Report of Foreign Issuer (6-k)

PT Indosat Tbk and Subsidiaries

Interim consolidated financial statementswith

report on review of interim consolidated financial

informationas of September 30, 2013 and for the

Nine-month Period then Ended With Comparative

Figuresas of December 31, 2012 and January 1, 2012/

December 31, 2011 and for the Nine-monthPeriod Ended

September 30, 2012

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

WITH REPORT ON REVIEW OF INTERIM CONSOLIDATED FINANCIAL INFORMATION

AS OF SEPTEMBER 30, 2013 AND FOR THE NINE-MONTH PERIOD THEN ENDED

WITH COMPARATIVE FIGURES

AS OF DECEMBER 31, 2012 AND JANUARY 1, 2012 / DECEMBER 31, 2011 AND FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2012 (AS RESTATED)

Table of Contents

Page

Report on Review of Interim Consolidated Financial Information

Interim Consolidated Statement of Financial Position

1 - 4

Interim Consolidated Statement of Comprehensive Income

5- 6

Interim Consolidated Statement of Changes in Equity

7 - 8

Interim Consolidated Statement of Cash Flows

9 - 10

Notes to the Interim Consolidated Financial Statements

11 - 159

***************************

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

WITH REPORT ON REVIEW OF INTERIM CONSOLIDATED FINANCIAL INFORMATION

AS OF SEPTEMBER 30, 2013 AND FOR THE NINE-MONTH PERIOD THEN ENDED

WITH COMPARATIVE FIGURES

AS OF DECEMBER 31, 2012 AND JANUARY 1, 2012 / DECEMBER 31, 2011 AND FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2012 (AS RESTATED)

This report is originally issued in the Indonesian language.

Report on Review of Interim Financial Information

Report No. RPC-848/PSS/2013/DAU

The Stockholders and the Boards of Commissioners and Directors

PT Indosat Tbk.

Introduction

We have reviewed the accompanying interim consolidated financial statements of PT Indosat Tbk and its subsidiaries, which comprise the interim consolidated statement of financial position as of September 30, 2013, and the interim consolidated statement of comprehensive income, statement of changes in equity, and statement of cash flows for the nine-month period then ended, and a summary of significant accounting policies and other explanatory notes. Management is responsible for the preparation and fair presentation of these interim consolidated financial statements in accordance with Indonesian Financial Accounting Standards. Our responsibility is to express a conclusion on these interim consolidated financial statements based on our review.

Scope of Review

We conducted our review in accordance with Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", established by the Indonesian Institute of Certified Public Accountants. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing established by the Indonesian Institute of Certified Public Accountants and consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of PT Indosat Tbk. and its subsidiaries as of September 30, 2013, and their consolidated financial performance and cash flows for the nine-month period then ended, in accordance with Indonesian Financial Accounting Standards.

Purwantono, Suherman & Surja

Roy Iman Wirahardja, CPA

Public Accountant Registration No. AP.0699

October 24, 2013

See Report on Review of Interim Consolidated Financial Information.

The accompanying notes form an integral part of these interim consolidated financial statements.

-0 * Arabic * MERGEFORMAT 8

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

September 30, 2013 (Unaudited)

With Comparative Figures as of December 31, 2012 and

January 1, 2012 / December 31, 2011

(Expressed in millions of rupiah, except share data)

					September 30,	December 31,	January 1, 2012 /
				Notes	2013	2012	December 31, 2011
ASSETS
CURRENT ASSETS
Cash and cash equivalents				2d,2n,2s,	2,309,074	3,917,236	2,224,206
				4,21,31,38
Accounts receivable				2n,21,38
	Trade			5
		Related parties - net of
			allowance for impairment
			of Rp22,382 as of
			September 30, 2013,
			Rp42,632 as of
			December 31, 2012
			and Rp47,107 as of
			January 1, 2012 /	2s,2t,31,33e,
			December 31, 2011	33g,33i	759,464	574,650	318,243
		Third parties - net of
			allowance for impairment
			of Rp465,670 as of
			September 30, 2013,
			Rp521,998 as of
			December 31, 2012
			and Rp489,544 as of
			January 1, 2012 /
			December 31, 2011		1,965,057	1,464,069	1,181,853
	Others - net of allowance
		for impairment of
		Rp25,030 as of
		September 30, 2013,
		Rp18,748 as of
		December 31, 2012 and
		Rp16,702 as of
		January 1, 2012 /
		December 31, 2011		8	79,243	22,441	5,660
Inventories - net of allowance
	for decline in value of
	Rp35,841 as of
	September 30, 2013,
	Rp14,613 as of
	December 31, 2012
	and Rp18,401 as of
	January 1, 2012 /
	December 31, 2011			2e	28,124	52,556	75,890
Derivative assets				2n,20,21,38	94,614	69,654	159,349
Advances				2s,31	36,785	36,057	40,485
Prepaid taxes				2p,6	342,151	294,343	30,695
Prepaid frequency fee and licenses				2f	518,964	1,528,215	1,353,819
Prepaid expenses - others				2f,2j,2m,2s,
				30,31	393,067	335,815	351,833
Other current financial assets - net				2d,2n,2s,7,
				21,31,38	18,580	13,382	24,790
Other current assets				2s,31	3,029	392	742
Total Current Assets					6,548,152	8,308,810	5,767,565

See Report on Review of Interim Consolidated Financial Information.

The accompanying notes form an integral part of these interim consolidated financial statements.

-0 * Arabic * MERGEFORMAT 8

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)

September 30, 2013(Unaudited)

With Comparative Figures as of December 31, 2012 and

January 1, 2012 / December 31, 2011

(Expressed in millions of rupiah, except share data)

			September 30,	December 31,	January 1, 2012 /
		Notes	2013	2012	December 31, 2011
NON-CURRENT ASSETS
Due from related parties - net of
	allowance for impairment
	of Rp15 as of
	September 30, 2013,
	December 31, 2012
	and January 1, 2012 /
	December 31, 2011	2n,2s,21,31,38	7,833	10,358	10,654
Deferred tax assets - net		2p,16	90,425	100,693	113,812
Property and equipment - net		2h,2i,2j,2l,8,
		26,33h	42,625,700	41,964,793	43,505,698
Goodwill and other
	intangible assets - net	2c,2i,9	1,362,437	1,373,707	1,366,853
Long-term prepaid rentals -
	net of current portion	2f,2s,10,31	785,766	755,237	766,349
Long-term prepaid licenses -
	net of current portion	2f,3a	216,646	266,027	331,868
Long-term advances		2s,11,31	119,820	40,994	161,649
Long-term prepaid pension - net
	of current portion	2m,2s,30,31	81,388	88,845	103,181
Long-term receivables			15,755	17,959	20,677
Other non-current financial		2d,2n,2s,2t,12,21,
	assets - net	31,33g,33i,38	1,523,518	1,543,140	212,270
Other non-current assets - net		2g,2p,2s,13,16,31	995,076	754,498	872,436
Total Non-current Assets			47,824,364	46,916,251	47,465,447
TOTAL ASSETS			54,372,516	55,225,061	53,233,012

See Report on Review of Interim Consolidated Financial Information.

The accompanying notes form an integral part of these interim consolidated financial statements.

-0 * Arabic * MERGEFORMAT 8

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)

September 30, 2013(Unaudited)

With Comparative Figures as of December 31, 2012 and

January 1, 2012 / December 31, 2011

(Expressed in millions of rupiah, except share data)

			September 30,	December 31,	January 1, 2012 /
		Notes	2013	2012	December 31, 2011
LIABILITIES AND EQUITY

CURRENT LIABILITIES
Short-term bank loan		2n,2s,14,21,
		31,38	1,499,769	299,529	1,499,256
Accounts payable - trade		2n,2s,21,31,38
	Related parties		61,013	22,650	23,581
	Third parties		317,478	209,087	295,477
Procurement payable		2n,2s,15,21,31,38	3,440,667	2,737,850	3,475,862
Taxes payable		2p,16	131,723	95,599	91,206
Accrued expenses		2m,2n,2s,17,21,
		31,38	1,800,677	1,961,285	1,895,613
Unearned income		2k,33j	1,298,330	1,073,088	1,032,415
Deposits from customers		2n,21,38	47,821	43,825	37,265
Derivative liabilities		2n,20,21,38	38,992	81,241	138,189
Current maturities of:
	Loans payable	2n,2s,18,21,31,38	2,303,418	2,669,218	3,300,537
	Bonds payable	2n,19,21,38	1,628,618	1,329,175	41,989
Other current financial
	liabilities	2j,2n,2s,21,31,33k,38	372,276	289,164	71,828
Other current liabilities		2s,29,31	207,430	204,040	64,849
Total Current Liabilities			13,148,212	11,015,751	11,968,067

NON-CURRENT LIABILITIES
Due to related parties		2n,2s,21,31,38	35,170	42,789	15,480
Obligations under finance lease -		2j,2n,21,33k,38	3,455,048	3,101,910	770,081
net of current maturities
Deferred tax liabilities - net		2p,16	1,061,054	1,684,270	1,956,352
Loans payable - net of current
	maturities	2n,2s,18,21,31,38	3,175,285	3,703,822	6,425,779
Bonds payable - net of current
	maturities	2n,19,21,38	13,634,015	13,986,507	12,138,353
Employee benefit obligations -
	net of current portion	2m,22	1,074,567	926,224	787,313
Other non-current financial
liabilities		2j,2n,21,38	43,477	69,273	107,433
Other non-current liabilities		2s,29,31	1,218,519	1,299,131	95,054
Total Non-current Liabilities			23,697,135	24,813,926	22,295,845
TOTAL LIABILITIES			36,845,347	35,829,677	34,263,912

See Report on Review of Interim Consolidated Financial Information.

The accompanying notes form an integral part of these interim consolidated financial statements.

-0 * Arabic * MERGEFORMAT 8

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)

September 30, 2013(Unaudited)

With Comparative Figures as of December 31, 2012 and

January 1, 2012 / December 31, 2011

(Expressed in millions of rupiah, except share data)

				September 30,	December 31,	January 1, 2012 /
			Notes	2013	2012	December 31, 2011
EQUITY

EQUITY ATTRIBUTABLE TO
OWNERS OF THE COMPANY
Capital stock - Rp100 par value
	per A share and B share
	Authorized - 1 A share and
		19,999,999,999 B shares
	Issued and fully paid - 1 A share
		and 5,433,933,499 B shares	23	543,393	543,393	543,393
Premium on capital stock				1,546,587	1,546,587	1,546,587
Retained earnings
	Appropriated			134,446	134,446	134,446
	Unappropriated			13,892,923	15,846,721	15,889,104
Difference in transactions of
	equity changes in associated
	companies/subsidiaries		2b,2g	404,104	404,104	404,104
Difference in foreign currency
	translation		2b,2o	1,289	(3,600)	(2,326)
Unrealized changes in fair value of
	available-for-sale investment		12a	425,692	389,718	-

Total Equity Attributable to:
	Owners of the Company			16,948,434	18,861,369	18,515,308
	Non-controlling interests		2b	578,735	534,015	453,792
TOTAL EQUITY				17,527,169	19,395,384	18,969,100
TOTAL LIABILITIES AND EQUITY				54,372,516	55,225,061	53,233,012

See Report on Review of Interim Consolidated Financial Information.

The accompanying notes form an integral part of these interim consolidated financial statements.

-0 * Arabic * MERGEFORMAT 8

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Nine-Month Period Ended September 30, 2013 (Unaudited)

With Comparative Figures for 2012 (as Restated) (Unaudited)

(Expressed in millions of rupiah, except share data)

		Notes	2013	2012
REVENUES		2j,2k,2s,2u,24,31,
		35,36,37
Cellular			14,479,675	13,455,531
Multimedia, Data
	Communication,
	Internet ("MIDI")	2t,33g,33i	2,432,869	2,062,681
Fixed telecommunications			886,715	757,178
Total Revenues			17,799,259	16,275,390

EXPENSES (INCOME)		2s,31
Cost of services		2k,2u,25,33l,
		33o,36,37	7,387,704	6,462,271
Depreciation and amortization		2h,2j,2u,8,9,37	6,605,004	5,785,623
Personnel		2l,2m,2s,26,30,31,37	1,209,800	1,052,482
Marketing		2k,2s,2u,31,37	649,150	646,345
General and administration		2k,2s,27,31,33e,37	586,272	443,323
Gain on sale of towers (including amortization of deferred gain on sale and leaseback of towers)		2u,29,37	(105,788)	(1,150,780)
Gain on foreign exchange - net		1,2n,2o,2p,2u,5,6,
		8,12,13,20,37,40	(39,085)	(26,468)
Others - net		2u,6,12,13,16,37,
Others - net		40	(14,612)	325,293
Net Expenses			16,278,445	13,538,089
OPERATING PROFIT			1,520,814	2,737,301
Gain (loss) on change in fair value
	of derivatives - net	2n,20,37	168,291	(24,682)
Interest income		2s,2u,31,37	81,986	87,512
Loss on foreign exchange - net		2n,2o,2u,37,40	(2,351,216)	(668,363)
Financing cost		2j,2s,2t,2u,14,18,19,
		28,31,33g,33i,37	(1,621,433)	(1,533,905)
Share of loss of associated companies		37	(9)	-
Other Expenses - Net			(3,722,381)	(2,139,438)
PROFIT (LOSS) BEFORE INCOME TAX			(2,201,567)	597,863
INCOME TAX BENEFIT (EXPENSE)		2p,16,37
Current			(87,482)	(118,546)
Deferred		2u	613,670	64,526
Income Tax Benefit (Expense) - Net			526,188	(54,020)
PROFIT (LOSS) FOR THE PERIOD			(1,675,379)	543,843

See Report on Review of Interim Consolidated Financial Information.

The accompanying notes form an integral part of these interim consolidated financial statements.

-0 * Arabic * MERGEFORMAT 8

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued)

Nine-Month Period Ended September 30, 2013 (Unaudited)

With Comparative Figures for 2012 (as Restated) (Unaudited)

(Expressed in millions of rupiah, except share data)

		Notes	2013	2012

OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized changes in fair value on available-
	for-sale investment		35,974	311,648
Difference in foreign currency translation		2b	5,693	(1,435)
Income tax effect			(804)	(402)
Net			40,863	309,811
NET COMPREHENSIVE INCOME (LOSS)
FOR THE PERIOD			(1,634,516)	853,654

PROFIT (LOSS) FOR THE PERIOD
ATTRIBUTABLE TO:
	Owners of the Company	2u	(1,766,219)	475,715
	Non-controlling interests	2b,2u	90,840	68,128
	Net		(1,675,379)	543,843

NET OTHER COMPREHENSIVE INCOME -
NET OF TAX ATTRIBUTABLE TO:
	Owners of the Company		40,863	309,811
	Non-controlling interests	2b	-	-
	Total		40,863	309,811

NET COMPREHENSIVE INCOME (LOSS)
FOR THE PERIOD ATTRIBUTABLE TO:
	Owners of the Company		(1,725,356)	785,526
	Non-controlling interests		90,840	68,128
	Net		(1,634,516)	853,654

BASIC AND DILUTED EARNINGS (LOSS)
PER SHARE ATTRIBUTABLE TO OWNERS
OF THE COMPANY		2r,23	(325.04)	87.55

BASIC AND DILUTED EARNINGS (LOSS)
PER ADS (50 SHARES PER ADS)
ATTRIBUTABLE TO OWNERS
OF THE COMPANY		2r,23	(16,251.76)	4,377.26

See Report on Review of Interim Consolidated Financial Information.

The accompanying notes form an integral part of these interim consolidated financial statements.

-0 * Arabic * MERGEFORMAT 8

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Nine-Month Period Ended September 30, 2013 (Unaudited)

With Comparative Figures for 2012 (as Restated) (Unaudited)

(Expressed in millions of rupiah)

			Equity Attributable to Owners of the Company

									Unrealized
									Changes in
			Capital				Difference in	Difference	Fair Value of
			Stock -	Premium			Transactions of Equity	in Foreign	Available-for-		Non-
			Issued and	of Capital	Retained Earnings		Changes in Associated	Currency	Sale		controlling
Description		Notes	Fully Paid	Stock	Appropriated	Unappropriated	Companies/Subsidiaries	Translation	Investment	Total	Interests	Total Equity

Balance as of January 1, 2012			543,393	1,546,587	134,446	15,889,104	404,104	(2,326)	-	18,515,308	453,792	18,969,100
Difference in foreign currency translation arising from the
	translation of the financial statements of Indosat Finance
	Company B. V. and Indosat International Finance
	Company B.V. from euro to rupiah - net of applicable
	income tax expense of Rp289 and Rp114, respectively	2b	-	-	-	-	-	(1,838)	-	(1,838)	-	(1,838)

Unrealized changes in fair value of available-for-sale investment			-	-	-	-	-	-	311,648	311,648	-	311,648

Resolution during the Annual Stockholders' General Meeting on
	May 14, 2012
	Declaration of cash dividend	32	-	-	-	(417,489)	-	-	-	(417,489)	-	(417,489)

Profit for the period			-	-	-	475,715	-	-	-	475,715	68,128	543,843

Changes in non-controlling interests			-	-	-	-	-	-	-	-	(32,037)	(32,037)
Balance as of September 30, 2012			543,393	1,546,587	134,446	15,947,330	404,104	(4,164)	311,648	18,883,344	489,883	19,373,227

See Report on Review of Interim Consolidated Financial Information.

The accompanying notes form an integral part of these interim consolidated financial statements.

-0 * Arabic * MERGEFORMAT 8

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Nine-Month Period Ended September 30, 2013 (Unaudited)

With Comparative Figures for 2012 (as Restated) (Unaudited)

(Expressed in millions of rupiah)

See Report on Review of Interim Consolidated Financial Information.

The accompanying notes form an integral part of these interim consolidated financial statements.

-0 * Arabic * MERGEFORMAT 8

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)

Nine-Month Period Ended September 30, 2013 (Unaudited)

With Comparative Figures for 2012 (as Restated) (Unaudited)

(Expressed in millions of rupiah)

			Equity Attributable to Owners of the Company

									Unrealized
									Changes in
			Capital				Difference in	Difference	Fair Value of
			Stock -	Premium			Transactions of Equity	in Foreign	Available-for		Non-
			Issued and	of Capital	Retained Earnings		Changes in Associated	Currency	-Sale		controlling
Description		Notes	Fully Paid	Stock	Appropriated	Unappropriated	Companies/Subsidiaries	Translation	Investment	Total	Interests	Total Equity

Balance as of January 1, 2013			543,393	1,546,587	134,446	15,846,721	404,104	(3,600)	389,718	18,861,369	534,015	19,395,384
Difference in foreign currency translation arising from the translation of
	the financial statements of Indosat Finance Company B. V. and
	Indosat International Finance Company B. V from euro to rupiah -
	net of applicable income tax expense of Rp1,211 and Rp470,
	respectively.	2b	-	-	-	-	-	4,889	-	4,889	-	4,889

Unrealized changes in fair value of available-for-sale
	investment		-	-	-	-	-	-	35,974	35,974	-	35,974

Resolution during the Annaual Stockholders' General Meeting on
	June 18, 2013
	Declaration of cash dividend	32	-	-	-	(187,579)	-	-	-	(187,579)	-	(187,579)

Profit (loss) for the period			-	-	-	(1,766,219)	-	-	-	(1,766,219)	90,840	(1,675,379)

Changes in non-controlling interests			-	-	-	-	-	-	-	-	(46,120)	(46,120)
Balance as of September 30, 2013			543,393	1,546,587	134,446	13,892,923	404,104	1,289	425,692	16,948,434	578,735	17,527,169

See Report on Review of Interim Consolidated Financial Information.

The accompanying notes form an integral part of these interim consolidated financial statements.

-0 * Arabic * MERGEFORMAT 8

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

Nine-Month Period Ended September 30, 2013 (Unaudited)

With Comparative Figures for 2012 (Unaudited)

(Expressed in millions of rupiah)

		Notes	2013	2012
CASH FLOW FROM OPERATING ACTIVITIES
Cash received from:
	Customers		17,372,064	15,882,060
	Refunds of taxes	6,13	272,426	179,478
	Settlement from currency forward contracts	20v-dr	123,212	117,804
	Interest income		84,481	78,106
	Settlement from currency swap contracts	20a-i	26,149	30,824
Cash paid to/for:
	Authorities, other operators, suppliers and others		(6,859,431)	(7,172,001)
	Financing cost		(1,741,229)	(1,569,150)
	Employees		(1,030,054)	(960,770)
	Income taxes		(150,580)	(95,577)
	Settlement from interest rate swap contracts	20l-r	(32,000)	-
	Interest rate swap margin	20j-u	(8,513)	(47,134)
	Swap cost from cross currency swap contracts	20a-i	(3,926)	(34,935)
Net Cash Provided by Operating Activities			8,052,599	6,408,705
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and equipment		8,29	175,860	2,806,470
Cash dividend received from other long-term investment		12b	19,691	-
Acquisitions of property and equipment		8	(7,875,579)	(4,453,531)
Acquisitions of intangible assets		9	(2,030)	(13,954)
Net Cash Used in Investing Activities			(7,682,058)	(1,661,015)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term loans		18	1,650,000	1,300,000
Proceeds from short-term loan		14	1,300,000	400,000
Repayment of long-term loans		18	(3,206,297)	(4,980,521)
Repayment of bonds payable		19	(1,330,000)	(41,989)
Cash dividend paid by the Company		32	(187,579)	(417,489)
Repayment of short-term loans		14	(100,000)	(1,900,000)
Cash dividend paid by subsidiaries to non-controlling interests			(13,610)	(6,593)
Increase in restricted cash and cash equivalents			(4,003)	(21,800)
Proceeds from bonds payable		19	-	3,000,000
Net Cash Used in Financing Activities			(1,891,489)	(2,668,392)
Net Foreign Exchange Differences
	from Cash and Cash Equivalents		(87,214)	44,542
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS			(1,608,162)	2,123,840
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD			3,917,236	2,224,206
CASH AND CASH EQUIVALENTS
AT END OF PERIOD		4	2,309,074	4,348,046

See Report on Review of Interim Consolidated Financial Information.

The accompanying notes form an integral part of these interim consolidated financial statements.

-0 * Arabic * MERGEFORMAT 8

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (continued)

Nine-Month Period Ended September 30, 2013 (Unaudited)

With Comparative Figures for 2012 (Unaudited)

(Expressed in millions of rupiah)

Notes

2013

2012

DETAILS OF CASH AND CASH EQUIVALENTS:

Time deposits with original maturities

of three months or less

and deposits on call

1,833,714

4,059,641

Cash on hand and in banks

475,360

288,405

Cash and cash equivalents as stated

in the interim consolidated statement

of financial position

2,309,074

4,348,046

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

GENERAL

Company’s Establishment

PT Indosat Tbk (“the Company”) was established in the Republic of Indonesia on November 10, 1967 within the framework of the Indonesian Foreign Investment Law No. 1 of 1967 based on the notarial deed No. 55 of Mohamad Said Tadjoedin, S.H. The deed of establishment was published in Supplement No. 24 of State Gazette No. 26 dated March 29, 1968 of the Republic of Indonesia. In 1980, the Company was sold by American Cable and Radio Corporation, an International Telephone & Telegraph subsidiary, to the Government of the Republic of Indonesia (“the Government”) and became a State-owned Company ( Persero ).

On February 7, 2003, the Company received the approval from the Capital Investment Coordinating Board (“BKPM”) in its letter No. 14/V/PMA/2003 for the change of its legal status from a State-owned Company ( Persero ) to a Foreign Capital Investment Company. Subsequently, on March 21, 2003, the Company received the approval from the Ministry of Justice and Human Rights of the Republic of Indonesia on the amendment of its Articles of Association to reflect the change in its legal status.

The Company’s Articles of Association has been amended from time to time. The latest amendment was covered by notarial deed No. 123 dated January 28, 2010 of Aulia Taufani, S.H. (as a substitute notary of Sutjipto, S.H.), as approved in the Stockholders’ Extraordinary General Meeting held on January 28, 2010, in order to comply with the Indonesian Capital Market and Financial Institutions Supervisory Agency (“BAPEPAM-LK”) Rule No. IX.J.1 dated May 14, 2008 on the Principles of Articles of Association of Limited Liability Companies that Conduct Public Offering of Equity Securities and Public Companies and Rule No. IX.E.1 on Affiliate Transactions and Certain Conflict of Interests Transactions. The latest amendment of the Company’s Articles of Association has been reported to and approved by the Ministry of Law and Human Rights of the Republic of Indonesia based on its letters No. AHU-09555.AH.01.02 Year 2010 dated February 22, 2010 and No. AHU-AH.01.10-04964 dated February 25, 2010. The latest amendment relates to, among other matters, the changes in the Company’s purposes, objectives and business activities, appointment of acting President Director if the incumbent President Director is unavailable and definition of conflict of interests.

According to article 3 of its Articles of Association, the Company’s purposes and objectives are
to provide telecommunications networks, telecommunications services as well as information technology and/or convergence technology services by carrying out the following main business activities:

To provide telecommunications networks, telecommunications services as well as information technology and/or convergence technology services, including but not limited to providing basic telephony services, multimedia services, internet telephony services, network access point service, internet services, mobile telecommunications networks and fixed telecommunications networks; and

To engage in payment transactions and money transfer services through telecommunications networks as well as information technology and/or convergence technology.

The Company can provide supporting business activities in order to achieve the purposes and objectives, and to support its main businesses, as follows:

To plan, to procure, to modify, to build, to provide, to develop, to operate, to lease, to rent, and to maintain infrastructures/facilities including resources to support the Company’s business in providing telecommunications networks, telecommunications services as well as information technology and/or convergence technology services;

GENERAL (continued)

Company’s Establishment (continued)

To conduct business and operating activities (including development, marketing and sales of telecommunications networks, telecommunications services as well as information technology and/or convergence technology services by the Company), including research, customer services, education and courses (both domestic and overseas); and

To conduct other activities necessary to support and/or related to the provision of telecommunications networks, telecommunications services as well as information technology and/or convergence technology services including, but not limited to, electronic transactions and provision of hardware, software, content as well as telecommunications-managed services.

The Company started its commercial operations in 1969.

For the nine-month period ended September 30, 2013 and years ended December 31, 2012 and 2011, the Company has performed all main and supporting business activities as stated in its Articles of Association.

Based on Law No. 3 of 1989 on Telecommunications and pursuant to Government Regulation No. 77 of 1991, the Company had been re-confirmed as an Operating Body (“Badan Penyelenggara”) that provided international telecommunications services under the authority of the Government.

In 1999, the Government issued Law No. 36 on Telecommunications (“Telecommunications Law”) which took effect on September 8, 2000. Under the Telecommunications Law, telecommunications activities cover:

Telecommunications networks

Telecommunications services

Special telecommunications services

National state-owned companies, regional state-owned companies, privately-owned companies and cooperatives are allowed to provide telecommunications networks and services. Individuals, government institutions and legal entities, other than telecommunications networks and service providers, are allowed to render special telecommunications services.

The Telecommunications Law prohibits activities that result in monopolistic practices and unhealthy competition and expects to pave the way for market liberalization.

Based on the Telecommunications Law, the Company ceased as an Operating Body and has to obtain licenses from the Government for the Company to engage in the provision of specific telecommunications networks and services.

On August 14, 2000, the Government, through the Ministry of Communications (“MOC”), granted the Company an in-principle license as a nationwide Digital Communication System (“DCS”) 1800 telecommunications provider as compensation for the early termination of the exclusivity rights on international telecommunications services given to the Company prior to the granting of such licenseeffective August1,2003. On August 23, 2001, the Company obtained the operating license from the MOC. Subsequently, based on Decree No. KP.247 dated November 6, 2001 issued by the MOC, the operating license was transferred to the Company’s subsidiary, PT Indosat Multi Media Mobile (see “e” below).

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

GENERAL (continued)

Company’s Establishment (continued)

On September 7, 2000, the Government, through the MOC, also granted the Company in-principle licenses for local and domestic long-distance telecommunications services as compensation for the termination of its exclusivity rights on international telecommunications services. On the other hand, PT Telekomunikasi Indonesia Tbk (“Telkom”) was granted an in- principle license for international telecommunications services as compensation for the early termination of Telkom’s rights on local and domestic long-distance telecommunications services.

Based on a letter dated August 1, 2002 from the MOC, the Company was granted an operating license for fixed local telecommunications network covering Jakarta and Surabaya. This operating license was converted to become a national license on April 17, 2003 based on Decree No. KP.130 Year 2003 of the MOC. The values of the above licenses granted to Telkom and the Company on the termination of their exclusive rights on local/domestic and international telecommunications services, respectively, have been determined by an independent appraiser.

The following are operating licenses obtained by the Company and PT Indosat Mega Media,
a subsidiary:

Licenses No.	Date Issued	Issuing Body	Period of	Description
			License
19/KEP/M.KOMINFO/	February 14, 2006	Ministry of	10 years	Determination of the winner and operating license for IMT-2000 cellular network provider using 2.1 GHz radiofrequency spectrum (a third generation ["3G"]) mobile communicationstechnology for 1 block (2 x 5 Mhz) of frequency (*)
02/2006 and	and March 27, 2006	Communications and
29/KEP/M.KOMINFO/		Information
03/2006		Technology
		("MOCIT")


504/KEP/M.KOMINFO/	August 31, 2012	MOCIT	Evaluated	Amended Indosat's Mobile CellulerLicense which allows Indosat to deploy3rd Generation Partnership Project (3Gsystem) at 900 MHz spectrum band.The Ministerial Decree replaces Indosat's previous licenses No. 252/KEP/M.KOMINFO/07/2011and 102/KEP/M.KOMINFO/10/2006.
08/2012			every
			5 years





460/M.KOMINFO/12/ 2011	December 7, 2011	MOCIT	Satellite end of life	Approval for Indonesian Satellite to utilize Orbital Slot 150 ^o (**)
252/KEP/	July 6, 2011	MOCIT	Evaluated	Amended operating license for nationwide GSM cellular mobilenetwork (including its basic telephone services and the rights and obligations relating to 3G services), which replaces the previous licenseNo. 102/KEP/M.KOMINFO/10/2006dated October 11, 2006
M.KOMINFO/07/2011			every
(previously			5 years
102/KEP/M.KOMINFO/
10/2006)



181/KEP/M.KOMINFO/	December 12, 2006	MOCIT	-	Allocation of two nationwide frequencychannels, i.e., channels 589 and 630in the 800 MHz spectrum for LocalFixed Wireless Network Services withLimited Mobility
12/2006



01/DIRJEN/2008	January 7, 2008	Directorate General	Evaluated	Operating license as internet serviceprovider
		of Post and	every	Operating license as internet serviceprovider
		Telecommunications	5 years
		("DGPT")
51/DIRJEN/2008	January 9, 2008	DGPT	Evaluated	Operating license for internetinterconnection services (NetworkAccess Point/NAP), which replacesthe previous license given toPT Satelit Palapa Indonesia("Satelindo")
			every
			5 years

(*) As one of the winners in the selection of IMT-2000 cellular providers, the Company was obliged to, among others, pay upfront fee of Rp320,000 (Note 3a) and
radio frequency fee (Note 33l). (**)On September 19, 2013, the MOCIT issued letter No. 838/KOMINFO/DJSDPPI.2/SP.01/09/2013 regarding the Government’s plan to retrieve the Company’s right to fill up Orbital Slot 150 ^O . The Company has replied to the letter on September 20, 2013 describing the Company’s plan to construct Palapa E Satellite to file the Orbital Slot 150 ^O (Note 33d). As of October 24, 2013, the Company has not received any response from the MOCIT.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

GENERAL (continued)

Company’s Establishment (continued)

Licenses No.	Date Issued	Issuing Body	Period of	Description
			License
52/DIRJEN/2008	January 9, 2008	DGPT	Evaluated	Operating license for telephonyinternet services which replaces theprevious licenseNo. 823/DIRJEN/2002 for Voice overInternet Protocol Service with nationalcoverage that expired in 2007
			every
			5 years


237/KEP/M.KOMINFO/	July 27, 2009	MOCIT	10 years	Operating license for "Packet Switched" local fixed telecommunications network using 2.3GHZ radio frequency spectrum ofBroadband Wireless Access (BWA)(***)
7/2009



268/KEP/M.KOMINFO/	September 1, 2009	MOCIT	10 years	Operating licenses for one additionalblock (2 x 5 Mhz) of 3G frequency (****)
9/2009

198/KEP/M.KOMINFO/	May 27, 2010	MOCIT	Evaluated	Amended operating license fornationwide closed fixed communications network (e.g.,VSAT,frame relay, etc.), which replaces the previous license No.KP.69/Thn 2004given to the Company
05/2010			every
			5 years



311/KEP/M.KOMINFO/	August 24, 2010	MOCIT	Evaluated	Amended operating license for fixed network and basic telephony service which covers the provision of local,national long-distance, andinternational long-distance telephonyservices, which replaces the previous license No. KP.203/Thn 2004 given tothe Company
8/2010			every
312/KEP/M.KOMINFO/			5 years
8/2010
And
313/KEP/M.KOMINFO/
8/2010

(***) PT Indosat Mega Media was obliged to, among others, pay upfront fee of Rp18,408 (Note 3a) and radio frequency fee (Note 33l).
(****) The Company was obliged to, among others, pay upfront fee of Rp320,000 (Note 3a) and radio frequency fee (Note 33l).

On January 9, 2008, based on letter No. 10/14/DASP from Bank Indonesia (Central Bank), the Company obtained approval for “Indosat m-wallet” prepaid cards as a new means of making payments to certain merchants. The Company was also appointed as a special principal and technical acquirer for such prepaid cards. On November 19, 2009, the Company launched “Indosat m-wallet” to the public.

On March 17, 2008, the MOCIT issued Ministerial Decree No. 02/PER/M.KOMINFO/2008 on the Guidelines of Construction and Utilization of Sharing Telecommunications Towers. Based on this Decree, the construction of telecommunications towers requires permits from the relevant governmental institution and the local government determines the placement of the towers and the location in which the towers can be constructed. Furthermore, a telecommunications provider or tower provider which owns telecommunications towers is obliged to allow other telecommunications operators to utilize its telecommunications towers without any discrimination. The Decree also mandated that each of the tower contractor, provider and owner be 100% locally-owned companies.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

GENERAL (continued)

Company’s Establishment (continued)

On March 30, 2009, the Ministry of Domestic Affairs, Ministry of Public Works, MOCIT and Head of BKPM jointly issued Decrees No. 18 Year 2009, No. 07/PRT/M/2009, No. 19/PER/M.KOMINFO/03/09 and No. 3/P/2009, respectively, on the Detailed Guidelines of Construction and Utilization of Sharing Telecommunications Towers. The Decrees define the requirements and procedures for tower construction. A tower provider can be either a telecommunications operator or a non-telecommunications operator. If a tower provider is a non-telecommunications operator, it is required to be a 100% locally owned company.

On September 3, 2010, based on letter No. 12/67/DASP/25 from Bank Indonesia (Central Bank), the Company obtained approval to become a “money remittance provider” to customers in the local and international markets.

On December 13, 2010, based on letter No. 2619/BSN/D3-d3/12/2010 from the Badan Standardisasi Nasional (National Standardization Bureau), the Company obtained Issuer Identification Number (IIN) on its applications for “Indosat m-wallet ” and “money remittance” . On March 23, 2011, the President of the Republic of Indonesia issued Regulation or Peraturan Pemerintah (“PP”) No. 3 year 2011 regarding money remittance. This regulation becomes the operational guidance for the Company as a “money remittance provider”.

The Company is domiciled at Jalan Medan Merdeka Barat No. 21, Jakarta and has 2 regional offices located in Jakarta and Medan.

Ooredoo QSC, Qatar (previously Qatar Telecom QSC) (“Ooredoo”) is the ultimate parent company of the Company and subsidiaries. The immediate parent company of the Company is Ooredoo Asia Pte. Ltd., previously Qatar Telecom (Qtel Asia) Pte. Ltd., Singapore.

Company’s Public Offerings

On September 23, 1994, the Company obtained the effective statement from the Capital Market Supervisory Agency (“BAPEPAM”) to conduct the initial public offering in the Jakarta Stock Exchange through BAPEPAM Letter No. S-1656/PM/1994 and in the New York Stock Exchange of its 362,425,000 B shares, consisting of 22,510,870 American Depositary Shares (ADS, each representing 10 B Shares) and 103,550,000 B shares from the divestment of the B shares owned by the Government. The Company’s B shares and ADS have been registered in the Indonesia Stock Exchange (new entity after the merger of the Jakarta Stock Exchange and the Surabaya Stock Exchange in November 2007) and New York Stock Exchange since October 19, 1994. However, the Company has delisted its ADS from the New York Stock Exchange as of May 17, 2013.

Based on the resolution at the Company’s Extraordinary General Meeting held on March 8, 2004, the stockholders approved to split the nominal value of the Company’s B shares from Rp500 to Rp100 resulting in the increase in the number of authorized shares from 4,000,000,000 to 20,000,000,000 shares and in the number of issued and fully paid shares from 1,035,500,000 to 5,177,500,000 shares.

During the period August 1, 2004 to December 31, 2006, the Company issued additional 256,433,500 B shares in connection with the exercise of its Employee Stock Option Program (“ESOP”) Phases I and II. The ESOP program was approved in the Company’s Stockholders’ Annual General Meeting held on June 26, 2003.

GENERAL (continued)

Company’s Public Offerings (continued)

As of September 30, 2013, the outstanding bonds issued to the public by the Company and a subsidiary are as follows:

Bond (Note 19)	Effective Date	Registered with and Traded on:
1. Fifth Indosat Bonds in Year 2007 with Fixed	May 29, 2007	Indonesia Stock Exchange
Rates
2. Indosat Sukuk Ijarah II in Year 2007	May 29, 2007	Indonesia Stock Exchange
3. Sixth Indosat Bonds in Year 2008 with Fixed	April 9, 2008	Indonesia Stock Exchange
Rates
4. Indosat Sukuk Ijarah III in Year 2008	April 9, 2008	Indonesia Stock Exchange
5. Seventh Indosat Bonds in Year 2009 with	December 8, 2009	Indonesia Stock Exchange
Fixed Rates
6. Indosat Sukuk Ijarah IV in Year 2009	December 8, 2009	Indonesia Stock Exchange
7. Guaranteed Notes Due 2020	July 29, 2010	Singapore Exchange Securities Trading Limited
8. Eighth Indosat Bonds in Year 2012	June 27, 2012	Indonesia Stock Exchange
9. Indosat Sukuk Ijarah V in Year 2012	June 27, 2012	Indonesia Stock Exchange

Directors, Commissioners and Audit Committee

Based on resolutions of the Stockholders’ Annual General Meeting and the Stockholders’ Extraordinary General Meetings held on June 18, 2013, September 17, 2012, June 24, 2011 which are notarized under Deeds No. 84 and No. 5 of Aryanti Artisari, S.H., M.Kn., and No. 148 of Aulia Taufani, S.H. (as substitute notary of Sutjipto, S.H.), respectively, on the same dates, the composition of the Company’s Board of Commissioners and Board of Directors as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011, respectively, is as follows:

						January 1, 2012/
	September 30, 2013			December 31, 2012		December 31, 2011
Board of Commissioners:

President Commissioner	Abdulla Mohammed		Abdulla Mohammed		Abdulla Mohammed
		S.A Al Thani		S.A Al Thani		S.A Al Thani
Commissioner	Dr. Nasser Mohd.		Dr. Nasser Mohd.		Dr. Nasser Mohd.
		A. Marafih		A. Marafih		A. Marafih
Commissioner	Rachmad Gobel		Rachmad Gobel		Rachmad Gobel
Commissioner	Richard Farnsworth		Richard Farnsworth		Richard Farnsworth
		Seney*		Seney*		Seney
Commissioner	Rionald Silaban		Rionald Silaban		Rionald Silaban
Commissioner	Rudiantara*		Rudiantara*		Alexander Rusli*
Commissioner	Chris Kanter*		Chris Kanter*		Chris Kanter*
Commissioner	Cynthia Alison		Thia Peng Heok		Thia Peng Heok
		Gordon**		George*		George*
Commissioner	Soeprapto*		Soeprapto*		Soeprapto*
Commissioner	Beny Roelyawan		Beny Roelyawan		-

Independent Commissioner

Based on the resolution of the Company’s Stockholders’ Annual General Meeting (“SAGM”) held on June 18, 2013, Mrs. Cynthia Alison Gordon was appointed as Commissioner to replace Mr. Thia Peng Heok George, effective on the same date.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

GENERAL (continued)

Directors, Commissioners and Audit Committee (continued)


		September 30,		December 31,	January 1, 2012/
		2013		2012	December 31, 2011
Board of Directors:

President Director and Chief Executive Officer		Alexander Rusli	Alexander Rusli		Harry Sasongko
President Director and Chief Executive Officer					Tirtotjondro
Director and Chief Financial Officer		Curt Stefan Carlsson	Curt Stefan Carlsson		Curt Stefan Carlsson
Director and Chief Commercial Officer		-	Frederik Johannes Meijer		Laszlo Imre Barta
Director and Chief Technology Officer		Hans Christiaan Moritz*	Hans Christiaan Moritz		Hans Christiaan Moritz
Director and Chief Wholesale and		Fadzri Sentosa	Fadzri Sentosa		Fadzri Sentosa
	Infrastructure Officer

Mr. Hans Christiaan Moritz submitted his resignation letter to the Directors and Board of Commissioners on August 31, 2013. Based on Article 16 paragraphs 6 and 7 of the Company’s Articles of Association, among other things, it is stated that in the event that the Company does not convene the SAGM within the period at the latest of 60 days after the acceptance of Mr. Hans Christiaan Moritz resignation letter, then by the lapse of such period, the resignation of Mr. Hans Christiaan Moritz will become valid without the approval of the SAGM.

The composition of the Company’s Audit Committee as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011 is as follows:

			January 1, 2012/
	September 30, 2013	December 31, 2012	December 31, 2011

Chairman	Richard Farnsworth Seney*	Thia Peng Heok George	Thia Peng Heok George
Member	Chris Kanter	Chris Kanter	Chris Kanter
Member	Rudiantara*	Richard Farnsworth Seney	Soeprapto
Member	Unggul Saut Marupa	Unggul Saut Marupa	Unggul Saut Marupa
	Tampubolon	Tampubolon	Tampubolon
Member	Kanaka Puradiredja	Kanaka Puradiredja	Kanaka Puradiredja

Based on the resolution of the Company’s SAGM held on June 18, 2013, Mr. Thia Peng Heok George was no longer a member of the Company’s Board of Commissioners. Based on a resolution of the Board of Commissioners’ meeting held on June 18, 2013, the Board of Commissioners agreed to appoint Mr. Richard Farnsworth Seney as Audit Committee Chairman to replace Mr. Thia Peng Heok George and Mr. Rudiantara as a member of the Audit Committee.

The Company and subsidiaries (collectively referred to hereafter as “the Group”) has approximately 4,643, 4,540 and 4,461 employees (unaudited), including non-permanent employees, as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011, respectively.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

GENERAL (continued)

Structure of the Company’s Subsidiaries

As of September 30, 2013, December 31, 2012 and January 1, 2012/ December 31, 2011, the Company has direct and indirect ownership in the following Subsidiaries:

Percentage of Ownership (%) as of December 31, 2012 and January 1, 2012/December 31, 2011

Name of Subsidiary

Location

Principal Activity

Start of

Commercial Operations

Percentage of

Ownership (%) as of

September 30, 2013

Indosat Palapa Company

Amsterdam

Finance

2010

100.00

B.V. (“IPBV”) ⁽¹⁾

Indosat Mentari Company

Amsterdam

Finance

2010

100.00

B.V. (“IMBV”) ⁽¹⁾

Indosat Finance Company

Amsterdam

Finance

2003

100.00

B.V. (“IFB”) ⁽⁴⁾

Indosat International

Amsterdam

Finance

2005

100.00

Finance Company B.V.

(“IIFB”) ⁽⁴⁾

Indosat Singapore Pte.

Singapore

Telecommunication

2005

100.00

Ltd. (“ISPL”)

PT Indosat Mega Media

Jakarta

Multimedia

2001

99.85

(“IMM”)

PT Interactive Vision

Jakarta

Pay TV

99.83

Media (“IVM”) ⁽²⁾

PT Starone Mitra

Semarang

Telecommunication

2006

84.08

72.54

Telekomunikasi

(“SMT”) ⁽⁵⁾

PT Aplikanusa Lintasarta

Jakarta

Data

1989

72.36

(“Lintasarta”)

Communication

PT Lintas Media Danawa

Jakarta

Information and

2008

50.65

(“LMD”) ⁽³⁾

Communication

Services

PT Artajasa Pembayaran

Jakarta

Telecommunication

2000

39.80

Elektronis (“APE”) ⁽³⁾

	Total Assets (Before Eliminations)
			January 1, 2012 /
	September 30,	December 31,	December 31,
Name of Subsidiary	2013	2012	2011

IPBV ⁽¹⁾	7,602,529	6,442,367	6,015,894
IMBV ⁽¹⁾	7,595,030	6,436,524	6,010,359
IFB ⁽⁴⁾	26,885	21,963	20,923
IIFB ⁽⁴⁾	10,838	8,853	8,688
ISPL	135,605	99,519	78,264
IMM	839,457	813,308	746,404
IVM ⁽²⁾	5,648	5,448	5,198
SMT ⁽⁵⁾	234,405	250,856	209,651
Lintasarta	2,265,153	2,041,724	1,783,759
LMD ⁽³⁾	3,756	4,026	5,199
APE ⁽³⁾	435,842	371,603	258,745

^{(1)

IPBV and IMBV were incorporated in Amsterdam on April 28, 2010 to engage in treasury activities, to lend and borrow money, whether in the form of securities or otherwise, to finance enterprises and companies, and to grant security in respect of their respective obligations or those of their group companies and third parties.

⁽²⁾

IVM, a subsidiary of IMM, was established on April 21, 2009 to engage in Pay TV services. IMM made capital injections to IVM on March 9 and 30, 2011 totaling Rp4,999. On July 12, 2011, IVM obtained the license to conduct its Pay TV services. However, as of September 30, 2013, IVM has not started its commercial operations.

⁽³⁾

Lintasarta has direct 55% and 70% ownership in APE and LMD, respectively.

⁽⁴⁾

On July 4, 2013, the Company as the sole shareholder of IFB and IIFB resolved to voluntarily dissolve and put those two entities into voluntary liquidation, by virtue of an Extraordinary General Meeting of Shareholders (EGMS). In connection with such liquidation, IFB and IIFB have appointed IMBV as the liquidator and custodian of the books and records. A liquidation agreement has also been executed by the Company, IFB, IIFB and IMBV concerning the of liquidation (Note 39i).

⁽⁵⁾

On July 11, 2013, the Company made additional capital injection to SMT amounting to Rp16,549, resulting in the increase of the Company’s ownership in SMT from 72.54% into 84.08%.

1.

GENERAL (continued)

e.

Merger of the Company, Satelindo, Bimagraha and IM3

Based on Merger Deed No. 57 dated November 20, 2003 (“merger date”) of Poerbaningsih Adi Warsito, S.H., the Company, Satelindo, PT Bimagraha Telekomindo (“Bimagraha”) and PT Indosat Multi Media Mobile (“IM3”) agreed to merge, with the Company as the surviving entity. All assets and liabilities owned by Satelindo, Bimagraha and IM3 were transferred to the Company on the merger date. These three companies were dissolved by operation of law without the need to undergo the regular liquidation process.

The names “Satelindo” and “IM3” in the following notes refer to these entities before they were merged with the Company, or as the entities that entered into contractual agreements that were taken over by the Company as a result of the merger.

f.

Approval and Authorization for the Issuance of theUnaudited Interim Consolidated Financial Statements

The issuance of the unaudited interim consolidated financial statements of the Group as of September 30, 2013 and for the nine-month period then ended with comparative figures as of December 31, 2012 and January 1, 2012 / December 31, 2011and for the nine-month period ended September 30, 2012 was approved and authorized for issuance by the Board of Directors on October 24, 2013, as reviewed and recommended for approval by the Audit Committee.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a.

