TRADE RECEIVABLES FS TLKM Q3 2014engl

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of September 30, 2014 and for the Nine months Period Then Ended unaudited Figures in tables are expressed in billions of rupiah, unless otherwise stated 49

7. INVENTORIES continued

Movements in the provision for obsolescence are as follows: September 30, December 31, 2014 2013 Beginning balance 22 148 Provision reversal recognized during the year 5 29 Reclassification - 96 Divestment Note 3 - 1 Ending balance 27 22 The inventories recognized as expense and included in operations, maintenance, and telecommunication service expenses Note 28 as of September 30, 2014 and December 31, 2013 amounted to Rp459 billion and Rp752 billion, respectively. Management believes that the provision is adequate to cover losses from declines in inventory value due to obsolescence. Certain inventories of the Company’s subsidiaries amounting to Rp68 billion have been pledged as collateral under lending agreements Notes 17 and 21. As of September 30, 2014 and December 31, 2013, modules and components held by the Company and subsidiaries have been insured against fire, theft, and other specific risks with book value amounting to Rp59 billion and Rp280 billion, respectively. Modules are recorded as part of property and equipment. Total sum insured as of September 30, 2014 and December 31, 2013 amounted to Rp256 billion and Rp261 billion, respectively. Management believes that the insurance coverage is adequate to cover potential losses of certain inventories which happens to the Company and subsidiaries.

8. ADVANCES AND PREPAID EXPENSES September 30, December 31,

2014 2013 Frequency license Notes 41c.i and 41c.ii 1,115 2,330 Prepaid rental 1,063 744 Advances 655 297 Salaries 500 209 Deferred expense 102 124 Insurance 12 84 Tax restitution claims 299 10 Others each below Rp75 billion 468 149 Total 4,214 3,947 Refer to Note 37 for details of related party transactions. PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of September 30, 2014 and for the Nine months Period Then Ended unaudited Figures in tables are expressed in billions of rupiah, unless otherwise stated 50

9. ASSET HELD FOR SALE

This account represents the carrying amount of Telkomsel’s equipment to be exchanged with equipment of Nokia Siemens Network Oy “NSN Oy” and PT Huawei Tech Investment “PT Huawei”. The amount will be used as part of the settlement for the acquisition of equipment from these companies. In addition, land of Sigma Citra Caraka located in residential of Alam Sutera will be diverted to PT Graha Indah Semesta. The transaction is in progress and expected to be completed on December 15, 2014. In 2014, SCC’s land and Telkomsel’s equipment with net carrying amount of Rp65 billion Note 11c.vi and Rp17 billion respectively are reclassified to asset held for sale. Asset held for sale is presented under personal and corporate segment Note 38.

10. LONG-TERM INVESTMENTS

September 30, 2014 Share of net loss Percentage profit of of Beginning Addition associated Translation Ending ownership balance deduction company adjustment balance Long-term investments in associated companies: Indonusa a 20.00 189 32 - - 221 PT Melon Indonesia “Melon” b 51.00 39 - 3 - 42 ILCS c 49.00 37 - 6 - 31 Telin Malaysia d 49.00 18 4 16 5 1 CSM e 25.00 - - - - - PSN f 14.60 - - - - - Tiphone i 25.00 - 1,394 6 - 1,400 Sub-total 283 1,430 13 5 1,695 Other long-term investments 21 - - - 21 Total long-term investments 304 1,430 13 5 1,716 September 30, 2014 Assets Liabilities Revenue Gain loss Long-term investments in associated companies: Indonusa a 575 789 271 62 Melon b 129 47 92 6 ILCS c 85 22 73 13 Telin Malaysia d 6 2 7 32 CSM e 1,273 1,387 229 136 PSN f 1,130 2,033 271 14 Tiphone i 4,700 2,879 6,313 25 Total 7,898 7,159 7,256 226 Assets, liabilities and revenue of Tiphone were disclosed based on financial statement of Tiphone as of June 30, 2014.