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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 Position September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008 September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

Notes

Desember 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

ASSETS Cash Demand deposits with Bank Indonesia

2c,2f,34,35,40 2c,2f,2g,4,34,35,40

579,508

306,716

269,274

199,311

141,250

1,362,218

1,302,748

1,067,918

854,850

365,516

847 68,132 68,979

171,742 128,927 300,669

277 86,295 86,572

436 88,148 (886) 87,698

636 110,539 (1,112) 110,063

422,061 (100) 421,961

379,884 (20) 379,864

706,189 706,189

276,037 (2,760) 273,277

85,857 (859) 84,998

1,085,058 (38) 1,085,020

1,472,091 1,472,091

942,744 (1,107) 941,637

783,055 (145) 782,910

Demand deposits with other banks Related parties Third parties Allowance for impairment losses Net

2c,2f,5,34,35,40 2d,32

Placements with other banks Third parties Allowance for impairment losses Net

2c,2f,2h,6,34,35,40

Securities - third parties Allowance for impairment losses Net

2c,2f,7,34,35,40 2j

3,438,252 (20) 3,438,232

2c,2f,8,34,35,40

40,585 (262) 40,323

Securities purchased under agreements to resell - third party Unamortized interest received in advance Net Loans Related parties Third parties Total Allowance for impairment losses Net

2j

2j

2c,2f,2i,9,34,35,40 2d,32

-

1,436,003 7,727,712 9,163,715 (97,226) 9,066,489

2j

858,316 5,346,186 6,204,502 (141,867) 6,062,635

75,221 (283) 74,938

10,060 (42) 10,018

794,940 6,216,856 7,011,796 (77,638) 6,934,158

741,894 4,671,970 5,413,864 (90,889) 5,322,975

-

83,408 4,198,075 4,281,483 (52,704) 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 Cost Accumulated depreciation Net

2k,12,28,29 399,712 (86,590) 313,122

286,722 (60,610) 226,112

294,339 (66,362) 227,977

261,945 (44,421) 217,524

187,788 (26,007) 161,781

Ijarah assets - net Cost Accumulated depreciation Net

2l,13 166,948 (65,107) 101,841

275,079 (21,866) 253,213

275,370 (56,212) 219,158

144,091

60,626

80,451

46,687

120,176

15,668,075

10,073,620

11,232,179

8,036,015

6,064,626

Other assets - net

2c,2d,2f,2m,14,30,32,34,35,40

TOTAL ASSETS

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

-3-

-

-

PT BANK SINARMAS Tbk Statements of Financial Position September 30, 2011 and 2010, and December 31, 2010, 2009 and 2008 September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

Notes

Desember 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

LIABILITIES AND EQUITY Liabilities Liabilities immediately payable Deposits Related parties Third parties Total Deposits from other banks Related parties Third parties Total Securities Sold under Agreements to Repurchase - third party Unamortized interest Net Taxes payable Securities issued Estimated losses on commitments and contingencies Accrued interest Deferred tax liabilities - net Defined-benefit post-employment reserve Other liabilities

2c,2d,2f,15,32,34,35,40 2c,2f,2p,16,34,35,40 2d,32

2c,2f,2p,17,34,35,40 2d,32

2f,18,35,40

Unrealized loss on decrease in fair value of securities - net

59,892

46,739

65,362

59,213

5,478,037 8,352,950 13,830,987

4,557,149 4,477,078 9,034,227

4,443,285 5,375,929 9,819,214

2,984,945 3,847,477 6,832,422

1,689,451 3,585,750 5,275,201

328,108 328,108

14,101 229,841 243,942

14,250 352,603 366,853

14,891 223,735 238,626

80,045 80,045

259,061 (633) 258,428

170,042 (283) 169,759

-

-

-

2c,2v,19,30,34 2f,2r,35,41

19,614 886

19,056 1,635

25,208 1,616

19,227 2,626

12,242 5,431

2c,2j,2t,20,33,34 2c,2d,2f,2s,21,32,34,35,40 2v,30 2x,36 2c,2f,22,34,35,40

4,160 36,471 16,738 14,314 17,069

6,610 17,958 6,261 7,207 25,149

3,537 24,564 14,016 8,324 10,614

6,763 15,657 9,866 4,735 10,874

2,561 19,762 7,133 2,840 12,776

14,411,236

9,421,937

10,320,685

7,464,586

5,646,963

23,24 2q,23

907,887 165,240

568,050 -

728,050 75,322

525,000 -

425,000

37

3,500 217,586

3,000 119,722

3,000 144,694

2,500 86,001

2,000 37,735

2f,7

(37,374)

(39,089)

(39,572)

(42,072)

(47,072)

1,256,839

651,683

911,494

571,429

417,663

15,668,075

10,073,620

11,232,179

8,036,015

6,064,626

Total Liabilities Equity Capital Stock Authorized 20,000,000,000 shares at Rp 100 par value per share in September 30, 2011 and 2010, and December 31, 2010 4,000,000 shares at Rp 500,000 par value per share in December 31, 2009 1,000,000 shares at Rp 500,000 par value per share in December 31, 2008 Issued and paid-up 9,078,869,400 shares in September 30, 2011 5,680,500,000 shares in September 30, 2010 7,280,500,000 shares in December 31, 2010 1,050,000 shares in December 31, 2009 850,000 shares in December 31, 2008 Additional paid-in capital Retained earnings Appropriated Unappropriated

142,889

Total Equity TOTAL LIABILITIES AND EQUITY

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

-4-

PT BANK SINARMAS Tbk Statements of Comprehensive Income For the Nine - Month Periods Ended September 30, 2011 and 2010 and for the Years Ended December 31, 2010, 2009 and 2008

Notes

Interest Revenues and Profit Sharing Interest Expense and Profit Sharing

2l,2s,13,25 2s,26

2008 Rp '000,000

782,390 470,357

601,035 425,759

369,720

323,457

418,456

312,033

175,276

2t 2c

50,771 7,745 2,715

47,404 1,647 1,295

61,667 2,373 9,907

55,381 9,988 1,142

35,837 9,270 606

20

-

2u,14 28

-

1,382

2d,2x,27,32,36 2k,12 2f,2j,5,6,7,8,9

-

495

-

3,190

-

467

-

-

713

3,403

245 448

432,785

374,516

499,491

379,704

224,847

178,892 111,496 20,282 19,234

128,690 80,089 16,351 49,867

180,734 103,905 22,103 48,091

148,324 72,534 18,747 60,473

118,354 59,532 13,558 13,057

20

648

2u,14

249

-

2,477

452

440

-

4,299 33

Total Operating Expenses

331,134

INCOME BEFORE TAX

101,651

29

-

10 2,593

-

-

1,381

-

3,679

4,530

426 279

278,040

358,545

308,907

205,206

96,476

140,946

70,797

19,641

25,537 2,722 28,259

23,247 (3,605) 19,642

34,990 4,150 39,140

19,298 2,733 22,031

-

73,392

76,834

101,806

48,766

12,851

2v,30

NET INCOME OTHER COMPREHENSIVE INCOME Gain (loss) on change in fair value of available for sale securities - net TOTAL COMPREHENSIVE INCOME EARNINGS PER SHARE (in full Rupiah) Basic

2009 Rp '000,000

916,108 497,652

333

TAX EXPENSE Current Deferred

2010 Rp '000,000

674,286 350,829

Total Operating Revenues Other Operating Expenses General and administrative expenses Personnel expenses Depreciation - premises and equipment Impairment losses on financial assets Estimated losses on commitments and contingencies Provision for possible losses on non-earning assets Loss on decrease in fair value of trading securities - net Other expenses

December 31 (12 months)

941,850 572,130

Interest Revenues - Net Other Operating Revenues Fees and commissions other than loans Gain on foreign exchange - net Gain on sale of trading securities - net Gain on increase in fair value of trading securities - net Reversal of estimated losses on commitments and contingencies Reversal of allowance for impairment losses of non - productive assets Other income

September 30 (9 months) 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

6,790 6,790

2,198

2,983

2,500

5,000

(14,314)

75,590

79,817

104,306

53,766

(1,463)

12.94

17.62

2w,31 11.08

Diluted

10.84

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

-5-

-

17.40

8.72 -

3.25 -

PT BANK SINARMAS Tbk Statements of Changes in Equity For the Years Ended December 31, 2010, 2009 and 2008

Notes

Balance as of January 1, 2008 Changes in equity in 2008 Additional issuance of shares of stock Unrealized loss on decrease in fair value of available for sale securities Increase in general reserve Net income for the year

23 2f,7 37

Balance as of December 31, 2008 Changes in equity in 2009 Additional issuance of shares of stock Unrealized gain on increase in fair value of available for sale securities Increase in general reserve Net income for the year

23 2f,7 37

Balance as of December 31, 2009 Balance as of January 1, 2010 Impact of initial adoption of PSAK 50 and PSAK 55

2f

Balance as of January 1, 2010, after the impact of initial adoption of PSAK 50 and PSAK 55 Changes in equity in 2010 Capitalization of retained earnings to capital stock Unrealized gain on increase in fair value of available for sale securities Increase in general reserve Initial public offering of shares Shares issuance costs Net income for the year

23 37 23 2q, 23

Balance as of December 31, 2010

Additional Paid In Capital - Net Rp '000,000

Capital Stock Rp '000,000 275,000

-

150,000 -

-

425,000

-

100,000 -

-

525,000

-

525,000 -

-

525,000

-

43,050 160,000 -

-

728,050

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

-6-

Retained Earnings Appropriated Unappropriated Rp '000,000 Rp '000,000 1,500 -

25,384 -

500

2,000

500

2,500

86,001

2,500

86,001 437

2,500

80,000 (4,678)

75,322

(43,050)

12,851 (47,072)

417,663

5,000

100,000 5,000 48,766

(42,072)

571,429

(42,072)

571,429 437

(42,072)

571,866

-

2,500

(500) 101,806

3,000

150,000 (14,314)

-

-

-

(14,314)

-

86,438

500

269,126

(500) 48,766

-

(32,758)

-

37,735

-

Total Equity Rp '000,000

(500) 12,851

-

-

Unrealized loss on Decrease in Fair Value of Securities Rp '000,000

144,694

-

2,500 240,000 (4,678) 101,806

(39,572)

911,494

PT BANK SINARMAS Tbk Statements of Changes in Equity for the Nine Month Periods Ended September 30, 2011 and 2010

Notes

Balance as of January 1, 2010 Impact of initial adoption of PSAK 50 and PSAK 55

Additional Paid In Capital - Net Rp '000,000

Capital Stock Rp '000,000 525,000 -

-

525,000

-

43,050 -

-

Balance as of September 30, 2010

568,050

-

Balance as of January 1, 2011

728,050

Balance as of January 1, 2010, after the impact of initial adoption of PSAK 50 and PSAK 55 Changes in equity for nine - month period ended September 30, 2010 Capitalization of retained earnings to capital stock Unrealized gain on increase in fair value of available for sale securities Increase in general reserve Net income for the period

Changes in equity for nine - month period ended September 30, 2011 Increase in general reserve Additional issuance of capital stock from conversion of warrants Unrealized gain on increase in fair value of available for sale securities Net income for the period

2f

23 37

37 23

Balance as of September 30, 2011

179,837 907,887

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

-7-

Retained Earnings Appropriated Unappropriated Rp '000,000 Rp '000,000 2,500

86,001 437

2,500 -

(43,050)

165,240

571,429 437

(42,072)

571,866 -

2,983 (500) 76,834

-

2,983 76,834

3,000

119,722

(39,089)

651,683

3,000

144,694

(39,572)

911,494

500 89,918

(42,072)

-

-

-

Total Equity Rp '000,000

-

86,438

500

75,322

Unrealized loss on Decrease in Fair Value of Securities Rp '000,000

-

(500) -

2,198

73,392 3,500

-

217,586

(37,374)

269,755 2,198 73,392 1,256,839

PT BANK SINARMAS Tbk Statements 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

Notes

Interest income, fees and commissions other than loans Other operating income Interest expense and other finance charges Gain on foreign exchange - net General and administration expenses salaries expenses Other operational expenses - net

September 30 (9 months) 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

10,25 28 21,26 28 27,36 27 26,29

Operating cash flow before changes in operating assets and liabilities Decrease (increase) operating assets : Placements with other banks Securities Securities purchased under agreements to resell Loans Prepaid expenses Ijarah assets - net Other assets Increase (decrease) operating liabilities : Liabilities immediately payable Deposits Deposits from other banks Taxes payable Securities issued Securities sold under agreements to repurhase Other liabilities

2009 Rp '000,000

2008 Rp '000,000

932,999 51,223 (560,223) (5,902) (172,902) (111,496) (323)

673,978 47,987 (348,528) 1,647 (126,103) (80,204) (2,593)

912,763 62,071 (488,745) 23,206 (177,697) (103,905) (3,177)

832,834 491 (473,633) 9,988 (146,422) (72,756) (757)

623,658 1,033 (420,209) 9,270 (118,424) (59,750) 834

133,376

166,184

224,516

149,745

36,412

(863,578) 34,615 (2,151,919) (29,007) 117,317 (63,889)

(15,671) 10,018 (790,638) (13,670) (253,213) (11,463)

97 (346,635) (64,920) (1,663,590) (8,070) (219,158) (31,414)

194 (175,509) (10,017) (1,148,363) (8,829) 73,707

97 (24,534) 87,797 (1,230,635) (7,171) (41,202)

15 16 17 19,30

96,151 4,011,773 (38,745) (31,131) (730) 6,455

(5,470) 2,201,805 5,316 (23,418) (991) (258,428) 14,275

(18,623) 2,986,792 128,227 (29,009) (1,010) (258,428) (260)

6,149 1,557,221 158,581 (19,840) (2,805) 88,669 (1,852)

54,358 372,451 (164,889) (1,699) (2,828) 169,759 2,494

1,220,688

1,024,636

698,515

667,051

(749,590)

18 22

12,28,29 12

Net Cash Used in Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from additional issuances of capital stock from conversion of series I warrants Proceeds from initial public offering of shares Share issuance costs Proceeds from additional issuance of shares of stock

2010 Rp '000,000

6 7 8 9 11 13 14

Net cash provided (used in) by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of premises and equipment Acquisitions of premises and equipment

December 31 (12 months)

24 23 23 23

Net cash provided by financing activities

10 (105,447)

190 (24,999)

190 (32,616)

197 (74,320)

395 (94,041)

(105,437)

(24,809)

(32,426)

(74,123)

(93,646)

269,754 -

-

240,000 (4,678) -

100,000

150,000

269,754

-

235,322

100,000

150,000 (693,236)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

1,385,005

999,827

901,411

692,928

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD Effect on foreign exchange rate changes

2,301,226 14,096

1,420,684 (6,217)

1,420,684 (20,869)

727,981 (225)

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD

3,700,327

2,414,294

2,301,226

1,420,684

727,981

579,508 1,362,218 68,979

306,716 1,302,748 300,669

269,274 1,067,918 86,572

199,311 854,850 88,584

141,250 365,516 111,175

422,061

379,787

706,189

275,940

85,565

SUPPLEMENTAL DISCLOSURES Cash and cash equivalents consist of : Cash Demand deposits with Bank Indonesia Demand deposits with other banks Placements with other banks - original maturities of three months or less from the acquisition date Securities Sertifikat Bank Indonesia Bank Indonesia Intervention (excluding with maturity of more than 3 months)

4 5 6 7

26,299

Total cash and cash equivalents NON-CASH TRANSACTIONS Writte-off of loans Capitalization of retained earnings to capital stock Reclassification from unused property, plant and equipment to property, plant and equipment Writte-off of property, plant and equipment

-

-

-

1,241,262

124,374

171,273

1,999

24,475

3,700,327

2,414,294

2,301,226

1,420,684

727,981

216

15,981 -

-

254 14

-

9 23

-

43,050

63,015 43,050

12,14 12

-

-

-

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

-8-

1,421,181 36

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 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.01.1022483.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.