Basis of Presentation of the Interim Consolidated Financial Statements

The interim consolidated financial statements have been prepared in accordance with Indonesian Financial Accounting Standards which comprise the Statements and Interpretations issued by the Financial Accounting Standards Board of the Indonesian Institute of Accountants (“DSAK”) and the Regulations No. VIII.G.7 of the Guidelines on Financial Statement Presentation and Disclosures issued by BAPEPAM-LK and Decision Letter No.KEP-347/BL/2012 of the Chief of BAPEPAM-LK regarding “Financial Presentation and Disclosure for Issuers or Public Companies.”

The interim consolidated financial statements are prepared in accordance with Statement of Financial Accounting Standards (“PSAK”) 1 (Revised 2009), “Presentation of Financial Statements”.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

a.

Basis of Presentation of the Interim Consolidated Financial Statements (continued)

The interim consolidated financial statements, except for the interim consolidated statement of cash flows, have been prepared on the accrual basis using the historical cost concept of accounting, except as disclosed in the relevant notes herein.

The interim consolidated statement of cash flows, which has been prepared using the direct method, presents receipts and disbursements of cash and cash equivalents classified into operating, investing and financing activities.

The reporting currency used in the interim consolidated financial statements is the Indonesian rupiah, which is also the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

b.

Principles of Consolidation

The interim consolidated financial statements include the accounts of the Company and subsidiaries mentioned in Note 1d, in which the Company maintains (directly or indirectly) equity ownership of more than 50% or less than 50% but exercises control over the subsidiary as in the case of APE.

All material intercompany transactions and account balances (including the related significant unrealized gains or losses) have been eliminated.

Subsidiaries are fully consolidated from the date of acquisitions, being the date on which the Group obtains control, and continue to be consolidated until the date such control ceases. Control is presumed to exist if the Company owns, directly or indirectly through a subsidiary, more than half of the voting power of an entity. Control also exists when the parent owns half or less of the voting power of an entity when there is:

a)

power over more than half of the voting rights by virtue of an agreement with other investors;

b)

power to govern the financial and operating policies of the entity under a statute or an agreement;

c)

power to appoint or remove the majority of the members of the board of directors or equivalent governing body and control of the entity is by that board or body; or

d)

power to cast the majority of votes at meetings of the board of directors or equivalent governing body and control of the entity is by that board or body.

Non-controlling interests (“NCI”) represent the portion of the profit or loss and net assets of the subsidiaries not attributable, directly or indirectly, to the Company, which are presented in the interim consolidated statement of comprehensive income and under the equity section of the interim consolidated statement of financial position, respectively, separately from the corresponding portion attributable to the equity holders of the parent company.

Losses of a non-wholly owned subsidiary are attributed to the NCI even if they create an NCI deficit balance.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

b.

Principles of Consolidation (continued)

In case of loss of control over a subsidiary, the Group:

·

derecognizes the assets (including goodwill) and liabilities of the subsidiary;

·

derecognizes the carrying amount of any NCI;

·

derecognizes the cumulative translation differences, recorded in equity, if any;

·

recognizes the fair value of the consideration received;

·

recognizes the fair value of any investment retained;

·

recognizes any surplus or deficit in profit or loss; and

·

reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss or retained earnings, as appropriate.

c.

Business Combinations

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at fair value at acquisition-date and the amount of any NCI in the acquiree. For each business combination, the acquirer measures the NCI in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are directly expensed and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition-date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability,are recognized in accordance with PSAK 55 (Revised 2006) either in profit or loss or as other comprehensive income. If the contingent consideration is classified as equity, it should not be remeasured until it is finally settled within equity.

At acquisition date, goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred and the amount recognized for NCI over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units (“CGUs”) that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those CGUs.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

c.

Business Combinations (continued)

Where goodwill forms part of a CGU and part of the operations within that CGU is disposed of, the goodwill associated with the operations disposed of is included in the carrying amount of the operations when determining the gain or loss on disposal of the operations. Goodwill disposed of in this circumstance is measured based on the relative values of the operations disposed of and the portion of the CGU retained.

d.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and in banks and all unrestricted time deposits (including deposits on call) with original maturities of three months or less at the time of placement.

Time deposits which are pledged as collateral for bank guarantees are not classified as part of “Cash and Cash Equivalents”. These are presented as part of either “Other Current Financial Assets” or “Other Non-current Financial Assets”.

e.

Inventories

Inventories, which mainly consist of Subscriber Identification Module (“SIM”) cards, starter packs, broadband modems,cellular handsets and pulse reload vouchers are valued at the lower of cost or net realizable value. Cost is determined using the weighted average method.

In accordance with PSAK 14 (Revised 2008), the Group applies the guidance on the determination of inventory cost and its subsequent recognition as an expense, including any write-down to net realizable value, as well as guidance on the cost formula used to assign costs to inventories.

f.

Prepaid Frequency Fee and Licenses and Other Prepaid Expenses

Prepaid frequency fee and licenses and other prepaid expenses, which mainly consist of frequency fee, rentals, upfront fee of 3G and BWA licenses, advertising and insurance, are expensed as the related asset is utilized. The non-current portions of prepaid rentals and upfront fee of 3G and BWA licenses are shown as part of “Long-term Prepaid Rentals - Net of Current Portion” and “Long-term Prepaid Licenses - Net of Current Portion”, respectively.

g.

Investments in Associated Companies

The Group’s investment in its associated company is accounted for using the equity method. An associated company is an entity in which the Group has significant influence. Under the equity method, the cost of investment is increased or decreased by the Group’s share in net earnings or losses of, and dividends received from, the associated company since the date of acquisition.

The interim consolidated statement of comprehensive income reflects the share of the results of operations of the associated company. Where there has been a change recognized directly in the equity of the associated company, the Group recognizes its share of any such changes and discloses this, when applicable, in the interim consolidated statement of changes in equity. Unrealized gains and losses resulting from transactions between the Group and the associated company are eliminated to the extent of the Group’s interest in the associated company.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

g.

Investment in Associated Company (continued)

The Group determines whether it is necessary to recognize an additional impairment loss on the Group’s investment in its associated company. The Group determines at each reporting date whether there is any objective evidence that the investment in the associated company is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the investment in associated company and its carrying value, and recognizes the amount in profit or loss.

h.

Property and Equipment

The Group has implemented PSAK 16 (Revised 2011), “Fixed Assets”, which impacts recognition of the assets, the determination of their carrying amounts and the depreciation charges and impairment losses to be recognized in relation to them. The revised PSAK No. 16 also prescribes accounting for land and provides further guidance related to the treatment of certain landrights in Indonesia and the related costs.

Property and equipment are stated at cost (which includes certain capitalized borrowing costs incurred during the construction phase), less accumulated depreciation and impairment in value.

The Group has chosen the cost model for the measurement of its property and equipment. Property 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 to 40

Information technology equipment

3 to 5

Office equipment

3 to 5

Building and leasehold improvements

3 to 25

Vehicles

3 to 5

Cellular technical equipment

8

Transmission and cross-connection equipment

3 to 15

Fixed Wireless Access (“FWA”) technical equipment

7

Operation and maintenance center and measurement unit

            3 to 5

Fixed access network equipment

3 to 10

The residual values, useful lives and methods of depreciation of property and equipment are reviewed and adjusted prospectively, if appropriate, at each financial year end.

Landrights, including the legal costs incurred at initial acquisition of landrights, are stated at cost and not amortized. Specific costs associated with the renewal or extension of land titles are deferred and amortized over the legal term of the landrights or economic life of the land, whichever is shorter.

The cost of maintenance and repairs is charged to income as incurred; significant renewals and betterments which enhance an asset’s condition on its initial performance are capitalized. When properties are retired or otherwise disposed of, their costs and the related accumulated depreciation are derecognized from the accounts, and any resulting gains or losses are recognized in profit or loss.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

h.

Property and Equipment (continued)

Property and equipment acquired in exchange for a non-monetary asset or for a combination of monetary and non-monetary assets are measured at fair values unless:

(i)

the exchange transaction lacks commercial substance, or

(ii)

the fair value of neither the assets received nor the assets given up can be measured reliably.

The acquired assets are measured this way even if the Group cannot immediately derecognize the assets given up. If the acquired assets cannot be reliably measured at fair value, their value is measured at the carrying amount of the assets given up plus cash consideration.

Properties under construction and installation are stated at cost, which includes borrowing costs.Under PSAK 26 (Revised 2011), “Borrowing Costs”, all borrowing costs such as interest, finance charges in respect of finance leases recognized in accordance with PSAK 30 (Revised 2011) and foreign exchange differences (estimated quarterly to the extent that they are regarded as an adjustment to interest costs by capping the exchange differences taken as borrowing costs at the amount of borrowing costs on the functional currency equivalent borrowings) that can be attributed to qualifying assets, are capitalized to the cost of properties under construction and installation. Other borrowing costs are recognized as an expense in the period in which they are incurred. Capitalization of borrowing costs ceases when the construction or installation is completed and the constructed or installed asset is ready for its intended use.

i.

Impairment of Non-financial Assets

The Group assesses at each annual reporting period whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset (i.e., an intangible asset with an indefinite useful life, an intangible asset not yet available for use, or goodwill acquired in a business combination) is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of the asset’s CGU’s fair value less costs to sell and its value in use, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses of continuing operations are recognized in the interim consolidated statement of comprehensive income as “impairment losses”. In assessing the value in use, the estimated net future cash flows 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 determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used to determine the fair value of the asset. These calculations are corroborated by valuation multiples or other available fair value indicators.

Impairment losses of continuing operations, if any, are recognized in profit or loss under expense categories that are consistent with the functions of the impaired assets.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

i.

Impairment of Non-financial Assets (continued)

An assessment is made at each annual reporting period as to whether there is any indication that previously recognized impairment losses recognized for an asset other than goodwill may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss for an asset other than goodwill is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. If that is the case, the carrying amount of the asset is increased to its recoverable amount. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceeds the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior periods. Reversal of an impairment loss is recognized in the interim consolidated statement of comprehensive income. After such a reversal, the depreciation charge on the said asset is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. Where the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods.

In accordance with PSAK 19 (Revised 2010), software that is not an integral part of the related hardware is amortized using the straight-line method over 5 years and assessed for impairment whenever there is indication of impairment. The Company reviews the amortization period and the amortization method for the software at least at each financial year end. Residual value of software is assumed to be zero.

j.

Leases

Effective January 1, 2012, the Group retrospectively implemented PSAK 30 (Revised 2011), “Leases”.

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date. The arrangement is assessed for whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

Group as a lessee

A finance lease that transfers to the Group substantially all the risks and benefits incidental to ownership of the leased item, is capitalized at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in financing cost in profit or loss.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

j.

Leases (continued)

Group as a lessee (continued)

The current portion of obligations under finance lease is presented as part of Other Current Financial Liabilities.

Operating lease payments are recognized as an operating expense in the interim consolidated statement of comprehensive income on a straight-line basis over the lease term.

Group as a lessor

A lease in which the Group does not transfer substantially all the risks and benefits of the ownership of an asset is classified as an operating lease. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents, if any, are recognized as revenue in the period they are earned.

A lease in which the Group transfers substantially all the risks and benefits of the ownership of an asset is classified as a finance lease. The leased asset is recognized as asset held under a finance lease in the interim consolidated statement of financial position and is presented as a receivable at an amount equal to the net investment in the lease. Selling profit or loss is recognized during the period, in accordance with the policy followed by the Group for outright sales. Costs incurred by the Group in connection with negotiating and arranging a lease are recognized as an expense when the selling profit is recognized.

Sale-and-leaseback transaction

When the Group enters into a sale-and-leaseback transaction, the Group analyzes if the leaseback arrangement meets the criteria of a finance lease or operating lease. Where the classification results in a finance lease, any excess of sales proceeds over the carrying value of the asset sold is deferred and amortized over the lease term. Where the transaction is classified as an operating lease and it is clear that the transaction is established at fair value, any profit or loss is recognized immediately.

k.

Revenue and Expense Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates and Value Added Taxes (“VAT”). The following specific recognition criteria must also be met before revenue is recognized:

Cellular

Cellular revenues arising from airtime and roaming calls are recognized based on the duration of successful calls made through the Company’s cellular network and presented on a gross basis.

For post-paid subscribers, monthly service fees are recognized as the service is provided.

The activation component of starter package sales is deferred and recognized as revenue over the expected average period of the customer relationship. Sales of initial/reload vouchers are recorded as unearned revenue and recognized as revenue upon usage of the airtime or upon expiration of the airtime.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

k.

Revenue and Expense Recognition (continued)

Cellular (continued)

Sales of wireless broadband modems and cellular handsets are recognized upon delivery to the customers.

Revenues from wireless broadband data communications are recognized based on the duration of usage or fixed monthly charges depending on the arrangement with the customers.

Cellular revenues are presented on a net basis, after compensation to value added service providers.

Customer Loyalty Program

The Company operates a customer loyalty program called

“Poin Plus Plus”

, which allows customers to accumulate points for every reload and payment by the Company’s prepaid and post-paid subscribers, respectively. The points can then be redeemed for free telecommunications and non-telecommunications products, subject to a minimum number of points being obtained. Starting July 29, 2011, the

“Poin Plus Plus”

program has been replaced with the

“Indosat Senyum”

program. Both programs have similarity in nature and scheme to redeem the points, except that under the new program, the Company no longer includes the subscription period as a variable item in calculating the points.

Customer loyalty credits are accounted for as a separate component of the sales transaction in which they are granted. The Company records a liability at the time of reload and payment by its prepaid and post-paid subscribers, respectively, based on the fair value expected to be incurred to supply products in the future. The consideration received is allocated between the cellular products sold and the points issued, with the consideration allocated to the points equal to their fair value. Fair value of the points issued is deferred and recognized as revenue when the points are redeemed or when the redemption period expires.

Dealer Commissions

Consideration in the form of sales discount given by the Company to a dealer is recognized as a reduction of revenue.

If the Company receives, or will receive, an identifiable benefit in exchange for a consideration given by the Company to a dealer, and the fair value of such benefit can be reasonably estimated, the consideration will be recorded as a marketing expense.

Tower Leasing

Revenue arising from tower leasing classified as an operating lease is recognized on the straight-line basis over the lease term based on the amount stated in the agreement between the Company and the lessee.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

k.

Revenue and Expense Recognition (continued)

MIDI

Internet

Revenues from installation services are deferred and recognized over the expected average period of the customer relationship. Revenues from monthly service fees are recognized as the services are provided. Revenues from usage charges are recognized monthly based on the duration of internet usage or based on the fixed amount of charges, depending on the arrangement with the customers.

Frame Net, World Link and Direct Link

Revenues arising from installation services are deferred and recognized over the expected average period of the customer relationship. Revenues from monthly service fees are recognized as the services are provided.

Satellite Operating Lease

Revenues are recognized on the straight-line basis over the lease term.

Revenues from other MIDI services are recognized when the services are rendered.

Fixed Telecommunications

International Calls

Revenue from outgoing international call traffic is reported on a gross basis.

Fixed Wireless

Fixed wireless revenues arising from usage charges are recognized based on the duration of successful calls made through the Company’s fixed network.

For post-paid subscribers, monthly service fees are recognized as the services are provided.

For prepaid subscriber, the activation component of starter package sales is deferred and recognized as revenue over the expected average period of the customer relationship. Sale of initial/reload vouchers is recorded as unearned income and recognized as income upon usage of the airtime or upon expiration of the airtime.

Fixed Line

Revenues from fixed line installations are deferred and recognized over the expected average period of the customer relationship. Revenues from usage charges are recognized based on the duration of successful calls made through the Company’s fixed network.

Interconnection Revenue

Revenues from network interconnection with other domestic and international telecommunications carriers are recognized monthly on the basis of the actual recorded traffic for the month.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

k.

Revenue and Expense Recognition (continued)

Agency Relationships

Revenues from an agency relationship are recorded based on the gross amount billed to the customer when the Group acts as a principal in the sale of services.

When the Group acts as an agent and earns commission from the supplier of the service, revenue is recorded based on the net amount retained (the amount paid by the customer less the amount paid to the supplier).

Expenses

Interconnection Expenses

Expenses from network interconnection with other domestic and international telecommunications carriers are accounted for as operating expenses in the period these are incurred.

Other Expenses

Expenses are recognized when incurred.

l.

Personnel Costs

Personnel costs which are directly related to the development, construction and installation of property and equipment are capitalized as part of the cost of such assets.

m.

Pension Plan and Employee Benefits

Pension costs under the Group’s defined benefit pension plans are determined by periodic actuarial calculation using the projected-unit-credit method and applying the assumptions on discount rate, expected return on plan assets and annual rate of increase in compensation.

Actuarial gains or losses from post-employment benefits are recognized as income or expense when the net cumulative unrecognized actuarial gains or losses for each individual plan at the end of the previous reporting year exceed the greater of 10% of the present value of the defined benefit obligation or 10% of the fair value of plan assets, at that date. These gains or losses in excess of the 10% corridor are recognized on a straight-line basis over the expected average remaining working lives of the employees. The past service costs from post-employment benefits are recognized as an expense on a straight-line basis over the average period until the benefits become vested. If the benefits have already vested, following the introduction of changes to a pension plan, past service costs are recognized immediately.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

m.

Pension Plan and Employee Benefits (continued)

Actuarial gains or losses and past service costs from other long-term employee benefits are recognized immediately in the interim consolidated statement of comprehensive income within personnel expenses.

The Group recognizes gains or losses on the curtailment of a defined benefit plan when the curtailment occurs (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 the defined benefit plan terms such 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). The gain or loss on curtailment comprises any resulting change in the fair value of plan assets, change in the present value of defined benefit obligation and any related actuarial gains or losses and past service cost that had not previously been recognized.

n.

Financial Instruments

The Group has applied PSAK 50 (Revised 2010), “Financial Instruments: Presentation”, PSAK 55 (Revised 2011), “Financial Instruments: Recognition and Measurement”, and PSAK 60, “Financial Instruments: Disclosures”.

PSAK 50 (Revised 2010) contains the requirements for the presentation of financial instruments and identifies the information that should be disclosed. The presentation requirements apply 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. This PSAK requires the disclosure of, among others, information about factors that affect the amount, timing and certainty of an entity’s future cash flows relating to financial instruments and the accounting policies applied to those instruments.

PSAK 55 (Revised 2011) establishes the principles for recognizing and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This PSAK provides the definitions and characteristics of derivatives, the categories of financial instruments, recognition and measurement, hedge accounting and determination of hedging relationships, among others.

PSAK 60 requires the disclosures of the significance of financial instruments for financial position and performance; and the nature and extent of risks arising from financial instruments to which the Group is exposed during the period and at the end of the reporting period, and how the entity manages those risks.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

n.

Financial Instruments (continued)

n1.

Financial assets

Initial recognition

Financial assets within the scope of PSAK 55 (Revised 2011) are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate. The Group determines the classification of its financial assets at initial recognition.

All financial assets are recognized initially at fair value plus transaction costs, except in the case of financial assets which are recorded at fair value through profit or loss.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the trade date, i.e., the date that the Group commits to purchase or sell the assets.

The Group’s financial assets include cash and cash equivalents, trade and other accounts receivable, due from related parties, derivative assets and other current and non-current financial assets (quoted and unquoted financial instruments).

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

•

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss.

Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets at fair value through profit or loss are carried in the interim consolidated statement of financial position at fair value, with changes in fair value recognized in profit or loss.

Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value through profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognized in the interim consolidated statement of comprehensive income. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required.

The Group’s financial assets classified at fair value through profit or loss consist of derivative assets.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

n.

Financial Instruments (continued)

n1.

Financial assets (continued)

Subsequent measurement (continued)

•

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (“EIR”) method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in profit or loss. The losses arising from impairment are also recognized in profit or loss.

The Group’s cash and cash equivalents, trade and other accounts receivable, due from related parties, other current financial assets, finance lease receivables and other non-current financial assets are included in this category.

•

Held-to-maturity (HTM) investments

Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as HTM when the Group has the positive intention and ability to hold them to maturity. After initial measurement, HTM investments are measured at amortized cost using the EIR method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in profit or loss. The losses arising from impairment are recognized in profit or loss.

The Group did not have any HTM investments as of September 30, 2013 and              December 31, 2012 and January 1, 2012/December 31, 2011.

•

Available-for-sale (AFS) financial assets

AFS financial assets are non-derivative financial assets that are designated as available- for-sale or are not classified in any of the three preceding categories. After initial measurement, AFS financial assets are measured at fair value with unrealized gains or losses recognized in other comprehensive income until the investment is derecognized, at which time the cumulative gain or loss is recognized, or determined to be impaired, and is reclassified from other comprehensive income to profit or loss. Interest earned on AFS financial investments is reported as interest income using the EIR method.

The Group has the following investments classified as AFS:

-

Investments in shares of stock that do not have readily determinable fair value in which the equity interest is less than 20%. These are carried at cost less allowance for impairment.

-

Investments in equity shares that have readily determinable fair value in which the equity interest is less than 20% and which are classified as available-for-sale, are recorded at fair value.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

n.

Financial Instruments (continued)

n2.

Financial liabilities

Initial recognition

Financial liabilities within the scope of PSAK 55 (Revised 2011) are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, inclusive of directly attributable transaction costs.

The Group’s financial liabilities include trade accounts payable, procurement payable, accrued expenses, deposits from customers, obligations under financial lease, loans and bonds payable, due to related parties, derivative liabilities and other current and non-current financial liabilities.

Subsequent measurement

The measurement of financial liabilities depends on their classification as follows:

•

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. This category includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by PSAK 55 (Revised 2011). Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognized in profit or loss.

•

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. The amortization is included in financing costs in profit or loss.

Gains or losses are recognized in profit or loss when the liabilities are derecognized as well as through the amortization process.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

n.

Financial Instruments (continued)

n3.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the interim consolidated statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

n4.

Fair value of financial instruments

The fair value of financial instruments that are traded in active market at each reporting date is determined by reference to quoted market prices or dealer price quotations (bid price for long position and ask price for short position), without any deduction for transaction costs. For financial instruments where there is no active market, fair value is determined using valuation techniques. Such techniques may include using recent arm’s length market transactions, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis, or other valuation models.

Credit risk adjustment

The Company adjusts the price in the more advantageous market to reflect any differences in counterparty credit risk between instruments traded in that market and the ones being valued for financial asset positions. In determining the fair value of financial liability positions, the Company's own credit risk associated with the instrument is taken into account.

n5.

Amortized cost of financial instruments

Amortized cost is computed using the EIR method less any allowance for impairment and principal repayment or reduction. The calculation takes into account any premium or discount on acquisition and includes transaction costs and fees that are an integral part of the EIR.

n6.

Impairment of financial assets

The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

n.

Financial Instruments (continued)

n6. Impairment of financial assets (continued)

•

Financial assets carried at amortized cost

For loans and receivables carried at amortized cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and the group is collectively assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss has occurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original EIR. If a loan or receivable has a variable interest rate, the discount rate for measuring impairment loss is the current EIR.

The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognized in profit or loss. Interest income continues to be accrued on the reduced carrying amount based on the rate of interest used to discount future cash flows for the purpose of measuring impairment loss. Loans and receivables, together with the associated allowance, are written off when there is no realistic prospect of future recovery and all collateral has been realized or has been transferred to the Group. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is recognized in profit or loss.

•

AFS financial assets

In the case of an equity investment classified as an AFS financial asset, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost.

Where there is objective evidence of impairment, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognized in profit or loss - is recycled from other comprehensive income to profit or loss. Impairment loss on equity investment is not reversed through the profit or loss; increase in its fair value after impairment is recognized in other comprehensive income.

In the case of a debt instrument classified as an AFS financial asset, impairment is assessed based on the same criteria as financial asset carried at amortized cost. Future interest income is based on the reduced carrying amount and is accrued based on the rate of interest used to discount future cash flows for the purpose of measuring impairment loss. Such accrual is recorded as part of the “Interest Income” account in profit or loss. If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss is reversed through profit or loss.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

n.

Financial Instruments (continued)

n7.

Derecognition of financial assets and liabilities

Financial assets

A financial asset (or where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized when: (1) the rights to receive cash flows from the asset have expired; or (2) the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or has expired.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in profit or loss.

n8.

Derivative financial instruments

The Company enters into and engages in cross currency swaps, interest rate swaps and other permitted instruments, if considered necessary, for the purpose of managing its foreign exchange and interest rate exposures emanating from the Company’s loans and bonds payable in foreign currencies. These derivative financial instruments, while providing effective economic hedges of specific interest rate and foreign exchange risks under the Company’s financial risk management objectives and policies, do not meet the criteria for hedge accounting as provided in PSAK 55 (Revised 2011) and are initially recognized at fair value on the date the derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Any gains or losses arising from changes in fair value of derivatives during the period, which are entered into as economic hedges that do not qualify for hedge accounting, are taken directly to profit or loss.

Derivative assets and liabilities are presented under current assets and liabilities, respectively. Embedded derivative is presented with the host contract in the interim consolidated statement of financial position which represents an appropriate presentation of overall future cash flows for the instrument taken as a whole.

The net changes in fair value of derivative instruments, swap cost or income, termination cost or income, and settlement of derivative instruments are credited (charged) to “Gain (Loss) on Change in Fair Value of Derivatives - Net”, which is presented in profit or loss.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

o.

Foreign Currency Transactions and Balances

The Group has applied PSAK 10 (Revised 2010), “The Effects of Changes in Foreign Exchange Rates”, which describes how to include foreign currency transactions and foreign operations in the financial statements of an entity and translate financial statements into a presentation currency. The Group considers the primary indicators and other indicators in determining its functional currency. If indicators are mixed and the functional currency is not obvious, management uses its judgment to determine the functional currency that most faithfully represents the economic effects of the underlying transactions, events and conditions.

The interim consolidated financial statements are presented in rupiah, which is the Company’s functional currency and the Group’s presentation currency. Transactions involving foreign currencies are recorded at the rates of exchange prevailing at the time the transactions are made. At interim consolidated statement of financial position date, monetary assets and liabilities denominated in foreign currencies are adjusted to reflect the prevailing exchange rates at such date and the resulting gains or losses are credited or charged to current operations, except for foreign exchange differentials that can be attributed to qualifying assets which are capitalized to properties under construction and installation.

The functional currency of IFB and IIFB is the euro, while that of IPBV, IMBV and ISPL is the U.S. dollar. As at the end of the reporting period, the assets and liabilities of these subsidiaries are translated into the presentation currency of the Company at the spot rate which is the exchange rate prevailing at the end of the reporting period and their statements of comprehensive income are translated at the average exchange rates during the period. The resulting differences arising from the translations of the financial statements of IPBV, IMBV, IFB, IIFB and ISPL are included in other comprehensive income and presented as part of “Difference in Foreign Currency Translation” in the interim consolidated statement of changes in equity.

For September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011, the foreign exchange rates used (in full amounts) were Rp11,613, Rp9,670 and Rp9,068, respectively, per US$1 which are computed by taking the average of the buying and selling rates of bank notes last published by Bank Indonesia for the period / year.

p.

Income Tax

The Group has applied PSAK 46 (Revised 2010), which requires the Group to account for the current and future tax consequences of the future recovery (settlement) of the carrying amount of assets (liabilities) that are recognized in the interim consolidated statement of financial position, and transactions and other events of the current period which are recognized in the interim consolidated statement of comprehensive income. The revised PSAK also requires the Group to present interest and penalties for the underpayment / overpayment of income tax, if any, as part of “Income Tax Benefit (Expense) - Current” in the interim consolidated statement of comprehensive income.

Current tax expense is provided based on the estimated taxable income for the period. Deferred tax assets and liabilities are recognized for temporary differences between the financial and the tax bases of assets and liabilities at each reporting date. Future tax benefits, such as the carryover of unused tax losses, are also recognized to the extent that realization of such benefits is probable. The tax effects for the period are allocated to current operations, except for the tax effects from transactions which are directly charged or credited to equity.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

p.

Income Tax (continued)

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in

the period when the assets are realized or the liabilities are settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the interim consolidated statement of financial position date. Changes in the carrying amount of deferred tax assets and liabilities due to a change in tax rates are credited or charged to current operations, except to the extent that they relate to items previously charged or credited to equity.

The Company recognizes deferred tax liabilities and deferred tax assets associated with its investments in subsidiaries, except:

·

In respect of taxable temporary differences, when the timing of the reversals of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

·

In respect of deductible taxable temporary differences, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

The difference between the financial statement carrying amounts of existing assets and liabilities, and their respective final tax bases are not recognized as deferred tax assets or liabilities.

The amounts of additional tax principal and penalty imposed through a tax assessment letter (“SKP”) are recognized as expense of the current period in the interim consolidated statement of comprehensive income, unless further settlement is submitted. The amounts of tax principal and penalty imposed through SKP are deferred as long as they meet the asset recognition criteria.

For each of the consolidated entities, the tax effects of temporary differences and tax loss

carryover, which individually are either assets or liabilities, are shown at the applicable net amounts.

q.

Segment Reporting

The Group has applied PSAK 5 (Revised 2009), “Operating Segments”. This revised PSAK requires disclosures that will enable users of financial statements to evaluate the nature and financial effects of business activities in which the entity engages and the economic environments in which it operates.

A segment is a distinguishable component of the Group that is engaged in providing certain products (business segment), which component is subject to risks and rewards that are different from those of other segments.

Segment revenue, expenses, results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis to that segment. They are determined before intra-group balances and intra-group transactions are eliminated.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

r.

Basic and Diluted Earnings (Loss) per Share/ADS

The Group has applied PSAK 56 (Revised 2011), “Earnings per Share”, which prescribes principles for the determination and presentation of earnings (loss) per share.

The amount of basic and diluted earnings (loss) per share is computed by dividing profit (loss) for the period attributable to owners of the Company by the weighted-average number of shares outstanding during the period.

The amount of basic and diluted earnings (loss) per ADS attributable to owners of the Company is computed by multiplying basic earnings (loss) per share attributable to owners of the Company by 50, which is equal to the number of shares per ADS.

There were no potentially dilutive shares as of September 30, 2013 and 2012.

s.

Transactions with Related Parties

The Group has transactions with related parties as defined under PSAK 7 (Revised 2010), “Related Party Disclosures”.

The details of the accounts and the significant transactions entered into with related parties are presented in Note 31.

t.

Concession Financial Assets

The Group constructs or upgrades infrastructure (construction or upgrade services) under arrangements to provide public service and operates and maintains that infrastructure (operation services) for a specified period of time. These arrangements may include infrastructure used in a public-to-private service concession arrangement for its entire useful life.

The arrangements are accounted for based on the nature of the consideration. The financial asset model is used when the Group has an unconditional contractual right to receive cash or another financial asset from or at the direction of the grantor for the construction services.

In the financial asset model, the amount due from the grantor meets the definition of a receivable which is measured at fair value. It is subsequently measured at amortized cost. The amount initially recognized plus the cumulative interest on that amount is calculated using the effective interest method.

The consideration received or receivable is allocated by reference to the relative fair values of the services provided, typically a construction component and a service element for operating and maintenance services performed. Revenue from the concession arrangements earned under the financial asset model consists of the (i) fair value of the amount due from the grantor; and (ii) interest income related to the capital investment in the project.

Any asset carried under concession arrangements is derecognized on disposal or when no future economic benefits are expected from its future use or disposal or when the contractual rights to the financial asset expire.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

u.

Restatement of Interim Consolidated Financial Statements

Effective January 1, 2012, the Group has retrospectively adopted PSAK 30 (Revised 2011), “Leases” - Note 2j, ISAK 16, “Service Concession Arrangements”, and ISAK 22, “Service Concession Arrangements: Disclosures”.

Leases

Prior to January 1, 2012, there was no requirement to separately evaluate lease agreement that contained land and building elements. Accordingly, the Company accounted for the tower lease arrangement as an operating lease, as it viewed the arrangement as a single package of land and buildings and treated the overall arrangement as a land lease.

Effective January 1, 2012, the Company has applied PSAK 30 (Revised 2011) retrospectively, which requires the Company to assess the classification of land and building elements of tower leasing arrangements separately whether as finance or an operating lease. As a result of the separate assessment made by the Company, taking into consideration comparison of the lease term with the economic life of the assets and comparison of the present value of the minimum lease payments and the fair value of the leased assets, each element might result in different lease classification. Accordingly, the Company determined that the majority of its historical lease transactions, where the Company is the lessee, were finance leases. The main impact of PSAK 30 (Revised 2011) is the recognition of finance lease assets and liabilities on the building element of tower slot leasing arrangements where the Company is the lessee. For the amended lease policy, see Note 2j.

Service Concession

Prior to January 1, 2012, there was no specific guidance on the accounting for service concession arrangement. The Group accounted for this arrangement as an executory contract. The infrastructure assets constructed under this arrangement were accounted for as property and equipment and depreciated over their estimated useful lives.

Effective January 1, 2012, the Group has retrospectively adopted ISAK 16, “Service Concession Arrangements”, and ISAK 22, “Service Concession Arrangements: Disclosures”, to account for its concession contract. Under ISAK 16, revenues relating to construction or upgrade services under a service concession arrangement are recognized based on the stage of completion of the work performed. Operation or service revenue is recognized in the period in which the service is provided. When more than one service is provided in the service concession arrangements, the consideration received is allocated by reference to the relative fair value of the services. The infrastructure assets constructed under this arrangement are not recognized as property and equipment because the contractual arrangement does not convey the right to control the use of the public service infrastructure assets to the Group. In its concession contract, the Group has contractual rights to receive considerations from the grantor. The Group recognizes a financial asset in the interim consolidated statement of financial position, in consideration for the services it provides. Such financial asset is recognized in the interim consolidated statement of financial position as a receivable, for the amount of the fair value of the infrastructure on initial recognition and subsequently at amortized cost. The receivable is settled by means of the grantor’s payments received. The financial income calculated on the basis of the effective interest rate is recognized as interest income.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

u.

Restatement of Interim Consolidated Financial Statements (continued)

As a result of the retrospective application of PSAK 30 (Revised 2011), “Leases”, ISAK 16 “Service Concession Arrangements” and ISAK 22, “Service Concession Arrangements: Disclosures”, the following adjustments were made retrospectively to the interim consolidated financial statements for the nine-month period ended September 30, 2012:

September 30, 2012

September 30, 2012

(Previously Reported)

Adjustments

(Restated)

REVENUES

Cellular

13,650,482

(194,951

)

13,455,531

MIDI

2,101,364

(38,683

)

2,062,681

EXPENSES (INCOME)

Cost of services

6,524,319

(62,048

)

6,462,271

Depreciation and amortization

5,770,403

15,220

5,785,623

Marketing

841,874

(195,529

)

646,345

Gain on sale of towers (including

     amortization of deferred gain on sale

     and leaseback of towers)

(2,187,300)

1,036,520

(1,150,780)

Gain on foreign exchange - net

-

(26,468

)

(26,468)

Others – net

243,462

81,831

325,293

Interest income

79,876

7,636

87,512

Financing cost

(1,468,037)

(65,868

)

(1,533,905)

Loss on foreign exchange - net

(616,326)

(52,037

)

(668,363)

INCOME TAX BENEFIT

Deferred

28,549

35,977

64,526

PROFIT FOR THE PERIOD

ATTRIBUTABLE TO:

Owners of the Company

1,628,413

(1,152,698

)

475,715

Non-controlling interests

72,882

(4,754

)

68,128

3.

MANAGEMENT’S USE OF SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Group’s interim consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the assets or liabilities affected in future periods.

a.

Judgments

In the process of applying the Group’s accounting policies, management has made the following judgments, apart from those including estimations and assumptions, which have the most significant effect on the amounts recognized in the interim consolidated financial statements:

·

Determination of functional currency

The currency of each of the entities under the Group is the currency of the primary economic environment in which each entity operates. It is the currency that mainly influences the revenue and cost of rendering services.

·

Leases

The Group has various lease agreements where the Group acts as lessee or lessor in respect of certain asset. The Group evaluates whether significant risks and rewards of ownership of the leased asset are transferred to the lessee or retained by the Group based on PSAK30 (Revised 2011)

,

“Leases”, which requires the Group to make judgments and estimates of transfer of risks and rewards of ownership of leased asset.

Tower leases

For tower leases, the unit of account is considered at the level of the slot or site space because the lease is dependent on the use of a specific space in the tower where the Company places its equipment.

Licenses

In 2006, the Company was granted a license to use 2.1 GHz radio frequency spectrum (a 3G mobile communications technology - Note 1a) by the MOCIT. The Company was obliged to, among others, pay upfront fee and annual radio frequency fee for 10 years (Note 33l). The upfront fee is recorded as part of Long-term Prepaid Licenses for the non-current portion and Prepaid Expenses for the current portion, and amortized over the 10-year license term using the straight-line method.

In 2009, the Company received additional 3G license (Note 1a), and IMM was granted an operating license for “Packet Switched” local telecommunications network using 2.3 GHz radio frequency spectrum of Broadband Wireless Access (“BWA”). The Company and IMM were obliged to, among others, pay upfront fee and annual radio frequency fee for 10 years (Note 33l). The upfront fee is recorded as part of Long-term Prepaid Licenses for the non-current portion and Prepaid Expenses for the current portion, and amortized over the 10-year license term using the straight-line method.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

3.

MANAGEMENT’S USE OF SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS (continued)

a.

Judgments (continued)

·

Leases (continued)

Licenses (continued)

Management believes, as supported by written confirmation from the DGPT, that the 3G and BWA licenses may be returned at any time without any financial obligation to pay the remaining outstanding annual radio frequency fees (i.e., the license arrangement does not transfer substantially all the risks and rewards incidental to ownership). Accordingly, the Company and IMM recognize the annual radio frequency fee as prepaid operating lease expense, amortized using the straight-line method over the term of the rights to operate the 3G and BWA licenses. Management evaluates its plan to continue to use the licenses on an annual basis.

·

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or CGU exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on available data from binding sales transactions in arm’s length transactions of similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash inflows and the growth rate used for extrapolation purposes.

·

Exchange of asset transactions

During 2010 to 2012, the Group entered into several contracts for exchanging of asset for certain of its existing cellular technical equipment with third party supplier. For the exchange of asset transactions, the Group evaluates whether the transactions contain commercial substance based on PSAK 16 (Revised 2011)

“Property, Plant, and Equipment”

, which requires the Group to make judgments and estimates of the future cash flow and the fair value of the asset received and given up as a result of the transactions. Management considers the exchange of asset transactions to have met the criteria of commercial substance; however, the fair value of neither the asset received nor the asset given up could be measured reliably, hence, their value was measured at the carrying amount of the asset given up plus cash consideration paid.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

3.

MANAGEMENT’S USE OF SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS (continued)

a.

Judgments (continued)

·

Sale-and-leaseback transaction

The Group classifies leases into finance leases or operating leases in accordance with the accounting policies stated in Note 2j. Determining whether a lease transaction is a finance lease or an operating lease is a complex issue and requires substantial judgment as to whether the lease agreement transfers substantially all the risks and rewards of ownership to or from the Group. Careful and considered judgment is required on various complex aspects that include, but are not limited to, the fair value of the leased asset, the economic life of the leased asset, whether renewal options are included in the lease term and determining an appropriate discount rate to calculate the present value of the minimum lease payments.

The classification as a finance lease or operating lease determines whether the leased asset is capitalizable and recognized on the interim consolidated statement of financial position. In a sale-and-leaseback transaction, the classification of the leaseback arrangements as described above determines how the gain or loss on the sale transaction is recognized. It is either deferred and amortized (finance lease) or recognized in the consolidated statement of comprehensive income immediately (operating lease).

·

Provision for legal contingency

The Group is currently involved in one significant legal proceeding (Note 33f). Management’s judgment of the probable cost for the resolution of the claim has been developed in a consultation with the Company’s counsels handling the defense in this matter and is based upon their analysis of potential result. Management currently does not believe this proceeding could materially reduce the Company’s revenues and profitability. It is possible, however, that future financial performance could be materially affected by changes in their judgment or effectiveness of their strategy relating to this proceeding.

·

Allowance for impairment of receivables

If there is objective evidence that an impairment loss has been incurred on trade receivables, the Group recognizes an allowance for impairment losses related to its trade receivables that are specifically identified as doubtful for collection.

In addition to specific allowance against individually significant receivables, the Group also assesses a collective impairment allowance against credit exposure of its debtors which are grouped based on common credit characteristics, and although not specifically identified as requiring a specific allowance, have a greater risk of default than when the receivables were originally granted to debtors.

b.

Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below:

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

3.

MANAGEMENT’S USE OF SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS (continued)

b.

Estimates and Assumptions (continued)

·

Determination of fair values of financial assets and financial liabilities

When the fair value of financial assets and financial liabilities recorded in the interim consolidated statement of financial position cannot be derived from active markets, their fair value is determined using valuation techniques, including the discounted cash flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair value. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 21 for further discussion.

·

Estimating useful lives of property and equipment and intangible assets

The Group estimates the useful lives of its property and equipment and intangible assets based on expected asset utilization as anchored on business plans and strategies that also consider expected future technological developments and market behavior. The estimation of the useful lives of property and equipment is based on the Group’s collective assessment of industry practice, internal technical evaluation and experience with similar assets. The estimated useful lives are reviewed at least each financial year-end and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limitations on the use of the assets. It is possible, however, that future results of operations could be materially affected by changes in the estimates brought about by changes in the factors mentioned above.

The amounts and timing of recorded expenses for any period are affected by changes in these factors and circumstances. A reduction in the estimated useful lives of the Group’s property and equipment increases the recorded operating expenses and decreases non-current assets. An extension in the estimated useful lives of the Group’s property and equipment decreases the recorded operating expenses and increases non-current assets.

·

Goodwill and intangible assets

The interim consolidated financial statements reflect acquired businesses after the completion of the respective acquisition. The Company accounts for the acquired businesses using the acquisition method starting January 1, 2011 and the purchase method for prior year acquisitions, which requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair market values of the acquiree’s identifiable assets and liabilities at the acquisition date. Any excess in the purchase price over the estimated fair market values of the net assets acquired is recorded as goodwill in the interim consolidated statement of financial position. Thus, the numerous judgments made in estimating the fair market value to be assigned to the acquiree’s assets and liabilities can materially affect the Company’s financial performance.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

3.

MANAGEMENT’S USE OF SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS (continued)

b.

Estimates and Assumptions (continued)

·

Recoverability of deferred tax assets

The Group reviews the carrying amounts of deferred tax assets at the end of each reporting period and reduces these to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred tax assets to be utilized. The Group’s assessment on the recognition of deferred tax assets on deductible temporary differences is based on the level and timing of forecasted taxable income of the subsequent reporting periods. This forecast is based on the Group’s past results and future expectations on revenues and expenses as well as future tax planning strategies. However, there is no assurance that the Group will generate sufficient taxable income to allow all or part of the deferred tax assets to be utilized.

·

Estimating allowance for impairment loss on receivables

The level of a specific allowance is evaluated by management on the basis of factors that affect the collectibility of the accounts. In these cases, the Group uses judgment based on the best available facts and circumstances including, but not limited to, the length of the Group’s relationship with the customers and the customers’ credit status based on third-party credit reports and known market factors, to record specific reserves for customers against amounts due in order to reduce the Group’s receivables to amounts that it expects to collect. These specific reserves are re-evaluated and adjusted as additional information received affects the amounts estimated.

Any collective allowance recognized is based on historical loss experience using various factors such as historical performance of the debtors within the collective group and judgments on the effect of deterioration in the markets in which the debtors operate and identified structural weaknesses or deterioration in the cash flows of debtors.

·

Estimation of pension cost and other employee benefits

The cost of defined benefit plan and present value of the pension obligation are determined using the projected-unit-credit method. Actuarial valuation includes making various assumptions which consist of, among other things, discount rates, expected rates of return on plan assets, rates of compensation increases and mortality rates. Actual results that differ from the Group’s assumptions are recognized as income or expense when the net cumulative unrecognized actuarial gains and losses at the end of the previous reporting period exceed 10% of the higher of the present value of defined benefit obligation or the fair value of plan assets at that date. Due to the complexity of the valuation, the underlying assumptions and their long-term nature, a defined benefit obligation is highly sensitive to changes in assumptions.

While the Group believes that its assumptions are reasonable and appropriate, significant differences in the Group’s actual experience or significant changes in its assumptions may materially affect the costs and obligations of pension and other long-term employee benefits. All assumptions are reviewed at each reporting date.

Further details about the assumptions used, including a sensitivity analysis, are presented in Note 30.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

3.

MANAGEMENT’S USE OF SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS (continued)

b.

Estimates and Assumptions (continued)

·

Asset retirement obligations

Asset retirement obligations are recognized in the period in which they are incurred if a reasonable estimate of fair value can be made. The recognition of the obligations requires an estimation of the cost to restore/dismantle on a per location basis and is based on the best estimate of the expenditure required to settle the obligation at the future restoration/dismantlement date, discounted using a pre-tax rate that reflects the current market assessment of the time value of money and, where appropriate, the risk specific to the liability.

·

Revenue recognition

The Group’s revenue recognition policies require making use of estimates and assumptions that may affect the reported amounts of revenues and receivables.

The Company’s agreements with domestic and foreign carriers for inbound and outbound traffic subject to settlements require traffic reconciliations before actual settlement is done, which may not be the actual volume of traffic as measured by the Company. Initial recognition of revenues is based on observed traffic adjusted by the normal experience adjustments, which historically are not material to the interim consolidated statement of comprehensive income. Differences between the amounts initially recognized and the actual settlements are taken up in the account upon reconciliation. However, there is no assurance that the use of such estimates will not result in material adjustments in future periods.

The Group recognizes revenues from installation and activation-related fees and the corresponding costs over the expected average periods of customer relationship for cellular, MIDI and fixed telecommunications services. The Group estimates the expected average period of customer relationship based on the most recent churn-rate analysis.

·

Uncertain tax exposure

In certain circumstances, the Group may not be able to determine the exact amount of its current or future tax liabilities due to ongoing investigations by, or discussions with, the taxation authority. Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. In determining the amount to be recognized in respect of an uncertain tax liability, the Group applies similar considerations as it would use in determining the amount of a provision to be recognized in accordance with PSAK 57 (Revised 2009), “

Provisions, Contingent Liabilities and Contingent Assets”.

The Group makes an analysis of all tax positions related to income taxes to determine if a tax liability for uncertain tax benefit should be recognized.

As of September 30, 2013, the Company is subject to tax audit for fiscal year 2012.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

4.

CASH AND CASH EQUIVALENTS

This account consists of the following:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Cash on hand

Rupiah

1,484

1,837

1,465

U.S. dollar (US$14 in 2013 and US$13 in 2011)

163

-

115

1,647

1,837

1,580

Cash in banks

Related parties (Note 31)

Rupiah

PT Bank Mandiri (Persero) Tbk ("Mandiri")

86,879

74,373

45,441

PT Bank Negara Indonesia (Persero) Tbk ("BNI")

3,612

1,279

3,022

PT Bank Pembangunan Daerah Sumatera Barat

      (“BPD - Sumbar”)

                1,866

2

                       -

PT Bank Pembangunan Daerah Jawa Barat dan

      Banten Tbk (“BPD - Jawa Barat”)

                 1,529

132

                    605

PT Bank Pembangunan Daerah DKI Jakarta

                 1,316

2,996

1,110

PT Bank Pembangunan Daerah Nusa Tenggara

      Timur

                     638

1,234

                  1,033

PT Bank Pembangunan Daerah Yogyakarta

      (“BPD - Yogyakarta”)

                   513

685

                  1,473

PT Bank Pembangunan Daerah Sumatera Selatan

314

2,231

                      -

PT Bank Tabungan Negara (Persero) Tbk ("BTN")

161

1,924

500

PT Bank Rakyat Indonesia (Persero) Tbk ("BRI")

86

1,178

1,409

PT Bank Pembangunan Daerah Jawa Timur

18

1,326

743

PT Bank Pembangunan Daerah Sumatera Utara

12

12

1,134

Others (each below Rp1,000)

933

1,706

2,904

U.S dollar

Mandiri (US$7,154 in 2013, US$2,746 in 2012 and

US$3,793 in 2011)

83,078

26,557

34,397

Others (US$6 in 2013, US$8 in 2012 and

US$12 in 2011)

59

72

109

Third parties

Rupiah

PT Bank Central Asia Tbk ("BCA")

82,744

159,969

13,247

PT Bank CIMB Niaga Tbk ("CIMB Niaga")

11,154

17,678

4,828

Hongkong and Shanghai Banking Corporation,

     Jakarta Branch (“HSBC”)

1,141

14,076

2,414

Citibank N.A., Jakarta Branch ("Citibank")

910

3,429

52,768

Others (each below Rp5,000)

11,651

11,163

13,787

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

4.

