non-Current liabilities external liquidity Sources

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PT Telkom Indonesia Persero Tbk The realization of the future capital expenditures may difer from the amounts indicated above due to various factors, including but not limited to the Indonesian and global economy environments, the RupiahUS Dollar, Yen or other applicable foreign exchange rates, the availability of supply or vendor or other inancing on terms acceptable to us, and also any technical or other problems in the implementation. Material Commitment for Capital expenditures We had material commitments for capital expenditure under certain contractual arrangements. The contracts particular with regard to the procurement and installation of central telephone equipment, transmission equipment and cable networks. Material commitment includes the following signiicant agreements related The Group and subsidiaries as follows: Composition of Capital expenditure telkom • Procurement and installation agreement for the modernization of copper cable network through optimalization of asset copper cable network Trade In Trade Of method. • Procurement and installation agreement for the modernization of copper cable network through optimalization of asset copper cable network Trade In Trade Of method. • Procurement and Installation Agreement of Outside Plant Fiber To The Home OSP FTTH. • Procurement and Installation Agreement of the Sulawesi Maluku Papua Cable System Project SMPCS. • Procurement and Installation Agreement of SMPCS Package-2. • Procurement and Installation Agreement of CISCO WIFI. • Procurement and Installation of IP Radio Equipment Agreement for Backhaul Node-B Telkomsel Package-3 Platform NEC. • Procurement and Installation of IP Radio Equipment Agreement for Backhaul Node-B Telkomsel Package-2 Platform Huawei. • Procurement and Installation of IP Radio Equipment Agreement for Backhaul Node-B Telkomsel Package-1 Platform Ericsson.. • Procurement Agreement of Telkom-3 Substitution T3S Satellite System. • Procurement and Installation Agreement of Indonesia WIFI Platform Huawei Access Points. • Procurement and Installation Agreement of the Southeast Asia-Middle East-Western Europe 5 Cable System SEA-ME-WE5. • Procurement and Installation Agreement MSAN Modernization for Acceleration of the Disposal of Cooper Wire - Platform Huawei. • Procurement and Installation Agreement MSAN modernization for Acceleration of the Disposal of Cooper Wire - Platform ZTE. • Procurement and Installation Agreement for DWDM Platform Alcatel – Lucent ALU. • Procurement and Installation Agreement for Metro Ethernet Platform ALU. • Procurement and Installation Agreement for PE-VPN CISCO. • Procurement and Installation Agreement for Metro Ethernet Platform Huawei. • Procurement and Installation Agreement for IP Backbone System Expansion. • Procurement and Installation Agreement for IPTV Platform ZTE Capacity Expansion. • The Procurement and Installation of the Sea Cable Communications System “SKKL” of Sibolga-Nias, Batam-Tanjung Balai Karimun, Larantuka-Kabalahi- Atambua. Telkomsel Telkom Others 42.9 36.5 2 .6