-9-

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

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 Independent Commissioners

: Tjendrawati Widjaja : Wimpie Rianto : Antonius Chandra Satya Napitupulu *)

President Director Vice President Director Operations Director Sharia Business Unit and GA Director Compliance Director Risk Management Director

: : : : : :

Freenyan Liwang Dani Lihardja Hadi Christianto Wijaya Heru Agus Wuryanto Salis Teguh Hartono 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

- 10 -

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

: : : :

Tjendrawati Widjaja Wimpie Rianto Antonius Chandra Satya Napitupulu Freenyan Liwang **)

Credit and Marketing Director Operations Director Sharia Business Unit and GA Director Compliance Director Risk Management Director

: : : : :

Dani Lihardja Hadi Christianto Wijaya Heru Agus Wuryanto Salis Teguh Hartono 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 Independent Commissioners

: Johny Josephus Lumintang : Wimpie Rianto : Antonius Chandra Satya Napitupulu

President Director Operations Director Credit and Marketing Director Human Resources and GA Director Compliance Director

: : : : :

Tjendrawati Widjaja Hadi Christianto Wijaya Dani Lihardja Heru Agus Wuryanto 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: September 30, (9 months) 2011 Audit Committee Chairman Members

Antonius C.S. Napitupulu *) Wimpie Rianto Edwin Hidayat Abdullah Agustinus Antonius Ketut Sanjaya

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2010

Antonius C.S. Napitupulu Wimpie Rianto Edwin Hidayat Abdullah Agustinus Antonius

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 2011 Renumeration and Nomination Committee Chairman Members

Risk Monitoring Committee Chairman Members

Sharia Supervisory Board Chairman Members

Audit Committee Chairman Members

Renumeration and Nomination Committee Chairman Members Risk Monitoring Committee Chairman Members

Sharia Supervisory Board Chairman Members

Antonius C.S. Napitupulu *) Tjendrawati Widjaja Trusto Jati Prakoso

Antonius C.S. Napitupulu Tjendrawati Widjaja Trusto Jati Prakoso

Wimpie Rianto Antonius C.S. Napitupulu *) Agustinus Antonius Edwin Hidayat Abdullah

Wimpie Rianto Antonius C.S. Napitupulu Agustinus Antonius Edwin Hidayat Abdullah

Ali Mustafa Yaqub Ahmadi bin Sukarno

Ali Mustafa Yaqub Ahmadi bin Sukarno

December 31, (12 months) 2009

2010

2010

2008

Antonius C.S. Napitupulu Wimpie Rianto Edwin Hidayat Abdullah Agustinus Antonius

Antonius C.S. Napitupulu Wimpie Rianto Edwin Hidayat Abdullah Agustinus Antonius

Antonius C.S. Napitupulu Wimpie Rianto Edwin Hidayat Abdullah Agustinus Antonius

Antonius C.S. Napitupulu Tjendrawati Widjaja Trusto Jati Prakoso

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

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

Wimpie Rianto Antonius C.S. Napitupulu Agustinus Antonius Edwin Hidayat Abdullah

Wimpie Rianto Antonius C.S. Napitupulu Agustinus Antonius Edwin Hidayat Abdullah

Wimpie Rianto Antonius C.S. Napitupulu Agustinus Antonius Edwin Hidayat Abdullah

Ali Mustafa Yaqub Ahmadi bin Sukarno

Ali Mustafa Yaqub Ahmadi bin Sukarno

-

*) 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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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 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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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 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 January 1, 2011

Statements

of

Financial

Accounting

Standards

Effective

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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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 PSAK Efective beginning on or after January 1, 2011 1. 2. 3. 4. 5. 6. 7. 8. 9.

PSAK 2 (Revised 2009), Statements of Cash Flows PSAK 4 (Revised 2009), Consolidated and Separate Financial Statements PSAK 8 (Revised 2010), Events After the Reporting Period PSAK 12 (Revised 2009), Investments in Joint Ventures PSAK 15 (Revised 2009), Investments in Associates PSAK 19 (Revised 2010), Intangible Assets PSAK 22 (Revisi 2010), Business Combinations PSAK 23 (Revised 2010), Revenues 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. 2. 3. 4. 5. 6. 7.

ISAK 7 (Revised 2009), Consolidation – Special Purpose Entities ISAK 9 (Revised 2009), Changes in Existing Decommissioning, Restoration and Similar Liabilities ISAK 10 (Revised 2009), Customer Loyalty Program ISAK 11 (Revised 2009), Distribution of Non – Cash Assets to Owners ISAK 12 (Revised 2009), Jointly Controlled Entities – Nonmonetary Contributions by Ventures ISAK 14 (Revised 2009), Intangible Assets – Website Cost 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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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 d. Transactions with Related Parties Accounting Policies Effective January 1, 2011 A party is considered to be related to the Company if: 1.

2. 3. 4. 5. 6.

7.

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; The party is an associate of the Company ; The party is a joint venture in which the Company is a venturer; The party is a member of the key management personnel of the Company and/ or its parent; The party is a close member of the family of any individual referred to in (1) or (4); 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 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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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 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 January 1, 2010 Rp'000.000

Transition Adjustments Rp'000.000

As adjusted January 1, 2010 Rp'000.000

Assets Demand deposits with other banks Placements with other banks Securities Loans

87,698 273,277 941,637 5,322,975

Total Assets

6,625,587

437

6,626,024

86,001

437

86,438

Equity Retained earnings Unappropriated

886 2,760 1,107 (4,316)

88,584 276,037 942,744 5,318,659

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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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 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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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 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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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 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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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 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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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 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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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 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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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 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 “passthrough” 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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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 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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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 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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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 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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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 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 nonproductive 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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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 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: Precentage of Allowance Classification

for impairment losses Minimum Minimum Minimum Minimum

Current Special mention Substandard Doubtful Loss

1% 5% 15% 50%

100%

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 Substandard Doubtful Loss

Percentage of Allowance for Possible Losses

Minimum Minimum Minimum -

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1% 15% 50% 100%

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 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 nonrefundable 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 Office equipment Vehicles

20 10 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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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 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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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 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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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 r.

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

s. Recognition of Interest Revenues, Interest Sharing Distribution

Expenses, Sharia Revenues and Revenue

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 nonperforming. 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 nonperforming 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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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 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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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 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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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 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.

- 36 -

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 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.

- 37 -

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 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 September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

Rupiah Foreign currencies (Note 34)

1,119,918 242,300

307,232 995,516

674,609 393,309

266,465 588,385

225,511 140,005

Total

1,362,218

1,302,748

1,067,918

854,850

365,516

- 38 -

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 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: September 30 2011 2010 (Unaudited) (Unaudited) % %

December 31 2010 %

2009 %

2008 %

Minimum liquidity reserve requirement Rupiah Primary reserve Conventional Sharia Secondary reserve LDR reserve Foreign currency Conventional Sharia

8.00 5.00 2.50 1.67

5.00 5.00 2.50 -

8.00 5.00 2.50 -

5.00 2.50 -

5.00 -

8.00 1.00

1.00 1.00

1.00 1.00

1.00 -

1.00 -

Company's liquidity reserve Rupiah Primary reserve Conventional Sharia Secondary reserve LDR reserve Foreign currency Conventional Sharia

9.71 6.24 5.49 1.67

5.03 5.29 9.87 -

8.02 5.06 7.74 -

5.04 4.76 -

5.04 -

8.00 3.44

31.53 -

12.82 4.47

24.12 -

15.67 -

- 39 -

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 5. Demand Deposits with Other Banks September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Related party (Note 32) Foreign currency (Note 34) Bank International Ningbo, China Third Parties Rupiah PT Bank Central Asia Tbk PT Bank Internasional Indonesia Tbk Others Subtotal Foreign currencies (Note 34) PT Bank Mandiri (Persero) Tbk, Indonesia PT Bank Central Asia Tbk, Indonesia Deutsche Bank Trust Company Americas, United States America United Overseas Bank, Singapore Sumitomo Mitsui Banking Corporation, Japan Bank of China, China Standard Chartered Bank, England Wells Fargo Bank, N.A, United States of America Standard Chartered Bank, United States of America OCBC, Singapore PT Bank Mandiri (Persero) Tbk, England DBS Bank, Hong Kong Wells Fargo Bank, N.A, England Deutsche Bank AG, Germany UBS AG, Switzerland Sumitomo Mitsui Banking Corporation, United States of America Bank of China, Australia UBS AG, Singapore ANZ Banking Group Ltd, Australia Standard Chartered Bank, Hong Kong

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

636

847

171,742

277

436

13,247 76 96

6,719 85 56

14,041 68 71

11,183 26

13,419

6,860

14,180

11,209

1,561

12,923 12,586

46,806 42,378

17,798 32,924

5,171 24,304

46,414 44,051

8,228 5,651

4,846

4,730

3,007

-

3,870 2,838 1,799

-

49

198 188

1,547 14

338

1,581 -

335 -

1,681

2,898

1,402

525

2,121

1,350 1,225 731 729 474 372 148

513 1,517 1,879 313 18,071 1,120

1,705 3,153 3,747 532 2,464

20,882 883 3,915 557 3,771 322

10,991 752 1,053 30 -

82 26

1,817

27 -

225 -

5,374 -

469 -

517 911 222

554 454 224

54,713

122,067

72,115

76,939

68,132

128,927

86,295

88,148

110,539

Total Allowance for impairment losses

68,979 -

300,669 -

86,572 -

88,584 (886)

111,175 (1,112)

Net

68,979

300,669

86,572

87,698

110,063

Total - third parties Total

-

-

1,340 1,084

6,647 -

108,978

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.

- 40 -

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 Interest rates per annum of demand deposits with other banks are as follows: September 30 2,011 2010 (Unaudited) (Unaudited) % % Rupiah Foreign currencies

0.85 - 0.90

0.85 - 0.90

December 31 2010 %

2009 %

0.85 - 0.90

2008 %

1.00 0.02

1.00 0.00

The changes in allowance for impairment losses are as follows: September 30, 2011 Foreign Rupiah Currencies Total Rp '000,000 Rp '000,000 Rp '000,000

September 30, 2010 Foreign Rupiah Currencies Total Rp '000,000 Rp '000,000 Rp '000,000

Balance at beginning of the period Adjusment on PSAK 55 (Revised 2006) (Note 2f) Provision (reversal) during the period Exchange rate difference

-

-

-

112

-

-

-

(112) -

-

-

Balance at end of the period

-

-

-

-

-

-

Desember 31, 2010 Foreign Currencies Total Rp '000,000 Rp '000,000

Rupiah Rp '000,000 Balance at beginning of the year Adjusment on PSAK 55 (Revised 2006) (Note 2f) Provision (reversal) during the year Exchange rate difference

112

774

886

(112) -

(774)

(886)

-

-

Balance at end of the year

-

-

-

Desember 31, 2009 Foreign Currencies Total Rp '000.000 Rp '000.000

Rupiah Rp '000.000 16 96 112

1,096

1,112

-

(102) (124)

774

886

886

(774)

(886)

Desember 31, 2008 Foreign Currencies Total Rp '000.000 Rp '000.000

Rupiah Rp '000.000 1 -

(198) (124)

774

505 -

506 -

15

439 152

454 152

16

1,096

1,112

-

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:

Type of Placement Rupiah Call money Time deposits

Terms

1-10 days 3-31 days

Total

September 30, 2011 (Unaudited) Average Interest Third Rate Parties % Rp '000,000 5.35 7.20

180,000 10,000 190,000

- 41 -

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

Type of Placement Foreign currency (Note 34) Call money Deposits on call

September 30, 2011 (Unaudited) Average Interest Third Rate Parties % Rp '000,000

Terms

1-31 days 4 days

0.24 0.05

229,573 2,488

Total

232,061

Total Allowance for impairment losses

422,061 (100)

Net

421,961

Type of Placement Rupiah Time deposits Others

September 30, 2010 (Unaudited) Average Interest Third Rate Parties % Rp '000,000

Terms

30 days 18 years

6.00 6.00

2,000 97

Total

2,097

Foreign currency (Note 34) Call money Time deposits Deposits on call

1 day 30 days 1 day

0.05 1.25 0.05

331,874 35,700 10,213

Total

377,787

Total Allowance for impairment losses

379,884 (20)

Net

379,864

Type of Placement

Terms

Rupiah Time deposits

3-25 days

Total

December 31, 2010 Average Interest Rate % 6.00

Third Parties Rp '000,000 90,000 90,000

- 42 -

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

Type of Placement

Terms

Foreign currency (Note 34) Call money Time deposits Deposits on call

1-31 days 27 days 4 days

December 31, 2010 Average Interest Rate % 0.85 0.90 0.05

Third Parties Rp '000,000 566,039 36,040 14,110

Total

616,189

Total Allowance for impairment losses

706,189 -

Net

706,189

Type of Placement

Terms

Rupiah Time deposits Others

31-33 days 18 years

December 31, 2009 Average Interest Rate % 7.07 6,00

Total

Third Parties Rp '000,000 91,535 97 91,632

Foreign currency (Note 34) Call money Time deposits Deposits on call

1 day 31 days 1 day

0.05 2.05 0.00

145,153 37,580 1,672

Total

184,405

Total Allowance for impairment losses

276,037 (2,760)

Net

273,277

Type of Placement

Terms

Rupiah Others Foreign currency (Note 34) Call money

December 31, 2008 Average Interest Rate %

Third Parties Rp '000,000

18 years

6.00

292

1 day

0.05

85,565

Total Allowance for impairment losses

85,857 (859)

Net

84,998

- 43 -

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 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:

Bank Name Time Deposits PT CIMB Niaga Tbk - Sharia PT Bank Rakyat Indonesia (Persero) Tbk - Sharia PT BPD Jawa Barat dan Banten Tbk - Sharia PT Bank Internasional Indonesia Tbk - Sharia PT Bank Mega Syariah PT Bank Victoria Syariah Total

September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

10,000

-

-

-

-

10,000

2,000 2,000

50,000 25,000 15,000 90,000

48,000 30,000 10,535 3,000 91,535

-

-

-

-

-

90,000

91,535

-

Call Money PT Lembaga Pembiayaan Ekspor Indonesia PT Bank Pan Indonesia Tbk PT Bank Commonwealth Total

70,000 60,000 50,000 180,000

Total

190,000

2,000

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

Bank Name

Call Money Wells Fargo Bank, N.A., United States of America PT Bank Mutiara Tbk Standard Charterd Bank, United States of America PT Lembaga Pembiayaan Ekspor Indonesia Total Time deposit PT Bank Internasional Indonesia Tbk - Sharia Deposits on call UBS AG, Singapore Total

September 30 2011 2010 (Unaudited) (Unaudited) US$ US$

December 31 2010 US$

2009 US$

2008 US$

20,100,000 5,000,000

30,600,000 -

15,400,000 -

15,450,000 -

1,017,531

6,584,710

37,423,433

-

-

10,000,000

-

-

-

-

6,017,531

7,850,000 -

6,584,710

47,423,433

-

4,000,000

4,000,000

4,000,000

-

283,071

1,144,327

1,566,027

177,975

-

6,300,602

11,729,037

52,989,460

4,177,975

-

-

-

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.

- 44 -

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 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:

Types of Placements Rupiah Call Money Time deposits Total Foreign currency (Note 34) Call money Deposits on call Total Total

Types of Placements Rupiah Time deposits - sharia Others Total Foreign currency (Note 34) Call money Time deposits Deposits on call Total Total

Types of Placements Rupiah Time deposits

Up to 1 month Rp '000,000

September 30, 2011 (Unaudited) 3 months 6 months 1 month until until until More than 3 months 6 months 12 months 12 months Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Total Rp '000,000

180,000 10,000

-

-

-

-

180,000 10,000

190,000

-

-

-

-

190,000

229,573 2,488

-

-

-

-

229,573 2,488

232,061

-

-

-

-

232,061

422,061

-

-

-

-

422,061

Up to 1 month Rp '000,000

September 30, 2010 (Unaudited) 3 months 6 months 1 month until until until More than 3 months 6 months 12 months 12 months Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

2,000 -

-

2,000

-

331,874 35,700 10,213

-

377,787

-

379,787

-

Up to 1 month Rp '000,000

1 month until 3 months Rp '000,000

-

Total Rp '000,000

97

-

-

2,000 97

97

-

-

2,097

-

-

-

331,874 35,700 10,213

-

-

-

377,787

-

-

379,884

97

December 31, 2010 3 months 6 months until until 6 months 12 months Rp '000,000 Rp '000,000

More than 12 months Rp '000,000

Total Rp '000,000

90,000

-

-

-

-

90,000

Foreign currency (Note 34) Call money Time deposits Deposits on call

566,039 36,040 14,110

-

-

-

-

566,039 36,040 14,110

Total

706,189

-

-

-

-

706,189

- 45 -

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

Types of Placements

Up to 1 month Rp '000,000

Rupiah Time deposits Others Total Foreign currency (Note 34) Call money Time deposits Deposits on call Total Total

Type of Placements

1 month until 3 months Rp '000,000

58,535 16

33,000 24

58,551

33,024

December 31, 2009 3 months 6 months until until 6 months 12 months Rp '000,000 Rp '000,000 -

-

More than 12 months Rp '000,000

Total Rp '000,000

24

33

-

91,535 97

24

33

-

91,632

145,153 37,580 1,672

-

-

-

-

145,153 37,580 1,672

184,405

-

-

-

-

184,405

242,956

33,024

-

276,037

Up to 1 month Rp '000,000

Rupiah Others

1 month until 3 months Rp '000,000

122

Foreign currency (Note 34) Call money

85,565

Total

85,687

24

33

December 31, 2008 3 months 6 months until until 6 months 12 months Rp '000,000 Rp '000,000

16

24

-

49

16

More than 12 months Rp '000,000

-

Total Rp '000,000

81

292

-

24

49

85,565 81

85,857

The changes in allowance for impairment losses on placements with other banks are as follows: September 30, 2011 (Unaudited) Foreign Rupiah Currency Total Rp '000.000 Rp '000.000 Rp '000.000 Balance at beginning of the period Adjusment on PSAK 55 (revisi 2006) (Note 2f) Provision (reversal) during the period Exchange rate difference

100 -

Balance at end of the period

100

December 31, 2010 Foreign Rupiah Currency Total Rp '000.000 Rp '000.000 Rp '000.000

-

100 -

-

100

December 31, 2009 Foreign Rupiah Currency Total Rp '000.000 Rp '000.000 Rp '000.000

Balance at beginning of the year Adjusment on PSAK 55 (revisi 2006) (Note 2f) Provision (reversal) during the year Exchange rate difference

1,292 (1,292) -

1,468 (1,468) -

2,760 (2,760) -

3 1,289 -

Balance at end of the year

-

-

-

1,292

856

September 30, 2010 (Unaudited) Foreign Rupiah Currency Total Rp '000.000 Rp '000.000 Rp '000.000 1,292 (1,292) 20 20

1,468 (1,468) -

2,760 (2,760) 20 20

December 31, 2008 Foreign Rupiah Currency Total Rp '000.000 Rp '000.000 Rp '000.000

847 (235)

859 2,136 (235)

1,294 (1,291) -

3,128 (2,154) (118)

4,422 (3,445) (118)

1,468

2,760

3

856

859

-

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.