CASH AND CASH EQUIVALENTS (continued)

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Cash in banks (continued)

Third parties (continued)

U.S. dollar

Fortis Bank N.V., The Netherlands

(US$9,670 in 2013, US$5,258 in 2012

and US$6,220 in 2011)

112,301

50,846

56,405

Citibank N.A., Singapore Branch

(US$3,236 in 2013, US$3,411 in 2012

and US$5,256 in 2011)

37,581

32,983

47,660

Citibank (US$2,430 in 2013, US$801 in 2012 and

US$790 in 2011)

28,225

7,750

7,164

CIMB Niaga (US$221 in 2013, US$25 in 2012 and

US$697 in 2011)

2,564

243

6,323

Deutsche Bank AG , Jakarta Branch (“DB”) (US$37 in

2013, US$728 in 2012 and US$305 in 2011)

426

7,042

2,763

HSBC (US$4 in 2013, US$14 in 2012 and

US$151 in 2011)

46

132

1,369

Others (US$341 in 2013, US$95 in 2012

and US$87 in 2011)

3,956

914

791

473,713

421,932

303,399

Time deposit and deposits on call

Related parties (Note 31)

Rupiah

Mandiri

163,700

198,800

245,820

BTN

153,575

169,372

180,400

BNI

135,755

138,320

143,720

BRI

75,000

71,500

145,000

BPD - Jawa Barat

31,500

34,850

24,850

PT Bank Jawa Barat Banten Syariah

30,000

10,000

-

PT Bank BRI Syariah

22,500

47,500

7,500

Mandiri Syariah

12,000

34,000

35,000

BPD - Sumbar

10,000

10,000

-

BPD - Yogyakarta

1,000

1,000

1,000

PT Bank Pembangunan Daerah Sulawesi Selatan

1,000

-

-

U.S. dollar

Mandiri Syariah (US$5,000 in 2013 and US$3,000

       in 2011)

58,065

-

27,204

Mandiri (US$2,401 in 2013, US$2,701 in 2012

and US$3,040 in 2011)

27,884

26,119

27,566

BRI (US$60,000 in 2012 and US$5,000 in 2011)

-

580,200

45,340

PT Bank QNB Kesawan Tbk (“QNBK”)

(US$10,000)

-

96,700

-

BPD - Jawa Barat (US$75)

-

-

680

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

4.

CASH AND CASH EQUIVALENTS (continued)

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Time deposit and deposits on call (continued)

Third parties

Rupiah

PT Bank Tabungan Pensiunan Nasional Tbk

180,500

82,500

34,500

PT Bank Bukopin Tbk

134,500

88,500

27,500

PT Bank Syariah Muamalat Indonesia Tbk (“Muamalat”)

56,000

96,800

249,894

PT Bank Saudara Tbk

(previously PT Bank Himpunan Saudara 1906 Tbk)

47,000

48,000

32,100

PT Bank Mega Syariah

38,500

25,500

17,750

DB

33,493

42,485

79,354

CIMB Niaga (including CIMB Niaga Syariah)

30,000

4,000

55,000

PT Bank ICB Bumiputera Tbk

11,500

11,500

9,500

PT Bank Mega Tbk

10,250

27,250

5,000

PT Bank Panin Tbk

10,000

-

-

Citibank

9,425

50,000

-

PT Bank Internasional Indonesia (“BII”) (including BII Syariah)

9,100

13,500

12,500

PT Bank Danamon Indonesia Tbk

2,000

2,000

33,000

BCA

-

-

200,000

PT Bank DBS Indonesia (“DBS”)

-

-

50,000

Others (each below Rp5,000)

2,500

2,100

3,100

U.S. dollar

DB (US$37,738 in 2013, US$19,752 in 2012 and

US$17,917 in 2011)

438,256

191,005

162,473

Permata Syariah (US$5,000 in 2013

and US$15,000 in 2012)

58,065

145,050

-

Muamalat (US$2,500 in 2013 and

     US$7,000 in 2011)

29,033

-

63,476

CIMB Niaga (US$1,000 in 2013 and

US$50,000 in 2012)

11,613

483,500

-

DBS (US$55,000)

-

531,850

-

PT Bank UOB Buana Indonesia (US$15,000 )

-

145,050

-

Fortis Bank N.V., The Netherlands (US$3,740)

-

36,166

-

Standard Chartered Bank, Jakarta Branch

(“Standchart”) (US$5,000)

-

48,350

-

1,833,714

3,493,467

1,919,227

Total

2,309,074

3,917,236

2,224,206

Time deposits and deposits on call denominated in rupiah earned interest at annual rates ranging from 2.00% to 9.50% in 2013, from 2.00% to 9.50% in 2012 and from 2.50% to 9.75% in 2011, while those denominated in U.S. dollar earned interest at annual rates ranging from 0.03% to 3.25% in 2013, from 0.01% to 3.00% in 2012 and from 0.01% to 2.75% in 2011.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

5.

ACCOUNTS RECEIVABLE - TRADE

This account consists of the following:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Related parties (Note 31)

Telkom (including US$436 in 2012 and

US$51 in 2011)

101,152

73,835

19,977

Others (including US$5,714 in 2013, US$7,318

in 2012 and US$8,085 in 2011)

680,694

543,447

345,373

Sub-total

781,846

617,282

365,350

Less allowance for impairment

22,382

42,632

47,107

Net

759,464

574,650

318,243

Third parties

Local companies (including US$33,773 in 2013,

US$24,583 in 2012 and US$16,593 in 2011)

1,119,575

902,013

791,178

Overseas international carriers (US$81,926

in 2013, US$79,275 in 2012 and

US$66,532 in 2011)

951,407

766,070

603,309

Post-paid subscribers from:

Cellular

299,860

297,721

254,565

Fixed telecommunications

59,885

20,263

22,345

Sub-total

2,430,727

1,986,067

1,671,397

Less allowance for impairment

465,670

521,998

489,544

Net

1,965,057

1,464,069

1,181,853

Total

2,724,521

2,038,719

1,500,096

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

5.

ACCOUNTS RECEIVABLE - TRADE (continued)

The aging schedule of the accounts receivable - trade is as follows:

September 30,

December 31,

January 1, 2012 /

2013

2012

December 31, 2011

Number of

Percentage

Percentage

Percentage

Months Outstanding

Amount

(%)

Amount

(%)

Amount

(%)

Related parties

0 - 6 months

719,290

92.00

477,272

77.32

257,348

70.44

7 - 12 months

18,978

2.43

52,246

8.46

35,252

9.65

13 - 24 months

6,605

0.84

30,390

4.92

64,498

17.65

Over 24 months

36,973

4.73

57,374

9.30

8,252

2.26

Total

781,846

100.00

617,282

100.00

365,350

100.00

Third parties

0 - 6 months

1,488,330

61.23

1,036,438

52.19

945,410

56.56

7 - 12 months

282,078

11.61

235,844

11.87

208,218

12.46

13 - 24 months

289,320

11.90

259,715

13.08

255,648

15.30

Over 24 months

370,999

15.26

454,070

22.86

262,121

15.68

Total

2,430,727

100.00

1,986,067

100.00

1,671,397

100.00

The changes in the allowance for impairment of accounts receivable - trade are as follows:

Related

Third

Total

Parties

Parties

September 30, 2013 (Nine Months)

Balance at beginning of period

564,630

42,632

521,998

Provision (reversal) - net (Note 27)

72,941

(7,540)

80,481

Net effect of foreign exchange adjustment

             17,879

507

17,372

Write-offs

(167,398)

(13,217)

(154,181)

Balance at end of period

488,052

22,382

465,670

Individual impairment

108,026

17,810

90,216

Collective impairment

380,026

4,572

375,454

Total

488,052

22,382

465,670

Gross amount of receivables, individually impaired

before deducting any individually assessed

impairment allowance

486,820

142,966

343,854

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

5.

ACCOUNTS RECEIVABLE - TRADE (continued)

The changes in the allowance for impairment of accounts receivable - trade are as follows (continued):

Total

Related

Parties

Third

Parties

December 31, 2012 (One Year)

Balance at beginning of year

536,651

47,107

489,544

Provision (reversal) - net

56,163

(6,567)

62,730

Net effect of foreign exchange adjustment

7,802

2,092

5,710

Write-offs

(35,986)

-

(35,986)

Balance at the end of year

564,630

42,632

521,998

Individual impairment

208,208

37,852

170,356

Collective impairment

356,422

4,780

351,642

Total

564,630

42,632

521,998

Gross amount of receivables, individually impaired,

before deducting any individually assessed

impairment allowance

341,363

111,124

230,239

Related

Third

Total

Parties

Parties

January 1, 2012 / December 31, 2011 (One Year)

Balance at beginning of year

496,110

47,640

448,470

Provision (reversal) - net

41,051

(1,509)

42,560

Net effect of foreign exchange adjustment

105

976

(871)

Write-offs

(615)

-

(615)

Balance at end of year

536,651

47,107

489,544

Individual impairment

189,486

44,086

145,400

Collective impairment

347,165

3,021

344,144

Total

536,651

47,107

489,544

Gross amount of receivables, individually impaired,

before deducting any individually assessed

impairment allowance

309,556

117,572

191,984

The net effect of foreign exchange adjustment was due to the strengthening or weakening of the rupiah vis-à-vis the U.S. dollar in relation to U.S. dollar accounts previously provided with allowance and was credited or charged to “Gainon Foreign Exchange - Net” presented under Expenses (Income).

There are no significant concentrations of credit risk.

Management believes the established allowance is sufficient to cover impairment losses from uncollectible accounts receivable.

6.

PREPAID TAXES

This account consists of the following:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

VAT - net

257,681

124,642

29,677

Claims for tax refund

81,165

167,216

-

Others

3,305

2,485

1,018

Total

342,151

294,343

30,695

On May 5, 2011, the Company submitted an appeal letter to the Tax Court concerning the Company’s request for cancellation of Tax Collection Letters (“STPs”) for the underpayment of the Company’s 2008 and 2009 income tax article 26 totalling Rp80,018 (including interest). On July 30, 2012, the Company received the Tax Court’s Decision Letter which accepted the Company’s appeal concerning these STPs. On September 11, 2012, the Company submitted a request for restitution to the Tax Office to transfer the tax overpayment related to these STPs. On December 26, 2012, the Company received a copy of a Memorandum for Reconsideration Request

(Memori Permohonan Peninjauan Kembali)

from the Tax Court to the Supreme Court on the Tax Court’s Decision Letter dated July 30, 2012 for the underpayment of the Company’s 2008 and 2009 income tax article 26. On February 6, 2013, the Company submitted a Counter-Memorandum Requesting for a Reconsideration to the Supreme Court. As of October 24, 2013, the restitution and decision from the Supreme Court on such request have not yet been received.

On October 12, 2010, the Company submitted appeal letters to the Tax Court concerning the Company’s objection to the correction of Satelindo’s 2002 and 2003 income tax article 26. On November 6, 2012, the Company received the Decision Letter from the Tax Court which accepted the Company’s appeal on Satelindo’s 2002 and 2003 income tax article 26 amounting to Rp87,198, which is lower than the amount recognized by the Company in its financial statements. The Company accepted the correction amounting to Rp4,655, which was charged to current operations as part of “Expenses - Others - Net”. On January 28, 2013, the Company received the restitution.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

7.

OTHER CURRENT FINANCIAL ASSETS

This account consists of the following:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Short-term investments*

-

25,395

25,395

Less allowance for impairment

-

25,395

25,395

Net

-

-

-

Restricted cash and cash equivalents (including

US$378 in 2013, US$231 in 2012 and

US$168 in 2011)

6,639

5,483

18,830

Others (including US$6 in 2013, US$257 in 2012 and

US$10 in 2011)

11,941

7,899

5,960

Total

18,580

13,382

24,790

*The Company wrote off the short-term investment in mutual funds in PT Jakarta Asset Management in April 2013 based on the approval from the Board of Commissionersdated April 16, 2013.

.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

8.

PROPERTY AND EQUIPMENT

The details of property and equipment are as follows:

September 30, 2013 (Nine Months)

Balance

Balance

at Beginning

Transactions during the Period

at End

of Period

Additions

Derecognitions

Reclassifications

of Period

Cost

Direct ownership

Landrights

545,499

1,573

-

-

547,072

Buildings

871,174

1,448

-

-

872,622

Information technology equipment

3,649,793

-

(6,286)

435,522

4,079,029

Office equipment

1,213,413

29,267

(7,474)

116

1,235,322

Building and leasehold

improvements

10,413,096

-

(81,939)

338,445

10,669,602

Vehicles

22,637

-

(4,264)

-

18,373

Cellular technical equipment

39,953,889

57,069

(391,540)

2,572,871

42,192,289

Transmission and cross-

connection equipment

21,164,810

106,659

(216,577)

933,034

21,987,926

FWA technical equipment

1,345,306

-

-

-

1,345,306

Operation and maintenance

center and measurement unit

1,478,308

-

-

16,648

1,494,956

Fixed access network

equipment

1,190,936

-

-

11,557

1,202,493

Properties under

construction and

installation

2,966,461

7,039,942

-

(4,308,193)

5,698,210

Under finance lease

Building and leasehold

improvements (Note 2j)

3,551,653

215,119

-

-

3,766,772

Information technology equipment

50,670

-

-

-

50,670

Total

88,417,645

7,451,077

(708,080)

-

         95,160,642

Accumulated Depreciation

Direct ownership

Buildings

365,694

13,177

-

-

378,871

Information technology

equipment

3,039,529

268,351

(6,286)

-

3,301,594

Office equipment

977,644

32,034

(7,474)

-

1,002,204

Building and leasehold

improvements

5,296,960

597,123

(81,938)

-

5,812,145

Vehicles

19,154

925

(4,090)

-

15,989

Cellular technical equipment

21,851,774

3,634,416

(334,472)

-

         25,151,718

Transmission and cross-

connection equipment

11,231,139

1,438,187

(75,354)

-

12,593,972

FWA technical equipment

931,908

197,318

-

-

1,129,226

Operation and maintenance

center and measurement unit

1,301,739

50,476

-

-

1,352,215

Fixed access network equipment

975,151

43,353

-

-

1,018,504

Under finance lease

Building and leasehold

improvements (Note 2j)

363,549

316,344

-

-

679,893

Total

46,354,241

6,591,704

(509,614)

-

  52,436,331

Less Impairment in Value

98,611

-

-

-

98,611

Net Book Value

41,964,793

42,625,700

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

8.

PROPERTY AND EQUIPMENT (continued)

December 31, 2012 (One Year)

Balance

Balance

at Beginning

Transactions during the Year

at End

of Year

Additions

Derecognitions

Reclassifications

of Year

Cost

Direct ownership

Landrights

543,062

2,437

-

-

545,499

Buildings

867,712

-

-

3,462

871,174

Information technology equipment

3,395,355

66

-

254,372

3,649,793

Office equipment

1,242,130

7,958

(36,963)

288

1,213,413

Building and leasehold

improvements

12,213,728

-

(2,386,031)

585,399

10,413,096

Vehicles

23,794

2,597

(3,754)

-

22,637

Cellular technical equipment

37,413,004

273,665

(585,293)

2,852,513

39,953,889

Transmission and cross-

connection equipment

19,684,883

186,914

(77)

1,293,090

21,164,810

FWA technical equipment

1,345,306

-

-

-

1,345,306

Operation and maintenance

center and measurement unit

1,452,593

-

-

25,715

1,478,308

Fixed access network

equipment

1,167,401

-

-

23,535

1,190,936

Properties under

construction and

installation

2,808,976

5,195,859
^*

-

(5,038,374)

2,966,461

Under finance lease

Building and leasehold

improvements (Note 2j)

898,293

2,653,360

-

-

3,551,653

Information technology equipment

-

50,670

-

-

50,670

Total

83,056,237

8,373,526

(3,012,118)

-

88,417,645

Accumulated Depreciation

Direct ownership

Buildings

348,244

17,450

-

-

365,694

Information technology

equipment

2,718,609

320,920

-

-

3,039,529

Office equipment

972,372

41,868

(36,596)

-

977,644

Building and leasehold

improvements

5,443,328

856,369

(1,002,737)

-

5,296,960

Vehicles

20,431

1,977

(3,254)

                              -

19,154

Cellular technical equipment

17,535,524

4,627,878

(311,628)

                              -

21,851,774

Transmission and cross-

connection equipment

9,479,255

1,751,961

(77)

                              -

11,231,139

FWA technical equipment

657,696

274,212

-

                              -

931,908

Operation and maintenance

center and measurement unit

1,219,365

82,374

-

                              -

1,301,739

Fixed access network equipment

909,355

65,796

-

                              -

975,151

Under finance lease

Building and leasehold

improvements (Note 2j)

147,749

215,800

-

                                -

363,549

Total

39,451,928

8,256,605

(1,354,292)

-

46,354,241

Less Impairment in Value

98,611

-

-

-

98,611

Net Book Value

43,505,698

41,964,793

*including additional property and equipment purchased from Lintasarta amounting to Rp1,345 (net of intercompany profit of Rp384)

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

8.

PROPERTY AND EQUIPMENT (continued)

January 1, 2012/December 31, 2011 (One Year)

Balance

Balance

at Beginning

Transactions during the Year

at End

of Year

Additions

Derecognitions

Reclassifications

of Year

Cost

Direct ownership

Landrights

541,087

-

-

1,975

543,062

Buildings

814,191

2,518

-

51,003

867,712

Information technology equipment

3,046,084

16

(42,816)

392,071

3,395,355

Office equipment

1,239,609

37,596

(37,171)

2,096

1,242,130

Building and leasehold

improvements

11,974,442

-

(101,426)

340,712

12,213,728

Vehicles

24,700

160

(1,066)

-

23,794

Cellular technical equipment

34,850,044

400,956

(1,709,433)

3,871,437

37,413,004

Transmission and cross-

connection equipment

18,287,587

114,475

(90,488)

1,373,309

19,684,883

FWA technical equipment

1,345,157

-

-

149

1,345,306

Operation and maintenance

center and measurement unit

1,355,263

-

(22)

97,352

1,452,593

Fixed access network

equipment

1,126,614

-

-

40,787

1,167,401

Properties under

construction and

installation

3,461,884

5,517,983
^*

-

(6,170,891)

2,808,976

Under finance lease

Building and leasehold

improvements (Note 2j)

471,051

427,242

-

-

898,293

Total

78,537,713

6,500,946

(1,982,422)

-

83,056,237

Accumulated Depreciation

Direct ownership

Buildings

313,721

34,523

-

-

348,244

Information technology

equipment

2,349,288

412,137

(42,816)

-

2,718,609

Office equipment

958,324

51,219

(37,171)

-

972,372

Building and leasehold

improvements

4,694,662

850,015

(101,349)

-

5,443,328

Vehicles

18,646

2,852

(1,067)

-

20,431

Cellular technical equipment

15,488,516

3,250,203

(1,203,195)

-

17,535,524

Transmission and cross-

connection equipment

8,032,100

1,527,191

(80,036)

-

9,479,255

FWA technical equipment

534,842

122,854

-

-

657,696

Operation and maintenance

center and measurement unit

1,093,598

125,789

(22)

-

1,219,365

Fixed access network equipment

842,092

67,263

-

-

909,355

Under finance lease

Building and leasehold

improvements (Note 2j)

51,277

96,472

-

-

147,749

Total

34,377,066

6,540,518

(1,465,656)

-

39,451,928

Less Impairment in Value

98,611

-

-

-

                  98,611

Net Book Value

44,062,036

43,505,698

*including additional property and equipment purchased from Lintasarta amounting to Rp88,371 (net of intercompany profit of Rp27,578)

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

8.

PROPERTY AND EQUIPMENT (continued)

Submarine cables (presented as part of transmission and cross-connection equipment) represent the Company’s proportionate investment in submarine cable circuits jointly constructed, operated, maintained and owned with other countries, based on the respective contracts and/or the construction and maintenance agreements.

Depreciation expense charged to profit or loss amounted to Rp6,591,704 and Rp5,773,257 for the nine-month periods ended September 30, 2013 and 2012, respectively.

Management believes that there is no impairment in asset value or recovery of the impairment reserve as contemplated in PSAK 48 (Revised 2009) for the current period.

As of September 30, 2013, the Group has no property and equipment pledged as collateral to any credit facilities.

As of September 30, 2013, the Group insured its property and equipment (except submarine cables and landrights) for US$242,914 and Rp35,502,526 including insurance amounting to US$117,700 on the Company‘s satellite. Management believes that the sum insured is sufficient to cover possible losses arising from fire, explosion, lightning, aircraft damage and other natural disasters.

As of September 30, 2013, the Group has property and equipment with total cost amounting to Rp4,967,053, which have been fully depreciated but are still being used.

As of September 30, 2013, the fair value of the Group’s property and equipment determined under the income approach amounted to Rp77,592,149.

The details of the Group’s properties under construction and installation as of September 30,2013, December 31, 2012 and January 1, 2012 / December 31, 2011 are as follows:

Percentage of

Estimated Date

Completion

Cost

of Completion

September 30, 2013

Cellular technical equipment

1- 97

4,478,282

October2013 -April 2015

Building and leasehold improvements

10- 96

694,936

October 2013 - May 2015

Transmission and cross-connection equipment

2 - 93

319,809

October 2013 - May 2015

Information technology equipment

45 - 98

95,730

October 2013 - January 2014

Building

95

71,385

December 2013

Others

95

38,068

October 2013 - January 2014

Total

5,698,210

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

8.

PROPERTY AND EQUIPMENT (continued)

Percentage of

Estimated Date

Completion

Cost

of Completion

December 31, 2012

Cellular technical equipment

9 - 99

1,944,855

January - March 2013

Transmission and cross-connection equipment

7 - 99

491,131

January - March 2013

Building and leasehold improvements

10 - 96

279,435

January - March 2013

Information technology equipment

18 - 95

202,740

January - September 2013

Others

30 - 80

48,300

January - December 2013

Total

2,966,461

January 1, 2012 / December31, 2011

Cellular technical equipment

17 - 90

1,775,032

January - June 2012

Transmission and cross-connection equipment

18 - 98

799,321

January - June 2012

Building and leasehold improvements

20 - 95

141,022

January - June 2012

Information technology equipment

40 - 80

91,182

January 2012 - January 2013

Others

40 - 90

2,419

January - September 2012

Total

2,808,976

There are no borrowing costs capitalized to properties under construction and installation for the nine-month periods ended September 30, 2013 and 2012.

For the nine-month period ended September 30, 2013 and years ended December 31, 2012 and 2011, exchanges and sales of certain property and equipment were made as follows:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

(Nine Months)

(One Year)

(One Year)

^{Exchanges of Assets

Kalimantan Project

Carrying amount of assets received

-

-

400,956

Carrying amount of assets given up

-

-

(400,956)

Sumatra and Java Project (Note 33h)

Carrying amount of assets received

57,069

273,665

115,734

Carrying amount of assets given up

(57,069)

(273,665

)

  (115,734)

Sales of 2,500 Towers (Note 29)

Proceeds

                          -

3,870,600

-

Net book value

                          -

(1,372,674

)

-

^{Excess of selling price over carrying amount

                          -

2,497,926

-

Deferred gain

                          -

           (1,318,923)

-

^{Recognized gain

-

1,179,003

-

^{Outright Sales of Assets Being Leased

Fair value of assets being leased

               196,464

-

-

Net book value

          (141,223)

-

-

^{Gain

55,241

-

-

^{Sales of Assets

Proceeds

11,334

7,215

6,708

Net book value

(174)

(11,487

)

(76)

^{Gain

66,401

1,174,731

6,632

^{^{8.

PROPERTY AND EQUIPMENT (continued)

In the above exchange of asset transactions, the fair values of neither the assets received nor the assets given up could be measured reliably, hence, their values were measured at the carrying amounts of the assets given up plus cash consideration.

On January 28, 2013, the Company and PT Link Net (Link Net) entered into an agreement, whereby the Company agreed to grant Link Net an Indefeasible Right of Use (“IRU”) for a pair of fiber optics in the Company’s Jakarta-Batam-Singapore (JAKABARE) submarine cable network for a non-cancellable period of 12 years starting on January 1, 2013 to December 31, 2024. Link Net agreed to pay the Company upfront the amount of US$20,300 (equivalent to Rp196,464) for the 12-year period right to use the pair of fiber optics (from the total fiber optics capacity of4 pairs of JAKABARE submarine cable). The payment will be done in several installments until October 30, 2013. In April, May and August 2013, the Company received the first, second and third installments totaling US$17,000 (equivalent to Rp169,922). As of September 30, 2013, the outstanding receivable amounting to US$3,300 (equivalent to Rp38,323) from Link Net is presented as part of “Accounts Receivable - Others”.For the nine-month period ended September 30, 2013, the Company derecognized a portion of its asset with carrying value of Rp141,223 and recognized the gain from outright sales of Rp55,241.

9.

GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in goodwill and other intangible assets, including non-integrated software, for the nine-month period ended September 30, 2013 and years ended December 31, 2012 and 2011 are as follows:

Non-integrated

Other intangible

software

asset

Goodwill

Total

Cost

At January 1, 2011

275,629

597,448

2,944,362

3,817,439

Additions

10,340

112

-

10,452

At December 31, 2011

285,969

597,560

2,944,362

3,827,891

Additions

23,055

18

-

23,073

At December 31, 2012

309,024

597,578

2,944,362

3,850,964

Additions

2,016

14

-

2,030

At September 30, 2013

311,040

597,592

2,944,362

3,852,994

Accumulated Amortization

At January 1, 2011

225,952

597,448

1,619,979

2,443,379

Amortization

17,608

51

-

17,659

At December 31, 2011

243,560

597,499

1,619,979

2,461,038

Amortization

16,210

9

-

16,219

At December 31, 2012

259,770

597,508

1,619,979

2,477,257

Amortization

13,293

7

-

13,300

At September 30, 2013

273,063

597,515

1,619,979

2,490,557

Net Book Value

At December 31, 2011

42,409

61

1,324,383

1,366,853

At December 31, 2012

49,254

70

1,324,383

1,373,707

At September 30, 2013

37,977

77

1,324,383

1,362,437

9.

GOODWILL AND OTHER INTANGIBLE ASSETS (continued)

Goodwill arose from the acquisition of ownership in Bimagraha and Satelindo in 2001 and 2002, respectively, and from the acquisition of additional ownership in Lintasarta in 2005, in SMT in 2008 and in LMD in 2010.

The details of other intangible assets arising from the acquisition of Satelindo in 2002 are as follows:

Amount

Spectrum license

222,922

Customer base

-

Post-paid

154,220

-

Prepaid

73,128

Brand

147,178

Total

597,448

Goodwill acquired through business combination has been allocated to the cellular business unit, which is also considered as one of the Group’s operating segments.

Goodwill is tested for impairment annually (as at December 31) and when circumstances indicate the carrying value may be impaired. The Company considers the relationship between its market capitalization and its book value, among other factors, when reviewing for indicators of impairment. As of December 31, 2012, the market capitalization of the Company was above the book value of its equity. The recoverable amount of the cellular business unit has been determined based on fair values less cost to sell (“FVLCTS”) calculation that uses the Income Approach (a Discounted Cash Flows Method) and the Market Approach (a Guideline Public Company Method).

Key assumptions used in the FVLCTS calculation at December 31, 2012:

Discount rates

- The Company has chosen to use weighted average cost of capital (“WACC”) as the discount rate for the discounted cash flow. The estimated WACC applied in determining the recoverable amount of the cellular business unit is between 11% and 12%.

Compounded Annual Growth Rate (“CAGR”)

- The CAGR projection for the 5-year budget period of the cellular business unit’s revenue based on the market analysts’ forecast is between 5.6% and 7.8%.

Cost to Sell

- As the recoverable amount of the cellular business unit is determined using FVLCTS, the estimated cost to sell the business is based on a certain percentage of the equity value. The estimated cost to sell used for this calculation is at approximately 1.0% of the enterprise value.

The Company considers the relationship between its market capitalization and its book value, among other factors, when reviewing for indicators of impairment. As of September 30, 2013, the market capitalization of the Company was above the book value of its equity. As a result, management does not perform an impairment calculation as of September 30, 2013.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

10.

LONG-TERM PREPAID RENTALS - NET OF CURRENT PORTION

This account represents mainly the long-term portion of prepaid rentals on sites.

11.

LONG-TERM ADVANCES

This account represents advances to suppliers and contractors for the purchase and construction/ installation of property and equipment which will be reclassified to the related property and equipment accounts upon the receipt of the property and equipment purchased or after the construction/installation of the property and equipment has reached a certain percentage of completion.

12. OTHER NON-CURRENT FINANCIAL ASSETS

This account consists of the following:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Other long-term investments

1,519,291

1,483,317

116,307

Less allowance for impairment

113,577

113,577

113,577

Net

1,405,714

1,369,740

2,730

Restricted cash and cash equivalents

(including US$258in 2013, US$140 in 2012 and

US$290 in 2011)

66,216

83,232

50,826

Employee loans receivable

             9,254

11,025

13,515

Others (including US$1,306 in 2013, US$1,010

in 2012 and US$1,288 in 2011)

42,334

79,143

145,199

Sub-total

117,804

173,400

209,540

Total

1,523,518

1,543,140

212,270

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

12. OTHER NON-CURRENT FINANCIAL ASSETS (continued)

Other long-term investments - net consist of the following:

a.

Investments in shares of stock classified as available-for-sale investment:

September 30, 2013

Location

Principal Activity

Ownership

(%)

Cost

Unrealized Changes in Fair Value

Carrying Value

PT Tower Bersama Infrastructure Tbk (“Tower Bersama”)* (Note 29)

Indonesia

Telecommunication infrastructure service

5.00

977,292

425,692

1,402,984

December 31, 2012

Tower Bersama (Note 29)

Indonesia

Telecommunication infrastructure service

5.00

977,292

389,718

1,367,010

*

For the nine-month period ended September 30, 2013, the Company recorded dividend income from Tower Bersama amounting to Rp14,390,which is received on October 3, 2013 (Note 39b).

The Company’s 5% ownership in Tower Bersama is part of the compensation from sale and leaseback transaction of telecommunication towers done on August 2, 2012 (Note 29).

b.

Investments in shares of stock accounted under the cost method:

September 30, 2013

Ownership

Cost/Carrying

Location

Principal Activity

(%)

Value

PT First Media Tbk

Indonesia

Cable television and internet network service provider

1.07

50,000

Pendrell Corporation

[previously ICO Global

Communication

(Holdings) Limited**]

United States of America

Satelite service

0.0065

49,977

Asean Cableship Pte. Ltd.

Repairs and maintenance of submarine cables

(“ACPL”)***

Singapore

16.67

1,265

Others

12,80 - 18,89

14,966

Total

116,208

Less allowance for impairment

113,577

Net

2,631

December 31, 2012 and January 1, 2012 / December 31, 2011

PT First Media Tbk

Indonesia

Cable television and internet network service provider

1.07

50,000

Pendrell Corporation**

United States of America

Satelite service

0.0067

49,977

ACPL***

Singapore

Repairs and maintenance of submarine cables

16.67

1,265

Others

12,80 - 18,89

14,966

Total

116,208

Less allowance for impairment

113,577

Net

2,631

**

On March 15, 2011, the Company’s ownership in ICO Global Communication (Holdings) Limited was diluted from 0.0087% to 0.0068% since the Company did not exercise its right in relation to a right issue conducted by ICO Global Communication (Holdings) Limited. On July 21, 2011, ICO Global Communication changed its name to Pendrell Corporation. Furthermore, as of September 30, 2013, the Company’s ownership in Pendrell has been diluted to 0.0065%.

***

The Company received dividend income from its investment in ACPL totaling US$1,979 (equivalent to Rp19,691) andUS$1,574 (equivalent to Rp13,790) for the nine-monthperiod ended September 30, 2013 and year ended December 31, 2011, respectively.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

12. OTHER NON-CURRENT FINANCIAL ASSETS (continued)

b.

Investments in shares of stock accounted under the cost method (continued):

The Company has provided allowance for impairment of its investments in shares of stock accounted for under the cost method amounting to Rp113,577 as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011, which the Company believes is adequate to cover impairment losses on the investments.

c.

Equity securities from BNI of Rp89 and Telkom of Rp10 are both available-for-sale investments as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011.

13.

OTHER NON-CURRENT ASSETS

This account consists of the following:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Investment in an associated company (i)

57,166

57,174

56,300

Less allowance for impairment

56,300

56,300

56,300

Net

866

874

-

Claims for tax refund

Corporate income tax

Current period / year (Note 16)

177,668

162,647

181,717

Previous years (ii)

230,968

248,509

333,217

VAT and others (iii)

474,697

339,995

351,909

883,333

751,151

866,843

Others

110,877

2,473

5,593

Total

995,076

754,498

872,436

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

13.

OTHER NON-CURRENT ASSETS (continued)

(i) Investment in an associated company - accounted under the equity method

Accumulated

Equity in

Ownership

Undistributed

Location

Principal Activity

%

Cost

Net Loss

Carrying Value

September 30, 2013

PT Citra Bakti

Indonesia

Indonesia

Certified service

33.33

1,000

134

866

company for chip-

based ATM/debit

cards and related

devices and

infrastructure

December 31, 2012

PT Citra Bakti

Indonesia

Indonesia

Certified service

33.33

1,000

126

874

company for chip-

based ATM/debit

cards and related

devices and

infrastructure

(ii)

The claims for tax refund with respect to corporate income tax for previous years include the following:

·

Satelindo’s 2002 corporate income tax

On October 14, 2010, the Company submitted an appeal letter to the Tax Court concerning the Company’s objection to the correction on Satelindo’s corporate income tax for fiscal year 2002 amounting to Rp105,809 (including penalties and interest). On June 25, 2012, the Company received the Decision Letter from the Tax Court which declined the Company’s appeal on Satelindo’s corporate income tax for fiscal year 2002. The Company charged the related claim for tax refund amounting to Rp103,163 to current operations as part of “Income Tax Expense - Current” (Note 16).

·

The Company’s 2009 corporate income tax

On April 21, 2011, the Company received an assessment letter on tax overpayment (“SKPLB”) from the Directorate General of Taxation (“DGT”) for the Company’s 2009 corporate income tax amounting to Rp29,272, which is lower than the amount recognized by the Company in its financial statements. The Company accepted a part of the corrections amounting to Rp836, which was charged to current operations. On May 31, 2011, the Company received the tax refund of its claim for 2009 corporate income tax amounting to Rp23,695, after being offset with the accepted amount of tax correction of VAT for the period January - December 2009 (iii). On July 20, 2011, the Company submitted an objection letter to the Tax Office regarding the remaining correction on the Company’s 2009 corporate income tax amounting to Rp65,570. On June 29, 2012, the Company received the Decision Letter from the DGT which declined the Company’s objection. On September 21, 2012, the Company submitted an appeal letter to the Tax Court concerning the Company’s objection to the correction on corporate income tax for fiscal year 2009. As of October24, 2013, the Company has not received any decision from the Tax Court on such appeal.

13.

OTHER NON-CURRENT ASSETS (continued)

(ii)

The claims for tax refund with respect to corporate income tax for previous years include the following (continued):

·

The Company’s 2006 corporate income tax

On April 26, 2011, the Company received the Tax Court’s Decision Letter which accepted the Company’s appeal on the remaining correction of the 2006 corporate income tax. On June 21, 2011, the Company received the tax refund amounting to Rp82,626. On           August 22, 2011, the Company received a copy of a Memorandum Request for Reconsideration(

Memori Permohonan Peninjauan Kembali

) from the Tax Court to the Supreme Court on the Tax Court’s Decision Letter dated April 26, 2011 for the 2006 corporate income tax. On September 21, 2011, the Company submitted a Counter-Memorandum Requesting for Reconsideration to the Supreme Court. As of October 24, 2013, the Company has not received any decision from the Supreme Court on such request.

·

The Company’s and IMM’s 2010 corporate income tax

On April 26, 2012, IMM received SKPLB from the Tax Office for IMM’s 2010 corporate income tax amounting to Rp68,657, which is lower than the amount recognized by IMM in its financial statements. IMM charged the unapproved 2010 claim for tax refund amounting to Rp6,422 to current operations as part of current income tax expense (Note 16). On the same date, IMM also received the assessment letter of tax underpayment (“SKPKBs”) for its 2010 income tax articles 21, 23 and 26 and VAT totaling Rp11,132 (including penalties and interest). On June 22, 2012, IMM received the refund of its claim for 2010 corporate income tax amounting to Rp57,525, after being offset with above underpayment of its 2010 income tax articles 21, 23 and 26 and VAT.

On July 3, 2012, the Company received SKPLB from the DGT for the Company’s 2010 corporate income tax amounting to Rp89,381, which is lower than the amount recognized by the Company in its financial statements. The Company accepted all of the corrections amounting to Rp61, which were charged to current operations (Note 16). On August 24, 2012, the Company received the tax refund of its claim for 2010 corporate income tax amounting to Rp89,381. Based on this SKPLB, the tax loss carryforward was adjusted to become Rp1,040,083, which is lower than the amount recognized by the Company in its financial statements. The Company accepted all of the corrections amounting to Rp101,978.

·

The Company’s and IMM’s 2011 corporate income tax

On June 26, 2013, the Company received SKPLB from the DGT for the Company’s 2011 corporate income tax amounting to Rp97,600, which is the same amount recognized by the Company in its annual income tax return. On August 14, 2013, the Company received the tax refund from the DGT amounting to Rp97,600. Based on this SKPLB, the Tax Office made two corrections totaling Rp409,921, which decreased the tax loss carryforward as of December 31, 2011. On September 23, 2013, the Company submitted an objection letter to the Tax Office regarding these two corrections totaling Rp409,921. However, on October 16, 2013, the Company submitted a letter to cancel the objection of one correction amounting to Rp165,944. As of October 24, 2013, the Company has not received any decision from the Tax Office on the remaining objection.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

13.

OTHER NON-CURRENT ASSETS (continued)

(iii)

The claims for tax refund with respect to corporate income tax for previous years include the following (continued):

·

The Company’s and IMM’s 2011 corporate income tax (continued)

On July 19, 2013, IMM received SKPLB from the Tax Office for IMM’s 2011 corporate income tax amounting to Rp90,812, which is higher than the amount recognized by IMM in its financial statements. On the same date, IMM also received SKPKBs for its 2011 income tax articles 23 and 26 and VAT totaling Rp 3,184 (including penalties and interest). On September 6, 2013, IMM received the refund of its claim for 2011 corporate income tax amounting to Rp87,628, after being offset with above underpayment of its 2011 income tax articles 23 and 26 and VAT.

(iii)

The claims for tax refund with respect to VAT and others include the following:

·

The Company’s 2009, 2010, 2011 and 2012 VAT

On April 21, 2011, the Company received SKPKB from the DGT for the Company’s VAT for the period January - December 2009 totaling Rp182,800 (including penalties). The Company accepted a part of the corrections amounting to Rp4,160 which was charged to current operations. On July 15, 2011, the Company paid the remaining underpayment amounting to Rp178,640 of the VAT for the period January - December 2009. OnJuly 19, 2011, the Company submitted an objection letter to the Tax Office regarding the remaining correction on the Company’s VAT for the period January - December 2009. On June 4, 2012, the Company received the decision letter from the DGT that declined the Company’s objection and, based on its audit, the DGT charged the Company for additional underpayment for the period January, March, April, June, August - December 2009 totaling Rp57,166 and overpayment for the period February, May and July 2009 totaling Rp4,027. On July 4, 2012, the Company paid the additional underpayment amounting to Rp57,166. On August 24 and 31, 2012, the Company received the overpayment totaling Rp4,027. On September 3, 2012, the Company submitted an appeal letter to the Tax Court regarding the remaining correction on the Company’s VAT for the period January - December 2009. As of October 24, 2013, the Company has not received any decision from the Tax Court on such appeal.

On July 3, 2012, the Company received SKPLB from the DGT for the Company’s VAT for the period March 2010 amounting to Rp28,545, which is lower than the amount recognized by the Company in its financial statements, and SKPKBs for the Company’s VAT for the period January, February and April - December 2010 totaling Rp98,011 (including penalties). On August 2, 2012, the Company paid the underpayment amounting to Rp98,011. On          August 24, 2012, the Company received the overpayment amounting to Rp28,545 from the DGT. On October 1 and 2, 2012, the Company submitted objection letters to the Tax Office regarding SKPLB and SKPKBs on the Company’s VAT for the period January - December 2010 totaling Rp106,619. On September 17 and 26, 2013, the Company received the decision letter from the DGT which charged the Company for additional underpayment for the period January - December 2010 totaling Rp93,167 (Note 39e). As of October 24, 2013, the Company plans to submit the appeal letter to the Tax Court regarding the remaining correction on the Company’s VAT for the period January - December 2010 totaling Rp199,786.

On June 26, 2013, the Company received SKPKBs from the DGT for the Company’s 2011 income tax articles 21, 26 and 4(2) totaling Rp4,171 (including penalties) and VAT for the period January - December 2011 totaling Rp133,160 (including penalties). The Company accepted all of the corrections on income taxes totaling Rp4,171 and a part of the corrections on VAT totaling Rp2,069, which were charged to current operations.On July 24, 2013, the Company paid the remaining underpayment amounting to Rp131,091 of the VAT for the period January - December 2011. On September 23, 2013, the Company submitted an objection letter to the Tax Office regarding the remaining correction on the Company’s VAT for the period January - December 2011. As of October 24, 2013, the Company has not received any decision from the Tax Office on such objection.

13.

OTHER NON-CURRENT ASSETS (continued)

(iii)

The claims for tax refund with respect to VAT and others include the following (continued):

·

The Company’s 2009, 2010, 2011 and 2012 VAT (continued)

On September 4, 2013, the Company received SKPKBs from the DGT for the Company’s VAT for the period January - December 2012 totaling Rp148,161 (including penalties) (Note 39a). As of October 24, 2013, the Company plans to submit the objection letter to the Tax Office regarding the correction on the Company’s VAT for the period January - December 2012.

·

As of January 1, 2012 / December 31, 2011, this account included the claims for tax refund from the Company’s 2008 and 2009 income tax article 26 and Satelindo’s 2002 and 2003 income tax article 26 which were reclassified to “Prepaid Taxes” as of December 31, 2012 (Note 6).

14. SHORT-TERM BANK LOAN

The balance of this account amounting to Rp1,499,769, Rp299,529 and Rp1,499,256 (net of unamortized loan issuance cost of Rp231, Rp471 and Rp744, respectively) as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011, respectively, represents unsecured facility drawdowns from Mandiri, a related party (Note 31).

On June 21, 2011, the Company entered into a Revolving Time Loan Facility agreement with Mandiri covering a maximum amount of Rp1,000,000 to finance the Company’s operational working capital, capital expenditure and/or refinancing requirements. This facility is available from June 21, 2011 to June 20, 2014 and drawdowns bear interest at 1-month Jakarta Inter-Bank Offered Rate (“JIBOR”) plus 1.4% per annum. Each drawdown matures 3 months from the drawdown date and can be extended for further 3-month periods by submitting a written request for such extension to Mandiri.

Subsequently, on December 5, 2011, the Company entered into an amendment of this agreement to cover the increase of the facility amount to Rp1,500,000 and the change of the interest rate to 1-month JIBOR plus 1.25% per annum. On July 12, 2013, the interest rate was changed to 1-month JIBOR plus 1.75% per annum.

On August 2 and December 14, 2011, March 28, June 21, December 12 and 26, 2012, April 5, June 4 and July 24, 2013, the Company made several drawdowns from this loan facility totaling Rp3,500,000.

On February 2, May 14, June 29, July 5, August 2, 2012 and January 15, 2013, the Company repaid the drawdowns made previously totalling Rp2,000,000.

Voluntary early repayment is permitted subject to 3 days’ prior written notice. The Company may early repay the whole or any part of the loan.

Based on the facility agreement, the Company is required to comply with certain covenants such as maintaining financial ratios. As of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011, the Company has complied with all the financial ratios required to be maintained under the loan agreements.

The amortization of the loan issuance cost for the nine-month periods ended September 30, 2013 and 2012 amounted to Rp240 and Rp241, respectively (Note 28).

15.

PROCUREMENT PAYABLE

This account consists of amounts due for capital and operating expenditures procured from the following:

January 1,

2011 /

September 30,

December 31,

December 31,

2013

2012

2011

Related parties (Note 31) (including US$20

in 2013, US$78 in 2012 and US$114 in 2011)

26,974

43,783

36,073

Third parties (including US$118,936 in 2013,

US$141,024 in 2012 and US$220,674 in 2011)

3,413,693

2,694,067

3,439,789

Total

3,440,667

2,737,850

3,475,862

The billed amount of procurement payable amounted to Rp877,333, Rp531,799 and Rp555,065 as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011, respectively. The unbilled amount amounted to Rp2,563,334 Rp2,206,051 and Rp2,920,797 as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011, respectively.

16.

TAXES PAYABLE

This account consists of the following:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Estimated corporate income tax payable,

less tax prepayments of Rp81,505 in 2013,

Rp97,715 in 2012 and Rp106,874 in 2011

5,977

26,137

13,330

Income tax:

Article 4(2)

16,853

16,676

10,624

Article 21

17,967

25,661

15,366

Article 23

8,151

9,942

4,107

Article 25

9,139

7,888

14,964

Article 26

10,335

8,962

18,863

Article 29

61,686

-

-

VAT

660

317

13,765

Others

955

16

187

Total

131,723

95,599

91,206

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

16.

