TRADE RECEIVABLES FS English 2017final

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2017 and For the Six Months Period Then Ended unaudited Figures in tables are expressed in billions of Rupiah, unless otherwise stated 39

5. TRADE RECEIVABLES continued

d. Movements in the provision for impairment of receivables June 30, 2017 December 31, 2016 Beginning balance 2,990 3,048 Provision recognized during the year Note 25 325 743 Receivables written off - 801 Ending balance 3,315 2,990 The receivables written off relate to both related party and third party trade receivables. Management believes that the provision for impairment of trade receivables is adequate to cover losses on uncollectible trade receivables. As of June 30, 2017, certain trade receivables of the subsidiaries amounting to Rp4,535 billion have been pledged as collateral under lending agreements Notes 15, 16b and 16c. Refer to Note 31 for details of related party transactions.

6. INVENTORIES June 30, 2017

December 31, 2016 Components 342 299 SIM cards and blank prepaid vouchers 135 168 Others 709 164 Total 1,186 631 Provision for obsolescence Components 18 18 SIM cards and blank prepaid vouchers 29 29 Others Total 47 47 Net 1,139 584 Movements in the provision for obsolescence are as follows: June 30, 2017 December 31, 2016 Beginning balance 47 41 Provision recognized during the period - 11 Inventory written off - 5 Ending balance 47 47 The inventories recognized as expense and included in operations, maintenance, and telecommunication service expenses as of June 30, 2017 and 2016 amounted to Rp1,268 billion and Rp1,015 billion, respectively Note 24. Management believes that the provision is adequate to cover losses from decline in inventory value due to obsolescence. Certain inventories of the subsidiaries amounting to Rp256 billion have been pledged as collateral under lending agreements Notes 15, 16b and 16c. As of June 30, 2017 and December 31, 2016, modules and components held by the Group with book value amounting to Rp197 billion and Rp199 billion, respectively, have been insured against fire, theft, and other specific risks. Modules are recorded as part of property and equipment. Total sum insured as of June 30, 2017 and December 31, 2016 amounted to Rp210 billion and Rp220 billion, respectively. Management believes that the insurance coverage is adequate to cover potential losses of inventories arising from the insured risks. PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2017 and For the Six Months Period Then Ended unaudited Figures in tables are expressed in billions of Rupiah, unless otherwise stated 40

7. ADVANCES AND PREPAID EXPENSES June 30, 2017

December 31, 2016 Prepaid rental 1,883 1,234 Frequency license Notes 34c.i and 34c.ii 1,430 3,056 Advances 402 394 Salaries 351 229 Advance to employee 189 32 Others 1,115 301 Total 5,370 5,246 Refer to Note 31 for details of related party transactions.

8. LONG-TERM INVESTMENTS

June 30, 2017 Percentage of ownership Beginning balance Additions Deductions Share of net profit loss of associated company Dividend Share of other comprehensive income of associated company Ending balance Long-term investments in associated companies: Tiphone a 24.43 1,488 - 44 - 2 1,530 Indonusa b 20.00 221 - - - - 221 Teltranet c 51.00 38 - 10 - - 28 PT Integrasi Logistik Cipta Solusi “ILCS” e 49.00 42 - 1 - - 43 Telin Malaysia f 49.00 - - - - - CSM g 25.00 - - - - - - Sub-total 1,789 - 35 - 2 1,822 Other long-term investments 58 44 - - - 102 Total Long-term investments 1,847 44 35 - 2 1,924 Summarized financial information of the Group’s investments accounted under the equity method for 2017: Tiphone Indonusa Teltranet ILCS Telin Malaysia CSM Statements of financial position Current assets 6,927 170 109 147 39 161 Non-current assets 738 444 93 18 13 761 Current liabilities 538 532 77 77 88 594 Non-current liabilities 3,773 405 71 1 - 1,206 Equity deficit 3,354 323 54 87 36 878 Statements of profit or loss and other comprehensive income Revenues 6,414 605 64 51 56 131 Cost of revenues and operating expenses 6,199 583 90 48 68 221 Other income expenses including finance costs - net 58 17 1 - - 88 Profit loss before tax 157 5 27 3 12 178 Income tax benefit expense 40 33 - - - - Profit loss for the period 117 28 27 3 12 178 Other comprehensive income loss 9 7 - - - - Total comprehensive income loss for the period 108 21 27 3 12 178 Using financial information as of December 31, 2016 and for the period then ended. Using financial information as of March 31, 2017 and for the three months period then ended.