- 46 -

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 7. Securities a. The details of securities by type and purpose of investments are as follows: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Rupiah At fair value through profit and loss Corporate bonds PT Bank Pan Indonesia Tbk PT Indofood Sukses Makmur Tbk Unrealized gain (loss) on increase (decrease) in fair value Fair value Available for sale Government bonds IFR006 IFR005 Fair value Held-to-maturity Bank Indonesia Intervension Unamortized interest Net Certificate of Bank Indonesia Unamortized interest Net Government bonds FR0028 ORI-04 FR0026 FR0038 FR0027 FR0020 FR0031 FR0043 FR0042 FR0034 FR0036 FR0033 FR0023 FR0017 FR0045 FR0018 FR0040 ORI-03 Total Unamortized premium Net

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

30,000 -

-

30,000 -

5,000

5,000

(348) 29,652

-

120 30,120

53 5,053

(460) 4,540

10,790 10,790

11,426 5,380 16,806

-

-

1,996,000 (21,921)

124,400 (26)

171,300 (27)

2,000 (1)

24,500 (25)

1,974,079

124,374

171,273

1,999

24,475

12,352 12,352

26,488 (189)

-

-

-

-

26,299

-

-

-

-

78,860 75,010 71,691 52,104 39,265 32,466 29,653 28,172 27,566 21,642 20,718 20,708 20,322 20,193 17,273 10,255 9,749 575,647 575,647

- 47 -

78,720 75,030 72,154 52,306 39,106 33,438 29,632 28,087 27,512 21,732 20,773 21,149 20,566 20,835 17,255 10,560 9,742 10,007 588,604 588,604

78,746 10,005 72,043 52,256 39,139 33,214 29,635 28,104 27,522 21,711 20,759 21,045 20,509 20,684 17,258 10,489 9,743 75,021 587,883 587,883

80,000 75,000 70,000 50,000 40,000 30,000 30,000 30,000 30,000 20,000 20,000 20,000 20,000 20,000 20,000 10,000 10,000 10,000 585,000 5,654 590,654

80,000 75,000 70,000 50,000 40,000 30,000 30,000 30,000 30,000 20,000 20,000 20,000 20,000 20,000 20,000 10,000 10,000 10,000 585,000 8,616 593,616

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 September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Rupiah Held-to-maturity Corporate bonds PT Excelcomindo Pratama Tbk PT Indomobil Finance Indonesia Sukuk Ijarah Indosat IV 2009 Seri A PT Branta Mulia Tbk Total Unamortized discount Net Total-held-to-maturity Total Rupiah Foreign currency (Note 34) At fair value through profit and loss Mutual fund HPAM Maestro Dollar Corporate bonds Enercoal Resources Pte. Ltd PT Bank Internasional Indonesia Tbk Total fair value through profit and loss

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

26,000 20,000 2,000 48,000 (3,048) 44,952

10,000 10,000 (66) 9,934

25,152 20,000 2,000 47,152 47,152

23,821 20,000 2,000 45,821 45,821

24,138 20,000 2,000 46,138 46,138

2,623,177

758,799

805,294

637,605

628,025

2,665,181

769,589

852,220

642,658

632,565

44,970

-

47,331

-

-

44,970

21,632 21,632

47,331

9,466 9,466

-

Available for sale Republik Indonesia - ROI Loan

18,986

5,116

19,687

-

-

Held-to-maturity Republik Indonesia - ROI Loan

163,863

166,103

167,753

174,652

74,190

43,950 43,950

44,625 17,850 62,475

45,050 18,020 63,070

46,975 18,790 65,765

54,500 21,800 76,300

Credit Linked Notes Merrill Lynch Notes UBS Jersey Notes Total Subordinated bonds PT Bank CIMB Niaga Tbk PT Bank Internasional Indonesia Tbk Total

-

38,354 38,354

Bills receivable

1,476

21,789

209,289

288,721

Total Held-to-maturity Loans and receivable Bills receivable

499,826

Total foreign currency

773,071

315,469

Total Allowance for imparment losses

3,438,252 (20)

1,085,058 (38)

Net

3,438,232

1,085,020

-

-

21,561 27,753 49,314

-

322,030

889

-

552,853

290,620

619,871

-

150,490

-

300,086

150,490

1,472,091 -

942,744 (1,107)

783,055 (145)

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.

- 48 -

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

1 year or less Rp '000,000 Based on contractual maturity Rupiah Bank Indonesia Intervention Certificate of Bank Indonesia Government bonds Corporate bonds Net Foreign currency Republic of Indonesia - ROI Loan Credit Linked Notes Bills receivable

1,974,079 26,299 -

75,010 45,152

1,974,079 26,299 575,647 47,152

120,162

502,637

2,623,177

1,476

-

163,863 43,950 -

163,863 43,950 1,476

1,476

-

207,813

209,289

-

-

Total Rp '000,000

500,637 2,000

2,000,378

Total

September 30, 2011 (Unaudited) More than 1 year More than until 5 years 5 years Rp '000,000 Rp '000,000

Total

2,001,854

120,162

710,450

2,832,466

Based on remaining maturity Rupiah Bank Indonesia Intervention Certificate of Bank Indonesia Government bonds Corporate bonds

1,974,079 26,299 143,439 45,152

143,422 -

288,786 2,000

1,974,079 26,299 575,647 47,152

2,188,969

143,422

290,786

2,623,177

58,176

163,863 43,950 1,476

Total Foreign currency Republic of Indonesia - ROI Loan Credit Linked Notes Bills receivable Total Total

1,476

105,687 43,950 -

1,476

149,637

58,176

209,289

2,190,445

293,059

348,962

2,832,466

- 49 -

-

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

1 year or less Rp '000,000 Based on contractual maturity Rupiah Bank Indonesia Intervention Government bonds Corporate bonds

Foreign currency Republic of Indonesia - ROI Loan Credit Linked Notes Subordinated bonds Bills receivable

Total Based on remaining maturity Rupiah Bank Indonesia Intervention Government bonds Corporate bonds

Total Total

451,605 -

124,374 588,604 45,821

124,374

182,820

451,605

758,799

21,789

-

166,103 62,475 38,354 -

166,103 62,475 38,354 21,789

21,789

-

266,932

288,721

146,163

182,820

718,537

1,047,520

124,374 10,007

292,839 45,821

285,758 -

124,374 588,604 45,821

134,381

338,660

285,758

758,799

59,064

166,103 62,475 38,354 21,789

-

Total Foreign currency Republic of Indonesia - ROI Loan Credit Linked Notes Subordinated bonds Bills receivable

136,999 45,821

-

Total

Total Rp '000,000

124,374 -

Net

September 30, 2010 (Unaudited) More than 1 year More than until 5 years 5 years Rp '000,000 Rp '000,000

-

21,789

107,039 44,619 -

39,645

151,658

97,418

288,721

174,026

490,318

383,176

1,047,520

17,856 -

- 50 -

38,354 -

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

1 year or less Rp '000,000 Based on contractual maturity Rupiah Bank Indonesia Intervention Government bonds Corporate bonds

Foreign currency Republic of Indonesia - ROI Loan Credit Linked Notes Bills receivable

Total Based on remaining maturity Rupiah Bank Indonesia Intervention Government bonds Corporate bonds

Total Total

482,173 2,000

171,273 587,883 46,138

171,273

149,848

484,173

805,294

322,030

-

167,753 63,070 -

167,753 63,070 322,030

322,030

-

230,823

552,853

493,303

149,848

714,996

1,358,147

171,273 10,005

292,143 44,138

285,735 2,000

171,273 587,883 46,138

181,278

336,281

287,735

805,294

59,625 45,050

322,030

108,128 18,020 -

-

167,753 63,070 322,030

322,030

126,148

104,675

552,853

503,308

462,429

392,410

1,358,147

-

Total Foreign currency Republic of Indonesia - ROI Loan Credit Linked Notes Bills receivable

105,710 44,138

-

Total

Total Rp '000,000

171,273 -

Net

December 31, 2010 More than 1 year More than until 5 years 5 years Rp '000,000 Rp '000,000

-

- 51 -

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

1 year or less Rp '000,000 Based on contractual maturity Rupiah Bank Indonesia Intervention Government bonds Corporate bonds

Foreign currency Republic of Indonesia - ROI Loan Credit Linked Notes Subordinated bonds Bills receivable

Total Total

1,999 590,654 44,952

1,999

162,064

473,542

637,605

-

174,652 65,765 49,314

174,652 65,765 889 49,314

-

289,731

290,620

889 889 2,888

162,064

763,273

928,225

1,999

193,411 44,952

397,243 -

1,999 590,654 44,952

1,999

238,363

397,243

637,605

98,057

49,314

174,652 65,765 889 49,314

-

Total Foreign currency Republic of Indonesia - ROI Loan Credit Linked Notes Bills receivable Subordinated bonds

473,542 -

-

Total Based on remaining maturity Rupiah Bank Indonesia Intervention Government bonds Corporate bonds

117,112 44,952

-

Total

Total Rp '000,000

1,999 -

Net

December 31, 2009 More than 1 year More than until 5 years 5 years Rp '000,000 Rp '000,000

-

76,595 65,765 889

-

-

-

889

142,360

147,371

290,620

2,888

380,723

544,614

928,225

- 52 -

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

1 year or less Rp '000,000 Based on contractual maturity Rupiah Bank Indonesia Intervention Government bonds Corporate bonds

Total

Total Total

c.

475,525 -

24,475 593,616 9,934

24,475

128,025

475,525

628,025

-

74,190 76,300

74,190 76,300

-

-

150,490

150,490

24,475

128,025

626,015

778,515

24,475 9,934

196,150 -

397,466 -

24,475 593,616 9,934

34,409

196,150

397,466

628,025

74,190

74,190 76,300

76,300

74,190

150,490

272,450

471,656

778,515

-

Total Foreign currency Republic of Indonesia - ROI Loan Credit Linked Notes

118,091 9,934

-

Total Based on remaining maturity Rupiah Bank Indonesia Intervention Government bonds Corporate bonds

Total Rp '000,000

24,475 -

Net Foreign currency Republic of Indonesia - ROI Loan Credit Linked Notes

December 31, 2008 More than 1 year More than until 5 years 5 years Rp '000,000 Rp '000,000

-

76,300

34,409

-

Interest rates per annum of securities are as follows: September 30 2011 2010 (Unaudited) (Unaudited) % % Rupiah Bank Indonesia certificate Bank Indonesia Intervention Government bonds Corporate bonds Foreign currency Republic of Indonesia - ROI Loan Credit Linked Notes

Wesel Ekspor Subordinated bonds

December 31 2010 %

2009 %

2008 %

6.75 - 6.80 5.25 - 7.25 9.50 - 14.27 10.35 - 17.00

5.5 9.40 - 14.27 10.35 - 17.00

5.5 9.40 - 14.27 10.75 - 17.00

6.00 9.40 - 14.28 10.01 - 17.00

8.75 - 9.25 9.40 - 14.28 10.00 - 13.50

5.87 - 10.37 7.00 1.34 - 2.45 -

5.87 - 10.37 6.75 - 9.35 1.19 - 1.55 7.37

5.87 - 10.37 6.75 - 9.35 1.19 - 1.55 -

6.62 - 10.38 6.75 - 9.35 2.50 7.38 - 7.75

6.62 - 6.87 6.75 - 9.35 -

- 53 -

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 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: September 30 2011 2010 (Unaudited) (Unaudited) PT Bank Pan Indonesia Tbk PT Indofood Sukses Makmur Tbk PT Excelcomindo Pratama Tbk PT Indomobil Finance Indonesia PT Bank Internasional Indonesia Tbk PT Bank CIMB Niaga Tbk Sukuk Ijarah PT Indosat Tbk Merrill Lynch Notes UBS Jersery Notes PT Branta Mulia Tbk

idAAidAAidAidAA+(sy) Baa1 -

December 31

idAAidAAidAidAA+(sy) Aa3 -

2010

2009

2008

idAA idAAidAidAA+(sy) A2 Aa3 -

idAA idA+ idABa1 Ba1 idAA+(sy) Aa3 Aa2 -

idAA+ 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: September 30, 2011 (Unaudited) Foreign Rupiah Currency Total Rp '000,000 Rp '000,000 Rp '000,000 Balance at beginning of the period Adjusment on PSAK 55 (Revised 2006) (Note 2f) Provision during the period Exchange rate difference

-

-

-

-

-

20 -

Balance at end of the period

20

- 54 -

September 30, 2010 (Unaudited) Foreign Rupiah Currency Total Rp '000,000 Rp '000,000 Rp '000,000 500 (500) 20

20

-

20

607 (607) 18

1,107 (1,107) 38 -

18

38

20

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

Rupiah Rp '000,000 Balance at beginning of the year Adjusment on PSAK 55 (Revised 2006) (Note 2f) Provision (reversal) during the year Exchange rate difference

-

Balance at end of the year

-

Desember 31, 2010 Foreign Currency Total Rp '000,000 Rp '000,000

500

607

1,107

(607) -

(1,107) -

-

-

(500)

Rupiah Rp '000,000

Desember 31, 2009 Foreign Currency Total Rp '000,000 Rp '000,000

145 -

-

145

355

500

Rupiah Rp '000,000

-

Desember 31, 2008 Foreign Currency Total Rp '000,000 Rp '000,000

511 -

704 (97)

1,059 (97)

607

1,107

668

1,179

(668) -

(1,034) -

-

145

(366)

145

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:

Type Rupiah Government Bond Subdebt BCA Finance SUN FR45 PT Bank Lampung

Terms

Due date

30 days 30 days 32 days

October 19, 2011 October 28, 2011 October 17, 2011

Total

Type Rupiah Government Bond FR040 Corporate Bonds PT Bank Lampung PT Bank Lampung

19,579 17,190 3,816

109 134 19

19,470 17,056 3,797

40,585

262

40,323

December 31, 2010 Nominal Unearned Carrying value interest income value Rp '000,000 Rp '000,000 Rp '000,000

Terms

Due date

40 days

January 10, 2011

45,889

116

45,773

32 days 31 Days

January 17, 2011 January 20, 2011

9,770 19,562

49 118

9,721 19,444

75,221

283

74,938

Total

Type

September 30, 2011 (Unaudited) Nominal Unearned Carrying value interest income value Rp '000,000 Rp '000,000 Rp '000,000

Terms

Due date

30 days

January 22, 2010

December 31, 2009 Nominal Unearned Carrying value interest income value Rp '000,000 Rp '000,000 Rp '000,000

Foreign currency Government Bonds

ROI 2014 Total

10,060

42

10,018

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.

- 55 -

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 9. Loans a. By Types of Loans September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Related parties (Note 32) Rupiah Fixed loans Overdraft Consumer loans Installment loans Loans to employees Sharia receivables - murabahah Total Allowance for impairment losses Net

2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

306,500 647 1,798 437 46 309,428 (7,516) 301,912

231,557 6,939 1,682 580 67 240,825 (150) 240,675

163,500 331 116 154 164,101 (4) 164,097

80,831 1,398 539 640 83,408 (24) 83,384

1,199,835

548,888

554,115

577,793

-

Total related parties

1,435,952

850,800

794,790

741,890

83,384

Third parties Rupiah Consumer loans Installment loans Fixed loans Factoring Sharia receivables - murabahah Overdraft Investment loans Loans to employees Sharia receivables - qardh Total Allowance for impairment losses Net

2,987,073 1,694,955 1,376,829 605,667 470,654 168,066 56,882 11,045 23 7,371,194 (93,200) 7,277,994

2,042,082 1,218,263 1,040,114 495,667 88,055 128,419 58,350 7,605 5,078,555 (123,355) 4,955,200

2,323,631 1,445,533 1,251,931 592,291 146,895 146,137 59,297 8,165 5,973,880 (75,058) 5,898,822

2,046,713 608,357 985,263 463,237 3,940 122,284 235,665 5,812 4,471,271 (84,228) 4,387,043

1,803,203 484,658 1,246,868 220,701 92,765 62,752 3,396 3,914,343 (44,984) 3,869,359

Foreign currency (Note 34) Installment loans Fixed loans Overdraft Total Allowance for impairment losses Net

254,741 101,777 356,518 (3,975) 352,543

172,508 95,123 267,631 (10,996) 256,635

166,573 76,403 242,976 (2,430) 240,546

59,213 141,486 200,699 (6,657) 194,042

46,530 237,201 1 283,732 (7,696) 276,036

Foreign currency (Note 34) Fixed loans

Total third parties Net

227,164 4,795 3,601 263 333 12 236,168 (51) 236,117

December 31

7,630,537

5,211,835

6,139,368

4,581,085

4,145,395

9,066,489

6,062,635

6,934,158

5,322,975

4,228,779

- 56 -

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 b. By Economic Sectors September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Rupiah Agriculture, hunting and agriculture facilities Mining Manufacturing Electricity, gas and water Construction Trading, restaurant and hotel Transportation, warehousing and communication Business service Social and public services Others

2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

40,285 364,870 246,131 83,722 357,940 1,284,790

20,000 183,209 193,670 51,993 265,518 461,331

58,552 206,320 218,101 22,523 299,012 519,526

39,644 51,223 705,421 62,135 262,377 330,925

70,184 512,712 40,496 337,670 322,882

308,444 1,229,041 233,170 3,458,969

265,172 1,135,093 183,220 2,628,777

298,622 1,284,413 206,423 3,101,213

237,407 840,540 35,033 2,070,667

80,723 877,343 38,547 1,717,194

7,607,362

5,387,983

6,214,705

4,635,372

3,997,751

8,270 76,730 1,202,136 99,321 58,056

67,299 555,668 111,563 14,047

65,753 542,899 108,999 13,724

39,834 584,180 32,882 85,639

43,600 11,672 23,640 95,271

14,720 57,896 39,224 -

25,041 16,674 26,227

24,466 16,291 24,959

35,957 -

99,520 10,029

1,556,353

816,519

797,091

778,492

283,732

Total Allowance for impariment losses

9,163,715 (97,226)

6,204,502 (141,867)

7,011,796 (77,638)

5,413,864 (90,889)

4,281,483 (52,704)

Net

9,066,489

6,062,635

6,934,158

5,322,975

4,228,779

Total Foreign currency (Note 34) Agriculture, hunting and agriculture facilities Mining Manufacturing Construction Trading, restaurant and hotel Transportation, warehousing and communication Business service Social and public services Others Total

c.