TAXES PAYABLE (continued)

The reconciliation between profit(loss) before income tax and estimated taxable income (tax loss) of the Company for the nine-monthperiods ended September 30, 2013 and 2012 is as follows:

2013

2012

Profit (loss) before income tax per interim consolidated statement of

comprehensive income

(2,201,567)

597,863

Company's equity in Subsidiaries’ profit before income tax and reversal of

inter-company consolidation eliminations

(197,782)

(160,065)

Profit (loss) before income tax of the Company

(2,399,349)

437,798

Positive adjustments

Depreciation - net

1,211,375

435,053

Charges from leasing transactions

532,980

82,052

Accrual of employee benefits - net

130,227

83,586

Provision for impairment of accounts receivable - net

80,112

65,182

Employee benefit

48,169

41,885

Provision for termination, gratuity and compensation benefits

of employees

36,093

32,804

Provision for decline in value of inventory

25,550

-

Tax expenses

               25,408

                     -

Amortization of long-term prepaid licenses

12,208

2,575

Donations

8,773

7,963

Assessments for income taxes and VAT (including penalties)

6,156

-

Net periodic pension cost

632

-

Representation and entertainment

563

978

5% final tax on tower sales (Note 29)

-

185,339

Interest compensation on the overpayment of 2004

corporate income tax

-

60,674

Amortization of debt and bonds issuance costs,

consent solicitation fees and discount (Notes 18 and 19)

-

22,755

Others

        45,626

41,014

Negative adjustments

Equity in net income of investees

(187,793)

(140,083)

Write-off of accounts receivable

(154,654)

-

Amortization of deferred gain on tower sales - net, already subjected

    to final tax (Note 29)

(105,787)

-

Amortization of other intangible assets

(96,693)

(112,913)

Gain on outright sale of assets being leased (Note 8)

(55,241)

-

Loss on sale and exchange of property and equipment

(40,814)

(135,147)

Interest income already subjected to final tax

(32,801)

(41,603)

Write-off of short-term investments (Note 7)

(25,395)

-

Amortization of debt and bonds issuance costs,

consent solicitation fees and discount (Notes 18 and 19)

(17,904)

-

Gain on tower sales - net already subjected to final tax (Note 29)

-

(860,946)

Net periodic pension cost

-

(4,781)

Others

                       -

(1,486)

Estimated taxable income (tax loss) of the Company - current period

(952,559)

202,699

Tax losses carryforward at beginning of period after tax audit

adjustments

(571,516)

(1,307,007)

Tax losses carryforward at end of period

(1,524,075)

(1,104,308)

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

16. TAXES PAYABLE (continued)

The computation of the income tax expense (benefit) - net for the nine-month periods ended September 30, 2013 and 2012 is as follows:

2013

2012

Income tax expense (benefit) - current,at statutory tax rates

Company

Income tax expense - current

-

-

Tax expense from correction on Satelindo's corporate income tax

for fiscal year 2002 (Note 13)

-

103,163

Tax expense from tax correction on the Company's corporate income

tax for fiscal year 2010 (Note 13)

-

61

Interest compensation on the overpayment of 2004 corporate

income tax

-

(60,674)

Subsidiaries

   Income tax expense -current

87,482

69,574

Tax expense from tax correction on IMM's corporate income tax

for fiscal year 2010 (Note 13)

-

6,422

Income tax expense - current - net

87,482

118,546

Income tax expense (benefit) - deferred - effect of temporary

differences at applicable tax rate

Company

Equity in net income of investees

35,514

27,600

Amortization of other intangible assets

24,173

28,228

Write-off of accounts receivable (provision for impairment of

18,636

(16,295)

receivables)- net

Gain on outright sale of assets being leased

13,810

-

Loss on sale and exchange of property and equipment - net

10,204

33,787

Write-off of short-term investments (Note 7)

6,349

-

Amortization of debt and bonds issuance costs,

consent solicitation fees and discount (Notes 18 and 19)

4,476

(5,689)

Adjustment due to tax audit (Note 13)

-

25,495

Reversal of deferred tax liabilities from tower sale transactions

(Note 29)

-

(57,527)

Depreciation -net

(302,844)

(108,763)

Utilization of tax losses carryforward (tax loss)

(238,140)

    50,675

Charges from leasing transactions

(133,245)

(20,513)

Accrual of employee benefits - net

(32,557)

(20,896)

Realization of accrual of provision for termination, gratuity

and compensation benefits of employees - net

(9,023)

(8,201)

Provision for decline in value of inventory

(6,388)

372

Amortization of long-term prepaid licenses

(3,052)

(644)

Net periodic pension cost

(158)

1,195

Others

(20,884)

(9,291)

Net

(633,129)

(80,467)

Subsidiaries

19,459

15,941

Net income tax benefit-deferred

(613,670)

(64,526)

Income tax expense (benefit) - net

(526,188)

54,020

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

16. TAXES PAYABLE (continued)

The computation of the estimated income tax payable for the nine-month periodsended September 30, 2013 and 2012 is as follows:

2013

2012

Income tax expense (benefit) - current

Company

   Income tax expense - current

-

-

Tax expense from tax correction on Satelindo's corporate income tax

for fiscal year 2002 (Note 13)

-

103,163

Tax expense from tax correction on Company's corporate income tax

for fiscal year 2010 (Note 13)

-

61

Interest compensation on the overpayment of 2004 corporate

income tax

-

(60,674)

Subsidiaries

   Income tax expense - current

87,482

69,574

Tax expense from tax correction on IMM's corporate income tax

for fiscal year 2010 (Note 13)

-

6,422

Income tax expense - current - net

87,482

118,546

Less prepayments of income tax of the Company

Article 22

169,244

62,101

Article 23

3,934

7,338

Total prepayments of income tax of the Company

173,178

69,439

Less prepayments of income tax of Subsidiaries

Article 23

4,483

4,148

Article 25

81,512

98,795

Total prepayments of income tax of Subsidiaries

85,995

102,943

Total prepayment of income tax

259,173

172,382

Estimated income tax payable

Subsidiaries

5,977

3,965

Net

171,691

102,808

Presented in interim consolidated statement of financial position as:

Estimated income tax payable - part of taxes payable

5,977

3,965

Claims for tax refund - as part of “Other Non-Current Assets” (Note 13)

Company

173,178

69,439

Subsidiaries

4,490

37,334

Total

177,668

106,773

Net

171,691

102,808

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

16. TAXES PAYABLE (continued)

The reconciliation between the income tax expense (benefit) calculated by applying the applicable tax rate of 25% to the profit (loss) before income tax and the income tax expense (benefit) - net as shown in the interim consolidated statement of comprehensive income for the nine-month periods ended September 30, 2013 and 2012 is as follows:

2013

2012

Profit (loss) before income tax per interim consolidated statement

of comprehensive income

(2,201,567)

597,863

Income tax expense(benefit) at the applicable tax rate

(550,392)

149,466

Company’s equity in Subsidiaries’ profit before income tax

and reversal of inter-company consolidation eliminations

37,190

38,352

Tax effect on permanent differences

Employee benefits

17,138

14,164

Unrecognized deferred tax asset on current fiscal loss

              13,412

12,913

Assessment for income taxes and VAT (including penalties)

               8,882

336

Donations

3,328

3,909

Representation and entertainment

1,984

667

Amortization of deferred gain on tower sale - net already

subjected to final tax (Note 29)

(26,447)

-

Interest income already subjected to final tax

(19,009)

(18,561)

Gain on tower sale - net already subjected to final tax (Note 29)

-

(226,428)

Others

(12,274)

4,735

Adjustment due to tax audit

-

25,495

Interest compensation on the overpayment of 2004 corporate income tax



     and tax expense from correction on Satelindo’s corporate income tax for

     fiscal year 2002

-

42,489

Tax expenses from tax correction on IMM's and the Company’s corporate

income tax for fiscal year 2010

   -

6,483

Income tax expense (benefit) - net per interim consolidated statement

(526,188)

54,020

of comprehensive income

The tax effects of significant temporary differences between financial and tax reporting of the Company which are outstanding as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011 are as follows:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Deferred tax assets

Tax losses carryforward

381,019

216,784

352,246

Accrual of employee benefits - net

301,613

260,033

206,416

Charges from leasing transactions

185,801

52,556

18,823

Allowance for impairment of accountsreceivable

118,933

137,568

125,073

Allowance for impairment of investment in associated

company and other long-term investment

42,469

42,469

42,469

Pension cost

17,894

17,736

18,296

Allowance for decline in value of inventory

6,732

345

774

Allowance for impairment of short-term investments

-

6,349

6,349

Others

3,070

-

775

Total

1,057,531

733,840

771,221

16. TAXES PAYABLE (continued)

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Deferred tax liabilities

Property and equipment

1,769,280

2,122,016

2,499,935

Investments in subsidiaries/associated

company - net of amortization of goodwill

and other intangible assets

313,262

271,388

195,595

Long-term prepaid licenses

12,966

16,018

16,876

Deferred debt and bonds issuance costs,

consent solicitation fees and discount

5,023

547

6,856

Difference in transactions of equity changes in

associated company

1,460

1,460

1,460

Others

  1,267

463

659

Total

2,103,258

2,411,892

2,721,381

Deferred tax liabilities - net

1,045,727

1,678,052

1,950,160

The breakdown by entity of the deferred tax assets and liabilities outstanding as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011 is as follows:

January 1, 2012 /

September 30, 2013

December 31, 2012

December 31, 2011

Deferred Tax

Deferred Tax

Deferred Tax

Deferred Tax

Deferred Tax

Deferred Tax

Assets

Liabilities

Assets

Liabilities

Assets

Liabilities

Company

-

1,045,727

-

1,678,052

-

1,950,160

Subsidiaries

Lintasarta

73,540

-

78,593

-

80,094

-

IMM

16,885

-

22,100

-

33,718

-

APE

-

14,630

-

5,438

-

5,165

ISPL

-

697

-

780

-

1,027

Total

90,425

1,061,054

100,693

1,684,270

113,812

1,956,352

The deferred tax assets of Lintasarta relate mainly to the deferred tax on the temporary difference in the recognition of depreciation on property and equipment.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

16. TAXES PAYABLE (continued)

The significant temporary differences on which deferred tax assets have been computed are not deductible for income tax purposes until the accrued employee benefits are paid, the allowance for impairment of trade receivables is realized upon the write-off of the receivables after fulfilling certain requirements under the Income Tax Law, the allowance for impairment of investment in associated company and other long-term investments is realized upon sale of the investments and the pension cost is paid.

The significant deferred tax liabilities relate to the differences in the book and tax bases of property and equipment, investments in subsidiaries/associated company, long-term prepaid licenses, debt and bonds issuance costs, consent solicitation fees and discount.

On March 5, 2012, the Company received the Tax Court’s Decision Letter accepting the Company’s request for interest compensation related to the issuance of 2004 SKPLB amounting to Rp60,674, which was credited to current income tax benefit in the Company’s statement of comprehensive income. On June 29, 2012, the Company received a copy of a Memorandum for Reconsideration Request (

Memori Permohonan Peninjauan Kembali

) from the Tax Court to the Supreme Court on the Tax Court’s Decision Letter dated March 5, 2012 for the interest compensation related to the issuance of 2004 SKPLB. On July 27, 2012, the Company submitted a Counter-Memorandum Requesting for Reconsideration to the Supreme Court. Based on the Company’s evaluation for the year ended December 31, 2012, the realization of income related with the interest compensation was only probable, instead of virtually certain. Therefore, the interest compensation was not recognized in the Company’s financial statements for the year ended December 31, 2012. As of

October 24, 2013, the Company has not received any decision from the Supreme Court on such request.

On November 28, 2012, the Company received SKPKBs from the DGT for the Company’s 2009 income tax articles 21, 22, 23, 26 and 4(2) totaling Rp4,829 (including penalties), which were charged to current operations as part of “Expenses - Others - Net”.

On September 26, 2013, the Company submitted to the Tax Office a revised 2012 annual corporate income tax return after considering the result of tax audit on 2011 corporate income tax, which increased the estimated taxable income for the year ended December 31, 2012 and decreased the accumulated tax losses carry over as of December 31, 2012 by Rp193,846.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

16.TAXES PAYABLE (continued)

The tax losses carryover of SMT and the Company as of September 30, 2013 can be carried forward through 2018 based on the following schedule:

Year of Expiration

Amount

2014

31,901

2015

355,363

2016

           289,695

2017

36,210

2018

974,559

Total

1,687,728

17.

ACCRUED EXPENSES

This account consists of the following:

January 1,

2011 /

September 30,

December 31,

December 31,

2013

2012

2011

Network repairs and maintenance

242,679

229,921

288,731

Employee benefits (Notes 22 and 30)

217,948

200,033

180,441

Link

208,712

60,646

55,593

Marketing

202,991

235,957

214,907

Interest

167,046

331,101

319,880

Dealer incentives (Note 2k)

136,211

170,115

82,615

Universal Service Obligation (“USO”) (Note 35)

98,868

92,916

59,716

Utilities

97,703

87,669

58,609

Consultancy fees

54,356

44,331

35,309

Blackberry access fee

45,113

48,666

79,627

Concession fee (Note 35)

32,757

41,277

39,507

General and administration

27,106

34,772

31,119

Rental

20,352

95,200

59,929

Others

248,835

288,681

389,630

Total

1,800,677

1,961,285

1,895,613

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

18.

LOANS PAYABLE

This account consists of the following:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Third parties - net*

5,478,703

6,373,040

8,727,473

Related party (Note 31)

Mandiri - net**

-

-

998,843

Total loans payable

5,478,703

6,373,040

9,726,316

Less current maturities - net ***

Third parties

2,303,418

2,669,218

2,301,694

Related party

-

-

998,843

Total current maturities

2,303,418

2,669,218

3,300,537

Long-term portion

Third parties

3,175,285

3,703,822

6,425,779

Related party

-

-

-

Total long-term portion

3,175,285

3,703,822

6,425,779

*

net of unamortized debt issuance cost and consent solicitation fees of Rp84,997 as of September 30, 2013, Rp111,333as of December 31, 2012, and Rp146,511as of January 1, 2012 / December 31, 2011; and unamortized debt discount of Rp3,682as of December 31, 2012 and Rp11,891as of January 1, 2012 / December 31, 2011

**

net of unamortized debt issuance cost and consent solicitation fee of Rp1,157 as of January 1, 2012 / December 31, 2011

***

net of unamortized debt issuance cost and consent solicitation fees of Rp134 as of September 30, 2013, Rp6,415 as of December 31, 2012 and Rp2,295 as of January 1, 2012 / December 31, 2011

18.

LOANS PAYABLE (continued)

The loans from third parties consist of the following:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

AB SvenskExportkredit (“SEK”), Sweden with Guarantee

from Exportkreditnamnden (“EKN”) - net of unamortized

debt issuance cost of Rp14,813 in 2013, Rp21,351

in 2012 and Rp26,434 in 2011

1,830,825

1,840,124

2,127,216

BCA Revolving Time Loan - net of unamortized

debt issuance cost of Rp134 in 2013, Rp413

in 2012 and Rp736 in 2011

1,499,866

999,587

1,499,264

HSBC France - net of unamortized debt issuance cost

and consent solicitation fees of Rp68,270 in 2013,

Rp84,315 in 2012 and Rp104,536 in 2011

1,334,953

1,278,872

1,356,403

Bank Sumitomo Mitsui Indonesia ("BSMI")

Revolving Time Loan - net of unamortized debt

issuance cost of Rp727 in 2013 and Rp971 in 2012

649,273

99,029

-

9-Year Commercial Loan - net of unamortized

debt issuance cost and consent solicitation fees

of Rp1,053 in 2013, Rp1,550 in 2012

and Rp2,046 in 2011

163,786

155,318

181,834

Syndicated U.S. Dollar Loan Facility - net

of unamortized debt issuance cost and consent

solicitation fees of Rp2,733 in 2012 and Rp11,621

in 2011

-

1,520,292

2,069,484

Goldman Sachs International (“GSI”)

Principal, net of unamortized debt discount

of Rp3,682 in 2012 and Rp11,891 in 2011

-

479,818

422,409

Foreign Exchange (FX) Conversion Option

-

-

49,518

BCA - net of unamortized debt issuance cost

and consent solicitation fees of Rp1,138

-

-

998,862

Investment Credit Facility 6 from CIMB Niaga

-

-

22,483

Total

5,478,703

6,373,040

8,727,473

Less current maturities (net of unamortized debt

issuance costs and consent solicitation fees

totaling Rp134 in 2013, Rp6,415 in 2012

and Rp2,295 in 2011)

2,303,418

2,669,218

2,301,694

Long-term portion

3,175,285

3,703,822

6,425,779

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

18. LOANS PAYABLE (continued)

The details of the loans from the related party and third parties are as follows:

Counterparties

Loan Type

Maturity

Amount

Interest

Remarks

Structure

a.

Mandiri*

▪

5-year unsecured

September 18, 2012

Rp2,000,000

▪

Year 1:

▪

Without penalty if the

credit facility 1

9.75% p.a.

repayment was made

▪

Loan drawdowns

▪

Year 2:

after the 24
^th
month

were payable

10.5% p.a.

after the agreement

annually

▪

Years 3-5:

date subject to 7 days’

Average 3-

prior written notice

month JIBOR

▪

With penalty of 2% of

+ 1.5% p.a.

the prepaid amount for

▪

Paid quarterly

repayment prior to the

24
^th
month after the

agreement date

▪

On June 21, 2012, the

Company obtained the

consent letter from

Mandiri for the sale of

asset transaction (Note

29).

▪

In September 2012,

this loan was fully paid.

b.

SEK Sweden

▪

Credit facilities

May 31, 2016

US$315,000

▪

Facility A:

▪

Permitted only in

with Guarantee

consisting of

for Facility A,

Margin of

proportionate amount

from EKN

Facilities A, B and

February 28,

0.25% London

for each of Facilities A,

C with maximum

2017 for

Inter-Bank

B and C, after the last

amounts of

Facility B and

Offered Rate

day of the availability

US$100,000,

November 30,

("LIBOR"), SEK

period and on a

US$155,000 and

2017 for

Funding Cost

repayment date subject

US$60,000,

Facility C

of 1.05% and

to 20 days’ prior written

respectively

EKN

notice

▪

Loan drawdowns

Premium

▪

In minimum amount of

are payable semi-

Margin of

US$5,000 and in an

annually

1.57%

amount divisible by

▪

Facility B:

US$500

Margin of

▪

Any repayment shall

0.05%,

satisfy the obligation

Commercial

of loan repayment in

Interest

inverse chronological order.

Rate

▪

On June 18, 2012, the

(“CIRR”) and

Company amended its

EKN

credit facility agreement

Premium

with HSBC Bank Plc,

Margin of

as facility agent. The

1.61%

amendment included

▪

Facility C:

changes in definition of

Margin of

certain terms related to

0.05%, CIRR

sale of asset

and EKN

transactions (Note 29).

Premium

Margin of 1.59%

▪

Payable

semi-

annually

*   related party (Note 31)

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

18. LOANS PAYABLE (continued)

Counterparties

Loan Type

Maturity

Amount

Interest

Remarks

Structure

c.

BCA

▪

Revolving time loan

February 10,

Rp1,500,000

▪

JIBOR +

▪

Permitted subject to 1

with maximum amount

2014

1.4% p.a.

day prior written notice

of Rp1,000,000

However,

the Company may repay

▪

Each drawdown

starting

the whole or any part of

matures 1 month from

December

the loan.

the drawdown date.

1, 2011,

▪

On June 11, 2012, the

Subsequently, on

JIBOR +

Company obtained the

August 9, 2011, the

1.25% p.a.,

consent letter from BCA

Company obtained an

starting

for the sale of asset

approval from BCA to

July 26, 2013,

transaction (Note 29).

amend the maturity

JIBOR +

▪

On December 19, 2012,

date of each drawdown

1.5% p.a.,

the Company amended

to become at the latest

starting

its credit facility

on February 10, 2014.

August 26,

agreement with BCA.

▪

On December 1, 2011,

the facility amount was increased to Rp1,500,000 and the interest rate was changed.

2013, JIBOR +

The amendment included

1.75% p.a.

changes in the definition of

▪

Payable

sale of asset transaction

monthly

(Note 29).

§

d.

HSBC

▪

12 year - COFACE

September 30,

US$157,243

▪

5.69% p.a.

▪

Permitted with a

France

term facility

2019

▪

Payable

corresponding

▪

Payable in twenty

semi-

proportionate voluntary

semi-annual

annually

prepayment under the

installments

SINOSURE Facility

after the last day of the

availability period and

on a repayment date

subject to 30 days’ prior

written notice

▪

In minimum amount of

US$10,000 and in an

amount divisible by

US$1,000

▪

Any repayment shall

satisfy the obligations of

loan repayment in

inverse chronological

order

▪

On June 18, 2012, the

Company amended its

COFACE credit facility

agreement with HSBC

France, as facility

agent. The amendment

included changes in the

definition of certain

terms related to sale of

asset transactions

(Note 29).

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

18. LOANS PAYABLE (continued)

Counterparties

Loan Type

Maturity

Amount

Interest

Remarks

Structure

d.

HSBC

▪

12 year -

September 30,

US$44,200

▪

USD LIBOR

▪

Permitted with a

France

SINOSURE term

2019

+ 0.35% p.a.

corresponding

(continued)

facility

▪

Payable

proportionate voluntary

▪

Payable in twenty

semi-

prepayment under the

semi-annual

annually

COFACE Facility after

installments

the last day of the

availability period and

on a repayment date

subject to 30 days’ prior

written notice

▪

In minimum amount of

US$10,000 and in an

amount divisible by

US$1,000

▪

Any repayment shall

satisfy the obligations of

loan repayment in

inverse chronological

order.

▪

On July 23, 2012, the

Company amended its

SINOSURE credit

facility agreement with

HSBC France, as

facility agent. The

amendment included

changes in the definition of

certain terms related to

sale of asset transactions

(Note 29).

e.

BSMI

▪

Revolving time

December 31,

Rp650,000

▪

JIBOR +

▪

Permitted subject to 5

loan with maximum

2015

1.25% p.a.

days’ prior written notice,

amount of

▪

Payable

the Company may

Rp650,000

monthly,

repay the whole or any

▪

Each drawdown

quarterly or

part of the loan.

matures at the maximum

semi-annually

of 36 months from the

drawdown

date, but not exceeding

December 31, 2015.

f.

HSBC

▪

9-year unsecured

November 28,

US$27,037

▪

USD LIBOR

▪

Permitted only on each

Jakarta

commercial facility

2016

+ 1.45% p.a.

repayment date after

Branch,

▪

Payable in fifteen

▪

Payable

the firs repayment date

CIMB Niaga

semi-annual

semi-

subject to 30 days’ prior

and Bank of

payments after

annually

written notice

China Limited

24 months from the

▪

In minimum amount of

Jakarta

date of loan

US$5,000 and in an

Branch

agreement. For the

amount divisible by

1
^st
five installments:

US$1,000

US$1,351.85 each;

▪

Any prepayment shall

and US$2,027.78

satisfy the obligations of

each for the

loan repayment

remaining

proportionately.

installments

▪

On June 20, 2012, the

thereafter

Company amended its

credit facility agreement

with HSBC Ltd, as

facility agent. The

amendment included

changes in the definition of

certain terms related to

sale of asset transactions

(Note 29).

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

18. LOANS PAYABLE (continued)

Counterparties

Loan Type

Maturity

Amount

Interest

Remarks

Structure

g.

Syndicated U.S.

▪

5-year unsecured

June 12, 2013

US$450,000

▪

USD

▪

Permitted only after the

Dollar Loan Facility

credit facility

LIBOR +

6
^th
month from the date

- 12 Financial

▪

Loan drawdowns were

1.9% p.a.

of loan agreement

Institutions**

paid semi-

(onshore

subject to 15 days' prior

annually

lenders);

written notice (in the

USD LIBOR +

minimum amount of

1.85% p.a.

US$10,000 and in an

(offshore

amount divisible by

lenders)

US$1,000).

▪

Payable

▪

On June 19, 2012, the

semi-

Company amended its

annually

credit facility agreement

with PT Bank DBS

Indonesia, as facility

agent. The amendment

included changes in the

definition of certain terms

related to sale of asset

transactions (Note 29).

▪

In June 2013, this loan

was fully paid.

h.

GSI***

▪ Investment loan

May 30, 2013

US$50,000

▪ 8.75% p.a.

▪

Certain changes affecting

▪ Provides an “FX”

▪ Payable

withholding taxes in the

Conversion Option”

quarterly

United Kingdom or

for GSI to convert the

▪ If GSI takes

Indonesia.

loan payable into U.S.

FX

▪

Default under Guaranteed

dollar loan of

Conversion

Notes due 2012.

US$50,000 on May

Option,

▪

Default under the

30, 2012 (“FX

starting May

Company’s USD Notes

Conversion Option”)

30, 2012, the

and IDR Bonds.

▪ Fair value of FX

loan will bear

▪

Redemption, purchase or

Conversion Option as

interest at

cancellation of the

of December 31,

the fixed

Guaranteed Notes Due

2011 and 2010

annual rate

2012 and there are no

amounting to

of 6.45%

USD Indosat Notes

US$5,460.78

applied on

outstanding upon such

(equivalent to

the fixed

redemption, purchase or

Rp49,518) and

US$50,000

cancellation.

US$6,072.20

principal

▪

Change of control in the

(equivalent to

Company.

Rp54,595),

▪

In May 2013, this loan was

respectively (Note 20)

fully paid.

**

On October 14, 2011, PT Bank UOB Indonesia (one of lenders under the Syndicated U.S. Dollar Loan Facility) transferred its portion of theloan to UOB Limited (another lender under the Syndicated U.S. Dollar Loan Facility), hence the number of lenders became 12.

***

On May 30, 2012, GSI exercised the FX conversion option to convert the loan into U.S. dollar loan of US$50,000. The Company earnedgain from the exercise amounting to Rp5,319which is credited to Gain (Loss) on Change in Fair Value of Derivatives - Net.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

18.

LOANS PAYABLE (continued)

Counterparties

Loan Type

Maturity

Amount

Interest

Remarks

Structure

i.

BCA

§

5-year unsecured credit facility 1

§

Loan drawdowns payable paid annualy

September 27,

2012

Rp2,000,000

§

Year 1: 9.75% p.a

.

§

Year 2: 10.5% p.a.

§

JIBOR + 1.5% p.a.

§

Years 3-5: 3-month    JIBOR + 1.5% p.a.

§

Payable quarterly

§

Without penalty if the repayment was made after the 24
^th
month after the agreement date subject to 7 days’ prior written notice

§

With penalty of 2% of the prepaid amount for repayment prior to the 24
^th
month after the agreement date

§

On June 11, 2012, the Company obtained the consent letter from BCA for the sale of asset transaction (Note 29).

§

In September 2012, this loan was fully paid.

j.

CIMB Niaga

▪

Investment

August 24,

Rp75,000

▪

14.5% p.a

▪

Permitted only on

credit facility 6

2012

subject to change

interest payment date

obtained by

by CIMB Niaga

subject to 15 days’ prior

Lintasarta

depending on the

written notice.

▪

Paidquarterly

market condition

Lintasarta may repay

▪

Payable quarterly

the whole or any part of

the loan before the due

date only by using the

fund from Lintasarta’s

operational activities.

Repayment using the

fund from loans

obtained from other

parties is allowed with

penalty determined by

CIMB Niaga.

▪

The loan is

collateralized by all

equipment (Note 8)

purchased from the

proceeds of credit

facility.

▪

In April 2012, this

loan was fully paid.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

18.

LOANS PAYABLE (continued)

The Scheduled Principal Payments from 2014 of all the loans payable as of September 30, 2013 are as follows:

Twelve months ending September 30,

2018 and

2014

2015

2016

2017

Thereafter

Total

In rupiah

BCA - revolving

time loan

1,500,000

-

-

-

-

1,500,000

BSMI - revolving

time loan

-

-

650,000

-

-

650,000

Sub-total

1,500,000

-

650,000

-

-

2,150,000

In U.S. dollar

SEK, Sweden

(US$158,928.57)

522,585

522,585

522,585

228,113

49,770

1,845,638

HSBC France

(US$120,832.02)

233,870

233,870

233,870

233,870

467,743

1,403,223

9-Year Commercial

Facility

(US$14,194.43)

47,097

47,097

47,097

23,548

-

164,839

Sub-total

803,552

803,552

803,552

485,531

517,513

3,413,700

Total

2,303,552

803,552

1,453,552

485,531

517,513

5,563,700

Less:

-

unamortized debt issuance costs and consent solicitation fees

(84,997)

Net

5,478,703

All loans are neither collateralized by any specific Group assets nor guaranteed by other parties, except for the assets that have been specifically used as security in Note 18j.

The total amortization of debt issuance, discount and consent solicitation fees on the loans for the nine-month periods ended September 30, 2013 and 2012 amounted to Rp30,021 and Rp52,872, respectively (Note  28).

As of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011, the Group has complied with all financial ratios required to be maintained under the loan agreements.

19. BONDS PAYABLE

This account consists of the following:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

^{a. Guaranteed Notes Due 2020 - net of unamortized

notes issuance cost of Rp66,683in 2013,

Rp73,454 in 2012 and Rp58,420 in 2011 and

discount of Rp20,863in 2013, Rp23,154 in 2012

and Rp26,208 in 2011

7,460,904

6,188,892

5,809,572

b. Eighth Indosat Bonds in Year 2012 with Fixed Rates

- net of unamortized bonds issuance cost and

consent solicitation fees of Rp7,898 in 2013

and Rp8,478 in 2012

2,692,102

2,691,522

-

c. Fifth Indosat Bonds in Year 2007 with Fixed Rates

- net of unamortized bonds issuance cost and

consent solicitation fees of Rp5,281in 2013,

Rp7,061 in 2012 and Rp9,102 in 2011

2,594,719

2,592,939

2,590,898

d. Seventh Indosat Bonds in Year 2009 with Fixed Rates

- net of unamortized bonds issuance cost of

Rp2,595in 2013, Rp3,454 in 2012 and

Rp4,442 in 2011

1,297,405

1,296,546

1,295,558

e. Indosat Sukuk Ijarah II in Year 2007 - net of

unamortized bonds issuance cost and consent

solicitation fees of Rp340 in 2013, Rp698 in 2012

and Rp1,124 in 2011

399,660

399,302

398,876

f. Sixth Indosat Bonds in Year 2008 with Fixed Rates

- net of unamortized bonds issuance cost and

consent solicitation fees of Rp794in 2013,

Rp1,609 in 2012 and Rp3,603 in 2011

319,206

1,078,391

1,076,397

g. Indosat Sukuk Ijarah V in Year 2012 - net of

unamortized bonds issuance cost and consent

solicitation fees of Rp847in 2013 and Rp930 in 2012

299,153

299,070

-

h. Indosat Sukuk Ijarah IV in Year 2009 - net of

unamortized bonds issuance cost and consent

solicitation fees of Rp516 in 2013, Rp627 in 2012

and Rp754 in 2011

199,484

199,373

199,246

i. Indosat Sukuk Ijarah III in Year 2008 - net of

unamortized bonds issuance cost and consent

solicitation fees of Rp353 in 2012 and

Rp1,545 in 2011

-

569,647

568,455

j. Second Indosat Bonds in Year 2002 with Fixed and

Floating Rates - net of unamortized consent

solicitation fees of Rp649

-

-

199,351

k. Limited Bonds II issued by Lintasarta

*

-

-

25,000

l. Limited Bonds I issued by Lintasarta

**

-

-

16,989

^{Total bonds payable

15,262,633

15,315,682

12,180,342

Less current maturities (net of unamortized bonds

issuance cost and consent solicitation fees totalling

Rp1,382 in 2013 and Rp825 in 2012)

1,628,618

1,329,175

41,989

^{Long-term portion

13,634,015

13,986,507

12,138,353

^{*

After elimination of Limited Bonds II amounting to Rp35,000 issued to the Company on January 1, 2010 and December 31, 2010. Lintasarta made early repayment of such amount on December 29, 2011.

**

     After elimination of Limited Bonds I amounting to Rp9,564 issued to the Company on January 1, 2010 and December 31, 2010.     Lintasarta made early repayment of such amount on December 29, 2011.

19. BONDS PAYABLE (continued)

Bond

Nominal

Amount

Interest

Maturity

Remarks

a. GuaranteedNotes Due 2020

US$650,000

§

7.375% p.a.

§

Payable semi-annually

July 29, 2020

The notes are redeemable at the                            option of IPBV:

§

Prior to July 29, 2013, the Issuer may redeem up to a maximum of 35% of the original aggregate Notes issued with the proceeds of one or more Public Offerings at a redemption price equal to 107.375% of the principal amount.

§

Prior to July 29, 2015, the Issuer will be entitled at its option to redeem all or any portion of the Notes at a redemption price equal to 100% of the principal amount of the Notes plus the Applicable Premium.

§

On and after July 29, 2015, the issuer may redeem the Notes in whole or in part at any time and from time to time at certain redemption prices.

§

At any time, upon not less than 30

days’ nor more than 60 days’ prior notice, the Issuer may redeem the Notes at a price equal to 100% of the principal amount thereof, plus any accrued and unpaid interest to (but not including) the redemption date and any additional amounts, in the event of certain changes affecting withholding taxes in Indonesia and the Netherlands.

§

Upon a change in control of IPBV,

the holder of the notes has the right to require IPBV to repurchase all or any part of such holder’s notes.

§

Based on latest rating reports (released in July, August and June 2013), the notes have BB+ (stable outlook), Ba1 (stable outlook) and BBB (stable outlook) ratings from Standard & Poor’s (“S&P”), Moody’s Investors Service (“Moody’s”) and Fitch Ratings (“Fitch”), respectively.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

19. BONDS PAYABLE (continued)

Bond

Nominal

Interest

Maturity

Remarks

Amount

b. Eighth Indosat Bonds in Year 2012

§

Series A

Rp1,200,000

§

8.625% p.a.

§

Payable quarterly

June 27, 2019

§

The Company can buy back part or all of the bonds, after the 1
^st
anniversary of the bonds, at market price temporarily or as an early settlement.

§

Based on the latest rating report released in March 2013, the bondshave
_id
AA+ rating from PTPemeringkat Efek Indonesia (“Pefindo”).

§

Series B

Rp1,500,000

§

8.875% p.a.

§

Payable quarterly

June 27, 2022

c. Fifth Indosat Bonds in Year 2007

§

Series A

Rp1,230,000

§

10.20% p.a.

§

Payable quarterly

May 29, 2014

§

The Company can buy back part or all of the bonds, after the 1
^st
anniversary of the bonds, at market price temporarily or as an early settlement.

§

Based on the latest rating report released in March 2013, the bondshave
_id
AA+ rating from Pefindo.

§

Series B

Rp1,370,000

§

10.65% p.a.

§

Payable quarterly

May 29, 2017

d. Seventh Indosat Bonds in Year 2009

§

Series A

Rp700,000

§

11.25% p.a.

§

Payable quarterly

December 8, 2014

§

The Company can buy back part or all of the bonds, after the 1
^st
anniversary of the bonds, at market price temporarily or as an early settlement.

§

Based on the latest rating report released in March 2013, the bondshave
_id
AA+ rating from Pefindo.

§

Series B

Rp600,000

§

11.75% p.a.

§

Payable quarterly

December 8, 2016

e.

Indosat Sukuk Ijarah II in Year 2007 (“Sukuk Ijarah II”)

Rp400,000

§

Bondholders are entitled to annual fixed Ijarah return (“

Cicilan Imbalan Ijarah

”) totaling Rp40,800, payable on a quarterly basis starting August 29, 2007 up to May 29, 2014.

May 29, 2014

§

The Company can buy back part or all of the bonds, after the 1
^st
anniversary of the bonds, at market price.

§

Based on the latest rating report released in March 2013, the bonds have
_id
AA+
_(sy)
rating from Pefindo.

e.

Sixth Indosat Bonds in Year 2008

§

Series A

Rp760,000

§

10.25% p.a.

§

Paid quarterly

April 9, 2013

§

The Company had the option to buy back part or all of the bonds, after the 1
^st
anniversary of the bonds, at market price temporarily or as an early settlement.

§

Based on the rating report released in March 2013, the bonds had
_id
AA+ rating from Pefindo.

§

On April 9, 2013, the Company paid the series A bonds in full.

§

Series B

Rp320,000

§

10.80% p.a.

§

Payablequarterly

April 9, 2015

e.

Indosat Sukuk Ijarah V in Year 2012 (“Sukuk Ijarah V”)

Rp300,000

§

Bondholders are entitled to annual fixed Ijarah return (“Cicilan Imbalan Ijarah”) totaling Rp25,875, payable on a quarterly basis starting September 27, 2012 up to June 27, 2019.

June 27, 2019

§

The Company can buy back part or all of the bonds, after the 1
^st
anniversary of the bonds, at market price.

§

Based on the latest rating report released in March 2013, the bonds have
_id
AA+
_(sy)
rating from Pefindo.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

19. BONDS PAYABLE (continued)

Bond

Nominal

Interest

Maturity

Remarks

Amount

e.

Indosat Sukuk Ijarah IV in Year 2009 (“Sukuk Ijarah IV”)

§

Series A

Rp28,000

§

Bondholders are entitled to annual fixed ijarah return (“

Cicilan Imbalan Ijarah

”) totaling Rp3,150, payable on a quarterly basis starting March 8, 2010 up to December 8, 2014.

December 8, 2014

§

The Company can buy back part or all of the bonds, after the 1
^st
anniversary of the bonds, at market price.

§

Based on the latest rating report released in March 2013, the bonds have
_id
AA+
_(sy)
rating from Pefindo.

§

Series B

Rp172,000

§

Bondholders are entitled to annual fixed ijarah return (“

Cicilan Imbalan Ijarah

”) totaling Rp20,210, payable on a quarterly basis starting March 8, 2010 up to December 8, 2016.

December 8, 2016

e.

Indosat Sukuk Ijarah III in Year 2008 (“Sukuk Ijarah III”)

Rp570,000

§

Bondholders were entitled to annual fixed Ijarah return (“

Cicilan Imbalan Ijarah

”) totaling Rp58,425, paid on a quarterly basis starting July 9, 2008 up to April 9, 2013.

April 9, 2013

§

The Company had the option to buy back part or all of the bonds, after the 1
^st
anniversary of the bonds, at market price.

§

Based on the rating report released in March 2013, the bonds had
_id
AA+
_(sy)
(stable outlook) rating from Pefindo.

§

On April 9, 2013, the Company paid the bonds in full.

e.

Second Indosat Bonds in Year 2002 - Series B

Rp200,000

§

16% p.a.

§

Paid quarterly

November 6, 2032

§

The Company had call option on the 10
^th
, 15
^th
, 20
^th
and 25
^th
anniversaries of the bonds at 101% of the bonds’ nominal value and the bondholder had sell option if the rating of the bonds decreased to
_id
AA- or lower or on the 15
^th
, 20
^th
and 25
^th
anniversaries of the bonds.

§

Based on the rating report released in June 2012, the bonds had
_id
AA+rating from Pefindo.

§

On November 6, 2012, the Company exercised the right to redeem in full the remaining outstandingSecond Indosat Bonds at 101% of the nominal value of the bonds.

k.

Limited Bonds II issued by Lintasarta (amended on August 25, 2009)

Rp66,150, with the remaining amount of Rp60,000 since June 14, 2009

§

Average 3-month rupiah time deposit rates with Mandiri, BNI, BRI and BTN, plus a fixed premium of 3%. The maximum limit of floating rates was 19% and the minimum limit was 11% p.a. and starting June 14, 2009, the minimum limit increased to 12.75%.

§

Paid quarterly

June 14, 2009 extended to

June 14, 2012

§

On February 29, 2012, Lintasarta paid these bonds in full.

l.

Limited Bonds I issued by Lintasarta (amended on August 25, 2009)

Rp34,856, with the remaining amount of Rp26,553 since      June 2, 2009

§

Average 3-month rupiah time deposit rates with Mandiri, BNI, BRI and BTN, plus a fixed premium of 3%. The maximum limit of floating rates was 19% and the minimum limit was 11% p.a. and starting June 14, 2009, the minimum limit increased to 12.75%.

§

Paid quarterly

June 2, 2009 extended to

June 2, 2012

§

On January 31, 2012, Lintasarta paid these bonds in full.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

19. BONDS PAYABLE (continued)

The scheduled principal payments of all the bonds payable outstanding as of September 30, 2013 are as follows:

Twelve months ending September 30,

2018 and

2014

2015

2016

2017

thereafter *

Total

I

n U.S. dollar

Guaranteed Notes

Due 2020*

(US$650,000)

-

-

-

-

7,548,450

7,548,450

In Rupiah

Eighth Indosat Bonds*

-

-

-

-

2,700,000

2,700,000

Fifth Indosat Bonds*

1,230,000

-

-

1,370,000

-

2,600,000

Seventh Indosat Bonds*

-

700,000

-

600,000

-

1,300,000

SukukIjarah II*

400,000

-

-

-

-

400,000

Sixth Indosat Bonds*

-

320,000

-

-

-

320,000

SukukIjarah V*

-

-

-

-

300,000

300,000

SukukIjarah IV*

-

28,000

-

172,000

-

200,000

Sub-total

1,630,000

1,048,000

-

2,142,000

3,000,000

7,820,000

Total

1,630,000

1,048,000

-

2,142,000

10,548,450

15,368,450

Less:

-

unamortized notes issuance cost

(66,683)

-

unamortized notes discount

(20,863)

-

unamortized bonds issuance cost and consent solicitation fees

(18,271)

Net

15,262,633

*

Refer to previous discussion on early repayment options for each bond/note.

All bonds are neither collateralized by any specific Group assets nor guaranteed by other parties. All of the Group’s assets, except for the assets that have been specifically used as security (Note 18j) to its other creditors, are used as pari-passu security to all of the Group’s other liabilities including the bonds.

On June 5, 2012, the Company and IPBV entered into a supplemental indenture with Bank of New York Mellon, as a trustee, for the IPBV Guaranteed Notes Due 2020 based on the consent letter received on May 21, 2012 representing 93.21% of the notesholders. The supplemental indenture included the amendment of certain definition under the previous Guaranteed Notes Due 2020 indentures and the approval for the sale of asset transactions (Note 29).

On June 8, 2012, the Company received the consent letter from BRI, as a trustee, for the Eighth Indosat Bonds, Seventh Indosat Bonds, Sixth Indosat Bonds, Fifth Indosat Bonds, Second Indosat Bonds and Sukuk Ijarah V, IV, III and II regarding the Company’s sale of asset transactions (Note 29).

The total amortization of bonds issuance cost, consent solicitation fees, notes issuance cost and discount for the nine-month periods ended September 30, 2013 and 2012 amounted to Rp14,001 and Rp17,643, respectively (Note 28).

As of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011, the Group has complied with all financial ratios required to be maintained under the Notes Indenture and Trustee Agreements.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

20. DERIVATIVES

The Company entered into several swap and forward contracts. Listed below is information related to the contracts and their fair values (net of credit risk adjustment) as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011:

Fair Value (Rp)

January 1, 2012 /

Notional

September 30, 2013

December 31, 2012

December 31, 2011

Amount

Receivable

Payable

Receivable

Payable

Receivable

Payable

(US$)

Cross Currency Swap Contracts:

a.

StandChart
⁽¹⁾

25,000

-

-

-

-

-

6,981

b.

StandChart
⁽³⁾

25,000

-

-

-

-

1,620

-

c.

StandChart
⁽⁴⁾

25,000

-

-

-

-

12,608

-

d.

MLIB
⁽²⁾

25,000 with

decreasing amount

-

-

7,919

-

3,639

-

e.

DBS
⁽²⁾

25,000 with

decreasing amount

-

-

7,962

-

4,271

-

f.

HSBC, Jakarta Branch
⁽⁸⁾

10,000

-

-

2,631

-

-

-

g.

Barclays Bank PLC

(“Barclays”)
⁽⁸⁾

14,500

-

-

3,295

-

-

-

h.

HSBC, Jakarta Branch
⁽⁹⁾

14,000

-

-

4,338

-

-

-

i.

HSBC, Jakarta Branch
⁽¹⁰⁾

11,000

-

-

3,762

-

-

-

Sub-total

-

-

29,907

-

22,138

6,981

Interest Rate Swap Contracts:

j.

HSBC, Jakarta Branch

27,037 with

decreasing amount

-

10,041

-

11,613

-

13,254

k.

HSBC, Jakarta Branch

44,200 with

decreasing amount

-

27,665

-

38,260

-

35,370

l.

GSI
⁽¹¹⁾

100,000

-

-

-

25,287

-

60,869

m.

DBS
⁽¹¹⁾

25,000 with

decreasing amount

-

-

-

1,391

-

4,174

n.

DBS
⁽¹²⁾

25,000 with

decreasing amount

-

-

-

1,244

-

3,678

o.

Bank of Tokyo MUFJ

25,000 with

(“BTMUFJ”)
⁽¹³⁾

decreasing amount

-

-

-

894

-

2,649

p.

BTMUFJ
⁽¹³⁾

25,000 with

decreasing amount

-

-

-

804

-

2,347

q.

BTMUFJ
⁽¹³⁾

25,000 with

decreasing amount

-

-

-

735

-

2,118

r.

StandChart
⁽¹³⁾

40,000 with

decreasing amount

-

-

-

1,013

-

2,692

s.

DBS
⁽⁶⁾

26,000 with

decreasing amount

-

-

-

-

-

1,486

t.

DBS
⁽⁷⁾

26,000 with

decreasing amount

-

-

-

-

-

1,282

u.

BTMUFJ
⁽⁵⁾

36,500 with

decreasing amount

-

-

-

-

-

1,289

Sub-total

-

37,706

-

81,241

-

131,208

⁽¹⁾

contract entered into January 2006 and settled in June 2012

⁽²⁾

In June 2013, December 2012, June 2012 and December 2011, the Company used the option to exercise US$8,750 in June 2013, US$2,000 in December 2012, US$2,000 in June 2012 and US$6,000 in December 2011 of the contract amount.

⁽³⁾

contract entered into in March 2006 and settled in June 2012

⁽⁴⁾

contract entered into in May 2006 and settled in June 2012

⁽⁵⁾

contract entered into in March 2009 and settled in June 2012

⁽⁶⁾

contract entered into in December 2008 and settled in December 2012

⁽⁷⁾

contract entered into in January 2009 and settled in December 2012

⁽⁸⁾

contract entered into in August 2012 and settled in January 2013

⁽⁹⁾

contract entered into in August 2012 and settled in February 2013

⁽¹⁰⁾

contract entered into in August 2012 and settled in March 2013

⁽¹¹⁾

contract entered into in September 2008 and settled in June 2013

⁽¹²⁾

contract entered into in October 2008 and settled in June 2013

⁽¹³

⁾
contract entered into in December 2008 and settled in June 2013

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

20. DERIVATIVES (continued)

Fair Value (Rp)

January 1, 2012 /

Notional

September 30, 2013

December 31, 2012

December 31, 2011

Amount

Receivable

Payable

Receivable

Payable

Receivable

Payable

(US$)

Currency Forward Contracts:

v.

HSBC, Jakarta Branch

10,000

-

-

-

-

5,231

-

w.

JP Morgan

2,000

-

-

-

-

1,011

-

x.

StandChart

7,000

-

-

-

-

3,902

-

y.

JP Morgan

9,500

-

-

-

-

4,832

-

z.

HSBC, Jakarta Branch

6,000

-

-

-

-

3,222

-

aa.

HSBC, Jakarta Branch

7,500

-

-

-

-

4,021

-

ab.

JP Morgan

13,750

-

-

-

-

6,771

-

ac.

StandChart

8,000

-

-

-

-

4,542

-

ad.

StandChart

6,600

-

-

-

-

3,666

-

ae.

StandChart

3,000

-

-

-

-

1,486

-

af.

DBS

10,000

-

-

-

-

5,010

-

ag.

ING

7,000

-

-

-

-

3,538

-

ah.

DBS

7,000

-

-

-

-

3,528

-

ai.

DBS

10,000

-

-

-

-

5,497

-

aj.

JP Morgan

10,000

-

-

-

-

5,523

-

ak.

HSBC, Jakarta Branch

10,000

-

-

-

-

4,909

-

al.

ING

10,000

-

-

-

-

5,330

-

am.

ING

13,000

-

-

-

-

6,960

-

an.

DBS

13,000

-

-

-

-

6,859

-

ao.

ING

13,500

-

-

-

-

7,386

-

ap.

ING

10,000

-

-

-

-

5,478

-

aq.

ING

10,000

-

-

-

-

5,508

-

ar.

GSI

8,000

-

-

-

-

4,558

-

as.

GSI

13,000

-

-

-

-

7,550

-

at.

Royal Bank of Scotland (“RBS”)

12,000

-

-

-

-

6,370

-

au.

GSI

12,000

-

-

-

-

7,185

-

av.

GSI

12,500

-

-

-

-

7,338

-

aw.

ING

23,000

-

-

4,137

-

-

-

ax.

GSI

13,000

-

-

3,278

-

-

-

ay.

BNP Paribas

20,000

-

-

2,981

-

-

-

az.

Barclays

20,000

-

-

3,254

-

-

-

ba.

BNP Paribas

20,000

-

-

3,675

-

-

-

bb.

JP Morgan

20,000

-

-

4,427

-

-

-

bc.

ING

15,000

-

-

2,956

-

-

-

bd.

