PT BANK SINARMAS Tbk Review PT Ba… · PT BANK SINARMAS Tbk Table of Contents Page The Directors’ Statement on the Responsibility for Financial Statements of PT Bank Sinarmas Tbk

PT BANK SINARMAS Tbk Table of Contents Page

The Directors’ Statement on the Responsibility for Financial Statements of PT Bank Sinarmas Tbk as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008 , and for the Nine-Month Periods Ended September 30, 2011 and 2010 and for the Years Ended December 31, 2010, 2009 and 2008

Independent Accountants’ Report 1 Financial Statements – As of September 30, 2011 and 2010, and December 31, 2010,

2009 and 2008 , and for the Nine - Month Periods Ended September 30, 2011 and 2010 and for the Years Ended December 31, 2010, 2009 and 2008

Statements of Financial Position 3 Statements of Comprehensive Income 5 Statements of Changes in Equity 6 Statements of Cash Flows 8 Notes to Financial Statements 9

PT BANK SINARMAS Tbk Statements of Financial PositionSeptember 30, 2011 and 2010, and December 31, 2010, 2009 and 2008

2011 2010Notes (Unaudited) (Unaudited) 2010 2009 2008

Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

ASSETS

Cash 2c,2f,34,35,40 579,508 306,716 269,274 199,311 141,250

Demand deposits with Bank Indonesia 2c,2f,2g,4,34,35,40 1,362,218 1,302,748 1,067,918 854,850 365,516

Demand deposits with other banks 2c,2f,5,34,35,40Related parties 2d,32 847 171,742 277 436 636 Third parties 68,132 128,927 86,295 88,148 110,539 Allowance for impairment losses 2j - - - (886) (1,112) Net 68,979 300,669 86,572 87,698 110,063

Placements with other banks 2c,2f,2h,6,34,35,40Third parties 422,061 379,884 706,189 276,037 85,857 Allowance for impairment losses 2j (100) (20) - (2,760) (859) Net 421,961 379,864 706,189 273,277 84,998

Securities - third parties 2c,2f,7,34,35,40 3,438,252 1,085,058 1,472,091 942,744 783,055 Allowance for impairment losses 2j (20) (38) - (1,107) (145) Net 3,438,232 1,085,020 1,472,091 941,637 782,910

Securities purchased under agreements to resell - third party 2c,2f,8,34,35,40 40,585 - 75,221 10,060 -

Unamortized interest received in advance (262) - (283) (42) -Net 40,323 - 74,938 10,018 -

Loans 2c,2f,2i,9,34,35,40Related parties 2d,32 1,436,003 858,316 794,940 741,894 83,408 Third parties 7,727,712 5,346,186 6,216,856 4,671,970 4,198,075 Total 9,163,715 6,204,502 7,011,796 5,413,864 4,281,483 Allowance for impairment losses 2j (97,226) (141,867) (77,638) (90,889) (52,704) Net 9,066,489 6,062,635 6,934,158 5,322,975 4,228,779

Interest receivable 2c,2d,2f,2s,10,32,34,35,40 56,204 44,317 47,353 44,008 39,952

Prepaid expenses 2d,2o,11,32 75,107 51,700 46,100 38,030 29,201

Premises and equipment 2k,12,28,29Cost 399,712 286,722 294,339 261,945 187,788 Accumulated depreciation (86,590) (60,610) (66,362) (44,421) (26,007) Net 313,122 226,112 227,977 217,524 161,781

Ijarah assets - net 2l,13Cost 166,948 275,079 275,370 - -Accumulated depreciation (65,107) (21,866) (56,212) - -Net 101,841 253,213 219,158 - -

Other assets - net 2c,2d,2f,2m,14,30,32,34,35,40 144,091 60,626 80,451 46,687 120,176

TOTAL ASSETS 15,668,075 10,073,620 11,232,179 8,036,015 6,064,626

See accompanying notes to financial statements which are an integral part of the financial statements.

September 30 Desember 31

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PT BANK SINARMAS Tbk Statements of Financial PositionSeptember 30, 2011 and 2010, and December 31, 2010, 2009 and 2008


Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

LIABILITIES AND EQUITY

Liabilities Liabilities immediately payable 2c,2d,2f,15,32,34,35,40 142,889 59,892 46,739 65,362 59,213 Deposits 2c,2f,2p,16,34,35,40

Related parties 2d,32 5,478,037 4,557,149 4,443,285 2,984,945 1,689,451 Third parties 8,352,950 4,477,078 5,375,929 3,847,477 3,585,750 Total 13,830,987 9,034,227 9,819,214 6,832,422 5,275,201

Deposits from other banks 2c,2f,2p,17,34,35,40Related parties 2d,32 - 14,101 14,250 14,891 -Third parties 328,108 229,841 352,603 223,735 80,045 Total 328,108 243,942 366,853 238,626 80,045

Securities Sold under Agreements to Repurchase - third party 2f,18,35,40 - - - 259,061 170,042

Unamortized interest - - - (633) (283) Net - - - 258,428 169,759

Taxes payable 2c,2v,19,30,34 19,614 19,056 25,208 19,227 12,242 Securities issued 2f,2r,35,41 886 1,635 1,616 2,626 5,431 Estimated losses on commitments

and contingencies 2c,2j,2t,20,33,34 4,160 6,610 3,537 6,763 2,561 Accrued interest 2c,2d,2f,2s,21,32,34,35,40 36,471 17,958 24,564 15,657 19,762 Deferred tax liabilities - net 2v,30 16,738 6,261 14,016 9,866 7,133 Defined-benefit post-employment reserve 2x,36 14,314 7,207 8,324 4,735 2,840 Other liabilities 2c,2f,22,34,35,40 17,069 25,149 10,614 10,874 12,776

Total Liabilities 14,411,236 9,421,937 10,320,685 7,464,586 5,646,963

EquityCapital Stock

Authorized20,000,000,000 shares at

Rp 100 par value per share inSeptember 30, 2011 and 2010, and December 31, 2010

4,000,000 shares atRp 500,000 par value per share inDecember 31, 2009

1,000,000 shares atRp 500,000 par value per share inDecember 31, 2008

Issued and paid-up9,078,869,400 shares in

September 30, 20115,680,500,000 shares in

September 30, 20107,280,500,000 shares in

December 31, 20101,050,000 shares in

December 31, 2009850,000 shares in

December 31, 2008 23,24 907,887 568,050 728,050 525,000 425,000 Additional paid-in capital 2q,23 165,240 - 75,322 -Retained earnings

Appropriated 37 3,500 3,000 3,000 2,500 2,000 Unappropriated 217,586 119,722 144,694 86,001 37,735

Unrealized loss on decrease in fair value of securities - net 2f,7 (37,374) (39,089) (39,572) (42,072) (47,072)

Total Equity 1,256,839 651,683 911,494 571,429 417,663

TOTAL LIABILITIES AND EQUITY 15,668,075 10,073,620 11,232,179 8,036,015 6,064,626


September 30 Desember 31

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PT BANK SINARMAS TbkStatements of Comprehensive IncomeFor the Nine - Month Periods Ended September 30, 2011 and 2010 and for the Years Ended December 31, 2010, 2009 and 2008


Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Interest Revenues and Profit Sharing 2l,2s,13,25 941,850 674,286 916,108 782,390 601,035Interest Expense and Profit Sharing 2s,26 572,130 350,829 497,652 470,357 425,759

Interest Revenues - Net 369,720 323,457 418,456 312,033 175,276

Other Operating RevenuesFees and commissions other than loans 2t 50,771 47,404 61,667 55,381 35,837Gain on foreign exchange - net 2c 7,745 1,647 2,373 9,988 9,270Gain on sale of trading securities - net 2,715 1,295 9,907 1,142 606Gain on increase in fair value of trading

securities - net 1,382 - 495 467 -Reversal of estimated losses on

commitments and contingencies 20 - - 3,190 - 2,477Reversal of allowance for impairment

losses of non - productive assets 2u,14 - - - 245 -Other income 28 452 713 3,403 448 1,381

Total Operating Revenues 432,785 374,516 499,491 379,704 224,847

Other Operating ExpensesGeneral and administrative expenses 2d,2x,27,32,36 178,892 128,690 180,734 148,324 118,354Personnel expenses 111,496 80,089 103,905 72,534 59,532Depreciation - premises and equipment 2k,12 20,282 16,351 22,103 18,747 13,558Impairment losses on financial assets 2f,2j,5,6,7,8,9 19,234 49,867 48,091 60,473 13,057Estimated losses on commitments and

contingencies 20 648 440 - 4,299 -Provision for possible losses on

non-earning assets 2u,14 249 - 33 - -Loss on decrease in fair value of trading

securities - net - 10 - - 426Other expenses 29 333 2,593 3,679 4,530 279

Total Operating Expenses 331,134 278,040 358,545 308,907 205,206

INCOME BEFORE TAX 101,651 96,476 140,946 70,797 19,641

TAX EXPENSE 2v,30Current 25,537 23,247 34,990 19,298 -Deferred 2,722 (3,605) 4,150 2,733 6,790

28,259 19,642 39,140 22,031 6,790

NET INCOME 73,392 76,834 101,806 48,766 12,851

OTHER COMPREHENSIVE INCOMEGain (loss) on change in fair value of

available for sale securities - net 2,198 2,983 2,500 5,000 (14,314)

TOTAL COMPREHENSIVE INCOME 75,590 79,817 104,306 53,766 (1,463)

EARNINGS PER SHARE(in full Rupiah) 2w,31Basic 11.08 12.94 17.62 8.72 3.25

Diluted 10.84 - 17.40 - -


September 30 (9 months) December 31 (12 months)

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PT BANK SINARMAS TbkStatements of Changes in EquityFor the Years Ended December 31, 2010, 2009 and 2008

Unrealized losson Decrease in

Additional Paid In Fair Value ofNotes Capital Stock Capital - Net Appropriated Unappropriated Securities Total Equity

Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Balance as of January 1, 2008 275,000 - 1,500 25,384 (32,758) 269,126

Changes in equity in 2008Additional issuance of shares of stock 23 150,000 - - - - 150,000Unrealized loss on decrease in fair value of available for sale securities 2f,7 - - - - (14,314) (14,314)Increase in general reserve 37 - - 500 (500) - -Net income for the year - - - 12,851 - 12,851

Balance as of December 31, 2008 425,000 - 2,000 37,735 (47,072) 417,663

Changes in equity in 2009Additional issuance of shares of stock 23 100,000 - - - - 100,000Unrealized gain on increase in fair value of available for sale securities 2f,7 - - - - 5,000 5,000Increase in general reserve 37 - - 500 (500) - -Net income for the year - - - 48,766 - 48,766

Balance as of December 31, 2009 525,000 - 2,500 86,001 (42,072) 571,429

Balance as of January 1, 2010 2f 525,000 - 2,500 86,001 (42,072) 571,429Impact of initial adoption of PSAK 50 and PSAK 55 - - - 437 - 437

Balance as of January 1, 2010, after the impact of initial adoption of PSAK 50 and PSAK 55 525,000 - 2,500 86,438 (42,072) 571,866

Changes in equity in 2010Capitalization of retained earnings to capital stock 23 43,050 - - (43,050) - -Unrealized gain on increase in fair value of available for sale securities - - - - 2,500 2,500Increase in general reserve 37 - - 500 (500) - -Initial public offering of shares 23 160,000 80,000 - - - 240,000Shares issuance costs 2q, 23 - (4,678) - - - (4,678)Net income for the year - - - 101,806 - 101,806

Balance as of December 31, 2010 728,050 75,322 3,000 144,694 (39,572) 911,494


Retained Earnings

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PT BANK SINARMAS TbkStatements of Changes in Equityfor the Nine Month Periods Ended September 30, 2011 and 2010

Unrealized losson Decrease in

Additional Paid In Fair Value ofNotes Capital Stock Capital - Net Appropriated Unappropriated Securities Total Equity

Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Balance as of January 1, 2010 525,000 - 2,500 86,001 (42,072) 571,429Impact of initial adoption of PSAK 50 and PSAK 55 2f - - - 437 - 437

Balance as of January 1, 2010, after the impact of initial adoption of PSAK 50 and PSAK 55 525,000 - 2,500 86,438 (42,072) 571,866

Changes in equity for nine - month period ended September 30, 2010Capitalization of retained earnings to capital stock 23 43,050 - - (43,050) - -Unrealized gain on increase in fair value of available for sale securities - - - - 2,983 2,983Increase in general reserve 37 - - 500 (500) - -Net income for the period - - - 76,834 - 76,834

Balance as of September 30, 2010 568,050 - 3,000 119,722 (39,089) 651,683

Balance as of January 1, 2011 728,050 75,322 3,000 144,694 (39,572) 911,494

Changes in equity for nine - month period ended September 30, 2011Increase in general reserve 37 - - 500 (500) - -Additional issuance of capital stock from conversion of warrants 23 179,837 89,918 - - - 269,755Unrealized gain on increase in fair value of available for sale securities - - - - 2,198 2,198Net income for the period - - - 73,392 - 73,392

Balance as of September 30, 2011 907,887 165,240 3,500 217,586 (37,374) 1,256,839


Retained Earnings

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PT BANK SINARMAS TbkStatements of Cash Flows

For the Nine - Month Periods Ended September 30, 2011 and 2010 and for the Years Ended December 31, 2010, 2009 and 2008


Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Interest income, fees and commissions other than loans 10,25 932,999 673,978 912,763 832,834 623,658 Other operating income 28 51,223 47,987 62,071 491 1,033 Interest expense and other finance charges 21,26 (560,223) (348,528) (488,745) (473,633) (420,209) Gain on foreign exchange - net 28 (5,902) 1,647 23,206 9,988 9,270 General and administration expenses 27,36 (172,902) (126,103) (177,697) (146,422) (118,424) salaries expenses 27 (111,496) (80,204) (103,905) (72,756) (59,750) Other operational expenses - net 26,29 (323) (2,593) (3,177) (757) 834

Operating cash flow before changes in operating assets and liabilities 133,376 166,184 224,516 149,745 36,412

Decrease (increase) operating assets :Placements with other banks 6 - - 97 194 97 Securities 7 (863,578) (15,671) (346,635) (175,509) (24,534) Securities purchased under agreements to resell 8 34,615 10,018 (64,920) (10,017) 87,797 Loans 9 (2,151,919) (790,638) (1,663,590) (1,148,363) (1,230,635) Prepaid expenses 11 (29,007) (13,670) (8,070) (8,829) (7,171) Ijarah assets - net 13 117,317 (253,213) (219,158) - -Other assets 14 (63,889) (11,463) (31,414) 73,707 (41,202)

Increase (decrease) operating liabilities :Liabilities immediately payable 15 96,151 (5,470) (18,623) 6,149 54,358 Deposits 16 4,011,773 2,201,805 2,986,792 1,557,221 372,451 Deposits from other banks 17 (38,745) 5,316 128,227 158,581 (164,889) Taxes payable 19,30 (31,131) (23,418) (29,009) (19,840) (1,699) Securities issued (730) (991) (1,010) (2,805) (2,828) Securities sold under agreements to repurhase 18 - (258,428) (258,428) 88,669 169,759 Other liabilities 22 6,455 14,275 (260) (1,852) 2,494

Net cash provided (used in) by operating activities 1,220,688 1,024,636 698,515 667,051 (749,590)

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of premises and equipment 12,28,29 10 190 190 197 395 Acquisitions of premises and equipment 12 (105,447) (24,999) (32,616) (74,320) (94,041)

Net Cash Used in Investing Activities (105,437) (24,809) (32,426) (74,123) (93,646)

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from additional issuances of capital stock

from conversion of series I warrants 24 269,754 - - - -Proceeds from initial public offering of shares 23 - - 240,000 - -Share issuance costs 23 - - (4,678) - -Proceeds from additional issuance of shares of stock 23 - - - 100,000 150,000

Net cash provided by financing activities 269,754 - 235,322 100,000 150,000

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,385,005 999,827 901,411 692,928 (693,236)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 2,301,226 1,420,684 1,420,684 727,981 1,421,181

Effect on foreign exchange rate changes 14,096 (6,217) (20,869) (225) 36

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 3,700,327 2,414,294 2,301,226 1,420,684 727,981

SUPPLEMENTAL DISCLOSURESCash and cash equivalents consist of :

Cash 579,508 306,716 269,274 199,311 141,250 Demand deposits with Bank Indonesia 4 1,362,218 1,302,748 1,067,918 854,850 365,516 Demand deposits with other banks 5 68,979 300,669 86,572 88,584 111,175 Placements with other banks - original maturities of

three months or less from the acquisition date 6 422,061 379,787 706,189 275,940 85,565 Securities 7

Sertifikat Bank Indonesia 26,299 - - -Bank Indonesia Intervention (excluding with maturity of

more than 3 months) 1,241,262 124,374 171,273 1,999 24,475

Total cash and cash equivalents 3,700,327 2,414,294 2,301,226 1,420,684 727,981

NON-CASH TRANSACTIONSWritte-off of loans 9 216 - 63,015 15,981 -Capitalization of retained earnings to capital stock 23 - 43,050 43,050 - -Reclassification from unused property, plant and

equipment to property, plant and equipment 12,14 - - - 254 -Writte-off of property, plant and equipment 12 - - - 14 -


September 30 (9 months) December 31 (12 months)

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PT BANK SINARMAS Tbk Notes to Financial Statements As of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, and for the Nine-Month Periods Ended September 30, 2011 and 2010 and for the Years Ended December 31, 2010, 2009 and 2008

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1. General a. Establishment and General Information

PT Bank Sinarmas Tbk (“the Company”) was established in 1989 as PT Bank Shinta Indonesia, based on Notarial Deed No. 52 dated August 18, 1989 of Buniarti Tjandra, S.H., notary public in Jakarta, as amended by Notarial Deed No. 91 dated September 15, 1989, of the same notary. The Deed of Establishment was approved by the Minister of Justice of the Republic of Indonesia in his Decision Letter No. C2-9142.HT.01.01-TH.89 dated September 27, 1989 and published in Supplement No. 6448 of the State Gazette of the Republic of Indonesia No. 49 dated June 21, 2005.

On January 26, 2007, the Company changed its name in to PT Bank Sinarmas. The said change was approved by the stockholders in the Extraordinary Stockholders’ Meeting, which resolution was stated in Notarial Deed No. 1 dated November 21, 2006 of Triphosa Lily Ekadewi, S.H., notary public in Jakarta. The amendment to the Articles of Association was approved by the Minister of Law and Human Rights to the Republic of Indonesia in his Decision Letter No. W7-03960 HT.01.04-TH.2006 dated December 20, 2006. Such change in name was approved by Bank Indonesia based on its Decision Letter No. 9/4/KEP.GBI/2007 dated January 22, 2007, wherein the Business License Under the Name of PT Bank Shinta Indonesia changed to become Business License Under the Name of PT Bank Sinarmas. Furthermore, the Company’s Articles of Association has been amended, as stated in Deed No. 1 dated October 8, 2009 from Endang Saritomo Utari, SH, notary in Jakarta, concerning the conduct of business activities to be based on principles of Islamic banking and the extension of terms of office of directors and commissioners. These amendments were approved by the Minister of Justice and Human Rights Republic of Indonesia in his Decree No. AHU-AH.01.10-22483.Tahun 2009 dated December 11, 2009. In the General Shareholders' Meeting held on April 6, 2010, which is stated in the Deed. No. 31 dated April 6, 2010 from Sutjipto, SH, Mkn, notary in Jakarta, the shareholders approved the following resolutions: a. To split the number of shares through decrease in par value per share from Rp 500,000 per

share into of Rp 100 per share.

b. To appropriate retained earnings to general reserve as at December 31, 2009 amounted Rp 500 million and to capitalize retained earnings of Rp 43,050 million to be distributed proportionately to the shareholders in April 2010.

c. To change the status of the Company from a Limited Liability Company to become a Public

Company. d. To amend the Articles of Association to conform with Bapepam and LK No. IX.J.I,

Attachment of Bapepam and LK No. Kep 179/BL/2008 dated May 14, 2008 on the Principles of the Articles of Association of Public Offering of Equity Securities and Public Companies.

e. To change the Articles of Association, among others, the change of the Company to

become PT Bank Sinarmas Tbk. The related amendments of the Articles of Association were approved by the Minister of Justice of the Republic of Indonesia in his decision letter No. AHU-22745.AH.01.02 Tahun 2010 dated May 4, 2010.


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The Company’s head office is located at Plaza BII Tower I, Jl. M.H. Thamrin No. 51, Jakarta. The Company has 1 main branch, 55 branches, 72 sub-branches, 1 sharia branch, 9 cash offices, and 1 sharia cash office all located in Indonesia. The Company is part of the Sinar Mas Group of Companies. PT Sinar Mas Multiartha Tbk is the holding of the Company. In accordance with article 3 of the Company’s Articles of Association, the scope of its activities is to engage mainly in general banking business. The Company started its commercial operations on February 16, 1990, based on the business license granted by the Minister of Finance of the Republic of Indonesia in his Decision Letter No. 156/KMK.013/1990 dated February 16, 1990. Pursuant to Bank Indonesia’s Decree No. 27/156/KEP/DIR dated March 22, 1995, the Company was authorized to operate as a Foreign Exchange Bank.

b. Initial Public Offering of Shares

On November 29, 2010, the Company obtained the Notice of Effectivity from the Chairman of the Capital Market and Financial Institutions Supervisory Agency (Bapepam and LK) in his letter No. S-10683/BL/2010 for the initial public offering of the 1,600,000,000 new shares with par value of Rp 100 per share at offering price of Rp 150 per share with attached 1,920,000,000 Series I Warrants (Note 24). Each holder of 5 (five) new shares of the Company is entitled to 6 (six) warrants where each 1 (one) warrant entitles the holder to purchase 1 (one) new share of the Company at exercise price at Rp 150, - (one hundred fifty rupiah) per share, which can be exercised from June 13, 2010 until December 13, 2015. On December 13, 2010, the Company’s shares including warrants have been listed to the Indonesia Stock Exchange. The IPO was approved by Bank Indonesia in its Letter No. 12/52/DPB3/TPB 3 - 1 dated August 5, 2010.

As of September 30, 2011 and December 31, 2010, 8,986,864,400 shares representing 98.99% and 7,188,495,000 shares representing 98.74%, respectively, are listed in the Indonesia Stock Exchange.

c. Boards of Commissioners and Directors and Employees

The Company’s members of the management as at September 30, 2011 and 2010, and December 31, 2010, as appointed in the Extraordinary Stockholders’ Meeting held on November 26, 2010, which the resolution is stated in Notarial Deed No. 71 dated January 13, 2011 of Aulia Taufani, S.H., notary public in Jakarta, are as follows:

President Commissioner : Tjendrawati Widjaja Independent Commissioners : Wimpie Rianto : Antonius Chandra Satya Napitupulu *) President Director : Freenyan Liwang Vice President Director : Dani Lihardja Operations Director : Hadi Christianto Wijaya Sharia Business Unit and GA Director : Heru Agus Wuryanto Compliance Director : Salis Teguh Hartono Risk Management Director : Loa Johnny Mailoa

*) Resigned on August 22, 2011 The Company's members of the management as at 31 December 2009, as appointed in the General Meeting of Shareholders Extraordinary held on December 21, 2009, as documented in


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Deed No. 1 dated January 7, 2010 of Endang Saritomo Utari, SH, notary in Jakarta, are as follows:

President Commissioner : Tjendrawati Widjaja Independent Commissioners : Wimpie Rianto : Antonius Chandra Satya Napitupulu Commissioner : Freenyan Liwang **) Credit and Marketing Director : Dani Lihardja Operations Director : Hadi Christianto Wijaya Sharia Business Unit and GA Director : Heru Agus Wuryanto Compliance Director : Salis Teguh Hartono Risk Management Director : Loa Johnny Mailoa

**) Has not been effective since he has not resigned from his previous position in other entity.

The Company’s management as at December 31, 2008, based on Extraordinary Stockholders’ Meeting, which resolution was stated in Notarial Deed No. 12 dated August 8, 2008 of Dahlia, S.H., notary public in Jakarta, consists of the following: President Commissioner : Johny Josephus Lumintang Independent Commissioners : Wimpie Rianto : Antonius Chandra Satya Napitupulu President Director : Tjendrawati Widjaja Operations Director : Hadi Christianto Wijaya Credit and Marketing Director : Dani Lihardja Human Resources and GA Director : Heru Agus Wuryanto Compliance Director : Salis Teguh Hartono Salis Teguh Hartono the Company’s Compliance Director was approved by Bank Indonesia in its Letter No. 9/154/GBI/DPIP/Rahasia dated October 8, 2007. The members Audit Committee, Remuneration and Nomination Committee, Risk Oversight Committee and Sharia Supervisory Board on September 31, 2011 and 2010, and December 31, 2010 and 2009 are as follows:

2011 2010

Audit CommitteeChairman Antonius C.S. Napitupulu *) Antonius C.S. NapitupuluMembers Wimpie Rianto Wimpie Rianto

Edwin Hidayat Abdullah Edwin Hidayat AbdullahAgustinus Antonius Agustinus AntoniusKetut Sanjaya

September 30, (9 months)


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2011 2010

Renumeration and Nomination CommitteeChairman Antonius C.S. Napitupulu *) Antonius C.S. NapitupuluMembers Tjendrawati Widjaja Tjendrawati Widjaja

Trusto Jati Prakoso Trusto Jati Prakoso

Risk Monitoring CommitteeChairman Wimpie Rianto Wimpie RiantoMembers Antonius C.S. Napitupulu *) Antonius C.S. Napitupulu

Agustinus Antonius Agustinus AntoniusEdwin Hidayat Abdullah Edwin Hidayat Abdullah

Sharia Supervisory BoardChairman Ali Mustafa Yaqub Ali Mustafa YaqubMembers Ahmadi bin Sukarno Ahmadi bin Sukarno

2010 2009 2008

Audit CommitteeChairman Antonius C.S. Napitupulu Antonius C.S. Napitupulu Antonius C.S. NapitupuluMembers Wimpie Rianto Wimpie Rianto Wimpie Rianto

Edwin Hidayat Abdullah Edwin Hidayat Abdullah Edwin Hidayat AbdullahAgustinus Antonius Agustinus Antonius Agustinus Antonius

Renumeration and Nomination Committee

Chairman Antonius C.S. Napitupulu Antonius C.S. Napitupulu Antonius C.S. NapitupuluMembers Tjendrawati Widjaja Johny J. Lumintang Johny J. Lumintang

Trusto Jati Prakoso Tjendrawati Widjaja Tjendrawati Widjaja

Risk Monitoring CommitteeChairman Wimpie Rianto Wimpie Rianto Wimpie RiantoMembers Antonius C.S. Napitupulu Antonius C.S. Napitupulu Antonius C.S. Napitupulu

Agustinus Antonius Agustinus Antonius Agustinus AntoniusEdwin Hidayat Abdullah Edwin Hidayat Abdullah Edwin Hidayat Abdullah

Sharia Supervisory BoardChairman Ali Mustafa Yaqub Ali Mustafa Yaqub -Members Ahmadi bin Sukarno Ahmadi bin Sukarno -

December 31, (12 months)

*) Resigned on August 22, 2011 The establishment of the Risk Management Committee is in compliance with Appendix 1 of the Bank Indonesia Circular Letter No. 5/21/DPNP dated September 29, 2003, regarding “Guidelines on Standards for Application of Risk Management for Commercial Banks”. Total remuneration paid to commissioners and directors amounted to Rp 5,848 million and Rp 3,626 million for the nine - month periods ended September 30, 2011 and 2010, respectively; and Rp 4,824 million, Rp 4,046 million, and Rp 3,611 million for the years ended December 31, 2010, 2009, and 2008, respectively. The Company had an average total number of employees (unaudited) of 1,856 employees and 1,682 employees in September 30, 2011 and 2010, respectively; and 1,764 employees, 1,456 employees, and 968 employees in December 31, 2010, 2009, and 2008, respectively. The Directors had completed the financial statements of PT Bank Sinarmas Tbk on October 26, 2011, and was responsible for the financial statements.


