493,683

Movements in the allowance for obsolescence are as follows:


	2008			2009
Beginning balance		54,701			64,849
Additions (Note 36)		2,645			3,262
Inventories write-off		(478	)		—

Ending balance		56,868			68,111

Components and modules represent telephone terminals, cables, transmission installation spare parts and other spare parts.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

7.		INVENTORIES (continued)

		Management believes that the allowance is adequate to cover probable losses from decline in inventory value due to obsolescence.

		As of March 31, 2009, certain inventories held by the Company have been insured against fire, theft and other specific risks. Total sum insured as of March 31, 2009 amounted Rp.4,878 million (Note 43d.vii).

		Certain inventories held by a certain subsidiary have been insured against all industrial risk and loss risk during delivery with the total sum insured as of March 31, 2009 amounting Rp.5,662 million.

		Management believes that the insurance coverage is adequate to cover potential losses of the insured inventories.

8.		PREPAID EXPENSES


	2008		2009
Frequency license		—		1,212,156
Salaries		342,694		425,027
Rental		746,379		331,466
Insurance		83,583		79,753
Telephone directory issuance costs		31,273		2,483
Others		22,866		36,146

Total		1,226,795		2,087,031

		Refer to Note 43 for details of related party transactions.

9.		OTHER CURRENT ASSETS

		Other current assets as of March 31, 2008 and 2009 consist of restricted time deposits as follows:


		2008				2009
		Foreign				Foreign
		currencies		Rupiah		currencies		Rupiah
	Currency	(in millions)		equivalent		(in millions)		equivalent
BNI
The Company	US$		—		—		0.075		870
	Rp.		—		—		—		20,362
Bank Mandiri
The Company	US$		0.916		8,440		—		—
	Rp.		—		64,021		—		1,348
Infomedia	Rp.		—		3,225		—		13,262
TII	US$		—		—		0.569		6,559
Bank Syariah Mega
Dayamitra	Rp.		—		—		—		800

Total					75,686				43,201

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

9.		OTHER CURRENT ASSETS (continued)

		The restricted time deposits represent time deposits of the Company’s and certain subsidiaries’ pledged as collateral for bank guarantees to the respective banks.

		Refer to Note 43 for details of related party transactions.

10.		LONG-TERM INVESTMENTS


	2008
	Percentage						Share of
	of		Beginning				net (loss)			Translation			Ending
	ownership		balance		Addition		income			adjustment			balance
Equity method:
CSM		25.00		57,240		—		(2,021	)		(1,103	)		54,116
Patrakom		40.00		32,892		—		1,146			—			34,038
PSN		22.38		—		—		—			—			—

				90,132		—		(875	)		(1,103	)		88,154

Cost method:
Bridge Mobile Pte. Ltd. (“BMPL”)		10.00		20,360		—		—						20,360
PT Batam Bintan Telekomunikasi (“BBT”)		5.00		587		—		—			—			587
PT Pembangunan Telekomunikasi Indonesia (“Bangtelindo”)		2.11		199		—		—			—			199
Scicom (MSC) Berhad (“Scicom”)		9.81		2,712		28,249		—			—			30,961

				23,858		28,249		—			—			52,107

				113,990		28,249		(875	)		(1,103	)		140,261


	2009
	Percentage
	of		Beginning		Share of		Translation		Ending
	ownership		balance		net income		adjustment		balance
Equity method:
CSM		25.00		84,197		—		—		84,197
Patrakom		40.00		32,949		931		—		33,880
PSN		22.38		—		—		—		—

				117,146		931		—		118,077

Cost method:
BMPL		10.00		20,360		—		—		20,360
BBT		5.00		587		—		—		587
Bangtelindo		2.11		199		—		—		199
Scicom		9.80		30,961		—		—		30,961

				52,107		—		—		52,107

				169,253		931		—		170,184

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


10.		LONG-TERM INVESTMENTS (continued)

	a.		CSM

			CSM is engaged in providing Very Small Aperture Terminal (“VSAT”), network application services and consulting services on telecommunications technology and related facilities.

			As of March 31, 2008 and 2009, the carrying amount of the investment in CSM was equal to the Company’s share in the net assets of CSM.

	b.		Patrakom

			Patrakom is engaged in providing satellite communication system services, related services and facilities to companies in the petroleum industry.

			The increase of ownership in Patrakom in 2007 represents an adjustment arising from the difference between the book value and the initial investment made in 2005.

			Pursuant to the AGM of Stockholders of the Company as stated in notarial deed No. 235 of Sutjipto, S.H., M.Kn. dated April 30, 2008, Patrakom’s stockholders approved the distribution of cash dividends for 2007 amounting to Rp.4,859 million and the appropriation of Rp.607 million for general reserves. The Company’s share of the dividend amounting to Rp.1,944 million.

			As of March 31, 2008 and 2009, the carrying amount of investment in Patrakom approximated to the Company’s share in the net assets of Patrakom.

	c.		PSN

			PSN is engaged in providing satellite transponder leasing and satellite-based communication services in the Asia Pacific region. The Company’s share in losses in PSN has exceeded the carrying amount of its investment since 2001, accordingly, the investment value has been reduced to Rp.nil.

			On January 20, 2006, PSN’s stockholders agreed to issue new shares to a new stockholder. The issuance of new shares resulted in dilution of the Company’s interest in PSN to 22.38%.

	d.		BMPL

			BMPL (Singapore), an associated entity of Telkomsel, is engaged in providing regional mobile services in the Asia Pacific region.

			Subsequently, on March 7, 2007, it was resolved that each of the stockholders shall subscribe for 1,500,000 additional shares of BMPL, subject to the accession of SK Telecom Co., Ltd (“SK Telecom”) as a stockholder of BMPL. However, the additional subscription of 300,000 shares shall be cancelled if SK Telecom becomes a stockholder of BMPL.

			Based on the Accession Agreement dated June 18, 2007, BMPL’s stockholders agreed to admit SK Telecom as a stockholder of BMPL. Consequently, the additional subscription of 300,000 shares was cancelled. On the same date, BMPL’s stockholders also agreed to admit Advanced Info Service Public Company Limited as a stockholder of BMPL.

			Telkomsel has paid additional subscriptions of US$600,000 (equivalent to Rp.5,455 million and Rp.5,615 million) in April and November 2007, respectively.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


10.		LONG-TERM INVESTMENTS (continued)

	d.		BMPL (continued)

			As of March 31, 2008 and 2009, Telkomsel’s contributions which represent 10% ownership interest amounted to US$2,200,000 (Rp.20,360 million).

	e.		BBT

			BBT is engaged in providing fixed line telecommunication services at Batamindo Industrial Park in Muka Kuning, Batam Island and at Bintan Beach International Resort and Bintan Industrial Estate in Bintan Island.

	f.		Bangtelindo

			Bangtelindo is primarily engaged in providing consultancy services on the installation and maintenance of telecommunications facilities.

			On July 19, 2007, based on decision of the EGM of Stockholders of Bangtelindo as covered by notarial deed No. 38 of Dr. Wiratni Ahmadi, S.H. dated July 19, 2007, the Bangtelindo’s stockholders agreed the addition of paid in capital amounting to Rp.2,000 million from PT Fokus Investama Mondial’s (“FIM”) stockholders. As a result, the Company’s ownership in Bangtelindo was diluted to 2.41%.

			On February 5, 2008, based on decision of the EGM of Stockholders of Bangtelindo as covered by notarial deed No. 85 of Dr. Wiratni Ahmadi, S.H. dated June 30, 2008, the Bangtelindo’s stockholders agreed the addition of paid in capital amounting to Rp.1,200 million from FIM’s stockholders. As a result, the Company’s ownership in Bangtelindo was diluted to 2.11%.

	g.		Scicom

			Scicom is engaged in providing call center services in Malaysia. As of March 31, 2008, TII’s contributions amounted to US$3.42 million (equivalent to Rp.30,961 million) which represent or equivalent to 9.81% of TII’s total ownership in Scicom.

			On July 31, 2008, Scicom issued 35,000 new shares. As a result, TII’s ownership in Scicom diluted to 9.80%.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


11.		PROPERTY, PLANT AND EQUIPMENT


	January 1,		Acquisitions										March 31,
	2008		of Sigma		Additions		Deductions			Reclassifications			2008
At cost:
Direct acquisitions
Land		561,348		—		11,274		—			—			572,622
Buildings		2,557,804		—		2,107		—			38,650			2,598,561
Leasehold improvements		403,498		2,227		16,760		—			1,027			423,512
Switching equipment		24,293,139				13,350		—			136,161			24,442,650
Telegraph, telex and data communication equipment		156,036		—		—		—			(2,403	)		153,633
Transmission installation and equipment		44,758,386		—		210,443		—			1,965,505			46,934,334
Satellite, earth station and equipment		5,979,626		—		33,557		—			2,799			6,015,982
Cable network		20,669,529		—		129,041		—			(1,133	)		20,797,437
Power supply		4,416,077		—		5,910		—			257,782			4,679,769
Data processing equipment		5,710,782		14,523		12,025		—			137,919			5,875,249
Other telecommunications peripherals		637,020		2,186		4,307		—			—			643,513
Office equipment		706,484		1,345		6,720		—			(40	)		714,509
Vehicles		156,192		1,161		—		(466	)		(5,980	)		150,907
Other equipment		109,784		—		224		—			—			110,008
Property under construction:
Buildings		86		—		48,725		—			(39,822	)		8,989
Switching equipment		83,740		—		121,520		—			(137,579	)		67,681
Transmission installation and equipment		2,525,030		—		1,687,204		—			(1,977,647	)		2,234,587
Satellite, earth station and equipment		3,557		—		—		—			(525	)		3,032
Cable network		381		—		34,364		—			—			34,745
Power supply		37,979		—		245,630		—			(259,016	)		24,593
Data processing equipment		31,351		27,544		152,471		—			(137,937	)		73,429
Leased assets
Vehicles		—		—		20,874		—			—			20,874
Transmission installation and equipment		283,813		—		—		—			—			283,813

Total		114,081,642		48,986		2,756,506		(466	)		(22,239	)		116,864,429

Accumulated depreciation and impairment:
Direct acquisitions
Buildings		1,207,216		—		31,586		—			(50	)		1,238,752
Leasehold improvements		257,862		—		15,873		—			—			273,735
Switching equipment		13,562,557		—		584,204		—			(504	)		14,146,257
Telegraph, telex and data communication equipment		152,427		—		99		—			(2,403	)		150,123
Transmission installation and equipment		16,178,965		—		1,061,269		—			(2,856	)		17,237,378
Satellite, earth station and equipment		2,373,355		—		130,045		—			8,642			2,512,042
Cable network		12,917,430		—		331,685		—			598			13,249,713
Power supply		1,864,747		—		108,636		—			(276	)		1,973,107
Data processing equipment		3,895,304		—		183,984		—			15			4,079,303
Other telecommunications peripherals		575,458		—		3,014		—			38			578,510
Office equipment		584,927		—		11,398		—			570			596,895
Vehicles		147,055		—		965		(466	)		(5,933	)		141,621
Other equipment		100,437		—		749		—			—			101,186
Leased assets
Vehicles		—		—		863		—			—			863
Transmission installation and equipment		188,094		—		4,932					(191	)		192,835

Total		54,005,834		—		2,469,302		(466	)		(2,350	)		56,472,320

Net Book Value		60,075,808												60,392,109

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


11.		PROPERTY, PLANT AND EQUIPMENT (continued)


	January 1,										March 31,
	2009		Additions		Deductions			Reclassifications			2009
At cost:
Direct acquisitions
Land		684,768		15,422		—			12,027			712,217
Buildings		2,721,804		91,040		—			43,384			2,856,228
Leasehold improvements		460,836		9,198		—			—			470,034
Switching equipment		26,356,172		7,496		—			441,396			26,805,064
Telegraph, telex and data communication equipment		139,165		—		—			—			139,165
Transmission installation and equipment		56,572,954		696,103		(4	)		1,305,157			58,574,210
Satellite, earth station and equipment		6,502,198		155,180		—			211			6,657,589
Cable network		21,857,982		270,570		(294	)		(93	)		22,128,165
Power supply		5,838,258		44,040		—			230,349			6,112,647
Data processing equipment		7,184,767		37,009		—			189,712			7,411,488
Other telecommunications peripherals		545,194		647		—			—			545,841
Office equipment		678,640		4,685		(2,290	)		(167	)		680,868
Vehicles		127,274		45		(100	)		5			127,224
Other equipment		105,386		1,905		—			—			107,291
Property under construction:
Buildings		60,099		24,899		—			(43,487	)		41,511
Switching equipment		17,155		367,789		—			(331,215	)		53,729
Transmission installation and equipment		1,173,830		1,225,253		—			(1,356,491	)		1,042,592
Satellite, earth station and equipment
Cable network		384		11,453		—			(22	)		11,815
Power supply		13,131		190,725		—			(173,661	)		30,195
Data processing equipment		427,698		349,662		—			(305,202	)		472,158
Leased assets
Vehicles		56,998		—		—			—			56,998
Transmission installation and equipment		284,978		—		—			—			284,978
Data processing equipment		236,240		—		—			—			236,240
Office equipment		437,705		—		—			—			437,705
Customer premise equipment (“CPE”) assets		23,307		—		—			—			23,307

Total		132,506,923		3,503,121		(2,688	)		11,903			136,019,259

Accumulated depreciation and impairment:
Direct acquisitions
Buildings		1,351,589		34,015		—			787			1,386,391
Leasehold improvements		323,910		15,087		—			380			339,377
Switching equipment		15,926,334		636,333		—			298			16,562,965
Telegraph, telex and data communication equipment		135,327		146		—			—			135,473
Transmission installation and equipment		19,220,612		1,333,530		—			24			20,554,166
Satellite, earth station and equipment		2,732,847		123,494		—			283			2,856,624
Cable network		13,506,314		330,233		(294	)		(226	)		13,836,027
Power supply		2,333,053		131,166		—			—			2,464,219
Data processing equipment		4,588,877		261,494		—			(5,775	)		4,844,596
Other telecommunications peripherals		462,208		3,632		—			20			465,860
Office equipment		561,073		10,991		(592	)		471			571,943
Vehicles		108,049		1,584		(54	)		20			109,599
Other equipment		94,866		939		—			—			95,805
Leased assets
Vehicles		11,640		3,977		—			—			15,617
Transmission installation and equipment		207,323		4,814		—			—			212,137
Data processing equipment		60,162		14,824		—			1,440			76,426
Office equipment		290,717		33,283		—			(927	)		323,073
CPE assets		2,432		608		—			—			3,040

Total		61,917,333		2,940,150		(940	)		(3,205	)		64,853,338

Net Book Value		70,589,590										71,165,921

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


11.		PROPERTY, PLANT AND EQUIPMENT (continued)

(Loss) gain on disposal or exchange of assets


	2008		2009
Proceeds from sale of property, plant and equipment		5,298		844
Net book value		—		(1,748	)

(Loss) gain on disposal		5,298		(904	)

KSO assets ownership arrangements

	(i)		In accordance with the amended and restated KSO VII agreement with BSI, the ownership rights to the acquired property, plant and equipment in KSO VII are legally retained by BSI until the end of the KSO period which is on December 31, 2010. As of March 31, 2008 and 2009, the net book value of these property, plant and equipment was Rp.1,010,385 million and Rp.899,970 million, respectively.

	(ii)		In accordance with the amended and restated KSO IV agreement with PT Mitra Global Telekomunikasi Indonesia (“MGTI”), the ownership rights to the acquired property, plant and equipment in KSO IV are legally retained by MGTI until the end of the KSO period which is on December 31, 2010. As of March 31, 2008 and 2009, the net book value of this property, plant and equipment was Rp.741,409 million and Rp.434,589 million, respectively.

Assets impairment and related claims

	(i)		In the first quarter of 2005, the Government issued a series of regulations in its efforts to rearrange the frequency spectra utilized by the telecommunications industry. This action has resulted in the Company not being able to utilize certain frequency spectra it had used to support its fixed wireline cable network by the end of 2006. As a result of these regulations, certain of the Company’s cable network facilities within the fixed wireline segment, which comprised primarily of Wireless Local Loop (“WLL”) and Approach Link equipment operating in the affected frequency spectra, could no longer be used by the end of 2006. Hence, the Company had shortened the remaining useful lives for WLL and Approach Link equipment in the first quarter of 2005 and depreciated the remaining net book value of these assets through December 31, 2006, and charged additional depreciation expense of Rp.240,398 million (Rp.168,279 million net after tax) in 2006.

	(ii)		Further, on August 31, 2005, MoCI issued a press release which announced that in order to conform with international standards and as recommended by the International Telecommunications Union — Radio communication Sector (“ITU-R”), the 1900 MHz frequency spectrum would only be used for IMT-2000 or 3G network. In its press release, the MoCI also announced that the Code Division Multiple Access (“CDMA”)-based technology network which the Company used for its fixed wireless services could only operate in the 800 MHz frequency spectrum. The Company utilizes the 1900 MHz frequency spectrum for its fixed wireless network in Jakarta and West Java areas while for other areas, the Company utilizes the 800 MHz frequency spectrum.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


11.		PROPERTY, PLANT AND EQUIPMENT (continued)

Assets impairment and related claims (continued)

	(ii)		(continued)

			On January 13, 2006, the MoCI issued MoCI Regulation No. 01/PER/M.KOMINFO/1/2006 which reaffirmed the Government’s decision that the Company’s fixed wireless network could only operate in the 800 MHz frequency spectrum and that the 1900 MHz will be allocated for 3G network. Following the preceding Government’s decisions, the Company reviewed the recoverable amount of cash-generating unit to which the affected fixed wireless asset belongs and in 2005, the Company had written-down Rp.616,768 million for transmission installation and equipment of fixed wireless assets. The recoverable amount was estimated using value in use which represented the present value of estimated future cash flows from cash-generating unit using a pretax discount rate of 16.89%, representing the Company’s weighted average cost of capital as of December 31, 2005. In determining cash-generating unit to which an asset belongs, assets were grouped at the lowest level that included the assets and generated cash inflows that were largely independent of the cash inflows from other assets or group of assets. In addition, the Company recognized a loss relating to non-cancelable contracts for procurement of the 1900 MHz transmission installation and equipment in Jakarta and West Java areas amounting to Rp.79,359 million.

			As a result of this Government’s decision, the Company’s Base Station System (“BSS”) equipment in Jakarta and West Java areas which are part of the transmission installation and equipment for the fixed wireless network could no longer be used by the end of 2007 with total acquisition cost amounted to Rp.1,330,818 million. The BSS equipment has been completely replaced with BSS equipment operating in 800 MHz by the end of December 2007. Further, the Company changed the estimated remaining useful lives for the Jakarta and West Java BSS equipment and depreciated the remaining net book value of these assets through June 30, 2007 and recognized an additional depreciation expense of Rp.173,826 million (Rp.121,678 million net after tax) in 2006. In June 2007, the Company has been fully depreciated the assets.

	(iii)		As of March 31, 2008 and 2009, the Company operated two satellites, Telkom-1 and Telkom-2 primarily providing backbone transmission links for its network and earth station satellite up-linking and down-linking services to domestic and international users. As of March 31, 2009, there were no events or changes in circumstances that would indicate that the carrying amount of the Company’s satellites may not be recoverable.

	(iv)		On July 9, 2008, Balikpapan and its surrounding, area of Divre VI Kalimantan were covered by flood from which insurance claim for the replacement of the assets has been made. Buildings and other equipments affected by the flood have been re-operated gradually since July 2008.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


11.		PROPERTY, PLANT AND EQUIPMENT (continued)

Others

	(i)		Interest capitalized to property under construction amounted to Rp.nil for the three months period ended March 31, 2008 and 2009.

	(ii)		Foreign exchange loss capitalized as part of property under construction amounted to Rp.nil for the three months period ended March 31, 2008 and 2009.

	(iii)		In 2008, the Company reclassified its software which was previously recorded as property plant and equipment to intangible assets (Notes 14 and 52).

	(iv)		In 2008, certain Telkomsel’s equipment (part of infrastructure) with a total cost of Rp.797,208 million and their previous expected useful lives subsequent to 2010, are planned to be used up to 2010. Hence, the depreciation of the equipment are accelerated up to that year. The change in the useful life has an insignificant impact to the depreciation charged.

	(v)		In 2008, Telkomsel recorded Rp.8,260,648 million of its property, plant and equipment which was subject to price adjustment (Note 47a.ii). In March 2009, Telkomsel and its vendors agreed to adjust price by US$107.05 million (Note 47a.ii). The effect of the adjustment is a reduction to recorded property, plant and equipment by Rp.1,035,588 million and to depreciation by Rp.47,868 million that was recorded in 2008 consolidated financial statement.

	(vi)		The Company and its subsidiaries own several pieces of land located throughout Indonesia with Building Use Rights (“Hak Guna Bangunan” or “HGB”) for a period of 20-30 years, which will expire between 2009 and 2038. Management believes that there will be no difficulty in obtaining the extension of the land rights when they expire.

	(vii)		The Company was granted the right to use certain parcels of land by the Ministry of Communications and Information Technology of the Republic of Indonesia (formerly Ministry of Tourism, Post and Telecommunications) where they are still under the name of the Ministry of Tourism, Post and Telecommunications and the Ministry of Transportation of the Republic of Indonesia. The transfer to the Company of the legal title of ownership on those parcels of land is still in progress.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


11.		PROPERTY, PLANT AND EQUIPMENT (continued)

Others (continued)

	(viii)		As of March 31, 2009, the Company’s and its subsidiaries’ property, plant and equipment, except for land, were insured with PT Asuransi Jasa Indonesia (“Jasindo”), PT Asuransi Ramayana Tbk, PT Asuransi Wahana Tata, PT Asuransi Ekspor Indonesia, PT Asuransi Sinar Mas, PT Asuransi Central Asia, PT Asuransi Allianz Utama Indonesia, PT Asuransi Bintang Tbk, PT Asuransi Tri Pakarta and PT Asuransi QBE POOL Indonesia against fire, theft, earthquake and other specified risks. Total cost of assets being insured amounted to Rp.67,529,060 million, which was covered by sum insured basis with a maximum loss claim of Rp.758,979 million and US$12.82 million and on first loss basis of Rp.5,391,473 million and US$4.00 million including business recovery of Rp.324,000 million with the Automatic Reinstatement of Loss Clause. In addition, Telkom-1 and Telkom-2 were insured separately for US$28.48 million and US$47.14 million, respectively. Management believes that the insurance coverage is adequate to cover potential losses of the insured assets.

	(ix)		As of March 31, 2009, the completion of assets under construction was around 57.71% of the total contract value, with estimated dates of completion between April 2009 up to Mei 2010. Management believes that there is no impediment to the completion of the construction in progress.