Barclays

15,000

-

-

2,166

-

-

-

be.

DBS

15,000

-

-

1,983

-

-

-

bf.

DBS

20,000

-

-

2,621

-

-

-

bg.

JP Morgan

25,000

-

-

77

-

-

-

bh.

DBS

15,000

-

-

140

-

-

-

bi.

Barclays

26,000

-

-

1,850

-

-

-

bj.

JP Morgan

30,000

-

-

2,231

-

-

-

bk.

BNP Paribas

25,000

-

-

2,356

-

-

-

bl.

ING

15,000

-

-

1,615

-

-

-

bm.

StandChart

12,000

-

-

-

-

-

-

bn.

BTMU Singapore

13,000

-

-

-

-

-

-

bo.

BNP Paribas

11,000

-

-

-

-

-

-

bp.

ING

28,000

-

-

-

-

-

-

bq.

BTMU Singapore

20,000

-

-

-

-

-

-

br.

BTMU Singapore

10,000

-

-

-

-

-

-

bs.

BTMU Singapore

13,000

-

-

-

-

-

-

bt.

DBS

20,000

-

-

-

-

-

-

bu.

DBS

20,000

-

-

-

-

-

-

bv.

Barclays

10,000

-

-

-

-

-

-

bw.

StandChart

15,000

-

-

-

-

-

-

bx.

CIMB Niaga

15,000

-

-

-

-

-

-

by.

JP Morgan

10,000

-

-

-

-

-

-

bz.

StandChart

20,000

-

-

-

-

-

-

ca.

DBS

18,000

-

-

-

-

-

-

cb.

BNP Paribas

20,000

-

-

-

-

-

-

cc.

Barclays

20,000

-

-

-

-

-

-

cd.

ING

20,000

-

-

-

-

-

-

ce.

Natixis

15,000

-

-

-

-

-

-

cf.

JP Morgan

15,000

-

-

-

-

-

-

cg.

JP Morgan

10,000

-

-

-

-

-

-

ch.

JP Morgan

15,000

-

-

-

-

-

-

ci.

CIMB Niaga

9,750

-

-

-

-

-

-

cj.

BNP Paribas

12,000

-

-

-

-

-

-

ck.

Barclays

25,000

-

-

-

-

-

-

cl.

CIMB Niaga

20,000

-

-

-

-

-

-

20. DERIVATIVES (continued)

Fair Value (Rp)

January 1, 2012 /

Notional

September 30, 2013

December 31, 2012

December 31, 2011

Amount

Receivable

Payable

Receivable

Payable

Receivable

Payable

(US$)

Currency Forward Contracts (continued):

cm.

CIMB Niaga

20,000

-

-

-

-

-

-

cn.

BNP Paribas

25,000

-

-

-

-

-

-

co.

DBS

20,000

-

-

-

-

-

-

cp.

Danareksa

10,000

-

-

-

-

-

-

cq.

Merrill Lynch

12,000

-

-

-

-

-

-

cr.

Merrill Lynch

14,500

-

-

-

-

-

-

cs.

Merrill Lynch

12,000

-

-

-

-

-

-

ct.

DBS

25,000

-

-

-

-

-

-

cu.

StandChart

12,000

-

-

-

-

-

-

cv.

BTMU

12,000

-

-

-

-

-

-

cw.

DBS

12,500

-

-

-

-

-

-

cx.

Danareksa

9,500

-

-

-

-

-

-

cy.

CIMB Niaga

11,000

-

-

-

-

-

-

cz.

CIMB Niaga

21,000

-

-

-

-

-

-

da.

StandChart

15,000

19,402

-

-

-

-

-

db.

CIMB Niaga

12,000

17,614

-

-

-

-

-

dc.

CIMB Niaga

12,000

17,579

-

-

-

-

-

dd.

BTMU

10,000

-

-

-

-

-

-

de.

DBS

5,000

-

-

-

-

-

-

df.

Merrill Lynch

13,000

847

-

-

-

-

-

dg.

CIMB Niaga

9,500

2,255

-

-

-

-

-

dh.

Barclays

14,000

-

1,141

-

-

-

-

di.

BNP Paribas

9,500

-

145

-

-

-

-

dj.

BNP Paribas

10,000

1,715

-

-

-

-

-

dk.

Barclays

10,000

2,429

-

-

-

-

-

dl.

BTMU

10,000

6,005

-

-

-

-

-

dm.

Barclays

10,000

2,624

-

-

-

-

-

dn.

BTMU

10,000

6,137

-

-

-

-

-

do.

BNP Paribas

10,000

6,795

-

-

-

-

-

dp.

Barclays

10,000

3,071

-

-

-

-

-

dq.

JP Morgan

10,000

2,392

-

-

-

-

-

dr.

BTMU

10,000

5,749

-

-

-

-

-

Sub-total

94,614

            1,286

39,747

-

137,211

-

Total

94,614

38,992

69,654

81,241

159,349

138,189

The net changes in fair value of the swap contracts, currency forward contracts and embedded derivative, swap income or cost, termination income or cost, and settlement of derivative instruments totaling Rp168,291 and (Rp24,682) for the nine-month periods ended September 30, 2013 and 2012, respectively, were credited (charged) to “Gain(Loss) on Change in Fair Value of Derivatives - Net”, which is presented in profit or loss.

20. DERIVATIVES (continued)

The following are the details of the contracts:

Cross Currency Swap Contracts

No.

Counter-parties

Contract Period and

Swap Amount

Annual Swap Premium Rate

Swap

Premium Payment Date

Amount of Swap Premium Paid / Amortized (Rp)

2013

2012

a.

StandChart
⁽¹⁾

January 11, 2006 - June 22, 2012

Swap Rp236,250 for US$25,000

4.78% of US$25,000

Every June 22 and

December 22

-

5,754

b.

StandChart
⁽²⁾

March 15, 2006 - June 22, 2012

Swap Rp228,550 for US$25,000

3.75% of US$25,000

Every June 22 and

December 22

-

4,514

c.

StandChart
⁽³⁾

May 12, 2006 - June 22, 2012

Swap Rp217,500 for US$25,000

3.45% of US$25,000

Every June 22 and

December 22

-

4,154

d.

MLIB
⁽⁴⁾

September 2, 2008 - June 12, 2013.

The Company will receive the following:

·

zero amount if the IDR/USD spot rate at termination date is less than or equal to Rp8,800 to US$1 (in full amounts)

·

certain U.S. dollar amount as arranged in the contract multiplied by (IDR/USD spot rate - Rp8,800) (in full amount) divided by IDR/USD spot rate if the IDR/USD spot rate at termination date is greater than Rp8,800 but is less than or equal to Rp12,000 to US$1 (in full amounts)

·

certain U.S. dollar amount as arranged in the contract multiplied by (Rp3,200 [in full amount] divided by IDR/USD spot rate) if the IDR/USD spot rate at termination date is greater than Rp12,000 to US$1 (in full amounts)

4.10% of US$25,000 up to June 12, 2011, and 4.10% of decreasing U.S. dollar amount as arranged in the contract up to June 12, 2013

Every June 12 and

December 12

2,223

3,114

e.

DBS
⁽⁵⁾

September 10, 2008 - June 12, 2013.

The Company will receive the following:

·

zero amount if the IDR/USD spot rate at the scheduled settlement date is at or less than Rp8,800 to US$1 (in full amounts)

·

certain U.S. dollar amount which is equal to U.S. dollar amount at scheduled settlement date multiplied by (IDR/USD spot rate - Rp8,800) (in full amount) divided by IDR/USD spot rate if the IDR/USD spot rate at settlement date is greater than Rp8,800 and is at or less than Rp12,000 to US$1 (in full amounts)

·

certain U.S. dollar amount which is equal to U.S. dollar amount at scheduled settlement date multiplied by (Rp12,000 - Rp8,800) (in full amounts) divided by IDR/USD spot rate if the IDR/USD spot rate at settlement date is greater than Rp12,000 to US$1 (in full amounts)

3.945% of US$25,000 up to June 12, 2011, and 3.945% of decreasing U.S. dollar amount as arranged in the contract up to June 12, 2013

Every June 12 and

December 12

1,703

2,370

⁽¹⁾

On June 22, 2012, this contract expired and the Company received settlement gain on the cross currency swap amounting to Rp575.

⁽²⁾

^{On June 22, 2012, this contract expired and the Company received settlement gain on the cross currency swap amounting to Rp8,275.

⁽³⁾

On June 22, 2012, this contract expired and the Company received settlement gain on the cross currency swap amounting to Rp19,325.

⁽⁴⁾

On June 12, 2013, December 12, 2012, June 13, 2012 and December 12, 2011, the Company used the option to exercise US$8,750, US$2,000, US$2,000 and US$6,000 of the contract amount, and received settlement gain from the exercise amounting to US$1,055 or equivalent to Rp10,482 on June 12, 2013, US$186 or equivalent to Rp1,793 on December 12, 2012, US$140 or equivalent to Rp1,325 on June 13, 2012 and US$189 or equivalent to Rp1,716 on December 12, 2011.

⁽⁵⁾

On June 12, 2013, December 12, 2012, June 12, 2012 and December 12, 2011, the Company used the option to exercise US$8,750, US$2,000, US$2,000 and US$6,000 of the contract amount, and received settlement gain from the exercise amounting to US$1,055 or equivalent to Rp10,482 on June 12, 2013, US$186 or equivalent to Rp1,793 on December 12, 2012, US$140 or equivalent to Rp1,324 on June 12, 2012 and US$189 or equivalent to Rp1,716 on December 12, 2011.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

20. DERIVATIVES (continued)

Cross Currency Swap Contracts (continued)

No.

Counter-

Contract Period and

Annual Swap Premium Rate

Swap

Amount of Swap Premium Paid /

Premium

Amortized (Rp)

parties

Swap Amount

Payment Date

2013

2012

f.

HSBC
⁽⁶⁾

August 23, 2012 - January 23, 2013

3.00% of US$10,000

Upfront

429

708

Swap Rp96,000 for US$10,000

premium of

US$300

(equivalent to

Rp2,851)

which was fully

paid on August

27, 2012. The

premium is

amortized over

the contract

period.

g.

Barclays
⁽⁷⁾

August 23, 2012 - January 23, 2013

2.94% of US$14,500

Upfront

609

1,006

Swap Rp139,200 for US$14,500

premium of

US$426

(equivalent to

Rp4,052)

which was fully

paid on August

27, 2012. The

premium is

amortized over

the contract

period.

h.

HSBC
⁽⁸⁾

August 23, 2012 - February 25, 2013

3.20% of US$14,000

Upfront

1,282

870

Swap Rp134,400 for US$14,000

premium of

US$448

(equivalent to

Rp4,258)

which was fully

paid on August

27, 2012. The

premium is

amortized over

the contract

period.

i.

HSBC
⁽⁹⁾

August 23, 2012 - March 25, 2013

3.70% of US$11,000

Upfront

1,518

687

Swap Rp105,600 for US$11,000

premium of

US$407

(equivalent to

Rp3,868)

which was fully

paid on August

27, 2012. The

premium is

amortized over

the contract

period.

Total

7,764

23,177

⁽⁶⁾

On January 25, 2013, this contract was terminated and the Company received settlement gain on the cross currency swap amounting to Rp430.

⁽⁷⁾

On February 8, 2013, this contract was terminated and the Company received settlement gain on the cross currency swap amounting to Rp2,204.

⁽⁸⁾

On February 27, 2013, this contract was terminated and the Company received settlement gain on the cross currency swap amounting to Rp1,176.

⁽⁹⁾

On March 27, 2013, this contract was terminated and the Company received settlement gain on the cross currency swap amounting to Rp1,375.

Cross currency swap contract with GSI (contract No. a) is structured to include credit-linkage with the Company as the reference entity and with the Company’s (i) bankruptcy, (ii) failure to pay on certain debt obligations or (iii) restructuring of certain debt obligations as the relevant credit events. Upon the occurrence of any of these credit events, the Company’s obligations and those of GSI under these swap contracts will be terminated without any further payments or settlements being made by or owed to either party, including a payment by either party of any marked-to-market value of the swap contracts.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

20.

DERIVATIVES (continued)

Interest Rate Swap Contracts

No.

Counter-parties

Contract Period

Annual Interest Swap Rate

Swap Income (Expense) Receipt (Payment) Date

Amount of Swap Expense Paid (Rp)

2013

2012

j.

HSBC

April 23, 2008 - November 27, 2016

5.42% of US$27,037, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.45% per annum

Every April 1 and October 1 up to October 2009, and every May 27 and November 27 up to termination date

2,747

3,074

k.

HSBC

April 23, 2008 -September 29, 2019

4.82% of US$44,200, the notional amount of which will decrease based on predetermined schedule, in exchange for U.S. dollar LIBOR plus 0.35% per annum

Every January 28 and July 28 up to July 2009, and every March 29 and September 29 up to termination date

5,766

12,438

l.

GSI
⁽¹²⁾

September 2, 2008 - June 12, 2013

(8.10% - underlyer return) of US$100,000 per annum, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum

Every June 10 and   December 10 up to June 2011, and every June 12 and December 12 up to termination date

-

21,068

m.

DBS
⁽¹³⁾

September 5, 2008 - June 12, 2013

5.625% of US$25,000 per annum, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum

Every June 10 and   December 10 up to December 2010, and every June 12 and December 12 up to termination date

-

1,811

n.

DBS
⁽¹⁴⁾

October 23, 2008 - June 12, 2013

5.28% of US$25,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum

Every March 25 and September 25 up to March 2011, and

every June 12 and    December 12 up to termination date

-

1,603

o.

BTMUFJ
⁽¹⁵⁾

December 1, 2008 - June 12, 2013

4.46% of US$25,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum

Every March 25 and September 25 up to March 2011, and

every June 12 and    December 12 up to termination date

-

1,111

p.

BTMUFJ
⁽¹⁶⁾

December 4, 2008 - June 12, 2013

4.25% of US$25,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum

Every March 25 and September 25 up to March 2011, and

every June 12 and    December 12 up to termination date

-

985

q.

BTMUFJ
⁽¹⁷⁾

December 12, 2008 - June 12, 2013

4.09% of US$25,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum

Every March 25 and September 25 up to March 2011, and

every June 12 and    December 12 up to termination date

-

889

r.

StandChart
⁽¹⁸⁾

December 19, 2008 - June 12, 2013

3.85% of US$40,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum

Every March 25 and September 25 up to March 2011, and

every June 12 and    December 12 up to termination date

-

1,191

s.

DBS
⁽¹¹⁾

December 22, 2008 - December 12, 2012

4.02% of US$26,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum

Every March 25 and September 25 up to March 2011, and

every June 12 and    December 12 up to termination date

-

881

t.

DBS
⁽¹¹⁾

January 21, 2009 - December 12, 2012

3.83% of US$26,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum

Every March 25 and September 25 up to March 2011, and

every June 12 and    December 12 up to termination date

-

762

u.

BTMUFJ
⁽¹⁰⁾

March 2, 2009 - June 12, 2012

4.10% of US$36,500, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum

Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date

-

1,321

Total

8,513

47,134

⁽¹⁰⁾

On June 12, 2012, this contract expired and the Company received zero settlement.

⁽¹¹⁾

On December 12, 2012, these contracts expired and the Company received zero settlement.

⁽¹²⁾

On June 12, 2013, this contract expired and the Company paid settlement loss on the interest rate swap amounting to (Rp25,854).

⁽¹³⁾

On June 12, 2013, this contract expired and the Company paid settlement loss on the interest rate swap amounting to (Rp1,406).

⁽¹⁴⁾

On June 12, 2013, this contract expired and the Company paid settlement loss on the interest rate swap amounting to (Rp1,257).

⁽¹⁵⁾

On June 12, 2013, this contract expired and the Company paid settlement loss on the interest rate swap amounting to (Rp903).

⁽¹⁶⁾

On June 12, 2013, this contract expired and the Company paid settlement loss on the interest rate swap amounting to (Rp813).

⁽¹⁷⁾

On June 12, 2013, this contract expired and the Company paid settlement loss on the interest rate swap amounting to (Rp743).

⁽¹⁸⁾
On June 12, 2013, this contract expired and the Company paid settlement loss on the interest rate swap amounting to (Rp1,024).

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

20.

DERIVATIVES (continued)

Currency Forward Contracts

No.

Counter-parties

Contract Period

IDR/USD Fixing Rate

Amount of Settlement Gain/(Loss)

(Rp)

(in full amounts)

2013

2012

v.

HSBC

August 10, 2011 - January 24, 2012

Rp8,698 to US$1

-

3,200

w.

JP Morgan

August 10, 2011 - January 24, 2012

Rp8,696 to US$1

-

578

x.

StandChart

August 10, 2011 - January 24, 2012

Rp8,696 to US$1

-

966

y.

JP Morgan

August 11, 2011 - January 24, 2012

Rp8,693 to US$1

-

2,774

z.

HSBC

August 11, 2011 - February 28, 2012

Rp8,714 to US$1

-

2,226

aa.

HSBC

August 11, 2011 - February 28, 2012

Rp8,715 to US$1

-

2,775

ab.

JP Morgan

August 12, 2011 - March 29, 2012

Rp8,764 to US$1

-

5,830

ac.

StandChart

August 15, 2011 - May 30, 2012

Rp8,785 to US$1

-

5,495

ad.

StandChart

August 15, 2011 - May 30, 2012

Rp8,787 to US$1

-

5,168

ae.

StandChart

August 16, 2011 - June 12, 2012

Rp8,788 to US$1

-

5,280

af.

DBS

August 19, 2011 - January 27, 2012

Rp8,708 to US$1

-

3,173

ag.

ING

August 19, 2011 - January 27, 2012

Rp8,706 to US$1

-

2,235

ah.

DBS

August 19, 2011 - January 27, 2012

Rp8,705 to US$1

-

2,242

ai.

DBS

August 19, 2011 - June 12, 2012

Rp8,819 to US$1

-

6,430

aj.

JP Morgan

August 19, 2011 - June 12, 2012

Rp8,826 to US$1

-

6,365

ak.

HSBC

August 19, 2011 - June 12, 2012

Rp8,832 to US$1

-

6,160

al.

ING

August 22, 2011 - January 12, 2012

Rp8,662 to US$1

-

5,405

am.

ING

August 22, 2011 - January 30, 2012

Rp8,679 to US$1

-

4,053

an.

DBS

August 22, 2011 - February 28, 2012

Rp8,715 to US$1

-

4,786

ao.

ING

August 22, 2011 - March 28, 2012

Rp8,737 to US$1

-

6,070

ap.

ING

August 23, 2011 - January 12, 2012

Rp8,644 to US$1

-

5,585

aq.

ING

August 23, 2011 - January 12, 2012

Rp8,647 to US$1

-

5,555

ar.

GSI

August 23, 2011 - January 12, 2012

Rp8,640 to US$1

-

4,500

as.

GSI

August 24, 2011 - January 27, 2012

Rp8,645 to US$1

-

4,940

at.

RBS

August 24, 2011 - February 10, 2012

Rp8,666 to US$1

-

3,901

au.

GSI

August 24, 2011 - February 29, 2012

Rp8,663 to US$1

-

6,005

av.

GSI

August 24, 2011 - February 29, 2012

Rp8,675 to US$1

-

6,107

aw.

ING

September 14, 2012 - January 11, 2013

Rp9,631 to US$1

4,564

-

ax.

GSI

September 17, 2012 - January 11, 2013

Rp9,560 to US$1

3,487

-

ay.

BNP Paribas

November 14, 2012 - February 8, 2013

Rp9,683 to US$1

20

-

az.

Barclays

November 29, 2012 - March 4, 2013

Rp9,697 to US$1

(560)

-

ba.

BNP Paribas

November 30, 2012 - March 4, 2013

Rp9,669 to US$1

-

-

bb.

JP Morgan

December 3, 2012 - March 5, 2013

Rp9,638 to US$1

862

-

20.

DERIVATIVES (continued)

Currency Forward Contracts (continued)

No.

Counter-parties

Contract Period

IDR/USD Fixing Rate

Amount of Settlement Gain/(Loss)

(Rp)

(in full amounts)

2013

2012

bc.

ING

December 4, 2012 - March 6, 2013

Rp9,666 to US$1

658

-

bd.

Barclays

December 5, 2012 - February 5, 2013

Rp9,690 to US$1

1,175

-

be.

DBS

December 5, 2012 - February 5, 2013

Rp9,695 to US$1

1,102

-

bf.

DBS

December 7, 2012 - February 11, 2013

Rp9,702 to US$1

496

-

bg.

JP Morgan

December 10, 2012 - March 13, 2013

Rp9,865 to US$1

(4,425)

-

bh.

DBS

December 10, 2012 - March 12, 2013

Rp9,853 to US$1

(2,475)

-

bi.

Barclays

December 12, 2012 - February 11, 2013

Rp9,770 to US$1

(1,118)

-

bj.

JP Morgan

December 12, 2012 - February 11, 2013

Rp9,765 to US$1

(1,140)

-

bk.

BNP Paribas

December 17, 2012 - March 20, 2013

Rp9,775 to US$1

(1,425)

-

bl.

ING

December 18, 2012 - March 20, 2013

Rp9,770 to US$1

(780)

-

bm.

Standchart

January 22, 2013 - March 27, 2013

Rp9,815 to US$1

(1,080)

-

bn.

BTMU Singapore

January 22, 2013 - May 3, 2013

Rp9,834 to US$1

(1,457)

-

bo.

BNP Paribas

February 27, 2013 - May 3, 2013

Rp9,721 to US$1

11

-

bp.

ING

February 28, 2013 - May 3, 2013

Rp9,697 to US$1

701

-

bq.

BTMU Singapore

February 6, 2013 - May 3, 2013

Rp9,709 to US$1

937

-

br.

BTMU Singapore

February 25, 2013 - April 9, 2013

Rp9,732 to US$1

239

-

bs.

BTMU Singapore

February 27, 2013 - May 3, 2013

Rp9,743 to US$1

(273)

-

bt.

DBS

February 8, 2013 - April 9, 2013

Rp9,694 to US$1

1,236

-

bu.

DBS

February 21, 2013 - April 9, 2013

Rp9,731 to US$1

498

-

bv.

Barclays

February 28, 2013 - May 13, 2013

Rp9,708 to US$1

141

-

bw.

Standchart

February 4, 2013 - May 28, 2013

Rp9,795 to US$1

105

-

bx.

CIMB Niaga

February 11, 2013 - May 28, 2013

Rp9,729 to US$1

1,095

-

by.

JP Morgan

March 6, 2013 - May 10, 2013

Rp9,735 to US$1

60

-

bz.

Standchart

March 11, 2013 - May 28, 2013

Rp9,787 to US$1

300

-

ca.

DBS

March 13, 2013 - May 28, 2013

Rp9,779 to US$1

414

-

cb.

BNP Paribas

March 14, 2013 - June 5, 2013

Rp9,790 to US$1

2,387

-

cc.

Barclays

March 14, 2013 - June 5, 2013

Rp9,788 to US$1

2,427

-

cd.

ING

March 15, 2013 - June 3, 2013

Rp9,784 to US$1

2,506

-

ce.

Natixis

March 19, 2013 - June 5, 2013

Rp9,793 to US$1

1,745

-

cf.

JP Morgan

March 19, 2013 - June 5, 2013

Rp9,787 to US$1

1,835

-

cg.

JP Morgan

March 19, 2013 - July 26, 2013

Rp9,870 to US$1

3,839

-

ch.

JP Morgan

March 19, 2013 - July 26, 2013

Rp9,870 to US$1

5,759

-

ci.

CIMB Niaga

March 20, 2013 - June 17, 2013

Rp9,835 to US$1

1,014

-

cj.

BNP Paribas

March 22, 2013 - July 3, 2013

Rp9,900 to US$1

1,004

-

ck.

Barclays

March 22, 2013 - July 3, 2013

Rp9,899 to US$1

2,116

-

cl.

CIMB Niaga

March 26, 2013 - June 5, 2013

Rp9,833 to US$1

620

-

cm.

CIMB Niaga

March 26, 2013 - June 5, 2013

Rp9,817 to US$1

620

-

cn.

BNP Paribas

March 27, 2013 - June 5, 2013

Rp9,815 to US$1

2,362

-

co.

DBS

March 27, 2013 - June 5, 2013

Rp9,814 to US$1

840

-

cp.

Danareksa

March 26, 2013 - June 5, 2013

Rp9,834 to US$1

220

-

cq.

Merrill Lynch

April 9, 2013 - July 3, 2013

Rp9,807 to US$1

3,335

-

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

20.

DERIVATIVES (continued)

Currency Forward Contracts (continued)

No.

Counter-parties

Contract Period

IDR/USD Fixing Rate

Amount of Settlement Gain/(Loss)

(Rp)

(in full amounts)

2013

2012

cr.

Merrill Lynch

April 10, 2013 - July 3, 2013

Rp9,755 to US$1

2,130

-

cs.

Merrill Lynch

April 25, 2013 - August 2, 2013

Rp9,805 to US$1

6,172

-

ct.

DBS

April 26, 2013 - August 2, 2013

Rp9,802 to US$1

12,937

-

cu.

StandChart

May 27, 2013 - July 26, 2013

Rp9,884 to US$1

4,728

-

cv.

BTMU

May 31, 2013 - July 26, 2013

Rp9,929 to US$1

4,188

-

cw.

DBS

June 5, 2013 - August 26, 2013

Rp9,965 to US$1

11,988

-

cx.

Danareksa

June 5, 2013 - September 16, 2013

Rp9,996 to US$1

14,944

-

cy.

CIMB Niaga

June 12, 2013 - September 16, 2013

Rp9,988 to US$1

15,785

-

cz.

CIMB Niaga

June 20, 2013 - July 8, 2013

Rp10,015 to US$1

5,523

-

da.

StandChart

June 21, 2013 - November 25, 2013

Rp10,240 to US$1

-

-

db.

CIMB Niaga

June 27, 2013 - January 6, 2014

Rp10,285 to US$1

-

-

dc.

CIMB Niaga

June 27, 2013 - January 6, 2014

Rp10,282 to US$1

-

-

dd.

BTMU

July 15, 2013 - August 16, 2013

Rp10,140 to US$1

5,830

-

de.

DBS

July 15, 2013 - August 16, 2013

Rp10,125 to US$1

2,990

-

df.

Merrill Lynch

August 21, 2013 - November 21, 2013

Rp11,660 to US$1

-

-

dg.

CIMB Niaga

August 22, 2013 - December 20, 2013

Rp11,502 to US$1

-

-

dh.

Barclays

August 30, 2013 - October 1, 2013

Rp11,375 to US$1

-

-

di.

BNP Paribas

September 9, 2013 - October 11, 2013

Rp11,538 to US$1

-

-

dj.

BNP Paribas

September 12, 2013 - January 6, 2014

Rp11,720 to US$1

-

-

dk.

Barclays

September 13, 2013 - January 6, 2014

Rp11,680 to US$1

-

-

dl.

BTMU

September 13, 2013 - January 6, 2014

Rp11,675 to US$1

-

-

dm.

Barclays

September 18, 2013 - January 6, 2014

Rp11,660 to US$1

-

-

dn.

BTMU

September 18, 2013 - January 6, 2014

Rp11,661 to US$1

-

-

do.

BNP Paribas

September 19, 2013 - January 6, 2014

Rp11,199 to US$1

-

-

dp.

Barclays

September 24, 2013 - November 6, 2014

Rp11,362 to US$1

-

-

dq.

JP Morgan

September 24, 2013 - November 6, 2014

Rp11,407 to US$1

-

-

dr.

BTMU

September 24, 2013 - November 1, 2014

Rp11,440 to US$1

-

-

Total

123,212

117,804

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

21.

FINANCIAL ASSETS AND LIABILITIES

The Group has various financial assets such as trade and other accounts receivable, and unrestricted and restricted cash and cash equivalents, which arise directly from the Group’s operations. The Group’s principal financial liabilities, other than derivatives, consist of loans and bonds payable, procurement payable, and trade accounts payable and others. The main purpose of these financial liabilities is to finance the Group’s operations. The Company also enters into derivative transactions, primarily cross currency swaps, interest rate swaps, and currency forward contracts, for the purpose of managing its foreign exchange and interest rate exposures emanating from the Company’s loans and bonds payable in foreign currencies.

The following table sets forth the carrying values and estimated fair values of the Group’s financial instruments that are carried in the consolidated statements of financial position as of                     September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011:

Carrying Amount

Fair Value

January 1,

January 1,

2012 /

2012 /

September 30,

December 31,

December 31,

September 30,

December 31,

December 31,

2013

2012

2011

2013

2012

2011

Current Financial Assets

Cash and cash equivalents

2,309,074

3,917,236

2,224,206

2,309,074

3,917,236

2,224,206

Accounts receivable - trade

and others - net

2,803,764

2,061,160

1,505,756

2,803,764

2,061,160

1,505,756

Derivative assets

94,614

69,654

159,349

94,614

69,654

159,349

Other current financial

assets - net

18,580

13,382

24,790

18,580

13,382

24,790

Total current financial

assets

5,226,032

6,061,432

3,914,101

5,226,032

6,061,432

3,914,101

Non-current Financial Assets

Due from related parties

7,833

10,358

10,654

6,827

9,539

8,967

Other non-current

financial assets - net

1,523,518

1,543,140

212,270

1,522,304

1,541,388

207,991

Total non-current

financial assets

1,531,351

1,553,498

222,924

1,529,131

1,550,927

216,958

Total Financial Assets

6,757,383

7,614,930

4,137,025

6,755,163

7,612,359

4,131,059

Current Financial Liabilities

Short-term bank loan

1,499,769

299,529

1,499,256

1,499,769

299,529

1,499,256

Accounts payable - trade

378,491

231,737

319,058

378,491

231,737

319,058

Procurement payable

3,440,667

2,737,850

3,475,862

3,440,667

2,737,850

3,475,862

Accrued expenses

1,800,677

1,961,285

1,895,613

1,800,677

1,961,285

1,895,613

Deposits from customers

47,821

43,825

37,265

47,821

43,825

37,265

Derivative liabilities

38,992

81,241

138,189

38,992

81,241

138,189

Loans payable - current

portion

2,303,418

2,669,218

3,300,537

2,406,510

2,791,147

3,927,062

Bonds payable - current

portion

1,628,618

1,329,175

41,989

1,652,080

1,343,205

43,137

Other current financial

liabilities

372,276

289,164

71,828

372,276

289,164

71,828

Total current financial

liabilities

11,510,729

9,643,024

10,779,597

11,637,283

9,778,983

11,407,270

Non-current Financial

Liabilities

Due to related parties

35,170

42,789

15,480

30,653

39,405

13,030

Obligations under finance lease

-

      net of current maturities

3,455,048

3,101,910

770,081

3,455,048

3,101,910

770,081

Loans payable -

non-current portion

3,175,285

3,703,822

6,425,779

2,816,515

3,331,132

5,864,354

Bonds payable -

non-current portion

13,634,015

13,986,507

12,138,353

14,236,202

15,318,676

13,334,903

Other non-current financial liabilities

43,477

69,273

107,433

42,415

66,433

101,068

Total non-current

financial liabilities

20,342,995

20,904,301

19,457,126

20,580,833

21,857,556

20,083,436

Total Financial Liabilities

31,853,724

30,547,325

30,236,723

32,218,116

31,636,539

31,490,706

21.

FINANCIAL ASSETS AND LIABILITIES (continued)

The fair values of the financial assets and liabilities are presented at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate such value:

Short-term financial assets and liabilities:

·

Short-term financial instruments with remaining maturities of one year or less (cash and cash equivalents, trade and other accounts receivable, other current financial assets, short-term loan, trade accounts payable, procurement payable, accrued expenses, deposits from customers and other current financial liabilities).

These financial instruments approximate their carrying amounts largely due to their short-term maturities.

·

Derivative financial instruments

Cross currency swap contracts

These derivatives are measured at their fair values using internal valuation techniques as no quoted market prices exist for such instruments. The principal technique adopted to value these instruments is the use of discounted cash flows. The key inputs include interest rate yield curves, foreign exchange rates, Credit Default Spread (“CDS”), and the spot price of the underlying instruments.

Interest rate swap contracts

These derivatives are measured at their fair values, computed using discounted cash flows based on observable market inputs which include interest rate yield curves and payment dates.

Currency forward contracts

These derivatives are measured at their fair values, computed using discounted cash flows based on observable market inputs which include foreign exchange rates, payment dates and the spot price of the underlying instruments.

Long-term financial assets and liabilities:

·

Long-term fixed-rate and variable-rate financial liabilities (unquoted loans and bonds payable)

The fair value of these financial liabilities is determined by discounting future cash flows using applicable rates from observable current market transactions for instruments with similar terms, credit risk and remaining maturities.

·

Other long-term financial assets and liabilities (due from/to related parties, obligations under finance lease and other non-current financial assets)

Estimated fair value is based on discounted value of future cash flows adjusted to reflect counterparty risk (for financial assets) and the Group’s own credit risk (for financial liabilities) and using risk-free rates for similar instruments.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

21.

FINANCIAL ASSETS AND LIABILITIES (continued)

Long-term financial assets and liabilities (continued):

·

Financial instruments quoted in an active market

The fair value of the bonds issued by the Company which are traded in an active market is determined with reference to their quoted market prices.

For equity investments classified as available-for-sale investments, the fair value is determined based on the latest market quotation as published by the Indonesia Stock Exchange as of                  September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011.

Fair Value Hierarchy

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. The assessment of the significance of a particular input to the fair value measurements requires judgment, and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

The best evidence of fair value is quoted prices in an active market. If the market for a financial instrument is not active, an entity establishes fair value by using a valuation technique. The objective of using a valuation technique is to establish what the transaction price would have been on the measurement date in an arm's length exchange motivated by normal business considerations. Valuation techniques include using recent arm's length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. If there is a valuation technique commonly used by market participants to price the instrument and that technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions, the entity uses that technique. The chosen valuation technique makes maximum use of market inputs and relies as little as possible on entity-specific inputs. It incorporates all factors that market participants would consider in setting a price and is consistent with accepted economic methodologies for pricing financial instruments. Periodically, the Company calibrates the valuation technique and tests it for validity using prices from any observable current market transactions in the same instrument (i.e., without modification or repackaging) or based on any available observable market data.

The Company’s fair value hierarchy as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011 is as follows:

September 30, 2013

Quoted prices

Significant

in active

and

markets for

observable

identical

inputs,

Significant

assets or

directly or

unobservable

liabilities

indirectly

inputs

Total

(Level 1)

(Level 2)

(Level 3)

Current Financial Assets

Derivative assets

94,614

-

94,614

-

Non-current Financial Assets

Other non-current financial assets - net

1,402,984

1,402,984

-

-

Total Financial Assets

1,497,598

1,402,984

94,614

-

Current Financial Liabilities

Derivative liabilities

38,992

-

38,992

-

21. FINANCIAL ASSETS AND LIABILITIES (continued)

Fair Value Hierarchy (continued)

December 31, 2012

Quoted prices

Significant

in active

and

markets for

observable

identical

inputs,

Significant

assets or

directly or

unobservable

liabilities

indirectly

inputs

Total

(Level 1)

(Level 2)

(Level 3)

Current Financial Assets

Derivative assets

69,654

-

69,654

-

Non-Current Financial Assets

Other non-current financial assets

1,367,010

1,367,010

-

-

Total Financial Assets

1,436,664

1,367,010

69,654

-

Current Financial Liabilities

Derivative liabilities

81,241

-

81,241

-

January 1, 2012 / December 31, 2011

Quoted prices

Significant

in active

and

markets for

observable

identical

inputs,

Significant

assets or

directly or

unobservable

liabilities

indirectly

inputs

Total

(Level 1)

(Level 2)

(Level 3)

Current Financial Assets

Derivative assets

159,349

-

159,349

-

Current Financial Liabilities

Derivative liabilities

138,189

-

138,189

-

Embedded derivatives

49,518

-

49,518

-

Total Financial Liabilities

187,707

-

187,707

-

For the nine-month period ended September 30, 2013 and years ended December 31, 2012 and January 1, 2012 / December 31, 2011, there were no transfers between Level 1 and Level 2 fair value measurements.

22.

EMPLOYEE BENEFIT OBLIGATIONS - NET OF CURRENT PORTION

This account consists of the non-current portions of employee benefit obligations as follows:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Post-retirement healthcare (Note 30)

728,460

632,737

555,752

Labor Law 13 (Note 30)

295,137

249,314

194,329

Service award

47,600

41,479

35,071

Accumulated leave benefits

3,370

2,694

2,161

Total

1,074,567

926,224

787,313

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

23. CAPITAL STOCK

The Company’s capital stock ownership as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011 is as follows:

Number of

Percentage

Shares Issued

of Ownership

Stockholders

and Fully Paid

Amount

(%)

September 30, 2013

A Share

Government

1

-

-

B Shares

Ooredoo Asia, Pte. Ltd.

3,532,056,600

353,206

65.00

Government

776,624,999

77,662

14.29

SKAGEN Funds (SKAGEN AS)

                   297,046,950

29,705

5.46

Director:

Fadzri Sentosa

10,000

1

0.00

Others (each holding below 5%)

                    828,194,950

82,819

15.25

Total

5,433,933,500

543,393

100.00

December 31, 2012

A Share

Government

1

-

-

B Shares

Ooredoo Asia, Pte. Ltd.

3,532,056,600

353,206

65.00

Government

776,624,999

77,662

14.29

SKAGEN Funds (SKAGEN AS)

299,382,400

29,938

5.51

Director:

Fadzri Sentosa

10,000

1

0.00

Others (each holding below 5%)

825,859,500

82,586

15.20

Total

5,433,933,500

543,393

100.00

January 1, 2012 / December 31, 2011

A Share

Government

1

-

-

B Shares

Ooredoo Asia, Pte. Ltd.

3,532,056,600

353,206

65.00

Government

776,624,999

77,662

14.29

SKAGEN Funds (SKAGEN AS)

305,498,450

30,550

5.62

Director:

Fadzri Sentosa

10,000

1

0.00

Others (each holding below 5%)

819,743,450

81,974

15.09

Total

5,433,933,500

543,393

100.00

The “A” share is a special share held by the Government and has special voting rights. The material rights and restrictions which are applicable to the “B” shares are also applicable to the “A” share, except that the Government may not transfer the “A” share, which has a veto right with respect to                                (i) amendment to the objective and purposes of the Company; (ii) increase of capital without pre-emptive rights; (iii) merger, consolidation, acquisition and demerger; (iv) amendment to the provisions regarding the rights of “A” share as stipulated in the Articles of Association; and (v) dissolution, bankruptcy and liquidation of the Company. The holder of “A” share also has the right to appoint one director and one commissioner of the Company.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

24.

REVENUES

The breakdown of this account for the nine-month periods ended September 30, 2013 and 2012 consists of the following:

2013

2012

Cellular

Usage charges

6,992,501

6,319,365

Value-added services

6,207,325

5,777,510

Interconnection services (Note 36)

1,879,967

1,468,612

Tower leasing (Notes 2u and 33j)

419,664

375,943

Monthly subscription charges

92,882

102,683

Upfront discount and Customer Loyalty Program (Notes 2k and 2u)

(1,283,567)

(746,352)

Others

170,903

157,770

Sub-total

14,479,675

13,455,531

MIDI

Internet Protocol Virtual Private Network (IP VPN)

539,827

551,097

Internet

468,131

302,633

Multiprotocol Label Switching (MPLS)

280,326

202,797

World link and direct link

249,830

217,963

Application services

193,848

166,216

Satellite lease

188,749

149,929

Leased line

143,199

102,908

Digital data network

81,542

84,378

Frame net

72,535

98,257

Value added service (Note 2u)

34,163

106,108

Others

180,719

80,395

Sub-total

2,432,869

2,062,681

Fixed Telecommunications

International Calls

739,322

587,703

Fixed Line

100,748

89,599

Fixed Wireless

46,645

79,876

Sub-total

886,715

757,178

Total

17,799,259

16,275,390

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

24.

REVENUES (continued)

The details of net revenues (included as part of cellular revenue - value added services) received by the Company from agency relationships for the nine-month periods ended September 30, 2013 and 2012 are as follows:

2013

2012

Gross revenues

6,330,582

5,849,155

Compensation to value added service providers

(123,257)

(71,645)

Net revenues

6,207,325

5,777,510

Operating revenues from related parties amounted to Rp1,592,027 and Rp1,263,762 for the nine-month periods ended September 30, 2013 and 2012, respectively. These amounts represent 8.94% and 7.76% of the total operating revenues for the nine-month periods ended September 30, 2013 and 2012, respectively.

The operating revenues from interconnection services are presented on a gross basis.

25.

EXPENSES - COST OF SERVICES

The breakdown of this account for the nine-month periods ended September 30, 2013 and 2012 consists of the following:

2013

2012

Interconnection (Note 36)

2,239,894

1,784,486

Radio frequency fee (Notes 33l and 35)

1,654,292

1,457,738

Maintenance

688,659

584,973

Utilities

655,587

637,582

Rent (Notes 2u and 33k)

579,657

520,413

Blackberry access fee

394,565

378,200

Leased circuits

373,393

288,172

USO (Note 35)

204,610

203,147

Cost of SIM cards and pulse reload vouchers

180,261

166,218

Concession fee (Note 35)

109,019

101,868

Installation

102,027

120,944

Delivery and transportation

89,396

83,357

License

26,920

37,550

Billing and collection

23,848

29,707

Cost of handsets and modems

5,523

9,857

Others

60,053

58,059

Total

7,387,704

6,462,271

Interconnection relates to the expenses for the interconnection between the Company’s telecommunications networks and those owned by Telkom or other telecommunications carriers (Note 2k).

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

26. EXPENSES - PERSONNEL

The breakdown of this account for the nine-month periods ended September 30, 2013 and 2012 is as follows

:

2013

2012

Salaries

444,764

412,411

Incentives and other employee benefits

       248,521

231,852

Employee income tax

159,416

126,377

Bonuses

121,584

101,384

Post-retirement healthcare benefits (Note 30)

104,413

68,682

Separation, appreciation and compensation expense

under Labor Law No. 13/2003 (Note 30)

49,518

42,738

Medical expense

44,694

43,498

Pension (Note 30)

14,546

11,814

Early retirement**

2,759

                     -

Severance benefits under Voluntary Separation Scheme (“VSS”)*

                   -

6,330

Others

  19,585

7,396

Total

1,209,800

1,052,482

*

On January 20, 2011 and January 2, 2012, the Company’s and Lintasarta’s Boards of Directors issued Directors’ Decree No. 003/Direksi/2011 and Directors’ Decree No. 015/Direksi/40000/2012, regarding the Organizational Restructuring Program through an offering scheme on the basis of mutual agreement between the Company / Lintasarta and certain employees (VSS), that became effective on the same date. For the nine-month period ended September 30, 2012 , there were 24 employees of Lintasarta who availed themselves of the scheme, and the benefits paid amounted to Rp6,330.

**On June 27, 2006, the Company’s Directors issued Decree No. 051/DIREKSI/2006, “Additional Benefits for Voluntarily Resigned Employees”. Under this decree, employees qualified for early retirement and who voluntarily resigned after the approval from the Board of Directors were given benefits of additional remuneration, traveling and training package. For the nine-month period ended September 30, 2013, there were 11 employees who took the option.

The personnel expenses capitalized to properties under construction and installation for the            nine-month periods ended September 30, 2013 and 2012 amounted to Rp37,732and             Rp40,125, respectively.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

27.

EXPENSES - GENERAL AND ADMINISTRATION

The breakdown of this account for the nine-month periods ended September 30, 2013 and 2012 consists of the following:

2013

2012

Professional fees (Note 33e)

205,471

111,110

Rent

100,811

83,825

Provision for impairment of receivables - net (Note 5)

72,941

65,751

Transportation

46,157

43,976

Insurance

24,439

29,161

Training, education and research

21,652

13,597

Office

20,989

21,649

Public relations

15,996

7,213

Social activities

15,676

16,509

Utilities

10,558

10,471

Communication

5,083

5,770

Others (each below Rp5,000)

46,499

34,291

Total

586,272

443,323

28.

FINANCING COST

The breakdown of this account for the nine-month periods ended September 30, 2013 and 2012 consists of the following:

2013

2012

Interest on loans

1,237,737

1,314,833

Finance charges under finance lease

330,291

135,224

Amortization of debt and bonds issuance

     costs, consent solicitation fees and discount (Notes 14, 18 and 19)

44,262

70,756

Interest expense from Lintasarta’s USO Project

7,218

8,672

Bank charges

1,925

4,420

Total

1,621,433

1,533,905

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

29.

GAIN ON TOWER SALE

On February 7, 2012, the Company entered into an Asset Sale Agreement with PT Tower Bersama Infrastructure Tbk and its subsidiary, PT Solusi Menara Bersama (collectively referred to as “Tower Bersama”), whereby the Company agreed to sell 2,500 of its telecommunication towers to Tower Bersama for a total consideration of US$518,500, consisting of US$406,000 to be paid upfront and a maximum potential deferred payment of US$112,500. The upfront payment includes PT Tower Bersama Infrastructure Tbk's shares of not less than 5% of the increase in its capital stock (upon the Rights Issue of PT Tower Bersama Infrastructure Tbk). Based on the agreement, the Company also agreed to lease back the spaces in the 2,500 telecommunication towers for a 10-year period with fixed monthly lease rate of US$1,300 per tower slot (in full amount). The leases have an option to be renewed for a further 10-year period.

On August 2, 2012, the Company and Tower Bersama closed the deal on the sale-and-leaseback transactions of 2,500 telecommunication towers. On the closing date of such transaction, the Company received cash amounting to US$326,289 (equivalent to Rp3,092,894) and obtained 5% ownership (equal to 239,826,310 shares) in Tower Bersama with a value of US$103,101 (equivalent to Rp977,292) (Note 12).

The total consideration of US$429,390 (equal to Rp4,070,187) is allocated to the sales of property and equipment amounting to Rp3,870,600 and the remainder is allocated to prepaid land lease and existing tower lease contracts from the 2,500 towers. The total carrying amount of the separately identifiable components of the transaction is Rp1,534,494 which includes the carrying amount of property and equipment amounting to Rp1,372,674. As of the agreement closing date, the Company recorded the excess of the selling price over the carrying amounts amounting to Rp2,535,693 (including the Rp2,497,926 from the sale of property and equipment) as “Gain on Sale of Towers” of Rp1,125,192, and “Deferred Gain on Sale-and-Leaseback Transactions” of Rp1,410,501. The deferred gain will be amortized over the term of the lease, being 10 years.

For the nine-month period ended September 30, 2012, the Company recognized total “Gain on Sale of Towers” of Rp1,150,780, which includes the amortization of the “Deferred Gain on Sale-and-Leaseback Transactions”. As of September 30, 2013 and December 31, 2012, the balances of the current portion of outstanding deferred gain on sale-and-leaseback transactions amounting to Rp141,050 each are presented as part of “Other Current Liabilities”, whilethe balances of the Iong-term portion amounting to Rp1,140,155 and Rp1,210,680, respectively, are presented as part of “Other Non-current Liabilities”.

For the nine-month period ended September 30, 2013, the Company recorded amortization of deferred gain on sale-and-leaseback transactions amounting to Rp105,788.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

30.

PENSION PLAN

The Company, Satelindo and Lintasarta have defined benefit and defined contribution pension plans covering substantially all of their respective qualified permanent employees.

Defined Benefit Pension Plan

The Company, Satelindo and Lintasarta provide defined benefit pension plans to their respective employees under which pension benefits to be paid upon retirement are based on the employees’ most recent basic salary and number of years of service. PT Asuransi Jiwasraya (“Jiwasraya”), a state-owned life insurance company, manages the plans. Pension contributions are determined by periodic actuarial calculations performed by Jiwasraya.

Based on an amendment dated December 22, 2000 of the Company’s pension plan, which was further amended on March 29, 2001, the benefits and the premium payment pattern were changed.

