Telkom Indonesia Annual Report 2022

Plain-text annual report

BOLD MOVES, BOOSTING SUSTAINABLE GROWTH ESG A NN U A L R E PO R T I Annual Report 2022 PT Telkom Indonesia (Persero) Tbk k b T ) o r e s r e P ( a i s e n o d n I l m o k e T T P THEME Bold Moves, Boosting Sustainable Growth PT Telkom Indonesia (Persero) Tbk (Telkom) as one of the State-Owned Enterprises (SOEs) is a national economic driver, which continuously make every effort to effect Indonesia’s digital sovereignty through various innovations. We support the Government’s measures to ameliorate a domestic development performance that is more equitable. To achieve this, we carry out clear strategies, goals, and directions whilst continuing to balance environmental, social, and governance (ESG) performances to achieve sustainability. With a business world that is very dynamic and with rapid changes, we thus invite all stakeholders to run with us as we pursue our sustainability goals and toward a brighter future. Annual Report 2022 k b T ) o r e s r e P ( a i s e n o d n I l m o k e T T P DISCLAIMER PT Telkom Indonesia (Persero) Tbk has published this Report as a form of transparency and accountability to present material data and information for our stakeholders. In general, the contents of this Report are derived from internal analysis as well as credible document sources and trustworthy sources. Some parts of this Report contain data and information that are forward-looking statements such as targets, expectations, forecasts, estimates, prospects, or projections of Telkom’s future operational performance and business conditions. Before being presented in this Report, Telkom has carefully considered the data and information. However, Telkom understands that risks and uncertainties that are caused by several factors, such as changes in the economic, social, and political conditions in Indonesia may affect future operational performance and business conditions. Consequently, Telkom would like to remind readers that Telkom cannot guarantee that the data and information that comprise this Report’s forward-looking statements are true, accurate, and can be fulfilled entirely. In addition to publishing this Report, Telkom as a company listed on the New York Stock Exchange (NYSE) is also required to submit SEC Form 20-F as Annual Report to the Securities and Exchange Commission (SEC). Therefore, some of the information in the 2022 Annual Report can also be found in the SEC Form 20-F, although the two Reports are not the same. The term “Telkom” as used in this Report refers to the parent entity, while the term “Telkom and its Subsidiaries” or “TelkomGroup” refers to the entire parent company, subsidiaries, and affiliated entities as a whole. Nevertheless, the use of the term “Telkom” does not exclude subsidiaries and affiliates within the scope of the contents and discussion of the Report. For the convenience of stakeholders, the electronic document of this 2022 Annual Report can be accessed and downloaded through http://www.telkom.co.id Or scan here: IDX Ticker NYSE Ticker : TLKM : TLK Telkom stakeholders can submit questions and suggestions to: Investor Relation Unit Edwin Julianus Sebayang PT Telkom Indonesia (Persero) Tbk The Telkom Hub, Telkom Landmark Tower 39th Floor Jl. Jend. Gatot Subroto Kav. 52, Jakarta 12710, Indonesia Phone Fax. E-mail Facebook Instagram Twitter : (6221) 521 5109 : (6221) 522 0500 : investor@telkom.co.id : TelkomIndonesia : telkomindonesia : @telkomindonesia Annual Report 2022 1 k b T ) o r e s r e P ( a i s e n o d n I l m o k e T T P TABLE OF CONTENTS THEME DISCLAIMER TABLE OF CONTENTS 0101 TELKOM HIGHLIGHTS Profile of Telkom and Its Subsidiaries Products and Customers Infrastructure 1 2 6 8 9 10 Operational Areas and Services 78 Chronology of Stocks Registration 80 Chronology of Other Securities Registration 82 Name and Address of Institutions and/or Supporting Capital Market Profession 0404 MANAGEMENT DISCUSSION AND ANALYSIS Key Financial Data Overview 86 Business Environment Overview 2022 Stock Information 89 Operational Overview by Business Information Regarding Obligations, Sukuk or Convertible Bonds Segment 106 Marketing Overview 12 16 18 22 28 34 38 42 44 0202 REPORT OF THE BOARD OF COMMISSIONERS AND DIRECTORS Report of the Board of Commissioners Report of the Board of Directors Statement Letter of Responsibility for 2022 Annual Report 0303 ABOUT TELKOM Purpose, Vision, Mission, and Strategy Corporate Culture and Value Telkom Milestones 46 Business Activities 48 Telkom Organizational Structure 50 52 58 64 66 70 72 List of Industry Association Memberships Profile of the Board of Commissioners Profile of the Board of Directors Profile of the Senior Vice President Telkom Employees Shareholders Composition Subsidiaries, Associated Companies, and Joint Ventures 2 Annual Report 2022 115 Comprehensive Financial Performance 127 Solvency 128 Capital Structure and the Management Policies for Capital Structure 129 Realization of Capital Expenditure 130 Material Commitment for Capital Expenditure 131 Receivables Collectability 132 Material Information and Fact After Accountant Reporting Date 133 Business Prospects and Sustainability of the Company 134 Comparison of Initial Year Target and Realization 135 Target or Projections for the Following Year TIPS FOR READING THE CONTENTS OF THIS REPORT Readers who wish to gain a general understanding of Telkom are advised to read this Report from the beginning to the “Report of the Board of Commissioners and Board of Directors”. Readers who wish to learn in-depth about Telkom are advised to continue reading this Report until the end. k b T ) o r e s r e P ( a i s e n o d n I l m o k e T T P 136 Dividend 253 Significant Legal Disputes 137 Realization of Public Offering Fund 138 Material Information Regarding Transaction with Conflict of Interest, Transaction with Affiliated Parties, Investment, Divesment, and Acquisition 139 Changes in Law and Regulation 140 Changes in Accounting Policy 0505 CORPORATE GOVERNANCE 144 Corporate Governance Principle and Platform 150 Corporate Governance Structure 151 Corporate Governance Assessment 152 General Meeting of Shareholders (GMS) 162 Board of Commissioners 186 Audit Committee 253 Information Regarding Administrative Sanctions 254 Information Access and Company’s Public Data 255 Corporate Code of Conduct 257 Anti Corruption Policy 0606 CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENT (CSR) 260 Brief Summary of Corporate Social Responsibility and Environment 261 Corporate Social Responsibility and Environment Program Implementation Report 0707 APPENDICES 280 Appendix 1 : Glossary 194 Committee for Nomination and 285 Appendix 2 : List of Abbreviations Remuneration 199 Committee for Planning and Risk Evaluation and Monitoring 203 Board of Directors 217 Corporate Secretary 221 Internal Audit Department 226 Internal Control System 229 Risk Management System 246 Whistleblowing System 251 Policy Regarding Reporting Share Ownership of Directors and Commissioners 252 Employee Stock Ownership Program 289 Appendix 3 : Cross Reference to the Circular Letter by the Financial Services Authority No. 16/SEOJK.04/2021 310 Appendix 4 : Affiliate Transactions List 0808 CONSOLIDATED FINANCIAL STATEMENTS 329 Audited Consolidated Financial Statements 2022 and Audited Financial Statements 2022 for Pusat Pengelolaan Program Tanggung Jawab Sosial dan Lingkungan (formerly Program Kemitraan dan Bina Lingkungan) (Community Development Center) FEEDBACK FORM Annual Report 2022 3 01 HIGHLIGHT TELKOM 4 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 01 TELKOM HIGHLIGHTS 01 HIGHLIGHT TELKOM 6 8 9 Profile of Telkom and Its Subsidiaries Products and Customers Infrastructure 10 Operational Areas and Services 12 16 18 Key Financial Data Overview Stock Information Information Regarding Obligations, Sukuk or Convertible Bond 5 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk PROFILE OF TELKOM AND ITS SUBSIDIARIES PROFILE OF TELKOM Company Name Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk. Abbreviated Name PT Telkom Indonesia (Persero) Tbk. Commercial Name Telkom Business Fields, Type of Products, and Services The operation and management of telecommunications networks and services, informatics as well as the optimalization of the utilization of the Company’s resources. Corporate Status Public Company, State-Owned Enterprise Ownership Legality Company Establishment Date Legal Basis of Establishment 52.09% The Government of the Republic of Indonesia 47.91% Public Tax Identification Number (NPWP) 01.000.013.1-093.000 Trade Business License (SIUP) based on Business Identification Number (NIB) No. 9120304490415 Business Identification Number (NIB) 9120304490415 November 19, 1991 Based on Government Regulation No. 25 of 1991, the status of our Company was converted into a state-owned limited liability corporation (“Persero”), based on the Notarial Deed of Imas Fatimah, S.H. No.128 dated September 24, 1991, as approved by the Ministry of Justice of the Republic of Indonesia by virtue of Decision Letter No. C2 6870.HT.01.01.th.91 dated November 19, 1991 and as announced in the State Gazette of Republic of Indonesia No. 5 dated January 17, 1992, Supplement to the State Gazette No. 210. Head Office Address and Contact Graha Merah Putih Jl. Japati No. 1 Bandung Jawa Barat, Indonesia - 40133 Company Contact Social Media Stock Listing Ticker Phone Fax Call Center Website E-mail Facebook Instagram Twitter YouTube LinkedIn : +62-22-4521404 : +62-22-7206757 : +62-21-147 : www.telkom.co.id : corporate_comm@telkom.co.id : investor@telkom.co.id : TelkomIndonesia : telkomindonesia : @telkomindonesia : TelkomIndonesiaOfficial : Telkom Indonesia The Company is listed on the Indonesia Stock Exchange (IDX) and New York Stock Exchange (NYSE) since November 14, 1995 Indonesia Stock Exchange: TLKM New York Stock Exchange: TLK Stock Type Series A Dwiwarna shares and series B shares Authorized Capital 1 series A Dwiwarna share 389,999,999,999 series B shares Issued and Fully Paid Capital 1 series A Dwiwarna share 99,062,216,599 series B shares Rating International Domestic : Baa1 (stable) from Moody’s BBB (stable) from Fitch Ratings : idAAA by Pefindo for 2022 6 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 01 TELKOM HIGHLIGHTS PROFILE OF SUBSIDIARIES Telkom is the largest telecommunication company in Indonesia with: 12 25 9 Direct subsidiaries with active operation Indirect subsidiaries Affiliated companies DIRECT SUBSIDIARIES WITH ACTIVE OPERATION: www.telkomsel.com www.metra.co.id www.telkomsat.co.id PT Telekomunikasi Selular (Telkomsel) is a cellular operator with the widest network, reaching more than 90% of Indonesia’s population, with its core business comprises of cellular telecommunications services and the operation of cellular telecommunications networks. PT Multimedia Nusantara (Telkom Metra) is an investment company and sub-holding which has expanded into various basic digital services and ICT industries through acquisition, partnership and the construction of a strong business ecosystem. PT Telkom Satelit Indonesia (Telkomsat) is a company with a satellite business portfolio that provides end-to-end satellite-based digital service focusing on customer needs (customer-oriented). www.pins.co.id www.telkomakses.co.id www.telin.net PT PINS Indonesia (PINS) is a company that provides various technological facilities and equipment, device integration, networks, systems, processes, and the Internet of Things (IoT). PT Telkom Akses (Telkom Akses) is engaged in the deployment and management of fixed broadband access network infrastructure services, managed service, and operation maintenance of fixed broadband access networks. PT Telekomunikasi Indonesia International (Telin) is a global telecommunications operator that provides telecommunications & IT service solutions overseas with 7 active and operating subsidiaries overseas. www.mitratel.co.id www.telkominfra.co.id www.metranet.co.id PT Dayamitra Telekomunikasi (Mitratel) is a company that provides infrastructure for telecommunication towers (tower provider) for the domestic market with a core business that includes tower construction and tower management services (collocation & reseller). PT Infrastruktur Telekomunikasi Indonesia (Telkom Infra) is a provider of domestic and international telecommunications infrastructure management services (service and solution), with the core business of telecommunications infrastructure services and submarine cable services. PT Metranet (Metranet) is an integrated media and digital content provider with a core business in online media, digital content, and digital billing. www.telkomproperty.co.id www.neutradc.com www.telkomsigma.co.id PT Graha Sarana Duta (Telkom Property) is a property service company that focuses on leveraging Telkom’s idle assets. Its core business is property management, property development, project management, and facilities management. PT Telkom Data Ekosistem (NeutraDC) is a company with a focus on data center infrastructure business portfolio with the core business of collocation provider and their supporting ecosystem including managed data center operations, cross connect, and smart hand. Note: A more complete list of subsidiaries can be seen in the Consolidated Financial Statements. PT Sigma Cipta Caraka (Sigma) is a consulting service provider company for hardware, computer software, and consolidated data center. 7 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk PRODUCTS AND CUSTOMERS To increase value for customers, Telkom manages business based on customer segments or Customer Facing Units (CFU) which are categorized into five segments, namely Consumer, Mobile, Enterprise, Wholesale and International Business, and Others. CONSUMER Fixed voice, fixed broadband, IP-TV, and digital services. IndiHome Fixed Broadband Subscribers 9.2 million MOBILE Cellular legacy services (voice and SMS), mobile broadband, as well as mobile digital services including IoT, big data, financial services, VOD, music, gaming, and digital advertisement. Cellular Subscribers 156.8 million Postpaid Subscribers 7.1 million Prepaid Subscribers 149.7 million Mobile Broadband Subscribers 120.9 million ENTERPRISE ICT and platform services that include connectivity, IT services and cloud, business process outsourcing, devices, satellite business, digital services and adjacent services, such as e-health services and ATM management. Corporate Customers 1,481 SME Customers 377,894 Government Institution Customers 934 WHOLESALE AND INTERNATIONAL BUSINESS Domestic and international wholesale traffic, network, and digital platform and services as well as tower, data center, and managed infrastructure and network. Other Licensed Operator (OLO) Customers Transponder & Closed User Group Customers 7 Internet Service Provider Customers 321 25 Global Partner Customers 402 OTHERS Digital services such as digital platform, digital content, e-commerce for B2B, and property management in view to fully utilize Telkom’s property assets throughout Indonesia. Digital Music (RBT, music streaming, and Langit Musik) 50 million active users Digital Games 27 million paying users Note: The data presented on this page is current as of December 31, 2022. 8 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 01 TELKOM HIGHLIGHTS INFRASTRUCTURE Telkom and its Subsidiaries continue to develop infrastructure and actualize digitalization empowerment in Indonesia through Indonesia Cyber Core Program which consists of three components, namely id-Service (“id-SEV”), id- Convergence (“id-COV”), and id-Network (“id-NET”). id-Service (“id-SEV”) Games, Video/TV, education, e-commerce, mobile payment, travel, crowd-sourcing, health • 4 clusters Application Development Platform infrastructure • 1 cluster Data Management Platform infrastructure • 1 cluster Graphical Processing Unit (GPU) Farming infrastructure • 1 cluster In-memory database infrastructure • 1 cluster Artificial Intelligent infrastructure • 2 clusters Big Data Platform infrastructure id-Convergence (“id-COV”) Data Center Security 28 data centers consisting of: • 5 data centers (overseas) • 19 data centers neuCentrIX (domestic) • 3 data centers enterprise tier 3 and 4 (domestic) • 1 data center Hyperscale tier 3 and 4 (domestic) Telkom Cloud (T-Cloud) • Public Cloud: 2 zones, consisting of T-Cloud and Flou-Cloud • Hybrid Cloud: 1 zone, Playcourt • Private Cloud: 1 zone, Telkom Internal Cloud Internet of Thing (IoT)/Machine to Machine (M2M) To guard against cyberattacks towards systems and applications, a Vulnerability Assessment is conducted on a regular basis for all applications and network elements that we operate. The testing process is carried out using Vulnerability Assessment Tools to ensure the accuracy of the test results. Big Data/Artificial Intelligence (AI) • 1 system full-stack big data platform • 1 system multimedia data extraction • Various standalone and embedded AI capabilities Augmented Reality (AR)/Virtual Reality (VR) 1 system Payment/Block-chain 3 systems id-Network (“id-NET”) Fiber Optic Backbone Network 173,266 km • 108,566 km domestic fiber optic • 64,700 km international fiber optic Point of Presence (PoP) 122 PoP covers: • 64 PoP in the domestic network • 58 PoP in the international network Satellite 2 Satellites with total capacity 109 TPE • Merah Putih Satellite (60 TPE) • Telkom 3S (49 TPE) Mobile Network 265,194 BTS • 50,158 BTS 2G • 49,632 BTS 3G • 165,120 BTS 4G • 284 BTS 5G 40,588 towers • 4,693 Telkomsel towers • 35,418 Mitratel towers • 477 Telkom towers Fiber Optic Access Network • 37 million Homes Passed • 15.3 million Optical Ports Wi-Fi 391,317 Access Points • 136,170 Managed Access Point • 221,000 Homespot • 34,147 ONT Premium Note: Cluster is a group of integrated infrastructure to support digital services. 9 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk OPERATIONAL AREAS AND SERVICES 7 61 Telkom Regional Offices Telecommunications areas 387 Plasa Telkom Outlets 11 Malaysia, Global offices in Australia, Hong Myanmar, Kong, Singapore, Taiwan, Timor-Leste, Dubai, United States as well as Global Sales Representative in United Kingdom and Philippines 372 GraPARI in Indonesia, including 9 GraPARI TelkomGroup in Jakarta, Tangerang, Bandung, Medan, Pinang, Palembang, Pematang Sorong, Surabaya and 2 GraPARI Lite in Bukit Tinggi and Bekasi Pangkal Siantar, 750 IndiHome Sales Car Merah Putih (108 0E) Telkom-3S (118 0E) SEO TYO C2C SHA HKG MAC SHI TWN RGN BKK HAN BSW SG DUM BTM JKT SBYDPS DIL IGG APCN-2 SJC SMPCS SJ LAX SLO TOR CHG NYX ASH JUS UNITY FASTER TNG-IA GUA HWI AAG SP SHM AMS WRS FRA SWI VNA MLN SOF KIV IST DUB MAN LON LUX PRS MRS EIG MDR LSB PAL ALG CAI RYD MOS DUB DJI BBG IMEWE SEA-ME-WE 5 SEA-ME-WE 4 10 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 01 TELKOM HIGHLIGHTS SEA-USPoint of Presence (POP)International Direct Dialing (IDD)Submarine Fiber Optic (SEA-ME-WE 4)Submarine Fiber Optic (SEA-ME-WE 5)Submarine Fiber Optic APCN-2Submarine Fiber Optic EIGSubmarine Fiber Optic SEA - USSubmarine Fiber Optic IGGSubmarine Fiber Optic SMPCSTelekomunikasi Indonesia Internasional (TELIN)173,266 km Optic Backbone Network 265,194 Mobile Network BTS 122 2 Point of Presence (PoP) 40,588 Towers Satellites with a total capacity of 109 TPE 391,317 Wi-Fi Access Point Merah Putih (108 0E) Telkom-3S (118 0E) SHM MOS DUB PRS MAN LON LUX MRS AMS WRS KIV FRA SWI VNA MLN SOF IST EIG MDR LSB PAL ALG CAI RYD SEO TYO C2C SHA HKG MAC SHI TWN RGN BKK HAN BSW SG APCN-2 SJC SMPCS DUB DJI BBG IMEWE SEA-ME-WE 5 SEA-ME-WE 4 DUM BTM JKT SBYDPS DIL IGG SJ LAX SLO TOR CHG NYX ASH JUS UNITY FASTER TNG-IA GUA HWI AAG SP 11 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk SEA-USPoint of Presence (POP)International Direct Dialing (IDD)Submarine Fiber Optic (SEA-ME-WE 4)Submarine Fiber Optic (SEA-ME-WE 5)Submarine Fiber Optic APCN-2Submarine Fiber Optic EIGSubmarine Fiber Optic SEA - USSubmarine Fiber Optic IGGSubmarine Fiber Optic SMPCSTelekomunikasi Indonesia Internasional (TELIN)KEY FINANCIAL DATA OVERVIEW Consolidated Statements of Comprehensive Income (In billions Rupiah except for net income per share and per ADS which are represented in Rupiah) Year ended on December 31 2022 2021 2020 2019 2018 136,462 135,567 130,784 Total revenues Total expenses* EBITDA Operating profit Profit for the year 147,306 101,569 78,992 39,581 27,680 143,210 99,303 75,723 47,563 33,948 93,274 72,080 43,505 29,563 Profit for the year attributable to: Owners of the parent company 20,753 24,760 20,804 Non-controlling interest 6,927 Total comprehensive profit for the year 29,447 9,188 35,928 8,759 25,986 Total comprehensive profit for the year attributable to: Owners of the parent company 22,468 26,767 Net income per share Net income per share Net income per ADS (1 ADS : 100 common stock) Remark: *Exclude other income (expense). 6,979 209.49 20,949 9,161 249.94 24,994 17,595 8,391 210.01 21,001 93,913 64,832 42,394 27,592 18,663 8,929 25,400 16,624 8,776 188.40 18,840 93,009 59,181 38,845 26,979 18,032 8,947 31,921 22,844 9,077 182.03 18,203 Consolidated Statement of Financial Position (In billions Rupiah) Assets Liabilities Equity attributable to owner of the parent company Net working capital (current asset - current liabilities) Year ended on December 31 2022 2021 2020 2019 2018 275,192 277,184 246,943 221,208 206,196 125,930 131,785 126,054 103,958 129,258 121,646 102,527 99,561 88,893 98,910 (15,331) (7,854) (22,590) (16,647) (2,993) Long-term investment in associates 123 139 192 1,944 2,472 Capital Expenditure (In billions Rupiah) Year ended on December 31 2022 2021 2020 2019 2018 Total 34,156 30,341 29,436 36,585 33,620 12 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 01 TELKOM HIGHLIGHTS Year ended on December 31 2022 2021 2020 2019 2018 Consolidated Financial and Operation Ratios Return on Assets (ROA (%)(1) Return on Equity (ROE) (%)(2) Operating Profit Margin (%)(3) Current Ratio (%)(4) 10.1 18.5 26.9 78.2 Total Liabilities to Equity (%)(5) 84.4 Total Liabilities to Total Assets (%)(6) 45.8 Debt to Equity Ratio(x)(7) Debt to EBITDA Ratio(x)(8) 0.42 0.80 EBITDA to Interest Expense (x)(9) 19.6 12.2 23.3 33.2 88.6 90.6 47.5 0.48 0.91 17.3 12.0 24.5 31.9 67.3 104.3 51.0 0.54 0.91 15.9 12.5 23.5 31.3 71.5 88.7 47.0 0.44 0.80 15.3 13.1 23.0 29.7 93.5 75.8 43.1 0.38 0.74 16.9 Remarks: (1) ROA is calculated as profit for the year divided by total assets at year end December 31. (2) ROE is calculated as profit for the year divided by total equity at year end December 31. (3) Operating profit margin is calculated as operating profit divided by revenues. (4) Current ratio is calculated as current assets divided by current liabilities at year end December 31. (5) Liabilities to equity ratio is calculated as total liabilities divided by total equity at year end December 31. (6) Liabilities to total assets ratio is calculated as total liabilities divided by total assets at year end December 31. (7) Debt to equity ratio is calculated as debt (included finance lease) divided by total equity. (8) Debt to EBITDA ratio is calculated as debt (included finance lease) divided by EBITDA. (9) EBITDA to interest ratio is calculated as EBITDA divided by cost of funds. 13 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk Revenue (Rp Billion) EBITDA (Rp Billion) 147,306 143,210 136,462 135,567 130,784 78,992 75,723 72,080 64,832 59,181 2.9% yoy 4.3% yoy 2022 2021 2020 2019 2018 2022 2021 2020 2019 2018 Net Income Earning per Share (Rp Billion) (Rp) 20,753 24,760 20,804 18,663 18,032 209.49 249.94 210.01 188.40 182.03 -16.2% yoy -19.3% yoy 2022 2021 2020 2019 2018 2022 2021 2020 2019 2018 14 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 01 TELKOM HIGHLIGHTS EBITDA Margin Net Income Margin 53.6 52.9 52.8 47.8 45.3 60.0 50.0 40.0 60.0 14.1 15.0 10.0 17.3 15.2 13.8 13.8 2022 2021 2020 2019 2018 2022 2021 2020 2019 2018 Profitability Ratio Leverage Ratio 25.0 23.3 24.5 23.5 23.0 18.5 20.0 10.1 15.0 10.0 5.0 12.2 12.0 12.5 13.1 0.91 0.91 0.80 0.54 0.48 0.42 0.80 0.74 0.44 0.38 1.0 0.8 0.6 0.4 0.2 0.0 2022 2021 2020 2019 2018 2022 2021 2020 2019 2018 Return on Equity (ROE) Return on Assets (ROA) Debt to EBITDA Ratio DEBT to Equity Ratio (DER) 15 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk STOCK INFORMATION TELKOM’S STOCK INFORMATION AT THE IDX The following table reports the highest, lowest and closing share prices, trading volumes, number of shares outstanding, and market capitalization of Telkom’s stock which were recorded at the Indonesia Stock Exchange (IDX) for the periods indicated. Calendar Year Highest Lowest Closing Price Per Share (In Rupiah) Volume (Shares) Outstanding Shares Excluding Treasury Stock Market Capitalization (Rp Billion) 2018 2019 2020 2021 2022 First quarter Second quarter Third quarter Fourth quarter First quarter Second quarter Third quarter Fourth quarter September October November December 4,460 4,500 4,030 4,250 3,640 3,570 3,690 4,250 4,850 4,700 4,850 4,770 4,540 4,650 4,540 4,420 4,040 3,250 3,480 2,450 3,000 3,040 3,130 3,000 3,590 3,570 4,030 3,930 3,840 3,570 4,300 4,200 3,960 3,570 3,750 24,436,003,500 99,062,216,600 3,970 20,656,298,500 99,062,216,600 3,310 34,789,507,100 99,062,216,600 4,040 25,419,078,500 99,062,216,600 3,420 8,170,188,800 99,062,216,600 3,150 5,206,365,000 99,062,216,600 3,690 5,542,524,500 99,062,216,600 4,040 6,500,000,200 99,062,216,600 3,750 29,679,859,500 99,062,216,600 4,580 6,812,010,800 99,062,216,600 4,000 7,780,427,000 99,062,216,600 4,460 7,522,276,500 99,062,216,600 3,750 7,565,145,200 99,062,216,600 4,460 2,273,825,600 99,062,216,600 371,483 393,277 327,896 400,211 338,793 312,046 365,540 400,211 371,483 453,705 396,249 441,817 371,483 441,817 4,390 1,839,863,200 99,062,216,600 434,883 4,040 2,773,125,000 99,062,216,600 3,750 2,952,157,000 99,062,216,600 400,211 371,483 Telkom’s stock price on the last trading day of the IDX, which was December 30, 2022, closed at Rp3,750. At that price, Telkom’s market capitalization reached Rp371 trillion or 3.91% of the total capitalization of the Indonesia Stock Exchange (IDX). 5,000 4,000 3,000 2,000 ) p R ( e c i r P 1,000 0 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2021 2021 2021 2021 2022 2022 2022 2022 ) s e r a h S ( e m u o V l 700,000,000 600,000,000 500,000,000 400,000,000 300,000,000 200,000,000 100,000,000 0 16 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 01 TELKOM HIGHLIGHTS TELKOM’S AMERICAN DEPOSITORY SHARES (ADS) INFORMATION AT NYSE On December 30, 2022, 1 Telkom ADS closed at US$23.85 at New York Stock Exchange (NYSE). The following table reports the highest, lowest and closing share prices, trading volumes, number of shares outstanding, and market capitalization of the Telkom ADS which were recorded at New York Stock Exchange (NYSE) for the periods indicated. Calendar Year Highest Lowest Closing Volume (ADS) Price Per ADS (In US$) 32.51 31.48 29.37 29.72 25.62 27.46 25.62 29.72 33.21 32.75 33.21 31.95 29.56 30.76 29.56 28.25 25.62 21.75 24.27 16.06 20.44 22.39 21.65 20.44 25.00 23.03 28.38 26.43 26.08 23.03 28.61 26.89 24.96 23.03 26.21 28.50 23.52 28.99 23.64 21.67 25.40 28.99 23.85 31.95 27.04 28.85 23.85 28.85 27.82 25.48 23.85 First quarter Second quarter Third quarter Fourth quarter First quarter Second quarter Third quarter Fourth quarter September October November December 2018 2019 2020 2021 2022 ) S D A ( e m u o V l 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2021 2021 2021 2021 2022 2022 2022 2022 98,313,215 58,515,643 69,959,149 59,114,415 14,775,028 19,535,239 14,257,500 10,546,648 69,735,455 18,962,553 15,991,374 16,838,474 17,943,054 5,523,585 5,114,080 5,395,765 7,433,209 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0 ) $ S U ( e c i r P 17 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk CORPORATE ACTION INFORMATION REGARDING STOCKS During 2022 reporting period, Telkom did not take any corporate actions at IDX or NYSE, such as stock splits, reverse stock, shares dividend, bonus shares, and decrease in nominal value of shares. Therefore, this report does not contain information regarding the dates of corporate actions, stock split ratios, reverse stock, stock dividends, bonus shares, the number and value of shares emitted, changes in the nominal value of shares, the number of shares before and after corporate action as well as the value of stocks before and after corporate actions. INFORMATION REGARDING OBLIGATIONS, SUKUK OR CONVERTIBLE BONDS Principal (Rp million) Issuance Date Maturity Date Term (Years) Interest Rate per Annum (%) 2,200,000 June 23, 2015 June 23, 2022 7 9.93 2,100,000 June 23, 2015 June 23, 2025 10 10.25 1,200,000 June 23, 2015 June 23, 2030 15 10.60 1,500,000 June 23, 2015 June 23, 2045 30 11.00 Rating (Pefindo) idAAA Underwriter Trustee PT Bank Permata Tbk PT Bahana Sekuritas; PT BRI Danareksa Sekuritas; PT Mandiri Sekuritas; PT Trimegah Sekuritas Indonesia Tbk Bonds Telkom Shelf Registered Bond I 2015 Series A* Telkom Shelf Registered Bond I 2015 Series B Telkom Shelf Registered Bond I 2015 Series C Telkom Shelf Registered Bond I 2015 Series D Remark: * Bonds principal has been paid in a timely manner according to applicable regulation and has been submitted to the public by letter number Tel.66/LP000/ DCI-M200000/2022 to President Director of PT Bursa Efek Indonesia. 18 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 01 TELKOM HIGHLIGHTS KALEIDOSKOP 2022 Together with Telkom to Boost Indonesia's Digital Transformation FEBRUARY • With a focus on accelerating digital inclusion, Telkom was elected Chairman of the B20 Indonesia TF Digitalization. • Agreed to support the digitalization of Agricultural PMO. • Digitalization of SMEs mentored by Telkom in Lampung. 2 JANUARY • Sinergy between Finnet and Posfin to promote financial inclusion in Indonesia. • Smart Government Digitalization in Medan, North Sumatera. . 1 • Telkom launched the Pijar Camp Scholarship program to prepare Indonesia digital talents. 9.2 Million IndiHome Subscribers 96% Coverage 156.8 Million Telkomsel Subscribers 99% Coverage 28 Data Centers Domestic and overseas, including tier 3 and 4 DIGITAL CONNECTIVITY DIGITAL PLATFORM DIGITAL SERVICE 173,266 km Fiber Optics 265,194 Unit Telkomsel Base Transceiver Station 35,418 Mitratel Tower Numerous Digital Services MARCH • To reinforce the international infrastructure, Telin joined the SEA-ME-WE 6 consortium to build a 19,200 km-long submarine cable system. • Minister of State-Owned Enterprises launched Leap - Telkom Digital to accelerate Indonesia's digital transformation. • Telkom provided the ICT infrastructure throughout the 3 Mandalika MotoGP Series. APRIL • Expanding its market to the Middle East, Telkom opened its 11th international representative office in Dubai, United Arab Emirates. • Joined the “Proudly Made in Indonesian” movement for MSMEs in West Sumatera. • Strategic alliance between Telkom and Singtel for a Regional Data Center. • Strategic partnership between Telkom and Microsoft to drive Indonesia's digital acceleration and intelligent infrastructure. 4 MAY • Telkom reinforced Telkomsigma to fulfill the needs of the Cloud and IT Services market in Indonesia. • Pijar Sekolah to help Middle and High Schools in Tarutung. 5 • Telkom AGM for the Year 2021 distributed dividends to the value of Rp14,86 trillion. JUNE • Telkomsat obtained Starlink docking rights from Kominfo to push equitable access to the internet throughout Indonesia. • Telkom unveiled its smart city solutions at London Tech Week 2022. • To reinforce connectivity in Eastern Indonesia, Telkom built the Bifrost Jakarta - Balikpapan - Manado – America submarine cable communication system (SKKL). 6 • Digitalizing education for SLBN special needs schools. . JULY • Celebrating 57 Years of Telkom Indonesia “Digital Bisa untuk Semua” (Digital is accessible to all). • Launched the Second Gateway Manado, a digital toll gate in Eastern Indonesia. • Telkom supported the infrastructure and services at the 2022 ASEAN Para Games XI. • Telkom donated and distributed 900 Qurban animals on Eid al-Adha 1443H. 7 AUGUST • Inauguration of neuCentrIX Sepaku and Digital Community Center at Ibu Kota Nusantara. • An international alliance between ITDRI and the Massachusetts Institute of Technology. • Indigo Demo Day 2022, a meet up for startups mentored by Telkom with venture capitalists. 8 SEPTEMBER • A strategic partnership between Telin and Expereo in regard to SD-WAN cloud solutions. • Telkom’s strategic alliance with Amazon Web Services provides cloud computing solutions for digital industry players. • Batic 2022 strengthens the Indo-Pacific connectivity ecosystem to become a Regional Digital Hub. 9 10 . OCTOBER • Digital Innovation Learning School for digitalization in education in the 3T area. • Business matching, investor talk, and corporate day at the SOE International Conference 2022. • Tourism Collaborative Platform, a collaboration between Telkom dan Injourney to digitize the tourism ecosystem. NOVEMBER • TelkomGroup provided first-rate infrastructure during the peak of the 2022 G20 Summit. • Formed a strategic alliance with global tech giants during the 2022 B20 Summit (Google and Indosat Ooredo Hutchitson). • TelkomGroup matched investors with Indonesian startups, generating US$399 million in 11 funding. • Recycling and upcycling electronic waste through the Eduvice Program. DECEMBER • Telkom formed a strategic partnership with Cisco regarding IoT Control Center and SDN for the growth of Industry 4.0 in Indonesia. • Groundbreaking NeutraDC Hyperscale Data Center in Batam. . . • TelkomGroup Siaga NARU 2022/2023. 12 Financial Performance (Year 2022) Revenue Rp147.31 trillion (+2.9% YoY) EBITDA Rp78.99 trillion (+4.3% YoY) Net Profit Rp20.75 trillion (-16.2% YoY) Best 3: Press Release and Website Category Anugerah Media Humas 2022 Large Business Category 19 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk 02 REPORT OF THE BOARD OF COMMISSIONERS AND DIRECTORS 20 PT Telkom Indonesia (Persero) TbkChapter 02 REPORT OF THE BOARD OF COMMISSIONERS AND DIRECTORSAnnual Report 202202 REPORT OF THE BOARD OF COMMISSIONERS AND DIRECTORS 22 Report of the Board of Commissioners 28 Report of the Board of Directors 34 Statement Letter of Responsibility for 2022 Annual Report 21 PT Telkom Indonesia (Persero) TbkAnnual Report 2022REPORT OF THE BOARD OF COMMISSIONERS “ The Board of Commissioners considers that the Board of Directors has carried out the management of the Company in a good manner and has successfully recorded positive financial and operational performances amid the COVID-19 pandemic, which hadn’t yet been mitigated in 2022. We have also observed that Telkom’s digital transformations, which focused on the development of digital connectivity, digital platforms, and digital services, are progressing well. ” Dear Respected Shareholder and all Stakeholders, As a telecommunications company, we will continue Let us offer praise and gratitude to God Almighty as with customers. In 2022, we saw a significant shift towards His blessing PT Telkom Indonesia (Persero) Tbk (Telkom or digitalization, with ever more customers relying on our the Company) successfully saw through 2022 by recording service for work, education and entertainment. We have an upstanding performance. responded to this trend by widening our network reach to innovate and offer reliable digital services for our GENERAL OUTLOOK REGARDING MACRO-ECONOMY AND THE INDUSTRY SUPERVISION AND ASSESSMENT OF THE BOARD OF and through the introduction of new services. DIRECTORS’ PERFORMANCE IN 2022 Indonesia’s GDP grew by around 5.31% in 2022. The country’s economy remained resilient as it was supported Overall, we have assessed that throughout 2022 the by the Government’s strong expenditure on infrastructure Board of Directors had carried out its duties and projects, improving consumer spending, and its functions in managing the company in a good manner. investments in various business sectors. However, we also The Board of Directors had prepared a work plan and faced challenges due to rising inflation, which peaked in had implemented the appropriate strategies to attain September 2022 at 5.51%. This put pressure on consumer the Company’s strategic targets in accordance with spending and affected our business operations. its purpose, vision and mission. Moreover, the Board of Directors had also been able to maintain the Company’s The IMF has predicted a global economic growth rate of technological leadership in the industry, made effective around 2.9% for 2023, driven by a continued recovery from and efficient investments, developed its talents and the COVID-19 pandemic. This growth is expected to be digital capabilities as well as achieving a good balance uneven as some countries face greater challenges than between economic values and social aspects. We thus see others. Geopolitical tensions, climate change, and supply the results in the achievement of a very good growth in chain disruptions are factors that could affect global the Company’s Revenue and EBITDA for 2022. From the economic growth in 2023. With regards to Indonesia, the operational perspective, the Company also recorded a IMF is predicting continued growth of Indonesia’s economy solid performance growth owing to the rise in the number in 2023, with a growth rate of around 5.0%. This is supported of IndiHome fixed broadband subscribers and an increase by a strong domestic demand and the Government’s in data traffic on cellular services. A positive performance expenditures on its infrastructure projects. However, this of the Company’s financial and operational aspects has country still faces challenges such as rising inflation as well further strengthened Telkom’s position as the market as potential uncertainties in the global economy. leader in the Indonesian telecommunications industry. 22 PT Telkom Indonesia (Persero) TbkChapter 02 REPORT OF THE BOARD OF COMMISSIONERS AND DIRECTORSAnnual Report 2022 A positive performance of the Company’s financial and operational aspects has further strengthened Telkom’s position as the market leader in the Indonesian telecommunications industry. Bambang Permadi Soemantri Brodjonegoro President Commissioner/Independent Commissioner 23 PT Telkom Indonesia (Persero) TbkAnnual Report 2022“The Board of Commissioners is of the opinion that the growth of Telkom’s business prospects going forward is well assured. Through the development and strengthening of its digital connectivity, digital platforms, and digital services, in the future the Company will have excellent resources to secure various opportunities as well as grow in a sustainable manner. We believe that the Company will be able to maintain its market Telkom always ensures the best and Board of Commissioners Directors; widest digital connectivity for the Committee Meetings, in which community by strengthening its the Board of Commissioners is a infrastructure capabilities through member of the Committee; and its backbone and optical fiber-based Internal Meetings of the Board of access networks, as well as its Base Commissioners for which the Board Transceiver Stations (BTS) fitted with of Directors is invited to join. the latest technology. The Company also develops both cloud and data VIEWS ON BUSINESS PROSPECTS centers, as well as security and data analytics to further strengthen digital The Board of Commissioners is platforms. Furthermore, Telkom also develops various digital services to of the opinion that the growth of Telkom’s business prospects going provide digital solutions with the forward is well assured. Through the best experience for customers. We development and strengthening consider that all of these were carried of its digital connectivity, digital out to increase the Company’s platforms, and digital services, in competitiveness and create the future the Company will have competitive and sustainable growth excellent resources to secure various in the future. opportunities as well as grow in a sustainable manner. We believe FREQUENCY AND METHODS USED that the Company will be able TO PROVIDE GUIDANCE TO THE to maintain its market position, BOARD OF DIRECTORS especially as Telkom continues to invest in increasing its capacity and The Board of Commissioners capabilities to provide the best digital regularly provides advice to the experience for all its customers. position, especially as Board of Directors, both in writing Telkom continues to invest in increasing its capacity and capabilities to provide the best digital experience for all its customers.” and verbally. In writing, the Board of Future growth opportunities Commissioners’ recommendations include IndiHome’s fixed broadband is provided in letter form or services, mobile digital business through a Decision of the Board services, enterprise solutions services, of Commissioners. Verbal advice is data centers and the provision of delivered directly during the Board telecommunication towers. Telkom of Commissioners’ meetings which is in prime position to capture consists of: Joint Meetings between diverse opportunities in the future, the Board of Commissioners and the supported by the reach, capacity and capabilities of a comprehensive, reliable and integrated infrastructure. 24 PT Telkom Indonesia (Persero) TbkChapter 02 REPORT OF THE BOARD OF COMMISSIONERS AND DIRECTORSAnnual Report 2022From Left to Right: Rizal Mallarangeng (Commissioner), Bono Daru Adji (Independent Commissioner), Abdi Negara Nurdin (Independent Commissioner), Wawan Iriawan (Independent Commissioner), Bambang Permadi Soemantri Brodjonegoro (President Commissioner/Independent Commissioner), Marcelino Rumambo Pandin (Commissioner), Isa Rachmatarwata (Commissioner), Ismail (Commissioner), Arya Mahendra Sinulingga (Commissioner). 25 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Moreover, the Board of Commissioners also supports the the selection of strategic positions within the Company efforts by the Board of Directors to explore additional and its subsidiaries; as well as the remuneration of the opportunities to increase the value of the Company, such Board of Directors. The Planning and Risk Evaluation as: the selective and prudent implementation of inorganic and Monitoring Committee provided recommendations activities; the exploration of revenue from assets that regarding the strategic and risk management aspects have not been optimally valued; and the development of of the Company. It also conducted a comprehensive startups with the hope that these will have greater value evaluation of the Board of Directors’ proposals regarding or generate synergetic value in the future. the Company’s Long-Term Plan, the Implementation ASSESSMENT OF THE PERFORMANCE Company’s Budget Activity Plan and monitored their Strategy Document (Mid-Term Plan), as well as the OF COMMITTEES UNDER THE BOARD OF COMMISSIONERS implementation. VIEWS ON THE IMPLEMENTATION OF GOOD In carrying out its supervisory function of the Company, CORPORATE GOVERNANCE Telkom’s Board of Commissioners is assisted by three committees: the Audit Committee; the Nomination and Corporate governance is one of the supervisory focuses Remuneration Committee (KNR); and the Planning and of the Board of Commissioners. We are committed to Risk Evaluation and Monitoring Committee (KEMPR). In ensuring the implementation of a high standard of our view, the three Committees have carried out their governance across the TelkomGroup, in accordance with duties effectively in accordance with their roles. Each the principles of Good Corporate Governance (GCG) and Committee carried out studies, made recommendations by upholding the core values of AKHLAK. Throughout and gave their full support to the Board of Commissioners 2022, the Board of Commissioners actively supervised so that the oversight mechanism of the Board of Directors and provided recommendations on various aspects of could run effortlessly. company management, including risk management. Amongst its other tasks, the Audit Committee assisted One of the governance practices that has been functioning us in supervising and conducting reviews of financial effectively is the implementation of the Whistleblowing information that will be submitted to the public, as well System (WBS). The Board of Commissioners continues as examining complaints related to the accounting to encourage a regular improvement. Through this and financial reporting processes. The Nomination and mechanism, the Company can identify and minimize the Remuneration Committee provided diverse and crucial potential for fraud as well as policy deviations or internal recommendations related to policies; criteria for and violations. 26 PT Telkom Indonesia (Persero) TbkChapter 02 REPORT OF THE BOARD OF COMMISSIONERS AND DIRECTORSAnnual Report 2022APPRECIATION TO STAKEHOLDERS AND CLOSING On behalf of the Board of Commissioners, we would like to thank all the Directors, management, and employees who have wholeheartedly contributed to manage TelkomGroup’s business activities. Furthermore, we would also like to give our appreciation to all our stakeholders who have given their full support to Telkom in an effort to achieve the Company’s purpose, vision and mission. Through a good collaboration between stakeholders, we believe that Telkom will continue to grow in a sustainable manner and play an important role in supporting the progress of the Nation henceforward. Jakarta, April 5, 2023 On behalf of the Board of Commissioners, Bambang Permadi Soemantri Brodjonegoro President Commissioner /Independent Commissioner 27 PT Telkom Indonesia (Persero) TbkAnnual Report 2022REPORT OF THE BOARD OF DIRECTORS “ In 2022, Telkom increasingly focused on strengthening its business fundamentals and successfully saw through the COVID-19 pandemic. We have consistently invested for the future to create growth opportunities through our three business pillars: Digital Connectivity, Digital Platform, dan Digital Services. ” Esteemed Shareholders, Board of Commissioners, and all stakeholders, We are confident that economic conditions will continue to improve alongside COVID-19’s mitigation and people’s increasing mobility. We are also predicting that post- We give thanks and gratitude to God Almighty for His pandemic, people will maintain the online practices they infinite blessings, thus enabling PT Telkom Indonesia had adopted during the pandemic. We will thus continue (Persero) Tbk (“Telkom” or “Company”) to masterfully to strengthen our digital infrastruture and develop various navigate the challenging 2022 period. On this occasion, allow us to present a summary of the various efforts platforms and digital solutions accordingly to realize the Company’s vision to be the community’s ‘digital telco of and achievements that we have successfully attained choice’. throughout 2022. ECONOMIC AND INDUSTRY CONDITIONS TARGETS PERFORMANCE ACHIEVEMENTS COMPARED TO In general, the COVID-19 pandemic still remained the Telkom posted a revenue of Rp147.31 trillion in 2022, or a primary challenge for businesses in Indonesia. The growth of 2.9% compared to the previous year. In terms emergence of new variants in mid-2021 led to the of profitability, Telkom’s recorded EBITDA was Rp78.99 pandemic’s second wave, which put great pressure on trillion or an increase of 3.7% with a Net Profit of Rp20.75 the national economy. However, the Government’s quick trillion or a decline of 16.2%. If we do not factor in the and precise measures, including the implementation of impact of GOTO’s unrealized loss, Telkom was able to Community Activities Restrictions Enforcement (PPKM) record an operational net profit of Rp25.85 trillion, or a were very effective in controlling the pandemic whilst growth of 7.7% compared to the 2021 period even though gradually restoring the economy. The Statistics Indonesia the revenue attainment was slightly below our target or recorded that in 2022 the Indonesian economy grew by 97.8% of the target. 5.31%, better than that of 2021 which was at 3.69%. In the Mobile segment, Telkomsel was able to maintain its Meanwhile, the Rupiah exchange rate against the position as the leading cellular operator in Indonesia with USD fluctuated throughout 2022. The Bank Indonesia 156.8 million customers, of which 120.9 million are mobile transaction rate on January 3, 2022 was Rp14,270 per USD and closed at Rp15,592 per USD on December 31, 2022. data users. Telkomsel’s revenue for 2022 was recorded at Rp85.49 Trillion or an increase of 1.5%. The Mobile The 2022 inflation rate, another key macro indicator, was segment’s performance was 96.5% of the set target. The relatively high at 5.51%. This high inflation rate provided Digital Business’ revenue contribution increased to 81.9% space for Bank Indonesia (BI 7 Days Repo Rate) to raise of Telkomsel’s total revenue, in comparison to the previous its benchmark interest rate from 3.50% in January 2022 to year’s 77.9%. The growth of the Digital Business was 5.50% in December 2022. supported by a 7.5% revenue growth from Data that was driven by a 18.7% increase in data traffic (Data Payload). Meanwhile, revenue from the Legacy Business decreased by 16.4% alongside with the trending shift from voice and SMS to data. 28 PT Telkom Indonesia (Persero) TbkChapter 02 REPORT OF THE BOARD OF COMMISSIONERS AND DIRECTORSAnnual Report 2022In 2022, Telkom recorded a positive performance with Revenue and EBITDA growth compared to the previous year. Ririek Adriansyah President Director 29 PT Telkom Indonesia (Persero) TbkAnnual Report 2022“We believe that henceforward Telkom will continue to have excellent business prospects and growth, as the three business pillars (digital connectivity, digital platform, and digital In the Consumer segment, IndiHome In addition to these four segments, continues to be the country’s market Telkom also manages other leader for fixed broadband by segments. Telkom has recorded a securing 75.2% of the market. The growth of 16.6% for these segments. number of IndiHome subscribers at The contributions of these segments the end of 2022 reached 9.2 million towards Telkom’s consolidated customers, an increase of 611.000 new revenue is still relatively low, but customers compared to the previous they show high growth through year. As a result, the Consumer various initiatives in developing segment’s revenue increased and providing of a variety of digital significantly by 5.7% to Rp26.354 services for both B2B and B2C. trillion, a substantial contribution to the increase of the consolidated OVERVIEW OF BUSINESS services) are increasingly revenue. The Consumer segment’s PROSPECTS relevant to the needs and demands of consumers.” revenue performance reached 96.9% of the set target. Amid ongoing conditions due to the COVID-19 pandemic, Telkom The Enterprise segment’s continues to create growth performance in 2022 was quite opportunities through three good amid the pressures from the business pillars: Digital Connectivity, COVID-19 pandemic. Revenue from Digital Platform and Digital Services. this segment reached Rp19.16 trillion Strengthening the Company’s or a 0.1% growth compared to the position as the market leader in the previous period. This performance domain of digital connectivity is an reach 97.8% of the previously set important endeavor that Telkom target. undertakes through the consistent strengthening of its network to deliver Meanwhile, the Wholesale and quality broadband services with the International Business (WIB) segment widest coverage in Indonesia for recorded a revenue of Rp15.44 trillion, both mobile and fixed. Additionally, or an 8.3% growth compared to the Telkom is increasing the capacity previous year which was Rp14.26 and capabilities of the data center trillion. This segment’s performance and cloud business lines as well as reached 104.3% of the target set at various other digital platforms such the beginning of the year. as data analytics and security which 30 PT Telkom Indonesia (Persero) TbkChapter 02 REPORT OF THE BOARD OF COMMISSIONERS AND DIRECTORSAnnual Report 2022are also enablers for the creation of various digital service a complete digital infrastructure, Telkom is in pole solutions according to customer needs. We believe that position to seize various business opportunities and grow in the future Telkom will continue to have good business together with corporations as well as small and medium and growth prospects, as the three business pillars are businesses in Indonesia. Meanwhile, with regards to the increasingly relevant to consumer needs and demands. Wholesale & International Business segment, Telkom is focusing on increasing business towers, data centers In its effort to give the best experience for its Mobile and infrastructure managed services to strengthen its segment customers, Telkom commits to continuously position as a supportive partner in the digital ecosystem innovate as well as implement up-to-date and cutting- for domestic and global content providers. edge technology. We have begun to gradually implement 5G technology since 2021 through our subsidiary Additionally, through MDI, Telkom also carries out digital Telkomsel. Going forward, in line with the development of the ecosystem and various use cases, we are confident initiatives through its investments in various start-ups in sectors that are in line with the company’s strategy and that 5G technology will offer new opportunities for growth. that have good future potential synergies and valuations. Telkomsel also carries out digital initiatives through We hope that in the future some these start-ups can make separate entities in order to have the competitiveness and significant contributions to the Company, either through agility to develop digital services according to the needs business synergies or through increasing valuations as of the community, such as in the health, education and these start-ups mature. lifestyle sectors. We are also in the process of increasing the capacity of In the Consumer segment, we believe there is still wide our data centers as well as consolidating their assets as we room for growth as the penetration of fixed broadband in hope to be able to unlock the data center business in the Indonesia is relatively low, under 20% of the total number of future. The strategy is expected to increase the corporate existing households. We have observed that people’s daily value as we had previously done with the tower business. activities are increasingly carried out at home with the support of high-quality internet whether for work, study, Telkom believes that the convergence of the fixed and shopping, entertainment, and even entrepreneurism. mobile businesses (fixed mobile convergence) is a Through IndiHome, Telkom will maintain the momentum necessity. To achieve this, we have created a roadmap to create a digital environment, build a digital society, and with the aim of providing a better customer experience, accelerate the digital economy. a more effective allocation of capital expenditure (CAPEX) The Enterprise segment’s business prospects are quite good, in line with the revitalization of the business Telkom is always open to establishing partnerships with sector following the alleviation of pandemic conditions other parties, in order to accelerate the increase in digital and especially during the post-pandemic period. With capabilities or to get investors who have the vision to its variety of enterprise solutions and supported by jointly seize growth opportunities and create higher value. and creating better data integration. 31 PT Telkom Indonesia (Persero) TbkAnnual Report 2022From Left to Right: Muhamad Fajrin Rasyid (Director of Digital Business), Herlan Wijanarko (Director of Network & IT Solution), FM Venusiana R (Director of Consumer Service and Acting (PLT) Director of Enterprise & Business Service), Ririek Adriansyah (President Director), Heri Supriadi (Director of Finance & Risk Management), Budi Setyawan Wijaya (Director of Strategic Portfolio), Bogi Witjaksono (Director of Wholesale & International Service), Afriwandi (Director of Human Capital Management). 32 PT Telkom Indonesia (Persero) TbkChapter 02 REPORT OF THE BOARD OF COMMISSIONERS AND DIRECTORSAnnual Report 2022PROGRAM AND PERFORMANCE GOALS FOR 2023 IMPLEMENTATION OF GOOD CORPORATE To capture the various growth opportunities we have GOVERNANCE described above, Telkom has planned a strategic program TelkomGroup continuously upholds the implementation for 2023 with the theme ‘Enhance Digital Capability and of good governance in accordance with the principles of Business Performance for Sustainable Growth’. The main Good Corporate Governance (GCG) and with reference to programs to be carried out are: the eight principles of company management as well as 1. Deliver the best quality of service with excellent with the Financial Services Authority’s (OJK) Corporate customer experience: whereby service quality and Governance Guideline for Public Companies. We are customer experience management are key in gaining confident that good governance is a primary aspect that customer loyalty. will help ensure the company’s long-term sustainability. 2. Excel in the 3 digital domains and unlock business Telkom’s implementation of GCG aims to support the leveraging group synergy: to deal with the dynamics realization of the Company’s purpose, vision and mission, of a telecommunications industry that is constantly which will ultimately provide added value and benefits for in movement, an integrated telco is required and can shareholders and other stakeholders. be achieved by delayering to reach a wider customer segment and increase the Company’s value. Throughout 2022, we continuously strive to strengthen 3. Accelerate digitalization and a lean organization various sectors that we consider significant, including the development for impactful operations: Telkom will reinforcing of our organization as well as the competence continue to accelerate the improvements to its of our Internal Audit in order to improve oversight within operating and business models to become leaner. the company. SUPPORTING DIGITALIZATION FOR A BETTER FUTURE CLOSING We believe that the digitalization of various fields is a In closing, on behalf of the Board of Directors of PT Telkom very good opportunity for Indonesia. It will enable the Indonesia (Persero), I would like to express our gratidue country to make a leap and stand on an equal footing and great appreciation for all our shareholders, the Board with other developed countries. Advances in education, of Commissioners, loyal customers, business partners, the health, finance and other sectors can be achieved faster media, the general public and all other stakeholders for and cheaper through various digital platforms. For the support given to Telkom throughout 2022. I would this reason, the need for extensive and quality digital also like to thank the management and all TelkomGroup connectivity infrastructure, a capable digital platform, employees for their dedication and contributions in and diverse digital services meeting the needs of the carrying out their duties and responsibilities as well as community is very important. Telkom has the resources their support in attaining Telkom’s purpose, vision, mission required as well as the passion to help all levels of the and work program throughout 2022. society benefit from the digital era. Our efforts to continue investing on strengthening the digital connectivity, digital Henceforward, may we continue to innovate without stop platforms and digital services business lines are a solid in this digital era that promises many opportunities, so manifestation of Telkom’s contributions in the creation that Telkom can consistently grow well and sustainably. of a digital environment, building a digital society, and accelerating the digital economy, considering that digital Jakarta, April 5, 2023 literacy and skills are one of the main assets for Indonesia to achieve its aspirations to become a developed country. On behalf of the Board of Director Ririek Adriansyah President Director 33 PT Telkom Indonesia (Persero) TbkAnnual Report 2022STATEMENT OF THE MEMBER OF BOARD OF COMMISSIONERS REGARDING WITH RESPONSIBILITY FOR PT TELKOM INDONESIA (PERSERO) TBK 2022 ANNUAL REPORT We the undersigned hereby declare that all the information in the PT Telkom Indonesia (Persero) Tbk 2022 Annual Report has been presented in its entirety and that we assume full responsibility for the accuracy of the content of the Company’s Annual Report. This statement is made in all truthfulness. Jakarta, April 5, 2023 Board of Commissioners Bambang Permadi Soemantri Brodjonegoro President Commissioner/Independent Commissioner Wawan Iriawan Independent Commissioner Bono Daru Adji Independent Commissioner Abdi Negara Nurdin Independent Commissioner Ismail Commissioner Marcelino Rumambo Pandin Commissioner Rizal Mallarangeng Commissioner Isa Rachmatarwata Commissioner Arya Mahendra Sinulingga Commissioner 34 PT Telkom Indonesia (Persero) TbkChapter 02 REPORT OF THE BOARD OF COMMISSIONERS AND DIRECTORSAnnual Report 2022STATEMENT OF THE MEMBER OF BOARD OF DIRECTORS REGARDING WITH RESPONSIBILITY FOR PT TELKOM INDONESIA (PERSERO) TBK 2022 ANNUAL REPORT We the undersigned hereby declare that all the information in the PT Telkom Indonesia (Persero) Tbk 2022 Annual Report has been presented in its entirety and that we assume full responsibility for the accuracy of the content of the Company’s Annual Report. This statement is made in all truthfulness Jakarta, April 5, 2023 Board of Directors Ririek Adriansyah President Director Heri Supriadi Director of Finance & Risk Management FM Venusiana R Director of Consumer Service and Acting (PLT) Director of Enterprise & Business Service Herlan Wijanarko Director of Network & IT Solution Bogi Witjaksono Director of Wholesale & International Service Budi Setyawan Wijaya Director of Strategic Portfolio Afriwandi Director of Human Capital Management Muhamad Fajrin Rasyid Director of Digital Business 35 PT Telkom Indonesia (Persero) TbkAnnual Report 202203 ABOUT TELKOM 36 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 202203 ABOUT TELKOM 38 Purpose, Vision, Mission, and Strategy 42 Corporate Culture and Value 44 Telkom Milestones 46 Business Activities 48 50 Telkom Organizational Structure List of Industry Association Memberships 52 Profile of the Board of Commissioners 58 Profile of the Board of Directors 64 Profile of the Senior Vice President 66 70 72 Telkom Employees Shareholders Composition Subsidiaries, Associated Companies, and Joint Ventures 78 Chronology of Stocks Registration 80 Chronology of Other Securities Registration 82 Name and Address of Institutions and/or Supporting Capital Market Profession 37 PT Telkom Indonesia (Persero) TbkAnnual Report 2022PURPOSE, VISION, MISSION, AND STRATEGY Telkom determines the purpose, vision, mission, strategy, and corporate culture listed in the long- term plan and approved by the Board of Commissioners and Directors on December 9, 2019. This is done to support national digitalization and internalize the transformation agenda. Purpose To build a more prosperous and competitive nation as well as deliver the best value to our stakeholders. To be the most preferred digital telco to empower the society. Vision Mission 1. Advance rapid buildout of sustainable intelligent digital infrastructure and platforms that is affordable and accessible to all. 2. Nurture best-in-class digital talent that helps develop nation’s digital capabilities and increase digital adoption. 3. Orchestrate digital ecosystem to deliver superior customer experience. 38 38 Annual Report 2022 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022Strategy Telkom conceives its strategic framework into a portfolio direction strategy that includes the development of 3 (three) digital business domains, namely digital connectivity, digital platforms, and digital services. The portfolio direction strategy in the business domain is supported by a value delivery model strategy that includes portfolio optimization strategies, technology, organization, synergy and operational excellence, talent management and corporate culture, inorganic initiatives, and corporate governance. In broad lines, Telkom’s long-term strategy is contained in the acronym of WINDIGITAL, which includes: W Win broadband connectivity business to maximize cash flow I N Invest to scale DC and be The National B2B Digital Leader to Maximize Value Nurture Digital Service Ecosystem through Smart Investment to Maximize Synergy Value and Value Creation DD Drive continuous and strict optimization of business and asset portfolio II Increase group technology integration and digitization GG Gear up for streamlined lean digital-ready organization II TT AA LL Improve operation quality and synergy for cost leadership and better customer experience Transform to digital telco talents and incorporate digital culture Acquire digital capabilities inorganically and accelerate ecosystem partnership Link up group strategic planning and implementation and enhance risk management and compliance Annual Report 2022 39 39 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Transformation For Digital Acceleration In 2022, we will enter the next normal era, where 2. Excel in the 3 digital domains and unlock business the digital economy will develop more rapidly with leveraging group synergy increasingly demanding customer expectations. This The dynamics of telecommunication industry encourages an increasingly dynamic competitive continues to move and several integrated telco are situation accompanied by the acceleration of various implementing a delayering strategy in order to reach product and service innovations. On the other hand, a wider customer segment and increase corporate Indonesian market, which is still growing, remains value. We will continue to strengthen our position attractive for global player and technology giant to and competitive advantage in the domain of digital enter into domestic market. We answer this challenge connectivity, digital platform, and digital services, through the Company’s journey, namely Investing supported by business unlocking initiatives and for Future. We focus on strengthening essential utilization of all potential synergies. We also manage competencies in digital domain, supported by operations and services in a customer-centric manner, corporate restructuring and partnership development efficient infrastructure, and digital businesses as while improving the company’s business growth engines simultaneously. fundamentals. To accelerate the transformation 3. Accelerate digitization and lean organization towards a digital telco company, our corporate theme development for impactful operation for 2022 is “Enhance digital capability and business We continue to accelerate improvements to our performance for sustainable growth” with three operating and business models to become leaner by main programs, namely: utilizing digital technology and artificial intelligence. We also ensure the readiness of various supporting talents, especially digital talent so that the company’s growth milestones can take place at the right momentum. 1. Deliver the best quality of services with excellent customer experience In the next normal era, service quality and customer experience management are the main keys to gaining customer loyalty. We strive to comprehensively understand customer needs and behavior. Furthermore, we also manage customer data in a systematic and sustainable manner by maximizing the implementation of data analytics at every stage of the customer journey. 40 Annual Report 2022 Annual Report 2022 We have also initiated a value unlocking strategy which 3. Data Center Co (DC Co) we refer to as the five big programs (five bold moves) We are in the process of consolidating data center to build competitive advantage in the fields of digital asset and increasing data center business capacity. connectivity, digital platform, and digital services, as well In addition, we also collaborate with hyper-scaler and as strengthen our position to become a world-class digital technology giant to accelerate data center business telecommunications company, with long-term goals to growth and expand our data center presence in the create higher value for the Company’s stakeholders. The region – starting from Indonesia and ASEAN. five big programs (five bold moves) consist of: 4. B2B Digital IT Service Co 1. Fixed Mobile Convergence (FMC) We continue to strengthen market penetration, cost efficiency, and operational excellence, while enhancing the best customer experience by developing our technology and services to optimize interoperability between our fixed and mobile networks to enable customers to switch seamlessly regardless of location and device. 2. InfraCo We seek to unlock the consolidation potential of our infrastructure asset, including optical access network infrastructure and tower so as to create higher value. We believe this initiative will provide benefits, including optimal asset utilization, cost-effective connectivity, and accelerated market penetration so that in the end it will be able to increase the value of infrastructure asset and attract investors to join. We are transforming towards B2B Digital IT Services through partnership and collaboration with technology giant, such as Microsoft and AWS. Furthermore, we are preparing Telkomsigma to become a leading B2B Digital IT Service player serving the corporate market, SOE, government, and MSME. 5. DigiCo We are developing a digital company (DigiCo) that focuses on B2B and B2C segments to accelerate digital service by taking advantage of our advantages that competitor do not have. Telkomsel through PT Telkomsel Digital Ecosystem (TED) is developing a vertical business portfolio in the digital sector, namely health-tech, edu-tech, and mobile gaming. Annual Report 2022 41 Annual Report 2022 CORPORATE CULTURE AND VALUE CORE VALUES AKHLAK Since 2020, every State-Owned Enterprise (SOE) is required to apply the main values called AKHLAK, in accordance with the Circular Letter of the Minister of SOEs Number: SE 7/MB/07/2020 dated July 1, 2020 regarding Core Values of Human Resources of State-Owned Enterprises. Amanah/Trustworthy Holding on to the trust given Kompeten/Competent Continue to learn and develop capabilities Harmonis/Harmonious Caring for each other and respecting differences Loyal Dedicated and prioritizing the interests of the nation and the state Adaptif/Adaptive Continue to innovate and be enthusiastic in moving or facing change Kolaboratif/Collaborative Building a synergistic collaboration Therefore, in order to answer these directives and in line with Telkom’s Corporate Strategic Scenario 2021-2025 which mandates companies to carry out Align Ways of Working Under Digital Age, TelkomGroup as one of the SOEs is committed to implementing Core Values AKHLAK. One form of TelkomGroup’s commitment in implementing the Core Values AKHLAK is by making a pledge and commitment by all TelkomGroup Directors and employees to implement AKHLAK and become a role model for its implementation. The company also issued a Regulation of the Director of Human Capital Management regarding the implementation of Core Values AKHLAK in TelkomGroup. COMPANY CULTURE ACTIVATION PROGRAM The CEO of TelkomGroup and all unit leaders act as role models as well as the main movers in the corporate culture activation program. The unit leader appoints a Culture Agent to ensure that the internalization of corporate culture through the participation of all employees goes well. The current number of Culture Agents is 5,184 people, where 3,054 people are from units at Telkom and 2,130 people are from Subsidiaries. Every Culture Agent must participate in the Culture Agent on boarding program in order to have the same interpretation and knowledge regarding the Company’s culture. Furthermore, the unit leadership will be assisted by a Culture Agent to form a forum called the Cultural Activation Provocation Community (Kipas Budaya) for the implementation of cultural activation in each unit. CALENDAR OF CULTURE ACTION The theme of Telkom’s cultural program in 2022 is Amplify Internalization & Actualization Core Values AKHLAK for Digital Telco Transformation. This theme synergizes and supports the main programs and goals of the company. This theme is the basis for preparing corporate cultural activities during 2022. These cultural activities are arranged in a Calendar of Culture Action (COCA) every year. COCA becomes a reference for each unit to develop and implement various cultural activity programs by instilling AKHLAK values into daily behavior to improve company performance. 42 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022During 2022, Telkom also builds a culture of Core Values AKHLAK, including how to work in the digital era through online training, namely Strengthening the Internalization of Core Value AKHLAK. BUILDING DIGITAL CULTURE Telkom continues to strive for digital transformation by updating its corporate culture program, in order to encourage changes in mindset, behavior, abilities, and digital-oriented skills with AKHLAK as the Company’s value system. Since 2017, Telkom has carried out the Hack Idea Program as a forum for exchanging innovations between employees such as design sprints, design thinking, experimentation, and collaboration. As a strengthening of the Hack Idea program, since 2020, the IdeaBox platform has been present as innovation social media single platform for TelkomGroup employees to convey ideas and collaborate to develop them. With the combination of the two, it is hoped to increase the enthusiasm and support system for the innovation culture built at the TelkomGroup. The Talent Booster activity initiated the Hack Idea series of activities, namely the development of knowledge and innovation capabilities through classrooms and e-learning learning methods, then continued with an assessment of the resulting innovations. Innovations deemed feasible will enter the development stage and are guided by experienced mentors and facilitated by the company through the AMOEBA program, which has produced various products and the development of digital-based internal business processes. In its business processes, Telkom has used various digital tools, such as a corporate portal as a daily operational application which includes, e-office; e-budgeting; file sharing; collaboration (Diarium); career & succession management (Ingenium); learning & knowledge management (Cognitium); etc. CORPORATE CULTURE EVALUATION Telkom evaluates corporate culture using AKHLAK Culture Health Index (ACHI) measurement to determine the level of effectiveness of corporate culture implementation. This value is measured as a whole or specifically which leads to the internalization of Core Value AKHLAK. The results of 2022 ACHI measurement obtained a total score in high category (94.5%), which means that Telkom’s organizational culture is healthy and productive. 43 PT Telkom Indonesia (Persero) TbkAnnual Report 2022TELKOM MILESTONE Indonesian Government established Perusahaan Negara Pos dan Telekomunikasi (PN Postel) in 1961 through Government Regulation Number 240 year 1961 regarding the Establishment of State Post and Telecommunication Company. Based on Government Regulation No. 30 dated July 6, 1965, PN Postel was then split into PN Pos dan Giro and Perusahaan Negara Telekomunikasi (PN Telekomunikasi). This moment is the basis for determining the anniversary of Telkom Indonesia. Then in 1974, PN Telekomunikasi was split into two entities, namely Perusahaan Umum Telekomunikasi (Perumtel) and PT Industri Telekomunikasi Indonesia (PT INTI). In 1991, Perumtel changed to become a state-owned limited liability company with official name PT Telekomunikasi Indonesia (Persero) or Telkom. In 1995, Telkom became a public company listed on IDX and NYSE. At the end of 2022, Telkom’s market capitalization value will reached Rp371 trillion. 2022 In 2022, Telkom will complete the first phase of building Hyperscale Data Center in Cikarang. In addition, at the end of 2022 Telkom will also start groundbreaking for the construction of Hyperscale Data Center in Batam. In terms of connectivity, in 2022 Telkom will open a second gateway in Manado, and also through its subsidiary Telin, Telkom has also joined SEA-ME-WE 6 Submarine Cable consortium. This year, Telkom has also established strategic partnership with several major world technology companies such as Microsoft, and so forth. 2021 On May 27, 2021, Telkomsel officially launched its 5G service, making it the first cellular operator to provide 5G in Indonesia. Telkom also continues to enhance its collaboration through additional investment in Gojek and signing of an MoU with Microsoft. Telkom’s subsidiary, Mitratel, successfully conducted an Initial Public Offering (IPO) on November 22, 2021 and raised funds of Rp18.8 trillion. 44 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 20222016 2011-2015 Telkom has completed the construction of the Southeast Asia-Middle East-Western Europe 5 (SEA- ME-WE 5) submarine system. In 2011, Telkom completed Super Nusantara Highway project and True Broadband Access project. Then in 2014, Telkom became the first operator in Indonesia to provide 4G LTE service. A year later, Telkom launched IndiHome, a service package consisting of broadband internet, fixed wireline telephone, and interactive TV services. 2017 Telkom launched the Telkom 3S Satellite and completed the Southeast Asia-United States (SEA- US) submarine fiber optic cable line. 1999-2010 2018 Telkom launched the Telkom-1 satellite in 1999 and the Telkom-2 satellite in 2005. Telkom has also successfully completed JaKaLaDeMa underwater fiber optic cable project. Telkom launched the Merah Putih Satellite and inaugurated the Telkom Hub as a Center of Excellence and Source of Inspiration to Build Digital Indonesia. Telkom has also completed the construction of the Indonesia Global Gateway (IGG). 1991-1995 2019 In the context of expansion, TelkomGroup acquired 2,100 towers owned by Indosat Ooredoo through Mitratel and acquired 95% shares in PT Persada Sokka Tama which owns 1,017 towers. Telkom also received the “2019 Indonesia IoT Services Provider of the Year” award at the Frost & Sullivan 2019 Asia Pacific Best Practices Awards. 2020 TelkomGroup carried out several initiatives at the company, community and national levels in response to the COVID-19 pandemic. Several corporate actions are carried out by Telkomsel, including signing a conditional sale and purchase agreement for selling 6,050 telecommunication towers to Mitratel and establishing cooperation and investing in Gojek. In 1991 Perumtel officially changed to Telkom. Then in 1995, Telkom established a subsidiary, Telkomsel as a cellular operator and conducted an IPO on Jakarta Stock Exchange and Surabaya Stock Exchange, registered shares on NYSE and LSE, and offered open shares without listing on Tokyo Stock Exchange. 1974 PN Telekomunikasi was split into Perumtel, which provides telecommunications services, and PT INTI, which manufactures telecommunications equipment. 1965 Indonesian Government separated postal and telecommunications services, so PN Postel was split into two entities, namely Perusahaan Negara Pos dan Giro (PN Pos and Giro) and Perusahaan Negara Telekomunikasi (PN Telekomunikasi). 45 PT Telkom Indonesia (Persero) TbkAnnual Report 2022BUSINESS ACTIVITIES BUSINESS ACTIVITIES BASED ON TELKOM’S ARTICLES OF ASSOCIATION Based on Article 3 of the Company’s Articles of Association as stated in the Deed of Statement of Resolution of the Company’s GMS Number 37 dated June 22, 2022, which was received and approved by the Minister of Law and Human Rights based on Letter No. AHU-0044650.AH.01.02. year 2022 dated June 29, 2022, Telkom’s business activities are in the field of providing telecommunications networks and services, informatics, as well as optimizing the utilization of the Company’s resources to produce goods and/or services of high quality and with solid competitiveness to gain/ pursue profit to increase Company’s value by applying the principle of Limited Liability Company. Principal business activities and supporting business activities of Telkom in general are: PRINCIPAL BUSINESS ACTIVITIES 1. Planning, building, providing, developing, operating, marketing/selling/leasing, and maintaining telecommunication and information technology networks in the broadest definition with due observance of the statutory regulations. 2. Planning, developing, providing, marketing/selling, and improving telecommunication and information technology services in the broadest definition with due observance of the statutory regulations. 3. Making investments including equity participation in other companies in line with and in order to achieve the goals and objectives of the Company. SUPPORTING BUSINESS ACTIVITIES 1. Provide payment transaction and money transfer services through telecommunications and informatics networks. 2. Carry out other activities and businesses in the context of optimizing resources owned by the Company, including the use of fixed and movable assets, information system facilities, education facilities and training facilities, maintenance and repair facilities. 3. Cooperate with other parties in the context of optimizing informatics, communication or technology resources owned by other parties in the informatics, communication, and technology industries, in line with and in order to achieve the aims and objectives of the Company. 