other Comprehensive income AR TELKOM 2015 ENG.1

142 PT Telkom Indonesia Persero Tbk

2. expenses

Total expenses increased by Rp3,864 billion, or 6.7, from Rp57,700 billion in 2013 to Rp61,564 billion in 2014. For futher explaination as shown below:

a. operations, Maintenance and

telecommunication Service expenses Operations, maintenance and telecommunication service expenses increased by Rp2,956 billion, or 15.3, from Rp19,332 billion in 2013 to Rp22,288 billion in 2014. The increase in operations, maintenance and telecommunication service expenses was primarily attributable to the following: − Operations and maintenance of Rp2,169 billion, or 22.5, due to an increase in expenses associated with network maintenance to improve our mobile cellular business performance; − Leased lines and CPE increased by Rp318 billion, or 72.3, which was used for operation and maintenance of leased lines as a result of an increased in projects from our corporate customers; − Cost of handset increase by Rp268 billion, or 175.2, from Rp153 billion in 2013 to Rp421 billion in 2014 due to modem and terminal bundling program. The above increases were ofset by decreased in cost of IT services by Rp320 billion, or 47.2, from Rp677 billion in 2013 to Rp357 billion in 2014 due to eiciency gains as a result of of using integrated system.

b. Depreciation and amortization expenses

Depreciation and amortization expenses increased by Rp1,351 billion, or 8.6, from Rp15,780 billion in 2013 to Rp17,131 billion in 2014, primarily due to an increase in depreciation expense related to switching equipment as an eforts improving service to customers and by our allowance for impairment losses of ixed assets due to changes in business strategies for our ixed wireless line.

c. personnel expenses

Personnel expenses increased by Rp54 billion, or 0.6, from Rp9,733 billion in 2013 to Rp9,787 billion in 2014 due to a increased in salaries and related beneits by Rp206 billion, or 5.8, due to increased personnel amount by 1.37 in 2013 from 25,011 people to 25,284 people in 2014. This resulted an increased in employees’ income tax by Rp157 billion, or 13.5 from Rp1,160 billion in 2013 to Rp1,317 billion in 2014. 4,155 7.2 4 80 0.8 9 ,3 8 3 16 .9 4 ,9 2 7 8 .5 15 , 780 27 . 3 1 9 ,3 3 2 3 3 . 5 2013 2014 restated Composition of expenses 1 4 . 2 4 9 . 4 22 ,2 8 8 3 6 .2 1 7 , 131 27. 8 9 ,7 8 7 15 .9 3,96 3 6.4 4 ,8 93 7. 9 3 ,0 9 2 5 . 3 9 6. 1 0. 6 3 , 4 4 5 .3 Operations Maintenance Depreciation Amortization Interconnection Others Gain loss on Foreign Exchange Marketing Personnel General Administrative