Before the amendment, the premium was regularly paid annually until the plan would be fully funded and the benefits consisted of retirement benefit (regular monthly or lump-sum pension) and death insurance. In conjunction with the amendment, the plan would be fully funded after making installment payments up to January 2002 of the required amount to fully fund the plan determined as of September 1, 2000. The amendment also includes an additional benefit in the form of thirteenth-month retirement benefit, which is payable annually 14 days before Idul Fitri (“Moslem Holiday”).

The amendment covers employees registered as participants of the pension plan as of

September 1, 2000 and includes an increase in basic salary pension by 9% compounded annually starting from September 1, 2001. The amendment also stipulates that there will be no increase in the premium even in cases of mass employee terminations or changes in marital status.

The total premium installments based on the amendment amounted to Rp355,000 and were paid on due dates.

On March 1, 2007, the Company entered into an agreement with Jiwasraya to provide defined death insurance plan to 1,276 employees as of January 1, 2007, who are not covered by the defined benefit pension plan as stated above. Based on the agreement, a participating employee will receive:

·

Expiration benefit equivalent to the cash value at the normal retirement age, or

·

Death benefit not due to accident equivalent to 100% of insurance money plus cash value when the employee dies not due to accident, or

·

Death benefit due to accident equivalent to 200% of insurance money plus cash value when the employee dies due to accident.

The premium of Rp7,600 was fully paid on March 29, 2007. Subsequently, in August 2007, February to December 2008, January to December 2009, January to December 2010, January to December 2011, January to December 2012 and January to September 2013, the Company made payments for additional premium of Rp275 for additional 55 employees, Rp805 for additional 161 employees, Rp415 for additional 81 employees, Rp120 for additional 14 employees, Rp378 for additional 41 employees, Rp883 for additional 143 employees and Rp425 for additional 57 employees, respectively.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

30.

PENSION PLAN (continued)

Defined Benefit Pension Plan (continued)

On June 25, 2003, Satelindo entered into an agreement with Jiwasraya to amend the benefits and premium payment pattern of the former’s pension plan. The amendment covers employees registered as participants of the pension plan as of December 25, 2002 up to June 25, 2003. Other new conditions include the following:

·

An increase in pension basic salary at 6% compounded annually starting from December 25, 2002

·

Thirteenth-month retirement benefit, which is payable annually 14 days before Idul Fitri

·

An increase in periodic payment of retirement benefit at 6% compounded annually starting one year after receiving periodic retirement benefit for the first time

·

If the average annual interest rate of time deposits of government banks exceeds 15%, the participants’ retirement benefit will be increased by a certain percentage in accordance with the formula agreed by both parties.

On April 15, 2005, Lintasarta entered into an agreement with Jiwasraya to replace their existing agreement. Based on the new agreement, the benefits and the premium payment pattern were changed. This agreement is effective starting January 1, 2005. The total premium installments based on the agreement amounted to Rp61,623, which is payable in 10 annual installments starting 2005 until 2015.

The new agreement covers employees registered as participants of the pension plan as of

April 1, 2003. The conditions under the new agreement include the following:

·

An increase in pension basic salary by 3% (previously was estimated at 8%) compounded annually starting April 1, 2003

·

An increase in periodic payment of retirement benefit at 5% compounded annually starting one year after receiving periodic retirement benefit for the first time

·

If the average annual interest rate of time deposits of government banks exceeds 15%, the participants’ retirement benefit will be increased by a certain percentage in accordance with the formula agreed by both parties.

On May 2, 2005, Lintasarta entered into an agreement with Jiwasraya to amend the above agreement. The amendment covers employees registered as participants of the pension plan as of April 1, 2003 up to November 30, 2004 with additional 10 annual premium installments totalling Rp1,653 which are payable starting 2005 until 2015.

The contributions made by Lintasarta to Jiwasraya amounted to Rp9,653 each for the nine-month periods ended September 30, 2013 and 2012.

30.

PENSION PLAN (continued)

Defined Benefit Pension Plan (continued)

The net periodic pension cost for the pension plans of the Company and Lintasarta for the           nine-month periods ended September 30, 2013 and 2012 was calculated based on actuarial valuations as of December 31, 2012 and 2011, respectively. The actuarial valuations were prepared by an independent actuary, using the projected-unit-credit method and applying the following assumptions:

2013

2012

Annual discount rate

6.0%

7.0 - 7.5%

Expected annual rate of return on plan assets

4.5 - 8.0%

4.5 - 9.0%

Annual rate of increase in compensation

3.0 - 9.0%

3.0 - 9.0%

Mortality rate (Indonesian Mortality Table - TMI)

TMI 2011

TMI 1999

a.

The composition of the net periodic pension cost for the nine-month periods ended              September 30, 2013 and 2012 is as follows:

September 30, 2013

The Company

Lintasarta

Total

Interest cost

21,623

2,583

24,206

Service cost

21,072

2,792

23,864

Amortization of unrecognized actuarial loss

-

1,348

1,348

Return on plan assets

(29,735)

(3,035)

(32,770)

Immediate recognition of past service

     cost - vested benefit

-

(2,102)

(2,102)

Net periodic pension cost (Note 26)

12,960

1,586

14,546

September 30, 2012

The Company

Lintasarta

Total

Interest cost

21,104

2,942

24,046

Service cost

19,500

2,702

22,202

Amortization of unrecognized actuarial loss

-

889

889

Return on plan assets

(31,370)

(3,953)

(35,323)

Net periodic pension cost (Note 26)

9,234

2,580

11,814

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

30.

PENSION PLAN (continued)

Defined Benefit Pension Plan (continued)

b.

The funded status of the plans as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011 is as follows:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Plan assets at fair value

625,734

576,335

538,902

Projected benefit obligation

(602,279)

(554,209)

(463,074)*

Excess of plan assets over projected

benefit obligation

23,455

22,126

75,828

Unrecognized actuarial loss

61,858

68,175

29,464

Total prepaid pension cost

85,313

90,301

105,292

^{^{* net of curtailment effect during 2011 due to VSS (Note 26)}

c.

The movements in the fair value of plan assets for the nine-month period ended                   September 30, 2013 and years ended December 31, 2012 and 2011 are as follows:

September 30, 2013 (NineMonths)

The Company

Lintasarta

Total

Fair value of plan assets

at beginning of period

513,316

63,019

576,335

Expected return on plan assets

29,735

3,035

32,770

Actuarial gain (loss) on plan assets

11,567

(5,016)

6,551

Contributions

425

9,653

10,078

Fair value of plan assets at end of period

555,043

70,691

625,734

December 31, 2012 (One Year)

The Company

Lintasarta

Total

Fair value of plan assets

at beginning of period

476,890

62,012

538,902

Expected return on plan assets

37,479

3,607

41,086

Actuarial gain (loss) on plan assets

7,815

(3,175)

4,640

Contributions

883

9,653

10,536

Actual benefits paid

(9,751)

(9,078)

(18,829)

Fair value of plan assets at end of year

513,316

63,019

576,335

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

30.

PENSION PLAN (continued)

Defined Benefit Pension Plan (continued)

c.

The movements in the fair value of plan assets for the nine-month period ended                   September 30, 2013 and years ended December 31, 2012 and 2011 are as follows (continued):

December 31, 2011 (One year)

The Company

Lintasarta

Total

Fair value of plan assets

at beginning of year

793,664

59,294

852,958

Expected return on plan assets

47,175

5,038

52,213

Actuarial gain (loss) on plan assets

14,651

(610)

14,041

Contributions

378

9,653

10,031

Actual benefits paid

(378,978)

(11,363)

(390,341)

Fair value of plan assets at end of year

476,890

62,012

538,902

d.

The movements in the present value of the defined benefit obligation for the nine-month period ended September 30, 2013 and years ended December 31, 2012 and 2011 are as follows:

September 30, 2013 (NineMonths)

The Company

Lintasarta

Total

Defined benefit obligation at beginning of period

493,854

60,355

554,209

Interest cost

21,623

2,583

24,206

Current service cost

21,072

2,792

23,864

Defined benefit obligation at end of period

536,549

65,730

602,279

December 31, 2012 (One Year)

The Company

Lintasarta

Total

^{Defined benefit obligation at beginning of year

409,808

53,266

463,074

Interest cost

28,346

3,590

31,936

Current service cost

25,617

3,219

28,836

Actuarial loss on obligation

2,434

7,632

10,066

Effect of settlement

-

(4,360

)

(4,360)Actual benefit paid(9,751)(3,909)(13,660)

Effect of curtailment

-

917

917

Effect of changes in actuarial assumption

37,400

-

37,400

^{Defined benefit obligation at end of year

493,854

60,355

554,209

^{66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

30. PENSION PLAN (continued)

Defined Benefit Pension Plan (continued)

d. The movements in the present value of the defined benefit obligation for the nine-month period endedSeptember 30, 2013 and years ended December 31, 2012 and 2011 are as follows (continued):

December 31, 2011 (One Year)

The Company

Lintasarta

Total

Defined benefit obligation at beginning of year

700,410

50,215

750,625

Interest cost

43,786

4,189

47,975

Current service cost

27,167

3,839

31,006

Actuarial loss (gain) on obligation

(12,066)

4,315

(7,751)

Effect of settlement

(358,597)

(9,080)

(367,677)

Actual benefits paid

(18,750)

(1,857)

(20,607)

Effect of curtailment

(18,886)

1,645

(17,241)

Effect of changes in actuarial assumptions

46,744

-

46,744

Defined benefit obligation at end of year

409,808

53,266

463,074}}}}}}}}}}}}}}}}}}

e. The movements in the prepaid pension cost for the nine-month period ended September 30, 2013 and years ended December 31, 2012 and 2011 are as follows:

September 30, 2013 (Nine Months)

The Company

Lintasarta

Total

Prepaid pension cost at beginning of period

60,130

30,171

90,301

Contribution to Jiwasraya

425

9,653

10,078

Net periodic pension cost

(12,960)

(1,586)

(14,546)

Refund from Jiwasraya

-

(520)

(520)

Prepaid pension cost at end of period

47,595

37,718

85,313

December 31, 2012 (One Year)

The Company

Lintasarta

Total

Prepaid pension cost at beginning of year

75,731

29,561

105,292

Contribution to Jiwasraya

883

9,653

10,536

Net periodic pension cost

(16,484)

(8,235)

(24,719)

Refund from Jiwasraya

-

(808)

(808)

Prepaid pension cost at end of year

60,130

30,171

90,301

30. PENSION PLAN (continued)

Defined Benefit Pension Plan (continued)

e.

The movements in the prepaid pension cost for the nine-month period ended September 30, 2013 and years ended December 31, 2012 and 2011 are as follows (continued):

December 31, 2011 (One Year)

The Company

Lintasarta

Total

Prepaid pension cost at beginning of year

82,871

30,390

113,261

Contribution to Jiwasraya

378

9,653

10,031

Net periodic pension cost

(5,887)

(10,056)

(15,943)

Refund from Jiwasraya

(1,631)

(426)

(2,057)

Prepaid pension cost at end of year

75,731

29,561

105,292

f.

Prepaid pension cost consists of:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Current portion (presented as part of

“Prepaid expenses - others”)

Company

1,224

1,224

1,730

Lintasarta

2,701

232

381

           3,925

1,456

2,111

Long-term portion (presented as “Long-term

prepaid pension - net of current portion”)

Company

46,371

58,906

74,001

Lintasarta

35,017

29,939

29,180

81,388

88,845

103,181

Total prepaid pension cost

85,313

90,301

105,292

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

30.

PENSION PLAN (continued)

Defined Benefit Pension Plan (continued)

The major categories of plan assets as a percentage of the fair value of total plan assets as of        September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011 are as follows:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Investment in mutual fund

60.73%

75.34%

78.11%

Investment in shares of stocks and properties

26.15%

7.10%

4.19%

Investment in time deposits

8.61%

12.13%

12.50%

Investment in debt securities

4.51%

5.43%

5.19%

Other investments

0.00%

0.00%

0.01%

The overall expected rate of return on assets is determined based on the market expectations prevailing on that date, applicable to the period over which the obligation is to be settled.

Defined Contribution Pension Plan

In May 2001 and January 2003, the Company and Satelindo assisted their employees in establishing their respective employees’ defined contribution pension plans. Starting June 2004, the Company also assisted ex-IM3 employees in establishing their defined contribution pension plan. Under the defined contribution pension plan, the employees contribute 10% - 20% of their basic salaries, while the Company does not contribute to the plans. Total contributions of employees for the nine-month periods ended September 30, 2013 and 2012 amounted to Rp39,981 and Rp36,906, respectively. The plan assets are being administered and managed by seven financial institutions appointed by the Company and Satelindo, based on the choice of the employees.

Labor Law No. 13/2003

The Company, Lintasarta and IMM also accrue benefits under Labor Law No. 13/2003 (“Labor Law”) dated March 25, 2003. Their employees will receive the benefits under either this law or the defined benefit pension planwhichever is higher.

The net periodic pension cost of the Company and the subsidiaries under the Labor Law for thenine-month periods ended September 30, 2013 and 2012 was calculated based on actuarial valuations as of December 31, 2012 and 2011, respectively. The actuarial valuations were prepared by an independent actuary, using the projected-unit-credit method and applying the following assumptions:

2013

2012

Annual discount rate

6.0 - 6.5%

7.5%

Annual rate of increase in compensation

8.0-8.5%

8.0 -9.0%

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

30.

PENSION PLAN (continued)

Labor Law No. 13/2003 (continued)

a.

The composition of the periodic pension cost under the Labor Law for the nine-month periods ended September 30, 2013 and 2012 is as follows:

September 30, 2013

The Company

Lintasarta

IMM

Total

Service cost

21,521

3,007

2,264

26,792

Interest cost

14,479

2,207

958

17,644

Amortization of unrecognized

actuarial loss

3,364

555

126

4,045

Immediate recognition of past

service cost - vested benefit

-

527

-

527

Amortization of unrecognized

past service cost

-

489

21

510

Net periodic pension

cost under the Labor

Law (Note 26)

39,364

6,785

3,369

49,518

September 30, 2012

The Company

Lintasarta

IMM

Total

Service cost

18,725

1,568

2,237

22,530

Interest cost

13,991

1,353

893

16,237

Amortization of unrecognized

actuarial loss (gain)

3,547

(178)

83

3,452

Amortization of unrecognized

past service cost

-

498

21

519

Net periodic pension

cost under the Labor

Law (Note 26)

36,263

3,241

3,234

42,738

b.

The composition of the accrued pension cost under the Labor Law as of                        September 30, 2013, December 31, 2012 and January 1, 2012/ December 31, 2011is as follows:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Projected benefit obligation

408,716

367,641

291,135*

Unrecognized actuarial loss

(101,381)

(105,413)

(83,494)

Unrecognized past service cost

(6,745)

(7,795)

(8,612)

Net accrued pension cost under the Labor Law

300,590

254,433

199,029

^{^{*net of curtailment effect during 2011 due to VSS (Note 26)}

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

30.

PENSION PLAN (continued)

Labor Law No. 13/2003 (continued)

c.

The movements in the present value of the pension cost obligation under the Labor Law for the nine-month period ended September 30, 2013 and years ended December 31, 2012 and 2011 are as follows:

September 30, 2013 (Nine Months)

The Company

Lintasarta

IMM

Total

Benefit obligation

at beginning of period

299,410

48,489

19,742

367,641

Current service cost

21,521

3,007

2,264

26,792

Interest cost

14,479

2,207

958

17,644

Actual benefits paid

(3,271)

(90)

-

(3,361)

Benefit obligation

at end of period

332,139

53,613

22,964

408,716

December 31, 2012 (One Year)

The Company

Lintasarta

IMM

Total

Benefit obligation

at beginning of year

250,988

24,160

15,987

291,135

Current service cost

25,711

3,289

2,632

31,632

Interest cost

18,776

1,775

1,166

21,717

Actuarial loss (gain) on

obligation

(889)

16,734

57

15,902

Actual benefits paid

(1,290)

(186)

(878)

(2,354)

Effect of curtailment

-

(395)

-

(395)

Immediate recognition

   of past service cost

-

-

(523)

(523)

Effect of changes in

actuarial assumptions

6,114

3,112

1,301

10,527

Benefit obligation

at end of year

299,410

48,489

19,742

367,641

30.

PENSION PLAN (continued)

Labor Law No. 13/2003 (continued)

c. The movements in the present value of the pension cost obligation under the Labor Law for the nine-month period ended September 30, 2013 and years ended December 31, 2012 and 2011 are as follows (continued):

December 31, 2011 (One Year)

The Company

Lintasarta

IMM

Total

Benefit obligation

at beginning of year

182,572

24,340

10,842

217,754

Actuarial loss (gain) on

obligation

75,163

(5,182)

(1,442)

68,539

Current service cost

24,740

2,003

2,612

29,355

Interest cost

12,855

2,064

969

15,888

Actual benefits paid

(1,826)

(111)

(255)

(2,192)

Effect of curtailment

(38,828)

(890)

-

(39,718)

Effect of changes in

actuarial assumptions

(3,688)

1,936

3,261

1,509

Benefit obligation

at end of year

250,988

24,160

15,987

291,135

.

d.

The movements in the accrued pension cost under the Labor Law for the nine-month period ended September 30, 2013 and years ended December 31, 2012 and 2011 are as follows:

September 30, 2013 (Nine Months)

The Company

Lintasarta

IMM

Total

Accrued pension cost under

the Labor Law at beginning

of period

213,139

26,432

14,862

254,433

Periodic Labor Law cost

39,364

6,785

3,369

49,518

Benefit payment

(3,271)

(90

)

-

(3,361)

Accrued pension cost under

the Labor Law at end

of period

249,232

33,127

18,231

300,590

30.

PENSION PLAN (continued)

Labor Law No. 13/2003 (continued)

d.

The movements in the accrued pension cost under the Labor Law for the nine-month period ended September 30, 2013 and years ended December 31, 2012 and 2011 are as follows (continued):

December 31, 2012 (One Year)

The Company

Lintasarta

IMM

Total

Accrued pension cost under

the Labor Law at beginning

of year

165,213

21,489

12,327

199,029

Periodic Labor Law cost

49,216

5,129

3,413

57,758

Benefit payment

(1,290)

(186)

(878)

(2,354)

Accrued pension cost under

the Labor Law at end

of year

213,139

26,432

14,862

254,433

December 31, 2011 (One Year)

The Company

Lintasarta

IMM

Total

Accrued pension cost under

the Labor Law at beginning

of year

164,285

17,648

8,944

190,877

Periodic Labor Law cost

2,754

3,952

3,638

10,344

Benefit payment

(1,826)

(111)

(255)

(2,192)

Accrued pension cost under

the Labor Law at end

of year

165,213

21,489

12,327

199,029

The current portion of pension cost under the Labor Law included in accrued expenses (Note 17) amounted to Rp5,453, Rp5,119 and Rp4,700 as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011, respectively. The non-current portion included in employee benefit obligations amounted to Rp295,137, Rp249,314 and Rp 194,329 (Note 22) as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011, respectively.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

30.

PENSION PLAN (continued)

Post-retirement Healthcare

The Company provides post-retirement healthcare benefits to its employees who leave the Company after the employees fulfill the early retirement requirement. The spouse and children who have been officially registered in the administration records of the Company are also eligible to receive benefits. If the employees die, the spouse and children are still eligible for the post-retirement healthcare until the spouse dies or remarries and the children reach the age of 25 or get married.

The utilization of post-retirement healthcare is limited to an annual maximum ceiling that refers to monthly pension from Jiwasraya as follows:

·

16 times the Jiwasraya monthly pension for a pensioner who receives monthly pension from Jiwasraya

·

16 times the equality monthly pension for a pensioner who became permanent employee after September 1, 2000

·

16 times the last monthly pension for a pensioner who retires after July 1, 2003 and does not receive Jiwasraya monthly pension.

The net periodic post-retirement healthcare cost for the nine-month periods ended               September 30, 2013 and 2012 was calculated based on actuarial valuations as of December 31, 2012 and 2011, respectively. The actuarial valuations were prepared by an independent actuary, using the projected-unit-credit method and applying the following assumptions:

2013

2012

Annual discount rate

7.0%

8.0%

Ultimate cost trend rate

6.0%

6.0%

Next year trend rate

10.0%

12.0%

Period to reach ultimate cost trend rate

2 years

3 years

a.

The composition of the periodic post-retirement healthcare cost - net for the nine-month periods ended September 30, 2013 and 2012 is as follows:

2013

2012

Interest cost

53,030

40,879

Service cost

30,089

19,958

Amortization of unrecognized past service cost

5,747

5,805

Amortization of unrecognized actuarial loss

15,547

2,040

Net periodic post-retirement healthcare cost (Note 26)

104,413

68,682

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

30.

PENSION PLAN (continued)

^{Post-retirement Healthcare (continued)

b.

The composition of the accrued post-retirement healthcare cost as of September 30, 2013,       December 31, 2012 and January 1, 2012 / December 31, 2011 is as follows:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Projected benefit obligation

1,092,102

1,017,673

687,789*

Unrecognized actuarial loss

(346,569)

(362,116)

(103,679)

Unrecognized past service cost

(1,915)

(7,662)

(15,401)

Net accrued post-retirement healthcare cost

743,618

647,895

568,709

^{*net of curtailment effect during 2011 due to VSS (Note 26)}

c.

The movements in the present value of defined benefit obligation during the nine-month period ended September 30, 2013 and years ended December 31, 2012 and 2011 are as follows:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Balance at beginning of period/year

1,017,673

687,789

846,636

Interest cost

53,030

54,484

68,955

Service cost

30,089

27,712

24,149

Actual benefits paid

(8,690)

(13,470)

(10,978)

Effect of changes in actuarial assumptions

-

239,705

150,330

Effect of curtailment

-

-

(230,600)

Actuarial gain (loss) on obligation

-

21,453

(160,703)

Balance at end of period/year

1,092,102

1,017,673

687,789

d.

The movements in the accrued post-retirement healthcare cost during the nine-month period ended   September 30, 2013 and years ended December 31, 2012 and 2011 are as follows:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Balance at beginning of period/year

647,895

568,709

653,940

Net periodic post-retirement healthcare cost (income)

104,413

92,656

(74,253)

Benefit payment

(8,690)

(13,470)

(10,978)

Balance at end of period/year

743,618

647,895

568,709

The current portion of post-retirement healthcare cost included in accrued expenses - employee benefits (Note 17) amounted to Rp15,158, Rp15,160 and Rp12,957 as of September 30, 2013, December 31, 2012, and January 1, 2012 / December 31, 2011, respectively. The non-current portion included in employee benefit obligations amounted to Rp728,460, Rp632,737 and Rp555,752 as of September 30, 2013, December 31, 2012, and January 1, 2012 / December 31, 2011, respectively (Note 22).

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

30.

PENSION PLAN (continued)

Post-retirement Healthcare (continued)

e.

The effect of a one percentage point change in assumed post-retirement healthcare cost trend rate would result in aggregate service and interest costs for the nine-month period ended               September 30, 2013 and years ended December 31, 2012 and 2011 and in accumulated post-retirement healthcare benefit obligation as of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011 as follows:

January 1,

2012 /

September 30,

December 31,

December 31,

2013

2012

2011

Increase

Service and interest costs

107,185

82,196

118,454

Accumulated post-retirement healthcare benefit

obligation

1,369,164

1,270,669

844,612

Decrease

Service and interest costs

65,223

82,196

73,626

Accumulated post-retirement healthcare benefit

obligation

881,386

824,853

566,627

Amounts of employee benefits for previous annual periods:

      Defined Benefit Pension Plan

January 1, 2012 /

December 31,

December 31,

December 31,

December 31,

December 31,

2012

2011

2010

2009

2008

^{The Company

Plan assets

513,316

476,890

793,664

763,244

763,700

Projected benefit obligation

(493,854

)

(409,808

)

(700,410

)

(684,611)(512,513)

^{Excess of plan assets over

projected benefit obligation

19,462

67,082

93,254

78,633

251,187

Experience gain (loss) adjustments

     arising on plan liabilities

(2,434

)

12,066

156,063

(624)10,588

Experience loss (gain) adjustments

^{arising on plan assets

(7,815

)

(14,651

)

12,000

8,910(37,546)

^{Lintasarta

Plan assets

63,019

62,012

59,294

50,344

41,499

Projected benefit obligation

(60,355

)

(53,266

)

(50,215

)

(41,816)(28,726)

^{Excess of plan assets over

projected benefit obligation

2,664

8,746

9,079

8,528

12,773

Experience gain (loss) adjustments

     arising on plan liabilities

(356)

560

486

1,100

(3,194)

Experience loss adjustments

^{arising on plan assets

3,175

610

2,677

3,000

1,632

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

30.

PENSION PLAN (continued)

      Labor Law No. 13/2003

January 1, 2012 /

December 31,

December 31,

December 31,

December 31,

December 31,

2012

2011

2010

2009

2008

^{The Company

Projected benefit obligation

(299,410

)

(250,988

)

(182,572

)

(159,055)(141,316)

Experience gain (loss) adjustments

     arising on plan liabilities

889

(75,163)

(1,166

)

3,316

(27,284)

^{Net

(298,521

)

(326,151

)

(183,738

)

(155,739)(168,600)

^{Lintasarta

Projected benefit obligation

(48,489

)

(24,160

)

(24,340

)

(22,173)(11,464)

Experience gain (loss) adjustments

     arising on plan liabilities

(16,734

)

5,182

890

78(2,285)

^{Net

(65,223

)

(18,978

)

(23,450

)

(22,095)(13,749)

^{IMM

Projected benefit obligation

(19,742

)

(15,987

)

(10,842

)

(6,660)(3,674)

Experience gain (loss) adjustments

     arising on plan liabilities

(57

)

1,442

(804

)

368666

^{Net

(19,799

)

(14,545

)

(11,646

)

(6,292)(3,008)

^{Post-retirement Healthcare

January 1, 2012 /

December 31,

December 31,

December 31,

December 31,

December 31,

2012

2011

2010

2009

2008

^{The Company

Projected benefit obligation

(1,017,673

)

(687,789

)

(846,636

)

(605,660)(492,615)

Experience gain (loss) adjustments

     arising on plan liabilities

   (21,453)

160,703

38,574

37,176

150,730

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

31.

ACCOUNTS AND TRANSACTIONS WITH RELATED PARTIES

The details of the accounts and the significant transactions entered into with related parties are as follows:

Amount

Percentange to Total Assets/Liabilities (%)

January 1,2012

January 1,2012

September 30,

December 31,

December 31,

September 30,

December 31,

December 31,

2013

2012

2011

2013

2012

2011

Cash and cash equivalents

(Note 4)

Government-related entities:

State-owned banks

902,993

1,534,068

977,960

1.66

2.78

1.84

Accounts receivable - trade

(Note 5)

Government-related entities:

State-owned companies

757,191

593,773

358,423

1.40

1.08

0.68

Ultimate parent company:

Ooredoo

24,655

23,509

6,927

0.03

0.04

0.01

Total

781,846

617,282

365,350

1.43

1.12

0.69

Less allowance for

impairment

22,382

42,632

47,107

0.04

0.08

0.09

Net

759,464

574,650

318,243

1.39

1.04

0.60

Prepaid expenses

Government-related entities:

State-owned companies

19,072

6,543

8,222

0.03

0.01

0.01

Governmental departments

332

84

205

0.00

0.00

0.00

Entity under common significant

influence:

Kopindosat

1,904

2,579

3,681

0.00

0.01

0.01

Total

21,308

9,206

12,108

0.03

0.02

0.02

Other current and non-current

assets - financial and non-financial

Government-related entities:

State-owned banks

80,742

162,071

193,679

0.14

0.36

0.36

Governmental departments

87

87

87

0.00

0.00

0.00

80,829

162,158

193,766

0.14

0.36

0.36

Due from related parties

Entity under common significant

influence:

Kopindosat

3,459

6,188

6,012

0.01

0.01

0.01

Government-related entities:

State-owned companies

2,571

1,870

1,583

0.00

0.01

0.00

Key management personnel:

Senior management

1,818

1,621

3,020

0.00

0.00

0.01

Ultimate parent company:

Ooredoo

-

694

54

-

0.00

0.00

Total

7,848

10,373

10,669

0.01

0.02

0.02

Less allowance for

impairment

15

15

15

0.00

0.00

0.00

Net

7,833

10,358

10,654

0.01

0.02

0.02

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

31.

ACCOUNTS AND TRANSACTIONS WITH RELATED PARTIES (continued)

Amount

  Percentage to Total Assets/Liabilities (%)

January 1, 2012 /

January 1, 2012 /

September 30,

December 31,

December 31,

September 30,

December 31,

December 31,

2013

2012

2011

2013

2012

2011

Long-term prepaid rentals

- net of current portion

Government-related

entities:

State-owned companies

20,895

21,346

21,587

0.04

0.04

0.04

Entity under common

significant influence:

Kopindosat

6,478

4,275

9,962

0.01

0.01

0.02

Total

27,373

25,621

31,549

0.05

0.05

0.06

^{Advances andLong-term advances

Entity under common

significant influence:

Kopindosat

2

-

12,148

0.00

-

0.02

Government-related entities:

State-owned companies

-

-

44

-

-

0.00

Total

2

-

12,192

0.00

-

0.02

^{Long-term prepaid pension - net

of current portion (Note 30)

Government-related entities:

State-owned companies

81,388

88,845

103,181

0.14

0.16

0.19

^{Short-term bank loan (Note 14)

Government-related entity:

State-owned bank

1,499,769

299,529

1,499,256

4.07

0.84

4.38

^{Accounts payable - trade

Government-related entities:

State-owned companies

60,869

22,614

23,233

0.16

0.06

0.07

Ultimate parent company

Ooredoo

144

36

348

0.00

0.00

0.00

Total

61,013

22,650

23,581

0.16

0.06

0.07

^{Procurement payable (Note 15)

Entities under common significant

influence:

Kopindosat

11,826

11,875

9,872

0.03

0.03

0.03

PT Personel Alih Daya

10,357

17,993

16,319

0.03

0.05

0.05

Government-related entities:

State-owned companies

4,791

13,915

9,882

0.01

0.04

0.03

Total

26,974

43,783

36,073

0.07

0.12

0.11

^{Accrued expenses

Government-related entities:

State-owned companies

99,744

56,590

66,399

0.27

0.15

0.19

Entities under common significant

influence:

PT Personel Alih Daya

45,065

  40,420

  18,222

0.12

0.12

0.05

Kopindosat

16,590

    10,265

    5,817

0.04

0.03

0.02

Key management personnel:

Senior management

-

  43,610

  37,851

-

0.12

0.11

Total

161,399

150,885

128,289

0.43

0.42

0.37

^{Due to related parties

Ultimate parent company:

Ooredoo

15,114

25,968

552

0.04

0.07

0.00

Entities under common significant

influence:

PT Personel Alih Daya

12,826

-

-

0.05

-

-

Kopindosat

5,176

-

-

0.00

-

-

Government-related entities:

State-owned companies

2,054

16,821

14,928

0.00

0.05

0.05

Total

35,170

42,789

15,480

0.09

0.12

0.05

^{66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

31.

ACCOUNTS AND TRANSACTIONS WITH RELATED PARTIES (continued)

Amount

  Percentage to Total Assets/Liabilities (%)

January 1, 2012 /

January 1, 2012 /

September 30,

December 31,

December 31,

September 30,

December 31,

December 31,

2013

2012

2011

2013

2012

2011

Other current and non-current

liabilities - financial

and non-financial

Government-related entities:

Governmental departments

-

4,131

2,141

-

0.01

0.01

State-owned companies

-

-

6,455

-

-

0.02

Total

-

4,131

8,596

-

0.01

0.03

^{Loan payable (including current

maturities) (Note 18)

Government-related entity:

State-owned bank

-

-

998,843

-

-

2.92

^{Percentage to Total Revenue (%)

Amount

or Expenses (%)

Nine-month periods ended September 30,

Nine-month periods ended September 30,

                2013

2012

2013

2012

Revenues (Note 24)

Government-related entities:

State-owned companies

997,435

1,050,371

5.60

6.45

Governmental departments

530,324

152,505

2.98

0.93

Ultimate parent company:

Ooredoo

63,775

60,430

0.36

0.38

Entity under common significant

influence:

Kopindosat

493

456

0.00

0.00

Total

1,592,027

1,263,762

8.94

7.76

Expenses

Cost of services

Government-related entities:

State-owned companies

1,749,474

1,319,856

10.59

9.75

Entities under common significant

influence:

Kopindosat

86,116

16,278

0.52

0.12

PT Personel Alih Daya

82,472

66,698

0.50

0.49

Ultimate parent company:

Ooredoo

49,769

43,973

0.30

0.32

Total

1,967,831

1,446,805

11.91

10.68

Personnel

Key management personnel:

Senior management

Short-term employee benefits

124,300

105,275

0.75

0.77

Other long-term benefits

8,501

6,150

0.06

0.05

Sub-total

132,801

111,425

0.81

0.82

^{Government-related entities:

State-owned companies

14,545

11,815

0.09

0.09

Total

147,346

123,240

0.90

0.91

Marketing

Entities under common significant

influence:

PT Personel Alih Daya

78,731

67,629

0.48

0.50

Kopindosat

14,049

14,709

0.08

0.10

Government-related entities:

State-owned companies

-

3

-

0.00

^{Total

92,780

82,341

0.56

0.60

31.

ACCOUNTS AND TRANSACTIONS WITH RELATED PARTIES (continued)

Percentange to Total Revenue(%)

Amount

or Expenses (%)

Nine-month periods ended September 30,

Nine-month periods ended September 30,

2013

2012

2013

2012

General and administration

Government-related entities

State-owned companies

29,705

6,745

0.18

0.06

Entities under common significant

influence:

Kopindosat

19,136

16,492

0.12

0.12

PT Personel Alih Daya

16,512

9,387

0.10

0.06

Total

65,353

32,624

0.40

0.24

Interest income (financing cost) - net

Government-related entities:

State-owned banks

(6,788)

(55,455)

(0.18)

(2.59)

The relationship and nature of account balances/transactions with related parties are as follows:

Nature of Account

No

Related Parties

Relationship

Balances/Transactions

1.

State-owned banks

Government-

related entities

Cash and cash equivalents, other current and non-current financial and non-financial assets, short-term bank loan, loan payable and interest income (financing cost) - net

2.

State-owned companies

Government-

related entities

Accounts receivable - trade, prepaidexpenses, due from related parties,long-term prepaid rentals, advances and long-termadvances, long-term prepaidpension, accounts payable - trade, procurement payable, accrued expenses, due to related parties,other current and non-currentfinancial and non-financial liabilities, revenues, expenses - cost of services, expenses - personnel, expenses - marketing and expenses - general and administration

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

31.

ACCOUNTS AND TRANSACTIONS WITH RELATED PARTIES (continued)

Nature of Account

No

Related Parties

Relationship

Balances/Transactions

3.

Ooredoo

Ultimate parent

company

Accounts receivable - trade, due from

related parties, accounts payable -trade, due to related parties, revenues, expenses - cost of services and expenses - general and administration

4.

Governmental departments

Government-related

entities

Prepaid expenses, other current andnon-current financial and non-financial assets, other current and non-current financial and non-financial liabilities, revenues - MIDI

5.

Kopindosat

Entity under

common significant

influence

Prepaid expenses, due from related parties, long-term prepaid rentals, advances and long-term advances, procurement payable, accrued expenses, due to related parties, revenues, expenses - cost of services, expenses - marketing and expenses - general and administration

6.

Senior management (consist of members of Board of Directors and Commissioners and those who directly report to the Board of Directors)

Key management

personnel

Due from related parties, accruedexpenses and expenses - personnel

7.

PT Personel Alih Daya

Entity under

common significant

influence

Procurement payable, accrued expenses, due to related parties, expenses - cost of services, expenses -marketing and expenses - general and administration

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

32.

DISTRIBUTION OF PROFIT AND APPROPRIATION OF RETAINED EARNINGS

At the Company’s SAGM, the shareholders approved, among others, the appropriation of annual profit for cash dividend distribution, as follows, and the utilization of the remaining amount for reinvestment and working capital:

SAGM Date

Dividend

per Share (Rp)

Dividend Payment Date

2011 Profit

  May 14, 2012

76.83

June 26, 2012*

2012 Profit

  June 18, 2013

34.52

July 29, 2013**

*

Dividend for the Government was paid in accordance with the prevailing laws and regulations in Indonesia. On June 11 and June 26, 2012, the Company paid dividend amounting to Rp59,668 and Rp357,821, respectively, to the Government and other stockholders for the dividend declared on May 14, 2012.

**

Dividend for the Government was paid in accordance with the prevailing laws and regulations in Indonesia. On July 29, 2013, the Company paid dividend amounting to Rp26,809 and Rp160,770, respectively, to the Government and other stockholders for the dividend declared on               June 18, 2013.

33.

SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCY

a.

As of September 30, 2013, commitments on capital expenditures which are contractual agreements not yet realized relate to the procurement and installation of property and equipment amounting to US$112,738 and Rp1,703,153 (Note 39j).

The significant commitments on capital expenditures are as follows:

Amount of

Contract/Purchase

Amount of

Orders (“POs”)

Contract/POs Not Yet

Contract Date

Contract Description

Vendor

Already Issued

Served

October 1, 2010 &

Procurement of Telecommunications

PT Ericsson Indonesia and

US$603,570 and

US$35,788 and

December 10, 2012

Equipment and Related Services

Ericsson AB

Rp2,176,593

Rp532,167

June 16, 2010 &

Procurement of Telecommunications

PT Nokia Siemens Networks and

US$482,472 and

US$20,701 and

December 10, 2012

Infrastructure

Nokia Siemens Networks Oy

Rp2,003,504

Rp399,685

August 2, 2010 &

Procurement of Telecommunications

PT Huawei Tech Investment

US$175,830 and

US$19,243 and

December 21, 2012

Infrastructure

Rp564,257

Rp283,125

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

33. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCY (continued)

b.

On September 11, 2013, the Company and QNBK,a related party, entered into an agreement on “

Indosat m - Wallet”

services. Based on the agreement, the Company and QNBK will collaborate to develop the Company’s

m

-

Wallet

services.

c.

On July 15, 2013, the Company entered into an amendment of Loan Agreement with BCA. Based on the loan amendment agreement, BCA agreed to provide the Company an additional 5-year unsecured investment credit facility with a maximum amount of Rp1,000,000. The loan from the investment credit facility will bear interest at the annual fixed rate of 8.7% for the 5-year period. Subsequently, on July 23, 2013, BCA issued a letter to increase the interest rate for the 5-year unsecured investment credit facility from 8.7% to 9.0% effective on August 26, 2013. Furthermore, on September 10, 2013, BCA issued a letter to further increase the interest rate of such facility to 9.25% effective September 26, 2013. As of September 30, 2013, the Company had not made any drawdown from this credit facility.

d.

On May 1, 2013, the Company and Orbital Sciences Corporation signed the Authorization to Proceed (ATP) for the procurement of new satellite “Palapa E” (Note 1a). The final contract is expected to be finalized by the end of 2013.

e.

In 2012, the Company and Ooredoo, the Group’s ultimate parent company, entered into a cooperation agreement, whereas Ooredoo agreed to provide several professional experts to work in the Company, to provide the Group with their experience and knowledge to increase the effectiveness of the Group’s operational and business activities. The agreement covers a 10-year period. For the nine-month period ended September 30, 2013, the Company recorded the cost for the provision of the professional experts totaling Rp37,330 as part of “General and Administration Expense - Professional Fees (Note 27).”

f.

On January 18, 2012, the Company and IMM, a subsidiary, were investigated by the Attorney General’s Office in connection with the cooperation agreement between the Company and IMM to provide 3G-based broadband internet services. IMM had been accused of illegally using the Company’s 3G license (Note 1a) without paying annual frequency fee, concession fee and tender upfront fee. The MOCIT, as well as the Indonesian Regulatory Body (BRTI), has made a public statement that IMM has not breached any laws / prevailing rules; nevertheless, the case continues to be investigated by the Attorney General’s Office.

On May 1, 2013, the panel of judges of the Jakarta Administrative Court issued a favorable verdict in support of the Company and IMM's claim. The Jakarta Administrative Court (i) found the decision and audit results of the Finance and Development Supervisory Agency (LHPKKN BPKP) to be legally flawed, and ordered for their revocation; and (ii) upheld its interim verdict to suspend the implementation of Badan Pengawasan Keuangan dan Pembangunan’s (BPKP) decision until this verdict has become final and binding ("inkracht verklaard"). This verdict negates the “losses to the State” argument and should be beneficial in the Company and IMM’S defense of the ongoing case at the Corruption Court.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

33. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCY (continued)

Up to May 8, 2013, the Corruption Court has examined 24 witnesses, including expert witnesses, 22 of whom have testified that the cooperation agreement between IMM and the Company does not breach the prevailing laws and regulations, and there was no sharing of the 2.1 GHz frequency band as alleged, with only two expert witnesses having different opinion.

On July 8, 2013, the Corruption Court issued final verdict which found Mr. Indar Atmanto (former IMM President Director) guilty by virtue of representing IMM in entering into a cooperation agreement with the Company, and sentenced him to 4 years of imprisonment as well as imposing monetary fine of Rp200or 3 months of confinement. In addition, IMM was also ordered to pay monetary fine of Rp1,358,343to compensate for State losses. A statement of appeal was formally lodged by Mr. Indar Atmanto on July 11, 2013 and subsequently the AGO also submitted its appeal on July 15, 2013. It is confirmed by the Company's external lawyersthat, based on the appeal process on the case of Mr. Indar Atmanto and the support from the relevant ministry and industry, there will be a re-trial process as if the judicial process is started from zero. Furthermore, the Company’s external lawyers also confirmed that they believe that there is no liability to be recognized by IMM at this stage, and the Company and IMM have a strong legal basis to defend their position.

As of September 30, 2013, the Company did not accrue any liabilities related to the legal case because the Company believes, as supported by the MOCIT, that the cooperation agreement with IMM does not breach any laws.

g.

On December 30, 2011, Lintasarta, entered into agreements with MOCIT-

Balai Telekomunikasi dan Informasi Pedesaan

(“MOCIT-BTIP”), whereby Lintasarta agreed to provide Public Access Services for Wireless Fidelity (WiFi) Internet in

Kewajiban Pelayanan Umum

/ Universal Service Obligation (KPU/USO) Regencies (

Kabupaten

) (

Penyediaan Jasa Akses Publik Layanan Internet WiFi Kabupaten KPU/USO

) for Work Packages (

Paket Pekerjaan

) 3 and 6 that cover the provinces of West Kalimantan, South Kalimantan, Central Kalimantan, East Kalimantan, Bali, West Nusa Tenggara and East Nusa Tenggara. The agreements cover a four-year concession period and have contract values of Rp71,992 and Rp44,422 for Work Packages 3 and 6, respectively. In accordance with the contract, Lintasartareceived advance payments representing 15% of the contract value. Fixed payment for services is received on a quarterly basis based on performance evaluation. At the end of the concession period, Lintasarta must transfer the assets subject to the concession agreement back to the local government.

Subsequently on January 10, 2012, Lintasarta, also entered into an agreement with MOCIT-BTIP for the provision of Public Access Services for Wireless Fidelity (WiFi) Internet in KPU/USO Regencies (

Kabupaten KPU/USO

) (

Penyediaan Jasa Akses Publik Layanan Internet WiFi Kabupaten KPU/USO

) for Work Package (

Paket Pekerjaan

) 4 that covers the provinces of Gorontalo, West Sulawesi, South Sulawesi, Central Sulawesi, South East Sulawesi and North Sulawesi with contract value of Rp91,491. The terms and conditions of this agreement are consistent with those of the earlier agreement above.

The consideration received or receivable in exchange for Lintasarta’s infrastructure construction services or its acquisition of infrastructure to be used in the arrangements was recognized as a financial asset to the extent that Lintasarta has an unconditional contractual right to receive cash or other financial asset for its construction services from or at the direction of the grantor. As of September 30, 2013, December 31, 2012 and January 1, 2012 / December 31, 2011, the current

33.

SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCY(continued)

portions of outstanding receivables arising from this service concession arrangement amounting to Rp15,258 and Rp nil, respectively are classified as part of “Trade Receivables - Related Parties”, while the long-term portions of the outstanding receivables amounting to Rp8,383 and Rp8,974, respectively, are classified as part of “Other Non-current Financial Assets”. Revenues from construction services earned by Lintasarta for the nine-month periods ended September 30, 2013 and 2012 amounting to Rp12,487 and Rp17,938 are classified as part of “Revenues - MIDI”.

On February 8, 2012, Lintasarta entered into an agreement with PT Widtech Indonesia, for the procurement of equipment and infrastructure required for the construction of WiFi, as agreed with the MOCIT-BTIP above, with total contract value amounting to Rp121,927.

h.

In May 2011 to March 2012, the Company issued several POs to PT Nokia Siemens Network and Nokia Siemens Network OY with total amount of US$34,829 and Rp208,948 for the procurement of cellular technical equipment in the Sumatra and Java Areas. Based on the POs, the Company agreed to exchange certain existing cellular equipment with new equipment units and pay US$11,462 and Rp171,844 to Nokia for the installation services and additional equipment. For the nine-month period ended September 30, 2013, the carrying amount of the cellular technical equipment units given up amounted to Rp57,069 (Note 8) and the accumulated carrying amount of such equipment up to September 30, 2013 amounted to Rp446,468.

i.

On April 15, 2010, Lintasarta, a subsidiary entered into agreements with MOCIT-BTIP, whereby Lintasarta agreed to provide

Pusat Layanan Jasa Akses Internet Kecamatan

(Center for Internet Access and Services in Rural Areas) (PLIK) for Work Packages (

Paket Pekerjaan

) 7, 8 and 9 that cover the provinces of Bali, West Nusa Tenggara, East Nusa Tenggara, West Kalimantan, South Kalimantan, East Kalimantan, Central Kalimantan, Maluku and Papua. On December 22, 2010, the agreements were amended to increase the contract value. The agreements are non-cancellable and cover four years starting from October 15, 2010 with contract value amounting to Rp91,895, Rp143,668 and Rp116,721 for Work Packages 7, 8 and 9, respectively. In accordance with the agreements, Lintasarta placed its time deposits totaling Rp18,200 as a performance bond for the four-year contract period, which deposits are classified as part of “Other Non-current Financial Assets”. In accordance with the agreements, Lintasarta received advance payments representing 20% of the contract value. Fixed payment for services is received on a quarterly basis based on performance evaluation. At the end of the agreements, Lintasarta and MOCIT-BTIP plan to renegotiate the terms and conditions of any new arrangements.

On December 12, 2010, Lintasarta entered into agreements with MOCIT-BTIP to provide Pusat Layanan Jasa Akses Internet Kecamatan Bergerak (Mobile Center for Internet Access and Services in Rural Areas) (PLIKB) for Work Packages 2, 3, 11, 15, 16 and 18 that cover the provinces of North Sumatra, West Sumatra, East Nusa Tenggara, West Kalimantan, South Kalimantan and East Kalimantan. The agreements are non-cancellable and cover four years starting on September 22, 2011 with contract values amounting to Rp79,533, Rp92,003, Rp60,149, Rp71,879, Rp84,583 and Rp69,830 for Work Packages 2, 3, 11, 15, 16 and 18, respectively. On October 19, 2011, the agreements were amended to change the work starting date from September 22, 2011 to December 22, 2011. In accordance with the agreements, Lintasarta received advance payments representing 15% of the contract value. Fixed payment for services is received on a quarterly basis based on performance evaluation. At the end of the concession period, Lintasarta must transfer all assets subject to the concession agreement to the local government.

33.

SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCY (continued)

On May 6, 2010, Lintasarta entered into an agreement with PT Wira Eka Bhakti (WEB), for the procurement of equipment and infrastructure required for the construction of PLIK, as agreed with MOCIT-BTIP above, with total contract value amounting to Rp189,704. The agreement had been amended several times, with the latest amendment dated March 9, 2011 increasing the contract value to Rp208,361.