December 31

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

- 57 -

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 Based on contractual maturity: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Rupiah 1 year or less More than 1 year until 2 years More than 2 years until 5 years More than 5 years

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

1,869,385 1,274,337 3,074,817 1,388,823

1,145,830 879,900 2,633,670 728,583

1,440,837 1,342,919 2,257,600 1,173,349

1,156,108 593,686 2,044,654 840,924

997,174 659,795 1,585,036 755,746

7,607,362

5,387,983

6,214,705

4,635,372

3,997,751

1,253,914 27,389 176,979 98,071

36,355 575,035 93,567 111,562

607,588 24,931 57,909 106,663

677,594 7,693 93,205 -

208,930 26,746 48,056 -

1,556,353

816,519

797,091

778,492

283,732

Total Allowance for impairment losses

9,163,715 (97,226)

6,204,502 (141,867)

7,011,796 (77,638)

5,413,864 (90,889)

4,281,483 (52,704)

Net

9,066,489

6,062,635

6,934,158

5,322,975

4,228,779

Subtotal Foreign currency (Note 34) 1 year or less More than 1 year until 2 years More than 2 years until 5 years More than 5 years Subtotal

Based on Remaining Period until Maturity: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Rupiah 1 year or less More than 1 year until 2 years More than 2 years until 5 years More than 5 years

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

2,824,527 1,343,419 2,791,923 647,493

2,293,267 660,517 1,816,204 617,995

2,590,571 767,708 2,160,474 695,952

1,820,150 582,591 1,476,659 755,972

1,524,104 394,734 1,346,005 732,908

7,607,362

5,387,983

6,214,705

4,635,372

3,997,751

1,304,449 35,662 118,171 98,071

600,878 48,817 55,261 111,563

586,405 47,696 53,992 108,998

719,279 8,977 50,236 -

242,188 41,544 -

1,556,353

816,519

797,091

778,492

283,732

Total Allowance for impairment losses

9,163,715 (97,226)

6,204,502 (141,867)

7,011,796 (77,638)

5,413,864 (90,889)

4,281,483 (52,704)

Net

9,066,489

6,062,635

6,934,158

5,322,975

4,228,779

Subtotal Foreign currency (Note 34) 1 year or less More than 1 year until 2 years More than 2 years until 5 years More than 5 years Subtotal

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.

- 58 -

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 d. The range of interest rates per annum on loans are as follows: September 30 2011 2010 (Unaudited) (Unaudited) % % Rupiah United States Dollar

6.00 - 33.66 2.70 - 9.00

December 31

6.00 - 22.64 4.25 - 9.50

2010 %

2009 %

2008 %

5.95 - 26.97 4.25 - 9.50

6.00 - 21.00 4.65 - 10.00

9.00 - 21.00 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: December 31, 2009 Types of Loans

Rupiah Overdraft Installment loans Fixed loans Subtotal Allowance for impairment losses Net

Special Mention Rp'000,000

Substandard Rp'000,000

291

-

(3) 288

Current Rp'000,000

291 -

Doubtful Rp'000,000

Loss Rp'000,000

Total Rp'000,000

-

19,000 19,000

4,500 4,500

291 19,000 4,500 23,791

-

-

(1,266)

(4,500)

(5,769)

-

-

17,734

- 59 -

-

18,022

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 December 31, 2008 Types of Loans

Rupiah Overdraft Fixed loans Subtotal

Current Rp'000,000

273 273 (3)

Net

Substandard Rp'000,000

Doubtful Rp'000,000

Loss Rp'000,000

-

-

-

-

-

-

-

-

-

25,000 25,000

-

Allowance for impairment losses

k.

Special Mention Rp'000,000

(144)

270

24,856

-

-

Total Rp'000,000

273 25,000 25,273 (147) 25,126

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: September 30, 2011 (Unaudited) Types of Loans

Current Rp '000.000

Rupiah Related parties (Note 32) Third parties Subtotal

236,168 6,893,813 7,129,981

Foreign currency (Note 34) Related parties (Note 32) Third parties Subtotal

1,199,835 356,518 1,556,353

Total

8,686,334

Allowance for impairment losses Net

(67,958) 8,618,376

Special Mention Rp '000.000

390,312 390,312

390,312

Substandard Rp '000.000

Doubtful Rp '000.000

Loss Rp '000.000

4,728 4,728

6,777 6,777

75,564 75,564

-

-

4,728

(23,251) 367,061

6,777

(23) 4,705

-

(322) 6,455

75,564 (5,672) 69,892

Total Rp '000.000

236,168 7,371,194 7,607,362

1,199,835 356,518 1,556,353 9,163,715 (97,226) 9,066,489

September 30, 2010 (Unaudited) Types of Loans

Current Rp '000,000

Special Mention Rp '000,000

Rupiah Related parties (Note 32) Third parties Subtotal

309,428 4,820,495 5,129,923

130,752 130,752

Foreign currency (Note 34) Related parties (Note 32) Third parties Subtotal

548,888 241,261 790,149

21,896 21,896

5,920,072

152,648

Total Allowance for impairment losses Net

(124,841) 5,795,231

(2,897) 149,751

- 60 -

Substandard Rp '000,000

Doubtful Rp '000,000

Loss Rp '000,000

3,962 3,962

25,301 25,301

98,045 98,045

309,428 5,078,555 5,387,983

-

-

4,474 4,474

548,888 267,631 816,519

3,962

25,301

102,519

6,204,502

(3,568)

(10,526)

21,733

91,993

(35) 3,927

Total Rp '000,000

(141,867) 6,062,635

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 December 31, 2010 Current Rp '000,000

Special Mention Rp '000,000

Substandard Rp '000,000

Rupiah Related parties (Note 32) Third parties Subtotal

240,825 5,591,739 5,832,564

293,793 293,793

21,953 21,953

-

Foreign currency (Note 34) Related parties (Note 32) Third parties Subtotal

554,115 242,976 797,091

;-

-

Types of Loans

Total

6,629,655

Allowance for impairment losses Net

293,793

(58,482)

(8,922)

Doubtful Rp '000,000

Loss Rp '000,000

Total Rp '000,000

65,862 65,862

240,825 5,973,880 6,214,705

533 533

-

554,115 242,976 797,091

21,953

533

65,862

7,011,796

(3,019)

(34)

(7,181)

(77,638)

18,934

499

58,681

6,934,158

6,571,173

284,871

Current Rp '000,000

Special Mention Rp '000,000

Substandard Rp '000,000

Doubtful Rp '000,000

Loss Rp '000,000

Total Rp '000,000

Rupiah Related parties (Note 32) Third parties Subtotal

164,101 3,862,035 4,026,136

496,387 496,387

39,731 39,731

60,770 60,770

12,348 12,348

164,101 4,471,271 4,635,372

Foreign currency (Note 34) Related parties (Note 32) Third parties Subtotal

577,793 196,002 773,795

-

-

4,697 4,697

577,793 200,699 778,492

496,387

39,731

60,770

17,045

5,413,864

(22,819)

(3,029)

(8,287)

(17,045)

(90,889)

473,568

36,702

52,483

2009 Types of Loans

Total

4,799,931

Allowance for possible losses Net

(39,709) 4,760,222

-

-

5,322,975

2008 Special Types of Loans

Rupiah Related parties (Note 32) Third parties Subtotal Foreign currency (Note 34) Third parties Total Allowance for possible losses Net

Current Rp '000,000

83,408

Mention Rp '000,000

Substandard Rp '000,000

Doubtful Rp '000,000

Loss Rp '000,000

-

-

-

-

47,006 47,006

10,489 10,489

7,335 7,335

3,914,343 3,997,751

13,912

-

6,512

283,732

69,856

60,918

10,489

13,847

4,281,483

(1,493)

(2,387)

(27)

(9,179)

(52,704)

68,363

58,531

10,462

4,668

4,228,779

3,779,657 3,863,065

263,308 4,126,373 (39,618) 4,086,755

69,856 69,856

-

- 61 -

Total Rp '000,000

83,408

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 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: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Rupiah Agriculture, hunting and agriculture facilities Manufacturing Construction Trading, restaurant and hotel Transportation, warehousing and communication Business services Social and public services Others

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

511 758 21,786 4,771

12,654 4,573 15,570 4,979

12,511 49 22,342 4,337

22,154 31,842 440

480 3,845 16,594 2,033

12,499 34,193 50 12,501

14,486 71,978 3,068

12,499 33,456 62 3,092

52,118 12 6,283

41,024 854

87,069

127,308

88,348

112,849

64,830

Total Allowance for impairment losses

87,069 (6,017)

4,474 4,474 131,782 (14,129)

88,348 (10,234)

4,697 117,546 (28,361)

20,424 20,424 85,254 (11,593)

Net

81,052

117,653

78,114

89,185

73,661

Subtotal Foreign currency Minning Manufacture Construction

4,697 -

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: September 30, 2011 (Unaudited) Rupiah Rp '000,000 Balance at beginning of the period Individual Collective Adjusment on PSAK 55 Revised 2006) (Note 2b) Recovery Individual Collective Provision during the period Individual Collective Write-off Exchange rate difference Collective Balance at end of the period

September 30, 2010 (Unaudited)

Foreign Currency

Total

Rp '000,000

Rp '000,000

3,581 71,627 -

-

3,581 74,057 -

6,251 9

-

6,251 9

6,757 5,242 (216)

-

93,251

- 62 -

-

Rupiah Rp '000,000

Total

Rp '000,000

Rp '000,000

-

14,192 76,697 4,316

-

-

-

11,241 36,424 (5,343) -

-

(5,570)

6,757 12,357 (216) (5,570)

2,195

11,241 38,568 (5,343) 2,195

3,975

97,226

130,870

10,996

141,866

2,430

7,115 -

9,495 74,737 4,316

Foreign Currency

4,697 1,960

2,144 -

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 December 31, 2010

Balance at beginning of the period Individual Collective Adjusment on PSAK 55 Revised 2006) (Note 2b) Provision during the period Individual Collective Accrual interest on impairment loans Write-off Exchange rate difference collective Balance at end of the period

December 31, 2009

Rupiah Rp '000,000

Foreign Currency

Total

Rp '000,000

9,495 74,737

4,697 1,960

4,316

December 31, 2008

Foreign Currency

Total

Rp '000,000

Rupiah Rp '000,000

Rp '000,000

14,192 76,697

45,008

7,696

-

4,316

-

Foreign Currency

Total

Rp '000,000

Rupiah Rp '000,000

Rp '000,000

Rp '000,000

52,704

26,391

7,577

33,968

-

-

-

-

-

4,942 9,352 (5,150) (22,484) -

38,947 (40,531) (2,643)

4,942 48,299 (5,150) (63,015) (2,643)

42,091 (2,867) -

31,270 (13,114) (19,195)

73,361 (15,981) (19,195)

18,617 -

(1,535) 1,654

17,082 1,654

75,208

2,430

77,638

84,232

6,657

90,889

45,008

7,696

52,704

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: September 30, 2011 (Unaudited) Rupiah Rp '000,000

Foreign Currency Rp '000,000

Total Rp '000,000

September 30, 2010 (Unaudited) Rupiah Rp '000,000

Foreign Currency Rp '000,000

Total Rp '000,000

Beginning balance at beginning period Mutation during the period Write-off Recovery Exchange rate difference

25,598

49,246

74,844

3,114

10,562

13,676

216 (6,260) -

(1,203)

216 (6,260) (1,203)

5,343 -

(1,885)

5,343 (1,885)

Balance at end of the period

19,554

48,043

67,597

8,457

8,677

17,134

December 31, 2010

December 31, 2009

Foreign Currency Rp '000.000

Total Rp '000.000

Foreign Currency Rp '000.000

Rupiah Rp '000.000

Rupiah Rp '000.000

Total Rp '000.000

Beginning balance at beginning period Mutation during the period Write-off Delete Notes Recovery Exchange rate difference

3,114

10,562

13,676

782

22,484 -

40,531 -

63,015 -

2,867 (535)

13,114 (1,513)

15,981 (2,048)

(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

-

-

December 31, 2008 Rupiah Rp '000.000

782

782 -

Foreign Currency Rp '000.000

Total Rp '000.000

-

782

-

782 782

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.

- 63 -

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 10. Interest Receivables September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

Interest from: Loans Securities Placements with other banks

34,916 20,356 932

22,199 22,023 95

26,176 20,904 273

23,063 20,698 247

19,185 17,695 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 September 30 2010 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

Insurance Promotion and operating development Others

39,430 10,915 7,091 5,699 5,168 2,278 4,526

32,038 7,815 4,089 4,039 3,317 402

34,068 4,971 2,930 2,410 1,721

26,420 5,042 3,101 2,361 1,106

17,541 4,783 2,454 1,842 2,581

Total

75,107

51,700

46,100

38,030

29,201

New branches renovation Rental Software maintenance

Premium on Government guarantee

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 Rp '000,000

Changes during the period (9 months) Additions Deductions Reclassification Rp '000,000 Rp '000,000 Rp '000,000

Cos t: Land Buildings Office equipment Vehicles

38,506 56,365 187,482 11,986

10,761 17,475 75,987 1,224

Total

294,339

105,447

- 64 -

(74) (74)

September 30, 2011 Rp '000,000

-

49,267 73,840 263,395 13,210

-

399,712

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

January 1, 2011 Rp '000,000

Changes during the period (9 months) Additions Deductions Reclassification Rp '000,000 Rp '000,000 Rp '000,000

Accumulated depreciation: Buildings Office equipment Vehicles

8,377 47,777 10,208

2,323 16,906 1,053

Total

66,362

20,282

Net Book Value

-

10,700 64,629 11,261

(54)

-

86,590

-

313,122

Changes during the period (9 months) (Unaudited) Additions Deductions Reclassification Rp '000,000 Rp '000,000 Rp '000,000

Cost: Land Buildings Office equipment Vehicles

37,466 53,270 159,269 11,940

Total

261,945

24,999

Accumulated depreciation: Buildings Office equipment Vehicles

5,633 30,409 8,379

2,048 12,759 1,544

Total

44,421

16,351

2,116 22,661 222

-

September 30, 2010 Rp '000,000

(222)

-

37,466 55,386 181,930 11,940

(222)

-

286,722

(162)

-

7,681 43,168 9,761

(162)

-

60,610

-

217,524

January 1, 2010 Rp '000,000

226,112

Changes during the year (12 months) Additions Deductions Reclassification Rp '000,000 Rp '000,000 Rp '000,000

Cost: Land Buildings Office equipment Vehicles

37,466 53,270 159,269 11,940

1,040 3,095 28,213 268

Total

261,945

32,616

Accumulated depreciation: Buildings Office equipment Vehicles

5,633 30,409 8,379

2,744 17,368 1,992

Total

44,421

22,103

Net Book Value

(54)

227,977

January 1, 2010 Rp '000,000

Net Book Value

-

September 30, 2011 Rp '000,000

217,524

-

December 31, 2010 Rp '000,000

(222)

-

38,506 56,365 187,482 11,986

(222)

-

294,339

(162)

-

8,377 47,777 10,208

(162)

-

66,362

-

227,977

- 65 -

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

January 1, 2009 Rp '000,000

Changes during the year (12 months) Additions Deductions Reclassification Rp '000,000 Rp '000,000 Rp '000,000

December 31, 2009 Rp '000,000

Cost: Land Buildings Office equipment Vehicles

33,760 25,247 117,213 11,568

3,495 28,040 42,254 531

(43) (17) (198) (159)

Total

187,788

74,320

(417)

Accumulated depreciation: Buildings Office equipment Vehicles

3,512 16,630 5,865

2,124 13,951 2,672

(3) (172) (158)

-

5,633 30,409 8,379

Total

26,007

18,747

(333)

-

44,421

Net Book Value

254

37,466 53,270 159,269 11,940

254

261,945

-

161,781

January 1, 2008 Rp '000,000

217,524

Changes during the year (12 months) Additions Deductions Reclassification Rp '000,000 Rp '000,000 Rp '000,000

Cost: Land Buildings Office equipment Vehicles

5,748 11,220 68,326 8,857

28,012 14,160 49,031 2,839

Total

94,151

(133) (144) (128)

-

33,760 25,247 117,213 11,568

94,042

(405)

-

187,788

2,535 6,744 3,293

981 9,908 2,670

(4) (22) (98)

-

3,512 16,630 5,865

Total

12,572

13,559

(124)

-

26,007

Net Book Value

81,579

Accumulated depreciation: Buildings Office equipment Vehicles

-

December 31, 2008 Rp '000,000

161,781

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).

- 66 -

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 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.