	(x)		Certain property, plant and equipment of the Company’s subsidiaries have been pledged as collateral for lending agreements (Notes 19 and 22).

	(xi)		The Company and its subsidiaries has lease commitments for transmission installation and equipment, vehicles, data processing equipment and office equipment, with the option to purchase the leased assets at the end of the lease terms. Future minimum lease payments for assets under finance leases as of March 31, 2008 and 2009 are as follows:


Year	2008			2009
2008		84,142			—
2009		84,756			296,863
2010		84,756			176,266
2011		77,489			112,953
2012		51,307			62,375
2013		14,809			17,607
Later		415			415

Total minimum lease payments		397,674			666,479
Interest		(152,581	)		(136,803	)

Net present value of minimum lease payments		245,093			529,676
Current maturities (Note 20a)		(35,578	)		(236,904	)

Long-term portion (Note 20b)		209,515			292,772

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


12.		PROPERTY, PLANT AND EQUIPMENT UNDER REVENUE-SHARING ARRANGEMENTS (“RSA”)


	January 1,							March 31,
	2008		Additions		Reclassifications			2008
At cost:
Land		4,646		—		—			4,646
Buildings		3,982		—		—			3,982
Switching equipment		286,688		—		—			286,688
Transmission installation and equipment		179,785		—		(18,179	)		161,606
Cable network		583,353		—		—			583,353
Other telecommunications peripherals		149,200		—		—			149,200

Total		1,207,654		—		(18,179	)		1,189,475

Accumulated depreciation:
Land		2,935		58		—			2,993
Buildings		2,435		50		—			2,485
Switching equipment		169,663		6,137		—			175,800
Transmission installation and equipment		90,141		3,808		(6,059	)		87,890
Cable network		144,603		12,059		—			156,662
Other telecommunications peripherals		92,786		6,072		—			98,858

Total		502,563		28,184		(6,059	)		524,688

Net Book Value		705,091							664,787


	January 1,							March 31,
	2009		Additions		Adjustments			2009
At cost:
Land		1,313		—		—			1,313
Buildings		338		—		—			338
Switching equipment		152,776		—		—			152,776
Transmission installation and equipment		100,072		—		—			100,072
Cable network		461,315		—		—			461,315
Other telecommunications peripherals		10,547		—		—			10,547

Total		726,361		—		—			726,361

Accumulated depreciation:
Land		926		17		—			943
Buildings		61		18		(14	)		65
Switching equipment		69,899		4,169		(298	)		73,770
Transmission installation and equipment		53,282		2,387		446			56,115
Cable network		116,234		10,494		(272	)		126,456
Other telecommunications peripherals		9,305		79		5,781			15,165

Total		249,707		17,164		5,643			272,514

Net Book Value		476,654							453,847

In accordance with the RSA, the ownership rights to the property, plant and equipment under RSA are legally retained by the investors until the end of the revenue-sharing periods.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


12.		PROPERTY, PLANT AND EQUIPMENT UNDER RSA (continued)

The balances of unearned income on RSA as of March 31, 2008 and 2009, are as follows:


	2008			2009
Gross amount		1,189,474			726,361

Accumulated amortization:
Beginning balance		(704,269	)		(427,037	)
Additions (Note 33)		(60,372	)		(31,932	)
Deductions		18,180			—

Ending balance		(746,461	)		(458,969	)

Net		443,013			267,392


13.		ADVANCES AND OTHER NON-CURRENT ASSETS

Advances and other non-current assets as of March 31, 2008 and 2009 consist of:


	2008		2009
Prepaid rent — net of current portion (Note 8)		828,937		897,669
Advances for purchase of property, plant and equipment		305,053		789,427
Restricted cash		91,618		194,234
Deferred Indefeasible Right of Use (“IRU”) Agreement charges (Note 43c.ii)		163,936		151,257
Deferred land rights charges		94,619		112,200
Security deposits		48,719		55,897
Equipment not used in operations — net		65,258		51,255
Others		25,942		8,849

Total		1,624,082		2,260,788

		As of March 31, 2008 and 2009, restricted cash represent cash received from the Government relating to compensation for early termination of exclusive rights to be used for the construction of certain infrastructures (Notes 1a and 28) and time deposits with original maturities of more than one year pledged as collateral for bank guarantees.

		Deferred land rights charges represent costs to extend the contractual life of the land rights which have been deferred and amortized over the contractual life (Note 11d.vi).

		As of March 31, 2009, equipment not used in operations represents Base Transceiver Station (BTS) and other equipment of the Company and Telkomsel temporarily taken out from operations but planned to be reinstalled. Telkomsel’s depreciation charged to the consolidated statements of income for three months period ended March 31, 2008 and 2009 amounted to Rp.3,091 million and Rp.7,404 million, respectively.

		In 2008 and 2009, certain equipment of Telkomsel with a net carrying amount of Rp.1,131 million and Rp.nil, respectively, was reclassified to property, plant and equipment (Note 11).

		Refer to Note 43 for details of related party transactions.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


14.		GOODWILL AND OTHER INTANGIBLE ASSETS

(i)

The changes in the carrying amount of goodwill and other intangible assets for the three months period ended March 31, 2008 and 2009 are as follows:


			Other
			intangible
	Goodwill		assets			License			Total
Gross carrying amount:
Balance, December 31, 2007		—		8,419,906			436,000			8,855,906
Additions — Sigma’s software license		—		21,044			—			21,044
Additions — acquisition of Sigma (Note 4)		232,335		—			—			232,335
Additions — the Company’s software		—		24,344			—			24,344

Balance, March 31, 2008		232,335		8,465,294			436,000			9,133,629

Accumulated amortization:
Balance, December 31, 2007		—		(5,022,301	)		(58,393	)		(5,080,694	)
Accumulated — Sigma’s software license		—		(12,605	)		—			(12,605	)
Amortization expense for three months period (Note 36)		—		(284,689	)		(11,679	)		(296,368	)

Balance, March 31, 2008		—		(5,319,595	)		(70,072	)		(5,389,667	)

Net Book Value		232,335		3,145,699			365,928			3,743,962

Weighted-average amortization period		5 years		7.22 years			9.33 years


				Other
				intangible
	Goodwill			assets			License			Total
Gross carrying amount:
Balance, December 31, 2008		106,544			8,969,599			436,000			9,512,143
Additions — Sigma’s software		—			2,013			—			2,013
Reclassification — GSD’s software		—			(50	)		—			(50	)

Balance, March 31, 2009		106,544			8,971,562			436,000			9,514,106

Accumulated amortization:
Balance, December 31, 2008		(17,048	)		(6,202,180	)		(105,107	)		(6,324,335	)
Amortization expense for three months period (Note 36)		(1,279	)		(303,730	)		(11,679	)		(316,688	)
Reclassification — GSD’s software		—			4			—			4

Balance, March 31, 2009		(18,327	)		(6,505,906	)		(116,786	)		(6,641,019	)

Net Book Value		88,217			2,465,656			319,214			2,873,087

Weighted-average amortization period		5 years			7.05 years			9.33 years

	(ii)		Goodwill resulted from the acquisition of Sigma in 2008 (Note 4) and Indonusa in 2008 (Notes 1d.b and 1d.c). Goodwill is amortized using the straight-line method over a period of not more than five years (Note 2d). Other intangible assets resulted from the acquisitions of Dayamitra, Pramindo, TII, KSO IV and KSO VII, and represented the rights to operate the business in the KSO areas.

	(iii)		The up-front fee paid by Telkomsel in February 2006 for the 3G license amounting to Rp.436,000 million was recognized as an intangible asset and is amortized over the term of the 3G license (Notes 2j and 43a.ii).

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


14.		GOODWILL AND OTHER INTANGIBLE ASSETS (continued)

(iv)

The estimated annual amortization expense relating to other intangible assets for each year beginning from April 1, 2009 is approximately Rp.1,275,569 million per year.


15.		ESCROW ACCOUNTS

Escrow accounts as of March 31, 2008 and 2009 consist of the following:


	2008		2009
Bank Mandiri		—		42,811
Bank Danamon		1,177		1,186
Others (each below Rp.1 billion)		108		108

		1,285		44,105

		The escrow account with Bank Mandiri were established in relation with the Palapa Ring Consortium Construction and Maintenance Agreement (“C&MA”) as an initial deposit 5% of the commitment value (Note 47c.iv).

		The escrow account with Bank Danamon were established in relation with the RSA in telecommunications equipment in Divre VII East Indonesia.

		Refer to Note 43 for details of related party transactions.


16.		TRADE PAYABLES


	2008		2009
Related parties
Concession fees		280,931		838,639
Purchases of equipment, materials and services		229,537		160,622
Payables to other telecommunications providers		67,101		238,852

Sub-total		577,569		1,238,113


Third parties
Purchases of equipment, materials and services		4,647,468		8,870,211
Payables related to RSA		92,033		74,542
Payables to other telecommunications providers		105,602		9,504

Sub-total		4,845,103		8,954,257

Total		5,422,672		10,192,370

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


16.		TRADE PAYABLES (continued)

Trade payables by currency are as follows:


	2008		2009
Rupiah		5,194,977		4,066,279
U.S. Dollars		187,698		5,298,858
Euro		34,592		798,914
Singapore Dollars		4,916		27,093
Others		489		1,226

Total		5,422,672		10,192,370

Refer to Note 43 for details of related party transactions.


17.		ACCRUED EXPENSES


	2008		2009
Operations, maintenance and telecommunications services		1,024,133		1,513,581
Salaries and benefits		1,347,508		1,128,243
General, administrative and marketing		533,490		505,237
Interest and bank charges		164,370		236,670

Total		3,069,501		3,383,731

Refer to Note 43 for details of related party transactions.


18.		UNEARNED INCOME


	2008		2009
Prepaid pulse reload vouchers		2,298,523		2,634,337
Other telecommunications services		51,518		29,756
Others		127,518		129,936

Total		2,477,559		2,794,029

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


19.		SHORT-TERM BANK LOANS


	2008		2009
Bank CIMB Niaga		29,800		25,213
Bank Ekonomi		—		17,399
BNI		166,667		—
Bank Syariah Mega		19,347		—

Total		215,814		42,612

Refer to Note 43 for details of related party transactions.

	a.		Bank CIMB Niaga

			On April 25, 2005, Balebat entered into a Rp.800 million, 12% per annum fixed rate revolving credit facility and Rp.1,600 million investment credit facility agreement with Bank CIMB Niaga. These credit facilities are secured by Balebat’s property, plant and equipment located in West Java up to a maximum of Rp.3,350 million (Note 11). The applicable fixed interest rate and maturity date of the revolving credit facility was amended on July 26, 2005 from 12% per annum to 12.5% per annum and May 30, 2006, respectively and subsequently on June 13, 2006 to 16.5% per annum and May 30, 2007, respectively. Based on the latest amendment, the revolving credit facility amounting to Rp.800 million was combined with the short-term fixed credit facility of Rp.4,000 million (Note 22f). Additionally, Balebat obtained a credit facility of Rp.500 million with a fixed interest rate of 16.75% per annum, maturing on May 30, 2007. On May 23, 2007, the loan agreement was amended (4^th amendment agreement) to increase the maximum facility amount and interest rate to Rp.15,000 million and 13% per annum respectively, for the period up to May 29, 2008. On April 29, 2008, the loan agreement was amended to change the maturity period to May 29, 2009 and change rate from 13% per annum to 11% per annum. The principal outstanding as of March 31, 2008 and 2009 amounted to Rp.14,800 million and Rp.15,000 million, respectively.

			On April 29, 2008, Balebat received an additional Specific Transaction Facility and Bank Overdraft Facility of Rp.5,000 million and Rp.500 million, respectively (Note 22f). The loan bears an interest rate of 11.5% per annum and will mature on May 29, 2009. As of March 31, 2009, the principal outstanding amounted to Rp.5,000 million and Rp.213 million.

			On October 18, 2005, GSD entered into two short-term loan agreements with Bank CIMB Niaga for an original facility of Rp.12,000 million and Rp.3,000 million. The loans bore interest rate of 14.50% per annum and matured on October 18, 2006 for each loan. The loan agreements were amended twice, the latest on November 3, 2006 to change the interest rate from 16.25% per annum to 15.5% per annum and the maturity period to October 18, 2007. On November 23, 2007, GSD entered into a short-term loan agreement with Bank CIMB Niaga as an amendment of the both loans for an original facility of Rp.15,000 million. The loan bore interest rate of 11% per annum and matured on 18 October 2008. The loan agreement was amended twice, the latest on December 23, 2008 to change the total facility to Rp.19,000 million with interest rate of 15.5% per annum and the maturity period to October 18, 2009. This credit facility is secured by GSD’s property, plant and equipment located in Jakarta (Note 11). The principal outstanding as of March 31, 2008 and 2009 amounted to Rp.15,000 million and Rp.5,000 million, respectively.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


19.		SHORT-TERM BANK LOANS (continued)

	b.		Bank Ekonomi

			On October 14, 2008, Sigma entered into a Rp.7,500 million short-term loan agreement with Bank Ekonomi for working capital purpose. The loan bears floating interest rate from 12.50% per annum to 15.50% per annum and repayable within 9 months from the signing date to July 15, 2009. This facility is secured by Sigma’s trade receivables (Note 6). As of March 31, 2009, the principal outstanding amounted to Rp.7,500 million.

			On November 14, 2008, Sigma entered into a Rp.5,500 million short-term loan agreement with Bank Ekonomi for working capital purpose. On December 2, 2008, Rp.3,500 million were drawdown from the Facility. The loan bears interest rate of 15.50% per annum and is repayable within 12 months from the signing date to December 2, 2009. This facility is secured by Sigma’s trade receivables (Note 6). As of March 31, 2009, the principal outstanding amounted to Rp.5,500 million.

			On February 11, 2009, Sigma entered into a US$550,000 short-term loan agreement with Bank Ekonomi for working capital purpose. On March 23, 2009, US$380,000 were drawdown from the Facility. The loan bears interest rate of 6% per annum and is repayable within 3 months from the signing date to June 23, 2009. This facility is secured by Sigma’s trade receivables (Note 6). As of March 31, 2009, the principal outstanding amounted to US$380,000 (equivalent to Rp.4,399 million).

	c.		BNI

			On June 15, 2007, Telkomsel signed a Rp.300,000 million short-term facility agreement with BNI, payable in 3 equal quarterly installments commencing after 3 months from the end of the availability period. The loan bore a floating interest rate of three-month Jakarta Interbank Offered Rate (“JIBOR”) plus 1.25% per annum which becomes due quarterly in arrears and was unsecured. On July 24, 2007, the loan agreement was amended for additional facilities of Rp.200,000 million. On April 28, 2008, the loan was fully repaid.

	d.		Bank Syariah Mega

			On December 11, 2007, Infomedia entered into a Rp.10,535 million loan agreement with Bank Syariah Mega for working capital purpose. The facility was obtained through sharia principles with the estimated rates on borrowing at 14% per annum and was secured by the receivables from contact center (Note 6). The loan was payable within 3 months from the signing date. Based on amendment on June 10, 2008 (2^ndamendment agreement), the maturity period of loan agreement was extended to September 11, 2008. As of March 31, 2008, the principal outstanding amounted to Rp.10,535 million and on September 29, 2008, the loan was fully repaid.

			On March 31, 2008, Infomedia entered into a Rp.8,812 million loan agreement with Bank Syariah Mega for working capital purpose. The facility was obtained through sharia principles with the estimated rates on borrowing at 14% per annum and was secured by the receivables from contact center (Note 6). The loan was payable within 3 months from the signing date. Based on amendment on September 25, 2008 (2^ndamendment agreement), the maturity period of loan agreement was extended to December 28 , 2008. As of March 31, 2008, the principal outstanding amounted to Rp.8,812 million and on November 27, 2008, the loan was fully repaid.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


20.		MATURITIES OF LONG-TERM LIABILITIES

Current maturities


	Notes		2008		2009
Bank loans		22		2,924,835		5,008,936
Deferred consideration for business combinations		23		1,154,537		1,262,104
Two-step loans		21		452,477		472,730
Obligations under finance leases		11		35,578		236,904

Total				4,567,427		6,980,674

Long-term portion


			(In billions of Rupiah)
	Notes		Total		2010		2011		2012		2013		Later
Bank loans		22		6,393.7		3,883.4		1,270.9		616.2		609.2		14.0
Two-step loans		21		3,874.7		353.8		449.1		451.1		376.3		2,244.4
Deferred consideration for business combinations		23		1,179.7		1,057.0		122.7		—		—		—
Obligations under finance leases		11		292.8		132.7		89.5		53.8		16.4		0.4

Total				11,740.9		5,426.9		1,932.2		1,121.1		1,001.9		2,258.8


21.		TWO-STEP LOANS

	a.		Two-step loans are unsecured loans obtained by the Government from overseas banks and consortium of contractors, which are then re-loaned to the Company. The loans entered into up to July 1994 were recorded and payable in Rupiah based on the exchange rate at the date of drawdown. Loans entered into after July 1994 are payable in their original currencies and any resulting foreign exchange gain or loss is borne by the Company.

			The details of the two-step loans are as follows:


	Interest rate						Outstanding
Creditors	2008			2009			2008			2009
Overseas banks		3.10% - 11.64	%		3.10% - 12.27	%		4,123,786			4,347,468
Consortium of contractors		3.20	%		—			17,401			—

Total								4,141,187			4,347,468
Current maturities (Note 20a)								(452,477	)		(472,730	)

Long-term portion (Note 20b)								3,688,710			3,874,738

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


21.		TWO-STEP LOANS (continued)

The details of two-step loans obtained from overseas banks as of March 31, 2008 and 2009 are as follows:


	Interest rate						Outstanding
Currencies	2008			2009			2008		2009
U.S. Dollars		4.00% - 6.67	%		4.00% - 6.67	%		1,548,663		1,725,649
Rupiah		8.97% - 12.14	%		11.47% - 12.27	%		1,363,688		1,174,363
Japanese Yen		3.10% - 3.20	%		3.10	%		1,211,435		1,447,456

Total								4,123,786		4,347,468

			The loans are intended for the development of telecommunications infrastructure and supporting equipment. The loans are payable in semi-annual installments and are due on various dates through 2024.

			The two-step loans which are payable in Rupiah bear either fixed interest rates and floating interest rates based upon the average interest rate on three-month Certificate of Bank Indonesia (“Sertifikat Bank Indonesia” or “SBI”) during the six-months preceding the installment due date plus 1% per annum, and floating interest rate offered by the lenders plus 5.25% per annum. Two-step loans which are payable in foreign currencies bear either fixed rate interests and the floating interest rate offered by the lenders, plus 0.5% per annum.

	c.		The two-step loans obtained from a consortium of contractors as of March 31, 2008 consisted of loans in Japanese Yen with an interest rate of 3.10% per annum.

			The consortium of contractors consists of Sumitomo Corporation, PT NEC Nusantara Communications and PT Humpuss Elektronika (SNH Consortium). The loans were obtained to finance the second digital telephone exchange project. The loans were payable in semi-annual installments and were due on various dates through June 15, 2008. On June 15, 2008, the loans were fully repaid.

As of March 31, 2009, the Company has used all facilities under the two-step loans program and the drawdown period for the two-step loans has expired.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


21.		TWO-STEP LOANS (continued)

The Company is required to maintain financial ratios as follows:

	a.		Projected net revenue to projected debt service ratio should exceed 1.5:1 and 1.2:1 for the two-step loans originating from the World Bank and Asian Development Bank (“ADB”), respectively.

	b.		Internal financing (earnings before depreciation and interest expense) should exceed 50% and 20% compared to annual average capital expenditures for loans originating from World Bank and ADB, respectively.

		As of March 31, 2009, the Company complied with the above mentioned ratios.

		Refer to Note 43 for details of related party transactions.


22.		BANK LOANS

The details of long-term bank loans as of March 31, 2008 and 2009 are as follows:


				2008					2009
				Outstanding					Outstanding
		2009		Original					Original
		Total facility		currency		Rupiah			currency		Rupiah
Lenders	Currency	(in millions)		(in millions)		equivalent			(in millions)		equivalent
The Export-Import Bank of Korea	US$		124		82		758,793			59		680,433
Bank Mandiri	Rp.		3,700,000		—		1,690,000			—		2,030,000
BCA	Rp.		2,250,000		—		700,000			—		1,000,000
Citibank	US$		113		16		144,994			—		—
	Euro		73		7		106,811			—		—
	Rp.		1,000,000		—		200,000			—		400,000
BNI	Rp.		3,550,000		—		1,270,000			—		2,250,000
Bank CIMB Niaga	Rp.		52,300		—		39,060			—		27,909
Bank Bukopin	Rp.		5,300		—		2,964			—		1,824
BRI	Rp.		3,400,000		—		1,820,000			—		2,560,000
Bank Ekonomi	Rp.		60,000		—		23,200			—		52,445
Syndication of banks	Rp.		2,400,000		—		—			—		2,400,000

Total							6,755,822					11,402,611
Current maturities of bank loans (Note 20a)							(2,924,835	)				(5,008,936	)

Long-term portion (Note 20b)							3,830,987					6,393,675

Refer to Note 43 for details of related party transactions.

	a.		The Export-Import Bank of Korea

			On August 27, 2003, the Company entered into a loan agreement with The Export-Import Bank of Korea for a loan facility of US$124 million, to finance the CDMA procurement from the Samsung Consortium. The facility bears interest, commitment and other fees totaling 5.68% per annum. The loan is unsecured and payable in 10 semi-annual installments on June 30 and December 30 of each year beginning in December 2006.

Bank Mandiri

(i)

On March 20, 2006, Telkomsel signed a loan agreement with Bank Mandiri for a facility of Rp.600,000 million, payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of three-month SBI plus 1.75% per annum which becomes due quarterly in arrears and is unsecured. The principal outstanding as of March 31, 2008 and 2009 amounted to Rp.240,000 million and Rp.nil, respectively.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


22.		BANK LOANS (continued)

Bank Mandiri (continued)

	(ii)		On August 15, 2006, Telkomsel signed a medium-term facility loan agreement with Bank Mandiri for Rp.350,000 million, payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of three-month SBI plus 1.5% per annum which becomes due quarterly in arrears and is unsecured. The principal outstanding as of March 31, 2008 and 2009 amounted to Rp.140,000 million and Rp.nil, respectively.

	(iii)		On June 15, 2007, Telkomsel signed a medium-term facility loan agreement with Bank Mandiri of Rp.500,000 million. This facility is payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of three-month JIBOR plus 1,25% per annum which becomes due quarterly in arrears and is unsecured. On July 24, 2007, the loan agreement was amended with addition of total facilities provided amounted to Rp.200,000 million. The principal outstanding as of March 31, 2008 and 2009 amounted to Rp.560,000 million and Rp.280,000 million, respectively.

