LONG-TERM INVESTMENTS AR TELKOM 2015 ENG.

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2015 and for the Year Then Ended Figures in tables are expressed in billions of Rupiah, unless otherwise stated 55

10. PROPERTY AND EQUIPMENT continued

January 1, Business Reclassifications December 31, 2014 acquisition Additions Deductions Translations 2014 At cost: Directly acquired assets Land rights 1,098 - 107 21 - 1,184 Buildings 4,224 - 131 19 235 4,571 Leasehold improvements 812 - 49 52 134 943 Switching equipment 18,705 - 331 496 668 19,208 Telegraph, telex and data communication equipment 6 - - - - 6 Transmission installation and equipment 95,853 - 2,298 1,235 10,657 107,573 Satellite, earth station and equipment 7,456 - 312 21 180 7,927 Cable network 28,987 - 3,025 250 1,352 33,114 Power supply 11,755 - 225 78 874 12,776 Data processing equipment 9,230 - 684 53 381 10,242 Other telecommunications peripherals 500 - 102 - 602 Office equipment 770 4 191 5 9 951 Vehicles 332 2 18 6 346 Other equipment 104 - - - 5 99 Property under construction 1,971 - 16,660 15 14,763 3,853 Assets under finance lease Transmission installation and equipment 5,683 - 495 296 - 5,882 Data processing equipment 123 - - 21 - 102 Office equipment 7 - 15 1 - 21 Vehicles 26 - 18 - 44 CPE assets 22 - - - - 22 RSA assets 459 - - - 207 252 Total 188,123 6 24,661 2,569 503 209,718 January 1, Reclassifications December 31, 2014 Additions Impairments Deductions Translations 2014 Accumulated depreciation and impairment losses: Directly acquired assets Buildings 1,840 135 - 16 5 1,954 Leasehold improvements 649 71 - 52 1 669 Switching equipment 12,903 1,549 - 496 95 13,861 Telegraph, telex and data communication equipment 3 1 - - - 4 Transmission installation and equipment 46,666 9,084 406 1,161 231 54,764 Satellite, earth station and equipment 5,190 577 332 - 6,099 Cable network 17,758 1,101 67 249 85 18,762 Power supply 6,794 1,246 - 62 7,978 Data processing equipment 6,822 869 - 57 10 7,624 Other telecommunications peripherals 267 55 - - 322 Office equipment 564 109 - 5 9 659 Vehicles 68 46 - 2 1 113 Other equipment 100 2 - - 5 97 Assets under finance lease Transmission installation and equipment 1,345 632 - 296 - 1,681 Data processing equipment 83 17 - 21 - 79 Office equipment 2 3 - 1 2 6 Vehicles

1 4

- - - 5 CPE assets 13 2 - - - 15 RSA assets 294 130 - - 207 217 Total 101,362 15,633 805 2,418 473 114,909 Net Book Value 86,761 94,809 PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2015 and for the Year Then Ended Figures in tables are expressed in billions of Rupiah, unless otherwise stated 56

10. PROPERTY AND EQUIPMENT continued

a. Gain on disposal or sale of property and equipment 2015 2014 Proceeds from sale of property and equipment 733 501 Net book value 8 64 Gain on disposal or sale of property and equipment 725 437 b. Asset impairment As of December 31, 2015 and 2014, the CGUs that independently generate cash inflows were fixed wireline, fixed wireless, cellular and others. In 2014, the Group decided to cease its fixed wireless business no later than December 15, 2015. The Company assessed the recoverable amount to be Rp549 billion and determined that the assets for fixed wireless CGU were further impaired by Rp805 billion. The recoverable amount has been determined based on VIU calculation using the most recent cash flows projection approved by management. The cash flows projection included cash inflows from the continuing use of the assets during the remaining service period and projected net cash flows to be received for the disposal of the assets for fixed wireless CGU at the end of service period. Projected net cash flows to be received for the disposal of the assets was determined based on cost approach, adjusted for physical, technological and economic obsolescence. Management applied a pre-tax discount rate of 13.5 derived from the Company