indebtedness 2,764 Cash flows from financing activities

151 PT Telkom Indonesia Persero Tbk

a. Current liabilities

Our ability to pay our current liabilities is indicated by the ratios on the table below: Rasio 2015 2014 Restated 2013 Current ratio 1353 106.1 116.0 Quick ratio 133.8 104.6 114.2 Cash ratio 87.4 63.3 74.3

b. non-Current liabilities

Our ability to pay our debt is indicated by the ratios on the table below Rasio 2015 2014 Restated 2013 debt to equity ratio 37.0 27.3 26.4 debt to EBITDA 67.3 51.4 48.5 times interest earned ratio 20.7 25.2 27.8 We have made provision for impairment of trade receivables based on the collective assessment of historical impairment rates and individual assessment of its customers’ credit history, amounted to Rp3,048 billion in 2015 and Rp3,096 billion in 2014. The Group does not apply a distinction between related party and third party receivables in assessing amounts past due. As of December 31, 2015 and 2014, the carrying amount of our receivables considered past due but not impaired amounted to Rp3,430 billion and Rp3,529 billion, respectively. Management believes that receivables past due but not impaired, along with trade receivables that are neither past due nor impaired, are due from customers with good credit history and are expected to be recoverable. For detail discussion about our receivable, see Note 6 to our Consolidated Financial Statements. For detail discussion about our debt, see Notes 16-20 to our Consolidated Financial Statements. receivable Collectibility Our receivable collectability, indicated by the ratios average collection period that show an average of days that we take to collect our receivable and receivable turnover that show how many times in average the funds invested in receivable are turned in one year. Our average collection period were 26.8 days in 2015 and 28.5 days in 2014. Our receivable turnover for 2015 and 2014 were 13.6 and 12.8. 152 PT Telkom Indonesia Persero Tbk Capital Structure Our capital structure as of December 31, 2015 is described as follows: We take a qualitative approach towards our capital structure and debt levels. Periodically, the Company conducts debt valuation to assess possibilities of reinancing existing debts with new ones which have more eicient cost that will lead to more optimized cost- of-debt. the Company also maintains its capital structure at the level it believes will not risk its credit rating and which is comparable with its competitors. The Company is required to maintain a certain debt-to- equity ratio and debt service coverage ratio by the lenders. In 2015, our debt to equity ratio was 0.37 and our debt service coverage ratio was 3.9 times, indicating our strong ability to meet our debt obligations. During the years ended December 31, 2015, the Company has complied with the externally imposed capital requirements. For detail discussion about management policy on capital structure, see Note 43 to our Consolidated Financial Statements. Capital expenditures In 2015, we incurred capital expenditures of Rp26,401 billion US1,915 million. Our capital expenditures are grouped into the following categories for planning purposes: • Broadband services, which consist of broadband, IT, application and content and service node; • Network infrastructure, which consists of core transmission network, metro-ethernet and Regional Metro Junction “RMJ”, IP backbone and satellite; • Optimizing legacy, for ixed lines; and • Capex supports. Of our Rp26,401 billion capital expenditure in 2015, Telkom, as parent company, incurred capital expenditures of Rp9,641 billion US699 million, Telkomsel incurred capital expenditures of Rp11,321 billion US821 million and our other subsidiaries incurred capital expenditures of Rp5,439 billion US395 million as follows: Amount Rp billion Portion Short Term 602 0.5 Long Term 34,010 31.0 Debt 34,612 31.5 Equity 75,136 68.5 Total Invested Capital 109,748 100.0 Table of Realization of Our Capital Expenditure Years Ended December 31, 2015 2014 2013 Rp billion US million Rp billion Rp billion Telkom parent company 9,641 699 8,099 5,313 Subsidiaries Telkomsel 11,321 821 13,002 15,662 Others 5,439 395 3,560 3,923 Subtotal for subsidiaries 16,760 1,216 16,562 19,585 Total for Telkom Group 26,401 1,915 24,661 24,898