46 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022 PORTFOLIO PRODUCT AND/OR SERVICE Telkom develops business activities in various segments in accordance with the digital transformation strategy and the development of telecommunications industry. In each business segment, Telkom has a portfolio of products and services which are described as follows: Segment Business Line Product Mobile Consumer Mobile Legacy Mobile Data Mobile Digital Mobile Voice, Mobile SMS Mobile Broadband IoT, Big Data, Financial Service, VOD, Music, Gaming, Digital ads Home Fixed Services IndiHome Fixed BB, Non-IndiHome Fixed BB (e.g., Wifi, etc.), Fixed Voice, IPTV, Digital Services (e.g., Gaming, Music, etc) Home Legacy Legacy Fixed Voice Connectivity Satellite Enterprise Digital IT Services Fixed Voice (Non-Digital), Fixed BB (Digital), Enterprise Data (Digital), CPE Networks Upstream (Orbital Slot, Satellite Mission, Transponder), Downstream (VSAT, Broadband Satellite), Link IT Service (Integration), IT Service (Vertical), Big Data, IoT, Cybersecurity, Cloud (IaaS, PaaS, SaaS) Digital Adjacent Service Financial Services, eHealth (Claim and Health Service) BPO Device WS Network WS Traffic Traditional BPO (e.g., Call Center), Digital BPO, Shared Service Operations CPE Trading (Mobile Handset), CPE Managed Service International Network, Domestic Network International Voice, Domestic Voice, Internet Traffic WS Intl, Platform & Services SMS A2P, DC & CDN DC Tower Infrastructure Smart Platform Collocation & Hosting, Integrated DC Services, Hyperscale Tower Owned (Macro, Micro, etc.), Reseller, Managed Service, Project Infra & Network Managed Service, Submarine Cable Service, Power Solutions Financial Service, Big Data, IoT Platform, Cybersecurity, Digital Advertising Digital Content Music, Gaming, Video e-Commerce B2B e-Commerce Wholesale & International Service Digital Other Non-portfolio Digital Investment, Property Development, Property Management, Hospitality 47 PT Telkom Indonesia (Persero) TbkAnnual Report 2022TELKOM ORGANIZATIONAL STRUCTURE Telkom’s organizational structure as of December 31, 2022 with disclosures at least up to the structure of 1 (one) level below the Board of Directors is presented as follows: President Director (RIRIEK ADRIANSYAH) Director of Enterprise & Business Service (Plt) (FM VENUSIANA R) Director of Consumer Service (FM VENUSIANA R) Director of Wholesale & International Service (BOGI WITJAKSONO) Director of Network & IT Solution (HERLAN WIJANARKO) Director of Digital Business (MUHAMAD FAJRIN RASYID) Director of Strategic Portofolio (BUDI SETYAWAN WIJAYA) AVP Secretariat of the Directorate EBIS (YOSEPH GUSTOMMY BISONO) AVP Secretariat of the Directorate CONS (FITIRIANSYAH NASUTION) AVP Secretariat of the Directorate WINS (DANIEL SYAFRIL) AVP Secretariat of the Directorate NITS (AGUNG KERTIOSO) AVP Secretariat of the Directorate DB (H MOHAMAD RAHMAT YUSUF) AVP Secretariat of the Directorate SP (ZAKARIAH) VP Enterprise Business Strategy (IRWAN ANDRIYANTO NUGROHO) VP Planning & Resource Management (-) VP Strategy Planning & Performance (-) VP Network/IT Strategy, Technology and Architecture (RIZAL AKBAR) VP Digital Busines Straretegy & Governance (RIZA A N RUKMANA) VP Corporate Strategic Planning (TORKIS ROPINDA SIHOMBING) VP Enterprise Business Orchestration (ARIWIATI) VP Marketing Management (EDIE KURNIAWAN) VP Wholesale Product & Service (MICHAEL ADIGUNA) VP Integrated Infrastructure Program & Budget Mgt (SOENDOJOADI) VP Digital Busines Performance (JOKOADI WIBOWO) VP Enterprise Business Governance (AMBAR KUSPARDIANTO) OVP Customer Fullfillment (FIRMAN HIDAYAT) VP Wholesale Solution & Customer Management (OKTADIASIH MUNINGGAR) VP Performance & Governance Management (ADMIRAL DASRIN) OVP Customer Assurance (MOHAMMAD SYIBLI) OVP Cyber Security (ELYSABETH DAMAYANTI) VP Integrated Portofolio Management (IMAM RIJANTO) VP Synergy (SUHARTONO) VP Strategic Investment Digital Telco (YUSUF WIBISONO) VP Strategic Investment ICT & Services (AGUNG NUGROHO) VP Global Strategic Partnership (AHMAD ZAKI BIN NASRUDDIN) EGM Solution, Delivery & Assurance Division (SUJITO) EGM TV Video Division (ANAK AGUNG GEDE MAYUN WIRAYUDA) EVP Wholesale Service Division (MUHAMMAD ROFIK) EGM Service Operation Division (BAMBANG HARYASENA) EVP Business & Technology Division (SAIFUL HIDAJAT) EGM Enterprise Service Division (TEUKU MUDA NANTA) EGM Business Service Division (EDDY SOFRYANO) EGM Goverment Service Division (DEDY MARDHIANTO) 48 Annual Report 2022 EGM Digital Connectivity Service Division (-) EGM Digital Infrastructure Develpoment Division (TOTO SUGIHARTO) EGM Digital Information Technology Division (SIHMIRMO ADI) CRO EVP Telkom Regional I (TEDDY HARTADI) EVP Telkom Regional II (MOHAMMAD SALSABIL) EVP Telkom Regional III (SYAIFUDIN) I E C F F O E T A R O P R O C T I N U S S E N S U B I Y R O T I R R E T Board of Commissioners Audit Committee Committee for Nomination and Remuneration Committee for Planning and Risk Evaluation and Monitoring Director of Finance and Risk Management (HERI SUPRIADI) Director of Human Capital Management (AFRIWANDI) SVP Corporate Secretary (INDRAWAN DITAPRADANA) SVP Corporate Communication & Investor Relation (AHMAD REZA) SVP Internal Audit (DARU MULYAWAN) SVP Group Corporate Transformation (DEVI ALZY) CEO’s Office VP Regulatory Management (CHAIRUDIN MIRZA) VP Corporate Communication (ANDRI HERAWAN SASOKO) VP Planning & Development Audit (IMAM SANTOSO) VP Corporate Office Support (HARDI PURWANTO) VP Investor Relation (EDWIN JULIANUS SEBAYANG) VP Infrastructure & Operation Audit (AFDOL MUFTIASA) VP Legal & Compliance (JUNIAN SIDHARTA) VP Information Technology Audit (UMAR SYAHID) VP Integrated & Financial Audit (AGUS WIDJAJANTO) Transformation Program Leader Taskforce Leader AVP GCT Budget & Resourcing (RAHAYU SYAHRAINI) AVP GCT Planning, Governance, Monitoring & Reporting (NOVRIWAN) VP GCT Change Management & Communication (MOHAMMAD IZZUDIN) AVP Secretariat of the Directorate Finance (WILLY KOESPRASETYO) AVP Secretariat of the Directorate HCM (YULIO) SVP Risk Management (JATI WIDAGDO) VP HC Strategic Management (AHMED YASSER) VP Telkom Financial Control (DEVINDRA KAMAL) VP HC Development (NIZAR) VP Subsidaries Financial Control (HENDRA KURNIAWAN) VP HC Organizational Effectiveness (IWAN SETIAWAN) VP HC Technology & People Analytics (DIDI HARYADI) VP Subsidaries Accounting & Corporate Finance (JUNAINAH) VP Financial & Procurement Policy (NURCHOLIS FERI AHMADI) SGM SSO Finance Center (ACHMAD ALIYADIN) SGM Assesment Center Indonesia (JUSTI ARIESTHIAWATI) SGM SSO Procurement & Sourcing Center (MOKHTAR ISMAIL) SGM Community Development Center (HERY SUSANTO) SGM Asset Management Center (-) SGM Telkom Shared Service Center (EKA SETIAWAN) SGM HC Business Partner Center (SENDI ADITYA KAMESVARA) SGM Telkom Corporate University Center (JEMY VESTIUS CONFIDO) EVP Telkom Regional IV (RIJANTO UTOMO) EVP Telkom Regional V (DJATMIKO) EVP Telkom Regional VI (FERA PEBRAYENTI) EVP Telkom Regional VII (AGUS YUDHA BASUKI) Annual Report 2022 49 LIST OF INDUSTRY ASSOCIATION MEMBERSHIPS No. National Member 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Masyarakat Telematika Indonesia (MASTEL) Telkom, Telkomsat, TelkomMetra, Infomedia, AdMedika, Mitratel, Telkomsel Asosiasi Kliring Trafik Telekomunikasi (ASKITEL) Telkom, Telkomsel Asosiasi Penyelenggara Jaringan Internet Indonesia (APJII) Telkom, Telkomsat, TelkomMetra, Telkomsel Asosiasi Telekomunikasi Seluruh Indonesia (ATSI) Telkom, Telkomsel Indonesia Telecommunication Users Group (IDTUG) Telkom Asosiasi Penyelenggara Pengiriman Uang Indonesia (APPUI) Telkom, Finnet, Telkomsel Asosiasi Sistem Pembayaran Indonesia (ASPI) Telkom, Finnet, Telkomsel Asosiasi Penyelenggara SKKL Seluruh Indonesia (ASKALSI) Telkom Indonesia Mobile Content Association (IMOCA) Asosiasi Televisi Swasta Indonesia (ATVSI) Telkom Telkom Asosiasi Satelit Indonesia (ASSI) Telkom, Telkomsat Forum Komunikasi Satuan Pengawas Internal (FKSPI) Telkom Asosiasi Gabungan Pelaksana Konstruksi Nasional Indonesia (GAPENSI) Graha Sarana Duta, Telkomsat, Mitratel 14. Keanggotaan Green Building Council Indonesia (GBCI) Graha Sarana Duta 15. 16. 17 18. Keanggotaan Persatuan Perusahaan Real Estate Indonesia (REI) Graha Sarana Duta Asosiasi Gabungan Rekanan Konstruksi Indonesia (GARANSI) Graha Sarana Duta Asosiasi Badan Usaha Jasa Pengamanan Indonesia (ABUJAPI) Graha Sarana Duta Asosiasi Perusahaan Klining Servis Indonesia (APKLINDO) Graha Sarana Duta 19. Keanggotaan Kamar Dagang dan Industri (KADIN) Telkom, Graha Sarana Duta, Telkomsat, Infomedia, Nutech, AdMedika, Bosnet, Swadharma Sarana Informatika (SSI) Asosiasi Perawatan Bangunan Indonesia (APBI) Graha Sarana Duta Asosiasi Kontraktor Ketenagalistrikan Indonesia (AKLINDO) Graha Sarana Duta Asosiasi Pengelola Gedung Badan Usaha Milik Negara (APG BUMN) Graha Sarana Duta Indonesia Cyber Security Forum (ICSP) Telkom Asosiasi Inkubator Bisnis Indonesia (AIBI) Indigo Creative Nation Asosiasi Perusahaan Nasional Telekomunikasi (APNATEL) Telkom, Telkom Akses Asosiasi Perusahaan Teknik Mekanikal Elektrikal (APTEK) Nutech, Swadharma Sarana Informatika (SSI) Asosiasi Perusahaan Pengadaan Komputer dan Telematik Indonesia (ASPEKMI) Nutech, Infomedia, Swadharma Sarana Informatika (SSI), Telkomsat Asosiasi Pengusaha Indonesia (APINDO) Asosiasi Bisnis Alih Daya Indonesia (ABADI) Indonesia Contact Center Association (ICCA) Asosiasi Cloud Computing Indonesia Asosiasi Data Center Indonesia (IDPRO) Infomedia Infomedia Infomedia Telkomsigma Telkomsigma 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 50 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022 No. 33. National Member Asosiasi PMOI (Project Management Office Professional Indonesia) Telkomsigma 34. Asosiasi Badan Usaha Jasa Pengamanan Indonesia (ABUJAPI) Swadharma Sarana Informatika (SSI) Asosiasi Perusahaan Jasa Pengolahan Uang Tunai Indonesia (APJATIN) Swadharma Sarana Informatika (SSI) Asosiasi Perusahaan dan Konsultan Telematika Indonesia (ASPEKTI) Asosiasi Perusahaan Perdagangan Barang Distributor, Keagenan Dan Industri (ARDIN) Swadharma Sarana Informatika (SSI) Swadharma Sarana Informatika (SSI), Telkomsat Asosiasi Fintech (AFTECH) Finnet, Telkomsel Asosiasi E-Commerce Indonesia (idEA) Ikatan Ahli Ekonomi Islam Indonesia (IAEI) Masyarakat Ekonomi Syariah (MES) BUMN Muda Business 20 (B20) Forum Human Capital Indonesia (FHCI) Finnet Telkom Telkom Telkom Telkom Telkom Asosiasi Pengembang Menara Telekomunikasi (ASPIMTEL) Mitratel Asosiasi IoT Indonesia (ASIOTI) Asosiasi Emiten Indonesia (AEI) 48. Himpunan Jasa Konstruksi Indonesia (HJKI) 49. Ikatan Akuntan Indonesia (IAI) Telkomsel Telkom Telkom Akses Telkom 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. International Member International Telecommunication Union (ITU) Telkom International Telecommunications Satellite Organization (ITSO) Telkom International Telecommunications Satellite (INTELSAT) International Marine / Maritime Satellite (INMARSAT) Telkom Telkom Asia Pacific Telecommunication (APT) Telkom, Telkomsel Asia Pacific Economic Cooperation (APECTEL) Telkom TM Forum ASEAN CIO Association (ACIOA) Wireless Broadband Alliance (WBA) Telkom, Telkomsel Telkom Telkom Asia-Pacific Satellite Communications Council (APSCC) Telkomsat Asia Pacific Network Information Centre (APNIC) Bridge Alliance Telkomsel Telkomsel Global System for Mobile Communications Association (GSMA) Telkomsel PMO Global Alliance (PMOGA) Telkomsigma Pacific Telecommunications Council (PTC) Mobile Ecosystem Forum (MEF) International Cable Protection Committee (ICPC) Telin Telin Telin 51 PT Telkom Indonesia (Persero) TbkAnnual Report 2022 PROFILE OF THE BOARD OF COMMISSIONERS MEMBER OF THE BOARD OF COMMISSIONERS WHO OFFICIATE AS OF DECEMBER 31, 2022 Bambang Permadi Soemantri Brodjonegoro President Commissioner/Independent Commissioner Wawan Iriawan Independent Commissioner Age 56 years old Citizenship Indonesian Domicile Jakarta, Indonesia Age 59 years old Citizenship Indonesian Domicile Jakarta, Indonesia Educations • 1997 Ph.D, University of Illinois at Urbana Champaign, Educations • 2018 Doctoral degree in Law, Universitas Padjadjaran, United States of America. Indonesia. • 1993 Master of Urban Planning, University of Illinois at • 2005 Master degree in Law, Universitas Padjadjaran, Urbana Champaign, United States of America. Indonesia. • 1990 Bachelor degree in Economics, Universitas • 1989 Bachelor degree in Law, Universitas Jenderal Indonesia, Indonesia. Soedirman, Indonesia. Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom Base of Appointment Annual General Meeting of Shareholder (AGMS) of Telkom on May 28, 2021. on June 19, 2020. Current Double Position Do not have double position. Work Experiences • 1999 - 2000 Managing Partner, Iriawan & Co. Current Double Position • 2022 President Commissioner, PT Prudential Syariah. • 2021 • 2021 President Commissioner, PT Bukalapak Tbk. Independent Commissioner, PT Astra International Tbk. • 2021 Independent Commissioner, PT TBS Energi • 2021 • 2021 • 2021 • 2021 Utama Tbk. Commissioner, PT Combiphar. President Commissioner, PT Oligo Infrastruktur. Independent Commissioner, PT Indofood Tbk. President Commissioner, PT Nusantara Green Energy. Work Experiences • 2019 - 2021 • 2016 - 2019 Minister of Research, Technology, and the National Innovation of Republic of Indonesia. Minister of National Development Planning of Republic of Indonesia. • 2014 - 2016 • 2013 - 2014 Minister of Finance of Republic of Indonesia. Vice Minister of Finance of the Republic of Indonesia. 52 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022 Bono Daru Adji Independent Commissioner Abdi Negara Nurdin Independent Commissioner Age 54 years old Citizenship Indonesian Domicile Jakarta, Indonesia Educations • 1995 • 1993 LLM, Monash University, Australia. Bachelor degree in Law, Universitas Trisakti, Indonesia. Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom on May 28, 2021. Current Double Position • 2017 Managing Partner, Assegaf Hamzah & Partners. Work Experiences • 2019 - 2022 Disciplinary Committee, PT Bursa Efek Indonesia. • 2018 - 2021 Chairman, Standards Board of the Age 54 years old Citizenship Indonesian Domicile Jakarta, Indonesia Educations • 1988 Faculty of Economics, Universitas Tadulako, Indonesia. Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom on May 28, 2021. Current Double Position • 2022 Adviser of Persatuan Artis Penyanyi, Pencipta Lagu dan Pemusik Republik Indonesia (PAPPRI). Commissioner, PT Nagara Sains Ekosistem. • 2021 • 2020 Commissioner, PT Sugih Reksa Indotama. • 2019 • 2015 Commissioner, PT NSA. • 2009 Founder, Maleo Music. • 2005 Co-Founder and Commissioner, PT Hijau Multi Co-Founder and Producer, Give.ID. Association of Capital Market Legal Kreatif. Consultants. Work Experiences • 2015 - 2019 Senior Advisor, National Economic Agency. • 2015 - 2016 Supervisory Board, LMKN (National Collective Management Institute). 53 PT Telkom Indonesia (Persero) TbkAnnual Report 2022 Marcelino Rumambo Pandin Commissioner Ismail Commissioner Age 56 years old Citizenship Indonesian Domicile Jakarta, Indonesia Age 53 years old Citizenship Indonesian Domicile Jakarta, Indonesia Educations • 2007 Ph.D. of Technology and Innovation, the University of Queensland, Australia. • 2005 Graduate Diploma in Company Director Course, Australian Institute of Company Director (GAICD), Australia. • 2003 Diploma in Company Direction (Chartered Director Level II), The Institute of Directors (IoD), London, United Kingdom. • 1999 Master of Philosophy, Judge Business School University of Cambridge, United Kingdom. • 1991 Bachelor degree in Architectural Engineering, Institut Teknologi Bandung, Indonesia. Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom on May 24, 2019. Current Double Position Do not have double position. Work Experiences • 2018 - 2019 Committee, World Observatory on Educations • 2010 Doctoral degree in Electrical and Informatics Engineering, Institut Teknologi Bandung, Indonesia. • 1999 Master degree in Electrical Engineering, Universitas Indonesia, Indonesia. Bachelor degree in Physics Engineering, Institut Teknologi Bandung, Indonesia. • 1993 Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom on May 24, 2019. Current Double Position • 2016 Director General of Resources and Equipment of Post and Information Technology, Ministry of Communication and Information of the Republic of Indonesia. Work Experiences • 2018 - 2019 Chairman, Indonesian Telecommunications Regulatory Agency (BRTI). • 2016 - 2018 Deputy Chairman, Indonesian Telecommunications Regulatory Agency (BRTI). Subnational Government Finance and • 2014 - 2016 Director of Broadband Development (previously • 2017 - 2019 Senior Policy Advisor on City Finance, Investment OECD Paris, France. United City and Local Government (UCLG) Asia Pacific. called Special Telecommunications), Ministry of Communication and Information of the Republic of Indonesia. • 2012 - 2014 Director of Telecommunications, Ministry of Communication and Information of the Republic of Indonesia. • 2008 - 2012 Director of IT System Operations, Center for Financial Transaction Reports and Analysis, Ministry of Communication and Information of the Republic of Indonesia. 54 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022 Rizal Mallarangeng Commissioner Isa Rachmatarwata Commissioner Age 58 years old Citizenship Indonesian Domicile Jakarta, Indonesia Educations • 2000 Doctoral degree in Comparative Politics, Ohio State University, United States of America. • 1994 Master degree in Comparative Politics, Ohio State University, United States of America. • 1990 Bachelor degree in Communication Science, Universitas Gadjah Mada, Indonesia. Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom on June 19, 2020. Current Double Position • 2021 Commissioner, PT. Energi Mega Persada. Work Experiences • 2001 - 2020 • 2016 • 2009 Executive Director, Freedom Institute. Founder, Freedom Corp. Founder, Fox Indonesia. Age 56 years old Citizenship Indonesian Domicile Jakarta, Indonesia Educations • 1994 Master of Mathematics, Actuarial Science, University of Waterloo, Canada. • 1990 Bachelor in Department of Mathematics and Natural Sciences, Institut Teknologi Bandung, Indonesia. Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom on May 28, 2021. Current Double Position • 2021 Director General of Budget, Ministry of Finance of the Republic of Indonesia. Work Experiences • 2017 - 2021 Director-General of State Assets, Ministry of Finance of the Republic of Indonesia. • 2013 - 2017 Expert Staff to the Minister of Finance for Policy and Regulation on Financial Services and Capital Markets, Ministry of Finance of the Republic of Indonesia. • 2013 Senior Employee at the Fiscal Policy Agency, Ministry of Finance of the Republic of Indonesia. • 2005 - 2012 Head of the Insurance Bureau, Capital Market and Financial Institution Supervisory Agency (BPPMLK), Ministry of Finance of the Republic of Indonesia. 55 PT Telkom Indonesia (Persero) TbkAnnual Report 2022 Arya Mahendra Sinulingga Commissioner Age 51 years old Citizenship Indonesian Domicile Tangerang, Indonesia Educations • 1995 Bachelor degree in Civil Engineering, Institut Teknologi Bandung, Indonesia. Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom on May 28, 2021. Current Double Position • 2021 Secretary General, Bandung Institute of Technology Alumni Association. • 2020 Member of the Board of Trustees, North Sumatera University. Work Experiences • 2021 - 2022 • 2019 - 2021 • 2018 - 2019 • 2018 - 2019 • 2017 - 2018 • 2015 - 2018 • 2015 - 2018 • 2014 - 2019 Head of Public Communication Division, PMO Implementation of KPCPEN. Commissioner, PT INALUM. Director, PT MNC Tbk. Corporate Secretary, PT MNC Tbk. President Commissioner, PT MNC Infotainment. President Director, PT IDX Channel. Deputy Director, iNews TV. President Commissioner, PT Hikmat Makna Aksara. • 2014 - 2018 News Director, PT MNC Tbk and • 2014 - 2015 • 2014 - 2015 • 2011 - 2014 • 2010 - 2018 Director of PT MCI. Director, PT MNC Investama Tbk. Editor-in-Chief, RCTI. Editor-in-Chief, Global TV. News Director and Corporate Secretary, Global TV. • 2010 - 2014 • 2008 - 2014 Corporate Secretary, PT MNC Tbk. President Director, PT Hikmat Makna • 2019 Special Staff III, The Minister of State-Owned Aksara (Sindo Weekly). Enterprises (SOE). • 2008 - 2014 Corporate Secretary, PT Global Mediacom Tbk. • 2004 - 2007 Member, The Indonesian Broadcasting Commission. • 2001 - 2004 Expert Staff, The Chairman of the Regional House of Representatives and Spatial Consultant for North Sumatera Province. • 1995 - 2001 Drainage & Marine Consultant, Bandung. 56 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022 MEMBER OF THE BOARD OF COMMISSIONERS WHOSE TERM OF OFFICE ENDS IN 2022 There was no member of the Board of Commissioners whose term of office ends in 2022. COMMISSIONER AFFILIATION RELATIONSHIPS Telkom discloses the affiliation of members of the Board of Commissioners with fellow Commissioners, Directors and major and controlling shareholders, including the names of affiliated parties, in accordance with the principle of transparency in the implementation of good corporate governance or GCG. Name Position BOC BOD Major & Controlling Shareholder(1) BOC BOD Major & Controlling Shareholder(1) Financial Affiliation with Family Affiliation with Bambang Permadi Soemantri Brodjonegoro Wawan Iriawan Bono Daru Adji Abdi Negara Nurdin Marcelino Rumambo Pandin President Commissioner/ Independent Commissioner Independent Commissioner Independent Commissioner Independent Commissioner Commissioner Ismail Commissioner Rizal Mallarangeng Commissioner Isa Rachmatarwata Commissioner Arya Mahendra Sinulingga Commissioner No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No Remarks: (1) The controlling shareholder in this matter is the Government of Indonesia represented by the Minister of SOE as a primary shareholder. BOARD OF COMMISSIONERS’ COMPOSITION Composition of the Board of Commissioners of Telkom has not changed. As of December 31, 2022, composition of the Board of Commissioners of Telkom are as follow: Bambang Permadi Soemantri Brodjonegoro Wawan Iriawan Bono Daru Adji Abdi Negara Nurdin Marcelino Rumambo Pandin Ismail Rizal Mallarangeng Isa Rachmatarwata Arya Mahendra Sinulingga : President Commissioner/Independent Commissioner : Independent Commissioner : Independent Commissioner : Independent Commissioner : Commissioner : Commissioner : Commissioner : Commissioner : Commissioner 57 PT Telkom Indonesia (Persero) TbkAnnual Report 2022 PROFILE OF THE BOARD OF DIRECTORS THE BOARD OF DIRECTORS WHO OFFICIATE AS OF DECEMBER 31, 2022 Ririek Adriansyah President Director Heri Supriadi Director of Finance & Risk Management Age 59 years old Citizenship Indonesian Domicile Jakarta, Indonesia Age 57 years old Citizenship Indonesian Domicile Jakarta, Indonesia Educations • 1989 Bachelor degree in Electrical Engineering, Institut Teknologi Bandung, Indonesia. Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom on May 24, 2019. Current Double Position Do not have double position. Work Experiences • 2019 - 2021 President Commissioner, PT Telekomunikasi Selular (Telkomsel). • 2015 - 2019 President Director, PT Telekomunikasi Selular (Telkomsel). Educations • 2013 Honorary Doctoral degree in Business Management, Universitas Padjadjaran, Indonesia. • 1997 Master degree in Business Administration (MBA), • 1991 Saint Mary’s University, Canada. Bachelor degree in Industrial Engineering, Institut Teknologi Bandung, Indonesia. Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom on June 19, 2020. Current Double Position • 2020 President Commissioner, PT Graha Sarana Duta • 2021 (Telkom Property). Commissioner, PT Telekomunikasi Selular (Telkomsel). • 2014 Director of Wholesale & International Service, PT Telkom Indonesia (Persero) Work Experiences • 2020 • 2012 - 2013 Director of Compliance & Risk Tbk. Management, PT Telkom Indonesia (Persero) Tbk. • 2011 - 2012 President Director, PT Telekomunikasi • 2010 - 2011 Director of Marketing & Sales, PT Indonesia International. • 2008 - 2010 Telekomunikasi Indonesia International. Director of International Carrier • 2019 - 2020 • 2019 - 2020 • 2012 - 2020 • 2012 - 2014 • 2010 - 2012 Service, PT Telekomunikasi Indonesia • 2008 - 2011 International. • 2007 - 2010 Commissioner, PT Telekomunikasi Selular (Telkomsel). President Commissioner, PT Fintech Karya Nusantara (LinkAja). President Commissioner, PT Telkomsel Mitra Inovasi. Director of Finance, PT Telekomunikasi Selular (Telkomsel). President Commissioner, PT Graha Sarana Duta (Telkom Property) President Director, PT Graha Sarana Duta (Telkom Property). Commissioner, PT Multimedia Nusantara (Metra). Vice President Subsidiary Performance, PT Telkom Indonesia (Persero) Tbk. 58 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022 FM Venusiana R Director of Consumer Service and PLT Director of Enterprise & Business Service Herlan Wijanarko Director of Network & IT Solution Age 56 years old Citizenship Indonesian Domicile Jakarta, Indonesia Educations • 2004 Master degree in Management, Universitas • 1992 Hasanuddin, Indonesia. Bachelor degree in Electrical Engineering, Universitas Diponegoro, Indonesia. Basis of Appointment Director of Consumer Service: Annual General Meeting of Shareholders (AGMS) of Telkom on June 19, 2020. Director of Enterprise & Business Service: Letter of the Board of Commissioners on July 11, 2022. Current Double Position • 2022 President Commissioner, PT PINS Indonesia. • 2020 President Commissioner, PT Telkom Akses. Work Experiences • 2020 • 2017 - 2020 • 2016 - 2017 • 2013 - 2016 Director Network, PT Telekomunikasi Selular (Telkomsel). Senior Vice President Procurement, PT Telekomunikasi Selular (Telkomsel). Senior Vice President Consumer Marketing, PT Telekomunikasi Selular (Telkomsel). Executive Vice President, Jabodetabek- West Java Areas, PT Telekomunikasi Selular (Telkomsel). Age 57 years old Citizenship Indonesian Domicile Bandung, Indonesia Educations • 2005 Master degree in Management, Institut Teknologi Telkom, Indonesia. • 1989 Bachelor degree in Electrical Engineering, Institut Teknologi Bandung, Indonesia. Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom on June 19, 2020. Current Double Position • 2020 President Commissioner, PT Dayamitra Telekomunikasi. Work Experiences • 2018 - 2020 • 2016 - 2018 • 2015 - 2016 • 2014 - 2015 • 2014 • 2013 - 2014 • 2010 - 2013 • 2009 - 2010 • 2007 - 2009 President Director, PT Dayamitra Telekomunikasi. EGM Service Operations Division, PT Telkom Indonesia (Persero) Tbk. Deputy EGM Infra Operations & Maintenance, PT Telkom Indonesia (Persero) Tbk. Deputy EGM Network Infrastructure & Access, PT Telkom Indonesia (Persero) Tbk. Deputy EGM IP Network & Operation, PT Telkom Indonesia (Persero) Tbk. GM Regional West Java in North Region (Bekasi), PT Telkom Indonesia (Persero) Tbk. GM Network Regional West Java Region, PT Telkom Indonesia (Persero) Tbk. GM Network Regional Central Java Region, PT Telkom Indonesia (Persero) Tbk. GM Network Regional Eastern Indonesia, PT Telkom Indonesia (Persero) Tbk. 59 PT Telkom Indonesia (Persero) TbkAnnual Report 2022 Muhamad Fajrin Rasyid Director of Digital Business Budi Setyawan Wijaya Director of Strategic Portfolio Age 36 years old Citizenship Indonesian Domicile Jakarta, Indonesia Age 50 years old Citizenship Indonesian Domicile Bandung, Indonesia Educations • 2019 Executive Educations in Innovations and Growth, Stanford University of Business, United States of America. Educations • 2003 Master degree in Management, Institut Manajemen Telkom, Indonesia. • 1996 Bachelor degree in Technical and Industrial • 2018 Executive Educations in Scaling Entrepreneurial Management, Institut Teknologi Telkom, Indonesia. Ventures, Harvard Business School, United States of America. • 2009 Bachelor degree in Technical Information, Institut Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom Teknologi Bandung, Indonesia. on June 19, 2020. • 2008 Student Exchange Program, Daejeon University, South Korea. Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom on June 19, 2020. Current Double Position • 2020 President Commissioner, PT Metranet. • 2020 President Commissioner, PT MDI. • 2020 Commissioner, PT Sigma Cipta Caraka. Work Experiences • 2011 - 2020 • 2011 - 2014 • 2009 - 2011 CO-Founder & President, Bukalapak. President Director, Suitmedia. Consultant, The Boston Consulting Group (BCG). Current Double Position • 2022 President Commissioner, PT Multimedia Nusantara. • 2020 President Commissioner, PT Sigma Cipta Caraka. • 2020 President Commissioner, PT Jalin Pembayaran Nusantara. Work Experiences • 2017 - 2020 • 2015 - 2017 • 2013 - 2015 President Director, PT Admedika. President Director, PT MD Media. President Director, PT Melon Indonesia. 60 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022 Afriwandi Director of Human Capital Management Bogi Witjaksono Director of Wholesale & International Service Age 51 years old Citizenship Indonesian Domicile Bekasi, Indonesia Educations • 2011 Master degree in Management, Universitas Islam • 1995 Sumatera Utara, Indonesia. Bachelor degree in Industrial Engineering, Institut Teknologi Telkom, Indonesia. Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom on June 19, 2020. Current Double Position • 2020 President Commissioner, Infomedia. • 2020 Chairman of the Supervisory Board, Telkom Pension Fund. Work Experiences • 2015 - 2020 • 2015 • 2014 - 2015 • 2013 - 2014 • 2012 - 2013 • 2012 • 2011 - 2012 • 2008 - 2011 SVP Corporate Secretary, PT Telkom Indonesia (Persero) Tbk. Advisor CEO, PT Telkom Indonesia (Persero) Tbk. Executive General Manager Regional VII, PT Telkom Indonesia (Persero) Tbk. Deputy EGM of Business Service Division, PT Telkom Indonesia (Persero) Tbk. GM of National Segment of Welfare Service Unit, PT Telkom Indonesia (Persero) Tbk. GM Enterprise Regional Barat, PT Telkom Indonesia (Persero) Tbk. GM Enterprise Regional 2, PT Telkom Indonesia (Persero) Tbk. GM Enterprise Regional 1, PT Telkom Indonesia (Persero) Tbk. Age 55 years old Citizenship Indonesian Domicile Bogor, Indonesia Educations • 1995 Master degree in Telecomunication Engineering, Institut Teknologi Bandung, Indonesia. • 1989 Bachelor degree in Electrical Engineering, Institut Teknologi Sepuluh Nopember, Indonesia. Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom on May 28, 2021. Current Double Position • 2022 President Commissioner, PT Telkom Data Ekosistem (NeutraDC). • 2022 President Commissioner, PT Telkom Satelit (Telkomsat). • 2021 President Commissioner of PT Telekomunikasi Indonesia International (Telin). • 2021 President Commissioner of PT Telkom Infra. Work Experiences • 2019 - 2020 • 2019 - 2020 • 2019 - 2020 • 2018 - 2019 • 2015 - 2019 • 2012 - 2019 • 2009 - 2012 Director of Enterprise & Business Service, PT Telkom Indonesia (Persero) Tbk. President Commissioner, PT Telkom Satelit. Commissioner, PT Telkom Metra. Deputy President Director/COO, PT Telkom Satelit. President Director, PT Patrakom. Managing Director, PT Metrasat. General Manager of Operations, PT Metrasat. 61 PT Telkom Indonesia (Persero) TbkAnnual Report 2022 MEMBER OF THE BOARD OF DIRECTORS WHOSE TERM OF OFFICE ENDS IN 2022 Edi Witjara Director of Enterprise & Business Service Age 50 years old Citizenship Indonesian Domicile Bandung, Indonesia Educations • 2018 Doctoral degree in Business Management, Universitas Padjajaran, Indonesia. • 2009 Master degree in Business Law, Universitas • 1995 Padjajaran, Indonesia. Bachelor degree in Electrical Engineering, Universitas Islam Sumatera Utara, Indonesia. Basis of Appointment Annual General Meeting of Shareholders (AGMS) of Telkom on May 24, 2019. Current Double Position • 2020 President Commissioner, PT Telkom Satelit Indonesia. • 2020 President Commissioner, PT PINS Indonesia. • 2019 President Commissioner, PT Multimedia Nusantara. Work Experiences • 2019 - 2020 • 2019 - 2020 • 2019 - 2020 • 2018 - 2019 • 2017 - 2018 • 2016 - 2018 • 2013 - 2016 • 2013 - 2016 Director of Human Capital Management, PT Telkom Indonesia (Persero) Tbk. Presiden Commissioner, PT Infomedia Nusantara. Board of Supervisor, Global Council of Corporate University. SVP Group Financial Planning Analysis and Control, PT Telkom Indonesia (Persero) Tbk. Head of the Shared Service Organization Business Program, PT Telkom Indonesia (Persero) Tbk. SVP Financial Planning & Analysis, PT Telkom Indonesia (Persero) Tbk. Commissioner, PT Telkom Akses. VP Management Accounting, PT Telkom Indonesia (Persero) Tbk. 62 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022 DIRECTORS AFFILIATIONS AND RELATIONSHIPS Telkom discloses the affiliation relationship between members of the Board of Directors and fellow members of the Board of Directors, Commissioners, and major and controlling shareholders, including the names of affiliated parties in accordance with the principle of transparency in the implementation of good corporate governance or GCG. Nama Position Financial Affiliation with Family Affiliation with Major & Major & BOC BOD Controlling BOC BOD Controlling Shareholder(1) Shareholder(1) Ririek Adriansyah President Director Director of Heri Supriadi Finance and Risk Management No No No No Director of Consumer No No FM Venusiana R Service and PLT Director of Enterprise & Business Service Herlan Wijanarko Director of Network & No IT Solution Muhamad Fajrin Director of Digital Rasyid Business Budi Setyawan Director of Strategic Wijaya Portfolio Afriwandi Director of Human Capital Management No No No Director of Wholesale No Bogi Witjaksono & International Service No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No No Edi Witjara(2) Director of Enterprise No No No No No No & Business Service Remarks: (1) Controlling Shareholder in this matter is the Indonesian government represented by the Ministry of State-Owned Enterprises as the primary shareholder. (2) Not serving since July 8, 2022. BOARD OF DIRECTORS’ COMPOSITION There was a change in the composition of members of the Board of Directors of Telkom in 2022. On July 8, 2022, based on Regulation of Minister of State-Owned Enterprises as General Meeting of Shareholders of the Company (Persero) PT Industri Telekomunikasi Indonesia regarding Appointment and Dismissal of President Director of the Company (Persero) PT Industri Telekomunikasi Indonesia, Minister of State-Owned Enterprises appointed Mr. Edi Witjara as President Director of Limited Liability Company (Persero) PT Industri Telekomunikasi Indonesia, then the duties of Director of Enterprise and Business Service were carried out by Mrs. FM Venusiana R. Composition of member of the Company’s Board of Directors as of December 31, 2022 are as follow: Ririek Adriansyah Budi Setyawan Wijaya Heri Supriadi Herlan Wijanarko Bogi Witjaksono Muhamad Fajrin Rasyid Afriwandi FM Venusiana R : President Director : Director of Strategic Portofolio : Director of Finance and Risk Management : Director of Network & IT Solution : Director of Wholesale & International Service : Director of Digital Business : Director of Human Capital Management : Director of Consumer Service and PLT Director of Enterprise & Business Service 63 PT Telkom Indonesia (Persero) TbkAnnual Report 2022 PROFILE OF THE SENIOR VICE PRESIDENT Indrawan Ditapradana SVP Corporate Secretary Ahmad Reza SVP Corporate Communication & Investor Relation Daru Mulyawan SVP Internal Audit 64 Age 49 years old Citizenship Indonesian Domicile Bekasi Serving since October 1, 2020 Educations • 2012 Master degree in Management, Universitas • 1997 Gadjah Mada, Indonesia. Bachelor degree in Electrical Engineering, Institut Teknologi Telkom, Indonesia. Age 45 years old Citizenship Indonesian Domicile Jakarta Serving since October 1, 2020 Educations • 2001 Bachelor degree in Economics , STIE IBII (Kwik Kian Gie Business School), Indonesia. Age 51 years old Citizenship Indonesian Domicile South Tangerang Serving since July 1, 2022 Educations • 1996 Bachelor degree in Accounting, Universitas Diponegoro, Indonesia. PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022 Devi Alzy SVP Group Corporate Transformation Jati Widagdo SVP Risk Management Age 55 years old Citizenship Indonesia Domicile Bekasi Serving since October 1, 2021 Educations • 2014 Master degree in Management, Business • 1992 Strategic Finance, Universitas Paramadina, Indonesia. Bachelor degree in Electrical Engineering, Universitas Indonesia, Indonesia. Age 49 years old Citizenship Indonesia Domicile Jakarta Serving since August 1, 2021 Educations • 1996 Bachelor degree in Industrial Engineering, Institut Teknologi Telkom, Indonesia. 65 PT Telkom Indonesia (Persero) TbkAnnual Report 2022 TELKOM EMPLOYEES TelkomGroup realizes that successful achievement of the Company’s vision and mission cannot be separated from the role and contribution of all employees. Therefore, TelkomGroup strategically engages employees (employee engagement), in an effort to support TelkomGroup to continue to transform towards a digital telecommunication company. In addition, all TelkomGroup employees are encouraged to have high agility at work, including by involving and forming cross-functional and cross-expertise tribes and squads in product and service development. During the 2022 period, all TelkomGroup employees, both in the parent company and subsidiary companies, have worked well and complied with the management’s strategic directions. This is realized, cannot be separated from the role of TelkomGroup management which ensures a professional, safe, comfortable, and prosperous work environment. In addition, the guarantee of diversity without discrimination in accordance with human rights, allows all TelkomGroup employees to work wholeheartedly without feeling disturbed or worried. Subsidiary Employee 14,874 Postgraduate 1,791 Pre-University 1,036 Total Employee Education Telkom Employee 8,919 Undergraduate 5,485 Diploma 607 > 45 years 3,941 Others 1,350 Senior Management 139 Age Employee Position 30 - 45 years 2,408 < 30 years 2,570 Supervisor 4,436 Middle Management 2,994 Retirement Preparation Period 37 Female 3,032 Employment Status Gender Male 5,887 Study Assignments 21 Rehire 284 Professional 404 Permanent Employee 8,173 66 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022EMPLOYEE PROFILE At the end of 2022 period, Telkom is recorded to have 23,793 employees, consisting of 8,919 employees from the parent company and 14,874 employees from subsidiaries. When compared to 2021, the number of TelkomGroup employees in 2022 increased by 37 people or 0.16%. In addition, during 2022 period, Telkom did not release employees before retirement. Number of Telkom and Subsidiaries Employees as of December 31 for 2020 - 2022 Telkom Employee Subsdiary Employee Total 2022 2021 2020 8,919 14,874 23,793 8,789 14,967 23,756 9,745 15,603 25,348 NUMBER OF EMPLOYEES BASED ON EDUCATION LEVEL AND AGE DISTRIBUTION At the end of 2022 period, the proportion of TelkomGroup employees who have taken the undergraduate level is 66.6% or 15,837 people, the largest compared to other categories. While the remaining 9.6% or 2,276 employees took pre-college, 10.5% or 2,492 employees took diploma levels, and 13.4% or 3,188 employees took postgraduate (Master and Doctorate). The following table presents data on TelkomGroup employees by education level, from 2020 to 2022. Number of Telkom and Subsidiary Employees Based on Education as of December 31 for 2020 - 2022 Pre-University Diploma Undergraduate Postgraduate (Master and Doctorate) 2022 2021 2020 Telkom Subsidiary Total % Total % Total % 1,036 607 5,485 1,240 1,885 2,276 2,492 9.6 10.5 2,524 2,651 10.62 3,090 11.16 3,643 10,352 15,837 66.6 15,415 64.89 15,533 1,791 1,397 3,188 13.4 3,166 13.33 3,082 12.2 14.4 61.3 12.1 Total 8,919 14,874 23,793 100.0 23,756 100.0 25,348 100.0 Next, a grouping of employees based on age is presented. As of the end of the 2022 period, Telkom has 71.8% or 17,082 employees who are under 45 years of age. This number increased by 1% when compared to the previous period thus showing a good regeneration process. 67 PT Telkom Indonesia (Persero) TbkAnnual Report 2022The table below presents data on TelkomGroup employees by age, from 2020 to 2022. Number of Telkom and Subsidiary Employees Based on Age as of December 31 for 2020 - 2022 < 30 years 30-45 years > 45 years Total 2022 2021 2020 Telkom Subsidiary Total % Total % Total % 2,570 2,408 3,941 8,919 2,831 9,273 2,770 5,401 11,681 6,711 22.7 49.1 28.2 5,754 11,065 6,937 24.2 46.6 29.2 7,233 10,102 8,013 28.5 39.9 31.6 14,874 23,793 100.0 23,756 100.0 25,348 100.0 NUMBER OF EMPLOYEES BY POSITION AND EMPLOYMENT STATUS TelkomGroup has several positions, namely senior management, middle management, supervisors, and other positions under supervisors. At the end of 2022 period, the highest number of employees of Telkom and its subsidiaries were at the supervisory level as many as 12,632 people. This number increased by 3.3% or 419 employees compared to the previous period. The following table presents data on TelkomGroup employees by position, from 2020 to 2022. Number of Telkom and Subsidiary Employees Based on Position as of December 31 for 2020 - 2022 Senior Management Middle Management Supervisor Others Total 2022 2021 2020 Telkom Subsidiary Total % Total % Total % 139 2,994 4,436 1,350 8,919 183 322 3,215 6,209 8,196 12,632 3,280 4,630 1.4 26.1 53.1 19.5 319 6,039 12,213 5,185 1.4 25.4 51.4 21.8 296 6,130 12,480 6,442 1.2 24.2 49.2 25.4 14,874 23,793 100.0 23,756 100.0 25,348 100.0 Furthermore, in terms of employment status, as of December 31, 2022, TelkomGroup has 20,869 permanent employees or 87.7% percent of the total employees. Meanwhile, the number of non-permanent employees owned by TelkomGroup is 2,924 people or by 12.3%. In the following table, TelkomGroup’s non-permanent employees are divided into 4 categories, namely Professional Personnel, Rehire, Retirement Preparation Period, and Study Assignment. Number of Telkom and Subsidiary Employees Based on Employment Status as of December 31 for 2020 - 2022 2022 2021 2020 Telkom Subsidiary Total % Total % Total % Permanent Employee Professional Rehire Retirement Preparation Period Study Assignment Total 8,173 404 284 37 21 12,696 20,869 2,127 2,531 27 21 3 311 58 24 87.7 10.7 1.3 0.2 0.1 20,829 2,585 287 33 22 87.7 10.9 1.2 0.1 0.1 21,336 3,453 393 120 46 84.2 13.6 1.5 0.5 0.2 8,919 14,874 23,793 100.0 23,756 100.0 25,348 100.0 68 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022GENDER EQUALITY ASSURANCE AND NUMBER OF EMPLOYEES BASED ON GENDER TelkomGroup guarantees gender equality in its company’s operating environment. This is following Resolution of the Board of Directors PD.201.01/r.00/PS150/COP-B0400000.2014 dated May 6, 2014 regarding Business Ethics within TelkomGroup. At the end of the 2022 period, TelkomGroup has 16,654 male employees, more than the number of female employees, namely 7,139 people. TelkomGroup does not have a policy to set a quota for the number of employees based on gender or to discriminate against one gender in employment. However, based on the characteristics of the industry, the interest of men to work in the telecommunications sector is higher than women. The table below presents information on number of TelkomGroup employees by gender from 2020 to 2022. Number of Telkom and Subsidiary Employees Based on Gender as of December 31 for 2020 - 2022 Male Female Total 2022 2021 2020 Telkom Subsidiary Total % Total % Total % 5,887 3,032 8,919 10,767 16,654 4,107 7,139 70.0 30.0 16,847 6,909 70.9 29.1 17,787 7,561 70.2 29.8 14,874 23,793 100.0 23,756 100.0 25,348 100.0 The next table shows the seriousness of TelkomGroup in implementing gender equality in the work environment. Both men and women who have the capability and competence have the right to occupy any position in the company. In the 2022 period, there are 33 women occupying Senior Management positions, 1,341 people occupying Middle Management positions, 3,584 people occupying supervisory positions, and 2,181 persons occupying other positions. Number of Telkom and Subsidiary Employees Based on Position and Gender as of December 31, 2022 Senior Management Middle Management Supervisor Others Total Telkom Subsidiary Total Male Female Total Male Female Total Male Female Total 126 13 139 163 20 183 289 33 322 2,151 843 2,994 2,717 498 3,215 4,868 1,341 6,209 2,933 677 5,887 1,503 4,436 673 1,350 6,115 1,772 2,081 1,508 8,196 9,048 3,584 12,632 3,280 2,449 2,181 4,630 3,032 8,919 10,767 4,107 14,874 16,654 7,139 23,793 69 PT Telkom Indonesia (Persero) TbkAnnual Report 2022SHAREHOLDERS COMPOSITION Telkom’s shareholder structure as of December 31, 2022 can be seen in the following diagram. PT Telkom Indonesia (Persero) Tbk Public (47.91%) Series B Shares Government of the Republic of Indonesia (52.09%) Series A Shares Series B Shares Foreign Ownership (37.40%) Local Ownership (10.51%) The authorized capital issued and fully paid is 99,062,216,600 shares, which are divided into 1 Series A Dwiwarna share which is only owned by the Government of the Republic of Indonesia and 99,062,216,599 Series B shares (common shares). The main and controlling shareholder of Telkom is the Government of the Republic of Indonesia which has a percentage of share ownership of 52.09%. Composition of Shareholders Telkom as of December 31, 2022 Shareholders The Government of the Republic of Indonesia Public Total Series A Dwiwarna Series B Saham Biasa % 1 - 1 51,602,353,559 47,459,863,040 99,062,216,599 52.09 47.91 100.00 The following is information regarding the composition of Telkom’s shareholders in more detail. 1. Shareholders with More than 5% Ownership (Major/Controlling Shareholders) Type of Share Individual or Group Identity January 1, 2022 December 31, 2022 Total Shares % Total Shares % Series A Series B The Government of the Republic of Indonesia 1 0 1 0 The Government of the Republic of Indonesia 51,602,353,559 52.09 51,602,353,559 52.09 2. Ownership of Shares by Directors and the Board of Commissioners On December 31, 2022 there are no Commissioners or Directors which has more than 1.0% of Telkom shares. Board of Commisioners Board of Directors BOC and BOD January 1, 2022 December 31, 2022 Total Shares % Total Shares % Arya Mahendra Sinulingga - - 87,500 <0.01 Ririek Adriansyah Budi Setyawan Wijaya Herlan Wijanarko Afriwandi Heri Supriadi 1,156,955 275,000 42,500 42,500 40,000 <0.01 <0.01 <0.01 <0.01 <0.01 1,156,955 275,000 42,500 42,500 40,000 <0.01 <0.01 <0.01 <0.01 <0.01 70 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 20223. Percentage of Indirect Ownership of Shares of Issuers or Public Companies by Members of the Board of Directors and Members of the Board of Commissioners at the Beginning and End of Financial Year All members of the Board of Directors and/or the entire Board of Commissioners do not own shares of issuers or public companies indirectly at the beginning and end of 2022. 4. Shareholders with Less than 5% Ownership Telkom Shareholders with Individual Ownership Less than 5%, on December 31, 2022. Description Group January 1, 2022 December 31, 2022 Total Shares % Total Shares % Foreign Business/Institution 36,078,995,431 36.42 37,027,407,617 37.38 Individual 21,958,300 0.02 16,925,500 0.02 Local Business/Institution Pensions Funds Mutual Fund Insurance Company Limited Liability Others Individual 4,601,914,950 4.65 3,531,262,544 2,970,228,038 3.00 2,592,846,400 2,589,339,110 2.61 2,663,197,893 142,057,398 0.14 175,105,807 85,881,850 0.09 97,124,250 969,487,963 0.98 1,355,993,029 3.56 2.62 2.69 0.18 0.10 1.37 Total 47,459,863,040 47.91 47,459,863,040 47.91 5. Percentage of Shares Owned by Domestic and Foreign As of December 31, 2022, 190,640 shareholders (including the Government of the Republic of Indonesia) were registered as ordinary shareholders. From this amount, 37,044,333,117 common shares are owned by 2,416 overseas shareholders or 37.40%. In addition, there are 69 ADS shareholders who own 49,800,925 ADS (1 ADS is equivalent to 100 common shares). 6. List of 20 Largest Public Shareholders Institution % No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. CITIBANK SINGAPORE S/A GOVERNMENT OF SIN DJS KETENAGAKERJAAN PROGRAM JHT BNYM RE BNYMLB RE EMPLOYEES PROVIDENTFD THE NT TST CO S/A HARDING LOEVNER FUNDS JPMCB NA RE - VANGUARD EMERGING MARKETS CITIBANK SINGAPORE S/A MONETARY AUTHORIT JPMCB NA RE-VANGUARD TOTAL INTERNATIONAL JPMSE LUX RE UCITS CLT RE-JPMORGAN FUNDS STATE STREET BANK-ISHARES CORE MSCI EMER BNYMSANV RE BNYM RE PEOPLE’S BANK OF CHI JP MORGAN SECURITIES PLC THE NT TST CO S/A WGI EMERGING MARKETS F DJS KETENAGAKERJAAN PROGRAM JP HSBC BANK PLC S/A KUWAIT INVESTMENT AUTH PT. PRUDENTIAL LIFE ASSURANCE - REF STATE STREET BANK-OMERS ADMINISTRATION C HSBC BK PLC S/A THE PRUDENTIAL ASSURANCE PT. AXA MANDIRI FINANCIAL SERVICES S/A M JPMCB NA RE-VANGUARD FIDUCIARY TRUST COM 20. JPMCB NA RE - BLACKROCK INST TR CO N A I 3.12 2.36 1.27 0.83 0.65 0.63 0.62 0.44 0.42 0.42 0.40 0.39 0.36 0.36 0.35 0.32 0.30 0.29 0.28 0.27 71 PT Telkom Indonesia (Persero) TbkAnnual Report 2022k b T ) o r e s r e P ( a i s e n o d n I l m o k e T T P 3 0 r e t p a h C SUBSIDIARIES, ASSOCIATED COMPANIES, AND JOINT VENTURES As of December 31, 2022, Telkom has 37 subsidiaries with direct and indirect ownership and an ownership percentage of more than 50%, so that its Financial Statements are consolidated with Telkom as the parent company. In addition, there are 9 unconsolidated subsidiaries (affiliates). 98.85% -% |-% 65.00% 99.99% 71.87% 99.99% 99.99% 30.40% 100.00% | -% 99.99% 100.00% 60.00% 51.00% | 49.00% 99.99% 24.27% 100.00% 24.00% 51.00% -% | 99.99% -% |99.99% 60.00% 60.00% -% |99.99% 60.00% SMI Description: Direct Ownership (Consolidated) Indirect Ownership (Consolidated) Unconsolidated 72 Annual Report 2022 k b T ) o r e s r e P ( a i s e n o d n I l m o k e T T P The Government of the Republic of Indonesia 52.09% Public 47.91% 99.99% 99.99% 99.99% 99.99% 99.99% 99.96% 100.00% 100.00% 100.00% 100.00% 100.00% 70.0% 34.00% | 36.00% 51.00% 99.99% 55.00% -% | 15.67% 25.00% 6.32% 5.00% 2.11% 33.00% Annual Report 2022 73 As of December 31, 2022, Telkom has consolidated its Financial Statements for all subsidiaries that are owned directly or indirectly. SUBSIDIARIES WITH DIRECT OWNERSHIP Company PT Telekomunikasi Selular (Telkomsel) Jakarta, Indonesia Share Ownership 65% Operational Status Total Asset (Rp billion) Operating 100,991 Operating 56,072 Operating 18,710 Business Field Telecommunication - provides telecommunication facilities and mobile cellular services using Global Systems for Mobile Communication (GSM) technology Leasing telecommunication towers and other telecommunications services Network telecommunication services and multimedia 71.87% 100% 100% Telecommunication Operating 13,949 PT Dayamitra Telekomunikasi (Mitratel) Jakarta, Indonesia PT Multimedia Nusantara (Metra) Jakarta, Indonesia PT Telekomunikasi Indonesia International (Telin) Jakarta, Indonesia PT Sigma Cipta Caraka Tangerang, Indonesia 100% PT Graha Sarana Duta Jakarta, Indonesia 100% PT Telkom Akses Jakarta, Indonesia PT Telkom Satelit Indonesia (Telkomsat) Jakarta, Indonesia 100% 100% Operating 8,522 Operating 5,865 Operating 5,308 Operating 6,470 Information technology service-system implementation and integration service, outsourcing and software license maintenance Leasing of offices and providing building management and maintenance services, civil consultant and developer Construction, service and trade in the field of telecommunication Telecommunication - provide satellite communication system, services and facilities 74 Address Telkomsel Smart Office Telkom Landmark Tower 1st -20th floor, The Telkom Hub, Jl. Jend Gatot Subroto Kav. 52 Jakarta 12710, Indonesia Telkom Landmark Tower 25th-27th floor, The Telkom Hub, Jl. Jend Gatot Subroto Kav. 52 Jakarta 12710, Indonesia Telkom Landmark Tower 22nd & 41st floor, The Telkom Hub, Jl. Jend Gatot Subroto Kav. 52 Jakarta 12710, Indonesia Telkom Landmark Tower 16th-17th floor, The Telkom Hub, Jl. Jend Gatot Subroto Kav. 52 Jakarta, 12710, Indonesia Telkom Landmark Tower 23rd floor, The Telkom Hub, Jl. Jend Gatot Subroto Kav. 52 Jakarta 12710, Indonesia Graha Telkom Property, Jl. Kebon Sirih No. 10, Central Jakarta, 10110, Indonesia Telkom Building, West Jakarta, Jl. S. Parman Kav. 8 West Jakarta, 11440, Indonesia Telkom Landmark Tower 21st floor, The Telkom Hub, Jl. Jend Gatot Subroto Kav. 52 Jakarta 12710, Indonesia PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022 Company PT PINS Indonesia Jakarta, Indonesia PT Infrastruktur Telekomunikasi Indonesia (Telkom Infra) Jakarta, Indonesia PT Metra-Net Jakarta, Indonesia PT Telkom Data Ekosistem, Indonesia Share Ownership 100% Business Field Telecommunication construction and services Operational Status Total Asset (Rp billion) Operating 797 100% Construction, service and trade in the field of telecommunication Operating 1,360 Address Telkom Landmark Tower 42nd floor, The Telkom Hub, Jl. Jend Gatot Subroto Kav. 52 Jakarta 12710, Indonesia Telkom Landmark Tower 19th floor, The Telkom Hub, Jl. Jend Gatot Subroto Kav. 52 Jakarta 12710, Indonesia 100% Multimedia portal service Operating 1,731 Mulia Business Park, J Building, Jl. Letjen MT Haryono Kav. 58 – 60 Pancoran, Jakarta, 12780, Indonesia 100% Data center Operating 3,202 Graha Telkomsigma 5th floor, Jl. Kapten Subijanto DJ BSD City, South Tangerang, Banten 15321, Indonesia PT Napsindo Primatel Internasional Jakarta, Indonesia 60% Telecommunication – provides Network Access Point (NAP), Voice Over Data (VOD) and other related services Ceased operations on January 13, 2006 5 - SUBSIDIARIES WITH INDIRECT OWNERSHIP Company Share Ownership Business Field Operational Status Total Asset (Rp billion) Address 100% Telecommunication Operating 3,537 Maritime Square, #09-63 Telekomunikasi Indonesia International Pte. Ltd. Singapore PT Infomedia Nusantara Jakarta, Indonesia 100% PT Telkom Landmark Tower Jakarta, Indonesia 55% Data and information service-provide telecommunication information service and other information services in the form of print and electronic media and call center service Service for property development and management Operating 2,268 Operating 2,100 Telekomunikasi Indonesia International Ltd., Hong Kong 100% Telecommunication Operating 3,196 Harbour Front Centre, 099253, Singapore PT Infomedia Nusantara Head Office, Jl. RS. Fatmawati 77-81 Jakarta, 12150, Indonesia Telkom Landmark Tower, The Telkom Hub, Jl. Jend Gatot Subroto Kav. 52, Jakarta 12710, Indonesia Suite 905, 9/F, Ocean Centre, 5 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong 75 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Company PT Metra Digital Investama Jakarta, Indonesia PT Metra Digital Media Jakarta, Indonesia Operational Status Total Asset (Rp billion) Operating 9,019 Share Ownership 100% Business Field Trading and/or providing services related to information and technology, multimedia, entertainment and investment 100% Directory information services Operating 986 PT Finnet Indonesia Jakarta, Indonesia 60% Information technology services Operating 1,248 PT Persada Sokka Tama, Jakarta, Indonesia 100% Providing telecommunication network infrastructure Operating 1,401 TS Global Network Sdn. Bhd. Petaling Jaya, Malaysia Telekomunikasi Indonesia International S.A. Dili, Timor Leste PT Nuon Digital Indonesia Jakarta, Indonesia PT Telkomsel Mitra Inovasi Jakarta, Indonesia PT Swadharma Sarana Informatika Jakarta, Indonesia PT Administrasi Medika Jakarta, Indonesia PT Graha Yasa Selaras Jakarta, Indonesia PT Nusantara Sukses Investasi Jakarta, Indonesia 70% Satellite service Operating 566 100% Telecommunication Operating 825 100% Digital content exchange hub services Operating 1,199 100% 51% 100% Business management consulting and capital venture services Cash Replenishment services and ATM maintenance Health insurance administration services Operating 945 Operating 458 Operating 632 51% Tourism service Operating 285 100% Service and trading Operating Address Telkom Landmark Tower 21st floor, The Telkom Hub, Jl. Jend Gatot Subroto Kav. 52 Jakarta 12710, Indonesia Telkom Landmark Tower 18th floor, The Telkom Hub, Jl. Jend Gatot Subroto Kav. 52, Jakarta 12710 Indonesia Telkom Landmark Tower 18th floor, The Telkom Hub, Jl. Jend Gatot Subroto Kav. 52 Jakarta 12710, Indonesia Graha Persada 2, 1st floor, Jalan Kyai Haji Noor Alie No. 89, Kalimalang, Kota Bekasi, Jawa Barat 17148, Indonesia Teknorat ½ street, Cyber 3, 6300 Cyberjaya, Selangor Darul Ehsan, Malaysia Timor Plaza 4th floor, Rua Presidente Nicolao Lobato, Comoro, Dili Timor Leste Telkom Landmark Tower 45th floor, The Telkom Hub, Jl. Jend Gatot Subroto Kav. 52 Jakarta 12710, Indonesia Telkomsel Smart Office 8th floor, Jl Gatot Subroto Kav. 52, Jakarta 1270, Indonesia St Arteri JORR, No. 70, Jati Melati, Pondok Melati, Bekasi, Indonesia, STO Telkom Gambir Building C 3rd floor, Jl. Medan Merdeka Selatan, No. 12, Central Jakarta, 10110, Indonesia Jl. Cimanuk No. 33 Bandung, Indonesia 301 Multimedia Tower, Annex Building 2nd floor, Jl. Kebon Sirih No. 10-12, Central Jakarta, Indonesia 30 Mulia Business Park, J Building, Jl. Letjen MT Haryono Kav. 58 – 60 Pancoran, Jakarta 12780, Indonesia PT Metraplasa Jakarta, Indonesia 60% Network & e-commerce services Operating 76 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022Company Share Ownership Business Field Operational Status Total Asset (Rp billion) Address 60% System integrator Operating 273 100% Telecommunication Operating 316 100% Telecommunication Operating 44 Jl. Tanjung Barat Raya, No. 17, Pasar Minggu, South Jakarta, 12510, Indonesia 800 Wilshire Boulevard, Suite 620 Los Angeles, California 90017, USA Level 4, 241 Commonwealth Street Surry Hills NSW 2010, Australia Communication system services Operating 384 88 @ Kasablanka, 35th floor of Jakarta 12870 PT Nutech Integrasi Jakarta, Indonesia Telekomunikasi Indonesia International Inc., Los Angeles, USA Telekomunikasi Indonesia International Australia Pty. Ltd. Sydney, Australia PT Digital Aplikasi Solusi Jakarta, Indonesia PT Telkomsel Ekosistem Digital (“TED”) Jakarta, Indonesia Telekomunikasi Indonesia International (Malaysia) Sdn. Bhd. Kuala Lumpur, Malaysia PT Teknologi Data Infrastruktur Jakarta, Indonesia PT Graha Telkomsigma Jakarta, Indonesia PT Collega Inti Pratama Jakarta, Indonesia PT Media Nusantara Data Global Jakarta, Indonesia 100% 100% Information services and multimedia technology, entertainment and investment Operating 807 70% Telecommunication Operating 100% Satellite services Operating 8 7 100% Management and consulting services Operating 191 70% Trade and services Operating 173 55% Consulting services Operating 116 PT Metra TV Jakarta, Indonesia 100% Subscription broadcasting services Operating 34 PT Pojok Celebes Mandiri Jakarta, Indonesia 100% Travel agency services Operating 33 Telkom Landmark Building Tower Menara 1, 3rd floor, Jl. Jend. Gatot Subroto Kav. 52 Jakarta 12710, Indonesia Suite 7-3, Level 7, Wisma UOA II No. 21, Jalan Pinang, KLCC, 50450, Kuala Lumpur, Malaysia Telkom Landmark Tower 41st floor, The Telkom Hub. Jl. Jend Gatot Subroto Kav. 52, Jakarta 12710, Indonesia Jl. Kapt. Subijanto Dj. Bumi Serpong Damai Tangerang 15321, Indonesia Gedung Tavalera 6-7th floor, Jl. TB Simatupang Kav. 22-26, Jakarta 12430, Indonesia Kuningan Barat No. 8, Mampang Prapatan Gedung Cyber-1 Jakarta Selatan, DKI Jakarta 12710, Indonesia Telkom Landmark Tower 22nd & 41st floor, The Telkom Hub, Jl. Jend Gatot Subroto Kav. 52, Jakarta 12710, Indonesia Plasa Telkom Group 2nd floor Jl. RS. Fatmawati No. 65, Cilandak Barat Jakarta Selatan 12430, Indonesia 77 PT Telkom Indonesia (Persero) TbkAnnual Report 2022CHRONOLOGY OF STOCKS REGISTRATION Since November 14, 1995, Telkom shares have been listed and traded in Indonesia Stock Exchange (IDX) and New York Stock Exchange (NYSE) with tickers of TLKM and TLK. Price (Rp/per sheet) Composition of Share Ownership Date Corporate Actions Nominal Bid Government of Republic of Indonesia Public Pre-Initial Public Offering 500 2,050 8,400,000,000 - Sale of Shares Held by Government (933,334,000) 933,334,000 13/11/1995 Telkom Right Issue - 933,333,000 11/12/1996 15/05/1997 07/05/1999 02/08/1999 Composition of Share Ownership 7,466,666,000 1,866,667,000 Government Shares Block Sale 500 3,850 (388,000,000) 388,000,000 Composition of Share Ownership Government Distributes Incentive Shares to All Public Shareholders Composition of Share Ownership 7,078,666,000 2,254,667,000 500 3,675 (2,670,300) 2,670,300 7,075,995,700 2,257,337,300 Government Shares Block Sale 500 3,825 (898,000,000) 898,000,000 Composition of Share Ownership Distribution of Shares Bonus (Issuance) (Each 50 Shares Gets 4 Shares) Composition of Share Ownership 6,177,995,700 3,155,337,300 500 3,275 494,239,656 252,426,984 6,672,235,356 3,407,764,284 07/12/2001 Government Shares Block Sale 500 2,700 (1,200,000,000) 1,200,000,000 Composition of Share Ownership 5,472,235,356 4,607,764,284 16/07/2002 Government Shares Block Sale 500 3,775 (312,000,000) 312,000,000 Composition of Share Ownership 5,160,235,356 4,919,764,284 01/10/2004 Stock Split with Ratio 1:2 Shares Buy Back Program (I)(1) Composition of Share Ownership 250 250 4,200 10,320,470,712 9,839,528,568 6,050 - (211,290,500) 10,320,470,712 9,628,238,068 Shares Buy Back Program (II)(2) 250 9,850 - (215,000,000) Composition of Share Ownership 10,320,470,712 9,413,238,068 Shares Buy Back Program (III)(3) 250 7,750 - (64,284,000) Composition of Share Ownership 10,320,470,712 9,348,954,068 Shares Buy Back Program (IV)(4) 250 7,600 - (520,355,960) Composition of Share Ownership 10,320,470,712 8,828,598,108 Transfer of Shares Buy Back Program III to Employees through ESOP Program 250 10,550 - 59,811,400 Composition of Share Ownership 10,320,470,712 8,888,409,508 21/12/2005 29/06/2007 20/06/2008 19/05/2011 14/06/2013 78 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022 Price (Rp/per sheet) Composition of Share Ownership Date Corporate Actions Nominal Bid Government of Republic of Indonesia Public 30/07/2013 Transfer of Shares Buy Back Program I through Private Placement 250 11,750 - 211,290,500 Composition of Share Ownership 10,320,470,712 9,099,700,008 02/09/2013 Stock Split with Ratio 1:5 13/06/2014 Transfer of Shares Buy Back Program II through Private Placement 50 50 2,150 51,602,353,560 45,498,500,040 2,440 - 1,075,000,000 51,602,353,560 46,573,500,040 Composition of Share Ownership Transfer of Remaining Shares Buy Back Program III through Private Placement Composition of Share Ownership Transfer of Remaining Shares Buy Back Program IV through Private Placement Composition of Share Ownership 50 3,110 - 22,363,000 51,602,353,560 46,595,863,040 50 3,970 - 864,000,000 51,602,353,560 47,459,863,040 No corporate action - - - - Composition of Share Ownership Transfer of Treasury Stock throught Withdrawal by way of Capital Reduction Composition of Share Ownership No corporate action Composition of Share Ownership No corporate action Composition of Share Ownership No corporate action Composition of Share Ownership No corporate action 51,602,353,560 47,459,863,040 50 3,750 - 1,737,779,800 - - - - 51,602,353,560 47,459,863,040 - - 51,602,353,560 47,459,863,040 - - 51,602,353,560 47,459,863,040 - - 51,602,353,560 47,459,863,040 - - - - - - Composition of Share Ownership 51,602,353,560 47,459,863,040 21/12/2015 29/06/2016 2017 02/07/2018 2019 2020 2021 2022 Remarks: (1) First shares buy back program began on December 21, 2005 (simultaneously with the EGMS when the program was approved) and ended in June 2007. (2) Second shares buy back program began on June 29, 2007 (simultaneously with the EGMS when the program was approved) and ended in June 2008. (3) Third shares buy back program began on June 20, 2008 (simultaneously with the EGMS when the program was approved) and ended in December 2009. (4) Fourth shares buy back program began on May 19, 2011 (simultaneously with the AGMS when the program was approved) and ended in November 2012. 79 PT Telkom Indonesia (Persero) TbkAnnual Report 2022CHRONOLOGY OF OTHER SECURITIES REGISTRATION Telkom issued its first bonds on Surabaya Stock Exchange on July 16, 2002 with a value of Rp1,000 billion for a period of 5 years. On the maturity date of July 16, 2007, Telkom fulfilled the obligations on the bonds. Telkom issued its second bonds on IDX on June 25, 2010, consisting of Series A worth Rp1,005 billion with a tenor of 5 years and Series B worth Rp1,995 billion with a tenor of 10 years. Bonds II Series A and Series B have been paid in full at maturity, on the date of July 6, 2015 and July 6, 2020. On July 16, 2015, Telkom issued Phase I Sustainable Bonds I, consisting of Series A worth Rp2,200 billion with a tenor of 7 years, Series B worth Rp2,100 billion with a tenor of 10 years, Series C worth Rp1,200 billion with a tenor of 15 years, and Series D worth Rp1,500 billion with a term of 30 years. All of these bonds have been listed and traded on IDX. Bond Name Amount (Rp million) Issuance Date Maturity Date Period (Year) Interest Rate Underwriter Trustee Settlement Date Telkom Bond I 2002 1,000,000 July 16, 2002 July 16, 2007 5 17.00 % PT Danareksa Sekuritas PT BNI Tbk, PT BRI Tbk July 16, 2007 Telkom Bond II 2010 Series A 1,005,000 June 25, 2010 July 6, 2015 5 9.60 % Telkom Bond II 2010 Series B 1,995,000 June 25, 2010 July 6, 2020 10 10.20% Telkom Shelf Registered Bond I 2015 Series A Telkom Shelf Registered Bond I 2015 Series B Telkom Shelf Registered Bond I 2015 Series C Telkom Shelf Registered Bond I 2015 Series D Remark: 2,200,000 June 23, 2015(1) June 23, 2022 7 9.93% 2,100,000 June 23, 2015(1) June 23, 2025 10 10.25% 1,200,000 June 23, 2015(1) June 23, 2030 15 10.60% 1,500,000 June 23, 2015(1) June 23, 2045 30 11.00% PT Bank CIMB Niaga Tbk July 6, 2015 PT Bank Tabungan Negara (Persero) Tbk July 6, 2020 PT Bank Permata Tbk - PT Bahana Sekuritas; PT Danareksa Sekuritas; PT Mandiri Sekuritas PT Bahana Sekuritas; PT Danareksa Sekuritas; PT Mandiri Sekuritas. PT Bahana Sekuritas; PT Danareksa Sekuritas; PT Mandiri Sekuritas; PT Trimegah Sekuritas Indonesia Tbk. (1) Telkom Shelf Registered Bonds 1 Telkom 2015 Series A was issued June 16, 2015 but the official sale transaction was on June 23, 2015. 80 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022On September 4, 2018, Telkom issued Telkom’s Medium Term Notes I Year 2018 with a principal value of Rp758,000,000,000. In addition, Telkom also issued Medium Term Notes Syariah Ijarah I Telkom Year 2018 with the remaining ijarah fee of Rp742,000,000,000. Telkom issued three series for each of these Medium Term Notes and appointed PT Bank Tabungan Negara (Persero) Tbk as the Monitoring Agent. In the 2021 period, Telkom has paid off Telkom’s 2018 MTN I Series C and Telkom’s 2018 Series C Sharia Ijarah MTN which will mature on September 4, 2021. Medium Term Notes Currency Principal (Rp million) Issuance Date Maturity Date Term (Year) Telkom’s 2018 MTN I A Series Telkom’s 2018 MTN I B Series Telkom’s 2018 MTN I C Series Telkom’s 2018 MTN Syariah Ijarah I A Series Telkom’s 2018 MTN Syariah Ijarah I B Series Telkom’s 2018 MTN Syariah Ijarah I C Series 262,000 September 4, 2018 September 14, 2019 200,000 September 4, 2018 September 4, 2020 296,000 September 4, 2018 September 4, 2021 264,000 September 4, 2018 September 14, 2019 296,000 September 4, 2018 September 4, 2020 182,000 September 4, 2018 September 4, 2021 1 2 3 2 2 2 Interest Rate per Annum (%) /Installment Payment per Year (Rp million) 7.25% 8.00% 8.35% Rp19,000 Rp24,000 Rp15,000 Arranger Monitoring Agent Settlement Datet PT Bahana Sekuritas, PT BNI Sekuritas, PT CGS- CIMB Sekuritas Indonesia, PT Danareksa Sekuritas dan PT Mandiri Sekuritas PT Bank Tabungan Negara (Persero) Tbk September 14, 2019 September 4, 2020 September 4, 2021 September 14, 2019 September 4, 2020 September 4, 2021 81 PT Telkom Indonesia (Persero) TbkAnnual Report 2022NAME AND ADDRESS OF INSTITUTIONS AND/OR SUPPORTING CAPITAL MARKET PROFESSION External Auditor/ Public Accountant Supporting Capital Market Profession KAP Purwantono, Sungkoro & Surja (A member firm of Ernst & Young Global Limited). Bursa Efek Indonesia Building, 2nd Tower, 7th floor Jl. Jend. Sudirman Kav. 52 - 53 Jakarta - 12190 Address Service 2022 Fee Assignment Period • Conducting integrated audit of Rp65.1 billion 2022 2021 2020 2019 2018 2017 2016 2015* 2014 2013 2012 consolidated financial statements based on Indonesian Financial Accounting Standards (“IFAS”) and International Financial Reporting Standards (“IFRS”) and the effectiveness of internal controls over financial reporting. • Conducting audit based on ETAP Accounting Standards (Entities Without Public Accountability) on the Financial Statements of the Social and Environmental Responsibility Program. • Conducting an audit based on State Financial Audit Standards for Company Compliance with Legislation and Internal Control. • Conducting collaborative audit services with BPK RI regarding the preparation of LKPP RI for the 2022 financial year (SA 600). • Conducting audit of LK KBUMN. • Performing compliance attestation services on the Activity Report on the Implementation of Prudential Principles (KPPK Report) in managing Foreign Debt of Non- Bank Corporations. • Performing attestation services for calculating the BoD & BoC Key Performance Index (KPI). Acting as a depository institution (Custodian) for Telkom’s common shares traded on the IDX, providing administrative services for holding GMS, and providing administrative services for dividend payment. Representing the interests of bondholders with the Company for Telkom’s phase I sustainable bonds. • Providing central custodial service and settlement of stock/bond transactions on the IDX. • Storage services and settlement of securities transactions, distribution of corporate action results. Rp1.26 billion Since 1995 Rp75 million Since 2015 Rp40 million Since 1995 Providing rating on credit risk of Telkom bond issuance. Rp150 million Since 2012 Securities Admini- stration Bureau PT Datindo Entrycom Wisma Sudirman Jl. Jend. Sudirman Kav. 34 - 35 Jakarta - 10220 Trustee PT Bank Permata Tbk. Central Custodian PT Kustodian Sentral Efek Indonesia Rating Agency PT Pemeringkat Efek Indonesia WTC II Building 28th floor Jl. Jend Sudirman Kav. 29 - 31 Jakarta 12920 Bursa Efek Indonesia Building, Tower 1, 5th floor Jl. Jend. Sudirman Kav. 52 - 53 Jakarta - 12190 Equity Tower, 30th Floor Sudirman Central Business District Lot. 9 Jl. Jenderal Sudirman Kav. 52 - 53 Jakarta 12190 82 PT Telkom Indonesia (Persero) TbkChapter 03 ABOUT TELKOMAnnual Report 2022Supporting Capital Market Profession Moody’s Fitch ADS Custodian Bank The Bank of New York Mellon Corporation Legal Counsel Herbert Smith Freehills Hiswara, Bunjamin & Tandjung Address Service 2022 Fee Assignment Period Moody’s Investors Service Singapore Pte. Ltd, 50 Raffles Place #23-06, Singapore Land Tower, Singapore - 048623 Fitch (Hong Kong) Limited 19/F Man Yee Building 68 Des Voeux Road Central, Hong Kong + 852 2263 9963 Corporate Headquarters 240 Greenwich Street New York, NY 10286 USA +1 212 495 1784 50 Raffles Place, #24-01 Singapore Land Tower, Singapore 048623 Floor 18 Tower I, Sudirman 7.8 Jl. Jend Sudirman Kav. 7-8 Jakarta 10220 Provides ratings on Telkom credit risk. US$80,500 Since 2018 Provides ratings on Telkom credit risk. US$67,500 Since 2018 Acting as a depository institution (Custodian) of ADS shares traded on the NYSE. US$127,714 Since 1995 Acted as a corporate legal consultant regarding the United States capital market for the Annual Report on Form 20F. US$140,000 Since 2022 Notaris Notaries/PPAT Ashoya Ratam, SH, MKn Jl. Suryo No. 54, Kebayoran Baru, Jakarta 12180 Acting as a notary in the Annual General Meeting of Shareholders (AGMS). Rp82.5 million Since 2012 Remark: *) In 2015, Public Accounting Firm Purwantono, Suherman & Surja has changed into Public Accounting Firm Purwantono, Suherman & Surja due to the changes on composition of Partners. In the past five years, Telkom has conducted an audit of the Consolidated Financial Statements. The incurred fees for other service would never exceed the fees for audit services. The following details the fees of public accountants for the last five years No. Audited Financial Year Public Accounting Firm Certified Public Accountant Fee (Rp million) Auditing Service Other Service Total 1. 2. 3. 4. 5. 2022 2021 2020 2019 2018 KAP Purwantono, Sungkoro & Surja (A member firm of Ernst & Young Global Limited) KAP Purwantono, Sungkoro & Surja (A member firm of Ernst & Young Global Limited) KAP Purwantono, Sungkoro & Surja (A member firm of Ernst & Young Global Limited) KAP Purwantono, Sungkoro & Surja (A member firm of Ernst & Young Global Limited) KAP Purwantono, Sungkoro & Surja (A member firm of Ernst & Young Global Limited) Agung Purwanto 59,700 5,440 65,140 Widya Arijanti 59,050 11,540 70,590 Handri Tjendra 63,461 1,925 65,386 Handri Tjendra 57,070 2,055 59,125 David Sungkoro 51,826 2,819 54,645 83 PT Telkom Indonesia (Persero) TbkAnnual Report 202204 ANALISA DAN PEMBAHASAN MANAJEMEN 84 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSIS04 ANALISA DAN PEMBAHASAN MANAJEMEN 86 Business Environment Overview 2022 89 Operational Overview by Business Segment 106 Marketing Overview 115 Comprehensive Financial Performance 127 Solvency 128 Capital Structure and the Management Policies for Capital Structure 129 Realization of Capital Expenditure 130 Material Commitment for Capital Expenditure 131 Receivables Collectability 132 Material Information and Fact After Accountant Reporting Date 133 Business Prospects and Sustainability of The Company 134 Comparison of Initial Year Target and Realization 135 Target or Projections for the Following Year 136 Dividend 137 Realization of Public Offering Fund 138 Material Information regarding Transaction with Conflict of Interest, Transaction with Affiliated Parties, Investment, Divestment, and Acquisition 139 Changes in Law and Regulation 140 Changes in Accounting Policy 85 Annual Report 2022 PT Telkom Indonesia (Persero) TbkBUSINESS ENVIRONMENT OVERVIEW 2022 GLOBAL ECONOMY AND INDONESIA In 2022, global economic growth in general still grew positively, indicating a continuation of economic recovery from the effects of people’s mobility restrictions in various countries during the COVID-19 pandemic in 2020 and 2021. Nonetheless, global economic conditions in 2022 still experienced challenges that are not only hindering the pace of recovery but also increasing the risk of stagflation and global recession. These challenges include high inflation, strict financial policies, the Russia-Ukraine war, which affected the global supply chains, the ongoing COVID-19 pandemic in several countries, and unmatched supply-demand requests. Based on the World Economic Outlook (WEO) report released in January 2023, the IMF maintains the outlook for global economic growth will continue to slow down to 3.4% in 2022 compared to 2021 of 6.2%. This projection is more pessimistic than the IMF’s initial projection of 4.4% in January 2022. Developing countries (emerging markets and developing economies) are still the main engine of global economic growth, with a growth of 3.9%. Meanwhile, the economic growth of the developed countries (advanced economies) only grew by 2.7%. We predicted Indonesia’s economic recovery would continue while we kept considering the impact of the global economic slowdown. In 2022, Indonesia’s economic growth was at 5.31%, which improved compared to the previous year of 3.70%. It was supported by increased consumption and investment activities, positive export performance, and people’s purchasing power amidst rising inflation. Almost all business sectors have indicated growth in line with Indonesia’s economic recovery. With these developments, national economic growth is expected to remain strong in the future. Indonesia’s inflation rate this year was relatively high, recorded at 5.51% (YoY) in December 2022, higher than the previous year’s inflation of 1.87% (YoY) and higher than the target of 3.0±1%. It was due to the adjustment in the fuel price (BBM) to increase inflation in the Volatile Foods (VF) category and inflation in the Administered Prices (AP) category. As for the capital market, increasing volatility in global stock markets has put pressure on the Jakarta Composite Index (IHSG). In general, capital market developments are still optimistic, as indicated by the strengthening of the IHSG by 2.03% YTD as of December 11, 2022. The exchange rate of the Rupiah against the USD judging from the throughout 2022 has fluctuated, leading macro indicators. Bank Indonesia’s transaction rate on January 3, 2022, was Rp14,270 per USD and closed at Rp15,730 per USD on December 31, 2022. Meanwhile, Bank Indonesia’s benchmark interest rate (BI 7-days Repo Rate) increased from 3.50% in January 2022 to 5.50% in December 2022. The credit rating agency, Fitch Ratings, also maintained Indonesia’s Sovereign Credit Rating at BBB with a stable outlook in June 2022. This assessment indicates maintained macroeconomic stability amid global economic uncertainty, and Indonesia’s medium-term economic prospects were quite good. The excellent policy synergy and credibility between Bank Indonesia and the Government supported financial stability and accelerated national economic recovery. INDONESIAN TELECOMMUNICATIONS INDUSTRY transformation The Indonesian Government is aggressively implementing the national digital acceleration program. The critical sector to the program’s success is the telecommunications sector, whose core business closely correlates with internet usage and digitalization. One of the Government’s steps to encourage the telecommunications industry development is providing state budget investment for digital infrastructure, which from 2019-2022 has reached around Rp75 trillion. Based on the Central Statistics Agency (BPS), the telecommunications industry grew by 7.14% in Q1 2022. The COVID-19 pandemic over the last three years has caused a shift in people’s consumption patterns which have more of a digital lifestyle and economy. It has led to an increase in internet needs and data usage traffic, both fixed broadband services for domestic activities and mobile data, which are the main factors in the telecommunication industry development. Another factor that improved the telecommunications industry performance was the consolidation of two major operators in Indonesia, namely Indosat Ooredoo and Tri Hutchison, to become Indosat Ooredoo Hutchison (IOH). This consolidation reduced the number of operators, which we expected to stabilize competition and improve Indonesia’s telecommunications industry’s health. 86 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISIn addition, with the beginning of the 5G network in Indonesia, we hoped it could accelerate digital transformation and meet various digital needs, such as video streaming, games, content, and other data- based applications. Completing the migration of analog to digital TV in December 2022 will also provide the required spectrum to maximize the existing 5G network. We hope it will accelerate the internet network distribution in Indonesia and succeed national digital transformation program. Indonesia, with 274 million population, has become Southeast Asia’s most enormous digital economic power. The 2021 SEA economy report states that Indonesia’s digital economy is valued at US$ 70 billion, outperforming neighbouring countries in Southeast Asia. It even predicted that it would double to US$146 billion in 2025. The e-commerce sector, online transportation, and food ordering services mainly drive these business opportunities. In addition, other sectors are also starting to show great potential for further growth. This potential market has encouraged operators to develop a digital business besides the conventional business as data and voice services. To capture this opportunity, Telkomsel has started this step by creating a separate subsidiary of PT Telkomsel Ekosistem Digital or INDICO. It INDICO is a holding company that optimizes Telkomsel’s assets and capabilities and becomes a leading platform to create the flywheel effect innovations that will accelerate Indonesia’s digital economy. is also Telkomsel’s determination to expand its digital business portfolio and proof to build an inclusive and sustainable digital ecosystem. It is by implementing Telkomsel’s digital trifecta: Digital Connectivity, Digital Platform, and Digital Services. To encouraging its development in the first wave, INDICO will focus on three digital industry sectors, such as edu-tech (Kuncie), health-tech (Fita), and gaming (Majamojo). INDICO will also accelerate the presence of genuine digital talent, which focuses on the collaboration of cross- sector start-ups, investors, and stakeholders in the digital industry to have a more significant impact on the national digital economy through several initiatives, which include partnerships with Agate, one of the largest game developers in Indonesia. This collaboration will encourage the penetration of local games and open up potential opportunities for local creators and talents to contribute to the Indonesian game ecosystem development. TELECOMMUNICATION INDUSTRY COMPETITION in Digital telecommunications has become people’s primary choice nowadays. These conditions have encouraged telecommunications operators’ competition to switch to digital transformation. TelkomGroup, as a digitalization locomotive in comprehending market potential and opportunities to expand its businesses. Telkom will still commit to being the market share leader in the telecommunications industry. Hence, Telkom remains focused on the three business domains: digital connectivity, digital platforms, and digital services. Indonesia, will still be proactive MOBILE BUSINESS In 2022, Telkomsel remained the largest cellular provider in Indonesia with 156.8 million subscribers and 49.5% market share, higher than Indosat Ooredoo Hutchison (IOH), and XL Axiata. As of December 2022, SIM card penetration in the cellular industry has grown by reaching more than 100% with 316.5 million subscribers, increased 6,6% compared to the last period. Data traffic showed significant growth, while voice and SMS continued declining. We predict this downward trend will continue due to the increase in smartphones that substitutes traditional voice and SMS services to Over the Top (OTT) services. Responding to the inclining trend, Telkomsel changed its strategy scheme from pay-as-you-use (PAYU) to a personalized package, enhanced the subscribers’ market segmentation, and improved the diversification initiative through Broadband and Digital Service. FIXED BROADBAND & FIXED VOICE BUSINESS (FIXED BUSINESS) Until the end of 2022, Telkom remained the largest fixed broadband business operator in Indonesia through the IndiHome brand with 9.2 million subscribers and 75.2% market share. The main competitors in this business are PT Link Net Tbk (First Media), PT Supra Primatama Nusantara (Biznet Home), PT Eka Mas Republik (My Republic), PT MNC Kabel Mediacom (MNC Play), PT XL Axiata (XL Home Fiber), and several newcomers that should be considered, such as Cyberindo Aditama (CBN Fiber) and PT Oxygen Multimedia Indonesia (Oxygen.id). In addition, Iconnet, formed by a subsidiary of PT Perusahaan Listrik Negara (PLN), and Gasnet from the State Gas Company (PGN) are also new competitors. Even though dealing with many competitors, Telkom is optimistic about being the leader with its coverage and infrastructure across Indonesia. 