On March 23, 2011, Lintasarta entered into agreements with WEB and PT Personel Alih Daya (a related party), for the procurement of equipment and infrastructure required for the construction of PLIKB, as agreed with MOCIT-BTIP above, with total contract values amounting to Rp276,274 and Rp60,739, respectively.

As of September 30, 2013and December 31, 2012 the current portions of outstanding receivables amounting to Rp345,724 and Rp283,945, respectively, are classified as part of “Trade Receivables - Related Parties”, while the long-term portions amounting to Rp6,143 and Rp45,097, respectively, are classified as part of “Other Non-current Financial Assets”.

Revenue from construction services earned by Lintasarta for the nine-month period ended September 30, 2012 amounting to Rp33,439 is classified as part of “Revenues - MIDI”.

j.

On January 29, April 15, May 24 and June 3 in 2010, and February 4 and 10 in 2011, the Company agreed to lease part of its telecommunications towers and sites to PT Hutchison CP Telecommunications (“Hutchison”) for a period of 12 years, toPT Axis Telecom (previously PT Natrindo Telepon Selular) (“Axis”) for a period of 10 years, to PT XL Axiata Tbk (“XL Axiata”) for a period of 10 years, to   PT Berca Global Access (“Berca”) for a period of 10 years, to PT Dayamitra Telekomunikasi (“Mitratel”) for a period of 10 years and to PT First Media Tbk (“FM”) for a period of 5 years, respectively. Hutchison, Axisand XL Axiata (on annual basis), Berca and Mitratel (on quarterly basis) and FM (on semi-annual basis) are required to pay the lease and maintenance fees in advance which are recorded as part of unearned income.

On August 18, 2011, the Company and Hutchison amended their tower leasing agreement covering changes in certain arrangements with respect to, among others, amount of compensation paid to landlords or residents around the leased site shouldered by the Company, penalty charged for overdue payments and effective lease period.

Future minimum lease receivables under the agreements as at September 30, 2013,     December 31, 2012 and January 1, 2012 / December 31, 2011 are as follows:

September 30,

December 31,

January 1, 2012 /

2013

2012

December 31, 2011

Within one year

427,662

655,894

471,284

After one year but not more than five years

2,098,020

2,597,263

1,874,860

More than five years

960,663

2,211,422

1,817,218

Total

3,486,345

5,464,579

4,163,362

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

33.

SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCY (continued)

k.

During 2008-2013, the Company entered into several agreements with PT Solusi Menara Indonesia, PT Professional Telekomunikasi Indonesia (“Protelindo”), PT Solusindo Kreasi Pratama, XL Axiata, PT Dayamitra Telekomunikasi, PT BIT Teknologi Nusantara, PT Solusi Tunas Pratama, PT Corona Telecommunication Services, PT Mitrayasa Sarana Informasi, Tower Bersama (Note 29) and for the Company to lease part of spaces in their telecommunication towers and sites for an initial period of 10 years. The Company may extend the lease period for another 10 years, with additional lease fees based on the inflation rates in Indonesia.

Future minimum rentals payable under the finance lease agreements as at September 30, 2013 are as follows:

Minimum

Present value

payments

of payments

Within one year

730,605

318,965

After one year but not more than five years

2,864,132

1,679,467

More than five years

2,121,476

1,775,581

Total

5,716,213

3,774,013

Less amount representing finance charge

1,942,200

-

Present value of minimum lease payments

3,774,013

3,774,013

Current portion (presented as part of Other Current Financial Liabilities)

318,965

Long-term portion (presented as Obligations under Finance Lease)

3,455,048

Total

3,774,013

l.

The Company and IMM have committed to pay annual radio frequency fee over the 3G and BWA licenses period, provided the Company and IMM hold the 3G and BWA licenses. The amount of annual payment is based on the payment scheme set out in Regulations

No. 7/PER/M.KOMINFO/2/2006, No. 268/KEP/M.KOMINFO/9/2009 and No. 237/KEP/ M.KOMINFO/7/2009 dated February 8, 2006, September 1, 2009 and July 27, 2009, respectively, of the MOCIT. The Company and IMM paid the annual frequency fee for the 3G and BWA licenses totaling Rp620,417 and Rp548,154 for the nine-month period ended       September 30, 2013 and year ended December 31, 2012, respectively.

33.

SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCY (continued)

m.

On July 20, 2005, the Company obtained facilities from HSBC to fund the Company’s short-term working capital needs. The facilities agreement has been amended several times. On September 20, 2011, the expiration date of the facilities was extended up to April 30, 2012 and the interest rate and certain provisions of the agreement were changed as follows:

·

Overdraft facility amounting to US$2,000 (including overdraft facility denominated in rupiah amounting to Rp17,000). Interest is charged on daily balances at 3.75% per annum and 6% per annum below the HSBC Best Lending Rate for the loan portions denominated in rupiah and U.S. dollar, respectively.

·

Revolving loan facility amounting to US$30,000 (including revolving loan denominated in rupiah amounting to Rp255,000). The loan matures within a maximum period of 180 days and can be drawn in tranches with minimum amounts of US$500 and Rp500 for loans denominated in U.S. dollar and rupiah, respectively. Interest is charged on daily balances at 2.25% per annum above the HSBC Cost of Fund Rate for the loans denominated either in rupiah or U.S. dollar.

·

The facilities are considered uncommitted facility based on guidelines No.12/516/DPNP/DPnP dated September 21, 2010 issued by the Central Bank of Indonesia; consequently, these facilities can be automatically cancelled by HSBC in the event that the Company’s credit collectibility declines to either substandard, doubtful or loss based on HSBC’s assessment pursuant to the general criteria set out by the Central Bank of Indonesia.

On March 27, 2012, the Company received the letter from HSBCextending these facilities up to April 30, 2013. Furthermore, on July 8, 2013, the Company received the letter from HSBC extending these facilities up to June 30, 2014.

b.

In 1994, the Company was appointed as a Financial Administrator (“FA”) by a consortium which was established to build and sell/lease Asia Pacific Cable Network (“APCN”) submarine cable in countries in the Asia-Pacific Region. As an FA, the Company collected and distributed funds from the sale of APCN’s Indefeasible Right of Use (“IRU”), Defined Underwritten Capacity (“DUC”) and Occasional Commercial Use (“OCU”).

The funds received from the sale of IRU, DUC and OCU and for upgrading the APCN cable did not belong to the Company and, therefore, were not recorded in the Company’s books. However, the Company managed these funds in separate accounts.

As of September 30, 2013, the balance of the funds (including interest earned) which are under the Company’s custody amounted to US$3,952. Besides receiving their share of the funds from the sale of IRU, DUC and OCU, the members of the consortium also received their share of the interest earned by the above funds.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

33.

SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCY (continued)

o.

Other agreements made with Telkom are as follows:

·

Under a cooperation agreement, the compensation to Telkom relating to leased circuit/ channel services, such as world link and bit link, is calculated at 15% of the Company’s collected revenues from such services.

The Company and Satelindo also lease circuits from Telkom to link Jakarta, Medan and Surabaya.

·

In 1994, Satelindo entered into a land transfer agreement for the transfer of Telkom’s rights to use a 134,925-square meter land property located at Daan Mogot, West Jakarta, where Satelindo’s earth control station is currently situated. The land transfer agreement enables Satelindo to use the land for a period of 30 years from the date of the agreement, for a price equivalent to US$40,000 less Rp43,220. The period of the agreement may be extended based on mutual agreement.

The aforementioned agreement was subsequently superseded by a land rental agreement dated December 6, 2001, generally under the same terms as those of the land transfer agreement.

·

In 1999, Lintasarta entered into an agreement with Telkom, whereby Telkom agreed to lease transponder to Lintasarta. This agreement has been amended several times, the latest amendment of which is based on the tenth amendment agreement dated March 7, 2012. Transponder lease expense charged to operations amounting to Rp24,783 for the ninemonths ended September 30, 2013is presented as part of “Expenses - Cost of Services- Leased Circuits” (Note 25) in the interim consolidated statement of comprehensive income.

34.

TARIFF SYSTEM

a.

International telecommunications services

The service rates (“tariffs”) for overseas exchange carriers are set based on the international telecommunications regulations established by the International Telecommunications Union (“ITU”).

These regulations require the international telecommunications administrations to establish and revise, under mutual agreement, accounting rates to be applied among them, taking into account the cost of providing specific telecommunications services and relevant recommendations from the Consultative Committee on International Telegraph and Telephone (“CCITT”). The rates are divided into terminal shares payable to the administrations of terminal countries and, where appropriate, into transit shares payable to the administrations of transit countries.

The ITU also regulates that the monetary unit to be used, in the absence of special arrangements, shall be the Special Drawing Right (“SDR”) or the Gold Franc, which is equivalent to 1/3.061 SDR. Each administration shall, subject to applicable national law, establish the charges to be collected from its customers.

The tariffs billed to domestic subscribers for international calls originating in Indonesia, also known as collection rates, are established in a decision letter of the MOC, which rates are generally higher than the accounting rates. During the period 1996 to 1998, the MOC made tariff changes effective January 1, 1997, March 15, 1998 and November 15, 1998.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

34.

TARIFF SYSTEM (continued)

a.

International telecommunications services (continued)

Based on Decision Letter No. 09/PER/M.KOMINFO/02/06 dated February 28, 2006 of the MOCIT,thecollectionratesareset by tariff formula known as price cap formula which already considers customer price index starting January 1, 2007.

b.

Cellular services

The basic telephony tariffs for cellular mobile network service are set on the basis of Regulation No. 12/PER/M.KOMINFO/02/2006 dated February 28, 2006 of the MOCIT. Under this regulation, the cellular tariffs consist of the following:

·

Connection fee

·

Monthly charges

·

Usage charges

·

Additional facilities fee

Cellular providers should implement the new tariffs referred to as “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.

In April 2008, the MOCIT issued Ministerial Decree No. 09/PER/M.KOMINFO/04/2008 about guidelines on calculating basic telephony service tariffs through cellular mobile network. Under this new Decree, the cellular providers should implement the new tariffs referred to as “price cap”. The types of tariffs for telecommunications services through cellular network consist of the following:

·

Tariff for basic telephony services

·

Tariff for roaming

·

Tariff for multimedia services

The retail tariffs should be calculated based on Network Element Cost, Activation Cost of Retail Services and Profit Margin.

The implementation of the new tariffs for a dominant operator has to be approved by the Government. A dominant operator is an operator that has revenue of more than 25% of the total industry revenue for a certain segment.

Starting May 2008, the Company has fully adopted the new cellular tariff system.

c.

Fixed telecommunications services

In February 2006, the MOCIT released Regulation No. 09/PER/M.KOMINFO/02/2006 regarding basic telephony tariffs for fixed network service.

In April 2008, the MOCIT issued Ministerial Decree No. 15/PER/M.KOMINFO/04/2008 about the guidelines on calculating basic telephony service tariffs through fixed network. This Decree also applies to fixed wireless access (FWA) network.

Under this new decree, the tariffs for basic telephony services and SMS (short message service) must be calculated based on the formula stated in the Decree. The fixed network providers should implement the new tariffs referred to as “price cap”.

Starting May 2008, the Company has fully adopted the new fixed telecommunications tariff system.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

35.

INTERCONNECTION TARIFFS, USO, SPECTRUM FREQUENCY FEES AND REVENUESHARING

Interconnection tariffs among domestic telecommunications operators are regulated by the MOC through its Decree No. KM.108/PR.301/MPPT-94 dated December 28, 1994. The Decree was updated several times with the latest update being Decree No. KM.37 Year 1999 (“Decree No. 37”) dated June 11, 1999. This Decree, along with Decree No. KM.46/PR.301/MPPT-98 (“Decree No. 46”) dated February 27, 1998, prescribed interconnection tariff structures between mobile cellular   telecommunications network and Public Switched Telephone Network (“PSTN”), mobile cellular telecommunications network and international telecommunications network, mobile cellular telecommunications network and other domestic mobile cellular telecommunications network, international telecommunications network and PSTN, and between two domestic PSTNs.

Based on the Decree of the MOC, the interconnection tariff arrangements are as follows:

1.

Structure of Interconnection Tariffs

a.    Between international and domestic PSTN

Based on Decree No. 37 dated June 11, 1999, the interconnection tariffs are as follows:

Tariff

Basis

Access charge

Rp850 per call

Number of successful outgoing

and incoming calls

Usage charge

Rp550 per paid minute

Duration of successful outgoing

and incoming calls

b.

Between domestic PSTN and another domestic PSTN

Interconnection charges for domestic telecommunications traffic (local and SLJJ) between a domestic PSTN and another domestic PSTN are based on agreements made by those domestic PSTN telecommunications carriers.

c.

Between cellular telecommunications network and domestic PSTN

Based on Decree No. 46 dated February 27, 1998 which became effective starting April 1, 1998, the interconnection tariffs are as follows :

(1)

Local Calls

For local calls from a cellular telecommunications network to a PSTN subscriber,

the cellular operator pays the PSTN operator 50% of the prevailing tariffs for local calls.

For local calls from the PSTN to a cellular subscriber, the cellular operator receives

the airtime charged by the PSTN operator to its subscribers.

(2)

Sambungan Langsung Jarak Jauh

(“SLJJ”)

For SLJJ which originates from the PSTN to a cellular subscriber, the cellular operator receives a portion of the prevailing SLJJ tariffs, which portion ranges from 15% of

the prevailing SLJJ tariffs plus the airtime charges in cases where the entire long-distance portion is not carried by the cellular operator, to 60% of the tariffs plus the airtime charges in cases where the entire long-distance portion is carried by the cellular operator.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

35.

INTERCONNECTION TARIFFS, USO, SPECTRUM FREQUENCY FEES AND REVENUE SHARING (continued)

1.

Structure of Interconnection Tariffs (continued)

c.

Between cellular telecommunications network and domestic PSTN (continued)

(2)

Sambungan LangsungJarak Jauh

(“SLJJ”)

(continued)

For SLJJ which originates from a cellular telecommunications network to a PSTN subscriber, the cellular operator is entitled to retain a portion of the prevailing SLJJ tariffs, which portion ranges from 15% of the tariffs in cases where the entire long-distance portion is not carried by the cellular operator, to 60% of the tariffs in cases where the entire long-distance portion is carried by the cellular operator.

d.

Between cellular telecommunications network and another cellular telecommunications network

Based on Decree No. 46, the interconnection tariffs are as follows:

(1)

Local Calls

For local calls from a cellular telecommunications network to another, the “origin” cellular operator pays the airtime to the “destination” cellular operator. If the call is carried by

a PSTN, the “origin” cellular operator pays the PSTN operator 50% of the prevailing tariffs for local calls.

(2)

SLJJ

For SLJJ which originates from a cellular telecommunications network, the cellular operator is entitled to retain a portion of the prevailing SLJJ tariffs, which portion ranges from 15% of the tariffs in cases where the entire long-distance portion is not carried by

the cellular operator, to 85% of the tariffs in cases where the entire long-distance portion is carried by the cellular operator and the call is delivered to another cellular operator, and to 100% if the call is delivered to the same cellular operator.

e.

Between international PSTN and cellular telecommunications network

Starting in 1998, the interconnection tariffs for international cellular call traffic to/from overseas from/to domestic cellular subscribers, regardless of whether the traffic is made through domestic PSTN or not, is based on the same tariffs applied to traffic made through domestic PSTN as discussed in “a” above. However, as agreed mutually with the cellular telecommunications operators, the Company (including Satelindo until it was merged -

Note 1e) still applied the original contractual sharing agreements regarding the interconnection tariffsuntil December 31, 2006 (Note 36).

f.

Between international gateway exchanges

Interconnection charges for international telecommunications traffic between international gateway exchanges are based on agreements between international telecommunications carriers and international telecommunications joint ventures.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

35.

INTERCONNECTION TARIFFS, USO, SPECTRUM FREQUENCY FEES AND REVENUE SHARING (continued)

1.

Structure of Interconnection Tariffs (continued)

Decree No. 37 and Decree No. 46 were subsequently superseded by Decree No. 32 Year 2004 of the MOC which provides cost-based interconnection to replace the current revenue-sharing arrangement. Under the new Decree, the operator of the network on which calls terminate determines the interconnection charge to be received by it based on a formula mandated by the Government, which is intended to have the effect of requiring that operators charge for calls based on the cost of carrying such calls.

The effective date of the new Decree, which was originally set to start on January 1, 2005,

was subsequently postponed until January 1, 2007 based on Regulation No. 08/PER/M.KOMINFO/02/2006 dated February 8, 2006 of the MOCIT (Note 36).

The implementation of interconnection billing between operators starts from the time they sign their interconnection agreements. All interconnection agreements are based on Reference Interconnection Offer (“RIO”). All operators have to publish their RIO and a dominant operator is required to obtain an approval of its RIO from the Government.

In August 2006, the DGPT issued Decree No. 278/DIRJEN/2006, which approved the RIO of the Company and two other dominant telecommunications operators (Telkom and Telkomsel). This decree was implemented since January 2007 as agreed by all operators and approved by the Government. On April 11, 2008, the DGPT approved the new RIO for dominant operators (Telkom, Telkomsel and the Company). The DGPT requires all domestic operators to amend their interconnection agreements in line with the approved new RIO starting April 1, 2008. On April 1, 2008, the Company implemented the new interconnection tariffs based on the approved RIO.

However, on December 31, 2010, the

Badan Regulasi Telekomunikasi Indonesia

(BRTI or Indonesian Telecommunications Regulatory Bureau) issued letter No. 227/BRTI/XII/2010 regarding the implementation of new interconnection tariffs based on the implementation of cost-based interconnection fees, which would be used by all telecommunications operators effective January 1, 2011. The Company has adopted the new tariffs starting January 1, 2011.

On June 27, 2011, the MOCIT issued Regulation No.16/PER/M.KOMINFO/06/2011 regarding the amendment of the Ministry of Transportation Decree No. 35 Year 2004 on implementation of local fixed wireless network with limited mobility, which encouraged the implementation of cost-based tariffs by all telecommunications operators effective July 1, 2011.

Prior to 2012, the interconnection for Short Message Services ("SMS") applied the "Senders Keep All" scheme. Under this old scheme, the telecommunication operators may keep all of the revenue received from their subscribers from services of sending SMS to other operators without any interconnection cost paid to other operators. Starting June 1, 2012, the BRTI issued letter No. 262/BRTI/XII/2011 replacing the previous "Senders Keep All" scheme with the new cost-based scheme. Under the new scheme, the telecommunication operators are obliged to pay interconnection cost with maximum amount of Rp23 (in full amount) for every SMS sent to other telecommunication operators.

Effective June 1, 2012, the Company has applied this new BRTI regulation.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

35.

INTERCONNECTION TARIFFS, USO, SPECTRUM FREQUENCY FEES AND REVENUE SHARING (continued)

2.

USO and Spectrum Frequency Fees

On January 16, 2009, the Government issued Regulation No. 7 Year 2009 increasing the USO development contribution from 0.75% to 1.25% and decreasing the concession fee from 1% to 0.50% of annual gross revenue (after deducting bad debts and interconnection charges) effective January 1, 2009.

On December 13, 2010, the President of the Republic of Indonesia issued PP No.76/2010 regarding the amendment of PP No.7/2009 on types and tariffs of non-tax state income imposed by the MOCIT. This regulation affects the computation method and payment of the spectrum fee allocated to the Company (800 Mhz, 900 Mhz and 1,800 Mhz frequency bands).

On July 26, 2013, the MOCIT issued Decree No 21 Year 2013 on the Provision of Content Provider Services on Cellular Network and Fixed Local Wireless Network with Limited Mobility. The Decree regulates, among others, the cooperation between content provider carriers and telecommunication operators, roles and responsibilities of thecontent provider carriers and telecommunication operators, the type of contents allowed, service subscription mechanism, content offerings, protection for users, access number, content provider license, concession fee (

Biaya Hak Penyelenggaraan

/ BHP) and USO obligation, data storage, claims, dispute resolutions, supervision and monitoring and administrative sanctions. Under this new Decree, the content provider carriers are obliged to pay the USO and concession fee obligations in accordance with the regulations. The payments of the concession fee and USO obligations will be done by the content provider carriers through the telecommunication operators.

3.

Revenue Sharing

Revenue from access and usage charges from international telecommunications traffic with telecommunications networks owned by more than one domestic telecommunications carrier which is not regulated by Decree No. 08/PER/M.KOMINFO/02.2006, is to be proportionally shared with each carrier, which proportion is to be bilaterally arranged between the carriers.

36.

INTERCONNECTION AGREEMENTS

The Company (including Satelindo and IM3 until they were merged - Note 1e) has interconnection arrangements with domestic and overseas operators. Some significant interconnection agreements are as follows:

1.

Telkom

The following are significant interconnection agreements/transactions with Telkom:

a.

Fixed telecommunications services

On September 23, 2005, the Company and Telkom signed an agreement regarding the interconnection of local, long-distance and international fixed networks. The principal matters covered by the agreement are as follows:

·

Interconnection between the Company’s and Telkom’s local, long-distance and international fixed networks enables the Company’s fixed telecommunications service subscribers to make or receive calls to or from Telkom’s subscribers or international gateways.

·

The Company’s and Telkom’s international services are accessible and continuously open to each other’s fixed networks.

·

The Company and Telkom are responsible for their respective telecommunications facilities.

·

The compensation arrangement for the services provided is based on interconnection tariffs determined by both parties.

·

Each party handles subscriber billing and collection for the other party’s international calls service used by the other party’s subscribers. Each party has to pay the other party 1% of the collections made by the other party, plus the billing process expenses which are fixed at Rp82 per record of outgoing call as compensation for billing processing.Starting January 1, 2009, Telkom bills the Company service charge of Rp1,200 per minute of outgoing call.

On December 28, 2006, the Company entered into a memorandum of understanding

with Telkom applying the new interconnection rates under cost-based regime that were

effective starting January 1, 2007. This memorandum of understanding was replaced by an agreement dated December 18, 2007. This agreement was amended several times. The

latest amendment was dated December 20, 2011 to meet the requirement in the BRTI letter

No. 227/BRTI/XII/2010 dated December 31, 2010 regarding the implementation of the new interconnection tariffs in 2011. The Company has adopted the new tariffs starting January 1, 2011.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

36.

INTERCONNECTION AGREEMENTS (continued)

1.

Telkom (continued)

b.

Cellular services

On December 1, 2005, the Company and Telkom signed an agreement regarding the interconnection between the Company’s cellular telecommunications network and Telkom’s fixed telecommunications network. Under this agreement, the interconnection between the Company’s cellular telecommunications network and Telkom’s fixed telecommunications network enables the Company’s cellular subscribers to make or receive calls to or from Telkom’s fixed telecommunications subscribers.

On December 28, 2006, the Company entered into a memorandum of understanding

with Telkom applying the new interconnection rates under cost-based regime that are effective starting January 1, 2007. This memorandum of understanding was replaced by an agreement dated December 18, 2007. This agreement was amended several times. The latest amendment was dated December 20, 2011 to meet the requirement in the BRTI letter No. 227/BRTI/XII/2010 dated December 31, 2010 regarding the implementation of new interconnection tariffs in 2011. The Company has adopted the new tariffs starting January 1, 2011.

On May 30, 2012, the Company and Telkom signed “

Berita Acara Kesepakatan

” to meet the requirement in the BRTI letter No. 262/BRTI/XII/2011 dated December 12, 2011 (Note 35) regarding the implementation of the new cost-based scheme for SMS interconnection for fixed telecommunications and cellular services which became effective starting June 1, 2012.

2.

XL Axiata, PT Smartfren Telecom Tbk (previously PT Mobile-8 Telecom Tbk) (“Smartfren”) and Telkomsel

The principal matters covered by the agreements with these operators are as follows:

·

The Company’s and Satelindo’s international gateway exchanges are interconnected with the mobile cellular telecommunications operators’ networks to make outgoing or receive incoming international calls through the Company’s and Satelindo’s international gateway exchanges.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

36.

INTERCONNECTION AGREEMENTS (continued)

2.

XL Axiata, PT Smartfren Telecom Tbk (previously PT Mobile-8 Telecom Tbk) (“Smartfren”) and Telkomsel (continued)

·

The Company and Satelindo receive, as compensation for the interconnection, a portion of

the cellular telecommunications operators’ revenues from the related services that are made through the Company’s and Satelindo’s international gateway exchanges.

·

Satelindo and IM3 also have an agreement with the above operators for the interconnection of Satelindo’s and IM3’s GSM mobile cellular telecommunications network with the above operators’ network, enabling the above operators’ customers to make calls/send SMS to or receive calls/SMS from Satelindo’s and IM3’s customers.

·

The agreements are renewable annually.

The Company (including Satelindo and IM3 until they were merged) and the above operators still continue their business under the agreements by applying the original compensation formula, except for interconnection fee.

On December 8, 27 and 28, 2006, the Company entered into a memorandum of understanding with each of Telkomsel, Smartfren and XL Axiata, respectively, applying the new interconnection rates under cost-based scheme effective January 1, 2007 to comply with Regulation No. 08/PER/M.KOMINFO/02/2006 of the MOCIT. The memoranda of understanding with Smartfren, XL Axiata and Telkomsel were subsequently replaced by agreements dated September 14, and December 17 and 19, 2007, respectively. The agreements with Smartfren and XL Axiata were amended on March 31, 2008, while the agreement with Telkomsel was amended on February 18, 2008. Subsequently, the agreements with Smartfren and XL Axiata were further amended on March 15, 2011 and March 3, 2011, respectively, while the agreement with Telkomsel was further amended on July 19, 2011, to meet the requirement in the BRTI letter No. 227/BRTI/XII/2010 dated December 31, 2010 regarding the implementation of new interconnection tariffs in 2011. The Company has adopted the new tariffs starting January 1, 2011.

On May 28, 2012and March 13, 2013, the Company amended the agreement with Telkomsel and Smartfren, respectively, to meet the requirement in the BRTI letter No. 262/BRTI/XII/2011 dated December 12, 2011 (Note 35) regarding the implementation of the new cost-based scheme for SMS interconnection which became effective starting June 1, 2012.

2.

PT Bakrie Telecom Tbk (“Bakrie Telecom”)

The principal matters covered by the latest amendment of the agreement dated June 10, 2009 are related to interconnection of the Company’s mobile cellular network and international gateway exchanges to Bakrie Telecom’s network, including SLI 009 network. Subsequently, the agreement with Bakrie Telecom was further amended on February 9, 2011 to meet the requirement in the BRTI letter No. 227/BRTI/XII/2010 dated December 31, 2010 regarding the implementation of new interconnection tariffs in 2011. The Company has adopted the new tariffs starting January 1, 2011.

On May 31, 2012, the Company and Bakrie Telecom signed “

Berita Acara Kesepakatan

” to meet the requirement in the BRTI letter No. 262/BRTI/XII/2011 dated December 12, 2011 (Note 35) regarding the implementation of the new cost-based scheme for SMS interconnection which became effective starting June 1, 2012.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

36.

INTERCONNECTION AGREEMENTS (continued)

Net interconnection revenues (charges) from (to) major operators for the nine-month periods ended September 30, 2013 and 2012 are as follows:

2013

2012

Telkom

48,943

52,564

Smartfren

4,689

7,410

Telkomsel

(65,697)

(80,956)

XL Axiata

(63,128)

(69,078)

Bakrie Telecom

(2,651)

(5,816)

Net charges

(77,844)

(95,876)

37.

SEGMENT INFORMATION

The Group manages and evaluates its operations in three major reportable segments: cellular, fixed telecommunications and MIDI. The operating segments are managed separately because each offers different services/products and serves different markets. The Group operates in one geographical area only, so no geographical information on segments is presented.

The cellular segment currently provides the network coverage in all major cities and population centers across Indonesia by using GSM 900 and GSM 1800 technology. Its primary service is the provision of voice and data transfer which is sold through post-paid and prepaid plans.

The fixed telecommunication segment is the provider of international long-distance services, fixed wireless services, Direct Long Distance (“DLD”) services and local fixed telephony services.

The MIDI segment offers products and services which include internet, high-speed point-to-point international and domestic digital leased line broadband and narrowband services, a high-performance packet-switching service and satellite transponder leasing and broadcasting services.

Refer to Notes 2k and 24 for the description of the types of products and services under each reporting segment.

No operating segments have been aggregated to form the above reportable operating segments.

Segment results and assets include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Expenditures for segment assets represent the total costs incurred during the period to acquire segment assets that are expected to be used for more than one year.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in certain respects, as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. The Group’s financing (including finance costs and finance income) and income taxes are managed on a group basis and are not allocated to operating segments.

Operating segments are reported based on financial information determined in conformity with Indonesian Financial Accounting Standards (“IFAS”), which reporting is also consistent with the internal reporting provided to the chief operational decision maker. The chief operational decision maker is responsible for allocating resources and assessing performance of the operating segments, and has been identified as a steering committee that makes strategic decisions.

37.

SEGMENT INFORMATION (continued)

Consolidated information by industry segment follows:

Major Segments

Fixed

Segment

Cellular

Telecommunications

MIDI

Total

Nine-month period ended September 30, 2013

Revenues

Revenues from external customers

14,479,675

886,715

2,432,869

17,799,259

Inter-segment revenues

-

-

492,441

492,441

Total revenues

14,479,675

886,715

2,925,310

18,291,700

Inter-segment revenues elimination

(492,441)

Revenues - net

17,799,259

Expenses

13,462,932

998,078

1,976,920

16,437,930

Operating income

1,016,743

(111,363)

455,949

1,361,329

Gain on sale of towers

105,788

Gain on foreign exchange - net

39,085

Others - net

14,612

Operating profit

1,520,814

Income tax benefit - net

526,188

Gain on change in fair value of derivatives - net

168,291

Interest income

81,986

Loss on foreign exchange - net

(2,351,216)

Financing cost

(1,621,433)

Share of loss of associated companies

(9)

Loss for the period

(1,675,379)

Depreciation and amortization

5,668,704

294,175

642,125

6,605,004

Other Information

Segment assets

51,573,556

1,156,895

8,744,762

61,475,213

Unallocated assets

2,632,210

Inter-segment assets elimination

(9,734,907)

Assets - net

54,372,516

Segment liabilities

30,337,309

582,112

3,034,391

33,953,812

Unallocated liabilities

10,725,191

Inter-segment liabilities elimination

(7,833,656)

Liabilities - net

36,845,347

Capital expenditures

6,449,267

122,457

881,369

7,453,093

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

37.

SEGMENT INFORMATION (continued)

Consolidated information by industry segment follows (continued):

Major Segments

Fixed

Segment

Cellular

Telecommunications

MIDI

Total

Nine-month period ended September 30, 2012

Revenues

Revenues from external customers

13,455,531

757,178

2,062,681

16,275,390

Inter-segment revenues

-

-

457,418

457,418

Total revenues

13,455,531

757,178

2,520,099

16,732,808

Inter-segment revenues elimination

          (457,418)

Revenues - net

16,275,390

Expenses

11,576,812

972,440

1,840,792

14,390,044

Operating income

1,878,719

(215,262)

221,889

1,885,346

Gain on sale of towers

1,150,780

Gain on foreign exchange - net

26,468

Others - net

(325,293)

Operating profit

2,737,301

Interest income

87,512

Financing cost

        (1,533,905)

Loss on foreign exchange - net

          (668,363)

Income tax expense - net

           (54,020)

Loss on change in fair value of derivatives - net

   (24,682)

Profit for the period

543,843

Depreciation and amortization

4,895,406

331,540

558,677

5,785,623

Capital expenditure

5,235,290

75,090

449,547

5,759,927

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

37.

SEGMENT INFORMATION (continued)

Consolidated information by industry segment follows (continued):

Major Segments

^{Fixed

Segment

Cellular

Telecommunications

MIDI

Total

^{As of December 31, 2012

Other Information

Segment assets

51,599,983

1,417,859

8,460,77261,478,614

Unallocated assets

2,219,928

Inter-segment assets elimination

(8,473,481)

Assets - net

55,225,061

^{Segment liabilities

29,495,438

448,908

2,521,52532,465,871

Unallocated liabilities

10,004,614

Inter-segment liabilities elimination

(6,640,808)

Liabilities - net

35,829,677

^{^{As of January 1, 2012 / December 31, 2011

Other Information

Segment assets

48,913,656

2,068,759

8,185,38759,167,802

Unallocated assets

1,994,640

Inter-segment assets elimination

(7,929,430)

Assets - net

53,233,012

^{Segment liabilities

27,073,313

742,444

3,042,38730,858,144

Unallocated liabilities

9,674,836

Inter-segment liabilities elimination

(6,269,068)

Liabilities - net

34,263,912

^{38.

Financial Risk Management Objectives And Policies

a.

Risk Management

The main risks arising from the Group’s financial instruments are interest rate risk, foreign exchange rate risk, equity price risk, credit risk and liquidity risk. The importance of managing these risks has significantly increased in light of the considerable change and volatility in both Indonesian and international financial markets. The Company’s Board of Directors reviews and approves the policies for managing these risks which are summarized below.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to its loans and bonds payable with floating interest rates.

The Company’s policies relating to interest rate risk are as follows:

(1)

Manage interest cost through a mix of fixed and variable rate debts. The Company evaluates the fixed to floating rate ratio of its loans and bonds payable in line with movements of relevant interest rates in the financial markets. Based on management’s assessment, new financing will be priced either on a fixed or floating rate basis.

(2)

Manage interest rate exposure on its loans and bonds payable by entering into interest rate swap contracts.

As of September 30, 2013, more than 79% of the Group’sdebts are fixed-rated.

Several interest rate swap contracts are entered into to hedge floating rate U.S. dollar debts. These contracts are accounted for as transactions not designated as hedges, wherein the changes in the fair value are credited or charged directly to profit or loss for the period.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the Group’s net comprehensive loss for the nine-month period ended September 30, 2013 (through the impact on floating rate borrowings which is based on LIBOR for U.S. dollar borrowings and on JIBOR for rupiah borrowings):

Increase/decrease in basis points:

U.S. dollar

5

Rupiah

49

Effect on net comprehensive loss for the period:

U.S. dollar

US$26 (equivalent to Rp302)

Rupiah

Rp5,993

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

38.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

a.

Risk Management (continued)

Interest rate risk (continued)

Management conducted a survey among the Group’s banks to determine the outlook of the LIBOR and JIBOR interest rates until the Group’s next reporting date of December 31, 2013. The outlook is that the LIBOR and JIBOR interest rates may move 5 and 49basis points, respectively, higher or lower than the interest rates at the end of the nine-month period ended September 30, 2013.

If LIBOR interest rates were 5 basis points higher or lower than the market levels for the nine-month period ended September 30, 2013, with all other variables held constant, the Group’s net comprehensive loss for the period would be (Rp1,725,658)or (Rp1,725,054)and the equity would be Rp16,948,132 or Rp16,948,736, respectively.

If JIBOR interest rates were 49 basis points higher or lower than the market levels for the nine-month period ended September 30, 2013, with all other variables held constant, the Group’s net comprehensive loss for the period would be (Rp1,731,349)or (Rp1,719,363) and the equity would be Rp16,942,441 or Rp16,954,427, respectively.

Foreign exchange rate risk

Foreign exchange rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group’s exposure to exchange rate fluctuations results primarily from its U.S. dollar-denominated loans and bonds payable, accounts receivable, accrued expenses and procurement payable.

To manage foreign exchange rate risks, the Company entered into several cross currency swap and currency forward contracts and other permitted instruments, if considered necessary. These contracts are accounted for as transactions not designated as hedges, wherein the changes in the fair value are credited or charged directly to the profit or loss for the period.

The Group’s procurement payable is primarily denominated in foreign currencies payable to suppliers and contractors for the purchase and construction or installation of property and equipment, while a significant part of the Group’s accounts receivable represents Indonesian rupiah-denominated collectibles from domestic operators.

To the extent the Indonesian rupiah depreciates further from the exchange rates in effect at

September 30, 2013, the Group’s obligations denominated in foreign currencies will increase in Indonesian rupiah terms. However, the increases in these obligations will be offset in part by increases in the values of foreign currency-denominated time deposits and accounts receivable. As of September 30, 2013, 18.54% of the Group’s U.S. dollar-denominated debts were covered by several currency forward contracts.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

38.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

a.

Risk Management (continued)

Foreign exchange rate risk (continued)

The following table shows the Group’s consolidated U.S. dollar-denominated assets and liabilities as of September 30, 2013:

U.S. Dollar

Rupiah *

Assets:

Cash and cash equivalents

76,752

891,315

Accounts receivable - trade

121,413

1,409,969

Accounts receivable - others

             2,308

26,804

Derivative assets

8,147

94,614

Other current financial assets - net

384

4,459

Due from related parties

45

526

Other non-current financial assets - net

1,564

18,163

Total assets

210,613

2,445,850

Liabilities:

Accounts payable - trade

16,056

186,458

Procurement payable

118,956

1,381,436

Accrued expenses

28,782

334,248

Deposits from customers

2,762

32,080

Derivative liabilities

3,358

38,992

Other current financial liabilities

19,249

223,540

Due to related parties

              1,447

16,804

Loans payable (including current maturities)

293,955

3,413,700

Bonds payable (including current maturities)

650,000

7,548,450

Other non-current financial liabilities

199,413

2,315,777

Total liabilities

1,333,978

15,491,485

Net liabilities position

1,123,365

13,045,635

*

The exchange rate used to translate the U.S. dollar amounts into rupiah was Rp11,613 to US$1 (in full amounts) as published by the Indonesian Central Bank as of September 30, 2013.

The following table demonstrates the sensitivity to a reasonably possible change in the U.S. dollar exchange rate, with all other variables held constant, of the Group’s profit or loss for the nine-month period ended September 30, 2013:

Change in U.S. dollar exchange rate

1.96%

Effect on loss for the period

Rp192,095

Management conducted a survey among the Group’s banks to determine the outlook of the U.S. dollar exchange rate until the Group’s next reporting date of December 31, 2013. The outlook is that the U.S. dollar exchange rate may weaken by 1.96% as compared to the exchange rate at September 30, 2013.

If the U.S. dollar exchange rate weakens by 1.96% as compared to the exchange rate as of September 30, 2013, with all other variables held constant, the Group’s loss for the nine-month period ended September 30, 2013 would be (Rp1,533,261) lower than the actual results.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

38.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

a.

Risk Management (continued)

Equity price risk

The Group’s long-term investments consist primarily of minority investment in the equity of private Indonesian companies and equity of foreign companies. With respect to the Indonesian companies in which the Group has investments, the financial performance of such companies may be adversely affected by the economic conditions in Indonesia.

Credit risk

Credit risk is the risk that the Group will incur a loss arising from its customers, clients or counterparties that fail to discharge their contractual obligations. There are no significant concentrations of credit risk. The Group manages and controls this credit risk by setting limits on the amount of risk it is willing to accept for individual customers and by monitoring exposures in relation to such limits.

The Group trades only with recognized and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis to reduce the exposure to bad debts.

The table below shows the maximum exposure to credit risk for the components of the interim consolidated statement of financial position as of September 30, 2013:

Maximum

Exposure
⁽¹⁾

Loans and receivables:

Cash and cash equivalents

2,307,427

Accounts receivable

Trade - net

2,724,521

Others - net

79,243

Other current financial assets - net

18,580

Due from related parties - net

7,833

Other non-current financial assets

117,804

Held-for-trading:

Currency forward

94,614

Available-for-sale investments:

Other non-current financial assets -

2,730

other long-term investments - net

Total

5,352,752

(1)

There are no collaterals held or other credit enhancements or offsetting arrangements that affect this maximum exposure.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

38.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

a.

Risk Management (continued)

Liquidity risk

Liquidity risk is defined as the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

The Group’s liquidity requirements have historically arisen from the need to finance investments and capital expenditures related to the expansion of its telecommunications business. The Group’s telecommunications business requires substantial capital to construct and expand mobile and data network infrastructure and to fund operations, particularly during the network development stage.

Although the Group has substantial existing network infrastructure, the Group expects to incur additional capital expenditures primarily in order to focus cellular network development in areas it anticipates will be high-growth areas, as well as to enhance the quality and coverage of its existing network.

In the management of liquidity risk, the Group monitors and maintains a level of cash deemed adequate to finance the Group’s operations and to mitigate the effects of fluctuation in cash flows. The Group also regularly evaluates the projected and actual cash flows, including its loan maturity profiles, and continuously assesses conditions in the financial markets for opportunities to pursue fund-raising initiatives. These activities may include bank loans, debt capital and equity market issues.

The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments.

Expected maturity as of September 30,

Total

2018

contractual

and

cash

Interest

Carrying

2014

2015

2016

2017

thereafter

flows

value

amount

September 30, 2013

Short-term bank loan

1,500,000

-

-

-

-

1,500,000

(231)

1,499,769

Accounts payable - trade

378,491

-

-

-

-

378,491

-

378,491

Procurement payable

3,440,667

-

-

-

-

3,440,667

-

3,440,667

Accrued expenses

1,800,677

-

-

-

-

1,800,677

-

1,800,677

Deposits from customers

47,821

-

-

-

-

47,821

-

47,821

Derivative liabilities

38,992

-

-

-

-

38,992

-

38,992

Other current financial liabilities

783,916

-

-

-

-

783,916

(411,640)

372,276

Due to related parties

-

35,170

-

-

-

35,170

-

35,170

Obligations under finance lease

-

728,734

728,734

722,737

2,805,402

4,985,607

(1,530,559)

3,455,048

Other non-current financial

liabilities

-

46,214

-

-

-

46,214

(2,737)

43,477

Loans payable

2,303,552

803,552

1,453,552

485,532

517,512

5,563,700

(84,997)

5,478,703

Bonds payable

1,630,000

1,048,000

-

2,142,000

10,548,450

15,368,450

(105,817)

15,262,633

Total

11,924,116

2,661,670

2,182,286

3,350,269

13,871,364

33,989,705

(2,135,981)

31,853,724

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

38.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

a.

Risk Management (continued)

Liquidity risk (continued)

Expected maturity as of December 31,

Total

2017 and

contractual

InterestCarrying

2013

2014

2015

2016

thereafter

cash flows

valueamount

^{December 31, 2012

Short-term bank loan

315,736

-

-

-

-

315,736

(16,207)299,529

Accounts payable - trade

231,737

-

-

-

-

231,737

-231,737

Procurement payable

2,737,850

-

-

-

-

2,737,850

-2,737,850

Accrued expenses

1,961,285

-

-

-

-

1,961,285

- 1,961,285

Deposits from customers

43,825

-

-

-

-

43,825

-43,825

Derivative liabilities

81,241

-

-

-

-

81,241

- 81,241

Other current financial

liabilities

670,834

-

-

-

-

670,834

(381,670)289,164

Due to related parties

-

42,789

-

-

-

42,789

-42,789

Obligation under financial

lease

-

622,020

622,020

622,020

2,827,500

4,693,560

(1,591,650)3,101,910

Other non-current

financial liabilities

-

71,592

4,588

-

-

76,180

(6,907) 69,273

Loans payable

2,924,722

1,793,139

856,839

654,973

830,089

7,059,762

(686,722) 6,373,040

Bonds payable

2,643,553

3,520,261

1,299,951

1,734,671

13,638,300

22,836,736

(7,521,054

) 15,315,682

^{Total

11,610,783

6,049,801

2,783,398

3,011,664

17,295,889

40,751,535

(10,204,210

)30,547,325

Expected maturity as of December 31,

Total

2016 and

contractual

InterestCarrying

2012

2013

2014

2015

thereafter

cash flows

valueamount

^{January 1, 2012 /

December 31, 2011

Short-term bank loan

1,579,092

-

-

-

-

1,579,092

(79,836)1,499,256

Accounts payable - trade

319,058

-

-

-

-

319,058

-319,058

Procurement payable

3,475,862

-

-

-

-

3,475,862

-3,475,862

Accrued expenses

1,895,613

-

-

-

-

1,895,613

- 1,895,613

Deposits from customers

37,265

-

-

-

-

37,265

-37,265

Derivative liabilities

138,189

-

-

-

-

138,189

-138,189

Other current financial

liabilities

196,675

-

-

-

-

196,675(124,847)71,828

Due to related parties

-

15,480

-

-

-

15,480

-15,480

Obligation under financial

lease

-

180,602

180,602

180,602

696,670

1,238,476

(468,395)770,081

Other non-current

financial liabilities

-

84,186

34,631

-

-

118,817

(11,384)107,433

Loans payable

3,732,456

2,774,662

2,245,335

706,241

1,396,047

10,854,741

(1,128,425)9,726,316

Bonds payable

1,167,023

2,384,195

3,260,902

1,040,592

11,263,104

19,115,816

(6,935,474)12,180,342

^{Total

12,541,233

5,439,125

5,721,470

1,927,435

13,355,821

38,985,084

(8,748,361)30,236,723

38.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

b.

Capital Management

The Group aims to achieve an optimal capital structure in pursuit of its business objectives, which include maintaining healthy capital ratios and strong credit ratings, and maximizing stockholder value.

Some of the Group’s debt instruments contain covenants that impose compliance with certain leverage ratios. In addition, the Company’s credit ratings from the international credit ratings agencies are based on its ability to remain within certain leverage ratios. The Group has complied with all externally imposed capital requirements.

Management monitors capital using several financial leverage measurements such as debt-to-equity ratio. The Group’s objective is to maintain its debt-to-equity ratio at a maximum of 2.50 as of September 30, 2013.

As of September 30, 2013, the Group’s debt-to-equity ratio accounts as defined under the loan agreements are as follows:

Loans and

Guaranteed

Bonds Payables

Notes Due 2020

Short-term bank loan

1,500,000

1,500,000

Loans and bonds payable - including current maturities

20,932,150

20,932,150

Obligation under finance lease

-

3,792,956

Total debts

22,432,150

26,225,106

Total equity

17,527,169

17,527,169

Debts-to-equity-ratio

1.28

1.50

c.

Collateral

Except as discussed in Notes 8 and 19 to the interim consolidated financial statements, there are no other significant terms and conditions associated with the use of collateral.

The Company did not hold any collateral from other parties as of September 30, 2013.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

39.

EVENTS AFTER REPORTING PERIOD

a.

On October 3, 2013, the Company paid VAT for the period January - December 2012 totaling Rp148,161 (including penalties) based on the SKPKBs dated September 4, 2013 received from the DGT (Note 13).

b.

On October 3, 2013, the Company received dividend income amounting to Rp14,390from its other long-term investment in Tower Bersama’s shares (Note 12a).

c.

On October 8 and 11, 2013, the Companyentered into 1 and 2 derivative contracts with total notional amount of US$10,000 and US$20,000, respectively, with ING.

d.

On October 10, 2013, the Company entered into 2 derivative contracts with Barclays and DBS Ltd with notional amount of US$10,000 each.

e.

On October 16, 2013, the Company made apartial payment of additional underpayment of the Company’s VAT for the period January - August 2010 totaling Rp76,669(Note 13).

f.

On October 17, 2013, the Company entered into 1 derivative contract with JP Morgan with notional amount of US$10,000.

g.

On October 18, 2013, the Company entered into a 3-year syndicated time revolving loan facility of Rp750,000with PT Indonesia Infrastructure Finance and PT Sarana Multi Infrastructure (Persero) and PT Bank Permata Tbk as the Facility Agent.The loan from such facility bears interest at the annual rate of JIBOR + 2.25%.

h.

On October 21, 2013, the Company entered into a derivative contract with DBS Ltd with notional amount of US$10,000.

i.

On October 21, 2013, the Company received the return of capital from IFB amounting to US$275.0 and EUR1,481.9 and from IIFB amounting to EUR673.9 due to their liquidation.The deregistration with the Dutch Chamber of Commerceis still in process as of October 21, 2013.

j.

As of October 24, 2013, the prevailing exchange rate of the rupiah to U.S. dollar is Rp11,268 to US$1 (in full amounts), while as of September 30, 2013, the prevailing exchange rate was Rp11,613 to US$1 (in full amounts). Using the exchange rate as of October 24, 2013, the Group earned exchange gain amounting to approximately Rp387,561 (excluding the effect of revaluing derivative contracts on October 24, 2013) on the foreign currency liabilities, net of foreign currency assets, as of September 30, 2013 (Note 38).