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2. Summary of Significant Accounting and Financial Reporting Policies

a. Basis of Financial Statement Preparation and Measurement The financial statements have been prepared using accounting principles and practices generally accepted in Indonesia, namely the Indonesian Statement of Financial Accounting Standards “PSAK”, Bank Indonesia regulation, the Capital Market Supervisory Agency and Financial Institution Supervisory Agency (Bapepam and LK) No. VIII.G.7 dated 13 March 2000 on Guidelines for the Preparation of Financial Statements which are an Attachment of Bapepam and LK No. KEP-06/PM/2000 dated March 13, 2000 and Circular Letter No.. SE-02/BL/2008 January 31, 2008 on "Guidelines for the Preparation of Financial Statements of Public Companies General Mining, Oil and Gas and Banking". In additions the preparation of the September 30, 2011 and 2010, and December 31, 2010 financial statements are based on PSAK 50 (Revised 2006), "Financial Instruments: Presentation and Disclosure" and PSAK 55 (Revised 2006), "Financial Instruments: Recognition and Measurement", and Guidelines "Accounting Banking" Indonesia (PAPI), published in 2008. The December 31, 2009 and 2008 financial statement had been prepared based on PSAK 31 and Accounting for Banking and PAPI published in 2001. Effective January 1, 2010, PSAK 31 had been revoked on the basis of Revocation of Statement of Financial Accounting Standards (PPSAK) 4 and PAPI (2001) on the basis of PAPI (2008) in compliance with PSAK revisions described in Note 2f. The recording of transactions of Sharia Unit is based on PSAK 101, “Presentation of Sharia Financial Statement”, PSAK 102, "Accounting for Murabaha", PSAK 105, "Accounting Mudharabah", PSAK 106, "Accounting Musharaka", PSAK 107 (Revised 2009), "Accounting for Ijarah" (effective on January 1, 2010) and Indonesia Sharia Banking Accounting Guidelines (PAPSI) and Indonesian Financial Accounting Standards, including accounting and reporting principle designated by Indonesia banking authority and Bapepam and LK. The Company’s financial statements for the nine-month period ended September 30, 2011 are prepared in accordance with the Statements of Financial Accounting Standard (“PSAK”) 1 (Revised 2009), “Presentation of Financial Statements” and PSAK 3 (Revised 2010), “Interim Financial Statements, both adopted on January 1, 2011. The said adoption of PSAK 1 (Revised 2009) and PSAK 3 (Revised 2010) have significant impact on the related presentation and disclosures in the interim financial statements. The accounting policies adopted in the preparation of the financial statements are consistently applied, except for adoptions of several amended PSAK’s as disclosed in this Note. The measurement basis used is the historical cost, except for certain accounts which are measured on the bases described in the related accounting policies. The financial statements, except for the statements of cash flows, are prepared under the accrual basis of accounting. The statements of cash flows are prepared using the direct method, which were previously prepared using indirect method, with classifications of cash flows into operating, investing and financing activities. Cash and cash equivalents include cash on hand, demand deposits with Bank Indonesia, demand deposits with other banks, and placement with other banks with original maturity of three months or less from the acquisition date.


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For the purpose of the statement of cash flows, allowance for impairment losses is not considered as part of cash and cash equivalents. The reporting currency used in the preparation of the financial statements is the Indonesian Rupiah (Rupiah). Unless otherwise stated, all figures presented in the financial statements are stated in millions of Rupiah.

b. Adoption of Revised Statements of Financial Accounting Standards Effective January 1, 2011

The Company has adopted the following Financial Accounting Standards (PSAK) and Interpretations (ISAK) effective January 1, 2011: (1) PSAK 1 (Revised 2009), “Presentation of Financial Statements”, regulates the

presentation of financial statements as to, among others, the objective, component of financial statements, fair presentation, materiality and aggregate, offsetting, distinction between current and non-current assets and short term and long-term liabilities, comparative information and consistency and introduces new disclosures such as, among others, key estimations and judgments, capital management, other comprehensive income, departures from accounting standards and statement of compliance.

This standard introduces a statement of comprehensive income that combines all items of income and expenses recognized in the profit and loss together with “other comprehensive income”. The entities may choose to present all items in one statement, or to present two linked statements, a separate statement of income and a statement of comprehensive income. The Company has elected to present a single statement and has presented its prior periods’ financial statements in conformity with this PSAK to be comparative with the September 30, 2011 interim financial statements.

(2) PSAK 3 (Revised 2010), “Interim Financial Reporting”, regulates the minimum

presentation of interim financial statements, and also the principles of recognition and measurement in the complete or condensed interim financial statements.

(3) PSAK 5 (Revised 2009), “Operating Segments”, requires reporting information of each

operating segment to be in accordance with the information which are regularly reported to the decision maker in operations to make decisions on resources that will be allocated to the segment and to value its performance. This PSAK has improved the definition of segment information using the same basis as in the internal reporting. The Company has presented prior period’s segment information in accordance with this PSAK to be comparative with the interim financial statements for the nine-month period ended September 30, 2011.

(4) PSAK 7 (Revised 2010), “Related Party Disclosures”, requires disclosures of related party

relationships, transactions and outstanding balances, including commitments, in the financial statements.

The following are the new and revised accounting standards and interpretations which should be adopted effective January 1, 2011 but which are either irrelevant or relevant but do not have material impact to the Company’s financial statements:


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PSAK Efective beginning on or after January 1, 2011 1. PSAK 2 (Revised 2009), Statements of Cash Flows 2. PSAK 4 (Revised 2009), Consolidated and Separate Financial Statements 3. PSAK 8 (Revised 2010), Events After the Reporting Period 4. PSAK 12 (Revised 2009), Investments in Joint Ventures 5. PSAK 15 (Revised 2009), Investments in Associates 6. PSAK 19 (Revised 2010), Intangible Assets 7. PSAK 22 (Revisi 2010), Business Combinations 8. PSAK 23 (Revised 2010), Revenues 9. PSAK 25 (Revised 2009), Accounting Policies, Changes in Accounting Estimates and

Errors 10. PSAK 48 (Revised 2009), Impairment of Assets 11. PSAK 57 (Revised 2009), Provisions, Contingent Liabilities and Contingent Assets 12. PSAK 58 (Revised 2009), Noncurrent Assets Held For Sale and Discontinued Operations.

ISAK

1. ISAK 7 (Revised 2009), Consolidation – Special Purpose Entities 2. ISAK 9 (Revised 2009), Changes in Existing Decommissioning, Restoration and Similar

Liabilities 3. ISAK 10 (Revised 2009), Customer Loyalty Program 4. ISAK 11 (Revised 2009), Distribution of Non – Cash Assets to Owners 5. ISAK 12 (Revised 2009), Jointly Controlled Entities – Nonmonetary Contributions by

Ventures 6. ISAK 14 (Revised 2009), Intangible Assets – Website Cost 7. ISAK 17 (Revised 2009), Interim Financial Reporting and Impairment

c. Foreign Currency Transactions and Balances

The Company maintains its accounting records in Rupiah. Transactions during the period involving currencies other than Rupiah are recorded at the rates of exchange prevailing at the time the transactions are made. At statement of financial position dates, monetary assets and liabilities denominated in foreign currencies were translated into Rupiah using the Reuters spot rate at 16:00 WIB. The resulting gains or losses from the translation of monetary assets and liabilities are recognized in current operations. The foreign exchange gains or losses on monetary items is the difference between amortized cost in Rupiah at the beginning of the period, adjusted for effective interest and payments during the year, and the amortized cost in foreign currency translated into Rupiah at the exchange rate at the end of the period.


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d. Transactions with Related Parties Accounting Policies Effective January 1, 2011

A party is considered to be related to the Company if:

1. Directly, or indirectly through one or more intermediaries, the party:

a) controls, is controlled by, or is under common control with, the Company; b) has an interest in the Company that gives it significant influence over the Company;

or, c) has joint control over the Company;

2. The party is an associate of the Company ; 3. The party is a joint venture in which the Company is a venturer; 4. The party is a member of the key management personnel of the Company and/ or its

parent; 5. The party is a close member of the family of any individual referred to in (1) or (4); 6. The party is an entity that is controlled, jointly controlled or significantly influenced by or for

which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (4) or (5); or

7. The party is a post employment benefit plan for the benefit of employees of the Company, or of any entity that is a related party of the Company.

Accounting Policies Prior to January 1, 2011

Related parties consisted of the following:

1. Companies that, through one or more intermediaries, control or are controlled by, or are

under common control with, the Company (including holding companies, subsidiaries, and fellow subsidiaries);

2. Associated companies;

3. Individuals owning, directly or indirectly, an interest in the voting power of the Company

that gives them significant influence over the Company, and close family members of such individuals (close family members are those who can influence or can be influenced by such individuals in their transactions with the Company);

4. Key management personnel, that is, those persons having authority and responsibility for

planning, directing and controlling the activities of the Company, including commissioners, directors and managers of the Company and close family members of such individuals; and

5. Companies in which a substantial interest in the voting power is owned, directly or

indirectly, by any person described in (3) or (4) or over which such person is able to exercise significant influence. These include companies owned by commissioners, directors or major stockholders of the Company, and companies that have a common member of key management with that of the Company.

Employees, besides key management personnel, are not classified as related party. All transactions with related parties, whether or not done under similar terms and conditions as those done with third parties, are disclosed in the financial statements.


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e. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in Indonesia requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. Information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies on financial instruments that have significant effect on the amounts recognized in the financial statements are described in Note 3 to the financial statements.

f. Financial Instruments

Effective January 1, 2010 the Company has adopted PSAK 50 (Revised 2006) “Financial Instruments: Presentation and Disclosures” and PSAK 55 (Revised 2006) “Financial Instruments: Recognition and Measurement”. In adopting the above new standards, the Company has identified the following transition adjustments in accordance with the Technical Bulletin No. 4 concerning the Transition Provisions for the First Adoption of PSAK 50 (Revised 2006) and PSAK 55 (Revised 2006) as issued by the Indonesian Institute of Accountants. The effect of the transition to PSAK 50 (Revised 2006) and PSAK 55 (Revised 2006) to the Company’s statement of financial position as of January 1, 2010 is set out in the following table:

As reported As adjustedJanuary 1, Transition January 1,

2010 Adjustments 2010Rp'000.000 Rp'000.000 Rp'000.000

AssetsDemand deposits with other banks 87,698 886 88,584Placements with other banks 273,277 2,760 276,037Securities 941,637 1,107 942,744Loans 5,322,975 (4,316) 5,318,659

Total Assets 6,625,587 437 6,626,024

EquityRetained earnings

Unappropriated 86,001 437 86,438

The above transition adjustments were derived from the reassessment of impairment losses for financial assets, which represents the difference between impairment loss reserve calculated based on PSAK 55 (Revised 2006) and allowance for impairment losses calculated using the Bank Indonesia Regulation concerning allowance of productive assets (Note 2.j).


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Recognition and Classification The Company recognizes a financial asset or a financial liability in the statement of financial position when it becomes a party to the contractual provisions of the instrument. Financial instruments are recognized initially at fair value, which is the fair value of the consideration given (in case of an asset) or received (in case of a liability). The fair value of the consideration given or received is determined by reference to the transaction price or other market prices. If such market prices are not reliably determinable, the fair value of the consideration is estimated as the sum of all future cash payments or receipts, discounted using the prevailing market rates of interest for similar instruments with similar maturities. The initial measurement of financial instruments, except for financial instruments at fair value through profit and loss (FVPL), includes transaction costs. Transaction costs include only those costs that are directly attributable to the acquisition of a financial asset or issue of financial liability and they are incremental costs that would not have been incurred if the instrument had not been acquired or issued. Such transaction costs are amortized over the terms of the instruments based on the effective interest rate method. Included in transaction fees are fees and commissions paid to agents (including employees acting as selling agents), consultants, brokerage and securities dealers, levies required by regulators and stock exchanges, as well as taxes and duties imposed on transfers made. Transaction costs do not include debt premium or discount, financing costs (financing costs), or internal administrative costs or storage costs (handling cost). Effective interest rate method is a method of calculating the amortized cost of a financial asset or a financial liability and allocating the interest income or expense over the relevant period by using an interest rate that exactly discounts estimated future cash payments or receipts through the expected life of the instruments or, when appropriate, a shorter period to the net carrying amount of the financial instruments. When calculating the effective interest, the Company estimate future cash flows considering all contractual terms of the financial instruments excluding future credit losses and includes all fees and points paid or received that are an integral part of the effective interest rate. Amortized cost is the amount at which the financial asset or financial liability is measured at initial recognition, minus principal repayments, plus or minus the cumulative amortization using the effective interest rate method of any difference between the initial amount recognized and the maturity amount, minus any reduction for impairment. The classification of the financial instruments depends on the purpose for which the instruments were acquired and whether they are quoted in an active market. At initial recognition, the Company classifies its financial instruments in the following categories: financial assets at FVPL, loans and receivables, held-to-maturity (HTM) investments, available for sale (AFS) financial assets, financial liabilities at FVPL and other financial liabilities; and where allowed and appropriate, re-evaluates such classification at every reporting date.


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Determination of Fair Value The fair value of financial instruments traded in active markets at the statement of financial position date is based on their quoted market price or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs. When current bid and asking prices are not available, the price of the most recent transaction is used since it provides evidence of the current fair value as long as there has not been a significant change in economic circumstances since the time of the transaction. For all other financial instruments not listed in an active market, except investment in unquoted equity securities, the fair value is determined by using appropriate valuation techniques. Valuation techniques include net present value techniques, comparison to similar instruments for which market observable prices exist, options pricing models, and other relevant valuation models. Day 1 Profit/Loss Where the transaction price in a non-active market is different from the fair value of other observable current market transactions in the same instrument or based on a valuation technique whose variables include only data from observable market, the Company recognizes the difference between the transaction price and fair value (a Day 1 profit/loss) in the statement of comprehensive income unless it qualifies for recognition as some other type of asset. In cases where the data is not observable, the difference between the transaction price and model value is only recognized in the statement of comprehensive income when the inputs become observable or when the instrument is derecognized. For each transaction, the Company determines the appropriate method of recognizing the “Day 1” profit/loss amount.

Financial Assets

1. Financial Assets at FVPL

Financial assets at FVPL include financial assets held for trading and financial assets designated upon initial recognition at FVPL. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading unless the derivative is designated as effective hedging instruments. Financial assets may be designated at initial recognition at FVPL if the following criteria are met:

a. the designation eliminates or significantly reduces the inconsistent treatment that would

otherwise arise from measuring the financial assets or recognizing gains or losses on them on a different basis; or

b. the assets are part of a group of financial assets, financial liabilities or both which are

managed and their performance evaluated on a fair value basis, in accordance with a documented risk management or investment strategy; or

c. the financial instruments contains an embedded derivative, unless the embedded

derivative does not significantly modify the cash flows or it is clear, with little or no analysis, that it would not be separately recorded.


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Financial assets at FVPL are recorded in the statement of financial position at fair value. Changes in fair value are recognized directly in the statement of income. Interest earned is recorded as interest income, while dividend income is recorded as part of other income according to the terms of the contract, or when the right of payment has been established. As of September 30, 2011 and 2010, and December 31, 2010, the Company classifies securities in the form of corporate bonds and mutual fund unit, and other asset in the form of derivative receivable under this category.

2. Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are not entered into with the intention of immediate or short-term resale and are not classified as financial assets at FVPL, HTM investments or AFS financial assets.

After initial measurement, loans and receivables are subsequently measured at amortized cost using the effective interest rate method, less allowance for impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees and costs that are an integral part of the effective interest rate. The amortization is included as part of interest income in the statement of comprehensive income. The losses arising from impairment are recognized in the statement of comprehensive income. As of September 30, 2011 and 2010, and December 31, 2010, this category includes cash, demand deposits with Bank Indonesia and other banks, placements with other banks, securities in the form of bills receivable, securities purchased under agreements to resell, loans, interest income to be received as well as other assets in the form of security deposit, receivable in connection with the settlement Indover Bank, insurance commission bill, bills relating to ATM and money transfers and others.

3. HTM Investments

HTM investments are quoted non-derivative financial assets with fixed or determinable payments and fixed maturities for which the Company’s management has the positive intention and ability to hold to maturity. When the Company sells or reclassifies other than an insignificant amount of HTM investments before maturity, the entire category would be tainted and reclassified as AFS financial assets.

After initial measurement, these investments are subsequently measured at amortized cost using the effective interest rate method, less any impairment in value. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees that are an integral part of the effective interest rate. The amortization is included as part of interest income in the statement of comprehensive income. Gains and losses are recognized in the statement of comprehensive income when the HTM investments are derecognized and impaired, as well as through the amortization process using the effective interest rate method. As of September 30, 2011 and 2010, and December 31, 2010, this category includes investment in securities in the form of Bank Indonesia Certificates (SBI), Bank Indonesia's intervention, Government Bonds, corporate bonds, the Republic of Indonesia - ROI Loan, Credit Linked Note, and export bills receivables.


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4. AFS Financial Assets

AFS financial assets are those which are designated as such or not classified in any of the other categories. They are purchased and held indefinitely and may be sold in response to liquidity requirements or changes in market conditions.

After initial measurement, AFS financial assets are subsequently measured at fair value. The effective yield component of AFS debt securities, as well as the impact of translation on foreign currency-denominated AFS debt securities, is reported in the statement of income. The unrealized gains and losses arising from the fair valuation of AFS financial assets are reported as net unrealized gains and losses on AFS financial assets in the equity section of the statement of financial position and in the statement of changes in equity. On September 30, 2011 and 2010, and December 31, 2010, this category includes securities in the form of Government Bonds and Republic of Indonesia – ROI Loans.

Financial Liabilities

1. Financial Liabilities at FVPL

Financial liabilities are classified in this category if these result from trading activities or derivative transactions that are not accounted for as accounting hedges, or when the Company elects to designate a financial liability under this category. Changes in fair value are recognized directly in the statements of comprehensive income. As of September 30, 2011 and 2010, and December 31, 2010, the Company derivative liabilities (recorded as part of other liabilities) classifies in this category.

2. Financial liabilities measured at Amortized Cost

This category pertains to financial liabilities that are not held for trading or not designated at FVPL upon the inception of the liability. Issued financial instruments or their components, which are not classified as financial liabilities at FVPL are classified as other financial liabilities, where the substance of the contractual arrangement results in the Company having an obligation either to deliver cash or another financial asset to the holder, or to satisfy the obligation other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of own equity shares. Other financial liabilities are recognized initially at fair value and are subsequently carried at amortized cost, taking into account the impact of applying the effective interest rate method of amortization (or accretion) for any related premium, discount and any directly attributable transaction costs. As of September 30, 2011 and 2010, and December 31, 2010, this category includes liabilities immediately payable, deposits, deposits from other banks, securities issued, accrued interest, as well as other liabilities in the form of Government guarantee premium liabilities, security deposit for L/C and bank guarantee.


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Derivative Financial Instruments Embedded derivative is separated from the host contract and accounted for as a derivative if all the following conditions are met:

a. Economic characteristics and risks of the embedded derivative are not closely related to the

economic characteristics and risks of the main contract. b. Separate instruments that have the same terms as the embedded derivative meets the

definition of a derivative; c. Hybrid combined instruments are not measured at fair value through profit or loss.

Stand-alone derivatives and separated embedded derivatives are classified as assets or financial liabilities measured at fair value through profit or loss, unless the derivative is designated as effective hedging instruments. On initial recognition, derivative financial instruments measured at fair value on derivative transactions occur or separated, and subsequently measured at fair value. Derivatives are recorded as assets when fair value is positive, and are presented as liabilities when fair value is negative. Gains or losses from changes in fair value of derivatives are recognized immediately in profit or loss. Management review whether embedded derivative should be separated from the main contract in the very first company to be one party of the contract. The review re-occur if there is a change in terms of the contract which resulted in modifications to the cash flows significantly. Offsetting of Financial Instruments Financial assets and liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable right to offset the recognized amounts and there is intention to settle on a net basis, or to realize the asset and settle the liability simultaneously. Impairment of Financial Assets The Company’s management assesses at each statement of financial position date whether a financial asset or group of financial assets is impaired. (1) Assets Carried at Amortized Cost

The management 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 management determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets 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.


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If there is objective evidence that an impairment loss on loans and receivables or held to maturity investments carried at amortized cost has been incurred, 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 credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (i.e., the effective interest rate computed at initial recognition). The carrying amount of the asset shall be reduced either directly or through the use of an allowance account. The amount of loss is charged to the statement of comprehensive income.

If, on the next year, the amount of impairment loss increases or decreases because of an event occurring after the impairment is recognized, then made an adjustment to the reserve account any impairment loss previously recognized. Subsequent reversal of an impairment is recognized in the statement of comprehensive income, with the provisions of the carrying value after reversal of an impairment of assets does not exceed the amortized cost at the date of this reversal.

(2) Assets Carried at Cost

If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, 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 discounted at the current market rate of return for a similar financial asset.

(3) AFS Financial Assets

In case of equity investments classified as AFS, assessment of any impairment would include a significant or prolonged decline in the fair value of the investments below its cost. Where there is 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 financial asset previously recognized in the statement of comprehensive income is removed from equity and recognized in the statement of comprehensive income. Impairment losses on equity investments are not reversed through the statement of comprehensive income. Increases in fair value after impairment are recognized directly in equity.

In the case of debt instruments classified as AFS, impairment is assessed based on the same criteria as financial assets carried at amortized cost. Interest continues to be accrued at the original effective interest rate on the reduced carrying amount of the asset and is recorded as part of interest income in the statement of comprehensive income. If, in subsequent period, the fair value of a debt instrument increased and the increase can be objectively related to an event occurring after the impairment loss was recognized in the statement of comprehensive income, the impairment loss is reversed through the statement of comprehensive income.


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Derecognition of Financial Assets and Liabilities

1. Financial Assets

Financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized when:

a. the rights to receive cash flows from the asset have expired;

b. the Company retains the right to receive cash flows from the asset, but has assumed an

obligation to pay them in full without material delay to a third party under a “pass-through” arrangement; or

c. the Company has transferred its rights to receive cash flows from the asset and either

(i) has transferred substantially all the risks and rewards of the asset, or (ii) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Company’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

2. Financial Liabilities

A financial liability is derecognized when the obligation under the liability is discharged, cancelled or has expired. Where 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. The recognition of a new liability and the difference in the respective carrying amounts is recognized in the statement of comprehensive income.

Accounting Policies on Financial Instruments Prior to January 1, 2010 Placements with Other Banks Placements with other banks (Notes 2.h) were stated at the outstanding balances of the placements, less allowance for possible losses. Securities

Initial and subsequent measurement of the securities were stated based on classification of securities as determined by management in accordance with PSAK 50 (1999) regarding “Accounting for certain investment in securities” less allowance for impairment losses.


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Securities were classified based on management’s intention at the time of acquisition and were recognized as follows: 1. Investments in securities classified as held-to-maturity were stated at cost, adjusted for

unamortized premium or discount. If it was probable that the cost of such securities (including amortized premium and discount) could not be fully recovered, a permanent decline in value was considered to have occurred and, as a result, the cost basis of the individual security was written-down to its fair value. Any such write-down was recognized as loss in the current operations.

2. Investments in securities classified as available-for-sale were stated at fair value. Unrealized

gains or losses from the increase or decrease in fair value were recognized and presented as an equity component, and would not be recognized as gain or loss until realized.

3. Investments in securities classified as trading were stated at fair values. Unrealized gains or

losses from the increase or decrease in fair values were recognized in the current operations. Investments in securities classified as trading consist of securities purchased and owned for resale in the near future. Securities for trading usually show a very high frequency of purchases and sales. These securities were owned with the objective of obtaining profit from short-term price differences.

Transfer of securities to held to maturity of available for sale were recorded at fair value at the time of the transfer of the securities group. Gains or unrealized losses recorded as part of equity and were amortized straight-line method over the remaining lives of securities.

Transfer of securities to held to maturity of trading securities were recorded at fair value at the time of transfer, which was considered as cost of the securities. If there was a permanent decline in fair value, the cost basis of the individual security was written-down to its fair value as a new cost basis, and the amount of written-down was recognized as loss in the current operations. For the computation of realized gain or loss, cost of equity securities was determined using the weighted-average method, while cost of debt securities classified as held-to-maturity was determined using the specific identification method.

Derivative Assets and Liabilities

Prior to January 1, 2010, derivative assets and liabilities were accounted for in accordance with PSAK 55 (Revised 1999) on Accounting for Derivative Instruments and Hedging Activities. Derivative assets and liabilities were presented at the amount of unrealized gains or losses on derivative contracts, which are accounted for based on the purpose the Company had designated upon acquisition as trading. Unrealized gains or losses calculated from the difference between contract value and fair value of derivative instruments at the reporting date and charged to income in the current year. Fair value was determined based on market value, pricing models or quoted prices of other instruments with similar characteristics.


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Embedded derivative were separated from the host contract and accounted for as derivative instruments, if all the following criteria were met:

1. Economic characteristics and risks of the embedded derivative were not clearly and closely

related to the economic characteristics and risks of the main contract. 2. Derivative instruments that included embedded derivatives and the contracts were not

remeasured at fair value under generally accepted accounting principles. 3. Separate instrument with the same conditions as the embedded derivative instrument can

be a derivative instrument as defined under generally accepted accounting principles. If an entity could not definitely identify and measure an embedded derivative that must be separated from the host contract, the overall agreement was measured at fair value.

Loans Loans (Note 2.i) were stated at the gross amount of its outstanding balance, less allowance for possible losses established based on review of collectibility of each loan granted.

Troubled Loans Restructuring Troubled debt restructuring involving only modification of terms of loans, that was, not involving receipt of assets (including an equity interest in the debtor) accounts for the effects of the restructuring prospectively and did not change the carrying amount of loans at the restructuring date unless that amount exceeded the total future cash receipts specified by the new terms. That is, the effects of changes in the amounts or timing (or both) of future cash receipts designated either as interest or as principal was recognized prospectively in future periods. Acceptances Receivable and Acceptances Payable Acceptances receivable and acceptances payable were stated at the amount of the Letters of Credit (L/C) or the net realizable value of the L/C that was accepted by the counter party banks. Acceptances receivable were presented net of allowance for impairment losses, which was determined based on evaluation by management of the collectibility of acceptances receivable. Deposits and Deposits from Other Bank Deposits from customer and deposits from other banks (Note 2.p) were stated at the outstanding balance. Securities Purchased Under Agreements to Resell / Securities Sold Under Agreements to Repurchase Securities purchased with a promise to be resold (reverse repo) Securities purchased with a promise to be resold (reverse repo) were recognized as a repo receivable in the amount of the resale price of the related securities, less unearned interest income and allowance for impairment losses. The difference between the purchase price and the selling price was treated as unearned interest income and recognized as income in accordance with the period since the securities were purchased until they were resold.


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Interest income received in advance were amortized over the term of the securities were purchased using the straight-line method. Securities sold under agreements to repurchase (repo) Securities sold under agreements to repurchase (repo) were recognized as liabilities at the repurchase price agreed with the customer less unamortized interest expense. The difference between the selling price and the repurchase price was treated as prepaid interest and recognized as interest expense based on the period since the sale of securities to be bought back. Securities sold were recorded as assets on the statement of financial position because the ownership of the securities remains with the company as a seller. Prepaid interest was amortized over the term of the sale of securities using the straight-line method. Securities Issued Securities issued (Note 2.r) are stated at the outstanding liabilities of the Company to holders traveler's checks.

g. Minimum Liquidity Reserve

On October 23, 2008, Bank Indonesia (BI) issued regulation No. 10/25/2008 regarding the amendment of Bank Indonesia Regulation No. 10/19/2008 dated October 14, 2008 regarding Statutory Reserves at Bank Indonesia for Commercial Banks. The said regulations was amended with Bank Indonesia Regulation No. 12/19/PBI/2009 dated October 4, 2010 regarding Statutory Reserve for Commercial Banks at Bank Indonesia in Rupiah and Foreign Currency which is effective on November 1, 2010, except for Loan to Deposit (LDR) Reserve to take effect on March 1, 2011. On February 9, 2011, BI issued regulation No. 13/10/PBI/2011 regarding the amendment of Bank Indonesia Regulation No. 12/19/2010 regarding Statutory Reserves at Bank Indonesia for Commercial Banks in Rupiah and Foreign Currency. Based on the Bank Indonesia Regulation, the statutory reserve consists of Rupiah and Foreign Currency Reserve. Statutory Reserve in Rupiah consist of Primary Reserve, Secondary Reserve, and LDR Reserve. Primary Statutory Reserve is a minimum deposit that should be maintained by the bank in current account with BI based on certain percentage of Third Party Fund (TPF) as determined by BI. Secondary Statutory Reserve is a minimum deposit that should be maintained by the bank in the form of Bank Indonesia Certificates (SBI), Government Debenture Debt (SUN) and/or Excess Reserve, based on certain percentage of TPF in accordance with the regulation. LDR Reserve is a minimum deposit required to be maintained by the banks in the form of current account with BI for the percentage of TPF which is calculated based on the difference of LDR held by bank and Target LDR which must be complied by banks.