87 Annual Report 2022 PT Telkom Indonesia (Persero) TbkDATA CENTER BUSINESS NETWORK AND SATELLITE INFRASTRUCTURE BUSINESS The infrastructure business line, particularly for towers, is managed by Telkom’s subsidiaries, Mitratel and Telkomsel. Some of the main competitors in the tower business include Tower Bersama Infrastructure, Tunas Pratama Solutions, PT Profesional Telekomunikasi Indonesia, Indosat, and XL Axiata. Mitratel implements an organic strategy through the new towers’ construction or co-locations to serve cellular operators and an inorganic strategy the TelkomGroup and acquisition from other tower providers. tower consolidation within through Telkom’s customers in the satellite business are across the Asia Pacific region, especially Southeast Asia. The satellite service provides cellular backhaul, broadband backhaul, enterprise network, TV on demand, military and government networks, video distribution, DTH television, aviation communications, and disaster recovery. Telkom competes with other operators who already have satellites and are currently developing satellites in Southeast and South Asia. Telkom has two satellites: the Telkom- 3S Satellite, which operates in the 118°E orbital slot, and the Merah Putih Satellite in the 108°E orbital slot. Telkom via Telkomsat also plans to place a satellite in the 113°E orbit slot with the latest High Throughput Satellite (HTS) technology, which has obtained usage rights in 2021. DIGITAL BUSINESS The digital business will still be competitive with the acceleration of information technology and digitization. Several big competitors have penetrated vertical industries, such as logistics, e-commerce, financial services, and travel, so the time to lead the market is getting shorter. Therefore, Telkom develops digital products according to the requirements. Telkom orchestrates its digital products through synergies with existing businesses and establishes partnerships with competent parties in vertical industries and investors to accelerate the scale of its digital business. Telkomsel has taken steps to develop its digital business by establishing a separate subsidiary, namely PT Telkomsel Digital Ecosystem or INDICO. INDICO is an aggregator from Telkomsel in the digital business. In this early stage, the Company will focus on the health tech, edutech, and gaming sectors. In addition, Telkom has also developed a digital company, DigiCo, that focuses on the B2B and B2C business segments. Telkom’s data center has been integrated and supported by domestic and global networks with comprehensive service features designed to be flexible, modular, seamless, and scalable. Telin, a subsidiary of Telkom that provides global data centers, competes in the international market with other data center providers in Singapore and Hong Kong. In the domestic market, Telkom Data Ecosystem (NeutraDC), a Telkom subsidiary that manages the data center portfolio, owns and operates Hyperscale Data Centers in Cikarang, Enterprise Data Centers in Serpong, Sentul, and Surabaya, and manage the operation of Edge Data Centers owned by Telkom. Telkom competes with several companies that have also established data centers, DCI Indonesia, Indosat Ooredoo, Moratelindo, IDC Indonesia, BDx, Atria, Princeton DG, NTT Communication, EdgeConnex, and Biznet. The Data Center business is one of the pillars of the Telkom Group’s digital platform business growth. Telkom sees rapid technological developments in data centers, with the potential growth for data center business in Indonesia estimated at 33% based on the 10-year Compound Annual Growth Rate (CAGR). This figure is one of the highest in Asia. Therefore, Telkom strives to develop the data center business so that it can become one of Telkom’s growth engines in the future. INTERNATIONAL TRAFFIC AND INTERCONNECTION BUSINESS Traditional IDD (non-VoIP) of international traffic service operators in Indonesia are currently only Telkom and Indosat. This business line is getting more competitive with the presence of OTT and digital communication services such as Line, WhatsApp, and Skype, which provide VoIP services that can open international access, resulting in a decrease in Telkom’s revenue from this line. To address these challenges, Telkom business positions OTT as a customer, partner and/or competitor through connectivity services, data centers and Content Delivery Network (CDN) for OTT which could increase profits for the Company. 88 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISOPERATIONAL OVERVIEW BY BUSINESS SEGMENT Mobile Consumer Enterprise Wholesale & International Business Others Provides mobile voice, SMS, mobile data service, and mobile digital services. Provides high-speed internet connection for fixed voice, fixed broadband, IP-TV, and digital services. Provides enterprise connectivity, satellite, and digital platform system for corporate, institutional, and business customers. The largest cellular network operator in Indonesia covering more than 99% population and supported by 265,194 total BTS. As of December 31, 2022, it had 9.2 million IndiHome subscribers, increased by 7.1% from the previous year. As of December 31, 2022, became the market leaders by serving clients of 1,481 companies, 377,894 MSME and 934 Government institutions. Provides domestic and international services of wholesale traffic, wholesale network, wholesale digital platform & service, data center, tower, and managed infrastructure & network. Provides services in 12 countries with 1 office in Indonesia and 9 Telin’s global and 2 sales representative offices operating overseas. Provides digital payment solutions, big data & smart platform, digital advertising, music, gaming, and e-commerce. As of December 31, 2022, it had 29 million active users of Digital Music and 21.9 million paid users of Digital Games. PT Graha Sarana Duta (Telkom Property) performs asset leverage and increase the income with the services of property developer, leasing, facility, and management. 89 Annual Report 2022 PT Telkom Indonesia (Persero) TbkSEGMENT PERFORMANCE HIGHLIGHTS Social distancing during the COVID-19 pandemic further encouraged digital transformation. It was a business opportunity for TelkomGroup to adjust its business development to meet people’s digital needs, particularly broadband services. Financial performance during 2022 showed positive results due to increased demand for digital services. In general, all business segments recorded good performance, with the Mobile segment dominating the most contribution by 45.1%. The Mobile segment contributed the highest revenue for TelkomGroup of Rp88,837 billion. Then the Enterprise segment contributed to the second highest revenue of 22.2% or Rp43,807 billion, followed by the Wholesale and International Business (WIB) of 17.8% or Rp35,100 billion and the Consumer of 13.5% or Rp26,549 billion, while the Others provided the least contribution of 1.4% or Rp2,725 billion. Telkom’s Results of Operation by Segment 2022-2021 2022 2021 2020 (%) (Rp billion) (US$ million) (Rp billion) (Rp billion) Growth Years ended December 31 1.5 8.0 1.7 85,493 3,344 88,837 5,491 84,267 83,720 215 3,097 5,706 87,364 3,297 87,017 18.5 (62,715) (4,028) (52,929) (54,051) (24.1) 26,122 1,678 34,435 32,966 5.7 4.3 5.7 (1.3) 28.6 0.1 10.1 5.5 2.7 26,354 1,693 24,930 20,957 195 26,549 13 1,705 187 25,117 1,148 22,105 (18,970) (1,218) (19,223) (17,544) 7,579 487 5,894 4,561 19,161 24,646 43,807 1,231 1,583 2,814 19,141 22,395 17,729 18,591 41,536 36,320 (42,976) (2,760) (41,843) (36,864) 370.7 831 53 (307) (544) Mobile Revenues External revenues Inter-segment revenues Total segment revenues Total segment expenses Segment results Consumer Revenues External revenues Inter-segment revenues Total segment revenues Total segment expenses Segment results Enterprise Revenues External revenues Inter-segment revenues Total segment revenues Total segment expenses Segment results 90 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISTelkom’s Results of Operation by Segment 2022-2021 2022 2021 2020 (%) (Rp billion) (US$ million) (Rp billion) (Rp billion) Growth Years ended December 31 WIB Revenues External revenues Inter-segment revenues Total segment revenues Total segment expenses Segment results Others Revenues External Revenues Inter-segment revenues Total segment revenues Total segment expenses Segment results 8.3 8.8 8.6 13.1 15,442 19,658 35,100 992 1,263 14,255 18,072 13,501 16,139 2,254 32,327 29,640 (26,175) (1,681) (23,135) (23,143) (2.9) 8,925 573 9,192 6,497 16.6 3.8 4.8 57.8 239 2,486 2,725 (3,788) 634.2 (1,063) 15 160 175 (243) (68) 205 2,395 2,600 219 1,550 1,769 (2,401) (1,662) 199 107 91 Annual Report 2022 PT Telkom Indonesia (Persero) TbkOPERATIONAL HIGHLIGHT SUBSCRIBERS Cellular Subscribers 1) Telkomsel Halo Telkomsel Prabayar Broadband Subscribers Fixed broadband IndiHome 2) Mobile broadband 3) INFRASTRUCTURE Satellite Capacity4) Point of Presence Domestic International BTS BTS 2G BTS 3G BTS 4G BTS 5G Tower Fiber Optic Backbone Network Domestic International Wi-Fi Services Unit Year Ended on December 31 2022 2021 2020 (000) subscribers (000) subscribers (000) subscribers (000) subscribers (000) subscribers (000) subscribers TPE PoP PoP PoP unit unit unit unit unit unit km km km access point 156,812 7,111 149,702 130,119 9,212 120,907 109 122 64 58 265,194 50,158 49,632 165,120 284 40,588 173,266 108,566 64,700 391,317 175,977 7,201 168,776 169,542 6,496 163,046 129,117 123,954 8,601 120,516 8,016 115,938 109 120 62 58 251,116 50,241 63,149 137,613 113 36,761 170,885 106,185 64,700 133 117 59 58 231,172 50,252 73,397 107,523 n/a 35,822 167,935 103,235 64,700 390,976 386,856 92 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSIS CUSTOMER SERVICE PlasaTelkom5) Plasa Telkom Digital GraPARI International Domestic GraPARI GraPARI TelkomGroup GraPARI Mobile IndiHome Sales Car EMPLOYEES Unit location location location location location location location unit unit People Year Ended on December 31 2022 2021 2020 387 22 372 0 372 363 9 0 750 23,793 387 22 414 18 396 387 9 174 750 408 16 431 19 412 403 9 365 896 23,756 25,348 Remarks: 1) Since June 2021, the cellular brand has changed to Telkomsel Halo for postpaid and Telkomsel Prabayar for prepaid services. 2) IndiHome fixed broadband is a product that allows customers to choose one or more Consumer segments portfolios such as fixed telephone, fixed broadband, and IPTV services, including digital consumer services. 3) Mobile broadband includes Flash users, Blackberry users, PAYU, and Home LTE. 4) Telkom operates two satellites, namely Telkom-3S and Merah Putih Satellite, after the Telkom-2 satellite de-orbited since May 2021. 5) PlasaTelkom outlet is a face-to-face service consisting of GraPARI TelkomGroup, Plasa Telkom Digital, and other Plasa across Indonesia. Telkom’s operational performance in 2022 started with a decline of cellular subscribers from 176.0 million subscribers in 2021 to 156.8 million subscribers in 2022 or decreased 10.9%, resulted from healthier industry initiative and focusing on sustainable growth and more quality subscribers. Meanwhile, the number of broadband subscribers grew from 129.1 million subscribers in 2021 to 130.1 million subscribers in 2022. Fixed broadband IndiHome subscribers increased from 8.6 million in 2021 to 9.2 million subscribers in 2022. This growth trend will continue due to the transition towards broadband-based digital telecommunications. 93 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk MOBILE SEGMENT Data traffic 2022 increased by 18.7% to 16.4 million TB 265,194 total BTS with: 50,158 2G BTS; 49,632 3G BTS 165,120 4G BTS; 284 5G BTS, increased 14,078 BTS of total BTS. The products and services of the Mobile segment consist of mobile voice and SMS, mobile data services, and mobile digital services. For cellular services, TelkomGroup, through Telkomsel, carries GSM, 3G, 4G/LTE, and 5G technology officially launched on May 26, 2021, and currently has more than 40 points across Indonesia. 4. Telkomsel Orbit Telkomsel Orbit is a home broadband internet service with a Wi-Fi modem connected to cellular network infrastructure with the flexibility for users to buy a data package. The following are Telkomsel’s products and services: 1. Telkomsel Halo It is a postpaid cellular telecommunication product and service that prioritizes network quality, communication experience, and entertainment. Telkomsel Halo comes in a wide selection of comprehensive packages with exclusive advantages. 2. Telkomsel PraBayar It is the new brand launched in June 2021 by combining prepaid services from simPATI, Kartu As, and LOOP. Telkomsel Prepaid integrates products and services to provide convenience for customers. 3. by.U It is the end-to-end digital prepaid products and services presented in the by.U digital application, including the entire service process from selecting delivery options, by.U phone numbers, internet quota, additional quota (topping), and payment. MOBILE SEGMENT CAPACITY AND DEVELOPMENT As of the end of 2022, TelkomGroup’s cellular subscribers were 156.8 million, decreased 10.9% compared to the previous year. There were 95.5% prepaid and 4.5% postpaid subscribers. Prepaid users recorded at 149.7 million or decreased by 11.3%, while postpaid users recorded 7.1 million or decreased by 1,2%. The subscribers’ decrease was due to the healthier industry initiative and focusing on sustainable growth and more quality subscribers. TelkomGroup also keeps building reliable network capacity to remain the customer’s choice. TelkomGroup, through Telkomsel, continues to maximize 5G services that can improve digital connectivity, digital platforms, and digital services in Indonesia, as well as develop future technology solutions such as artificial 94 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSIS intelligence, cloud computing, and the Internet of Things. It was by the investments included in the roadmap plan, and the implementation will be in stages based on several considerations, including the readiness of the connectivity ecosystem. For mobile broadband services, there was a subscriber increase by 0.3% or to 120.9 million subscribers in 2022, while the data used increased by 18.7% to 16.4 million TB. This increase was due to the portfolio expansion of digital services to support the transformation while beginning to adopt the digital lifestyle. In addition, Telkomsel Orbit is a fixed wireless service with a 4G and 5G network. Cellular Traffic Data (TB) in 2020-2022 16,426,853 13,837,050 9,654,742 2022 2021 2020 Telkom develops digital mobile services with video content, music, games, and fintech. Telkom strengthens MAXstream’s position in the video streaming industry by partnership with strategic content provider. Telkom also provides streaming services LangitMusik and Telkomsel Dunia Games, which combine media content, distribution, payment, e-sports, and game publishing. To strengthen Telkom’s position as the leading network operator in Indonesia, Telkom had upgrades initiative its 3G and 4G service gradually and built 27.5K new 4G BTS in 2022 to support 4G/LTE services in various cities. Until the end of 2022, Telkom has had a total of 165,120 4G BTS, covering more than 96% population throughout Indonesia. Total TelkomGroup BTS (Units) in 2020-2022 50,158 49,632 165,120 284 50,241 63,149 137,613 113 50,252 73,397 107,523 - 2022 2021 2020 2G 3G 4G 5G 95 Annual Report 2022 PT Telkom Indonesia (Persero) TbkMOBILE SEGMENT FINANCIAL PERFORMANCE The Mobile segment revenue was still the main contributor to TelkomGroup’s consolidated revenue of Rp88,837 billion in 2022. The following table provides information on the performance of the Mobile segment over the last three years. Mobile Segment 2022-2021 2022 2021 2020 (%) (Rp billion) (US$ million) (Rp billion) (Rp billion) Revenues Expenses Result 1.7 18.5 88,837 5,706 87,364 87,017 (62,715) (4,028) (52,929) (54,051) (24.1) 26,122 1,678 34,435 32,966 The Mobile segment revenue from subsidiary Telkomsel was Rp88,837 billion, increased by Rp1,473 billion or 1.7% compared to the last year of Rp87,364 billion while operating expenses in this segment increased by Rp9,786 billion or 18.5%. The increase in revenue was due to customer behavior transition from voice to data and OTT services. Internet and cellular data revenues increased 7.0% or became Rp69,006 billion in 2022. This result shows an increase in people’s mobile data usage during the COVID-19 pandemic. Overall, the Mobile segment still made an Rp26,122 billion profit. 96 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISCONSUMER SEGMENT 9.2 million IndiHome 15.3 million optical ports subscribers, increased as broadband access based 7.1% from the previous year on optical fiber The Consumer segment consists of fixed voice, fixed broadband, IP-TV, and digital services under the IndiHome brand. The demand for IndiHome increased during the COVID-19 pandemic when people did their most activities at home. IndiHome subscribers in 2022 increased 7.1% compared to last year, from 8.6 million to 9.2 million subscribers. Meanwhile, average revenue per user (ARPU) was 270 thousand, consistently from previous year. CONSUMER SEGMENT CAPACITY AND DEVELOPMENT IndiHome’s developed strategically to retain its customers, including bundling programs for broadband internet, IP- TV, and fixed telephones, sales through digital channels, and varied promotions every year. Telkom also provides special packages for online learning activities (“Special Packages for Students, Teachers, and Journalists”). In addition, Telkom develops products and technology to meet the customers’ aspirations and needs. In 2022, there was a collaboration with Netflix to provide Netflix services through IndiHome, a cloud recording service as an add-on through IndiHome Eazy. It stores IP camera recording data on a cloud server to be safe, secure, and easily accessible to customers. Telkom has also created an Ultra Wi-Fi product that provides a broader range of Wi-Fi for IndiHome customers with extensive residential areas or high-rise buildings. IndiHome, through IndiHome TV, maintains its position as Indonesia’s most complete and largest TV channel provider. IndiHome TV is our pay TV service bundled into IndiHome internet service for Android TV box devices and enriched by the Google Ecosystem. Our pay TV service includes multiple linear TV channels, TV-on- demand (catch-up TV), video-on-demand (VoD), and 14 OTT services to enrich IndiHome as an “Entertainment Window.” These OTT services consist of non-video OTT such as Gameqoo, Langitmusik, and IndiHome Karaoke, as well as video OTT services such as Netflix, Disney+ Hotstar, Lionsgate Play, Viu, Catchplay+, Mola, WeTV, Iflix, Vidio, Vision+, and IndiHome TV App. In addition, it also extended to the IndiHome TV mobile app and website indihometv.com (rebranded in December 2022 from UseeTV Go app and useetv.com) to enable our users to have OTT experiences, enjoy multi-screen, and access video content anywhere and anytime. IndiHome TV has more than 1 million active users. As part of our commitment to provide the best experience to customers, IndiHome TV now provides full high- definition channels, including 149 high-definition and 5 Dolby channels. In addition, customers can navigate menus conveniently, enjoy their favorite content directly accessed via deep-link and selection, and find their content from OTT applications available on the IndiHome TV service. In 2022, we continued to enrich and expand our inventory with world-class sports content, such as the 2022 FIFA World Cup Qatar in partnership with Vidio, Badminton World Federation (BWF), and Grand Prix motorcycle racing (MotoGP) via SPO TV and SPO TV 2 channels. In addition, IndiHome continued to collaborate with leading partners to provide programs on our in-house channels, such as Liga 1, the national futsal competition “Futsal Challenge,” the Children’s Talent Show “Panggung Kamulah Bintang,” K-Pop Dance Cover Competition, International Badminton Junior Competition, Studio Dangdut, etc. The quality improvement of IndiHome services was still challenging in 2022. We strive to provide the best customer experience and convenience in using IndiHome products. We tried implementing one of the strategies by updating the myIndiHome application. This application offers solutions and conveniences for customers to 97 Annual Report 2022 PT Telkom Indonesia (Persero) Tbkmanage IndiHome services and transactions via a mobile app. Customers can also easily apply for new installations and repairment to IndiHome services, such as setting technician schedules and monitoring the progress. We have developed the myIndiHome application based on customer feedback and internal business process improvements to provide the best digital customer experience. Later, it will be equipped with a biometric feature of facial recognition so that customers can access the application faster. As of December 31, 2022, we had approximately 9.2 million IndiHome fixed broadband subscribers, representing about 75.2% market share in Indonesia. We also offer the wifi.id service to IndiHome customers, an additional service that allows customers to enjoy unlimited internet access at all wifi.id access points in Indonesia. wifi.id stands for Indonesia Wi-Fi, our wireless public internet network for enjoying high-speed internet and other multimedia services. Another challenge was increasing ARPU and reducing churn. Network infrastructure reliability is one of the success keys to overcoming this challenge. As of the end of 2022, Telkom had 15.3 million optical ports with optical fiber, which is the basis of the fixed broadband access network. The optical fiber (T-Cloud) usage in 2022 has reached 1,128 T-Cloud. We also continuously improved Mean Time To Install (MTTI) and Mean Time To Repair (MTTR) by increasing the capacity of technicians and improving business processes. Through the Telkom Access Command Center, Telkom can manage access networks digitally with integrated controls and detect potential disruptions promptly so that they can repair immediately. CONSUMER SEGMENT FINANCIAL PERFORMANCE The Consumer segment revenue has contributed 13.5% to TelkomGroup’s consolidated revenue. The following table shows the performance of the Consumer segment for the last three years. Consumer Segment 2022-2021 2022 2021 2020 (%) (Rp billion) (US$ million) (Rp billion) (Rp billion) Revenues Expenses Result 5.7 (1.3) 28.6 26,549 1,705 25,117 22,105 (18,970) (1,218) (19,223) (17,544) 7,579 487 5,894 4,561 The increase in the IndiHome subscribers has improved the Consumer segment revenue of Rp26,549 billion, increased by 5.7% or Rp1,432 billion compared to last year of Rp25,117 billion. Expenses on the Consumer segment was Rp18,970 billion, decreased by 1.3% or Rp253 billion compared to the previous year. Thus, the Consumer segment recorded a profit of Rp7,579 billion. IndiHome’s profitability was improved, with EBITDA margin reaching 50%. 98 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISENTERPRISE SEGMENT 1,481 corporate customers, 377,894 MSME customers, and 934 government institution customers 2 satellites with 109 TPE capacity In the Enterprise segment, Telkom provides ICT and platform services to provide end-to-end solutions and the information technology ecosystem consisting of enterprise-grade connectivity services, satellite, cloud, digital IT services, business process outsourcing, and device & other adjacent services. Customers for this segment are corporations, micro, small and medium enterprises (MSMEs), and government institutions. ENTERPRISE SEGMENT CAPACITY AND DEVELOPMENT We maintain the Enterprise segment performance following our strategy to focus on recurring business lines with higher profitability, particularly on enterprise solutions services such as enterprise connectivity, data center, and cloud. Enterprise connectivity services consist of fixed broadband, Wi-Fi, ethernet, and data communication, including leased channels, i.e., metro ethernet, VPN-IP, and high-capacity data network solutions that provide point-to-point connections and fixed voice services. In 2022, TelkomGroup provided bandwidth in service of 3,156 Gbps, with 1,554 Gbps for corporate internet and 1,602 Gbps for data communication customers. It increased 3.5% from the last year. To support connectivity services, through its subsidiary Telkomsat, Telkom has integrated satellite services with the transponder capacity of 109 TPE and rents from third parties with a capacity of approximately 40.36 TPE. Customers can rent satellite transponder capacity for broadcasting and VSAT operators, cellular telephones, and ISPs and experience earth station satellite up-link and down-link services. Later, Telkom plans to launch High Throughput Satellite (HTS) which is considered suitable to serve satellite broadband subscribers. The launch of the FLOU cloud service in 2020 has successfully achieved customer hybrid cloud demands with flexible package options for the MSME/SME, startup, SOE, enterprise segments, and the Government. In 2022, Telkomsigma implemented a strategic initiative through FLOU New Expansion and Capability. FLOU, as Telkomsigma’s new growth engine, focuses on progressing FLOU 2.0 New Expansion and Capability to improve cloud performance. In 2022, TelkomGroup could service acquired Rp324.8 billion through various national projects, such as PeduliLindungi, SIAP Online, e-Tilang, International Certification Vaccines, and other projects that use FLOU’s capabilities or strategic business partnerships with hyperscalers. To support MSMEs amid digitalization developments, Telkom launched the application of mysooltan, a Digital Touch Point specifically designed to help MSMEs prepare and accelerate digital transformation. It is easy for MSMEs to run their business with various services, such as internet sooltanNet, business applications sooltanPay, sooltanKasir, and sooltanToko. We have developed this application based on user input to be more suitable for their needs. For system integration and IT service management services, TelkomGroup provides business process management, business process as-a-service, and customer relationship management. We are also developing a digital advertising agency through media placements and integrated digital media, such as mobile advertising, online advertising, and digital printing. We have developed platforms to support these services that provide consumer behavior insight to create marketing campaigns based on big data and data analytics. TelkomGroup also provides various hardware and software sales services, including its IT support services. TelkomGroup also provides IoT solutions for buildings and 99 Annual Report 2022 PT Telkom Indonesia (Persero) Tbkdevelops IoT applications for smart energy monitoring management, fleet management, IT security services, unified communication, and collaboration services. We have a fiber-optic-based infrastructure network with comprehensive coverage as the advantage of our services in the Enterprise segment. Thus, TelkomGroup will continue to innovate and manage products and services that can provide total solutions for customers. Until the end of 2022, the Enterprise segment has 380,309 customers consisting of 1,481 corporate, 377,894 MSMEs, and 934 Government institutions. We also have developed products, solutions, customer experience, and new brand experience in stages in 2022. Internal HR and supporting infrastructure competency improved by obtaining have also ISO 27001-17/18 Certification and CSA Star & PII Related Certification to increase customer trust and be more competitive in the Indonesian cloud market. In 2022, we focused on professional services for the financial, manufacturing, government, and communications sectors, as we expect this segment to experience significant growth. We use our resources and partner with global cloud players to provide them with professional cloud management and consulting services. We expected our strategic collaborations with Amazon Web Services (AWS), Google Cloud Platform (GCP), Microsoft Azure, and Alibaba Cloud would meet workload needs in various industries such as MSMEs, startups, State-Owned Enterprises (SOEs), enterprises, and government. ENTERPRISE SEGMENT FINANCIAL PERFORMANCE Enterprise segment revenue contributed 22.2% of the total consolidated revenue in 2022. The performance of Enterprise segment for the past three years can be seen in the following table: Enterprise Segment 2022-2021 2022 2021 2020 (%) (Rp billion) (US$ million) (Rp billion) (Rp billion) Revenues Expenses Result 5.5 2.7 43,807 2,814 41,536 36,320 (42,976) (2,760) (41,843) (36,864) 370.7 831 53 (307) (544) Enterprise segment revenue increased by 5.5% or Rp2,271 billion in 2022. It was due to the increase in network revenues which grew by 32.3% or Rp351 billion, IndiHome revenues by 7.0% or Rp183 billion, and call center service revenue by 12.5% or Rp127 billion, and others revenue in other telecommunication services revenues by 26.4% or Rp273 billion. These increases were compensated by the decrease in manage service and terminal revenue by 43.5% or Rp891 billion, while expenses increased by 2.7% or Rp1,133 billion compared to last year. Thus, the Enterprise segment recorded a profit of Rp831 billion in 2022. 100 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISWHOLESALE AND INTERNATIONAL BUSINESS SEGMENT (WIB) 173,266 km total optical fiber backbone network (108,566 km domestic and 64,700 km international) 122 Point of Presence (PoPs) (58 international PoPs & 64 domestic PoPs) 28 data centers (5 overseas data centers & 23 domestic data centers) 40,588 towers (35,418 Mitratel towers, 477 Telkom towers, and 4,693 Telkomsel towers) The WIB segment has several business lines for domestic and international, including wholesale traffic, wholesale network, wholesale digital platform & service, data center, tower, and managed infrastructure & network. Customers for this segment are Other Licensed Operators (OLO), Service Provider, and Digital Player domestic and overseas. In 2022, the performance of the WIB segment was relatively stable. However, TelkomGroup is still striving to prepare new business innovations and initiatives to maintain its profitability. WHOLESALE AND INTERNATIONAL BUSINESS (WIB) SEGMENT CAPACITY AND DEVELOPMENT 1. Carrier Service This business line provides domestic and international wholesale traffic and network services, including voice, data & internet interconnection services and network services. In addition, this business line also includes wholesale digital platform and services for domestic and international, which include A2P SMS services, platforms, and solutions. During 2022, it grew positively, contributed by Domestic & International Network, Internet Traffic, and A2P SMS. The SMS A2P demand has been increasing due to customers’ consumption habits transition that uses more certain applications, which need authentication and broadcast information to support digital activities at home. We developed the Enabler Digital Ecosystem initiative for supporting Wholesale Network. SEA-ME-WE 5 and SEA-US submarine cables support the delivery of direct broadband connectivity across Europe, Asia, and America, and as the main gateway for digital connectivity bridging domestic traffic to global, global traffic to domestic, and between countries (hubbing), both voice and A2P (application-to-person) SMS. second TelkomGroup’s inaugurated the Manado In 2022, TelkomGroup Gateway, international communication channel after the Batam Gateway. This digital toll gate is a concrete manifestation of equalized access to digital telecommunications and information throughout Indonesia. The Manado Gateway will be strengthened by the Bifrost submarine cable construction owned by the TelkomGroup consortium through Telin with global tech giant. In the 1Q 2022, TelkomGroup, through Telin, also joined the international communication system consortium of submarine cable of Southeast Asia- Middle East-Western Europe 6 (SEA-ME-WE 6), with an approximately of 19,200 km underwater cable system connecting several countries from Southeast Asia to Europe. Telin’s participation in SEA-ME- WE 6 will strengthen TelkomGroup’s international cable infrastructure to improve the quality of faster broadband access and provide the best digital experience for customers. On the other hand, TelkomGroup has 122 Points of Presence (PoP), consisting of 58 Global PoPs in 27 countries and 64 Domestic PoPs in 49 cities. In 2022, Telkom added 2 Domestic PoPs. Another service is the Content Delivery Networks (CDN) operation with a capacity of 14,572 Gbps, which increased by 19.3% compared to last year. 2. Data Center Service TelkomGroup strives to strengthen Indonesia’s digital ecosystem by developing a data center ecosystem. It aims to support the transformation & development of the digital economy and assist various domestic and international industries in growing their business, including finance, manufacturing, and cloud computing service providers. In 2022, TelkomGroup implemented a business consolidation strategy of the data center into one managing entity of PT Telkom Data Ecosystem 101 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk (NeutraDC) to strengthen the data center business as one of the growth engines. NeutraDC has an essential role as a digital ecosystem enabler that provides neutral data center infrastructure in global standard with the best and most extensive network connectivity to ensure business continuity and scalability for international and domestic Digital Players/Hyperscalers and the Enterprises & Government segment. The consolidation is by management transfer of 3 Enterprise Data Centers located in Sentul, Serpong, and Surabaya from Telkomsigma to NeutraDC. Thus, NeutraDC manages 3 Enterprise Data Centers and 1 Tier 3 and 4 Hyperscale Data Center (HDC) in Cikarang. HDC Cikarang’s capacity will gradually increase until it reaches the total designed IT Load Capacity of 51 MW. Mitratel, as a subsidiary of Telkom, has a significant role in supporting the increase in tower leasing revenue. TelkomGroup expects Mitratel would support the national digitalization acceleration for the upcoming 5G era and achieve the nation’s objective: to become a country with the most prominent digital economy by 2025, especially in the Asia Pacific. 4. Infrastructure Services and Network Management TelkomGroup provides network infrastructure and management services, including the construction and maintenance of the network, consisting of installing and maintaining submarine cables and energy solutions. TelkomGroup has a fiber optic backbone network of 173,266 km, consisting of 64,700 km of the international network and 108,566 km of the domestic network with each capacity of 73,635 Gbps and 148,100 Gbps. Telkom also operates and owns the license for the fiber optic backbone network with a total of 134,040 km under a long-term telecommunications lease agreement with other global submarine cable operators/consortiums. through For submarine cable deployment and maintenance, Telkom, its subsidiary of Telkominfra, improves its capability by collaborating with the vessel’s provider of the submarine cable or the procurement to increase TelkomGroup’s assets. While for the energy solutions, Telkominfra cooperates with State-Owned Enterprises (SOEs) to maintain diesel engines for telecommunications networks until 2022 in Kalimantan and June 2023 in Sulawesi. 5. International Business the sales representative Telkom, through its subsidiary Telin, manages and develops its business activities in Singapore, Hong Kong, Timor Leste, Australia, Myanmar, Malaysia, Taiwan, the United States of America, and Dubai, including in UK and Philippines that started the operation in 2022 based on the region. Telin provides wholesale services, cloud, and connectivity, data center and managed services, retail mobile services (MNO and MVNO), IP transit, and digital platform & services. Telkom regularly analyzes and assesses overseas operations for profitability, prospects, and position to optimize the portfolio structure and global market access. At the end of 2022, TelkomGroup operated a total of 28 data centers in all operational areas, namely 5 overseas data centers located in Singapore (Telin-1, Telin-2, and Telin-3), Timor Leste (1 location), Hong Kong (1 location), and 23 domestic data centers consisting of 19 NeuCentrIX data centers, 3 Enterprise Data Centers and 1 Hyperscale Data Center. Average data center occupancy rates abroad are around 86%, while neuCentrIX data center occupancy averages 71% of total capacity. In December 2022, Telkom, through NeutraDC, started the groundbreaking of the Hyperscale Data Center in Batam. NeutraDC will work with global strategic partners to develop HDC Batam, which will be built on an approximate area of 8 hectares with a total of 3 campuses by world-class data center standards with a total IT load capacity of 51 MW. The presence of HDC Batam is a definite step for TelkomGroup to strengthen its position as a significant data center business player in the region. HDC Batam will serve not only various business needs in Indonesia but also could capture potential spillovers from other countries. 3. Tower Service TelkomGroup serves the procurement and installation of telecommunication devices for other operators with a leasing system. TelkomGroup, through Mitratel, will create offers for the co-location and reseller business of the operator’s tower. Mitratel manages 52,006 tenants and 2,818 reseller towers. As of 2022, TelkomGroup managed 40,588 towers, with 35,418 towers of Mitratel, 477 towers of Telkom, and 4,693 towers of Telkomsel. 102 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSIS Telin uses the new data center capacity and develops service with omnichannel cloud-based CPaaS communication features (bots and live chat, real- time voice capabilities, SMS, emails, video calls, and messaging service). In addition, Telin through the NeuTrafiX launch, a web-based B2B marketplace platform, has helped connect buyers and sellers efficiently and transaction of transparently wholesale voice, SMS, and virtual numbers trading. for WIB SEGMENT FINANCIAL PERFORMANCE The WIB segment contributed 17.8% to the total consolidated revenue. Throughout the year, most of WIB’s income was from providing various services, i.e., network, interconnection, internet, submarine cable, data center, tower, and infrastructure. WIB has a significant role in TelkomGroup, as an enabler and catalyst for other business segments to create value. WIB Segment 2022-2021 2022 2021 2020 (%) (Rp billion) (US$ million) (Rp billion) (Rp billion) Revenues Expenses Result 8.6 13.1 (2.9) 35,100 2,254 32,327 29,640 (26,175) (1,681) (23,135) (23,143) 8,925 573 9,192 6,497 WIB segment revenue in 2022 increased by 8.6% or Rp2,773 billion compared to the previous year. This increase was due to the revenue growth from internet, data communication, and information technology services by 8.4% or Rp172 billion and interconnection revenue by 10.4% or Rp768 billion. The expenses incurred for the WIB segment increased by 13.1% or Rp3.040 billion compared to last year. At the end of 2022, the WIB segment recorded an Rp8,925 billion profits. 103 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk OTHERS SEGMENT 29 million Digital Music 21.9 million Digital Games active users paid users Telkom offers a variety of digital products and services based on big data, smart platforms, digital advertising, digital entertainment (music & games), and e-commerce. In addition, Telkom also manages venture capital funds through PT Metra Digital Innovation (MDI Ventures), which it invested in several digital startups in 2022 that have growth potential in the future and can enhance TelkomGroup’s business performance. OTHERS SEGMENT CAPACITY AND DEVELOPMENT Telkom’s big data and smart platforms services are the BigBox and IoT platforms under the Antares for Enterprise segment customers. BigBox is a big data platform with analytic services, data & business solutions, and an API provider platform to help developers and startups grow their businesses. Regarding the IoT smart platform, Telkom works on projects that can improve people’s productivity and quality of life, such as Smart Manufacturing, Air Pollution Monitoring, Smart Electricity, Waste Management, and others. Telkom provides digital advertising services with the Uzone.id news portal and an ad exchange service platform called UAd, which brings together publishers, advertisers, and agencies so that digital advertising activities can be effective and efficient. Telkom, with its subsidiary PT Nuon Digital Indonesia, manages digital entertainment, which provides digital music services of ring backtones under the Nada Sambung Pribadi (NSP), music streaming under the Langit Musik, and game payment services under UPoint. Digital music services have 29 million active users (14.7 million from music streaming and 14.3 million from NSP) with 136 million transactions (47 million from music streaming and 88.9 million from NSP) in 2022. Meanwhile, PT Nuon Digital Indonesia recorded 197.6 million game payment transaction, with 21.9 million paid digital games users. Telkom also launched e-commerce platforms, including Pasar Digital (PaDi) for MSMEs, Xooply for the non-SOE Enterprise segment, Agree (agriculture and fisheries ecosystem), Logee (logistics ecosystem), Wonderin. Id (tourism ecosystem), Pijar (educational ecosystem), Gameqoo (games), and others. In addition, Telkomsel to strengthen strategic collaborates with Gojek partnership initiatives and accelerate the digitalization of MSMEs. The initiatives undertaken are: 1. Collaborate to increase Telkomsel users in the Gojek ecosystem. 2. Easy onboarding for Gojek’s MSME partners to become Telkomsel reseller partners. 3. Easy access to Telkomsel outlets and resellers via GoShop. 4. Improve customer experience in Gojek services with the Number Masking feature from Telkomsel’s Enterprise solution. 5. Forming a new GoTo entity as a synergy initiative to expand to Tokopedia. investments On the other hand, MDI Ventures serves as corporate venture capital with its investing, synergy, portfolio management, value creation, and fundraising activities. focus on high-growth MDI Ventures business verticals to enhance the digital experience and provide the best services to improve customer experiences, such as logistics, financial technology, cloud computing, agritech/food, deep tech, digital life, healthtech, new retail, and IoT. In 2022, MDI Ventures invested in 22 newly managed funds startups, bringing the cumulative reach to over 80 startups spread across 12 countries. MDI Ventures currently manages a total of five types of funds at various stages, namely: • MDI 500, supporting developed companies by leveraging the network from TelkomGroup and other BUMN Initiatives. • MDI 100, MDI’s first disbursed fund, and currently in the “harvesting” phase. The MDI 100 is objectively earmarked for the evergreen fund and reinvesting purposes. • Telkomsel Mitra Inovasi (TMI) Fund focuses on funding startups that provide synergy value for Telkomsel. 104 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSIS• Centauri Fund, in collaboration with KB Financial Group (Kook Min Bank) from South Korea, focuses on growth-stage startups. The goal is to support Indonesian and startups, particularly technology startups, including financial technology, e-commerce infrastructure, Software as a Service (SaaS), and big data. regional • Arise Fund, launched in 2020, in which MDI collaborates with Finch Capital Netherlands, focuses primarily on early-stage startups for Indonesian technology startups. OTHERS SEGMENT FINANCIAL PERFORMANCE Others segment revenue contributed 1.4% of TelkomGroup’s total revenue. The performance of Other segment for the last three years can be seen in the following table: Others Segment Revenues Expenses Result 2022-2021 2022 2021 2020 (%) (Rp billion) (US$ million) (Rp billion) (Rp billion) 4.8 57.8 (634.2) 2,725 (3,788) (1,063) 175 (243) (68) 2,600 (2,401) 199 1,769 (1,662) 107 Others segment revenue increased by 4.8% or Rp125 billion from the previous year. In terms of expenses, it increased by 57.8% or Rp1,387 billion. Overall, the Others segment recorded a loss of Rp1,063 billion. 105 Annual Report 2022 PT Telkom Indonesia (Persero) TbkMARKETING OVERVIEW MARKET SHARE TelkomGroup constantly monitors tech developments and improves products, services, standards, and business models that align with the latest developments to respond to market dynamics and win domestic and global competition. Therefore, Telkom and its subsidiaries have the synergy to increase its value and provide the best digital experience for customers. MOBILE SEGMENT MARKET SHARE In 2022, Telkomsel had 156.8 million cellular subscribers (a decrease of 10.9%), including 120.9 million mobile broadband subscribers (an increase of 0.3%). Based on the number of subscribers, Telkomsel’s market share among the three major operators in Indonesia is 49.5% for the Mobile segment, a decrease compared to the previous year due to the impact of the merger of Indosat and Hutchison Tri Indonesia, resulting in a change in the competition with Hutchison Tri Indonesia into the three major operators together with Indosat to became Indosat Ooredoo Hutchison (IOH). In addition, Telkomsel also carries out initiatives to encourage a healthier industry by focusing on sustainable growth and higher-quality customers. Cellular Subscribers Market Share for Telkomsel and Competitors 2020-2022 49.5% 50.5% 59.3% 40.7% 58.9% 41.1% 2022 2021 2020 Telkomsel Competitor Intense competition among operators and customer preference shift to fixed broadband will affect the Mobile segment revenue. Telkomsel had planned a marketing strategy to maintain positive profitability and market share. Telkomsel has been one step ahead of its competitors by being the first operator to offer a 5G network in Indonesia, which other telecommunications operators later followed. We predicted the 5G network to become a bridge for digital transformation in Indonesia and the key to developing business competitiveness. The Company will utilize 5G to enhance connectivity and digital platforms. The speed offered can open up limitless possibilities in digital transformation. However, there are still challenges to 5G network adoption. We still need 5G learning and ecosystem adjustments, such as spectrum availability, devices, and user needs. The 4G network has supported the current internet access demand, so the 5G network deployment has not been massive and large-scale. On the other hand, several manufacturing companies urgently need the 5G network to adopt application solutions such as the Internet of Things (IoT) and Artificial Intelligence (AI) so that it will be deployed later at specific points according to industry needs. 106 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISCONSUMER SEGMENT MARKET SHARE Social distancing during the pandemic, which forced people to do their activities at home, positively impacted the Consumer segment. Through IndiHome, Telkom competes to meet people’s digital needs and has succeeded in becoming one of TelkomGroup’s business growth and increasing its revenue. However, IndiHome must compete with other large fixed broadband service providers, such as First Media, Biznet Home, MNC Play, MyRepublic for the middle and upper-class segment. In addition, we should consider the existence of Iconnet (a subsidiary of PLN) and Gasnet (a brand under PGN), and XL Home for the middle and lower-class segment. As of the end of 2022, IndiHome’s fixed broadband marketing has achieved 0.6 million new subscribers, bringing the cumulative 9.2 million subscribers. IndiHome has dominated the market share in fiber-based fixed broadband services to the increasing number of new customers. The IndiHome network has covered 97.5% of districts/cities or 501 of districts/cities in Indonesia. Fixed Broadband Market Share for IndiHome and Competitors 2020-2022 75.2% 24.8% 80.2% 19.8% 82.3% 17.7% 2022* 2021 2020 IndiHome Competitor Remarks: *Considering industry competition dynamics, market share calculation with the competitors addtion from 2022 Along with the increase in digital lifestyles and internet demand, we estimate that the telecommunications industry will constantly grow and become part of emerging economic growth in 2023. In addition, the national speed ranking will continue to increase along with the New High-Speed Same Price (New HSSP) program by increasing the internet package speed of at least 30-40 Mbps up to 300 Mbps for loyal customers without any additional costs. IndiHome is supported by five add-on services to win the market: Ultra Wifi, Streamax, Upload Booster, IndiHome Eazy, and Speed on Demand. Ultra Wifi is a wifi coverage expansion for IndiHome or WMS customers by adding devices at their location with a seamless roaming experience when moving rooms. Streamax (Streaming Maximal) is an add-on service to improve streaming services without lagging and buffering, and Upload Booster is an add-on to get larger bandwidth to support customer activities. Meanwhile, cloud recording service is an add-on provided by IndiHome Eazy. It stores IP camera recording data on a cloud server to be safe, secure, and easily accessible to customers. Speed on Demand ensures customers can increase their internet speed temporarily based on their needs. 107 Annual Report 2022 PT Telkom Indonesia (Persero) TbkIn line with the high market demand, TelkomGroup will expanding the fixed broadband area in 2023 in all regions in Indonesia, especially for the Eastern Indonesia Region, Kalimantan, Sumatra, and West Java. IndiHome will target two segments for connectivity services of the low-affordability and high-end markets. ENTERPRISE SEGMENT MARKET SHARE TelkomGroup continues to encourage the growth of digital services to improve the Enterprise segment performance, such as IoT, cyber security, big data, and digital ads that complement various types of connectivity products and services, satellite, IT services, data centers, and cloud. In addition, the BigData and BigBox platforms will assist the Company in making decisions, governance, and formulating beneficial strategies for its business. TelkomGroup provided 3,156 Gbps bandwidth in 2022 increased 3.5% from 2021. TelkomGroup’s market share of in- service bandwidth was around 59.4% in 2022, or increased 0.3% from last year. The cloud business market and B2B IT services in Indonesia are projected to increase significantly, with a CAGR of 27% for cloud and 7% for B2B IT services in 2024, according to Gartner research in 2021. The COVID-19 pandemic has played a role in increasing cloud adoption and accelerating digital transformation. It was an opportunity for TelkomGroup through TelkomSigma with its B2B IT services business portfolio. Telkomsigma has prepared to anticipate increases in cloud demand by expanding services and having more cooperation with global players. Likewise, Telkomsigma could be more aggressive in supporting the ICT needs to provide the best value for stakeholders. Through Telkomsigma, TelkomGroup’s system integration market share in 2022 was 14.6%, grew by 0.4% from the last year, while Infomedia’s Business Process Outsourcing (BPO) market share grew by 54.6%. On the other hand, TelkomGroup dominated 29.4% of the satellite business market share that grew 2.5% from the last year. System Integration Market Share for Telkomsigma and Competitors 2020-2022 14.6% 85.4% 14.2% 85.8% 17.0% 83.0% 2022 2021 2020* Telkomsigma Competitor Remarks: *Restatement 108 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISWHOLESALE & INTERNATIONAL BUSINESS SEGMENT MARKET SHARE The market share for the WIB segment includes domestic and international business of wholesale traffic, wholesale network, wholesale digital platform & service, data center, tower, and managed infrastructure & network. In 2022, this segment was relatively stable but needed improvement, so TelkomGroup has prepared a new business portfolio to support the Company’s position by building a Hyperscale Data Center that targets enterprise and wholesale customers. In the International Business segment, TelkomGroup increased data center capacity in Singapore and Hong Kong to support the higher demand for data centers. TelkomGroup has now led the wholesale traffic market with voice interconnection of 88.6%. Meanwhile, the wholesale network market share was 62.3%, and the wholesale internet market share was 22.6%. The wholesale network products are Metro E and leased line, while the wholesale internet product is IP Transit. Tower Market Share form Mitratel and Competitors 2020-2022 40.6% 59.4% 31.7% 68.3% 26.9% 73.1% 2022 2021 2020 Mitratel Competitor On the other hand, TelkomGroup operates the wireless telecommunication tower business through Mitratel. Mitratel’s market share reached 40.6%, increased from the previous year into 31.7%. In terms of coverage, Mitratel has 35,418 towers throughout Indonesia, of which around 58% are outside Java. It will attract cellular operators if they want to expand their services outside Java. In addition, most of Mitratel’s towers are connected by the fiber optic network, which increases bandwidth capacity and reduces latency. Mitratel is also working with Telkomsat to provide connectivity solutions using satellite services. With satellite connectivity, good-quality tower construction can be carried out anywhere, including in remote areas. Therefore, Mitratel will become the most significant telecommunication tower company and the complete service in Indonesia. Mitratel will be ready to become the market leader for telecommunications tower companies in welcoming the 5G era in Indonesia. 109 Annual Report 2022 PT Telkom Indonesia (Persero) TbkDIGITAL AND OTHERS SEGMENTS MARKET SHARE The digital service portfolio comprises smart platforms, digital content access, and e-commerce. Meanwhile, for other segments, Telkom manages venture capital funds through its subsidiary MDI Ventures. The TelkomGroup smart platform business line consists of digital advertising, intelligent applications, big data, IoT, and financial services. The digital content business line consists of music and games, focusing on entertainment services for cellular customers, including music apps (such as Langit Musik and ringtones) and GameMax, which combines content data for several games and game vouchers. In the e-commerce line, Telkom focuses on B2B e-commerce through PaDi UMKM to expand the MSME business ecosystem and Xooply for the non-SOE Enterprise segment with more diverse suppliers. Venture capital fund management continues to develop, with MDI Ventures focusing on investing in high-growth business verticals that provide the best digital services for customers, such as financial technology, cloud computing, big data, health technology, e-commerce, IoT, and other services. At the end of 2022, MDI Ventures invested in more than 20 new portfolios and startups. Since 2016, it has invested in more than 80 startups focusing on early and mid-stage startups in South East Asia and internationally. MARKETING STRATEGY TelkomGroup has a competitive, strategic, comprehensive product and service distribution channel. TelkomGroup seeks to strengthen its brand to increase sales so that it becomes the customers’ choice by demonstrating its value-added commitment and improving the customer experience of products and services. TelkomGroup also manages the pricing offers according to marketability so that it remains within a good range and considers network utilization, traffic load, and revenue. including a shift TelkomGroup uses several momentums for its marketing strategy, in people’s consumption habits to digital services, the Government policies that encourage the telco industry development to support national digital transformation, expansion opportunities to build telco infrastructure in Indonesia’s remote areas, conducting collaborations, and transforming into a digital telco. Telkom has planned its marketing strategy, including expanding the market, collaborating with other strategic companies to build a sustainable digital ecosystem in particular, developing products and services, customer engagement, and maintaining the network to provide optimal service. Telkom’s strategy for maintaining the network to provide optimal services: • Upgrade and add adequate capacity to maintain good services. • Monitor network reliability with an integrated command center (TIOC). • Have a maintenance team that conducts regular control to prevent disturbances or intrusions, equipped with applications so that the team can handle end-to- end problems. MOBILE For the Mobile customer segment, in 2022, we focused our marketing strategy on targeting specific customer segments and personalizing the offers through various channels for efficient implementation. Telkomsel seeks to find the right balance between growing market share, revenue, and profitability through several strategies, including providing products and services for specific customer segments and personalizing offers through digital channels to be more efficient. Telkomsel also increases payload growth and acquires new users by improving network quality, services, product offerings, and digital capabilities and accelerating and expanding the digital ecosystem. In addition, Telkomsel partners with other parties to increase data usage and digital products. We improve it by enriching content on existing platforms and focusing on the customers’ satisfaction with the offers based on their needs and behavior to increase ARPU and yield. In 2022, Telkomsel, as the market leader, encourages the industry to be healthier and focus on sustainable growth. Strategic actions have been well implemented to achieve the goal, including price rationalization, personalized offers, network optimization, cost optimization, and strengthening core broadband with digital services. We are enhancing our digital lifestyle for video and game content, including MAXstream’s position in the video streaming industry through partnership expansion with crucial content partners and MAXstream. 110 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISWe also expand in the mobile game industry by providing a complete solution that fosters the gamer community and enters game publishing with the “Dunia Games” brand. We also develop Telkomsel Orbit, a wireless internet service at home to optimize and boost our network capacity. As of December 31, 2022, we had 156.8 million cellular subscribers, consisting of 149.7 million prepaid subscribers, 7.1 million postpaid subscribers, and 120.9 million mobile broadband subscribers. Telkomsel explores opportunities in new digital initiatives and solutions supported by superior network quality to improve product offerings, expand its digital ecosystem, and meet customer needs. Through PT Telkomsel Ekosistem Digital (INDICO) as a digital powerhouse, Telkomsel will increase user-centered digital innovation by offering products and services beyond connectivity. Thus, it will optimally contribute to accelerating Indonesia’s digital economy. CONSUMER IndiHome is our main product in the Consumer customer segment. IndiHome services combine digital-based fixed voice, fixed broadband, and IP-TV. IndiHome marketing is carried out in various ways, including utilizing digital channels with discount events and service benefits for IndiHome customers and applying dynamic prices for products and services. We enhance the quality of services and customer experience to a broader customer through our “You Are First” program, which defines the mindset of putting our customers first. As part of this program, we organize activities and design a loyalty program to continue our customer engagements. We also improved network equipment and response times to handle disruptions. In 2022, our sales strategy implemented value-based pricing for products and services to adjust our selling prices according to local conditions in all Indonesian regions while providing customers faster and improved services with superior bundled products. We also had branding campaigns to attract new customers, including customers from competitors. interesting products We also intensify our customized services by using personalized profiles generated from customer data compilation and offering to them. We also rely on end-to-end traceable customer relationship management processes, allowing us to identify and solve issues promptly without customer complaints. Thus, we proactively solve problems before customers get inconvenienced. With various marketing strategies, from discounts to value innovation, we can offer products that can provide attractive value. We offer these products through various sales channels, including digital channels, and have festive campaigns and promotions as follows: 1. Aktivitas Tanpa Batas (Unlimited Activities) It was our campaign tagline and marketing theme in 2022. IndiHome had a series of campaigns and promotional activities, including product offers, brand stories, gimmicks, and special offers. IndiHome also conducts campaigns for thematic holidays, such as the 11.11 and 12.12 sale days, to increase customer subscriptions. We also focus on community empowerment activities that enable communities to reach their full potential (empowering society). 2. Multisectoral Activities In addition to its core business activities, IndiHome supports many multisectoral activities across Indonesia almost every week, such as sports, e-sports, arts, literacy, education, and social activities. For example, IndiHome contributed to the success of the Indonesian MotoGP in March 2022 by preparing fiber optic internet for all stakeholders and spectators who attended. We also create value and collaborate in other events, such as the Mandalika MotoGP, IndiHome Gideon Badminton Academy (IGBA), International Basketball Federation (FIBA), IndiHome Blog Competition, FIFA World Cup Broadcast sponsorship, IndiHome Limitless E-Sport Academy, and others. Through IndiHome’s Limitless E-Sport Academy IndiHome has successfully created gifted talents that could contribute to the Indonesian international image. With several LEAD events held by IndiHome, those talents participated in the Southeast Asian championship in (LEAD), mid-2022. 111 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk The marketing strategy implemented in 2022 focused on the following: 1. Offering an attractive business scheme for our voice traffic portfolio to increase retail traffic through voice traffic product bundling at competitive prices according to the service quality offered. 2. Improving services, such as quality and coverage for data center customers and overseas connectivity. 3. Offer end-to-end tower solutions to customers, both for core tower services such as “built to suit” tower leasing services tailored to the preferred (tower location and specifications of the first or primary tenant for the relevant tower), co-location services, as well as adjacent towers such as site maintenance, and other related services. 4. Exploring regional markets by providing submarine cable deployment and maintenance services. The tower market is developed by transferring tower operations from Telkomsel to Mitratel to increase this segment’s value. This policy aims to increase the tenancy ratio and optimize the tower business with more focus on Mitratel management. TelkomGroup also has various approaches to WIB customers by providing account managers, wholesale digital touchpoints (apps and web), and customer care support for 24 hours, as well as developing team capability and competency based on customer centricity. TelkomGroup conducts regular surveys through digital touchpoints and interviews to better understand customer needs and feedback. The survey results will be used as input in the development of products and services. DIGITAL AND OTHERS SERVICES in the Digital and Others The marketing strategy segments is increasing digital innovation. It includes enriching digital content, creating digital services with unique features, improving brands, platforms, operational and customer experiences, building digital business models to support Indonesia’s digital economy, leveraging assets and inventory to gain insight into digital services and customer experience, as well as growing our digital business portfolio through digital startups investment. TelkomGroup also has a contact center, dedicated account management, customer care, channel management, website, and social media as a communication channel for serving customers. ENTERPRISE sustainable fundamental In managing the Enterprise segment, Telkom always makes improvements, improvises consultative selling, and develops strategies to encourage products and services to approach the market. Telkom also improves business relations and attracts high-end market customers through Telkom and customer collaboration to design tailored services based on their needs. We also have a transformative digital marketing strategy consisting of the following: 1. Lead enterprise digital transformation agenda (including SOE) and strengthen market position for our product portfolio to become a leading digital connectivity player by bandwidth share in the enterprise segment. 2. Empower SMEs through the digital platform to gain better market access, fund access, and information and technology access as part of supporting Indonesia’s digital transformation agenda. 3. Become a trusted ICT partner for the Government to support key national digital agenda (Making Indonesia 4.0 and One Data Indonesia). TelkomGroup provides an Account Manager for corporate customers, the primary interaction channel in delivering end-to-end and after-sales services. To serve SOE’s customers, TelkomGroup has Government Relationship Officers (GRO) who are responsible for managing relations with government agencies and extending work contracts. For Small and Medium Enterprises (UKM), TelkomGroup provides Business Account Manager (BAM) and Tele Account Management (TAM) to serve small businesses and a value-added reseller to help micro businesses. WHOLESALE AND INTERNATIONAL BUSINESS In the WIB segment, TelkomGroup seeks to increase the effectiveness and efficiency of the cost structure, develop new opportunities, and provide support for ministry programs related to BUMN Go Global. TelkomGroup also constantly reviews ongoing overseas businesses to build a better portfolio structure. TelkomGroup continues to evaluate its business portfolio to create a good portfolio structure to maximize the value of the WIB segment. 112 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISOur digital service program also focuses on improving IndiHome services, such as the myIndiHome app as a digital touch point, which also offers Disney+ Hotstar as a bundling starter package, IndiBox as additional services (such as video content, games, and other Google applications), GameQoo as a cloud gaming service, and IndiHome Smart as an IoT home service for IndiHome subscribers. DISTRIBUTION CHANNEL DIGITAL TOUCH POINT To support the expansion of the IndiHome distribution network, Telkom provides digital touchpoints based on web and mobile applications. Customers can use the myIndiHome service for mobile-based applications to request new installations and manage bills and payments more efficiently. By the end of 2022, 9.2 million IndiHome subscribers registered on the myIndiHome application. Meanwhile, Telkomsel provides MyTelkomsel as a self- care mobile application for purchasing information on service packages and products. Until now, around 32.3 million active users have used MyTelkomsel. My Telkom Enterprise Solution (MyTeNS) is a digital touchpoint for Enterprise segment customers, which can simplify business processes to increase customer productivity and service performance. MyTeNS easily accesses product catalogs and digital quotations, tracks shipping tickets and enables fast customer complaints for service disruption by the released tickets as a disruption log. For MSME, Telkom provides mysooltan, a one-stop service solution, by offering various products, such as sooltaNet, sooltanPay, sooltanKasir, and others. Users can also be partners and easily apply for a venture capital loan. For Wholesale Customers, we offer MyCarrier, self-service digital touch points that provide an end-to-end digital experience that integrates with the real-time internal process, from the product catalog, order management, installation tracking/service activation, billing & payment, disruption ticketing and monitoring, and others. TelkomGroup uses digital touch points with the Net Promoter Score (NPS) method to measure customer experience. With this method, TelkomGroup has accurate data and information to improve the quality of products, services, and future customer experiences. CUSTOMER SERVICE POINT TelkomGroup provides customer service points, such as Plasa Telkom and GraPARI, to provide service solutions and products for Telkom and its subsidiaries. As of 2022, TelkomGroup had 387 Plasa Telkom, 22 Plasa Telkom Digital, and 372 GraPARI Centers in Indonesia (including 9 GraPARI TelkomGroup). TelkomGroup also operated 750 units of IndiHome sales cars. AUTHORIZED DEALERS, RETAIL OUTLETS AND MODERN CHANNELS TelkomGroup has a non-exclusive distribution network operating across Indonesia, such as authorized dealers and retail outlets that provide various Telkomsel products, such as starter packs, prepaid SIM cards, and top-up vouchers with diverse discounts. In line with the use of dedicated mobile applications rather than transacting in traditional outlets, Telkomsel will reward partners who can optimize their business models to increase sales. PARTNERSHIP STORES TelkomGroup collaborates with various third-party marketing outlets to expand its distribution network. These third parties include computer and electronic stores, ATM networks, and other business networks. CONTACT CENTERS TelkomGroup has a contact center service that operates 24 hours in Semarang, Bandung, and Malang. It aims to facilitate customers in registering, submitting complaints, and obtaining information on IndiHome services and other Telkom products. 113 Annual Report 2022 PT Telkom Indonesia (Persero) TbkACCOUNT MANAGEMENT TEAM LINKAJA LinkAja is a digital wallet app that provides features of bill payment, purchasing digital product and service and other digital transaction via smartphone. CUSTOMER RELATIONSHIP MANAGEMENT (CRM) customer implements TelkomGroup relationship management to identify services and follows consumer interests by compiling data for personalized services. One of the implementations of customer relationship management is through the IndiHome service. The officers will proactively identify and resolve customer problems so that IndiHome customers’ convenience. With a robust customer database, IndiHome can provide service quality for each customer’s characteristics to improve customer experience. increase the it could In addition, we carried out continuous improvement with a close-the-loop system. It means “beginning and ending with the customer mind” by solving customer pain points to improve customer experience. We implement an in- depth analysis through the NPS survey of the customers (notably respondents detractors/who do not recommend IndiHome services). For further identification, we have the root cause analysis and prioritized the most effective action plans for IndiHome subscribers’ satisfaction. TelkomGroup has account management teams that is responsible for managing customer relationships, portfolios, and customer satisfaction. The account management team serves corporate, SME, Government institutions, and Wholesale & International customers. SALES SPECIALIST TelkomGroup has sales specialists who work with account managers to identify customer technical needs. CHANNEL PARTNER TelkomGroup collaborates with other parties to increase revenue, through sales and marketing activities, including organizing events for Enterprise customers. TelkomGroup also works with Value Added Reseller (VAR) to fulfill Enterprise customer demand and approach retail customers. WEBSITE TelkomGroup has various website that customers can access according to their needs, including www. telkom.co.id, www.telkomsel.com, www.telin.net, and www.indihome.co.id. It is more convenient to access information, submit complaints, and get several services such as e-billing, registration, and collective billing information for customers. SOCIAL MEDIA TelkomGroup manages social media, such as Facebook, Instagram, and Twitter to communicates with customers and gets fast feedback on products and services. 114 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISCOMPREHENSIVE FINANCIAL PERFORMANCE FINANCIAL POSITION OVERVIEW As of December 31, 2022, TelkomGroup had total assets of Rp275,192 billion or US$17,676 million, decreased by 0.7% from the previous period. The decrease in total assets was due to the decrease of cash and cash equivalents, claim for tax refund, prepaid taxes, assets held for sale, long-term investment in financial instruments, contract assets, and other non-current assets. Total liabilities were Rp125,930 billion or US$8,088 million as of December 31, 2022. It decreased by 4.4% from the last year. The decrease was due to the decrease of other payables, accrued expenses, contract liabilities, current maturities of long-term borrowings, and current maturities of lease liabilities. Telkom and Its Subsidiaries Financial Position 2020-2022 Total Current Assets Total Non-Current Assets Total Assets Total Current Liabilities Total Non-Current Liabilities Total Liabilities Total Equity attributable to owners of the parent company Growth 2022-2021 (%) Years ended December 31 2022 2021 2020 (Rp billion) (US$ million) (Rp billion) (Rp billion) (10.2) 2.0 (0.7) 55,057 220,135 275,192 1.8 70,388 (11.4) (4.4) 55,542 125,930 3,536 14,139 61,277 46,503 215,907 200,440 17,676 277,184 246,943 4,521 3,567 69,131 62,654 69,093 56,961 8,088 131,785 126,054 6.3 129,258 8,302 121,646 102,527 FINANCIAL POSITION COMPARISON The position of Telkom’s current asset and non-current asset as of December 31, 2022, was 20.0% dan 80.0%. Meanwhile, for the liabilities, Telkom had 55.9% current liabilities and 44.1% non-current liabilities. The diagrams below present Telkom’s composition assets and liabilities for the last three years. Asset Composition 2020-2022 (Rp billion) Non Current Asset 80.0% | 220,135 Non Current Asset 77.9% | 215,907 Non Current Asset 81.2% | 200,440 Current Asset 20.0% | 55,057 Current Asset 22.1% | 61,277 2022 2021 2020 Current Asset 18.8% | 46,503 115 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk Liabilities Composition 2020-2022 (Rp billion) Non Current Liabilities 44,1% | 55,542 Non Current Liabilities 47.5% | 62,654 Non Current Liabilities 45.2% | 56,961 2022 2021 2020 Current Liabilities 55,9% | 70,388 Current Liabilities 52.5% | 69,131 Current Liabilities 54.8% | 69,093 COMPARISON OF FINANCIAL POSITION AS OF DECEMBER 31, 2022 COMPARED TO AS OF DECEMBER 31, 2021 1. Assets At the end of 2022, Telkom’s total assets were Rp275,192 billion or US$17,676 million. It decreased by Rp1,992 billion or 0.7% compared to 2021. It was due to: a. Current Assets Telkom’s current assets of December 31, 2022 was recorded at Rp55,057 billion or US$3,536 million, decreased by Rp6,220 billion or 10.2% from 2021. It was the impact of: • A decrease in cash and cash equivalents by Rp6,364 billion or 16.6% due to the decrease in cash disbursements for repayments of loan and other borrowings. • A decrease in assets held for sale by Rp812 billion or 99.3% related to the reclassification of Telkomsel equipment that has been exchanged with PT ZTE Indonesia equipment. • A decrease in prepaid taxes by Rp680 billion or 31.7% due to the decrease in VAT and Income Tax Article 23. • A decrease in claim for tax refund by Rp310 billion or 44.9% due to the decrease in claim for VAT refund of parent company and subsidiaries. The decreases were offset by: • An increase in other current financial assets by Rp856 billion or 173.6% due to the increase in time deposits, escrow accounts, and mutual funds. • An increase in contract cost by Rp15 billion or 2.3% due to the significant increase in cost to fulfill. • An increase in other current assets by Rp409 billion or 6.4% due to the increase in short term prepaid frequency usage license. • An increase in inventories – net by Rp365 billion or 46.9% related to SIM cards, prepaid vouchers, etc. • An increase in contract assets – net by Rp127 billion or 5.5% on the side of short-term contract assets. • An increase in trade receivables by Rp124 billion or 1.5% related to related parties (SOEs). b. Non-Current Assets At the end of 2022, Telkom recorded non-current asset of Rp220,135 billion or US$14,139 million, it increased by 2.0% or Rp4,228 billion from the last period of Rp215,907 billion. The changes were due to: • An increase in property and equipment by Rp8,303 billion or 5.0% due to the increase in direct ownership in the form of buildings, telephone exchange equipment, transmission equipment and installations, cable networks, power supplies, data processing equipment, and assets under construction. • An increase in right-of-use asset by Rp1,867 billion or 10.1% in the form of transmission installation and equipment, land, and vehicles. • An increase in intangible assets by Rp796 billion or 10.6% in the form of software and license. • An increase in deferred tax assets by Rp293 billion or 7.7% as resulted of a greater realized future taxable profit than estimated. • An increase in contract cost by Rp133 billion or 8.3% to the increase in the difference between the amortization of contract costs during the year with the addition of contract acquisition costs and contract fulfillment costs. 116 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSIS The increases were offset by: • A decrease in long-term investments by Rp5,147 billion or 37.3% due to the decrease in long-term investment in financial instruments in the form of equity and convertible bonds. • A decrease in other non-current assets by Rp1,908 billion or 34.5% in the form of prepaid frequency usage permit, claim for tax refund and prepaid tax, all after deducting the short- term portion. • A decrease in contract assets by Rp109 billion or 76.2% of the long-term contract assets. 2. Liabilities TelkomGroup recorded total liabilities of Rp125,930 billion or US$8,088 million at the end of 2022, it decreased by 4.4% or Rp5,855 billion. The following influenced changes in liabilities in 2022. a. Current Liabilities At the end of 2022, TelkomGroup’s current liabilities were Rp70,388 billion or US$4,521 million. It increased by 1.8% or Rp1,257 billion and was due to: • An increase in short-term bank loans by Rp1,509 billion or 22.6% which was proportionately obtained from related party creditors. • An increase in taxes payable by Rp1,449 billion or 36.9% due to the increase in the subsidiaries’ corporate income tax and VAT - tax collector • An increase in trade payables by Rp1,287 billion or 7.5%, mostly from purchases of equipments, materials, and services. The increases were offset by: • A decrease in current maturities of lease liabilities by Rp1,036 billion or 17.4%. • A decrease in current maturities of long-term borrowings Rp832 billion or 8.6% related to the most proportion in settlement of series A bonds 2015. • A decrease in current portion of contract liabilities by Rp500 billion or 7.4%, mostly advances from customers for Mobile and Enterprise segment. • A decrease in accrued expenses by Rp440 billion or 2.8% in the form of operation, maintenance, and telecommunication service expenses. b. Non-Current Liabilities TelkomGroup recorded non-current liabilities of Rp55,542 billion or US$3,567 million as of December 31, 2022. It decreased by 11.4% or Rp7,112 billion, which was due to: • A decrease loans and other borrowings by Rp8,988 billion or 24.7% proportionally to related party creditors. long-term in • A decrease in pension benefits and other post- employment benefits obligations by Rp1,291 billion or 11.2%. • A decrease in long service award provisions by Rp175 billion or 14.5% of defined pension benefit obligation funded by the Company and net periodic post-employment health care benefit. • A decrease in deferred tax liabilities – net by Rp135 billion or 11.7% generally from Telkomsel that related to leases, fair value measurement of financial instruments, and difference between book value of accounting and tax property equipment. • A decrease in other liabilities by Rp111 billion or 15.9%. The decreases were compensated by: • An increase in lease liabilities by Rp3,310 billion or 31.7% due to the additional leasing activities by the Company. • An increase in non-current portion of contract liabilities by Rp278 billion or 21.7% in the form of advances from customers for Consumer, WIB, and Others segment. 3. Equity TelkomGroup recorded total equity in 2022 of Rp149,262 billion or US$9,587 million, increased by 2.7% or Rp3,863 billion from the 2021 of Rp145,399 billion. 