The translation of the foreign currency liabilities, net of foreign currency assets, should not be construed as a representation that these foreign currency liabilities and assets have been, could have been, or could in the future be, converted into rupiah at the prevailing exchange rate of the rupiah to U.S. dollar as of September 30, 2013 or at any other rate of exchange.

The commitments for the capital expenditures denominated in foreign currencies as of

September 30, 2013 as disclosed in Note 33a are approximately Rp1,270,332 if translated at the prevailing exchange rate as of October 24, 2013.

66 * Arabic * MERGEFORMAT 66

These consolidated financial statements are originally issued in the Indonesian language.

PT INDOSAT Tbk AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2013 and for the Nine-month Period then Ended (Unaudited)

With Comparative Figures

as of December 31, 2012 and January 1, 2012 / December 31, 2011

and for the Nine-month Period Ended September 30, 2012 (as Restated Unaudited)

(Expressed in millions of rupiah and thousands of U.S. dollar, except share and tariff data)

u

40. RECLASSIFICATION OF ACCOUNTS

Following are the accounts in the interim consolidated statement of comprehensive income for the nine-month period ended September 30, 2012 which were reclassified in accordance with the BAPEPAM-LK Regulation No VIII.G.7:

Previously Reported

Reclassified

Amount

Reason

Other income (expenses) - Loss on foreign exchange - net

Expenses -Loss on foreign exchange - net

26,468

Reclassification to conform

with the 2013 presentation

Other income (expenses) - Others - net

Expenses - Others - net

(243,462)*

Reclassification to conform

with the 2013 presentation

* before the restatement impact (see Note 2u)

66 * Arabic * MERGEFORMAT 66}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}

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	Non-integrated	Other intangible
	software	asset	Goodwill	Total
Cost
At January 1, 2011	275,629	597,448	2,944,362	3,817,439
Additions	10,340	112	-	10,452
At December 31, 2011	285,969	597,560	2,944,362	3,827,891
Additions	23,055	18	-	23,073
At December 31, 2012	309,024	597,578	2,944,362	3,850,964
Additions	2,016	14	-	2,030
At September 30, 2013	311,040	597,592	2,944,362	3,852,994

Accumulated Amortization
At January 1, 2011	225,952	597,448	1,619,979	2,443,379
Amortization	17,608	51	-	17,659
At December 31, 2011	243,560	597,499	1,619,979	2,461,038
Amortization	16,210	9	-	16,219
At December 31, 2012	259,770	597,508	1,619,979	2,477,257
Amortization	13,293	7	-	13,300
At September 30, 2013	273,063	597,515	1,619,979	2,490,557

Net Book Value
At December 31, 2011	42,409	61	1,324,383	1,366,853
At December 31, 2012	49,254	70	1,324,383	1,373,707
At September 30, 2013	37,977	77	1,324,383	1,362,437

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		September 30, 2012			September 30, 2012
		(Previously Reported)	Adjustments		(Restated)

REVENUES
Cellular		13,650,482	(194,951	)	13,455,531
MIDI		2,101,364	(38,683	)	2,062,681

EXPENSES (INCOME)
Cost of services		6,524,319	(62,048	)	6,462,271
Depreciation and amortization		5,770,403	15,220		5,785,623
Marketing		841,874	(195,529	)	646,345

Gain on sale of towers (including amortization of deferred gain on sale and leaseback of towers)		(2,187,300)	1,036,520		(1,150,780)
Gain on foreign exchange - net		-	(26,468	)	(26,468)
Others – net		243,462	81,831		325,293

Interest income		79,876	7,636		87,512
Financing cost		(1,468,037)	(65,868	)	(1,533,905)
Loss on foreign exchange - net		(616,326)	(52,037	)	(668,363)

INCOME TAX BENEFIT
Deferred		28,549	35,977		64,526

PROFIT FOR THE PERIOD
ATTRIBUTABLE TO:
	Owners of the Company	1,628,413	(1,152,698	)	475,715
	Non-controlling interests	72,882	(4,754	)	68,128

							January 1,
							2012 /
					September 30,	December 31,	December 31,
					2013	2012	2011
Cash on hand
	Rupiah				1,484	1,837	1,465
	U.S. dollar (US$14 in 2013 and US$13 in 2011)				163	-	115
					1,647	1,837	1,580
Cash in banks
	Related parties (Note 31)
		Rupiah
			PT Bank Mandiri (Persero) Tbk ("Mandiri")		86,879	74,373	45,441
			PT Bank Negara Indonesia (Persero) Tbk ("BNI")		3,612	1,279	3,022
			PT Bank Pembangunan Daerah Sumatera Barat (“BPD - Sumbar”)		1,866	2	-
			PT Bank Pembangunan Daerah Jawa Barat dan Banten Tbk (“BPD - Jawa Barat”)		1,529	132	605
			PT Bank Pembangunan Daerah DKI Jakarta		1,316	2,996	1,110
			PT Bank Pembangunan Daerah Nusa Tenggara Timur		638	1,234	1,033
			PT Bank Pembangunan Daerah Yogyakarta (“BPD - Yogyakarta”)		513	685	1,473
			PT Bank Pembangunan Daerah Sumatera Selatan		314	2,231	-
			PT Bank Tabungan Negara (Persero) Tbk ("BTN")		161	1,924	500
			PT Bank Rakyat Indonesia (Persero) Tbk ("BRI")		86	1,178	1,409
			PT Bank Pembangunan Daerah Jawa Timur		18	1,326	743
			PT Bank Pembangunan Daerah Sumatera Utara		12	12	1,134
			Others (each below Rp1,000)		933	1,706	2,904
		U.S dollar
			Mandiri (US$7,154 in 2013, US$2,746 in 2012 and
				US$3,793 in 2011)	83,078	26,557	34,397
			Others (US$6 in 2013, US$8 in 2012 and
				US$12 in 2011)	59	72	109
	Third parties
		Rupiah
			PT Bank Central Asia Tbk ("BCA")		82,744	159,969	13,247
			PT Bank CIMB Niaga Tbk ("CIMB Niaga")		11,154	17,678	4,828
			Hongkong and Shanghai Banking Corporation, Jakarta Branch (“HSBC”)		1,141	14,076	2,414
			Citibank N.A., Jakarta Branch ("Citibank")		910	3,429	52,768
			Others (each below Rp5,000)		11,651	11,163	13,787

			Related	Third
		Total	Parties	Parties
September 30, 2013 (Nine Months)
Balance at beginning of period		564,630	42,632	521,998
Provision (reversal) - net (Note 27)		72,941	(7,540)	80,481
Net effect of foreign exchange adjustment		17,879	507	17,372
Write-offs		(167,398)	(13,217)	(154,181)
Balance at end of period		488,052	22,382	465,670

Individual impairment		108,026	17,810	90,216
Collective impairment		380,026	4,572	375,454
Total		488,052	22,382	465,670

Gross amount of receivables, individually impaired
	before deducting any individually assessed
	impairment allowance	486,820	142,966	343,854

		Total	Related Parties	Third Parties
December 31, 2012 (One Year)
Balance at beginning of year		536,651	47,107	489,544
Provision (reversal) - net		56,163	(6,567)	62,730
Net effect of foreign exchange adjustment		7,802	2,092	5,710
Write-offs		(35,986)	-	(35,986)
Balance at the end of year		564,630	42,632	521,998

Individual impairment		208,208	37,852	170,356
Collective impairment		356,422	4,780	351,642
Total		564,630	42,632	521,998

Gross amount of receivables, individually impaired,
	before deducting any individually assessed
	impairment allowance	341,363	111,124	230,239


		September 30, 2013 (Nine Months)
		Balance				Balance
		at Beginning	Transactions during the Period			at End
		of Period	Additions	Derecognitions	Reclassifications	of Period
Cost
Direct ownership
Landrights		545,499	1,573	-	-	547,072
Buildings		871,174	1,448	-	-	872,622
Information technology equipment		3,649,793	-	(6,286)	435,522	4,079,029
Office equipment		1,213,413	29,267	(7,474)	116	1,235,322
Building and leasehold
	improvements	10,413,096	-	(81,939)	338,445	10,669,602
Vehicles		22,637	-	(4,264)	-	18,373
Cellular technical equipment		39,953,889	57,069	(391,540)	2,572,871	42,192,289
Transmission and cross-
	connection equipment	21,164,810	106,659	(216,577)	933,034	21,987,926
FWA technical equipment		1,345,306	-	-	-	1,345,306
Operation and maintenance
	center and measurement unit	1,478,308	-	-	16,648	1,494,956
Fixed access network
	equipment	1,190,936	-	-	11,557	1,202,493
Properties under
	construction and
	installation	2,966,461	7,039,942	-	(4,308,193)	5,698,210

Under finance lease
Building and leasehold
	improvements (Note 2j)	3,551,653	215,119	-	-	3,766,772
Information technology equipment		50,670	-	-	-	50,670
Total		88,417,645	7,451,077	(708,080)	-	95,160,642

Accumulated Depreciation
Direct ownership
Buildings		365,694	13,177	-	-	378,871
Information technology
	equipment	3,039,529	268,351	(6,286)	-	3,301,594
Office equipment		977,644	32,034	(7,474)	-	1,002,204
Building and leasehold
	improvements	5,296,960	597,123	(81,938)	-	5,812,145
Vehicles		19,154	925	(4,090)	-	15,989
Cellular technical equipment		21,851,774	3,634,416	(334,472)	-	25,151,718
Transmission and cross-
	connection equipment	11,231,139	1,438,187	(75,354)	-	12,593,972
FWA technical equipment		931,908	197,318	-	-	1,129,226
Operation and maintenance
	center and measurement unit	1,301,739	50,476	-	-	1,352,215
Fixed access network equipment		975,151	43,353	-	-	1,018,504

Under finance lease
Building and leasehold
	improvements (Note 2j)	363,549	316,344	-	-	679,893
Total		46,354,241	6,591,704	(509,614)	-	52,436,331
Less Impairment in Value		98,611	-	-	-	98,611
Net Book Value		41,964,793				42,625,700


		January 1, 2012/December 31, 2011 (One Year)
		Balance				Balance
		at Beginning	Transactions during the Year			at End
		of Year	Additions	Derecognitions	Reclassifications	of Year
Cost
Direct ownership
Landrights		541,087	-	-	1,975	543,062
Buildings		814,191	2,518	-	51,003	867,712
Information technology equipment		3,046,084	16	(42,816)	392,071	3,395,355
Office equipment		1,239,609	37,596	(37,171)	2,096	1,242,130
Building and leasehold
	improvements	11,974,442	-	(101,426)	340,712	12,213,728
Vehicles		24,700	160	(1,066)	-	23,794
Cellular technical equipment		34,850,044	400,956	(1,709,433)	3,871,437	37,413,004
Transmission and cross-
	connection equipment	18,287,587	114,475	(90,488)	1,373,309	19,684,883
FWA technical equipment		1,345,157	-	-	149	1,345,306
Operation and maintenance
	center and measurement unit	1,355,263	-	(22)	97,352	1,452,593
Fixed access network
	equipment	1,126,614	-	-	40,787	1,167,401
Properties under
	construction and
	installation	3,461,884	5,517,983 ^*	-	(6,170,891)	2,808,976

Under finance lease
Building and leasehold
	improvements (Note 2j)	471,051	427,242	-	-	898,293
Total		78,537,713	6,500,946	(1,982,422)	-	83,056,237

Accumulated Depreciation
Direct ownership
Buildings		313,721	34,523	-	-	348,244
Information technology
	equipment	2,349,288	412,137	(42,816)	-	2,718,609
Office equipment		958,324	51,219	(37,171)	-	972,372
Building and leasehold
	improvements	4,694,662	850,015	(101,349)	-	5,443,328
Vehicles		18,646	2,852	(1,067)	-	20,431
Cellular technical equipment		15,488,516	3,250,203	(1,203,195)	-	17,535,524
Transmission and cross-
	connection equipment	8,032,100	1,527,191	(80,036)	-	9,479,255
FWA technical equipment		534,842	122,854	-	-	657,696
Operation and maintenance
	center and measurement unit	1,093,598	125,789	(22)	-	1,219,365
Fixed access network equipment		842,092	67,263	-	-	909,355

Under finance lease
Building and leasehold
	improvements (Note 2j)	51,277	96,472	-	-	147,749
Total		34,377,066	6,540,518	(1,465,656)	-	39,451,928
Less Impairment in Value		98,611	-	-	-	98,611
Net Book Value		44,062,036				43,505,698


*including additional property and equipment purchased from Lintasarta amounting to Rp88,371 (net of intercompany profit of Rp27,578)

	Percentage of		Estimated Date
	Completion	Cost	of Completion

September 30, 2013
Cellular technical equipment	1- 97	4,478,282	October2013 -April 2015
Building and leasehold improvements	10- 96	694,936	October 2013 - May 2015
Transmission and cross-connection equipment	2 - 93	319,809	October 2013 - May 2015
Information technology equipment	45 - 98	95,730	October 2013 - January 2014
Building	95	71,385	December 2013
Others	95	38,068	October 2013 - January 2014
Total		5,698,210

		Amount
Spectrum license		222,922
Customer base
-	Post-paid	154,220
-	Prepaid	73,128
Brand		147,178
Total		597,448

	Corporate income tax
		Current period / year (Note 16)	177,668	162,647	181,717
		Previous years (ii)	230,968	248,509	333,217
VAT and others (iii)			474,697	339,995	351,909
			883,333	751,151	866,843
Others			110,877	2,473	5,593
Total			995,076	754,498	872,436

				January 1,
				2011 /
		September 30,	December 31,	December 31,
		2013	2012	2011
Related parties (Note 31) (including US$20
	in 2013, US$78 in 2012 and US$114 in 2011)	26,974	43,783	36,073
Third parties (including US$118,936 in 2013,
	US$141,024 in 2012 and US$220,674 in 2011)	3,413,693	2,694,067	3,439,789
Total		3,440,667	2,737,850	3,475,862

				2013	2012
Profit (loss) before income tax per interim consolidated statement of
	comprehensive income			(2,201,567)	597,863
Company's equity in Subsidiaries’ profit before income tax and reversal of
	inter-company consolidation eliminations			(197,782)	(160,065)
Profit (loss) before income tax of the Company				(2,399,349)	437,798
Positive adjustments
		Depreciation - net		1,211,375	435,053
		Charges from leasing transactions		532,980	82,052
		Accrual of employee benefits - net		130,227	83,586
		Provision for impairment of accounts receivable - net		80,112	65,182
		Employee benefit		48,169	41,885
		Provision for termination, gratuity and compensation benefits
			of employees	36,093	32,804
		Provision for decline in value of inventory		25,550	-
		Tax expenses		25,408	-
		Amortization of long-term prepaid licenses		12,208	2,575
		Donations		8,773	7,963
		Assessments for income taxes and VAT (including penalties)		6,156	-
		Net periodic pension cost		632	-
		Representation and entertainment		563	978
		5% final tax on tower sales (Note 29)		-	185,339
		Interest compensation on the overpayment of 2004
			corporate income tax	-	60,674
		Amortization of debt and bonds issuance costs,
			consent solicitation fees and discount (Notes 18 and 19)	-	22,755
		Others		45,626	41,014

Negative adjustments
	Equity in net income of investees			(187,793)	(140,083)
	Write-off of accounts receivable			(154,654)	-
	Amortization of deferred gain on tower sales - net, already subjected to final tax (Note 29)			(105,787)	-
	Amortization of other intangible assets			(96,693)	(112,913)
	Gain on outright sale of assets being leased (Note 8)			(55,241)	-
	Loss on sale and exchange of property and equipment			(40,814)	(135,147)
	Interest income already subjected to final tax			(32,801)	(41,603)
	Write-off of short-term investments (Note 7)			(25,395)	-
	Amortization of debt and bonds issuance costs,
			consent solicitation fees and discount (Notes 18 and 19)	(17,904)	-
	Gain on tower sales - net already subjected to final tax (Note 29)			-	(860,946)
	Net periodic pension cost			-	(4,781)
	Others			-	(1,486)
Estimated taxable income (tax loss) of the Company - current period				(952,559)	202,699
Tax losses carryforward at beginning of period after tax audit adjustments				(571,516)	(1,307,007)
Tax losses carryforward at end of period				(1,524,075)	(1,104,308)

				2013	2012
Income tax expense (benefit) - current,at statutory tax rates
	Company
		Income tax expense - current		-	-
		Tax expense from correction on Satelindo's corporate income tax
			for fiscal year 2002 (Note 13)	-	103,163
		Tax expense from tax correction on the Company's corporate income tax for fiscal year 2010 (Note 13)		-	61
		Interest compensation on the overpayment of 2004 corporate
			income tax	-	(60,674)
	Subsidiaries Income tax expense -current			87,482	69,574
		Tax expense from tax correction on IMM's corporate income tax
			for fiscal year 2010 (Note 13)	-	6,422
Income tax expense - current - net				87,482	118,546
Income tax expense (benefit) - deferred - effect of temporary
	differences at applicable tax rate
	Company
		Equity in net income of investees		35,514	27,600
		Amortization of other intangible assets		24,173	28,228
		Write-off of accounts receivable (provision for impairment of		18,636	(16,295)
		receivables)- net
		Gain on outright sale of assets being leased		13,810	-
		Loss on sale and exchange of property and equipment - net		10,204	33,787
		Write-off of short-term investments (Note 7)		6,349	-
		Amortization of debt and bonds issuance costs,
			consent solicitation fees and discount (Notes 18 and 19)	4,476	(5,689)
		Adjustment due to tax audit (Note 13)		-	25,495
		Reversal of deferred tax liabilities from tower sale transactions (Note 29)		-	(57,527)
		Depreciation -net		(302,844)	(108,763)
		Utilization of tax losses carryforward (tax loss)		(238,140)	50,675
		Charges from leasing transactions		(133,245)	(20,513)
		Accrual of employee benefits - net		(32,557)	(20,896)
		Realization of accrual of provision for termination, gratuity
			and compensation benefits of employees - net	(9,023)	(8,201)
		Provision for decline in value of inventory		(6,388)	372
		Amortization of long-term prepaid licenses		(3,052)	(644)
		Net periodic pension cost		(158)	1,195
		Others		(20,884)	(9,291)
		Net		(633,129)	(80,467)
	Subsidiaries			19,459	15,941
Net income tax benefit-deferred				(613,670)	(64,526)
Income tax expense (benefit) - net				(526,188)	54,020

				2013	2012
Income tax expense (benefit) - current
	Company Income tax expense - current			-	-
		Tax expense from tax correction on Satelindo's corporate income tax
			for fiscal year 2002 (Note 13)	-	103,163
		Tax expense from tax correction on Company's corporate income tax
			for fiscal year 2010 (Note 13)	-	61
		Interest compensation on the overpayment of 2004 corporate
			income tax	-	(60,674)
	Subsidiaries Income tax expense - current			87,482	69,574
		Tax expense from tax correction on IMM's corporate income tax
			for fiscal year 2010 (Note 13)	-	6,422
Income tax expense - current - net				87,482	118,546
Less prepayments of income tax of the Company
	Article 22			169,244	62,101
	Article 23			3,934	7,338
Total prepayments of income tax of the Company				173,178	69,439
Less prepayments of income tax of Subsidiaries
	Article 23			4,483	4,148
	Article 25			81,512	98,795
Total prepayments of income tax of Subsidiaries				85,995	102,943
Total prepayment of income tax				259,173	172,382
Estimated income tax payable Subsidiaries				5,977	3,965
Net				171,691	102,808
Presented in interim consolidated statement of financial position as:
Estimated income tax payable - part of taxes payable				5,977	3,965
Claims for tax refund - as part of “Other Non-Current Assets” (Note 13)
	Company			173,178	69,439
	Subsidiaries			4,490	37,334
Total				177,668	106,773
Net				171,691	102,808

				2013	2012
Profit (loss) before income tax per interim consolidated statement
	of comprehensive income			(2,201,567)	597,863
Income tax expense(benefit) at the applicable tax rate				(550,392)	149,466
Company’s equity in Subsidiaries’ profit before income tax
	and reversal of inter-company consolidation eliminations			37,190	38,352
Tax effect on permanent differences
	Employee benefits			17,138	14,164
	Unrecognized deferred tax asset on current fiscal loss			13,412	12,913
	Assessment for income taxes and VAT (including penalties)			8,882	336
	Donations			3,328	3,909
	Representation and entertainment			1,984	667
	Amortization of deferred gain on tower sale - net already
			subjected to final tax (Note 29)	(26,447)	-
	Interest income already subjected to final tax			(19,009)	(18,561)
	Gain on tower sale - net already subjected to final tax (Note 29)			-	(226,428)
	Others			(12,274)	4,735
Adjustment due to tax audit				-	25,495
Interest compensation on the overpayment of 2004 corporate income tax
and tax expense from correction on Satelindo’s corporate income tax for fiscal year 2002				-	42,489
Tax expenses from tax correction on IMM's and the Company’s corporate
		income tax for fiscal year 2010		-	6,483
Income tax expense (benefit) - net per interim consolidated statement				(526,188)	54,020
	of comprehensive income			(526,188)	54,020

	Year of Expiration		Amount
	2014		31,901
	2015		355,363
	2016		289,695
	2017		36,210
	2018		974,559
	Total		1,687,728

Counterparties		Loan Type		Maturity	Amount	Interest		Remarks
Counterparties		Loan Type		Maturity	Amount	Structure		Remarks
a.	Mandiri*	▪	5-year unsecured	September 18, 2012	Rp2,000,000	▪	Year 1:	▪	Without penalty if the
			credit facility 1				9.75% p.a.		repayment was made
		▪	Loan drawdowns			▪	Year 2:		after the 24 ^th month
			were payable				10.5% p.a.		after the agreement
			annually			▪	Years 3-5:		date subject to 7 days’
							Average 3-		prior written notice
							month JIBOR	▪	With penalty of 2% of
							+ 1.5% p.a.		the prepaid amount for
						▪	Paid quarterly		repayment prior to the
									24 ^th month after the
									agreement date
								▪	On June 21, 2012, the
									Company obtained the
									consent letter from
									Mandiri for the sale of
									asset transaction (Note
									29).
								▪	In September 2012,
									this loan was fully paid.
b.	SEK Sweden	▪	Credit facilities	May 31, 2016	US$315,000	▪	Facility A:	▪	Permitted only in
	with Guarantee		consisting of	for Facility A,			Margin of		proportionate amount
	from EKN		Facilities A, B and	February 28,			0.25% London		for each of Facilities A,
			C with maximum	2017 for			Inter-Bank		B and C, after the last
			amounts of	Facility B and			Offered Rate		day of the availability
			US$100,000,	November 30,			("LIBOR"), SEK		period and on a
			US$155,000 and	2017 for			Funding Cost		repayment date subject
			US$60,000,	Facility C			of 1.05% and		to 20 days’ prior written
			respectively				EKN		notice
		▪	Loan drawdowns				Premium	▪	In minimum amount of
			are payable semi-				Margin of		US$5,000 and in an
			annually				1.57%		amount divisible by
						▪	Facility B:		US$500
							Margin of	▪	Any repayment shall
							0.05%,		satisfy the obligation
							Commercial		of loan repayment in
							Interest		inverse chronological order.
							Rate	▪	On June 18, 2012, the
							(“CIRR”) and		Company amended its
							EKN		credit facility agreement
							Premium		with HSBC Bank Plc,
							Margin of		as facility agent. The
							1.61%		amendment included
						▪	Facility C:		changes in definition of
							Margin of		certain terms related to
							0.05%, CIRR		sale of asset
							and EKN		transactions (Note 29).
							Premium
							Margin of 1.59%
						▪	Payable
							semi-
							annually

		Twelve months ending September 30,
						2018 and
		2014	2015	2016	2017	Thereafter	Total
In rupiah
BCA - revolving
	time loan	1,500,000	-	-	-	-	1,500,000
BSMI - revolving
	time loan	-	-	650,000	-	-	650,000
Sub-total		1,500,000	-	650,000	-	-	2,150,000
In U.S. dollar
SEK, Sweden
	(US$158,928.57)	522,585	522,585	522,585	228,113	49,770	1,845,638
HSBC France
	(US$120,832.02)	233,870	233,870	233,870	233,870	467,743	1,403,223
9-Year Commercial
	Facility
	(US$14,194.43)	47,097	47,097	47,097	23,548	-	164,839
Sub-total		803,552	803,552	803,552	485,531	517,513	3,413,700
Total		2,303,552	803,552	1,453,552	485,531	517,513	5,563,700
Less:
-	unamortized debt issuance costs and consent solicitation fees						(84,997)

Net							5,478,703

Bond	Nominal			Interest		Maturity		Remarks
	Amount
b. Eighth Indosat Bonds in Year 2012
§ Series A		Rp1,200,000		§ 8.625% p.a. § Payable quarterly		June 27, 2019		§ The Company can buy back part or all of the bonds, after the 1 ^st anniversary of the bonds, at market price temporarily or as an early settlement. § Based on the latest rating report released in March 2013, the bondshave _id AA+ rating from PTPemeringkat Efek Indonesia (“Pefindo”).
§ Series B		Rp1,500,000		§ 8.875% p.a. § Payable quarterly		June 27, 2022
c. Fifth Indosat Bonds in Year 2007
§ Series A		Rp1,230,000		§ 10.20% p.a. § Payable quarterly		May 29, 2014		§ The Company can buy back part or all of the bonds, after the 1 ^st anniversary of the bonds, at market price temporarily or as an early settlement. § Based on the latest rating report released in March 2013, the bondshave _id AA+ rating from Pefindo.
§ Series B		Rp1,370,000		§ 10.65% p.a. § Payable quarterly		May 29, 2017
d. Seventh Indosat Bonds in Year 2009
§ Series A			Rp700,000		§ 11.25% p.a. § Payable quarterly	December 8, 2014	§ The Company can buy back part or all of the bonds, after the 1 ^st anniversary of the bonds, at market price temporarily or as an early settlement. § Based on the latest rating report released in March 2013, the bondshave _id AA+ rating from Pefindo.
§ Series B			Rp600,000		§ 11.75% p.a. § Payable quarterly	December 8, 2016
e. Indosat Sukuk Ijarah II in Year 2007 (“Sukuk Ijarah II”)			Rp400,000		§ Bondholders are entitled to annual fixed Ijarah return (“ Cicilan Imbalan Ijarah ”) totaling Rp40,800, payable on a quarterly basis starting August 29, 2007 up to May 29, 2014.	May 29, 2014	§ The Company can buy back part or all of the bonds, after the 1 ^st anniversary of the bonds, at market price. § Based on the latest rating report released in March 2013, the bonds have _id AA+ _(sy) rating from Pefindo.
e. Sixth Indosat Bonds in Year 2008
§ Series A			Rp760,000		§ 10.25% p.a. § Paid quarterly	April 9, 2013	§ The Company had the option to buy back part or all of the bonds, after the 1 ^st anniversary of the bonds, at market price temporarily or as an early settlement. § Based on the rating report released in March 2013, the bonds had _id AA+ rating from Pefindo. § On April 9, 2013, the Company paid the series A bonds in full.
§ Series B			Rp320,000		§ 10.80% p.a. § Payablequarterly	April 9, 2015
e. Indosat Sukuk Ijarah V in Year 2012 (“Sukuk Ijarah V”)			Rp300,000		§ Bondholders are entitled to annual fixed Ijarah return (“Cicilan Imbalan Ijarah”) totaling Rp25,875, payable on a quarterly basis starting September 27, 2012 up to June 27, 2019.	June 27, 2019	§ The Company can buy back part or all of the bonds, after the 1 ^st anniversary of the bonds, at market price. § Based on the latest rating report released in March 2013, the bonds have _id AA+ _(sy) rating from Pefindo.

						Fair Value (Rp)
										January 1, 2012 /
					Notional	September 30, 2013		December 31, 2012		December 31, 2011
					Amount	Receivable	Payable	Receivable	Payable	Receivable	Payable
					(US$)
Cross Currency Swap Contracts:
a.	StandChart ⁽¹⁾				25,000	-	-	-	-	-	6,981
b.	StandChart ⁽³⁾				25,000	-	-	-	-	1,620	-
c.	StandChart ⁽⁴⁾				25,000	-	-	-	-	12,608	-
d.	MLIB ⁽²⁾				25,000 with
				decreasing amount		-	-	7,919	-	3,639	-
e.	DBS ⁽²⁾				25,000 with
				decreasing amount		-	-	7,962	-	4,271	-
f.	HSBC, Jakarta Branch ⁽⁸⁾				10,000	-	-	2,631	-	-	-
g.		Barclays Bank PLC
			(“Barclays”) ⁽⁸⁾		14,500	-	-	3,295	-	-	-
h.	HSBC, Jakarta Branch ⁽⁹⁾				14,000	-	-	4,338	-	-	-
i.	HSBC, Jakarta Branch ⁽¹⁰⁾				11,000	-	-	3,762	-	-	-
Sub-total						-	-	29,907	-	22,138	6,981
Interest Rate Swap Contracts:
j.	HSBC, Jakarta Branch				27,037 with
				decreasing amount		-	10,041	-	11,613	-	13,254
k.	HSBC, Jakarta Branch				44,200 with
				decreasing amount		-	27,665	-	38,260	-	35,370
l.	GSI ⁽¹¹⁾				100,000	-	-	-	25,287	-	60,869
m.	DBS ⁽¹¹⁾				25,000 with
				decreasing amount		-	-	-	1,391	-	4,174
n.	DBS ⁽¹²⁾				25,000 with
				decreasing amount		-	-	-	1,244	-	3,678
o.	Bank of Tokyo MUFJ				25,000 with
			(“BTMUFJ”) ⁽¹³⁾ decreasing amount			-	-	-	894	-	2,649
p.	BTMUFJ ⁽¹³⁾				25,000 with
				decreasing amount		-	-	-	804	-	2,347
q.	BTMUFJ ⁽¹³⁾				25,000 with
				decreasing amount		-	-	-	735	-	2,118
r.	StandChart ⁽¹³⁾				40,000 with
				decreasing amount		-	-	-	1,013	-	2,692
s.	DBS ⁽⁶⁾				26,000 with
				decreasing amount		-	-	-	-	-	1,486
t.	DBS ⁽⁷⁾				26,000 with
				decreasing amount		-	-	-	-	-	1,282
u.	BTMUFJ ⁽⁵⁾				36,500 with
				decreasing amount		-	-	-	-	-	1,289
Sub-total						-	37,706	-	81,241	-	131,208

	Currency Forward Contracts (continued):
cm.			CIMB Niaga		20,000		-		-		-		-		-		-
cn.			BNP Paribas		25,000		-		-		-		-		-		-
co.			DBS		20,000		-		-		-		-		-		-
cp.			Danareksa		10,000		-		-		-		-		-		-
cq.			Merrill Lynch		12,000		-		-		-		-		-		-
cr.			Merrill Lynch		14,500		-		-		-		-		-		-
cs.			Merrill Lynch		12,000		-		-		-		-		-		-
ct.			DBS		25,000		-		-		-		-		-		-
cu.			StandChart		12,000		-		-		-		-		-		-
	cv.	BTMU		12,000		-		-		-		-		-		-
	cw.	DBS		12,500		-		-		-		-		-		-
	cx.	Danareksa		9,500		-		-		-		-		-		-
	cy.	CIMB Niaga		11,000		-		-		-		-		-		-
	cz.	CIMB Niaga		21,000		-		-		-		-		-		-
	da.	StandChart		15,000		19,402		-		-		-		-		-
	db.	CIMB Niaga		12,000		17,614		-		-		-		-		-
	dc.	CIMB Niaga		12,000		17,579		-		-		-		-		-
	dd.	BTMU		10,000		-		-		-		-		-		-
	de.	DBS		5,000		-		-		-		-		-		-
	df.	Merrill Lynch		13,000		847		-		-		-		-		-
	dg.	CIMB Niaga		9,500		2,255		-		-		-		-		-
	dh.	Barclays		14,000		-		1,141		-		-		-		-
	di.	BNP Paribas		9,500		-		145		-		-		-		-
	dj.	BNP Paribas		10,000		1,715		-		-		-		-		-
	dk.	Barclays		10,000		2,429		-		-		-		-		-
	dl.	BTMU		10,000		6,005		-		-		-		-		-
	dm.	Barclays		10,000		2,624		-		-		-		-		-
	dn.	BTMU		10,000		6,137		-		-		-		-		-
	do.	BNP Paribas		10,000		6,795		-		-		-		-		-
	dp.	Barclays		10,000		3,071		-		-		-		-		-
	dq.	JP Morgan		10,000		2,392		-		-		-		-		-
	dr.	BTMU		10,000		5,749		-		-		-		-		-

	Sub-total					94,614		1,286		39,747		-		137,211		-
	Total					94,614		38,992		69,654		81,241		159,349		138,189

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No.	Counter-parties	Contract Period and Swap Amount	Annual Swap Premium Rate	Swap Premium Payment Date	Amount of Swap Premium Paid / Amortized (Rp)
No.	Counter-parties	Contract Period and Swap Amount	Annual Swap Premium Rate	Swap Premium Payment Date	2013	2012
a.	StandChart ⁽¹⁾	January 11, 2006 - June 22, 2012 Swap Rp236,250 for US$25,000	4.78% of US$25,000	Every June 22 and December 22	-	5,754
b.	StandChart ⁽²⁾	March 15, 2006 - June 22, 2012 Swap Rp228,550 for US$25,000	3.75% of US$25,000	Every June 22 and December 22	-	4,514
c.	StandChart ⁽³⁾	May 12, 2006 - June 22, 2012 Swap Rp217,500 for US$25,000	3.45% of US$25,000	Every June 22 and December 22	-	4,154
d.	MLIB ⁽⁴⁾	September 2, 2008 - June 12, 2013. The Company will receive the following: · zero amount if the IDR/USD spot rate at termination date is less than or equal to Rp8,800 to US$1 (in full amounts) · certain U.S. dollar amount as arranged in the contract multiplied by (IDR/USD spot rate - Rp8,800) (in full amount) divided by IDR/USD spot rate if the IDR/USD spot rate at termination date is greater than Rp8,800 but is less than or equal to Rp12,000 to US$1 (in full amounts) · certain U.S. dollar amount as arranged in the contract multiplied by (Rp3,200 [in full amount] divided by IDR/USD spot rate) if the IDR/USD spot rate at termination date is greater than Rp12,000 to US$1 (in full amounts)	4.10% of US$25,000 up to June 12, 2011, and 4.10% of decreasing U.S. dollar amount as arranged in the contract up to June 12, 2013	Every June 12 and December 12	2,223	3,114
e.	DBS ⁽⁵⁾	September 10, 2008 - June 12, 2013. The Company will receive the following: · zero amount if the IDR/USD spot rate at the scheduled settlement date is at or less than Rp8,800 to US$1 (in full amounts) · certain U.S. dollar amount which is equal to U.S. dollar amount at scheduled settlement date multiplied by (IDR/USD spot rate - Rp8,800) (in full amount) divided by IDR/USD spot rate if the IDR/USD spot rate at settlement date is greater than Rp8,800 and is at or less than Rp12,000 to US$1 (in full amounts) · certain U.S. dollar amount which is equal to U.S. dollar amount at scheduled settlement date multiplied by (Rp12,000 - Rp8,800) (in full amounts) divided by IDR/USD spot rate if the IDR/USD spot rate at settlement date is greater than Rp12,000 to US$1 (in full amounts)	3.945% of US$25,000 up to June 12, 2011, and 3.945% of decreasing U.S. dollar amount as arranged in the contract up to June 12, 2013	Every June 12 and December 12	1,703	2,370

No.	Counter-	Contract Period and	Annual Swap Premium Rate	Swap	Amount of Swap Premium Paid /
	Counter-	Contract Period and		Premium	Amortized (Rp)
	parties	Swap Amount		Payment Date	2013	2012
f.	HSBC ⁽⁶⁾	August 23, 2012 - January 23, 2013	3.00% of US$10,000	Upfront	429	708
		Swap Rp96,000 for US$10,000		premium of
				US$300
				(equivalent to
				Rp2,851)
				which was fully
				paid on August
				27, 2012. The
				premium is
				amortized over
				the contract
				period.
g.	Barclays ⁽⁷⁾	August 23, 2012 - January 23, 2013	2.94% of US$14,500	Upfront	609	1,006
		Swap Rp139,200 for US$14,500		premium of
				US$426
				(equivalent to
				Rp4,052)
				which was fully
				paid on August
				27, 2012. The
				premium is
				amortized over
				the contract
				period.
h.	HSBC ⁽⁸⁾	August 23, 2012 - February 25, 2013	3.20% of US$14,000	Upfront	1,282	870
		Swap Rp134,400 for US$14,000		premium of
				US$448
				(equivalent to
				Rp4,258)
				which was fully
				paid on August
				27, 2012. The
				premium is
				amortized over
				the contract
				period.
i.	HSBC ⁽⁹⁾	August 23, 2012 - March 25, 2013	3.70% of US$11,000	Upfront	1,518	687
		Swap Rp105,600 for US$11,000		premium of
				US$407
				(equivalent to
				Rp3,868)
				which was fully
				paid on August
				27, 2012. The
				premium is
				amortized over
				the contract
				period.

Total					7,764	23,177

No.	Counter-parties	Contract Period	Annual Interest Swap Rate	Swap Income (Expense) Receipt (Payment) Date	Amount of Swap Expense Paid (Rp)
No.	Counter-parties	Contract Period	Annual Interest Swap Rate	Swap Income (Expense) Receipt (Payment) Date	2013	2012
j.	HSBC	April 23, 2008 - November 27, 2016	5.42% of US$27,037, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.45% per annum	Every April 1 and October 1 up to October 2009, and every May 27 and November 27 up to termination date	2,747	3,074
k.	HSBC	April 23, 2008 -September 29, 2019	4.82% of US$44,200, the notional amount of which will decrease based on predetermined schedule, in exchange for U.S. dollar LIBOR plus 0.35% per annum	Every January 28 and July 28 up to July 2009, and every March 29 and September 29 up to termination date	5,766	12,438
l.	GSI ⁽¹²⁾	September 2, 2008 - June 12, 2013	(8.10% - underlyer return) of US$100,000 per annum, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum	Every June 10 and December 10 up to June 2011, and every June 12 and December 12 up to termination date	-	21,068
m.	DBS ⁽¹³⁾	September 5, 2008 - June 12, 2013	5.625% of US$25,000 per annum, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum	Every June 10 and December 10 up to December 2010, and every June 12 and December 12 up to termination date	-	1,811
n.	DBS ⁽¹⁴⁾	October 23, 2008 - June 12, 2013	5.28% of US$25,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum	Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date	-	1,603
o.	BTMUFJ ⁽¹⁵⁾	December 1, 2008 - June 12, 2013	4.46% of US$25,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum	Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date	-	1,111
p.	BTMUFJ ⁽¹⁶⁾	December 4, 2008 - June 12, 2013	4.25% of US$25,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum	Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date	-	985
q.	BTMUFJ ⁽¹⁷⁾	December 12, 2008 - June 12, 2013	4.09% of US$25,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum	Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date	-	889
r.	StandChart ⁽¹⁸⁾	December 19, 2008 - June 12, 2013	3.85% of US$40,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum	Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date	-	1,191
s.	DBS ⁽¹¹⁾	December 22, 2008 - December 12, 2012	4.02% of US$26,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum	Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date	-	881
t.	DBS ⁽¹¹⁾	January 21, 2009 - December 12, 2012	3.83% of US$26,000, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum	Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date	-	762
u.	BTMUFJ ⁽¹⁰⁾	March 2, 2009 - June 12, 2012	4.10% of US$36,500, the notional amount of which will decrease based on predetermined schedule, in exchange for 6-month U.S. dollar LIBOR plus 1.85% per annum	Every March 25 and September 25 up to March 2011, and every June 12 and December 12 up to termination date	-	1,321
Total					8,513	47,134

		Carrying Amount			Fair Value
				January 1,			January 1,
				2012 /			2012 /
		September 30,	December 31,	December 31,	September 30,	December 31,	December 31,
		2013	2012	2011	2013	2012	2011
Current Financial Assets
Cash and cash equivalents		2,309,074	3,917,236	2,224,206	2,309,074	3,917,236	2,224,206
Accounts receivable - trade
	and others - net	2,803,764	2,061,160	1,505,756	2,803,764	2,061,160	1,505,756
Derivative assets		94,614	69,654	159,349	94,614	69,654	159,349
Other current financial
	assets - net	18,580	13,382	24,790	18,580	13,382	24,790
Total current financial
	assets	5,226,032	6,061,432	3,914,101	5,226,032	6,061,432	3,914,101
Non-current Financial Assets
Due from related parties		7,833	10,358	10,654	6,827	9,539	8,967
Other non-current
	financial assets - net	1,523,518	1,543,140	212,270	1,522,304	1,541,388	207,991
Total non-current
	financial assets	1,531,351	1,553,498	222,924	1,529,131	1,550,927	216,958
Total Financial Assets		6,757,383	7,614,930	4,137,025	6,755,163	7,612,359	4,131,059
Current Financial Liabilities
Short-term bank loan		1,499,769	299,529	1,499,256	1,499,769	299,529	1,499,256
Accounts payable - trade		378,491	231,737	319,058	378,491	231,737	319,058
Procurement payable		3,440,667	2,737,850	3,475,862	3,440,667	2,737,850	3,475,862
Accrued expenses		1,800,677	1,961,285	1,895,613	1,800,677	1,961,285	1,895,613
Deposits from customers		47,821	43,825	37,265	47,821	43,825	37,265
Derivative liabilities		38,992	81,241	138,189	38,992	81,241	138,189
Loans payable - current
	portion	2,303,418	2,669,218	3,300,537	2,406,510	2,791,147	3,927,062
Bonds payable - current
	portion	1,628,618	1,329,175	41,989	1,652,080	1,343,205	43,137
Other current financial
	liabilities	372,276	289,164	71,828	372,276	289,164	71,828
Total current financial
	liabilities	11,510,729	9,643,024	10,779,597	11,637,283	9,778,983	11,407,270
Non-current Financial
	Liabilities
Due to related parties		35,170	42,789	15,480	30,653	39,405	13,030
Obligations under finance lease		-
net of current maturities		3,455,048	3,101,910	770,081	3,455,048	3,101,910	770,081
Loans payable -
	non-current portion	3,175,285	3,703,822	6,425,779	2,816,515	3,331,132	5,864,354
Bonds payable -
	non-current portion	13,634,015	13,986,507	12,138,353	14,236,202	15,318,676	13,334,903
Other non-current financial liabilities		43,477	69,273	107,433	42,415	66,433	101,068
Total non-current
	financial liabilities	20,342,995	20,904,301	19,457,126	20,580,833	21,857,556	20,083,436
Total Financial Liabilities		31,853,724	30,547,325	30,236,723	32,218,116	31,636,539	31,490,706

	September 30, 2013
		Quoted prices	Significant
		in active	and
		markets for	observable
		identical	inputs,	Significant
		assets or	directly or	unobservable
		liabilities	indirectly	inputs
	Total	(Level 1)	(Level 2)	(Level 3)
Current Financial Assets
Derivative assets	94,614	-	94,614	-
Non-current Financial Assets
Other non-current financial assets - net	1,402,984	1,402,984	-	-
Total Financial Assets	1,497,598	1,402,984	94,614	-
Current Financial Liabilities
Derivative liabilities	38,992	-	38,992	-

			Number of		Percentage
			Shares Issued		of Ownership
Stockholders			and Fully Paid	Amount	(%)
September 30, 2013
A Share
	Government		1	-	-
B Shares
	Ooredoo Asia, Pte. Ltd.		3,532,056,600	353,206	65.00
	Government		776,624,999	77,662	14.29
	SKAGEN Funds (SKAGEN AS)		297,046,950	29,705	5.46
	Director:
		Fadzri Sentosa	10,000	1	0.00
	Others (each holding below 5%)		828,194,950	82,819	15.25
Total			5,433,933,500	543,393	100.00
December 31, 2012
A Share
	Government		1	-	-
B Shares
	Ooredoo Asia, Pte. Ltd.		3,532,056,600	353,206	65.00
	Government		776,624,999	77,662	14.29
	SKAGEN Funds (SKAGEN AS)		299,382,400	29,938	5.51
	Director:
		Fadzri Sentosa	10,000	1	0.00
	Others (each holding below 5%)		825,859,500	82,586	15.20
Total			5,433,933,500	543,393	100.00
January 1, 2012 / December 31, 2011
A Share
	Government		1	-	-
B Shares
	Ooredoo Asia, Pte. Ltd.		3,532,056,600	353,206	65.00
	Government		776,624,999	77,662	14.29
	SKAGEN Funds (SKAGEN AS)		305,498,450	30,550	5.62
	Director:
		Fadzri Sentosa	10,000	1	0.00
	Others (each holding below 5%)		819,743,450	81,974	15.09
Total			5,433,933,500	543,393	100.00

		2013	2012
Cellular
	Usage charges	6,992,501	6,319,365
	Value-added services	6,207,325	5,777,510
	Interconnection services (Note 36)	1,879,967	1,468,612
	Tower leasing (Notes 2u and 33j)	419,664	375,943
	Monthly subscription charges	92,882	102,683
	Upfront discount and Customer Loyalty Program (Notes 2k and 2u)	(1,283,567)	(746,352)
	Others	170,903	157,770
	Sub-total	14,479,675	13,455,531
MIDI
	Internet Protocol Virtual Private Network (IP VPN)	539,827	551,097
	Internet	468,131	302,633
	Multiprotocol Label Switching (MPLS)	280,326	202,797
	World link and direct link	249,830	217,963
	Application services	193,848	166,216
	Satellite lease	188,749	149,929
	Leased line	143,199	102,908
	Digital data network	81,542	84,378
	Frame net	72,535	98,257
	Value added service (Note 2u)	34,163	106,108
	Others	180,719	80,395
	Sub-total	2,432,869	2,062,681
Fixed Telecommunications
	International Calls	739,322	587,703
	Fixed Line	100,748	89,599
	Fixed Wireless	46,645	79,876
	Sub-total	886,715	757,178
Total		17,799,259	16,275,390

The details of net revenues (included as part of cellular revenue - value added services) received by the Company from agency relationships for the nine-month periods ended September 30, 2013 and 2012 are as follows:

	2013	2012
Gross revenues	6,330,582	5,849,155
Compensation to value added service providers	(123,257)	(71,645)
Net revenues	6,207,325	5,777,510

	2013	2012
Interconnection (Note 36)	2,239,894	1,784,486
Radio frequency fee (Notes 33l and 35)	1,654,292	1,457,738
Maintenance	688,659	584,973
Utilities	655,587	637,582
Rent (Notes 2u and 33k)	579,657	520,413
Blackberry access fee	394,565	378,200
Leased circuits	373,393	288,172
USO (Note 35)	204,610	203,147
Cost of SIM cards and pulse reload vouchers	180,261	166,218
Concession fee (Note 35)	109,019	101,868
Installation	102,027	120,944
Delivery and transportation	89,396	83,357
License	26,920	37,550
Billing and collection	23,848	29,707
Cost of handsets and modems	5,523	9,857
Others	60,053	58,059
Total	7,387,704	6,462,271

		2013	2012
Salaries		444,764	412,411
Incentives and other employee benefits		248,521	231,852
Employee income tax		159,416	126,377
Bonuses		121,584	101,384
Post-retirement healthcare benefits (Note 30)		104,413	68,682
Separation, appreciation and compensation expense
	under Labor Law No. 13/2003 (Note 30)	49,518	42,738
Medical expense		44,694	43,498
Pension (Note 30)		14,546	11,814
Early retirement**		2,759	-
Severance benefits under Voluntary Separation Scheme (“VSS”)*		-	6,330
Others		19,585	7,396
Total		1,209,800	1,052,482