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PT Telkom Indonesia Persero Tbk telkomsel • The Combined 2G and 3G CS Core Network Rollout Agreements. • Technical Service Agreement TSA for combined 2G and 3G CS Core Network. • 2G BSS and 3G UTRAN Rollout Agreement for the provision of 2G GSM BSS and 3G UMTS Radio Access Network. • Maintenance and Procurement of Equipment and Related Service Agreement for Next Generation Convergence IP RAN Rollout and Technical Support. • Maintenance and Procurement of Equipment and Related Service Agreement for Next Generation Convergence Core Transport Rollout and Technical Support. • Online Charging System “OCS” and Service Control Points “SCP” System Solution Development Agreement. • Technical Support Agreement to Provide Technical Support Services for the OCS and SCP. • Development and Rollout Agreement for Customer Relationship Management and Contact Center Solutions. • Technical Support Agreement for the Procurement of Gateway GPRS Support Node “GGSN” Service Complex. • Development and Procurement of OSDSS Solution Agreement. • Procurement of GGSN Service Complex Rollout Agreement. We expect to fund the above commitment with our internal and external source of funds. Historically, we have good level of leverage and able to inance capital expenditure In the year of 2015, we allocate capital expenditure adjusted for the company’s business plan. See explanation on “Capital Expenditure Material commitment for capital expenditure conducted by Company use several currencies. Following details of material commitment by currency as of December 31, 2015: Beside using rupiah currency, the value of the material commitment is denominated in foreign currencies, especially in U.S. Dollars and Japanese Yen. The Company faces the risk of foreign currency exchange rates. In general, the risk exposure of foreign currency exchange rate the Company is not material. Increasing risks of foreign currency exchange rates on our obligations are expected to be ofset by the time deposits and receivables in foreign currencies that are equal to at least 25 of outstanding current liabilities. For detail discussion on material commitments for capital investment, exchange rate and interest rate see Notes 39 and 42 to our Consolidated Financial Statements. fixed asset Our property and equipment is used for telecommunication operations, which mainly consist of transmission installation and equipment, cable network and switching equipment. A description of these is contained elsewhere in Note 10 to our Consolidated Financial Statements. Except for ownership rights granted to individuals in Indonesia, reversionary rights to land rests with the Republic of Indonesia, pursuant to Agrarian Law No.51960. Land title is designated through land rights, including Right to Build Currencies Amounts in Foreign Currencies in millions Equivalent in Rupiah in billions Rupiah - 10,648 US Dollar 320 4,410 Euro 0.21 3 Total - 15,061 155 PT Telkom Indonesia Persero Tbk Hak Guna Bangunan or HGB and Right of Use Hak Guna Usaha or HGU. Land title holders enjoy full use of the land for a speciied period, subject to renewal and extensions. In most instances, land rights are freely tradable and may be pledged as security under loan agreements. We own several pieces of land located throughout Indonesia with the right to build and use for a period of 10 to 45 years, which will expire between 2016 and 2053. We believe that there will be no diiculty in obtaining the extension of the land rights when they expire. We hold registered rights to build and use for most of our properties. Pursuant to Government Regulation No.401996, the maximum initial period for the right to build is 30 years and is renewable for an additional 20 years. We are not aware of any environmental issues that could afect the utilization of our property and equipment. See Note 16, 19 and 20 to our Consolidated Financial Statements. As of December 31, 2015 the cost of fully depreciated property and equipment of the Company that are still used in operations amounted to Rp54,168 billion. We are currently performing modernization of network assets to replace the fully depreciated property and equipment. See Note 10 to our Consolidated Statements. insurance As of December 31, 2015, property and equipment excluding land rights, with net carrying amount of Rp93,460 billion were insured against ire, theft, earthquake and other speciied risks, including business interuption, under blanket policies totalling of Rp10,980 billion, US99 million, HKD3 million and SGD34 million. Management believes that the insurance coverage is adequate to cover potential losses from the insured risks. taXation The following is an overview of tax consequences in Indonesia and Federal taxes of the United States of America “U.S.A” in relation with purchases, ownerships and sales of ADSs or common stocks. This summary is not intended to describe all aspects of taxation which may be relevant to the decision regarding purchases, ownerships or sales of ADSs or common stocks. Investors are expected to consult with their tax advisors regarding tax consequences in Indonesia and in the U.S.A on purchases, ownerships and sales of ADSs or common stocks.