117 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk PROFIT AND LOSS OVERVIEW As of December 31, 2022, Telkom’s consolidated revenue was Rp147,306 billion (US$9,461 million), or increased by 2.9% from the last year of Rp143,210 billion. The increase was due to the revenue growth of IndiHome, data, internet, and information technology service, interconnection and network. The total expense of TelkomGroup in 2022 was Rp102,007 billion (US$6,552 million), it increased by 2.7% compared to the total expense in 2021 of Rp99,303 billion (US$6,967 million). It was due to the increase in interconnection, marketing, depreciation and amortization, and general and administrative expenses. At the end of the year, TelkomGroup recorded a net profit of Rp20,753 billion (US$1,333 million), it decreased by 16.2%, and EBITDA of Rp78,554 billion that increased by 3.7% compared to 2021. Telkom and Its Subsidiaries Consolidated Profit and Loss in 2020-2022 Revenues Telephone revenues Cellular Fixed Line Interconnection revenues Data, internet, and information technology service revenues Celluler internet and data Internet, data communication and information technology services Short Messaging Service (SMS) Others Network revenues IndiHome revenues Other services revenues Manage service and terminal Call center service E-health E-payment Others Revenues from lessor transaction Growth 2022-2021 Years ended December 31 2022 2021 2020 (%) (Rp billion) (US$ million) (Rp billion) (Rp billion) 2.9 147,306 9,461 143,210 136,462 (17.5) (18.2) (11.2) 8.8 5.1 7.0 0.1 (9.4) 4.1 26.5 6.4 (4.6) (43.5) 7.7 13.9 (2.7) 24.3 8.0 13,588 12,052 1,536 8,472 86,410 69,006 10,286 4,309 2,809 2,378 28,020 5,834 1,157 1,164 729 474 2,310 2,604 873 774 99 544 16,467 14,737 1,730 7,787 5,550 82,224 4,432 64,500 661 10,272 277 180 153 4,754 2,698 1,880 21,610 19,510 2,100 7,686 75,816 59,502 9,744 4,817 1,753 1,689 1,800 26,325 22,214 375 74 75 47 30 148 167 6,115 2,048 1,081 640 487 1,859 2,412 5,170 1,292 845 549 499 1,985 2,277 118 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISExpenses Depreciation and amortization expenses Operations, maintenance, and telecommunication services expenses Operations and maintenance Radio frequency usage charges Leased lines and CPE Concession fees and USO charges Electricity, gas, and water Cost of SIM Cards and vouchers Project management Insurance Vehicles rental and supporting facilities Others Personnel expenses Salaries and related benefits Vacation pay, incentives and other benefits Pension benefit cost Net periodic post-employment health care benefits cost Long Service Award (LSA) expense Obligation under the Labor Law Other post-employment benefit cost Long service employee benefit Others Growth 2022-2021 Years ended December 31 2022 2021 2020 (%) (Rp billion) (US$ million) (Rp billion) (Rp billion) 2.3 4.5 101,569 33,255 6,524 99,303 2,136 31,816 93,274 28,892 0.1 38,184 2,453 38,133 34,593 6.0 6.8 (29.4) 5.2 0.7 1.1 (22.9) (46.8) 12.5 (13.9) (4.0) 8.1 (23.3) 11.5 (19.0) (39.9) (69.3) 8.7 (66.7) 12.9 22,746 1,461 21,467 6,510 3,530 2,601 904 747 400 230 343 173 14,907 9,360 3,835 1,268 213 92 78 25 1 35 418 227 167 58 48 26 15 22 11 957 601 246 81 14 6 5 2 0 2 6,097 5,003 2,472 898 739 519 432 305 201 15,524 8,661 4,999 1,137 263 153 254 23 3 31 19,930 5,930 3,371 2,411 946 544 538 378 343 202 14,390 8,272 4,321 804 253 290 258 81 53 58 119 Annual Report 2022 PT Telkom Indonesia (Persero) TbkInterconnection expenses Marketing expenses General and administrative expenses General Expenses Professional fees Allowance for expected credit losses Travelling Training, education, and recruitment Social contribution Collection expenses Meeting Research and development Others Gain (loss) on foreign exchange-net Unrealized gain on changes in fair value of investments Other Income - net Operating Profit Finance income Finance costs Share of profit (loss) of associated companies Impairment of long-term investment in associated companies Growth 2022-2021 Years ended December 31 2022 2021 2020 (%) (Rp billion) (US$ million) (Rp billion) (Rp billion) 5.0 8.1 16.7 10.6 39.0 18.0 31.2 30.6 2.3 (18.4) 25.3 31.7 (4.0) (412.0) (287.6) 5,440 3,929 5,854 2,259 1,097 563 421 371 218 173 312 108 332 256 349 252 376 145 70 36 27 24 14 11 20 7 21 16 5,181 3,633 5,016 2,043 789 477 321 284 213 212 249 82 346 50 (6,438) (414) 3,432 (85.1) 26 2 174 5,406 3,482 6,511 1,805 981 2,267 275 308 223 193 184 52 223 (86) 129 274 (16.8) 39,581 2,542 47,563 43,505 57.3 (7.6) 11.5 878 56 558 (4,033) (259) (4,365) (87) (6) (78) 799 (4,520) (246) - - - - (763) Profit Before Income Tax (16.8) 36,339 2,334 43,678 Income Tax (Expense) Benefit (11.0) (8,659) (556) (9,730) Profit for the Year (18.5) 27,680 1,778 33,948 Other comprehensive income (loss) 10.8 1,767 113 1,980 (18.0) 29,447 1,891 35,928 38,775 (9,212) 29,563 (3,577) 25,986 20,753 1,333 24,760 20,804 6,927 445 9.188 8.759 22,468 1,443 26.767 17.595 6,979 448 9.161 8.391 Net comprehensive income for the year Profit for the year attributable to owners of the parent company Profit for the year attributable to non- controlling interest Net comprehensive income attributable to owner of the parent company Net comprehensive income for the year attributable to non-controlling interest 120 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSIS PROFIT AND LOSS COMPARISON TelkomGroup’s highest revenue composition in 2022 was from data, internet, and information technology service revenues of 58.7%, followed by IndiHome revenue with the contribution of 19% and telephone revenue of 9.2%. Meanwhile, the highest expense composition was from operation, maintenance, and telecommunication services of 37.4%, followed by depreciation and amortization expenses of 32.6% due to property and equipment, software, hardware, and technology infrastructure use. The least expense in 2022 was the marketing expense of 3.9%. Other Services 4.0% | 5,834 IndiHome 19.0% | 28,020 Revenue Composition 2020-2022 (Rp billion) Revenue from lessor transactions 1.8% | 2,604 Telephone 9.2% | 13,588 Interconnection 5.8% | 8,472 Other Services 4.3% | 6,115 IndiHome 18.4% | 26,325 Revenue from lessor transactions 1.7% | 2,412 Telephone 11.5% | 16,467 Interconnection 5.4% | 7,787 Network 1.6% | 2,378 2022 Network 1.3% | 1,880 2021 Data, Internet and Information Technology 58.7% | 86,410 Data, Internet and Information Technology 57.4% | 82,224 Other Services 3.8% | 5,170 IndiHome 16.3% | 22,214 Network 1.2% | 1,689 2020 Revenue from lessor transactions 1.7% | 2,277 Telephone 15.8% | 21,610 Interconnection 5.6% | 7,686 Data, Internet and Information Technology 55.6% | 75,816 Expenses Composition 2020-2022 (Rp billion) General and Administrative 5.8% | 5,854 Marketing 3.9% | 3,929 Interconnection 5.4% | 5,440 Personnel 14.7% | 14,907 Depreciation and Amortization 32.7% | 33,255 Operations, Maintenance and Telecommunication Services 37.6% | 38,184 General and Administrative 5.1% | 5,016 Marketing 3.7% | 3,633 Interconnection 5.2% | 5,181 Personnel 15.6% | 15,524 2022 Depreciation and Amortization 32.0% | 31,816 Operations, Maintenance and Telecommunication Services 38.4% | 38,133 2021 General and Administrative 7.0% | 6,511 Marketing 3.7% | 3,482 Interconnection 5.8% | 5,406 Personnel 15.4% | 14,390 Depreciation and Amortization 31.0% | 28,892 2020 Operations, Maintenance and Telecommunication Services 37.1% | 34,593 121 Annual Report 2022 PT Telkom Indonesia (Persero) Tbkd. Interconnection Revenues interconnection revenue TelkomGroup obtains from Telkom fixed-line telephone, including direct international services of IDD 007 and Telkomsel cellular interconnection revenues in 2022 were Rp8,472 billion (US$544 million), increase by 8.8% or Rp685 billion from the last year of Rp7,787 billion. The increase was due to the higher traffic between countries in hubbing voice and SMS A2P (Application to Person). network. Telkom’s e. Network Revenues TelkomGroup’s network revenues increased by 26.5% or Rp498 billion, from Rp1,880 billion in 2021 to Rp2,378 billion (US$153 million) in 2022. The increase was due to lease line and satellite transponder revenue. f. IndiHome Revenues In 2022, IndiHome revenues increased by 6.4% to Rp28,020 billion (US$1,800 million), compared to the last year of Rp26,325 billion. It was due to the IndiHome new subscribers of 9.2 million subscribers or increased by 7.1%. g. Other Services Revenues For the other services, TelkomGroup recorded revenue of Rp5,834 billion (US$375 million) in 2022. It decreased by 4.6% or Rp281 billion compared to the 2021 revenues of Rp6,115 billion. The decrease was due to: • A decrease in manage service and terminal revenue by Rp891 billion or 43.5%. • A decrease in e-payment revenue by Rp13 billion or 2.7%. The decrease was compensated by the increase in others revenue by Rp451 billion or 24.3%. h. Revenues from Lessor Transactions Telkom also has revenues from lessor transactions of Rp2,604 billion in 2022 resulted from the adoption of PSAK 72, which Telkom requires to disclose revenues from lessor transactions; for instance, leases were separately from contracts with customers’ revenues. COMPARISON OF PROFIT AND LOSS FOR THE YEAR ENDED DECEMBER 31, 2022 COMPARED TO YEAR ENDED DECEMBER 31, 2021 1. Revenues TelkomGroup recorded revenues in 2022 at Rp147,306 billion (US$9,461 million), it increased by 2.9% or Rp4,096 billion, compared to the 2021 revenue of Rp143,210 billion. The increase was due to the increase in IndiHome, data, internet, and information technology service, interconnection and network revenue. a. Cellular Telephone Revenues The cellular voice revenue decreased by 18.2% in 2022 to Rp12,052 billion (US$774 million) compared to the last year of Rp14,737 billion. The decrease was due to the higher subscriber’s usage of Over the Top (OTT) service in communication media preference. b. Fixed Lines Telephone Revenues In 2022, Fixed lines telephone revenues decreased by 11.2% to Rp1,536 billion (US$99 million), compared to 2021 of Rp1,730 billion. It was due to the higher customer mobility that more prefer to the mobile device. c. Data, Internet, and Information Technology Services Revenues At the end of 2022, TelkomGroup recorded data, internet, and information technology services revenue of Rp86,410 billion (US$5,550 million), it increased by 5.1% or Rp4,186 billion compared to the 2021 revenue of Rp82,224 billion. The increase was due to: • An increase in cellular data and internet revenue by Rp4,506 billion or 7.0% driven by the growth of mobile data usage. • An increase in others service revenue by Rp111 billion or 4.1% driven by the growth of data usage in Enterprise segment products. • An increase in Internet, data communication, and information technology services revenue by Rp14 billion or 0.1% driven by the growth of IT services in Consumer and Wholesale & International Business segment. The increases were compensated by the decrease in SMS revenue by Rp445 billion or 9.4% due to the transition from SMS to the Over the Top (OTT) service. 122 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSIS 2. Expense d. Interconnection Expense it Telkom recorded total expenses as of December 31, 2022, were Rp101,569 billion (US$6,524 million), increased by 2.3% or Rp2,266 billion, compared to 2021 of Rp99,303 billion. These changes were due to: a. Operation, Maintenance and Telecommunication operating, Service maintenance, and telecommunications services expenses in 2022 were Rp38,184 billion (US$2,453 million), increased by 0.1% or Rp51 billion compared to 2021 of Rp38,133 billion. It was due to: • An TelkomGroup’s Expense increase in operation and maintenance expense by Rp1,279 billion or 6.0% resulted from usufructuary fee of backbone network with other operators/global submarine cable consortiums. • An increase in radio frequency usage charges by Rp413 billion or 6.8%, which is directly proportional to the increase in cellular internet and data services. increase fees and USO charges by Rp129 billion or 5.2% due to the higher contribution from the gross revenue of the telecommunications operation as development of KPU. in concession • An TelkomGroup’s interconnection expenses in 2022 increased by 5.0% or Rp259 billion. In the last period, interconnection expenses were Rp5,181 billion, it increased in 2022 to Rp5,440 billion (US$349 million), in line with the increase in interconnection revenue. e. Marketing Expense In 2022, TelkomGroup recorded marketing expenses at Rp3,929 billion (US$252 million). It increased by 8.1% or Rp296 billion, compared to 2021 of Rp3,633 billion. It was due to more aggressive marketing programs, promotion of new digital products and business, consumer education, and strengthening SMEs through Padi UMKM. f. General and Administrative Expense and general TelkomGroup’s administrative expenses in 2022 were Rp5,854 billion (US$376 million), it increased by 16.7% or Rp838 billion compared to 2021 of Rp5,016 billion. It was due to the increase in professional fees by 39% or Rp308 billion, general expenses by Rp216 billion or 10.6%, and traveling expense by Rp100 billion or 31.2%. The increases were compensated by: • A decrease in leased lines and CPE expense by Rp1,473 billion or 29.4%. • A decrease in insurance expense by Rp202 billion or 46.8%. • A decrease in project management expense by Rp119 billion or 22.9%. b. Depreciation and Amortization Expense recorded depreciation TelkomGroup and amortization expenses in 2022 at Rp33,255 billion (US$2,136 million), it increased by 4.5% or Rp1,439 billion compared to the last year of Rp31,816 billion. The increase was due to the increase capex in the current year and the Company accelerated the useful lives of Multi-Service Access Node (MSAN) assets. The Company accelerated the useful lives of Multi-Service Access Node (MSAN) assets. c. Personnel Expense In 2022, there was a decrease in personnel expense by 4.0% or Rp617 billion from Rp15,524 billion in 2021 to Rp14,907 billion (US$957 million) in 2022. The decrease was due to a decrease in vacation pay, incentives, and other benefits expense by Rp1,164 billion or 23.3% and a decrease in other benefit expense by Rp176 billion or 69.3%. The decreases were compensated by the increase in salaries and related benefits by Rp699 billion or 8.1%. 3. Gain (Losses) on Foreign Exchange-Net TelkomGroup’s business involves foreign currencies, and exchange rate fluctuations throughout 2022 may positively or negatively impact the Company’s financial transactions. In 2022, TelkomGroup recorded gain on foreign exchange - net of Rp256 billion (US$16 million), it increased by Rp206 billion or 412.0% compared to the previous period that gained Rp50 billion. 4. Unrealized Gain (Loss) on Changes in Fair Value of Investments TelkomGroup recorded unrealized loss on changes in fair value of investments in 2022 at Rp6,438 billion, it decreased by 287.6% compared to the last period of Rp3,432 billion. 5. Other Income - Net TelkomGroup’s other income - net in 2022 recorded at Rp26 billion (US$2 million), it decreased by 85.1% or Rp148 billion compared to the last period of Rp174 billion. 6. Operating Profit and Operating Profit Margin In 2022, TelkomGroup recorded an operating profit of Rp39,581 billion (US$2,542 million), it decreased by 16.8% compared to the last operating profit of Rp47,563 billion. Meanwhile, the operating profit margin decreased from 33.2% in 2021 to 26.9% in 2022. 123 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk 7. Profit Before Income Tax and Pre-Tax Margin 10. Profit for The Year Attributable to Owners of The In 2022, TelkomGroup’s profit before income tax was Rp36,339 billion (US$2,334 million), it decreased by 16.8% compared to the last period of Rp43,678 billion. On the other hand, TelkomGroup recorded pre-tax margin decreased from 30.5% in 2021 to 24.7% in 2022. Parent Company Profit for the year attributable to owners of the parent company decreased by 16.2% from Rp24,760 billion in 2021 to Rp20,753 billion (US$1,333 million) in 2022. 11. Profit for The Year Attributable to Non-Controlling 8. Income Tax (Expense) Benefit Interest TelkomGroup’s expense tax benefit in 2022 was Rp8,659 billion (US$556 million), it decreased by 11% or Rp1,071 billion compared to 2021 of Rp9,730 billion. It was in line with the increase in deferred tax benefits of Rp426 billion. Profit for the year attributable to non-controlling interests was at Rp6,927 billion (US$445 million), it decreased by 24.6% compared to the last period of Rp9,188 billion. 9. Other Comprehensive Income (Losses) Telkom recorded other comprehensive income of Rp1,767 billion (US$113 million) in 2022. If compared to other comprehensive income in 2021 of Rp1,980 billion, it decreased by 10.8%. It was due to the decrease in defined benefit actuarial gain – net by Rp491 billion. 12. Total Comprehensive Income for The Year In 2022, Telkom recorded comprehensive income for the year of Rp29,447 billion (US$1,891 million), it decreased by 18% or Rp6,481 billion compared to 2021 of Rp35,928 billion. 13. Net Income per Share TelkomGroup’s net income per share in 2022 was Rp209.49 per share, it decreased by 16.2% or Rp40.45 compared to the last year of Rp249.94 per share. CASHFLOW OVERVIEW TelkomGroup’s cash and cash equivalent as of December 31, 2022, was decent at Rp31,947 billion (US$2,052 million). The net cash provided by operating activities was Rp73,354 billion, net cash used in investing activities was Rp39,250 billion, and net cash used in financing activities was Rp40,837 billion. TelkomGroup Cashflow 2020-2022 Net Cash provided by operating activities used in investing activities used in financing activities Years ended December 31 2022 2021 2020 (Rp billion) (US$ mil- lion) (Rp billion) (Rp billion) Growth 2022-2021 (%) 7.3 4.1 73,354 4,712 68,353 65,317 (39,250) (2,521) (37,703) (35,256) 214.5 (40,837) (2,623) (12,986) (27,753) Net increase in cash and cash equivalents (138.1) (6,733) (432) 17,664 2,308 Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at beginning of year 536.2 369 24 58 39 86.1 38,311 2,461 20,589 18,242 Cash and cash equivalents at end of year (16.6) 31,947 2,052 38,311 20,589 124 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSIS CASHFLOW COMPARISON The composition of TelkomGroup cash receipt in 2022 indicated that the highest cash receipt was from operating activities of 80.0%, followed by the cash receipt from financing activities of 19.2%. This composition indicated that TelkomGroup’s internal and external funds supported the Company’s operational activities. TelkomGroup’s composition of cash receipt and cash disbursement in the last three years presents in the diagram below. Composition of Cash Receipt 2020-2022 (Rp billion) Financing 19.2% | 36,003 Financing 30.3% | 65,075 Financing 14.9% | 24,469 Investing 0.8% | 1,402 2022 2021 Investing 0.3% | 475 2020 Investing 0.8% | 1,696 Operating 80.0% | 149,882 Operating 68.9% | 148,234 Operating 84,8% | 139,451 Composition of Cash Disbursement 2020-2022 (Rp billion) Financing 39.6% | 76,840 Financing 39.5% | 78,061 Financing 32.3% | 52,222 2022 2021 2020 Operating 39.4% | 76,528 Operating 40.5% | 79,881 Operating 45.7% | 74,134 Investing 21.0% | 40,652 Investing 20.0% | 39,399 Investing 22.0% | 35,731 COMPARISON OF CASH FLOW FOR YEAR ENDED DECEMBER 31, 2022 COMPARED TO YEAR ENDED DECEMBER 31, 2021 At the end of 2022, TelkomGroup recorded cash and cash equivalents of Rp31,947 billion or US$2,052 million, while the last year’s total cash and cash equivalents were Rp38,311 billion, which it decreased by 16.6% or Rp6,364 billion. The cash receipts of operating activities in 2022 were Rp149,882 billion or 80.0% of total cash receipts, while the cash receipts from financing activities were Rp36,003 billion or contributed to 19.2%. The least cash receipt in 2022 was investing activities of Rp1,402 billion or contributed to 0.8% of total cash receipts. In 2022, the cash disbursements for operating activities were Rp76,528 billion or 39.4% of total cash disbursements. Then, cash disbursements were for financing activities of Rp76,840 billion or 39.6% of total cash disbursements, while the least cash disbursements were from investing activities of Rp40,652 billion or 21.0%. 125 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk 1. Cash Flow from Operating Activities • Dividend received from associated company of In 2022, net cash provided by operating activities were Rp73,354 billion or US$4,712 million. Compared to the last period, it increased by Rp5,001 billion. • Rp17 billion. Increase in advances and other assets of Rp560 billion. TelkomGroup recorded cash receipts from operating activities of Rp149,882 billion in 2022, while, cash receipts from operating activities for 2021 were Rp148,234 billion, it increased by Rp1,648 billion or 1.1%. The cash receipts were from: • Cash receipts from customers and other operators of Rp146,268 billion. • Cash receipts for tax refund of Rp2,411 billion. • Cash receipts from finance income of Rp865 billion. • Cash receipts for other – net of Rp338 billion. Cash disbursements for operating activities in 2022 were Rp76,528 billion. It decreased by 4.2% or Rp3,353 billion compared to the last cash disbursements of Rp79,881 billion. TelkomGroup’s cash disbursements were for: • Cash payments for expenses of Rp45,559 billion. • Cash payments to employees of Rp14,052 billion. • Cash payments for corporate and final income taxes of Rp8,465 billion. • Cash payments for finance costs of Rp4,064 billion • Cash payments for short-term and low-value lease assets of Rp3,873 billion. • Cash payments for Value Added Taxes – net of Rp515 billion. 2. Cash Flow from Investing Activities In 2022, TelkomGroup’s net cash used in investing activities was Rp39,250 billion or US$2,521 million. It increased by Rp1,547 billion or 4.1% compared to the last period of Rp37,703 billion. Cash receipts from investing activities in 2022 were Rp1,402 billion, it decreased by 17.3% or Rp294 billion from the last period of Rp1,696 billion. Cash receipts were from: • Proceeds from sale of property and equipment of Telkom recorded cash disbursements for investing activity of Rp40,652 billion in 2022. It increased by 3.2% or Rp1,253 billion from the last year of Rp39,399 billion. The cash disbursement was for: • Purchase of property and equipment of Rp35,138 billion. • Purchase of intangible assets of Rp3,259 billion. • Additional of long-term investment in financial instrument of Rp1,401 billion. • Placement in other current financial assets-net of Rp854 billion. 3. Cash Flows from Financing Activities TelkomGroup recorded net cash used in financing activities was Rp40,837 billion (US$2,623 million) while in 2021 was minus Rp12,986 billion. TelkomGroup received cash from financing activities of Rp36,003 billion, it decreased by 44.7% or compared to the last period of Rp65,075 billion. The cash receipt was from: • Proceeds from loans and other borrowings of • Proceeds Rp35,958 billion. from subsidiaries of Rp45 billion. issuance of new shares of Meanwhile, the cash disbursement for financing activities was of Rp76,528 billion, it decreased by Rp3,353 billion or 4.2% compared to the last period of Rp78,061 billion. The cash disbursement was for: • Repayments of Rp44,304 billion. loan and other borrowings of • Cash dividends paid to the Company’s stockholders of Rp14,856 billion. • Cash dividends paid to non-controlling interests of subsidiaries of Rp10,103 billion. • Repayments of principal portion of lease liabilities Rp526 billion. of Rp6,896 billion. • Proceeds from insurance claims of Rp299 billion. • Buy back shares of non-controlling shareholders of subsidiaries of Rp681 billion. 126 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSIS SOLVENCY TelkomGroup’s 2022 Consolidated Financial Statements (Audited) show the Company’s decent liquidity, solvency, and the ability to pay the short and long-term liabilities. TelkomGroup’s debt repayment originate from cash inflows from operational activities, so that it shows the ability to manage its operations and liquidity. SHORT-TERM LIABILITY For measuring the ability to pay short-term debt, TelkomGroup uses the current ratio, quick ratio, and cash ratio to maintain liquidity and ensure the funds’ availability to pay short-term debt. TelkomGroup’s strategy for short-term debt is to keep the current ratio percentage above the industry average current ratio and maintain the loan availability that can be withdrawn if needed. TelkomGroup Liquidity Ratio 2020-2022 Ratio 2022 2021 2020 Current Ratio Quick Ratio Cash Ratio 78.2 % 59.9 % 47.3 % 88.6 % 68.7 % 56.1 % 67.3 % 48.4 % 31.7 % LONG-TERM LIABILITY TelkomGroup constantly monitors the Debt to Equity Ratio, the Debt to EBITDA Ratio, and the EBITDA to Interest Expense Ratio to ensure its ability to pay its long-term debt. The TelkomGroup Consolidated Financial Statements indicate a Debt to Equity Ratio of 0.42 times, a Debt to EBITDA Ratio of 0.80 times, and an EBITDA to Interest Expense Ratio of 19.6 times. Those ratios conclude that TelkomGroup’s ability to pay the long-term debt has a relatively low risk of default. Ratio 2022 2021 2020 Debt to Equity Ratio Debt to EBITDA Ratio EBITDA to Interest Expense Ratio 0.42 X 0.80 X 19.6 X 0.48 X 0.91 X 17.3 X 0.54 0.91 15.9 X X X To reduce interest expenses and exposure to interest rate fluctuations in the future, TelkomGroup tried to improve its debt profile, particularly debt with floating interest. Further information regarding liquidity and the discussion regarding the debt of Telkom and its subsidiaries can be seen in Notes 18 and 19 in TelkomGroup’s Consolidated Financial Statements for 2022. 127 Annual Report 2022 PT Telkom Indonesia (Persero) TbkCAPITAL STRUCTURE AND THE MANAGEMENT POLICIES FOR CAPITAL STRUCTURE CAPITAL STRUCTURE The Company’s capital structure consists of short-term debt, long-term debt, and equity. As of December 31, 2022, the most significant composition of TelkomGroup’s capital structure was equity. There were no substantial changes to the equity and capital composition in 2022 compared to the previous period. Capital Structure 2020-2022 (Rp billion) Equity 67.2% | 129,258 Short Term 4.3% | 8,191 Equity 63.8% | 121,646 Short Term 3.5% | 6,682 Equity 61.0% | 102,527 Short Term 5.9% | 9,934 2022 Long Term 28.5% | 54,850 2021 Long Term 32.7% | 62,396 2020 Long Term 33.1% | 55,528 Capital Structure 2022 2021 2020 (Rp billion) (US$ million) (Rp billion) (Rp billion) Debt Short Term Debt Long Term Debt Equity Total 63,041 8,191 54,850 129,258 192,299 4,049 526 3,523 8,302 12,351 69,078 6,682 62,396 121,646 190,724 65,462 9,934 55,528 102,527 167,989 MANAGEMENT POLICY FOR CAPITAL STRUCTURE TelkomGroup is required to maintain its creditworthiness, as indicated in its credit rating and capital structure. In 2022, TelkomGroup was able to keep the debt levels below the industry average, which it signified in the Debt to Equity Ratio and Debt to EBITDA Ratio. Maintaining a solid capital structure is done by optimizing the cost of capital (weighted average cost of capital), tax benefits and ensuring healthy financial ratios to maintain a balanced capital structure. These measures support TelkomGroup’s capital structure policy to achieve an optimal funding composition. The capital structure policy in the current year will become the basis for management decision-making in terms of adding or paying the short-term and long-term debt. In 2022, TelkomGroup’s Debt to Equity Ratio (DER) was 0.42 times, while in 2021, it was 0.48 times. TelkomGroup’s Debt Service Coverage Ratio as of December 31, 2022, was 1.6 times, while in 2021, it was 1.6 times. Further information regarding management’s policy on the capital structure is in Notes 38 Capital Management in the 2022 TelkomGroup’s Consolidated Financial Statements. 128 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSIS REALIZATION OF CAPITAL EXPENDITURE Throughout 2022, TelkomGroup has realized capital expenditure investments tailored to the Company’s needs and strategies to anticipate dynamic technology transformation. The denomination of TelkomGroup’s capital expenditure investment is in two currencies, namely Rupiah (Rp) and US Dollar (US$). STRATEGY AND OBJECTIVES OF INVESTMENT IN CAPITAL EXPENDITURE The objective and strategy in determining investment in capital expenditure are to support the expansion and maintain business growth in the digital era based on digital connectivity, digital platforms, and digital services. In 2022, TelkomGroup constantly invested capital expenditure to build infrastructure capacity and capability in realizing the higher and more dynamic demand. TYPES OF INVESTMENT IN CAPITAL EXPENDITURE Capital expenditure of Telkom and its subsidiaries are: • Broadband services, comprising of mobile (4G, 5G) and fixed broadband; • Network infrastructures, consist of core network, submarine cable, terrestrial cable, Metro-Ethernet, IP Backbone, and satellite; • Data Center, Cloud, TV Video, IoT, IT (smart platform, solution, and services); and • Other supporting capital expenditures, such as supporting facility of connectivity, building, and power supply. INVESTMENT VALUE IN CAPITAL EXPENDITURE The total investment realization of TelkomGroup’s capital expenditure in 2022 was Rp34,156 billion or US$2,194 million. It increased by 12.6% from the previous year of Rp30.341 billion. The following are some of TelkomGroup’s capital expenditure: • Constructed Telkomsel BTS. • Building neuCentrix and hyperscale data center. • Tower addition and its supporting capacity. • National project of submarine cable system deployment, such as Lumori (Luwuk-Morowali-Kendari) submarine cable, interisland Batam and North Papua submarine cable, and international submarine cable system. • Telkomsat built high-throughput satellite (HTS) on the 133°E orbital to improve terrestrial network infrastructure. TelkomGroup’s Capital Expenditure Investment 2020-2022 Years ended December 31 2022 2021 2020 (Rp billion) (US$ million) (Rp billion) (Rp billion) Total Investment in Capital Expenditure 34,156 2,194 30,341 29,436 129 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk MATERIAL COMMITMENT FOR CAPITAL EXPENDITURE OBJECTIVES OF MATERIAL COMMITMENT FOR CAPITAL EXPENDITURE TelkomGroup is necessary to make sustainable investments to accelerate digital transformation. We made several material commitments for capital expenditure to support transmission and network equipment, as well as for other digital infrastructure. The material commitment of TelkomGroup and other parties in the form of project agreements is in Note 35 Significant Commitments and Agreements in the 2022 TelkomGroup’s Consolidated Financial Statements. SOURCES OF FUNDS TO FULFILL OF MATERIAL COMMITMENT FOR CAPITAL EXPENDITURE In 2022, TelkomGroup had a good leverage to fund capital expenditures. TelkomGroup has several alternatives for other funding, including using internal and external funding sources (such as bank funding, debt instruments, and additional share capital for capital expenditure investment) according to a predetermined business plan. DENOMINATED CURRENCIES OF MATERIAL COMMITMENT FOR CAPITAL EXPENDITURE TelkomGroup uses several currency denominations in material commitments for capital expenditure investment. It consists of Rupiah and US Dollar. The most significant bond is in Rupiah currency of Rp10,046 billion. Ikatan Material Berdasarkan Mata Uang per 31 Desember 2022 Table of Material Commitment based on Currencies Amounts in Foreign Currencies (million) Equivalent in Rupiah (billion) IDR USD Total — 267 10,046 4,157 14,203 FOREIGN CURRENCY RISK MITIGATION OF MATERIAL CONTRACTS FOR CAPITAL EXPENDITURE Material commitments for capital expenditure using foreign currencies can be affected by fluctuations in exchange rates. Therefore, TelkomGroup determines time deposits and receivables of at least 25% of the outstanding foreign currency short-term liabilities so that TelkomGroup can offset exchange rate fluctuation losses with exchange rate gains on time deposits and receivables. A detailed explanation regarding material commitments for capital expenditure investment and foreign exchange rate risk is in Note 35 Significant Commitments and Agreements and Note 37 Financial Instruments in the 2022 TelkomGroup’s Consolidated Financial Statements. 130 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISRECEIVABLES COLLECTABILITY TelkomGroup had a decent receivables collectability level with consolidated maturity receivables as of December 31 for 2022 and 2021, which are not impaired or collectible of Rp1,876 billion and Rp3,417 billion. The accounts receivable turnover ratio was recorded at 17.2%, and the average collection time ratio was 21.2 days. TelkomGroup monitors receivables and collection balances regularly to minimize the customers’ credit risk. Methods in collecting its accounts receivable are direct visits and collection to the customer, cooperating with partners regarding account receivable collection service, and actively contacting customers via telephone, letter, or email. TelkomGroup’s Receivables Collectability 2020-2022 Ratio Average collection ratio (days) Receivables turnover ratio (%) Average Collection Duration Ratio (%) 2022 2021 2020 21.2 17.2 25.3 14.4 30.9 11.8 ANALYSIS AND EXPLANATION OF RECEIVABLES COLLECTABILITY TelkomGroup classifies receivables in analyzing accounts receivable based on the age of accounts receivable. Analysis of TelkomGroup’s Accounts Receivables by Age Period 2020-2022 Analysis of Accounts Receivable by Age 2022 2021 (Rp billion) 2020 Not past due 0 – 3 months 3 – 6 months > 6 months Total receivables before provision Provision for impairment of receivables Net receivables after provision 6,964 1,674 664 6,900 16,202 (7,568) 8,634 5,625 2,447 924 7,316 16,312 (7,802) 8,510 7,818 2,300 1,274 8,307 19,699 (8,360) 11,339 In 2022, TelkomGroup established a provision for impairment of trade receivables based on the collective historical impairment rate and individual customer credit historical rates. Provision for impairment of receivables in 2022 was Rp7,568 billion, lower than the provision for 2021 of Rp7,802 billion. Further discussion of TelkomGroup’s receivables is in Note 5 Trade Receivables in the 2022 TelkomGroup’s Consolidated Financial Statements. 131 Annual Report 2022 PT Telkom Indonesia (Persero) TbkMATERIAL INFORMATION AND FACT AFTER ACCOUNTANT REPORTING DATE TelkomGroup continues complying with the transparency and accountability principles to implement good corporate governance. Thus, TelkomGroup requires conveying material information and facts after the financial reporting date. Some material information and facts that occurred after the date of the accountant’s report as of December 31, 2022, are as follows: Material Information and Fact After Accountant Reporting Date for 2022 Reporting Period No. 1. 2. 3. On February 6, 2023, Telkomsel paid the entire outstanding loans to Bank of China amounting to Rp1,000 billion. Material Information and Facts On February 15, 2023, Mitratel acquired 997 telecommunication towers belonging to PT Indosat Tbk. amounting to Rp1,684 billion. On March 16, 2023, The Company withdrawn facilities from Bank of China amounting to Rp1,000 billion. Detailed explanations regarding the above transactions can be found in TelkomGroup’s 2022 Consolidated Financial Statements, particularly in Note 40 Subsequent Event. 132 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISBUSINESS PROSPECTS AND SUSTAINABILITY OF THE COMPANY The telecommunications sector is one of the sectors that grew positively during the COVID-19 pandemic. During the pandemic, people’s consumption patterns have shifted towards a digital lifestyle. It has led to increasing internet consumption and data usage, which are the primary growth factors of the telecommunications sector. Telecommunications operators are competing to expand and strengthen the network while increasing the number of subscribers. increase The telecommunications growth has contributed to in digital telecommunications services the (digital telco). This phenomenon has also accelerated national digitalization, one of the main programs being intensified by the Government of Indonesia. Telkom sees this potential as an excellent opportunity to support digitalization equity and quality improvement. Therefore, Telkom has committed to transforming into a leading digital telco. To accelerate the transformation, Telkom builds a strong and competitive telecommunication infrastructure. Telkom will focus on developing digital connectivity, digital platforms, and digital services through in digital its competence and capabilities business. Telkom seizes opportunities to accelerate digital business to provide sustainable growth for the Company, optimal value for stakeholders, and benefits for Indonesians. The transformation into a digital telco company has shown positive results, and as a digitalization locomotive in Indonesia, Telkom will be proactive in looking over market potential and opportunities for various business expansions. The Company implements the primary strategy of Five Bold Moves to achieve the long-term goal of becoming a world-class leading digital telco company that positively impacts all stakeholders. Each Five Bold Moves strategy has a different impact on the Company: 1. Fixed & Mobile Convergence (FMC) strengthens market penetration and optimizes cost efficiency, especially in the retail segment; 2. InfraCo maintains the Company’s position as the most extensive infrastructure provider in Indonesia; 3. Data Center Co (DC Co) ensures that the Company can capture the growth in demand for data centers; 4. B2B Digital IT Service Co strategy increases the competitiveness of the B2B Digital IT business by improving the service capability through partnership with Tech Giants; and 5. DigiCo encourages potential new sources of revenue for the Company by leveraging the digital ecosystem growth. Informatics On the other hand, to anticipate the increasing digital demand, the Government, through the Ministry of Communication and (MoCI), continues to expand and accelerate the even distribution of the internet network so that it covers all of Indonesia region to remote areas. One of the Ministry of Communication and Information measures is the construction of 4G Base Transceiver Stations (BTS) in the 3T region (frontier, disadvantaged and outermost region). In addition, with the beginning of the 5G network in Indonesia, the Government also maximizes the network with this latest technology to provide the required spectrum by accelerating the migration from analog to digital TV. It also supported the Telkom seeks to increase its capacity, products, and services to meet people’s needs in telecommunications. The Company has deployed 173,266 km of fiber optic networks. infrastructure with 109 transponders, 265,194 base two satellites with transceiver stations (BTS) of Telkomsel, and 37,918 telecommunication towers. In addition, Telkom has the infrastructure to support digital platforms, such as 28 data centers, with 23 domestic and 5 overseas data centers. In the Mobile segment, TelkomGroup has the opportunity to maximize the growth potential of high-value customers and develop digital mobile services. Telkom will also maximize 5G services to improve digital connectivity, digital platforms, and digital services in Indonesia, as well as the development of future tech solutions such as artificial intelligence, cloud computing, and the Internet of Things. Along with the increasing activities at home, such as work and study, shopping via e-commerce, and digital entertainment, TelkomGroup will focus on improving the quality of fixed broadband services. In the Consumer segment, Telkom seeks to increase its service capacity and coverage by synergizing the Mobile and Consumer segments to develop innovative fixed wireless products that complement each other to meet the increasing demand for this segment’s services. 133 Annual Report 2022 PT Telkom Indonesia (Persero) TbkTelkomGroup implements a strategy in the Enterprise segment by focusing on high profitability and recurring business lines, such as enterprise connectivity, data center, and cloud. In addition, regional improvement in Enterprise segment is one of the main programs to obtain the available market opportunity. for TelkomGroup focuses on improving tower, carrier, data center services, network infrastructure, management services telecommunications network/service providers, and domestic and regional digital ecosystems in the Wholesale and International Business segment. Data center development is also Telkom’s main focus due to the high potential demand in line with the various digital services development, such as e-commerce and other digital solutions. The Company also develops a global digital hub that provides direct broadband connectivity across Europe, Asia, and America. regulates its digital To maintain business continuity and respond to customer needs, Telkom develops infrastructure, platforms, and services to support various activities in every segment and social stratification. However, the Job Creation Law’s derivative regulations are challenging for Telkom, which telecommunication companies should share infrastructure and spectrum. Because Telkom has the most expansive infrastructure and network capacity in Indonesia, this policy benefits competitors who can take advantage of Telkom’s infrastructure network at a lower expense. Nevertheless, Telkom will still strengthen the Company’s competitive advantages to accelerate its vision of becoming the leading digital telco and create equal digital sovereignty in Indonesia. COMPARISON OF INITIAL YEAR TARGET AND THE REALIZATION In 2022, TelkomGroup’s revenue grew by 2.9% to Rp147,306 billion. Telkom’s EBITDA and Net Profit in 2022 were recorded at Rp78,992 billion and Rp20,753 billion. Meanwhile, the EBITDA margin and Net Profit margin were recorded at 53.6% and 14.1%. TelkomGroup’s capital expenditures in 2022 were Rp34,156 billion or 23.2% of total revenue. The following table compares the initial target for 2022 with the realization as of December 31, 2022. Comparison of TelkomGroup Targets and Realizations in 2022 Indicator Realization In 2022 Targets In Initial 2022 Revenue Growth Revenues grew by 2.9%. EBITDA Margin and Net Income Margin EBITDA Margin increased to 53.6% while Net Income Margin increased to 14.1%. Capital Expenditure The realization of capital expenditures is to Rp34,156 billion, or 23.2% of revenue with focused in digital business infrastructure. investment We estimate that the impact of the COVID-19 pandemic will still affect the Company for the first half in particular. Overall, we expected the Company to grow positively in the low to mid- single digit range. EBITDA Margin and Net Income Margin are projected to slightly decreased in line with the decline in legacy businesses shifting to digital businesses. Around 24%-27% of our revenue is planned for capital expenditure, focusing on building digital business infrastructure. 134 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISTARGET OR PROJECTIONS FOR THE FOLLOWING YEAR TelkomGroup strives to achieve sustainable Company growth based on the 2021-2025 Framework as the basis for a corporate strategy that focuses on developing three main pillars: digital connectivity, digital platforms, and digital services. These three pillars are supported by seven other pillars that serve as delivery directions: portfolio optimization, technology, organization, synergy and operational excellence, individual and corporate culture, inorganic, and corporate governance. TelkomGroup targets the revenue to grow competitively in 2023, with IndiHome as the most significant contributor and maintaining its dominance aggressively in the cellular market amid digital business development. As of 2022, TelkomGroup invested in capacity expansion and maintaining service quality amidst increased traffic. Investment also focused on developing digital platforms as business enablers in the future. Therefore, TelkomGroup plans a capital expenditure allocation of around 25%-30% of the revenue to build the infrastructure. TelkomGroup’s Target or Projections for The Following Year Indicator Revenue Growth Target in 2023 We estimate that the impact of the COVID-19 pandemic and an increasingly competitive climate will still affect the Company. Overall, the Company is expected to grow positively in the low to mid-single-digit range. EBITDA Margin and Net Income Margin EBITDA Margin and Net Income Margin are projected to increase slightly in line with the decline in legacy business shifting to digital business (connectivity, platform, and service). Capital Expenditure Around 25%-30% of our revenue is planned for capital expenditures, focusing on building digital business infrastructure. Dividend Policy The dividend payout ratio ranges from 60%-90%. 135 Annual Report 2022 PT Telkom Indonesia (Persero) TbkDIVIDEND TelkomGroup annually distributes dividends in order to optimize value for shareholders. The dividend distribution policy is through a process of determination and approval from the shareholders at the Annual General Meeting of Shareholders (AGMS). TelkomGroup has set a dividend payout ratio that ranges from 60% to 90% in the last five years. The dividend paid in 2022 for business performance in 2021 was Rp14,855,921 billion (60% from nett profit). Telkom will determine the payout ratio, dividend amount, and total final dividend for 2022 performance at the AGMS in the following year of 2023. Telkom’s Dividend Payment for the Year 2017-2021 Operational Performance Dividend Year Dividend Policy Date of Dividend Payment in Cash and/or Date of Dividend Distribution in Non-Cash Payment Ratio / Payout ratio (%) 1 Dividend Amount paid per year (Rp million) Dividend Amount per Share (cash and/or non- cash) after Stock Split (Rp) 2017 2018 2019 2020 2021 RUPST, April 27, 2018 May 31, 2018 RUPST, May 24, 2019 June 27, 2019 RUPST, June 19, 2020 July 23, 2020 RUPST, May 28, 2021 July 2, 2021 RUPST, May 27, 2022 June 30, 2022 75.00 90.00 81.78 80.00 60.00 16,608,751 2 16,228,619 3 15,262,338 4 16,643,443 5 14,855,921 6 167.66 163.82 154.07 168.01 149.97 Remarks: 1. Represents the percentage of profit attributable to owners of the parent paid to shareholders in dividends. 2. Consists of cash dividend amounting to Rp13,286,997 million and special cash dividend amounting to Rp3,321,754 million. 3. Consists of cash dividend amounting to Rp10,819,080 million and special cash dividend amounting to Rp5,409,540 million. 4. Consists of cash dividend amounting to Rp11,197,606 million and special cash dividend amounting to Rp4,064,730 million. 5. Consists of cash dividend amounting to Rp12,482,582 million and special cash dividend amounting to Rp4,160,860 million. 6. Only consists of cash dividend amounting to Rp14,855,921 million. 136 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISREALIZATION OF PUBLIC OFFERING FUND Telkom has issued several bonds which are currently outstanding and owned by investors. We have several underwriters for bond issuance, namely PT Bahana Sekuritas, PT Danareksa Sekuritas, PT Mandiri Sekuritas, and PT Trimegah Sekuritas Tbk, and a bank that is the trustee, namely PT Bank Permata Tbk. Telkom guarantees all bonds with assets, and Pefindo assigns an idAAA rating to all Telkom bonds. The following table presents the unmatured bond status as of December 31, 2022. Realization of Telkom’s Public Offering Funds as of December 31, 2022 Name of the Bond Amount (Rp million) Date of Issue Maturity Date The Shelf Registered Bonds I Telkom 2015 series C The Shelf Registered Bonds I Telkom 2015 series D Obligasi Berkelanjutan I Telkom Tahun 2015 seri D 2.100.000 June 23, 2015 June 23, 2025 1.200.000 June 23, 2015 June 23, 2030 1.500.000 June 23, 2015 June 23, 2045 30 Time Periode (year) 10 15 Realization of Funds Balance (Rp million) 0 0 0 Year 2016 2016 2016 Currently, Telkom has realized all the funds obtained from the public offering, with the remaining funds recorded as nil. There is no change regarding the realization of the previously planned use of funds. Details related to bond information can be seen in Note 18 Short-Term Bank Loans and Long-Term Loans Maturing Within One Year, and Note 19 Long-Term Loans and Other Loans in the 2022 TelkomGroup Consolidated Financial Statements. 137 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk MATERIAL INFORMATION REGARDING TRANSACTION WITH CONFLICT OF INTEREST, TRANSACTION WITH AFFILIATED PARTIES, INVESTMENT, DIVESTMENT, AND ACQUISITION In 2022, TelkomGroup recorded affiliated transactions. Based on the review, Telkom stated that the implementation of all affiliated transactions followed internal policies related to the Main Procedures for Affiliated Transactions and Conflicts of Interest Transactions stipulated in the President Director’s Official Note and following the provision of POJK No. 42/2020. On the other hand, no transactions with related parties contain conflicts of interest as they are according to the principles of fairness and business practice during 2022. Transaction Transaction Type Cause of Transaction PT Telekomunikasi Selular Appointed as a Winner of Selection for 2.1 Ghz Radio Frequency Band Users for the Purpose of 2022 Mobile Cellular Network Capital Injection to PT Fita Sehat Nusantara by PT Telkomsel Ekosistem Digital Groundbreaking the Construction of NeutraDC Hyperscale Data Center Batam by PT Telkom Data Ekosistem Investment Affiliation Affiliation This additional spectrum will be optimized to increase capacity and quality of mobile cellular network, the building of prime accelerate quality with wide coverage 4G/LTE infrastructure even for the 3T areas, also extend 5G coverage gradually and measurably in accordance to the needs of the customers. This capital injection is allocated to develop product that prioritized not only by user oriented, but also to complete supporting features that will be used by professional coach in order reach the users’ objective. For helping societies to live a healthy lifestyle, supported by our market research that showed there is not many health platforms that focus on prevention, Fita has a vision to become the leading integrated health platform in Indonesia. The development of TelkomGroup’s data center business in Batam will support the long-term plan of data center NeutraDC business development and further increase TelkomGroup’s data center business competitive advantage. A further detailed list of affiliated transactions that must be disclosed in the Annual Report for the 2022 financial year, can be seen in Note 32 regarding Related Parties Transactions in 2022 TelkomGroup’s Consolidated Financial Statements and Appendix 4 in Annual Report for 2022 Reporting Period. 138 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISCHANGES IN LAW AND REGULATION In line with Good Corporate Governance (GCG) practices, TelkomGroup reviews any changes to the provisions of laws and regulations that may affect operations. On October 17, 2022, the Government passed Law Number 27 of 2022 regarding Personal Data Protection (PDP). It generally regulates the standards of Personal Data Protection, whether processed non-electronically or electronically, depending on the sector’s characteristics. We expect the PDP Law will create a balance between individual and community rights whose interests are represented by the state. We also hope that Personal Data Protection will create order and improvement in the information society. TelkomGroup has implemented a data governance implementation of mechanism supported by the internal policies, which aligned with the practice of the PDP Law. In addition, TelkomGroup’s Data Sharing Standard includes: 1) Information Classification; 2) Director Approval of the Use Case Owner; 3) Data Owner Approval; 4) Approval of TelkomGroup’s Data Governance Council; and 5) Implementing Personal Data Cryptography, including Company Confidential Data. In addition, there is a Government Regulation in Lieu of Law (Perpu) Number 2 of 2022 regarding Job Creation (“Perpu 2/2022”), which revokes Law Number 11 of 2022 regarding Job Creation, thus changing part of the provisions in Law Number 5 of 1999 regarding Prohibition of Monopolistic Practices and Unfair Business Competition (“Business Competition Law”), namely provisions related to: 1. The transfer of the examination of objections to the Indonesia Competition Commission (KPPU) decision from the District Court to the Commercial Court; 2. Elimination of time limits for examining objections at the Commercial Court and cassation at the Supreme Court; 3. Addition of Article References in Administrative Actions and elimination of a maximum fine of Rp25,000,000,000.- (twenty five billion Rupiah) to a minimum of Rp1,000,000,000.- (one billion Rupiah); and 4. Elimination of basic and additional criminal provisions. the Government On February 2, 2021, issued Government Regulation Number 44 of 2021 regarding the Implementation of the Prohibition of Monopolistic Practices and Unfair Business Competition, which further regulates the KPPU’s authorities, sanctions criteria, sanctions types, and the number of fines, as well as examination of objections and cassation of KPPU decisions. Furthermore, on May 31, 2021, KPPU Regulation Number 2 of 2021 was promulgated regarding the Guidelines for Imposing Fines for Violating Monopolistic Practices and Unfair Business Competition, which contains provisions for the calculation of fines, bank guarantees, fines payment, and concessions in fines payment. Based on KPPU Regulation Number 2 of 2021, KPPU imposes administrative sanctions in a fine of at least Rp1,000,000,000, - (one billion Rupiah) and a maximum of 50% (fifty percent) of the net profit earned by the Business Actor in the Relevant Market or a maximum of 10% (ten percent) of the total sales in the Relevant Market during the period of the Law violation occurred. In addition, in 2022, KPPU issued KPPU Regulation Number 9 of 2022 regarding Revocation of Indonesia Competition Commission Regulation Number 3 of 2009 regarding Guidelines for the Application of Article 1 Number 10 regarding Relevant Markets, so that provisions for interpreting Relevant Markets will refer to the Business Competition Law as lastly amended by Perpu 2/2022. KPPU also promulgates KPPU Regulation Number 1 of 2022 regarding the Business Compliance Program, which generally aims to provide a compliance understanding for Business Actors in preventing violations and encouraging the implementation of business activities to comply with the principles of fair business competition. One of the benefits if you have registered a compliance program is the right to sanctions reliefs that will be imposed if you are proven to have violated the Law. 139 Annual Report 2022 PT Telkom Indonesia (Persero) TbkCHANGES IN ACCOUNTING POLICY TelkomGroup’s Consolidated Financial Statements refers to the Financial Accounting Standards (SAK) issued by the Indonesian Institute of Accountants (IAI) and complies with the Regulation of the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) No. VIII.G.7 regarding the Presentation and Disclosure of Financial Statements of Issuers or Public Companies, attached to the letter KEP347/BL/2012. In addition, TelkomGroup applies the International Financial Reporting Standard (IFRS) accounting standards based on the Securities and Exchange Commission (SEC) regulations. Changes in accounting policies in 2022, including: 1. Amendments to PSAK 22 regarding References to the Conceptual Framework 2. Amendment to PSAK 57 regarding Onerous contracts – Cost of Fulfilling a contract 3. Annual Adjustment to PSAK 71 Financial Instruments 4. Annual Adjustment to PSAK 73 Leases 5. Amendments to IAS 16 regarding Proceeds before Intended Use 6. Amendments to IAS 37 regarding Onerous Contracts-Cost of Fulfilling a Contracts 7. Amendments to IFRS 3 regarding Reference to the Conceptual Framework 8. Amendments to IFRS 9 (Annual Improvement): Financial Instruments 9. Amendments to IFRS 16 (Annual Improvement): Leases Implementation and Changes of Accounting Policies of TelkomGroup in 2022 No Accounting Policy 1. PSAK 22 2. PSAK 57 3. PSAK 71 4. PSAK 73 5. IAS 16 6. IAS 37 Reason for Change DSAK issued amendments to the accounting standards as the adoption of IFRS 3 DSAK issued amendments to the accounting standards as the adoption of IAS 37 DSAK issued amendments to the accounting standards as the adoption of IFRS 9 (Annual Improvement) DSAK issued amendments to the accounting standards as the adoption of IFRS 16 (Annual Improvement) IASB issued amendments to IAS 16 regarding Proceeds before Intended Use IASB issued amendments to IAS 37 regarding Onerous Contracts- Cost of Fulfilling a Contracts Impact on Financial Statements for Financial Year 2022 SAK Financial Report IFRS Financial Report No impact on SAK financial statements No impact on IFRS financial statements No impact on SAK financial statements No impact on IFRS financial statements No impact on SAK financial statements No impact on IFRS financial statements No impact on SAK financial statements No impact on IFRS financial statements No impact on SAK financial statements No impact on IFRS financial statements No impact on SAK financial statements No impact on IFRS financial statements 140 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 04MANAGEMENT DISCUSSION AND ANALYSISNo Accounting Policy 7. IFRS 3 8. IFRS 9 9. IFRS 16 Reason for Change IASB issued amendments to IFRS 3 regarding Reference to The Conceptual Framework IASB issued amendments to IFRS 9 regarding (Annual Improvement): Financial Instrument IASB issued amendments to IFRS 16 regarding (Annual Improvement): Leases Impact on Financial Statements for Financial Year 2022 SAK Financial Report IFRS Financial Report No impact on SAK financial statements No impact on IFRS financial statements No impact on SAK financial statements No impact on IFRS financial statements No impact on SAK financial statements No impact on IFRS financial statements Further details of the changes in accounting policies in Telkom’s financial statements for the current year is disclosed in Note 2 Summary of Significant Accounting Policies of 2022 TelkomGroup’s Consolidated Financial Statements. 141 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk05 CORPORATE GOVERNANCE 05 CORPORATE GOVERNANCE 144 Corporate Governance Principle and Platform 150 Corporate Governance Structure 151 Corporate Governance Assessment 152 General Meeting of Shareholders (GMS) 162 Board of Commissioners 186 Audit Committee 194 Committee for Nomination and Remuneration 199 Committee for Planning and Risk Evaluation and Monitoring 203 Board of Directors 217 Corporate Secretary 221 Internal Audit Unit 226 Internal Control System 229 Risk Management System 246 Whistleblowing System 251 Policy Regarding Reporting Share Ownership of Directors and Commissioners 252 Employee Stock Ownership Program 253 Significant Legal Disputes 253 Information Regarding Administrative Sanctions 254 Information Access and Company’s Public Data 255 Corporate Code of Conduct 257 Anti Corruption Policy CORPORATE GOVERNANCE PRINCIPLE AND PLATFORM Telkom consistently applies the principles of Good Corporate Governance (GCG) to fulfill the following objectives: 1. Supporting Telkom’s purpose, “To build a more prosperous and competitive nation as well as deliver the best value to our Stakeholders”. 2. Supporting Telkom’s vision, “To be the most preferred digital telco to empower the society”. 3. Supporting Telkom’s mission, “Advance rapid build out of sustainable intelligent digital infrastructure and platforms that are affordable and accessible to all; nurture best-in-class digital talent that helps develop nation’s digital capabilities and increase digital adoption; and orchestrate a digital ecosystem to deliver superior customer experience”. 4. Providing added value and benefits for Shareholders and Stakeholders. 5. Maintain and improve long-term health and competitive business continuity. 6. Increase the trust of Shareholders and Stakeholders in Telkom. In implementing GCG, Telkom refers to various relevant regulations as a reference, including: 1. Law No. 40 Year 2007 regarding Limited Liability Companies; 2. Law No. 8 Year 1995 regarding Capital Market; 3. SOE Minister Regulation No. PER-01/MBU/2011 regarding the Implementation of Good Corporate Governance in State-Owned Enterprises as amended by State-Owned Enterprises Regulation No. PER-09/ MBU/2012 regarding Amendments to the Regulation of the State Minister for BUMN No. PER-01/MBU/2011 regarding the Implementation of Good Corporate Governance in State-Owned Enterprises. 4. Financial Services Authority Regulation No. 33/ POJK.04/2014 regarding Directors and Commissioners of Issuers or Public Companies; 5. Financial Services Authority Regulation No. 34/ POJK.04/2014 regarding Nomination and Remuneration Committee of Issuers or Public Companies; 6. Financial Services Authority Regulation No. 55/ POJK.04/2015 regarding Establishment and Guidelines for Work Implementation of Audit Committee; 7. Financial Service Authority Regulation No.11/ PJOK.04/2017 regarding Reports of Ownership or Any Changes in Ownership of Public Company Shares. 8. Financial Services Authority Regulation No. 8/ POJK.04/2015 regarding Website of Issuers or Public Companies; 9. Financial Services Authority Regulation No. 29/ POJK.04/2016 regarding Annual Report of Issuers or Public Companies; 144 10. Financial Services Authority Regulation No. 21/ of regarding POJK.04/2015 Governance Guidelines for Public Companies; Implementation 11. Financial Services Authority Circular Letter No. 32/ SEOJK.04/2015 regarding Governance Guidelines for Public Companies; 12. Financial Services Authority Circular Letter No. 16/ SEOJK.04/2021 regarding Form and Content of Annual Report of Issuers or Public Companies. IMPLEMENTATION OF GCG BASIC PRINCIPLES Telkom also refers to GCG implementation guidelines, including the principles of Corporate Governance developed by the Organization for Economic Cooperation and Development (OECD) and General Guidelines for Indonesian Corporate Governance developed by the National Committee on Governance Policy (KNKG). The application of GCG best practices also refers to the ASEAN Corporate Governance Scorecard. Internally, Telkom builds a strong foundation in the implementation of GCG for Subsidiaries which is regulated in the Board of Directors’ Resolution No. PD.602.00/r.00/HK000/ COP-D0030000/2011 regarding the TelkomGroup GCG Guidelines as a guide for Telkom and its subsidiaries in operating and transacting according to GCG ethics and principles. Telkom applies 5 (five) GCG principles in carrying out its business processes, namely: 1. Transparency a. The publication of financial statements and Annual Report and other material information, such as the decision making process as a means for investors to access important information easily. b. Information access in the form of company website, print, and press releases, direct meeting with Investor, public expose, and press gathering. 2. Accountability a. The accessible charter, guide, or manual that contains the clear implementation, and accountability of Shareholders, Board of Commissioners, Directors, Committees, and Corporate Secretary. functions, b. Implement the mechanism of checks and balances of authority and role in the management of the Company. c. Have a clear Key Performance Indicator (KPI) and operational targets. PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE 3. Responsibility a. Comply with laws and/or tax regulations, fair competition, industrial relations, occupational health and safety, payroll standards, and other relevant regulations. b. Have mechanisms and procedures that regulate and evaluate compliance with applicable laws and regulations, as well as implement good corporate principles. c. Having a manager of Legal and Compliance function for ensuring the fulfillment of all rules and regulations. 4. Independency a. To carry out professionalism within the Company without a conflict of interest and free from the influence of pressures from other parties that are not appropriate with regulations and contrary to right corporate principles. b. Include rules/authority for corporate decision making in the Board Manual and Company’s Articles of Association which emphasizes independency. c. Have additional policies in the Corporate Governance Guidelines oriented towards the principle of independency, such as conflict of interest transaction policies, the prohibition of donations from political parties, and prohibitions on affiliation. 5. Fairness a. Apply the principles of equality and fairness in fulfilling the rights of Stakeholders that arise based on agreements and applicable laws and regulations. b. Respect the rights of minority Shareholders. c. Prohibit the practice of insider trading. d. Implement performance management based on a balanced scorecard. e. Conducting open auctions in the procurement of goods/services and implementing e-procurement. IMPLEMENTATION OF GCG MANAGEMENT PRINCIPAL - FINANCIAL SERVICES AUTHORITY Telkom has implemented 8 (eight) principles of corporate management in accordance with the Corporate Governance Guidelines for Public Companies from the Financial Services Authority (OJK), as follows: Principle Recommendation Implementation Status Principle 1 Improving The Value of General Meeting Shareholders (GMS). 1. or methods Technical procedures for open and closed voting that prioritizes independence and interest of the Shareholders. Telkom already has technical procedures for voting set out in the procedures for the General Meeting of Shareholders. Comply 2. Members of the Board of Directors and the Board of Commissioners the Annual GMS. attend All of the members of the Board of Directors and the Board of Commissioners attended the GMS. Comply 3. A summary of minutes of GMS is available at the Website at least 1 year. Telkom provided a Summary of Minutes of GMS at the Company’s Website under Investor Relations. Comply 145 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk Principle Recommendation Implementation Status Comply Comply Comply Comply Comply Comply Telkom has a policy on communications with investor through Non-Deal Roadshow, One on One Meeting, Earnings Call, Public Expose, Conference, and Investor Summit. Telkom has made available materials of each Earnings Call, Conference and materials of presentation to investor at the Company’s website to provide equality for Shareholders and Investor regarding the implementation of Communications with the Company. Telkom has a policy on communications with investor through Non-Deal Roadshow, One on One Meeting, Earnings Call, Public Expose, Conference, and Investor Summit. At the Shareholders’ discretion, members of the Board of Commissioners have been appointed by taking into account a variety of skills, knowledge, experiences and Telkom’s business conditions, and complexity. Based on the Joint Regulation of the Board of Commissioners and Directors No. 05/ KEP/DK/2022 and No. PD.620.00/r.01/HK200/ COP-M4000000/2022 regarding Guidelines for the Work Procedures of the Board of Commissioners and Directors (Board Manual) (Persero) PT Limited Liability Company Telekomunikasi Indonesia Tbk, there is a policy to assess the performance of Company's Board of Commissioners carried out by Series A Dwiwarna shareholders through the General Meeting of Shareholders mechanism. Based on the Joint Regulation of the Board of Commissioners and Directors No. 05/ KEP/DK/2022 and No. PD.620.00/r.01/HK200/ COP-M4000000/2022 regarding Guidelines for the Work Procedures of the Board of Commissioners and Directors (Board Manual) (Persero) PT Limited Liability Company Telekomunikasi Indonesia Tbk, there is a policy for self-assessment which is disclosed in the Annual Report. Principle 2 Improving The Public Listed Company Communication Quality with Shareholders or Investors. Principle 3 Strengthening The Membership and Composition of Board of Commissioners. Principle 4 Improving The Quality of Duty and Responsibility of Board of Commissioners. 1. 2. 1. 2. 1. a policy To have communications Public Shareholders or Investors. Company on between and Posted the communications policy of a Public Company at the Website. a policy To have communications Public Shareholders or Investors. Company on between and Posted the communications policy of a Public Company at the Website. The Board of Commissioners has the policy to self-assess the performance of the Board of Commissioners. 2. The self-assessment policy is reported in the Annual Report. 146 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE Principle Recommendation Implementation 3. The Board of Commissioners has a policy of resignation in the event of involvement in any financial crimes. 4. The Board of Commissioners through the Nomination and Remuneration Committee for- mulates a succession policy in the process of nominating members of the Board of Directors. Principle 5 Strengthening Membership and Compositions of Board of Directors. 1. Determination of the number of members of the Board of Directors takes into account conditions the Company’s and effectiveness in decision making. 2. Determination of the composition of members of the Board of Directors takes into account a variety of skills, knowledge, and experiences as required. 3. Members of the Board of Directors in charge of accounting and finance have skills and/or knowledge in accounting. In accordance with Telkom’s Articles of jo. Regulation of Financial Association, Services Authority No. 33/POJK.04/2014 regarding the Board of Directors and Board of Commissioners of Issuers or Public Companies, any member of the Board of Commissioners who does not meet any requirements to be a member of the Board of Commissioners as set out in the Articles of Association and Regulation of Financial Services Authority No. 33/POJK.04/2014 including any involvement in any financial crimes, consequently his/her position will be null and void. In the event that the members of the Board of Commissioners resign, it will be resolved at the GMS. in and Nomination the Nomination The Remuneration and Committee Remuneration Committee Charter states that one of its duties is to provide recommendations to the Board of Commissioners to be submitted to the Series A Dwiwarna Shareholders, one of which is regarding Succession Planning for Members of the Board of Directors. In addition, as a SOE, the provision of succession of the Board of Directors refers to Regulation of Minister of SOE No. PER- 03/MBU/02/2015 on the requirements, and procedures for the appointment and dismissal of a member of the Board of Directors of SOE. Determination of the number of Directors of the company refers to Article 2 paragraph (1) and paragraph (2) of Financial Service Authority Regulation No. 33/POJK.04/2014 regarding the Board of Directors and Board of Commissioners of Issuers or Public Companies which stipulates that the number of members of the Board of Directors consists of at least 2 (two) members of the Board of Directors, of which 1 (one) is appointed as President Director. At the shareholders’ discretion, members of the Board of Directors of the Company have been appointed by taking into account a variety of skills, knowledge, experiences, and the Company’s conditions and business complexity. The members of the Board of Directors in charge of accounting and finance in the company is the Finance Director & Risk Management who has sufficient accounting and financial knowledge and experience as can be seen in the position and education history of the Board of Directors under the section of Profiles of the Board of Directors. Status Comply Comply Comply Comply Comply 147 Annual Report 2022 PT Telkom Indonesia (Persero) TbkPrinciple Recommendation Implementation Status Principle 6 Improving The Quality of Task execution and Responsibility of Board of Directors. 1. 2. 3. The Board of Directors has the policy to self-assess the performance of the Board of Directors. The self-assessment policy is reported in an Annual Report. The Board of Directors has a policy of resignation in the event of involvement in any financial crimes. Principle 7 Improving Corporate Governance Aspect Through Stakeholders Participation. 1. To have a policy to prevent Insider Trading practice 2. To have a policy of Anti- Corruption and Anti-Fraud. The Board of Directors has a policy that regulates performance evaluation, process and indicators for assessing the performance of the Board of Directors individually and collegially, this is stated in the Board of Directors Performance Assessment section in the Board Manual. Results of the self-assessment of the Board of Directors are reported in the Company’s Annual Report under the section of Corporate Governance. Based on Telkom's Articles of Association and Financial Service Authority Regulation No. 33/POJK.04/2014 regarding the Board of Directors and Board of Commissioners of Issuers or Public Companies, any member of the Board of Directors who does not meet the requirements to become a member of the Board of Directors and who is involved in a financial crime, his position as Director will be null and void. In the event that the member of the Board of Directors resigns, it will be decided through the GMS mechanism. Based on Regulation of the Director of Human Capital Management No. PR 209.05/r.01/ K250/ regarding Employee COP-A4000000/2020 Discipline, the policy to prevent Insider Trading practice is contained in Article 5 regarding prohibitions for each employee include abuse of authority or position and unauthorized use of company information. implementation of in anti-corruption Telkom is always committed to supporting anti-corruption the and corporate the environment by developing programs and procedures as outlined in internal policies, namely the Integrity Pact, Business Ethics, LHKPN Reporting (Wealth Report of State Administrators), Discipline, Gratification Control, and ISO implementation 37001:2016 Anti-Bribery Management System. Employee 3. To have a policy on the selection and capacity building of Suppliers and Vendors. Telkom selects suppliers and vendors based on procurement policies that exist within internally which are managed Telkom through the SSO Procurement & Sourcing Center Unit which is carried out based on Regulation of the Director of Finance & Risk PR.301.08/r.05/HK240/ Management No. COP-K0700000/2022 regarding Guidelines for Procurement Implementation. 148 Comply Comply Comply Comply Comply Comply PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE Principle Recommendation Implementation 4. To have a policy on fulfillment of creditors’ rights. the 5. 6. 1. 2. Principle 8 Improving The Implementation of Information Disclosure. have To Whistleblowing system. a policy on long-term To have a Policy on the granting of to the Board of Directors and Employees. incentives Status Comply Comply Comply Telkom has a policy to fulfill the rights of our Creditors through the Financial Accounting Unit & Corporate Finance Unit that sets out and manages the rights of Telkom’s creditors. Through the Resolution of the Board of Commissioners No. 01/KEP/DK/2022 regarding Policies and Procedures for Handling Complaints (Whistleblowing System) within the TelkomGroup which was later ratified by Directors Regulation No. PD. 622.00/r.00/ HK200/COP-C0000000/2022 dated January 25, 2022, Telkom guarantees and ensures the protection of the confidentiality of reporters, both employees and third parties who submit complaints or reports of alleged violations. This Whistleblowing System develops complaint channels into 7 (seven) complaint channels, which can be accessed on the Telkom website in the Telkom Integrity Line menu. regarding Guidelines In determining the incentives obtained by the Board of Directors, Telkom is guided by Regulation of Minister of SOE No. PER- 12/MBU/11/2020 for Determining the Income of the Board of Directors, Board of Commissioners, and Supervisory Board of State-Owned Enterprises and their amendments as well as Guidelines for the Implementation of Work (Charter) of Committee for Nomination and Remuneration. As for employees, this incentive is contained in the Collective Labor Agreement regarding Compensation and Benefits and Director of Human Capital Management Regulation No. PR 207.22/r.00/ PS770/COP-J2000000/2016 regarding Awards and Recognition which explain the mechanism of giving rewards to employees in the form of stock option as well as an explanation of reward level, one of them at the advanced level are rewarded consistently and in the long-term financially. To use wider information technology along with website as a medium of information disclosure. The Annual Report of Public Companies disclose the most current beneficial owners of the ownership, at least 5% other than major shareholders and controllers. company’s Telkom also active in various social media as medium for information disclosure and product promotion. In addition, Telkom also use the mailing list system as medium for information disclosure and communication with Investor. Telkom discloses the ultimate beneficial owner in the ownership of company shares with ownership of 5% or more in Telkom's Annual Report in the Composition of Shareholders section. Comply Comply 149 Annual Report 2022 PT Telkom Indonesia (Persero) TbkCORPORATE GOVERNANCE STRUCTURE Telkom implements a corporate governance structure in accordance with the provisions of the Capital Market and Law no. 40 of 2007 regarding Limited Liability Companies. The Governance Structure at Telkom consists of Main Organs and Supporting Organs, as follows: MAIN ORGANS BOARD OF DIRECTOR GENERAL MEETING OF SHAREHOLDERS (GMS) BOARD OF COMMISSIONERS SUPPORTING ORGANS CORPORATE SECRETARY INTERNAL AUDITOR AUDIT COMMITTEE COMMITTEE FOR NOMINATION AND REMUNERATION COMMITTE FOR PLANNING AND RISK EVALUATION AND MONITORING 150 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE CORPORATE GOVERNANCE ASSESSMENT The principles of Good Corporate Governance (GCG) implemented by Telkom are able to support accountability and increase business success. By implementing GCG within Telkom’s environment, Telkom can further increase value and create a superior corporate image in the future. Going forward, Telkom is committed to implementing governance as a whole in accordance with relevant regulations, including laws, government regulations, and ministerial regulations. In addition, Telkom’s responsibility as an issuer listed on the Indonesia Stock Exchange cannot be separated from the rules imposed by Financial Services Authority (OJK). Telkom participates in the ranking of the ASEAN Corporate Governance Scorecard (ACGS) which is a parameter for measuring governance practices initiated by the ASEAN Capital Market Forum (ACMF). The parameters used in ACGS are based on OECD principles and are expected to increase investor confidence in listed companies in ASEAN. The components of the ACGS assessment are as follows: 1. Rights of Shareholders. The basic rights of shareholders include participating in decisions related to fundamental changes in the corporation, participating effectively and using votes in GMS and the right to obtain information regarding the rules that apply at GMS (including voting procedures). 2. Equal Treatment of Shareholders. Provisions related to share ownership and voting rights, summons for GMS, prohibition of insider trading and abusive self-dealing (abuse of authority), related party transactions conducted by members of the Board of Commissioners and Board of Directors, as well as protection for minority shareholders from abusive acts. 3. The Role of Stakeholders. Stakeholder rights stipulated by law or through collective agreements, development of mechanisms to improve employee performance and participation, protection of stakeholder freedom of expression. 4. Disclosure and Transparency. Transparency of ownership structure, quality and timely delivery of Annual Reports, disclosure of RPT (Related Party Transactions) and company share transactions conducted by members of the Board of Directors and Board of Commissioners, External auditors and Auditor’s Reports, Company communication media, and investor relations . 5. Board Responsibilities. Provisions related to the duties and responsibilities, structure and performance of the Board of Directors and Board of Commissioners. Based on the results of the ACGS assessment organized by the Indonesian Institute for Corporate Directorship (IICD), Telkom has managed to maintain the title of “Very Good” for the last 3 (three) years. Telkom’s GCG implementation has succeeded in bringing the company to an appreciation from the 13th IICD Corporate Governance Award 2022. Telkom won The Best State-Owned Enterprise in the category of Top 50 Issuers with the Largest Market Capitalization. This event is an initiation from Indonesian Institute for Corporate Directorship (IICD) as a form of appreciation to companies that have been able to implement good corporate governance. Furthermore, the IICD recommendations from the results of the 2022 ACGS assessment of the implementation of GCG at Telkom were reported along with the follow-up by Telkom to the Head of Risk Management and Compliance at the Ministry of State-Owned Enterprises. Then Telkom also received an award from Warta Ekonomi as Excellence Good Corporate Governance Implementation on Strengthening the Company’s Business Lines in the Information, Technology and Communication category. Through the 2022 Indonesia Excellence Good Corporate Governance Awards: Implementing a Continuous Process, Telkom is considered capable of consistently implementing GCG in managing its company’s activities. The implementation of good corporate governance will certainly have a positive impact on the process of business growth, company value and shareholders in a sustainable manner and create fair market competition and a conducive business climate, and ultimately contribute to developing Indonesia. 151 Annual Report 2022 PT Telkom Indonesia (Persero) TbkGENERAL MEETING OF SHAREHOLDERS (GMS) General Meeting of Shareholders (GMS) is Telkom’s general meeting one of the governance organ that functions as a means for shareholders to make important and strategic decisions. Annual GMS (AGMS) is held once every year in accordance with Telkom’s Articles of Association and the laws and regulations and has the following routine discussion agenda: 1. Approval of the Company’s Annual Report, including Board of Commissioners Supervisory Task Report. 2. Ratification of the Company’s Financial Statement and Annual Partnership and Community Development Program Report, as well as the Exemption of Liabilities of the members of the Board of Directors and Commissioners. 3. Determination of Company’s Net Income, including dividend payment in the Financial Year. 4. The determination of remuneration for the members of the Board of Directors and Commissioners. 5. The appointment of Public Accounting Firm to audit the Company’s Financial Statements, including audit of Internal Control over Financial Reporting and Appointment of a Public Accounting Firm to audit Financial Statements of Partnership and Community Development Programs. 6. Any other agenda proposed by one or more shareholders that represent 1/20 or more of all shares that have a voting right. AGMS FOR THE 2020 FINANCIAL YEAR On May 28, 2021, AGMS was held for the performance of the 2020 Financial Year. At the AGMS, the Company appointed independent parties to carry out vote counts and/or conduct validation at the meeting of the Securities Administration Bureau PT Datindo Entrycom and Notary Utiek R. Abdurachman SH. , MLI., MKn. with details of the agenda, vote count and realization of the 2020 AGMS resolutions as follows: Agenda AGMS Resolution Status of the AGMS Resolution 1. Approve the Annual Report for the Financial Year of 2020 including the Supervisory Report Resolution effective of the Board of Commissioners, and ratify the Consolidated Financial Statements of the immediately. Company for the Financial Year of 2020 which have been audited by the Public Accounting Firm (KAP) Purwantono, Sungkoro & Surja (member firm of Ernst & Young Global Limited) according to the report Number: 00884/2.1032/AU.1/06/1007-2/1/IV/2021 dated 29 April, 2021 with an opinion “fair, in all material respects”, as well as provide full acquittal and discharge of responsibility (volledig acquit et de charge) to the Board of Directors and the Board of Commissioners of the Company for management and supervision actions that have been carried out in the Financial Year ending on 31 December, 2020 as long as these actions would not be considered as criminal acts and are reflected in the report books of the Company. Agree Disagree Abstain The Result of Decision Making 78,476,251,347 shares or 96.2584707% 1,782,798,421 shares or 2.1867692% 1,267,542.900 shares or 1.5547601% 2. Ratify the Annual Report of the Partnership and Community Development Program (PKBL) Resolution effective for the Financial Year of 2020 and ratify the Financial Statements of PKBL of 2020 which immediately. have been audited by KAP Purwantono, Sungkoro & Surja (member firm of Ernst & Young Global Limited) according to the report Number: 00094/2.1032/AU.2/11/0687-4/1/II/2021 dated 23 February, 2021 with an opinion “fair in all material respects”, as well as provide full acquittal and discharge of responsibility (volledig acquit et de charge) to the Board of Directors and the Board of Commissioners of the Company for management and supervision actions PKBL for the Financial Year of 2020, as long as these actions are not criminal acts and are reflected in the report. 