INVENTORIES FS English Q3 2016 FINAL ammend2

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of September 30, 2016 and For the Nine-Month Period Then Ended unaudited Figures in tables are expressed in billions of rupiah, unless otherwise stated 40

8. LONG-TERM INVESTMENTS continued

December 31, 2015 Percentage of ownership Beginning balance Additions Deductions Share of net loss profit of associated company Dividend Share of other comprehensive income of associated company Ending balance Long-term investments in associated companies: Tiphone a 24.65 1,392 - 32 18 2 1,404 Indonusa b 20.00 221 - - - - 221 Teltranet c 51.00 52 43 24 - - 71 Melon d 51.00 43 - 7 - - 50 ILCS e 49.00 38 - 2 - - 40 Telin Malaysia f 49.00 6 19 19 - 6 CSM g 25.00 - - - - - - Sub-total 1,752 62 2 18 2 1,792 Other long-term investments 15 - - - - 15 Total long-term investments 1,767 62 2 18 2 1,807 Summarized financial information of the Group’s investments accounted under the equity method for 2015: Tiphone Indonusa Teltranet Melon ILCS Telin Malaysia CSM Statements of financial position Current assets 6,539 186 117 131 105 18 185 Non-current assets 1,261 471 58 27 32 10 1,221 Current liabilities 1,657 850 35 57 54 17 731 Non-current liabilities 3,073 103 1 2 1 - 1,535 Equity deficit 3,070 296 139 99 82 11 860 Statements of profit or loss and other comprehensive income Revenues 22,060 599 201 111 6 164 Operatingexpenses 21,295 608 72 184 108 40 364 Other income expensesincluding finance costs - net 265 37 9 2 3 74 Profit loss before tax 500 46 63 19 3 37 274 Income tax expense 130 19 16 5 - - Profit loss for the year 370 65 47 14 3 37 274 Other comprehensive income loss 7 - - - - Total comprehensive income for the year 363 65 47 14 3 37 274 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 September 30, 2016 and December 31, 2015, the fair value of investment amounting to Rp1,132 billion and Rp1,351 billion, respectively. The fair value was calculated by multiplying number of shares by the published price quotation as of September 30, 2016 and December 31, 2015 amounting to Rp645 and Rp770 per share, respectively. Reconciliation of financial information to the carrying amount of long-term investment in Tiphone as of December 31, 2015 is as follows: December, 31 2015 Assets 7,800 Liabilities 4,730 Net assets 3,070 Group’s proportionate share of net assets 24.65 in 2015 757 Goodwill 647 Carrying amount of long-term investment 1,404 PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of September 30, 2016 and For the Nine-Month Period Then Ended unaudited Figures in tables are expressed in billions of rupiah, unless otherwise stated 41

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 has 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 is engaged in providing Digital Content Exchange Hub services “DCEH”. Metra does not have control over Melon due to the existence of substantive participating rights held by the other venturer over the financial and operating policies of Melon. e ILCS is engaged in providing E-trade logistic services and other related services. f Telin Malaysia is engaged in telecommunication services in Malaysia. 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, 2015 amounting to Rp215 billion.

9. PROPERTY AND EQUIPMENT

January 1, 2016 Additions Deductions Reclassifications Translations September 30, 2016 At cost: Directly acquired assets Land rights 1,270 77 - - 1,347 Buildings 6,033 12 2 385 6,428 Leasehold improvements 1,036 61 7 38 1,128 Switching equipment 19,823 119 59 411 20,294 Telegraph, telex and data communication equipment 876 694 - - 1,570 Transmission installation and equipment 119,047 967 5,045 8,466 123,435 Satellite, earth station and equipment 8,146 53 - 106 8,305 Cable network 37,887 3,399 246 520 41,560 Power supply 13,822 96 45 727 14,600 Data processing equipment 11,351 65 43 785 12,158 Other telecommunications peripherals 632 15 - - 647 Office equipment 1,062 119 5 26 1,202 Vehicles 475 52 - - 527 Other equipment 99 - - - 99 Property under construction 4,580 13,851 - 12,368 6,063 Assets under finance lease Transmission installation and equipment 5,940 255 387 40 5,848 Data processing equipment 63 - 48 13 2 Office equipment 73 4 - - 77 Vehicles 94 48 22 - 120 CPE assets 22 - - - 22 Power supply 90 - - - 90 RSA assets 252 - - - 252 Total 232,673 19,887 5,909 877 245,774 January 1, 2016 Additions Deductions Reclassifications Translations September 30, 2016 Accumulated depreciation and impairment losses: Directly acquired assets Buildings 2,141 161 - 54 2,356 Leasehold improvements 623 97 7 7 720 Switching equipment 15,223 1,096 59 5 16,255 Telegrap, telex and data communication equipment 4 - - 4 Transmission installation and equipment 63,063 7,429 4,569 282 65,641 Satellite, earth station and equipment 6,706 240 - 1 6,945 Cable network 19,524 1,160 246 431 20,007 Power supply 9,114 902 39 18 9,959 Data processing equipment 8,503 1,048 43 4 9,512 Other telecommunications peripherals 385 56 - - 441 Office equipment 713 92 4 40 841 Vehicles 166 52 2 1 217 Other equipment 99 - - - 99 Assets under finance lease Transmission installation and equipment 2,327 433 387 7 2,380 Data processing equipment 53 5 48 6 4 Office equipment 51 40 - 2 89 Vehicles 13 32 20 - 25 CPE assets 17 2 - - 19 Power supply 18 17 - - 35 RSA assets 230 10 - - 240 Total 128,973 12,872 5,424 632 135,789 Net Book Value 103,700 109,985