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h. Placements with Other Banks Placements with other banks represent investments in time deposits of sharia, call money, deposits on call and others.

i. Loans

Loans represent provision of cash or cash equivalents based on agreements with borrowers, where borrowers required to repay their debts with interest after specified periods. Syndicated loans were stated at accordance with the risk borne by Company.

j. Allowance for impairment losses and Estimated Losses on Commitments and Contingencies

Quality assessment and allowance impairment losses carried out on productive assets and non-productive assets.

Productive assets consist of demand deposits with other banks, placements with other banks, securities, securities purchased under agreements to resell, loans, acceptance receivables, commitments and contingencies reflected in the administrative accounts who have credit risk and productive assets derived from activities of sharia, in accordance with Bank Indonesia regulations.

Non-productive assets are non-financial assets consisting of repossessed (foreclosed assets) and fixed assets that are not used in operation, inter-office accounts and suspense accounts in accordance with Bank Indonesia regulation. Starting January 1, 2010, the Company has applied PSAK 50 for the accounting for impairment as described in Note 2.f. Implementation of the Transitional Provisions of Bank Indonesia for the Impairment Collective of Loans On December 8, 2009, Bank Indonesia issued a Circular Letter. 11/33/DPNP regulating the estimation of collective impairment of loans with limited experience of specific losses. For banks that do not have sufficient historical loss data to determine the amount of impairment on loans collectively in accordance with the requirements under PSAK 55 (Revised 2006) and PAPI (2008), the formation of allowance for impairment losses to use the applicable Bank Indonesia provisions concerning "Asset Quality Rating for Commercial Banks". Starting January 1, 2010, the Company has applied the transitional provisions of Bank Indonesia for collective impairment of loans. Prior to January 1, 2010, determining the quality of assets and allowance for impairment losses was based on Bank Indonesia Regulation. 7/2/PBI/2005 dated January 20, 2005 and Circular Letter of Bank Indonesia. 7/3/DPNP dated 31 January 2005 on "Asset Quality Rating for Commercial Banks", the most recent through Bank Indonesia Regulation No. 11/2/PBI/2009 January 29, 2009. The company still refers to its rules for calculating allowance for impairment losses since January 1, 2010 according to the application of transitional provisions outlined above.


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Allowance for Impairment losses On Productive Assets Allowance for impairment losses on productive assets is based on review of the quality of their productive assets, commitments and contingencies in accordance with Bank Indonesia, which classifies these productive assets within five (5) categories, with the percentage of allowance for impairment losses as follows:

Classification

Current Minimum 1%Special mention Minimum 5%Substandard Minimum 15%Doubtful Minimum 50%Loss 100%

Precentage of Allowancefor impairment losses

Percentages are applied to the outstanding balances of the productive assets, less the collateral value in accordance with the Bank Indonesia Regulation, except for earning assets and commitments and contingencies classified as current where the rates are applied directly to the outstanding balance of earning assets and commitments and contingencies. Bank Indonesia Certificates (SBI), placements with Bank Indonesia (BI Intervention) and Government bonds are not not subject to allowance for impairment losses.

Estimated losses on commitment and contingencies (except acceptances) are presented under “Estimated losses on commitment and contingencies”. Productive assets are written-off against allowance for impairment losses of productive assets when management believes that productive assets should be written-off when the debtor is unable to pay and / or difficult to recover. Recoveries of productive assets that have been written off are recorded as an addition to allowance for impairment losses of productive asset account when received. If the amount received is more than the principal amount, the excess is recognized as interest income.

Allowance for Impairment losses On Non-Productive Assets

Allowance for impairment losses on non-productive assets is determined in accordance with Bank Indonesia regulation regarding “Assessment of Quality Asset of Commercial Banks”.

The Company establishes an allowance for impairment losses of non-productive assets based on the evaluation of the quality of each non-productive assets in accordance with the provisions of Bank Indonesia, which classifies the non-productive assets in four (4) categories based on the length of the asset is owned by the Company with the amount percentage of allowance for impairment losses as follows:

Category

Current Minimum 1%Substandard Minimum 15%Doubtful Minimum 50%Loss - 100%

Percentage of Allowance forPossible Losses


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k. Premises and Equipment

Premises and equipment, except for land, are carried at cost, less accumulated depreciation and any impairment in value. Land is not depreciated and is stated at cost less any impairment in value.

The initial cost of premises and equipment consists of its purchase price, including non-refundable import duties and taxes and any directly attributable costs in bringing the premises and equipment to its working condition and location for its intended use.

Expenditures incurred after the premises and equipment have been put into operations, such as repairs and maintenance costs, are normally charged to operations in the year such costs are incurred. In situations where it can be clearly demonstrated that the expenditures have resulted in an increase in the future economic benefits expected to be obtained from the use of the premises and equipment beyond its originally assessed standard of performance, the expenditures are capitalized as additional costs of premises and equipment. Depreciation is computed on a straight-line basis over the premises and equipment’s useful lives, as follows:

Years

Buildings 20 Office equipment 10 Vehicles 4

Unused premises and equipment (abandoned properties) are stated at the lower of carrying value and net realizable value, and is presented under “Other assets” account. Abandoned properties are provided with an allowance for possible losses in accordance with the regulation of Bank Indonesia (Note 2.j). The carrying values of premises and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying values may not be recoverable. When each major inspection is performed, its cost is recognized in the carrying amount of the item of premises and equipment as a replacement if the recognition criteria are satisfied. Such major inspection is capitalized and amortized over the next major inspection activity. When assets are sold or retired, the cost and related accumulated depreciation and any impairment loss are eliminated from the accounts.

An item of premises and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gains or loss arising from derecognition of premises and equipment (calculated as the difference between the net disposal proceeds, if any, and the carrying amount of the item) is included in the statement of comprehensive income in the period the item is derecognized. The asset’s residual values, useful lives and depreciation method are reviewed and adjusted, if appropriate, at each the end of financial period.

l. Ijarah Assets

Ijarah assets, such as motorcycle, machinery heavy equipment and software are depreciated or amortized over the lease term or the economic lives of assets, whichever is shorter, where at the end of the period, these assets are assigned to customer.


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For the Ijarah muntahiyah bitamlik contracts (lease financing), if at the time of transfer of ownership of the Asset from the owner to the ijarah tenant by grant, then the carrying amount is recognized as an ijarah asset expense.

Lease income during lease term is recognized when the benefits of assets have been handed over to the lessee. Ijarah income is presented net of related expenses such as, depreciation, maintenance and repairs expenses. Ijarah net income is presented as part of "interest revenues and profit sharing - loans" in the statements of comprehensive income.

m. Foreclosed Properties

Collaterals on loans in the form of land and other assets foreclosed by the Company, are presented under “Other Assets” account. Foreclosed properties are stated at net realizable values. Net realizable value is the fair value of the foreclosed property, less estimated cost of its disposal. The excess of the carrying value of the loan over the net realizable value of the foreclosed property is charged to provision for possible losses. If the net realizable value of the foreclosed property is more than the carrying value of the loan, the foreclosed property is recorded at the amount of the loan. The difference between the carrying value of the foreclosed property and the proceeds from the sale of such property is recorded as a gain or loss in the period the property was sold. Expenses for maintaining foreclosed properties are charged to operations as incurred. The carrying amount of the property is written-down to recognize a permanent decline in value of the foreclosed property and any write-down is charged to current operations. Foreclosed properties are provided with allowance for possible losses in accordance with the regulation of Bank Indonesia (Note 2.j).

n. Operating Lease The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. A reassessment is made after inception of the lease only if one of the following applies: a. there is a change in contractual terms, other than a renewal or extension of the agreement;

b. a renewal option is exercised or extension granted, unless the term of the renewal or

extension was initially included in the lease term;

c. there is a change in the determination of whether the fulfillment is dependent on a specified asset; or

d. there are a substantial change to the asset. Where a reassessment is made, lease accounting shall commence or cease from the date when the change in circumstances gave rise to the reassessment for scenarios a, c or d and the date of renewal or extension period for scenario b.


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Company as lessee. Operating lease payments are recognized as an expense in the statements of comprehensive income on a straight-line basis over the lease term. Company as lessor. Leases where the Company retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. 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 bases as rental income.

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

p. Deposits and Deposits from Other Banks Deposits are liabilities to customers in the form of demand deposits, savings deposits and time deposits. Demand deposits represent deposits of customers which may be used as instruments of payment, and which may be withdrawn at any time by checks, or other orders of payment or transfers. Savings deposits represent deposits of customers which may only be withdrawn when certain agreed conditions at the account opening are met. They may not be withdrawn by checks or other equivalent instruments, except by using specific withdrawal slip which can only be validated at the depository bank and/or by using Automatic Teller Machine (ATM) card. Time deposits represent deposits of customers which may only be withdrawn after a certain period of time in accordance with the agreement with the customers at the time of placement, or the customers will be fined or penalized if withdrawals are made before maturity. Deposits include syariah deposits and unrestricted investments consisting of: • Savings Wadiah is entrusted funds in the form of savings where income fund owners get a

bonus. • Unrestricted investments in current accounts, savings and time deposits represent deposits

of customers' funds that provide benefits for the owner of funds from Islamic unit revenue for the use of these funds in accordance with the ratio determined and approved previously.

Deposits from other banks are liabilities to other banks in the form of demand deposits, call money less than or 90 days and time deposits with original maturities of each agreement.

q. Share Issuance Costs

Share issuance costs are deducted from the additional paid-in capital resulting from the issuance of shares and are not amortized.


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r. Securities Issued Securities issued are securities issued in the form of traveler's checks (travelers' checks).

s. Recognition of Interest Revenues, Interest Expenses, Sharia Revenues and Revenue Sharing Distribution Interest Revenues and Expenses Starting January 1, 2010, income and interest expense for all financial instruments are recognized in the statement of comprehensive income on accrual basis using the effective interest rate method. Transaction costs that occur and are directly attributable to the acquisition or issuance of financial instruments not measured at fair value through profit and loss are amortized over the life of financial instruments using the effective interest rate method and recorded as part of interest income for financial assets directly attributable transaction costs, and as part of interest expense related to transaction costs of financial obligations. If a financial asset or group of similar financial assets in the category are held to maturity, loans and receivables, and available for sale has lowered its value as a result of impairment losses, the interest income earned after the impairment loss was recognized based on the interest rate used for discounting future cash flows in calculating impairment losses. Prior January 1, 2010, interest revenues and expenses were recognized on accrual basis, except for interest revenues on loans and other earning assets that were classified as non-performing. These interest revenues were recognized only when such interests were actually received. Interest revenues recognized or recorded but not yet received, were cancelled when the loans were classified as non-performing. Such interest revenues were recorded as contingent receivables in the administrative accounts and are recognized as revenues when cash was received. Discounts and premiums of securities were amortized using the straight-line method and recorded as part of the interest income and interest expense. Loans and other earning assets (excluding securities) were considered non-performing when they were classified as substandard, doubtful or loss. Securities were categorized as non-performing when the issuer of securities defaulted on its interest and/or principal payments. Cash payments of debtors pertaining to loans classified as doubtful and loss were applied against loan principal balances, and any excess of cash receipts over the outstanding principal balance was recognized as interest payment on the said loans. Revenue and Expense / Profit Sharing from Sharia Revenue consists of income from murabahah sharia, income from muntahiyah bittamlik ijarah (lease), and from the results of financing. Murabaha and revenue from ijarah muntahiyah bittamlik are recognized over the contract period on an accrual basis. Revenues for the results of financing are recognized when received or within the period of entitlement based on profit sharing agreement.


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t. Recognition of Revenues and Expenses on Commissions and Fees Fees and Commissions Related to Financial Instruments Starting January 1, 2010, commission income and expense fees associated with the acquisition of financial instruments categorized as held to maturity, loans granted and receivables, and available for sale, or related to a period of time that the amount is significant, recorded as part of the fair value of assets or financial liability and amortized over the time period using the effective interest rate method. Meanwhile, revenue and expense fees and commissions receipt that are insignificant in amounts are recognized as revenue or at the time of receipt or payment. Prior to January 1, 2010, commissions and fees, directly or indirectly related to loan activities and loan periods that amount that were significant were recorded as deferred revenues and expenses, and were systematically amortized within the periods of the respective loan and borrowings. If the loan and borrowings had been settled before their maturity dates, the related deferred revenues and expenses on commissions and fees were recognized upon settlement of loans and borrowings. Revenues and expenses on commissions and fees insignificant in amounts were recognized as revenue or expense upon receipt or payment. Fees and Commission Fees and commissions that are not related to the issuance acquisition of financial instrument and have maturity terms in which amounts are significant, are deferred and amortized using the straight-line method over the term of the relevant transaction. Meanwhile, revenue and expense fees and commissions that are not significant in amounts are recognized immediately as income or expenses on transaction date. Other fees and commission revenues not related to credit, such as banca assurance services, and revenue associated with export and import, and bank guarantee, are recognized as revenue associated upon services rendered.

u. Impairment of Non-Financial Assets

An assessment by management of the asset value is made at each statement of financial position date to determine whether there is any indication of impairment of any asset and possible write-down to its recoverable amount whenever events or changes in circumstances indicate that the asset value is impaired. An impairment loss is recognized only if the carrying amount of an asset exceeds its recoverable amount. An asset’s recoverable value is computed as the higher of the asset’s value in use and its net selling price. On the other hand, a reversal of an impairment loss is recognized whenever there is indication that the asset is not impaired anymore. The amount of impairment loss (reversal of impairment loss) is charged to (credited in) current year’s operations. Allowance for impairment losses of non-financial assets in the form of non-productive assets (consisting of foreclosed properties, fixed assets are not used, the administrative accounts and suspense accounts) is determined in accordance with Bank Indonesia (see Note 2.j).


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v. Income Tax Current tax expense is determined based on the taxable income for the period computed using prevailing tax rates.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized for deductible temporary differences and carryforward tax benefit of unused fiscal losses to the extent that it is probable that taxable income will be available in future periods against which the deductible temporary differences and carryforward tax benefit of unused fiscal losses can be utilized. Deferred tax is calculated at the tax rates that have been enacted or substantively enacted at statement of financial position date. Deferred tax is charged to or credited in the statements of income, except when it relates to items charged to or credited directly in equity, in which case the deferred tax is also charged to or credited directly in equity. Deferred tax assets and liabilities are offset in the statement of financial positions in the same manner the current tax assets and liabilities are presented. Amendments to tax obligations are recorded when an assessment is received or, if appealed against by the Company, when the result of the appeal is determined.

w. Earnings per Share

Basic earning per share is computed by dividing net income for the period with the weighted average number of outstanding common shares during the period.

The calculation of basic earnings per share is adjusted retrospectively as a result of the change in par value (stock split) from Rp 500,000 per share to Rp 100 per share on August 6, 2010 (Notes 1.a and 31). Diluted earnings per share is computed by dividing net income for the period by the weighted average number of shares outstanding during the period as adjusted for the effects of dilutive potential common shares specifically series I warrants

x. Employee Benefits

Short-term employee benefits Short-term employee benefits are in the form of wages, salaries and social security (Jamsostek) contribution. Short-term employee benefits are recognized at its undiscounted amount as a liability, after deducting any amount already paid, in the statement of financial position, and as an expense in the statements of comprehensive income.


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Post-employment benefits Post-employment benefits are unfunded defined-benefit plans which amounts are determined based on years of service and salaries of the employees at the time of pension. The actuarial valuation method used to determine the present value of defined-benefit reserve, related current service costs and past service costs is the Projected Unit Credit. Current service costs, past service costs which are already vested, interest costs and effects of curtailments and settlements (if any) are charged directly to current operations. Past service costs which are not yet vested and actuarial gains or losses for working (active) employees are amortized on a staight-line basis over the employees’ average remaining years of service, until the benefits become vested.

y. Events after the Reporting Period

Post year-end events that provide additional information about the Company’s financial position at the date of the statement of financial position (adjusting events), if any, are reflected in the financial statements. Post year-end events that are not adjusting events are disclosed in the notes to financial statements when material.

3. Management Use of Estimates, Judgments and Assumptions on Financial Instruments

In the application of the Company accounting policies, which are described in Note 2 to the financial statements, managements is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and assumptions are based on historical experience and other factors that are considered to be relevant. Management believes that the following represent a summary of the significant estimates, judgments and assumptions made that affected certain reported amounts of and disclosures in the financial statements: Fair Value of Financial Assets and Financial Liabilities Effective January 1, 2010, PSAK 55 (Revised 2006), Financial Instruments : Recognition and Measurement requires that certain financial assets and financial liabilities be carried at fair value, which requires the use of accounting estimates and judgment. While significant components of fair value measurement are determined using verifiable objective evidence (i.e. foreign exchange rates, interest rates), the timing and amount of changes in fair value, would differ using a different valuation methodology.

The fair value of financial assets and financial liabilities are set out in Note 35.

Financial Assets Not Quoted in Active Market

Effective January 1, 2010, the Company classifies financial assets by evaluating, among others, whether the asset is quoted or not in an active market. Included in the evaluation on whether a financial asset is quoted in an active market is the determination on whether quoted prices are readily and regularly available, and whether those prices represent actual and regularly occurring market transactions on an arm’s length basis.


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Allowance for Impairment of Financial Instruments

Allowance for impairment losses is maintained at a level considered adequate to provide for potentially uncollectible receivables. Effective January 1, 2010, the Company assess specifically at each financial position date whether there is objective evidence that a financial asset is impaired (uncollectible). The level of allowance is based on past collection experience and other factors that may affect collectability such as the probability of insolvency or significant financial difficulties of the debtor or significant delay in payments.

If there is objective evidence of impairment, timing and collectible amounts are estimated based on historical loss data. Provision for doubtful accounts is provided on accounts specifically identified as impaired. Loans and receivables written off are based on management’s decisions that the financial assets are uncollectible or cannot be realized in whatsoever actions will be taken. Evaluation of receivables to determine the total allowance to be provided, is performed periodically during the period. Therefore, the timing and amount of provision for doubtful accounts recorded at each period might differ based on the judgments and estimates that have been used.

Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are disclosed below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments may change due to market changes on circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur:

a. Fair Value of Financial Assets and Financial Liabilities

Indonesian Financial Accounting Standards require measurement of certain financial assets and liabilities at fair values, and the disclosure requires the use of estimates. Significant component of fair value measurement is determined based on objective evidence derived from diversification (i.e. foreign exchange, interest rate), while timing and amount of changes in fair value might differ due to different valuation method used.

The fair value of financial assets and financial liabilities are set out in Note 35.

b. Estimated Useful Lives of Property and Equipment

The useful lives of each of the item of the Company property and equipment are estimated based on the period over which the asset is expected to be available for use. Such estimation is based on a collective assessment of similar business, internal technical evaluation and experience with similar assets. The estimated useful life of each asset is reviewed periodically and updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the asset. It is possible, however, that future results of operations could be materially affected by changes in the amounts and timing of recorded expenses brought about by changes in the factors mentioned above. A reduction in the estimated useful life of any item of investment properties, property and equipment, property under build, operate and transfer agreement and assets for lease would increase the recorded depreciation and decrease the carrying values of these assets.


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There is no change in the estimated useful lives of investment properties, property and equipment, property under build, operate and transfer agreement and assets for lease during the period. The estimated lives and carrying value of property and equipment are set out in Notes 2k and 12.

c. Post-employment Benefits

The determination of the obligation and post-employment benefits is dependent on the selection of certain assumptions used by actuary in calculating such amounts. Those assumptions and include, among others, discount rate and rate of salary increase and the balance of outstanding defined benefit obligation are described in Note 36. Actual results that differ from the Company’s assumptions are accumulated and amortized over future periods and therefore, generally affect the recognized expense and recorded obligation in such future periods. While it is believed that the Company’s assumptions are reasonable and appropriate, significant differences in actual experience or significant changes in assumptions may materially affect the amount of Company’s defined benefit post-employment reserve.

d. Deferred Tax Assets

Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the temporary differences can be utilized. Significant management estimates are required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Deferred tax assets are disclosed in Note 30.

e. Impairment of Non-Financial Assets

Impairment review is performed when certain impairment indicators are present. Determining the fair value of assets requires the estimation of cash flows expected to be generated from the continued use and ultimate disposition of such assets. Any significant changes in the assumptions used in determining the fair value may materially affect the assessment of recoverable values and any resulting impairment loss could have a material impact on results of operations.

4. Demand Deposits with Bank Indonesia

2011 2010(Unaudited) (Unaudited) 2010 2009 2008Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Rupiah 1,119,918 307,232 674,609 266,465 225,511 Foreign currencies (Note 34) 242,300 995,516 393,309 588,385 140,005

Total 1,362,218 1,302,748 1,067,918 854,850 365,516

September 30 December 31


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As September 30, 2011 and 2010, and December 31, 2010, included in this accounts is the current account under the principles of Islamic banking amounted to Rp 44,061 million, Rp 2,783 million, and Rp 8,806 million, respectively. According to the regulation of Bank Indonesia, banks in Indonesia are required to maintain a minimum liquidity reserve of a certain percentage of third party funds both in Rupiah and foreign currencies. As of September 30, 2011 and 2010 and December 31, 2010, 2009, and 2008, the Company’s minimum liquidity reserves in Rupiah for primary reserves amounted to Rp 922,077 million, Rp 305,390 million, Rp 672,744 million, Rp 264,481 million, and Rp 223,991 million, respectively. As of September 30, 2011 and 2010, and December 31, 2010 and 2009, secondary reserve amounted to Rp 277,078 million, Rp 151,380 million, Rp 207,559 million and Rp 132,241 million, respectively. As of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008 the minimum liquidity reserves in foreign currencies equivalent to Rp 242,214 million, Rp 31,575 million, Rp 30,684 million, Rp 24,391 million, and Rp 8,939 million, respectively. The Company’s minimum liquidity reserves ratio for Rupiah and foreign currency as of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008 are as follows:

2011 2010(Unaudited) (Unaudited) 2010 2009 2008

% % % % %Minimum liquidity reserve requirement

RupiahPrimary reserve

Conventional 8.00 5.00 8.00 5.00 5.00Sharia 5.00 5.00 5.00 - -

Secondary reserve 2.50 2.50 2.50 2.50 -LDR reserve 1.67 - - -

Foreign currencyConventional 8.00 1.00 1.00 1.00 1.00Sharia 1.00 1.00 1.00 - -

Company's liquidity reserve Rupiah

Primary reserveConventional 9.71 5.03 8.02 5.04 5.04Sharia 6.24 5.29 5.06 - -

Secondary reserve 5.49 9.87 7.74 4.76 -LDR reserve 1.67 - - - -

Foreign currencyConventional 8.00 31.53 12.82 24.12 15.67Sharia 3.44 - 4.47 - -



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5. Demand Deposits with Other Banks


Related party (Note 32)Foreign currency (Note 34)

Bank International Ningbo, China 847 171,742 277 436 636

Third PartiesRupiah

PT Bank Central Asia Tbk 13,247 6,719 14,041 11,183 1,547PT Bank Internasional Indonesia Tbk 76 85 68 - -Others 96 56 71 26 14

Subtotal 13,419 6,860 14,180 11,209 1,561

Foreign currencies (Note 34)PT Bank Mandiri (Persero) Tbk, Indonesia 12,923 46,806 17,798 5,171 46,414PT Bank Central Asia Tbk, Indonesia 12,586 42,378 32,924 24,304 44,051Deutsche Bank Trust Company

Americas, United States America 8,228 - - - -United Overseas Bank, Singapore 5,651 4,846 4,730 3,007 338Sumitomo Mitsui Banking Corporation,

Japan 3,870 49 198 1,581 335Bank of China, China 2,838 - - - -Standard Chartered Bank, England 1,799 - 188 - -Wells Fargo Bank, N.A, United States

of America 1,681 2,898 1,402 525 2,121Standard Chartered Bank, United States

of America 1,350 513 1,705 20,882 10,991OCBC, Singapore 1,225 1,517 3,153 883 752PT Bank Mandiri (Persero) Tbk, England 731 1,879 3,747 3,915 1,053DBS Bank, Hong Kong 729 313 532 557 30Wells Fargo Bank, N.A, England 474 18,071 2,464 3,771 -Deutsche Bank AG, Germany 372 - - - -UBS AG, Switzerland 148 1,120 1,817 322 -Sumitomo Mitsui Banking Corporation,

United States of America 82 27 225 5,374 469Bank of China, Australia 26 - - - -UBS AG, Singapore - 517 554 - 1,340ANZ Banking Group Ltd, Australia - 911 454 6,647 1,084Standard Chartered Bank, Hong Kong - 222 224 - -

Total - third parties 54,713 122,067 72,115 76,939 108,978

Total 68,132 128,927 86,295 88,148 110,539

Total 68,979 300,669 86,572 88,584 111,175Allowance for impairment losses - - - (886) (1,112)

Net 68,979 300,669 86,572 87,698 110,063


The collectibility classification of all demand deposits with other banks as of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008 is current. As of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008, there are no demand deposits with other banks which are blocked or under lien.


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Interest rates per annum of demand deposits with other banks are as follows:

2,011 2010(Unaudited) (Unaudited) 2010 2009 2008

% % % % %

Rupiah - - - 1.00 1.00Foreign currencies 0.85 - 0.90 0.85 - 0.90 0.85 - 0.90 0.02 0.00


The changes in allowance for impairment losses are as follows:

Foreign ForeignRupiah Currencies Total Rupiah Currencies Total

Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Balance at beginning of the period - - - 112 774 886Adjusment on PSAK 55

(Revised 2006) (Note 2f) - - - (112) (774) (886)Provision (reversal) during the period - - - - - -Exchange rate difference - - - - - -

Balance at end of the period - - - - - -

September 30, 2010September 30, 2011

Foreign Foreign ForeignRupiah Currencies Total Rupiah Currencies Total Rupiah Currencies Total

Rp '000,000 Rp '000,000 Rp '000,000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000

Balance at beginning of the year 112 774 886 16 1,096 1,112 1 505 506Adjusment on PSAK 55

(Revised 2006) (Note 2f) (112) (774) (886) - - - - - -Provision (reversal) during the year - - - 96 (198) (102) 15 439 454Exchange rate difference - - - - (124) (124) - 152 152

Balance at end of the year - - - 112 774 886 16 1,096 1,112

Desember 31, 2008Desember 31, 2010 Desember 31, 2009

Management believes that the allowance for impairment losses on demand deposits with other banks at December 31, 2009 and 2008 are adequate to cover the losses that might arise from uncollectible demand deposits with other banks. Transactions with related parties were conducted under similar terms and conditions with third parties.

6. Placements with Other Banks Placements with other banks by type of placement are as follows:

Average Interest ThirdType of Placement Terms Rate Parties

% Rp '000,000Rupiah

Call money 1-10 days 5.35 180,000Time deposits 3-31 days 7.20 10,000

Total 190,000

September 30, 2011 (Unaudited)


- 42 -


% Rp '000,000Foreign currency (Note 34)

Call money 1-31 days 0.24 229,573Deposits on call 4 days 0.05 2,488

Total 232,061

Total 422,061Allowance for impairment losses (100)

Net 421,961



% Rp '000,000Rupiah

Time deposits 30 days 6.00 2,000Others 18 years 6.00 97

Total 2,097

Foreign currency (Note 34)Call money 1 day 0.05 331,874Time deposits 30 days 1.25 35,700Deposits on call 1 day 0.05 10,213

Total 377,787


Net 379,864



% Rp '000,000Rupiah

Time deposits 3-25 days 6.00 90,000

Total 90,000

December 31, 2010


- 43 -


% Rp '000,000Foreign currency (Note 34)

Call money 1-31 days 0.85 566,039Time deposits 27 days 0.90 36,040Deposits on call 4 days 0.05 14,110

Total 616,189

Total 706,189Allowance for impairment losses -

Net 706,189

December 31, 2010


% Rp '000,000Rupiah

Time deposits 31-33 days 7.07 91,535Others 18 years 6,00 97

Total 91,632

Foreign currency (Note 34)Call money 1 day 0.05 145,153Time deposits 31 days 2.05 37,580Deposits on call 1 day 0.00 1,672

Total 184,405

Total 276,037Allowance for impairment losses (2,760)

Net 273,277

December 31, 2009


% Rp '000,000Rupiah

Others 18 years 6.00 292

Foreign currency (Note 34)Call money 1 day 0.05 85,565


Net 84,998

December 31, 2008


- 44 -

Details of time deposits and call money in Rupiah as of September 30, 2011 and 2010 and December 31, 2010, 2009, and 2008 are as follows:


Time DepositsPT CIMB Niaga Tbk - Sharia 10,000 - - - -PT Bank Rakyat Indonesia

(Persero) Tbk - Sharia - 2,000 50,000 48,000 -PT BPD Jawa Barat dan Banten Tbk - Sharia - - 25,000 30,000 -PT Bank Internasional Indonesia Tbk - Sharia - - - 10,535 -PT Bank Mega Syariah - - - 3,000 -PT Bank Victoria Syariah - - 15,000 - -Total 10,000 2,000 90,000 91,535 -

Call MoneyPT Lembaga Pembiayaan Ekspor Indonesia 70,000 - - - -PT Bank Pan Indonesia Tbk 60,000 - - - -PT Bank Commonwealth 50,000 - - - -Total 180,000 - - - -

Total 190,000 2,000 90,000 91,535 -


Bank Name

Call money, time deposits and deposits on call in foreign currencies includes:


US$ US$ US$ US$ US$

Call MoneyWells Fargo Bank, N.A., United States

of America 20,100,000 30,600,000 15,400,000 15,450,000 7,850,000 PT Bank Mutiara Tbk 5,000,000 - - - -Standard Charterd Bank, United States

of America 1,017,531 6,584,710 37,423,433 - -PT Lembaga Pembiayaan

Ekspor Indonesia - - 10,000,000 - -

Total 6,017,531 6,584,710 47,423,433 - -

Time depositPT Bank Internasional Indonesia Tbk

- Sharia - 4,000,000 4,000,000 4,000,000 -

Deposits on callUBS AG, Singapore 283,071 1,144,327 1,566,027 177,975 -

Total 6,300,602 11,729,037 52,989,460 4,177,975 -


Bank Name

The collectibility classification of all placements with other banks is current as of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008.