152 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE Agenda AGMS Resolution Status of the AGMS Resolution Agree Disagree Abstain The Result of Decision Making 76,258,022,462 shares or 93.5376053% 3,980,720,606 shares or 4.8827266% 1,287,849,600 shares or 1.5796681% 3. 1. To approve and determine the appropriation of the Company’s net profit for the Financial • Dividend distribution Year 2020 in the amount of Rp20,804,310,657,418.00 (twenty trillion eight hundred four was conducted on July billion six hundred fifty-seven thousand and four hundred eighteen) as follow: 2, 2021. • Dividend distribution was conducted on July 2, 2021. a. Cash Dividend amounting to 60% of the net profit or in the amount of Rp12,482,586,394,450.80 (twelve trillion four hundred eighty two billion five hundred eighty six million three hundred ninety four thousand and four hundred fifty Rupiah point eighty cents) or amounting to Rp126.0075 (one hundred twenty six point zero zero seven five Rupiah) per shares based on issued shares on the date of the Meeting, amounting to 99,062,216,600 (ninety nine billion sixty two million two hundred sixteen thousand and six hundred) shares; b. Special Dividend amounting to 20% of the net profit or in the amount of Rp4,160,862,131,483.60 (four trillion one hundred sixty billion eight hundred sixty two million one hundred thirty one thousand and four hundred eighty three Rupiah point sixty cents) or amounting to Rp42.0025 (forty two point zero zero two five Rupiah) per shares based on issued shares on the date of the mvzeeting, amounting to 99,062,216,600 (ninety nine billion sixty two million two hundred sixteen thousand and six hundred) shares; c. Recorded as Retained Earnings in the amount of 20% from net profit or amounting to Rp4,160,862,131,483.60 (four trillion one hundred sixty billion eight hundred sixty two million one hundred thirty one thousand four hundred eighty three Rupiah point sixty cents) which will be used for the development of the Company. 2. The distribution of Cash Dividend and Special Dividend for the Financial Year 2020 will be conducted with the following conditions: a. Those who are entitled to receive Cash Dividend and Special Dividend are shareholders whose names are recorded in the Company’s Shareholders on June 10, 2021, up to 16.15 Western Indonesia Time; b. Cash Dividend and Special Dividend shall be paid all at the latest on July 2, 2021. 3. To grant the power and authority to the Board of Directors with the right of substitution to further regulate the procedure of dividend distribution and to announce the same with due regard to the prevailing laws and regulations in the stock exchange where the Company’s shares are listed. Agree Disagree Abstain The Result of Decision Making 76,157,129,413 shares or 93.4138505% 3,996,685,689 shares or 4.9023092% 1,372,777,566 shares or 1.6838402% 153 Annual Report 2022 PT Telkom Indonesia (Persero) TbkAgenda AGMS Resolution Status of the AGMS Resolution 4. 1. To grant power and authority to Shareholder Serie A Dwiwarna to determine the amount Resolution effective of tantieme for Financial Year 2020 and to determine honorarium allowance, facility, and immediately. other incentives to members of the Board of Commissioners for Year 2021. 2. To grant power and authority to the Board of Commissioners which previously has obtained written approval from Shareholder Serie A Dwiwarna to determine the amount of tantieme for Financial Year 2020 and also to determine salary, allowance, facility, and other incentives to members of the Board of Directors for Year 2021. Agree Disagree Abstain The Result of Decision Making 75,089,718,737 shares or 92.1045714% 4,488.754,931 shares or 5.5058782% 1,948,119,000 shares or 2.3895504% 5. 1. To reappoint the Public Accounting Firm Purwantono, Sungkoro & Surja (a member firm Resolution effective of Ernst & Young Global Limited) to conduct an integrated audit of the Company which immediately. include the audit of the Consolidated Financial Statements of the Company, including the Internal Control Audit over Financial Reporting and to audit the Financial Statements of Partnership and Community Development Program for the Financial Year 2021. 2. To grant authority to the Board of Commissioners of Company to determine the appropriate audit fee, addition of the scope of work required and other terms, and conditions of the relevant Public Accounting Firm. 3. To grant power and authority to the Board of Commissioners which previously has obtained written approval from Shareholder Serie A Dwiwarna to determine the substitute Public Accounting Firm in Purwantono, Sungkoro & Surja (a member firm of Ernst & Young Global Limited), in the event cannot complete its duty for any reason to audit of Financial Reporting and the Financial Statements of Partnership and Community Development Program for the Financial Year 2021. Agree Disagree Abstain The Result of Decision Making 77,741,267,774 shares or 95.3569446% 2,428,372,047 shares or 2.9786257% 1,356,952,847 shares or 1.6644297% 6. 1. Approve amendment to the Articles of Association to adjust to the Regulation of the Resolution effective Financial Services Authority Number 14/POJK.04/2019 regarding Amendment to the immediately. Regulation of the Financial Services Authority Number 32/POJK.04/2015 regarding Increase in Capital for Public Companies by Providing Pre-emptive Rights, Regulation if the Financial Services Authority Number 15/POJK.04/2020 regarding Plans and Implementation of General Meeting of Shareholders of Public Companies, and Regulation of the Financial Services Authority Number 16/POJK.04/2020 regarding Implementation of General Meeting of Shareholders of Public Companies Electronically 2. Approve the amendment to the Articles of Association of the Company to adjust the company’s business activities to the Indonesian Standard Industrial Classification of 2020. 3. Approve to reconstitute all provisions of the Articles of Association of the Company in connection with the amendments as referred to in points 1 and 2 of the a for rementioned decisions. 154 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE Agenda AGMS Resolution Status of the AGMS Resolution 4. Grant power and authority to the Board of Directors of the Company with the right of substitution to take all necessary actions in connection with the resolutions of the agenda of this Meeting, including reconstitute and restate the entire Articles of Association of the Company in a Notary Deed, and grant the power with the right of substitution to submit to the competent authority to obtain a receipt of notification of amendments to the Articles of Association of the Company, conduct everything deemed necessary and useful for this purpose with nothing is excluded, including to make additions and/ or any alterations of the amendments to the Articles of Association, if it is required by the competent authority. Agree Disagree Abstain The Result of Decision Making 58,233,851,711 shares or 71.4292721% 21,672,557,680 shares or 26.5834214% 1,620,183,277 shares or 1.9873065% 7. Affirm the enforcement of Regulation of the Minister of SOE Number PER-11MBU/11/2020 dated Resolution effective 12 November 2020 regarding Management Contracts and Annual Management Contracts for immediately. the Board of Directors of State-Owned Enterprises as well as the amendments there of. Agree Disagree Abstain The Result of Decision Making 80,126,825,278 shares or 98.2830542% 111,866,990 shares or 0.1372153% 1,287,900,400 shares or 1.5797304% Resolution effective immediately. 8. 1. To honorably dismiss the following members of the Board of Commissioners of the Resolution effective Company: No. Name Position immediately. 1) Mr. Rhenald Kasali President Commissioner/Independent Mr. Alex Denni Commissioner Commissioner Mr. Ahmad Fikri Assegaf Commissioner Mr. Chandra Arie Setiawan Independent Commissioner Mr. Marsudi Wahyu Kisworo Independent Commissioner 2) 3) 4) 5) Each was appointed based on the resolution of the Annual GMS of the financial year of 2018, Annual GMS of the financial year of 2019, effective as of the close of this GMS, with gratitude for the contribution of efforts and thought during their term as the member of the Board of Commissioners of the Company. 2. To appoint the names below as members of the Board of Commissioners of the Company: No. Name Position 1) Mr. Bambang Permadi Soemantri President Commissioner/Independent Brodjonegoro Commissioner Mr. Isa Rachmatarwata Commissioner Mr. Arya Mahendra Sinulingga Commissioner Mr. Bono Daru Adji Independent Commissioner Mr. Abdi Negara Nurdin Independent Commissioner 2) 3) 4) 5) 155 Annual Report 2022 PT Telkom Indonesia (Persero) TbkAgenda AGMS Resolution Status of the AGMS Resolution 3. To confirm the honorably dismissal of Mr. DIAN RACHMAWAN as Wholesale & Inter- national Service Director who was appointed based on Annual GMS financial year 2019, effective as of the closing of this GMS, with gratitude for the contribution of efforts and thought during their term as the member of the Board of Directors of the Company. 4. To change the nomenclature of positions for members of the Board of Directors of the Company, from originally as Director of Finance to Director of Finance and Risk Management. 5. Re-assign Mr. Heri Supriadi, who was appointed based on the Resolution of the Annual General Meeting of Shareholders for the Financial Year of 2019, previously the Director of Finance to become the Director of Finance and Risk Management, with a term of office continuing the remaining term of office in accordance with the resolution of the AGM. 6. Reappoint Mr. Bogi Witjaksono as Wholesale & International Service Director. 7. The term of office of the appointed members of the Board of Commissioners and the Board of Directors as referred to in number 2 and number 6, is in accordance with the provisions of the Articles of Association of the Company, with due observance of the laws and regulations in the capital market sector and without prejudice to the right of the GMS to dismiss at any time. 8. With the confirmation of dismissal, and the appointment of members of the Board of Commissioner as referred to in number 1, and number 2, as well as the dismissal, changes in nomenclature of positions, re-assignment, and the appointment of members of the Board of Directors as referred to in number 3, number 4, number 5 dan number 6, the composition of members of the Board of the Company shall be as follows: a. Board of Commissioners No. 1) 2) 3) 4) 5) 6) 7) 8) 9) Name Position Mr. Bambang President Commissioner/Independent Permadi Soemantri Brodjonegoro Commissioner Mr. Wawan Independent Commissioner Iriawan Mr. Bono Daru Independent Commissioner Adji Mr. Abdi Negara Independent Commissioner Nurdin Mr. Marcelino Commissioner Rumambo Pandin Mr. Ismail Commissioner Mr. Rizal Commissioner Mallarangeng Mr. Isa Commissioner Rachmatarwata Mr. Arya Mahendra Sinulingga Commissioner 156 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE Agenda AGMS Resolution b. Board of Directors No. Name Position Status of the AGMS Resolution 1) 2) 3) 4) 5) 6) 7) 8) 9) Mr. Ririek Adriansyah President Director Mr. Budi Strategic Portofolio Director Setyawan Wijaya Mr. Edi Witjara Enterprise and Business Service Director Mr. Heri Supriadi Financial Risk Management Director Mr. Herlan Wijanarko Network & IT Solution Director Mr. Bogi Wholesale and International Service Witjaksono Director Mr. Muhammad Digital Business Director Fajrin Rasyid Mr. Afriwandi Human Capital Management Director Mrs. FM Consumer Service Director Venusiana R. 9. Members of the Board of Directors and the Board of Commissioners, who are appointed as referred to in number 2 and number 6, however still in other positions that are prohibited based on laws and regulations to be concurrent with the position of member of the Board of Directors or the Board of Commissioners of a State-Owned Enterprise, must resign or be dismissed from such position. 10. To grant power and authority to the Board of Directors of the Company, with the right of substitution, to state of the resolution as adopted in the GMS in the Notarial Deed and to appear before Notary or authorized official and to make any adjustments or corrections which are necessary when required by the competent authority for the purposes of implementation of the resolutions of the meeting. Agree Disagree Abstain The Result of Decision Making 55,156,958,053 shares or 67.6551739% 23,162,924,856 shares or 28.4114963% 3,206,709,759 shares or 3.9333298% In practice, AGMS decision of the Financial Year of 2020 immediately applies to business implementation and Company operation. 157 Annual Report 2022 PT Telkom Indonesia (Persero) TbkAGMS FOR THE 2021 FINANCIAL YEAR On May 28, 2021, AGMS was held for the performance of the 2020 Financial Year. At the AGMS, the Company appointed independent parties to carry out vote counts and/or conduct validation at the meeting of the Securities Administration Bureau PT Datindo Entrycom and Notary Ashoya Ratam SH., MKn . with details on the agenda, vote count and realization of AGMS resolutions for the 2021 Financial Year as follows: Status of the AGMS Resolution Resolution effective immediately. Resolution effective immediately. Agenda 1. 2. AGMS Resolution Approved the Annual Report of the Company for the Financial Year of 2021 including the Report on the Supervisory Duties of the Board of Commissioners, and ratified the Consolidated Financial Statements of the Company for the year ended on December 31, 2021 which have been audited by the Public Accounting Firm (KAP) Purwantono, Sungkoro & Surja (a member firm of Ernst & Young Global Limited) according to its report Number: 00614/2.1032/ AU.1/06/0702-1/1/IV/2022 dated April 18, 2022 with an opinion of “fair, in all material respects”, as well as provided full acquittal and discharge of responsibility (volledig acquit et de charge) to the Board of Directors and Board of Commissioners of the Company for management and supervision actions that have been carried out in the Financial Year ended on December 31, 2021 as long as the action is not a criminal offense and has been reflected in the aforementioned Report. Agree Disagree Abstain The Result of Decision Making 86,750,611,190 shares or 99.4895581% 393,836,612 shares or 0.4516698% 51,246,733 shares or 0.0587721% Ratified the Financial Statements and Implementation of Social and Environmental Responsibility Program of the Company for the Financial Year of 2021 which includes the Financial Report of the Micro and Small Business Funding Program that have been audited by the Public Accounting Firm (KAP) Purwantono, Sungkoro & Surja (a member of firm of Ernst & Young Global Limited) according to its report Number: 00046/2.1032/AU.2/11/ 0687-5/1/II/2022 dated February 4, 2022, and provides full acquittal and discharge of responsibility (volledig acquit et de charge) to the Board of Directors and Board of Commissioners of the Company for the management and supervision action on the Social and Environmental Responsibility Program which ended on December 31, 2021 as long as the action is not a criminal offense and has been reflected in the aforementioned Report. Agree Disagree Abstain The Result of Decision Making 86,878,103,517 shares or 99.6357721% 260,667,085 shares or 0.2989449% 56,923,933 shares or 0.0652830% 158 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE Status of the AGMS Resolution Dividend distribution was conducted on June 30, 2022. The decision on retained earning effective immediately. Agenda 3. AGMS Resolution 1. Determined the utilization of the Company’s net profit for the Financial Year of 2021, which totally in the amount of Rp24,759,868,402,874.00, shall be allocated as follows: a. Cash Dividend amounting to 60% of the net profit or in the amount of Rp14,855,921,041,724.40 or Rp149.9656 per share, based on the amount of shares issued on the date of the Meeting, amounting to 99.062.216.600 shares. b. Recorded as Retained Earnings in the amount of 40% of the net profit or amounting to Rp9,903,947,361,149.60 which will be utilized for Company’s business development 2. The distribution of Cash Dividend for the Financial Year of 2021 shall be conducted with the following conditions: a. Those who are entitled to receive Dividend are shareholders whose names are recorded in the Register of Shareholders of the Company at the close of the trading of the Company’s shares on the Indonesia Stock Exchange on June 9, 2022. b. Cash Dividend will be fully paid at the latest on July 1, 2022. 3. Granted power and authority to the Board of Directors with the right of substitution to further regulate the procedure of dividend distribution and to announce the same with due regard to the prevailing laws and regulations at the stock exchange where the Company’s shares are listed.” Agree Disagree Abstain The Result of Decision Making 83,598,594,269 shares or 95.8746813% 3,537,310,930 shares or 4.0567495% 59,789,336 shares or 0.0685691% Resolution effective immediately. 4. 1. Granted power and authority to Shareholder of Serie A Dwiwarna to determine the amount of tantiem for the members of the Board of Commissioners for performance in the Financial Year of 2021 as well as salary/honorariums, benefits, facilities,, and other incentives for Year of 2022. 2. Granted power and authority to the Board of Commissioners after obtaining written approval from the Shareholder of Serie A Dwiwarna to determine the amount of tantiem to the members of the Board of Directors for the Financial Year of 2021 as well as salary/honorariums, benefits, facilities, and other incentives for Year of 2022.” Agree Disagree Abstain The Result of Decision Making 75,005,483,919 shares or 86.0197104% 12,149,969,480 shares or 13.9341392% 40,241,136 shares or 0.0461504% 159 Annual Report 2022 PT Telkom Indonesia (Persero) TbkStatus of the AGMS Resolution Resolution effective immediately. Agenda 5. AGMS Resolution 1. Reappointed the Public Accounting Firm (KAP) Purwantono, Sungkoro & Surja (a member firm of Ernst & Young Global Limited) as KAP that will audit the Consolidated Financial Statements of the Company and Report of Micro and Small Business Funding Program of the Company for the Fiscal Year 2022. 2. Granted power and authority to the Board of Commissioners of the Company to appoint KAP to conduct an audit of the Consolidation Financial Statements of the Company for other periods in Financial Year of 2022. 3. Granted authority the Board of Commissioners of the Company to determine the audit services fee and other requirements for the KAP, as well as determine replacement KAP in case KAP Purwantono, Sungkoro & Surja (a member firm of Ernst & Young Global Limited), for any reason, is not able to complete the audit of the Consolidated Financial Statements of the Company, Report of Micro and Small Business Funding Program of the Company as well as other reports for the Financial Year of 2022, including determining audit service fee and other requirements for the replacement KAP.” Agree Disagree Abstain The Result of Decision Making 83,776,438,962 shares or 96.0786417% 3,249,334,273 shares or 3.7264848% 169,921,300 shares or 0.1948735% 6. 1. Approved the Amendment to the Articles of Association of the Company to adjust the Business Activities of the Company to be in line with the Indonesia Standard Industrial Classification of 2020. Resolution effective immediately. 2. Approved to reconstitute all provisions of the Articles of Association of the Company in connection with the amendment as referred to point 1 of this resolution. 3. Granted power and authority to the Board of Directors of the Company with the right of substitution to take all necessary actions in connection to the resolutions of the agenda of this Meeting, including reconstitute and restate the entire Articles of Association of the Company in a Notarial Deed and granted power with the right of substitution to submit the same to the competent authority in order to obtain approval and/or receipt of notification regarding amendment to the Articles of Association of the Company, conduct everything as may be deemed necessary and useful for this purpose with nothing excluded, including to make additions and/or any alterations of amendments to the Articles of Association, if it is required by the competent authority. Agree Disagree Abstain The Result of Decision Making 62,197,663,488 shares or 71.3311177% 24,639,007,047 shares or 28.2571372% 359,024,000 shares or 0.4117451% 160 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE Agenda 7. AGMS Resolution Status of the AGMS Resolution 1. Affirmed the enforcement of MSOE Regulation No. PER-05/MBU/04/2021 regarding Corporate Social and Environmental Responsibility Program of State-Owned Enterprises as well as the amendments thereof. Resolution effective immediately. 2. Affirmed the enforcement of MSOE Regulation No. PER-11/MBU/07/2021 regarding Requirements and Procedures of Appointment and Dismissal of the Member of Board of Director of State-Owned Enterprises as well as the amendments thereof. 3. Affirmed the enforcement of MSOE Regulation No. PER-13/MBU/09/2021 regarding the Sixth Amendment to the MSOE Regulation No. PER-04/ MBU/2014 regarding Guidelines for the Determination of Remuneration of Board of Directors, Board of Commissioners, and Supervisory Board of State-Owned Enterprises as well as the amendments theretof. Agree Disagree Abstain The Result of Decision Making 83,745,134,639 shares or 96.0427405% 3,382,011,496 shares or 3.8786451% 68,548,400 shares or 0.0786144% 8. Approved the delegation of power and authority to the Board of Commissioners to approve the Statement of Founder of the Telkom Pension Fund regarding the Amendment to the Regulations of the Telkom Pension Fund which results in Changes in Funding and/or Amount of Pension Benefits.” Resolution effective immediately. Agree Disagree Abstain The Result of Decision Making 71,123,484,529 shares or 81.5676564% 15,657,110,706 shares or 17.9562888% 415,099,300 shares or 0.4760548% In practice, AGMS decision of the Financial Year of 2021 immediately applies to business implementation and Company operation. 161 Annual Report 2022 PT Telkom Indonesia (Persero) TbkBOARD OF COMMISSIONERS The Board of Commissioners is one of the organs of the Company and has duties and responsibilities that collectively oversee the running of the Company and provide advice to the Board of Directors, based on Law no. 40 of 2007 regarding Limited Liability Companies. In addition, the Board of Commissioners is also tasked with ensuring that the implementation of GCG principles has been implemented in every Telkom business practice. BOARD OF COMMISSIONERS’ CHARTER The work guidelines for Telkom’s Board of Commissioners are regulated in Board Manual of the Board of Commissioners and Directors which was approved and signed by the Board of Commissioners and Directors in Joint Regulation of the Board of Commissioners and Directors No. 05/KEP/DK/2022 and PD.620.00/r.01/HK200/ COP-M4000000/2022 regarding Guidelines for the Work Procedures of the Board of Commissioners and Directors (Board Manual) Limited Liability Company (Persero) PT Telekomunikasi Indonesia, Tbk. In the charter, there is a work order that regulates the responsibilities, obligations, and division of tasks of the Board of Commissioners. In addition, this Charter also stipulates provisions regarding meetings, conflicts of interest, share ownership, as well as the relationship between the Board of Commissioners and the Board of Directors and the GMS. The duties and responsibilities of members of the Board of Commissioners are also regulated in the Company’s Articles of Association. BOARD OF COMMISSIONERS’ AUTHORITIES, DUTIES, AND RESPONSIBILITIES Telkom’s Articles of Association stipulates the Board of Commissioners’ obligations to: 1. Provide advice to the Board of Directors in performing the Company’s management; 2. Provide opinion and give approval over the Annual Work Plan and Budget of the Company as well as other work plans which have been prepared by the Board of Directors, in accordance with the provisions of the Articles of Association and the prevailing laws and regulations; 3. Keep up with Company’s activities progress, provide opinions and advice to the GMS regarding every issue considered important for the Company’s management; 4. Report to Series A Dwiwarna shareholder if there is any indication of decreasing performance of the Company; 162 5. Propose to the GMS for the appointment of Public Accountant who will perform the audit over the Company’s book; 6. Review and analyze the periodic reports and the Annual Report prepared by the Board of Directors as well as execute the Annual Report; 7. Provide explanation, opinion, and advice to the GMS regarding the Annual Report, if requested; 8. Draw up the minutes of the meeting of the Board of Commissioners and keep their copies; 9. Report to the Company with regard to their and/ or their families share ownership in the Company aforesaid and in other companies; 10. Provide report regarding the supervisory duties, which have been performed during the recently passed Financial Year to the GMS; 11. Provide explanation regarding any matters inquired about or requested by Series A Dwiwarna shareholder with due observance of the statutory regulations, particularly those prevailing in the Capital Market sector; 12. Perform other obligations framework of supervisory duties and advice provision, to the extent, it does not contradict the statutory regulations, the Articles of Association and/or the resolutions of the GMS. in the The authority of the Board of Commissioners is as follows: 1. Examine books, letters, as well as other documents, examine cash position for verification purposes and other securities and examine the assets of the Company; 2. Enter the yards, buildings, and offices used by the Company; 3. Ask explanation from the Board of Directors and/ or other officials regarding any issues regarding the Company’s management; 4. Be informed of any policies and actions, which have been and which will be taken by the Board of Directors; 5. Ask the Board of Directors and/or other officials under the level of the Board of Directors, with the knowledge of the Board of Directors, to attend the meeting of the Board of Commissioners, while requests for or support for activities other than meetings will be carried out with due observance of professionalism, ethics, interests of the Company and the organs of the Company; 6. Appoint and dismiss a secretary of the Board of Commissioners; 7. Suspend the members of the Board of Directors in accordance with the provisions of this Articles of Association of the Company; 8. Form the Audit Committee, the Remuneration and Nomination Committee, the Risk Monitoring if considered Committee, and other committees, necessary, with due observance of the capability of the company; PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE 9. Utilize experts for certain matters and within a certain period on the account of the Company, if considered necessary; 10. Perform the management actions over the Company in certain conditions for a certain period under the provisions of this Articles of Association; 11. Approve the appointment and dismissal of the Corporate Secretary and/or the Head of Internal Supervisory Unit; 12. Examine and review the Annual Report prepared by the Board of Directors and sign the Annual Report; 13. Attend the meeting of the Board of Directors and give viewpoint towards the matters being discussed; 14. Perform other supervisory authorities long as it does not contradict with the statutory regulations, the Articles of Association and/or the resolutions of the GMS; 15. In order to carry out their supervisory function, members of the Board of Commissioners at agreed working hours or other times, jointly or individually, with or without prior notification to the Board of Directors, by taking into account professionalism, the interests of the Company, the public and organs, have rights access but not limited to buildings and locations from or other places that are used to be controlled by the Company’s subsidiaries and have rights to check books, documents, reports, and inventory of goods, and check cash positions (for verification purposes) and other guarantees and to find out all actions taken by the Directors of the subsidiary which are based on the principle of disclosure of information by taking into account the confidentiality of the Company, and can provide advice to subsidiaries regarding policies/ actions that have been decided or will be taken by the Directors of the subsidiaries either requested or not. In the event of a company loss, members of the Board of Commissioners have a collective responsibility for mistakes or omissions in carrying out their duties, unless proven: 1. Such loss is not caused by their mistake or negligence; 2. They have performed in good faith, full responsibility, and prudentially for the interest and based on the purpose and objective of the Company; 3. They do not have any conflict of interest either directly or indirectly with the management activities causing the loss; and 4. They have taken the action to prevent the occurrence or continuation of such loss. TERM OF SERVICE OF MEMBERS OF THE BOARD OF COMMISSIONERS Members of the Board of Commissioners have 5 years term of office without reducing the authority of the GMS to dismiss members at any time. The GMS has the right to reappoint members of the Board of Commissioners for the next 1 term after their term of office ends. MECHANISM OF RESIGNATION AND DISMISSAL OF THE BOARD OF COMMISSIONERS Based on the Minister of SOE Regulation Number: PER-02/MBU/02/2015 the Regulation of regarding the Minister of State-Owned Enterprises regarding Requirements and Procedures for Appointment and Dismissal of Members of the Board of Commissioners and Supervisory Board of State-Owned Enterprises, as well as amendments to the Minister of SOE Regulation Number: PER- 10/MBU/10/2020, members of the Board of Commissioners may resign and/or be dismissed at any time before their term of office ends for various reasons. Members of the Board of Commissioners may be dismissed by the Minister of SOE or the GMS for other reasons for the interests and objectives of the SOE and/or the Company. BASIS OF APPOINTMENT OF THE BOARD OF COMMISSIONERS The mechanism for selecting and appointing members of Telkom’s Board of Commissioners is carried out through the GMS. In addition, the appointment of Telkom’s Board of Commissioners is based on the Minister of SOE Regulation Number PER-02/MBU/02/2015 regarding the Regulation of the Minister of State-Owned Enterprises regarding Requirements and Procedures for Appointment and Dismissal of Members of the Board of Commissioners and Supervisory Board of State-Owned Enterprises, as well as amendments to the regulations. Minister of SOE Number: PER-10/MBU/10/2020. The appointment or selection of the Board of Commissioners takes into account the competence and expertise, integrity and background required by the Company. 163 Annual Report 2022 PT Telkom Indonesia (Persero) TbkORIENTATION PROGRAM FOR NEW MEMBERS OF THE BOARD OF COMMISSIONERS Each new member of the Board of Commissioners must attend an orientation to understand Telkom’s activities and conditions. This orientation program is coordinated by the Corporate Secretary, in accordance with the Regulation of the Minister of SOEs No. PER-01/MBU/2011. In 2022, there are no orientation program for members of the Board of Commissioners because in 2022 there are no change in members of the Board of Commissioners. EDUCATION, TRAINING, SEMINAR, AND CONGRESS Every year, Telkom provides opportunities for members of the Board of Commissioners to attend various educations, trainings, seminars, and other similar activities. The goal is that members of the Board of Commissioners can develop their knowledge and expertise. The following table presents information related to education and/or training that members of the Board of Commissioners have attended during 2022. EDUCATION, TRAINING, SEMINAR, AND CONGRESS OF MEMBERS OF THE BOARD OF COMMISSIONERS OF TELkOM IN 2022 No Program Organizer Location Date Commisioners Telkom Online January 5, 2022 Ismail 1. 2. 3. 4. 5. 6. 7. 8. 9. Dubai Expo Panelist "Satu Data Vaksin" Early Years Briefing at AdMedika Tech for Good Institute (TFGI) Inaugural Dialogue Indonesia Leaders Offsite Meeting The 1st National Conference "Leveraging the Roles of Audit Committee" AdMedika Jakarta Grab Indonesia Jakarta CTO Ministry of Finance Bali IKAI Online Indonesia Fiscal Reform Development Policy Loan IMF Online Startup Glory "Sharing Session" Telkom Financing for the Sustainable Development Goals IAI Italy Webinar Tel-U "Connectivity Improvement on The Rural Urban Area" TIP & Telkom University Denpasar, Bali Online Online January 10, 2022 January 13, 2022 January 13, 2022 January 26-27, 2022 January 27, 2022 January 28, 2022 February 1, 2022 February 2, 2022 Marcelino R Pandin Bambang PS Brodjonegoro Isa Rachmatarwata 1. Bambang PS Brodjonegoro 2. Bono Daru Adji 3. Wawan Iriawan 4. Abdi Negara Nurdin Isa Rachmatarwata Marcelino R Pandin Bambang PS Brodjonegoro Ismail 10. Webinar "Road to Indonesia 5G Security Readiness" Cloud Computing Indonesia & Huawei Online February 7, 2022 Ismail 164 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE No 11. 12. 13. 14. 15. 16. 17. 18. 19. Program Organizer Location Date Commisioners Sultra TV Talkshow "Roadmap for Implementation of Indonesia's Digital Transformation" Sultra TV Online February 8, 2022 Ismail Webinar Tel U APTIKOM Bandung March 23, 2022 Ismail BUMN Goes To Campus Ministry of Finance Online Speaker Invitation to IoT Asia+: Indonesia Roadshow IoT Asia+ Online Data-Driven Series: Data Revolution in Indonesia's Public Sector Press Conference "Preparation for the Implementation of the First Phase of ASO" Mobile World Congress (MWC) "Develop Open Technology and Metaverse Ecosystem in Indonesia" Meeting of the OPEC Fund for International Development Forbes Digital Assets & Web3 Summit Algoritma in partnership with KPK and LPS PPI Ministry of Communication and Information Technology Ministry of Communication and Information Technology, Meta Connectivity & TIP OPEC Fund for International Development February 24, 2022 February 24, 2022 February 24, 2022 Isa Rachmatarwata Ismail Ismail February 25, 2022 Ismail Online Jakarta Barcelona, Spain March 8, 2022 Ismail Online March 16, 2022 Isa Rachmatarwata Forbes Online March 16, 2022 Marcelino R Pandin 20. Webinar "Apakah Tarif Internet Menjadi hambatan Utama Terwujudnya Indonesia Terkoneksi?” PPI Ministry of Communication and Information Technology Online March 17, 2022 Ismail Ministry of SOE Online March 17, 2022 Bono Daru Adji 21. 22. Onboarding Commissioner Program Batch 4 of 2022 Ministry of SOE Leadership Forum Ministry of SOE Nusa Dua, Bali March 19, 2022 23. Workshop Telkom Corporate Telkom Jakarta March 23, 2022 Organization Post-5 Bold Moves 1. Marcelino R Pandin 2. Bono Daru Adji 3. Wawan Iriawan 4. Abdi Negara Nurdin 1. Bambang PS Brodjonegoro 2. Arya M Sinulingga 3. Isa Rachmatarwata 4. Marcelino R Pandin 5. Ismail 6. Rizal Mallarangeng 7. Bono Daru Adji 8. Wawan Iriawan 9. Abdi Negara Nurdin 165 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo Program Organizer Location Date Commisioners 24. Workshop National Resilience Institute National Resilience Institute Jakarta March 24, 2022 Marcelino R Pandin 25. Global Solution Summit Global Solution Initiative Berlin March 27-31, 2022 Bambang PS Brodjonegoro 26. 27. 28. 29. 30. 31. Student Communication Forum - TRISAKTI Socialization of the Law on Central and Regional Financial Relations Keynote Speech ABDI International Web summit: Cyber Security to Prevent Future Cyber Warfare Gathering Pelindo Digital Squad The 5th Conference on Web3, Blockchain & Crypto World Bank Indonesia Partnership: Advisory Committee Meeting on Accelerating Human Capital Development 32. Opening Ceremony Upgrade 3G ke 4G at TSO Gatsu 33. G20 Talk Press Conference for Internet of Things (IoT) Creation 2022 program "Recover Stronger, Collaboration Beyond Borders" Trisakti University DKI Jakarta March 27, 2022 Arya M Sinulingga Ministry of Finance Bandung March 29, 2022 Isa Rachmatarwata El Jhon: ABDI (Asosiasi Big Data & AI) Online March 30, 2022 Ismail Pelindo Bogor March 31, 2022 Arya M Sinulingga MC-SQUARE Leuven Online March 31, 2022 Marcelino R Pandin World Bank Online April 6, 2022 Isa Rachmatarwata Telkomsel Jakarta April 6, 2022 Ismail Online April 8, 2022 Bambang PS Brodjonegoro Online April 12, 2022 Ismail Oxford Society Indonesia Ministry of Communication and Information Technology & Asosiasi IoT Indonesia (Asioti) National Association of Broadcasters (NAB) Show NAB Las Vegas, USA April 20-27, 2022 1. Abdi Negara Nurdin 2. Marcelino R Pandin Sharing Session Update about Capital Market Telkom Online April 22, 2022 1. Bambang PS Brodjonegoro 2. Arya M Sinulingga 3. Isa Rachmatarwata 4. Marcelino R Pandin 5. Ismail 6. Rizal Mallarangeng 7. Bono Daru Adji 8. Wawan Iriawan 9. Abdi Negara Nurdin Global Spectrum Series Bangkok dan Online April 26, 2022 Ismail APAC Spectrum Conference - Session 2: Balancing priorities – Delivering a Spectrum Strategy to Meet The Varied Connectivity Requirements of the APAC Region 34. 35. 36. 37. 166 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE No 38. 39. 40. Program Organizer Location Date Commisioners Lead by Example IFG Global Meeting of the Emerging Markets Forum Global Emerging Market Online Paris April 27, 2022 Arya M Sinulingga May 15-18, 2022 Bambang PS Brodjonegoro TowerXchange Meetup Europe 2022 The Euromoney Institutional Investor PLC group London, Inggris May 15-19, 2022 1. Rizal Mallarangeng 2. Bono Daru Adji 3. Wawan Iriawan 41. T7 Summit T7 Berlin, Jerman May 23-25, 2022 ISEI - UNSRAT Online May 31, 2022 Bambang PS Brodjonegoro Bambang PS Brodjonegoro 42. The Impact of IKN on the Regional Economy and Banking Sector of North Sulawesi 43. Panelists on ITU - WSIS ITU, UNESCO, UNDP and UNCTAD Jenewa and Online June 1, 2022 Ismail 44. Talk Show Streaming through Youtube Heartline Networks Online June 3, 2022 Marcelino R Pandin 45. Workshop Political Parties in Local Governance and Development Penang Institute & Konrad Adenauer Shifting Penang, Malaysia June 6-7, 2022 Marcelino R Pandin 46. 47. 48. 49. 50. Musrebang Polri 2023 Indonesian Police Jakarta June 14, 2022 Isa Rachmatarwata BPKP Online June 14, 2022 Bono Daru Adji ANU - Indonesia project Canberra/ Australia June 15, 2022 Bambang PS Brodjonegoro PWC Online June 15, 2022 Bambang PS Brodjonegoro SDPPI Lombok, NTB June 16, 2022 Ismail Rakornas Pengawasan Intern Pemerintah Tahun 2022 Prospect for Australia - Indonesia Trade Investment Partnership Navigating Post-pandemic Opportunities: Indonesian M&A Outlook and Insights Public Lecture About Wisely Utilizing Telecommunications Devices in Islamic Boarding Schools to Support Digital Transformation 51. Digital Banking Trends and Innovations 52. Meeting of OFID 2022 Association of Capital Market Legal Consultants OPEC Fund for International Development Online June 16, 2022 Bono Daru Adji Vienna June 20, 2022 Isa Rachmatarwata 53. 54. National Team Alert Call II to control the frequency onboard the KRI Banda Aceh TNI AL at the Tanjung Priok Kolinlamil Global Pathways to a Hydrogen Energy Futures (GPHEF) Conference SDPPI and TNI AL Jakarta June 21, 2022 Ismail Institute on Sci-ence for Global Policy Online June 23, 2022 Bambang PS Brodjonegoro 167 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo 55. Program Organizer Location Date Commisioners Indonesia 5G & Digital Connectivity Workshop by UST-DA USTDA’s contrac-tor & BCIU Jakarta June 29, 2022 Ismail 56. Asian Impact Leader Net-work AVPN - The Rockefeller Foundation Bellagio July 4-8, 2022 Bambang PS Brodjonegoro 57. 58. 59. 60. 61. 62. 63. 64. 65. 66. 67. 68. Focus Group Discussion Implementation Multiple Voting Shares in Indonesia Indonesia Corporate Secretary Association Jakarta July 5, 2022 Bono Daru Adji FGD Impact of the Increase in World Oil Prices on the National Energy Supply and the burden on the State Budget Keynote Speech inauguration of TelkomGroup membership in TIP (Telecom Infra Project) BPK RI Online July 6, 2022 Isa Rachmatarwata Telkom Bandung July 11, 2022 Ismail Next Gen Fest 2022 Berita Satu Online July 14, 2022 Arya M Sinulingga Speech Education of Publik Communication Keterbukaan Informasi Publik (KIP) DKI Jakarta July 19, 2022 Arya M Sinulingga Engaging Your Team and Be A Great Leader Update on the Implementation of PaDi UMKM Speaker GSMA Mobile 360 Asia Pacific Conference and Policy Leaders Forum "Digital Policies & New Business Models for a Digital Future” Speaker at the Digital Transformation Indonesia Conference and Exhibition (DTICX) conference PPM-Management Online July 22, 2022 Arya M Sinulingga Ministry of SOE Online August 1, 2022 Bono Daru Adji Mobile 360 Asia Pacific Singapore August 3, 2022 Ismail Jakarta August 4, 2022 Ismail APTIKNAS (Asosiasi Pengusaha Teknologi Informasi dan Komunikasi (TIK) Nasional) Resource Person for the Press Conference "Adjustment to the Schedule for the Stages of Switching Off Analog TV" PPI Ministry Of Communication And Information Technology Online August 6, 2022 Ismail Policy Talk Side Event B20: Group Discussion on Digital Economy Transforming the Economy towards a Resilient and Sustainable Economic Growth Kemenkop - B20 KADIN Bali August 8, 2022 Bambang PS Brodjonegoro BAPPENAS Bali August 8, 2022 Bambang PS Brodjonegoro 69. Webinar Indonesia Economic Indofood Online Outlook 2023 August 8, 2022 Bambang PS Brodjonegoro 168 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE No Program Organizer Location Date Commisioners 70. Philantrophy festival 71. Kick Off E-Monev 2022 KIP Philantrophy Indonesia Keterbukaan Informasi Publik (KIP) Online August 9, 2022 Bambang PS Brodjonegoro Online August 10, 2022 Arya M Sinulingga 72. GRC Masterclass Ministry of SOE Online October 14, 2022 Ismail Event Metro TV Metro TV Online August 16, 2022 Isa Rachmatarwata Communication Summit BSI (Bank Syariah Indonesia) Bank Syariah Indonesia DKI Jakarta August 18, 2022 Arya M Sinulingga Ministry of Communication and Information Technology Keterbukaan Informasi Publik (KIP) Jakarta August 19, 2022 Ismail DKI Jakarta August 23, 2022 Arya M Sinulingga 73. 74. 75. 79. 80. 81. Talkshow Speaker “Dukung Era Baru TV Digital: Jabodetabek Siap ASO" 76. Workshop Monev 2022 KIP 77. Discussion of the 2023 State Budget Bill 78. Trade Policy Advisory Group Telkom University Scientific Oration Green Data Center Book Launch DPD Secretariat Online Badan Kebijakan - Kemendag Jakarta Telkom University Bandung IDPRO - MAASKEI Jakarta Advancing the Global Circular Carbon Economy KAPSACR 82. T20 Summit LPEM - CSIS Bali Bali 83. Fuel Subsidy Budget Transfer TVRI Online 84. 85. Pasundan Discussion Volume XIII BULOG Public Relations Workshop GEMA PASUNDAN Online BULOG DKI Jakarta 86. Young Leaders BUMN BNI DKI Jakarta August 24, 2022 August 25, 2022 August 27, 2022 August 30, 2022 Bambang PS Brodjonegoro Bambang PS Brodjonegoro Bambang PS Brodjonegoro Bambang PS Brodjonegoro September 2, 2022 Bambang PS Brodjonegoro 5-7 September 2022 Bambang PS Brodjonegoro September 5, 2022 September 10, 2022 September 15, 2022 September 16, 2022 Isa Rachmatarwata Arya M Sinulingga Arya M Sinulingga Arya M Sinulingga 87. G20 Global Financial Stability Ministry of Economy and Finance Seoul / South Korea September 21- 23, 2022 Bambang PS Brodjonegoro 88. Bali Annual Telecommunication International Conference (BATIC) 2022 TELIN Bali September 21- 23, 2022 1. Marcelino R Pandin 2. Wawan Iriawan 3. Abdi Negara Nurdin 89. The 9th Annual XCION Workshop XCION Indonesia – ICION Bali September 22, 2022 Marcelino R Pandin 169 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo Program Organizer Location Date Commisioners 90. BUMN Legal Summit 2022 Ministry of SOE Bali 91. Game Developer Gathering & Mini Game Exhibition Indigo Telkom Bali 92. Workshop Internal Audit Telkom Yogyakarta 93. Sharing Session Digitalization of GKBI 94. IT Leaders Festival 2022 Telkom Yogyakarta Computing/The Channel Company London, UK September 22- 23, 2022 Bono Daru Adji Wawan Iriawan September 24, 2022 September 29- 30, 2022 September 29, 2022 October 4, 2022 Marcelino R Pandin Bono Daru Adji Wawan Iriawan Wawan Iriawan Marcelino R Pandin 95. 96. 97. Special Event Toward the G20 Summit: Infrastructure Development Through Innovative Financing IPv6 switch ON "Boosting Indonesian Digital Economy Development" Updates regarding Startup with Venture Capital in Silicon Valley Task Force 8 - T20 Indonesia - Delloitte Washington DC October 10-11, 2022 Bambang PS Brodjonegoro Jakarta October 10, 2022 Ismail PPI Ministry Of Communication And Information Technology - IPv6 Summit Alignment Telkom United States October 12-15, 98. GRC Masterclass Ministry of SOE Online 2022 October 14, 2022 Bambang PS Brodjonegoro 1. Bambang PS Brodjonegoro 2. Arya M Sinulingga 3. Isa Rachmatarwata 4. Marcelino R Pandin 5. Ismail 6. Rizal Mallarangeng 7. Bono Daru Adji 8. Wawan Iriawan 9. Abdi Negara Nurdin 99. International Alumni Awards Celebration University of Illi-nois - Urbana Champaign 100. Tech Crunch Event 2022 Tech Crunch BUMN Goes to Campus Institut Teknologi PLN PLN Meta Jakarta "Connectivity for the Future of Metaverse Indonesia" at the Digital Experts Talk CfDS x Meta"Future Rural Broadband Connectivity, Disaster Recovery, Remote Sensing and Geo-Localization: Illnois, USA October 17-18, 2022 Bambang PS Brodjonegoro San Fransisco, USA DKI Jakarta October 18-22, 2022 1. Marcelino R Pandin 2. Abdi Negara Nurdin October 24, 2022 October 25, 2022 Arya M Sinulingga Ismail 101. 102. 170 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE No 103. Program Organizer Location Date Commisioners Opportunities and Challenges on Technologies, Applications and Regulation” International Seminar 2022 HAPS (High Attitude Platform Station) Jakarta October 26, 2022 Ismail 104. Taping Video Opening at the Policy Roundtable Session at the 2022 Fyuz Event Fyuz Madrid, Spain October 26, Ismail 105. The Indonesian Summit 2022 Bank Danamon Jakarta 2022 October 27, 2022 October 29, 2022 November 1, 2022 Bambang PS Brodjonegoro Arya M Sinulingga Ismail Kubik Empowering Leadres Forum Government Keynote Address "Driving Digitalization Ecosystems in ASEAN" at the AIBP Conference & Exhibition Kubik Leadership Online AIBP Jakarta Public lecture on Indonesian economy University of Indonesia Paramadina University Depok Jakarta November 2, 2022 Bambang PS Brodjonegoro November 2, 2022 Bambang PS Brodjonegoro PTC DKI Jakarta November 4, 2022 Arya M Sinulingga 106. 107. 108. 109. 110. Global Economy: Reflections and challenges from G20 Presidency Optimizing The Future Role of Corporate Secretary “Challenges, Issues & Opportunities" Communication 112. Working visit and technical cooperation with the South Korean Ministry of Science and ICT 111. Workshop PLN PLN DKI Jakarta November 7, 2022 Arya M Sinulingga Ministry of Science and ICT South Korea South Korea November 7-10, 2022 Ismail 113. 114. Bloomberg CEO Forum: New Capital City LPS AVPN Community Engage- ment AVPN 115. B20 summit B20 - KADIN 116. B20 Indonesia 2022 KADIN Bali Bali Bali Bali November 12,022 Bambang PS Brodjonegoro November 12, 2022 Bambang PS Brodjonegoro November 13- 14, 2022 Bambang PS Brodjonegoro November 13- 14, 2022 1. Arya M Sinulingga 2. Marcelino R Pandin 117. 118. 119. Kawan Lama Group Summit 2022 Public lecture Telkom Uni- versity “Developing Happy Digital Ecosystem by Aligning In- dustry, Government, and Education” at the Tri Hita Karana Forum 2022 Kawan lama Group Jakarta November 16, 2022 Bambang PS Brodjonegoro Telkom University Bandung - online Novevmber 17, 2022 Bambang PS Brodjonegoro Nusa Dua, Bali November 17, 2022 Ismail Ministry Of Communication and Information Technology and HDX 171 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo Program Organizer Location Date Commisioners 120. GRC Masterclass Ministry of SOE Online November 17, 2022 121. GRC Masterclass Ministry of SOE Online December 8, 2022 1. Bambang PS Brodjonegoro 2. Arya M Sinulingga 3. Isa Rachmatarwata 4. Marcelino R Pandin 5. Ismail 6. Rizal Mallarangeng 7. Bono Daru Adji 8. Wawan Iriawan 9. Abdi Negara Nurdin 1. Bambang PS Brodjonegoro 2. Arya M Sinulingga 3. Isa Rachmatarwata 4. Marcelino R Pandin 5. Ismail 6. Rizal Mallarangeng 7. Bono Daru Adji 8. Wawan Iriawan 9. Abdi Negara Nurdin Annual Meeting of PT. Circleka Indonesia Utama PT Circleka Utama Indonesia Gading Serpong December 13, 2022 Bambang PS Brodjonegoro 122. 123. December 22, 2022 Bambang PS Brodjonegoro December 27, 2022 Bambang PS Brodjonegoro Background Study Meeting of RPJPN BAPPENAS Jakarta 124. FGD Region Development BAPPENAS Jakarta 172 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE BOARD OF COMMISSIONERS’ DIVERSITY The diversity policy for members of the Board of Commissioners takes into account the implementation of GCG principles and Law no. 39 of 1999 regarding Human Rights in the mechanism. Candidates for members of the Board of Commissioners are determined by fulfilling the aspects of diversity, non-discrimination, human rights, and the principle of fairness. The appointment or election of the Board of Commissioners takes into account the competence and expertise, integrity, and background required by the Company. BOARD OF COMMISSIONERS’ DIvERSITy AS OF DECEMBER 31, 2022 Name Position Gender Background of Expertise & Skill Level of Education Male Economics and Planology Doctoral Bambang Permadi Soemantri Brodjonegoro Wawan Iriawan Bono Daru Adji Abdi Negara Nurdin President Commissioner/ Independent Commissioner Independent Commissioner Independent Commissioner Independent Commissioner Marcelino Rumambo Pandin Commissioner Male 6. Ismail Commissioner Male No. 1. 2. 3. 4. 5. 7. 8. 9. Male Law Male Law Male Economy, Content and Digital Architect, Business Management and Technology Electrical Engineering and Telecommunications Engineering Public Communication and Political Doctoral Master Bachelor Doctoral Doctoral Doctoral Master Bachelor Rizal Mallarangeng Commissioner Male Isa Rachmatarwata Commissioner Arya Mahendra Sinulingga Commissioner Male Male Mathematics Civil Engineering Composiiton Diversity of Board of Comissioners’s Position Composition Diversity of Board of Comissioners’s Education Level Independent 44% Doctoral 56% Master 22% Non Independent 56% to Bachelor 22% 173 Annual Report 2022 PT Telkom Indonesia (Persero) TbkBOARD OF COMMISSIONERS’ DOUBLE POSITION In order to apply the principle of transparency, Telkom discloses information on the concurrent positions of the Board of Commissioners as of December 31, 2022 in the table below: BOARD OF COMMISSIONERS’ DOUBLE POSITION AS OF DECEMBER 31, 2022 Telkom No. Name Posotion 1. Bambang Permadi Soematri Brodjonegoro President Commissioner/ Independent Commissioner Other Position Audit Committee, KEMPR 2. Wawan Iriawan 3. Bono Daru Adji Independent Commissioner Independent Commissioner 4. Abdi Negara Nurdin Independent Commissioner Audit Committee, KNR Audit Committee, KEMPR Audit Committee, KNR Subsidiary Other Entities None 1. 2. 3. 4. 5. 6. 7. 8. Commissioner of PT Bukalapak, Tbk Independent Commissioner of PT Astra International, Tbk Independent Commissioner of PT TBS Energi Utama, Tbk Commissioner of PT Combiphar President Commissioner of PT Oligo Infrastruktur Independent Commissioner of PT Indofood, Tbk President Commissioner of PT Nusantara Green Energy President Commissioner of PT Prudential Syariah None None None Managing Partner, Assegaf Hamzah & Partners None 1. 2. 3. 4. 5. 6. Commissioner of PT Nagara Sains Ekosistem Commissioner of PT Sugih Reksa Indotama Co-Founder of Producer Give.ID Commissioner of PT NSA Founder of Maleo Music Co-Founder and Commissioner of PT Hijau Multi Kreatif 5. Marcelino Rumambo Pandin Commissioner KNR None None 6. Ismail Commissioner KNR, KEMPR KNR, KEMPR None General Director of Resources and Equipment of Post and Information Technology, Ministry of Communication and Information None Commissioner of PT Energi Mega Persada Commissioner Commissioner KEMPR None General Director of Budget, Ministry of Finance Commissioner KNR, KEMPR None 1. 2. 3. Member of the Board of Trus-tees of Universitas Sumatera Utara Special Staff III to the Minister of State-Owned Enterprises (SOE) General Secretary of Institut Teknologi Bandung Alumni Asso-ciation 7. 8. 9. Rizal Mallarangeng Isa Rachmatarwata Arya Mahendra Sinulingga 174 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE BOARD OF COMMISSIONERS’ SELF ASSESSMENT POLICY Telkom’s Board of Commissioners has a self-assessment policy to assess the performance of the Board of Commissioners, in accordance with the Joint Regulation of the Board of Commissioners and Directors No. 05/KEP/ DK/2022 and PD.620.00/r.01/HK200/ COP-M4000000/2022 regarding Guidelines for the Work Procedures of the Board of Commissioners and Directors (Board Manual) of the Company (Persero) PT Telekomunikasi Indonesia, Tbk. Self-assessment is carried out by each member of the Board of Commissioners to assess the performance of the Board of Commissioners collegially, which means that it is not an individual performance assessment. This policy is a guideline used as a form of accountability for the performance appraisal of the Board of Commissioners. With this policy, each member of the Board of Commissioners is expected to contribute to improving their performance on an ongoing basis. INDEPENDENT COMMISSIONER As of December 31, 2022, Telkom has a total of 9 Commissioners and 4 of them are Independent Commissioners. This amount exceeds the provisions of the Financial Services Authority Regulation No. 33/ POJK.04/2014 by 30%. Criteria for determining Independent Commissioners and appointment at the GMS refers to: 1. Regulation of the Minister of State-Owned Enterprises No. PER-02/MBU/02/2015, as well as changes to the Minister of SOE Regulation Number: PER-10/ MBU/10/2020, which includes Formal Requirements, Material Requirements, and Other Requirements. 2. Financial Services Authority Regulation No. 33/ POJK.04/2014 regarding Directors and Board of Commissioners of Issuers or Public Companies, as follows: a. Not a person who works or has the authority and responsibility to plan, lead, control, or supervise the activities of the Company in the past 6 (six) months, except for the reappointment as an Independent Commissioner in the following period. b. Do not have Telkom shares either directly or indirectly. c. Has no affiliation with Telkom, members of the Board of Commissioners, members of the Board of Directors, or main Shareholders of Telkom. d. Has no direct or indirect business relationship related to Telkom’s business activities. INDEPENDENCE STATEMENT Each member of the Board of Commissioners must carry out their duties independently without any intervention from other parties. In the composition of Telkom’s Board of Commissioners, there are Independent Commissioners whose requirements refer to the provisions applicable in the Capital Market environment. In accordance with Article 25 of the Financial Services Authority Regulation No. 33/POJK.04/2014, Independent Commissioners who have served for 2 terms of office (2 times for 5 years) may be reappointed by declaring their independence to the GMS and publicly disclosed in the Annual Report. As of December 31, 2022, there is no Independent Commissioner of Telkom who has complied with these provisions. However, Telkom requires each Independent Commissioner to continue to sign an Independence Statement every year, as an effort to implement GCG. BOARD OF COMMISSIONERS’ MEETING In accordance with Telkom’s Board Manual and in line with Financial Service Authority Regulation No. 33/POJK.04/2014, in particular Article 31, the Board of Commissioners is required to hold a meeting at least 1 time in 1 month or at any time deemed necessary. In addition, the Board of Commissioners is also required to hold joint meetings with the Board of Directors at least once every 3 months or at any time if necessary. During 2022, the Board of Commissioners has held 27 internal meetings and 12 joint meetings with the Board of Directors. If more than half of the members of the Board of Commissioners, the meeting is considered a quorum. Decision making in the Board of Commissioners meeting is carried out by prioritizing deliberation for consensus. If consensus cannot be reached, then decision making is based on the majority vote of the members of the Board of Commissioners who are present or represented at the meeting. In the event that the number of votes is balanced, the decision taken is in accordance with the opinion of the Chairperson of the meeting. 175 Annual Report 2022 PT Telkom Indonesia (Persero) TbkThe table below shows the frequency of attendance of each member of the Board of Commissioners in internal meetings and the frequency of attendance of each member of the Board of Commissioners and Board of Directors in joint meetings during 2022. BOARD OF COMMISSIONERS’ ATTENDANCE & AGENDA AT INTERNAL MEETINGS No 1. Date Meeting’s Agenda Monday, January 10, 2022 1. Proposed Contract Extension for Members and Secretariat Staff of the Board of Commissioners at KEMPR; 2. Proposed Board of Commissioners Decision regarding the Appointment and Remuneration System for the Board of Commissioners’ Organs; 3. Proposed Agenda for the Joint Meetings of the Board of Commissioners and Directors for 2022. Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ IR √ IS √ MRP RM √ √ 2. Monday, January 24, 2022 Determination of TelkomGroup Nominated Talent Proposals for 2022 Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ IR √ IS √ MRP RM √ √ 3. Wednesday, February 9, 2022 Discussion on B2B & B2C Business Translation to Support TELKOM’s Performance Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ IR √ IS √ MRP RM √ √ 4. Friday, February 25, 2022 Extension of Contract Period for Secretariat Staff in the Audit Committee Attendance List BPSB ANN BDA √ √ √ 5. Wednesday, March 16, 2022 Digital Talent Discussion Attendance List BPSB ANN BDA √ √ √ WI √ WI √ AMS √ AMS √ IR √ IR √ IS √ IS √ MRP RM √ √ MRP RM √ √ 6. Thursday, April 14, 2022 1. Board of Commissioners Monitoring KPI 2022 2. Arrangements for Official Travel of the Company’s Management Attendance List BPSB ANN BDA - √ - WI √ AMS √ IR √ IS √ MRP RM √ √ 7. Monday, April 18, 2022 1. Report of the Audit Committee on the Implementation of the 2021 Financial Statement Audit by the Public Accounting Firm/EY Public Accountant (KAP/AP EY) 2. Proposal for the Issuance of Corporate Bonds in 2022 Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ IR - 8. Tuesday, April 26, 2022 Management of Government Assignment Programs Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ IR - IS √ IS √ MRP RM √ √ MRP RM √ √ 9. Monday, May 23, 2022 1. Discussion of the 2021 AGMS Agenda 2. Finalization of the Proposed Decision on the 2021 Bond Issuance Application Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ IR √ IS √ MRP RM √ √ 176 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE No 10. Date Monday, June 13, 2022 Meeting’s Agenda Monitoring Telkomsel’s Investment in PT Application Karya Anak Bangsa (AKAB/Gojek) Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ 11. Monday, June 30, 2022 Discussion on Strategic Fit Digico Telkom Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ IR √ IR √ IS √ IS √ MRP RM √ √ MRP RM √ √ 12. Monday, July 13, 2022 Discussion on Formation of SOE Digital Healthcare Ecosystem Initiative Legal Entity (FitAja) Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ IR √ IS √ MRP RM √ √ 13. Friday, July 22, 2022 Discussion of Requests for Approval for Changes in the Use of Phase-2 MDI500 Project Funds Attendance List BPSB ANN BDA √ √ √ WI √ AMS - IR √ IS √ MRP RM √ √ 14. Tuesday, August 23, 2022 Discussion on Proposed Changes to Pension Fund Regulations; Others: Honorarium for Supporting Organs of the Board of Commissioners. Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ IR √ IS √ MRP RM √ √ 15. Tuesday, August 25, 2022 1. Proposed Changes to the BPPU Directory EBIS KPI Dictionary, and Alignment of the Board of Directors’ Work Values; 2. Discussion of CSS 2023-2025; Board Manual Discussion Attendance List BPSB ANN BDA √ √ √ 16. Tuesday, September 6, 2022 Strategic Fit Digico Telkom Attendance List BPSB ANN BDA √ √ √ WI √ WI √ AMS √ AMS √ 17. Thursday, September 8, 2022 Strategic Fit Fixed Mobile Convergence Attendance List BPSB ANN BDA √ √ √ 18. Tuesday, September 13, 2022 Strategic Fit Project Sirius Attendance List BPSB ANN BDA √ √ √ WI √ WI √ AMS √ AMS √ IR √ IR √ IR √ IR √ IS √ IS √ IS √ IS √ MRP RM √ √ MRP RM √ √ MRP RM √ √ MRP RM √ √ 19 Friday, September 16, 2022 Strategic Fit Project Sirius: Follow-up Meeting on 13 September 2022 Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ IR √ IS √ MRP RM √ √ 177 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo 20. Date Meeting’s Agenda Tuesday, September 27, 2022 FMC, Infraco and Data Center Co. Project Deepening. Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ IR √ IS √ MRP RM √ √ 21. Wednesday, October 26, 2022 Telkom Digital Business Development Ytd September 2022 Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ IR √ IS √ MRP RM √ √ 22. Monday, October 31, 2022 Discussion of Release Commitment Budget Capex Phase II 2022 Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ IR √ IS √ MRP RM √ √ 23. Friday, November 4, 2022 Discussion on the Batam Data Center Initiative’s Strategic Fit Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ IR √ IS √ MRP RM √ √ 24. Wednesday, November 23, 2022 1. Discussion of the Board of Commissioners’ Work Program and Budget and the Board of Commissioners’ Organs for 2023; 2. Discussion of the 2023 RKAP Study. Attendance List BPSB ANN BDA √ √ √ WI √ AMS - IR √ IS √ MRP RM √ √ 25. Monday, December 5, 2022 1. Discussion on Strategic Fit Project Infraco; 2. Others: proposed extension of Ms. FM Venusiana R. as Acting PLT Director of Enterprise and Business Service. Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ 26. Wednesday, December 14, 2022 Discussion of Telkomsel’s investment in GoTo Attendance List BPSB ANN BDA √ √ - WI √ AMS √ IR √ IR √ IS √ IS √ MRP RM √ √ MRP RM √ √ 27. Monday, December 19, 2022 Discussion: 1. Application for Release Phase I of the Telkom Parent Capex Commitment Budget and Withdrawal of Telkom Parent Loans in the 2023 RKAP; 2. Proposal to write off Receivables for the 2022 Financial Year Attendance List BPSB ANN BDA √ √ √ WI √ AMS √ IR √ IS √ MRP RM - √ Remark: BPSB Bambang Permadi Soemantri Brodjonegoro AMS Arya Mahendra Sinulingga RM Rizal Mallarangeng ANN Abdi Negara Nurdin BDA Bono Daru Adji WI Wawan Iriawan IR IS Isa Rachmatarwata Ismail MRP Marcelino Rumambo Pandin 178 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE BOARD OF COMMISSIONERS’ ATTENDANCE AT INTERNAL MEETINGS Name Position Total Meetings Total Attendance Percentage of Attendance % Bambang Permadi Soemantri Brodjonegoro Abdi Negara Nurdin Bono Daru Adji Wawan Iriawan President Commissioner/ Independent Commissioner Independent Commissioner Independent Commissioner Independent Commissioner Arya Mahendra Sinulingga Commissioner Isa Rachmatarwata Commissioner Ismail Marcelino Rumambo Pandin Commissioner Commissioner Rizal Mallarangeng Commissioner 27 27 27 27 27 27 27 27 27 26 27 25 27 25 25 27 26 27 96 100 93 100 93 93 100 96 100 No. 1. 2. 3. 4. 5. 6. 7. 8. 9. BOARD OF DIRECTORS’ ATTENDANCE AND AGENDA AT JOINT MEETINGS No 1. Date Friday, January 28, 2022 Attendance List of BoC December 2021 Ytd Performance and BOC Concern Meeting’s Agenda BPSB √ IS √ MRP RM √ √ WI √ AMS BDA √ √ IR √ ANN √ Attendance List of BoD President Director (RA) Dir. NITS (HW) Dir. WINS (BW) Dir. kMR (HS) Dir. CONS (FMvR) Act. Dir. EBIS (FMvR) Dir. EBIS (EW) Dir. HCM (AF) Dir. SP (BSW) Dir. DB (MFR) √ √ √ √ √ n/a √ √ √ √ 2. Friday, February 25, 2022 1. January 2022 Ytd Performance 2. BoC Concern a. Routine: IndiHome Improvement, EBIS CFU Turn Around, Progress, and Settlement of Uncollectible Accounts. b. Addition: 1. Completion of Audit of Financial Statements for Financial Year 2021 2. Update on Telkom’s Competitive Position towards Local and Regional Competitors and the Development of Competitor Initiatives in Winning the Competition 3. Digico progress and its relation to FU Digital 179 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk No Date Meeting’s Agenda Attendance List of BoC BPSB √ IS √ MRP RM √ √ WI √ AMS BDA √ √ IR √ ANN √ Attendance List of BoD President Director (RA) Dir. NITS (HW) Dir. WINS (BW) Dir. kMR (HS Dir. CONS (FMvR) Act.Dir. EBIS (FMvR) Dir. EBIS (EW) Dir. HCM (AF) Dir. SP (BSW) Dir. DB (MFR) √ √ √ √ √ n/a √ √ √ √ 3. Friday, March 2vv5, 2022 1. February 2022 Ytd Performance 2. BoC Concern a. Routine: IndiHome Improvements, EBIS CFU Turn Around, Progress and Settlement of Uncollectible Accounts TelkomGroup b. Addition 1. Digico Progress and Alignment with Other Digital Initiatives 2. Risk Analysis of the Impact of the Russian-Ukrainian Crisis on Telkom’s Stock Prospects and Performance in 2022 3. Settlement of TelkomGroup Legal/Litigation Cases Q4 2021 (Including PINS Investigation Follow-up) Attendance List of BoC BPSB √ IS √ MRP RM √ √ WI √ AMS BDA √ √ IR √ ANN √ Attendance List of BoD President Director (RA) Dir. NITS (HW) Dir. WINS (BW) Dir. kMR (HS) Dir. CONS (FMvR) Act. Dir. EBIS (FMvR) Dir. EBIS (EW) Dir. HCM (AF) Dir. SP (BSW) Dir. DB (MFR) √ √ √ √ √ n/a √ √ √ √ 4. Monday, April 25, 2022 1. March 2022 Ytd Performance 2. BoC Concern a. Routine: IndiHome Improvements, EBIS CFU Turn Around, Progress and Settlement of Uncollectible Accounts TelkomGroup b. Addition 1. Submission of the TelkomGroup Cost Leadership Update 2. Update on the Health Level of the Company’s Subsidiaries 3. Submission of the GMS Preparation Report 4. Submission of the RAFI Preparation Report – Eid al-Fitr 1443 H 5. Development of Top Talent and Telkom’s Talent System Support for BUMN Talent Pool 6. GoTo Progress Update: Report on Fulfillment of Telkomsel’s Investment Bisplan in GoTo (FY 2021) and Achievement of GoTo-Telkomsel Synergy Bisplan. Attendance List of BoC BPSB √ IS √ MRP RM √ √ WI √ AMS BDA √ √ IR √ ANN √ Attendance List of BoD President Director (RA) Dir. NITS (HW) Dir. WINS (BW) Dir. kMR (HS) Dir. CONS (FMvR) Act. Dir. EBIS (FMvR) Dir. EBIS (EW) Dir. HCM (AF) Dir. SP (BSW) Dir. DB (MFR) √ √ √ √ √ n/a √ √ √ √ 180 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE No 5. Date Meeting’s Agenda Thursday, May 25, 2022 1. April 2022 Ytd Performance 2. BoC Concern a. Routine: IndiHome Improvements, EBIS CFU Turn Around, Progress and Settlement of Uncollectible Accounts TelkomGroup b. Addition 1. Progress of Network Modernization and Development of 5G 2. B2B Digital Platform Progress; Big Data / Data Analytics, IoT, Cyber Security TelkomGroup 3. Development of Data Center & Cloud Attendance List of BoC BPSB √ IS √ MRP RM √ √ WI √ AMS BDA √ √ IR √ ANN √ Attendance List of BoD President Director (RA) Dir. NITS (HW) Dir. WINS (BW) Dir. kMR (HS) Dir. CONS (FMvR) Act. Dir. EBIS (FMvR) Dir. EBIS (EW) Dir. HCM (AF) Dir. SP (BSW) Dir. DB (MFR) √ - √ √ √ n/a - √ √ √ 6. Friday, June 25, 2022 1. May 2022 Ytd Performance 2. BoC Concern a. Routine: IndiHome Improvements, EBIS CFU Turn Around, Progress and Settlement of Uncollectible Accounts TelkomGroup b. Addition: 1. Update related to TelkomGroup Transformation; Telkom Regional and Digital Talent Transformation 2. B2B Digital Platform Progress; B2C TelkomGroup and Data Center Co 3. Strategic Fit DigiCo Attendance List of BoC BPSB √ IS √ MRP RM √ √ WI √ AMS BDA √ √ IR √ ANN √ Attendance List of BoD President Director (RA) Dir. NITS (HW) Dir. WINS (BW) Dir. kMR (HS) Dir. CONS (FMvR) Act. Dir. EBIS (FMvR) Dir. EBIS (EW) Dir. HCM (AF) Dir. SP (BSW) Dir. DB (MFR) √ √ - √ √ n/a √ √ √ √ 7. Tuesday, July 26, 2022 1. June 2022 Ytd Performance 2. BoC Concern a. Routine: IndiHome Improvements, EBIS CFU Turn Around, Progress and Settlement of Uncollectible Accounts TelkomGroup b. Addendum: Completion of TelkomGroup Legal/Litigation Cases Q2/2022 3. Others: Response of the Board of Directors to the Concern of the Board of Commissioners regarding the Establishment of FitAja Digital Nusantara (FDN) Attendance List of BoC BPSB √ IS √ MRP RM √ √ WI √ AMS BDA √ √ IR √ ANN √ Attendance List of BoD President Director (RA) Dir. NITS (HW) Dir. WINS (BW) Dir. kMR (HS) Dir. CONS (FMvR) Act. Dir. EBIS (FMvR) Dir. EBIS (EW) Dir. HCM (AF) Dir. SP (BSW) Dir. DB (MFR) √ √ - √ √ √ n/a √ √ √ 181 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk No 8. Date Meeting’s Agenda Wednesday, August 31, 2022 1. May 2022 Ytd Performance 2. 2. BoC Concern a. Routine: IndiHome Improvements, EBIS CFU Turn Around, Progress and Settlement of Uncollectible Accounts TelkomGroup b. Addendum: Manual Board Approval: Submission of Proposals for Updating & Revision of the Board Manual for the 2022 Period 3. Others: Distribution of Audit Fees Attendance List of BoC BPSB √ IS √ MRP RM √ √ WI √ AMS BDA √ √ IR √ ANN √ Attendance List of BoD President Director (RA) Dir. NITS (HW) Dir. WINS (BW) Dir. kMR (HS) Dir. CONS (FMvR) Act. Dir. EBIS (FMvR) Dir. EBIS (EW) Dir. HCM (AF) Dir. SP (BSW) Dir. DB (MFR) √ √ √ √ - - n/a √ √ √ 9. Wednesday, September 28, 2022 1. August 2022 Ytd Performance 2. BoC Concern: IndiHome Improvement, EBIS CFU Turn Around, Progress and Settlement of TelkomGroup Uncollectible Accounts; 3. Update on the health level of the company’s subsidiaries; 4. CFU Enterprise Progress: development of market development initiatives for the private sector (non MSOE/non Ministries/institutions). Attendance List of BoC Attendance List of BoD BPSB √ IS √ MRP RM √ √ WI √ AMS BDA √ √ IR √ ANN √ President Director (RA) Dir. NITS (HW) Dir. WINS (BW) Dir. kMR (HS) Dir. CONS (FMvR) Act. Dir. EBIS (FMvR) Dir. EBIS (EW) Dir. HCM (AF) Dir. SP (BSW) Dir. DB (MFR) √ √ √ √ √ √ n/a √ √ √ 10. Friday, October 28, 2022 1. September 2022 Ytd Performance 2. BoC Concern: IndiHome Improvement, EBIS CFU Turn Around, Progress and Settlement of TelkomGroup Uncollectible Accounts; 3. Strengthening the Second Line and Third Line Functions (Risk, Audit, Legal) and determining the proposed indicators for the successful implementation of the Second Line and Third Line functions. 4. Discussion of the First Draft RKAP 2023. Attendance List of BoC BPSB √ IS √ MRP RM √ √ WI √ AMS BDA √ √ IR √ ANN √ Attendance List of BoD President Director (RA) Dir. NITS (HW) Dir. WINS (BW) Dir. kMR (HS) Dir. ConwS (FMvR) Act. Dir. EBIS (FMvR) Dir. EBIS (EW) Dir. HCM (AF) Dir. SP (BSW) Dir. DB (MFR) √ √ √ √ √ √ n/a √ √ √ 11. Monday, November 28, 2022 1. October 2022 Ytd Performance 2. BoC Concern: Improvement of IndiHome, Turn Around CFU EBIS, Progress and Settlement of TelkomGroup Uncollectible Accounts; 3. Ratification of the 2023 RKAP: a. 2023 RKAP Final Proposal; b. The Impact of FMC and Infraco Strategic Initiatives on the 2023 RKAP. Attendance List of BoC BPSB √ IS √ MRP RM √ √ WI √ AMS BDA √ √ IR √ ANN √ 182 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE No Date Meeting’s Agenda Attendance List of BoD President Director (RA) Dir. NITS (HW) Dir. WINS (BW) Dir. kMR (HS) Dir. CONS (FMvR) Act. Dir. EBIS (FMvR) Dir. EBIS (EW) Dir. HCM (AF) Dir. SP (BSW) Dir. DB (MFR) √ √ √ √ √ √ n/a √ √ √ 12. Friday, December 23, 2022 1. November 2022 Ytd Performance and BoC Concern: IndiHome Improvement, Turn Around CFU EBIS, Progress and Settlement of TelkomGroup Uncollectible Accounts; 2. Brainstorming BoC-BoD: a. Roadmap to Healthy Profitability of Telkom’s B2B Business b. Telkom B2B Business: Special/independent entity vs. As an entity in Telkom Attendance List of BoC BPSB √ IS √ MRP RM √ √ WI √ AMS BDA √ √ IR √ ANN √ Attendance List of BoD President Director (RA) Dir. NITS (HW) Dir. WINS (BW) Dir. kMR (HS) Dir. CONS (FMvR) Act. Dir. EBIS (FMvR) Dir. EBIS (EW) Dir. HCM (AF) Dir. SP (BSW) Dir. DB (MFR) √ - √ √ √ √ n/a √ √ √ Remarks: BPSB Bambang Permadi Soemantri BDA Bono Daru Adji EW Edi Witjara IS MRP RM WI Brodjonegoro Ismail Marcelino Rumambo Pandin Rizal Mallarangeng Wawan Iriawan AMS Arya Mahendra Sinulingga IR ANN RA HW BW Isa Rachmatarwata HS Heri Supriadi Abdi Negara Nurdin FMvR FM Venusiana R. Ririek Adriansyah Herlan Wijanarko Bogi Witjaksono AF BSW MFR Afriwandi Budi Setyawan Wijaya Muhamad Fajrin Rasyid BOARD OF COMMISSIONERS’ ATTENDANCE AT JOINT MEETINGS Name Position Total Meetings Total Attendances Percentage of Attendance % Bambang Permadi Soemantri Brodjonegoro Abdi Negara Nurdin Bono Daru Adji Wawan Iriawan President Commissioner/ Independent Commissioner Independent Commissioner Independent Commissioner Independent Commissioner Arya Mahendra Sinulingga Commissioner Ismail Commissioner Isa Rachmatarwata Commissioner Marcelino Rumambo Pandin Commissioner Rizal Mallarangeng Commissioner 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 100 100 100 100 100 100 100 100 100 No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 183 Annual Report 2022 PT Telkom Indonesia (Persero) TbkBOARD OF DIRECTORS’ ATTENDANCE AT INTERNAL MEETINGS No. Name Position Total of Meetings Total of Attendance Percentage of Attendance % 1. 2. 3. 4. 5. 6. 7. 8. 9. Ririek Adriansyah President Director Afriwandi Director of HCM Budi Setyawan Wijaya Director of SP Bogi Witjaksono Director of WINS Edi Witjara Director of EBIS1 FM Venusiana R Acting Director of EBIS1 FM Venusiana R Director of CONS Herlan Wijanarko Director of NITS Heri Supriadi Director of FRM 10. Muhamad Fajrin Rasyid Director of DB Remark: 1. Has been out of position since July 8, 2022 12 12 12 12 5 7 12 12 12 12 12 12 12 10 4 6 11 10 12 12 100 100 100 83 80 86 92 83 100 100 The position of Director of EBIS is filled by appointing Ms. FM Venusiana R as Acting Director of EBIS in addition to her position as Director of Consumer Service BOARD OF COMMISSIONERS’ PERFORMANCE ASSESSMENT In general, the Board of Commissioners is in charge of supervising management policies and the course of management both regarding the Company and the Company’s business carried out by the Board of Directors. In addition, the Board of Commissioners is also tasked with providing advice to the Board of Directors, including supervising the implementation of the Company’s Long Term Plan, Company’s Annual Work Plan and Budget, provisions of the Articles of Association and GMS Resolution, as well as law and regulation, for the benefit of the Company in accordance with the aims and objectives of the Company. These tasks have been formulated in the form of Key Performance Indicators (KPI) for the supervision of the Board of Commissioners whose achievements are evaluated every 3 (three) months. The aggregation of evaluation results in 2022 shows that the Board of Commissioners has carried out its supervisory duties well. BOARD OF COMMISSIONERS’ PERFORMANCE ASSESSMENT BASED ON kPI yEAR 2022 key Performance Indicators Planning Supervision and Direction Reporting Dynamic Point Achievement Score Point (%) Score (%) 18 28 18 36 100 105 108 100 100 103 In addition, the performance of the Board of Commissioners is also assessed through a GCG assessment, referring to Resolution of Secretary of the Ministry of SOE No. SK-16/S.MBU/2012 regarding Indicators/Parameters of Assessment and Evaluation of the Implementation of Good Corporate Governance (GCG) in SOE. 184 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE COMMITTEE UNDER BOARD OF COMMISSIONERS’ ASSESSMENT Audit Committee, Nomination and Remuneration Committee, and Planning and Risk Evaluation and Monitoring Committee assist the Board of Commissioners in carrying out their duties. The Committee’s performance appraisal is carried out annually by the Board of Commissioners and for 2022, the assessment is carried out with KPI self-assessment. Throughout 2022, these Committees generally performed well, and were able to carry out their duties and responsibilities as presented in the table below. PERFORMANCE OF THE COMMITTEES UNDER THE BOARD OF COMMISSIONERS IN 2022 Committees Audit Committee Committee for Nomination and Remuneration Committee for Planning and Risk Evaluation and Monitoring Score (%) 100 100 100 BOARD OF DIRECTORS’ PERFORMANCE ASSESSMENT Key Performance Indicator (KPI) is one of the measuring tools that can be used in assessing the performance of the Board of Directors. The formal basis for this assessment is the Minister of SOE Regulation Number: PER-11/MBU/11/2020 dated November 12, 2020 regarding Management Contracts and Annual Management Contracts for Directors of State-Owned Enterprises, which contain: 1. Obligation to sign the Management Contract by the Board of Directors. The Management Contract contains the promise or statement of the prospective members of the Board of Directors, namely that if he/she is reappointed/ reappointed as a members of the Board of Directors, he/she promises to fulfill all the targets set by the GMS/Minister, including KPI that have been previously determined, and apply the principles of GCG. 2. Performance appraisal based on KPI is determined collegially for the President Director, and individually for each member of the Board of Directors. 3. The establishment of five perspectives in collegial preparation of the KPI for the Board of Directors, namely: a. Economic and social values for Indonesia; b. Business model innovation; c. Technology leadership; d. Increased investment; and e. Talent development. The calculation of the achievement of the Board of Directors KPI is collegially and individually was evaluated by the Public Accountant Office (KAP) which audits Telkom’s financial statements. The collegial achievement report of KPI is presented in Board of Directors’ Collegiate Assessment section of this Annual Report. 185 Annual Report 2022 PT Telkom Indonesia (Persero) TbkAUDIT COMMITTE Under the Board of Commissioners, there is an Audit Committee that assists in its supervisory duties and functions, in accordance with Financial Service Authority Regulation No. 55/POJK.04/2015 dated December 23, 2015, the provisions of US SEC Exchange Act 10A-3, the principles of Good Corporate Governance (GCG), Regulation of the Minister of State-Owned Enterprises Number PER-12/ MBU/2012 and its amendments governing the Supporting Organs of the Board of Commissioners/Supervisory Board of State-Owned Enterprises and PER-5/MBU/09/2022 regarding in SOEs,and other regulations. This committee works based on Regulation of the Board of Commissioners No. 11/KEP/ DK/2021 regarding Guidelines for Work Implementation (Charter) of the Company’s Audit Committee (Persero) PT Telekomunikasi Indonesia Tbk. Implementation of Risk Management AUDIT COMMITTEE’S SCOPE, DUTIES, AND RESPONSIBILITIES Telkom’s Audit Committee has the following scope, duties ,and responsibilities: 1. Supervision of Financial Information b. Reviewing the process of preparing financial reports whether they have been carried out in accordance with applicable regulations, policies, and systems, and procedures; c. Evaluate the financial information that will be published by the Company such as financial reports, projections, and other financial information; d. Ensuring that financial reports and other related information are presented based on financial or management accounting data and information correctly and accurately in accordance with generally accepted accounting principles. 2. Supervision of Internal Audit a. Reviewing the Annual Audit Work Program (PKAT) and the Internal Audit Annual Non-Audit Work Program (PKNAT); b. Evaluating the effectiveness of the Company’s Internal Audit; c. Reviewing the implementation of follow-up on internal auditor findings and/or external auditor findings and Management Letters (recommendations) by the Board of Directors; d. Evaluate status and follow-up on significant issues; e. Regularly review and recommend improvements to the Internal Audit Charter. 186 3. Oversight of Internal Control a. Reviewing the adequacy of management efforts to build and operate effective internal controls, controls over financial particularly reporting; internal b. Conduct immediate discussions on findings and matters containing indications of weaknesses and/ or obstacles in internal control, inefficiencies in the Company’s activities, errors in the application of accounting standards, and violations of the applicable laws and regulations. 4. Supervision of External Audit a. Assisting the Board of Commissioners in the process of appointing independent auditor candidates who will carry out integrated audits of the Company and its consolidated Subsidiaries; b. Provide recommendations to the Company’s Board of Commissioners regarding the appointment of AP and/or KAP who will provide audit services; c. Review and provide pre-approval for non-audit services to be assigned to independent auditors; d. Oversight of the integrated audit process in the Company and the audit process in Subsidiaries whose financial statements are consolidated into the Company’s consolidated financial statements; e. Providing an independent opinion in the event of a difference of opinion between management and the independent auditors; f. Evaluate the implementation of the provision of audit services on annual historical financial information by AP and/or KAP. 5. Supervision of compliance with regulations and legislation as well as complaints regarding the process of accounting and financial reporting a. Conduct a review of compliance with laws and regulations related to the Company’s business activities including but not limited to laws and regulations in the Capital Market sector, taxation, and/or regulations related to good corporate governance, as well as regulations and other laws (financial relating to financial reporting risks reporting risk); b. Providing facilities to receive, review and follow up on complaints (Whistle-blower) which includes the Company, Subsidiaries, and affiliates (The definition of affiliate is as regulated in Law No. 8 of 1995 regarding Capital Markets, in Article 1 number 1); c. Ensuring that the Company’s management creates a work culture that encourages every employee to comply with the Company’s code of ethics. 6. Carry out other tasks given by the Board of Commissioners. 