	(iv)		On October 24, 2007, Telkomsel signed a medium-term facility loan agreement with Bank Mandiri of Rp.750,000 million. This facility is payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of three-month JIBOR plus 1.17% per annum which becomes due quarterly in arrears and is unsecured. The principal outstanding as of March 31, 2008 and 2009 amounted to 750,000 million and Rp.450,000 million, respectively.

	(v)		On December 23, 2008, Telkomsel signed a medium-term facility loan agreement with Bank Mandiri of Rp.1,300,000 million. On December 30, 2008, Rp.1,000,000 million has been drawn-down from the Facility and the remaining Rp.300,000 million will be drawn-down on January 30, 2009. On January 30, 2009, Rp.300 billion of the remaining loan facility from Mandiri was drawn-down by Telkomsel. This facility is payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of one-month JIBOR plus 2.25% per annum which becomes due monthly in arrears and is unsecured. The principal outstanding as of March 31, 2009 amounted to Rp.1,300,000 million.

BCA

	(i)		On March 16, 2006, Telkomsel signed a loan agreement with BCA for a facility of Rp.400,000 million, payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of three-month SBI plus 1.75% per annum which becomes due quarterly in arrears and is unsecured. The principal outstanding as of March 31, 2008 and 2009 amounted to Rp.160,000 million and Rp.nil, respectively.

	(ii)		On August 15, 2006, Telkomsel signed a medium-term facility loan agreement with BCA for Rp.350,000 million, payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of three-month SBI plus 1.5% per annum which becomes due quarterly in arrears and is unsecured. The principal outstanding as of March 31, 2008 and 2009 amounted to Rp.140,000 million and Rp.nil, respectively.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


22.		BANK LOANS (continued)

BCA (continued)

	(iii)		On June 15, 2007, Telkomsel signed a medium-term facility loan agreement with BCA of Rp.500,000 million, payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of three-month JIBOR plus 1.25% per annum which becomes due quarterly in arrears and is unsecured. The principal outstanding as of March 31, 2008 and 2009 amounted to Rp.400,000 million and Rp.200,000 million, respectively.

	(iv)		On July 14, 2008, Telkomsel signed a medium-term facility loan agreements with BCA of Rp.1,000,000 million. This facility is payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of one-month JIBOR plus 1.5% per annum which becomes due quarterly in arrears and is unsecured. The principal outstanding as of March 31, 2009 amounted to Rp.800,000 million.

Citibank

	1.		Hermes Export Facility

			On December 2, 2002, pursuant to the partnership agreement with Siemens Aktiengesellschaft (“AG”) (Note 47a.ii), Telkomsel entered into the Hermes Export Facility Agreement (“Facility”) with Citibank International plc (as “Original Lender” and “Agent”) and Citibank, Jakarta branch (“Arranger”) covering a total facility of Euro76.2 million divided into several tranches. The agreement was subsequently amended on October 15, 2003, amending the Facility amount to Euro73.4 million and the payment dates.

			The Facility bore interest rate based on the Euro Interbank Offered Rate (EURIBOR) plus 0.75% per annum and was unsecured. Interest was payable semi-annually, starting on the utilization date of the Facility (May 29, 2003) and was due on October 7, 2008. The principal outstanding as of March 31, 2008 amounted to Euro7.3 million (equivalent to Rp.106,811 million) and on May 28, 2008, the loan was fully repaid.

			In addition to interest, Telkomsel was also charged an insurance premium for the guarantee given by Hermes in favor of Telkomsel for each loan utilization, 15% of which was paid in cash. The remaining balance was settled through utilization of the facility.

High Performance Backbone (“HP Backbone”) Loans

	a.		On April 10, 2002, the Company entered into a loan agreement with Citibank (“Arranger”) and Citibank International plc (“Agent”), which was supported by an export credit guarantee of Hermes Kreditversicherungs AG (“Lender” and “Guarantor”), providing a total facility of US$23.4 million. The facility which was unsecured, was obtained to finance up to 85% of the cost of supplies and services sourced in Germany relating to the design, manufacture, construction, installation and testing of high performance backbone networks in Sumatra pursuant to the “Partnership Agreement” dated November 30, 2001, with Pirelli Cables and Siemens Indonesia for the construction and provision of a high performance backbone in Sumatra. The lender required a fee of 8.4% of the total facility, 15% of which was paid in cash and 85% was included in the loan balance.

			As of March 31, 2008, the outstanding loan was US$4.2 million (equivalent to Rp.38,644 million) and on September 15, 2008, the loan was fully repaid. The loan is payable in 10 equal semi-annual installments beginning in April 2004 with interest at a rate equal to the six-month London Interbank Offered Rate (LIBOR) plus 0.75% per annum.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


22.		BANK LOANS (continued)

Citibank (continued)

HP Backbone Loans (continued)

	b.		On April 10, 2002, the Company entered into a loan agreement with Citibank (“Arranger”) and Citibank International plc (“Agent”), which was supported by an export credit guarantee obtained from Servizi Assicurativi del Commercio Estero (“SACE Italy”) providing a total maximum facility to US$21.0 million. The facility which was unsecured, was used to finance up to 85% of material and services procured in Italy in connection with the design, manufacture, development, installation and testing of Sub-System VI, as part of HP Backbone network.

			The loan bore a fixed interest rate of 4.14% per annum payable in 10 semi-annual installments beginning in December 2003. Total principal outstanding as of March 31, 2008 was US$1.9 million (equivalent to Rp.17,110 million) and on June 5, 2008, the loan was fully repaid.

As stated in the agreements, the Company is required to comply with all covenants or restrictions including maintaining financial ratios as follows, in which the Company has complied with as of March 31, 2008 and up to the repayment date on June 5, 2008 and September 15, 2008, as follows:

	1.		Debt service coverage ratio should exceed 1.5:1.

	2.		Debt to equity ratio should not exceed:

	a.		3:1 for the period April 10, 2002 to January 1, 2003,

	b.		2.75:1 for the period January 2, 2003 to January 1, 2004,

	c.		2.5:1 for the period January 2, 2004 to January 1, 2005, and

	d.		2:1 for the period January 2, 2005 to the full repayment date of the loans.

Debt to EBITDA ratio should not exceed:

	a.		3.5:1 for the period April 10, 2002 to January 1, 2004, and

	b.		3:1 for the period January 2, 2004 to the full repayment date of the loans.

			In 2005, the Company has breached a covenant in the loan agreements which stipulate that the Company will not make any loans or grant any credit to or for the benefit of any person which in aggregate exceed 3% of stockholders’ equity. On May 12, 2006, the Company obtained a written waiver from Citibank International plc with regard to providing loans to certain subsidiaries which in aggregate exceed 3% of stockholders’ equity. In 2006, the Company has complied with the above covenant.

			As of June 21, 2007, the Company obtained a waiver letter from Citibank International plc pertaining to the waiver of the above providing loans facility covenant, which waiver letter is intended to be valid until the loans facility have been fully repaid. In 2008, the Company has complied with the above covenant.

	3.		EKN-Backed Facility

			On December 2, 2002, pursuant to the partnership agreement with PT Ericsson Indonesia (“Ericsson Indonesia”) (Note 47a.ii), Telkomsel entered into the EKN-Backed Facility agreement (“Facility”) with Citibank International plc (“Original Lender” and “Agent”) and Citibank, Jakarta branch (“Arranger”) covering a total Facility of US$70.5 million, divided into several tranches. The agreement was subsequently amended on December 17, 2004, to reduce the total Facility to US$68.9 million.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


22.		BANK LOANS (continued)

Citibank (continued)

	3.		EKN-Backed Facility (continued)

			The interest rate per annum on the Facility is determined based on Commercial Interest Reference Rate (CIRR) of 3.52% plus 0.5% per annum and is unsecured. Interest is payable semi-annually, starting on the utilization date of the Facility (July 31, 2003).

			In addition to interest, Telkomsel was also charged an insurance premium for the guarantee given by EKN in favor of Telkomsel for each loan utilization, 15% of which was paid in cash. The remaining balance was settled through utilization of the facility.

			No amounts were drawdown from the Facility in 2008. The principal outstanding as of March 31, 2008 amounted to US$9.7 million (equivalent to Rp.89,240 million) and on December 30, 2008, the loan was fully repaid.

Medium term loan

	(a)		On March 21, 2006, Telkomsel signed a medium term loan agreement with Citibank, Jakarta Branch for a facility of Rp.500,000 million, payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of three-month SBI plus 1.75% per annum which becomes due quarterly in arrears and is unsecured. The principal outstanding as of March 31, 2008 and 2009 amounted to Rp.200,000 million and Rp.nil, respectively.

	(b)		On October 24, 2007, Telkomsel signed a medium-term facility loan agreement with Citibank, Jakarta Branch of Rp.500,000 million. This facility is in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of three-month JIBOR plus 1.09% per annum which becomes due quarterly in arrears and is unsecured. The principal outstanding as of March 31, 2008 and 2009 amounted to Rp.nil and Rp.400,000 million.

The following table summarizes the principal outstanding on the various long-term loans from Citibank as of March 31, 2008 and 2009:


		2008					2009
		Foreign					Foreign
		currencies		Rupiah			currencies		Rupiah
		(in millions)		equivalent			(in millions)		equivalent
Hermes Export Facility	Euro		7.3		106,811			—		—
HP Backbone loans	US$		6.1		55,754			—		—
EKN-Backed Facility	US$		9.7		89,240			—		—
Medium term loan	Rp.		—		200,000			—		400,000

Total					451,805					400,000
Current maturities					(451,805	)				(200,000	)

Long-term portion					—					200,000

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


22.		BANK LOANS (continued)

BNI

	(i)		On August 15, 2006, Telkomsel signed a medium-term facility loan agreement with BNI for Rp.300,000 million, payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of three-month SBI plus 1.5% per annum which becomes due quarterly in arrears and is unsecured. The principal outstanding as of March 31, 2008 and 2009 amounted to Rp.120,000 million and Rp.nil, respectively.

	(ii)		On June 15, 2007, Telkomsel signed a medium-term facility loan agreement with BNI of Rp.500,000 million, payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of three-month JIBOR plus 1.25% per annum which becomes due quarterly in arrears and is unsecured. The principal outstanding as of March 31, 2008 and 2009 amounted to Rp.400,000 million and Rp.200,000 million, respectively.

	(iii)		On October 24, 2007, Telkomsel signed a medium-term facility loan agreement with BNI of Rp.750,000 million. This facility is payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of three-month JIBOR plus 1.17% per annum which becomes due quarterly in arrears and is unsecured. The principal outstanding as of March 31, 2008 and 2009 amounted to Rp.750,000 million and Rp.450,000 million, respectively.

	(iv)		On July 14, 2008, Telkomsel signed a medium-term facility loan agreements with BNI of Rp.2,000,000 million. This facility is payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of one-month JIBOR plus 1.5% per annum which becomes due quarterly in arrears and is unsecured. The principal outstanding as of as of March 31, 2009 amounted to Rp.1,600,000 million.

Bank CIMB Niaga

	(i)		On December 28, 2004, Balebat entered into a loan agreement with Bank CIMB Niaga for a total facility of Rp.7,200 million comprising of Rp.5,000 million to finance the construction of plant (“Investment Facility”) with an interest rate of 13.5% per annum and Rp.2,200 million to finance certain purchases of machinery (“Specific Transaction Facility”) with an interest rate of 12% per annum. Through an amendment on December 1, 2005, the interest rate was subsequently increased to 17% per annum. The Investment Facility is payable in 36 monthly installments commencing from March 31, 2005. The Specific Transaction Facility is payable in 60 monthly installments commencing from June 29, 2005. These facilities are secured by Balebat’s property, plant and equipment with a total value of Rp.8,450 million (Note 11). On March 1, 2008, the Investment Facility loan was fully repaid. As of March 31, 2008 and 2009, principal outstanding under these facilities amounted to Rp.990 million and Rp.513 million, respectively.

			On December 22, 2005, the loan agreement was amended to include a short-term credit facility of Rp.4,000 million with maturity date and interest rate of December 22, 2006 and 12.5% per annum, respectively. On June 13, 2006, the facility was combined with the revolving credit facility of Rp.800 million (Note 19a).

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


22.		BANK LOANS (continued)

Bank CIMB Niaga (continued)

	(i)		(continued)

			On June 13, 2006, Balebat also received an additional facility of Rp.2,500 million which consisted of a facility of Rp.2,000 million to finance the purchase of a printing machine and Rp.500 million to finance the purchase of operational vehicles with an interest rate of 16.5% per annum. These facilities will be due on October 30, 2011 and November 28, 2009, respectively. Both facilities are secured by Balebat’s property, plant and equipment located in West Java (Note 11). As of March 31, 2008, the outstanding loans of the facilities were Rp.1,184 million and Rp.nil, and as of March 31, 2009 was Rp.799 million and Rp.nil.

	(ii)		As discussed in Note 19a, on April 25, 2005, Balebat entered into a loan agreement with Bank CIMB Niaga for a total facility of Rp.2,400 million which includes an investment credit facility of Rp.1,600 million with maturity date of October 25, 2009. The investment credit facility loan is payable in 48 unequal monthly installments beginning in November 2005 through October 2009. The investment credit facility bears interest at a rate equal to market rate plus 2% per annum. As of March 31, 2008 and 2009, the principal outstanding amounted to Rp.667 million and Rp.235 million, respectively.

	(iii)		On May 29, 2006, Infomedia entered into a loan agreement with Bank CIMB Niaga for a facility of Rp.18,500 million, to finance its call center project with Telkomsel. The facility bears interest at 15.5% per annum and is secured by Infomedia’s receivables on the call center contract with Telkomsel amounted to Rp.23,125 million until the due date of the loan within 36 months from the withdrawal date (Note 6). As of March 31, 2008 and 2009, the principal outstanding amounted to Rp.9,201 million and Rp.1,840 million, respectively.

	(iv)		In March 2007, GSD entered into a loan agreement (2^nd special transaction loan agreement) with Bank CIMB Niaga for a total facility of Rp.20,000 million with an interest rate of 13% per annum. The facility is secured by a parcel of land and buildings of GSD (Note 11). The facility is payable in 8 years and the principal is payable in 33 quarterly installments and will be due in May 2015. As of March 31, 2008 and 2009, the principal outstanding amounted to Rp.19,550 million and Rp.18,650 million, respectively.

	(v)		On November 23, 2007, GSD entered into a loan agreement (3^rd special transaction loan agreement) with Bank CIMB Niaga for a total facility of Rp.8,000 million with an interest rate of 11% per annum. The facility is secured by a parcel of land and buildings of GSD (Note 11). The facility is payable in 5 years and the principal is payable in 60 monthly installments and will be due on November 23, 2012. As of March 31, 2008 and 2009, the principal outstanding amounted to Rp.7,468 million and Rp.5,872 million, respectively.

	g.		Bank Bukopin

			On May 11, 2005, Infomedia entered into loan agreements with Bank Bukopin for various facilities in a maximum of Rp.5,300 million to finance the acquisition of a property. The loan is payable in 60 monthly installments and bears an interest rate of 15.75% per annum and 15.00% per annum as of March 31, 2008 and 2009. A portion of the facilities of Rp.4,200 million will mature in June 2010 and the remainder of Rp.1,100 million will mature in December 2010. The facilities are secured by certain Infomedia’s property, plant and equipment (Note 11).

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

22.

BANK LOANS (continued)

BRI

	(i)		On June 15, 2007, Telkomsel entered into a medium-term loan agreement with BRI for a facility of Rp.400,000 million. The loan is payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of three-month JIBOR plus 1.25% per annum which becomes due quarterly in arrears and is unsecured. The principal outstanding as of March 31, 2008 and 2009 amounted to Rp.320,000 million and Rp.160,000 million, respectively.

	(ii)		On October 24, 2007, Telkomsel signed a medium-term loan agreement with BRI of Rp.2,000,000 million. The loan is payable in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of three-month JIBOR plus 1.17% per annum which becomes due quarterly in arrears and is unsecured. In 2008, the loan has been fully drawn-down. The principal outstanding as of March 31, 2008 and 2009 amounted to Rp.1,500,000 million and Rp.1,600,000 million, respectively.

	(iii)		On July 28, 2008, Telkomsel entered a medium-term facility loan agreement with BRI of Rp.1,000,000 million. This facility is in 5 equal semi-annual installments commencing 6 months after the end of the availability period. The loan bears a floating interest rate of one-month JIBOR plus 1.5% per annum which becomes due quarterly in arrears and is unsecured. As of March 31, 2009, the principal outstanding amounted to Rp.800,000 million.

Bank Ekonomi

	(i)		On December 7, 2006, Sigma entered into a facility loan agreement with Bank Ekonomi of Rp.14,000 million. The facility bears a floating interest rate from 9.50% per annum to 15.50% per annum and is payable in 63 monthly installments starting from September 12, 2007 and ending on December 12, 2012. As of March 31, 2008 and 2009, the principal outstanding amounted to Rp.12,849 million and Rp.10,812 million, respectively.

	(ii)		On March 9, 2007, Sigma entered into a facility loan agreement with Bank Ekonomi of Rp.13,000 million. The facility bears a floating interest rate from 9.50% per annum to 15.50% per annum and is payable in 60 monthly installments starting from December 12, 2007 and ending on December 12, 2012. As of March 31, 2008 and 2009, the principal outstanding amounted to Rp.10,351 million and Rp.8,633 million, respectively.

	(iii)		On September 10, 2008, Sigma entered into a facility loan agreement with Bank Ekonomi of Rp.33,000 million. The facility bears a floating interest rate from 12.50% per annum to 15.50% and is payable in 78 monthly installments starting from March 11, 2009 and ending on March 11, 2015. As of March 31, 2009, the principal outstanding amounted to Rp.33,000 million.

			These credit facilities are secured by a parcel of land and buildings of Sigma located in Surabaya (Note 11) and Sigma’s trade receivables (Note 6) and also includes certain restrictive covenants which require Sigma to obtain written consent from Bank Ekonomi prior to acting as guarantor for third party loan, mortgaging the land to other bank or third party, leasing the land to third party, withdrawing the facility exceeding the maximum facility limit, changing Sigma’s legal status, distributing or declaring dividend and paying shareholder’s receivables .

			As of March 31, 2009, Sigma has complied with the above covenant.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


22.		BANK LOANS (continued)

	j.		Syndication of banks

			On July 29, 2008, the Company entered into a long-term loan agreements with syndication of BNI, BRI and Bank Jabar (syndication of banks) of Rp.2,400,000 million. This facility is payable in 8 equal semi-annual installments commencing 6 months after the end of the availability period. Bank BNI, acting as the facility agent, charged a floating interest rate of three-month JIBOR plus 1.2% per annum which becomes due quarterly in arrears and is unsecured. The loan will mature on July 28, 2013.

			As stated in the agreements, the Company is required to comply with all covenants or restrictions including maintaining financial ratios as follows, in which the Company has complied with as of March 31, 2009 as follows:

	1.		Debt to equity ratio should not exceed 2:1.

	2.		Debt service coverage ratio should exceed 125%.


23.		DEFERRED CONSIDERATION FOR BUSINESS COMBINATIONS

Deferred consideration represents the Company’s obligations to the Selling Stockholders of TII in respect of the Company’s acquisition of 100% of TII, MGTI in respect of the Company’s acquisition of KSO IV and BSI in respect of the Company’s acquisition of KSO VII, with details as follows:


	2008			2009
TII transaction
PT Aria Infotek		105,611			—
The Asian Infrastructure Fund		25,145			—
MediaOne International I B.V.		70,407			—
Less discount on promissory notes		(5,085	)		—

		196,078			—

KSO IV transaction
MGTI		2,080,863			1,715,567
Less discount		(223,791	)		(119,942	)

		1,857,072			1,595,625

KSO VII transaction
BSI		1,488,475			962,720
Less discount		(269,922	)		(116,540	)

		1,218,553			846,180

Total		3,271,703			2,441,805
Current maturity — net of discount (Note 20a)		(1,154,537	)		(1,262,104	)

Long-term portion — net of discount (Note 20b)		2,117,166			1,179,701

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


23.		DEFERRED CONSIDERATION FOR BUSINESS COMBINATIONS (continued)

	a.		TII transaction

			The outstanding balance relating to the TII transaction represents non-interest bearing promissory notes which were included in the purchase consideration, and arose from the acquisition of the 100% outstanding common shares of TII (previously the Company’s KSO III partner) on July 31, 2003. These promissory notes have initial face value of US$109.1 million (equivalent to Rp.927,272 million). The promissory notes are payable in 10 equal semi-annual installments beginning July 31, 2004 and a present value at a discount rate of 5.16% at the closing date of US$92.7 million (equivalent to Rp.788,322 million).

			As of March 31, 2008 and 2009, the outstanding promissory notes, before unamortized discount, amounted to US$21.8 million (equivalent to Rp.201,163 million) and US$nil (equivalent to Rp.nil), respectively.

	b.		KSO IV transaction

			The outstanding balance relating to the KSO IV transaction arose from acquisition of KSO IV by the Company, based on amendment and restatement of KSO agreement entered into by the Company and MGTI on January 20, 2004. Based on the agreement, in consideration for the Company’s obtaining legal right to control the financial and operating decision of KSO IV, the Company has agreed to pay MGTI the total purchase price of approximately US$390.7 million (equivalent to Rp.3,285,362 million), which represents the present value of fixed monthly payments (totaling US$517.1 million), payable to MGTI beginning February 2004 through December 2010 at a discount rate of 8.3%, plus the direct cost of the business combination.

			As of March 31, 2008 and 2009, the remaining monthly payments to be made to MGTI, before unamortized discount, amounted to US$225.7 million (equivalent to Rp.2,080,863 million) and US$148.2 million (equivalent to Rp.1,715,567 million), respectively.

	c.		KSO VII transaction

			The outstanding balance relating to the KSO VII transaction arose from acquisition of KSO VII by the Company, based on amendment and restatement of KSO agreement entered into by the Company and BSI on October 19, 2006. Based on the agreement, in consideration for the Company’s obtaining legal right to control the financial and operating decision of KSO VII, the Company has agreed to pay BSI the total purchase price of approximately Rp.1,770,925 million which represents the present value of fixed monthly payments (totaling Rp.2,359,230 million), payable to BSI beginning October 2006 through December 2010 at a discount rate of 15%, plus the direct cost of the business combination.

			As of March 31, 2008 and 2009, the remaining monthly payments to be made to BSI, before unamortized discount, amounted to Rp.1,488,475 million and Rp.962,720 million, respectively.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

24.

MINORITY INTEREST


	2008		2009
Minority interest in net assets of subsidiaries:
Telkomsel		10,423,163		10,361,606
Infomedia		102,816		158,682
Metra		31,017		60,803

Total		10,556,996		10,581,091


	2008			2009
Minority interest in net income (loss) of subsidiaries:
Telkomsel		1,257,064			901,101
Infomedia		(9,039	)		(5,092	)
Metra		1,562			2,089

Total		1,249,587			898,098

25.