January 1, 2011 Rp '000,000

Changes during the period (9 months) (Unaudited) Transfer to the lessee at end Additions of contract Rp '000,000 Rp '000,000

Cost: Vehicles Heavy equipment Machine Software Multiservice assets

246,336 23,600 1,785 3,649 -

126 12,700 2,457 746 1,007

Total

275,370

17,036

Accumulated depreciation: Vehicles Heavy equipment Machine Software Multiservice assets

55,379 686 138 9 -

126,195 5,021 420 2,468 249

Total

56,212

134,353

Net Book Value

219,158

(123,182) (2,276) -

September 30, 2011 Rp '000,000

123,280 36,300 4,242 2,119 1,007

(125,458)

166,948

(123,182)

58,392 5,707 558 201 249

(2,276) (125,458)

65,107 101,841

- 67 -

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

January 1, 2010 Rp '000,000

Changes during the period (9 months) (Unaudited) Transfer to the lessee at end Additions of contract September 30, 2010 Rp '000,000 Rp '000,000 Rp '000,000

Cost: Vehicles Heavy equipment Machine

-

265,745 13,600 1,375

Total

-

280,720

Accumulated depreciation: Vehicles Heavy equipment Machine

-

27,438 8 61

Total

-

27,507

Net Book Value

-

(5,641)

260,104 13,600 1,375

(5,641)

275,079

(5,641)

21,797 8 61

(5,641)

21,866

-

-

253,213

January 1, 2010 Rp '000,000

Changes during the year (12 months) Transfer to the lessee at end Additions of contract December 31, 2010 Rp '000,000 Rp '000,000 Rp '000,000

Cost: Vehicles Heavy equipment Machine Software

-

265,741 23,600 1,785 3,649

Total

-

294,775

Accumulated depreciation: Vehicles Heavy equipment Machine Software

-

74,784 686 138 9

Total

-

75,617

Net Book Value

-

(19,405)

246,336 23,600 1,785 3,649

(19,405)

275,370

(19,405)

55,379 686 138 9

(19,405)

56,212

-

-

219,158

- 68 -

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 14. Other Assets September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Advances for purchases of property, plant and equipment Advances for building renovation Foreclosed assets Security deposits Printing materials and stamp duty Transfer checks for collection and clearing Receivables related to joint ATM Advances for official duty Claims in connection with the settlement of Indover Bank Insurance commission receivables Abandoned properties Advances related to initial public offering Receivable from a related party Tax over payment (Notes 29 and 30) Others Subtotal Allowance for possible losses of claims in connection with the settlement of Indover Bank Allowance for impairment losses of non - productive assets Net

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

71,514 33,636 8,961 6,813 6,153 4,607 3,819 3,380

25,000 9,054 4,813 5,548 5,095 3,401 2,152 628

41,358 11,296 3,407 5,554 4,530 10,749 1,692 669

14,966 10,772 1,295 4,832 3,169 651 123

17,172 26,703 415 4,444 4,006 1,090 770

1,122 700 130 5,214

1,040 2,660 130 921

1,778

1,133 1,508 130 145

3,516 2,504 130 7,710 1,089

3,988 2,591 384 39,590 7,710 12,112

146,049

62,220

82,171

50,757

120,975

(1,122)

(1,040)

(1,133)

(3,516)

(836)

(554)

(587)

(554)

144,091

60,626

80,451

46,687

(799) 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: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Beginning balance at beginning of period Addition (reversal)

587 249

Ending balance at end of period

836

554 554

December 31 2010 Rp '000,000

2009 Rp '000,000

554 33

799 (245)

587

554

2008 Rp '000,000 799 799

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.

- 69 -

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 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 September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

Transfer checks for collection and clearing Payables related to joint ATM Loans administration payable Accrued expenses Employees bonus reserve Payable to an insurance company Others

116,190 14,574 5,238 2,971 2,165 229 1,522

30,309 6,430 3,596 5,347 11,910 2,300

28,086 7,566 3,110 3,010 2,750 2,217

51,174 3,793 2,827 2,813 3,216 1,539

45,177 10,033 289 180 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: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

Demand deposits Saving deposits Time deposits

1,555,039 1,929,060 10,346,888

1,681,513 1,243,039 6,109,675

1,867,669 1,371,475 6,580,070

1,097,746 970,389 4,764,287

770,140 594,076 3,910,985

Total

13,830,987

9,034,227

9,819,214

6,832,422

5,275,201

- 70 -

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 a. Demand deposits consist of: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

Conventional Related parties (Note 32) Rupiah Foreign currencies (Note 34) Subtotal

281,379 153,781 435,160

368,382 412,487 780,869

413,566 531,386 944,952

273,673 222,036 495,709

176,753 131,483 308,236

Third parties Rupiah Foreign currencies (Note 34) Subtotal

669,243 427,297 1,096,540

435,343 454,139 889,482

420,561 497,166 917,727

297,752 304,230 601,982

273,817 188,087 461,904

1,531,700

1,670,351

1,862,679

1,097,691

770,140

Sharia Related parties (Note 32) Rupiah Current accounts - mudharabah Current accounts - wadiah Subtotal

13,087 53 13,140

7,508 44 7,552

2,239 2,239

-

Third parties Rupiah Current accounts - mudharabah Current accounts - wadiah Subtotal

2,522 6,331 8,853

896 2,714 3,610

1,750 1,750

-

Foreign currencies (Note 34) Current accounts - mudharabah Current accounts - wadiah Subtotal

1,346 1,346

1,001 1,001

-

Total konvensional

-

3 3

52 52

-

-

Total

10,199

3,610

2,751

52

-

Total sharia

23,339

11,162

4,990

55

-

1,555,039

1,681,513

1,867,669

1,097,746

Total

September 30 2011 2010 (Unaudited) (Unaudited) % % Interest rates per annum on demand deposits Rupiah Foreign currencies

1.00 - 6.00 0.10 - 3.00

1.50 - 5.00 0.15 - 2.25

770,140

December 31 2010 %

2009 %

2008 %

1.50 - 5.00 0.15 - 2.25

1.50 - 5.00 0.15 - 1.25

3.00 - 5.00 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).

- 71 -

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 b. Savings deposit consists of: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

Conventional Rupiah Related parties (Note 32) Tabungan Sinarmas Tabungan Sinarmas Gold Tabunganku Subtotal

1,935 4,350 126 6,411

1,847 3,165 78 5,090

3,340 4,127 110 7,577

1,496 2,658 4,154

16,863 16,863

Third parties Tabungan Sinarmas Tabungan Sinarmas Gold Tabunganku Subtotal

605,931 1,218,491 91,084 1,915,506

436,630 761,564 38,380 1,236,574

437,506 870,215 54,053 1,361,774

324,677 641,498 966,175

577,213 577,213

1,921,917

1,241,664

1,369,351

970,329

594,076

Total Sharia Rupiah Related parties (Note 32) Tabungan Wadiah Tabungan Mudharabah Subtotal

1 63 64

37 54 91

-

2,260 4,746 7,006

626 685 1,311

527 1,506 2,033

-

Total

7,143

1,375

Total

1,929,060

1,243,039

Third parties Tabungan Wadiah Tabungan Mudharabah Subtotal

90 47 137

September 30 2011 2010 (Unaudited) (Unaudited) % % Interest rates per annum on savings deposits Rupiah

0.25 - 6.50

- 72 -

0.25 - 6.50

10 10

-

50 50

-

2,124

60

-

1,371,475

970,389

594,076

December 31 2010 %

2009 %

2008 %

0.25 - 6.50

2.50 - 8.00

4.00 - 9.00

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 c.

Time deposits consist of: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

Conventional Related parties (Note 32) Rupiah Foreign currencies (Note 34) Subtotal

2,532,085 1,819,954 4,352,039

2,023,132 1,712,442 3,735,574

2,143,128 1,263,148 3,406,276

1,254,712 1,230,257 2,484,969

1,116,784 247,568 1,364,352

Third parties Rupiah Foreign currencies (Note 34) Subtotal

4,893,737 272,051 5,165,788

2,112,307 204,425 2,316,732

2,708,981 265,603 2,974,584

2,165,809 113,409 2,279,218

2,389,978 156,655 2,546,633

9,517,827

6,052,306

6,380,860

4,764,187

3,910,985

671,150

28,000

82,150

157,911

29,369

117,060

Total

829,061

57,369

199,210

Total

10,346,888

6,109,675

6,580,070

Total Sharia Mudharabah (sharia) time deposits Related parties (Note 32) Rupiah Third parties Rupiah

100 -

-

100 4,764,287

3,910,985

The details of time deposits based on contractual maturity are as follows: Based on contractual maturity: September 30, 2011 (Unaudited) Related parties Third (Note 32) parties Total Rp '000,000 Rp '000,000 Rp '000,000

September 30, 2010 (Unaudited) Related parties Third (Note 32) parties Total Rp '000,000 Rp '000,000 Rp '000,000

Rupiah Less than 1 month 1 month 3 months 6 months 12 months Subtotal

721,588 2,107,189 121,785 6,932 245,741 3,203,235

311,344 2,255,474 1,603,930 223,441 657,459 5,051,648

1,032,932 4,362,663 1,725,715 230,373 903,200 8,254,883

606,654 987,152 103,481 3,102 350,743 2,051,132

27,301 753,678 962,886 216,261 181,550 2,141,676

633,955 1,740,830 1,066,367 219,363 532,293 4,192,808

Foreign currencies (Note 34) Less than 1 month 1 month 3 months 6 months 12 months Subtotal

232,487 373,582 13,742 308 1,199,835 1,819,954

18,684 174,556 55,111 21,285 2,415 272,051

251,171 548,138 68,853 21,593 1,202,250 2,092,005

266,367 1,217,160 19,141 209,774 1,712,442

95,973 73,003 31,327 4,122 204,425

266,367 1,313,133 92,144 31,327 213,896 1,916,867

5,023,189

5,323,699

10,346,888

3,763,574

2,346,101

6,109,675

Total

- 73 -

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 December 31, 2010 Related parties (Note 32) Rp '000,000

Third parties Rp '000,000

Rupiah Less than 1 month 1 month 3 months 6 months 12 months Subtotal

518,750 1,293,478 137,583 1,602 273,865 2,225,278

Foreign currencies (Note 34) Less than 1 month 1 month 3 months 6 months 12 months Subtotal Total

December 31, 2009

Total Rp '000,000

Related parties (Note 32) Rp '000,000

Third parties Rp '000,000

27,310 1,236,165 1,115,903 194,735 251,928 2,826,041

546,060 2,529,643 1,253,486 196,337 525,793 5,051,319

204,443 805,857 31,284 1,624 211,604 1,254,812

194,976 837,064 19,373 211,735 1,263,148

169,579 65,147 27,873 3,004 265,603

194,976 1,006,643 84,520 27,873 214,739 1,528,751

3,488,426

3,091,644

6,580,070

December 31, 2008

Total Rp '000,000

Related parties (Note 32) Rp '000,000

Third parties Rp '000,000

Total Rp '000,000

28,851 497,791 1,068,088 429,357 141,722 2,165,809

233,294 1,303,648 1,099,372 430,981 353,326 3,420,621

386,361 648,068 3,948 10,677 67,740 1,116,794

29,399 1,421,133 539,299 239,818 160,329 2,389,978

415,760 2,069,201 543,247 250,495 228,069 3,506,772

185,599 798,190 10,992 235,476 1,230,257

77,946 17,130 4,643 13,690 113,409

185,599 876,136 28,122 4,643 249,166 1,343,666

217,728 23,976 5,864 247,568

26,912 117,923 963 2,432 8,425 156,655

244,640 141,899 6,827 2,432 8,425 404,223

2,485,069

2,279,218

4,764,287

1,364,362

2,546,633

3,910,995

Based on remaining maturity: September 30, 2011 (Unaudited) Related parties Third (Note 32) parties Total Rp '000,000 Rp '000,000 Rp '000,000

September 30, 2010 (Unaudited) Related parties Third (Note 32) parties Total Rp '000,000 Rp '000,000 Rp '000,000

Rupiah 1 month or less More than 1 month until 3 months More than 3 months until 6 months More than 6 months until 12 months Subtotal

2,899,238 87,324 1,432 215,241 3,203,235

3,174,801 1,174,416 518,312 184,119 5,051,648

6,074,039 1,261,740 519,744 399,360 8,254,883

1,659,436 143,729 1,102 246,865 2,051,132

1,190,512 715,312 142,600 93,252 2,141,676

2,849,948 859,041 143,702 340,117 4,192,808

Foreign currencies (Note 34) 1 month or less More than 1 month until 3 months More than 3 months until 6 months More than 6 months until 12 months Subtotal

650,019 13,742 308 1,155,885 1,819,954

202,366 54,188 14,393 1,104 272,051

852,385 67,930 14,701 1,156,989 2,092,005

1,529,936 17,357 165,149 1,712,442

106,134 76,411 21,250 630 204,425

1,636,070 93,768 21,250 165,779 1,916,867

Total

5,023,189

5,323,699

10,346,888

3,763,574

2,346,101

6,109,675

Third parties Rp '000,000

Total Rp '000,000

December 31, 2010 Related parties (Note 32) Rp '000,000

Third parties Rp '000,000

Rupiah 1 month or less More than 1 month until 3 months More than 3 months until 6 months More than 6 months until 12 months Subtotal

1,821,627 129,286 1,000 273,365 2,225,278

Foreign currencies (Note 34) 1 month or less More than 1 month until 3 months More than 3 months until 6 months More than 6 months until 12 months Subtotal Total

December 31, 2009

December 31, 2008

Total Rp '000,000

Related parties (Note 32) Rp '000,000

Third parties Rp '000,000

Total Rp '000,000

Related parties (Note 32) Rp '000,000

1,657,476 836,548 160,448 171,569 2,826,041

3,479,103 965,834 161,448 444,934 5,051,319

1,020,928 24,910 2,360 206,614 1,254,812

805,216 947,803 338,587 74,203 2,165,809

1,826,144 972,713 340,947 280,817 3,420,621

1,035,314 13,378 352 67,740 1,116,784

1,637,599 462,005 138,647 151,727 2,389,978

2,672,913 475,383 138,999 219,467 3,506,762

1,013,592 37,821 211,735 1,263,148

188,079 67,589 8,411 1,524 265,603

1,201,671 105,410 8,411 213,259 1,528,751

983,709 11,071 235,477 1,230,257

82,069 13,882 4,389 13,069 113,409

1,065,778 24,953 4,389 248,546 1,343,666

241,704 5,864 247,568

147,885 4,072 2,979 1,719 156,655

389,589 9,936 2,979 1,719 404,223

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

- 74 -

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 September 30 2011 2010 (Unaudited) (Unaudited) % % Interest rates per annum on time deposits Rupiah Foreign currencies

6.25 - 10.00 0.37 - 3.75

December 31

7.00 - 8.50 2.20 - 2.75

2010 %

2009 %

2008 %

6.25 - 9.75 2.50 - 2.75

6.75 - 8.75 2.50 - 3.00

7.75 - 13.00 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: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

Demand deposits Call money Time deposits

124,443 96,690 106,975

71,122 26,000 146,820

98,433 55,000 213,420

78,677 110,000 49,949

45 80,000 -

Total

328,108

243,942

366,853

238,626

80,045

a. Demand deposits consist of: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Related parties (Note 32) Foreign currencies (Note 34)

-

December 31 2010 Rp '000,000

2009 Rp '000,000

14,101

14,250

14,891

-

-

Third parties Rupiah Foreign currencies (Catatan 34)

111,281 13,162

57,021 -

84,183 -

63,786 -

Total

124,443

71,122

98,433

78,677

September 30 2011 2010 (Unaudited) (Unaudited) % % Interest rate per annum Rupiah United States Dollar

1.00 - 6.50 0.15

- 75 -

1.50 - 5.00 0.15

2008 Rp '000,000

45

45

December 31 2010 %

2009 %

2008 %

1.50 - 5.00 0.15

1.50 - 5.50 0.15 - 1.25

3.00 - 5.00 -

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 b. Call money consists of: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

Third parties

Rupiah Foreign currencies (Note 34) Total

Interest rate per annum Rupiah United States Dollar

c.

96,690

26,000 -

55,000 -

110,000 -

80,000 -

96,690

26,000

55,000

110,000

80,000

September 30 2011 2010 (Unaudited) (Unaudited) % %

2010 %

2009 %

2008 %

0.31 - 0.45

6.00 -

6.30 - 9.00 -

5.50 - 10.50 -

6.25 -

December 31

Time deposits are deposits placed by third parties in Rupiah. The details of time deposits based on contractual maturity are as follows: Based on contractual maturity: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

1 month 3 months 6 months 12 months

104,900 2,075

146,428 392 -

213,420 -

16,677 20,972 10,800 1,500

-

Total

106,975

146,820

213,420

49,949

-

Based on remaining maturity: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

1 month or less 1 month until 3 months 3 months until 6 months 6 months until 12 months

104,900 2,075

146,428 392 -

213,420 -

15,677 21,972 10,800 1,500

-

Total

106,975

146,820

213,420

49,949

-

- 76 -

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 Interest rate per annum for time deposits: September 30 2011 2010 (Unaudited) (Unaudited) % % 1 month 3 months 6 months 12 months

7.00 - 7.50 7.25 7.25

6.75 - 8.25 7.00 -

December 31 2010 % 6.50 - 7.25 -

2009 %

2008 %

6.75 - 8.75 7.00 - 8.75 7.00 - 8.75 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: December 31, 2009 Type

Rupiah Government bonds FR0028 FR0026 FR0038 FR0020 FR0023

Term

Due Date

14 days 14 days 14 days 14 days 14 days

January 14, 2010 January 12, 2010 January 14, 2010 January 12, 2010 January 14, 2010

Nominal Value Rp '000.000

Unamortized Interest Rp '000.000

Carrying Value Rp '000.000

81,991 73,671 54,865 34,139 14,395

214 163 143 75 38

81,777 73,508 54,722 34,064 14,357

259,061

633

258,428

Nominal Value Rp '000.000

Unamortized Interest Rp '000.000

Carrying Value Rp '000.000

71,857 48,766 49,419

120 81 82

71,737 48,685 49,337

170,042

283

169,759

Total

December 31, 2008 Type

Rupiah Government bonds FR0024 FR0038 ORI004

Term

Due Date

7 days 7 days 7 days

January 7, 2009 January 7, 2009 January 7, 2009

Total

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.