- 45 -

The details of placements with other banks as of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008 based on their maturity dates are as follows:

3 months 6 months Up to 1 month until until until More than

Types of Placements 1 month 3 months 6 months 12 months 12 months TotalRp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

RupiahCall Money 180,000 - - - - 180,000Time deposits 10,000 - - - - 10,000

Total 190,000 - - - - 190,000

Foreign currency (Note 34)Call money 229,573 - - - - 229,573Deposits on call 2,488 - - - - 2,488

Total 232,061 - - - - 232,061

Total 422,061 - - - - 422,061




RupiahTime deposits - sharia 2,000 - - - - 2,000Others - - 97 - - 97

Total 2,000 - 97 - - 2,097

Foreign currency (Note 34)Call money 331,874 - - - - 331,874Time deposits 35,700 - - - - 35,700Deposits on call 10,213 - - - - 10,213

Total 377,787 - - - - 377,787

Total 379,787 - 97 - - 379,884




RupiahTime deposits 90,000 - - - - 90,000

Foreign currency (Note 34)Call money 566,039 - - - - 566,039Time deposits 36,040 - - - - 36,040 Deposits on call 14,110 - - - - 14,110

Total 706,189 - - - - 706,189

December 31, 2010


- 46 -



RupiahTime deposits 58,535 33,000 - - - 91,535Others 16 24 24 33 - 97

Total 58,551 33,024 24 33 - 91,632

Foreign currency (Note 34)Call money 145,153 - - - - 145,153Time deposits 37,580 - - - - 37,580Deposits on call 1,672 - - - - 1,672

Total 184,405 - - - - 184,405

Total 242,956 33,024 24 33 - 276,037

December 31, 2009


Type of Placements 1 month 3 months 6 months 12 months 12 months TotalRp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

RupiahOthers 122 16 24 49 81 292

Foreign currency (Note 34)Call money 85,565 - - - - 85,565

Total 85,687 16 24 49 81 85,857

December 31, 2008

The changes in allowance for impairment losses on placements with other banks are as follows:

Foreign ForeignRupiah Currency Total Rupiah Currency Total

Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000

Balance at beginning of the period - - - 1,292 1,468 2,760Adjusment on PSAK 55 (revisi 2006) (Note 2f) - - - (1,292) (1,468) (2,760)Provision (reversal) during the period 100 - 100 20 - 20Exchange rate difference - - - - - -

Balance at end of the period 100 - 100 20 - 20

September 30, 2010 (Unaudited)September 30, 2011 (Unaudited)

Foreign Foreign Foreign

Rupiah Currency Total Rupiah Currency Total Rupiah Currency TotalRp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000

Balance at beginning of the year 1,292 1,468 2,760 3 856 859 1,294 3,128 4,422Adjusment on PSAK 55 (revisi 2006) (Note 2f) (1,292) (1,468) (2,760) - - - - - -Provision (reversal) during the year - - - 1,289 847 2,136 (1,291) (2,154) (3,445)Exchange rate difference - - - - (235) (235) - (118) (118)

Balance at end of the year - - - 1,292 1,468 2,760 3 856 859

December 31, 2008December 31, 2010 December 31, 2009

Management believes that the allowance for impairment losses on placements with other banks is adequate to cover the losses which might arise from uncollectible placements with other banks.


- 47 -

7. Securities a. The details of securities by type and purpose of investments are as follows:


RupiahAt fair value through profit and loss

Corporate bondsPT Bank Pan Indonesia Tbk 30,000 - 30,000 - -PT Indofood Sukses Makmur Tbk - - - 5,000 5,000Unrealized gain (loss) on increase (decrease) in fair value (348) - 120 53 (460)Fair value 29,652 - 30,120 5,053 4,540

Available for saleGovernment bonds

IFR006 12,352 10,790 11,426 - -IFR005 - - 5,380 - -Fair value 12,352 10,790 16,806 - -

Held-to-maturityBank Indonesia Intervension 1,996,000 124,400 171,300 2,000 24,500Unamortized interest (21,921) (26) (27) (1) (25)

Net 1,974,079 124,374 171,273 1,999 24,475

Certificate of Bank Indonesia 26,488 - - - -Unamortized interest (189) - - - -

Net 26,299 - - - -

Government bondsFR0028 78,860 78,720 78,746 80,000 80,000ORI-04 75,010 75,030 10,005 75,000 75,000FR0026 71,691 72,154 72,043 70,000 70,000FR0038 52,104 52,306 52,256 50,000 50,000FR0027 39,265 39,106 39,139 40,000 40,000FR0020 32,466 33,438 33,214 30,000 30,000FR0031 29,653 29,632 29,635 30,000 30,000FR0043 28,172 28,087 28,104 30,000 30,000FR0042 27,566 27,512 27,522 30,000 30,000FR0034 21,642 21,732 21,711 20,000 20,000FR0036 20,718 20,773 20,759 20,000 20,000FR0033 20,708 21,149 21,045 20,000 20,000FR0023 20,322 20,566 20,509 20,000 20,000FR0017 20,193 20,835 20,684 20,000 20,000FR0045 17,273 17,255 17,258 20,000 20,000FR0018 10,255 10,560 10,489 10,000 10,000FR0040 9,749 9,742 9,743 10,000 10,000ORI-03 - 10,007 75,021 10,000 10,000Total 575,647 588,604 587,883 585,000 585,000Unamortized premium - - - 5,654 8,616Net 575,647 588,604 587,883 590,654 593,616



- 48 -


RupiahHeld-to-maturity

Corporate bondsPT Excelcomindo Pratama Tbk 25,152 23,821 24,138 26,000 -PT Indomobil Finance Indonesia 20,000 20,000 20,000 20,000 -Sukuk Ijarah Indosat IV 2009 Seri A 2,000 2,000 2,000 2,000 -PT Branta Mulia Tbk - - - - 10,000Total 47,152 45,821 46,138 48,000 10,000Unamortized discount - - - (3,048) (66)Net 47,152 45,821 46,138 44,952 9,934

Total-held-to-maturity 2,623,177 758,799 805,294 637,605 628,025

Total Rupiah 2,665,181 769,589 852,220 642,658 632,565

Foreign currency (Note 34)At fair value through profit and loss

Mutual fundHPAM Maestro Dollar 44,970 - 47,331 - -

Corporate bondsEnercoal Resources Pte. Ltd - 21,632 - - -PT Bank Internasional Indonesia Tbk - - - 9,466 -

Total fair value through profit and loss 44,970 21,632 47,331 9,466 -

Available for saleRepublik Indonesia - ROI Loan 18,986 5,116 19,687 - -

Held-to-maturityRepublik Indonesia - ROI Loan 163,863 166,103 167,753 174,652 74,190

Credit Linked NotesMerrill Lynch Notes 43,950 44,625 45,050 46,975 54,500UBS Jersey Notes - 17,850 18,020 18,790 21,800Total 43,950 62,475 63,070 65,765 76,300

Subordinated bondsPT Bank CIMB Niaga Tbk - 38,354 - 21,561 -PT Bank Internasional Indonesia Tbk - - - 27,753 -Total - 38,354 - 49,314 -

Bills receivable 1,476 21,789 322,030 889 -

Total Held-to-maturity 209,289 288,721 552,853 290,620 150,490

Loans and receivableBills receivable 499,826 - - - -

Total foreign currency 773,071 315,469 619,871 300,086 150,490

Total 3,438,252 1,085,058 1,472,091 942,744 783,055Allowance for imparment losses (20) (38) - (1,107) (145)

Net 3,438,232 1,085,020 1,472,091 941,637 782,910


As of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008 all securities owned by the Company are issued by third parties.


- 49 -

b. The details of held-to-maturity securities are as follows:

More than 1 year More than 1 year or less until 5 years 5 years Total Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Based on contractual maturityRupiah

Bank Indonesia Intervention 1,974,079 - - 1,974,079 Certificate of Bank Indonesia 26,299 - - 26,299 Government bonds - 75,010 500,637 575,647 Corporate bonds - 45,152 2,000 47,152 Net 2,000,378 120,162 502,637 2,623,177

Foreign currencyRepublic of Indonesia - ROI Loan - - 163,863 163,863 Credit Linked Notes - - 43,950 43,950 Bills receivable 1,476 - - 1,476 Total 1,476 - 207,813 209,289

Total 2,001,854 120,162 710,450 2,832,466

Based on remaining maturityRupiah

Bank Indonesia Intervention 1,974,079 - - 1,974,079 Certificate of Bank Indonesia 26,299 - - 26,299 Government bonds 143,439 143,422 288,786 575,647 Corporate bonds 45,152 - 2,000 47,152 Total 2,188,969 143,422 290,786 2,623,177

Foreign currencyRepublic of Indonesia - ROI Loan - 105,687 58,176 163,863 Credit Linked Notes - 43,950 - 43,950 Bills receivable 1,476 - - 1,476 Total 1,476 149,637 58,176 209,289

Total 2,190,445 293,059 348,962 2,832,466



- 50 -



Bank Indonesia Intervention 124,374 - - 124,374 Government bonds - 136,999 451,605 588,604 Corporate bonds - 45,821 - 45,821

Net 124,374 182,820 451,605 758,799

Foreign currencyRepublic of Indonesia - ROI Loan - - 166,103 166,103 Credit Linked Notes - - 62,475 62,475 Subordinated bonds - - 38,354 38,354 Bills receivable 21,789 - - 21,789 Total 21,789 - 266,932 288,721

Total 146,163 182,820 718,537 1,047,520


Bank Indonesia Intervention 124,374 - - 124,374 Government bonds 10,007 292,839 285,758 588,604 Corporate bonds - 45,821 - 45,821

Total 134,381 338,660 285,758 758,799

Foreign currencyRepublic of Indonesia - ROI Loan - 107,039 59,064 166,103 Credit Linked Notes 17,856 44,619 - 62,475 Subordinated bonds - - 38,354 38,354 Bills receivable 21,789 - - 21,789

Total 39,645 151,658 97,418 288,721

Total 174,026 490,318 383,176 1,047,520



- 51 -



Bank Indonesia Intervention 171,273 - - 171,273 Government bonds - 105,710 482,173 587,883 Corporate bonds - 44,138 2,000 46,138

Net 171,273 149,848 484,173 805,294

Foreign currencyRepublic of Indonesia - ROI Loan - - 167,753 167,753 Credit Linked Notes - - 63,070 63,070 Bills receivable 322,030 - - 322,030

Total 322,030 - 230,823 552,853

Total 493,303 149,848 714,996 1,358,147


Bank Indonesia Intervention 171,273 - - 171,273 Government bonds 10,005 292,143 285,735 587,883 Corporate bonds - 44,138 2,000 46,138 Total 181,278 336,281 287,735 805,294

Foreign currencyRepublic of Indonesia - ROI Loan - 108,128 59,625 167,753 Credit Linked Notes - 18,020 45,050 63,070 Bills receivable 322,030 - - 322,030

Total 322,030 126,148 104,675 552,853

Total 503,308 462,429 392,410 1,358,147

December 31, 2010


- 52 -




Net 1,999 162,064 473,542 637,605

Foreign currencyRepublic of Indonesia - ROI Loan - - 174,652 174,652 Credit Linked Notes - - 65,765 65,765 Subordinated bonds 889 - - 889 Bills receivable - - 49,314 49,314

Total 889 - 289,731 290,620

Total 2,888 162,064 763,273 928,225



Total 1,999 238,363 397,243 637,605

Foreign currencyRepublic of Indonesia - ROI Loan - 76,595 98,057 174,652 Credit Linked Notes - 65,765 - 65,765 Bills receivable 889 - - 889 Subordinated bonds - - 49,314 49,314 Total 889 142,360 147,371 290,620

Total 2,888 380,723 544,614 928,225

December 31, 2009


- 53 -




Net 24,475 128,025 475,525 628,025

Foreign currencyRepublic of Indonesia - ROI Loan - - 74,190 74,190 Credit Linked Notes - - 76,300 76,300

Total - - 150,490 150,490

Total 24,475 128,025 626,015 778,515


Bank Indonesia Intervention 24,475 - - 24,475 Government bonds - 196,150 397,466 593,616 Corporate bonds 9,934 - - 9,934

Total 34,409 196,150 397,466 628,025

Foreign currencyRepublic of Indonesia - ROI Loan - - 74,190 74,190 Credit Linked Notes - 76,300 - 76,300

Total - 76,300 74,190 150,490

Total 34,409 272,450 471,656 778,515

December 31, 2008

c. Interest rates per annum of securities are as follows:


% % % % %

RupiahBank Indonesia certificate 6.75 - 6.80 - - - -Bank Indonesia Intervention 5.25 - 7.25 5.5 5.5 6.00 8.75 - 9.25Government bonds 9.50 - 14.27 9.40 - 14.27 9.40 - 14.27 9.40 - 14.28 9.40 - 14.28Corporate bonds 10.35 - 17.00 10.35 - 17.00 10.75 - 17.00 10.01 - 17.00 10.00 - 13.50

Foreign currencyRepublic of Indonesia - ROI Loan 5.87 - 10.37 5.87 - 10.37 5.87 - 10.37 6.62 - 10.38 6.62 - 6.87Credit Linked Notes 7.00 6.75 - 9.35 6.75 - 9.35 6.75 - 9.35 6.75 - 9.35Wesel Ekspor 1.34 - 2.45 1.19 - 1.55 1.19 - 1.55 2.50 -Subordinated bonds - 7.37 - 7.38 - 7.75 -



- 54 -

d. The fair values of held-to-maturity bonds (including Government Bonds) as of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008 amounted to Rp 908,494 million, Rp 923,600 million, Rp 907,905 million, Rp 607,077 million, and Rp 552,744 millon, respectively.

The details of corporates bond ratings from PT Pemeringkat Efek Indonesia (PT Pefindo) or Moody’s, are as follows:


PT Bank Pan Indonesia Tbk idAA- idAA- idAA - -PT Indofood Sukses Makmur Tbk - - - idAA idAA+PT Excelcomindo Pratama Tbk idAA- idAA- idAA- idA+ -PT Indomobil Finance Indonesia idA- idA- idA- idA- -PT Bank Internasional Indonesia Tbk - - - Ba1 -PT Bank CIMB Niaga Tbk - - - Ba1 -Sukuk Ijarah PT Indosat Tbk idAA+(sy) idAA+(sy) idAA+(sy) idAA+(sy) -Merrill Lynch Notes Baa1 - A2 Aa3 -UBS Jersery Notes - Aa3 Aa3 Aa2 -PT Branta Mulia Tbk - - - - idA-


e. As of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008, the collectibility

classification of all securities is current. f. In 2008, the Company changed its investment intention in Government bonds and ROI Loans

with nominal value of Rp 661,300 million that resulted into a reclassification from “Available for Sale” into “Held-to-Maturity” accounts as allowed based on a letter from Bank Indonesia No. 10/177/DpG/DPNP dated October 9, 2008 stating that banks are allowed to transfer Surat Utang Negara (SUN) and other long-term domestic debt securities from “Trading” and “Available for Sale” categories to “Held-to-Maturity” until such time that PSAK 55 (Revised 2006), Financial Instruments : Recognition and Measurement, becomes effective.

Management believes that the Company had the ability to hold the Government bonds and ROI Loans until maturity. The fair value of the Government bonds and ROI Loans at the time of transfer amounts to Rp 658,397 million. The unrealized loss on the transfer amounting to Rp 51,238 million is included in equity and is amortized up to the bonds’ maturity date.

g. The changes in allowance for impairment losses on securities are as follows:


Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Balance at beginning of the period - - - 500 607 1,107 Adjusment on PSAK 55 (Revised 2006) (Note 2f) - - - (500) (607) (1,107) Provision during the period 20 20 20 18 38 Exchange rate difference - - - - - -

Balance at end of the period 20 - 20 20 18 38



- 55 -

Foreign Foreign ForeignRupiah Currency Total Rupiah Currency Total Rupiah Currency Total

Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Balance at beginning of the year 500 607 1,107 145 - 145 511 668 1,179 Adjusment on PSAK 55

(Revised 2006) (Note 2f) (500) (607) (1,107) - - - - - -Provision (reversal) during the year - - - 355 704 1,059 (366) (668) (1,034) Exchange rate difference - - - - (97) (97) - - -

Balance at end of the year - - - 500 607 1,107 145 - 145

Desember 31, 2008Desember 31, 2010 Desember 31, 2009

Management believes that the allowance for impairment losses on securities as of September 30, 2011 and 2010, and December 31, 2009, and 2008 is adequate to cover the losses which might arise from uncollectible securities.

8. Securities Purchased under Agreements to Resell As of September 30, 2011, and December 31, 2010 and 2009, the securities purchased under agreements to resell consist of:

September 30, 2011 (Unaudited)Nominal Unearned Carrying

Type Terms Due date value interest income valueRp '000,000 Rp '000,000 Rp '000,000

RupiahGovernment Bond

Subdebt BCA Finance 30 days October 19, 2011 19,579 109 19,470SUN FR45 30 days October 28, 2011 17,190 134 17,056PT Bank Lampung 32 days October 17, 2011 3,816 19 3,797

Total 40,585 262 40,323

December 31, 2010Nominal Unearned Carrying

Type Terms Due date value interest income valueRp '000,000 Rp '000,000 Rp '000,000

RupiahGovernment Bond

FR040 40 days January 10, 2011 45,889 116 45,773Corporate Bonds

PT Bank Lampung 32 days January 17, 2011 9,770 49 9,721PT Bank Lampung 31 Days January 20, 2011 19,562 118 19,444

Total 75,221 283 74,938

December 31, 2009

Nominal Unearned CarryingType Terms Due date value interest income value

Rp '000,000 Rp '000,000 Rp '000,000Foreign currency

Government BondsROI 2014 30 days January 22, 2010 10,060 42 10,018

Total 10,060 42 10,018

Securities purchased under agreements to resell as of September 30, 2011, and December 31, 2010 and 2009 were settled at their maturity dates.


- 56 -

9. Loans a. By Types of Loans


Related parties (Note 32)Rupiah

Fixed loans 227,164 306,500 231,557 163,500 80,831Overdraft 4,795 - - - -Consumer loans 3,601 647 6,939 331 1,398Installment loans 263 1,798 1,682 116 539Loans to employees 333 437 580 154 640Sharia receivables - murabahah 12 46 67 - -Total 236,168 309,428 240,825 164,101 83,408Allowance for impairment losses (51) (7,516) (150) (4) (24)Net 236,117 301,912 240,675 164,097 83,384

Foreign currency (Note 34)Fixed loans 1,199,835 548,888 554,115 577,793 -

Total related parties 1,435,952 850,800 794,790 741,890 83,384

Third partiesRupiah

Consumer loans 2,987,073 2,042,082 2,323,631 2,046,713 1,803,203Installment loans 1,694,955 1,218,263 1,445,533 608,357 484,658Fixed loans 1,376,829 1,040,114 1,251,931 985,263 1,246,868Factoring 605,667 495,667 592,291 463,237 220,701Sharia receivables - murabahah 470,654 88,055 146,895 3,940 -Overdraft 168,066 128,419 146,137 122,284 92,765Investment loans 56,882 58,350 59,297 235,665 62,752Loans to employees 11,045 7,605 8,165 5,812 3,396Sharia receivables - qardh 23 - - - -Total 7,371,194 5,078,555 5,973,880 4,471,271 3,914,343Allowance for impairment losses (93,200) (123,355) (75,058) (84,228) (44,984)Net 7,277,994 4,955,200 5,898,822 4,387,043 3,869,359

Foreign currency (Note 34)Installment loans 254,741 172,508 166,573 59,213 46,530Fixed loans 101,777 95,123 76,403 141,486 237,201Overdraft - - - - 1Total 356,518 267,631 242,976 200,699 283,732Allowance for impairment losses (3,975) (10,996) (2,430) (6,657) (7,696)Net 352,543 256,635 240,546 194,042 276,036

Total third parties 7,630,537 5,211,835 6,139,368 4,581,085 4,145,395

Net 9,066,489 6,062,635 6,934,158 5,322,975 4,228,779



- 57 -

b. By Economic Sectors


RupiahAgriculture, hunting and agriculture

facilities 40,285 20,000 58,552 39,644 -Mining 364,870 183,209 206,320 51,223 70,184Manufacturing 246,131 193,670 218,101 705,421 512,712Electricity, gas and water 83,722 51,993 22,523 62,135 40,496Construction 357,940 265,518 299,012 262,377 337,670Trading, restaurant and hotel 1,284,790 461,331 519,526 330,925 322,882Transportation, warehousing and

communication 308,444 265,172 298,622 237,407 80,723Business service 1,229,041 1,135,093 1,284,413 840,540 877,343Social and public services 233,170 183,220 206,423 35,033 38,547Others 3,458,969 2,628,777 3,101,213 2,070,667 1,717,194

Total 7,607,362 5,387,983 6,214,705 4,635,372 3,997,751

Foreign currency (Note 34)Agriculture, hunting and agriculture

facilities 8,270 - - - -Mining 76,730 67,299 65,753 39,834 43,600Manufacturing 1,202,136 555,668 542,899 584,180 11,672Construction 99,321 111,563 108,999 32,882 23,640Trading, restaurant and hotel 58,056 14,047 13,724 85,639 95,271Transportation, warehousing and

communication 14,720 25,041 24,466 - -Business service 57,896 16,674 16,291 35,957 99,520Social and public services 39,224 - - - -Others - 26,227 24,959 - 10,029Total 1,556,353 816,519 797,091 778,492 283,732

Total 9,163,715 6,204,502 7,011,796 5,413,864 4,281,483Allowance for impariment losses (97,226) (141,867) (77,638) (90,889) (52,704)

Net 9,066,489 6,062,635 6,934,158 5,322,975 4,228,779


c. By Maturity

The classifications of loans based on contractual maturity as stated in the loan agreements, and based on remaining maturity are as follows:


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Based on contractual maturity:


Rupiah1 year or less 1,869,385 1,145,830 1,440,837 1,156,108 997,174More than 1 year until 2 years 1,274,337 879,900 1,342,919 593,686 659,795More than 2 years until 5 years 3,074,817 2,633,670 2,257,600 2,044,654 1,585,036More than 5 years 1,388,823 728,583 1,173,349 840,924 755,746

Subtotal 7,607,362 5,387,983 6,214,705 4,635,372 3,997,751

Foreign currency (Note 34)1 year or less 1,253,914 36,355 607,588 677,594 208,930More than 1 year until 2 years 27,389 575,035 24,931 7,693 26,746More than 2 years until 5 years 176,979 93,567 57,909 93,205 48,056More than 5 years 98,071 111,562 106,663 - -Subtotal 1,556,353 816,519 797,091 778,492 283,732

Total 9,163,715 6,204,502 7,011,796 5,413,864 4,281,483Allowance for impairment losses (97,226) (141,867) (77,638) (90,889) (52,704)

Net 9,066,489 6,062,635 6,934,158 5,322,975 4,228,779


Based on Remaining Period until Maturity:


Rupiah1 year or less 2,824,527 2,293,267 2,590,571 1,820,150 1,524,104More than 1 year until 2 years 1,343,419 660,517 767,708 582,591 394,734More than 2 years until 5 years 2,791,923 1,816,204 2,160,474 1,476,659 1,346,005More than 5 years 647,493 617,995 695,952 755,972 732,908

Subtotal 7,607,362 5,387,983 6,214,705 4,635,372 3,997,751

Foreign currency (Note 34)1 year or less 1,304,449 600,878 586,405 719,279 242,188More than 1 year until 2 years 35,662 48,817 47,696 8,977 -More than 2 years until 5 years 118,171 55,261 53,992 50,236 41,544More than 5 years 98,071 111,563 108,998 - -Subtotal 1,556,353 816,519 797,091 778,492 283,732

Total 9,163,715 6,204,502 7,011,796 5,413,864 4,281,483Allowance for impairment losses (97,226) (141,867) (77,638) (90,889) (52,704)

Net 9,066,489 6,062,635 6,934,158 5,322,975 4,228,779


Included in loans with remaining maturities of less than or equal to 1 year are past due loans as of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008 amounted to Rp 89 million, Rp 28 million, Rp 12,200 million, Rp 40,323 million, and Rp 36,485 million, respectively.


