TRADE RECEIVABLES continued FS English Q1 2017 FINAL

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three month periods Ended March 31, 2017 and 2016 unaudited Figures in tables are expressed in billions of Rupiah, unless otherwise stated 38

5. TRADE RECEIVABLES continued

a. Movements in the provision for impairment of receivables March 31, 2017 December 31, 2016 Beginning balance 2,990 3,048 Provision recognized during the year Note 25 479 743 Receivables written off - 801 Ending balance 3,469 2,990 The receivables written off relate to both related party and third party trade receivables. Management believes that the provision for impairment of trade receivables is adequate to cover losses on uncollectible trade receivables. As of March 31, 2017, certain trade receivables of the subsidiaries amounting to Rp4,422 billion have been pledged as collateral under lending agreements Notes 15, 16b and 16c. Refer to Note 31 for details of related party transactions.

6. INVENTORIES March 31, 2017

December 31, 2016 Components 332 299 SIM cards and blank prepaid vouchers 158 168 Others 170 164 Total 660 631 Provision for obsolescence Components 18 18 SIM cards and blank prepaid vouchers 29 29 Others Total 47 47 Net 613 584 Movements in the provision for obsolescence are as follows: March 31, 2017 December 31, 2016 Beginning balance 47 41 Provision recognized during the year - 11 Inventory written off - 5 Ending balance 47 47 The inventories recognized as expense and included in operations, maintenance, and telecommunication service expenses as of March 31, 2017 and March 31, 2016 amounted to Rp581 billion and Rp478 billion, respectively Note 24. Management believes that the provision is adequate to cover losses from decline in inventory value due to obsolescence. Certain inventories of the subsidiaries amounting to Rp256 billion have been pledged as collateral under lending agreements Notes 15, 16b and 16c. As of March 31, 2017 and December 31, 2016, modules and components held by the Group with book value amounting to Rp196 billion and Rp199 billion, respectively, have been insured against fire, theft, and other specific risks. Modules are recorded as part of property and equipment. Total sum insured as of March 31, 2017 and December 31, 2016 amounted to Rp220 billion, respectively. Management believes that the insurance coverage is adequate to cover potential losses of inventories arising from the insured risks. PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three month periods Ended March 31, 2017 and 2016 unaudited Figures in tables are expressed in billions of Rupiah, unless otherwise stated 39

7. ADVANCES AND PREPAID EXPENSES March 31, 2017

December 31, 2016 Frequency license Notes 34c.i and 34c.ii 2,195 3,056 Prepaid rental 1,899 1,234 Advances 434 394 Salaries 358 229 Advance to employee 72 32 Others 710 301 Total 5,668 5,246 Refer to Note 31 for details of related party transactions.

8. LONG-TERM INVESTMENTS

March 31, 2017 Percentage of ownership Beginning balance Additions Deductions Share of net profit loss of associated company Dividend Share of other comprehensive income of associated company Ending balance Long-term investments in associated companies: Tiphone a 24.43 1,488 - 20 - - 1.508 Indonusa b 20.00 221 - - - - 221 Teltranet c 51.00 38 - 3 - - 35 PT Integrasi Logistik Cipta Solusi “ILCS” e 49.00 42 - - - 42 Telin Malaysia f 49.00 - - - CSM g 25.00 - - - - - - Sub-total 1,789 - 17 - - 1.806 Other long-term investments 58 1 - - - 59 Total Long-term investments 1,847 1 17 - - 1.865 Summarized financial information of the Group’s investments accounted under the equity method for 2017: Tiphone Indonusa Teltranet ILCS Telin Malaysia CSM Statements of financial position Current assets 7.709 170 66 141 24 161 Non-current assets 743 444 90 20 14 761 Current liabilities 1.248 532 84 74 66 594 Non-current liabilities 3.762 405 3 1 - 1.206 Equity deficit 3.442 323 69 86 28 878 Statements of profit or loss and other comprehensive income Revenues 27.310 605 30 18 23 131 Cost of revenues and operating expenses 26.445 583 37 17 29 221 Other income expenses including finance costs - net 231 17 - - - 88 Profit loss before tax 634 5 7 1 6 178 Income tax benefit expense 166 33 2 - - Profit loss for the year 468 28 5 1 6 178 Other comprehensive income loss 5 7 - - - - Total comprehensive income loss for the year 463 21 5 1 6 178 Using financial information as of December 31, 2016 and for the period then ended.