revenues operating proit and operating proit Margin proit before income tax and pre-tax Margin

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

143

PT Telkom Indonesia Persero Tbk This increased was ofset by decreased in net periodic post-retirement health care beneits costs amounted to Rp126 billion, or 33.7 and decreased in net periodic pension costs by Rp219 billion, or 25.1 according to actuarial accounting.

d. interconnection expense

Interconnection expense decreased by Rp34 billion, or 0.7, from Rp4,927 billion in 2013 to Rp4,893 billion in 2014 primarily due to an decrease of Rp81 billion, or 2.2 in domestic interconnection and transit interconnection expense.

e. Marketing expense

Marketing expenses increased by Rp48 billion, or 1.6, from Rp3,044 billion in 2013 to Rp3,092 billion in 2014 due to an increase of Rp80 billion, or 15.1 in customer education expenses, primarily for our broadband service. The increase was ofset by decrease in advertising and promotion expenses by Rp18 billion, or 0.7, due to the selective use of media for promotion and increased group synergy in marketing our products.

f. general and administrative expenses

General and administrative expenses decreased by Rp192 billion, or 4.6, from Rp4,155 billion in 2013 to Rp3,963 billion in 2014 primarily due in part to an decrease in provision for doubtful impairment of receivables by Rp805 billion, or 50.7. This decreased was partially ofset with an increase in general expense by Rp292 billion, or 43.3 and also an in our training, education and recruitment expense by Rp116, or 28.2.

g. gain loss on foreign exchange - net

Loss on foreign exchange - net decreased by Rp235 billion, or 94.4, from Rp249 billion in 2013 to Rp14 billion in 2014.

h. other expenses

Other expenses decreased by Rp84 billion, or 17.5 from Rp480 billion in 2013 to Rp396 billion in 2014.

3. operating proit and operating proit Margin

As a result of the foregoing, operating proit increased by Rp1,360 billion, or 4.9, from Rp27,846 billion in 2013 to Rp29,206 billion in 2014. Operating proit margin decreased from 33.6 in 2013 to 32.6 in 2014.

4. proit before income tax and pre-tax Margin

As a result of the foregoing, proit before income tax increased by Rp1,464 billion, or 5.4, from Rp27,149 billion in 2013 to Rp28,613 billion in 2014. Pre-tax margin increased from 32.7 in 2013 to 31.9 in 2014.

5. income tax expense

Income tax expense decreased by Rp480 billion, or 7.0, from Rp6,859 billion in 2013 to Rp7,339 billion in 2014, in line with the increase in proit before income tax.

6. other Comprehensive income

Other comprehensive income increased by Rp655 billion, or 584.8, from Rp112 billion in 2013 to Rp767 billion in 2014.

7. proit for the year attributable to owners of the parent Company

Proit for the year attributable to owners of the parent company increased by Rp266 billion, or 1.9, from Rp14,205 billion in 2013 to Rp14,471 billion in 2014.

8. proit for the year attributable to non- controlling interest

Proit for the year attributable to non-controlling interest increased by Rp718 billion, or 11.8, from Rp6,085 billion in 2013 to Rp6,803 billion in 2014.

9. Comprehensive income for the year

Comprehensive income for the year increased by Rp1,639 billion, or 8.0, from Rp20,402 billion in 2013 to Rp22,041 billion in 2014.

10. net income per Share

Net income per share increased by Rp0.7, or 0.5, from Rp147.42 in 2013 to Rp148.13 in 2014

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PT Telkom Indonesia Persero Tbk CaSH floW StateMent overvieW The following table sets out information concerning our consolidated cash lows, as set out in and prepared on the same basis as our Consolidated Financial Statements: Growth As of Desember 31, 2015-2014 2015 2014 Restated 2013 Rp billion US million Rp billion Rp billion Net Cash provided by operating activities 15.7 43,669 3,168 37,736 36,574 used in investing activities 10.8 27,421 1,989 24,748 22,702 used in inancing activities 36.5 6,407 465 10,083 13,327 Net increase in cash and cash equivalents 238.8 9,841 714 2,905 545 Efect of exchange rate changes on cash and cash equivalents 750.7 604 44 71 1,039 Cash and cash equivalents at beginning of year 20.3 17,672 1,282 14,696 13,118 Ending balance of disposed subsidiary - - - - 6 Cash and cash equivalents at end of year 59.1 28,117 2,040 17,672 14,696 145 PT Telkom Indonesia Persero Tbk year enDeD DeCeMber 31, 2015 CoMpareD to year enDeD DeCeMber 31, 2014 As of December 31, 2015, total cash and cash equivalent amounted to Rp28,117 billion, increase by Rp10,445 billion, or 59.1 compared to 2014. In 2015, operating activity accounted for the largest cash receipts Rp102,663 billion, or 82.7, followed by inancing activity amounted to Rp20,634 billion, or 16.6 and investing activity amounted to Rp906 billion, or 0.7. In total, cash receipts increase by Rp13,859 billion, or 12.6 compared to 2014. Composition of cash receipts for all three of these activities in the year 2015 and 2014 display below. The majority of cash used for operating activities amounted to Rp58,994 billion, or 51.6 investment activities amounted to Rp28,327 billion, or 24.8 and inancing activities amounted to Rp27,041 billion, or 23.6. Compared to 2014, cash disbursement increase by Rp6,923 billion, or 6.4. Composition of disbursements for all three of these activities in the year 2015 and 2014 display below. 2015 Cash receipt 2014 90,3 63 8 1.9 6 ,9 12 6 .3 13 ,06 9 1 1.8 9 06 0. 7 20 , 63 4 1 6.6 102 , 6 6 3 8 2 .7 2015 2014 Cash Disbursement

52, 62

7 4 9 .0 3 1,6 6 2 9.5 23,15 21.5

58, 99

4 51 . 6 2 8 ,3 27 2 4.8 2 7 , 4 1 2 3 . 6 Operating Financing Investing Operating Financing Investing