CAPITAL STOCK


	2008
	Number of		Percentage		Total
Description	shares		of ownership		paid-up capital
Series A Dwiwarna share
Government		1		—		—
Series B shares
Government		10,320,470,711		52.06		2,580,118
JPMCB US Resident (Norbax Inc.)		1,673,923,863		8.44		418,481
The Bank of New York Mellon Corporation (formerly The Bank of New York Company, Inc.)		1,782,115,056		9.00		445,529
Directors (Note 1b):
Ermady Dahlan		17,604		—		4
Indra Utoyo		5,508		—		1
Public (individually less than 5%)		6,046,173,537		30.50		1,511,544

Total		19,822,706,280		100.00		4,955,677
Treasury stock (Note 27)		337,293,000		—		84,323

Total		20,159,999,280		100.00		5,040,000

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

25.

CAPITAL STOCK (continued)


	2009
	Number of		Percentage		Total
Description	shares		of ownership		paid-up capital
Series A Dwiwarna share
Government		1		—		—
Series B shares
Government		10,320,470,711		52.47		2,580,118
JPMCB US Resident (Norbax Inc.)		1,216,193,600		6.18		304,049
Directors (Note 1b):
Ermady Dahlan		17,604		—		4
Indra Utoyo		5,508		—		1
Public (individually less than 5%)		8,132,737,356		41.35		2,033,184

Total		19,669,424,780		100.00		4,917,356
Treasury stock (Note 27)		490,574,500		—		122,644

Total		20,159,999,280		100.00		5,040,000

		The Company only issued 1 Series A Dwiwarna Share which is held by the Government and cannot be transferred to any party, and has a veto in the General Meeting of Stockholders of the Company with respect to election and removal of the Board of Commissioners and Directors and to amend the Company’s Articles of Association.

		Series B shares give the same and equal rights to all the Series B stockholders.

26.		ADDITIONAL PAID-IN CAPITAL


	2008			2009
Proceeds from sale of 933,333,000 shares in excess of par value through IPO in 1995		1,446,666			1,446,666
Capitalization into 746,666,640 Series B shares in 1999		(373,333	)		(373,333	)

Total		1,073,333			1,073,333

27.		TREASURY STOCK

		Based on the resolution at the EGM of Stockholders of the Company on December 21, 2005, the stockholders authorized the phase I plan to repurchase the Company’s issued and outstanding Series B shares. The proposal for a stock repurchase program are under the following terms and conditions: (i) maximum stock repurchase would be 5% of the Company’s issued Series B shares with the total cost not to exceed Rp.5,250,000 million; and (ii) the period determined for the acquisition would not be longer than 18 months (December 21, 2005 to June 20, 2007).

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

27.		TREASURY STOCK (continued)

		Based on the resolution at the AGM of Stockholders of the Company on June 29, 2007, the stockholders authorized the discontinuance of the phase I plan to repurchase the Series B shares and authorized the phase II plan to repurchase the Company’s issued and outstanding Series B shares. The proposal was to undertake a stock repurchase program with the following terms and conditions: (i) maximum stock repurchase would be 215,000,000 of the Company’s issued Series B shares with total cost not to exceed Rp.2,000,000 million; and (ii) the period determined for the acquisition would not be longer than 18 months (June 29, 2007 to December 28, 2008).

		Based on the resolution at the AGM of Stockholders or the Company on June 20, 2008, the stockholders authorized the discontinuance of the phase II plan to repurchase the Series B shares and authorized the phase III plan to repurchase the Company’s issued and outstanding Series B shares. The proposal was to undertake a stock repurchase program with the following terms and conditions: (i) maximum stock repurchase would be 339,443,313 of the Company’s issued Series B shares with total cost not to exceed Rp.3,000,000 million; and (ii) the period determined for the acquisition would not be longer than 18 months (June 20, 2008 to December 20, 2009).

		On October 13, 2008, based on BAPEPAM-LK Regulation No. XI.B.3 Attachment to the Decision of the Chairman of BAPEPAM-LK No. Kep-401/BL/2008 dated October 9, 2008 concerning the Stock Repurchase of Stock Issued by the Public Company on Potential Crisis Market Condition, the Company has released a full disclosure statement to the public in relation to the Company’s plan to conduct a stock repurchase program of the Company’s stock which has been issued and listed in IDX up to 20% of its paid up capital with total cost not to exceed Rp.3,000,000 million which will be conduct gradually within the acquisition period that would not be longer than 3 months (October 13, 2008 to January 12, 2009).

		As of March 31, 2008 and 2009, the Company has repurchased 337,293,000 and 490,574,500 shares of the Company’s issued and outstanding Series B shares, respectively, representing 1.67% and 2.43% of the Company’s issued and outstanding Series B shares, for a total repurchase amount of Rp.3,030,368 million and Rp.4,264,114 million up to March 31, 2008 and 2009, respectively, (including broker’s commissions and custodian fees).

		The Company has planned to retain, sell or use the treasury stock for other purposes in accordance with BAPEPAM-LK Regulation No. XI.B.2 and under Law No. 40/2007 on Limited Liability Companies.

		The movement of shares held in treasury arising from the programs for repurchase of shares is as follows:

2008

2009

Number

of shares

Rp.

of shares

Rp.

Balance beginning

244,740,500

2,176,611

490,574,500

4,264,073

Number of shares acquired

92,552,500

853,757

—

Balance ending

337,293,000

3,030,368

490,574,500

4,264,114

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

27.		TREASURY STOCK (continued)

		Historical unit cost of repurchase of treasury shares for the three months period ended March 31, 2008 and 2009 is as follows:


	Rp.
	2008		2009
Weighted average		9,224		—
Minimum		8,407		—
Maximum		10,155		—

		The acquisition cost per share has included the broker’s commissions. Up to the consolidated balance sheet date, none of the shares acquired were sold.

		As of May 8, 2009, the Company had repurchased 490,574,500 shares equivalent to 2.43% of the issued and outstanding Series B shares, for a repurchase price of Rp.4,264,130 million, including broker and custodian fees (Note 1c).

28.		DIFFERENCE IN VALUE ARISING FROM RESTRUCTURING TRANSACTIONS AND OTHER TRANSACTIONS BETWEEN ENTITIES UNDER COMMON CONTROL

		The balance of this account amounting to Rp.360,000 million arose from the early termination of the Company’s exclusive rights to provide local and domestic fixed line telecommunication services. As discussed in Note 1a, on December 15, 2005, the Company signed an Agreement on Implementation of Compensation for Termination of Exclusive Rights with the State MoCI — DGPT, which was amended on October 18, 2006. Pursuant to this agreement, the Government agreed to pay Rp.478,000 million, net of tax, to the Company over a five-year period where Rp.90,000 million shall be paid from the 2005 State budget, Rp.90,000 million from the 2006 State budget and the remaining Rp.298,000 million shall be paid gradually or in one lump-sum payment based on the State’s financial ability. In addition, the Company is required by the Government to use the funds received from this compensation for the development of telecommunications infrastructure. As of March 31, 2008 and 2009, the development of the related infrastructures amounted to Rp.190,997 million and Rp.296,871 million, respectively.

		As of March 31, 2008 and 2009, the Company has received an aggregate of Rp.270,000 million and Rp.360,000 million, respectively, in relation to the compensation for the early termination of exclusivity rights, being Rp.90,000 million each paid on December 30, 2005, December 28, 2006, December 13, 2007 and November 12, 2008, respectively. The Company recorded these amounts in “Difference in value arising from restructuring transactions and other transactions between entities under common control” in the Stockholders’ Equity section. These amounts are recorded as a component of Stockholders’ Equity because the Government is the majority and controlling stockholder of the Company. The Company will record the remaining amount of Rp.118,000 million when received.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

29.

TELEPHONE REVENUES


	2008		2009
Fixed lines
Local and SLJJ		1,563,486		1,111,016
Monthly subscription charges		918,914		914,227
Installation charges		30,639		31,071
Phone cards		299		2,103
Others		27,100		58,176

Total		2,540,438		2,116,593
Cellular
Usage charges		5,683,839		5,733,675
Monthly subscription charges		84,555		443,961
Features		139,433		282,424
Connection fee charges		58,256		57,391

Total		5,966,083		6,517,451

Total Telephone Revenues		8,506,521		8,634,044

30.

INTERCONNECTION REVENUES


	2008			2009
Revenues		3,041,324			2,659,347
Expenses		(781,585	)		(743,834	)

Total — Net		2,259,739			1,915,513

		Based on the MoCI Regulation No. 08/Per/M.KOMINFO/02/2006, the implementation of cost-based interconnection tariff is applicable beginning January 1, 2007 (Note 46).

		Refer to Note 43 for details of related party transactions.

31.		DATA, INTERNET AND INFORMATION TECHNOLOGY REVENUES


	2008		2009
Short Messaging Services (“SMS”)		2,930,176		2,498,118
Internet		452,125		742,552
Data communication and information technology services		518,707		425,642
VoIP		37,462		41,590
e-Business		6,206		7,866

Total		3,944,676		3,715,768

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

32.

NETWORK REVENUES


	2008		2009
Leased lines		85,928		180,052
Satellite transponder lease		132,879		83,418

Total		218,807		263,470

		Refer to Note 43 for details of related party transactions.

33.		REVENUE-SHARING ARRANGEMENTS (“RSA”) REVENUES


	2008		2009
RSA revenues		37,564		11,841
Amortization of unearned income (Note 12)		60,372		31,932

Total		97,936		43,773

34.

PERSONNEL EXPENSES


	2008		2009
Salaries and related benefits		705,758		762,429
Vacation pay, incentives and other benefits		764,454		657,481
Employees’ income tax		233,307		152,454
Net periodic pension costs (Notes 40a)		179,662		132,030
Net periodic post-retirement health care benefits costs (Note 42)		225,659		82,811
Housing		98,200		52,049
Other post-retirement cost (Note 40b)		20,894		20,367
LSA and LSA termination costs (Note 41)		4,978		6,855
Other employees’ benefits (Note 40c)		3,002		3,711
Medical		2,008		1,581
Others		8,980		32,998

Total		2,246,902		1,904,766

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

35.

OPERATIONS, MAINTENANCE AND TELECOMMUNICATION SERVICES EXPENSES


	2008		2009
Operations and maintenance		1,377,968		1,733,710
Radio frequency usage charges (Note 47c.v)		341,263		557,790
Concession fees and Universal Service Obligation (“USO”) charges		261,740		261,396
Cost of handset, phone, SIM and RUIM cards		166,794		277,913
Electricity, gas and water		113,201		149,014
Leased lines and CPE		76,178		110,833
Insurance		87,643		75,808
Vehicles rental and supporting facilities		54,454		63,396
Cost of IT services		6,301		44,030
Travelling		12,219		13,297
Call center		7,319		5
Others		1,093		1,443

Total		2,506,173		3,288,635

		Refer to Note 43 for details of related party transactions.

36.		GENERAL AND ADMINISTRATIVE EXPENSES


	2008		2009
Amortization of goodwill and other intangible assets (Note 14)		296,368		316,688
Collection expenses		116,020		148,695
Provision for doubtful accounts and inventory obsolescence (Notes 6d and 7)		195,296		126,291
Security and screening		64,745		64,359
Travelling		51,656		51,616
Training, education and recruitment		41,004		33,647
General and social contribution		14,782		17,433
Vehicles rental		22,151		17,208
Professional fees		15,697		16,126
Meetings		19,300		15,834
Stationery and printing		14,054		13,421
Research and development		923		951
Others		6,486		18,988

Total		858,482		841,257

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

37.

TAXATION

Claim for tax refund


	2008		2009
Subsidiaries
Corporate income tax		—		5,484
Income tax — including interest
Article 21 — Individual income tax				388
Article 23 — Withholding tax on services delivery		72,751		211,321
Article 26 — Withholding tax on non-resident income tax		7,934		3,950
Value Added Tax (“VAT”) — including interest		327,326		1,811

		408,011		222,954

Prepaid taxes


	2008		2009
The Company
Corporate income tax		—		255,168

		—		255,168

Subsidiaries
Corporate income tax		63,402		535,708
VAT		3,247		11,299
Income tax Article 23 — Services delivery		4,717		1,525

		71,366		548,532

		71,366		803,700

Taxes payable


	2008		2009
The Company
Income taxes
Article 21 — Individual income tax		52,533		34,588
Article 22 — Withholding tax on goods delivery and imported		2,289		3,510
Article 23 — Withholding tax on services delivery		10,519		12,241
Article 24		115		—
Article 25 — Installment of corporate income tax		5,948		6,714
Article 26 — Withholding tax on non-resident income tax		2,112		1,298
Article 29 — Underpayment of corporate income tax		283,527		220,976
VAT		273,539		258,545

		630,582		537,872

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

37.

TAXATION (continued)

Taxes payable (continued)


	2008		2009
Subsidiaries
Income taxes
Article 21 — Individual income tax		9,042		22,445
Article 22 — Withholding tax on goods delivery and imported		—		2
Article 23 — Withholding tax on services delivery		25,567		56,184
Article 25 — Installment of corporate income tax		420,948		321,936
Article 26 — Withholding tax on non-resident income tax		5,283		16,919
Article 29 — Underpayment of corporate income tax		339,255		72,209
VAT		123,603		136,269

		923,698		625,964

		1,554,280		1,163,836

The components of income tax expense (benefit) are as follows:


	2008			2009
Current
The Company		568,140			434,005
Subsidiaries		1,490,236			971,605

		2,058,376			1,405,610

Deferred
The Company		(87,532	)		(36,758	)
Subsidiaries		82,169			30,011

		(5,363	)		(6,747	)

		2,053,103			1,398,863

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

37.

TAXATION (continued)

	e.		Corporate income tax is computed for each individual company as a separate legal entity (consolidated financial statements are not applicable for computing corporate income tax in Indonesia).

			The reconciliation between the consolidated income before tax and taxable income attributable to the Company and the consolidated income tax expense are as follows:


	2008			2009
Consolidated income before tax		6,509,934			4,754,846
Add back consolidation eliminations		2,295,998			1,621,543

Consolidated income before tax and eliminations		8,805,932			6,376,389
Less: income before tax of the subsidiaries		(5,117,987	)		(3,521,257	)

Income before tax attributable to the Company		3,687,945			2,855,132
Less: income subject to final tax		(178,104	)		(200,327	)

		3,509,841			2,654,805

Tax calculated at progressive rates		1,052,934			743,345
Non-taxable income		(688,537	)		(454,293	)
Non-deductible expenses		95,864			86,046
Deferred tax liabilities (assets) that cannot be utilized — net		(762	)		(1,669	)

Corporate income tax expense		459,499			373,429
Final income tax expense		21,109			23,818

Total income tax expense of the Company		480,608			397,247
Income tax expense of the subsidiaries		1,572,405			1,001,616

Total consolidated income tax expense		2,053,013			1,398,863

The reconciliation between income before tax attributable to the Company and the estimated taxable income for the three months period ended March 31, 2008 and 2009, are as follows:


	2008			2009
Income before tax attributable to the Company		3,687,945			2,855,132
Less: income subject to final tax		(178,104	)		(200,327	)

		3,509,841			2,654,805

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

37.

TAXATION (continued)

(continued)


	2008			2009
Temporary differences:
Amortization of intangible assets		250,793			245,871
Depreciation of property, plant and equipment		144,945			9,061
Allowance for doubtful accounts		163,918			84,401
Accrued employees’ benefits		115,622			84,153
Depreciation of property, plant and equipment under RSA		28,184			17,164
Finance leases		579			(7,150	)
Foreign exchange loss (gain) on deferred consideration for business combinations		(45,838	)		97,414
Allowance for inventory obsolescence		2,201			3,037
Amortization of land rights		(988	)		(1,021	)
Gain on sale of property, plant and equipment		1,545			—
Amortization of unearned income on RSA		(51,239	)		(31,651	)
Net periodic pension and other post-retirement benefits costs		(62,235	)		(101,119	)
Payments of deferred consideration for business combinations		(216,450	)		(294,983	)
Other provisions		(41,810	)		20,144

Total temporary differences		289,227			125,321

Permanent differences:
Net periodic post-retirement health care benefits costs		223,061			82,811
Amortization of discounts on promissory notes		3,689			520
Equity in net income of associates and subsidiaries		(2,295,124	)		(1,622,474	)
Others		92,800			223,972

Total permanent differences		(1,975,574	)		(1,315,171	)

Taxable income		1,823,494			1,464,955

Current corporate income tax expense		547,031			410,187
Final income tax expense		21,109			23,818

Total current income tax expense of the Company		568,140			434,005
Current income tax expense of the subsidiaries		1,490,236			971,605

Total current income tax expense		2,058,376			1,405,610

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

37.

TAXATION (continued)

Tax assessment

	(i)		Company

			In 2006, the Company received an underpayment tax assessment letter (“Surat Ketetapan Pajak Kurang Bayar” or “SKPKB”) from the Tax Office confirming an underpayment of its corporate income tax for fiscal year 2004 amounting to Rp.4,363 million. The underpayment was paid in August 2006.

	(ii)		Telkomsel

			In 2007, Telkomsel was assessed for underpayments of withholding taxes, VAT and corporate income tax including penalty covering the fiscal years 2004 and 2005 totaling Rp.478 billion. The underpayments were settled through netting off withholding tax paid in 2006 of Rp.25 billion and cash payments of Rp.453 billion. On January 3, 2008, Telkomsel filed an objection for underpayment of withholding taxes and VAT including a penalty totaling Rp.408 billion. The difference between the assessed and objected amounts of Rp.70 billion was charged to the 2007 consolidated statements of income.

			Subsequently, on December 31, 2008, the Tax Authorities accepted Rp.141 billion of the objection. Telkomsel recognized such amount and interest of Rp.39 billion as claims for tax refund as of December 31, 2008. Telkomsel filed an appeal to the Tax Court for the rejected objection on VAT of Rp.215 billion. Telkomsel believes that such amount will be refundable, hence, it was recognized as a claim for tax refund as of December 31, 2008. The remainder of the rejected amount of Rp.52 billion was charged to the 2008 consolidated statements of income. The Tax Authorities might raise similar issues for transactions that occurred in subsequent fiscal years.

			On October 2, 2007, Telkomsel filed an appeal to the Tax Court for the Tax Authorities’ rejection over the Telkomsel’s objection on SKPKB of withholding taxes article 23 and 26 for the fiscal year 2002 of Rp.21 billion. The amount of Rp.21 billion which was previously recorded as claims for tax refund was charged to the 2007 consolidated statement of income.

			Based on the Tax Court’s decision in December 2008, Telkomsel’s appeal has been accepted and an amount of Rp.115 billion with an interest of Rp.52 billion, net of underpayments of various taxes, was received in February 2009.

			On February 25, 2009, Tax Authorities filed a judicial review in Indonesian SC, on the Tax Court’s decision to accept Telkomsel’s appeal for a refund of Rp.115 billion. Telkomsel believes that the decision has properly been made. Accordingly, on April 3, 2009, Telkomsel filed a contra appeal to the SC. As of the issuance date of the consolidated financial statements, no decision has been reached on the judicial review.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

37.

TAXATION (continued)

	g.		Deferred tax assets and liabilities

			The details of the Company and subsidiaries’ deferred tax assets and liabilities are as follows:


				(Charged)
				credited to the
				consolidated
	December 31,			to statements			Acquisitions		March 31,
	2007			of income			of Sigma		2008
The Company
Deferred tax assets:
Deferred consideration for business combinations		1,010,035			(78,686	)		—		931,349
Allowance for doubtful accounts		306,329			48,971			—		355,300
Net periodic pension and other post-retirement benefits costs		375,994			(18,670	)		—		357,324
Accrued expenses		76,686			(12,866	)		—		63,820
Accrued for employees’ benefits		172,071			34,687			—		206,758
Finance leases		40,057			174			—		40,231
Allowance for inventory obsolescence		15,891			626			—		16,517

Total deferred tax assets		1,997,063			(25,764	)		—		1,971,299

Deferred tax liabilities:
Difference between book and tax property, plant and equipment’s net book value		(1,848,201	)		149,855			—		(1,698,346	)
Land rights		(4,592	)		(296	)		—		(4,888	)
RSA		(59,859	)		(6,368	)		—		(66,227	)
Intangible assets		(909,005	)		(29,895	)		—		(938,900	)

Total deferred tax liabilities		(2,821,657	)		113,296			—		(2,708,361	)

Deferred tax liabilities of the Company — net		(824,594	)		87,532			—		(737,062	)
Deferred tax liabilities of the subsidiaries — net		(2,209,506	)		(82,169	)		4,956		(2,286,719	)

Total deferred tax liabilities — net		(3,034,100	)		5,363			4,956		(3,023,781	)


			(Charged)
			credited to the
			consolidated
	December 31,		statements			March 31,
	2008		of income			2009
The Company
Deferred tax assets:
Deferred consideration for business combinations		698,048		(55,319	)		642,729
Allowance for doubtful accounts		259,195		28,101			287,296
Net periodic pension and other post-retirement benefits costs		275,741		(28,315	)		247,426
Accrued expenses		31,877		5,641			37,518
Early termination expenses		220,698		—			220,698
Accrued for employees’ benefits		93,035		23,562			116,597
Finance leases		22,034		(1,933	)		20,101
Allowance for inventory obsolescence		16,201		850			17,051

Total deferred tax assets		1,616,829		(27,413	)		1,589,416

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

37.

TAXATION (continued)

Deferred tax assets and liabilities (continued)


				(Charged)
				credited to the
				consolidated
	December 31,			statements			March 31,
	2008			of income			2009
Deferred tax liabilities:
Difference between book and tax property, plant and equipment’s net book value		(1,570,559	)		(42,031	)		(1,612,590	)
Land rights		(4,922	)		(285	)		(5,207	)
RSA		(57,869	)		(4,057	)		(61,926	)
Intangible assets		(573,918	)		110,544			(463,374	)

Total deferred tax liabilities		(2,207,268	)		64,171			(2,143,097	)

Deferred tax liabilities of the Company — net		(590,439	)		36,758			(553,681	)
Deferred tax liabilities of the subsidiaries — net		(2,314,434	)		(30,011	)		(2,344,445	)

Total deferred tax liabilities — net		(2,904,873	)		6,747			(2,898,126	)

			Realization of the deferred tax assets is dependent upon future profitable operations. Although realization is not assured, the Company and its subsidiaries believe that it is probable that these deferred tax assets will be realized through reduction of future taxable income. The amount of deferred tax assets is considered realizable, however, could be reduced if actual future taxable income is lower than that estimates.