- 77 -

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 19. Taxes Payable Taxes payable consists of: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Current tax (Note 30) Income tax Article 4 Article 21 Article 23 and 26 Article 25 Total income tax Value Added Tax Total

December 31 2010 Rp '000,000

2009 Rp '000,000

11,463

9,986

461

7,919

13,192 1,907 1,364 2,588 19,051

7,536 1,021 207 2,369 11,133

949 9,916 2,733 13,598

102

4

147

19,614

19,056

25,208

-

2008 Rp '000,000 -

303 7,224 1,714 9,241

1,305 10,007 930 12,242

-

-

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 September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Rupiah Bank guarantees Unused loan facilities Irrevocable letters of credit Subtotal

2,012 1,120 3,132

Foreign currencies (Note 34) Bank guarantees Irrevocable letters of credit Subtotal

839 189 1,028

Total

4,160

- 78 -

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

1,765 4,194 5,959

1,533 1,153 27 2,713

1,596 4,302 5,898

1,728 674 29 2,431

651 651

784 40 824

6,610

3,537

-

865 -

130 -

865

130

6,763

2,561

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 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: September 30, 2011 (Unaudited) Classification

Current Special mention

Rupiah

Total

Rupiah

Foreign Currencies

Total

Rp '000,000

Rp '000,000

Rp '000,000

Rp '000,000

Rp '000,000

Rp '000,000

366,755 592 367,347

112,539 112,539

479,294 592 479,886

315,680 11 315,691

97,820 97,820

413,500 11 413,511

Estimated Losses on commitments and contingencies Net

Classification

Current Special mention

Estimated Losses on Commitments and Contingencies Net

September 30, 2010 (Unaudited)

Foreign Currencies

(3,132)

(1,028)

(4,160)

(5,960)

(650)

(6,610)

364,215

111,511

475,726

309,731

97,170

406,901

December 31, 2010

December 31, 2009

Rupiah

Foreign Currencies

Total

Rupiah

Foreign Currencies

Total

Rupiah

Foreign 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

306,144 306,144

163,442 163,442

469,586 469,586

624,404 2,287 626,691

110,568 110,568

734,972 2,287 737,259

252,910 252,910

13,016 13,016

265,926 265,926

(2,713)

(824)

(5,898)

(865)

(6,763)

(2,431)

(130)

(2,561)

303,431

162,618

620,793

109,703

730,496

250,479

12,886

263,365

(3,537) 466,049

December 31, 2008

The changes in estimated losses on commitments and contingencies are as follows: September 30, 2011 (Unaudited)

Balance at beginning of the period Provision during the period Exchange rate difference

Rupiah

Total

Rupiah

Foreign Currencies

Total

Rp '000,000

Rp '000,000

Rp '000,000

Rp '000,000

Rp '000,000

Rp '000,000

2,714 418

823 230 (25)

3,537 648 (25)

5,898 62

865 378 (593)

6,763 440 (593)

1,028

4,160

5,960

650

6,610

-

3,132

Balance at end of the period

Balance at beginning of the year Provision (reversal) during the year Exchange rate difference Balance at end of the year

September 30, 2010 (Unaudited)

Foreign Currencies

-

December 31, 2010

December 31, 2009

Rupiah

Foreign Currencies

Total

Rupiah

Foreign Currencies

December 31, 2008 Total

Rupiah

Foreign 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

5,898

865

6,763

2,431

130

2,561

4,770

250

5,020

(3,185) -

(5) (36)

(3,190) (36)

3,467 -

832 (97)

4,299 (97)

(2,339) -

(138) 18

(2,477) 18

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.

- 79 -

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 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 September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Deferred income Premium on Government Guarantee (Note 42.g) Security deposits Others Total

9,470

5,079 -

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

4,231

5,593

6,473

2,745 1,185 3,669

761 19,309

1,748 816 3,819

1,077 650 3,554

248 479 5,576

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.

- 80 -

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 23. Capital Stock

Name of Stockholders

September 30, 2011 (Unaudited) Number of Percentage of Total Paid-up Shares Ownership Capital Stock % Rp '000,000

PT Sinar Mas Multiartha Tbk PT Shinta Utama Freenyan Liwang, President Director Public

5,127,408,650 319,758,350 2,750,000 3,628,952,400

56.48 3.52 0.03 39.97

512,741 31,976 275 362,895

Total

9,078,869,400

100.00

907,887

Name of Stockholders

Number of Shares

September 30, 2010 (Unaudited) Percentage of Total Paid-up Ownership Capital Stock

%

Rp '000,000

PT Sinar Mas Multiartha Tbk PT Shinta Utama

5,127,408,650 553,091,350

90.26 9.74

512,741 55,309

Total

5,680,500,000

100.00

568,050

Name of Stockholders

Number of Shares

December 31, 2010 Percentage of Ownership

%

Total Paid-up Capital Stock Rp '000,000

PT Sinar Mas Multiartha Tbk PT Shinta Utama Wimpie Rianto, Independent Commissioner Public

5,127,408,650 553,091,350 650,000 1,599,350,000

70.43 7.60 0.01 21.96

512,741 55,309 65 159,935

Total

7,280,500,000

100.00

728,050

December 31, 2009 Name of Stockholders

Number of Shares

PT Sinar Mas Multiartha Tbk PT Shinta Utama Total

Percentage of Ownership %

Total Paid-up Capital Stock Rp '000,000

948,000 102,000

90.26 9.74

473,883 51,117

1,050,000

100.00

525,000

- 81 -

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 December 31, 2008 Name of Stockholders

Number of Shares

Percentage of Ownership

Total Paid-up Capital Stock

%

Rp '000,000

PT Sinar Mas Multiartha Tbk PT Shinta Utama

748,000 102,000

87.97 12.03

373,883 51,117

Total

850,000

100.00

425,000

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.

b.

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. 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).

- 82 -

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

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:

Numbers of shares issued

Issued and paid-up capital Rp '000,000

Addition paid-in capital 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

1,050,000

525,000

Balance as of December 31, 2009 Split the number of shares through decrease in par value of share from Rp 500,000 per share to Rp 100 per share

5,248,950,000

-

-

-

430,500,000

43,050

-

Balance as of September 30, 2010

5,680,500,000

568,050

-

Additional paid-up capital stock from initial public 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

Capitalization of retained earnings

- 83 -

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 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 September 30 (9 Months) 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Rupiah Loans Securities Placements with other banks Securities purchased under agreements to resell Demand deposits with other banks Subtotal Foreign currencies Loans Securities Placements with other banks Securities purchased under agreements to resell Subtotal Total

December 31 (12 Months) 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

741,430 117,983 12,055

554,708 62,590 5,848

749,544 88,178 6,784

611,620 99,402 6,887

483,878 69,346 1,972

3,422 3,358

1,184 -

2,099 443

1,058 -

4,832 1,380

878,248

624,330

847,048

718,967

561,408

42,678 19,590 1,195

30,023 17,956 1,935

42,792 23,511 2,715

38,837 23,559 758

13,985 11,524 14,095

139

42

42

269

23

63,602

49,956

69,060

63,423

39,627

941,850

674,286

916,108

782,390

601,035

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.

- 84 -

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 26. Interest Expense and Profit Sharing September 30 (9 Months) 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Rupiah Time deposits Savings deposits Demand deposits Premium on Government guarantee (Note 42.g) Deposits from other banks Securities sold under repurchase agreements Securities Jumlah Foreign currencies Time deposits Demand deposits Deposits from other banks Subtotal Total

December 31 (12 Months) 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

437,483 60,611 23,995

230,611 42,892 21,337

333,707 59,512 30,557

347,635 45,497 26,000

314,716 25,857 22,538

19,868 644 4 -

12,126 4,654 1,308 18

17,912 4,158 1,309 -

13,816 4,274 1,294 -

10,048 16,802 7,182 -

542,605

312,946

447,155

438,516

397,143

26,578 2,938 9 29,525

31,947 5,936 37,883

42,536 7,961 50,497

26,834 5,006 1 31,841

24,059 4,505 52 28,616

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 September 30 (9 Months) 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 General Communications Repairs and maintenance Printing and stationery Transportation Building rent Promotions Education and training Post-employment benefit expense (Note 36) Travel Electricity and water Insurance Professional fees Total

December 31 (12 Months) 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

54,265 22,871 18,243 15,268 14,997 12,220 11,447 8,420

31,961 18,617 17,519 13,121 14,300 11,225 7,373 3,415

44,091 25,409 24,065 18,589 19,608 15,332 11,017 6,052

35,203 21,172 20,302 13,786 13,809 14,535 10,774 4,989

24,603 18,794 10,170 10,756 9,182 8,824 20,962 5,010

6,933 5,605 4,409 3,323 891

2,588 2,270 4,359 1,667 275

3,989 3,751 6,000 2,339 492

2,006 3,172 5,099 1,879 1,598

628 3,384 4,114 1,360 567

178,892

128,690

180,734

148,324

118,354

- 85 -

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

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 September 30 (9 Months) 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Recoveries of receivables from Bank Indover (Note 14) Gain on sale of premises and equipment (Note 12) Others

-

-

-

Total

December 31 (12 Months) 2010 Rp '000,000

2,383

-

2009 Rp '000,000

2008 Rp '000,000

-

-

452

713

130 890

127 321

114 1,267

452

713

3,403

448

1,381

29. Other Expenses September 30 (9 Months) 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Loss on sale of premises and equipment (Note 12) Excess of claims of income tax under article 25 for the year 2008 (Note 30) Provision for possible losses of receivable related to Indover Bank (Note 14) Others Total

10 -

2,215

-

-

December 31 (12 Months) 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

-

-

-

-

-

2,215

323

378

1,464

3,516 1,014

333

2,593

3,679

4,530

279 279

30. Income Tax

a. Tax expense of the Company consists of the following: September 30 (9 Months) 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 (12 Months) 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

Current tax Deferred tax

25,537 2,722

23,247 3,605

34,990 4,150

19,298 2,733

6,790

Total

28,259

26,852

39,140

22,031

6,790

- 86 -

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

b. Current Tax A reconcilliation between income before tax per statements of comprehensive income and taxable income is as follows: September 30 (9 Months) 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Income before tax per statements of comprehensive income

101,651

Temporary differences: Defined post-employment benefits - net Impairment losses (reversal of allowance) on earning assets - net Adjusment related to application of PSAK 50 and PSAK 55 Depreciation of premises and equipment Net Permanent differences: Benefits-in-kind Others Total Taxable Income (fiscal loss)

5,990

981 -

(279)

3,787 -

2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

140,946

70,797

19,641

3,589

1,895

411

2,957

10,110

(1,406)

(6,451)

-

-

(17,858) (10,887)

(17,928) (14,420)

(16,989) (11,849)

(20,963) (8,958)

5,816 5,570 11,386

6,080 3,349 9,429

8,296 2,569 10,865

6,285 2,402 8,687

4,111 2,024 6,135

102,150

91,485

139,962

70,526

(1,608)

(1,608)

(1,608)

68,918

(3,216)

Fiscal loss in 2008 Taxable Income

96,476

December 31 (12 Months)

-

-

102,150

-

91,485

139,962

(21,344) (27,384)

Current tax expense and payable are computed as follows: September 30 (9 Months) 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Current tax expense Less prepaid income tax - Article 25 Current tax payable (claim for tax refund) (Note 19)

December 31 (12 Months) 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

25,537

23,247

34,990

19,298

-

25,076

15,328

23,527

9,312

7,710

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.

- 87 -

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

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 (charged to) statement of comprehensive income for the period (Unaudited) Rp '000,000

January 1, 2011 Rp '000,000 Deferred tax assets: Allowances for impairment losses on earning assets Adjusment related to application of PSAK 50 and PSAK 55 Defined-benefit post-employment reserve Total

2,055

September 30, 2011 Rp '000,000

Credited in (charged to) statement of comprehensive income for the period (Unaudited) Rp '000,000

January 1, 2010 Rp '000,000

September 30, 2010 Rp '000,000

245

2,300

3,897

1,042

-

2,081 5,178

1,497 1,742

3,578 6,920

1,184 5,081

279 1,226

1,463 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 (charged to) statement of comprehensive income for the year Rp '000,000

December 31, 2010 Rp '000,000

1,042

January 1, 2008 Rp '000,000 Deferred tax assets: Allowances for impairment losses (reversal) on earning assets Adjusment related to application of PSAK 50 and PSAK 55 Fiscal loss Defined-benefit post-employment reserve Total Deferred tax liability Difference in depreciation of premises and equipment Deferred tax assets (liabilities) - net

-

Credited in (charged to) statement of comprehensive income for the year Rp '000,000

3,577

-

December 31, 2008 Rp '000,000

(2,209)

Credited in (charged to) statement of comprehensive income for the year Rp '000,000

1,368

-

402

-

December 31, 2009 Rp '000,000

2,529

402

947

(402)

-

3,897

-

4,844

(1,842)

2,055

1,042 -

1,184 5,081

1,042 -

729 4,306

(19) (1,826)

710 2,480

474 2,601

897 97

2,081 5,178

(4,649)

(4,964)

(9,613)

(5,334)

(14,947)

(4,247)

(19,194)

(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.

- 88 -

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

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: September 30 (9 Months) 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Income before tax per statements of comprehensive income

December 31 (12 Months) 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

101,651

96,476

140,946

70,797

19,641

25,413

24,119

35,236

19,823

5,875

1,454 1,392 2,846

1,520 837 2,357

2,074 642 2,716

1,760 673 2,433

1,233 625 1,858

Subtotal

28,259

26,476

37,952

22,256

7,733

Effect of change in tax rates Adjustment on deferred tax

-

(6,834)

1,188

Total

28,259

19,642

39,140

Income tax expense Tax effects of permanent differences: Benefits-in-kind Others Net

(177) (48)

(1,427) 484

22,031

6,790

31. Earnings per Share September 30 (9 Months) 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Net income (in Rp '000,000)

December 31 (12 Months) 2010 Rp '000,000

2009 Rp '000,000

2008 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

-

11.08 10.84

-

Earnings per share (in full Rupiah) Basic Diluted

12.94

5,849,802,892

-

17.62 17.40

-

-

8.72

3.25 -

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 ninemonth 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).

- 89 -

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 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: September 30, 2011 (Unaudited) Percentage to total Amount assets/liabilities Rp '000,000 %

September 30, 2010 (Unaudited) Percentage to total Amount assets/liabilities Rp '000,000 %

Assets Demand deposits with other banks Loans Interest receivable Prepaid expenses Other assets

847 1,436,003 761 8,160 6,450

0.01 9.16 0.01 0.05 0.04

171,742 858,316 859 1,887 2,660

Liabilities Liabilities immediately payable Deposits Deposits from other banks Accrued interest

2,087 5,478,037 8,451

0.01 38.02 0.06

2,912 4,557,149 14,101 5,547

December 31, 2010 Percentage to total assets/liabilities %

Amount Rp '000,000 Assets Demand deposits with other banks Loans Interest receivable Prepaid expenses Other assets Liabilities Liabilities immediately payable Deposits Deposits from other banks Accrued interest Other liabilities

December 31, 2009 Percentage to total assets/liabilities %

Amount Rp '000,000

1.70 8.52 0.01 0.02 0.03

0.03 48.37 0.15 0.06

December 31, 2008 Percentage to total assets/liabilities %

Amount Rp '000,000

277 794,940

0.01 7.08

436 741,894

0.01 9.22

636 83,408

0.01 1.38

915 5,265 1,810

0.01 0.05 0.01

839 5,028 1,778

0.01 0.06 0.02

224 4,462 39,590

0.00 0.07 0.65

2,839 4,443,285 14,250 6,718 -

0.03 43.05 0.14 0.07 -

3,336 2,984,945 14,891 3,762 -

0.04 39.99 0.20 0.05 -

1,689,451 4,565 249

29.92 0.08 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).

- 90 -

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

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: September 30 (9 Months) 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 (12 Months) 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

Short-term benefits Long-term benefits

30,120 2,386

18,751 1,497

24,676 1,721

18,039 1,221

16,507 908

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).

- 91 -

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 33. Commitments and Contingencies

a. Spot and forward purchases and sales of foreign currencies September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

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: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

Commitments Commitment Liabilities Unused loan commitments granted to customers Irrevocable letters of credit

111,971 19,951

95,628 29,608

115,266 37,254

444,523 16,403

67,382 9,860

Total

131,922

125,236

152,520

460,926

77,242

17,635

12,710

11,874

6,786

19,820

347,964

288,275

317,066

276,333

188,684

(330,329)

(275,565)

(305,192)

(269,547)

(168,864)

Contingencies Contingent Receivables Past due interest revenues Contingent Liabilities Bank guarantees Net

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).