7. Maintain the confidentiality of documents, data and information of the Company and its consolidated Subsidiaries. PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE AUDIT COMMITTEE’S COMPOSITION In accordance with Financial Service Authority Regulations and US SEC Regulations, Audit Committee at Telkom must have at least 3 members, chaired by an Independent Commissioner, and 2 other members must be independent parties. The following is the composition of the Audit Committee for 2022, which is based on the AGMS Resolution dated May 28, 2021, which stipulates changes to the composition of the Board of Commissioners, and Board of Commissioners Decision No. 08/KEP/DK/2021 dated 2 August 2021 regarding the Membership Composition of the Audit Committee of the Company (Persero) PT Telekomunikasi Indonesia Tbk: AUDIT COMMITTEE’S COMPOSITION AS OF DECEMBER 31, 2022 Jabatan Chairman Name and Double Position Status Bono Daru Adji* Independent Commissioner Basis of Appointment Term of Service Resolution of the Board of Commissioners No. 05/KEP/ DK/2021 dated June 8, 2021, and finally re-established through Resolution of the Board of Commissioners No. 08/KEP/DK/2021 dated August 2, 2021. June 8, 2021 - Present Members Bambang P.S. Brodjonegoro* President Commissioner/ Independent Commissioner Resolution of the Board of Commissioners No. 05/KEP/ DK/2021 dated June 8, 2021, and finally re-established through Resolution of the Board of Commissioners No. 08/KEP/DK/2021 dated August 2, 2021. June 8, 2021 - Present Wawan Iriawan * Independent Commissioner Resolution of the Board of Commissioners No. 17/KEP/ DK/2020 dated September 1, 2020 No. 05/KEP/DK/2021 dated June 8, 2021, and finally re-established through Resolution of the Board of Commissioners No. 08/KEP/ DK/2021 dated August 2, 2021. September 1, 2020 - Present Abdi Negara Nurdin * Independent Commissioner Resolution of the Board of Commissioners No. 05/KEP/ DK/2021 dated June 8, 2021, and finally re-established through Resolution of the Board of Commissioners No. 08/KEP/DK/2021 dated August 2, 2021. June 8, 2021 - Present Emmanuel Bambang Suyitno Independent Member/ Financial Expert Edy Sihotang Independent Member/ Financial & Forensic Audit Expert Resolution of the Board of Commissioners No. 17/KEP/ DK/2020 dated September 1, 2020 No. 05/KEP/DK/2021 dated June 8, 2021, and finally re-established through Resolution of the Board of Commissioners No. 08/KEP/ DK/2021 dated August 2, 2021. September 1, 2020 - Present Resolution of the Board of Commissioners No. 08/KEP/ DK/2021 dated August 2, 2021. August 2, 2021 - Present Remark: • Profile of Audit Committee members from the Board of Commissioners can be seen on Profile of the Board of Commissioners. The decision of the Board of Commissioners dated 2 August, 2021 is the legal basis whereby all the old members were reappointed and joined in the new Audit Committee. 187 Annual Report 2022 PT Telkom Indonesia (Persero) TbkAUDIT COMMITTEE MEMBER’S PROFILE WHO ARE NOT BOARD OF COMMISSIONERS’ DOUBLE POSITION EMMANUEL BAMBANG SUYITNO INDEPENDENT MEMBER/FINANCIAL ExPERT Age 52 years old Nationality Indonesian Domicile Jakarta, Indonesia Educations • 2007 MBA, Institut Pengembangan Manajemen Indonesia (IPMI) International Business School, Indonesia. • 1995 Bachelor Degree in Accounting, Universitas Indonesia, Indonesia. Basis of Appointment Resolution of the Board of Commissioners No. 17/KEP/DK/2020 dated September 1, 2020, then amended and re-established through. Resolution of the Board of Commissioners No. 08/KEP/DK/2021 on August 2, 2021. Term of Service September 1, 2020 up to present. Duties and Responsibilities Served to oversee and monitor the integrated audit process, the process of consolidating financial statements, and the effectiveness of internal control over financial reporting. Career Experiences • 2020 - Present Independent Member/Financial Expert of Audit Committee. • 2017 - 2020 Corporate Secretary Division, PT PP Presisi Tbk. • 2016 - 2017 SVP - Head of Investor Relations, Corporate Finance, MIS & Audit, Lucky Group of Indonesia. • 2014 - 2016 • 1994 - 2014 Audit Committee Member, PT Danareksa Persero. Audit Committee, Risk Management and Audit, Corporate Secretary, Investor Relations, Corporate Finance, ChemOne Holdings Pte Ltd, PT Indika Energy Tbk, PT. Surya Citra Media Tbk, PT. Kopitime Dot Com Tbk, Jan Darmadi Group, Ernst and Young. Certificates and Professional Licenses • 2019 Certification in Audit Committee Practices (CACP), Ikatan Komite Audit Indonesia. • 2015 Indonesia Registered Accountant (RNA) by Ministry of Finance of the Republic of Indonesia. • 2014 Chartered of Accountant by International Federation of Accountants (IFAC), Ikatan Akuntan Indonesia (IAI). 188 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE INDEPENDENT MEMBER/FINANCIAL & FORENSIC AUDIT ExPERT EDY SIHOTANG Age 57 years old Nationality Indonesian Domicile Jakarta, Indonesia Educations • 1997 MBA, University of Illinois at Urbana-Champaign, USA. • 1991 Diploma IV in Accounting, Sekolah Tinggi Akuntansi Negara, Indonesia. • 1985 Diploma III in Accounting, Sekolah Tinggi Akuntansi Negara, Indonesia. Basis of Appointment Resolution of the Board of Commissioners No. 08/KEP/DK/2021 dated August 2, 2021. Term of Service August 2, 2021 up to present. Duties and Responsibilities Served to oversee and monitor the integrated audit process, the process of consolidating financial statements, and the effectiveness of internal control over financial reporting. Career Experiences • 2021 - Present Independent Member/Financial & Forensic Audit Expert. • 2019 - 2020 Vice President Investigation & WBS, PT Pertamina (Persero). • 2018 - 2019 Head of Internal Audit, PT Pertamina Geothermal Energy. • 2013 - 2017 Head of Internal Audit, PT Pertamina Internasional Eksplorasi dan Produksi. • 2009 - 2012 GCG & Compliance, Corporate Secretary, PT Pertamina (Persero). • 2006 - 2009 Head of Internal Auditor/Inspector, Badan Rehabilitasi dan Rekonstruksi NAD-Nias. • 1999 - 2005 Widyaiswara/Lecturer, Badan Pendidikan dan Pelatihan Keuangan, Department of Finance. • 1997 - 1998 Auditor, Public Accounting Firm (KAP) Hadori, Soejatna & Rekan. • 1985 - 1997 Auditor, Badan Pengawasan Keuangan dan Pembangunan (BPKP). Professional Licenses and Certificates • 2021 Certification of Audit Committee Practices (CACP), Ikatan Komite Audit Indonesia. • 2019 Certified Forensic Auditor (CFrA), Lembaga Sertifikasi Profesi Auditor Forensik, Indonesia. • 2014 Chartered Accountant (CA), Ikatan Akuntan Indonesia. • 2014 Certified Control Self-Assessment (CCSA), Institute of Internal Auditor, USA. • 2013 Certified Risk Management Assurance (CRMA), Institute of Internal Auditor, USA. • 2012 Qualified Internal Auditor (QIA), Institute of Internal Auditor, Indonesia. • 2011 Certified Internal Auditor (CIA), Institute of Internal Auditor, USA. • 2009 Certified Fraud Examiner (CFE), Association of CFE, USA. • 1996 Certified Public Accountant (CPA), USA. 189 Annual Report 2022 PT Telkom Indonesia (Persero) TbkAUDIT COMMITTEE INDEPENDENCE Telkom Audit Committee members must always have integrity and be independent in carrying out their duties and responsibilities. All members of Audit Committee are required to sign an integrity and independence pact so that Telkom is confident that every decision taken through Audit Committee will be free from pressure from other parties as a form of commitment to independence. AUDIT COMMITTEE’S PERFORMANCE AND IMPLEMENTATION ACTIVITIES Telkom has summarized the performance and implementation of Audit Committee’s activities during 2022 Financial Year in Committee’s Activity Report, which contains: 1. Conduct discussions on the Company’s quarterly consolidated financial reports The Audit Committee conducts studies and discussions with management regarding the Company’s quarterly consolidated financial statements before these financial reports are reported to the Financial Services Authority and the Stock Exchange, so that the quality of the financial reports issued by management is presented fairly, there are sufficient disclosures and there are no material misstatements. 2. Supervise the Integrated Audit process for the 2021 and 2022 Financial years a. The Audit Committee has held discussions with the Independent Auditor KAP Purwantono, Sungkoro & Surja, (a member firm of Ernst & Young Global Limited) (KAP PSS/EY) together with the Internal Auditor and management (VP Financial Policy, SGM Shared Service of Finance), regarding standard quality and acceptability financial accounting applied by the company, the appropriateness of significant accounting estimates and judgments and the adequacy of disclosures in the consolidated financial statements, as well as the effectiveness of internal controls implemented by management, so that the quantity and quality of financial reports issued by management are presented fairly and there are no significant misstatements material. b. The Audit Committee has reviewed and discussed the audited consolidated financial statements and notes to the consolidated financial statements in the Annual Report (Form 20F) with the company’s management. Regarding to corporate risk management, the Audit Committee oversees and monitors the risk of fraud and financial reporting risks that may have a material impact on the presentation of the financial statements. c. In addition, the Audit Committee also reviews and discusses with the Independent Auditor (KAP PSS/EY) the management’s compliance with the implementation of Capital Market regulations and other regulations related to the company’s business in accordance with PSA 62 standards which began to be audited in 2017. d. The Audit Committee has held discussions with KAP PSS/EY regarding the Integrated Audit plan for the 2022 Financial Year. e. The Audit Committee has discussed developments - Interim Integrated Audit for Financial Year 2022 and the Early Warning Report (EWR). 3. Reviewing and supervising the implementation of the work program of the Internal Audit Department for the 2022 Financial year a. On a quarterly basis, the Audit Committee reviews the Management Report of the Internal Audit Department which contains the implementation of the work programs of all Internal Auditor Sub-Units, including the constraints found in the field. b. The Audit Committee evaluates the status of completion of internal audits, special audits and investigative audits, settlement of pending matters, implementation of recommendations from the audit process and internal consultation as well as from the external audit process, including follow-up monitoring. 4. Holding a workshop with the Internal Audit Department The Audit Committee held a workshop with the Internal Audit Department which aims to observe changes in the company’s needs for the Internal Audit function. In the workshop, a strategic session was held to discuss strategic matters relating to the adequacy of the fulfilment of Internal Audit’s duties and functions, as well as strategies to strengthen Internal Audit to face the challenges faced today and in the future. 190 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE 5. Reviewing the Internal Audit Department’s Annual Audit Work Program (PkAT) and Annual Non-Audit Work Program (PkNAT) plans for the 2023 Financial year The Audit Committee has conducted studies and discussions as well as input and recommendations on the proposed Annual Audit Work Program (PKAT) and Annual Non-Audit Work Program (PKNAT) for the Internal Audit Department for the 2023 Financial Year before the work programs were determined by Management. 6. Supervise the Internal Control a. The Audit Committee reviews significant issues and other findings, as well as follow-up actions, such as special audits and investigative audits. b. The Audit Committee reviews the Control Self-Assessment (CSA). 7. Evaluate the performance of the Independent Auditor who audited the Company’s consolidated financial statements for the 2021 Financial Year and provide recommendations to the Board of Commissioners regarding the appointment of an Independent Auditor who will audit the Company’s consolidated financial statements for the 2022 Financial Year a. The Audit Committee prepares an evaluation report on the audit implementation of the Company’s consolidated financial statements for the 2021 Financial Year which is submitted to the Board of Commissioners and the Capital Market Authority (OJK). b. Referring to the Audit Committee’s evaluation report on the audit of the Company’s consolidated financial statements for the 2021 Financial Year, the Board of Commissioners proposes a candidate for an Independent Auditor to audit the consolidated financial statements for the 2022 Financial Year to the Company’s Annual General Meeting of Shareholders (AGMS) for 2022. 8. Supervise the audit process of the Social and Environmental Responsibility Program (TJSL) being implemented by the Community Development Center (CDC) Unit for Financial year 2022 The Audit Committee has held discussions with CDC management regarding the implementation of the 2022 Social and Environmental Responsibility Program and the audit process for the 2022 TJSL Program financial reports, as well as agreed upon procedures (Agreed Upon Procedure/AUP) for compliance with the applicable regulations in management of the TJSL Program that has been carried out by KAP PSS/EY. 9. Conducting joint studies with the Planning and Risk Evaluation and Monitoring Committee (kEMPR) The Audit Committee has conducted joint discussions regarding special assignments given by the Board of Commissioners. 10. Preparing the 2023 Audit Committee Annual Work Program The Audit Committee has prepared and discussed the 2023 Audit Committee Annual Work Program together with the Board of Commissioners to ensure that the work program includes all duties and responsibilities that have been regulated and specified in the Charter, as well as specific tasks assigned by the Board of Commissioners. 11. Conduct a review of the complaint information that is received through the Whistleblowing System (WBS) program for the 2022 Financial year a. The Audit Committee evaluates and monitors all WBS reports that enter the Telkom Integrity line, which is managed by Deloitte. b. The Audit Committee reviews and follows up on all WBS reports it receives in accordance with the escalation. c. The Audit Committee coordinates with other stakeholders regarding incoming WBS to ensure that incoming WBS has been followed up in accordance with governance. 12. The Audit Committee has held discussions with the HCM Directorate regarding employee integrity management reports to ensure that management has been carried out properly. The employee integrity management reports are the My Integrity application, ISO 37001: 2016 SMAP, Business Ethics and Integrity Pact, LHKPN and gratuities. 191 Annual Report 2022 PT Telkom Indonesia (Persero) TbkAUDIT COMMITTEE’S MEETING Audit Committee must be carry out a Committee Meeting at least once a month, in accordance with Telkom’s Audit Committee Charter. This provision is more intensive when compared to the minimum provisions for Committee Meetings regulated in Financial Service Authority Regulation No. 55/ POJK.04/2015 dated December 23, 2015 regarding Establishment and Guidelines for Work Implementation of Audit Committee, particularly in Article 13, which states that Audit Committee holds regular meetings at least once every three months. Throughout 2022, Audit Committee has held 31 Committee Meetings with the attendance rate as presented in the table below. AUDIT COMMITTEE’S MEETING ATTENDANCES 2022 No. Name Total Meetings Total Attendances 1. 2. 3. 4. 5. 6. Wawan Iriawan Bono Daru Adji Bambang P. S. Brodjonegoro Abdi Negara Nurdin Edy Sihotang Emmanuel Bambang Suyitno 31 31 31 31 31 31 31 31 31 31 31 31 Percentage of Attendance % 100 100 100 100 100 100 AUDIT COMMITTEE’S EDUCATION AND TRAINING Members of Telkom Audit Committee regularly attend various trainings, seminars, and workshops with the aim of improving and developing competencies related to the implementation of the duties and functions of Audit Committee. The following table presents information related to the training that has been attended by members of Audit Committee during 2022. EDUCATION AND TRAINING OF AUDIT COMMITTEE IN 2022 Name Training Program Date Location Emmanuel Bambang Suyitno a. The 1st National Conference “Leveraging January 26-27, 2022 Jakarta (Virtual) the Roles of Audit Committee” b. Crime Challenges and Mitigation and Enhancement of Cyber Security in the Financial Services Industry March 10, 2022 Jakarta (Virtual) c. Oversight Function of External Audit April 7,2022 Jakarta (Virtual) d. Optimizing Sustainability Governance Through a Single Set of High Quality Global Sustainability Reporting Standards e. f. Sharing Session Update about Capital Market Bank Digitalization: Lesson Learnt from Asian Countries April 12, 2022 Jakarta (Virtual) April 22, 2022 Jakarta (Virtual) May 19, 2022 Jakarta (Virtual) No. 1. 192 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE No. Name Training Program Date Location g. Digital Governance: Prerequisites Support Digital Transformation to August 11, 2022 Jakarta (Virtual) h. Fostering Agility to Combat Money September 28, 2022 Jakarta (Virtual) i. j. k. l. Laundering & Economic Crime Recent Update Sustainability Disclosure Standard September 30, 2022 Jakarta (Virtual) Consumer Protection in the Digital Era October 6, 2022 Jakarta (Virtual) Follow-up Socialization of SOE Ministerial Regulation Number: PER-5/MBU/09/2022 regarding Implementation of Risk Management in SOEs Further discussion of SOE Ministerial Regulation Number: PER-5/MBU/09/2022 regarding Implementation of Risk Management in SOE October 14, 2022 Jakarta (Virtual) October 17, 2022 Jakarta (Virtual) m. Training: Tools for New Auditor October 18-20, 2022 Chicago (Offline) n. Fraud Detection With Data Science October 27,2022 Jakarta (Virtual) o. Cybersecurity: Are You Protected? November 3, 2022 Jakarta (Virtual) p. “Data Protection for Indonesia’s Digital Transformation” November 3, 2022 Jakarta (Virtual) q. Key Audit Matters: Why It Matters November 12, 2022 Jakarta (Virtual) r. GRC Masterclass: Strengthening the Role of the Audit Committee, Risk Committee, and Integrated Governance November 17, 2022 Jakarta (Virtual) s. Corporate Radar & Early Warning System November 19, 2022 Jakarta (Virtual) t. u. a. b. Integrating your Financial & Sustainability Disclosures & Carbon Tax Indonesia International Conference for Sustainability Finance & Economy 2022 The 1st National Conference "Leveraging the Roles of Audit Committee" Sharing Session Update about Capital Market November 21, 2022 Jakarta (Virtual) November 19, 2022 Jakarta (Virtual) January 26-27, 2022 Jakarta (Virtual) April 22, 2022 Jakarta (Virtual) c. Webinar IIA "Evolution IPPF Embracing August 30, 2022 Jakarta (Virtual) the Future" d. Implementation of Risk Management in Ministry of SOE October 17, 2022 Jakarta (Virtual) e. Tools for New Auditor October 18-20, 2022 Chicago f. Key Audit Matters: Why It Matters November 12, 2022 Jakarta (Virtual) g. Governance, Risk and Compliance November 17, 2022 Jakarta (Virtual) 2. Edy Sihotang Remark: *Education and Training of Audit Committee members who are members of the Board of Commissioners can be seen in the Education and Training of the Board of Commissioners. 193 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk COMMITTEE FOR NOMINATION AND REMUNERATION Telkom has Committee for Nomination and Remuneration (KNR) as a form of GCG implementation. This committee is tasked with assisting the Board of Commissioners in fulfilling their responsibilities related to remuneration decisions, submission of Top Talent proposals, and nominations for the Board of Directors and the Board of Commissioners of Subsidiaries. With KNR, Telkom hopes that the selection process and remuneration policy-making can be carried out in accordance with professional and independent considerations without any pressure from other parties. The establishment of Committee for Nomination and Remuneration (KNR) refers to Financial Service Authority Regulation No. 34/POJK.04/2015 regarding Committee for Nomination and Remuneration for Issuers or Public Companies and Regulation of the Minister of State- Owned Enterprises Number PER-12/MBU/2012 and its amendments regulates the Supporting Organs of the Board of Commissioners/Supervisory Board of State- Owned Enterprises and PER-5/MBU/09/2022 regarding Implementation of Risk Management in SOEs as an external regulation. (Charter) of Committee Internally, the provisions regarding KNR are regulated in Committee for Nomination and Remuneration Charter, which is stipulated by Resolution of the Board of Commissioners No. 12/KEP/DK/2021 dated November 29, 2021 regarding Guidelines for the Implementation for Nomination of Work and Remuneration of the Company (Persero) PT Telekomunikasi Indonesia, Tbk. The guidelines contain the working procedures of the KNR whose task is to assist the Board of Commissioners in overseeing the determination of qualifications and the nomination process, as well as the remuneration of the Board of Commissioners, Board of Directors, and executive officers. KNR’S SCOPE, DUTIES, AND RESPONSIBILITIES KNR’s scope, duties, and responsibilities are as follows: 1. For Nomination a. Conduct regular reviews of the Company’s Talent Management System as well as monitoring and evaluating its implementation. b. Evaluating the talent classification system and procedure carried out by the Board of Directors. c. Validate and calibrate talents proposed by the Board of Directors to the Board of Commissioners/ Supervisory Board (selected talent) to produce a list of talents that will be nominated by the Board of Commissioners/Supervisory Board (nominated talent) to the GMS/Minister. 194 d. Evaluate the candidates for representatives of the Company who will be proposed as members of the Board of Directors or the Board of Commissioners of the Company’s Subsidiaries, prior to submission to the GMS/Minister. e. Reviewing the proposed organizational structure of the Company one level below the Board of Directors proposed by the Board of Directors, referring to the principles of good corporate governance. f. Assist the Board of Commissioners who together with or consult with the Board of Directors in selecting candidates for strategic positions within the Company in accordance with the provisions in the Company’s Articles of Association, including the management of Subsidiaries. recommendations the Board of Commissioners to be submitted to Series A Dwiwarna Shareholders regarding: i. Proposed composition of position for members g. Provide to of the Company’s Board of Directors. ii. Candidates for members of the Board of Directors and Commissioners of Subsidiaries comply with the threshold. h. Develop policies and criteria needed iii. Candidates for President Director and President Commissioner of all the Company’s Subsidiaries. in the nomination process for candidates for members of the Board of Directors including the management of the Company’s Subsidiaries. 2. For Remuneration a. Provide to recommendations the Board of Commissioners to be submitted to the GMS through the Series A Dwiwarna Shareholder regarding the policy, amount and/or structure of the remuneration of the Board of Directors and the Board of Commissioners by taking into account: i. Remuneration applicable the in telecommunications industry; ii. The duties, responsibilities, and authorities of the members of the Board of Directors and/or the Board of Commissioners are related to the achievement of the goals and performance of the Company; iii. Performance targets for each member of the Board of Directors and Board of Commissioners. b. Propose remuneration for the Board of Directors and Board of Commissioners in the form of salary or honorarium, fixed allowances and facilities, as well as variable incentives to the Board of Commissioners at least once in 1 (one) year. c. Propose indicators and performance evaluations (Key Performance Indicators) for the Board of Commissioners. d. Prepare proposal individual performance evaluation systems (Individual Key Performance Indicators) for members of the Board of Directors. for PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE e. Develop and monitor the implementation of Performance Achievement Indicators (KPI) both Collegial KPI and Directors’ Individual KPI. f. Deliver the progress of the realization of the Performance Achievement (KPI) to the Shareholder/Minister in accordance with the provisions of the legislation. Indicators g. Evaluating the remuneration policy for employees who require approval/response from the Board of Commissioners/Supervisory Board. h. Develop competency development programs for Committee members and/or members of the Board of Commissioners. In Letter of Minister of SOE number S.675/MBU/10/2018 dated October 18, 2018, regarding approval of proposals, limits and/or criteria for the authority of the Board of Commissioners of PT Telekomunikasi Indonesia (Persero) Tbk, there is a division of authority for the nomination of the Company’s representatives in management of the Company’s Subsidiaries, then: 1. The authority of Series A Dwiwarna Shareholder is for: a. President Director and President Commissioner of the Company’s subsidiaries. b. Company management and Commissioners), with total assets ≥ 50% of total parent assets and/or subsidiary revenue ≥ 50% of parent revenue. (Directors 2. The authority of the Board of Commissioners of PT Telkom Indonesia (Persero) Tbk is for the Director (other than the President Director) and the Board than (other of Commissioners the President Commissioner) in the Company’s subsidiary with a total asset ≤ 50% of the total assets of the parent company, and/or a subsidiary with revenue ≤ 50% of the parent company’s total revenue. In 2022, KNR Telkom has conducted a Feasibility and Compliance Test for 18 (eighteen) times for 18 (eighteen) management positions (target positions) with 62 candidates in 8 (eight) Subsidiaries, as a follow-up to Letter of Minister of SOE number S.675/MBU/10/2018, dated October 18, 2018. KNR’S COMPOSITION Telkom’s Board of Commissioners issued Resolution of the Board of Commissioners No. 06/KEP/DK/2021 dated June 8, 2021 regarding Membership Composition of Committee for Nomination and Remuneration of PT Telekomunikasi Indonesia, Tbk. The Resolution was issued by the Board of Commissioners because it refers to Financial Service Authority Regulation No. 34/ POJK.04/2015 regarding Committee for Nomination and Remuneration of Issuers or Public Companies stipulates that the number of members of Committee for Nomination and Remuneration is at least 3 people with the provision that 1 Chairman who is concurrently a member is an Independent Commissioner, and the other two members may come from members of the Board Commissioners, parties from outside the Company, as well as parties holding managerial positions under the Board of Directors in charge of human resources. The following table presents information regarding the composition of Telkom’s KNR members as of December 31, 2022. COMMITTEE FOR NOMINATION AND REMUNERATION’S COMPOSITION AS OF DECEMBER 31, 2022 Position Name and Double Position Status Basis of Appointment Term of Service Chairman Wawan Iriawan* Independent Commissioner Resolution of the Board of Commissioners No. 06/KEP/ DK/2021 dated June 8, 2021 June 8, 2020 - Present Members Rizal Mallarangeng* Commissioner Resolution of the Board of Commissioners No. 10/KEP/DK/2020 dated June 29, 2020 and updated with Resolution of the Board of Commissioners No. 06/KEP/DK/2021 dated June 8, 2021 June 29, 2020 - Present Arya Mahendra Sinulingga* Commissioner Resolution of the Board of Commissioners No. 06/KEP/ DK/2021 dated June 8, 2021 June 8, 2021- Present Ismail* Commissioner Marcelino Rumambo Pandin* Commissioner Resolution of the Board of Commissioners No. 06/KEP/ DK/2019 dated December 17, 2019, updated several times with the latest amendment based on Resolution of the Board of Commissioners No. 06/KEP/DK/2021 dated June 8, 2021 May 29, 2019 - Present Resolution of the Board of Commissioners No. 06/KEP/ DK/2019 dated December 17, 2019, updated several times with the latest amendment based on Resolution of the Board of Commissioners No. 06/KEP/DK/2021 dated June 8, 2021 May 29, 2019 - Present Abdi Negara Nurdin* Independent Commissioner Resolution of the Board of Commissioners No. 06/KEP/ DK/2021 dated June 8, 2021 June 8, 2021 Remark: *Profile of KNR members from the Board of Commissioners can be seen on Profile of the Board of Commissioners. 195 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk KNR’S INDEPENDENCE Throughout 2022, each member of KNR has acted independently and fulfilled the independence aspect in carrying out their duties, in accordance with the applicable terms and conditions stated in Financial Services Authority Regulation No. 34/POJK.04/2015 regarding Committee for Nomination and Remuneration of Issuers or Public Companies and Resolution of the Board of Commissioners No. 12/KEP/DK/2021 dated November 29, 2021 regarding Guidelines for Implementation of Work (Charter) of Committee for Nomination and Remuneration of the Company (Persero) PT Telekomunikasi Indonesia, TBK. KNR’S PERFORMANCE AND IMPLEMENTATION ACTIVITIES Until the end of 2022, Committee for Nomination and Remuneration has assisted the implementation of the duties of the Board of Commissioners in producing decisions, through the implementation of a series of activity agendas, namely: 1. Preparation of the Board of Commissioners Decision Number: 03/KEP/DK/2022/RHS which regulates Key Performance Indicators (KPI) for the Directors collegially and individually in 2022. 2. Amendment to the Resolution of the Board of Commissioners Number: 03KEP/DK/2022/RHS regarding Collegial and Individual Key Performance Indicators (KPI) for Directors of the Company (Persero) as stated in the Board of Commissioners’ Decree KNR’S MEETINGS Based on Financial Service Authority Regulation No. 34/POJK.04/2015 regarding Committee for Nomination and Remuneration, Telkom is required to hold a Committee for Nomination and Remuneration Meeting at least once in 4 months. During 2022, KNR has held Committee meetings including circular decisions 40 times. The following table presents information of attendance rate of each member at Committee for Nomination and Remuneration meeting in 2022. COMMITTEE FOR NOMINATION AND REMUNERATION’S MEETING ATTENDANCE IN 2022 No. Name Total of Meetings Total of Attendance 1. 2. 3. 4. 5. 6. Wawan Iriawan Abdi Negara Nurdin Arya Mahendra Sinulingga Ismail Marcelino Rumambo Pandin Rizal Malarangeng 40 40 40 40 40 40 40 37 37 34 32 32 Percentage of Attendance % 100 93 93 85 80 80 KNR’S EDUCATION AND TRAINING Given that all members of Committee for Nomination and Remuneration are the Board of Commissioners, an explanation of education and training can be seen in the profile section of the Board of Commissioners in this Annual Report. 196 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE REMUNERATION OF THE BOARD OF COMMISSIONERS AND THE BOARD OF DIRECTORS BOARD OF COMMISSIONERS AND BOARD OF DIRECTORS REMUNERATION MECHANISM AND PROCEDURE KNR* by the instructions from the Board of Commisioners create remuneration draft. The result will be decide in 1 3 KNR ask independent Party for Suggestion Independent Party give the suggestion to KNR 2 5 4 AGMS *KNR: Committe for Nomination and Remuneration Furthermore, the procedure for proposing up to the determination of the remuneration of Telkom’s Board of Commissioners and Board of Directors are explained as follows: 1. The Board of Commissioners requests the KNR to draft a remuneration proposal for the Board of Commissioners and the Board of Directors. 2. If needed, Committee for Nomination and Remuneration can request an independent party to draw up a framework on the remuneration of the Board of Commissioner and the Board of Directors. 3. The Committee for Nomination and Remuneration proposes the remuneration framework referred to to the Board of Commissioners. 4. The Board of Commissioners proposes remuneration for the Board of Commissioners and the Board of Directors to GMS. 5. The GMS delegates authority and power to the Board of Commissioners, with the prior approval of Series A Dwiwarna Shareholders to determine the remuneration for Board of Commissioners and the Board of Directors. REMUNERATION ACCEPTANCE OF THE BOARD OF COMMISSIONERS In 2022, total remuneration paid by Telkom to all the Board of Commissioners who served in 2022 and previous period is Rp119.259 billion. The following table presents information on the remuneration paid to the Board of Commissioners in 2022. BOARD OF COMMISSIONERS’ RECAPITULATION OF REMUNERATION Honorarium and Other Allowance Tantiem Total (Rp million) 4,046,628,571 8,026,027,397 12,072,655,968 No. Commissioners Position Bambang P, S, Brodjonegoro President Commissioner/ Independent Commissioner 1. 2. 3. Bono Daru Adji Independent Commissioner1 3,629,080,000 7,223,424,658 10,852,504,658 Abdi Negara Nurdin Independent Commissioner1 3,631,008,571 7,223,424,658 10,854,433,229 4. Wawan Iriawan Independent Commissioner1 3,627,151,429 12,150,000,000 15,777,151,429 197 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo. Commissioners Position Honorarium and Other Allowance Tantiem Total (Rp million) 5. 6. 7. 8. 9. Total Arya Mahendra Sinulingga Independent Commissioner 3,627,151,429 7,223,424,657 10,850,576,086 Isa Rachmatarwata Commissioner1 3,627,151,429 7,223,424,657 10,850,576,086 Ismail Marcelino Rumambo Pandin Commissioner1 Commissioner2 3,627,151,429 12,482,073,657 16,109,225,086 3,629,080,000 12,482,073,657 16,111,153,657 Rizal Mallarangeng Commissioner2 3,631,008,571 12,150,000,000 15,781,008,571 33,075,411,429 86,183,873,341 119,259,284,770 Remarks: 1. Tantiem is declared as gross tantiem, including LTI, which is given to management of the Company who served in 2019 financial year. 2. Remuneration for tantiem rights for Financial Year 2022. REMUNERATION ACCEPTANCE OF THE BOARD OF DIRECTORS In 2022, total remuneration paid by Telkom to all the Board of Directors who served in 2022 and previous period is Rp170.957 billion. The following table presents information on the remuneration paid to each Board of Directors in 2022. BOARD OF DIRECTORS’ RECAPITULATION OF REMUNERATION No. Directors Position Honorarium & Other Allowance Tantiem Total (Rp million) Ririek Adriansyah President Director 6,068,268,800 19,500,000,000 25,568,268,800 1. 2. 3. 4. 5. 6. 7. 8. 9. Afriwandi Director of HCM Heri Supriadi Director of KMR FM Venusiana R, Director of CONS & Acting Director of EBIS Edi Witjara Director of EBIS1 Herlan Wijanarko Director of NITS Director of DB Muhamad Fajrin Rasyid Budi Setyawan Wijaya 4,941,000,000 4,941,000,000 4,941,000,000 3,184,088,320 4,941,000,000 4,941,000,000 16,575,000,000 21,516,000,000 16,575,000,000 21,516,000,000 16,575,000,000 21,516,000,000 0 3,184,088,320 16,575,000,000 21,516,000,000 16,575,000,000 21,516,000,000 Director of SP 4,941,000,000 16,575,000,000 21,516,000,000 Bogi Witjaksono Director of WINS 3,304,350,096 9,804,387,959 13,108,738,055 Total 42,202,707,216 128,754,387,959 170,957,095,175 Remark: 1. Has been out of position since 8 July 2022 The position of EBIS Director is filled by appointing Ms. FM Venusiana R as Acting Director of EBIS in addition to her position as Director of Consumer Service 198 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE COMMITTEE FOR PLANNING AND RISK EVALUATION AND MONITORING Telkom’s highest governance instrument is expected to be able to evaluate and monitor the business plans and risks faced in carrying out its business activities. Therefore, Telkom has formed Committee for Planning and Risk Evaluation and Monitoring (KEMPR) whose task is to assist the Board of Commissioners in supervising and monitoring the Company’s risk planning and management activities. KEMPR’S SCOPE, DUTIES, AND RESPONSIBILITIES The duties and responsibilities of KEMPR were officially stipulated through Regulation of the Board of Commissioners No. 13/KEP/DK/2021 dated November 29, 2021 regarding Work Implementation Guidelines (Charter) of Committee for Planning and Risk Evaluation and Monitoring (KEMPR) of PT Telekomunikasi Indonesia (Persero), Tbk. Some things covered by KEMPR Charter are: 1. The establishment and the appointment of its members; 2. The structure and requirements of membership, duties, responsibilities, and authority; and 3. The scope of work, meetings, reporting, a term of office, and funding. Then, the scope, duties, and responsibilities of KEMPR in helping the Board of Commissioners oversee the course of the Company which are: 1. Conduct a comprehensive evaluation of the proposed Company’s Long-Term Plan (RJPP), Corporate Strategic Scenario (CSS), and Company’s Budget Work Plan (RKAP) submitted by the Board of Directors; 2. To evaluate the implementation of RJPP, CSS, and RKAP to assess whether the implantation is in line with the target of RJPP, CSS, and RKAP which has been approved by the Board of Commissioners; and 3. Monitoring the implementation of enterprise risk management and project risk management, especially for projects whose implementation is through the approval of the Board of Commissioners. KEMPR’S COMPOSITION Based on Regulation of the Board of Commissioners No. 09/KEP/DK/2021 dated August 2, 2021 regarding Membership Composition of Committee for Planning and Risk Evaluation and Monitoring of Telkom, then the composition of KEMPR members as of the end of 2022 can be seen in the following table. With the appointment of KEMPR members, on August 2, 2021, the following KEMPR members will no longer carry out their duties in the committee. COMMITTEE FOR PLANNING AND RISk EvALUATION AND MONITORING’S COMPOSITION AS OF DECEMBER 31, 2022 Position Chairman Members Name and Double Position Status Arya Mahendra Sinulingga* Commissioner Basis of Appointment Regulation of the Board of Commissioners No. 07/KEP/ DK/2021 dated June 8, 2021 and updated with No. 09/KEP/ DK/2021 dated August 2, 2021. Term of Service May 28, 2021 - Present Bambang P. S. Brodjonegoro* President Commissioner/ Independent Commissioner Regulation of the Board of Commissioners No. 07/KEP/ DK/2021 dated June 8, 2021 and updated with No. 09/KEP/ DK/2021 dated August 2, 2021. May 28, 2021 - Present Rizal Mallarangeng* Commissioner Ismail* Commissioner Isa Rachmatarwata* Commissioner Regulation of the Board of Commissioners No. 11/KEP/DK/2020 dated June 29, 2020, and has been updated several times with the latest amendments based on Resolution of the Board of Commissioners No. 09/KEP/DK/2021 dated August 2, 2021. June 29, 2020 - Present Regulation of the Board of Commissioners No. 05/KEP/DK 2019 dated May 29, 2019. May 24, 2019 - Present Regulation of the Board of Commissioners No. 07/KEP/ DK/2021 dated June 8, 2021 and updated with No. 09/KEP/ DK/2021 dated August 2, 2021. May 28, 2021 - Present Bono Daru Adji* Independent Commissioner Regulation of the Board of Commissioners No. 07/KEP/ DK/2021 dated June 8, 2021 and updated with No. 09/KEP/ DK/2021 dated August 2, 2021. May 28, 2021 - Present Embun Prowanta Independent Member Regulation of the Board of Commissioners No. 02/KEP/ DK/2020 dated January 15, 2020, and was updated several times, with the latest amendment based on Resolution of the Board of Commissioners No. 09/KEP/DK/2021 dated August 2, 2021. January 9, 2020 - Present Siswa Rizali Independent Member Resolution of the Board of Commissioners No. 09/KEP/ DK/2021 dated August 2, 2021. August 2, 2021 - Present Remarks: *Profile of KEMPR members from the Board of Commissioners can be seen on Profile of the Board of Commissioners. 199 Annual Report 2022 PT Telkom Indonesia (Persero) TbkKEMPR’S MEMBER PROFILE WHO ARE NOT BOARD OF COMMISSIONERS’ MEMBER Age 59 years old Educations EMBUN PROWANTA INDEPENDENT MEMBER Nationality Indonesian Domicile Jakarta, Indonesia • 2017 Doctoral Degree, Universitas Brawijaya, Indonesia. • 1993 Master Degree in Management, Universitas Gajah Mada, Indonesia. • 1988 Bachelor Degree in Mathematic and Science Study, Universitas Nasional, Indonesia. Basis of Appointment Resolution of the Board of Commissioners No. 02/KEP/DK/2020 dated January 15, 2020 regarding Membership Composition of Committee for Planning and Risk Evaluation and Monitoring of Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia, Tbk as later amended and updated with the latest update through Resolution of the Board of Commissioners No. 09/KEP/DK/2021 dated August 2, 2021 regarding Membership Composition of Committee for Planning and Risk Evaluation and Monitoring of Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia, Tbk. Term of Service January 9, 2020 up to present. Duties and Responsibilities Together with other KEMPR members, it is tasked with evaluating the proposed Company Long Term Plan (RJPP), Corporate Strategic Scenario (CSS), and Company Budget Activity Plan (RKAP) submitted by the Board of Directors, evaluating the implementation of RJPP, CSS, and RKAP, and supervising the implementation of Telkom’s enterprise risk management and Telkom’s project risk management. Career Experiences • 2020 - Present • 2017 - Present • 1996 - Present Professional License and Certificate • 2022 Certificate in Sustainability for Finance. Certified Investment Banking (CIB) by Association of Indonesian Capital Market Professional. • 2018 Assessor Risk Management by BNSP. • 2017 Certified Risk Professional (CRP) by Association of Indonesian Capital Market Professional. • 2016 • 2012 Certified Securities Analysts (CSA) by Association of Securities Analysts Indonesia. • 2008 Certified Financial Planner (CFP) by Financial Planning Standard Board Indonesia. • 2005 Recommended Trainer Level 1 & 2 on Bank Risk Management by BSMR & GARP. Independent Member/Secretary of Committee for Planning and Risk Evaluation and Monitoring (KEMPR). Assessor of Lembaga Sertifikasi Profesi Pasar Modal (LSPPM). Postgraduate Lecturer at Perbanas Institute Jakarta. Age 49 years old Educations SISWA RIzALI MEMBER Nationality Indonesian Domicile South Tangerang, Indonesia • 2022 Master of Social Sciences (Economics), National University of Singapore, Singapore. • 1996 Bachelor of Economics, Universitas Indonesia, Indonesia. Basis of Appointment Reseolution of the Board of Commissioners No. 09/KEP/DK/2021 dated August 2, 2021 regarding Membership Composition of Committee for Planning and Risk Evaluation and Monitoring of the Company (Persero) PT Telekomunikasi Indonesia, Tbk. Term of Service August 2, 2021 up to present. Duties and Responsibilities Together with other KEMPR members, they are tasked with evaluating the proposed Company Long Term Plan (RJPP), Corporate Strategic Scenario (CSS), and Company Budget Work Plan (RKAP) submitted by the Board of Directors, evaluating the implementation of RJPP, CSS, and RKAP, as well as conducting supervising the implementation of Telkom’s enterprise risk management and project risk management. Career Experiences • 2021 • 2019 - 2021 • 2015 - 2018 Professional License and Certificate • 2022 Certified Risk Professional (CRP) by Association of Indonesia Capital Market Professional. • 2008 Member of Committee for Planning and Risk Evaluation and Monitoring. Investment and Placement Committee, Badan Pengelola Keuangan Haji. Director of Investment, PT Asanusa Asset Management. Investment Manager Representative Certificate. 200 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE KEMPR’S INDEPENDENCE In carrying out their duties during 2022, KEMPR members have acted independently and fulfilled the independence aspects in accordance with the terms and conditions stated in Resolution of the Board of Commissioners No. 13/ KEP/DK/2021 dated November 29, 2021 regarding Guidelines for Implementation of Work (Charter) of Committee for Planning and Risk Evaluation and Monitoring of PT Telekomunikasi Indonesia (Persero), Tbk. KEMPR’S PERFORMANCE AND IMPLEMENTATION ACTIVITIES Until the end of 2022, Telkom’s KEMPR has carried out various activities consisting of: 1. Company Long Term Plan (RJPP) and Corporate Strategic Scenario (CSS) a. Focus on Monitoring Implementation of RJPP 2020-2024 and CSS 2022-2024 • Development of initiatives related to digital connectivity, digital platforms, and digital services. • Strengthening the foundation and sharpening the strategy in implementing the Five Bold Moves initiative. • Ensuring Company transformation and Subsidiary streaming programs are running according to plan. b. Evaluation of 2023-2025 CSS Proposals KEMPR’s focus in preparing the 2023-2025 CSS includes among others: • Increasing the effectiveness of the orchestration business portfolio within the scope of the TelkomGroup, including digital business • Development and improvement of the effectiveness of the Five Bold Moves initiative • Improved digital platform & service business performance. 2. Company Work Plan and Budget, as well as Capital Expenditures a. Focus on Monitoring the Implementation of the 2022 RKAP and Capital Expenditures • Accelerating the utilization of new business opportunities and improving performance during the COVID-19 pandemic. • Program governance and effectiveness for subsidiaries, especially troubled subsidiaries. • Improved efficiency and capex contribution to company revenue and profitability. b. Evaluation of the 2023 RKAP and Capital Expenditure Proposals KEMPR’s focus in preparing the 2023 RKAP and capital expenditures includes: • • • Increasing IndiHome’s business competitiveness in each customer segment. Improvement of enterprise business capabilities both at national and regional scope. Increasing profitability, efficiency, and timeliness in deploying capex including ensuring anticipation and risk mitigation of potential delays in deploying capex. 3. Company Risk Management (Enterprise Risk Management/ERM) Based on monitoring of the Company’s risk profile, there are three things that receive attention, specifically: a. Implementation of risk management both within the scope of the Company and on strategic projects. b. Improving the quality of ERM implementation in Subsidiaries. c. TelkomGroup’s compliance with BUMN Ministerial Regulation No. 5 of 2022 regarding Implementation of Risk Management in SOEs. 4. Certain Actions of the Board of Directors that Require the Approval of the Board of Commissioners During 2022 KEMPR has assisted the Board of Commissioners in reviewing strategic plan proposals submitted by the Board of Directors, including the following projects: a. Support for the Establishment of a New Joint Venture Subsidiary for SOE Digital Healthcare Ecosystem Initiative Legal Entities (FitAja) b. Strategic Fit Digico B2B Telkom c. Changes in the Use of Phase-2 MDI500 Project Funds d. Strategic Fit Project Fixed Mobile Convergence (FMC) Speed 2 e. Approval of the Statement of the Founder of the Telkom Pension Fund regarding Changes to the Telkom Pen- sion Fund f. Approval of the Release Commitment Budget Capex Phase II of the 2022 RKAP g. Approval of the B2B and B2C Digital Business Management Strategy as KPI for Directors Individual Director of Digital Business for 2022 h. Batam Data Center Initiative Strategic Fit Approval i. Approval of Strategic Fit Project Infraco j. Approval of Write-off of Uncollectible Accounts Receivable in 2022 201 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk KEMPR’S MEETING During 2022, Telkom’s KEMPR has held 28 Committee Meetings. The following table presents information of the attendance rate of KEMPR members during Committee Meetings in 2022. COMMITTEE FOR PLANNING AND RISk EvALUATION AND MONITORING’S MEETING ATTENDANCE IN 2022 No. Name 1. 2. 3. 4. 5. 6. 7. 8. Ismail Rizal Mallarangeng Arya Mahendra Sinulingga Bambang P.S. Brodjonegoro Bono Daru Adji Isa Rachmatarwata Embun Prowanta Siswa Rizali Total of Meetings Total of Attendance Percentage of Attendance % 28 28 28 28 28 28 28 28 28 26 27 28 26 28 28 28 100 92.86 96.43 100 92.86 100 100 100 KEMPR’S EDUCATION AND TRAINING In 2022, Telkom has included KEMPR members to improve their competence, through education and/or training as shown in the table below. TRAINING AND EDUCATION ATTENDED By COMMITTEE FOR PLANNING AND RISk EvALUATION AND MONITORING 2022 No. 1. 2. Name Name of Training Date Location Siswa RIzali Certified Risk Professional (CRP) September 12-15, 2022 Jakarta (Virtual) Embun Prowanta Certificate in Sustainability for Finance October 22 – November Jakarta (Virtual) 06, 2022 Remark: *Education and Training of KEMPR members who are members of the Board of Commissioners can be seen in the Education and Training of the Board of Commissioners. 202 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE BOARD OF DIRECTORS Based on Law No. 40 Year 2007 regarding Limited Liability Companies, the Board of Directors is an organ of the Company which is authorized and fully responsible to Company’s management for the Company’s interest, in accordance with the aims and objectives of the Company, and represents the Company both inside and outside the court in accordance with the provisions of the Articles of Association and laws and regulations. Telkom’s Board of Directors must comply with the Articles of Association of the Company, Board of Directors’ Charter, and laws and regulations and must implement the principles of professionalism, efficiency, transparency, independence, accountability, responsibility, and fairness. BOARD OF DIRECTORS’ CHARTER Telkom has a Charter or Board Charter for Directors called the Board Manual. The Board Manual is set forth in the Joint Regulation of the Board of Commissioners and Directors of the Limited Liability Company (Persero) PT Telekomunikasi Indonesia Tbk No.PD.620.00/r.00/HK200/ COP-M4000000/2022 dated 31 August 2022. The Broad Manual is a guide for the Board of Directors in carrying out their duties , responsibilities, and authorities. These regulations contain guidelines and work procedures, authorities, duties, responsibilities, obligations, division of tasks, meetings, conflict of interest provisions, share ownership, mechanism arrangements and division of labor between members of the Board of Directors which are not regulated in the Company’s articles of association or statutory provisions. With the existence of the Board of Directors Manual, it is hoped that the performance of the Directors will be more directed and synergize with one another. BOARD OF DIRECTORS’ AUTHORITIES, DUTIES, AND RESPONSIBILITIES The management of the TelkomGroup is carried out through the TelkomGroup Board of Executives (BoE), which is coordinated by the Main Director of Telkom as the Chief of Executive (CEO) of the TelkomGroup. The main duties of the President Director are: a. Coordinating the process of structuring and/or reconstructing aspects of the Company’s philosophy which includes but is not limited to the vision, mission, goals, corporate culture, and leadership architecture; b. Formulate and state the strategic direction in order to condition the Company’s ability to achieve sustainable competitive growth in the entire TelkomGroup business portfolio and risk control as well as interacting with external constituents; c. Controlling the strategic planning function within the scope of the TelkomGroup and directing growth efforts with a focus on new business portfolios; d. Controlling the direction of the Company and in driving new business, well as the entering/developing new markets, as internationalization/regionalization; TelkomGroup e. Controlling the management of strategic aspects of the functions of finance and risk management, human capital, digital business, and strategic portfolios in all business portfolios carried out within the scope of the TelkomGroup; f. Leading the development process for TelkomGroup leaders, as well as appointing and dismissing office holders in accordance with stipulated career management regulations, as well as coaching TelkomGroup leaders; in certain positions g. Periodically reporting the Company’s performance in accordance with the provisions applicable to public companies; and; h. Establish policies and decisions related to the management of the Company and the TelkomGroup as referred to in letters a through g and other matters that have not been formulated in the duties and authorities of each member of the Board of Directors in this regulation. In carrying out his duties, the President Director is assisted by several Directors. The following table is the duties and responsibilities of each Director according to their field: 203 Annual Report 2022 PT Telkom Indonesia (Persero) TbkIn carrying out his duties, the President Director is assisted by several Directors. The following table is the duties and responsibilities of each Director according to their field: Directorship Duties and Responsibilities Director of Consumer Service 1. Director of Enterprise & Business Services Director of Wholesale & International Services 2. 1. 2. 1. 2. Director of Strategic Portfolio 1. The Director of Consumer Service, hereinafter referred to as the Director of CONS, in addition to his duties as a member of the Board of Directors, is responsible for business strategy in the context of conditioning sustainable competitive growth through winning competitions and growing the consumer segment business portfolio. The CONS Director as a member of the Board of Executives is appointed as the Consumer Business CEO whose job is to conduct the parenting strategy function through strategic control, coordination, and subsidiary performance management to create corporate value through optimizing and harmonizing interrelationships between the Parent and all operating managing entities and CFU subsidiaries. Consumer Business within the scope of the TelkomGroup. The Enterprise & Business Service Director, hereinafter referred to as the EBIS Director, in addition to his duties as a member of the Board of Directors, is responsible for the business strategy to condition sustainable competitive growth through winning competitions and growing the corporate segment business portfolio (enterprise, government, and business). The Director of EBIS as part of the Board of Executive members is appointed as the CEO of Enterprise Business whose task is to carry out the parenting strategy function through strategic control, coordination, and subsidiary performance management to create corporate value through optimizing and harmonizing inter-relationships between Parent and all operating entities managing CFU Enterprise Business within the scope of the TelkomGroup. The Director of Wholesale & International Service, hereinafter referred to as the Director of WINS, in addition to his duties as a member of the Board of Directors, is responsible for the business strategy in the context of conditioning sustainable competitive growth through winning competitions and growing the wholesale & international segment business portfolio. The Director of WINS as part of the Board of Executive members was appointed as the CEO of Wholesale & International Business whose job is to carry out the parenting strategy function through strategic control, coordination, and subsidiary performance management to create corporate value through optimizing and harmonizing interrelationships between Parent and all entities managing CFU operations Wholesale & International Business (WIB) within the scope of the TelkomGroup. The Strategic Portfolio Director, hereinafter referred to as SP Director, in addition to his duties as a member of the Board of Directors, is responsible for the availability of corporate level strategy formulation, which includes directional strategy, portfolio strategy, and parenting strategy as well as exploring new sources of growth for the growth of the TelkomGroup's business portfolio through alliance & acquisition and synergy. 2. The SP Director as part of the Board of Executive members is appointed as the Chief Strategic Officer (CSO) whose job is to carry out parenting strategy and functional strategy & business development in order to create corporate value through optimization and harmonization of strategy & business development management within the scope of the TelkomGroup. Director of Digital Business 1. The Director of Digital Business, hereinafter referred to as the Director of DB, in addition to his duties as a member of the Board of Directors, is responsible for the availability of an innovation strategy formulation to optimize the exploration of a coherent digital service business within the scope of the TelkomGroup. 2. The DB Director as part of the Board of Executive members was appointed as the Chief Digital & Innovation Officer (CDIO) whose job is to carry out functional digital business parenting strategies in order to create corporate value through optimizing and harmonizing digital business management within the scope of the TelkomGroup. 204 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE Directorship Director of Network & IT Solutions Director of Finance and Management Risk Director of Human Capital Management 1. 2. 1. 2. 1. 2. Duties and Responsibilities The Network & IT Solution Director, hereinafter referred to as the NITS Director, in addition to his duties as a member of the Board of Directors, is responsible for the business strategy to leverage the Company's resource capabilities in order to grow/ enlarge/exploit established businesses/services through efficient use of infrastructure and IT to synergistically support the TelkomGroup's business portfolio and to transform network/IT infrastructure in the TelkomGroup to improve operational management efficiency with priority on network investment and IT systems to accelerate digital business growth. The Director of NITS as part of the Board of Executive members is appointed as the Chief Information Technology Officer (CITO) whose job is to carry out the parenting strategy in order to increase the Company's value through optimizing and harmonizing the functional management of NITS within the scope of the TelkomGroup. The Director of Finance and Risk Management, hereinafter referred to as the Director of KMR, in addition to his duties as a member of the Board of Directors, is responsible for the availability of directional strategy formulation, portfolio strategy and parenting strategy, especially from the financial, supply and risk management aspects of the Company to realize sustainable competitive growth in the scope of TelkomGroup. The Director of KMR as part of the Board of Executive members is appointed as Chief Financial & Risk Officer (CFRO) in charge of carrying out the TelkomGroup's financial & risk management functional parenting strategy, including controlling asset management and asset leverage by implementing strategic control, coordination, and subsidiaries performance management in order to create corporate value through optimizing and harmonizing interrelationships between the Parent and all operating management entities and subsidiaries FU Finance & Risk Management. The Director of Human Capital Management, hereinafter referred to as the Director of HCM, in addition to his duties as a member of the Board of Directors, acts as a strategic partner for the business lines and corporate functions of the TelkomGroup's human capital management, supports business units and subsidiaries through the development of a center of excellence for human capital management functions , providing guidance and policies in the implementation of strategic human capital alignment and integration, as well as integrating the talent management system. The Director of HCM as part of the Board of Executives was appointed as Chief Human Capital Officer (CHCO) whose job is to carry out the functional parenting strategy of human capital management within the scope of the TelkomGroup and manage the supervision of the Pension Fund and the Telkom Foundation with the implementation of strategic control, coordination and foundation performance management in order to create Company value through optimizing and harmonizing the interrelationships between the Parent and all operating entities managing the operations of HCM FU Subsidiaries. Furthermore, in the event of Company’s losses, each member of the Board of Directors is jointly and severally liable for losses caused by errors or negligence in carrying out their duties. Members of the Board of Directors are not responsible for the Company’s losses if they can prove it: 1. Such loss is not caused by their mistake or negligence; 2. They have performed actions in good faith, with full responsibility, and prudentially for the interest and based on the purpose and objective of the Company; 3. They do not have an y conflict of interest either, directly or indirectly for the management activities causing the loss; and 4. They have taken the action to prevent the occurrence or continuation of such loss. BASIS OF APPOINTMENT OF THE BOARD OF DIRECTORS The mechanism of selecting and appointing members of Telkom’s Board of Directors is through the GMS. The main and controlling shareholder of Telkom, namely the Government of Indonesia, represented by the Ministry of State- Owned Enterprises (SOE). The appointment or election of the Board of Directors takes into account the competence and expertise, integrity, and background required by the Company. The selected prospective members are confirmed to have met the criteria and conditions specified in the fit and proper test. 205 Annual Report 2022 PT Telkom Indonesia (Persero) TbkEDUCATION, TRAINING, SEMINAR, AND CONGRESS Throughout 2022, Telkom provides opportunities for members of the Board of Directors to attend education, training, seminars, congresses, and other activities to develop their knowledge and skills. The following table presents the education and/or training that members of the Board of Directors of Telkom have attended during the 2022 Financial Year. EDUCATION, TRAINING, SEMINAR, AND CONGRESS OF MEMBER OF THE BOARD OF DIRECTORS IN 2022 No. Occasion Date Institution Location Directors Who Attended Speaker at MNC Investor Forum 2022 Speaker at Musyawarah Provinsi Asosiasi Pendidikan Tinggi Informatika dan Komputer Provinsi Jawa Barat. Revolusi Metaverse Digitalisasi Nusantara Expo & Summit March 15, 2022 MNC Online Dir SP March 23, 2022 APTIKOM Online Dir SP March 29-31, 2022 B20 Indonesia Surakarta President Director, Dir DB Speaker at Tempo Talkshow June 21, 2022 July 14, 2022 Tempo SBM ITB Jakarta Jakarta Dir SP Dir SP July 26, 2022 LPPI Online Dir SP Speaker at Inhouse Training PLN (Discovering Strategic Alliances & Managing Business Partnership) Colloquium of Stabilitas Magazine “Embracing the Next Level of Digital Banking - Metaverse: A Bold New World of Opportunities and Challenges “ Global Human Capital Summit August 25, 2022 B20 Indonesia Jakarta The Good Times Summit September 8, 2022 F20 Indonesia Jakarta Speaker at the event of BATIC 2022 “Building the Indo-Pacific Digital Connectivity Ecosystem” September 21, 2022 TELIN Bali Dir DB Dir DB All BoD BUMN Legal Summit 2022 September 22, 2022 Forum Hukum BUMN Bali Dir SP SOE International Conference October 17, 2022 Ministry of SOE Bali Masters of Scale Summit October 17-19, 2022 Masters of Scale San Francisco, USA B20 Summit November 13-14, 2022 B20 Indonesia Bali Dir SP Dir DB President Director, Dir SP, Dir DB Governance, Risk & Compliance (GRC) Masterclass Speaker at the event of PROFIT in CNBC: Theme: “Groundbreaking Neutra DC Hyperscale and Telkom’s Business Projection in 2023” December 8, 2022 McKinsey Jakarta All BoE December 28, 2022 CNBC Jakarta - 1. 2. 3. 4. 5. 6. 7. 8. 9. 10 11, 12. 13. 14. 15. 206 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE BOARD OF DIRECTORS’ DIVERSITY Telkom upholds equality of Human Rights (HAM) as stated in Law No. 39 Year 1999 regarding Human Rights. Therefore, Telkom’s main Shareholders and controllers guarantee there is no discrimination in the election and appointment of the Board of Directors even though it is not contained in a special human rights policy. Each member of the Board of Directors elected are professionals who have expertise, skills, and good integrity following Telkom’s needs in the digital era. The results of the 2022 AGMS determined nine members of the Board of Directors, one of whom is a woman. The decision was taken based on the results of the selection and was not an attempt to discriminate against women in determining the position of Telkom’s Board of Directors. BOARD OF DIRECTORS’ DIvERSITy AS OF DECEMBER 31, 2022 No. Name Position Gender Background of Expertise & Skill Level of Education 1. 2. 3. 4. 5. 6. 7. 8. Ririek Adriansyah President Director Male Electrical Engineering Bachelor Heri Supriadi Director of FRM Male Business Management FM Venusiana R. Director of CONS Female Herlan Wijanarko Director of NITS Male Muhamad Fajrin Rasyid Director of DB Budi Setyawan Wijaya Director of SP Male Male Afriwandi Director of HCM Male Bogi Witjaksono Director of WINS Male Electrical Engineering and Management Electrical Engineering and Management Informatics Engineering Industrial Engineering and Management Industrial Engineering and Management Electrical Engineering and Telecommunication Engineering Doctoral Master Master Bachelor Master Master Master Remarks: FRM Finance & Risk Management, CONS Consumer Service, EBIS Enterprise & Business Service, NITS Network & IT Solution, WINS Wholesale & International Service, HCM Human Capital Management, DB Digital Business, SP Strategic Portfolio. Composition Diversity of Board of Directors Gender Composition Diversity of Board of Directors Educational Level Male 87.5% Master 63% Female 12.5% Doctoral 13% Bachelor 25% 207 Annual Report 2022 PT Telkom Indonesia (Persero) TbkBOARD OF DIRECTORS’ DOUBLE POSITION During 2022, there are members of the Board of Directors of Telkom who hold double positions, both at Telkom as the Parent Company, Subsidiaries, or other Entities. The following table provides information on members of the Board of Directors who have double positions. BOARD OF DIRECTORS’ DOUBLE POSITION AS OF DECEMBER 31, 2022 No. Name 1. 2. Ririek Adriansyah Heri Supriadi 3. FM Venusiana R. Telkom Position Other Position Subsidiaries President Director Director of FRM Director of CONS None None President Commissioner Commissioner a. b. PT Graha Sarana Duta (Telkom Property) PT Telekomunikasi Selular (Telkomsel) President Commissioner President Commissioner a. PT Telkom Akses None b. PT PINS Indonesia Other Entities None None None None President Commissioner President Commissioner Commissioner President Commissioner President Commissioner President Commissioner President Commissioner a. PT Metranet b. PT MDI c. a. b. c. PT Sigma Cipta Caraka PT Sigma Cipta Caraka PT Jalin Pembayaran Nusantara None PT Multimedia Nusantara a. Infomedia None 6. Budi Setyawan Wijaya Director of SP 7. Afriwandi Director of HCM 4. 5. Herlan Wijanarko Director of NITS President Commissioner a. PT Dayamitra Telekomunikasi Muhamad Fajrin Rasyid Dire ctor of DB 8. Bogi Witjaksono Director of WINS President Commissioner a. PT Telekomunikasi Indonesia Internasional None Chairman of the Supervisory Board b. Dana Pensiun Telkom President Commissioner b. PT Telkom Satelit President Commissioner c. PT Telkom Data Ekosistem President Commissioner d. PT Telkom Infra Remarks: FRM Finance & Risk Management, CONS Consumer Service, EBIS Enterprise & Business Service, NITS Network & IT Solution, WINS Wholesale & International Service, HCM Human Capital Management, DB Digital Business, SP Strategic Portfolio. 208 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE BOARD OF DIRECTORS’ SELF ASSESSMENT POLICY The Board of Directors has a self-assessment policy to assess the performance of the Board of Directors, in accordance with the Joint Regulation of the Board of Commissioners and the Board of Directors No. 08/KEP/DK/2020 and PD.620.00/r.00/HK200/COP-M4000000/2020 regarding Guidelines for Work Procedures of the Board of Commissioners and Directors (Board Manual) of the Company (Persero) PT Telekomunikasi Indonesia, Tbk. These guidelines are used by Telkom as a form of accountability for collegially assessing the performance of the Board of Directors. Each member of the Board of Directors assesses the performance of the Board of Directors collegially, which means not assessing the individual performance of each member of the Board of Directors. With this self-assessment, it is hoped that each member of the Board of Directors can contribute to improving the performance of the Board of Directors on an ongoing basis. More complete information regarding the Board of Directors’ self-assessment policy can be accessed through the Telkom Board Manual which is found on the menu on the Telkom website. BOARD OF DIRECTORS’ COLLEGIATE ASSESSMENT No. kPI Unit Target Polarity Point A. Economic and Social value for Indonesia 1. Profitability Expansion a. b. c. EBITDA Cash Flow from Operation (CFO) Income for the year ROIC with long term rate ROIC ≥ WACC Interest Bearing Debt to Equity in the range of investment grade rated companies Interest Bearing Debt to EBITDA in the range of investment grade rated companies Consumer Operational a. Home-served/Home-passed New Corporate Structure (incl: InfraCo, PlatformCo, DigiCo) T Rp T Rp T Rp % X X % % 74.3 68.9 21.2 100 0.55 Maximize Maximize Maximize Maximize Minimize 0.7 Minimize 44 100 Maximize Maximize Development of digital platform for handling the COVID-19 pandemic Time March 2021 Minimize B. Business Model Innovation 1. 2. 3. Penetration of Bundling Product Fixed & Mobile TelkomGroup B2B IT/Digital External Revenue B2C Digital Services (non-connectivity) External Revenue C. Technology Leadership Project Milestone Completion for Planned 5G Initiative KSSL 480 Maximize T Rp T Rp Time 11.71 9.72 Maximize Maximize December 2021 Minimize Mobile Data Revenue Share % 49 Maximize 2. 3. 4. 5. 6. 7. 1. 2. 6 6 5 5 4 4 5 5 5 5 5 5 6 9 209 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo. kPI Unit Target Polarity Point D. Investment Increase 1. Telkom Digital Venture: a. Telkom Venture Fund Value T Rp b. Money Multiplier 2. % Subsidiaries with ROIC > WACC Telkom E. Talent Development % Woman in Nominated Talent % Millenial (< 40 tahun) in Top Talent Digital Talent Readiness (Build) Project milestone ITDRI 1. 2. 3. 4. Total X % % % Total Time BOARD OF DIRECTORS’ MEETING 6 1.5 50 15 3 Maximize Maximize Maximize Maximize Maximize 632 Maximize December 2021 Minimize 5 5 5 2 2 4 2 100 Based on the Company’s Articles of Association, Telkom’s Board of Directors has a stipulation to hold an internal meeting once a month, but may hold other meetings at any time. Meanwhile, joint meetings between the Board of Directors and the Board of Commissioners are held at least once in 4 months. In meeting, a quorum is reached when more than half of the members of the Board of Directors are present or legally represented at the meeting. Each member of the Board of Directors who is present or legally represented has one vote. The decision making mechanism at the Board of Directors meeting is based on deliberation to reach consensus. If consensus is not reached, then decision making will be carried out based on the majority vote of the members of the Board of Directors who are present. In 2022, Telkom Board of Directors held 54 meetings. The following table explains the frequency of attendance of the Board of Directors’ meetings during the 2022 reporting period. BOARD OF DIRECTORS’ ATTENDANCE AND AGENDA AT INTERNAL MEETINGS No. Date 1. January 4, 2022 1. 2. Operational Performance Report & Revenue W4 December 2021 Report of Limited Meetings Agenda Meeting’s Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ 2. January 11, 2022 Attendance List 3. January 18, 2022 1. 2. 1. 2. 3. Operational Performance Report, Revenue & SI Program Action Based YtD December 2021 (Outlook) Report of Limited Meetings Agenda RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ Report of Director Meeting’s Format 2022 Report of Corporate Theme 2022 TelkomGroup Operational Performance Report & Revenue W2 January 2022 Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ 210 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE No. 4. Date January 20, 2022 Meeting’s Agenda 1. 2. 3. Report of Company Performance YtD December 2021 BOC concern material that is reported regularly Additional concerns that need to be reported Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ 5. January 25, 2022 1. 2. 3. 4. Operational Performance Report and Revenue YtD December (Closing) 2021 and W3 January 2022 Report of Director Meeting’s Format 2022 Report of Gerakan PeduliInfrastruktur Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ 6. February 2, 2022 Attendance List 7. February 8, 2022 Attendance List 8. February 15, 2022 Attendance List 9. February 22, 2022 1. 2. 3. 1. 2. 1. 2. 3. 1. 2. Operational Performance Report & Revenue W4 January 2022 Report of STO’s Naming Report of Limited Meetings Agenda RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ Operational Performance Report, Revenue & SI Program Action Based YtD January 2022 (Outlook) Report of Limited Meetings Agenda RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ Operational Performance Report & Revenue W2 February 2022 Report of Five Bold Moves Program Report of Limited Meetings Agenda RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ - - - Operational Performance Report and Revenue YtD January (Closing) 2022 and W3 February 2022 Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ 10. March 1, 2022 1. 2. Operational Performance Report & Revenue W4 February 2022 Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ 11. March 08, 2022 1. 2. 3. 4. Operational Performance Report, Revenue & SI Program Action Based YtD February 2022 (Outlook) Report of Product Plan 2022 Kickoff Quality Control (QC) PSB IndiHome Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ 12. March 15, 2022 1. 2. 3. Operational Performance Report & Revenue W2 March 2022 Report of Five Bold Moves: Report of Fixed-mobile Convergence (FMC) Program Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW - √ √ √ √ √ 211 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo. 13. Date March 22, 2022 Meeting’s Agenda 1. 2. Operational Performance Report and Revenue YtD February (Closing) 2022 and W3 March 2022 Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ 14. March 29, 2022 1. 2. Operational Performance Report & Revenue W4 March 2022 Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ - 15. April 5, 2022 Attendance List 16. April 12, 2022 1. 2. 3. 4. 1. 2. 3. 4. Report of Follow up on the Direction of the President of the Republic of Indonesia regarding Increasing Use of Domestic Products Report of Limited Meetings Agenda Report of TelkomGroup Safari Ramadhan Readiness (including an update on the SOE Minister’s Safari Ramadhan readiness) Operational Performance Report, Revenue & SI Program Action Based YtD March 2022 (Outlook) RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ Report of Limited Meetings Agenda Operational Performance Report & Revenue W1 April 2022 Report of Redefining IT Transformation (Progress of audiences IT pain point program at CFU-FU) Report of House Style Gedung Telkom Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ 17. April 14, 2022 1. 2. Report of Management YtD March 2022 BoC Concern Joint Meetings Performance YtD March 2022 Attendance List RA √ AW - HS √ FMv EW(1) HW MFR BSW BW √ - - - - √ 18. April 19, 2022 Attendance List 19. May 10, 2022 Attendance List 20. May 18, 2022 1. 2. 3. 1. 2. 3. 1. 2. 3. Operational Performance Report & Revenue W2 April 2022 Update Earning Call FY Material 2021 Report of Limited Meetings Agenda RA - AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ - √ Operational Performance Report, Revenue & SI Program Action Based YtD April 2022 (Outlook) Report of Update the Readiness of IKN’s Satgas Report of Limited Meetings Agenda RA √ AW - HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ - Kick Off Satgas Increased Use of Domestic Products (P3DN) 2022 Report of Limited Meetings Agenda Operational Performance Report & Revenue W2 May 2022 Attendance List RA √ AW √ HS - FMv EW(1) HW MFR BSW BW √ √ √ √ - √ 21. May 20, 2022 1. Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ 212 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE No. 22. Date May 24, 2022 1. 2. Operational Performance Report and Revenue YtD April (Closing) and W3 May 2022 Report of Limited Meetings Agenda Meeting’s Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ 23. May 31, 2022 Attendance List 24. June 7, 2022 1. 2. 3. 1. 2. 3. Operational Performance Report & Revenue W4 May 2022 Update always on backbone national: Design & Capacity Report of Limited Meetings Agenda RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ Operational Performance Report, Revenue & SI Program Action Based YtD May 2022 (Outlook) Report of Readiness of Celebrate 57th Telkom’s Anniversary Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ 25. June 14, 2022 1. 2. Operational Performance Report & Revenue W4 December 2021 Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ - √ - √ √ 26. June 21, 2022 Attendance List 27. June 28, 2022 Attendance List 28. July 5, 2022 Attendance List 29. July 19, 2022 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 1. 2. 3. 1. 2. 3. Report of Limited Meetings Agenda Report of Limited Meetings Agenda Report of Limited Meetings Agenda Report of Limited Meetings Agenda Operational Performance Report and Revenue YtD May (Closing) 2022 and W2 June 2022 RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ √ √ √ √ Operational Performance Report & Revenue W3 June 2022 Kick Off Satgas INDI 4.0 TelkomGroup Report of Limited Meetings Agenda Report of Limited Meetings Agenda Report of Limited Meetings Agenda RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ √ - √ √ √ Operational Performance Report, Revenue & SI Program Action Based YtD June 2022 (Outlook) Kick Off Satgas Telkom Organization Post 5 Bold Moves Report of Limited Meetings Agenda RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ Operational Performance Report & Revenue W2 July 2022 Report of Limited Meetings Agenda Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 30. July 22, 2022 1. Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 213 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo. 31. Date July 26, 2022 Meeting’s Agenda 1. 2. 3. Operational Performance Report & Revenue YtD June (Closing) and W3 July 2022 Report of Limited Meetings Agenda Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 32. August 2, 2022 1. 2. Report of Limited Meetings Agenda Operational Performance Report & Revenue W4 July 2022 Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 33. August 16, 2022 Attendance List 34. August 23, 2022 1. 2. 3. 4. 1. 2. Report of Limited Meetings Agenda Report of Limited Meetings Agenda Report of Limited Meetings Agenda Operational Performance Report & Revenue W2 August 2022 RA √ AW √ HS - FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ Report of Limited Meetings Agenda Operational Performance Report and Revenue YtD July (Closing) 2022 and W3 August 2022 Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ - 35. August 24, 2022 1. 2. 3. Report of Limited Meetings Agenda Report of Limited Meetings Agenda Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 36. August 30, 2022 1. 2. Operational Performance Report & Revenue W4 August 2022 Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 37. September 7, 2022 1. 2. Operational Performance Report, Revenue & SI Program Action Based YtD August 2022 (Outlook) Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 38. September 13, 2022 1. 2. Operational Performance Report & Revenue W1 September 2022 Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 39. September 20, 2022 1. 2. 3. Operational Performance Report & Revenue W2 September 2022 Report of Program Non-5 Bold Moves: Regional Empowerment Office (REO) Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 40. September 23, 2022 1. 2. 3. 4. Report of Company Performance YtD August 2022 Report of Limited Meetings Agenda Report of Limited Meetings Agenda Report of Plan of Spectrum Auction 2100 MHz Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 214 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE No. 41. Date September 27, 2022 Attendance List 42. October 4, 2022 Attendance List 43. October 11, 2022 Meeting’s Agenda Operational Performance Report and Revenue YtD August (Closing) 2022 and W3 September 2022 Report of Limited Meetings Agenda Report of Limited Meetings Agenda RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ Operational Performance Report & Revenue W4 September 2022 Report of Progress Mitigation Fraud IndiHome Report of Limited Meetings Agenda RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ Operational Performance Report, Revenue & SI Program Action Based YtD September 2022 (Outlook) Report of Limited Meetings Agenda 1. 2. 3. 1. 2. 3. 1. 2. Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 44. October 19, 2022 1. 2. 3. 4. 5. Operational Performance Report & Revenue W2 October 2022 Report of Roadmap Management of Digital B2B & B2C TelkomGroup Report of Limited Meetings Agenda Report of Limited Meetings Agenda Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ - √ √ 45. November 1, 2022 1. 2. Operational Performance Report & Revenue W4 October 2022 Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 46. November 08, 2022 1. 2. 3. Operational Performance Report, Revenue & SI Program Action Based YtD October 2022 (Outlook) Report of National Appreciation of Innovation Report of Limited Meetings Agenda Attendance List RA √ AW √ HS - FMv EW(1) HW MFR BSW BW √ N/A √ √ - √ 47. November 15, 2022 1. 2. Operational Performance Report & Revenue W2 November 2022 Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 48. November 22, 2022 1. Operational Performance Report and Revenue YtD October (Closing) 2022 and W3 Attendance List 49. November 23, 2022 November 2022 RA - AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 1. 2. 3. Report of Limited Meetings Agenda Report of Limited Meetings Agenda Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 50. November 29, 2022 1. 2. Report of Limited Meetings Agenda Operational Performance Report & Revenue W4 November 2022 Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 215 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo. 51. Date December 6, 2022 Meeting’s Agenda 1. 2. 3. Report of Limited Meetings Agenda Report of Digital Group Strategic Orchestration (DGSO) Operational Performance Report, Revenue & SI Program Action Based YtD November 2022 (Outlook) Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 52. December 13, 2022 1. 2. Operational Performance Report & Revenue W1 December 2022 Report of Limited Meetings Agenda Attendance List RA √ AW √ HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 53 December 20, 2022 1. 2. 3. Report of Limited Meetings Agenda Report of Limited Meetings Agenda Operational Performance Report and Revenue YtD November (Closing) 2022 and W2 December 2022 Attendance List RA √ AW - HS √ FMv EW(1) HW MFR BSW BW √ N/A √ √ √ √ 54 December 28, 2022 1. 2. 3. 