Establishment and General Information

PERUSAHAAN PERSEROAN PERSERO PT PERUSAHAAN LISTRIK NEGARA DAN ENTITAS ANAKAND SUBSIDIARIES CATATAN ATAS LAPORAN KEUANGAN KONSOLIDASIAN Lanjutan Untuk Tahun-tahun yang Berakhir pada Tanggal 31 Desember 2016 dan 2015 Dalam jutaan Rupiah, kecuali dinyatakan lain NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued For the Years Ended December 31, 2016 and 2015 In millions of Rupiah, unless otherwise stated 12 Berdasarkan SK Menteri BUMN Republik Indonesia No. SK-272MBU122014 tanggal 23 Desember 2014, Sofyan Basir diangkat sebagai Direktur Utama Perusahaan dan Sarwono Sudarto, Nasri Sebayang, Supangkat Iwan Santoso, Amir Rosidin, Nicke Widyawati dan Amin Subekti diangkat sebagai direktur Perusahaan. Based on the Decision Letter of the MSOE of the Republic of Indonesia SK-272MBU122014 dated December 23, 2014, Sofyan Basir was appointed as the Company’s President Director and Sarwono Sudarto, Nasri Sebayang, Supangkat Iwan Santoso, Amir Rosidin, Nicke Widyawati and Amin Subekti were appointed as the Company’s Directors. Berdasarkan SK Menteri BUMN Republik Indonesia No. KEP-273MBU122014 tanggal 23 Desember 2014 Hasan Bisri diangkat sebagai Komisaris. Based on the Decision Letter of the MSOE of the Republic of Indonesia No. KEP-273MBU122014 dated December 23, 2014, Hasan Bisri was appointed as Commissioner. Berdasarkan SK Menteri BUMN Republik Indonesia No. SK-183MBU092015 tanggal 25 September 2015, Aloysius Kiik Ro diangkat sebagai Komisaris. Based on the Decision Letter of the MSOE of the Republic of Indonesia No. SK-183MBU092015 dated September 25, 2015, Aloysius Kiik Ro was appointed as Commissioner. Berdasarkan SK Komisaris Perusahaan No. 198SKDK-PLN2015 tanggal 16 Oktober 2015, pengangkatan Komite Audit Perusahaan yang terdiri dari Darmono sebagai Ketua Komite Audit, beserta Anggota Komite Audit yang terdiri dari Hasan Bisri, Sugeng Rohadi, Andin Hadiyanto, dan Aidil Yuzar. Di tahun 2016, Andin Hadiyanto telah habis masa jabatannya, sedangkan Aidil Yuzar digantikan oleh Achmad Wahyudi berdasarkan SK Komisaris Perusahaan No. 19SKDK-PLN2016 tanggal 28 Juli 2016. Berdasarkan SK Komisaris Perusahaan No. 29SKDK-PLN2015 tanggal 27 Agustus 2015, Joseph Suardi Sabda diangkat sebagai anggota Komite Audit Non Komisaris dengan status paruh waktu dan masa jabatannya habis pada tanggal 1 September 2016. Based on Decision Letter of the Company’s Board of Commissioners No. 198SKDK-PLN2015 dated October 16, 2015, the appointment of the Company’s Audit Committee consist of Darmodo as the Chairman, and Members of the Audit Committee consist of Hasan Bisri, Sugeng Rohadi, Andin Hadiyanto, and Aidil Yuzar. In 2016, Andin Hadiyanto ended his term, while Aidil Yuzar was replaced by Achmad Wahyudi based on the Company’s Board of Commissioners SK No. 19SKDK-PLN2016 dated July 28, 2016. Based on Decision Letter of the Company’s Board of Commissioners No. 29SKDP-PLN2015, Joseph Suardi Sabda was appointed as part time Audit Committee Non Commissioner and his term ended on September 1, 2016. Berdasarkan SK Menteri BUMN Republik Indonesia No. SK-211MBU102015 tanggal 30 Oktober 2015, Muhamad Ali, Djoko Rahardjo Abu Manan, Machnizon, dan Haryanto.W.S diangkat sebagai Direktur Perusahaan. Based on the Decision Letter of the MSOE of the Republic of Indonesia No. SK-211MBU102015 dated October 30, 2015, Muhamad Ali, Djoko Rahardjo Abu Manan, Machnizon and Haryanto.W.S were appointed as the Company’s Directors. Berdasarkan SK Menteri BUMN Republik Indonesia No. SK-223MBU112015 tanggal 10 November 2015, Kuntoro Mangkusubroto diangkat sebagai Komisaris Utama, dan Jarman diangkat sebagai komisaris. Based on the Decision Letter of the MSOE of the Republic of Indonesia No. SK- 223MBU112015 dated November 10, 2015, Kuntoro Mangkusubroto was appointed as President Commissioner, and Jarman was appointed as Commissioner. PERUSAHAAN PERSEROAN PERSERO PT PERUSAHAAN LISTRIK NEGARA DAN ENTITAS ANAKAND SUBSIDIARIES CATATAN ATAS LAPORAN KEUANGAN KONSOLIDASIAN Lanjutan Untuk Tahun-tahun yang Berakhir pada Tanggal 31 Desember 2016 dan 2015 Dalam jutaan Rupiah, kecuali dinyatakan lain NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued For the Years Ended December 31, 2016 and 2015 In millions of Rupiah, unless otherwise stated 13 Berdasarkan SK Menteri BUMN Republik Indonesia No. SK-106MBU052016 tanggal 24 Mei 2016, Hasan Bisri diangkat sebagai Pelaksana Tugas ”PLT” Komisaris Utama menggantikan Kuntoro Mangkusubroto. Based on the Decision Letter of the MSOE of the Republic of Indonesia No. SK- 106MBU052016 dated May 24, 2016, Hasan Bisri was appointed as Task Executor “PLT” of President Commissioner to replace Kuntoro Mangkusubroto.