a. taxation in indonesia

The following is an overview of the basic principles of taxation in Indonesia over the ownership and disposition of common stocks or ADSs for individual foreigners or foreign companies that have common stocks or ADSs “Foreign Shareholders” who are Foreign Taxpayers “WPLN”. Under the taxation laws in Indonesia, WPLN is an individual who does not reside in Indonesia, an individual who was in Indonesia for no longer than 183 one hundred eighty three days within a period of 12 twelve months, and entities not established and domiciled in Indonesia, which operatng business or engaged in activities in a form of permanent entities in Indonesia, or that may receive or earn income from Indonesia by not operating business or engaged in activities in a form of permanent entities in Indonesia, namely, earn income from the ownership or disposition of common stocks or ADSs. In the case of WPLN domiciled in a country party to Double Taxation Avoidance Agreement “P3B” with Indonesian Government, the determination of a resident, either an individual or entity, shall refers to the applicable provisions in the P3B. If resident conlict is occurred with regard to transactions between Indonesian-American citizen, the tie breaker rule as stipulated in the P3B between Government of Indonesia and the U.S.A shall be applied.

1. Dividend Dividen yang kami umumkan untuk dibagikan dari

laba Dividend that we announced for distribution of retained earnings and paid to the Shareholders with WPLN status in respect to common stocks or ADSs are subject to income tax in Indonesia, which at the date of publication of this Annual Report the rate is 20 of the paid amount in terms of cash dividends payment or the shareholder ownership portion of the distributed amount. A lower rate speciied in P3B between the Government of the Republic of Indonesia and the country where WPLN is domiciled can be applied, if the dividend recipient meets the following requirements: i the recipient is the owner who gains beneit from dividends, ii the recipient must be able to present a 156 PT Telkom Indonesia Persero Tbk Certiicate of Domicile of Non Resident For Indonesia Tax Withholding form DGT-1 Form or DGT-2 Form as determined by the Indonesian Tax Authorities, which completely and correctly illed out and authorized by the competent authorities in the country where WPLN is domiciled, iii the recipient does not misuse P3B in accordance with the provisions on misuse prevention of P3B. The Indonesian government is engaged the P3B with a number of countries, including Australia, Belgium, Canada, France, Germany, Japan, Malaysia, the Netherlands, Singapore, Sweden, Switzerland, the U.K. and the U.S.A. According to P3B between the Indonesian Government and the U.S.A Government, the income tax rate on dividends paid to WPLN is 10 portfolio or 25 minimum share ownership substantial holding of 25.

2. Capital gains

Sale or transfer of common stocks traded on Indonesia Stock Exchange Bursa Efek Indonesia”BEI” is subject to inal income tax at the rate of 0.1 of the transaction value. The income tax collection is conducted by withholding tax mechanism made by the stock organizer through stock brokers. In addition to inal income tax of 0.1, the founding shareholders at the time of initial public ofering IPO was also imposed an additional inal income tax at the rate of 0.5 of the current value of the shares at the initial public ofering which is to be deposited itself into state treasury by the issuer at no later than 1 one month after such shares are listed on BEI. Sale or transfer of common stocks that are not listed on BEI or ADS non-public companies’ shares in Indonesia, executed by Foreign Taxpayers other than Permanent Entities, is subject to inal income tax in Indonesia at the rate of 5 of the sale price. Mechanism of income tax imposition on the sale or transfer of common stocks that are not listed on BEI or ADS is withholding tax mechanism made by the Purchaser in the case of the Buyer is a Domestic Taxpayer, or made by the Non-Public Company which shares are traded in the case of the Buyer is a Foreign Taxpayer. Sale or transfer of common stocks, both listed traded on BEI and common stocks of Non-Public Companies, executed by Foreign Taxpayers may be exempted from withholding tax or lower rate depends on the provisions of the applicable P3B between the Government of the Republic of Indonesia and the country where the Foreign Taxpayers are domiciled. In order to gain benefits from the applicable P3B, Foreign Taxpayers shall submit Certificate of Domicile of the Non Resident For Indonesia Tax Withholding DGT-1 Form andor DGT-2 Form, which completely and correctly filled out by the Foreign Taxpayers and authorized by the competent tax authorities in their country.

