Report of the Audit Committee in 2014

- 173 - Table of Content

2. Report of the Audit Committee in 2014

The activities that have been performed the audit committee in 2014, are as follow: Independent Auditor In 2014, Telkom has reappointed Purwantono, Suherman Surja, a member firm of Ernst Young Global Limited EY as an independent auditor to conduct an integrated audit for Fiscal Year 2014. The reappointment of EY as an independent auditor has been approved by the Annual General Meeting of Shareholders on April 4, 2014. The Audit Committee, jointly with EY, has reviewed the quality and acceptability of the financial accounting standards adopted by the Company. Based on the results of the integrated audit, EY is responsible to give an opinion on the fairness of the presentation of the consolidated financial statements in accordance with financial accounting standards in Indonesia and International Financial Reporting Standards IFRS and the opinion on the effectiveness of internal control over financial reporting internal control over financial reporting in accordance with criteria of the Committee of Sponsoring Organizations of Treadway Commission COSO. The review and discussion of the Audit Committee with EA also cover matters in accordance with auditing standards on communication with the Audit Committee, the standards of the Public Company Accounting Oversight Board PCAOB, the OJK and SEC Regulations and other applicable regulations. In accordance with PCAOB rules 3526 - Communication with Audit Committees Concerning Independence, EY has submitted a letter to Audit Committee that provides explanation about the relationships between EY and Company would be regarded to bear on independence. The Audit Committee has discussed with EY about this independence and has received confirmation that EY professional consideration that Public Accounting Office are independent, considering the influence of of non-audit services from public accounting firm. Integrated Audit 1. The Audit Committee has reviewed managements report on its evaluation of the effectiveness of the Companys internal control over financial reporting and EYs report on the effectiveness of internal control over financial reporting. The Audit Committee had also discussed the significant deficiencies SD identified during the evaluation process and the audit process with management and EY as well as the management plans to remediate weaknesses of internal control over financial reporting. 2. The Audit Committee had discussed with the Companys internal auditors and EY about the overall scopes and plans for their audits. The Audit Committee has held meetings with the internal auditors and EY, without management present, to discuss the results of the examination and the results of their evaluation of internal control over financial reporting of the Company as a whole. The Audit Committee has reviewed and discussed the audited consolidated financial statements and notes to the consolidated financial statements in the Annual Report Form 20F with the Companys management. This discussion includes the quality and acceptability of financial accounting standards applied by Company, the feasibility of accounting estimation and judgement and the adequacy of disclosures in the consolidated financial statements. The management has confirmed to the Audit Committee that the consolidated financial statements: i are the responsibility of management and have been prepared with integrity and objective; and ii have been presented in accordance with financial accounting standards in Indonesia and IFRS. Based on the result of the discussions, the Audit Committee had recommended to the Board of Commissioners, and subsequently the Board of Commissioners has approved that the audited consolidated financial statements and notes on the consolidated financial statements and managements evaluation of the effectiveness of internal control over financial reporting to be included in the Annual Report which will be be reported by the Company to OJK and the Annual Report on Form 20F which will be reported by the Company to the US SEC. - 174 - Table of Content Internal Auditor 1. The Audit Committee reviewed Annual Audit Work Program of Internal Audit “IA” in 2014 which is based on Risk Based Approach Audit before set by Management. 2. The Audit Committee reviewed and discussed the findings or internal consultations including its recommendation on the implementation of Annual Audit Work Program of IA in 2014 and monitor the follow up IA recommendation about management on a quarterly basis. During 2014, IA has given 424 recommendations to Management consist of 347 has completed and 67 recommendations still in process because they were given in fourth quarter of 2014. 3. The Audit Committee monitors the findings of the Audit Board of the Republic of Indonesia “BPK” in 2014 and follow-up that has been done by the Management. During 2014, BPK has given 41 recommendations to Management, out of which 38 recommendations has completed and 3 recommendations could not be followed. 4. Based on limited review from IA, the Audit Committee supervise and monitor the risk of fraud and financial reporting risk that may have a material effect on the Financial Statement. Partnership and Community Development Programs The Audit Committee reviewed and discussed with management and EY on PKBL Financial Statement Fiscal Year 2014 and CSR Implementation Compliance Report with regulations. Whistleblower 1. The Audit Committee has developed procedures for receiving and handling complaints regarding accounting problem, internal controls and auditing, including procedures to keep secrecy of the informan, dan anonymous accusation submitted by employees in accordance with the OJK Regulations No.IX.1.5 and Sarbanes-Oxley Act of 2002 section 301 of the Public Company Audit Committees . 2. With regard to enterprise risk management, the Audit Committee also oversees and monitors the risk of fraud and financial reporting risks that may have a material effect on the financial statements. Jakarta, March 26, 2015 s Johnny Swandi Sjam Chairman of Audit Committee - 175 - Table of Content

3. Report of the KEMPR in 2014