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d. The range of interest rates per annum on loans are as follows:


% % % % %

Rupiah 6.00 - 33.66 6.00 - 22.64 5.95 - 26.97 6.00 - 21.00 9.00 - 21.00United States Dollar 2.70 - 9.00 4.25 - 9.50 4.25 - 9.50 4.65 - 10.00 8.00 - 9.00


e. As of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008, loans to related parties amounted to Rp 1,430,838 million, Rp 686,214 million, Rp 756,932 million, Rp 741,408 million, and Rp 80,983 million, respectively, are secured with time deposits.

f. Loans collateralized by cash collateral as of September 30, 2011 and 2010, and December 31,

2010, 2009 and 2008 amounted to Rp 1,487,948 million, Rp 901,383 million, Rp 796,606 million, Rp 829,019 million, and Rp 235,802 million, respectively.

g. As of September 30, 2011 and 2010, and December 31, 2010 and 2009, the Company has no

participation in syndicated loan. As of December 31, 2008, the syndicated loan amounting to Rp 6,512 million with 4.09% participation in the total syndicated loan.

h. As of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008, the outstanding

balance of the Company’s loan channeling amounted to Rp 2,885,502 million, Rp 1,958,762 million, Rp 2,332,310 million, Rp 1,905,850 million, and Rp 1,570,207 million, respectively, in which Rp 1,828,682 million, Rp 1,022,022 million, Rp 1,200,157 million, Rp 480,261 million, and Rp 366,154 million, respectively, were disbursed through related parties (Note 32).

i. Loans to employees represent distributed loans for purchases of cars, houses and other

necessities with special interest rate for loans term below 1 year and from 0% to 6% per annum for loan with terms ranging between 1 to 10 years. Loans to related parties, except for loans to employees, are granted under normal terms and conditions similar to those granted to third parties.

j. Restructured loans as of September 30, 2011 and 2010, and December 31, 2010 are nil, and as

of December 31, 2009 and 2008 restructured loans by type and quality of the loan are as follows:

SpecialTypes of Loans Current Mention Substandard Doubtful Loss Total

Rp'000,000 Rp'000,000 Rp'000,000 Rp'000,000 Rp'000,000 Rp'000,000

RupiahOverdraft 291 - - - - 291 Installment loans - - - 19,000 - 19,000 Fixed loans - - - - 4,500 4,500

Subtotal 291 - - 19,000 4,500 23,791

Allowance for impairment losses (3) - - (1,266) (4,500) (5,769)

Net 288 - - 17,734 - 18,022

December 31, 2009


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Rp'000,000 Rp'000,000 Rp'000,000 Rp'000,000 Rp'000,000 Rp'000,000

RupiahOverdraft 273 - - - - 273 Fixed loans - 25,000 - - - 25,000

Subtotal 273 25,000 - - - 25,273

Allowance for impairment losses (3) (144) - - - (147)

Net 270 24,856 - - - 25,126

December 31, 2008

k. The collectibility classification of loans as of September 30, 2011 and 2010, and December 31,

2010, 2009, and 2008 based on Bank Indonesia regulation is as follows:


Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000

RupiahRelated parties (Note 32) 236,168 - - - - 236,168 Third parties 6,893,813 390,312 4,728 6,777 75,564 7,371,194 Subtotal 7,129,981 390,312 4,728 6,777 75,564 7,607,362

Foreign currency (Note 34)Related parties (Note 32) 1,199,835 - - - - 1,199,835 Third parties 356,518 - - - - 356,518 Subtotal 1,556,353 - - - - 1,556,353

Total 8,686,334 390,312 4,728 6,777 75,564 9,163,715

Allowance for impairment losses (67,958) (23,251) (23) (322) (5,672) (97,226)

Net 8,618,376 367,061 4,705 6,455 69,892 9,066,489



Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000


Foreign currency (Note 34)Related parties (Note 32) 548,888 - - - - 548,888 Third parties 241,261 21,896 - - 4,474 267,631 Subtotal 790,149 21,896 - - 4,474 816,519

Total 5,920,072 152,648 3,962 25,301 102,519 6,204,502

Allowance for impairment losses (124,841) (2,897) (35) (3,568) (10,526) (141,867)

Net 5,795,231 149,751 3,927 21,733 91,993 6,062,635



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Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

RupiahRelated parties (Note 32) 240,825 - - - - 240,825 Third parties 5,591,739 293,793 21,953 533 65,862 5,973,880 Subtotal 5,832,564 293,793 21,953 533 65,862 6,214,705

Foreign currency (Note 34)Related parties (Note 32) 554,115 - - - - 554,115 Third parties 242,976 - ;- - - 242,976 Subtotal 797,091 - - - - 797,091

Total 6,629,655 293,793 21,953 533 65,862 7,011,796

Allowance for impairmentlosses (58,482) (8,922) (3,019) (34) (7,181) (77,638)

Net 6,571,173 284,871 18,934 499 58,681 6,934,158

December 31, 2010


Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000


Foreign currency (Note 34)Related parties (Note 32) 577,793 - - - - 577,793 Third parties 196,002 - - - 4,697 200,699 Subtotal 773,795 - - - 4,697 778,492

Total 4,799,931 496,387 39,731 60,770 17,045 5,413,864

Allowance for possible losses (39,709) (22,819) (3,029) (8,287) (17,045) (90,889)

Net 4,760,222 473,568 36,702 52,483 - 5,322,975

2009


Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000


Foreign currency (Note 34)Third parties 263,308 - 13,912 - 6,512 283,732

Total 4,126,373 69,856 60,918 10,489 13,847 4,281,483

Allowance for possible losses (39,618) (1,493) (2,387) (27) (9,179) (52,704)

Net 4,086,755 68,363 58,531 10,462 4,668 4,228,779

2008


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l. The details of non-performing loans as of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008, based on economic sectors are as follows:


RupiahAgriculture, hunting and agriculture

facilities 511 12,654 12,511 - 480Manufacturing 758 4,573 49 22,154 3,845Construction 21,786 15,570 22,342 31,842 16,594Trading, restaurant and hotel 4,771 4,979 4,337 440 2,033 Transportation, warehousing and

communication 12,499 14,486 12,499 52,118 -Business services 34,193 71,978 33,456 12 41,024 Social and public services 50 - 62 - -Others 12,501 3,068 3,092 6,283 854

Subtotal 87,069 127,308 88,348 112,849 64,830

Foreign currencyMinning - - - - -Manufacture - 4,474 - 4,697 -Construction - - - - 20,424

- 4,474 - 4,697 20,424Total 87,069 131,782 88,348 117,546 85,254 Allowance for impairment losses (6,017) (14,129) (10,234) (28,361) (11,593)

Net 81,052 117,653 78,114 89,185 73,661


m. As of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008, there is no loan

granted to related and third parties which has exceeded the Company’s Legal Lending Limit (LLL).

n. Interest not accrued on non-performing loans amounted to Rp 87,069 million, Rp 131,782

million, Rp 88,348 million, Rp 117,546 million, and Rp 85,254 million as of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008, respectively.

o. The changes in allowance for possible losses on loans are as follows:


Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Balance at beginning of the periodIndividual 3,581 - 3,581 9,495 4,697 14,192 Collective 71,627 2,430 74,057 74,737 1,960 76,697

Adjusment on PSAK 55 Revised 2006) (Note 2b) - - - 4,316 - 4,316 Recovery

Individual 6,251 - 6,251 - - -Collective 9 - 9 - - -

Provision during the periodIndividual 6,757 - 6,757 11,241 - 11,241 Collective 5,242 7,115 12,357 36,424 2,144 38,568

Write-off (216) - (216) (5,343) - (5,343) Exchange rate difference Collective - (5,570) (5,570) - 2,195 2,195

Balance at end of the period 93,251 3,975 97,226 130,870 10,996 141,866

September 30, 2011 (Unaudited) September 30, 2010 (Unaudited)


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Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Balance at beginning of the periodIndividual 9,495 4,697 14,192 - - - - - -Collective 74,737 1,960 76,697 45,008 7,696 52,704 26,391 7,577 33,968

Adjusment on PSAK 55Revised 2006) (Note 2b) 4,316 - 4,316 - - - - - -

Provision during the periodIndividual 4,942 - 4,942 - - - - - -Collective 9,352 38,947 48,299 42,091 31,270 73,361 18,617 (1,535) 17,082

Accrual interest on impairment loans (5,150) - (5,150) - - - - - -Write-off (22,484) (40,531) (63,015) (2,867) (13,114) (15,981) - - -Exchange rate difference collective - (2,643) (2,643) - (19,195) (19,195) - 1,654 1,654

Balance at end of the period 75,208 2,430 77,638 84,232 6,657 90,889 45,008 7,696 52,704

December 31, 2009December 31, 2010 December 31, 2008

Management believes that the allowance for impairment losses on loans is adequate to cover the losses which might arise from uncollectible loans.

p. The movement of loans written-off for nine-month periods ended September 30, 2011 and 2010,

and years ended December 31, 2010, 2009, and 2008 are as follows:


Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Beginning balance at beginning period 25,598 49,246 74,844 3,114 10,562 13,676 Mutation during the period

Write-off 216 - 216 5,343 - 5,343 Recovery (6,260) - (6,260) - - -Exchange rate difference - (1,203) (1,203) - (1,885) (1,885)

Balance at end of the period 19,554 48,043 67,597 8,457 8,677 17,134



Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000

Beginning balance at beginning period 3,114 10,562 13,676 782 - 782 782 - 782 Mutation during the period

Write-off 22,484 40,531 63,015 2,867 13,114 15,981 - - -Delete Notes - - - (535) (1,513) (2,048) - - -Recovery - - -Exchange rate difference - (1,847) (1,847) - (1,039) (1,039) - - -

Balance at end of the period 25,598 49,246 74,844 3,114 10,562 13,676 782 - 782

December 31, 2008December 31, 2009December 31, 2010

q. Loan collaterals are in the form of land, buildings, machinery, inventories and time deposits. r. The Company evaluates all loans for impairment losses as required by Bank Indonesia for

statements of financial position items as of September 2011 and 2010, and December 31, 2010, 2009, and 2008.

s. The ratio of small business loans to total loans at September 2011 and 2010, and December 31,

2010, 2009, and 2008 are 1.59%, 0.93, 1.07%, 1.69%, and 0.92%, respectively.


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10. Interest Receivables


Interest from:Loans 34,916 22,199 26,176 23,063 19,185Securities 20,356 22,023 20,904 20,698 17,695Placements with other banks 932 95 273 247 3,072

Total 56,204 44,317 47,353 44,008 39,952


Interest receivables in foreign currency as of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008 amounted to Rp 6,656 million, Rp 7,778 million, Rp 5,028 million, Rp 5,247 million, and Rp 2,629 million, respectively (Note 34). Interest receivables from related parties as of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008 amounted to Rp 761 million, Rp 859 million, Rp 915 million, Rp 839 million, and Rp 224 million, respectively (Note 32).

11. Prepaid Expenses


New branches renovation 39,430 32,038 34,068 26,420 17,541Rental 10,915 7,815 4,971 5,042 4,783Software maintenance 7,091 4,089 2,930 3,101 2,454Premium on Government guarantee 5,699 4,039 - - -Insurance 5,168 3,317 2,410 2,361 1,842Promotion and operating development 2,278 - - - -Others 4,526 402 1,721 1,106 2,581Total 75,107 51,700 46,100 38,030 29,201


As of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008, prepaid expenses to related parties amounted to Rp 8,160 million, Rp 1,887 million, Rp 5,265 million, Rp 5,028 million, and Rp 4,462 million, respectively (Note 32).

12. Premises and Equipment

January 1, 2011 Additions Deductions Reclassification September 30, 2011Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Cost:Land 38,506 10,761 - - 49,267Buildings 56,365 17,475 - - 73,840Office equipment 187,482 75,987 (74) - 263,395Vehicles 11,986 1,224 - - 13,210

Total 294,339 105,447 (74) - 399,712

Changes during the period (9 months)


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Accumulated depreciation:Buildings 8,377 2,323 - - 10,700Office equipment 47,777 16,906 (54) - 64,629Vehicles 10,208 1,053 - - 11,261

Total 66,362 20,282 (54) - 86,590

Net Book Value 227,977 313,122

Changes during the period (9 months)


Cost:Land 37,466 - - - 37,466Buildings 53,270 2,116 - - 55,386Office equipment 159,269 22,661 - - 181,930Vehicles 11,940 222 (222) - 11,940

Total 261,945 24,999 (222) - 286,722

Accumulated depreciation:Buildings 5,633 2,048 - - 7,681Office equipment 30,409 12,759 - - 43,168Vehicles 8,379 1,544 (162) - 9,761

Total 44,421 16,351 (162) - 60,610


Changes during the period (9 months) (Unaudited)

January 1, 2010 Additions Deductions Reclassification December 31, 2010Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Cost:Land 37,466 1,040 - - 38,506Buildings 53,270 3,095 - - 56,365Office equipment 159,269 28,213 - - 187,482Vehicles 11,940 268 (222) - 11,986

Total 261,945 32,616 (222) - 294,339

Accumulated depreciation:Buildings 5,633 2,744 - - 8,377Office equipment 30,409 17,368 - - 47,777Vehicles 8,379 1,992 (162) - 10,208

Total 44,421 22,103 (162) - 66,362


Changes during the year (12 months)


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Cost:Land 33,760 3,495 (43) 254 37,466Buildings 25,247 28,040 (17) - 53,270Office equipment 117,213 42,254 (198) - 159,269Vehicles 11,568 531 (159) - 11,940

Total 187,788 74,320 (417) 254 261,945

Accumulated depreciation:Buildings 3,512 2,124 (3) - 5,633Office equipment 16,630 13,951 (172) - 30,409Vehicles 5,865 2,672 (158) - 8,379

Total 26,007 18,747 (333) - 44,421




Cost:Land 5,748 28,012 - - 33,760Buildings 11,220 14,160 (133) - 25,247Office equipment 68,326 49,031 (144) - 117,213Vehicles 8,857 2,839 (128) - 11,568

Total 94,151 94,042 (405) - 187,788

Accumulated depreciation:Buildings 2,535 981 (4) - 3,512Office equipment 6,744 9,908 (22) - 16,630Vehicles 3,293 2,670 (98) - 5,865

Total 12,572 13,559 (124) - 26,007



Depreciation expense charged to operations for the nine-month periods ended September 30, 2011 and 2010 and for the years ended December 2010, 2009, and 2008 amounted to Rp 20,282 million, Rp 16,351 million, Rp 22,103 million, Rp 18,747 million, and Rp 13,559 million, respectively. The Company owns several parcels of land, with legal rights in the form of Proprietary Rights (Hak Milik) and Building Use Rights (Hak Guna Bangunan or HGB), and with terms between 20 to 30 years to mature until 2012 to 2037. Management believes that these landrights can be extended since all the parcels of land were acquired legally and supported by sufficient evidence of ownership. During the nine-month periods ended September 30, 2011 and for the years ended December 31, 2010 and 2009, the Company sold its premises and equipment with a net book value of Rp 20 million, Rp 60 million and Rp 70 million, respectively, for Rp 10 million, Rp 190 million and Rp 197 million, respectively. The related gain and losson sale of premises and equipment is recognized in Other income (Note 28) and other expenses (Note 29).


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Deductions in 2009 include “other assets – unused premises and equipment” (Note 14) with a net book value of Rp 254 million which were reclassified to premises and equipment account as well as premises and equipment with a net book value of Rp 14 million which were written-off. As of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008, all premises and equipment, except for land, are insured against risk of fire, earthquake, and other possible losses with PT Asuransi Sinar Mas, a related party, with insurance coverage of Rp 429,388 million, Rp 383,404 million, Rp 384,854 million, Rp 250,083 million, and Rp 24,297 million, respectively (Note 32). Management believes that the insurance coverages are adequate to cover possible losses on the assets insured.

Management also believes that there is no impairment in value of the aforementioned assets as of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008.

As of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008, there are no premises and equipment pledged as collateral.

13. Ijarah Assets

As of September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008, this account represents object of the Ijarah lease transactions with an option to transfer the Muntahiyah Bittamlik object property leased by grant.


Transfer to the lessee at end

January 1, 2011 Additions of contract September 30, 2011Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Cost:Vehicles 246,336 126 (123,182) 123,280Heavy equipment 23,600 12,700 - 36,300Machine 1,785 2,457 - 4,242Software 3,649 746 (2,276) 2,119Multiservice assets - 1,007 - 1,007

Total 275,370 17,036 (125,458) 166,948

Accumulated depreciation:Vehicles 55,379 126,195 (123,182) 58,392Heavy equipment 686 5,021 - 5,707Machine 138 420 - 558Software 9 2,468 (2,276) 201Multiservice assets - 249 - 249

Total 56,212 134,353 (125,458) 65,107



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January 1, 2010 Additions of contract September 30, 2010Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Cost:Vehicles - 265,745 (5,641) 260,104Heavy equipment - 13,600 - 13,600Machine - 1,375 - 1,375

Total - 280,720 (5,641) 275,079

Accumulated depreciation:Vehicles - 27,438 (5,641) 21,797Heavy equipment - 8 - 8Machine - 61 - 61

Total - 27,507 (5,641) 21,866

Net Book Value - 253,213



January 1, 2010 Additions of contract December 31, 2010Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Cost:Vehicles - 265,741 (19,405) 246,336 Heavy equipment - 23,600 - 23,600 Machine - 1,785 - 1,785 Software - 3,649 - 3,649

Total - 294,775 (19,405) 275,370

Accumulated depreciation:Vehicles - 74,784 (19,405) 55,379 Heavy equipment - 686 - 686 Machine - 138 - 138 Software - 9 - 9

Total - 75,617 (19,405) 56,212

Net Book Value - 219,158



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14. Other Assets


Advances for purchases of property, plant and equipment 71,514 25,000 41,358 14,966 17,172

Advances for building renovation 33,636 9,054 11,296 10,772 26,703Foreclosed assets 8,961 4,813 3,407 1,295 415Security deposits 6,813 5,548 5,554 4,832 4,444Printing materials and stamp duty 6,153 5,095 4,530 3,169 4,006Transfer checks for collection and clearing 4,607 3,401 10,749 - 1,090Receivables related to joint ATM 3,819 2,152 1,692 651 -Advances for official duty 3,380 628 669 123 770Claims in connection with the settlement

of Indover Bank 1,122 1,040 1,133 3,516 3,988Insurance commission receivables 700 2,660 1,508 2,504 2,591Abandoned properties 130 130 130 130 384Advances related to initial public offering - 921 - - -Receivable from a related party - - - 39,590Tax over payment (Notes 29 and 30) - - 7,710 7,710Others 5,214 1,778 145 1,089 12,112

Subtotal 146,049 62,220 82,171 50,757 120,975

Allowance for possible losses of claims in connection with the settlement of Indover Bank (1,122) (1,040) (1,133) (3,516) -

Allowance for impairment losses of non - productive assets (836) (554) (587) (554) (799)

Net 144,091 60,626 80,451 46,687 120,176


As of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, foreclosed properties are stated at Rp 8,255 million, Rp 4,389 million, Rp 2,950 million, Rp 871 million, and nil, respectively, after allowance for impairment losses amounted to Rp 706 million, Rp 424 million, Rp 457 million, Rp 424 million, and Rp 415 million, respectively. As of September 30, 2011 and 2010, and December 31, 2010, and 2009, the unused property, plant and equipment is stated at nil after allowance for impairment losses amounting to Rp 130 million, respectively. As of December 31, 2008, the unused property, plant and equipment is stated at nil after allowance for impairment losses amounting to Rp 384 million. Movements in allowance for impairment losses for non - productive assets are as follows:


Beginning balance at beginning of period 587 554 554 799 799 Addition (reversal) 249 - 33 (245) -

Ending balance at end of period 836 554 587 554 799


Receivable from a related party represents receivable from PT Cakrawala Mega Indah (CMI) arising from payment of customer which was not deposited to CMI‘s escrow account. The receivable was collateralized by current accounts of CMI totaling to Rp 25,636 million and was settled in early 2009.


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As of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, receivables from Bank Indover is equivalent to Rp 1,122 million, Rp 1,040 million, Rp 1,133 million, Rp 3,516 million, and Rp 3,988 million, respectively. The Company has provided an allowance for impairment losses at September 30, 2011 and 2010, and December 31, 2010 and 2009 amounted to Rp 1,122 million, Rp 1,040 million, Rp 1,133 million and Rp 3,516 million, respectively. The related impairment loss in 2009 were recorded as part of Other Operating Expenses (Note 29). In 2010, the Company recognized revenue related to Bank Indover amounting to Rp 2,383 million, which recognised as part of Other Income (Note 28). As of September 30, 2011 and 2011, and December 31, 2010, 2009 and 2008, other assets in foreign currencies equivalent to Rp 99 million, Rp 903 million, Rp 10,857 million, Rp 89 million and Rp 103 million, respectively (Note 34). Other assets with a related party as of September 30, 2011 and 2011, and December 31, 2010, 2009 and 2008 equivalent to Rp 6,450 million, Rp 2,660 million, Rp 1,810 million, Rp 1,778 million and Rp 39,590 million, respectively (Note 32). Management believes that the allowance of impairments losses for other assets is adequate to cover possible losses that will arise from these other assets.

15. Liabilities Immediately Payable


Transfer checks for collection and clearing 116,190 30,309 28,086 51,174 45,177 Payables related to joint ATM 14,574 6,430 7,566 3,793 -Loans administration payable 5,238 3,596 3,110 2,827 10,033 Accrued expenses 2,971 5,347 3,010 2,813 289 Employees bonus reserve 2,165 - - - -Payable to an insurance company 229 11,910 2,750 3,216 180 Others 1,522 2,300 2,217 1,539 3,534

Total 142,889 59,892 46,739 65,362 59,213


As of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, liabilities immediately payable in foreign currency equivalent to Rp 63,170 million, Rp 30,082 million, Rp 28,499 million, Rp 22,106 million and Rp 45,321 million, respectively (Note 34). Liabilities immediately payable to a related party as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008 amounted to Rp 2,087 million, Rp 2,912 million, Rp 2,839 million, Rp 3,336 million and nil, respectively (Note 32).

16. Deposits Deposits consist of the following:


Demand deposits 1,555,039 1,681,513 1,867,669 1,097,746 770,140 Saving deposits 1,929,060 1,243,039 1,371,475 970,389 594,076 Time deposits 10,346,888 6,109,675 6,580,070 4,764,287 3,910,985

Total 13,830,987 9,034,227 9,819,214 6,832,422 5,275,201



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a. Demand deposits consist of:


ConventionalRelated parties (Note 32)

Rupiah 281,379 368,382 413,566 273,673 176,753 Foreign currencies (Note 34) 153,781 412,487 531,386 222,036 131,483 Subtotal 435,160 780,869 944,952 495,709 308,236

Third partiesRupiah 669,243 435,343 420,561 297,752 273,817 Foreign currencies (Note 34) 427,297 454,139 497,166 304,230 188,087 Subtotal 1,096,540 889,482 917,727 601,982 461,904

Total konvensional 1,531,700 1,670,351 1,862,679 1,097,691 770,140

ShariaRelated parties (Note 32)

RupiahCurrent accounts - mudharabah 13,087 7,508 2,239 3 -Current accounts - wadiah 53 44 - - -

Subtotal 13,140 7,552 2,239 3 -

Third partiesRupiah

Current accounts - mudharabah 2,522 896 1,750 52 -Current accounts - wadiah 6,331 2,714 - - -

Subtotal 8,853 3,610 1,750 52 -

Foreign currencies (Note 34)Current accounts - mudharabah - - 1,001 - -Current accounts - wadiah 1,346 - - - -

Subtotal 1,346 - 1,001 - -

Total 10,199 3,610 2,751 52 -

Total sharia 23,339 11,162 4,990 55 -

Total 1,555,039 1,681,513 1,867,669 1,097,746 770,140



% % % % %

Interest rates per annum on demand deposits

Rupiah 1.00 - 6.00 1.50 - 5.00 1.50 - 5.00 1.50 - 5.00 3.00 - 5.00Foreign currencies 0.10 - 3.00 0.15 - 2.25 0.15 - 2.25 0.15 - 1.25 0.50 - 1.50


Current accounts blocked to guarantee loans, bank guarantee and letters of credit as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008 amounted to Rp 12,262 million, nil, Rp 16 million, Rp 41,334 million and Rp 44,028 million, respectively (Notes 9 and 33).


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b. Savings deposit consists of:


ConventionalRupiah

Related parties (Note 32)Tabungan Sinarmas 1,935 1,847 3,340 1,496 16,863 Tabungan Sinarmas Gold 4,350 3,165 4,127 2,658 -Tabunganku 126 78 110 - -

Subtotal 6,411 5,090 7,577 4,154 16,863

Third partiesTabungan Sinarmas 605,931 436,630 437,506 324,677 577,213 Tabungan Sinarmas Gold 1,218,491 761,564 870,215 641,498 -Tabunganku 91,084 38,380 54,053 - -

Subtotal 1,915,506 1,236,574 1,361,774 966,175 577,213

Total 1,921,917 1,241,664 1,369,351 970,329 594,076

ShariaRupiah

Related parties (Note 32)Tabungan Wadiah 90 1 37 - -Tabungan Mudharabah 47 63 54 10 -

Subtotal 137 64 91 10 -

Third partiesTabungan Wadiah 2,260 626 527 - -Tabungan Mudharabah 4,746 685 1,506 50 -

Subtotal 7,006 1,311 2,033 50 -

Total 7,143 1,375 2,124 60 -

Total 1,929,060 1,243,039 1,371,475 970,389 594,076



% % % % %

Interest rates per annum on savings depositsRupiah 0.25 - 6.50 0.25 - 6.50 0.25 - 6.50 2.50 - 8.00 4.00 - 9.00



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c. Time deposits consist of:


ConventionalRelated parties (Note 32)

Rupiah 2,532,085 2,023,132 2,143,128 1,254,712 1,116,784 Foreign currencies (Note 34) 1,819,954 1,712,442 1,263,148 1,230,257 247,568 Subtotal 4,352,039 3,735,574 3,406,276 2,484,969 1,364,352

Third partiesRupiah 4,893,737 2,112,307 2,708,981 2,165,809 2,389,978 Foreign currencies (Note 34) 272,051 204,425 265,603 113,409 156,655 Subtotal 5,165,788 2,316,732 2,974,584 2,279,218 2,546,633

Total 9,517,827 6,052,306 6,380,860 4,764,187 3,910,985

ShariaMudharabah (sharia) time deposits

Related parties (Note 32)Rupiah 671,150 28,000 82,150 100 -

Third partiesRupiah 157,911 29,369 117,060 - -

Total 829,061 57,369 199,210 100 -

Total 10,346,888 6,109,675 6,580,070 4,764,287 3,910,985


The details of time deposits based on contractual maturity are as follows:


Related Relatedparties Third parties Third

(Note 32) parties Total (Note 32) parties TotalRp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

RupiahLess than 1 month 721,588 311,344 1,032,932 606,654 27,301 633,9551 month 2,107,189 2,255,474 4,362,663 987,152 753,678 1,740,8303 months 121,785 1,603,930 1,725,715 103,481 962,886 1,066,3676 months 6,932 223,441 230,373 3,102 216,261 219,36312 months 245,741 657,459 903,200 350,743 181,550 532,293Subtotal 3,203,235 5,051,648 8,254,883 2,051,132 2,141,676 4,192,808

Foreign currencies (Note 34)Less than 1 month 232,487 18,684 251,171 266,367 - 266,3671 month 373,582 174,556 548,138 1,217,160 95,973 1,313,1333 months 13,742 55,111 68,853 19,141 73,003 92,1446 months 308 21,285 21,593 - 31,327 31,32712 months 1,199,835 2,415 1,202,250 209,774 4,122 213,896Subtotal 1,819,954 272,051 2,092,005 1,712,442 204,425 1,916,867

Total 5,023,189 5,323,699 10,346,888 3,763,574 2,346,101 6,109,675



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Related Related Relatedparties Third parties Third parties Third

(Note 32) parties Total (Note 32) parties Total (Note 32) parties TotalRp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

RupiahLess than 1 month 518,750 27,310 546,060 204,443 28,851 233,294 386,361 29,399 415,7601 month 1,293,478 1,236,165 2,529,643 805,857 497,791 1,303,648 648,068 1,421,133 2,069,2013 months 137,583 1,115,903 1,253,486 31,284 1,068,088 1,099,372 3,948 539,299 543,2476 months 1,602 194,735 196,337 1,624 429,357 430,981 10,677 239,818 250,49512 months 273,865 251,928 525,793 211,604 141,722 353,326 67,740 160,329 228,069Subtotal 2,225,278 2,826,041 5,051,319 1,254,812 2,165,809 3,420,621 1,116,794 2,389,978 3,506,772

Foreign currencies (Note 34)Less than 1 month 194,976 - 194,976 185,599 - 185,599 217,728 26,912 244,6401 month 837,064 169,579 1,006,643 798,190 77,946 876,136 23,976 117,923 141,8993 months 19,373 65,147 84,520 10,992 17,130 28,122 5,864 963 6,8276 months - 27,873 27,873 - 4,643 4,643 - 2,432 2,43212 months 211,735 3,004 214,739 235,476 13,690 249,166 - 8,425 8,425Subtotal 1,263,148 265,603 1,528,751 1,230,257 113,409 1,343,666 247,568 156,655 404,223

Total 3,488,426 3,091,644 6,580,070 2,485,069 2,279,218 4,764,287 1,364,362 2,546,633 3,910,995


Based on remaining maturity:

Related Relatedparties Third parties Third

(Note 32) parties Total (Note 32) parties TotalRp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Rupiah1 month or less 2,899,238 3,174,801 6,074,039 1,659,436 1,190,512 2,849,948More than 1 month until 3 months 87,324 1,174,416 1,261,740 143,729 715,312 859,041More than 3 months until 6 months 1,432 518,312 519,744 1,102 142,600 143,702More than 6 months until 12 months 215,241 184,119 399,360 246,865 93,252 340,117Subtotal 3,203,235 5,051,648 8,254,883 2,051,132 2,141,676 4,192,808

Foreign currencies (Note 34)1 month or less 650,019 202,366 852,385 1,529,936 106,134 1,636,070More than 1 month until 3 months 13,742 54,188 67,930 17,357 76,411 93,768More than 3 months until 6 months 308 14,393 14,701 - 21,250 21,250More than 6 months until 12 months 1,155,885 1,104 1,156,989 165,149 630 165,779Subtotal 1,819,954 272,051 2,092,005 1,712,442 204,425 1,916,867

Total 5,023,189 5,323,699 10,346,888 3,763,574 2,346,101 6,109,675


Related Related Relatedparties Third parties Third parties Third

(Note 32) parties Total (Note 32) parties Total (Note 32) parties TotalRp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Rupiah1 month or less 1,821,627 1,657,476 3,479,103 1,020,928 805,216 1,826,144 1,035,314 1,637,599 2,672,913More than 1 month until 3 months 129,286 836,548 965,834 24,910 947,803 972,713 13,378 462,005 475,383More than 3 months until 6 months 1,000 160,448 161,448 2,360 338,587 340,947 352 138,647 138,999More than 6 months until 12 months 273,365 171,569 444,934 206,614 74,203 280,817 67,740 151,727 219,467Subtotal 2,225,278 2,826,041 5,051,319 1,254,812 2,165,809 3,420,621 1,116,784 2,389,978 3,506,762

Foreign currencies(Note 34)1 month or less 1,013,592 188,079 1,201,671 983,709 82,069 1,065,778 241,704 147,885 389,589More than 1 month until 3 months 37,821 67,589 105,410 11,071 13,882 24,953 5,864 4,072 9,936More than 3 months until 6 months - 8,411 8,411 - 4,389 4,389 - 2,979 2,979More than 6 months until 12 months 211,735 1,524 213,259 235,477 13,069 248,546 - 1,719 1,719Subtotal 1,263,148 265,603 1,528,751 1,230,257 113,409 1,343,666 247,568 156,655 404,223

Total 3,488,426 3,091,644 6,580,070 2,485,069 2,279,218 4,764,287 1,364,352 2,546,633 3,910,985



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% % % % %

Interest rates per annum on time depositsRupiah 6.25 - 10.00 7.00 - 8.50 6.25 - 9.75 6.75 - 8.75 7.75 - 13.00Foreign currencies 0.37 - 3.75 2.20 - 2.75 2.50 - 2.75 2.50 - 3.00 3.00 - 6.00


Total time deposits which blocked to guarantee loans, bank guarantee and letter of credit as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, amounted to Rp 1,597,752 million, Rp 932,636 million, Rp 956,189 million, Rp 878,472 million and Rp 250,943 million, respectively (Notes 9 and 33).