			Telkomsel’s claims for overpayment of corporate income tax for fiscal years 2004 and 2005 due to recalculation of depreciation of property, plant and equipment in 2006 for tax purposes amounting to Rp.338 billion were rejected by the Tax Authorities, hence, it was reversed with a corresponding deduction to the deferred tax liability. The rejection of recalculation resulted to a recognition of overpayment of corporate income tax for 2006 of Rp.12.5 billion presented as part of prepaid taxes.

	h.		Administration

			Under the taxation laws of Indonesia, the Company and each subsidiary submit tax return on the basis of self assessment. The Directorate General of Tax (“DGT”) may assess or amend taxes within ten years of the time the tax becomes due, or until end of 2013, whichever is earlier. There are new rules applicable to fiscal year 2008 and subsequent years stipulating that the DGT may assess or amend taxes within five years of the time the tax becomes due.

			On September 23, 2008, the President of the Republic Indonesia and MoJHR has signed and enacted the Tax Law No. 36/2008 concerning the Forth Amendment of the Tax Law No. 7/1983 of Income Taxes. This regulation stipulates that corporate tax rate will be a flat rate of 28% in 2009 (previously calculated using progressive tax rates range from 10% to 30%), and 25% in 2010. As of December 31, 2008, the Company and its subsidiaries measured the effect of the enacted tax rate of 28% and 25% in calculating its deferred tax assets and liabilities depending on the timing of realization of its estimates.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


37.		TAXATION (continued)

	h.		Administration (continued)

			Other than tariff changes, the Tax Law No. 36/2008 also stipulates a reduction of 5% from the top rate applies for qualifying companies listed and traded its stock in the IDX which meet the prescribed criteria that the stocks owned by the public are 40% or more of the total fully paid and traded stocks in IDX, and such stocks are owned by at least 300 parties, each party owning less than 5% of the total paid-up stocks. These requirements should be fulfilled by the publicly-listed companies for a period of six months in one tax year. For fiscal year 2008, the Company has met all of the required criteria, thereby the Company is entitled the tax rate reduction incentive and it has been implemented for the calculation of corporate income tax.

			The Company has been audited by the Tax Office up to the fiscal year of 2004, excluding fiscal year 2003, Telkomsel up to fiscal year 2005 excluding fiscal year 2003, GSD up to fiscal year 2002 and 2007, Infomedia up to fiscal year 2003, and PIN for fiscal year 2007. Currently, Telkomsel is being audited by the Tax Office for the fiscal year 2006 and 2008.

			In 2008, Tax Authorities issued a sunset policy program in form of an opportunity to the tax payer to make revision in the prior years underpaid Annual Tax Returns Form (“Surat Pemberitahuan Tahunan” or “SPT Tahunan”), which will be granted for free tax administration sanction and will be no assessment in the related fiscal year, unless the Tax Authorities find new evidence to perform the assessment and investigation. The Company and Telkomsel have utilized sunset policy program through SPT revision. The Company settled the tax underpayments for fiscal years 2003, 2005 and 2006 amounting to Rp.1.9 billion, Rp.2.8 billion and Rp.2.4 billion, respectively, and Telkomsel for fiscal year 2003 amounting to Rp.1.9 billion. In addition, the Company received a certificate of tax investigation exemption from DGT for fiscal year 2007.


38.		BASIC EARNINGS PER SHARE

		Basic earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the year, totaling 19,860,250,480 and 19,748,574,254 for three months period ended March 31, 2008 and 2009, respectively.

		Basic earning per share amounting to Rp.161.50 and Rp.124.46 for the three months period ended March 31, 2008 and 2009, respectively.

		The Company does not have potentially dilutive ordinary shares.


39.		CASH DIVIDENDS AND GENERAL RESERVE

Pursuant to the AGM of Stockholders of the Company as stated in notarial deed No. 58 dated June 29, 2007 of A. Partomuan Pohan, S.H., LLM., the stockholders approved the distribution of cash dividends for 2006 amounting to Rp.6,053,067 million or Rp.303.21 per share (of which Rp.971,017 million or Rp.48.41 per share was distributed as interim cash dividend in December 2006) and the appropriation of Rp.4,897,482 million for general reserves.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


39.		CASH DIVIDENDS AND GENERAL RESERVE (continued)

Pursuant to the AGM of Stockholders of the Company as stated in notarial deed No. 41 dated June 20, 2008 of A. Partomuan Pohan, S.H., LLM., the stockholders approved the distribution of cash dividends for 2007 amounting to Rp.7,071,360 million or Rp.357.87 per share (of which Rp.965,398 million or Rp.48.45 per share was distributed as interim cash dividend in November 2007), the distribution of special cash dividends amounting to Rp.1,928,553 million and the appropriation of Rp.3,857,106 million for general reserves.


40.		PENSION AND OTHER POST-RETIREMENT BENEFITS


	2008		2009
Accrued pension and other post-retirement benefits costs
Pension
The Company		978,362		662,197
Telkomsel		79,575		105,952

Accrued pension costs		1,057,937		768,149
Other post-retirement benefits		209,399		222,379
Obligation under Labor Law		56,972		66,981

Accrued pension and other post-retirement benefits costs		1,324,308		1,057,509

Prepaid pension benefits costs		557		176

Net periodic pension costs
The Company		161,269		118,354
Telkomsel		15,505		13,674
Infomedia		2,288		2

Net periodic pension costs (Note 34)		179,062		132,030

Other post-retirement cost (Note 34)		20,894		20,367

Other employees’ benefits (Note 34)		3,002		3,711

Pension

	1.		The Company

			The Company sponsors a defined benefit pension plan and a defined contribution pension plan.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


40.		PENSION AND OTHER POST-RETIREMENT BENEFITS (continued)

Pension (continued)

	1.		The Company (continued)

			The defined benefit pension plan is provided to employees hired with permanent status prior to July 1, 2002. The pension benefits are paid based on the participating employees’ latest basic salary at retirement and the number of years of their service. The plan is managed by Telkom Pension Fund (“Dana Pensiun Telkom” or “Dapen”). The participating employees contribute 18% (before March 2003: 8.4%) of their basic salaries to the plan. The Company’s and subsidiaries’ contributions to the pension fund for the three months period ended March 31, 2008 and 2009 amounted to Rp.221,628 million and Rp.222,265 million, respectively.

			The defined contribution pension plan is provided to employees hired with permanent status on or after July 1, 2002. The plan is managed by Financial Institutions Pension Fund (“Dana Pensiun Lembaga Keuangan” or “DPLK”). The Company’s contribution to DPLK is determined based on certain percentage of the participants’ salaries and amounted to Rp.578 million and Rp.867 million for the three months period ended March 31, 2008 and 2009, respectively.

			The following table presents the change in projected benefits obligation, change in plan assets, funded status of the plan and net amount recognized in the Company’s consolidated balance sheets as of March 31, 2008 and 2009, for its defined benefit pension plan:


	2008			2009
Change in projected benefits obligation
Projected benefits obligation at beginning of year		10,727,812			9,516,975
Service costs		70,534			56,184
Interest costs		269,242			278,893
Plan participants’ contributions		21,317			11,081
Actuarial (gains) losses		195,173			(542,067	)
Expected benefits paid		(111,321	)		(110,267	)

Projected benefits obligation at end of period		11,172,757			9,210,799

Change in plan assets
Fair value of plan assets at beginning of year		9,034,391			8,713,418
Expected return on plan assets		228,827			257,707
Employer’s contributions		221,628			222,265
Plan participants’ contributions		21,317			11,081
Actuarial gains		159,880			66,421
Expected benefits paid		(102,952	)		(101,308	)

Fair value of plan assets at end of period		9,563,091			9,169,584

Funded status		(1,609,666	)		(41,215	)
Unrecognized prior service costs		1,624,066			1,442,389
Unrecognized net actuarial gain		(992,762	)		(2,063,371	)

Accrued pension benefit cost		(978,362	)		(662,197	)

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


40.		PENSION AND OTHER POST-RETIREMENT BENEFITS (continued)

Pension (continued)

	1.		The Company (continued)

			In 2007, the Company provides pension benefit based on uniformulation for both participants prior to and from April 20, 1992 effective for employees retiring beginning February 1, 2009. The change in benefit had increased the Company’s liabilities by Rp.698,583 million, which is amortized over 9.9 years until 2016.

			The actual return on plan assets was Rp.228,936 million and Rp.319,432 million for the three months period ended March 31, 2008 and 2009, respectively.

			The movement of the accrued pension benefits costs during the three months period ended March 31, 2008 and 2009, is as follows:


	2008			2009
Accrued pension benefits costs at beginning of year		1,054,097			775,657
Net periodic pension cost less amounts charged to KSO Units and subsidiaries		161,269			118,354
Amount charged to KSO Units and subsidiaries under contractual agreements		—			166
Employer’s contributions		(221,628	)		(222,265	)
Benefits paid by the Company		(15,376	)		(9,715	)

Accrued pension benefits costs at end of period		978,362			662,197

			As of March 31, 2009, plan assets consisted mainly of Indonesian Government bonds and corporate bonds. As of March 31, 2009, plan assets included Series B shares issued by the Company with fair value totaling Rp.299,564 million represents 3.16% of total assets of Dapen as of March 31, 2009.

			The actuarial valuation for the defined benefit pension plan and the other post-retirement benefits (Note 40b) was performed based on the measurement date as of December 31, 2007 and 2008, with reports dated March 31, 2008 and March 31, 2009, respectively, by PT Watson Wyatt Purbajaga (“WWP”), an independent actuary in association with Watson Wyatt Worldwide (“WWW”). The principal actuarial assumptions used by the independent actuary as of December 31, 2007 and 2008, are as follows:


	2007			2008
Discount rate		10.25	%		12	%
Expected long-term return on plan assets		10	%		11.5	%
Rate of compensation increases		8	%		8	%

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


40.		PENSION AND OTHER POST-RETIREMENT BENEFITS (continued)

Pension (continued)

	1.		The Company (continued)

			The components of net periodic pension costs are as follows:


	2008			2009
Service costs		70,534			56,184
Interest costs		269,242			278,893
Expected return on plan assets		(232,709	)		(257,707	)
Amortization of prior service costs		55,330			55,330
Recognized actuarial gain		(1,128	)		(14,180	)

Net periodic pension costs		161,269			118,520
Amount charged to KSO Units and subsidiaries under contractual agreements		—			(166	)

Total net periodic pension costs less amounts charged to KSO Units and subsidiaries (Note 34)		161,269			118,354

	2.		Telkomsel

			Telkomsel provides a defined benefit pension plan to its employees. Under this plan, employees are entitled to pension benefits based on their latest basic salary or take-home pay and the number of years of their service. PT Asuransi Jiwasraya (“Jiwasraya”), a state-owned life insurance company, manages the plan under an annuity insurance contract. Until 2004, the employees contributed 5% of their monthly salaries to the plan and Telkomsel contributed any remaining amount required to fund the plan. Starting 2005, the entire contributions are fully made by Telkomsel.

			The following table reconciles the unfunded status of the plans with the amounts included in the consolidated balance sheets as of March 31, 2008 and 2009:

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


40.		PENSION AND OTHER POST-RETIREMENT BENEFITS (continued)

Pension (continued)

Telkomsel (continued)


	2008			2009
Projected benefits obligation		(308,316	)		(301,332	)
Fair value of plan assets		107,480			129,239

Unfunded status		(200,836	)		(172,093	)
Unrecognized items in the consolidated balance sheet:
Unrecognized prior service costs		(829	)		(766	)
Unrecognized net actuarial losses		120,306			65,301
Unrecognized net obligation at the date of initial application of PSAK 24		1,784			1,606

Accrued pension benefits costs		(79,575	)		(105,952	)

The components of the net periodic pension costs are as follows:


	2008			2009
Service costs		9,324			8,487
Interest costs		7,643			8,521
Expected return on plan assets		(2,817	)		(3,864	)
Amortization of past service costs		(16	)		(16	)
Recognized actuarial losses		1,326			501
Amortization of net obligation at the date of initial application of PSAK 24		45			45

Net periodic pension costs (Note 34)		15,505			13,674

The net periodic pension cost for the pension plan was calculated based on the measurement date as of December 31, 2007 and 2008, with reports dated March 25, 2008 and February 12, 2009, respectively, by WWP, an independent actuary in association with WWW. The principal actuarial assumptions used by the independent actuary based on the measurement date as of December 31, 2007 and 2008 for each of the year, are as follows:


	2007			2008
Discount rate		10.5	%		12	%
Expected long-term return on plan assets		10.5	%		12	%
Rate of compensation increases		8	%		9	%

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


40.		PENSION AND OTHER POST-RETIREMENT BENEFITS (continued)

Pension (continued)

	3.		Infomedia

			Infomedia provides a defined benefit pension plan to its employees. The reconciliation of the funded status of the plan with the net amount recognized in the consolidated balance sheets as of March 31, 2008 and 2009, are as follows:


	2008			2009
Projected benefits obligation		(5,960	)		(5,387	)
Fair value of plan assets		6,517			5,563

Funded status		557			176

Prepaid pension benefits costs		557			176

The net periodic pension costs of Infomedia amounted to Rp.2,888 million and Rp.2 million for the three months period ended March 31, 2008 and 2009, respectively (Note 34).

	b.		*Other post-retirement benefits*

			The Company provides other post-retirement benefits in the form of cash paid to employees on their retirement or termination. These benefits consist of last housing allowance (“Biaya Fasilitas Perumahan Terakhir” or “BFPT”) and home passage leave (“Biaya Perjalanan Pensiun dan Purnabhakti” or “BPP”). In 2006, these benefits presented as part of LSA.

			The movement of the other post-retirement benefits for the three months period ended March 31, 2008 and 2009, are as follows:


	2008			2009
Accrued other post-retirement benefits costs at beginning of year		195,061			210,345
Other post-retirement benefits costs		20,894			20,367
Other post-retirement benefits paid		(6,556	)		(8,333	)

Total accrued other post-retirement benefits costs at end of period after early retirement benefits		209,399			222,379

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


40.		PENSION AND OTHER POST-RETIREMENT BENEFITS (continued)

	b.		*Other post-retirement benefits* (continued)

			The components of the net periodic other post-retirement benefits costs for the three months period ended March 31, 2008 and 2009, are as follows:


	2008		2009
Service costs		5,657		5,432
Interest costs		10,484		11,540
Amortization of past service costs		760		1,706
Recognized actuarial losses		3,993		1,689

Total net periodic other post-retirement benefits costs less amounts charged to KSO Units (Note 34)		20,894		20,367

	c.		*Obligation under Labor Law*

			Under Law No. 13/2003 concerning labor regulation, the Company and its subsidiaries are required to provide a minimum pension benefits, if not covered yet by the sponsored pension plans, to their employees upon retirement age. The total related obligation recognized as of March 31, 2008 and 2009 amounted to Rp.56,972 million and Rp.66,981 million, respectively. The related employees’ benefits cost charged to expense amounted to Rp.3,002 million and Rp.3,711 million for the three months period ended March 31, 2008 and 2009, respectively (Note 34).


41.		LONG SERVICE AWARDS (“LSA”)

		Telkomsel

		Telkomsel provides certain cash awards or certain number of days leave benefits to its employees based on the employees’ length of service requirements, including LSA and LSL (Note 47c.i). LSA are either paid at the time the employees reach the anniversary dates during employment, or at the time of termination. LSL are either certain number of days leave benefit or cash, subject to approval by management, provided to employees who met the requisite number of years of service and with a certain minimum age.

		The obligation with respect to these awards was determined based on an actuarial valuation using the Projected Unit Credit method, and amounted to Rp.76,806 million and Rp.108,722 million as of March 31, 2008 and 2009, respectively (Note 43). The related benefits cost charged to expense amounted to Rp.4,978 million and Rp.6,855 million for the three months period ended March 31, 2008 and 2009, respectively (Note 34).

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


42.		POST-RETIREMENT HEALTH CARE BENEFITS

		The Company provides a post-retirement health care plan to all of its employees hired before November 1, 1995 who have worked for the Company for 20 years or more when they retire, and to their eligible dependents. The requirement to work for 20 years does not apply to employees who retired prior to June 3, 1995. The employees hired by the Company starting from November 1, 1995 no longer be entitled to this plan. The plan is managed by Yayasan Kesehatan Pegawai Telkom.

		The following table presents the change in the projected benefits obligation, change in plan assets, funded status of the plan and net amount recognized in the Company’s consolidated balance sheets as of March 31, 2008 and 2009:


	2008			2009
Change in projected benefits obligation
Projected benefits obligation at beginning of year		8,925,612			5,855,224
Service costs		35,995			18,002
Interest costs		225,875			171,692
Actuarial gains		(32,603	)		(973,968	)
Expected post-retirement health care paid		55,499			(66,084	)
Effect of change in assumption		350,856			—

Projected benefits obligation at end of period		9,561,234			5,004,866

Change in plan assets
Fair value of plan assets at beginning of year		3,376,172			4,018,693
Expected return on plan assets		76,965			102,595
Employer’s contributions		100,000			100,084
Actuarial (losses) gains		42,134			77,297
Expected post-retirement health care paid		55,499			(66,084	)

Fair value of plan assets at end of period		3,650,770			4,232,585

Funded status		(5,910,464	)		(772,281	)
Unrecognized net actuarial (gains) losses		3,015,882			(1,781,250	)

Accrued post-retirement health care benefits costs		(2,894,582	)		(2,553,531	)

The actual return on plan assets was Rp.55,143 million for the three months period ended March 31, 2009.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


42.		POST-RETIREMENT HEALTH CARE BENEFITS (continued)

The components of net periodic post-retirement health care benefits cost are as follows:


	2008			2009
Service costs		35,995			18,002
Interest costs		225,875			171,692
Expected return on plan assets		(85,842	)		(102,595	)
Recognized actuarial losses		49,631			(4,204	)

Net periodic post-retirement benefits costs		225,659			82,895
Amounts charged to KSO Units and subsidiaries under contractual agreements		—			(84	)

Total net periodic post-retirement health care benefits costs less amounts charged to KSO Units and subsidiaries (Note 34)		225,659			82,811

		As of March 31, 2009, plan assets included the Company’s Series B shares with total fair value of Rp.67,474 million.

		The movements of the accrued post-retirement health care benefits costs for the three months period ended March 31, 2008 and 2009, are as follows:


	2008			2009
Accrued post-retirement health care benefits costs at beginning of year		2,768,923			2,570,720
Net periodic post-retirement health care benefits costs less amounts charged to KSO Units and subsidiaries (Note 34)		225,659			82,811
Amounts charged to KSO Units and subsidiaries under contractual agreements		—			84
Employer’s contributions		(100,000	)		(100,084	)

Accrued post-retirement health care benefits costs at end of period		2,894,582			2,553,531

The actuarial valuation for the post-retirement health care benefits was performed based on the measurement date as of December 31, 2007 and 2008, with reports dated March 31, 2008 and March 31, 2009, respectively, by WWP, an independent actuary in association with WWW. The principal actuarial assumptions used by the independent actuary as of December 31, 2007 and 2008, are as follows:

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


42.		POST-RETIREMENT HEALTH CARE BENEFITS (continued)


	2007			2008
Discount rate		10.25	%		12	%
Expected long-term return on plan assets		9	%		9.25	%
Health care costs trend rate assumed for next year		14	%		12	%
Ultimate health care costs trend rate		8	%		8	%
Year that the rate reaches the ultimate trend rate		2011			2011


43.		RELATED PARTY TRANSACTIONS

		In the normal course of business, the Company and its subsidiaries entered into transactions with related parties. It is the Company’s policy that the pricing of these transactions be the same as those of arms-length transactions.

		The following are significant agreements/transactions with related parties:

Government

	i.		The Company obtained two-step loans from the Government, the Company’s majority stockholder (Note 21).

			Interest expense for two-step loans amounted to Rp.58,463 million and Rp.66,522 million for the three months period ended March 31, 2008 and 2009, respectively. Interest expense for two-step loans represent 22.2% and 12.9% of the total interest expense for each period.

	ii.		The Company and its subsidiaries pay concession fees for telecommunications services provided and radio frequency usage charges to the Ministry of Communications and Information (formerly Ministry of Tourism, Post and Telecommunications) of the Republic of Indonesia.

			Concession fees amounted to Rp.149,836 million and Rp.75,248 million for the three months period ended March 31, 2008 and 2009, respectively (Note 35), representing 1.8% and 0.8%, respectively, of the total operating expenses for each period. Radio frequency usage charges amounted to Rp.341,263 million and Rp.557,790 million for the three months period ended March 31, 2008 and 2009, respectively (Note 35), representing 4.0% and 5.9% of the total operating expenses for each period.

			Telkomsel paid an up-front fee for the 3G license amounting to Rp.436,000 million and recognized as intangible asset (Note 14iii).

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


43.		RELATED PARTY TRANSACTIONS

Government

	iii.		Starting 2005, the Company and its subsidiaries pay USO charges to the Ministry of Communications and Information of the Republic of Indonesia pursuant to MoCI Regulation No.15/Per/M.KOMINFO/9/2005 of September 30, 2005.

			USO charges amounted to Rp.111,904 million and Rp.186,147 million for the three months period ended March 31, 2008 and 2009, respectively (Note 35), representing 1.3% and 2.0% of the total operating expenses for each period.

Commissioners and Directors remuneration

	i.		The Company and its subsidiaries provide honorarium and facilities to support the operational duties of their Board of Commissioners. The total of such benefits amounted to Rp.7,379 million and Rp.10,035 million for the three months period ended March 31, 2008 and 2009, respectively, representing 0.1% of the total operating expenses for each period.

	ii.		The Company and its subsidiaries provide salaries and facilities to support the operational duties of their Board of Directors. The total of such benefits amounted to Rp.18,495 million and Rp.28,908 million for the three months period ended March 31, 2008 and 2009, respectively, representing 0.2% and 0.3% of the total operating expenses for each period.

	c.		Indosat

			The Company considers Indosat as a related party because the Government can exert significant influence over the financial and operating policies of Indosat by virtue of its right to appoint one Director and one Commissioner of Indosat.

			The Company has an agreement with Indosat for the provision of international telecommunications services to the public.

			The principal matters covered by the agreement are as follows:

	i.		The Company provides a local network for customers to make or receive international calls. Indosat provides the international network for the customers, except for certain border towns, as determined by the Director General of Post and Telecommunications of the Republic of Indonesia. The international telecommunications services include telephone, telex, telegram, Package Switched Data Network (PSDN), television, teleprinter, Alternate Voice/Data Telecommunications (AVD), hotline and teleconferencing.

	ii.		The Company and Indosat are responsible for their respective telecommunications facilities.

	iii.		Customer billing and collection, except for leased lines and public phones located at the international gateways, are handled by the Company.

	iv.		The Company receives compensation for the services provided in the first item above, based on the interconnection tariff determined by the MoC.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


43.		RELATED PARTY TRANSACTIONS (continued)

	c.		Indosat (continued)

			The Company has also entered into an interconnection agreement between the Company’s fixed line network (Public Switched Telephone Network or “PSTN”) and Indosat’s cellular network in connection with implementation of Indosat Multimedia Mobile services and the settlement of the related interconnection rights and obligations.

