INVENTORIES June 30, 2017 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 41

8. LONG-TERM INVESTMENTS continued

December 31, 2016 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 1,404 - 108 23 1 1,488 Indonusa b 20.00 221 - - - - 221 Teltranet c 51.00 71 - 33 - - 38 PT Melon Indonesia “Melon” d 51.00 50 67 17 - - - PT Integrasi Logistik Cipta Solusi “ILCS” e 49.00 40 - 2 - - 42 Telin Malaysia f 49.00 6 - 6 - - CSM g 25.00 - - - - - - Sub-total 1,792 67 88 23 1 1,789 Other long-term investments 15 43 - - - 58 Total Long-term investments 1,807 24 88 23 1 1,847 Summarized financial information of the Group’s investments accounted under the equity method for 2016: Tiphone Indonusa Teltranet ILCS Telin Malaysia CSM Statements of financial position Current assets 7,709 170 66 131 9 161 Non-current assets 743 444 88 29 10 761 Current liabilities 1,248 532 78 73 35 594 Non-current liabilities 3,762 405 2 1 6 1,206 Equity deficit 3,442 323 74 86 22 878 Statements of profit or loss and other comprehensive income Revenues 27,310 605 66 116 8 131 Cost of revenues and operating expenses 26,445 583 149 112 43 221 Other income expenses including finance costs - net 231 17 3 - 88 Profit loss before tax 634 5 86 4 35 178 Income tax benefit expense 166 33 21 - - Profit loss for the year 468 28 65 4 35 178 Other comprehensive income loss 5 7 - - Total comprehensive income loss for the year 463 21 65 4 35 178 a Tiphone was established on June 25, 2008 as PT Tiphone Mobile Indonesia Tbk. Tiphone is engaged in the telecommunication equipment business, such as for celullar phone including spare parts, accessories, pulse reload vouchers, repair service and content provider through its subsidiaries. On September 18, 2014, the Company through Pins acquired 25 ownership in Tiphone for Rp1,395 billion. As of June 30, 2017 and December 31, 2016, the fair value of the investment amounted to Rp2,149 billion and Rp1,500 billion, respectively. The fair value was calculated by multiplying the number of shares by the published price quotation as of June 30, 2017 and December 31, 2016 amounting to Rp1,225 and Rp855 per share, respectively. Reconciliation of financial information to the carrying amount of long-term investment in Tiphone as of December 31, 2016 is as follows: 2016 Assets 8,452 Liabilities 5,010 Net assets 3,442 Group’s proportionate share of net assets 24.43 in 2016 841 Goodwill 647 Carrying amount of long-term investment 1,488 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 42

8. LONG-TERM INVESTMENTS continued

b Indonusa had been a subsidiary of the Company until 2013 when the Company disposed 80 of its interest in Indonusa. On May 14, 2014, based on the Circular Resolution of the Stockholders of Indonusa as covered by notarial deed No. 57 dated April 23, 2014 of FX Budi Santoso Isbandi, S.H., which was approved by the MoLHR in its Letter No. AHU- 02078.40.20.2014 dated April 29, 2014, Indonusa’s stockholders approved an increase in its issued and fully paid capital by Rp80 billion. The Company waived its right to own the new shares issued and transferred it to Metra and, as a result, Metra’s ownership in Indonusa increased to 4.33. c Investment in Teltranet is accounted for under the equity method, which covered by an agreement between Metra and Telstra Holding Singapore Pte. Ltd. dated August 29, 2014. Teltranet is engaged in communication system services. Metra does not have control as it does not determine the financial and operating policies of Teltranet. d Melon previously was an associated company. In 2016, the Group purchased 49 state in Melon through Metranet this Melon became a consolidated subsidiary Note 1d e ILCS is engaged in providing E-trade logistic services and other related services. f Telin Malaysia is engaged in telecommunication services in Malaysia. The unrecognized share of losses of Telin Malaysia for the year ended June 30, 2017 is Rp8 billion. g CSM is engaged in providing Very Small Aperture Terminal “VSAT”, network application services and consulting services on telecommunications technology and related facilities. The unrecognized share of losses of CSM for the year ended December 31, 2016 is Rp219 billion.

9. PROPERTY AND EQUIPMENT

January 1, 2017 Additions Deductions Reclassifications Translations June 30, 2017 At cost: Directly acquired assets Land rights 1,417 12 - - 1,429 Buildings 7,837 8 - 309 8,154 Leasehold improvements 1,116 16 21 42 1,153 Switching equipment 20,490 163 864 414 20,203 Telegraph, telex and data communication equipment 1,586 - - 3 1,583 Transmission installation and equipment 121,552 701 1,084 6,680 127,849 Satellite, earth station and equipment 8,445 40 - 3,340 11,825 Cable network 44,791 2,148 167 83 46,689 Power supply 15,022 26 170 669 15,547 Data processing equipment 12,515 35 164 573 12,959 Other telecommunications peripherals 700 96 - - 796 Office equipment 1,453 79 29 91 1,412 Vehicles 387 48 3 6 438 Other equipment 100 - - 1 99 Property under construction 4,550 9,479 76 8,859 5,094 Assets under finance lease Transmission installation and equipment 5,354 182 - 20 5,516 Data processing equipment 84 - 52 - 32 Vehicles 135 16 - 1 150 Office equipment 76 - - - 76 CPE assets 22 - - - 22 Power supply 215 - - - 215 RSA assets 252 - - - 252 Total 248,099 13,049 2,630 2,975 261,493 January 1, 2017 Additions Deductions Reclassifications Translations June 30, 2017 Accumulated depreciation and impairment losses: Directly acquired assets Buildings 2,435 158 - 5 2,588 Leasehold improvements 692 71 19 - 744 Switching equipment 16,650 699 862 5 16,482 Telegraph, telex and data communication equipment 333 179 - - 512 Transmission installation and equipment 62,302 5,108 993 30 66,387 Satellite, earth station and equipment 7,098 255 - 1 7,352 Cable network 20,301 829 166 121 20,843 Power supply 10,164 613 113 4 10,660 Data processing equipment 9,468 625 152 - 9,941 Other telecommunications peripherals 461 48 - - 509 Office equipment 846 88 21 3 910 Vehicles 168 31 2 2 195 Other equipment 99 - - - 99 Assets unde finance lease Transmission installation and equipment 2,054 289 - - 2,343 Data processing equipment 44 15 - - 59 Vehicles 32 14 - - 46 Office equipment 94 18 41 - 71 CPE assets 19 1 - - 20 Power supply 98 11 - - 109 RSA assets 243 6 - - 249 Total 133,601 9,058 2,369 171 140,119 Net Book Value 114,498 121,374