17. Deposits from Other Banks Deposits from Other Banks consist of:


Demand deposits 124,443 71,122 98,433 78,677 45Call money 96,690 26,000 55,000 110,000 80,000Time deposits 106,975 146,820 213,420 49,949 -

Total 328,108 243,942 366,853 238,626 80,045


a. Demand deposits consist of:


Related parties (Note 32)Foreign currencies (Note 34) - 14,101 14,250 14,891 -

Third partiesRupiah 111,281 57,021 84,183 63,786 45 Foreign currencies (Catatan 34) 13,162 - - - -

Total 124,443 71,122 98,433 78,677 45



% % % % %

Interest rate per annumRupiah 1.00 - 6.50 1.50 - 5.00 1.50 - 5.00 1.50 - 5.50 3.00 - 5.00United States Dollar 0.15 0.15 0.15 0.15 - 1.25 -



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b. Call money consists of:


Third partiesRupiah - 26,000 55,000 110,000 80,000Foreign currencies (Note 34) 96,690 - - - -

Total 96,690 26,000 55,000 110,000 80,000



% % % % %

Interest rate per annumRupiah - 6.25 6.00 6.30 - 9.00 5.50 - 10.50United States Dollar 0.31 - 0.45 - - - -


c. Time deposits are deposits placed by third parties in Rupiah.

The details of time deposits based on contractual maturity are as follows:



1 month 104,900 146,428 213,420 16,677 -3 months - 392 - 20,972 -6 months - - - 10,800 -12 months 2,075 - - 1,500 -

Total 106,975 146,820 213,420 49,949 -


Based on remaining maturity:


1 month or less 104,900 146,428 213,420 15,677 -1 month until 3 months - 392 - 21,972 -3 months until 6 months - - - 10,800 -6 months until 12 months 2,075 - - 1,500 -

Total 106,975 146,820 213,420 49,949 -



- 77 -

Interest rate per annum for time deposits:


% % % % %

1 month 7.00 - 7.50 6.75 - 8.25 6.50 - 7.25 6.75 - 8.75 -3 months - 7.00 - 7.00 - 8.75 -6 months 7.25 - - 7.00 - 8.75 -12 months 7.25 - - 7.00 - 8.75 -


18. Securities Sold under Agreements to Repurhase

As of December 31, 2009 and 2008, securities sold under agreements to repurchase consist of:

Nominal Unamortized CarryingTerm Due Date Value Interest Value

Rp '000.000 Rp '000.000 Rp '000.000

RupiahGovernment bonds

FR0028 14 days January 14, 2010 81,991 214 81,777FR0026 14 days January 12, 2010 73,671 163 73,508FR0038 14 days January 14, 2010 54,865 143 54,722FR0020 14 days January 12, 2010 34,139 75 34,064FR0023 14 days January 14, 2010 14,395 38 14,357

Total 259,061 633 258,428

Type

December 31, 2009

Nominal Unamortized CarryingTerm Due Date Value Interest Value

Rp '000.000 Rp '000.000 Rp '000.000

RupiahGovernment bonds

FR0024 7 days January 7, 2009 71,857 120 71,737FR0038 7 days January 7, 2009 48,766 81 48,685ORI004 7 days January 7, 2009 49,419 82 49,337

Total 170,042 283 169,759

Type

December 31, 2008

The Company settled its obligations at their maturity dates. As of September 30, 2011 and 2010, and December 31, 2010, the Company does not have securities sold under agreements to repurchase.


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19. Taxes Payable Taxes payable consists of:


Current tax (Note 30) 461 7,919 11,463 9,986 -Income tax

Article 4 13,192 7,536 - -Article 21 1,907 1,021 949 303 1,305Article 23 and 26 1,364 207 9,916 7,224 10,007Article 25 2,588 2,369 2,733 1,714 930Total income tax 19,051 11,133 13,598 9,241 12,242

Value Added Tax 102 4 147 - -

Total 19,614 19,056 25,208 19,227 12,242


The filing of tax returns is based on the Company’s own calculation of tax liabilities (self-assessment). The tax authorities may conduct a tax audit on the Company within a certain period based on Law of General Provision and Administration of Taxation.

20. Estimated Losses on Commitments and Contingencies


RupiahBank guarantees 2,012 1,765 1,533 1,596 1,728Unused loan facilities 1,120 4,194 1,153 4,302 674Irrevocable letters of credit - - 27 - 29Subtotal 3,132 5,959 2,713 5,898 2,431

Foreign currencies (Note 34)Bank guarantees 839 651 784 865 130Irrevocable letters of credit 189 - 40 - -Subtotal 1,028 651 824 865 130

Total 4,160 6,610 3,537 6,763 2,561



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The collectibility classification of commitments and contingent transactions (irrevocable letters of credit, bank guarantees, unused loan facilities) (Note 33) based on Bank Indonesia regulation are as follows:


Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Current 366,755 112,539 479,294 315,680 97,820 413,500Special mention 592 - 592 11 - 11

367,347 112,539 479,886 315,691 97,820 413,511

Estimated Losses on commitments and contingencies (3,132) (1,028) (4,160) (5,960) (650) (6,610)

Net 364,215 111,511 475,726 309,731 97,170 406,901


Classification


Rupiah Currencies Total Rupiah Currencies Total Rupiah Currencies TotalRp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Current 306,144 163,442 469,586 624,404 110,568 734,972 252,910 13,016 265,926Special mention - - - 2,287 - 2,287 - - -

306,144 163,442 469,586 626,691 110,568 737,259 252,910 13,016 265,926

Estimated Losses on Commitments and

Contingencies (2,713) (824) (3,537) (5,898) (865) (6,763) (2,431) (130) (2,561)

Net 303,431 162,618 466,049 620,793 109,703 730,496 250,479 12,886 263,365

Classification

December 31, 2009 December 31, 2008December 31, 2010

The changes in estimated losses on commitments and contingencies are as follows:


Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Balance at beginning of the period 2,714 823 3,537 5,898 865 6,763 Provision during the period 418 230 648 62 378 440 Exchange rate difference - (25) (25) - (593) (593)

Balance at end of the period 3,132 1,028 4,160 5,960 650 6,610



Rupiah Currencies Total Rupiah Currencies Total Rupiah Currencies TotalRp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Balance at beginning of the year 5,898 865 6,763 2,431 130 2,561 4,770 250 5,020Provision (reversal) during

the year (3,185) (5) (3,190) 3,467 832 4,299 (2,339) (138) (2,477)Exchange rate difference - (36) (36) - (97) (97) - 18 18

Balance at end of the year 2,713 824 3,537 5,898 865 6,763 2,431 130 2,561


Management believes that the estimated losses on commitments and contingent transanctions is adequate to cover the losses that might arise from commitments and contingencies.


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21. Accrued Interest This account represents accrued interest on demand deposits, savings deposits, time deposits and deposits from other banks. Accrued interest payable to related parties amounted to Rp 8,451 million, Rp 5,547 million, Rp 6,718 million, Rp 3,762 million and Rp 4,565 million as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, respectively (Note 32). Accrued interest in foreign currencies amounted to Rp 3,059 million, Rp 1,813 million, Rp 1,585 million Rp 1,302 million and Rp 522 million as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, respectively (Note 34).

22. Other Liabilities


Deferred income 9,470 5,079 4,231 5,593 6,473 Premium on Government Guarantee

(Note 42.g) 2,745 - 1,748 1,077 248 Security deposits 1,185 761 816 650 479 Others 3,669 19,309 3,819 3,554 5,576

Total 17,069 25,149 10,614 10,874 12,776


As of September 30, 2011 and 2010, and December 31, 2010, deferred income represents income from other provision which is amortized during the transaction period. As of December 31, 2009 and 2008, deferred income represents unearned income on credit provision and other fees which are amortized over the term of loans and transactions. Other liabilities in foreign currencies amounted to Rp 59 million, Rp 336 million, Rp 53 million, Rp 1,773 million and Rp 897 million as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, respectively (Note 34). Other liabilities as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008 include fair values of spot and forward contracts to purchase or sale of foreign currencies equivalent to nil, Rp 540 million, Rp 194 million, Rp 99 million and Rp 897 million, respectively (Note 33). Other liabilities to related parties as of September 30, 2011 and 2010, and December 31, 2010 and 2009 are nil, while as of December 31, 2008, amounted to Rp 249 million.


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23. Capital Stock

Number of Percentage of Total Paid-upName of Stockholders Shares Ownership Capital Stock

% Rp '000,000

PT Sinar Mas Multiartha Tbk 5,127,408,650 56.48 512,741 PT Shinta Utama 319,758,350 3.52 31,976 Freenyan Liwang, President Director 2,750,000 0.03 275 Public 3,628,952,400 39.97 362,895

Total 9,078,869,400 100.00 907,887



% Rp '000,000

PT Sinar Mas Multiartha Tbk 5,127,408,650 90.26 512,741 PT Shinta Utama 553,091,350 9.74 55,309

Total 5,680,500,000 100.00 568,050



% Rp '000,000

PT Sinar Mas Multiartha Tbk 5,127,408,650 70.43 512,741 PT Shinta Utama 553,091,350 7.60 55,309 Wimpie Rianto, Independent Commissioner 650,000 0.01 65 Public 1,599,350,000 21.96 159,935

Total 7,280,500,000 100.00 728,050

December 31, 2010


% Rp '000,000

PT Sinar Mas Multiartha Tbk 948,000 90.26 473,883 PT Shinta Utama 102,000 9.74 51,117

Total 1,050,000 100.00 525,000

December 31, 2009


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% Rp '000,000

PT Sinar Mas Multiartha Tbk 748,000 87.97 373,883 PT Shinta Utama 102,000 12.03 51,117

Total 850,000 100.00 425,000

December 31, 2008

On May 26, 2008, the Company held its Extraordinary Stockholders’ Meeting, which resolution was stated in Notarial Deed No. 14 dated June 5, 2008 of Dahlia, S.H., notary public in Jakarta, wherein the stockholders agreed to the issuance of 150,000 shares of stock which are still within the portfolio of the Company’s authorized capital stock and all of the shares were paid for by PT Sinar Mas Multiartha, Tbk. The paid-up capital increased by Rp 75,000,000 thousand from Rp 275,000,000 thousand to Rp 350,000,000 thousand. This amendment was approved by the Minister of Justice and Human Rights Republic of Indonesia in his Decree No. AHU-AH.01.10-18126 dated July 18, 2008. On July 25, 2008, the Company held its Extraordinary Stockholders’ Meeting, which resolution was stated in Notarial Deed No. 12 dated August 8, 2008 of Dahlia, S.H., notary public in Jakarta, wherein the stockholders approved the following resolutions: a. Issuance of 150,000 shares of stock which are still within the portfolio of the Company’s

authorized capital stock and all of the shares were paid for by PT Sinar Mas Multiartha Tbk. With the issuance of these shares, the paid up capital increased by Rp 75,000,000 thousand from Rp 350,000,000 thousand to Rp 425,000,000 thousand.

b. Amendment in the Company’s Articles of Association to be in accordance with the provisions of Law of the Republic of Indonesia No. 40/2007 regarding Limited Liabilitiy Company.

On February 2, 2009, the Company’s shareholders held their Extraordinary Stockholders’ Meeting, which was documented in Notarial Deed No. 1 dated Februari 2, 2009 of Dahlia, S.H., Mkn, notary public in Jakarta, wherein the stockholders agreed to increase its authorized capital stock by Rp 1,500,000 million from Rp 500,000 million to Rp 2,000,000 million, consisting of 4 million shares with the same par value of Rp 500,000 per share, and, to increase the issued and paid up shares by 200,000 shares which were fully paid for by PT Sinarmas Multiartha Tbk. Upon issuance of these shares, the issued and paid-up capital of the Company increased by Rp 100,000 million from Rp 425,000 million to Rp 525,000 million. The increase authorized capital stock and issued and paid-up capital was then reiterated in Deed No. 10 dated April 16, 2009 of Dahlia, S.H., notary in Jakarta. This amendment was approved by the Minister of Justice and Human Rights Republic of Indonesia in his Decree No. AHU-40480.AH.01.02.Tahun 2009 dated August 20, 2009. On April 6, 2010, the Company’s shareholders held their Extraordinary Shareholders’ meeting, which was documented in the Deed No. 31 dated April 6, 2010 of Sutjipto, S.H., M.kn, notary in Jakarta, wherein the shareholders agreed to split the number of shares through decrease in par value per share from Rp 500,000 per share to become Rp 100 per share, and to capitalize retained earnings of Rp 43,050 million representing 430,500 shares distributed to shareholders proportionally. The split in shares from the original authorized share capital from 4,000,000 shares to become 20,000,000,000 shares, the total issued and paid-up capital increased from Rp 525,000 million to Rp 568,050 million consisting of 5,680,500,000 shares, at Rp 100 per share after the capitalization of retained earnings. In addition, shareholders approved the issuance of new shares as much as 1,600,000,000 shares with par value of Rp 100 per share to be offered through initial public offering (IPO) with an attached 1,920,000,000 Series I warrants free of charge (Note 24).


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The related amendments of the Articles of Association have been approved by the Minister of Justice of the Republic of Indonesia in his Decision Letter No. AHU-22745.AH.01.02 Tahun 2010 dated May 4, 2010. Total proceeds of the IPO amounted to Rp 240,000 million and the related share issuance costs amounted to Rp 4,678 million. As of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, the ultimate stockholder of the Company is Indra Widjaja. PT Shinta Utama, PT Sinar Mas Multiartha Tbk and PT Sinar Mas Multifinance (the stockholders of Pt Shinta Utama) signed and conveyed letters of statement on the recognition of the Company’s liabilities as required in the Company’s participation in the Government guarantee program (Note 42.g). The changes in capital stock and additional paid-in capital account from January1, 2008 up to September 30, 2011 are as follows:

Issued Numbers of shares and paid-up Addition

issued capital paid-in capitalRp '000,000 Rp '000,000

Balance as of January 1, 2008 550,000 275,000 -

Additional paid-up capital stock 300,000 150,000 -

Balance as of December 31, 2008 850,000 425,000 -

Additional paid-up capital stock 200,000 100,000

Balance as of December 31, 2009 1,050,000 525,000 -

Split the number of shares through decrease inpar value of share from Rp 500,000 per share to Rp 100 per share 5,248,950,000 - -

Capitalization of retained earnings 430,500,000 43,050 -

Balance as of September 30, 2010 5,680,500,000 568,050 -

Additional paid-up capital stock from initialpublic offering 1,600,000,000 160,000 75,322

Balance as of December 31, 2010 7,280,500,000 728,050 75,322

Additional issuance from the conversion of Series I Warrants (Note 24) 1,798,369,400 179,836 89,918

Balance as of September 30, 2011 9,078,869,400 907,886 165,240


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24. Warrants On December 13, 2010, the Company issued attached 1,920,000,000 Series I Warrants, free of charge as attached to the 1,600 million new shares to be issued in the Initial Public Offering. Each holder of 5 (five) new shares of the Company is entitled to 6 (six) warrants where each 1 (one) warrant entitles the holder to purchase 1 (one) new shares of the Company at exercise price of Rp 150, - (one hundred fifty rupiah) per share exercise from June 13, 2011 until December 11, 2015. On December 13, 2010, the Company’s shares and warrants have been listed to the Indonesia Stock Exchange. In 2011, 1,798,369,400 warrants has been converted to 1,798,369,400 shares, with total proceeds of Rp 269,754 million. As of September 30, 2011, there are 121,630,600 unexercised Series I Warrants.

25. Interest Income and Profit Sharing


RupiahLoans 741,430 554,708 749,544 611,620 483,878Securities 117,983 62,590 88,178 99,402 69,346Placements with other banks 12,055 5,848 6,784 6,887 1,972Securities purchased under agreements

to resell 3,422 1,184 2,099 1,058 4,832Demand deposits with other banks 3,358 - 443 - 1,380

Subtotal 878,248 624,330 847,048 718,967 561,408

Foreign currenciesLoans 42,678 30,023 42,792 38,837 13,985Securities 19,590 17,956 23,511 23,559 11,524Placements with other banks 1,195 1,935 2,715 758 14,095Securities purchased under agreements

to resell 139 42 42 269 23

Subtotal 63,602 49,956 69,060 63,423 39,627

Total 941,850 674,286 916,108 782,390 601,035

September 30 (9 Months) December 31 (12 Months)

Interest income and profit sharing received from related parties for the nine month periods ended September 30, 2011 and 2010 and for the years ended December 31, 2010, 2009 and 2008 amounted to Rp 43,478 million, Rp 40,724 million, Rp 59,442 million, Rp 21,160 million and Rp 9,904 million, respectively, or representing 4.61%, 6.04%, 6.49%, 2.70% and 1.64%, respectively, from total interest income earned and profit sharing (Note 32). Included in interest income and profit sharing for the nine-month periods ended September 30, 2011 and 2010 and for the years ended December 31, 2010, 2009 and 2008 are income from syaria transactions amounting to Rp 60,784 million, Rp 16,696 million, Rp 107,377 million, Rp 553 million and nil, respectively.


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26. Interest Expense and Profit Sharing


RupiahTime deposits 437,483 230,611 333,707 347,635 314,716 Savings deposits 60,611 42,892 59,512 45,497 25,857 Demand deposits 23,995 21,337 30,557 26,000 22,538 Premium on Government

guarantee (Note 42.g) 19,868 12,126 17,912 13,816 10,048 Deposits from other banks 644 4,654 4,158 4,274 16,802 Securities sold under repurchase agreements 4 1,308 1,309 1,294 7,182 Securities - 18 - - -Jumlah 542,605 312,946 447,155 438,516 397,143

Foreign currenciesTime deposits 26,578 31,947 42,536 26,834 24,059 Demand deposits 2,938 5,936 7,961 5,006 4,505 Deposits from other banks 9 - - 1 52Subtotal 29,525 37,883 50,497 31,841 28,616

Total 572,130 350,829 497,652 470,357 425,759


Interest expenses to related parties for the nine-month periods ended September 30, 2011 and 2010 and for the years ended December 31, 2010, 2009 and 2008 amounting to Rp 223,858 million, Rp 136,017 million, Rp 192,021 million, Rp 175,477 million and Rp 111,303 million, respectively, or 39.13%, 38.77%, 38.59%, 37.30% and 26.14%, respectively, from total interest expense and profit sharing (Note 32). Included in interest expense and profit sharing for the nine-month periods ended September 30, 2011 and 2010 and for the year ended December 31, 2010 are expenses of sharia transactions amounted to Rp 30,747 million, Rp 1,464 million, Rp 102,539 million, respectively.

27. General and Administrative Expenses


General 54,265 31,961 44,091 35,203 24,603 Communications 22,871 18,617 25,409 21,172 18,794 Repairs and maintenance 18,243 17,519 24,065 20,302 10,170 Printing and stationery 15,268 13,121 18,589 13,786 10,756 Transportation 14,997 14,300 19,608 13,809 9,182 Building rent 12,220 11,225 15,332 14,535 8,824 Promotions 11,447 7,373 11,017 10,774 20,962 Education and training 8,420 3,415 6,052 4,989 5,010 Post-employment benefit

expense (Note 36) 6,933 2,588 3,989 2,006 628 Travel 5,605 2,270 3,751 3,172 3,384 Electricity and water 4,409 4,359 6,000 5,099 4,114 Insurance 3,323 1,667 2,339 1,879 1,360 Professional fees 891 275 492 1,598 567

Total 178,892 128,690 180,734 148,324 118,354



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Rental expenses to related parties for the nine-month periods ended September 30, 2011 and 2010 and for the years ended December 31, 2010, 2009 and 2008 amounted to Rp 32,956 million, Rp 17,560 million, Rp 35,561 million, Rp 18,885 million and Rp 12,766 million, respectively (Note 32).

28. Other Income


Recoveries of receivables fromBank Indover (Note 14) - - 2,383 - -

Gain on sale of premises and equipment (Note 12) - - 130 127 114

Others 452 713 890 321 1,267

Total 452 713 3,403 448 1,381


29. Other Expenses


Loss on sale of premises and equipment (Note 12) 10 - - - -

Excess of claims of income tax under article 25 for the year 2008 (Note 30) - 2,215 2,215 - -

Provision for possible losses of receivable related to Indover Bank (Note 14) - - - 3,516 -

Others 323 378 1,464 1,014 279

Total 333 2,593 3,679 4,530 279


30. Income Tax

a. Tax expense of the Company consists of the following:


Current tax 25,537 23,247 34,990 19,298 -Deferred tax 2,722 3,605 4,150 2,733 6,790

Total 28,259 26,852 39,140 22,031 6,790



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b. Current Tax

A reconcilliation between income before tax per statements of comprehensive income and taxable income is as follows:


Income before tax per statements of comprehensive income 101,651 96,476 140,946 70,797 19,641

Temporary differences:Defined post-employment

benefits - net 5,990 (279) 3,589 1,895 411 Impairment losses (reversal of

allowance) on earning assets - net 981 3,787 2,957 10,110 (6,451)

Adjusment related to application of PSAK 50 and PSAK 55 - - (1,406) - -

Depreciation of premises and equipment (17,858) (17,928) (16,989) (20,963) (21,344)

Net (10,887) (14,420) (11,849) (8,958) (27,384)

Permanent differences:Benefits-in-kind 5,816 6,080 8,296 6,285 4,111 Others 5,570 3,349 2,569 2,402 2,024 Total 11,386 9,429 10,865 8,687 6,135

Taxable Income (fiscal loss) 102,150 91,485 139,962 70,526 (1,608)

Fiscal loss in 2008 - - - (1,608) (1,608)

Taxable Income 102,150 91,485 139,962 68,918 (3,216)


Current tax expense and payable are computed as follows:


Current tax expense 25,537 23,247 34,990 19,298 -Less prepaid income

tax - Article 25 25,076 15,328 23,527 9,312 7,710 Current tax payable (claim

for tax refund) (Note 19) 461 7,919 11,463 9,986 (7,710)


The taxable income and current tax expense of the Company in 2010, 2009 and 2008 are in accordance with the corporate income tax returns filed in the Tax Office.

According to tax regulations, fiscal losses can be offset against the taxable income immediately within a period of five years after the fiscal loss was incurred.


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In 2010, Company received a Letter of Tax Overpayment (SKPLB) from the Tax Office for income tax-Article 25 for year 2008 amounted to Rp 5,495 million (Note 14), in which the excess of the claim amounted to Rp 2,215 million is recognized in other expenses (Note 29).

c. Deferred Tax

The details of the Company’s deferred tax assets and liability are as follows:

Credited in Credited in(charged to) (charged to) statement of statement of

comprehensive comprehensive January 1, income for the period September 30, January 1, income for the period September 30,

2011 (Unaudited) 2011 2010 (Unaudited) 2010Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Deferred tax assets:Allowances for impairment losses on

earning assets 2,055 245 2,300 3,897 947 4,844Adjusment related to application of

PSAK 50 and PSAK 55 1,042 - 1,042 - - -Defined-benefit post-employment

reserve 2,081 1,497 3,578 1,184 279 1,463Total 5,178 1,742 6,920 5,081 1,226 6,307

Deferred tax liability -Difference in depreciation of

premises and equipment (19,194) (4,464) (23,658) (14,947) 2,379 (12,568)

Deferred tax assets (liabilities) - net (14,016) (2,722) (16,738) (9,866) 3,605 (6,261)

Credited in Credited in Credited in(charged to) (charged to) (charged to) statement of statement of statement of

comprehensive comprehensive comprehensive January 1, income for December 31, income for December 31, income for December 31,

2008 the year 2008 the year 2009 the year 2010Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Deferred tax assets:Allowances for impairment

losses (reversal) on earning assets 3,577 (2,209) 1,368 2,529 3,897 (1,842) 2,055

Adjusment related to application of PSAK 50 and PSAK 55 - - - - - 1,042 1,042

Fiscal loss - 402 402 (402) - - -Defined-benefit

post-employmentreserve 729 (19) 710 474 1,184 897 2,081

Total 4,306 (1,826) 2,480 2,601 5,081 97 5,178

Deferred tax liability -Difference in depreciation

of premises and equipment (4,649) (4,964) (9,613) (5,334) (14,947) (4,247) (19,194)

Deferred tax assets (liabilities) - net (343) (6,790) (7,133) (2,733) (9,866) (4,150) (14,016)

In September 2008, Law No. 7 Year 1983 regarding “Income Tax” has been revised with Law No. 36 Year 2008. The revised Law stipulates changes in corporate income tax rates from progressive tax rates to a flat rate of 28% for fiscal year 2009 and 25% for fiscal year 2010 onwards. The Company has recorded the impact of the changes in tax rates in the calculation of the deferred tax assets and liability as of December 31, 2009 and 2008 totaling to Rp 177 million and Rp 1,427 million, respectively, as part of tax expense in the current year’s operations.


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A reconciliation between the total tax expense and the amounts computed by applying the effective tax rates to income before tax per statements of comprehensive income is as follows:


Income before tax per statements of comprehensive income 101,651 96,476 140,946 70,797 19,641

Income tax expense 25,413 24,119 35,236 19,823 5,875

Tax effects of permanent differences:Benefits-in-kind 1,454 1,520 2,074 1,760 1,233Others 1,392 837 642 673 625Net 2,846 2,357 2,716 2,433 1,858

Subtotal 28,259 26,476 37,952 22,256 7,733

Effect of change in tax rates - - - (177) (1,427)Adjustment on deferred tax - (6,834) 1,188 (48) 484

Total 28,259 19,642 39,140 22,031 6,790


31. Earnings per Share


Net income (in Rp '000,000) 73,392 76,834 101,806 48,766 12,851

Weighted average number of shares outstanding for computation of basic earnings per share 6,623,808,072 5,680,500,000 5,776,938,356 5,592,828,767 3,948,942,623

Weighted average number of shares outstanding for computation of diluted earnings per share 6,769,141,802 - 5,849,802,892 - -

Earnings per share (in full Rupiah)Basic 11.08 12.94 17.62 8.72 3.25Diluted 10.84 - 17.40 - -


The weighted average outstanding of shares outstanding for computation of basic earnings per share has considered the retroactive effect of the the capitalization of retained earnings amounted to Rp 43,050 million representing 430,500 shares and stock split through decrease in par value per share from Rp 500,000 per share to Rp 100 per share (Note 23). The weighted average of shares outstanding for computation of diluted earnings per share for nine-month period ended September 30, 2011 and year ended December 31, 2010 has considered the effects of dilutive potential shares of Series I Warrants (Note 24).


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32. Nature of Relationship and Transactions with Related Parties

Nature of Relationship

Other than the key management personnel, the related parties of the Company are companies under the Sinar Mas group of Companies because the stockholders of the Company belong to Sinar Mas Group of Companies. a. Stockholders (include ultimate stockholder)

b. Companies owned by Stockholders, direct or indirectly. c. Companies have the same management with the Company and controlled by close family

members of stockholders and key management personnel.