4. Report of Limited Meetings Agenda Report of System Integration Design (FIONA-Anaplan) Report of Masterplan IT & Maturity level IT Operational Performance Report & Revenue W3 December 2022 Attendance List RA - AW - HS √ FMv EW(1) HW MFR BSW BW - N/A √ √ - √ Remarks: 1. Has been out of position since July 8, 2022 RA DR Ririek Adriansyah HW Herlan Wijanarko FMv FM Venusiana R. BSW Budi Setyawan Wijaya HS Heri Supriadi Dian Rachmawan MFR Muhamad Fajrin Rasyid EW Edi Witjara BW Bogi Witjaksono AW Afriwandi BOARD OF DIRECTORS’ ATTENDANCE AT JOINT MEETINGS No. Name Position Total of Meetings Total of Attendance Percentage of Attendance % 1. 2. 3. 4. 5. 6. 7. 8. 9. Ririek Adriansyah President Director Heri Supriadi Director of FMR FM Venusiana R Director of CONS & Acting Director of EBIS Herlan Wijanarko Director of NITS Muhamad Fajrin Rasyid Director of DB Budi Setyawan Wijaya Director of SP Edi Witjara Afriwandi Director of EBIS1 Director of HCM Bogi Witjaksono Director of WINS Remark: 1. Has been out of position since 8 July 2022 54 54 54 54 54 54 27 54 54 51 51 52 52 50 48 25 51 50 94 94 96 96 93 89 93 94 93 The position of EBIS Director is filled by appointing Ms. FM Venusiana R as Acting Director of EBIS in addition to her position as Director of Consumer Service 216 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE CORPORATE SECRETARY Telkom has a Corporate Secretary/Investor Relations function which facilitates the internal communication of the Board of Directors and the Board of Commissioners, in accordance with POJK No. 35/POJK.04/2014 regarding Corporate Secretary of Issuers or Public Companies. In terms of external communication, Corporate Secretary/ Investor Relations role is to establish relationships between the Company and Stakeholders, especially the Government, Shareholders, and Financial Services Authority (OJK) and provide information about the company. In addition, from a compliance perspective, Corporate Secretary/Investor Relations has an important role in ensuring that Telkom complies with laws and regulations related to the Capital Market, so that the company’s business processes can run properly and comply with the provisions. CORPORATE SECRETARY’S DUTY AND RESPONSIBILITY The Corporate Secretary has the following duties and responsibilities: 1. Preparing and organizing GMS, including the material, particularly the Annual Report; 2. Attending the Board of Directors’ Meetings and Joint Meetings between the Board of Commissioners and Board of Directors; 3. Managing and maintaining documents related to the Company’s activities, including the GMS’s documents and other important documents of the Company; and types and contents of information that can be presented to the Stakeholders, including information that can be published as public documents. 4. Determining criteria regarding the CORPORATE SECRETARY’S FUNCTIONS The functions of Corporate Secretary include: 1. To prepare and communicate accurate, complete, and timely information regarding the performance and prospect of the Company to Stakeholders. 2. To synergize with related units, subsidiaries, for monitoring and implementation. socialization, reviewing of GCG, and including the implementation, its 3. To assist the Board of Directors in various activities, information, and documentation, among others: a. Preparing the Register Book of Shareholders; b. Attending the Board of Directors’ meetings and preparing its minutes of meetings; and c. Preparing and organizing GMS. 4. To publish the company’s information in a tactical, strategic, and timely manner. 217 Annual Report 2022 PT Telkom Indonesia (Persero) TbkCORPORATE SECRETARY’S PROFILE EDWIN JULIANUS SEBAyANG Age 53 years old Nationality Indonesian Domicile Jakarta, Indonesia Education • 1996 Master Of Business Administration, University of Exeter, United Kingdom. • 1993 Bachelor of Economic, University of Kristen Satya Wacana. Basis of Appointment Decision Letter of the Board of Directors. Term of Service Start from January 1st 2023 up to present. Career Experiences • • 2021-2022 2010-2020 Director of PT MNC Asset Management. Head of Research PT MNC Sekuritas. 218 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE CORPORATE SECRETARY’S IMPLEMENTATION TASKS Until the end of 2022, Corporate Secretary of Telkom has organized activities as presented in the following table. CORPORATE SECRETARy’S IMPLEMENTATION ACTIvITIES IN 2022 No. Date Name of Activities Organizer Location January 5-6, 2022 13th Credit Suisse ASEAN Conference Credit Suisse January 12, 2022 DBS Pulse of Asia 2022 DBS January 13, 2022 Nomura Virtual Indonesia Corporate Day Nomura February 10, 2022 Mandiri Investment Forum 2022 Mandiri Sekuritas March 4, 2022 Nomura ASEAN Conference April 21-22, 2022 Macquarie Indonesia Day Nomura Macquarie Online Online Online Online Online Online May 12, 2022 May 16, 2022 Investor Day with SOE – Abu Dhabi Mandiri Sekuritas Abu Dhabi Investor Day with SOE – Paris Mandiri Sekuritas May 18-19, 2022 Investor Day with SOE – London Mandiri Sekuritas June 8, 2022 UBS OneASEAN Conference 2022 June 10, 2022 12. June 29, 2022 13. June 30, 2022 CITI 3rd Pan-Asia Regional Investor Conference UOB Kay Hian Virtual Shariah Gems Conference 2022 UBS CITI UOB Morgan Stanley Virtual ASEAN Conference 2022 Morgan Stanley Online 14. August 11-12, 2022 CGS-CIMB 14th Annual Indonesia Conference 2022 CGS-CIMB Bali September 5-6, 2022 JPMorgan ASEAN CEO-CFO Forum 2022 JPMorgan September 8-9 ,2022 JPMorgan ASEAN CEO-CFO Forum 2022 JPMorgan September 14-15, 2022 29th Annual CITIC CLSA Flagship Investors’ Forum 2022 CLSA London New York Online October 6, 2022 IDX-Daiwa-Bahana Best of Indonesia 2022 IDX-Daiwa Singapore October 12, 2022 Investor Day with Macquarie Macquarie Paris London Online Singapore Online 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 15. 16. 17. 18. 19. 20. November 7-8, 2022 21. November 9, 2022 22. November 10, 2022 NDR SOE with Mandiri Sekuritas and Jeffriess - New York NDR SOE with Mandiri Sekuritas and Jeffriess – Boston NDR SOE with Mandiri Sekuritas and Jeffriess – San Fransisco Mandiri Sekuritas New York Mandiri Sekuritas Boston Mandiri Sekuritas San Fransisco 23. November 23-24, 2022 Investor Day with CLSA CLSA Hong Kong 219 Annual Report 2022 PT Telkom Indonesia (Persero) TbkCORPORATE SECRETARY’S TRAINING AND EDUCATION In 2022, Telkom will provide training for Investor Relations Unit to develop the competence of Corporate Secretary/ Investor Relations. Some of the education and training provided by Telkom during 2022 are as follows. TRAINING AND EDUCATION ATTENDED By CORPORATE SECRETARy/INvESTOR RELATIONS IN 2022 No. 1. Date Name of Activities Organizer May 17, 2022 Training Good Corporate Governance (GCG). Training ASEAN Corporate Governance Scorecard (ACGS) Telkom Corpu Location Online 2. May 31, 2022 3. June 16, 2022 4. June 24, 2022 5. June 28, 2022 Seminar Master Class: “Reporting Gender Equality and Employment Practices for Sustainability and Annual Report” Virtual demos with Q&A webinar, for the user about Toppan Merrill Bridge launching a new Fillings & Versions Apps Dissemination of Information Changes in Report Format E009 - Monthly Report on Registration of Securities Holders/Changes in Shareholder Structure Webinar with topic “ASEAN Corporate Governance Scorecard (ACGS) – Journey to ASEAN Asset Class” IDX, GRI, & IBCWE Online Toppan Merrill Online ICSA & IDX Online RSM Indonesia Online 6. 7. 8. August 29, 2022 Webinar New Accounting Standards (IFRS & PSAK) & Sustainability Reporting Update Deloitte November 5, 12, 19, 26, 2022 Standar Profesi Sekretaris Perusahaan Pendidikan Dasar II ICSA November 30, 2022 Consultative Workshop To Scale Up Green Finance In Indonesia OJK, IDX, ADB, & UNDP Online Online Jakarta 220 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE INTERNAL AUDIT DEPARTMENT Internal Audit Department (IA) is a part of TelkomGroup whose function independent and is to provide an objective view of Company’s business activities and helps the TelkomGroup achieve its goals through a systematic and disciplined approach in evaluating and improving the effectiveness of risk management, control, and implementation of GCG. Internal Audit Department is also expected to add value and improve the effectiveness and efficiency of Company’s business operations. INTERNAL AUDIT CHARTER Telkom has an IA Charter as stated in Resolution of the Board of Directors Number SK.13/PW000/TEL- 00000000/2021 dated May 18, 2021 regarding Internal Audit Charter, and has been approved by President Director, President Commissioner, and Chairman of Audit Committee. This charter is guided by the international standards of the Institute of Internal Auditors (IIA). IA Charter contains references and guidelines for IA in carrying out the functions and roles of carrying out internal audit activities in the company, in the form of vision, mission, structure, status, duties, responsibilities and authorities of internal auditor requirements. IA, as well as INTERNAL AUDIT DEPARTMENT’S DUTIES AND RESPONSIBILITIES Duties and responsibilities of IA Telkom, based on Internal Audit Charter, are : 1. To prepare work plans and annual risk-based audit programs in line with the direction and development of the company’s business and carry out work plans and audit programs that have been approved by the Audit Committee and approved by the President Director; 2. To help the Company to ensure that internal controls and risk management systems have been implemented effectively and efficiently about: i. financial reporting to produce information that is free from material misstatement and by applicable standards and regulations; ii. operational controls to ensure that management objectives are achieved appropriately; iii. asset management has been carried out appropriately to protect assets from physical and legal risks and ensure optimal use of assets; iv. ensure that the Company’s activities comply with the applicable laws and regulations. 3. To monitor, analyze, and report on follow-up improvements that have been recommended; 4. To develop evaluation methods and quality improvement programs for the activities and results of the Internal Audit in collaboration with the Audit Committee; 5. To provide consultancy needed by the Company, Subsidiaries, Affiliated Companies, and Other Entities following the agreed scope of internal audit; 6. To perform audit synergies with units that carry out the internal audit function in Subsidiaries, Affiliated Companies, and Other Entities; 7. Follow up on reports of whistle-blowers coming through the Telkom Integrity Line regarding alleged fraud in the Company, Subsidiaries, and other Affiliated Entities, and submit reports to the Audit Committee and President Director. 221 Annual Report 2022 PT Telkom Indonesia (Persero) TbkSVP INTERNAL AUDIT DEPARTMENT’S PROFILE DARU MULyAWAN Age 51 years old Nationality Indonesian Domicile South Tangerang, Indonesia Educations • 1991 - 1996 Bachelor Degree of Accounting in Universitas Diponegoro. Basis of Appointment Resolution of the Board of Directors of the Limited Liability Company (Persero) PT Telekomunikasi Indonesia Tbk Number SK 981/PS720/HCB-105/2022 dated June 30, 2022 regarding Assignment of Employee Exchange Employees as SVP of Internal Audit. Term of Office July 1, 2022 – June 30, 2024. Carreer Experiences • • • July 2022 – present January 2020 – June 2022 SVP Internal Audit Telkomsel. July – December 2019 SVP Internal Audit Telkom. • July 2016 – June 2019 • July 2013 – June 2016 VP Risk Management Telkomsel. SVP Enterprise Resource Planning Telkomsel. VP Accounting and Asset Management Telkomsel. • January 2012 – June 2013 GM Financial Accounting Policy and System Telkomsel. 222 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE INTERNAL AUDIT DEPARTMENT’S STRUCTURE AND POSITION Telkom’s Internal Audit (IA) reports directly to President Director. This unit is headed by Senior Vice President of Internal Audit (SVP IA) who is appointed and dismissed by President Director with approval of the Board of Commissioners. As of the end of 2022, IA Telkom consists of 92 employees. If SVP IA does not meet the requirements and/or fails or is unable to carry out its duties, the President Director may terminate SVP IA with the approval of the Board of Commissioners. This is in line with Financial Service Authority Regulation No. 56/POJK.04/2015 regarding “Formation and Guidelines for the Preparation of Internal Audit Department Charter”. Until the end of 2022, Telkom IA organizational structure can be seen below. SvP INTERNAL AUDIT vP PLANNING & DEvELOPMENT AUDIT vP INFRASTRUCTURE & OPERATION AUDIT vP INFORMATION TECHNOLOGy AUDIT vP INTEGRATED & FINANCIAL AUDIT AVP AUDIT PARTNER 1 AVP QUALITY ASSURANCE & SYSTEM DEVELOPMENT AVP QUALITY INFRASTRUCTURE & SUPPLY AUDIT AVP APPLICATION TRANSACTION AUDIT AVP ICOFR & RISK MANAGEMENT AUDIT AVP AUDIT PARTNER 2 AVP RESOURCE & ADMINISTRATION AVP SERVICE OPERATION & SUPPORT AUDIT AVP AUDIT PARTNER 3 POOL OF AUDITOR AVP SERVICE DELIVERY AUDIT AVP INFORMATION SYSTEM OPERATION AUDIT AVP INFORMATION SECURITY AUDIT AVP FINANCIAL & ASSET MANAGEMENT AUDIT AVP A&A COMPLIANCE AUDIT INTERNAL AUDIT DEPARTMENT’S TASK IMPLEMENTATION Every year, IA Telkom makes a work plan as outlined in Program Kerja Audit Tahunan (PKAT) or Annual Audit Work Program and Program Kerja Non Audit Tahunan (PKNAT) or Annual Non-Audit Work Program, which are approved by Audit Committee and President Director. In 2022 financial year, IA Telkom has carried out 68 assignments outside of PKNAT, which include audit, consultation, evaluation, and review activities. The description of IA Telkom activities are as follow: Sub Department Audit Consultation Evaluation Review Total Infrastructure & Operation Audit (IOA) Integrated & Financial Audit (IFA) Information & Technology Audit (ITA) Total 8 7 9 24 8 4 10 22 - 5 1 6 7 9 - 16 23 25 20 68 223 Annual Report 2022 PT Telkom Indonesia (Persero) TbkINTERNAL AUDIT’S QUALIFICATION AND PROFESSIONAL CERTIFICATION Telkom’s Internal Audit Division Employees need to have certain certifications in order to carry out standardized work and so the quality of internal control can run well. At the end of 2022, certifications held by Telkom’s Internal Audit Division Employees are presented in the table below. No. Certification Type Number of Certification Asian Chartered Professional Accountant (ACPA) Chartered Accountant (CA) Certification in Audit Committee Practice (CACP) Cisco Certified Network Associate (CCNA) Cisco Certified Network Professional (CCNP) Certified Data Center Professional (CDCP) Certified Data Center Specialist (CDCS) Certified Data Privacy Solution Engineer (CDPSE) Certified Ethical Hacker (CEH) Certified Enterprise Risk Governance (CERG) Certified Financial Consultant (CFC) Certified Fraud Examiner (CFE) Certified Forensic Auditor (CFrA) Certified Internal Auditor (CIA) Certification of Internal Audit Executive (CIAE) Certified Internal Audit Leader (CIAL) Certified International Procurement Professional (CIPP) Certified Information Systems Auditor (CISA) Certified Chief Information Security Officer (CISO) Certified Information Systems Security Professional (CISSP) Certified IT Infrastructure Library (ITIL) – IT Intermediate Examination Service Strategy Certified IT Infrastructure Library (ITIL) – IT Intermediate Examination Service Transition Certified IT Infrastructure Library (ITIL) – IT Service Management Certified Management Accountant (CMA) Certified Public Accountant (CPA) Certified Professional Marketer (CPM) Certified Policy Management Professional (CPMP) Certified Risk Associate (CRA) Certified Risk Governance Professional (CRGP) Certification in Risk Management Assurance (CRMA) Certified Risk Management Officer (CRMO) Certified Risk Management Professional (CRMP) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 224 2 9 3 4 2 2 2 1 6 1 1 3 1 3 3 1 1 3 1 1 1 1 2 1 1 2 1 2 1 2 10 1 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE No. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. Total Certification Type Number of Certification Certified Risk Professional (CRP) Certified Securities Analyst (CSA) Certified Scrum Product Owner (CSPO) Certified Governance, Risk Management and Compliance Auditor (GRCA) Certified Governance, Risk Management and Compliance Professional (GRCP) Certified in International Financial Reporting Standard (IFRS) ISO 20000: 2018 ITSMS – Auditor/ Lead Auditor ISO 27001: 2013 ISMS – Auditor/ Lead Auditor ISO 37001: 2016 – Lead Auditor Microsoft Certified Solution Associate Microsoft Certified Technology Specialist: Windows Server 2008 Network Infrastructure Configuration Offensive Security Certified Professional (OSCP) Qualified Internal Audit (QIA) Qualified Risk Governance Professional (QRGP) Qualified Wealth Planner (QWP) Red Hat Certified System Administrator (RHCSA) Sertifikasi Akuntan Publik Sertifikasi Auditor Hukum Indonesia Sertifikasi Manajemen Umum Dana Pensiun (MUDP) Sertifikasi Wakil Manajer Investasi The Open Group Architecture Framework version 9 Foundation (TOGAF 9) 3 1 1 2 2 2 1 3 2 1 1 2 3 1 1 1 1 1 1 2 1 108 INTERNAL AUDIT’S TRAINING AND EDUCATION In 2022, Telkom will involve IA Telkom employees in various educational and training activities organized by Telkom CorpU, ACFE, IIA, ISACA, SPRINT, BPKP, and others. This is done because Telkom realizes the importance of maintaining the competence of IA Telkom employees. The following are recapitulation of education and training attended by IA Telkom employees. Programs Number of Participants Number of Days Culture Leadership Business Technical Certification Sharing Knowledge Total 5 14 8 21 13 5 66 191 77 567 214 21 321 1,391 225 Annual Report 2022 PT Telkom Indonesia (Persero) TbkINTERNAL CONTROL SYSTEM The implementation of Internal Control System (SPI) at Telkom is a continuous monitoring mechanism, including the reliability of financial reports, availability of complete and timely financial reports, including the evaluation of financial reporting. Telkom’s SPI is under the supervision of President Director and Director of Finance, and is carried out by the Board of Directors, management, and other personnel collectively. Telkom continues to strive to ensure that the preparation of consolidated financial statements is in accordance with Financial Accounting Standards set by Indonesian Institute of Accountants (IAI) and also complies with the provisions of SOX Section 404 because Telkom’s shares are listed on New York Stock Exchange. SOX Section 404 requires Telkom to establish, maintain, test, and disclose the effectiveness of internal control over financial reporting. In addition to the financial aspect, SPI also aims to provide adequate guarantees for the achievement of efficiency and effectiveness of operational activities, as well as compliance with regulations. Through this system, Telkom monitors the Company’s compliance with applicable laws and regulations, both regulations issued by Telkom officials and government regulations. In addition, Telkom also controls its operational activities within the SPI framework, according to the activities in the applicable work procedures in each function. INTERNAL CONTROL FRAMEWORK SPI which was implemented by Telkom is in line with the Internal Control-Integrated Framework 2013 from The Committee of Sponsoring Organizations of the Treadway Commission (COSO). Telkom is committed to always ensuring that policies, compliance, and all business activities are carried out in accordance with applicable laws and regulations, both internal and external. The unit responsible for compliance with laws and regulations is Legal & Compliance Unit under Corporate Secretary Department. The unit carries out several activities, such as legal advisory, legal opinion, legal review, and litigation. Telkom implements five components of internal control in accordance with the COSO Framework. These components are interlinked at all levels and business units of the company. The five components implemented by Telkom are: 1. Control Environment a. Demonstrates commitment to integrity and ethical values. b. Exercises oversight responsibility. c. Establishes structure, authority, and responsibility. d. Demonstrates commitment to competence. e. Enforces accountability. 2. Risk Assessment a. Specifies relevant objectives. b. Identifies and analyzes risk. c. Assesses fraud risk. d. Identifies and analyzes significant change. 3. Control Activities a. Selects and develops control activities. b. Selects and develops general controls over technology. c. Deploys through policies and procedures. 4. Information and Communication a. Uses relevant information. b. Communicates internally. c. Communicates externally. 5. Monitoring Activity a. Conducts ongoing and/or separate evaluations. b. Evaluates and communicate deficiencies. 226 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE INTERNAL CONTROL IMPLEMENTATION IN TELKOM The five components have been applied to Telkom’s policies, including the following: INTERNAL CONTROL IMPLEMENTATION IN TELkOM Control Environment · · · Telkom is committed to integrity and ethical values by building and establishing a corporate culture as a guide for main players in building leadership patterns and strengthening organizational synergies, as an engine of economic growth, an accelerator of social welfare, a provider of employment, and a provider of high performing culture talent. Telkom guarantees sustainable competitive growth in the form of long-term superior performance achievement. Core Values AKHLAK (Amanah, Kompeten, Harmonis, Loyal, Adaptif, and Kolaboratif) are the main values of SOE human resources that must be adopted by TelkomGroup so that every TelkomGroup resource knows, implements, and internalizes seriously, consistently and consequently, thus bring forth to daily behaviors that shape the work culture of TelkomGroup which is in line with the Core Values of SOE. Telkom ensures the effectiveness of implemented Internal Audit activities by implementing the SOA 302/404 prerequisites and managed with a risk-based audit approach. Telkom also ensures that effective coordination and co-operation with internal and external parties, and business risks to all business activities are adequately managed with internal control systems. Telkom has a Competency Directory that defines the company's competency needs. One of them is Finance Stream which includes the competence of Corporate Finance with the sub-area of capital structure competency and Working Capital Management (Treasury Management). Then, Accounting with sub-area competence of Financial Accounting, Management Accounting, and Corporate Tax. The competency development policy is aimed at creating superior, global quality, and highly competitive employees. Risk Assessment · · · · Telkom has several considerations in developing accounting policies, such as Statements of Financial Accounting Standards (PSAK), Interpretation of Statements of Financial Accounting Standards (ISAK), International Accounting Standards (IAS), related laws, and changes in impacted internal environments. Telkom has a principle of financial assertion in ICOFR planning that is well respected by all relevant employees. Telkom manages internal and external corporate risk with established mechanisms. Telkom also implements an anti fraud policy control system and has potential fraud prevention. Control Activities · · · Telkom sets up a Business Process Owner (BPO) and AO (Application Owner) that have duties and responsibilities related to ICOFR. Risk determination rules and internal controls refer to the ICOFR policy consisting of segregation of duties, risk determination, and determination of internal controls. Telkom has guidelines for the implementation of information systems security that are aligned with company needs and can be implemented on an ongoing basis. Information and Communication · · Telkom has accounting policies implemented under IFAS and IFRS, outlined following accounting principles and implementation, including information or data related to the process and disclosure of financial reporting, and regulates the components of the consolidated financial statements. Telkom has an information technology policy that provides a frame of reference for each process or unit associated with the organization's IT operations in the preparation and implementation of guidelines and procedures. The scope of IT regulations in our company covers aspects of IT governance and IT management. Monitoring Activity · · Telkom has an Internal Audit Charter that includes the auditor's requirements in Internal Audit Department, which has professional integrity and behavior, knowledge of risks and important controls in the field of information technology, knowledge of Capital Market laws and regulations. CEO TelkomGroup always increases awareness from management regarding audit and change management in the form of CEO Notes and establishes Integrated Audit and forms Probis IFRS. Telkom regularly conducts assessments related to the implementation of SPI, to improve the quality of the Company’s Internal Control System (SPI). In 2022, Telkom has conducted an assessment of the implementation of SPI, in line with Regulation of the Minister of State-Owned Enterprises Article 26 Paragraph (2) of 2011 regarding Implementation of Good Corporate Governance (GCG) in SOE. The result of SPI assessment in 2022 stated that the effectiveness of the Telkom Control System is effective. 227 Annual Report 2022 PT Telkom Indonesia (Persero) TbkFINANCIAL AND OPERATIONAL CONTROL from financial plans, The Company runs a control system for the financial function starting feedback, adjustments to validation process to ensure that plans are implemented or to change existing plans in response to various changes that occur. Operational control includes the placement process so that operational activities are carried out effectively and efficiently. In general, financial and operational control at Telkom, includes: 1. Physical Control of Assets and Intangible Assets Physical control of assets in the corporate environment is directed at securing and protecting risky assets. 2. Separation of Functions and Authorization Segregation of functions is geared towards adequate review and reduces the potential for errors and fraud. 3. Execution of Events and Transactions Control is carried out to ensure that transaction activities are carried out properly according to the plan and need that have been determined. 4. Accurate and On Time Records on Events and Transactions Accurate and on time records of operational events and transactions that carried out. 5. Restricted Access and Accountability for Resources and Their Records Access to company resources and records should be limited only to the personnel that assigned the duties and responsibilities. 6. Good Documentation of Control Events and Transactions Every event and transaction in the company is well documented as basic evidence of the occurrence and fairness of the transaction. EFFECTIVENESS OF INTERNAL CONTROL SYSTEM OVERVIEW Telkom reviews the effectiveness of control system based on the supervision carried out by Internal Audit Department, and External Audit Unit. Management is responsible for the implementation of a reliable and effective Internal Control System and ensures that it is embedded at every level of the organization. Internal Audit Department oversees the implementation of Internal Control System and report it to the Board of Directors and the Board of Commissioners. The audit findings will be submitted to the relevant management for follow-up. Based on the supervision in 2022, Internal Control System at Telkom is considered to have been running effectively. STATEMENT OF THE BOARD OF DIRECTIONS AND/OR THE BOARD OF COMMISSIONERS ON ADEQUACY OF INTERNAL CONTROL SYSTEM In an effort to ensure the effectiveness of internal control system, the Board of Directors and the Board of Commissioners through Audit Committee hold regular meetings with the Internal Audit and External Audit Unit. The meeting discussed internal control monitoring and follow-up plans on matters that need to be of concern to management. Internal Audit and External Audit Unit will report to the Board of Directors and the Board of Commissioners the result of monitoring and testing of internal controls at least once a year. The Board of Directors and the Board of Commissioners assess that Telkom’s internal control system has been running effectively and has met the adequacy of policy and standard referred. This adequacy includes: 1. Provisions of Sarbanes-Oxley Act (SOX) 302, 404, and 906. a. SOX 302 Corporate Responsibility for Financial Reports Require the CEO and CFO to provide certification the effectiveness of design and regarding implementation of internal control and disclosure of significant deficiencies in internal control in the context of financial reporting (Internal Control over Financial Reporting/ICoFR). b. SOX 404 Management Assessment of Internal Controls Require companies that list their shares on United States stock exchange to design, implement, document, evaluate, and disclose the result of evaluation of the effectiveness of internal control over financial reporting (internal control over Fina ncial Reporting/ICoFR). c. SOX 906 Corporate Responsibilities for Financial Reports: Failure of Corporate Officers to Certify Financial Reports i. If misrepresented, the CEO and CFO are subject to criminal penalties of up to $1 million or up to 10 years in prison, or both, or ii. If the disclosure is intentional, the CEO and CFO are subject to criminal penalties of up to $5 million or up to 20 years in prison, or both. 2. Regulation of the Minister of State-Owned Enterprises Number 1 of 2011 Article 26 paragraph (2) regarding the Implementation of Good Corporate Governance (GCG) in SOEs. 228 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE RISK MANAGEMENT SYSTEM in role important Within Telkom and its Subsidiaries, the risk management system has an realizing GCG. Various business risks can be identified through the improvement of implementation and continuous the management system. By implementing a good risk management system, the company can compile appropriate risk changes to support business expansion and expansion of business scope for communication transformation in the digital era. GENERAL ILLUSTRATION REGARDING THE RISK MANAGEMENT SYSTEM As a company listed on the New York Stock Exchange (NYSE), Telkom has an obligation to implement risk management by complying with the Sarbanes-Oxley Act, specifically articles 302 and 404, also SOE Minister Regulation No. 1 of 2011. Implementation of a risk management system is not only a form of Telkom’s compliance, but so that the company’s business continuity can run well. 1. Decision of the Commissioners (KAKOM No. 7/2006 Risk Management regarding the Authorities and Responsibilities of the Commissioners, the Obligations Implementation of the Directors regarding the of Risk Management); 2. Decree of the Board of Directors/Regulation of the Board of Directors (KD 13/2009 regarding Guidelines for the Management of SOX Sections 302 and 404, Company Management refers to the provisions of the US SEC; 3. Regulation of the Board of Directors of a Limited Liability Company (Persero) (Number: 614.00/r/01/ HK200/COP-D0030000/2021) regarding Company Risk Management; 4. Regulation of Management the Director of Finance and 614.00/r.01/HK200/ Risk COP-I0000000/2022 for Implementing Corporate Risk Management (Telkom Enterprise Risk Management); regarding Guidelines (PR 5. Standard Operation Procedure, (Number: SOP.RMPP.03/ RSG/2022) regarding the explanation of the regulations for the director of finance and risk management for corporate companies (Persero) PR 614.00/r.01/HK200/ implementation COP-I0000000/2022 guidelines for enterprise risk management. regarding From the aspect of the company’s internal regulations, relating to the regulation of the implementation of risk management, Telkom has also issued various company policies in the form of: These various regulations and provisions form the foundation for Telkom to carry out risk management, of course referring to various existing standards and best practices. 229 Annual Report 2022 PT Telkom Indonesia (Persero) TbkHEAD OF RISK MANAGEMENT DEPARTMENT’S PROFILE JATI WIDAGDO Age 49 years old Nationality Indonesian Domicile Jakarta, Indonesia Education • 1996 Bachelor Degree in Industrial Engineering, Sekolah Tinggi Teknologi Telkom, Indonesia. Executive Course • Executive Education: INSEAD (Global Leadership Course). • Kellog Northwestern (Operational Strategy). • • BCI (Risk Management & Business Continuity Plan. Standford (Driving Innovation). Basis of Appointment Decision Letter of Telkom Directors No. SK 1804/PS720/ HCB-105/2021 dated July 30, 2021 regarding Employee Movements. Term of Office August 1, 2021 up to present. Career Experiences 2021 - Present • 2020 - 2021 • 2019 - 2020 • 2016 - 2019 • • 2009 - 2016 SVP Risk Management. CEO Admedika. CEO BOSNET Distribution Indonesia. Director IT and Operation PT Integrasi Logistik Cipta Solusi. Assistant Vice President RPM in Telkom. Experience Engaged in Strategic Projects • 2020 - 2021 Head of PMO Digital Market (PADI) MSME Ministry of SOE. Lead of Digitization Port and Logistics. Digital Healthcare. • • 2020 2017 - 2019 230 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE JAJAT SUTARJAT Age 55 years Nationality Indonesian Domicile Bandung, Indonesia Educational Background 2003 1992 MM Financial STMB Yayasan Pendidikan Telkom. Bachelor of Industrial Engineering ITB. Executive Course 1. Euromoney-Hongkong (M&A Winning Strategy). 2. American Management Association (AMA Strategic Planning). 3. The 9th Annual on Future EMEA Executive - STL Telco 2.0/London. 4. Workshop & Executive Training ICFR - Ernst & Young. 5. Risk Governance Master Class - ERM Academy/Malaysia. 6. London (Working with Business Processes: Discovery, Assessment, Mapping, Analysis and Design). Certification 1. Certified Governance Risk Compliance Professional (GRCP) OCEG 2022. 2. Certified Governance Professional (CGP) LSP MKS 202. 3. Certified Risk Professional (CRP) LSPPM 2021. 4. Certified in Enterprise Risk and Governance (CERG) from CRMS - Kuala Lumpur 2017. Basis of Appointment Decision Letter of Telkom Directors No. SK 1247/PS720/HCB-105/2022 dated August 26, 2022 regarding Employee Movements. Term of Office August 26, 2022 up to present. Career Experiences 2022 – Present 2021 – 2022 2020 – 2021 2017 – 2020 2015 – 2017 2012 – 2014 2006 - 2012 VP Risk Operation & Process Management. VP Risk Strategy & Governance. VP Governance & Risk Management Senior Principal Expert Risk and Process Assurance . VP Risk & Process Management. VP Corporate Strategic Planning. AVP Corporate Strategic Planning. RISK MANAGEMENT DEPARTMENT’S TRAINING AND CERTIFICATION As a commitment to constantly improve the risk management system, Telkom regularly enrolls members of the Risk Management Department to attend education and training to improve competency and quality. Apart from that, just like in previous years, Telkom conducted outreach and workshops on risk management in offices, divisions, and subsidiaries. This is done so that all units within Telkom have the same understanding in the implementation of risk management. The table below describes the risk management training activities in 2022: RISk MANAGEMENT TRAINING IN 2022 No. 1. 2. 3. year 2022 2022 2022 Name Training Activities Organization Institution ISO 22301 BCMS Lead Implementer Risk Assessment Project Risk Based Audit Online Sprint Consultant Online Online Tap Kapital CRMS (Center of Risk Management & Sustainability) 231 Annual Report 2022 PT Telkom Indonesia (Persero) TbkName Training Activities Organization Institution year 2022 2022 Training Anti-Fraud: Membangun Strategi Anti-Fraud dalam Organisasi Training ASEAN Corporate Governance Scorecard (ACGS) 2022 Risk Based Budgeting Online Online Online ACFE (Association of Certified Fraud Examiners) Indonesian Institute for Corporate Director CRMS (Center of Risk Management & Sustainability) 2022 Assessment significant business process ICOFR Online Deloitte 2022 Business Process Management Online IPQI Training Center Member of Proxsis PROFESSIONAL CERTIFICATION Risk Management Department consists of professionals who are experts in their fields. By the end of 2022, there are 17 members of Telkom Risk Management Department who have professional certifications related to risk management, as presented in the table below. Member’s Name Certification year of Review Status No. 4. 5. 6. 7. 8. No. 1. 2017 2021 2021 2022 2017 2020 2021 2022 2021 2021 2022 2020 2020 2020 2020 2020 2021 2021 2021 2021 Active Active Active Active Active Active Active Active Active Active Active Active Active Active Active Active Active Active Active Active Jajat Sutarjat a. Certified in Enterprise Risk Governance (CERG) b. Certified Risk Professional (CRP) c. Certified Governance Professional (CGP) d. Certified Risk Governance Professional (CRGP) 2. Moh Ahmad a. Certified in Enterprise Risk Governance (CERG) b. Certified Risk Professional (CRP) c. Certified Governance Professional (CGP) d. Certified Risk Governance Professional (CRGP) 3. Hendri Purnaratman a. Certified Risk Professional (CRP) b. Certified Governance Professional (CGP) c. Certified Risk Governance Professional (CRGP) 4. 5. 6. 7. 8. 9. Agus Suprijanto Certified Risk Professional (CRP) Rudi Sudiro M Certified Risk Professional (CRP) Iswatoen Hasanah Certified Risk Professional (CRP) Tati Krisnayanti Certified Risk Professional (CRP) Fivtina Marbelanty Certified Risk Professional (CRP) Sophia Khana a. Certified Risk Professional (CRP) 10. Meylia Candrawati a. Certified Risk Professional (CRP) b. Certified Governance Professional (CGP) b. Certified Governance Professional (CGP) 232 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE No. Member’s Name Certification year of Review Status 11. 12. 13. 14. 15. 16. 17. Nofriandi Rosa Certified Risk Professional (CRP) Tatwanto Prastistho Certified Risk Professional (CRP) Dimas Prasstyo Certified Risk Professional (CRP) Ardistya Wirawan Certified Risk Professional (CRP) Alya Mutiara Basti Certified Risk Professional (CRP) Rizka Raniah Rahmat Niken Dwi Trisnaningati Certified Risk Professional (CRP) Certified Risk Professional (CRP) 2021 2021 2021 2022 2022 2022 2022 Active Active Active Active Active Active Active In addition, training and certification programs are also aimed at divisions and/or sub-units where, in 2022 the Certified Risk Professional (CRP) program has been carried out for 22 Telkom employees who are the main risk managers in their respective divisions and/or sub-units. So that since 2020 the total number of TelkomGroup employees who have participated in the Certified Risk Professional (CRP) program are 115 employees. RISK AWARENESS AND CULTURE In line with the Strategic Plan of the Ministry of SOEs 2020-2024, specifically related to strengthening the risk management function and GCG of SOEs, increasing the Risk Aware Culture is important in achieving company targets & goals. A good Risk Aware Culture can improve: 1. Organizational capability to manage measurable risk levels 2. Improving Corporate Governance Compliance 3. Achievement of company performance targets As a basis for the behavior of Telkom personnel in realizing risk management practices, Risk Aware Culture is one of the implementations of AKHLAK’s Core Values, especially on the KOMPETEN value, namely continuing to learn and develop capabilities. The risk awareness program is carried out in 3 categories, namely the leader journey, people journey, and program journey. 1. Leader Journey a. Sharing Session Involving Telkom Leaders Telkom routinely conducts sharing sessions involving C-Level Executives from divisions and subsidiaries with the aim of building a commitment to risk management implementation. b. Training and Certification Telkom also strengthens risk management through relevant training programs that are attended by Heads of Units and Management of Subsidiaries. c. Webinars with External Experts The webinar program is conducted by external experts, both consultants, practitioners, and academics. 2. People Journey a. Communicate Clearly (Compile Story) Telkom’s Risk Management Department intensively conducts advisory and also provide coaching to Units and Subsidiaries in order to strengthen risk management through several platforms (information listed on the platform is available in Indonesian language) including: 1) Diarium (Digital Poster) 2) Telegram Channels 3) WhatsApp Blast 233 Annual Report 2022 PT Telkom Indonesia (Persero) TbkRisk Awareness Risk Awareness 28213 Pengikut 28213 Pengikut Risk Awareness Risk Awareness 1 tahun yang lalu 1 tahun yang lalu Diarium by Telkom Indo... Dalam rangka meningkatkan kualitas Manajemen Risiko, saat ini Departemen Risk Management sedang mengadangkan survei yang bertujuan untuk mengumpulkan persepsi Bapak/Ibu terhadap budaya risiko perusahaan dan masukan megenai pelaksanaan manajemen risiko di TelkomGroup. Untuk itu kami mohon bantuan Bapak/Ibu untuk dapat mengisi Survei Budaya Risiko Perusahaan di TelkomGroup & Peningkatan Kualitas Manajemen Risiko di TelkomGroup. Silahkan klik link; berikut, diperlukan sekitar 5 - 10 menit untuk mengisi. Risk Awareness Tel... 174 subscribers Risk Awareness Telkom Group Semangat Pagi Telkomers ..!! Berdasarkan PD.614/r.01/K.200/ COP-D0030000/2021/ tentang manajemen risiko perusahaan, Telkom menggunakan ISO 31000:2018, yang disusun oleh International Organization for Standarization, sebagai standar manajemen risiko perusahaan. ISO 31000 : 2018 memberikan pedoman bahwa pengelolaan risiko didasarkan pada prinsip, kerangka kerja, dan proses. Hari ini kak min akan memperk- enalkan Prinsip manajemen risiko berdasarkan ISO 31000 : 2018. Prinsip manajemen risiko memberikan panduan terhadap karakteristik manajemen risiko yang efektif dan eﬁsien, mengkomunikasikan nilainya, serta menjelaskan maksud dan Tampilan Channel Risk Awareness di Platform Diarium TelkomGroup Display of the Risk Awareness Channel on the TelkomGroup Diarium Platform Tampilan Broadcast Display Broadcast on Whatsapp Diarium di Whatsapp Diarium Tampilan Channel Risk Awareness Display of the Risk Awareness Channel on Telegram di Telegram b. Mandatory Digital Learning Telkom conducts mandatory digital training related to risk management which must be attended by all TelkomGroup entities. Besides that, after participating in digital training, awareness measurements were also carried out in the form of a risk culture survey. SUMMARy IMPROvEMENT PROGRAM RISk AWARENESS No. 1. 2. 3. Issue 2021 2022 2021 Program Evaluation Policies, regulations and SOPs related to Risk Management Implementation of Risk Management (Risk Monitoring) Implementation of Risk Management (Risk Evaluation) As many as 68% of respondents strongly agree and agree that policies, regulations, and SOPs related to Risk Management are easy to obtain. As many as 89% of respondents strongly agree and agree that information regarding risk management policies and procedures can be accessed easily by all units. Create Risk Management management policies that are contained in the PD, PR and SOP uploaded to the ERM Online application. As many as 80% of respondents strongly agree and agree That the management of major unit risks has been carried out properly, monitored transparently and measured objectively. As many as 86% of respondents strongly agree and agree that they have monitored risks, have used ERM Online in compiling and regularly updating the Risk Register and Risk Reporting. Socialization and enhancements have been carried out on the ERM Online application in order to make it easier for units to carry out risk monitoring in a transparent manner. As many as 32% of respondents strongly agree and agree that monitoring and evaluation of the implementation of risk management in the workplace has not gone well. As many as 92% of respondents strongly agree and agree that periodic monitoring and updating of risk mitigation reports have been carried out which have been evaluated by the Risk Management Department. • Implementation of LO (Liaison Officer) to strengthen and oversee risk management in units and subsidiaries. • Evaluation and Assessment of RME KPIs every quarter. 234 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE No. 4. Risk management budget 5. Risk management competency Issue 2021 2022 2021 Program Evaluation As many as 22% of respondents strongly agree and agree that Senior Leaders find it difficult to allocate budgets related to risk mitigation activities. As many as 68% of respondents strongly agree and agree that the competency of the person in charge of risk management in the unit is still lacking, so it needs to be improved. As many as 93% of respondents strongly agree and agree that the risk mitigation plan has been integrated with the budget preparation process to mitigate risk. As many as 90% of respondents strongly agree and agree have PIC Risk Management to help identify and manage risks. Adding quantitative features to the ERM Online application (Budget Plan, Realization of risk response, risk impact). Conduct CRP training and certification for risk managers in related units. c. New Employee Training Program Every new employee is required to attend several trainings, one of which is regarding Risk Management. 3. Program Journey a. Breakdown Silos The Risk Management Department acts as an intermediary and communication center across divisions and subsidiaries to be able to carry out collaborative cooperation in the context of mitigating corporate risk. One form of activity that has been implemented is advisory for the alignment of strategy and risk management of all units. b. Assume responsibility for risk There is a risk manager in each division and subsidiary who conducts direct identification and monitoring so that it is expected to be able to capture all possible risks that exist in the company. c. Utilization of technology and IT tools Telkom has an online ERM application that is used by all divisions and subsidiaries in real time. Some of the modules that have been developed include: 1) Telkom and Subsidiaries’ Risk Register Module 2) Project Risk Module 3) EWS (Early Warning System) Module 4) LED Module (Loss Event Database) 5) Support Needed Module FRAMES: Revenue Assurance & Fraud Mgt ICCA: CSA ICOFR Management EITA: Process Management i-Library: Dokumentasi IMS Portal SAS: Evaluasi Security Physic Tools pendukung lainnya: Display of ERM TelkomGroup Online Application 235 Annual Report 2022 PT Telkom Indonesia (Persero) Tbkd. Implement risk management KPIs 11. Coordinating the risk-based budgeting unit together with financial control. 12. Coordinating the preparation/updating of the BCP Set. 13. Coordinate risk assessment and business impact analysis. 14. Perform BCP (sampling) evaluation and testing. 15. Carry out ISO 22301 Certification: BCMS. 16. Managing Insurance (property, Director & Officer/ DNO, personal accident, in-orbit satellite insurance, etc.). 17. Support revenue assurance. 18. Oversee the implementation of fraud management. 19. Carry out the ICoFR fraud risk assessment business process. 20. Prepare risk management reports to BOD and BOC. 21. Prepare risk management reporting and support the risk management agenda of the Ministry of SOEs. 22. Develop and update ERM policies and SOPs (ERM PR, ERM SOP, guidelines for implementing risk assessment, BCMS, insurance, fraud management, and revenue). 23. Planning and facilitating the assessment of the effectiveness of risk management (risk maturity assessment). 24. Compiling, performance effectiveness units. developing, indicators and for evaluating key risk management 25. Develop policies, governance, and good corporate governance roadmaps. 26. Develop policies, governance, and quality management roadmaps. 27. Formulate policies (including methods), governance, and management mechanisms, process communications. 28. Manage, design, and develop company business processes (enterprise-wide processes, business unit processes). 29. Manage, design, and remediate ICoFR business processes. 30. Review the organization’s high-layer business processes. to commitment the The Senior Leader’s implementation of risk management is evidenced by the implementation of KPI Risk Management Effectiveness as one of the performance indicators assessed for all BOD-1 units in Telkom. Assessment is carried out quarterly by Telkom’s Risk Management Department on the Risk Register and Risk Reporting of all BOD-1 units. The parameters used to evaluate the effectiveness of Risk Management include completeness, quality, and reporting time delivery. RISK MANAGEMENT DEPARTMENT’S ACTIVITIES During 2022, the Risk Management Department has carried out its duties and responsibilities in managing various risks. Duties and responsibilities that have been carried out, namely: 1. Compile and update the TelkomGroup risk profile. 2. Developing CSS and RKAP risk factors. 3. Coordinate and carry out advisory activities in the context of compiling risk registers, risk reviews, and escorting ERM improvements in both units and subsidiaries. 4. Updating the risk universe. 5. Conduct risk taxonomy mapping based on SOE Minister Regulation Number PER-5/MBU/09/2022 regarding Implementation of Risk Management in State-Owned Enterprises. 6. Categorizing parent entities and entities under the TelkomGroup parent company based on risk intensity referring to the Minister of SOE Regulation Number PER-5/MBU/09/2022 regarding Implementation of Risk Management in State-Owned Enterprises. 7. Perform alignment implementation with Subsidiaries. of risk management 8. Conducting Risk Maturity 2022 measurements at Telkom and 12 Subsidiaries with external independent consultants. 9. Develop a TelkomGroup ERM strategy and roadmap. implement a 10. Develop and risk management architecture (risk appetite, risk acceptance criteria, risk tolerance, risk capacity). 236 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE TYPES OF RISK AND MANAGEMENT METHOD The Risk Management Department at Telkom has a function to assist the Company’s management in identifying strategic risks related to business processes. The following table presents some of the main risks that affect Telkom’s business activities. TABLE OF RISk AND MANAGEMENT METHOD Type of Risk Risks that is Faced The Impact to Telkom Mitigation/Risk Management 1. Sistemic Risks Political and Social Macro Economy Risk of Disaster Disruptions to political stability, social, and security turmoil both domestically and internationally caused by specific issues such as geopolitical crises, trade wars, and so on. Has a negative impact on business growth, operations, financial condition, results of supply chain of operations, production and equipment prospects, as well as market prices of securities. Changes inflation. in the rate of The fluctuation of Rupiah Exchange rate. Increase in energy and fuel prices. Increase rates. in loan interest of decrease The Government or Company’s credit rating. 1. Affects the purchasing power and ability to pay customers. 2. Have the impact on the business, financial condition, business result or business prospect. 3. Have a material adverse effect to the business, financial, condition, business proceeds or business prospect. a. Monitoring the influence of socio- political turmoil on operational/ service disruptions. b. The maintenance of awareness improvement of through the safety & security functions. c. Monitoring supply chain issues related to raw materials and looking to for materials/device designs. alternatives a. Monitoring the influence of macroeconomy to the change to increase the expense through Cost Leadership program. b. To look for the opportunity to increase the spending of APBN pursuant to the government focus (health, energy, education, etc). floods, disasters such Natural lightning, as earthquakes, hurricanes, tsunamis, volcanic eruptions, epidemics, fires, droughts and pandemics, as well as other events such as power outages, riots, terrorist attacks, which are beyond Telkom’s control. Disrupting its business operations and give negative impact to the financial performance and profit, business prospect as well as market price of securities. a. Monitoring indicators that have the potential to cause disturbances to equipment such as device humidity and temperature, ship traffic on the SKKL route through the system. b. Transfer of risk by using the insurance of assets to anticipate the natural disaster and fire. c. Coordination with ASKALSI (Indonesian Sea Cable Association) and BAKAMLA (Indonesian Marine Safety Agency) to secure SKKL. d. Preventive & corrective action by preparing the disaster recovery plan and crisis management team. 237 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk Type of Risk Risks that is Faced The Impact to Telkom Mitigation/Risk Management 2. Business Related Risks Operational Risk in failure The the sustainability of network operation, main system, gateway Telkom’s on network, or other operator’s network. Threat of physical and cyber security, such as brute force attack, DDoS attack, and threats do Data Center. Has the negative impact to the business, financial condition, proceeds from the operation and business prospect. a. Implementation of BCM, BCP, and DRP. b. Certification of Integrated Man- agement System (IMS) for infra- structure management. Has the negative impact to the business, financial condition, result operation materially. from the the a. The upgrade of preventive action in vulnerability assessment and penetration test periodically. form of b. Monitor and identify all types of attack in the real-time as well as to choose and conduct a necessary action immediately. c. Preparing the recommendation to handle cyber attack based on the historical incident analysis. coordination with relevant parties to handle the cyber attack. d. Intensive Risks related to sub-optimal internet services. May face a lawsuit and damage the reputation. To be more prudent the preparation of contract with content provider partner. in New technology. Has an impact on the competitive power. The limit of operation period, damage or ruin, delay or failure to launch, or the revocation of satellite license. Can create to financial loss condition, operation result, and capability to give services. a. The preparation of Technology Roadmap by taking into account the future possible of competitor’s technologies. and implementation technologies b. Acceleration of IDN Digital Network) program support future services. (Indonesia to a. The planning to change the satellite of which operation period will be immediately expired. b. The insurance of satellite operation during the active period. c. Insurance for manufacturing and launching of new satellite. d. Developing the understanding with regulator in relation to the satellite operation by Telkom. Financial Risk Interest rate risk. Market price risk. impact on increasing Has an interest expenses, especially for floating interest loans. Interest rate swap contract from the float interest rate to become the fix interest rate upon certain loan term. Has an impact of changes in fair value on the performance of financial assets measured through profit or loss. Perform hedging activities of financial assets. 238 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE Type of Risk Risks that is Faced The Impact to Telkom Mitigation/Risk Management Foreign exchange rate risk. Has negative impact on the financial condition or result from the operation. from risk mainly Credit trade receivables and other receivables. Liquidity risk. Adverse condition, performance, prospects. impact on financial operational business and Adverse condition, performance, prospects. impact on financial operational business and Placement of time deposit and hedging to cover the fluctuation risk of foreign exchange. Continuous monitoring of accounts receivable balances and periodic billing. a. Maintaining balances financial liabilities. adequate in an effort to cash fulfill b. Perform analysis to monitor statement of financial position liquidity ratios such as current ratio and debt to equity ratio against debt agreement requirements. The limitation of financing capital expenditures. Legal and Compliance Risk Regulation Risk Penalty/fine by KPPU in relation to the price-fixing and the occurrence of class action. The change of Indonesian or International Regulation. Has a material adverse effect to the business, financial condition, operational performance, and business prospect. improving the Maintaining and Company’s performance to gain the trust from national or global fund institution sources. Reducing revenue Telkom’s and has negative impact to the business, reputation, and profit. Strengthening legal review towards corporate action plan or certain contract. Has the impact to the business, financial condition, operational performance, business prospect. and a. Analysis on the impact of the the regulation plan industry in general and Telkom in particular. towards Transformation Risk The failure of significant business and organizational transformation initiatives. Has an growth and financial performance short and long-term. impact on business the company's in the b. Giving inputs so that the regulation that will be stipulated will give positive impact to the Company and industry. a. Market Assessment and strategic situation analysis on transformation initiatives. b. Preparation of strategic fit and transformation for roadmap initiatives. c. Conducting risk assessment of transformation initiatives both at the pre and post-transformation stages. of d. Implementation change management by maximizing the Project Management Office (PMO) function. 239 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk RISK MANAGEMENT SYSTEM’S REVIEW ON THE EFFECTIVENESS During 2022, Telkom’s risk management system has been running effectively. The implemented system can manage Telkom’s various business risks to support every policy and process in the TelkomGroup. The effectiveness of the risk management system at Telkom is supported information by several tools or risk management systems, namely: 1. Generic Tools Enterprise Risk Management Online (ERM Online), which is used by all units to manage risk register. 2. Specific Tools for certain risk management which are: a. Fraud Management System (FRAMES) application is used as an early detection system for the possibility of Customer and Third Party Fraud. b. i-Library Service application managed by Operation Division and to be used to manage the documentation system of the Integrated Management System. c. SMK 3 Online application managed by Security & Safety unit for Health and Safety Documentation Management. The evaluation process for assessing the effectiveness of Risk Management implementation will be carried out in 2022, namely: 1. Measurement of Risk Maturity Index (RMI). 2. Monitoring and evaluation of the effectiveness of risk mitigation through the ERM Online application. 3. One-on-one evaluation/discussion and advisory with business units as needed. 4. Joint reporting and evaluation with BOD and Committee for Planning and Risk Evaluation and Monitoring (KEMPR). STATEMENT OF BOARD OF DIRECTORS AND BOARD OF COMMISSIONERS ON ADEQUACY OF RISK MANAGEMENT SYSTEM In an effort to ensure the implementation of risk management, the Board of Directors and Board of Commissioners through the Planning and Risk Evaluation and Monitoring Committee conduct meetings with the Risk Management Department on a regular basis. The meeting discussed risk monitoring in the corporate environment and follow-ups that have been carried out by the risk owner to minimize the risks that occur. The Risk Management Department will report to the Board of Directors and Board of Commissioners the results of risk monitoring on a quarterly basis. In 2022, the Board of Directors and Board of Commissioners assess that the risk management system at Telkom has been running well according to and fulfilling the adequacy of the policies and standards referred to. The adequacy includes among others: 1. Adequacy of Risk Management Information System The risk management system implemented in the Company refers to the ISO 31000:2018 framework and adopts various international standards to ensure the best implementation of risk management. The preparation of the company’s risk register and risk profile has utilized the ERM Online application, as well as the monitoring and evaluation process as well as the dashboard. 2. Adequacy of Risk Identification, Measurement, Monitoring, and Control Processes. The Board of Directors through the Internal Audit function has carry out inspections, evaluations, reports, and/or recommendations for improvement of adequacy and the effectiveness of the risk management process then followed up through evaluation by the Evaluation Committee and Planning and Risk Monitoring. 240 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE RISK MANAGEMENT SYSTEM (FRAMEWORK) AND POLICY In implementing risk management policies, Telkom is guided by two policy bases, namely Regulation of the Board of Directors No. PD.614.00/r.01/HK.200/ COP-D0030000/2021 dated April 30, 2021 regarding Corporate Risk Management (Telkom Enterprise Risk Management) and Regulation of the Director of Finance PR.614.01/r.00/HK200/COP-D0030000/2016 number regarding Guidelines for the Implementation of Corporate Risk Management (Telkom Enterprise Risk Management). In 2021, the standardization of risk management at Telkom from which originally referred to COSO ERM switched to ISO 31000: 2018 Risk Management - Principles and Guidelines, where this standardization consists of 3 (three) main components, namely: 1. Principle Risk Management Principles as the foundation for how risk management works to ensure the creation and protection of value, including: 1) Integrated Risk management is an integrated part of the company’s overall activities. 2) Structured & Comprehensive In practice, the company takes a structured and comprehensive approach to provide consistent and comparable results. 3) Customized The risk management framework and process must be adapted and proportionate to the external and internal context of the organization in line with the company’s goals. 4) Inclusive It is necessary to involve the right stakeholders at the right time to take their knowledge, views, and perceptions into account, thereby increasing awareness of risk management, which is well- informed. 5) Dynamic Risks can appear, change, and disappear along with the changes in the context and conditions of the company’s internal and external environment. The application of risk management must be able to anticipate, detect, acknowledge, and respond to these changes and events in an appropriate and timely manner. 6) Best Available Information Risk management is based on historical, current information and expectations for the future. Risk management explicitly considers all limitations and uncertainties associated with such information and expectations. Information must be timely, clear, and available to relevant stakeholders. 7) Human & Culture Factors Behavior and culture significantly affect all aspects of risk management at every level and stage of the company’s activities. 8) Continuous Improvement Risk management through learning and experience. is continuously improved 2. Framework The framework that regulates the commitment to the role and division of Telkom’s risk management functions includes: 1) Leadership & Commitment i. The Board of Directors ensures that risk management is integrated into all activities of the Company and must demonstrate leadership and commitment, by: a. Customize and implement all components of the framework; b. Issue a statement or policy that sets out risk management approaches, plans, or actions; c. Ensure that necessary resources are allocated to manage risk; d. Establish authority, and accountability at the appropriate level within the Company. responsibility, responsible is ii. The Board of Directors for managing the Board of risks, while Commissioners is responsible for overseeing risk management. 2) Integration i. Risk management becomes inseparable from the Company’s objectives, governance, leadership and commitment, strategy, goals, and operations. ii. The integration of risk management into the Company is a dynamic and iterative process and must be adapted to the needs and culture of the Company. iii. Risks are managed in every part of the Company’s structure, where everyone in the Company has the responsibility to manage risks. 241 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk 3) Design 3. Context assignment - Scope, context, and criteria; a) Risk assessment consisting of: i. Risk identification; It is a process to find, recognize, and describe risks in achieving the Company’s objectives. Relevant, appropriate, and up-to-date is essential in identifying risks. information ii. Risk analysis; It is a process to understand the nature and characteristics of risk, including its level of risk. Risk analysis involves a detailed consideration of the uncertainty, the source of the risk, the consequences, the possibilities, events, scenarios, controls, and their effectiveness. An event can have many causes and consequences and can also affect a variety of objectives. iii. Risk evaluation. Is a process to support decision-making. Risk evaluation involves comparing risk analysis results with established risk criteria to determine where additional measures are needed. b) Risk treatment; i. Risk treatment is to select and implement options for dealing with risk, which consists of: a. risk aversion; b. accept risks; c. mitigating risks; d. dividing/transferring risks. ii. The risk treatment plan should be integrated into the Company’s management plans and processes in consultation with appropriate stakeholders. c) Monitoring and review; i. Monitoring and review are to ensure and improve the quality and effectiveness of the process design, implementation, and risk management outcomes. ii. Monitoring and review should be carried out at all process stages, including planning, collecting, analyzing information, documenting results, and providing feedback. d) Recording and reporting; i. The risk management process and its results should be documented and reported through appropriate mechanisms. ii. Reporting is an is It integral part of corporate governance. improve the intended to quality of dialogue with stakeholders and support the Board of Directors and the Board of Commissioners in fulfilling their responsibilities. i. The design of the risk management framework is carried out by examining and understanding the external and internal context of the Company. ii. The Board of Directors and the Board of Commissioners demonstrate and articulate their ongoing commitment to risk management through policies, statements, or other forms, and are communicated within the Company and stakeholders. iii. Authority, responsibility, and accountability related to risk management are established and communicated at all levels within the Company. iv. Management ensures the appropriate allocation v. The Company of resources for risk management. establishes approved communication and consulting approaches to support the framework and facilitate the implementation of effective risk management. 4) Implementation implementation Risk management requires stakeholders’ involvement and awareness, thus allowing the Company to consider uncertainty in decision-making explicitly. 5) Evaluation The company evaluates the effectiveness of the risk management framework by periodically measuring its performance of the risk management framework. 6) Improvements i. The Company monitors and adjusts the risk in anticipation of framework management external and internal changes. ii. The Company is constantly improving the suit- ability, adequacy, and effectiveness of the risk management framework and how to integrate risk management processes. 242 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE RISK MANAGEMENT’S ORGANIzATIONAL STRUCTURE As an initiative to strengthen the risk management organization based on directions and aspirations from the Ministry of SOEs and the Board of Commissioners, governance of the management function is under the responsibility of the Risk Management Department which is under the Directorate of Finance & Risk Management. Appointment and dismissal of members of Risk Management Department is carried out by President Director, Director of HCM or SGM HCBP based on Resolution of President Director, Director of HCM or SGM HCBP. The number of employees in Risk Management Department are currently 27 peoples. The arrangement of the organizational constellation of the Risk Management department is regulated in the Directors Regulation Number: PD.202.47/r.06/HK200/ COP-A2000000/2021 regarding the Organization of the Directorate of Finance & Risk Management, it is explained that the Risk Management Department is the department that has the role and responsibility for providing business processes, implementation of governance and quality management, management of strategic & operational risk management, adequate, and effective management of Enterprise Risk Management (ERM) within the scope of the TelkomGroup. The structure of the Risk Management Department is as follows: President Director Director VP Director of Finance & Risk Management Risk Management Department SVP RM VP Risk Strategy & Governance VP Risk Operartion & Process Management AVP Strategic Risk Mgt AVP Risk Mgt Planning and Policy AVP Governance & Quality Mgt AVP Operational Risk Mgt AVP Risk Reporting & Support AVP Process Mgt 243 Annual Report 2022 PT Telkom Indonesia (Persero) TbkVP RISK STRATEGY & GOVERNANCE 1. VP Risk Strategy & Governance is responsible for managing Enterprise Risk Management (ERM) at an adequate and effective strategic level and implementing governance and quality within the scope of TelkomGroup. 2. In carrying out its responsibilities, VP Risk Strategy & Governance carries out the main activities, among others, but not limited to the following: and a. Formulate Risk develop Management (ERM) strategies, roadmaps, policies, and architectures; Enterprise b. Compiling and managing the Company’s risks, including Risk Profile, Risk Factors, RKAP, including risk management advisory activities within the TelkomGroup; c. Develop, assign, and assess the Key Performance Indicator Risk Management Department and develop, manage, and update the Application Support ERM; d. Formulate strategies, policies, and mechanisms for GCG and quality management within the scope of TelkomGroup; e. Coordinating and overseeing the implementation of GCG & quality management as well as mechanisms and business process disclosure (DCP) along with its evaluation and reporting; and f. Carry out advisory functions for implementing GCG and quality management within the scope of TelkomGroup. 3. In carrying out its activities, VP Risk Strategy & is not interacts among others, but Governance limited to: a. All units in the Company and its Subsidiaries and other entities, including the Foundation, in terms of managing enterprise quality management and GCG; b. All units in the Company in terms of advisory on the preparation of risk register units, preparation of Risk Profile, and KPI assessment of Risk Management Effectiveness; c. All Subsidiaries management; terms of advisory risk in d. Financial Controller Unit in terms of risk budgeting & monitoring; e. Internal Audit Department in terms of auditing the effectiveness of Enterprise Risk Management (ERM) implementation; f. Performance management unit determines and measures KPI Risk Management Department. 4. In carrying out the duties and authorities as referred to in paragraph (3), VP Risk Strategy & Governance is assisted by: a. AVP Strategic Risk Management. b. AVP Risk Management Planning & Policy. c. AVP Governance & Quality Management. RISK MANAGEMENT GROUP TASKS AND RESPONSIBILITIES SVP RISK MANAGEMENT 1. The Risk Management Department is led by the Senior Vice President of Risk management, referred to as SVP Risk Management. 2. In carrying out its duties and authorities, the SVP of Risk Management is responsible for reporting to the Director of Finance and Risk Management. 3. SVP Risk Management is responsible for managing policies, controlling, supervising, and implementing risk management the management of Enterprise Risk Management implementation of governance and (ERM), the quality management, business processes, and risk management reports within the TelkomGroup. functions, including 4. If not otherwise determined by the Board of Directors or Company Regulations related to the Executive Committee, the SVP of Risk Management is responsible as Secretary of the Executive Committee of the Risk Management, Compliance, and Revenue Assurance Company. 5. In carrying out its strategies, roadmaps, responsibilities, SVP Risk Management carries out the main activities, among others, but not limited to the following: a. Determine policies, governance, and mechanisms in risk management (Enterprise Risk Management), governance & quality management, and process management at TelkomGroup; b. Coordinating risk management, GCG, quality management, and process management with related units within the TelkomGroup; implementation the of c. Coordinating strategies and implementation of risk management and GCG with external parties, including regulators; and d. Coordinate the monitoring, evaluation, and reporting processes of management, GCG, quality management, and process management implementation at TelkomGroup. 6. In carrying out the duties and authorities as referred to in paragraph (3), SVP Risk Management is assisted by: a. VP Risk Strategy & Governance; and b. VP Risk Operation & Process Management. 244 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE VP RISK OPERATION & PROCESS MANAGEMENT 1. VP Risk Operation & Process Management is responsible for managing Enterprise Risk Management (ERM) at the operational level and the availability of adequate and effective business processes within the scope of the Company. 2. In carrying out its responsibilities, VP Risk Operation & Process Management carries out the main activities, among others, but not limited to the following: a. Coordinate management business continuity insurance management, management revenue assurance, and fraud management; (BCP), b. Conduct business risk reviews, regularization notes, waivers, and ICoFR risk assessments; c. Coordinating risk-based budgeting, support hedging, budget management & KPI/KM, risk culture, and risk competency enhancement; d. Prepare the Company’s risk management reporting; e. Formulate strategies, policies, governance, and management mechanism management processes that include, among others, enterprise-wide process, business unit process, cross-functional process, and business process ICoFR (Transactional Level Control) of the Company; f. Ensure that all ICoFR business processes are by the provisions of SOA 404 to meet compliance with financial and internal control audits (integrated audits); and g. Formulate strategies, policies, governance, and control mechanisms for the Company’s Internal Entity Level Control. 3. In carrying out its activities, VP Risk Operation & Process Management interact, among others, but is not limited to: a. Infrastructure Management Business Unit and Asset Management Unit in terms of business continuity management and insurance management; b. Customer Management Business Unit in terms of revenue assurance and fraud management; c. Financial controller unit in terms of risk-based budgeting and budget management; d. All units in terms of business risk review, risk culture management, risk competency enhancement, and risk management reporting; and e. Organizational Development Management Unit, Corporate Policy Management Unit, Internal Audit Management Unit, all operational units and subsidiaries in terms of management and audit of the enterprise-wide process, business unit process, cross-functional process, and business process ICoFR (Transactional Level Control). 4. In carrying out the duties and authorities as referred to in paragraph (3), VP Risk Operation & Process Management is assisted by: a. AVP Process Management. b. AVP Risk Reporting & Support; and c. AVP Operational Risk Management. 245 Annual Report 2022 PT Telkom Indonesia (Persero) TbkWHISTLEBLOWING SYSTEM DELIVERING A VIOLATION REPORT Reports or complaints of violations can be submitted via website, e-mail, fax, or letter with address: Website Hotline Faksimile Email PO Box SMS WhatsApp : https://id.deloitte-halo.com/ telkomwbs/ : (021) 5088 4601 : (021) 5088 4602 : Telkomwbs@tipoffs.info : Telkom Integrity Line PO Box 2800 JkP 10028 : 0813 9000 3217 : 0813 9000 3217 The complaint must meet the following requirements: 1. Issues in accounting and internal control over financial reporting that has the potential to result in material misstatements in the Company’s financial statements; the issues, especially involving 2. Audit those independence of the Public Accounting Firm; 3. Violation of the laws and regulations of the capital market relating to the company’s operations; 4. Violation of internal regulations that have the potential to cause harm to the company; behaviour 5. Fraud and/or Abuse of Position committed by officials and/or employees within the TelkomGroup Environment; 6. Disrespectful of Commissioners, Organs of the Board of Commissioners, Directors, Management, and employees of the company, including but not limited to dishonesty, conflict of interest and providing misleading information to the public which directly or indirectly has the potential to damage reputation or cause losses to the company. the Board of (WBS) since 2006, Telkom already has and operates a Whistleblowing System following up on The Sarbanes-Oxley Act of 2002. The establishment of WBS mechanism is an effort to prevent fraud and is a medium for all individuals within Telkom and third parties to report violation, fraud, or other form of ethical violation related to Telkom. One of the concerns of Audit Committee as WBS manager is to increase the credibility of WBS system so that it can become a trusted medium for the public to submit report of violation. Audit Committee has conducted a series of comparative studies and studies to formulate the necessary improvement so that Telkom’s WBS can make an optimal contribution to improving the quality of internal control. To increase the independence and effectiveness of the WBS, on January 31, 2022 the Telkom Integrity Line was launched which is a new phase of the WBS, the result of the development of the existing WBS system. The development of this WBS involved Deloitte as an independent consultant. Previously, this system was managed internally by the Audit Committee of PT Telkom, which submitted complaints via 4 (four) channels, namely email, telephone number, fax and website. With the existence of Deloitte, the complaint channels are divided into 7 (seven) channels, which are independent and confidential. Complaint handling policies and procedures within the TelkomGroup have been set forth in Kep. Dekom No. 01/KEP/DK/2022 dated January 25, 2022 and has been ratified by Directors Regulation number: PD.622/r.00/HK200/COP-C0000000/2022 dated February 22, 2022. 246 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE PROTECTION TO THE COMPLAINANT Telkom guarantees the protection of the identity of the reporter who utilizes the WBS mechanism. This is based on the following internal policies: 1. Resolution of the Board of Commissioners No. 08/ KEP/DK/2016 dated June 8, 2016, regarding Policy Procedures for Complaints Handling (Whistleblower) of PT Telkom Indonesia (Persero) Tbk and Consolidated Subsidiaries. 2. Directors Regulation No. P.6.618.00/r.00/HK200/ COP-C0000000/2016 dated December 21, 2016. 3. Resolution of the Board of Commissioners No. 01/KEP/ DK/2018 regarding Standard Operating Procedure of the Whistleblower System at Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia, Tbk and Consolidated Subsidiaries. Telkom follows up on any complaints or reports through WBS by prioritizing confidentiality and the principle of presumption of innocence. The aim is to encourage parties to have courage and feel safe in submitting reports of violations without any fear or worry. THE COMPLAINT HANDLING Telkom operates Whistleblowing System mechanism under responsibility of Audit Committee. In practice, WBS mechanism refers to Financial Service Authority Regulation No. 55/ POJK.04/2015 and Sarbanes-Oxley Act 2002 Section 301 regarding Public Company Audit Committee. All complaint reports handled by Audit Committee cover the following topics: 1. Accounting and auditing. 2. Violation of regulation. 3. Fraud and/or the allegation of corruption. 4. Code of conduct. In order to fulfill a responsible and not defamatory complaint report against someone, Telkom determines certain complaint requirements. Report can be followed up immediately if the truth and accuracy of the complaint information has been supported by sufficient data. Some WBS complaints could not be followed up due to inaccurate and unreliable data and information. 247 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk COMPLAINT HANDLING MECHANISM The following is a diagram of the mechanism for handling violations reported through Telkom WBS. e v i h c r A l a i r e t a M n o i t a u a v E l - P U W O L L O F D N A G N I T R O P E R S S E C O R P N O I T A G I T S E v N I t r o p e R u F s e t o N U F ? D k k s e y o N o N s e y ? U F d n E n o i t a t n e m u c o D s e t o N U F f o t l u s e R e h T n o i t a g i t s e v n I t r o p e R e h T n o i t a g i t s e v n I d e e N ? s t r e p x E n a g n m r o F i n o i t a g i t s e v n I m a e T i ? s e i r a d i s b u S e s a C w e i v e R o N o N C C t r e p x E s e y t n e m t n o p p A i t r e p x E f o s s e c o r P o t l a v o r p p A p u w o l l o F t r a t S t r o p e R D k k t i d u A e h T t r o p e R o N s e y i d e n b m o C ? U F D k k i y r a d i s b u S y b n o i t a g i t s e v n I i y r a d i s b u S e s n o p s e R r e t t e L s e y o N s e y t n e d i s e r P e h t f o r e t t e L . i c C y r a d i s b u S o t r o t c e r i D t n e d i s e r P d e t a e R l . 1 l m o k e T f o r o t c e r i D e e t t i m m o C t i d u A . 2 i y r a d i s b u S t i d u A l a n r e t n I . 3 i y r a d i s b u S n o i s s u c s i D ? U F t r o p e r U F U F s i b U t r o p e R k D k k D k t n o J i o N ? m a e T t n o J i s e y e e t t i m m o C e n i l i p c s i D & e c n a i l p m o C d n a s c h t E r o n i i l p i s i D & n a h u t a p e K n a d a k i t E e t i m o K : D K K : k r a m e R COMMITTE AUDIT DIRECTOR PRESIDENT PROCESS COMMITTE SUBSIDIARy HR UBIS 248 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE THE PARTY THAT MANAGES THE COMPLAINT WBS mechanism at Telkom is managed by several parties which are Whistleblower Protection Officer (WPO), Audit Committee, and Investigation Committee with their respective duties and responsibilities. Whistleblower Protection Officer (WPO) is a member of Audit Committee whose job is to handle complaints by doing the following: 1. Receiving the complaint. 