			The Company also has an agreement with Indosat for the interconnection of Indosat’s GSM mobile cellular telecommunications network with the Company’s PSTN, enabling each party’s customers to make domestic calls between Indosat’s GSM mobile network and the Company’s fixed line network and allowing Indosat’s mobile customers to access the Company’s IDD service by dialing “007”.

			The Company has been handling customer billings and collections for Indosat. Indosat is gradually taking over the activities and performing its own direct billing and collection. The Company receives compensation from Indosat computed at 1% of the collections made by the Company beginning January 1, 1995, plus the billing process expenses which are fixed at a certain amount per record. On August 28, 2008, the Company and Indosat agreed to implement IDD service charge tariff, the tariff already taken into account the compensation of its billing and collection. The agreement is valid and effective starting on April to December 2008. The Company and Indosat performed evaluation for determining the IDD service charge tariff which will be effective in 2009.

			On December 28, 2006, the Company and Indosat signed amendments to the interconnection agreements for the fixed line networks (local, SLJJ and international) and mobile network for the implementation of the cost-based tariff obligations under the MoCI Regulations No. 8/2006 (Note 46). These amendments took effect on January 1, 2007.

			Telkomsel also entered into an agreement with Indosat for the provision of international telecommunications services to its GSM mobile cellular customers. The principal matters covered by the agreement are as follows:

	i.		Telkomsel’s GSM mobile cellular telecommunications network is interconnected with PT Indosat’s international gateway exchanges to facilitate outgoing and incoming international calls.

	ii.		Telkomsel’s and Indosat’s GSM mobile cellular telecommunications networks are interconnected to allow cross-network communications among their subscribers.

	iii.		In exchange for these interconnections, Indosat is entitled to a certain amount as compensation.

	iv.		Interconnection equipment installed by one of the parties in another party’s premises remain the property of the party installing such equipment. Expenses incurred in connection with the provision of equipment, installation and maintenance are borne by Telkomsel.

The Company and its subsidiaries were earned (charged) net interconnection income (charges) from Indosat of (Rp.36,757) million and Rp.19,725 million for the three months period ended March 31, 2008 and 2009, respectively, representing (0.2)% and 0.1% of the total operating revenues for each period.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


43.		RELATED PARTY TRANSACTIONS (continued)

	c.		Indosat (continued)

			Telkomsel also has an agreement with Indosat on the usage of Indosat’s telecommunications facilities. The agreement, which was made in 1997 and is valid for eleven years, is subject to change based on annual review and mutual agreement by both parties. The charges for the usage of the facilities amounted to Rp.6,821 million and Rp.8,218 million for the three months period ended March 31, 2008 and 2009, respectively, representing 0.1% of the total operating expenses for each period.

			Other agreements between Telkomsel and Indosat are as follows:

	i.		Agreement on Construction and Maintenance for Jakarta-Surabaya Cable System (“J-S Cable System”)

			On October 10, 1996, Telkomsel, Lintasarta, PT Satelit Palapa Indonesia (“Satelindo”) and Indosat (the “Parties”) entered into an agreement on the construction and maintenance of the J-S Cable System. The Parties have formed a management committee which consists of a chairman and one representative from each of the Parties to direct the construction and operation of the cable system. The construction of the cable system was completed in 1998. In accordance with the agreement, Telkomsel shared 19.325% of the total construction costs. Operating and maintenance costs are shared based on agreed formula.

			Telkomsel’s share in operating and maintenance costs amounted to Rp.92 million and Rp.915 million for the three months period ended March 31, 2008 and 2009, respectively.

	ii.		IRU Agreement

			On September 21, 2000, Telkomsel entered into agreement with Indosat on the use of SEA-ME-WE 3 and tail link in Jakarta and Medan. In accordance with the agreement, Telkomsel was granted an IRU for certain capacity of the link starting from September 21, 2000 until September 20, 2015 for an up-front payment of US$2.7 million (Note 13). In addition to the up-front payment, Telkomsel is also charged annual operating and maintenance costs amounting to US$0.1 million.

In 1994, the Company transferred to Satelindo the right to use a parcel of Company-owned land located in Jakarta which had been previously leased to Telekomindo. Based on the transfer agreement, Satelindo is given the right to use the land for 30 years and can apply for the right to build properties thereon. The ownership of the land is retained by the Company. Satelindo agreed to pay Rp.43,023 million to the Company for the 30 years right. Satelindo paid Rp.17,210 million in 1994 while the remaining balance Rp.25,813 million was not paid because the Utilization Right (“Hak Pengelolaan Lahan” or “HPL”) on the land could not be delivered as provided in the transfer agreement. In 2000, the Company and Satelindo agreed on an alternative solution resulting in the payment being treated as a lease expense up to 2006. In 2001, Satelindo paid an additional amount of Rp.59,860 million as lease expense up to 2024. As of March 31, 2008 and 2009, the prepaid portion is shown in the consolidated balance sheets as “Advances from customers and suppliers”.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

43.

RELATED PARTY TRANSACTIONS (continued)

	c.		Indosat (continued)

			The Company provides leased lines to Indosat and its subsidiaries, namely Indosat Mega Media, Lintasarta and PT Sistelindo Mitralintas. The leased lines can be used by these companies for telephone, telegraph, data, telex, facsimile or other telecommunication services. Revenues earned from these transactions amounted to Rp.44,121 million and Rp.35,049 million for the three months period ended March 31, 2008 and 2009, respectively, representing 0.3% and 0.2% of the total operating revenues for each period.

			Lintasarta utilizes the Company’s satellite transponders or frequency channels. Revenues earned from these transactions amounted to Rp.4,842 million and Rp.6,550 million for the three months period ended March 31, 2008 and 2009, respectively, representing less than 0.1% of total operating revenues for each period.

			Telkomsel has an agreement with Lintasarta (valid until October 31, 2010) and PT Artajasa Pembayaran Elektronis (“Artajasa”) (valid until May 2008) (a 39.8% owned subsidiary of Indosat) for the usage of data communication network system. The charges from Lintasarta and Artajasa for the services amounted to Rp.8,408 million and Rp.8,561 million for the three months period ended March 31, 2008 and 2009, respectively, representing 0.1% of the total operating expenses for each period.

	d.		Others

			Transactions with all BUMN are considered as related parties transactions:

	(i)		The Company provides telecommunication services to substantially all Government Agencies in Indonesia which transactions are treated as that of third parties customers.

	(ii)		The Company has entered into agreements with Government Agencies and associated companies, namely CSM, Patrakom and PSN for the utilization of the Company’s satellite transponders or frequency channels. Revenues earned from these transactions amounted to Rp.25,448 million and Rp.40,731 million for the three months period ended March 31, 2008 and 2009, respectively, representing 0.2% and 0.3% of the total operating revenues for each period.

	(iii)		The Company provides leased lines to associated companies, namely CSM, Patrakom, PSN and Gratika. The leased lines can be used by the associated companies for telephone, telegraph, data, telex, facsimile or other telecommunications services. Revenues earned from these transactions amounted to Rp.15,125 million and Rp.12,271 million for the three months period ended March 31, 2008 and 2009, respectively, representing 0.1% of the total operating revenues for each period.

	(iv)		The Company purchases property, plant and equipment including construction and installation services from a number of related parties. These related parties include, among others, PT Industri Telekomunikasi Indonesia (“INTI”) and Kopegtel. Purchases made from these related parties amounted to Rp.76,434 million and Rp.32,260 million for the three months period ended March 31, 2008 and 2009, respectively, representing 2.1% and 0.6% of the total fixed assets purchased in each period.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

43.

RELATED PARTY TRANSACTIONS (continued)

Others (continued)

	(v)		INTI is also a major contractor and supplier of equipment, including construction and installation services of Telkomsel. Purchases from INTI for the three months period ended March 31, 2008 and 2009 amounted to Rp.10,143 million and Rp.24,910 million, respectively, representing 0.3% and 0.5% of the total fixed assets purchased in each period.

	(vi)		Telkomsel has an agreement with PSN for the lease of PSN’s transmission link. Based on the agreement, which was made on March 14, 2001, the minimum lease period is 2 years since the operation of the transmission link and is extendable subject to agreement by both parties. The agreement was extended until March 13, 2011. The lease charges amounted to Rp.33,359 million and Rp.60,934 million for the three months period ended March 31, 2008 and 2009, respectively, representing 0.4% and 0.6% of the total operating expenses for each period.

	(vii)		The Company and its subsidiaries insured their property, plant and equipment against property losses, inventories and employees’ social security from Jasindo, PT Asuransi Tenaga Kerja and Jiwasraya, state-owned insurance companies. Insurance premiums amounted to Rp.79,614 million and Rp.75,910 million for the three months period ended March 31, 2008 and 2009, respectively, representing 0.9% and 0.8% of the total operating expenses for each period.

	(viii)		The Company and its subsidiaries maintain current accounts and time deposits in several state-owned banks. In addition, some of these banks are appointed as collecting agents for the Company. Total placements in the form of current accounts, time deposits and mutual funds in state-owned banks amounted to Rp.3,938,915 million and Rp.4,829,230 million as of March 31, 2008 and 2009, respectively, representing 4.8% and 5.3% of the total assets. Interest income recognized for the three months period ended March 31, 2008 and 2009 amounted to Rp.60,945 million and Rp.55,676 million, representing 35.0% and 40.0% of the total interest income for each period.

	(ix)		The Company’s subsidiaries obtained loans from state-owned banks. Interest expense on these loans for the three months period ended March 31, 2008 and 2009 amounted to Rp.127,937 million and Rp. 177,608 million, respectively, representing 48.6% and 34.3% of the total interest expense for each period.

	(x)		The Company leases buildings, leases vehicles, purchases materials and construction services, and utilizes maintenance and cleaning services of Kopegtel and PT Sandhy Putra Makmur (“SPM”), a subsidiary of Yayasan Sandikara Putra Telkom — a foundation managed by Dharma Wanita Telkom. Total charges from these transactions amounted to Rp.89,015 million and Rp.86,878 million for the three months period ended March 31, 2008 and 2009, respectively, representing 1.0% and 0.9% of the total operating expenses for each period.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

43.

RELATED PARTY TRANSACTIONS (continued)

Others (continued)

	(xi)		The Company and its subsidiaries incurred interconnection expenses from PSN, with a total of Rp.809 million and Rp.85 million for the three months period ended March 31, 2008 and 2009, respectively, representing 0.005% and 0.001% of the total operating expenses for each period.

	(xii)		The Company has RSA with Kopegtel. Kopegtel’s share in revenues from these arrangements amounted to Rp.3,194 million and Rp. 1,628 million for the three months period ended March 31, 2008 and 2009, respectively, representing 0.02% and 0.01% of the total operating revenues for each period.

	(xiii)		Telkomsel has operating lease agreements with Patrakom and CSM for the use of their transmission link for 3 years, subject to extension. Lease charges amounted to Rp.36,953 million and Rp.64,253 million for the three months period ended March 31, 2008 and 2009, respectively, representing 0.4% and 0.7% of the total operating expenses for each period.

	(xiv)		Koperasi Pegawai Telkomsel (“Kisel”) is a cooperation that was established by Telkomsel’s employees to engage in car rental services, printing and distribution of customer bills, collection and other services principally for the benefit of Telkomsel. For these services, Kisel charged Telkomsel Rp.106,359 million and Rp.121,124 million for the three months period ended March 31, 2008 and 2009, respectively, representing 1.3% of the total operating expenses for each period. Telkomsel also has dealership agreements with Kisel for distribution of SIM cards and pulse reload vouchers. Total SIM cards and pulse reload vouchers which were sold to Kisel amounted to Rp.510,710 million and Rp.525,361 million for the three months period ended March 31, 2008 and 2009, respectively, representing 3.4%, and 3.6% of the total operating revenues for each period.

	(xv)		The Company has seconded a number of its employees to related parties to assist them in operating their businesses. In addition, the Company provides to certain of its related parties, the right to use its buildings free of charge.

	(xvii)		Telkomsel has procurement agreements with Gratika, a subsidiary of Dapen, for installation and maintenance of equipment. Total procurement for installations of equipment amounted to Rp.7,974 million and Rp.38,248 million for the period three months period ended March 31, 2008 and 2009, respectively; representing 0.2% and 0.8% of the total acquisition of fixed assets for each period; and for maintenance of equipment amounted to Rp.11,568 and Rp.9,376 million for the three months period ended March 31, 2008 and 2009, respectively, representing 0.1% of the total operating expenses for each period.

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

43.		RELATED PARTY TRANSACTIONS (continued)

		Presented below are balances of accounts with related parties:


		2008				2009
				% to				% to
		Amount		total assets		Amount		total assets
a.	Cash and cash equivalents (Note 5)		3,591,612		4.39		4,269,004		4.68

b.	Temporary investments		186,708		0.23		287,531		0.31

c.	Trade receivables — net (Note 6)		399,786		0.49		770,121		0.84

d.	Other receivables
	State-owned banks (interest)		21,619		0.03		—		—
	Patrakom		2,773		0.00		4,725		0.01
	Kopegtel		3,829		0.00		3,827		0.00
	Government Agencies		2,065		0.00		2,442		0.00
	Other		558		0.00		425		0.00

	Total		30,844		0.03		11,419		0.01

e.	Prepaid expenses (Note 8)		22,443		0.03		1,284,159		1.41

f.	Other current assets (Note 9)
	BNI		—		—		21,232		0.02
	Bank Mandiri		75,686		0.09		21,169		0.02

	Total		75,686		0.09		42,401		0.04

g.	Advances and other non-current assets (Note 13)
	BNI		—		—		94,039		0.10
	Bank Mandiri		91,618		0.11		91,198		0.10
	Kisel		—		—		1,088		0.00
	Perusahaan Umum Percetakan Uang Republik Indonesia (Peruri)		813		0.00		813		0.00
	BRI		—		—		347		0.00

	Total		92,431		0.11		187,485		0.20

h.	Escrow accounts (Note 15)		—		—		42,811		0.05

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

43.

RELATED PARTY TRANSACTIONS (continued)


		2008				2009
				% to total				% to total
		Amount		liabilities		Amount		liabilities
i.	Trade payables (Note 16)
	Government Agencies		300,154		0.85		847,774		1.93
	Kopegtel		107,506		0.31		62,898		0.14
	Indosat		47,867		0.14		24,492		0.06
	Yakes		52,782		0.15		9,588		0.02
	SPM		15,199		0.04		7,377		0.02
	INTI		23,921		0.07		6,916		0.02
	Gratika		69		0.00		3,955		0.01
	CSM		—		—		1,012		0.00
	PSN		4,407		0.01		—		—
	Others		25,664		0.07		274,101		0.62

	Total		577,569		1.64		1,238,113		2.82

j.	Accrued expenses (Note 17)
	Employees		1,347,508		3.83		1,128,243		2.57
	Government Agencies and state-owned banks		43,271		0.12		85,694		0.20
	PT Jaminan Sosial Tenaga Kerja (Persero) (Jamsostek)		20,978		0.06		21,032		0.05
	Jasindo		93		0.00		93		0.00

	Total		1,390,872		3.95		1,235,062		2.82


k.	Short-term bank loans (Note 19)
	BNI		166,667		0.47		—		—

	Total		166,667		0.47		—		—

l.	Two-step loans (Note 21)		4,141,187		11.78		4,347,468		9.90

m.	Pension and other post-retirement benefits (Note 40)		1,324,308		3.77		1,057,509		2.41

n.	Accrued LSA (Note 41)		76,806		0.22		108,722		0.25

o.	Accrued post-retirement health care benefits (Note 42)		2,894,582		8.24		2,553,531		5.81

p.	Long-term bank loans (Note 22)
	BNI		1,270,000		3.61		3,450,000		7.86
	BRI		1,820,000		5.18		3,060,000		6.97
	Bank Mandiri		1,690,000		4.81		2,030,000		4.62

	Total		4,780,000		13.60		8,540,000		19.45

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

44.		SEGMENT INFORMATION

		The Company and its subsidiaries have three main business segments operating in Indonesia namely: fixed wireline, fixed wireless and cellular. The fixed wireline segment provides local, SLJJ and international telephone services, and other telecommunications services (including among others, leased lines, telex, transponder, satellite and VSAT) as well as ancillary services. The fixed wireless segment provides CDMA-based telecommunication services which offers customers the ability to use a wireless handset with limited mobility (within a local code area). The cellular segment provides basic telecommunication services, particularly mobile cellular telecommunication services. Operating segments that do not individually represent more than 10% of the Company’s revenues are presented as “Others”, comprising of telephone directories and building management businesses. Goodwill is allocated to fixed wireline segment.

		Segment revenues and expenses include transactions between business segments and are accounted for at prices that management believes represent market prices.


	2008
	Fixed			Fixed									Total before						Total
	wireline			wireless			Cellular			Others			elimination			Elimination			consolidated
Segment results
External operating revenues		4,832,852			799,072			9,392,850			6,829			15,031,603			—			15,031,603
Inter-segment operating revenues		316,169			(30,860	)		194,443			86,255			566,007			(566,007	)		—

Total segment revenues		5,149,021			768,212			9,587,293			93,084			15,597,610			(566,007	)		15,031,603

External operating expenses		(4,100,683	)		(404,270	)		(3,869,833	)		(114,329	)		(8,489,115	)		—			(8,489,115	)
Inter-segment operating expenses		(80,010	)		—			(510,189	)		(7,788	)		(597,987	)		597,987			—

Segment expenses		(4,180,693	)		(404,270	)		(4,380,022	)		(122,117	)		(9,087,102	)		597,987			(8,489,115	)

Segment results		968,328			363,942			5,207,271			(29,033	)		6,510,508			31,980			6,542,488

Interest expense																				(263,146	)
Interest income																				174,205
Loss on foreign exchange — net																				(45,655	)
Other income — net																				102,916
Income tax expense																				(2,053,013	)
Equity in net income of associated companies																				(874	)

Income before minority interest																				4,456,921
Unallocated minority interest																				(1,249,587	)

Net income																				3,207,334

Other information
Segment assets		29,481,326			7,115,618			46,776,830			657,686			84,031,460			(2,370,869	)		81,660,591
Investments in associates		119,902			—			20,359			—			140,261			—			140,261

Total consolidated assets																				81,800,852

Total consolidated liabilities		(18,477,244	)		(1,637,145	)		(17,025,929	)		(372,005	)		(37,512,323	)		2,370,869			(35,141,454	)
Capital expenditures		(514,584	)		(20,630	)		(2,280,052	)		(2,331	)		(2,817,597	)		—			(2,817,597	)

Depreciation and amortization		(878,909	)		(94,204	)		(1,535,157	)		(13,062	)		(2,521,332	)		15,995			(2,505,337	)

Amortization of goodwill and other intangible assets		(272,236	)		—			(24,132	)		—			(296,368	)		—			(296,368	)

Other non-cash expenses		(183,061	)		—			(12,475	)		240			(195,296	)		—			(195,296	)

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

44.

SEGMENT INFORMATION (continued)


	2009
	Fixed			Fixed									Total before						Total
	wireline			wireless			Cellular			Others			elimination			Elimination			consolidated
Segment results
External operating revenues		4,651,361			744,413			9,258,218			48,186			14,702,178			—			14,702,178
Inter-segment operating revenues		649,822			17,819			(21,313	)		81,365			727,693			(727,693	)		—

Total segment revenues		5,301,183			762,232			9,236,905			129,551			15,429,871			(727,693	)		14,702,178

External operating expenses		(3,928,107	)		(586,380	)		(4,743,859	)		(155,634	)		(9,413,980	)		—			(9,413,980	)
Inter-segment operating expenses		(197,787	)		—			(575,831	)		(9,006	)		(782,624	)		782,624			—

Segment expenses		(4,125,894	)		(586,380	)		(5,319,690	)		(164,640	)		(10,196,604	)		782,624			(9,413,980	)

Segment results		1,175,289			175,852			3,917,215			(35,089	)		5,233,267			54,931			5,288,198

Interest expense																				(517,388	)
Interest income																				138,451
Loss on foreign exchange — net																				(211,718	)
Other income — net																				56,371
Income tax expense																				(1,398,863	)
Equity in net income of associated companies																				931

Income before minority interest																				3,355,982
Unallocated minority interest																				(898,098	)

Net income																				2,457,884

Other information
Segment assets		30,836,414			8,152,772			53,222,294			743,830			92,955,310			(1,832,724	)		91,122,586
Investments in associates		149,825			—			20,359			—			170,184			—			170,184

Total consolidated assets																				91,292,770

Total consolidated liabilities		(19,224,027	)		(2,565,550	)		(23,635,051	)		(326,406	)		(45,751,034	)		1,832,724			(43,918,310	)
Capital expenditures		(893,119	)		(448,634	)		(2,156,983	)		(4,385	)		(3,503,121	)		—			(3,503,121	)

Depreciation and amortization		(874,021	)		(140,878	)		(1,940,513	)		(13,841	)		(2,969,253	)		—			(2,969,253	)

Amortization of goodwill and other intangible assets		(289,623	)		—			(27,065	)		—			(316,688	)		—			(316,688	)

Other non-cash expenses		(99,865	)		—			(24,840	)		(1,586	)		(126,291	)		—			(126,291	)

45.		REVENUE-SHARING ARRANGEMENTS (“RSA”)

		The Company has entered into agreements with several investors under RSA to develop fixed lines, public card-phone booths (including their maintenance), data and internet network and related supporting telecommunications facilities.

		As of March 31, 2009, the Company has 40 RSA with 33 investors. The RSA are located mainly in Pekanbaru, Jakarta, East Java, Kalimantan, Makassar, Pare-pare, Manado, Denpasar, Mataram and Kupang, with concession periods ranging from 48 to 172 months.

		Under the RSA, the investors finance the costs incurred in developing the telecommunications facilities. Upon completion of the construction, the Company manages and operates the facilities and bears the cost of repairs and maintenance during the revenue-sharing periods. The investors legally retain the rights to the property, plant and equipment constructed by them during the RSA periods. At the end of each the RSA period, the investors transfer the ownership of the facilities to the Company at a nominal price.

100

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

45.		RSA

		Generally, the revenues earned from the customers in the form of line installation charges are allocated in full to the investors. The revenues from outgoing telephone pulses and monthly subscription charges are shared between the investors and the Company based on certain agreed ratio.

		The net book value of the property, plant and equipment under RSA which have been transferred to property, plant and equipment of the Company amounted to Rp.12,120 million and Rp.nil as of March 31, 2008 and 2009, respectively (Note 12).