Transactions with of Related Parties In the normal course of business, the Company has transactions with related parties. These transactions have the same price, terms and conditions as those transactions conducted with third parties, except for employee loans (Note 9.h). a. Accounts and transactions with related parties are as follows:

Percentage to total Percentage to total

Amount assets/liabilities Amount assets/liabilitiesRp '000,000 % Rp '000,000 %

AssetsDemand deposits with

other banks 847 0.01 171,742 1.70Loans 1,436,003 9.16 858,316 8.52Interest receivable 761 0.01 859 0.01Prepaid expenses 8,160 0.05 1,887 0.02Other assets 6,450 0.04 2,660 0.03

LiabilitiesLiabilities immediately payable 2,087 0.01 2,912 0.03Deposits 5,478,037 38.02 4,557,149 48.37Deposits from other banks - - 14,101 0.15Accrued interest 8,451 0.06 5,547 0.06


Percentage to total Percentage to total Percentage to totalAmount assets/liabilities Amount assets/liabilities Amount assets/liabilities

Rp '000,000 % Rp '000,000 % Rp '000,000 %

AssetsDemand deposits with

other banks 277 0.01 436 0.01 636 0.01Loans 794,940 7.08 741,894 9.22 83,408 1.38

Interest receivable 915 0.01 839 0.01 224 0.00Prepaid expenses 5,265 0.05 5,028 0.06 4,462 0.07Other assets 1,810 0.01 1,778 0.02 39,590 0.65

LiabilitiesLiabilities immediately payable 2,839 0.03 3,336 0.04 - -Deposits 4,443,285 43.05 2,984,945 39.99 1,689,451 29.92Deposits from other banks 14,250 0.14 14,891 0.20 - -Accrued interest 6,718 0.07 3,762 0.05 4,565 0.08Other liabilities - - - - 249 0.00


b. As of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, Rp 1,828,682

million, Rp 1,022,022 million, Rp 1,200,157 million, Rp 480,261 million and Rp 366,154 million, respectively, of loan channeling were disbursed through related parties (Note 9).


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c. Interest income and profit sharing from related parties for nine-month periods ended

September 30, 2011 and 2010, and for the years ended December 31, 2010, 2009 and 2008 amounted to Rp 43,478 million, Rp 40,724 million, Rp 59,442 million, Rp 21,160 million and Rp 9,904 million, or representing 4.61%, 6.04%, 6.49 %, 2.70% and 1.64%, respectively, of total interest income and profit sharing (Note 25).

d. Interest expenses and profit sharing to related parties for nine-month periods ended September 30, 2011 and 2010, and for the years ended December 31, 2010, 2009 and 2008 amounted to Rp 223,858 million, Rp 136,017 million, Rp 192,021 million, Rp 175,477 million and Rp 111,303 million, respectively, or representing 39.13%, 38.77%, 38.59%, 37.30% and 26.14%, respectively, of total interest expense and profit sharing (Note 26).

e. General and administrative expenses incurred to related parties for nine-month periods ended September 30, 2011 and 2010, and for the years ended December 31, 2010, 2009 and 2008 amounted to Rp 32,956 million, Rp 17,650 million, Rp 35,361 million, Rp 18,885 million and Rp 12,766 million, respectively (Note 27).

f. Renumerations provided to directors and key management by the Company during the period are as follows:


Short-term benefits 30,120 18,751 24,676 18,039 16,507Long-term benefits 2,386 1,497 1,721 1,221 908

Total 32,506 20,248 26,397 19,260 17,415


g. As of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, the total

commitments and contingent transactions (which consist of letters of credit and bank guarantees) with related parties amounted to Rp 45,240 million, Rp 31,093 million, Rp 37,614 million, Rp 16,326 million and Rp 7,166 million, respectively (Note 33). The outstanding marginal deposits from related parties relating to the letters of credit and bank guarantees amounted to Rp 17,000 million, Rp 27,925 million, Rp 31,880 million, nil, and Rp 60 million as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, respectively.

h. As of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, all property,

plant and equipment, except for land, are insured with PT Asuransi Sinar Mas with a total coverage amounting to Rp 429,388 million, Rp 383,404 million, Rp 384,854 million, Rp 250,083 million and Rp 24,297 million, respectively (Note 12).


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33. Commitments and Contingencies a. Spot and forward purchases and sales of foreign currencies


Spot and forward contracts to purchased of foreign currency

U.S.Dollar 12,306 14,069 28,697 14,512 -

Spot contracts to sell of foreign currency

U.S.Dollar 52,740 14,076 27,030 14,513 -


The above spot and forward transactions are normally settled in 1 day to 3 days and 1 month, respectively.

b. The Company has commitments and contingent receivables and liabilities under export-import

transaction, guarantees given, and loans given to customers as follows:


CommitmentsCommitment Liabilities

Unused loan commitments granted to customers 111,971 95,628 115,266 444,523 67,382

Irrevocable letters of credit 19,951 29,608 37,254 16,403 9,860

Total 131,922 125,236 152,520 460,926 77,242

ContingenciesContingent Receivables

Past due interest revenues 17,635 12,710 11,874 6,786 19,820

Contingent LiabilitiesBank guarantees 347,964 288,275 317,066 276,333 188,684

Net (330,329) (275,565) (305,192) (269,547) (168,864)


As of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, commitment and contingent transactions consisting of letters of credit and bank guarantees with related parties amounted to Rp 45,240 million, Rp 31,093 million, Rp 37,614 million, Rp 16,326 million and Rp 7,166 million, respectively (Note 32).


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As of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, the average terms of letters of credit are 1 up 3 months, 1 up 6 months, 1 up 4 months, 1 up 2 months, and 1 up 5 months respectively, while for bank guarantees are from 1 month until 38 months, from 1 month until 36 months, from 1 month until 36 months, from 1 month until 36 months and from 1 month until 36 months, respectively. Letters of credit outstanding secured by cash collateral as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008 amounted to Rp 10,181 million, Rp 27,242 million, Rp 31,682 million, Rp 16,402 million and Rp 9,860 million, respectively(Note 16). Bank guarantees secured by cash collateral as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008 amounted to Rp 83,526 million, Rp 31,875 million, Rp 85,566 million, Rp 142,408 million and Rp 51,842 million, respectively (Note 16).

34. Monetary Assets and Liabilities Denominated in Foreign Currencies

a. The balances of monetary assets and liabilities denominated in foreign currencies at statement

of financial position dates are as follows:


Equivalent Rp Equivalent Rp Equivalent Rp Equivalent Rp Equivalent RpRp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

AssetsCash USD 36,236 36,664 50,616 17,066 13,053

SGD 5,218 4,343 8,655 1,162 685 EUR 873 2 - - -CNY 462 - - - -AUD 227 - - - -HKD 85 40 - - -JPY 16 - - - -

Demand deposits with Bank Indonesia USD 242,300 995,516 393,309 588,385 140,005

Demand deposits with other banks - gross USD 37,857 265,104 55,109 56,692 106,022

SGD 6,683 6,362 7,884 3,890 1,089 JPY 3,870 49 198 1,581 335 CNY 2,838 - - - -GBP 2,530 1,879 3,935 3,915 1,054 EUR 993 19,191 4,280 4,093 -HKD 729 313 532 557 31 AUD 60 911 454 6,647 1,083

Placements with other banks USD 232,061 377,787 616,189 184,405 85,857 Securities USD 773,071 315,469 619,871 300,086 150,490 Securities purchased under

agreements to resell USD - - - 10,018 -Loans - gross USD 1,556,353 816,519 797,091 778,492 283,732 Interest receivable USD 6,656 7,778 5,028 5,247 2,629 Ijarah assets USD 1,918 - - - -Other assets - gross USD 99 903 10,857 89 103

EUR 1,122 1,040 1,133 3,516 3,988

Total 2,912,257 2,849,870 2,575,141 1,965,841 790,156



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Equivalent Rp Equivalent Rp Equivalent Rp Equivalent Rp Equivalent RpRp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

LiabilitiesLiabilities immediately payable USD 62,915 30,082 28,499 21,904 45,017

SGD 203 - - 202 226 GBP 52 - - - -JPY - - - - 78

Deposits USD 2,632,012 2,761,443 2,535,562 1,858,513 718,158 SGD 22,977 13,718 18,941 7,673 5,635 EUR 10,714 7,348 3,801 3,746 -AUD 5,744 - - - -CNY 2,981 - - - -

Deposits from other banks USD 109,852 14,101 14,250 14,891 -Taxes payable USD 717 944 809 935 280

SGD 1 2 2 1 -GBP 2 8 - - -

Estimated losses on commitments and contingencies USD 1,028 651 824 865 130

Accrued interest USD 3,056 1,811 1,582 1,301 521 SGD 1 1 2 1 1 EUR - 1 1 - -AUD 2 - - - -

Other liabilities USD 51 44 45 1,764 451 SGD 8 7 8 9 7 GBP - 283 - - -

Total liabilities 2,852,316 2,830,444 2,604,326 1,911,805 770,504

Net - Assets (Liabilities) 58,819 18,386 (30,318) 50,520 15,664


The conversion rates used to translate monetary assets and liabilities as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008 are the Reuters rates at 16:00 WIB as follows:


Great Britain Poundsterling 13,714.60 14,178.26 13,941.18 15,164.94 15,755.42 Euro 11,901.23 12,168.79 12,017.99 13,542.43 15,356.48 United States Dollar 8,790.00 8,925.00 9,010.00 9,395.00 10,900.00 Australian Dollar 8,566.30 8,646.10 9,169.48 8,453.16 7,554.26 Singapore Dollar 6,798.29 6,785.53 7,025.89 6,704.50 7,587.91 Hong Kong Dollar 1,391.18 1,150.02 1,159.08 1,211.48 1,406.44 Japanese Yen 1,128.61 107.19 110.75 102.19 120.65 China Yuan 1,381.18 - - - -



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Net Open Position (NOP)

The following is the Company’s net open position as submitted to Bank Indonesia:


NetCurrency Assets Liabilities Absolute

Rp '000,000 Rp '000,000 Rp '000,000

United States Dollar 2,820,041 2,747,044 72,997Great Britain Poundsterling 2,530 54 2,476Japanese Yen 3,886 1 3,885Hong Kong Dollar 813 - 813Euro 2,494 11,409 8,915Singapore Dollar 11,901 23,189 11,288Australian Dollar 589 5,746 5,157China Yuan 3,300 2,982 318

Total 2,845,554 2,790,425 105,849

Administrative AccountsBalance Sheet and



Rp '000,000 Rp '000,000 Rp '000,000

United States Dollar 2,774,202 2,780,558 6,356Great Britain Poundsterling 1,879 292 1,587Japanese Yen 330 3 327Hong Kong Dollar 532 2 532Euro 20,877 9,303 11,574Singapore Dollar 10,708 13,933 3,225Australian Dollar 911 - 911

Total 2,809,439 2,804,091 24,512



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December 31, 2010


Rp '000,000 Rp '000,000 Rp '000,000

United States Dollar 2,520,033 2,552,744 32,711Great Britain Poundsterling 3,935 - 3,935Japanese Yen 768 - 768 Hong Kong Dollar 532 - 532Euro 5,414 4,502 912Singapore Dollar 16,538 19,178 2,640Australian Dollar 454 - 454

Total 2,547,674 2,576,424 41,952


December 31, 2009


Rp '000,000 Rp '000,000 Rp '000,000

United States Dollar 1,899,927 1,876,525 23,402Great Britain Poundsterling 3,915 - 3,915Japanese Yen 2,470 9 2,461Hong Kong Dollar 557 - 557Euro 7,080 5,921 1,159Singapore Dollar 5,052 7,885 2,833Australian Dollar 6,647 - 6,647

Total 1,925,648 1,890,340 40,974


December 31, 2008


Rp '000,000 Rp '000,000 Rp '000,000

United States Dollar 730,773 723,538 7,235Great Britain Poundsterling 1,054 - 1,054Japanese Yen 335 79 256Hong Kong Dollar 31 - 31Euro 3,988 - 3,988Singapore Dollar 1,775 5,873 4,098Australian Dollar 1,084 - 1,084

Total 739,040 729,490 17,746


Net open position as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008 was computed in accordance with the Bank Indonesia Regulation. The NOP ratio as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008 are 4.98%, 3.43%, 5.45%, 6.37% and 3.52%, respectively.


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35. Fair Value of Financial Assets and Liablities

The Company has financial assets and financial liabilities that arise directly from its business activities. The carrying values of financial assets and financial liabilities of the Company and the estimated fair values of financial assets and financial liabilities at September 30, 2011 and 2010, and December 31, 2010 are as follows:

Carrying valueEstimated Fair

value Carrying valueEstimated Fair

value Carrying valueEstimated Fair

valueRp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000

Financial AssetsFair value through profit loss

Securities 74,622 74,622 21,632 21,632 77,451 77,451Other asstes

Derivative receivable 1,109 1,109 - - - -Held-to-maturity

Securities 2,832,446 3,118,161 1,047,520 1,132,238 1,358,147 1,632,031Available-for-sale

Securities 31,338 31,338 15,906 15,906 36,493 36,493 Loans and receivable

Cash 579,508 579,508 306,716 306,716 269,274 269,274 Demand deposits with Bank Indonesia 1,362,218 1,362,218 1,302,748 1,302,748 1,067,918 1,067,918 Demand deposits with other banks 68,979 68,979 300,669 300,669 86,572 86,572 Placements with other banks - net 411,961 411,961 377,884 377,884 616,189 616,189 Securities 499,826 499,826 - - - -Securities purchased under agreements

to resell 40,323 40,323 - - 74,938 74,938 Loans - net 8,600,511 8,593,352 5,975,416 6,098,257 6,788,665 6,843,583 Interest receivable 56,204 56,204 44,316 44,316 47,353 47,353 Other assets 19,876 19,876 13,761 13,761 19,503 19,503

Total Financial Assets 14,578,921 14,857,477 9,406,568 9,614,127 10,442,503 10,771,305

Financial LiabilitiesFinancial Liabilities at FVPL

Other liabilitiesDerivative liabilities - - - - 194 194

Measured at amortized costLiabilities immediately payable 142,889 142,889 59,892 59,892 46,739 46,739 Deposits 12,971,444 12,971,444 8,964,321 8,964,321 9,612,890 9,612,890 Deposits from other banks 328,108 328,108 223,942 223,942 366,853 366,853 Securities issued 886 886 1,635 1,635 1,616 1,616 Accrued interest 36,471 36,471 17,958 17,958 24,564 24,564 Other liabilities 3,930 3,930 761 761 2,564 2,564

Total Financial Liabilities 13,483,728 13,483,728 9,268,509 9,268,509 10,055,226 10,055,226

December 31, 2010September 30, 2011 (Unaudited) September 30, 2010 (Unaudited)

The fair values of securities, except for Bank Indonesia Intervention, Certificates of Bank Indonesia and bill receivables on September 30 2011 and 2010, and December 31, 2010 are based on market prices. The fair values of Bank Indonesia Intervention, Bank Indonesia Certificates and bill receivables, are the same with their carrying values due to their short-term in nature.

The fair values of loans on September 30, 2011 and 2010, and December 31, 2010 are calculated based on the discounted cash flows method using prevailing market rates.

The fair values of financial assets other than securities and loans as of September 30, 2011 and 2010, and December 31, 2010, are the same with their carrying value due to their short-term in nature.

The fair values of financial liabilities withdrawal at any time, or with maturity of short-term at September 30, 2011 and 2010, and December 31, 2010, are the same are the same with their carrying values.


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36. Post-Employment Benefits The Company provides post-employee benefits to its employee based on the Law No. 13 Year 2003, dated March 25, 2003. No funding of the benefits has been made to date. The defined-benefit post-employment reserve was calculated based on the latest actuarial valuation report dated October 20,2011 from PT Rileos Pratama, an independent actuary. Number of eligible employees as of September 30, 2011, and December 31, 2010, 2009 and 2008 is 1,211 employees, 1,075 employees, 779 employees and 532 employees, respectively. No independent actuarial computation has been made for September 30, 2010 considering that there was no change in these data for the nine-month period ended September 30, 2010. The expense for this period in respect to the post-employement benefit obligation was calculated management based on actuarial assumptions as at December 31, 2009. A reconciliation of the present value of unfunded defined benefit reserve to the amount of defined-benefit post-employment reserve presented in the statement of financial positions is as follows:

September 302011

(Unaudited) 2010 2009 2008Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Present value of unfunded defined-benefit reserve 32,658 14,003 6,911 1,331Unrecognized actuarial losses (gain) (18,344) (5,679) (2,176) 1,509

Defined-benefit post-employment reserve 14,314 8,324 4,735 2,840

December 31

Details of defined-benefit post-employment expense are as follows:

September 30(9 Months)

2011(Unaudited) 2010 2009 2008Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Current service costs 5,342 2,971 1,529 439Interest costs 1,419 957 535 144Amortization of actuarial losses (gain) 172 61 (58) 45

Defined-benefit post-employment 6,933 3,989 2,006 628

December 31 (12 Months)

Defined-benefit post-employment expense is presented as part of “General and administrative expenses” (Note 27). Movements of defined-benefit post-employment reserve are as follows:


Defined-benefit post-employment reserve at beginning of the period 8,324 4,735 4,735 2,840 2,429

Defined-benefit post-employment expense during the period 6,933 2,587 3,989 2,006 628

Payments made during the period (943) (115) (400) (111) (217)

Defined-benefit post-employment reserve at end of the period 14,314 7,207 8,324 4,735 2,840



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Principal actuarial assumptions used in the independent valuation of the defined post-employment benefits are as follows:

September 302011

(Unaudited) 2010 2009 2008Rp '000,000 Rp '000,000 Rp '000,000

Normal pension age 55 years old 55 years old 55 years old 55 years oldDiscount rate 8% per annum 9.5% per annum 11% per annum 17% per annumFuture salary increase 9.55% per annum 7.5% per annum 7.5% per annum 1% per annumLevel of employee turnover 2.14% in 2011 2.30% in 2010 5% in 2009 5% in 2008

until 40 years old until 40 years old until 40 years old until 40 years old decrease to 0% at decrease to 0% at decrease to 0% at decrease to 0% at

55 years old 55 years old 55 years old 55 years oldMortality table Indonesian 2 Indonesian 2 Indonesian 2 Indonesian 2

Mortality table Mortality table Mortality table Mortality table

December 31

37. General Reserves

In the Extraordinary Shareholders Meeting, which was stated in Deed No. 145 dated June 24, 2011 from Sutjipto, S.H.,M.kn, notary in Jakarta, the stockholders agreed to increase the general reserve amounted to Rp 500 million taken from retained earnings. In the Extraordinary Shareholders’ meeting, which was stated in Deed No. 31 dated April 6, 2010 from Sutjipto S.H., notary in Jakarta, the stockholders agreed to increase the general reserve amounted to Rp 500 million taken from retained earnings. In the Extraordinary Shareholders Meeting, which was stated in Deed No. 1 dated July 2, 2009 from Mrs. Endang Saritomo Utari S.H., notary in Jakarta, the stockholders agreed to increase the general reserve amounted to Rp 500 million taken from retained earnings. In the Extraordinary Shareholders Meeting, which was stated in Deed No. 10 dated July 8, 20088 from Mrs. Dahlia S.H., notary in Jakarta, the stockholders agreed to increase the general reserve amounted to Rp 500 million taken from retained earnings. As fo September 30, 2011 and 2010, and December 31, 2010, 2009, and 2008, outstanding general reserves amounted to Rp 3,500 million, Rp 3,000 million, Rp 3,000 million, Rp 2,500 million, and Rp 2,000 million, respectively.

38. Legal Matters

The Company brought to the court the collection of certain non-performing loans, as a common action in the banking industry. The outcome of these mentioned cases cannot be reasonably determined and estimated at this point in time, and the management cannot reasonably estimate the possible losses that might arise from these cases. Management believes that there are no lawsuits that have a material effect on the Company’s financial statements.


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39. Segment Information a. Business Segments

The Company’s segment information is presented based on it’s business activities, namely marketing and credit, treasury, and trade finance. These business activities are the basis on which the Company reports its primary segment information, as follows:

Marketing Marketing and Credit Treasury Trade Finance and Financing Treasury Total

Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000Revenues

Interest revenues and profit sharing 739,932 141,134 - 51,769 9,015 941,850

Other revenues 5,599 16,649 132 - - 22,380

Total Revenues 745,531 157,783 132 51,769 9,015 964,230

ExpensesInterest expense 541,419 4 - 30,707 - 572,130 Other expenses 16,122 - 648 3,240 120 20,130

Total Expenses 557,541 4 - 33,947 - 592,260

Segment revenues - net 371,970 Unallocated revenues 40,685 Unallocated expenses 311,004

Income before tax 101,651 Tax expense 28,259 Net Income 73,392

General Bank Sharia Business UnitSeptember 30, 2011 (9 Months) (Unaudited)

Marketing and Marketing and credit Treasury Trade Finance Financing Treasury Total

Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

RevenuesInterest revenues and profit sharing 575,818 81,772 - 11,938 4,758 674,286 Other revenues 1,772 7,256 241 - 1 9,270

Total Revenues 577,590 89,028 241 11,938 4,759 683,556

ExpensesInterest expense 348,057 1,308 - 1,464 - 350,829 Other expenses 49,646 10 440 211 10 50,317

Total Expenses 397,703 1,318 440 1,675 10 401,146

Segment revenues - net 282,410 Unallocated revenues 41,789 Unallocated expenses 227,723

Income before tax 96,476 Tax expense 19,642

Net Income 76,834

September 30, 2010 (9 Months) (Unaudited)General Bank Sharia business Unit


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Marketing and Marketing and credit Treasury Trade Finance Financing Treasury Total

Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

RevenuesInterest revenues and profit sharing 770,528 113,830 - 25,916 5,834 916,108 Other revenues 2,804 18,689 3,568 - 1 25,062

Total Revenues 773,332 132,519 3,568 25,916 5,835 941,170

ExpensesInterest expense 491,504 1,309 - 4,839 - 497,652 Other expenses 47,747 - - 357 20 48,124

Total Expenses 539,251 1,309 - 5,196 20 545,776

Segment revenues - net 395,394 Unallocated operating revenues 55,973 Unallocated operating expenses 310,421


Net Income 101,806

December 31, 2010 (12 Months)General Bank Sharia business Unit

Marketing Marketing and Credit Treasury Trade Finance and Financing Treasury Total

Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

RevenuesInterest revenues and profit sharing 657,549 124,288 - 181 372 782,390 Other operating revenues 3,045 17,011 514 - - 20,570

Total Revenues 660,594 141,299 514 181 372 802,960

ExpensesInterest expense 469,062 1,294 - 1 - 470,357 Other operating expenses 59,498 - 4,299 955 20 64,772

Total Expenses 528,560 1,294 - 956 - 535,129

Segment revenues - net 267,831 Unallocated operating revenues 47,102 Unallocated operating expenses 244,136


Net Income 48,766

General Bank Sharia Business UnitDecember 31, 2009 (12 Months)

Marketing and Credit Treasury Trade Finance Total

Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

RevenuesInterest revenues 515,310 85,725 - 601,035 Other operating revenues 2,309 13,835 2,664 18,808

Total Revenues 517,619 99,560 2,664 619,843

ExpensesInterest expense 418,577 7,182 - 425,759 Other operating expenses 13,057 426 - 13,483

Total Expenses 431,634 7,608 - 439,242

Segment revenues - net 180,601 Unallocated operating revenues 30,763 Unallocated operating expenses 191,723 Income before tax 19,641 Tax expense 6,790

Net Income 12,851

December 31, 2008 (12 Months)


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Marketing and Marketing andcredit Treasury Trade Finance Financing Treasury Total

Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

AssetsSegment Assets 9,150,480 4,082,411 428 611,880 354,232 14,199,431 Unallocated assets 1,468,644

Total Assets 15,668,075

LiablitiesSegment Liabilities 13,365,299 1,261 20 859,544 - 14,226,124 Unallocated liabilities 185,112

Total Liablities 14,411,236

September 30, 2011 (Unaudited)General Bank Sharia business Unit

Marketing and Marketing andcredit Treasury Trade Finance credit Treasury Total

Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

AssetsSegment Assets 6,028,560 2,286,446 - 340,432 20,933 8,676,371 Unallocated assets 1,397,249




September 30, 2010 (Unaudited)General Bank Sharia business Unit


Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

AssetsSegment Assets 7,960,525 2,007,851 - 373,458 191,606 10,533,440 Unallocated assets 699,316




December 31, 2010General Bank Sharia business Unit


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Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

AssetsSegment Assets 5,343,018 1,230,956 - 3,743 92,600 6,670,317 Unallocated assets 1,365,540


LiablitiesSegment Liabilities 7,031,465 393,272 869 215 - 7,425,821 Unallocated liabilities 38,765


December 31, 2009General Bank Sharia business Unit

Marketing and Credit Treasury Trade Finance Total

Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000Assets

Segment assets 4,301,785 1,389,857 - 5,691,642 Unallocated assets 372,984


LiabilitiesSegment liabilities 5,480,153 85,476 - 5,565,629 Unallocated liabilities 81,334

Total Liabilities 5,646,963

December 31, 2008

b. Geographical Segments

Interest revenues based on geographical segments are as follows:


Jakarta - Capital City 594,318 324,934 430,478 492,408 382,978Java island (excluding Jakarta) 134,963 162,543 223,758 133,744 107,663Sumatera island 87,882 71,153 108,176 66,195 65,515Sulawesi and Maluku island 87,249 76,881 102,301 54,693 24,438Kalimantan island 9,541 14,519 19,612 11,202 7,823Bali and Lombok island 18,443 15,460 20,533 12,088 8,051Jayapura island 9,454 8,796 11,250 12,060 4,567

Total 941,850 674,286 916,108 782,390 601,035



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The carrying value of segment assets and additions to premises and equipment classified based on geographical region or location of the assets are as follows:

2011 2010(Unaudited) (Unaudited) 2010 2009 2008Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000 Rp '000.000

Jakarta - Capital City 10,566,295 6,081,036 6,714,276 4,706,888 3,525,741Jawa Island (outside Jakarta) 1,364,557 937,858 2,126,583 810,328 1,081,144Sumatera Island 981,957 548,325 874,429 399,554 529,409Sulawesi and Maluku Island 873,380 829,218 374,794 577,820 295,862Bali and Lombok Island 184,389 130,192 172,190 88,464 91,794Jayapura Island 117,310 82,288 87,343 75,349 74,829Kalimantan Island 111,548 67,454 183,825 11,914 92,863

Total 14,199,436 8,676,371 10,533,440 6,670,317 5,691,642

December 31September 30Carrying Value of Segment Assets


Jakarta - Capital City 95,723 15,566 20,082 58,579 67,381Jawa Island (outside Jakarta) 2,489 4,912 5,958 7,211 14,027Sumatera island 4,918 3,882 5,483 2,061 7,241Sulawesi and Maluku island 491 225 377 4,106 1,533Bali and Lombok island 889 359 359 1,374 1,872Jayapura Island 33 8 17 70 264Kalimantan island 904 47 340 919 1,724

Total 105,447 24,999 32,616 74,320 94,042

December 31September 30Additions to premises and equipment

40. Risk Management

In the performance of its activities, the Company recognizes that both external and internal banking environment have been developed, following the increase in complexity of risks in the banking industry and necessity of a good corporate governance. As a response to the condition of the Company’s environment, the Company has adopted a risk management policy for the purpose of ensuring that any risks resulting from its operating activities are identified, measured, managed, and reported. This risk management policy would in turn generate benefits to the Company such as increased public and shareholders’ trust, increased accuracy in projection of future performance, including any possibility of loss occurrence, and improved methods and processes of decision-making, as well as risk valuation, through the availability of updated information, which eventually would increase the performance and competitive power of the Company.


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The Company is continuously developing and enhancing framework and internal control structure that is integrated and comprehensive to be at far with leading international banks, risk management practices, in order to provide the Company with early warning indications of potential risks and for the Company to adopt risk mitigation measures to minimize those risks. The risk management framework is in the form of policies, procedures transactions and authorization limits, as well as other internal rules and various risk management tools, in all aspects of the business activities. The Company has the Unity of Management Risk Corporation which will be used to support the integrated and measurable risk management and continue to carry out the following: a. Prepares and reports risks profile to Bank Indonesia on a quarterly basis. b. Analyzes risks and gives opinion on all various risks before any transaction would be approved

by management, including Credit Risk, Market Risk, Liquidity Risk, Operational Risk, Legal Risk, Strategic Risk, Compliance Risk, and Reputation Risk.

c. Prepares concepts and methods to measure the composites risks from various risks based on

standard guidelines of Bank Indonesia and Risk Management Policy. The Company’s adoption of risk management includes active supervision by management, establishing policies and procedures, setting-up risk limits, developing a process of identifying, measuring and monitoring risks, and establishing information system and risk control, as well as an internal control system. Credit Risk Credit risk arises from failure of the counterparty to fulfill its obligations to the Company. This risk results from the Company’s functional activities such as credit (lending), treasury, investment and trade financing. The Company’s loan management is geared towards supporting loan expansion and managing the quality of each loan from the time it is granted until it is paid in full by the borrower, to prevent these from becoming Non Performing Loans (NPL). Effective loan management can minimize the risk of losses and optimize the use of capital allocated for credit risks. The Company already has written policies and guidelines on its lending activities in order to manage, among others, credit analysis procedures, credit approval procedures, credit recording and monitoring procedures, and credit restructuring. Policies and procedures are reviewed periodically to suit the size and complexity of the Company's business. The Company measures and monitors risk for every debtor either individually, or the economic sector as well as the entire credit portfolio by implementing the four-eyes principle consistenly. The Company also implemented procedures and measures to support the process of granting credit by considering risk and return.