- 92 -

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

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: September 30 2011 2010 (Unaudited) (Unaudited) Equivalent Rp Equivalent Rp Rp '000,000 Rp '000,000 Assets Cash

Demand deposits with Bank Indonesia Demand deposits with other banks - gross

Placements with other banks Securities Securities purchased under agreements to resell Loans - gross Interest receivable Ijarah assets Other assets - gross

Total

December 31 2010 Equivalent Rp Rp '000,000

2009 Equivalent Rp Rp '000,000

2008 Equivalent Rp Rp '000,000

USD SGD EUR CNY AUD HKD JPY

36,236 5,218 873 462 227 85 16

36,664 4,343 2 40 -

50,616 8,655 -

17,066 1,162 -

13,053 685 -

USD

242,300

995,516

393,309

588,385

140,005

USD SGD JPY CNY GBP EUR HKD AUD USD USD

37,857 6,683 3,870 2,838 2,530 993 729 60 232,061 773,071

265,104 6,362 49 1,879 19,191 313 911 377,787 315,469

55,109 7,884 198 3,935 4,280 532 454 616,189 619,871

56,692 3,890 1,581 3,915 4,093 557 6,647 184,405 300,086

106,022 1,089 335 1,054 31 1,083 85,857 150,490

USD USD USD USD USD EUR

1,556,353 6,656 1,918 99 1,122

816,519 7,778 903 1,040

797,091 5,028 10,857 1,133

10,018 778,492 5,247 89 3,516

283,732 2,629 103 3,988

2,912,257

2,849,870

2,575,141

1,965,841

790,156

- 93 -

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 September 30 2011 2010 (Unaudited) (Unaudited) Equivalent Rp Equivalent Rp Rp '000,000 Rp '000,000 Liabilities Liabilities immediately payable

Deposits

Deposits from other banks Taxes payable

Estimated losses on commitments and contingencies Accrued interest

Other liabilities

Total liabilities Net - Assets (Liabilities)

December 31 2010 Equivalent Rp Rp '000,000

2009 Equivalent Rp Rp '000,000

2008 Equivalent Rp Rp '000,000

USD SGD GBP JPY USD SGD EUR AUD CNY USD USD SGD GBP

62,915 203 52 2,632,012 22,977 10,714 5,744 2,981 109,852 717 1 2

30,082 2,761,443 13,718 7,348 14,101 944 2 8

28,499 2,535,562 18,941 3,801 14,250 809 2 -

21,904 202 1,858,513 7,673 3,746 14,891 935 1 -

45,017 226 78 718,158 5,635 280 -

USD USD SGD EUR AUD USD SGD GBP

1,028 3,056 1

651 1,811 1 1

824 1,582 2 1

865 1,301 1

130 521 1

2 51 8 -

-

44 7 283

2,852,316

2,830,444

58,819

18,386

-

45 8 2,604,326 (30,318)

1,764 9

-

451 7 -

1,911,805

770,504

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: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Great Britain Poundsterling Euro United States Dollar Australian Dollar Singapore Dollar Hong Kong Dollar Japanese Yen China Yuan

13,714.60 11,901.23 8,790.00 8,566.30 6,798.29 1,391.18 1,128.61 1,381.18

- 94 -

14,178.26 12,168.79 8,925.00 8,646.10 6,785.53 1,150.02 107.19 -

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

13,941.18 12,017.99 9,010.00 9,169.48 7,025.89 1,159.08 110.75 -

15,164.94 13,542.43 9,395.00 8,453.16 6,704.50 1,211.48 102.19 -

15,755.42 15,356.48 10,900.00 7,554.26 7,587.91 1,406.44 120.65 -

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

Net Open Position (NOP) The following is the Company’s net open position as submitted to Bank Indonesia:

Currency

September 30, 2011 (Unaudited) Balance Sheet and Administrative Accounts Net Assets Liabilities Absolute Rp '000,000 Rp '000,000 Rp '000,000

United States Dollar Great Britain Poundsterling Japanese Yen Hong Kong Dollar Euro Singapore Dollar Australian Dollar China Yuan

2,820,041 2,530 3,886 813 2,494 11,901 589 3,300

2,747,044 54 1 11,409 23,189 5,746 2,982

72,997 2,476 3,885 813 8,915 11,288 5,157 318

Total

2,845,554

2,790,425

105,849

Currency

September 30, 2010 (Unaudited) Balance Sheet and Net Administrative Accounts Assets Liabilities Absolute Rp '000,000 Rp '000,000 Rp '000,000

United States Dollar Great Britain Poundsterling Japanese Yen Hong Kong Dollar Euro Singapore Dollar Australian Dollar

2,774,202 1,879 330 532 20,877 10,708 911

2,780,558 292 3 2 9,303 13,933 -

6,356 1,587 327 532 11,574 3,225 911

Total

2,809,439

2,804,091

24,512

- 95 -

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

Currency

December 31, 2010 Balance Sheet and Administrative Accounts Assets Liabilities Rp '000,000 Rp '000,000

Net Absolute Rp '000,000

United States Dollar Great Britain Poundsterling Japanese Yen Hong Kong Dollar Euro Singapore Dollar Australian Dollar

2,520,033 3,935 768 532 5,414 16,538 454

2,552,744 4,502 19,178 -

32,711 3,935 768 532 912 2,640 454

Total

2,547,674

2,576,424

41,952

Currency

December 31, 2009 Balance Sheet and Administrative Accounts Assets Liabilities Rp '000,000 Rp '000,000

Net Absolute Rp '000,000

United States Dollar Great Britain Poundsterling Japanese Yen Hong Kong Dollar Euro Singapore Dollar Australian Dollar

1,899,927 3,915 2,470 557 7,080 5,052 6,647

1,876,525 9 5,921 7,885 -

23,402 3,915 2,461 557 1,159 2,833 6,647

Total

1,925,648

1,890,340

40,974

Currency

December 31, 2008 Balance Sheet and Administrative Accounts Assets Liabilities Rp '000,000 Rp '000,000

United States Dollar Great Britain Poundsterling Japanese Yen Hong Kong Dollar Euro Singapore Dollar Australian Dollar

730,773 1,054 335 31 3,988 1,775 1,084

Total

739,040

723,538 79 5,873 729,490

Net Absolute Rp '000,000 7,235 1,054 256 31 3,988 4,098 1,084 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.

- 96 -

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 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: September 30, 2011 (Unaudited) Estimated Fair Carrying value value Rp '000.000 Rp '000.000 Financial Assets Fair value through profit loss Securities Other asstes Derivative receivable Held-to-maturity Securities Available-for-sale Securities Loans and receivable Cash Demand deposits with Bank Indonesia Demand deposits with other banks Placements with other banks - net Securities Securities purchased under agreements to resell Loans - net Interest receivable Other assets Total Financial Assets

September 30, 2010 (Unaudited) Estimated Fair Carrying value value Rp '000.000 Rp '000.000

21,632

21,632

-

-

December 31, 2010 Estimated Fair Carrying value value Rp '000.000 Rp '000.000

74,622

74,622

77,451

1,109

1,109

2,832,446

3,118,161

1,047,520

1,132,238

1,358,147

1,632,031

31,338

31,338

15,906

15,906

36,493

36,493

579,508 1,362,218 68,979 411,961 499,826

579,508 1,362,218 68,979 411,961 499,826

306,716 1,302,748 300,669 377,884 -

306,716 1,302,748 300,669 377,884 -

269,274 1,067,918 86,572 616,189 -

269,274 1,067,918 86,572 616,189 -

40,323 8,600,511 56,204 19,876

40,323 8,593,352 56,204 19,876

5,975,416 44,316 13,761

6,098,257 44,316 13,761

74,938 6,788,665 47,353 19,503

74,938 6,843,583 47,353 19,503

14,578,921

14,857,477

9,406,568

9,614,127

10,442,503

10,771,305

194

194

-

77,451 -

Financial Liabilities Financial Liabilities at FVPL Other liabilities Derivative liabilities Measured at amortized cost Liabilities immediately payable Deposits Deposits from other banks Securities issued Accrued interest Other liabilities

142,889 12,971,444 328,108 886 36,471 3,930

142,889 12,971,444 328,108 886 36,471 3,930

59,892 8,964,321 223,942 1,635 17,958 761

59,892 8,964,321 223,942 1,635 17,958 761

46,739 9,612,890 366,853 1,616 24,564 2,564

46,739 9,612,890 366,853 1,616 24,564 2,564

Total Financial Liabilities

13,483,728

13,483,728

9,268,509

9,268,509

10,055,226

10,055,226

-

-

-

-

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.

- 97 -

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 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 definedbenefit post-employment reserve presented in the statement of financial positions is as follows: September 30 2011 (Unaudited) Rp '000,000 Present value of unfunded defined-benefit reserve Unrecognized actuarial losses (gain) Defined-benefit post-employment reserve

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

32,658 (18,344)

14,003 (5,679)

6,911 (2,176)

1,331 1,509

14,314

8,324

4,735

2,840

Details of defined-benefit post-employment expense are as follows: September 30 (9 Months) 2011 (Unaudited) Rp '000,000

2010 Rp '000,000

Current service costs Interest costs Amortization of actuarial losses (gain)

5,342 1,419 172

2,971 957 61

1,529 535 (58)

439 144 45

Defined-benefit post-employment

6,933

3,989

2,006

628

December 31 (12 Months) 2009 Rp '000,000

2008 Rp '000,000

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: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Defined-benefit post-employment reserve at beginning of the period Defined-benefit post-employment expense during the period Payments made during the period Defined-benefit post-employment reserve at end of the period

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000 2,429

8,324

4,735

4,735

2,840

6,933 (943)

2,587 (115)

3,989 (400)

2,006 (111)

7,207

8,324

4,735

14,314

- 98 -

628 (217) 2,840

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

Principal actuarial assumptions used in the independent valuation of the defined post-employment benefits are as follows: December 31

September 30 2011 (Unaudited)

Normal pension age Discount rate Future salary increase Level of employee turnover

Mortality table

55 years old 8% per annum 9.55% per annum 2.14% in 2011 until 40 years old decrease to 0% at 55 years old Indonesian 2 Mortality table

2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

55 years old 9.5% per annum 7.5% per annum 2.30% in 2010 until 40 years old decrease to 0% at 55 years old Indonesian 2 Mortality table

55 years old 11% per annum 7.5% per annum 5% in 2009 until 40 years old decrease to 0% at 55 years old Indonesian 2 Mortality table

55 years old 17% per annum 1% per annum 5% in 2008 until 40 years old decrease to 0% at 55 years old Indonesian 2 Mortality table

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.

- 99 -

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 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 and Credit Rp '000,000

September 30, 2011 (9 Months) (Unaudited) General Bank Sharia Business Unit Marketing Treasury Trade Finance and Financing Treasury Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Revenues Interest revenues and profit sharing Other revenues

739,932 5,599

141,134 16,649

Total Revenues

745,531

157,783

Expenses Interest expense Other expenses

541,419 16,122

Total Expenses

557,541

4

-

4

132

51,769 -

9,015 -

941,850 22,380

132

51,769

9,015

964,230

30,707 3,240

-

648

572,130 20,130

33,947

-

-

-

Total Rp '000,000

-

120

592,260

Segment revenues - net Unallocated revenues Unallocated expenses

371,970 40,685 311,004

Income before tax Tax expense

101,651 28,259

Net Income

73,392

Marketing and credit Rp '000,000

September 30, 2010 (9 Months) (Unaudited) General Bank Sharia business Unit Marketing and Treasury Trade Finance Financing Treasury Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Revenues Interest revenues and profit sharing Other revenues

575,818 1,772

81,772 7,256

Total Revenues

577,590

Expenses Interest expense Other expenses Total Expenses

241

11,938 -

4,758 1

674,286 9,270

89,028

241

11,938

4,759

683,556

348,057 49,646

1,308 10

440

1,464 211

10

350,829 50,317

397,703

1,318

440

1,675

10

401,146

Segment revenues - net Unallocated revenues Unallocated expenses

-

Total Rp '000,000

-

282,410 41,789 227,723

Income before tax Tax expense

96,476 19,642

Net Income

76,834

- 100 -

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

General Bank Marketing and credit Rp '000,000

Treasury Rp '000,000

Revenues Interest revenues and profit sharing Other revenues

770,528 2,804

113,830 18,689

Total Revenues

773,332

132,519

Expenses Interest expense Other expenses

491,504 47,747

Total Expenses

539,251

1,309 -

December 31, 2010 (12 Months) Sharia business Unit Marketing and Trade Finance Financing Treasury Rp '000,000 Rp '000,000 Rp '000,000

-

Total Rp '000,000

3,568

25,916 -

5,834 1

916,108 25,062

3,568

25,916

5,835

941,170

20

497,652 48,124

20

545,776

-

4,839 357

1,309

-

-

5,196

Segment revenues - net Unallocated operating revenues Unallocated operating expenses

395,394 55,973 310,421

Income before tax Tax expense

140,946 39,140

Net Income

101,806

General Bank Marketing and Credit Rp '000,000

Treasury Rp '000,000

Revenues Interest revenues and profit sharing Other operating revenues

657,549 3,045

124,288 17,011

Total Revenues

660,594

141,299

Expenses Interest expense Other operating expenses

469,062 59,498

Total Expenses

528,560

1,294

December 31, 2009 (12 Months) Sharia Business Unit Marketing Trade Finance and Financing Treasury Rp '000,000 Rp '000,000 Rp '000,000

-

181

1 955

-

4,299

956

-

-

372

782,390 20,570

372

802,960

20

470,357 64,772

-

514

-

1,294

181 514

Total Rp '000,000

Segment revenues - net Unallocated operating revenues Unallocated operating expenses

535,129 267,831 47,102 244,136

Income before tax Tax expense

70,797 22,031

Net Income

48,766

December 31, 2008 (12 Months) Marketing and Credit Rp '000,000

Treasury Rp '000,000

Trade Finance Rp '000,000

Revenues Interest revenues Other operating revenues

515,310 2,309

85,725 13,835

Total Revenues

517,619

99,560

Expenses Interest expense Other operating expenses

418,577 13,057

7,182 426

-

Total Expenses

431,634

7,608

-

Segment revenues - net Unallocated operating revenues Unallocated operating expenses Income before tax Tax expense

-

Total Rp '000,000

2,664

601,035 18,808

2,664

619,843 425,759 13,483 439,242 180,601 30,763 191,723 19,641 6,790

Net Income

12,851

- 101 -

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

General Bank

Assets Segment Assets Unallocated assets

Marketing and credit Rp '000,000

Treasury Rp '000,000

9,150,480

4,082,411

September 30, 2011 (Unaudited) Sharia business Unit Marketing and Trade Finance Financing Treasury Rp '000,000 Rp '000,000 Rp '000,000

428

611,880

354,232

Total Assets Liablities Segment Liabilities Unallocated liabilities

13,365,299

1,261

20

859,544

-

Marketing and credit Rp '000,000

Treasury Rp '000,000

6,028,560

2,286,446

September 30, 2010 (Unaudited) Sharia business Unit Marketing and Trade Finance credit Treasury Rp '000,000 Rp '000,000 Rp '000,000

-

340,432

20,933

Total Assets

9,012,532

226,431

8,676,371 1,397,249

761

89,925

-

9,329,649 92,288 9,421,937

General Bank Marketing and credit Rp '000,000

Treasury Rp '000,000

7,960,525

2,007,851

December 31, 2010 Sharia business Unit Marketing and Trade Finance Financing Treasury Rp '000,000 Rp '000,000 Rp '000,000

-

373,458

191,606

Total Assets Liablities Segment Liabilities Unallocated liabilities

Total Rp '000,000

10,073,620

Total Liablities

Assets Segment Assets Unallocated assets

14,226,124 185,112 14,411,236

General Bank

Liablities Segment Liabilities Unallocated liabilities

14,199,431 1,468,644 15,668,075

Total Liablities

Assets Segment Assets Unallocated assets

Total Rp '000,000

Total Rp '000,000

10,533,440 699,316 11,232,756

9,612,890

304,076

Total Liablities

815

269,323

-

10,187,104 133,580 10,320,684

- 102 -

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

General Bank

Assets Segment Assets Unallocated assets

Marketing and credit Rp '000,000

Treasury Rp '000,000

5,343,018

1,230,956

December 31, 2009 Sharia business Unit Marketing and Trade Finance Financing Treasury Rp '000,000 Rp '000,000 Rp '000,000

-

3,743

Total Rp '000,000

92,600

6,670,317 1,365,540

Total Assets Liablities Segment Liabilities Unallocated liabilities

8,035,857

7,031,465

393,272

869

215

-

7,425,821 38,765

Total Liablities

7,464,586

December 31, 2008 Marketing and Credit Rp '000,000 Assets Segment assets Unallocated assets

4,301,785

Treasury Rp '000,000

Trade Finance Rp '000,000

1,389,857

-

5,691,642 372,984

Total Assets Liabilities Segment liabilities Unallocated liabilities

Total Rp '000,000

6,064,626

5,480,153

85,476

-

5,565,629 81,334

Total Liabilities

5,646,963

b. Geographical Segments Interest revenues based on geographical segments are as follows: September 30 (9 Months) 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 (12 Months) 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

Jakarta - Capital City Java island (excluding Jakarta) Sumatera island Sulawesi and Maluku island Kalimantan island Bali and Lombok island Jayapura island

594,318 134,963 87,882 87,249 9,541 18,443 9,454

324,934 162,543 71,153 76,881 14,519 15,460 8,796

430,478 223,758 108,176 102,301 19,612 20,533 11,250

492,408 133,744 66,195 54,693 11,202 12,088 12,060

382,978 107,663 65,515 24,438 7,823 8,051 4,567

Total

941,850

674,286

916,108

782,390

601,035

- 103 -

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

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: Carrying Value of Segment Assets December 31 2010 (Unaudited) 2010 2009 Rp '000.000 Rp '000.000 Rp '000.000

September 30 2011 (Unaudited) Rp '000.000

2008 Rp '000.000

Jakarta - Capital City Jawa Island (outside Jakarta) Sumatera Island Sulawesi and Maluku Island Bali and Lombok Island Jayapura Island Kalimantan Island

10,566,295 1,364,557 981,957 873,380 184,389 117,310 111,548

6,081,036 937,858 548,325 829,218 130,192 82,288 67,454

6,714,276 2,126,583 874,429 374,794 172,190 87,343 183,825

4,706,888 810,328 399,554 577,820 88,464 75,349 11,914

3,525,741 1,081,144 529,409 295,862 91,794 74,829 92,863

Total

14,199,436

8,676,371

10,533,440

6,670,317

5,691,642

Additions to premises and equipment December 31 2010 (Unaudited) 2010 2009 Rp '000,000 Rp '000,000 Rp '000,000

2008 Rp '000,000

September 30 2011 (Unaudited) Rp '000,000 Jakarta - Capital City Jawa Island (outside Jakarta) Sumatera island Sulawesi and Maluku island Bali and Lombok island Jayapura Island Kalimantan island Total

95,723 2,489 4,918 491 889 33 904

15,566 4,912 3,882 225 359 8 47

20,082 5,958 5,483 377 359 17 340

58,579 7,211 2,061 4,106 1,374 70 919

67,381 14,027 7,241 1,533 1,872 264 1,724

105,447

24,999

32,616

74,320

94,042

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 decisionmaking, as well as risk valuation, through the availability of updated information, which eventually would increase the performance and competitive power of the Company.