		The investors’ share of revenues amounted to Rp.71,865 million and Rp.41,905 million for the three months period ended March 31, 2008 and 2009, respectively.

46.		TELECOMMUNICATIONS SERVICES TARIFFS

		Under Law No. 36/1999 and Government Regulation No. 52/2000, tariffs for the use of telecommunications network and telecommunication services are determined by providers based on the tariffs category, structure and with respect to fixed line telecommunications services, at price cap formula set by the Government.

	a.		Fixed line telephone tariffs

			The Government has issued new adjustment tariff formula which is stipulated in the MoCI Decree No. 15/Per/M.KOMINFO/4/2008 dated April 30, 2008 concerning Procedure for Tariff Calculation for Basic Telephone Service which connected through fixed line network.

			Under the Decree, tariff structure for basic telephone service which is connected through fixed line network consists of the following:

	•		Connection fee

	•		Monthly charges

	•		Usage charges

	•		Additional facilities fee

Based on the Decree, the Company adjusted the tariffs effective August 1, 2008 as follows:

	•		Local charges decreased by range from 2.5% to increase by 8.9%, depending on service usage and customer’s segment

	•		SLJJ charges decreased by an average range from 36.9% to increased by an average of 13.7%, depending on service usage and customer’s segment

	•		SMS charges decreased by an average range from 42.8% to 49.7%, depending on service usage and customer’s segment

	b.		Mobile cellular telephone tariffs

			Under Decree No. 12/Per/M.KOMINFO/02/2006 dated February 28, 2006 of the MoCI the cellular tariffs consist of the following:

	•		Connection fee

	•		Monthly charges

	•		Usage charges

	•		Additional facilities fee

101

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

46.

TELECOMMUNICATIONS SERVICES TARIFFS (continued)

	b.		Mobile cellular telephone tariffs (continued)

			The tariffs are determined based on certain formula with a “floor price”. For usage charges, the floor price should be the originating fee plus termination fee (total interconnection fee) while for connection fee and monthly charges, the floor price depends on the cost structure of each cellular provider.

			The implementation of the new tariff for a dominant operator has to be approved by the Government. A dominant operator is an operator that has operating revenues equal to or more than 25% of total Industry revenue for a certain segment.

			On April 7, 2008, the MoCI issued Decree No. 09/PER/M.KOMINFO/04/2008 “Mechanism to Determine Tariff of Telecommunication Services which Connected Through Mobile Cellular Network” which provides guidelines to determine cellular tariffs with a formula consisting of network element cost and retail services activity cost. This Decree replaced the previous Decree of No. 12/PER/M.KOMINFO/02/2006.

			Under Decree No. 09/PER/M.KOMINFO/04/2008 dated April 7, 2008 of the MoCI the cellular tariffs consist of the following:

	•		Basic services tariff

	•		Roaming tariff

	•		Multimedia tariff,

with the following structure:

	•		Connection fee

	•		Monthly charges

	•		Usage charges

	•		Additional facilities fee.

The tariffs are determined based on certain formula consisting of:

	•		Network element cost;

	•		Retail service activity cost plus margin.

The network element cost is determined using Long Run Incremental Cost (LRIC) Bottom up Method. The operators are allowed to apply de-average basic telephone service usage cost and bundling tariffs, maximum equal to tariff determined using the above formula.

	c.		Interconnection tariffs

			The MoC issued Decree No. 32/2004, dated March 11, 2004 stated that cost-based interconnection fees shall be applicable beginning January 1, 2005, of which subsequently postponed until January 1, 2007 based on the MoCI Regulation No. 08/Per/M.KOMINFO/02/2006 dated February 8, 2006. On December 28, 2006, the Company and all network operators signed amendments to their interconnection agreements for fixed line networks (local, SLJJ and international) and mobile network for the implementation of the cost-based tariff obligations under the MoCI Regulations No. 08/Per/M.KOMINFO/02/2006. These amendments took effect on January 1, 2007.

102

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

46.

TELECOMMUNICATIONS SERVICES TARIFFS (continued)

	c.		Interconnection tariffs (continued)

			Based on Director General of Post and Telecommunications Decree No. 205/2008 dated April 11, 2008, valid for one year period, about Agreement to RIO of the telecommunication network operator with operating revenue of 25% or more from the total revenue of all telecommunication operators in the service segmentation, shall be as follows:

(a)

Fixed line

	1.		Local termination from local fixed line service tariff is Rp.73/minute.

	2.		Local termination from domestic fixed line (local call) service tariff is Rp.73/minute.

	3.		Local termination from domestic fixed line (long distance call) service tariff is Rp.203/minute.

	4.		Long distance termination from domestic fixed line service tariff is Rp.560/minute.

	5.		Local termination from cellular mobile network service tariff is Rp.203/minute.

	6.		Local termination from satellite mobile network service tariff is Rp.204/minute.

	7.		Long distance termination from cellular mobile network service tariff is Rp.626/minute.

	8.		Long distance termination from satellite mobile network service tariff is Rp.613/minute.

	9.		Domestic termination from international network service tariff is Rp.612/minute.

	10.		International origination from domestic fixed line to fixed international network service provider tariff is Rp.612/minute.

	11.		Local origination service for long distance call from domestic fixed line to SLJJ service provider tariff is Rp.203/minute

	12.		Local transit service tariff is Rp.69/minute.

	13.		Long distance transit service tariff is Rp.295/minute.

	14.		International transit service tariff is Rp.316/minute.

(b)

Cellular

	1.		Local termination from fixed line service tariff is Rp.261/minute.

	2.		Long distance termination from fixed line service tariff is Rp.380/minute.

	3.		Local termination from cellular mobile network service tariff is Rp.261/minute.

	4.		Long distance termination from cellular mobile network service tariff is Rp.493/minute.

	5.		Local termination from satellite network service tariff is Rp.261/minute.

	6.		Long distance termination from satellite network service tariff is Rp.501/minute.

	7.		Local termination from SLJJ service provider tariff is Rp.261/minute.

	8.		Long distance termination from SLJJ service provider tariff is Rp.380/minute.

	9.		International termination from IDD service provider tariff is Rp.498/minute.

	10.		Local origination to SLJJ service provider tariff is Rp.261/minute.

	11.		Long distance origination to SLJJ service provider tariff is Rp.380/minute.

	12.		International origination to IDD service provider tariff is Rp.498/minute.

On March 2, 2009, 12 operators and PT Pratama Jaringan Nusantara (“PJN”) entered into an agreement for operating Telecommunicating Traffic Clearing System (“Sistem Kliring Trafik Telekomunikasi” or “SKTT”) that appointed PJN to conduct voice interconnect clearing process.

103

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

46.

TELECOMMUNICATIONS SERVICES TARIFFS (continued)

	d.		VoIP interconnection tariff

			Previously, the MoC Decree No. KM.23/2002 provided that access charges and network lease charges for the provision of VoIP services were to be agreed between network operators and VoIP operators. On March 11, 2004, the MoC issued Decree No. 31/2004, which stated that interconnection charges for VoIP are to be fixed by the MoC. Currently, the MoCI has not yet determined what the new VoIP interconnection charges will be. Until such time as the new charges are fixed, the Company will continue to receive connection fees for calls that originate or terminate on the Company’s fixed line network at agreed fixed amount per minute.

	e.		Network lease tariff

			The Government regulated the form, type and tariff structure and tariff formula for services of network lease through MoCI Decree No. 03/Per/M.KOMINFO/1/2007 dated January 26, 2007. Pursuant to the MoCI Decree, the Government released Director General of Post and Telecommunication Decision Letter No. 115/Dirjen/2008 dated March 24, 2008 which stated the agreement on Network Lease Service Type Document, Network Lease Service Tariff, Available Capacity of Network Lease Service, Quality of Network Lease Service and Provision Procedure of Network Lease Service in 2008 Owned by Dominant Network Lease Service Provider in conformity with the Company’s proposal. The minimum tariff for activation fee is Rp.2,400,000. The tariff for monthly usage for local (under 25 km) vary starting from Rp.1,750,000 up to Rp.88,650,000, depending on the speed and the tariff for monthly usage for long distance (over 25 km) starting from Rp.5,600,000 up to Rp.3,893,100,000 depending on the speed.

	f.		Public phone kiosk (“warung telekomunikasi” or “wartel”) tariff

			The MoC issued Decree No. KM. 46/2002 dated August 7, 2002 regarding the operation of phone kiosks as replaced by the MoCI Regulation No. PM.05/Per/M.KOMINFO/I/2006 dated January 30, 2006, which provided the Company the entitlement to retain a maximum of 70% of the phone kiosk basic tariffs for domestic calls and up to 92% of phone kiosk basic tariffs for international calls. It also provides that the airtime from the cellular operators shall generate at a minimum 10% of the kiosk phones’ revenues.

	g.		Tariff for other services

			The tariffs for satellite rental and other telephony and multimedia services are determined by the service provider by taking into account the expenditures and market price. The Government only determines the tariff formula for basic telephony services. There is no stipulation for the tariff of other services. On April 1, 2009, the Company reduced its internet tariff by an average of 20% depending on subscription packages

104

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

46.

TELECOMMUNICATIONS SERVICES TARIFFS (continued)

	h.		USO

			The MoCI issued Regulation No. 15/Per/M.KOMINFO/9/2005 dated September 30, 2005, which sets forth the basic policies underlying the USO program and requires telecommunications operators in Indonesia to contribute 0.75% of their gross revenues (with due consideration for bad debts and interconnection charges) for USO development. Based on Government’s Decree No. 7/2009 dated January 16, 2009, the contribution is changed to 1.25% gross revenues, net of bad debts and/or interconnection charges and/or connection charges. On January 16, 2009 and January 23, 2009, Telkomsel was selected in a tender by the Government through BTIP to provide telecommunication access and services in rural areas (USO Program) for a total amount of Rp.1.66 trillion, covering all Indonesian territory except Sulawesi, Maluku and Papua. Telkomsel will obtain local fixed-line licenses and the right to use radio frequency in 2,390 MHz-2,400 MHz.

			On February 18, 2009 and March 16, 2009, based on Decrees No. 62/KEP/M.KOMINFO/02/09 dated February 18, 2009 and No. 88/KEP/M.KOMINFO/03/2009 dated March 16, 2009 of the Ministry of Communication and Information Technology, the Ministry granted Telkomsel principle licenses to operate fixed-line network under USO program which provision is subject to an operation acceptance test within six months. The license is extendable for three months based upon evaluation of the DGPT.

			Based MoCI Decree No. 32/PER/M.KOMINFO/10/2008 dated October 10, 2008 which replaced MoCI Decree No. 11/PER/M.KOMINFO/04/2007 dated April 13, 2007 which was amended by MoCI Decree No. 38/Per/M.KOMINFO/9/2007 dated September 20, 2007, it is stipulated that, among others, in providing telecommunication access and services in rural areas (USO Program), the provider is determined through a selection process by Balai Telekomunikasi dan Informatika Pedesaan (“BTIP”) which was established based on MoCI Decree No. 35/Per/M.KOMINFO/11/2006 dated November 30, 2006.

47.

COMMITMENTS

	a.		Capital expenditures

			As of March 31, 2009, capital expenditures committed under the contractual arrangements, principally relating to procurement and installation of switching equipment, transmission equipment and cable network, are as follows:


	Amounts in
	foreign currencies		Equivalent
Currencies	(in millions)		in Rupiah
Rupiah		—		4,503,772
U.S. Dollars		750		8,671,403
Euro		27		421,286

Total				13,596,461

105

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


47.		COMMITMENTS (continued)

	a.		Capital expenditures (continued)

			The above balance includes the following significant agreements:

(i)

Company


				Outstanding
				purchase
Contracting	Date of	Significant provisions of		commitment as of
parties	agreement	the agreement	Total contract value	March 31, 2009
Company and ZTE Consortium	September 16, 2005	Procurement and installation agreement for Speedy Access Batch 1 in Divre II	US$5.05 million and Rp.240,955 million	US$0.48 million and Rp.71,515 million

Company and Huawei		Procurement and installation agreements for NSS, BSS and PDN FWA CDMA System Expansion Project in:

	January 6, 2006	a. Divre I (Sumatra) and IV (Central Java and Daerah Istimewa Yogyakarta)	US$58.9 million and Rp.249,840 million	US$33.8 million and Rp.148,026 million

	December 8, 2006	b. Divre II (Jakarta)	US$42.7 million and Rp.210,049 million	US$18.6 million and Rp.96,952 million

	December 8, 2006	c. Divre III (West Java and Banten)	US$20.4 million and Rp.113,262 million	US$12.05 million and Rp.53,716 million

Company and Samsung Consortium		Procurement and installation agreements for NSS, BSS and PDN FWA CDMA System Expansion Project in:

	October 13, 2006	a. Divre V (East Java)	US$90.4 million and Rp.157,166 million	US$42.2 million and Rp.67,131 million

	July 10, 2007	b. Divre VII (Bali-Nusa Tenggara	US$6.5 million and Rp.18,578 million	US$4.8 million and Rp.13,206 million

Company and ZTE Consortium		Procurement and installation agreement for Expansion of NSS, BSS and PDN System in:

	November 28, 2006	a. Divre VI (Kalimantan)	US$21.7 million and Rp.57,168 million	US$12.4 million and Rp.48,481 million

	July 10, 2007	b. Divre VII (Sulawesi, Maluku and Papua)	US$16.7 million and Rp.26,018 million	US$6.3 million and Rp.15,319 million

106

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


47.		COMMITMENTS (continued)

Capital expenditures (continued)

(i)

Company (continued)


				Outstanding
				purchase
Contracting	Date of	Significant provisions of		commitment as of
parties	agreement	the agreement	Total contract value	March 31, 2009
Company and Huawei	September 28, 2007	a. Procurement and installation agreement for Speedy Access Batch 2	US$23.6 million and Rp.119,725 million	Rp.79,475 million

	September 28, 2007	b. Procurement and installation agreement for Speedy Access Batch 3	US$18.8 million and Rp.129,618 million	Rp.61,435 million

Company and PT ZTE Indonesia (“ZTE”)	December 18, 2007	Procurement and installation agreement for Speedy Divre VII (Sulawesi, Maluku and Papua)	Rp.95,385 million	Rp.21,019 million

Company and NEC Corporation	March 3, 2008	Procurement and installation agreement for Batam Singapore Cable System (BSCS) Project	US$12.5 million	US$12.5 million

Company and Huawei	March 31, 2008	Procurement and installation agreement for Metro Ethernet Batch 3 in Divre V	Rp.86,053 million	Rp.7,164 million

Company and PT SCS Astragraphia Technologies	April 3, 2008	Procurement and installation agreement for ALPRO IP TRANSPORT for Speedy service and corporate service Batch 2	Rp.58,133 million	Rp.4,571 million

Company and PT Horison Komunikasi	April 18, 2008	Procurement and installation agreement for Outside Plant Fiber Optic 2008 Batch 6 Divre V	Rp.65,173 million	Rp.65,173 million

Company and PT Brimbun Raya Indah (“Brimbun”)	April 18, 2008	Procurement and installation agreement for Outside Plant Fiber Optic 2008 Batch 7 Divre VI	Rp.60,220 million	Rp.22,478 million

Company and G-Pas Consortium	April 18, 2008	Procurement and installation agreement for Outside Plant Fiber Optic 2008 Batch 8 Divre VII	Rp.72,450 million	Rp.72,450 million

Company and PT Konsorsium Jembo-Karteksi-Tridayasa	April 18, 2008	Procurement and installation agreement for Outside Plant Fiber Optic 2008 Batch 9 Netre Sumbagut Area	Rp.78,201 million	Rp.30,364 million

107

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


47.		COMMITMENTS (continued)

Capital expenditures (continued)

(i)

Company (continued)


				Outstanding
				purchase
Contracting	Date of	Significant provisions of		commitment as of
parties	agreement	the agreement	Total contract value	March 31, 2009
Company and PT Telekomindo Primakarya	April 18, 2008	Procurement and installation agreement for Outside Plant Fiber Optic 2008 Batch 11 Netre Sumbagsel	Rp.109,734 million	Rp.62,829 million

Company and Brimbun	April 18, 2008	Procurement and installation agreement for Outside Plant Fiber Optic Batch 12 Netre, Jakarta and West Java	Rp.84,217 million	Rp.19,335 million

Company and INTI	April 18, 2008	Procurement and installation agreement for Outside Plant Fiber Optic 2008 Batch 13 Netre, Central Java and East Java	Rp.71,266 million	Rp.40,047 million

Company and PT Lintas Teknologi Indonesia	September 26, 2008	Procurement and installation agreement for Inside Plan Backbone Kalimantan-Sulawesi	Rp.87,111 million	Rp.85,334 million

Company and PT Sansaine Exindo	October 15, 2008	Procurement agreement for TENOSS Batch 4 FWN Domain	Rp.97,248 million	Rp.80,086 million

Company and PT Datacraft Indonesia	December 4, 2008	Procurement and installation agreement for Tera Router 2008 in Divre I, Divre II and Divre V	Rp.89,477 million	Rp.4,702 million

Company and PT Nokia Siemens Networks	December 5, 2008	Procurement and installation agreement for Softswitch and modernization of MSAN Divre V and trial location of Bali and Timika	Rp.78,100 million	Rp.78,100 million

Company and NSW — Fujitsu Consortium	December 30, 2008	Procurement and installation agreement for Capacity Ring JaKa2LaDeMa Project	US$115.4 million	US$115.4 million

Company and ISS Reshetnev (Russia)	March 3, 2009	Procurement agreement for Telkom-3 Satellite	US$179.4 million	US$179.4 million

Company APT Satellite Company Limited	March 23, 2009	142E Degree Orbital Position Cooperation Agreement	US$18.5 million	US$18.5 million

108

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


47.		COMMITMENTS (continued)

Capital expenditures (continued)

	(ii)		Telkomsel

			The Telkomsel’s agreements with Motorola, Inc. and PT Motorola Indonesia, Ericsson AB and Ericsson Indonesia, Nokia Corporation and PT Nokia Network (“Nokia Network”) and Siemens AG since August 2004, relate to the maintenance and procurement of equipment and related services, involving:

	•		Joint Planning and Process Agreement

	•		Equipment Supply Agreement (“ESA”)

	•		Technical Service Agreement (“TSA”)

	•		Site Acquisition and Civil, Mechanical and Engineering Agreement (“SITAC” and “CME”)

			The agreements contain list of charges to be used in determining the fees payable by Telkomsel for all equipment and related services to be procured during the rollout period upon the issue of Purchase Orders (“PO”).

			The agreements are valid and effective as of the execution date by the respective parties for a period of three years, provided that the suppliers are able to meet the requirements set out in each PO. In the event that the suppliers fail to meet those requirements, Telkomsel may terminate the agreements at its sole discretion with prior written notice.

			In accordance with the agreements, the parties also agreed that the charges specified in the price list would apply to equipment and services (ESA and TSA) and services (SITAC and CME) acquired from the suppliers between May 26, 2004 and the effective date, except for those acquired from Siemens under TSA relating to equipment and maintenance of Telkomsel’s Switching Sub System (“SSS”) and BSS that were acquired between July 1, 2004 and the effective date. Prices are subject to quarterly reviews.

			In August 2007, due to the expiration of the above agreements, based on letters from Ericsson AB and Ericsson Indonesia and Nokia Siemens Networks (which currently represents Nokia Corporation, Nokia Network and Siemens AG), those companies agreed to:

	•		extend the above agreements until new agreements were made between Telkomsel and these other companies, and

	•		prior to the effective date of new agreements, retroactively apply prices under the new agreements (retroactive price adjustment) to PO for the procurement of BSS equipment and services issued by Telkomsel after July 1, 2007 using the previous price list (Note 11d.v).

109

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


47.		COMMITMENTS (continued)

Capital expenditures (continued)

	(ii)		Telkomsel (continued)

			Subsequently, on April 17, 2008, Telkomsel, Ericsson Indonesia, Ericsson AB, PT Nokia Siemens Networks, Nokia Siemens Network Oy and Nokia Siemens Network GmbH & Co. KG signed Combined 2G and 3G CS Core Network Rollout Agreements. The Agreements are valid until the later of:

	•		three years after the effective date (April 17, 2008, except for certain POs issued in August 2007 which commenced on August 15, 2007), or

	•		the date on which the last PO under this agreement terminates or expires in respect of any PO issued prior to the expiry of the three years period.

			For the purpose of providing telecommunication services with 3G, in September and October 2006, Telkomsel entered into agreements with Nokia Corporation and Nokia Networks, Ericsson AB and Ericsson Indonesia, and Siemens Networks GmbH & Co. KG for network construction (Rollout Agreement) and Nokia Networks, Ericsson Indonesia and Siemens Networks GmbH & Co. KG for network operations and maintenance (Managed Operations Agreement and Technical Support Agreement). The agreements are valid and effective as of the execution date by the respective parties (the effective date) until the later of December 31, 2008 or the date on which the last PO terminates under the agreements or expires in respect of any PO issued prior to December 31, 2008, providing that the suppliers are able to meet the requirements set out in each PO. Based on letters from Telkomsel, the Managed Operation Agreements with those companies were terminated as of March 31, 2008.

			On April 17, 2008, Telkomsel, Ericsson Indonesia, PT Nokia Siemens Networks also entered into Technical Service Agreements for technical support of Combined 2G and 3G CS Core Network. The agreements commence:

	•		in respect of the August 2007 Project only, on the date that transition-out services have been completed in accordance with the 3G Managed Operations Agreement;

	•		in all other respects, on the Effective Date;

			and continues until the later of:

	•		the date which is three years after the Effective Date; and

	•		the date on which the last PO under this Agreement terminates or expires in respect of any PO issued prior to the expiry of the 3 years period.

110

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


47.		COMMITMENTS (continued)

Capital expenditures (continued)

	(ii)		Telkomsel (continued)

			In July and August 2008, Telkomsel entered into 2G BSS and 3G UTRAN Network Trial Agreements (NTA) with PT Alcatel-Lucent Indonesia, ZTE and PT Huawei Tech Investment (“Huawei Tech”) (“Trial Participants”). Subsequently, in September 2008, the agreements with ZTE and Huawei Tech were amended. Such agreements contain, among others:

	•		The provision by Trial Participants of the design, supply, delivery, installation, integration and commissioning of 2G GSM BSS and 3G UMTS radio access network and technical support for such subsystem and networks on a trial basis for a period up to nine months.

	•		At Telkomsel’s election, the Trial Participants must transfer ownership to Telkomsel of those 2G GSM BSS and 3G UMTS radio access networks elements (excluding software).

