CAPITAL MANAGEMENT continued 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 136 46. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND IFRS INTERNATIONAL FINANCIAL REPORTING STANDARDS continued PSAK RECONCILIATION IFRS REVENUES 102,470 - 102,470 Operations, maintenance and telecommunication service expenses 28,116 - 28,116 Depreciation and amortization expenses 18,534 38 18,572 Personnel expenses 11,874 11 11,885 Interconnection expenses 3,586 - 3,586 General and administrative expenses 4,204 - 4,204 Marketing expenses 3,275 - 3,275 Loss on foreign exchange - net 46 - 46 Other income 1,500 - 1,500 Other expenses 1,917 - 1,917 OPERATING PROFIT 32,418 49 32,369 Finance income 1,407 - 1,407 Finance costs 2,481 - 2,481 Share of loss of associated companies 2 - 2 PROFIT BEFORE INCOME TAX 31,342 49 31,293 INCOME TAX EXPENSE 8,025 2 8,023 PROFIT FOR THE YEAR 23,317 47 23,270 OTHER COMPREHENSIVE INCOME LOSS Foreign currency translation 128 - 128 Change in fair value of available-for-sale financial assets 1 - 1 Share of loss of associated companies 2 - 2 Actuarial gain of defined benefits plan, net of tax 506 138 368 Net Other Comprehensive Income 631 138 493 TOTAL COMPREHENSIVE INCOME FOR THE YEAR 23,948 185 23,763 Profit for the year attributable to: Owners of the parent company 15,489 38 15,451 Non-controlling interests 7,828 9 7,819 23,317 47 23,270 Total comprehensive income for the year attributable to: Owners of the parent company 16,130 127 16,003 Non-controlling interests 7,818 58 7,760 23,948 185 23,763 BASIC AND DILUTED EARNINGS PER SHARE in full amount Net income per share 157.77 0.39 157.38 Net income per ADS 200 Series B shares per ADS 31,553.37 77.71 31,475.66 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 137 46. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND IFRS INTERNATIONAL FINANCIAL REPORTING STANDARDS continued a. Land rights Under PSAK, land rights are recorded as part of property and equipment and are not amortized, unless there is indication that the extension or renewal of land rights is not expected to be or will not be received. Costs incurred to process the extension or renewal of land legal rights are recognized as intangible assets and amortized over the shorter of the term of the land rights or the economic life of the land. Under IFRS, land rights are accounted for as finance lease and presented as part of property and equipment. Land rights are amortized over the lease term.

b. Related party transactions

Under Bapepam - LK Regulation No. VIII.G.7 regarding the Presentation and Disclosures of Financial Statements of Issuers or Public Companies, a government-related entity is an entity that is controlled, jointly controlled or significantly influenced by a government. Government in this context is the Ministry of Finance or the Local Government, as the shareholder of the entity. Under IFRS, a government-related entity is an entity that is controlled, jointly controlled or significantly influenced by a government. Government in this context refers to the Government of Indonesia, government agencies and similar bodies whether local, national or international.