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The on and off statement of financial position exposure related to credit risk as of September 30, 2011 and 2010, and December 31, 2010 are as follows:

Gross amounts Net amounts Gross amounts Net amounts Gross amounts Net amountsRp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Statement of Financial Position

Fair value through profit and lossSecurities

Corporate bonds 29,652 29,652 21,632 21,632 30,120 30,120Mutual fund 44,970 44,970 - - 47,331 47,331

Other assetsDerivative receivable 1,109 1,109 - - - -

Held-to-maturitySecurities

Corporate bonds 47,152 47,132 67,453 67,453 46,138 46,138 Credit Linked Notes 43,950 43,950 62,475 62,475 63,070 63,070 Bills receivable 1,476 1,476 21,789 21,789 322,030 322,030

Loan and receivableDemand deposits with other banks 68,979 68,979 300,669 300,669 86,572 86,572 Palcement with other banks

Short-term investment - call money 409,573 409,573 331,874 331,874 566,039 566,039

Short-term investment - time deposits 10,000 9,900 37,700 37,680 126,040 126,040

Short-term investment - on call 2,488 2,488 10,213 10,213 14,110 14,110Other short-term investment - - 97 97 - -

Securities Bills receivable 499,826 499,826 - - - -

Loans 9,163,715 9,066,489 6,204,502 6,062,636 7,011,796 6,934,158Securities purchased under

agreements to resell 40,323 40,323 - - 74,938 74,938 Interest receivable 56,204 56,204 44,316 44,316 47,353 47,353 Other assets 19,876 19,876 13,761 13,761 19,503 19,503

Total 10,439,293 10,341,947 7,116,481 6,974,595 8,455,040 8,377,402

Off - balance sheet

Unused loan commitments 111,971 111,971 95,628 95,628 115,266 115,266Bank Guarantee 347,964 347,964 288,275 288,275 317,066 317,066Irrevocable letters of credit 19,951 19,951 29,608 29,608 37,254 37,254

Total 479,886 479,886 413,511 413,511 469,586 469,586

Desember 31, 2010(Unaudited) (Unaudited)September 30, 2010September 30, 2011

Maximum exposure to credit risk is reflected in the percentage of each category of financial assets to total exposure with the largest portion is in the Loans category. Loans portfolio diversified into 10 economic sectors. As of September 30, 2011 and 2010, and December 31, 2010, other economic sectors in the form of consumer loans have obtained the largest loans from the Company.


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Companies categorize borrowers who received loans based on market segments, such as corporate, commercial and retail. The table below shows the composition of credit provided by the Company based on market segment and its level of NPLs as of September 30, 2011 and 2010, and December 31, 2010:

Outstanding Non-performing Outstanding Non-performing Outstanding Non-performingLoan Loan Loan Loan Loan Loan

% % % % % %

Corporate 35.59 73.19 35.61 80.23 37.63 87.30Coomercial 18.72 2.27 25.62 10.51 21.83 2.83Retail 45.69 24.54 38.77 9.26 40.54 9.87

Total 100.00 100.00 100.00 100.00 100.00 100.00

December 31, 2010September 30, 2011 (Unaudited) September 30, 2010 (Unaudited)

The Company continues to monitor the development of credit portfolio risk through credit risk profile reports that a composite assessment of the assessment of Inherent Risk and Risk Control System, which is specifically regulated by Bank Indonesia. The parameters used in the assessment of credit risk profile is the concentration of credit based on certain economic sectors, credit quality problems, the concentration of purchasing securities, the adequacy of reserves and collateral. The Company continues to maintain portfolio credit risk at a low level of risk through credit risk control and management of adequate and improving credit risk management implementation process, either by improving the credit policy and the development of adequate credit information system. Market Risk Market risk arises from possible losses on portfolio owned by the Company due to movements in market variables such as interest rate, exchange rate, and derivatives of both interest and exchange rates (derivative instrument risk). Also, market risk arises from the Company’s functional activities, such as treasury activities, investment in marketable securities and money market instruments, funding activities, issuance of debt securities and trade financing. a. Interest Rate Risk

Interest rate risk arises from possible losses caused by inverse movement in market interest rate against the Company’s position or transaction.

To measure interest rate risk, the Company uses analysis of net interest income (net interest margin) and the difference (spread) interest rates. In addition, the Company also reviewed the analysis maturity report (maturity gap analysis) and static interest rate gap analysis to provide a static description on the statement of financial position position on a particular date based on the characteristics of the determination date back to the level of interest (repricing time) or time remaining until the maturity date productive assets and savings (remaining maturity).

The Company determines its funding interest rate by monitoring movements of funding interest rate guaranteed by the Government and by analyzing the competitors’ funding interest rates. Lending interest rate is determined by adding a certain margin on the funding interest rate or the cost of fund.


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The table blow summarises the average interest rates per annum for significant assets and liabilities:

Rupiah US Dollar Rupiah US Dollar Rupiah US Dollar% % % % % %

AssetsDemand deposits with other

banks - 0.87 - 0.87 - 0.87Placements with other banks 6.27 0.14 6.00 0.65 6.00 0.47Securities 11.56 7.78 11.56 7.78 11.56 7.78Securities purchased under

agreements to resell 10.96 - 10.97 - 10.97 -Loans 19.83 5.85 16.46 6.87 16.46 6.87

LiabilitiesDeposits 5.50 1.92 5.00 1.45 5.62 1.45Deposits from other banks 4.25 3.82 4.62 3.57 4.37 3.70

Desember 31, September 30,

(Unaudited) 2010

September 30,

(Unaudited)20102011

The following table shows the carrying value of, the financial assets and financial liabilities related to interest rate risk based on maturity as of September 30, 2011 and 2010, and December 31, 2010:

Due withinOne year one year two years three years four years five years Total

Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000AssetsDemand deposits with other banks 68,979 - - - - - 68,979 Bank Indonesia Intervensi 1,644,079 - - - - - 1,644,079 Certificate of Bank Indonesia 26,299 - - - - - 26,299 Government bonds 105,459 41,029 105,388 143,720 - 362,900 758,496 Corporate bonds 74,804 - - - - - 74,804 Credit Linked Note - 43,950 - - - - 43,950 Bills receivable 501,302 - - - - - 501,302 Mutual fund 44,970 - - - - - 44,970 Placement to other bank 412,061 - - - - - 412,061 Securities purchased under agreement to resell 40,323 - - - - - 40,323 Loans - gross 4,089,393 1,251,551 1,714,899 486,953 405,048 745,182 8,693,026

LiabilitiesDeposits 12,971,444 - - - - - 12,971,444 Deposits from other bank 328,108 - - - - - 328,108

Due after



Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000AssetsDemand deposits with other banks 1,302,748 - - - - - 1,302,748 Bank Indonesia Intervensi 120,974 - - - - - 120,974 Government bonds 10,007 106,426 41,716 107,771 143,965 349,938 759,823 Corporate bonds - 43,821 21,632 - - 38,354 103,807 Credit Linked Note 17,850 - 44,625 - - - 62,475 Bills receivable 21,789 - - - - - 21,789 Placement to other bank 377,884 - - - - - 377,884 Loans - gross 2,806,044 709,334 1,141,701 382,051 347,713 729,558 6,116,401


Due after



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Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000AssetsDemand deposits with other banks 86,572 - - - - - 86,572 Bank Indonesia Intervensi 88,473 - - - - - 88,473 Government bonds 10,005 126,702 - 54,259 219,310 365,047 775,323 Corporate bonds 30,120 - 44,138 - - - 74,258 Credit Linked Note 18,020 45,050 - - - - 63,070 Bills receivable 322,030 - - - - - 322,030 Mutual fund 47,331 - - - - - 47,331 Placement to other bank 616,189 - - - - - 616,189 Securities purchased under agreement to resell 74,938 - - - - - 74,938 Loans - gross 1,900,890 1,367,850 849,025 1,139,456 327,601 1,280,012 6,864,834


Due after

December 31, 2010

b. Exchange Rate Risk

Exchange rate risk arises from possible losses caused by volatility of exchange rates at the time the Company has an open position on its foreign exchange portfolio.

The policy to manage exchange rate risk is based on the regulation of Bank Indonesia regarding limit on net open position. Bank Indonesia sets a limit on net open position for all foreign currencies at a maximum of 20% of capital (or at a maximum of 30%, if the Company is taking into account market risk in calculating its capital). The management of net open position is centralized and under the responsibility of the Treasury Division, which combines the daily net open position of all branches. Meanwhile, for managing the trading book position, the Company applies policies and limits in order to minimize the potential losses arising from trading book. The balances of monetary assets and liabilities denominated in foreign currencies at statement of financial position dates and net open position are disclosed in Note 34.

Liquidity Risk Liquidity risk arises from possible losses due to insuffiency of the Company’s liquidity level to fulfill its obligations when already due. Liquidity risk is divided into market liquidity risk, wherein the Company is not able to set-off its current position at market rate due to market insufficiency, and funding liquidity risk, wherein the Company is not able to liquidate its assets nor obtain funds from other sources. The Company maintains its liquidity by keeping a level of liquid assets in such amount which is considered sufficient based on anticipated withdrawal of deposits to be made by customers, and controlling any excess of matured liabilities over matured assets of each period. In addition, a branch cash limit is also set. The purpose of the branch cash limit is to enable the branch to meet its short-term obligation in the form of withdrawal of third party funds and to avoid idle cash in branches as well. Liquidity risk is being managed by the Treasury Division and ALCO (Asset Liability Committee).


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The schedule of maturities of financial assets and financial liabilities based on contractual undiscounted payments as of September 30, 2011 and 2010, and December 31, 2010 is disclosed below:

1 month more than more than more than more than more thanor 1 month untill 3 month untill 6 month untill 1 year untill 2 yeras untill More than Transaction Carrying

less 3 months 6 months 12 months 2 years 5 years 5 years Total coast valueRp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Assets

Cash 579,508 - - - - - - 579,508 - 579,508 Demand deposits with

Bank Indonesia 1,362,218 - - - - - - 1,362,218 - 1,362,218 Demand deposits with

other banks 68,979 - - - - - - 68,979 - 68,979 Placements with other banks 412,061 - - - - - - 412,061 - 412,061 Securities - third parties 1,436,299 407,186 828,020 55,407 84,980 251,108 375,252 3,438,252 - 3,438,252 Securities purchased under

agreements to resell 40,323 - - - - - - 40,323 - 40,323 Loan - gross 2,796 1,415 89,462 3,041,814 1,306,805 3,264,484 1,492,696 9,199,472 35,757 9,163,715 Interest receivable 56,204 - - - - - - 56,204 - 56,204 Other assets 20,985 - - - - - - 20,985 - 20,985 Total assets 3,979,373 408,601 917,482 3,097,221 1,391,785 3,515,592 1,867,948 15,178,002 35,757 15,142,245

Liabilities

Liabilities immediately payable 142,889 - - - - - - 142,889 - 142,889 Deposits 10,410,523 1,329,670 534,445 1,556,349 13,830,987 - 13,830,987 Deposits from other banks 326,033 - - 2,075 - - - 328,108 - 328,108 Securities issued 886 - - - - - - 886 - 886 Accrued interest 36,471 - - - - - - 36,471 - 36,471 Other liabilities 3,930 - - - - - - 3,930 - 3,930 Total liablities 10,920,732 1,329,670 534,445 1,558,424 - - - 14,343,271 - 14,343,271

Assets (Liabilities) - Net (6,941,359) (921,069) 383,037 1,538,797 1,391,785 3,515,592 1,867,948 834,731 35,757 798,974




Assets

Cash 306,716 - - - - - - 306,716 - 306,716 Demand deposits with


other banks 300,669 - - - - - - 300,669 - 300,669 Placements with other banks 379,884 - - - - - - 379,884 - 379,884 Securities - third parties 126,241 19,922 - - - 204,452 734,443 1,085,058 - 1,085,058 Loan - gross 821 12,155 3,206 1,169,491 1,459,228 2,735,284 842,624 6,222,809 18,307 6,204,502 Interest receivable 44,316 - - - - - - 44,316 - 44,316 Other assets 13,761 - - - - - - 13,761 - 13,761 Total assets 2,475,156 32,077 3,206 1,169,491 1,459,228 2,939,736 1,577,067 9,655,961 18,307 9,637,654

Liabilities

Liabilities immediately payable 142,889 - - - - - - 142,889 - 142,889

Deposits 7,410,570 952,809 164,952 505,896 - - - 9,034,227 - 9,034,227 Deposits from other banks 243,550 392 - - - - - 243,942 243,942 Securities issued 1,635 - - - - - - 1,635 - 1,635 Accrued interest 17,958 - - - - - - 17,958 - 17,958 Other liabilities 761 - - - - - - 761 - 761 Total liablities 7,817,363 953,201 164,952 505,896 - - - 9,441,412 - 9,441,412

Assets (Liabilities) - Net (5,342,207) (921,124) (161,746) 663,595 1,459,228 2,939,736 1,577,067 214,549 - 196,242



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AssetsCash 269,274 - - - - - - 269,274 - 269,274 Demand deposits with


other banks 86,572 - - - - - - 86,572 - 86,572 Placements with other banks 706,189 - - - - - - 706,189 - 706,189 Securities - third parties 171,273 435,397 - - - 226,774 638,647 1,472,091 - 1,472,091 Securities purchased under

agreements to resell 19,443 55,495 - - - - - 74,938 - 74,938 Loan - gross 4,933 7,412 77,674 1,967,132 1,374,063 2,326,601 1,285,826 7,043,641 31,845 7,011,796 Interest receivable 47,353 - - - - - - 47,353 - 47,353 Other assets 19,503 - - - - - - 19,503 - 19,503 Total assets 2,392,458 498,304 77,674 1,967,132 1,374,063 2,553,375 1,924,473 10,787,479 31,845 10,755,634

LiabilitiesLiabilities immediately

payable 46,739 - - - - - - 46,739 - 46,739 Deposits 7,919,918 1,071,244 169,859 658,193 - - - 9,819,214 - 9,819,214 Deposits from other banks 303,853 - - - - - - 303,853 - 303,853 Securities issued 1,616 - - - - - - 1,616 - 1,616 Accrued interest 24,564 - - - - - - 24,564 - 24,564 Other liabilities 2,758 - - - - - - 2,758 - 2,758 Total liablities 8,299,448 1,071,244 169,859 658,193 - - - 10,198,744 - 10,198,744

Assets (Liabilities) - Net (5,906,990) (572,940) (92,185) 1,308,939 1,374,063 2,553,375 1,924,473 588,735 31,845 556,890

December 31, 2010

Most of the obligations held by the Company will expire in less than 1 month, but majority of these obligations will be rolled over. Efforts made by the Company to retain customer funds in the Company is to improve service quality and offer reasonable rates and competitive. With these efforts, these also expected to attract new customers for placing their funds in the Company. In addition, one of the efforts made by the Company to mitigate the withdrawal of funds en masse by the customer that is by monitoring the 100 core depositors, especially the 25 largest core depositors, by evaluating the profile of the depositors, so that the Company may anticipate the withdrawal of funds large to be carried out depositors. Until to date, the Company has never experienced liquidity problems or conditions that potentially posed a risk to the Company. If there is a possibility, then the Company has had a number of efforts to anticipate such as the availability of Statutory Reserves, Secondary Reserves, as well as good penetration on the interbank market. Operational Risk Operational risk arises from insufficiency and/or malfunction of internal process, human error, system failure, or external problems affecting the operations of the Company. To minimize operational risk, the Company enhances its control function in transaction processing by adopting procedures which will guarantee an on-time transaction settlement, adjusting the currently used accounting methods to conform with prevailing standards, maintaining documents and files in order, protecting access to assets, data and those assets in custody of the Company, through usage of passwords, and adoption of “Know your customer principles”. To reduce the operational risks from human resource sector, the Company has intensified trainings and socializations within, to enhance the supportiveness and awareness of every individual in performing their tasks and responsibilities.

Applying Good Corporate Governance and monitoring the operational activities, the Company has implemented the following: • Increased the Functions of Internal Audit Work Unity by conducting periodic trainings to

improve quality of assigned internal auditors who will be assigned in branches regularly to audit the bank’s operational activities.


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• Applied compliance customs at organizational level by communicating information on Bank Regulations to all employees.

• Applied centralized process to coordinate and apply the “Know Your Customer Procedures” by building reporting system and monitoring based on customer transactions risks.

Legal Risk Legal risk arises from weaknesses in legal aspect, which is caused by, among others, claims, lack of supporting regulations or laws, and deficiencies in agreements engaged by the Company. To manage legal risk, the Company has a Corporate Legal Department which has the responsibility of monitoring or mitigating possible legal risks, through sufficient administration of legal documents, applying analytical procedures on legal aspects of new products and activities, ensuring that transactions carried out have complied with the legal requirements, and whenever necessary, obtaining legal advice of or consulting a public legal advisor. Strategic Risk Strategic risk arises from insufficient determination and implementation of the Company’s strategies, incorrect business decision, or irresponsive to external changes. Work plans and strategic plans are communicated to the officials and employees to monitor the progress and realization of budget. Compliance Risk Compliance risk is a risk caused by non-compliance of the Company in adopting rules and regulations such as minimum Capital Adequacy Ratio (CAR), Quality of Earning Assets, Allowance for Possible Losses on Earning Assets, Legal Lending Limit, Net Open Position (NOP), and others. To manage compliance risk, the Company calculates its materiality against the prevailing internal policies and procedures, and best practices and business ethics standard, including claims and complaints from customers. Reputation Risk Reputation risk arises from negative publication due to the Company’s activity or negative perception on the Company. To control reputation risk, the Company improved its quality of service to the customers in relation with the prevailing regulations regarding customer’s protection, including the implementation of effective strategic medium to anticipate possibility of creating negative issues. The Company has periodically conducted risk assessment of the eight risks as explained above as required per Bank Indonesia regulation. The Company’s risks assessment is performed through self-assessment process by making a risk profile which consists of risks inherent to the bank industry as well as the corresponding controls to address those risks. The Company’s profile assessment results are submitted to the Director of Risk Management Committee and immediately to Bank Indonesia on a quarterly basis. The result of the assessment on January 21, 2011 showed that the risk of the overall business of the Company as of December 31, 2010 is low with low inherent risk exposures and risk control system quality is satisfactory. The result of the assessment profile was submitted also to the Risk Oversight Committee.


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41. Capital Management The calculation of Capital Adequacy Ratio (CAR) is in accordance with Bank Indonesia Regulation No. 10/15/PBI/2008 dated September 24, 2008. Under these provisions, the Company is required to provide minimum capital of 8% of risk weighted assets, which consists of risk weighted assets for Credit, Market and Operational Risk based on predetermined criteria. The Company is required to take into consideration market risk as stipulated in Bank Indonesia Regulation. 9/13/PBI/2007 dated November 1, 2007, since the Company has a total assets of Rp 10,000,000,000,000 (ten trillion rupiah) or more. The calculation is performed using the standard method in accordance with. The calculation of Operational Risk for CAR purpose’s, is based the basic indicator approach in accordance to Circular Letter No. BI. 11/3/DPNP dated January 27, 2009. Effective January 1, 2011, the operational risk capital charges is based on 15% of average gross income over the last three years. The Company’s CAR as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008 are 15.56%, 14.09%, 14.92%, 13.95% and 12.70%, respectively. CAR as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008 has been calculated in accordance with Bank Indonesia Regulation. The calculation of CAR as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008 is as follows:


I. Capital Stock ComponentA. Total core capital 1,272,901 660,676 912,105 597,617 462,048B. Suplementary capital 72,239 64,339 62,019 51,111 44,294

II. Total core and suplementary capital (A+B) 1,345,140 725,015 974,124 648,728 506,342

III.Risk Weighted AssetsCredit risk after considering specific risk 8,647,105 5,147,095 6,529,888 4,648,915 3,987,474 Market risk 73,171 8,583 54,357 38,022 15,230 Operational risk 749,015 322,267 322,267 - -

Total risk weight assets for credit,market and operational risk 9,469,291 5,477,945 6,906,512 4,686,937 4,002,704

IV Capital adequacy ratio (CAR)CAR with credit risk 15.56% 14.09% 14.92% 13.95% 12.70%CAR with credit and market risk 15.43% 14.06% 14.79% 13.84% 12.65%CAR with credit and operational risk 14.32% 13.26% 14.22% N/A N/ACAR with credit, operational and market risk 14.21% 13.24% 14.10% N/A N/A

V. Minimum Capital Adequacy Ratio 8% 8% 8% 8% 8%

* TExcludes deferred taxes



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42. Other Information a. The ratios of productive assets to total productive assets as of September 30, 2011 and 2010,

and December 31, 2010, 2009 and 2008 are 2.09%, 1.55%, 1.53%, 2.94% and 1.15%, respectively.

b. The ratio of Non-Performing Loans (NPL) (at gross) to total loans as of September 30, 2011 and

2010, and December 31, 2010, 2009 and 2008 is 0.95%, 2.04%, 1.26%, 2.17% and 1.99%, respectively, while the ratio of net NPL to total loans is 0.88%, 1.58%, 1.11%, 1.65% and 1.72% as of September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008, respectively.

c. The ratio of loans to deposit ratio (LDR) on September 30, 2011 and 2010, and December 31,

2010, 2009 and 2008 is 66.99%, 71.48%, 73.64%, 79.01% and 81.16%, respectively. d. Return on assets (ROA) for nine-month periods ended September 30, 2011 and 2010, and for

the years ended December 31, 2010, 2009 and 2008 is 1.12%, 1.38%, 1.44%, 0.93% and 0.34%, respectively.

e. Return on Equity (ROE) for nine-month periods ended September 30, 2011 and 2010, and for

the years ended December 31, 2010, 2009 and 2008 is 10.63%, 15.33%, 15.34 %, 8.46% and 3.85%, respectively.

f. Know Your Customer Principles

Within the frameworks of the adoption of “Know Your Customer Principles” and in conformity with Law No. 15 of 2002 dated April 17, 2002 which has been amended by Law No. 25 of 2003 dated October 13, 2003, regarding “Money Laundering Act”, Bank Indonesia issued Bank Indonesia Regulation No. 3/10/PBI/2001 dated June 18, 2001, regarding “Application of Know Your Customer Principles” which have been amended twice, and the latest amendment was based on Bank Indonesia Regulation No. 5/21/PBI/2003 dated October 17, 2003. Based on the regulation, to adopt the “Know Your Customer Principles”, the Company is required to have written policies of accepting and identifying its customers and to apply those policies in its operating activities, to monitor the customers’ accounts and transactions, to identify and to apply risk management of know your customer principles, and to report to Bank Indonesia within 7 days after being detected by the Company, any suspicious transactions that occurred. The Company is required to have a sufficient information system to ensure effective adoption.

The Company’s Directors are responsible for the implementation of the above matters. The Company has established a special task force and has appointed officers who report directly to the Compliance Director, in accordance with the regulation’s requirement. Currently, the Company’s management is still in the process of making simultaneous adjustments and improvements of the “Know Your Customer Principles”.

g. Government Guarantee on Obligations of Private Banks

Since 2005, the Government guarantee program has been carried out by the Deposit Guarantor Agency.

The Deposit Guarantor Agency will settle the qualified guaranteed claims based on results of reconciliation and/or verification procedures in accordance with prevailing Deposit Guarantor Agency Regulations.


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43. Other Information a. The Company obtained its license to conduct business under sharia principles based on the

Decree from Deputy Governor of Bank Indonesia No.11/13/Kep.DpG/2009 dated October 27, 2009.

In accordance with BI Letter No.10/57/DpG/DPbS dated May 27, 2008 regarding "Uniformity of Names of Products and Services under Islamic Banking", starting in September 2008, all islamic products and services under Islamic banking should become homogenized Islamic banking (iB).

Financial information of sharia units as of September 30, 2011 and 2010, and December 31, 2010 and 2009, are as follows:

2011 2010(Unaudited) (Unaudited) 2010 2009Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

AssetsCash 808 897 736 47Demand deposits with Bank Indonesia 44,061 2,783 8,806 -Placements with other sharia

banks - net 9,900 1,980 90,000 90,620Securities - third parties 344,332 16,170 101,606 1,980iB receivable - net 465,977 87,220 145,493 3,743Prepaid expenses 21 33 33 -Property, plant and equipment - net 783 734 799 59Ijarah assets - net 101,842 253,212 219,159 -Other assets - net 31,688 41 2,410 32

Total 999,412 363,070 569,042 96,481

Liabilities and EquityiB deposit 859,543 69,906 206,324 215 Deposits from other bank - 20,000 63,000 -Tax payable 988 66 170 9 Other liabilities 100,906 262,798 282,267 97,116 Unrealized gain on increase in

fair value of securities - - 586 -Retained earnings (losses) 37,975 10,300 16,695 (859)

Total 999,412 363,070 569,042 96,481


2011 2010(Unaudited) (Unaudited) 2010 2009Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Profit and lossOperating income 60,784 16,696 31,750 553 Profit sharing 30,707 1,464 4,839 1

Income after profit sharing 30,077 15,232 26,911 552

Other revenues 48 70 79 -Other expenses (8,846) (4,142) (9,436) (1,411)

Other operating expenses - net (8,798) (4,072) (9,357) (1,411)

Income (loss) from operations 21,279 11,160 17,554 (859)



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44. Prospective Accounting Pronouncements

The Indonesian Institute of Accountants has issued the following Revised Financial Accounting Standards (PSAK) and Interpretations (ISAK). These standards will be applicable to financial statements with annual period begin on or before January 1, 2012 as follows:

Periods beginning on or after January 1, 2012

PSAK

1. PSAK 10 (Revised 2010), The Effects of Changes in Foreign Exchange Rates 2. PSAK 18 (Revised 2010), Accounting and Reporting by Retirement Benefit Plans 3. PSAK 24 (Revised 2010), Employee Benefits 4. PSAK 28 (Revised 2010), Accounting for Loss Insurance 5. PSAK 33 (Revised 2011), Accounting of Land Stripping Activities and Environmental

Management in General Mining 6. PSAK 34 (Revised 2010), Construction Contracts 7. PSAK 36 (Revised 2010), Accounting for Life Insurance 8. PSAK 45 (Revised 2011), Financial Reporting for Non-profit Organization 9. PSAK 46 (Revised 2010), Accounting for Income Taxes 10. PSAK 50 (Revised 2010), Financial Instruments: Presentation 11. PSAK 53 (Revised 2010), Share Based Payment 12. PSAK 56 (Revised 2011), Earnings per Share 13. PSAK 60, Financial Instruments: Disclosures 14. PSAK 61, Accounting of Government Grants and Disclosure of Government Assistance 15. PSAK 62, Insurance Contract 16. PSAK 63,Financial Reporting in Hyperinflationary Economies 17. PSAK 64, Exploration for and Evaluation of Mineral Resources ISAK

1. ISAK 13 (2010), Hedges of a Net Investment in a Foreign Operation 2. ISAK 15, PSAK 24 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements

and Their Interaction 3. ISAK 16, Service Concession Agreement 4. ISAK 18, Government Assistance - No Specific Relation with Operating Activity 5. ISAK 19, Applying the Restatement Approach under PSAK 63: Financial Reporting in

Hyperinflationary Economies 6. ISAK 20, Income Taxes - Changes in the Tax Status of an Entity or its Shareholders 7. ISAK 22, Service Concession Arrangements: Disclosures 8. ISAK 23, Operating Leases-Incentives 9. ISAK 24, Evaluating the Substance of Transactions Involving the Legal Form of a Lease

PPSAK

1. PPSAK 8: Withdrawal of IAS 27: Accounting for Cooperatives 2. PPSAK 10, Withdrawal of IAS 51: Accounting Quasi Reorganization 3. PPSAK 11, Withdrawal IAS 39: Accounting for Operation Cooperation

The Company is still evaluating the effects of these revised PSAKs, PPSAKs and ISAKs and have not yet determined the related effects on the financial statements.

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