			On March 3, 2009 and March 13, 2009, Telkomsel, Ericsson Indonesia, Ericsson AB, PT Nokia Siemens Indonesia, Nokia Siemens Network Oy, Huawei International Pte.Ltd. and PT Huawei Tech Investment entered into 2G BSS and 3G UTRAN Rollout Agreements for the provision of 2G GSM BSS and 3G UMTS Radio Access Network.

			During the terms, the vendors (excluding Huawei International Pte. Ltd. and PT Huawei Tech Investment) agreed to provide vouchers, free of charge equipment and other commercial incentives to Telkomsel. Part of the vouchers totaling US$107.05 million, provided by the vendors as an adjustment to prices stated in PO issued since July 1, 2007.

Borrowings and other credit facilities

	(i)		Telkomsel has a US$3 million bond and bank guarantee, standby letter of credit facility and foreign exchange facility with SCB, Jakarta. The facilities expire in July 31, 2009. Under these facilities, as of March 31, 2009, Telkomsel has issued a bank guarantee of Rp.20,000 million (equivalent to US$1.73 million) for a 3G performance bond (Note 47c.ii). Borrowings under the facilities bear interest at Singapore Interbank Offered Rate (“SIBOR”) plus 1.25% per annum (US$). As of March 31, 2008 and 2009, there were no outstanding loans under these facilities.

	(ii)		Telkomsel has not provided any collateral for its bank borrowings, or other credit facilities, except time deposits (Notes 9 and 46h). The terms of the various agreements with Telkomsel’s lenders and financiers require compliance with a number of pledges and negative pledges as well as financial and other covenants, which include inter alia, certain restrictions on the amount of dividends and other profit distributions which could adversely affect Telkomsel’s capacity to comply with its obligation under the facilities. The terms of the relevant agreements also contain default and cross default clauses. Telkomsel’s management is not aware of any breaches of the terms of these agreements and does not foresee any such breaches occurring in the future.

111

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


47.		COMMITMENTS (continued)

Others

	(i)		Employee benefits

			On May 26, 2008, Telkomsel and its Labour Union (“Serikat Pekerja Telkomsel”) signed a collective labour agreement (“Perjanjian Kerja Bersama” or “PKB”) which is valid until May 25, 2010. The agreement replaced the old agreement which expired on March 23, 2008. Based on the agreement, Telkomsel shall provide LSL to its employees (Note 41).

	(ii)		3G license

			With reference to the Decision Letter No. 07/Per/M.KOMINFO/2/2006 of the MoCI, as one of the successful bidders (Notes 1d and 2j), Telkomsel amongst other commitments, is required to:

Pay annual BHP fee which is determined based on a certain formula over license term (10 years). The BHP for the third and fourth year were paid in March 2008 and 2009, respectively. The commitments as of March 31, 2009 arising from the BHP up to the expiry period of the license using the formula set forth in the Decision Letter are as follows:


			Radio frequency
Year	BI rates (%)	Index (multiplier)	usage tariff

1	—	—	20% x HL
2	R1	I1 = (1 + R1)	40% x I1 x HL
3	R2	I2 = I1(1 + R2)	60% x I2 x HL
4	R3	I3 = I2(1 + R3)	100% x I3 x HL
5	R4	I4 = I3(1 + R4)	130% x I4 x HL
6	R5	I5 = I4(1 + R5)	130% x I5 x HL
7	R6	I6 = I5(1 + R6)	130% x I6 x HL
8	R7	I7 = I6(1 + R7)	130% x I7 x HL
9	R8	I8 = I7(1 + R8)	130% x I8 x HL
10	R9	I9 = I8(1 + R9)	130% x I9 x HL


Notes :

Ri		= average BI rate from previous year

Auction Price (“Harga Lelang” or HL)		= Rp.160,000 million

Index		= adjustment to the bidding price for respective period

			The BHP is payable upon receipt of notification letter (“Surat Pemberitahuan Pembayaran”) from the DGPT.

	2.		Provide roaming access for the existing 3G operators.

	3.		Contribute to USO development.

	4.		Construct a 3G network which covers at least the following provinces:

112

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

47.

COMMITMENTS (continued)

Others (continued)

(ii)

3G license (continued)

(continued)


		Minimum number
Year		of provinces
1		2
2		5
3		8
4		10
5		12
6		14

Issue a performance bond each year amounting to Rp.20,000 million or 5% of the annual fee to be paid for the subsequent year, whichever is higher. This performance bond shall be redeemed by the Government if Telkomsel is not able to meet the requirements set out in the above mentioned Decision Letter or upon cancellation/termination of the license, or if Telkomsel decides to return the license voluntarily.

			Based on MOCI’s letter No. 320/M.KOMINFO/12/2008 dated December 30, 2008, considering that Telkomsel has fulfilled its commitments, 1 block of radio frequency (2 x 5 MHz FDD) in 2.1 GHz bandwith is offered to Telkomsel with a price of Rp 160,000 million. Pursuant to that, Telkomsel has submitted its response that Telkomsel accepted the offering with a condition that such price is equally applied to the other operators. As of the issuance date of the consolidated financial statements, there is no decision from MoCI.

	(iii)		Asia-America Gateway Consortium (“AAG”)

			On April 27, 2007, the Company became a member of AAG consortium, an undersea cable consortium with 19 companies, by signing a C&MA and an AAG Cable Network Supply Contract and paid US$40 million. Through the AAG Consortium, the Company will acquire 40 Gbps international bandwidth at the end of 2008 in the AAG configuration that will be laid from Malaysia to the United States. As of March 31, 2009, the Company has paid US$31 million (equivalent to Rp.288,075 million) and recorded as advances for the purchase of property, plant and equipment (Note 13).

	(iv)		Palapa Ring Consortium

			On November 10, 2007, the Company entered into a C&MA with 5 other companies for Palapa Ring Consortium. This consortium was formed to build optical fiber network in 32 cities in Eastern Indonesia with total initial investment of Rp.2,070,336 million. The Company will obtain 4 lambdas bandwidth of total capacity of 8.44 lambdas from this consortium (Note 15). As of March 31, 2009, the Company has paid US$0.005 million (equivalent to Rp.48 million) and recorded as advances for the purchase of property, plant and equipment (Note 13).

113

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

47.

COMMITMENTS (continued)

Others (continued)

	(v)		Radio Frequency Usage Fees

			In accordance with the prevailing laws and telecommunications regulations, the operators are obliged to register their radio stations to the DGPT to obtain frequency usage license, except those stations that use 2.1 GHz frequency bandwidth (Note 47c.ii). The frequency usage fees are payable upon receipt of notification letter (“Surat Pemberitahuan Pembayaran”) from DGPT. The fee is determined based on the number of registered transceivers (TRXs) of the radio stations. The fees for 2009 will be determined based on 281,033 TRXs in operation as of March 31, 2009, with a fee ranging from Rp.0.035 million to Rp.17.5 million for each TRXs.

	(vi)		Apple, Inc

			On January 9, 2009, Telkomsel entered into an agreement with Apple, Inc for the purchase of iPhone products, marketing it to the customers using third party (PT Trikomsel OKE) and provide cellular network services. Cumulative minimum iPhone units that shall be purchased as of December 31, 2009, 2010 and 2011 are 125,000, 300,000 and 500,000 units for each year.

	(vi)		Operating leases

Minimum lease payment

Less than

1-5

More than

Total

1 year

years

5 years

Operating leases

392,807

51,317

314,303

27,187

Operating leases represent non-cancelable office lease agreements of certain subsidiaries.

48.

CONTINGENCIES

	a.		In the ordinary course of business, the Company and its subsidiaries have been named as defendant in various legal actions in relation with land disputes, monopolistic practice and unfair business competition and SMS cartel practices. Based on management’s estimate of the probable outcomes of these matters, the Company and its subsidiaries have accrued Rp.79,202 million as of March 31, 2009.

	b.		A former Director of Human Resources and an employee of the Company were indicted under the Eradication of Criminal Act of Corruption Law in Bandung District Court relating to allegations of misuse of authority in procuring consultancy services resulting to a loss of Rp.789 million. On May 2, 2007, the Bandung District Court found the defendants guilty and sentenced each defendant to a one-year prison term and gave Rp.50 million penalty. The defendants have filed and appeal to the West Java High Court, objecting to the District Court ruling. On October 3, 2007, West Java High Court found the defendants not guilty. The Attorney has filed an appeal to Indonesian Supreme Courts (“SC”) objecting to the High Court’s ruling. As of the issuance date of the consolidated financial statements, no decision has been reached on the appeal.

114

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

48.

CONTINGENCIES (continued)

	c.		On January 2, 2006, the Office of the Attorney General launched an investigation into allegations of misuse of telecommunications facilities in connection with the provision of VoIP services, whereby one of Company’s former employees and four of the Company’s employees in KSO VII were named suspects. As a result of the investigations, one of Company’s former employees and two of the Company’s employees were indicted in the Makassar District Court, and two other employees were indicted in the Denpasar District Court for their alleged corruption in KSO VII. On January 29, 2008, the Makassar District Court found the defendant not guilty. The Attorney has filed an appeal to Indonesian SC objecting the District Court ruling. On March 3, 2008, Denpasar District Court found the defendants guilty and sentenced each defendant to a one-year six-month prison term and a one year prison term and gave Rp.50 million penalty. The defendants have filed an appeal to the Bali High Court objecting to the District Court ruling. On November 5, 2008, the Bali High Court found the defendant guilty. On January 16, 2009, one of the defendant in Bali High Court has filed an appeal to Indonesian SC. As of the issuance date of the consolidated financial statements, no decision has been reached on both appeals.

	d.		The Commission for the Supervision of Business Competition (“Komisi Pengawasan Persaingan Usaha” or “KPPU”) on its letter dated December 5, 2007, notified Telkomsel that based on its investigation of case No. 07/KPPU-L/2007 dated November 19, 2007, according to the applied provisions regarding allegation of violating Law No. 5/1999, “Prohibition of Monopolistic Practice and Unfair Business Competition” (the “Law”), related to cross-ownership by Temasek Holdings and monopoly practices by Telkomsel, it had decided that, among other things:

	•		Telkomsel had not been proven to violate article 25.1.b of the Law,

	•		Telkomsel had violated article 17.1 of the Law,

	•		Temasek Holdings and certain affiliated companies were instructed to release their ownership either in Indosat or Telkomsel with the following conditions:

	n		Maximum 5% of total shares for each buyer,

	n		The buyer is not associated with Temasek Holdings.

•

Telkomsel was to be charged a penalty of Rp.25,000 million and instructed Telkomsel to discontinue the imposition of high tariffs and reduce its tariffs by least 15%.

On May 9, 2008 the Court pronounced its verdict and concluded among other things:

	•		Telkomsel had not been proven to violate article 25.1.b of the Law,

	•		Telkomsel had violated article 17.1 of the Law,

	•		Temasek Holdings and certain affiliated companies were instructed to release their ownership in either Indosat or Telkomsel or to decrease its ownership by 50% in each of those companies within twelve months from the date of the decision becoming final and legally binding at the following conditions:

	n		Maximum 10% of total shares for each buyer,

	n		The buyer is not associated with Temasek Holdings.

	•		Telkomsel was charged a penalty of Rp.15 billion,

	•		The Court revoked the decision of KPPU on the instruction to reduce the tariffs because KPPU did not have the authority to determine the tariffs.

115

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES

48.

CONTINGENCIES (continued)

	d.		(continued)

			On May 22, 2008, Telkomsel filed an appeal to SC. In its verdict on September 9, 2008, the SC revoked the Court’s verdict on the instruction to Temasek Holdings and certain affiliated companies to release their ownership in either Indosat or Telkomsel. As of the issuance date of the consolidated financial statements, Telkomsel is still reviewing the result to determine a favorable action to be taken including the option for a judicial review by the SC.

	e.		Certain subscribers of Telkomsel, Indosat and PT Excelcomindo Pratama (“Excelcomindo”) which are domiciled in Bekasi, Tangerang and other various locations, represented by the Law Firms, have filed class-action lawsuits with the Courts against Telkomsel, the Company, Indosat, the Government, Temasek Holdings and certain of its affiliated companies (“Parties”). The Parties are alleged to have had excessive price practices that potentially could have adversely affected those subscribers.

			On July 8, 2008, the class-action lawsuits filed in Bekasi District Courts against Telkomsel by certain subscribers has been revoked and the case is closed.

			On August 14, 2008, based on the Court’s verdict, the class-action lawsuits in Tangerang shall be consolidated with other various locations. The subscribers in other various locations objected to the decision and filed an appeal to SC. On January 21, 2009, in its verdict No. 01K/Pdt.Sus/2009, the SC approved the subscribers’ appeal, accordingly, the class action lawsuit are processed separately in respective Court.

			Management believes that Telkomsel has applied tariffs in accordance with prevailing regulations, accordingly, such allegation has no strong basis.

	f.		The Company, Telkomsel and seven other local operators are being investigated by the KPPU for allegation of SMS cartel practices. As a result of the investigations on June 17, 2008, KPPU found that the Company, Telkomsel and certain other local operators had proven to violate Law No. 5/1999 article 5 and gave the Company and Telkomsel Rp.18,000 million penalty and Rp.25,000 million penalty, respectively.

			Pursuant to the decision of KPPU dated June 17, 2008, the Company and Telkomsel have filed an objection with the Bandung District Court and South Jakarta District Court, respectively, on July 14, 2008 and July 11, 2008, respectively.

			Management believes that there are no such cartel practices that led to breach of prevailing regulations. As of the issuance date of the consolidated financial statements, no decision has been reach on the appeal.

For the matters and cases stated above, the Company and its subsidiaries do not believe that any subsequent investigation or court decision will have significant financial impact to the Company and its subsidiaries.

116

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


49.		ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The balances of monetary assets and liabilities denominated in foreign currencies are as follows:


	2008				2009
	Foreign				Foreign
	currencies		Rupiah		currencies		Rupiah
	(in millions)		equivalent		(in millions)		equivalent
Assets
Cash and cash equivalents
U.S. Dollars		157.50		1,450,556		183.20		2,123,412
Euro		73.20		1,064,958		47.87		733,626
Singapore Dollars		0.01		33		0.21		1,570
Malaysian Ringgit		—		—		0.03		109
Japanese Yen		4.45		412		0.18		22
Temporary investments
U.S. Dollars		7.95		73,189		8.00		92,280
Trade receivables
Related parties
U.S. Dollars		7.83		70,528		2.34		27,033
Third parties
U.S. Dollars		33.38		307,497		66.37		766,353
Other receivables
U.S. Dollars		3.84		35,392		0.79		9,080
Euro		0.06		833		0.02		268
Great Britain Pound sterling		0.01		225		0.01		203
Singapore Dollars		—		—		0.00		2
Other current assets
U.S. Dollars		0.92		8,440		0.64		7,429
Advances and other non-current assets
U.S. Dollars		20.77		191,256		3.28		37,901
Euro		—		—		0.07		494

Escrow accounts
U.S. Dollars		—		—		3.71		42,811

Total assets				3,203,319				3,842,593

117

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


49.		ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES (continued)


	2008					2009
	Foreign					Foreign
	currencies		Rupiah			currencies		Rupiah
	(in millions)		equivalent			(in millions)		equivalent

Liabilities
Trade payables
Related parties
U.S. Dollars		0.54		4,968			6.13		71,005
Singapore Dollars		0.00		22			2.29		17,477
Third parties
U.S. Dollars		19.82		182,730			451.66		5,227,853
Euro		2.51		34,592			52.12		798,914
Singapore Dollars		0.73		4,894			1.26		9,616
Japanese Yen		0.51		47			5.61		661
Australian Dollars		—		—			0.05		427
Hongkong Dollars		—		—			0.07		104
Swiss Franc		0.05		442			0.00		16
Great Britain Pound sterling		—		—			0.00		14
Malaysian Ringgit		—		—			0.00		4
Other payables
U.S. Dollars		0.80		7,418			0.05		573
Singapore Dollars		0.00		11			0.00		12
Great Britain Pound sterling		0.00		2			—		—
Accrued expenses
U.S. Dollars		160.03		1,475,487			10.30		119,243
Japanese Yen		149.23		13,849			137.74		16,227
Malaysian Ringgit		—		—			0.54		1,722
Great Britain Pound sterling		0.05		832			0.05		751
Singapore Dollars		0.53		3,531			0.03		263
Euro		88.61		1,290,719			—		—
Short-term bank loans
U.S. Dollars		—		—			0.38		4,399
Advances from customers and suppliers
U.S. Dollars		1.00		9,241			1.23		14,247
Current maturities of long-term liabilities
U.S. Dollars		143.51		1,318,446			125.15		1,448,610
Japanese Yen		955.40		88,662			767.90		90,466
Euro		7.34		106,811			—		—
Long-term liabilities
U.S. Dollars		345.68		3,187,154			234.66		2,716,179
Japanese Yen		12,286.36		1,140,174			11,518.46		1,356,990

Total liabilities				8,870,032					11,895,773

Net liabilities				(5,666,713	)				(8,053,180	)

118

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


49.		ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES (continued)

		The Company and its subsidiaries’ activities expose them to a variety of financial risks, including the effects of changes in debt and equity market prices, foreign currency exchange rates and interest rates.

		The Company and its subsidiaries’ overall risk management programs focus on the unpredictability of financial markets and seek to minimize potential adverse effects on the financial performance of the Company and its subsidiaries. Management provides written policy for foreign currency risk management mainly through time deposits placements and hedging to cover foreign currency risk exposures for the time range of 3 up to 12 months.

		If the Company and its subsidiaries reports monetary assets and liabilities in foreign currencies as of December 31, 2008 using the rates on May 8, 2009, unrealized foreign exchange loss will decrease by the amount of Rp.794.171 million.


50.		SUBSEQUENT EVENTS

On April 1, 2009, the Company reduced its internet tariff by an average of 20% for various subscription packages (Note 46g).


51.		RECENT ACCOUNTING PRONOUNCEMENTS IN INDONESIA

The recent accounting pronouncement in Indonesia that relevant to the Company and its subsidiaries are as follow:

	(i)		PSAK 50 (Revised 2006), “Financial Instruments: Presentation and Disclosures”

			In December 2006, the DSAK issued PSAK 50 (Revised 2006), “Financial Instruments: Presentation and Disclosures” which amends PSAK 50, “Accounting for Investments in Certain Securities”. PSAK 50 (Revised 2006) provides guidance on how to disclose and present financial instruments in the financial statements and whether a financial instrument is a financial liability or an equity instrument. This standard applies to the classification of financial instruments, from the perspective of the issuer, into financial assets, financial liabilities and equity instruments; the classification of related interest, dividends, losses and gains; and the circumstances in which financial assets and financial liabilities should be offset. PSAK 50 (Revised 2006) complements the principles for recognizing and measuring financial assets and financial liabilities in PSAK 55 (Revised 2006). DSAK has postponed the application of PSAK 50 (Revised 2006) until January 1, 2010 based on its letter No. 1705/DSAK/IAI/XII/2008 regarding, “The Announcement of the Change of Effective Date of PSAK No. 50 (Revised 2006) and PSAK No. 55 (Revised 2006)” dated December 30, 2008.

119

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


51.		RECENT ACCOUNTING PRONOUNCEMENTS IN INDONESIA (continued)

	(ii)		PSAK 55 (Revised 2006), “Financial Instruments: Recognition and Measurement”

			In December 2006, the DSAK issued PSAK 55 (Revised 2006), “Financial Instruments: Recognition and Measurement” which amends PSAK 55 (Revised 1999), “Accounting for Derivative Instruments and Hedging Activities”. PSAK 55 (Revised 2006) provides guidance on how to recognize, measure and derecognize financial asset and financial liability including derivative instruments. It also provides guidance on the recognition and measurement of sales and purchase contracts of non-financial items. DSAK has postponed the application of PSAK 55 (Revised 2006) until January 1, 2010 based on its letter No. 1705/DSAK/IAI/XII/2008 regarding, “The Announcement of the Change of Effective Date of PSAK No. 50 (Revised 2006) and PSAK No. 55 (Revised 2006)” dated December 30, 2008.

	(iii)		PSAK 26 (Revised 2008), “Borrowing Costs”

			In September 2008, the DSAK issued PSAK 26 (Revised 2008), “Borrowing Costs” which amends PSAK 26, “Borrowing Costs”. PSAK 26 (Revised 2008) provides guidance on commencement, suspension and cessation of borrowing cost capitalization as part of the cost of an asset. PSAK 26 (Revised 2008) requires borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset to be capitalized as part of the cost of that asset. There are no significant differences between PSAK 26 (Revised 2008) and PSAK 26. PSAK 26 (Revised 2008) shall be effective on January 1, 2010. The Company and its subsidiaries are currently assessing the impact of the requirement of PSAK 26 (Revised 2008) on the consolidated financial statements.


52.		ACCOUNTS RECLASSIFICATION

Certain accounts in the consolidated financial statement for the three months period ended March 31, 2008 has been reclassified to conform with the presentation of accounts of the consolidated financial statements for the three months period ended March 31, 2009, as follows:


	Before						After
	reclassification			Reclassification			reclassification

Consolidated balance sheet March 31, 2008:
Property, plant and equipment — cost		117,705,831			(841,402	)		116,864,429
Accumulated depreciation		(56,935,191	)		462,871			(56,472,320	)

Property, plant and equipment — net of accumulated depreciation		60,770,640			(378,531	)		60,392,109

Goodwill and other intangible assets — gross carrying amount		8,292,227			841,402			9,133,629
Accumulated amortization		(4,926,796	)		(462,871	)		(5,389,667	)

Goodwill and other intangible assets — net of accumulated amortization		3,365,431			378,531			3,743,962

120

PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES


52.		ACCOUNTS RECLASSIFICATION (continued)


	Before						After
	reclassification			Reclassification			reclassification

Consolidated balance sheet March 31, 2008:

Claims for tax refund		420,550			(12,539	)		408,011
Prepaid taxes		58,827			12,539			71,366

Consolidated income statement for the three months ended March 31, 2008:
Operating revenues — data, internet and information technology services		(3,917,418	)		(27,258	)		(3,944,676	)
Operating revenues — network		(223,816	)		5,009			(218,807	)
Operating revenues — Other telecommunications services		(26,173	)		22,249			(3,924	)
Operating expenses — depreciation		2,534,473			(33,896	)		2,500,577
Operating expenses — general and administrative		824,586			33,896			858,482

121


		Perusahaan Perseroan (Persero) PT TELEKOMUNIKASI INDONESIA


		(Registrant)

Date	May 11, 2009	By		/s/ Heri Supriadi

			(Signature)

				Heri Supriadi VP Investor Relations/ Corporate Secretary


	Page
Consolidated Financial Statements
Consolidated Balance Sheets		1-3
Consolidated Statements of Income		4
Consolidated Statements of Changes in Stockholders’ Equity		5-6
Consolidated Statements of Cash Flows		7-8
Notes to Consolidated Financial Statements		9-121