2. Penerapan Prinsip Akuntansi yang Berlaku

Umum di Indonesia ”PABU” 2. Implementation of Indonesian Generally Accepted Accounting Principles “PABU”

a. Penerapan Peraturan Otoritas Jasa Keuangan No.6POJK.042017 tentang

Perlakuan Akuntansi atas Transaksi Berdasarkan Perjanjian Jual Beli Tenaga Listrik “POJK No.6” a. Implementation of Financial Services Authority Regulation No.6POJK.042017 regarding Accounting Treatment for Transactions Based on Power Purchase Agreements “POJK No.6” Perusahaan dan entitas anak mengadakan perjanjian jual beli tenaga listrik, yakni Perjanjian Jual Beli Tenaga Listrik “PPA” dan Kontrak Penjualan Energi “ESC”, dengan penyedia dan Pengembang Tenaga Listrik Swasta “IPP”. IPP tersebut merupakan pemegang Izin Usaha Ketenagalistrikan untuk kepentingan umum, yang dapat diserahkan kepada entitas usaha lain dengan tanggung jawab untuk menghasilkan tenaga listrik guna kepentingan umum. The Company and its subsidiaries entered into power purchase agreements namely Power Purchase Agreements “PPA” and Energy Sales Contracts “ESC”, with Independent Power Producers “IPPs”. Those IPPs are holders of Electricity Business License for public use, which may be granted to other business entities with responsibility to generate electricity for public use. Sebelum 1 Januari 2016, Perusahaan dan entitas anak menerapkan ISAK 8: Penentuan Apakah Suatu Perjanjian Mengandung Suatu Sewa “ISAK 8” dalam mengevaluasi apakah PPA dan ESC dengan IPP mengandung unsur sewa Catatan 3.l. Before January 1, 2016, the Company and its subsidiaries applied ISFAS 8: Determining Whether an Arrangement Contain a Lease “ISFAS 8” in evaluating whether PPAs and ESCs with IPPs contain a lease Note 3.l. Pada tanggal 1 Maret 2017, Otoritas Jasa Keuangan “OJK” menerbitkan POJK No.6 yang berlaku bagi Emiten dan Perusahaan Publik. Berdasarkan POJK No.6, transaksi berdasarkan perjanjian jual beli tenaga listrik diperlakukan sebagai transaksi jual beli, meskipun perjanjian jual beli tenaga listrik tersebut mengandung substansi selain jual beli. POJK No.6 berlaku secara prospektif untuk periode tahun buku yang dimulai sejak 1 Januari 2017 dan mengijinkan perlakuan lebih awal sejak 1 Januari 2016. POJK No.6 berlaku sampai akhir periode tahun buku berakhirnya penugasan untuk percepatan pembangunan infrastruktur ketenagalistrikan berdasarkan Peraturan Presiden. On March 1, 2017, Financial Services Authority “OJK” issued POJK No.6 which is applicable for listed and public companies. Based on POJK No.6, transactions based on a power purchase agreement are treated as sale and purchase transactions, even though the power purchase agreements contain substances other than of a sale and purchase. POJK No.6 applies prospectively for the year beginning on January 1, 2017 and early implementation is allowed for the year beginning on January 1, 2016. POJK No.6 is valid until the end of the assignment on acceleration of electricity infrastructures development in accordance with Presidential Regulation.