- 104 -

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

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.

- 105 -

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

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: September 30, 2011 September 30, 2010 (Unaudited) (Unaudited) Desember 31, 2010 Gross amounts Net amounts Gross amounts Net amounts Gross amounts Net amounts Rp '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 loss Securities Corporate bonds Mutual fund Other assets Derivative receivable Held-to-maturity Securities Corporate bonds Credit Linked Notes Bills receivable Loan and receivable Demand deposits with other banks Palcement with other banks Short-term investment - call money Short-term investment - time deposits Short-term investment - on call Other short-term investment Securities Bills receivable Loans Securities purchased under agreements to resell Interest receivable Other assets Total

29,652 44,970

29,652 44,970

1,109

1,109

47,152 43,950 1,476

47,132 43,950 1,476

67,453 62,475 21,789

67,453 62,475 21,789

46,138 63,070 322,030

46,138 63,070 322,030

68,979

68,979

300,669

300,669

86,572

86,572

409,573

409,573

331,874

331,874

566,039

566,039

10,000 2,488

9,900 2,488 -

37,700 10,213 97

37,680 10,213 97

126,040 14,110 -

126,040 14,110 -

499,826 9,163,715

499,826 9,066,489

6,204,502

6,062,636

7,011,796

6,934,158

40,323 56,204 19,876

40,323 56,204 19,876

44,316 13,761

44,316 13,761

74,938 47,353 19,503

74,938 47,353 19,503

10,439,293

10,341,947

7,116,481

6,974,595

8,455,040

8,377,402

-

21,632 -

21,632 -

30,120 47,331

30,120 47,331

-

-

Off - balance sheet Unused loan commitments Bank Guarantee Irrevocable letters of credit

111,971 347,964 19,951

111,971 347,964 19,951

95,628 288,275 29,608

95,628 288,275 29,608

115,266 317,066 37,254

Total

479,886

479,886

413,511

413,511

469,586

115,266 317,066 37,254 469,586

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.

- 106 -

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

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: September 30, 2011 (Unaudited) Outstanding Non-performing Loan Loan % % Corporate Coomercial Retail Total

September 30, 2010 (Unaudited) Outstanding Non-performing Loan Loan % %

December 31, 2010 Outstanding Non-performing Loan Loan % %

35.59 18.72 45.69

73.19 2.27 24.54

35.61 25.62 38.77

80.23 10.51 9.26

37.63 21.83 40.54

87.30 2.83 9.87

100.00

100.00

100.00

100.00

100.00

100.00

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.

- 107 -

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

The table blow summarises the average interest rates per annum for significant assets and liabilities:

Assets Demand deposits with other banks Placements with other banks Securities Securities purchased under agreements to resell Loans Liabilities Deposits Deposits from other banks

September 30, 2011 (Unaudited) Rupiah US Dollar % %

September 30, 2010 (Unaudited) Rupiah US Dollar % %

Desember 31,

Rupiah %

6.27 11.56

0.87 0.14 7.78

6.00 11.56

0.87 0.65 7.78

6.00 11.56

0.87 0.47 7.78

10.96 19.83

5.85

10.97 16.46

6.87

10.97 16.46

6.87

5.50 4.25

1.92 3.82

5.00 4.62

1.45 3.57

5.62 4.37

1.45 3.70

2010 US Dollar %

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: September 30, 2011 (Unaudited) Due within One year Rp '000,000 Assets Demand deposits with other banks Bank Indonesia Intervensi Certificate of Bank Indonesia Government bonds Corporate bonds Credit Linked Note Bills receivable Mutual fund Placement to other bank Securities purchased under agreement to resell Loans - gross Liabilities Deposits Deposits from other bank

68,979 1,644,079 26,299 105,459 74,804 501,302 44,970 412,061 40,323 4,089,393

12,971,444 328,108

one year Rp '000,000 41,029 43,950 1,251,551

-

two years Rp '000,000

Due after three years four years Rp '000,000 Rp '000,000

five years Rp '000,000

Total Rp '000,000

105,388 -

143,720 -

-

362,900 -

68,979 1,644,079 26,299 758,496 74,804 43,950 501,302 44,970 412,061

1,714,899

486,953

405,048

745,182

40,323 8,693,026

-

-

-

-

12,971,444 328,108

September 30, 2010 (Unaudited) Due within One year Rp '000,000

one year Rp '000,000

Assets Demand deposits with other banks Bank Indonesia Intervensi Government bonds Corporate bonds Credit Linked Note Bills receivable Placement to other bank Loans - gross

1,302,748 120,974 10,007 17,850 21,789 377,884 2,806,044

106,426 43,821 709,334

Liabilities Deposits Deposits from other bank

8,964,321 223,942

-

- 108 -

two years Rp '000,000 41,716 21,632 44,625 1,141,701

-

Due after three years four years Rp '000,000 Rp '000,000

five years Rp '000,000

Total Rp '000,000

107,771 382,051

143,965 347,713

349,938 38,354 729,558

1,302,748 120,974 759,823 103,807 62,475 21,789 377,884 6,116,401

-

-

-

8,964,321 223,942

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 December 31, 2010 Due within One year Rp '000,000

one year Rp '000,000

Assets Demand deposits with other banks Bank Indonesia Intervensi Government bonds Corporate bonds Credit Linked Note Bills receivable Mutual fund Placement to other bank Securities purchased under agreement to resell Loans - gross

86,572 88,473 10,005 30,120 18,020 322,030 47,331 616,189

126,702 45,050 -

74,938 1,900,890

1,367,850

Liabilities Deposits Deposits from other bank

9,612,890 303,853

-

two years Rp '000,000 -

54,259 44,138

849,025

-

Due after three years four years Rp '000,000 Rp '000,000

1,139,456

-

five years Rp '000,000

Total Rp '000,000

219,310 -

365,047 -

86,572 88,473 775,323 74,258 63,070 322,030 47,331 616,189

327,601

1,280,012

74,938 6,864,834

-

-

9,612,890 303,853

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).

- 109 -

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

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 or less Rp '000,000

more than more than 1 month untill 3 month untill 3 months 6 months Rp '000,000 Rp '000,000

September 30, 2011 (Unaudited) more than more than more than 6 month untill 1 year untill 2 yeras untill More than 12 months 2 years 5 years 5 years Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

Total Rp '000,000

Transaction coast Rp '000,000

Carrying value Rp '000,000

Assets Cash Demand deposits with Bank Indonesia Demand deposits with other banks Placements with other banks Securities - third parties Securities purchased under agreements to resell Loan - gross Interest receivable Other assets Total assets

579,508

-

-

-

-

-

-

579,508

-

579,508

1,362,218

-

-

-

-

-

-

1,362,218

-

1,362,218

-

68,979 412,061 3,438,252

68,979 412,061 1,436,299

407,186

828,020

55,407

84,980

251,108

375,252

68,979 412,061 3,438,252

40,323 2,796 56,204 20,985 3,979,373

1,415 408,601

89,462 917,482

3,041,814 3,097,221

1,306,805 1,391,785

3,264,484 3,515,592

1,492,696 1,867,948

40,323 9,199,472 56,204 20,985 15,178,002

Liabilities immediately payable 142,889 Deposits 10,410,523 Deposits from other banks 326,033 Securities issued 886 Accrued interest 36,471 Other liabilities 3,930 Total liablities 10,920,732

1,329,670 1,329,670

534,445 534,445

1,556,349 2,075 1,558,424

-

-

-

-

-

-

142,889 13,830,987 328,108 886 36,471 3,930 14,343,271

383,037

1,538,797

1,391,785

3,515,592

1,867,948

35,757 35,757

40,323 9,163,715 56,204 20,985 15,142,245

Liabilities

Assets (Liabilities) - Net

(6,941,359)

1 month or less Rp '000,000

(921,069)

September 30, 2010 (Unaudited) more than more than more than 6 month untill 1 year untill 2 yeras untill More than 12 months 2 years 5 years 5 years Rp '000,000 Rp '000,000 Rp '000,000 Rp '000,000

834,731

35,757

142,889 13,830,987 328,108 886 36,471 3,930 14,343,271 798,974

more than 1 month untill 3 months Rp '000,000

more than 3 month untill 6 months Rp '000,000

306,716

-

-

-

-

-

-

306,716

-

306,716

1,302,748

-

-

-

-

-

-

1,302,748

-

1,302,748

300,669 379,884 126,241 821 44,316 13,761 2,475,156

19,922 12,155 32,077

3,206 3,206

1,169,491 1,169,491

1,459,228 1,459,228

204,452 2,735,284 2,939,736

734,443 842,624 1,577,067

300,669 379,884 1,085,058 6,222,809 44,316 13,761 9,655,961

142,889 7,410,570 243,550 1,635 17,958 761 7,817,363

952,809 392 953,201

164,952 164,952

505,896 505,896

-

-

-

142,889 9,034,227 243,942 1,635 17,958 761 9,441,412

-

142,889 9,034,227 243,942 1,635 17,958 761 9,441,412

(5,342,207)

(921,124)

(161,746)

663,595

1,459,228

2,939,736

1,577,067

214,549

-

196,242

Total Rp '000,000

Transaction coast Rp '000,000

Carrying value Rp '000,000

Assets Cash Demand deposits with Bank Indonesia Demand deposits with other banks Placements with other banks Securities - third parties Loan - gross Interest receivable Other assets Total assets

18,307 18,307

300,669 379,884 1,085,058 6,204,502 44,316 13,761 9,637,654

Liabilities Liabilities immediately payable Deposits Deposits from other banks Securities issued Accrued interest Other liabilities Total liablities Assets (Liabilities) - Net

- 110 -

-

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

1 month or less Rp '000,000 Assets Cash 269,274 Demand deposits with Bank Indonesia 1,067,918 Demand deposits with other banks 86,572 Placements with other banks 706,189 Securities - third parties 171,273 Securities purchased under agreements to resell 19,443 Loan - gross 4,933 Interest receivable 47,353 Other assets 19,503 Total assets 2,392,458 Liabilities Liabilities immediately payable Deposits Deposits from other banks Securities issued Accrued interest Other liabilities Total liablities Assets (Liabilities) - Net

46,739 7,919,918 303,853 1,616 24,564 2,758 8,299,448 (5,906,990)

more than more than 1 month untill 3 month untill 3 months 6 months Rp '000,000 Rp '000,000

more than 6 month untill 12 months Rp '000,000

December 31, 2010 more than more than 1 year untill 2 yeras untill 2 years 5 years Rp '000,000 Rp '000,000

More than 5 years Rp '000,000

Total Rp '000,000

Transaction coast Rp '000,000

Carrying value Rp '000,000

-

-

-

-

-

-

269,274

-

269,274

-

-

-

-

-

-

1,067,918

-

1,067,918

-

-

-

-

86,572 706,189 1,472,091

435,397 55,495 7,412 498,304

77,674 77,674

1,967,132 1,967,132

1,071,244 1,071,244

169,859 169,859

658,193 658,193

(572,940)

(92,185)

1,308,939

226,774

638,647

86,572 706,189 1,472,091

1,374,063 1,374,063

2,326,601 2,553,375

1,285,826 1,924,473

74,938 7,043,641 47,353 19,503 10,787,479

-

-

-

-

-

-

46,739 9,819,214 303,853 1,616 24,564 2,758 10,198,744

1,374,063

2,553,375

1,924,473

588,735

31,845 31,845

-

74,938 7,011,796 47,353 19,503 10,755,634

-

46,739 9,819,214 303,853 1,616 24,564 2,758 10,198,744

31,845

556,890

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.

- 111 -

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 • •

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 selfassessment 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.

- 112 -

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 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: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

2008 Rp '000,000

I. Capital Stock Component A. Total core capital B. Suplementary capital

1,272,901 72,239

660,676 64,339

912,105 62,019

597,617 51,111

462,048 44,294

II. Total core and suplementary capital (A+B)

1,345,140

725,015

974,124

648,728

506,342

III.Risk Weighted Assets Credit risk after considering specific risk Market risk Operational risk

8,647,105 73,171 749,015

5,147,095 8,583 322,267

6,529,888 54,357 322,267

4,648,915 38,022 -

3,987,474 15,230 -

9,469,291

5,477,945

6,906,512

4,686,937

4,002,704

Total risk weight assets for credit, market and operational risk IV Capital adequacy ratio (CAR) CAR with credit risk CAR with credit and market risk CAR with credit and operational risk CAR with credit, operational and market risk V. Minimum Capital Adequacy Ratio

15.56% 15.43% 14.32% 14.21%

14.09% 14.06% 13.26% 13.24%

14.92% 14.79% 14.22% 14.10%

13.95% 13.84% N/A N/A

12.70% 12.65% N/A N/A

8%

8%

8%

8%

8%

* TExcludes deferred taxes

- 113 -

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 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.

- 114 -

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 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: September 30 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000

December 31 2010 Rp '000,000

2009 Rp '000,000

Assets Cash Demand deposits with Bank Indonesia Placements with other sharia banks - net Securities - third parties iB receivable - net Prepaid expenses Property, plant and equipment - net Ijarah assets - net Other assets - net

808 44,061

897 2,783

736 8,806

9,900 344,332 465,977 21 783 101,842 31,688

1,980 16,170 87,220 33 734 253,212 41

90,000 101,606 145,493 33 799 219,159 2,410

90,620 1,980 3,743 59 32

Total

999,412

363,070

569,042

96,481

859,543 988 100,906

69,906 20,000 66 262,798

206,324 63,000 170 282,267

37,975

10,300

586 16,695

999,412

363,070

569,042

Liabilities and Equity iB deposit Deposits from other bank Tax payable Other liabilities Unrealized gain on increase in fair value of securities Retained earnings (losses) Total

September 30 (9 Months) 2011 2010 (Unaudited) (Unaudited) Rp '000,000 Rp '000,000 Profit and loss Operating income Profit sharing

47 -

215 9 97,116 (859) 96,481

December 31 (12 Months) 2010 Rp '000,000

2009 Rp '000,000

60,784 30,707

16,696 1,464

31,750 4,839

553 1

Income after profit sharing

30,077

15,232

26,911

552

Other revenues Other expenses

48 (8,846)

70 (4,142)

79 (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

- 115 -

(859)

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 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. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.

PSAK 10 (Revised 2010), The Effects of Changes in Foreign Exchange Rates PSAK 18 (Revised 2010), Accounting and Reporting by Retirement Benefit Plans PSAK 24 (Revised 2010), Employee Benefits PSAK 28 (Revised 2010), Accounting for Loss Insurance PSAK 33 (Revised 2011), Accounting of Land Stripping Activities and Environmental Management in General Mining PSAK 34 (Revised 2010), Construction Contracts PSAK 36 (Revised 2010), Accounting for Life Insurance PSAK 45 (Revised 2011), Financial Reporting for Non-profit Organization PSAK 46 (Revised 2010), Accounting for Income Taxes PSAK 50 (Revised 2010), Financial Instruments: Presentation PSAK 53 (Revised 2010), Share Based Payment PSAK 56 (Revised 2011), Earnings per Share PSAK 60, Financial Instruments: Disclosures PSAK 61, Accounting of Government Grants and Disclosure of Government Assistance PSAK 62, Insurance Contract PSAK 63,Financial Reporting in Hyperinflationary Economies PSAK 64, Exploration for and Evaluation of Mineral Resources

ISAK

1. 2. 3. 4. 5. 6. 7. 8. 9.

ISAK 13 (2010), Hedges of a Net Investment in a Foreign Operation ISAK 15, PSAK 24 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction ISAK 16, Service Concession Agreement ISAK 18, Government Assistance - No Specific Relation with Operating Activity ISAK 19, Applying the Restatement Approach under PSAK 63: Financial Reporting in Hyperinflationary Economies ISAK 20, Income Taxes - Changes in the Tax Status of an Entity or its Shareholders ISAK 22, Service Concession Arrangements: Disclosures ISAK 23, Operating Leases-Incentives ISAK 24, Evaluating the Substance of Transactions Involving the Legal Form of a Lease

PPSAK

1. 2. 3.

PPSAK 8: Withdrawal of IAS 27: Accounting for Cooperatives PPSAK 10, Withdrawal of IAS 51: Accounting Quasi Reorganization 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. ********

- 116 -

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