Borrowings Revenue and expense recognition continued

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2013 and for the Year Then Ended Figures in tables are expressed in billions of rupiah, unless otherwise stated 43

6. TRADE RECEIVABLES

Trade receivables arise from services provided to both retail and non-retail customers, with details as follows: a. By debtor i Related parties 2013 2012 State-owned enterprises 877 549 Indonusa 180 - PT Indosat Tbk “Indosat” 48 55 CSM 45 51 Patrakom - 56 Others 241 62 Total 1,391 773 Provision for impairment of receivables 491 72 Net 900 701 ii Third parties 2013 2012 Individual and business subscribers 7,010 6,177 Overseas international carriers 497 320 Total 7,507 6,497 Provision for impairment of receivables 2,381 1,975 Net 5,126 4,522 Trade receivables from certain parties are presented net of the Company and subsidiaries’ liabilities to such parties due to the existence of a legal right of set-off in accordance with the agreements with those parties. b. By age i Related parties 2013 2012 Up to 6 months 836 442 7 to 12 months 223 248 More than 12 months 332 83 Total 1,391 773 Provision for impairment of receivables 491 72 Net 900 701 In 2013, Patrakom was fully consolidated Note 3. PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2013 and for the Year Then Ended Figures in tables are expressed in billions of rupiah, unless otherwise stated 44

6. TRADE RECEIVABLES continued

b. By age continued ii Third parties 2013 2012 Up to 3 months 4,526 3,969 More than 3 months 2,981 2,528 Total 7,507 6,497 Provision for impairment of receivables 2,381 1,975 Net 5,126 4,522 iii Aging of total trade receivables 2013 2012 Provision for Provision for impairment impairment Gross of receivables Gross of receivables Not past due 3,618 10 3,174 140 Past due up to 3 months 1,525 401 1,250 157 Past due more than 3 to 6 months 703 321 455 193 Past due more than 6 months 3,052 2,140 2,391 1,557 Total 8,898 2,872 7,270 2,047 The Company and subsidiaries have made provision for impairment of trade receivables based on the collective assessment of historical impairment rates and individual assessment of their customers’ credit history. The Company and subsidiaries do not apply a distinction between related party and third party receivables in assessing amounts past due. As of December 31, 2013 and 2012, the carrying amount of trade receivables of the Company and subsidiaries considered past due but not impaired amounted to Rp2,418 billion and Rp2,189 billion, respectively. Management has concluded that receivables past due but not impaired, along with trade receivables that are neither past due nor impaired, are due from customers with good credit history and are expected to be recoverable. c. By currency i Related parties 2013 2012 Rupiah 1,361 686 U.S. dollar 30 87 Total 1,391 773 Provision for impairment of receivables 491 72 Net 900 701 PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2013 and for the Year Then Ended Figures in tables are expressed in billions of rupiah, unless otherwise stated 45

6. TRADE RECEIVABLES continued

c. By currency continued ii Third parties 2013 2012 Rupiah 6,699 5,770 U.S. dollar 806 722 Euro 1 3 Hong Kong dollar 1 2 Total 7,507 6,497 Provision for impairment of receivables 2,381 1,975 Net 5,126 4,522 d. Movements in the provision for impairment of receivables 2013 2012 Beginning balance 2,047 1,732 Provision recognized during the year Note 29 1,589 848 Receivables written-off 622 533 Acquisition 1 - Disposal Note 3 158 - Reclassification 15 - Ending balance 2,872 2,047 The receivables written off are 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. Certain trade receivables of the subsidiaries amounting to Rp1,700 billion have been pledged as collateral under lending agreements Notes 17 and 21. Refer to Note 37 for details of related party transactions.

7. INVENTORIES

2013 2012 Components 272 183 SIM cards, RUIM cards, set top box, and blank prepaid vouchers 102 134 Others 157 410 Total 531 727 Provision for obsolescence Components 21 51 SIM cards, RUIM cards, set top box, and blank prepaid vouchers 1 1 Modules - 96 Total 22 148 Net 509 579 PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2013 and for the Year Then Ended Figures in tables are expressed in billions of rupiah, unless otherwise stated 46

7. INVENTORIES continued

Movements in the provision for obsolescence are as follows: 2013 2012 Beginning balance 148 106 Divestment 1 - Provision reversal recognized during the year 29 67 Reclassification 96 - Inventories written-off - 25 Ending balance 22 148 The inventories recognized as expense and included in operations, maintenance, and telecommunication service expenses Note 28 for the years ended December 31, 2013 and 2012 amounted to Rp752 billion and Rp633 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 Rp53 billion have been pledged as collateral under lending agreements Notes 17 and 21. As of December 31, 2013 and 2012, modules and components held by the Company and subsidiaries have been insured against fire, theft, and other specific risks with book value amounting to Rp280 billion and Rp272 billion, respectively. Modules are recorded as part of property and equipment. Total sum insured as of December 31, 2013 and 2012 amounted to Rp261 billion and Rp275 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

2013 2012 Frequency license Notes 41c.i and 41c.ii 2,330 2,563 Prepaid rental 744 666 Advances 297 120 Salaries 209 165 Deferred expense 124 45 Insurance 84 18 Others each below Rp50 billion 149 144 Total 3,937 3,721 Refer to Note 37 for details of related party transactions.