3. Stamp Duty Stock transactions in Indonesia is subject to stamp

duty. Based on Government Regulation No.24 of 2000 regarding Amendment on Stamp Duty Rates and the Limit Amount of Nominal Price imposed with Stamp Duty, stamp duty in the amount of Rp3,000 shall be charged for any transaction value up to Rp1,000,000 and any transaction value of more than Rp1,000,000 shall be imposed by stamp duty in the amount of Rp6,000.

b. Certain Consideration regarding federal income tax in the U.S.a

Based on requirements of Internal Revenue Service “IRS” which generally applied, tax information in this report including its attachments are not intended to be used and cannot be used for the purpose of i avoiding any ines imposed by the U.S.A’s Internal Revenue Code, or ii promoting, marketing, or recommends to other person any matter related to taxes. The following is a summary of some of the consequences of federal income tax in the U.S.A in relation to the acquisition of ownership and transfer of ADSs or common stocks by American Shareholders who own ADSs or common stocks as capital assets generally, they use their property for investment under section 1221 of U.S.A Internal Revenue Code the “Tax Code”. This summary is based on the U.S.A Federal laws of applicable income taxes, which can be interpreted diferently or may change, possibly with retroactive efect. This summary does not address all aspects of the U.S.A federal income taxation that may be important for certain investors in accordance with each of investment situation, including investors who are subject to special tax for instance, inancial institutions, insurance companies, broker-dealers, partnerships and their partners, and tax- exempted organizations including private foundations, shareholders who are the U.S.A. Holder sic, investors who will own ADSs or common stocks as part of straddle, hedging, conversion, constructive sales, or other integrated transactions with the U.S.A federal income taxes 157 PT Telkom Indonesia Persero Tbk purposes, or investors who have their functional currency other than the U.S.Dollars, all of which may be subject to very diferent tax rules other than the summary below. Moreover, this summary does not address considerations relating to property tax and grants from the U.S.A federal sic states, locals, or non-U.S.A tax considerations. Each shareholder is advised to have consultation with their tax advisors concerning the U.S.A federal, states, locals and non-U.S.A incomes, and other tax considerations of their investment in ADSs or common stocks. For the purpose of this summary, “U.S.A shareholder” is a beneicial owner of ADSs or common stocks in which, for the U.S.A federal income tax purposes, i an individual who is a citizen or resident of the U.S.A, ii a company, or other entities treated as a company for federal income tax purposes, corporated in, established under the laws of the U.S.A or the state or the District of Columbia, iii any entity established or organized in or under the laws of another jurisdiction if it is treated as a domestic company in accordance with the tax laws, iv income from property that is included in gross revenues for federal income taxation purposes regardless of its sources, or v the trust A which the implementation is the subject of major supervision of U.S. courts and owned by one or more American citizen who have the authority to control all substantial decisions or B that has otherwise elected to be treated as U.S.A citizens according to the tax laws. If a partnership or other entities which treated as a “transparent tax” entity for the U.S.A tax purposes is the holder of ADSs or common stocks, therefore, tax treatment of a partner in a partnership or the stackholder in “transparent tax” entity generally depends on the status of the partners or shareholders and the activities of the partnership or “transparent tax “ entities. For federal income tax purposes, the U.S.A citizens who own ADSs will be treated as the owner who receives the beneits of Common Stocks which represented by ADSs.

1. threshold Classiication of passive foreign investment Company “piap”

A non-U.S.A company, such as Telkom, will be treated as a PIAP for the U.S.A Federal income tax purposes, if 75 or more of its gross revenues consists of a speciic “passive” income or 50 or more of its assets are passive. Based on the Company’s revenues and assets in 2014, we strongly believe that the Company is not classiied as a PIAP. Because of the status of PIAP is determined by intensive facts made on annual basis, there is no guarantee that the Company is not or will not be classiied as a PIAP. The following discussion regarding “Dividends” and “Sales or Other Transfers of the ADSs or Common Stocks” are made on the basis that the Company will not be classiied as a PIAP for the U.S.A Federal income tax purposes.