2. Administering the complaint. 3. Conducting the initial verification of whether the complaint is in line with the criteria. 4. Monitoring the follow up of the complaint. The Audit Committee through meetings determines decisions relating to: 1. Approval to follow up or not to receive complaints. 2. Approval whether the complaint is followed up to internal or external parties. 3. Assessment whether the follow up of complaints is adequate or not. Internal Auditors play a role in: 1. Conducting the initial assessment of the complaint received by Audit Committee. 2. Preparing initial assessment reports and submitting the reports to the President Director to be copied to Audit Committee. The Investigation Committee has a role in: 1. Conducting further investigation upon the complaint that has been initially assessed by Internal Auditor. 2. Preparing reports on the result of further investigation and submitting the reports to the President Director to be copied to the Audit Committee. THE RESULT OF COMPLAINT HANDLING Throughout 2022, Telkom has received 26 complaints that meet the criteria for follow-up. Of the 26 complaints, 16 complaints were declared closed and 10 others were waiting for additional data to ensure the next follow-up. Website Email P.O Box Fax Hotline WhatsApp SMS Reporting Channel Total in 2022 Category Accounting issues and internal control over financial reporting Auditing issues Violation of the laws and regulations of the capital market relating to the company's operations Violation of internal regulations Fraud and/or abuse of the position Disgraceful behavior Gratuities and bribes 0 0 0 9 4 1 0 Total in 2022 14 0 0 0 3 4 0 0 7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5 0 0 0 5 0 0 0 0 0 0 0 0 0 0 0 17 8 1 0 26 249 Annual Report 2022 PT Telkom Indonesia (Persero) TbkCOMPARISON OF COMPLAINT HANDLING WITH THE PREvIOUS yEAR Description 2022 Jumlah 2022 (Deloitte) 2021 2020 Total Complaints: Qualified: Follow-up Closed (not proven / not fulfilled) Additional Data Further studies according to the procedure 129 26 16 9 1 36 0 0 0 0 48 1 1 0 1 Remarks complaints received complaints worthy of actions THE COMPLAINT HANDLING MECHANISM 1. The organizational unit or other party appointed as the party responsible for receiving complaints in the whistleblowing system monitors incoming complaints from all existing distribution channels as mentioned in point V above; 2. The complaints received are reviewed and verified to ensure that the complaint meets the requirements to be determined as a valid complaint and will be processed further. Meanwhile, complaints that do not meet the requirements are not processed and stored as archives for the Whistleblowing Manager; 3. Complaints that meet the requirements and will be processed further, are sorted based on the level/ levelling being complained about and submitted to: a. The Board of Commissioners through the Audit Committee, for complaints against one or more members of the Board of Directors of Telkom (including the Main Director), employees on duty at Telkom’s Internal Audit Unit or employees within the supporting organs of the Board of Commissioners; b. Main Director of Telkom through SVP Internal Audit, for all complaints against all TelkomGroup employees including members of the Board of Directors and/or Commissioners of Subsidiaries, except for Telkom Directors and Telkom employees who serve in the Internal Audit Unit; c. Ministry of BUMN, for complaints against the Board of Commissioners. 4. For complaints that meet the requirements as referred to in point 3.a. and 3.b. above, an in-depth study is carried out through a preliminary examination by the company’s Internal Audit Group Unit (IAG) or other independent parties if necessary, and a Preliminary Examination Report (LHP) is prepared to be submitted to the Audit Committee and the Main Director; 5. Based on the Preliminary LHP received from the IAG Unit or an independent party, the Audit Committee and/or Main Director through the appointed Team, will evaluate and decide whether the results of the inspection need to be followed up and processed further or not need to be followed up and stored as files; 6. For LHP which needs to be followed up and requires the assistance of an independent party, approval will be sought from the Board of Commissioners. While the follow-up of LHP which does not require the assistance of an independent party, a Letter of Request for Internal Investigation is made from the Audit Committee and/or IAG to the Main Director; who then assigned the Investigation Committee to conduct an investigation; 7. In the event that the Board of Commissioners agrees to use the assistance of a Consultant/Independent Third Party, the Audit Committee will select, appoint and assign the selected Consultant/Independent Third Party to conduct an investigation and prepare an LHP for the investigation or examination that has been carried out; 8. If the Board of Commissioners does not approve the use of independent party assistance, then the LHP that needs to be followed up is processed by making an Internal Investigation Request Letter to the Main Director as stated in point 6 above. 250 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE INVESTIGATION PROCESS The investigation process as a follow-up to the Preliminary LHP is carried out by an Investigation Committee formed by the President Director with the following procedure: 1. The Investigation Committee examines the issues to be investigated as stated in the Preliminary LHP to determine whether the investigation process requires the assistance of an expert or whether it concerns a subsidiary company. If the investigation process in a subsidiary concerns personnel and/or units company, the Investigation Committee will convey this matter to the President Commissioner and Directors of the subsidiary in question; 2. In the event that Expert assistance is required, the Investigation Committee will ask the Main Director to process the appointment and assignment of Experts to handle the investigation in question; 3. If the investigation does not require the assistance of Experts, the Investigation Committee will form an Investigation Team whose members include personnel from subsidiaries (if needed) to carry out the necessary investigations and prepare an Investigation Report; 4. The Investigation Report is submitted to the President Director and/or the Telkom Audit Committee as material for evaluation of the company’s management to be followed up to the next stage (if necessary). COOPERATION HANDLING OF INTEGRATED WBS On March 2, 2021, Telkom together with 26 other SOEs and Corruption Eradication Commission (KPK) signed a Perjanjian Kerja Sama (PKS) or Cooperation Agreement of Complaint Handling as an effort to eradicate corruption through an integrated Whistleblowing System (WBS). The scope of the cooperation agreement includes, among others: 1. Formulation and/or strengthening of the internal rules for handling complaints; 2. Commitment to complaint handling management; 3. Handling complaint through application; 4. Coordination and complaints; and joint activities for handling 5. Exchange of data and/or information. Further discussion of WBS can be found in Sustainability Report. POLICY REGARDING REPORTING SHARE OWNERSHIP OF DIRECTORS AND COMMISSIONERS Provisions regarding periodic reporting of any changes in share ownership directly or indirectly from each member of the Board of Directors and Board of Commissioners of Telkom are regulated in Board Manual of the Board of Directors and the Board of Commissioners listed in the Joint Regulations of the Board of Commissioners and Board of Directors Number: 05/KEP/DK/2022 and Number: PD.620.00/r.01/HK200/COP-M4000000/2022 regarding Guidelines for the Work Procedures of the Board of Commissioners and Directors (Board Manual) of the Company (Persero) PT Telekomunikasi Indonesia, Tbk. This is also done by Telkom to comply with Financial Service Authority Regulation No. 11/POJK.04/2017 regarding Ownership Report or Any Change in Share Ownership of a Public Company. In the 2022 Financial Year Annual Report, Telkom provides information on share ownership by members of the Board of Directors and Board of Commissioners, as well as the changes in the “Composition of Shareholders” section. Company has routinely reported the share ownership of members of the Board of Directors and members of the Board of Commissioners every month and disclosed it in the Annual Report and financial report. Member of the Board of Directors and member of the Board of Commissioners reports the change in share ownership no later than three working days after the occurrence of ownership or any change in ownership of the shares of a Public Company. This policy applies to all member of the Board of Directors and Board of Commissioners. As of the end of 2022, there are no members of the Board of Commissioners who carry out share buying/selling transaction conducted by issuer. These activities are reported to OJK as part of the information disclosure of the Company’s management. 251 Annual Report 2022 PT Telkom Indonesia (Persero) TbkEMPLOYEE STOCK OWNERSHIP PROGRAM Employee stock ownership program is an implementation of a long-term performance-based compensation policy for management and/or employees owned by Telkom as a Public Company. In addition, the provision of long-term compensation is one of the efforts to increase a sense of belonging, retention, and give appreciation for employee contributions. Regarding the stock transfer process, employees who become program participants are subject to the provisions of the Lock-Up Period based on the following levels: a. Level BP I and II are subject to a Lock Up Period of 12 (twelve) months; b. Level BP III and IV are subject to a Lock Up Period of There are two stock ownership programs that have been carried out by Telkom, namely Employee Stock Ownership Program (ESOP) for employees and Management Stock Ownership Program (MSOP) for management. This program was started in 1995, when Telkom conducted an Initial Public Offering (IPO). Then, Telkom decided to carry out this program again on June 14, 2013. 6 (six) months; c. Levels BP V to VII are subject to a Lock Up Period of 3 (three) months. 2. Execution Time Telkom stock ownership program by employees and/ or management was implemented on June 14, 2013. 3. Employee and/or Management Requirements in The following are some provisions related to the implementation of ESOP program in 2013: Telkom Stock Ownership Program a. Meet Eligibility Criteria: Subsidiaries/Affiliates whose i. Employees of Company and Employees of financial statements are consolidated in Telkom Financial Statements; of ii. Directors Subsidiaries/Affiliates whose financial statements are consolidated, except BOD/BOC Telkom and Telkomsel. b. Have contributed at least 1 month in 2012; c. In the event that employee has an inactive status in 2013, then: i. The person concerned is still entitled to participate in the program, with the allocation of stock calculated proportionally according to the contribution of the person concerned in 2012; ii. The person concerned did not quit at his own request (APS), was dismissed due to a serious violation of employee discipline, and/or quit because he was appointed as the Board of Directors of a SOE. d. The program is optional with conditions: the right to buy is non-transferable and void if it is not used during the offer period. 4. Execution Pricing or Pricing Whereas, in the implementation of employee stock ownership program in 2013, Telkom set a stock transfer price of Rp10,714 (ten thousand seven hundred and fourteen rupiah), which is 90% of the average closing price of stock trading for a period of 25 days prior to the price fixing date. 1. Number of Shares Number of shares offered during ESOP program period in 2013 was 64,284,000 Series B stock which were the result of buyback phase III or Treasury Stock. The amount was allocated to each participant with the following conditions: a. Participants have an active status, referring to the Band Position level, Role Category, and participant’s contribution period as of December 31, 2012; temporary b. Participants have a non-active status, referring to the Band Position level and the contribution period during 2012, except in the event that the person concerned dies, the contribution is calculated at 100%. 252 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE No. 1. 2. Date November 14, 1995 June 14, 2013 Number of Employees 43,218 24,993 Number of Shares Stock value 116,666,475 shares Rp239 billion 59,811,400 shares Rp661 billion (equivalent to 299,057,000 shares after a stock split) SIGNIFICANT LEGAL DISPUTES Throughout 2022, Telkom faced 116 legal cases consisting of 45 criminal law cases and 71 civil law cases. Among these cases, 48 cases are a continuation of cases from the previous period, while the remaining 68 cases are cases that began in 2022. Until the end of 2022, there are 62 cases that have not been completed and the process will continue for the next period. RECAPITULATION OF LAWSUITS CASES IN 2020-2022 Status 2022 Legal Issues 2021 2020 In process Final and binding (inkracht) Sub Total Total Criminal Civil* Criminal Civil Criminal Civil 18 27 45 44 27 71 18 10 28 28 14 42 29 4 33 36 7 43 116 70 76 Remark: *Combination of Civil and Non-Litigation Cases. Throughout 2022, apart from the legal cases faced by Telkom, there were no civil or criminal cases faced by members of the Board of Commissioners and Directors of Telkom, both those who are still in office and those who have ended their positions. INFORMATION REGARDING ADMINISTRATIVE SANCTIONS Throughout 2022, Telkom did not receive administrative sanctions, whether members of the Board of Commissioners and/or Directors, by the Otoritas Jasa Keuangan (OJK) and other authorities. 253 Annual Report 2022 PT Telkom Indonesia (Persero) TbkINFORMATION ACCESS AND COMPANY‘S PUBLIC DATA Stakeholders can easily access Telkom information through various approaches and media. This is done because Telkom continues to strive to establish good relations with all Stakeholders and comply with Financial Service Authority Regulation No. 31/POJK.04/2015 regarding Disclosure of Material Information and Facts by Issuers or Public Companies. Until the end of the 2022 period, Telkom has provided several approaches and media as communication channels as follows: 1. General Meeting of Shareholders (GMS) . GMS is a medium for Telkom to convey information related to the Company’s performance to Shareholders. Shareholders can participate in strategic decision making, for the betterment of the Company. PPID Telkom has an E-PPID channel as an online service facility for requests for public information and as a form of implementing information disclosure in the TelkomGroup which can be accessed via the https://eppid.telkom.co.id/sites page. 5. Meeting with Analyst and Investor Telkom always held meetings with Analyst and Investor. This meeting is held for Telkom to provide information on the Company’s performance and prospects as well as providing the latest information on the telecommunications industry in general. In times of pandemic, meetings with Analyst and Investor are held online. 2. Media 6. Contact via E-Mail Throughout 2022, Telkom made news releases and sent them to the mass media to disseminate Company information to Stakeholders. 3. Website Telkom’s website is available in two languages, namely Indonesian and English, with a page www.telkom.co.id page. Stakeholders can access the latest information on profits, GCG practices, implementation of CSR programs, job opportunities and career development, as well as Telkom products. In addition, Stakeholders can also access Telkom reports, including Annual Report, Financial Report, and other report. 4. Information and Documentation Management Officer (PPID) PPID a form of transparent and accountable corporate public information service to fulfill the rights of in accordance applicants for public with statutory provisions. is responsible for carrying out the functions of storing, information. documenting, and/or serving public is an official who information One of the corporate contact facilities listed on the Telkom website is in the form of e-mail contacts, which can be used by Stakeholders to communicate with each other. Specifically, Telkom customers can use the e-mail address customercare@telkom.co.id, while the e-mail address Investor@telkom.co.id is intended for Investor. 7. Internal Media Telkom has an Intra Telkom bulletin which is managed as a means of information, education, and outreach to all internal employees of the Company. 8. Social Media In line with the current digital era, Telkom uses a variety of social media to reach out to Stakeholders and the wider community. Besides that, This communication channel is also useful for communicating with young people who are very familiar with digital media and social media today. Social Media Twitter Facebook Instagram youTube Tiktok Account Followers/ Subscribers/ Fans @TelkomIndonesia Telkom Indonesia @telkomindonesia Telkom Indonesia Official Tiktok Telkom Indonesia 150.1K Followers 526,437 Fans 553K Followers 19.5K Subscribers 61.3K Subscribers Remark: Data as of December 31, 2022. 254 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE CORPORATE CODE OF CONDUCT CODE OF CONDUCT’S IMPLEMENTATION FOR BOARD OF DIRECTORS, BOARD OF COMMISSIONERS AND EMPLOYEES The code of ethics within the TelkomGroup is regulated in Directors Regulation No.PD.201.01/2014 regarding Business Ethics within the TelkomGroup and Regulation of the Director of Human Capital Management No.PR.209.05/r.01/ HK250/COP-A4000000/2020 regarding Employee Discipline. In addition to complying with applicable policies, the application of Telkom’s code of ethics refers to the Sarbanes-Oxley Act (SOA) 2002 section 406. Members of the Board of Directors, members of the Board of Commissioners, and extended families of Telkom employees are required to implement this code of conduct. Telkom’s code of conduct regulates business ethics for the external environment (customers, suppliers, contractors, and other external parties) as well as employee work ethics for the internal environment (applies to fellow Telkom personnel). In addition to code of conduct, Telkom requires employees, Directors, and the Board of Commissioners to sign an Integrity Pact. The Integrity Pact contains the commitment of employees and Directors not to violate the integrity and established code of conduct which includes Resolution of the Board of Directors Number KD.36/HK290/ COP-D0053000/2009. CODE OF CONDUCT’S PRINCIPLES The Telkom Code of Conduct, which applies, among others, regulates the main matters regarding: 1. Employee Ethics The system of values or norms that are used by all employees and leaders in the daily work. 2. Business Ethics The system of values or norms that are upheld by the Company as guidelines for the company, management, and its employees to interact with the surrounding business environment. DISSEMINATION OF THE CODE OF ETHICS AND ITS EFFORTS TO ENFORCEMENT Every Telkom employee who violates the code of ethics will potentially receive sanctions after going through an investigation process and various considerations. The following table presents Telkom’s code of ethics, which regulates provisions related to sanctions for each type of violation. No. Main Thing Type of violation Penalty 1. Employee Work Ethics 1. Misdemeanor Light Discipline Punishment 2. Business Ethics 2. Moderate Violation Moderate Discipline Punishment 3. 1. Serious Violation Insider Trading Severe Discipline Punishment Integrity Committee Decision 2. Conflict of Interest Employee Discipline Committee Decision 3. Window Dressing Integrity Committee Decision 4. Do gratuities Employee Discipline Committee Decision 255 Annual Report 2022 PT Telkom Indonesia (Persero) TbkEFFORTS TO DISSEMINATION OF CODE OF CONDUCT Information about ethics is conveyed to all TelkomGroup personnel by Telkom Management on a regular basis. These materials cover the topics of GCG, Business Ethics, Integrity Pact, Fraud, Risk Management, Internal Control (SOA), Whistleblowing, Prohibition of Gratification, IT Governance, Information Security, and other matters related to corporate governance practices. Telkom also socializes business ethics through various media, including through e-learning. One of the efforts to disseminate the code of ethics is to apply the obligation to each employee to make an Integrity Pact, which is filled out and signed by all employees every year as long as they are still employees of TelkomGroup. The table below presents information on efforts to disseminate Telkom’s code of ethics during 2022. TELkOM’S 2022 CODE OF CONDUCT SOCIALIZATION TABLE No. 1. 2. 3. Oncoming Amount Reached E-learning Face to face (training, communication forum/ workshop) Socialization material through the intranet portal 9731/9,731 616/9,731 9731/9,731 REPORT ON RESULTS OF APPLICATION OF CODE OF CONDUCT During 2022, violations of code of conducts for Employee Discipline Violations at Telkom were recorded in 13 cases consisting of 3 cases decided with 25 perpetrators and 10 cases in process with 118 people. This number increased compared to the previous period, which was 16 cases and consisted of 109 perpetrators. Judging from the information, Telkom still needs to continue to improve the quality of supervision (internal control) so that violations of the code of ethics can be reduced every year. The following table presents data related to violations of code of conducts that processed during 2022. RESULTS OF CODE OF CONDUCT IN 2022 Forms of Code violation Number of Code violations in 2022 Sanctions Given in 2022 No. 1. Misuse of Goods/Assets/Money/ Authority-Position 12 cases Disciplinary Punishment: Minor Medium Severe Acquitted : 6 : 9 : 5 : 4 On Progress : 118 Dismissal Acquitted Severe Severe : 0 : 0 : 0 : 1 2. Absenteeism 0 cases 3. 4. Criminal Case Violations of Moral Norms 0 case 1 case 256 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 05 CORPORATE GOVERNANCE ANTI CORRUPTION POLICY Telkom Indonesia as a company or issuer that has been listed on the IDX and NYSE continues to be committed to maintaining the principles of GCG to ensure that the company continues to grow and avoids corruption, kickbacks, fraud, bribery, and illegal gratuities. As a form of commitment in preventing all practices of corruption, kickbacks, fraud, and illegal gratuities, Telkom Indonesia has developed programs and procedures as outlined in the following internal policies: 1. Decision of the Board of Directors of the Company Number: KD.36/HK290/COP-D0053000/2009 regarding Integrity Pact. 2. Company Regulation PD.201.01/r.00/PS150/COP-B0400000/2014 regarding Business Ethics in TelkomGroup. 3. Regulation of Director of Human Capital Management Number: PR.209.03/r.01/PS000/COP-A4000000/2017 regarding Obligations for Reporting on Assets of State Administrators within TelkomGroup. 4. Regulation of Director of Human Capital Management Number: PR.209.05/r.01/HK250/COP-A4000000/2020 regarding Employee Discipline. 5. Regulation of Director of Human Capital Management Number: PR.209.04/r.01/PS950/COP-A4000000/2021 regarding Gratification Control. Telkom Indonesia has also implemented ISO 37001:2016 Anti Bribery Management System (SMAP) since 2020. Policies, targets, and all SMAP implementation documents are outlined in ISO 37001:2016 Anti Bribery Management System Manual and 17 Procedures. ANTI-CORRUPTION, KICKBACKS, ANTI GRATIFICATION, AND ANTI-FRAUD PROGRAMS AND PROCEDURES During 2022, Telkom conducts anti-corruption training and socialization programs for employees as well as external audits to support the implementation of anti-corruption, kickbacks, anti-gratification, and anti-fraud. Apart from issuing internal regulations to prevent corrupt practices, kickbacks, fraud, bribery, and illegal gratification, Telkom also holds various programs for all employees. The following are the programs implemented by Telkom Indonesia during 2022: 1. Conducting training and understanding of business ethics and signing the annual Integrity Pact, which is mandatory for all employees. 2. Conducted Awareness and Internal Audit training on ISO 37001:2016 Anti-Bribery Management System by experts in their fields to the team on the scope of expansion. 3. Participated in Technical Guidance Training, UPG Development, Training on Gratification Prone Points by the KPK Anti-Corruption Education Center for UPG (Gratification Control Unit). 4. Conducting training on Lead Auditor ISO 37001:2016 Anti-Bribery Management System through an external institution, the Professional Evaluation and Certification Board. 5. Completed Gratification e-learning training by the Anti-Corruption Learning Center (ACLC) to the Gratification Control Unit (UPG) team and all Regional Human Capital Managers. 6. Participate in the 2022 Gratification Control Unit (UPG) personnel training for selected agencies by the Corruption Eradication Commission. 7. Conducted ISO 19011:2018 Internal Auditor training for representatives of the scope of the Anti-Bribery Management System certification. 8. Carry out an Internal Surveillance Audit ISO 37001:2016 Anti-Bribery Management System. 9. Conducting ISO 37001:2016 ISO 37001:2016 surveillance External Audit Management System. 10. Organized a program to commemorate World Anti-Corruption Day (HAKORDIA) within Telkom. With the implementation of these programs within Telkom Indonesia, it is hoped that it will further enhance a work environment that is conducive and free from corrupt practices. 257 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk06 TANGGUNG JAWAB LINGKUNGAN DAN SOSIAL 258 PT Telkom Indonesia (Persero) TbkAnnual Report 2022CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTChapter 0606 TANGGUNG JAWAB LINGKUNGAN DAN SOSIAL 260 261 Brief Summary of Corporate Social Responsibility and Environment Corporate Social Responsibility and Environment Program Implementation Report 259 Annual Report 2022 PT Telkom Indonesia (Persero) TbkBRIEF SUMMARY OF CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENT The Company runs its business by considering employee rights and positive impacts on other stakeholders and contributing to environmental preservation. Telkom implements good corporate governance through social responsibility and environment (TJSL) or corporate social responsibility (CSR). The implementation and reporting of the Company’s CSR program refer to generally accepted principles, including ISO 26000 Guidance for Social Responsibility, Sustainable Development Goals (SDGs), Global Reporting Initiative (GRI), and Sustainability Accounting Standards Board (SASB). Based on SEOJK No.16/POJK.04/2021 regarding the Form and Content of Annual Reports of Issuers or Public Companies, Telkom conveys information on implementing CSR in a Sustainability Report, which is separate from this Annual Report. The basis for preparing Telkom’s Sustainability Report is OJK Regulation No.51/POJK.03/2017 regarding implementing Sustainable Finance for Financial Services Institutions, Issuers, and Public Companies. Access to the 2022 Sustainability Report: In addition, as a BUMN, Telkom implements TJSL following the Regulation of the Minister of State-Owned Enterprises Number: PER-05/MBU/04/2021 regarding Social and Environmental Responsibility of State-Owned Enterprises as last amended by the Regulation of the Minister of State-Owned Enterprises Number: PER-6/MBU/09/2022 regarding Amendments to the Regulation of the Minister of State-Owned Enterprises Number: PER-05/MBU/04/2021 Regarding the Social and Environmental Responsibility Program for State-Owned Enterprises (“PM BUMN PER-6/2022”). PM BUMN PER-6/2022 Article 23 stipulates that reports on implementing the BUMN TJSL Program are included in the BUMN performance annual report (Annual Report). The report on the implementation of the SOE TJSL Program is an integral part of the Annual Report for the Corporate Social and Environmental Responsibility sub-chapter, while the Financial Report for the MSE Funding Program is presented as an attachment to this Annual Report. 260 PT Telkom Indonesia (Persero) TbkAnnual Report 2022CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTChapter 06CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENT PROGRAM IMPLEMENTATION REPORT CSR SUSTAINABILITY STRATEGY FRAMEWORK We are committed to implementing sustainable practices through our Social and Environmental Responsibility Programs, supported by good organizational governance practices. The Board of Directors also ensures oversight of implementing the Company’s social and environmental responsibility strategy and operations and encourages compliance to ensure program accountability. The Company’s sustainability program is also aligned with environmental, social, and governance (ESG) aspects and supports strategic business goals to maximize sustainability performance achievements. Telkom has carried out a sustainability strategy through the Social and Responsibility Environment Program (TJSL), which is realized through the Main Program “SUSTAIN”, which is in line with the achievement of the Sustainable Development Goals (SDGs) targets, with the following description: 1. Speed-up inclusive education and quality healthy life to support a prosperous and competitive nation, namely encouraging the realization of inclusive education and good quality of healthy life to help a profitable and competitive nation through digital infrastructure support and digital talent education to support increased literacy national digital. 2. Uplift sustainable infrastructure and encourage greeneration to increase climate change resiliency, namely supporting the realization of sustainable infrastructure and encouraging efforts to increase resilience to climate change through community empowerment and the deployment of digital environmental ecosystems. 3. Scale-up SME capacity and enlarge SME fund intensify economic growth, namely access to increasing access and capacity of Micro and Small Enterprises (SME) to financial services to expand employment, improve labor productivity and promote economic growth by intensifying channels’ quality and strengthening loan repayment capacity. 4. Transform excellent MSME platform to build up digital engine value creation, namely accelerating digital platform transformation for superior MSEs to form digital economic growth centers through increasing MSE digital literacy and digital market penetration and accelerating the utilization of BUMN houses. 5. Assure good TJSL governance, risk and compliance management reinforcement, namely maintaining accountability aspects of the management of the TJSL Program and aspects of the implementation of risk management and compliance through quality improvement and evaluation of governance, as well as overseeing audit processes and management reporting. 6. Intensify and communication for TJSL program impact through partnership/collaboration, namely activating the publication of the implementation of the TJSL program by prioritizing communication from aspects of the impact of the Telkom TJSL Program through multi-stakeholder partnerships/collaborations. branding impact strong 7. Nurture TJSL process digitization and data analytics to enable data-driven decision making, namely strengthening the transformation of digitization and digitalization of the management of the TJSL Program through information systems, utilizing data analytics and decision support systems in strategic decision making. improving and maintaining COMMITMENT AND POLICY ON SOCIAL AND ENVIRONMENTAL RESPONSIBILITY The legal basis for implementing Corporate Social and Environmental Responsibility activities refers to the Regulation of the Minister of State-Owned Enterprises Number: PER-05/MBU/04/2021 regarding Social and Environmental Responsibility of State-Owned Enterprises as last amended by the Regulation of the Minister of State-Owned Enterprises Number: PER-6/MBU/09/2022 regarding Amendments to the Minister of State-Owned Enterprises Regulation Number: PER-05/MBU/04/2021 regarding Social and Environmental Responsibility Programs for State-Owned Enterprises. In addition, the guidelines for implementing the TJSL Program refer to the Shareholders/Capital Owners Aspiration Letter No. S-787/ MB/10/2021 dated 8 October 2021 regarding Aspirations of Shareholders/Capital Owners for Compilation of the Company’s 2022 Work Plan and Budget. To carry out this obligation, Telkom has formulated regulations and policies as operational guidelines in implementing the TJSL Program, namely Regulations Board of Directors No. PD.703.00/r.00/HK200/CDC-A1000000/2021, regarding Social and Environmental Responsibility Programs. 261 Annual Report 2022 PT Telkom Indonesia (Persero) TbkFor Telkom, the TJSL program is one of the efforts to contribute to improving the welfare and quality of life of the community in a sustainable manner. Through the TJSL Program, Telkom carries out strategic steps in the social and environmental fields to support the Sustainable Development Goals (SDG), namely: 1. Social assistance in the framework of increasing 2. community welfare; Initiatives to improve the quality of nutrition and community food security; 3. Health assistance in the context of new normal 4. adaptation; Increasing digital inclusion as an effort to equalize access to quality education for the nation; 5. Digital certification program for vocational; 6. Digital competency improvement program for millennials; 7. Empowerment of groups with disabilities to increase 8. 9. the independence of vulnerable communities; Improving community hygiene through the provision of proper sanitation and clean water facilities; Increasing access to funding and capacity building for MSEs; 10. Utilization of digital platform solutions for MSEs; 11. Infrastructure to support mobility and local economic growth; 12. Development of independent assisted villages; 13. Sustainable settlement development programs; 14. Reduction of e-waste through recycling of digital devices; 15. Integrated waste management solutions and circular economy development; 16. Reducing the greenhouse gas effect through planting mangroves and coral reefs; 17. Handling climate change through restoration and conservation of fostered forests; 18. Strengthening institutional synergy to prevent violence and terrorism; 19. Student social project competition: Innovillage; and 20. Activate the Employee Volunteering Program through social project incubation (Ayo Bikin Nyata). Telkom seeks to encourage socially responsible behavior in all parts of the organization, including the parent company and Subsidiaries’ units, functions, and divisions. This is done by disseminating core values and developing a corporate culture for all TelkomGroup people. In addition, employee involvement was carried out in the Employee Volunteering Program (EVP) through an employee social project incubation with the Ayo Bikin Nyata (Let’s Make Real) program. Implementation of the Social and Environmental Responsibility Program (TJSL) is under the authority of the Community Development Center (CDC) unit, specifically publication of the implementation of the Company’s CSR Program is under the authority of the Corporate Communication Sub-Department. In carrying out the TJSL Program, Telkom encourages and ensures the active role of stakeholders in planning and formulating an integrated, directed, and measurable TJSL Program to create added value for the Company. TelkomGroup continues to strive to create shared values for stakeholders. 262 PT Telkom Indonesia (Persero) TbkAnnual Report 2022CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTChapter 06REALIZATION OF SOCIAL AND ENVIRONMENTAL RESPONSIBILITY (TJSL) PROGRAM 2022 In 2022, the total funds realized for implementing the TJSL Program amounted to Rp372.24 billion, an increase of 4.7% from 2021. The table for the realization of the implementation of the TJSL Program in 2022 is as follows: No. 1. 2. 3. 4. TJSL Pillars Realizations (Rp Billion) Social Pillar Economic Pillar Environmental Pillar Pillars of Law and Governance Total 72.99 259.24 37.57 2.43 372.24 263 Annual Report 2022 PT Telkom Indonesia (Persero) TbkTJSL REALIZATION PER PRIORITY SECTOR I. TJSL Program Focus on Education Sector No. 1. 2. 3. 4. Featured Program Descriptions SDGs Realizations Increasing digital inclusion as an effort to equalize access to the quality of the nation’s education Digital certification program for vocational Digital competency improvement program for millennials Empowerment of groups with disabilities to increase the independence of vulnerable communities Telkom’s efforts in helping schools and students to gain internet & computer access as well as improving ICT (Technology, Information, and Computer) skills for learning purposes in 3T (Foremost, Outermost, and Disadvantaged) areas, through the use of IndiHome fiber optic technology, Orbit, and Satellite Mangoesky. Telkom’s efforts to support the improvement of digital education competence in Indonesia through the implementation of a digital certification program for high school/vocational high school graduates. Telkom’s commitment to supporting digital education competence in Indonesia on an ongoing basis by holding a Digital Bootcamp for Millennials through the role of Rumah BUMN. Telkom assists in the form of digital application devices and software for disabilities as well as digital training and certification for persons with disabilities to increase the independence of vulnerable communities, which are carried out at several location points. 364 location points 18,200 Benefit recipients 4,917 registrants 1,040 participants passed certification 540 schools 25 provinces 516 participants 3 location points 326 persons with disabilities 8 location points Education Digitalization Inclusion Program Digital Certification Program for Vocational (DigiUp) Digital Competence Improvement Program for Millennials (Coding for Millennials) Empowerment of groups with disabilities in order to increase the independence of vulnerable communities 264 PT Telkom Indonesia (Persero) TbkAnnual Report 2022CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTChapter 06II. TJSL Program Focus on the Environmental Sector No. 1. 2. 3. 4. Featured Program Descriptions SDGs Realizations Reduction of e-waste through digital device recycling Integrated Waste Management Solutions and Circular Economy Development Reducing the effect of greenhouse gases through the planting of mangroves and coral reefs Handling Climate Change through restoration and conservation of fostered forests Telkom’s efforts in reducing the amount of electronic waste, through collection by means of donations, sorting, and repairing to be further distributed as an educational support tool for community groups in need. Telkom initiates the development of integrated waste management by piloting in Tuksongo Village, Borobudur, through processing household waste into economically valuable products so that it can generate social, environmental, and community economic benefits. Telkom has carried out the rehabilitation of coral reefs, cultivation of mangroves, and planting of trees/greening as an effort to reduce the greenhouse gas effect. 191 electronic devices 12 beneficiary communities 1 ton of managed waste generation 70 kg of generated waste that is recycled Rp7.5 million per month of circular economy income 31,550 mangrove plantings 550 coral reef substrates Efforts to deal with climate change through planting tree seeds scattered in several locations. 48,100 tree seedlings/50 ha 5 location points Eduvice: Electronic Waste Reduction Program through Digital Device Recycling Integrated Waste Management and Circular Economy Development - TPS Balkondes Tuksongo Mangrove and Coral Reef Cultivation Program Handling Climate Change through Fostered Forest Conservation 265 Annual Report 2022 PT Telkom Indonesia (Persero) TbkIII. TJSL Program Focus on Development of MSEs UMK funding and UMK Development Program grants are formulated through the 3C approach, namely access to capital, access to competence, and access to commerce. Through this program, Telkom is committed to strengthening the capacity of Fostered MSEs to contribute to national economic growth and are oriented towards creating added value for the Company. The realization of the 2022 MSE Development Program Implementation is as follows: No. 1. 2. 3. Featured Program Descriptions SDGs Realizations Increasing MSEs access to Financial Services (Access to Capital) Strengthening MSE Business Capacity through coaching of Go Modern and Go Digital (Access to Competence) Penetration of digital and global market access: online marketplace, and virtual expo (Access to Commerce) Telkom distributes the MSE Funding Program as working capital and increases the business capacity of the MSEs assisted. The loan is channeled to fostered MSEs engaged in various business sectors such as industry, trade, livestock, plantations, fisheries, agriculture, services, and others. MSE competency improvement programs through skills training and certification, including Halal and PIRT (Home Industry Products), and assistance in making NIB (Business Identification Number). In addition, the Access to Competence program is carried out by digitizing business activity solutions to increase the productivity of MSEs. Acceleration of promotion of UMK products through marketplaces and virtual expos to increase UMK market access for consumers without having to open physical outlets . Rp247.47 billion disbursement of PUMK funds 5,032 Fostered MSEs 15,261 UMK Go Modern 15,135 UMK Go Digital 1,362 Halal & PIRT Certifications 3,785 NIB UMK Go Online: 5,793 UMK Go Global: 21 Fostered UMK-Craft Category (Omah Wayang Maju Karya) Fostered UMK-Craft Category (diTUTA) Fostered UMK-Food Category (Yanies Cookies) Fostered UMK-Fashion Category (Ozzy Batik) 266 PT Telkom Indonesia (Persero) TbkAnnual Report 2022CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTChapter 06REALIZATION OF THE COMPANY’S CREATING SHARED VALUE PROGRAM Creating Shared Value (CSV) is a strategic step for the company to create social and economic value with the community. CSV implementation is expected to contribute to efforts to resolve socioeconomic problems and improve social welfare. Throughout 2022, the implementation of the TJSL Program with the CSV approach will be realized through 2 (two) programs, namely: Descriptions Social Benefit Business Benefit Realizations No. 1. CSV Programs Student social project competition: Innovillage The potential for increasing the socioeconomic benefits of the community at the location of the implementation of the social project Innovilage is a socio- digipreneurship incubation for students, collaborating with universities throughout Indonesia to provide solutions to community social problems, as well as a corporate digital talent crowdsourcing program. 2. Utilization of Digital Platforms for MSEs Telkom initiates the utilization of digitization solutions for MSME business activities through application & digital platform utilization and product commercialization through digital e-commerce. - Encouraging MSE digital literacy toward increasing user adoption of digital service utilization - Helping MSEs to innovate to develop business quickly to be applied independently - Encouraging MSEs to upgrade through the implementation of digitization - Telkom has an inventory of applicable digital solutions to be developed to market validation - Telkom has Company Digital Talent Pool profiling - Increase the number of subscribers and user traction on digital platforms for MSEs - Increase usage digital connectivity • 1,442 registrants • 402 social project proposals • 120 colleges • 150 social projects funded • 25 Provinces distributed social projects funded • 137 districts/ cities with social projects funded • 450 Digital Talent Candidates • 620 UMK Class Up • 14,930 active UKM Access users • 1,767 active users of mySooltan • 2,506 active PaDI UMKM users • 1,681 SSL High Speed Internet One of the Implementations of the Innovillage Social Project: Internet of Things for Hydroponic Management Socialization of Innovillage Participants to the Villagers of the Social Project Implementation Location Safe and Growing Business Training with Digital Marketing Socialization of the Use of the QREN Application for MSEs 267 Annual Report 2022 PT Telkom Indonesia (Persero) TbkCOLLABORATION TJSL PROGRAM REALIZATION Telkom also contributes to implementing the Collaborative TJSL Program with the Ministry of SOEs and others. Throughout 2022, the Collaborative TJSL Program has been implemented, which represents three focus priority areas, namely environment, education, and MSE development, including: Programs Program Realization SOEs Collaboration No. 1. SOEs Service Volunteer Program The BUMN Bakti Volunteer Program provides opportunities for all BUMN employees with the involvement of Telkom as many as four employees with locations spread in Surakarta, Karangasem, Banten, and Anambas. Apart from that, Telkom also participated by becoming the coordinator in the Lampung area, Way Kambas. The BUMN Bakti programs implemented in this area include: (1) Educational Assistance for the Rainbow Root Reading Gardens, (2) Assistance for Honey Farming MSMEs, (3) Environmental Assistance for Elephant Posts and Rawa Kibang. Telkom’s contribution to the Banten educational assistance collaboration program included the assistance of 3,000 school uniforms and a digital educational device package consisting of an all-in-one PC, projector, internet network, and screen projector. The implementation of this program is spread across three regencies and two cities in Banten Province. The BeriArti Festival through Rumah BUMN Batam, Telkom has initiated the MSME exhibition program with the realization of a total of 6,000 visitors. Telkom, Bukit Asam, PTPN VII Telkom, BRI, Bahana PUI, Angkasara Pura II, Danareksa, and PLN Telkom, Mandiri, BRI, BTN, BNI, Pertamina, PLN, Inalum, Pegadaian, and BUMN Foundation 2. Educational Assistance Collaborative Program 3 UMK Exhibition Collaboration Program Festival BeriArti: Collaboration for the UMK Exhibition Organizing Program Telkom Employees Selected to Become SOE Service Volunteers 2022 Implementation of the 2022 BUMN Volunteer Program in Lampung Distribution of Computer Packages in the Context of Educational Aid Collaboration Program in Banten 268 PT Telkom Indonesia (Persero) TbkAnnual Report 2022CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTChapter 06MSE FUNDING PROGRAM The MSE Funding Program (Access to capital) is a community economic empowerment program with the primary objective of expanding access to credit for MSEs through financing in the form of capital assistance loans with relatively low levels of administrative services. The management of the MSE Funding Program run by Telkom is also strengthened through the digitalization process, making it easier for MSEs to access loan applications, obtain information, and monitor installment history. Throughout 2022, the UMK Funding Program funds that have been distributed by Telkom amounted to Rp237.52 billion to 5,032 MSEs engaged in the industrial, trade, agriculture, livestock, plantation, fisheries, services, and other business sectors. The following is data on the realization of the number of Fostered Partners and the distribution of MSE Funding funds per business sector from 2020 to 2022. Table of Distribution of Funds for the MSE Funding Program and the Number of Telkom Fostered Partners No. Business Sectors Number of Fostered Partners Total Distributions (Rp Billion) 1. 2. 3. 4. 5. 6. 7. 8. Industry Trading Agriculture Farm Plantation Fishery Service Others Total Growth (%) 2022 2021 2020 2022 2021 2020 1,012 2,836 112 140 49 104 760 19 5,032 (6.29) 1,095 2,929 110 146 50 117 847 76 5,370 5.48 1,043 2,795 100 168 45 99 807 34 5,091 (8.15) 48.98 128.50 6.02 6.98 2.51 4.93 38.89 0.71 47.12 118.75 5.07 6.27 2.32 4.91 35.83 3.01 45.10 112.74 4.46 7.38 2.02 4.81 33.11 0.93 237.52 223.28 6.37 6.04 210.55 (12.53) The number of UMK Funding Program Foster Partners in 2022 decreased by 6.29% compared to 2021, while the amount of funds disbursed in 2022 increased by 6.37%. 269 Annual Report 2022 PT Telkom Indonesia (Persero) TbkFUND DISTRIBUTION EFFECTIVENESS OF MSE FUNDING PROGRAM In 2022, Telkom targets the effectiveness of the distribution of PUMK Program funds at 90% of the available funds, with the realization reaching 95.11% (score 3). This achievement has been consistent in the last three years as a form of the company’s commitment to empowering the national MSE sector. Table of Effectiveness of Distribution of Telkom Partnership Program Funds Partnership Program Unit 2022 2021 2020 Amount of Funds Disbursed Amount of Funds Available Level of Effectiveness of Funding Funding Effectiveness Level Score Rp billion 237.52 223.28 221.66 Rp billion 238.35 231.92 225.58 % 95.11 96.58 98.27 3 3 3 MSE FUNDING PROGRAM REFUND COLLECTIBILITY The realization of collectibility of refunds for the Telkom UMK Funding Program in 2022 reached 76.07% (score 3), with a collectibility target of 70%. This performance has been relatively consistent in the last three years, as a form of the company’s success in managing loan funds for the UMK Funding Program. Partnership Program Refund Collectibility Table Collectibility Collectibility Percentage Score Unit % 2022 2021 2020 76.07 74.82 74.03 3 3 3 270 PT Telkom Indonesia (Persero) TbkAnnual Report 2022CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTChapter 06CAPACITY BUILDING OF FOSTERED MSES Types of UMK Development Programs Training • Report training simple finance • Offline Marketing Training • MSME Skills Training Product Packaging • Product photo assistance • Packaging grants product Digitization • Introduction to Digitalization Business and Marketplace • Digital Training Marketing UMK DEVELOPMENT PROGRAMS Networking • Business Matching • Benchmark • Local Sharing (local hero/ plasma/Podcast) Online Onboarding • Marketplace Optimization • Advanced Digital Marketing Training • B2B Marketing Training Legal Assistance • NIB Registration at OSS • SPP-IRT/Halal/BPOM/IPR Licensing Exhibition • Curation • Offline Exhibition Event (Local/ Regional/International) To support MSEs’ efforts to upgrade, Telkom has developed the capacity of MSEs through the Go Modern and Go Digital programs, expanding market access through the Go Online and Go Global programs, and other activities to increase the productivity of the assisted MSEs. One of Telkom’s efforts to increase the capacity of Fostered MSEs is to participate in the Dubai Expo 2022 exhibition, WSBK, and Mandalika MotoGP 2022, as well as the Proudly Made in Indonesia National Movement Program 2022 (Program Gerakan Nasional Bangga Buatan Indonesia 2022). This exhibition presents various products from Telkom’s Leading MSEs such as fashion, food, and crafts, which are the mainstay products of Indonesia’s creative economy. In addition, the UMK Development Program activities are carried out by increasing the competence of UMK, including by holding mindset, skill-set, tool-set training, as well as assisting UMK in obtaining certification and business licenses. The achievements of the UMK Development Program are presented in the following table: Table of Achievements of the 2022 UMK Development Program No. Program Type Achievement of Fostered UMK 1. 2. 3. 4. 5. 6. 7. 8. 9. UMK Go Modern UMK Go Digital UMK Go Online UMK Go Global Certifications (Halal and PIRT) NIB Assistance Mindset Training Skillset Training Toolset Training 15,261 15,135 5,793 21 1,362 3,785 102 1,284 239 271 Annual Report 2022 PT Telkom Indonesia (Persero) TbkDISTRIBUTION EFFECTIVENESS OF SOCIAL AND ENVIRONMENTAL RESPONSIBILITY PROGRAMS In setting the 2022 target, Telkom is expected to be able to distribute 100% of the TJSL program from the budget allocation of Rp125 billion. The realization of the TJSL Program in 2022 is Rp124.78 billion or 99.82% of the budget allocation for that year. Table of Effectiveness of Telkom’s Social, Economic and Environmental Empowerment Program Distribution of Funds Community Development Program Unit 2022 2021 2020 Amount of Funds Disbursed Fund Allocation Available Level of Effectiveness of Funding Rp billion 124.78 124.76 124.73 Rp billion 125 125 124.74 % 99.82 99.80 99.99 BUDGET ALLOCATION OF SOCIAL AND ENVIRONMENTAL RESPONSIBILITY PROGRAM In accordance with the regulations of the Ministry of SOEs, the sources of funds for the TJSL Program are part of the budget, which is calculated as the Company’s costs and a provision for a portion of the Company’s net profit in the previous fiscal year. The total TJSL budget increased from Rp345 billion in 2021 to Rp355 billion in 2022. The increase in the budget allocation for the TJSL program was due to an additional 4.5% budget allocation for the MSE Funding Program due to the rise in the number of available funds. Telkom Social and Environmental Responsibility Program Budget Allocation Table No. 1. 2. Program Type MSE Funding Program Social and Environmental Responsibility Program Total Number Changes 2022 2021 2020 % Rp billion 4.5 - 4.5 230 125 355 220 125 345 225.58 124.74 350.32 272 PT Telkom Indonesia (Persero) TbkAnnual Report 2022CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTChapter 06FINANCIAL STATEMENT Statement of Financial Position (Rp) ASSETS Current Assets Cash and Cash Equivalents Loan to Foster Partners net of allowance for impairment losses of Rp84,929,581,437 Total current assets Non current assets Other assets Troubled Loan net of allowance for impairment losses of Rp289,951,899,219 Total non current assets TOTAL ASSETS LIABILITIES AND NET ASSETS LIABILITIES Current Liabilities Payables and other current liabilities Overpayment of Installments TOTAL LIABILITIES NET ASSETS Without restrictions from resource provider With restrictions from resource provider TOTAL NET ASSETS TOTAL LIABILITIES DAN NET ASSETS 11,599,419,605 293,000,450,534 304,599,870,139 - - 304,599,870,139 380,916,088 203,691,711 584,607,799 304,015,262,340 - 304,015,262,340 304,599,870,139 273 Annual Report 2022 PT Telkom Indonesia (Persero) TbkStatement of Comprehensive Income (Rp) WITHOUT RESTRICTIONS FROM RESOURCE PROVIDER REVENUES Loan Administration Service Income Interest Income Other Income TOTAL REVENUES INCOME (EXPENSES) Recovery/(Allowance) for Impairment of Loan Other Income/(Expenses) TOTAL INCOME/(EXPENSES) SURPLUS WITH RESTRICTIONS FROM RESOURCE PROVIDER OTHER COMPREHENSIVE INCOME TOTAL COMPREHENSIVE INCOME NET ASSETS WITHOUT RESTRICTIONS FROM RESOURCE PROVIDER Statement of Changes in Net Assets (Rp) Beginning balance Surplus Ending balance Other comprehensive income Total WITH RESTRICTIONS FROM RESOURCE PROVIDER TOTAL NET ASSETS 15,482,696,576 301,902,379 46,014,976 15,830,613,931 4,422,134,092 190,366,869 4,612,500,961 20,443,114,892 - - 20,443,114,892 283,572,147,448 20,443,114,892 304,015,262,340 - 304,015,262,340 - 304,015,262,340 274 PT Telkom Indonesia (Persero) TbkAnnual Report 2022CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTChapter 06Statement of Cash Flows (Rp) OPERATING ACTIVITIES Loan repayments from Foster Partners Payment Loan Acceptance of Loan Administration Services Interest Income Distribution of Loan Funds to Development Partners Partnership Development Fund Partnership Development Fund Refund Return of Excess Installments to Fostered Partners NET CASH FLOWS RECEIVED TO OPERATING ACTIVITIES INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR 226,749,898,042 (372,611,905) 15,236,139,190 301,902,379 (237,524,200,000) - - (236,788,598) 4,154,339,108 4,154,339,108 7,445,080,497 11,599,419,605 DIGITALIZATION OF MSE MANAGEMENT In 2021, Telkom digitized the management of the MSE Funding Program, starting from MSE capital assistance to monitoring loan repayments through the implementation of UKM Access. Through the UKM Access application, it is possible to integrate the MSE management system as a whole, including with all TelkomGroup service solutions for the MSE segment, to make the process of submitting the Telkom PUMK Program for Fostered MSEs candidates easier, faster, and paperless. Throughout 2022, Telkom will implement a comprehensive enhancement system based on Sustainable Development Goals (TPB/SDGs). Furthermore, to improve the customer experience for MSEs and managers, Telkom has re- engineered the UKM Access application to become UKM Access Reborn. It divided applications specifically for TJSL Managers through the New Smart Survey and for Development Partners through UKM Access Reborn. In addition, to add virtual account installment payment options, Telkom is collaborating with Bank Syariah Indonesia (BSI) with Development Partners in Aceh City as a pilot project. Telkom also migrated the CDC Dashboard, which initially used the Extract Transform Load (ETL) mechanism to become a machine-to-machine mechanism through the Application Programming Interface (API), which was integrated with SIMPKBL in real-time. In early 2022, to create a comprehensive profile of Telkom-assisted SMEs based on personal data and business data profiles, Telkom CDC developed the One Data UKM platform. On the other hand, through One UKM Data, it is hoped that it will become a decision-maker tool for corporate businesses, especially for offering TelkomGroup products that are right for SMEs. 275 Annual Report 2022 PT Telkom Indonesia (Persero) TbkCSR ACTIVITIES SUCCESS PARAMETERS Telkom measures the success of TJSL Program activities through community satisfaction as beneficiaries of the TJSL Program using the community satisfaction Index (IKM) and Net Promoter Score (NPS) methods. In addition, to measure the impact of the benefits of the CSR program, an assessment is carried out using the Social Return on Investment (SROI) method. In 2022, the Company measured the CSR (TJSL) Index with an achievement of 83.08%. This achievement illustrates that the CSR activities carried out by the Company are in the excellent category or at a substantial level and positively influence the Company’s image. This is due to the increased perception of the assisted MSEs/beneficiaries and the surrounding community towards Telkom’s CSR program, especially in the dimensions of citizenship, governance, and workplace. Meanwhile, the Net Promoter Score (NPS) is used to measure the success of social responsibility toward society. With the NPS, Telkom identifies people’s motivation to recommend or promote Telkom’s products and services. The 2022 NPS measurement result of 55.53% shows a positive value from the public’s point of view in recommending Telkom products. This increase indicates community motivation in advocating or promoting Telkom’s products and services. The results of the 2022 NPS measurement show a positive value from the community’s point of view in recommending the use of Telkom products. Then, Social Return on Investment (SROI) is used to measure the beneficial impact of implementing the TJSL Program. Throughout 2022, 3 priority programs have been calculated in Environment, Education, and MSE Development with an average value above 1. This indicates that every rupiah that has been socially invested in the TJSL Program provides returns in the form of more beneficial impacts of more than 1 rupiah. AWARDS OF TJSL PROGRAM 2022 Date Events Awards March 23 BUMN Corporate Communications and Sustainability Summit (BCOMSS) 1st Place – CID Bidang Pendidikan 1st Place – SME Development 1st Place – Creating Shared Values 1st Place – TJSL Officer of The Year Providing Agencies/ Institutions Ministry of State-Owned Enterprises (BUMN) March 30 Top Business July 18 Info Brand & Trans n Co August 15 Bisnis Indonesia Award August 26 Nusantara CSR Award Top CSR Award 2022 #Star5 & Top Leader on CSR Commitment 2022 Top CSR Award Best of CSR Concept. CSR Impact and CSR Donation Value Top CSR of The Year Bisnis Indonesia Award The most Consistent Digital Telco Company in Implementing Integrated CSR Bisnis Indonesia Best Program Peningkatan Mutu Pendidikan La Toffi Scholl of CSR September 15 HR Online Asia Pacific Gold Medalist on CSR Strategy HR Excellence Award 276 PT Telkom Indonesia (Persero) TbkAnnual Report 2022CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTChapter 06Date Events Awards Providing Agencies/ Institutions November 4 United Nations 1st Runner Up – Community Engagement & Partnership Women’s Empowerment Principles (WEPs) Awards November 11 Anugerah CSR IDX Channel Award 1st Place – Economic Development Initiatives IDX Channel November 22 Indonesia SDGs Award (ISDA) Best of CSR Concept. CSR Impact and CSR Donation Value Corporate Forum for CSR Development (CFCD) November 23 Taiwan Institute for Sustainable Energy Best Practice – Global Sustainability Program Global Corporate Sustainability Awards December 1 SDG Action Award 3rd Place – Pelaku Usaha Besar Ministry of National Development Planning (Bappenas) 277 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk07 APPENDIX 278 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIX07 APPENDIX 280 Appendix 1 : Glossary 285 Appendix 2 : List of Abbreviations 289 Appendix 3 : Cross Reference to the Circular Letter by the Financial Services Authority No. 16/SEOJK.04/2021 310 Appendix 4 : Affiliate Transactions List 279 Annual Report 2022 PT Telkom Indonesia (Persero) TbkAPPENDIX 1: GLOSSARY Glossary Description 2G 3G 4G/LTE 5G ADS AKHLAK Application Development Platform ARPU The abbreviation for second-generation: relating to or using a technology that gave mobile phone users improved features and allowed people to send text messages (SMS). The generic term for third generation mobile telecommunications technology. 3G offers high speed connections to cellular phones and other mobile devices, enabling video conference and other applications requiring broadband connectivity to the internet. A fourth generation super fast internet network technology based on IP that makes the process of data transfer much faster and more stable. A fifth generation of cellular mobile communications which targets high data rate, reduced latency, energy saving, cost reduction, higher system capacity and massive device connectivity. American Depositary Share (also known as an American Depositary Receipt, or an “ADR”), a certificate traded on a U.S. securities market (such as the New York Stock Exchange) representing a number of foreign shares. Each of our ADS represents 100 shares of common stock. Defined as Amanah (trustworthy), Kompeten (competent), Harmonis (harmonious), Loyal (loyal), Adaptif (adaptive), and Kolaboratif (collaborative) values that underlie the behavior of SOE personnel. Defined as an application creation platform which refers to a set of technologies that can assist companies in designing, developing, and implementing these applications. Average Revenue per Unit, a measure used primarily by telecommunications and network companies that expresses how much revenue an average user generates. It is defined as the total revenue from a particular service divided by the number of users of that service. Artificial Intelligent Defined as computer program developed by human on a system so that they can think like human and can complete certain task by processing and recognizing data pattern. B2B (Business-to- business) B2C (Business-to- customer) Backbone The sale of products or services provided by one business and intended for another business, not to consumers. A business that provides services or sales of goods or services to individual or group of consumers directly. telecommunications network consisting of The main switching facilities connecting several network access nodes. The transmission links between nodes and switching facilities include microwave, submarine cable, satellite, fiber optic and other transmission technology. transmission and Balanced Scorecard One of the tools used by managers to measure the performance of a business seen from four perspectives. The four perspectives consist of a financial perspective, a customer perspective, an internal business process perspective, and a growth and learning perspective. Bandwidth The capacity of a communication link. Bapepam-LK Badan Pengawas Pasar Modal dan Lembaga Keuangan, or the Indonesian Capital Market and Financial Institution Supervisory Agency, the predecessor to the OJK. Big Data Platform Defined as a large, varied, and dynamic data processing platform. Broadband A signaling method that includes or handles a relatively wide range (or band) of frequencies. BTS SOE/BUMN Base Transceiver Station, equipment that transmits and receives radio telephony signals to and from other telecommunication systems. State-Owned Enterprise/Badan Usaha Milik Negara is a government-owned company, state- owned company, state-owned entity, state-owned company, public-owned company, or parastatal which is a legal entity formed by the Government to conduct commercial activities on behalf of the Government as the owner. 280 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIXGlossary CFU Description Customer Facing Unit, similar to a strategic business unit, which is an organizational unit that interacts with certain customer segments, with responsibility for profit and loss respectively, and is responsible for restructuring subsidiaries and business portfolios that are relevant to certain business segments that being its responsibility. Cloud Computing The practice of using a network of remote servers hosted on the internet to store, manage, and process data, rather than a local server or a personal computer. Cloud Hybrid Co-Location The storage infrastructure that uses a combination of on-premises storage resources with a public cloud storage provider. Telecommunication infrastructure leasing service that owned existing sites after the first customer or Anchor Tenant, which offers the space in telecommunication infrastructure to install their equipments. Common Stock Our Series B shares having a par value of Rp50 per share. CPE Cyber Attack Cyber Security Data Center Customer Premises Equipment, any handset, receiver, set-top box or other equipment used by the consumer of wireless, fixed line or broadband services, which is the property of the network operator and located on the customer’s premises. A cyber attack is deliberate of the exploitation of computer systems, technology-dependent enterprises, and networks. Cyber attacks use malicious code to alter computer code, logic or data, resulting in disruptive consequences that can compromise data and lead to cybercrimes, such as information and identity theft. An effort to protect information from cyber attacks. Cyber attacks in information operations are any kind of deliberate action to disrupt the confidentiality, integrity, and availability of information. The facility composed of networked computers, storage systems and computing infrastructure that organizations use to assemble, process, store and disseminate large amounts of data. Data Management Platform Defined as a platform that manages data, such as collecting, organizing, and activating data from various online and offline sources, for the purposes of advertising and personalization initiatives. Deep-Link Diarium Digitization The use of a hyperlink that links to a specific, generally searchable or indexed, piece of web content on a website, rather than the website’s home page. A tool or media that used by PT Telkom Indonesia (Persero) Tbk to distribute the information about internal company. Process of converting non-digital information to digital. If a company uses this digital information to increase business, generate revenue, or simplify some business processes, it is called digitization. The result of the digitization and digitization process is called digital transformation. e-Commerce Electronic commerce, the buying and selling of products or services over electronic systems such as the internet and other computer networks. e-Procurement Electronic procurement, the process of procuring goods and services carried out online. EBITDA Adjusted EBITDA is defined as earnings before interest, tax, depreciation, and amortization. Adjusted EBITDA and other related ratios in this Annual Report serve as additional indicators on our performance and liquidity, which is a non-GAAP financial measure. Edutainment Education and entertainment. Face Recognition The technology capable of matching a human face from a digital image or a video frame against a database of faces, which is typically employed to authenticate users through ID verification services, and works by pinpointing and measuring facial features from a given image. Fiber Optic Cables using optical fiber and laser technology through which modulating light beams representing data are transmitted through thin filaments of glass. 281 Annual Report 2022 PT Telkom Indonesia (Persero) TbkGlossary Fixed Wireline Gateway Gbps GHz Description A fixed wire or cable path linking a subscriber at a fixed location to a local exchange, usually with an individual phone number. A peripheral that bridges a packet-based network (IP) and a circuit-based network (PSTN). Gigabit per second, the average number of bits, characters, or blocks per unit time passing between equipment in a data transmission system. This is typically measured in multiples of the unit bit per second. Gigahertz, The hertz (symbol Hz), is the international standard unit of frequency defined as the number of cycles per second of a periodic phenomenon. GraPARI Telkomsel service network. Graphical Processing Unit (GPU) Farming GSM High Throughput Satellite Defined as a graphics processing usage allocation system. Global System for Mobile Telecommunication which is the European standard for digital cellular telephones. Communication satellite that provides more throughput than conventional communication satellites (Fixed Satellite Service or FSS), which refers to a significant increase in capacity when using the same amount of orbital spectrum from 2 to more than 100 times as much capacity as the classic FSS. Hyperscale Data Center Data center that can accommodate 5,000 or more servers and has an area of more than 10,000 square feet (over 900 square meters). Homes Passed A connection with access to fixed-line voice, IPTV and broadband services. In-memory database Defined as database processing performed on memory storage media. Insider Trading The trading of a public company’s stock or other securities (such as bonds or stock options) by individuals with access to nonpublic information about the company. In various countries, some kinds of trading based on insider information is illegal. Interconnection The physical linking of a carrier’s network with equipment or facilities not belonging to that network. Internet of Things Computing concept that describes the idea of everyday physical objects being connected to the internet and being able to identify themselves to other devices and send and receive data. Intranet IP IPO IP Transit IPTV ISP Latency SIM cards A computer network based on TCP / IP protocols such as the internet, however the usage is restricted or closed and only certain people or users can log on and use the intranet network. Internet Protocol, the method or protocol by which data is sent from one computer to another on the internet. Initial Public Offering, the first sale of stock by a Company to the public. The large-scale interconnection service to the global internet with reliable performance, bundled with extensive features, Block IP with BGP routing, and Autonomous System (AS) owned by clients. Internet Protocol Television, a system through which television services are delivered using the Internet Protocol suite over a packet-switched network such as the internet, instead of being delivered through traditional terrestrial, satellite signal, and cable television formats. Internet Service Provider, an organization that provides access to the internet. Delay in network communications that indicating the time it takes for data to transfer across the network. Subscriber Identity Module card is a stamp-sized smart card placed on a mobile phone that holds the key to the telecommunication service. Leased Line A dedicated telecommunications transmissions line linking one fixed point to another, rented from an operator for exclusive use. 282 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIXGlossary Mbps Metro Ethernet Description Megabit per second, a measure of speed for digital signal transmission expressed in millions of bits per second. Bridge or relationship between locations that are apart geographically. This network connects LAN customers at several different locations. MHz Megahertz, a unit of measure of frequency equal to one million cycles per second. Mobile Broadband The marketing term for wireless internet access through a portable modem, mobile phone, USB Wireless Modem or other mobile devices. Multimedia Data Extraction Defined as advances in web analytics, news, social media crawlers (such as text, sound, and images) that are integrated with analytics engines. Network Access Point A public network exchange facility where ISPs connected in peering arrangements. OJK OTT Postpaid PoP Prepaid PSA 62 PSTN Pulse Otoritas Jasa Keuangan, or the Financial Services Authority, the successor of Bapepam-LK, is an independent institution with the authority to regulate and supervise financial services activities in the banking sector, capital market sector as well as a non-bank financial industry sector. Over The Top, an umbrella term commonly used to refer to the delivery of audio, video and other media over the internet without the involvement of multi-system operators in the control or distribution of content. A type of communication service where customers can use telecommunications services first and then pay for them. Point of Presence. An access point, location or facility that connects to and helps other devices establish a connection with the Internet, which may consist of a router, switches, servers and other data communication devices. We operate two points of presence, namely main and primary points of presence. The "main point of presence" is the main transportation network that contains traffic aggregates within a country. The "primary point of presence" is a collection of major regional transportation networks that have the ability to create a service. A type of communication service where the customer makes an advance payment in order to use telecommunications services. Audit Standard Statement No. 62 (PSA 62) is a statement issued by the Indonesian Accounting Association which states that in conducting audits of financial statements of government entities or other recipients of government financial assistance which conducts stock offers through the capital market, auditors must comply with the provisions of the Capital Market Law. Public Switched Telephone Network, a telephone network operated and maintained by Telkom. The unit in the calculation of telephone charges. Reverse Stock The compression of shares to become a smaller amount of shares using higher value per share. RMJ GMS Regional Metro Junction, an inter-city cable network installation service in one regional (region/ province). General Meeting of Shareholders, which may be an Annual General Meeting of Shareholders (“AGMS”) or an Extraordinary General Meeting of Shareholders (“EGMS”). Satellite Transponder Radio relay equipment embedded in a satellite that receives signals from earth and amplifies and tra nsmits the signal back to the earth. Security Insight Platform Self-Assessment SKKL Defined as a platform for generating insights on cyber security. Guidelines are used as a form of accountability for collegially assessing the performance of the Board of Commissioners. Sistem Komunikasi Kabel Laut/Submarine Communications Cable System, a cable laid on the sea bed between land-based stations to carry telecommunication signals across stretches of ocean. 283 Annual Report 2022 PT Telkom Indonesia (Persero) TbkGlossary Description SKSO SMS SOA SOX Section 404 Dwiwarna Share Earth Station Stock Split Switching Sistem Komunikasi Kabel Laut/Submarine Communications Cable System, a cable laid on the sea bed between land-based stations to carry telecommunication signals across stretches of ocean. Short Messaging Service, a technology allowing the exchange of text messages between mobile phones and between fixed wireless phones. Sarbanes-Oxley Act, effective from July 30, 2002, also known as the Public Company Accounting Reform and Investor Protection Act and Corporate and Auditing Accountability and Responsibility Act. SOX Section 404 (Sarbanes-Oxley Act Section 404) mandates that all publicly-traded companies must establish internal controls and procedures for financial reporting and must document, test, and maintain those controls and procedures to ensure their effectiveness. The Series A Dwiwarna Share have a par value of Rp50 per share. The Dwiwarna Share is held by the Government and provides special voting rights and veto rights over certain matters related to our corporate governance. Antennas and related equipment used to receive or transmit telecommunication signals via satellites. Splitting the number of shares to increase the shares volume using a lower value per share. A mechanical, electrical or electronic device that opens or closes circuits, completes or breaks an electrical path, or selects paths or circuits, used to route traffic in a telecommunications network. Fixed Line Fixed wireline and fixed wireless. TPE A normalized way to refer to transponder bandwidth which simply means how many transponders would be used if the same total bandwidths used only 36 Mt transponder (1 TPE = 36 MHz). Treasury Stock Stock/share which bought back/repurchased by the issuing company. USO Universal Service Obligation, the service obligation imposed by the Government on all telecommunications services providers for the purpose of providing public services in Indonesia. Various standalone and embedded AI capabilities Defined as various kinds of artificial intelligence (AI) capabilities, both stand-alone and combined with other devices, such as Indonesian Natural Language Processing (NLP), Sentiment Analysis, Text to Speech, Speech to Text, Image Recognition for Objects Detection/Counting/Segmentation, Machine/Deep Learning, Facial Recognition, and Robotics Process Automation (RPA). VoIP VPN VSAT Vulnerability Management Platform Whistleblower Voice over Internet Protocol, a means of sending voice information using the IP. Virtual Private Network, a secure private network connection, built on top of publicly-accessible infrastructure, such as the internet or the public telephone network. VPN typically employs some combination of encryption, digital certificates, strong user authentication and access control to secure the traffic they carry. VPN provides connectivity to many machines behind a gateway or firewall. Very Small Aperture Terminal, a relatively small antenna, typically 1.5 to 3.0 meters in diameter, placed in the user’s premises and used for two-way communications by satellite. It is a platform for managing cyber security vulnerabilities such as malware, viruses or hacking. The term for employees, former employees or workers, members of institutions or organizations who report actions that are considered to violate the regulation to the authorities. 284 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIXAPPENDIX 2: LIST OF ABBREVIATIONS Keywords Description Keywords Description A2P ACGS ACHI ACMF ADS AGMS Application to Person ASEAN Corporate Governance Scorecard AKHLAK Culture Health Index ASEAN Capital Market Forum American Depositary Shares Annual General Meeting of Shareholders AKHLAK Amanah Kompeten Harmonis Loyal Adaptif Kolaboratif AO AP API ARPU ASEAN ASKALSI ATM B2B B2C Application Owner Administered Prices Application Programming Interface Average Revenue per Unit Association of Southeast Asian Nations Asosiasi Kabel Laut Seluruh Indonesia or Indonesian Submarine Cable Association Automated Teller Machine Business-to-Business Business-to-Consumer BAKAMLA Badan Keamanan Laut or Maritime Security Agency BAM Business Account Manager Bapepam-LK Badan Pengawas Pasar Modal dan Lembaga Keuangan or Financial Institution Supervisory Agency BBM BCM BCP BOC BOD BPJS BPK BPO BPS Fuel oil Business Continuity Management Business Continuity Plan Board of Commissioners Board of Directors Badan Penyelenggara Jaminan Sosial or Social Insurance Administration Organization Audit Board of the Republic of Indonesia Business Process Outsourcing Badan Pusat Statistik or Central Bureau of Statistics BSCS BTS CAGR CAPEX CDC CDIO CDN CEO CFO CFRO CHCO CITO COCA CONS COSO Batam-Singapore Cable System Base Transceiver Station Compund Annual Growth Rate Capital Expenditure Community Development Center Chief Digital & Innovation Officer Content Delivery Networks Chief Executive Officer Chief Financial Officer Chief Financial & Risk Officer Chief Human Capital Officer Chief Information Technology Officer Calendar of Culture Action Consumer Service Committee of Sponsoring Organizations of the Treadway Commission COVID-19 Corona Virus Disease 19 CPaaS CPE CSLS CRM CSA CSR CSS DB Communication Platform as a Service Customer Premises Equipment Customer Satisfaction and Loyalty Survey Customer Relationship Management Control Self Assessment Corporate Social Responsibility Corporate Strategic Scenario Digital Business DC Co Data Center Co DRP DSL DTH EBIS Disaster Recovery Plan Digital Subscriber Line Direct to Home Enterprise & Business Service Edutainment Education and Entertainment EGM ERM ESG ESOP Executive General Manager Enterprise Risk Management Environmental, Social, and Governance Employee Stock Ownership Program 285 Annual Report 2022 PT Telkom Indonesia (Persero) TbkKeywords Description Keywords Description ETL EWR EY FHCI FMC Extract Transform Load Early Warning Report Ernst & Young Forum Human Capital Indonesia Fixed & Mobile Convergence FRAMES Fraud Management System FRM Gbps GCG GCT GDP GHz GMS GRI GRO GSD GSM Finance & Risk Management Gigabit per second Good Corporate Governance Group Corporate Transformation Gross Domestic Product Gigahertz General Meeting of Shareholders Global Reporting Initiative Government Relationship Officer Graha Sarana Duta Global System for Mobile Communication HAKORDIA Hari Anti Korupsi Dunia or World Anti- Corruption Day HAM HCM HD HR HSDC HTS IA IAI IAS ICOFR ICT IDN IDX/BEI IFAS Hak Asasi Manusia or Human Rights Human Capital Management High Definition Human Resource HyperScale Data Center High Throughput Satellite Internal Audit Ikatan Akuntan Indonesia or Institute of Indonesia Chartered Accountants International Accounting Standards Internal Control over Financial Reporting Information and Communications Technology Indonesia Digital Network Indonesia Stock Exchange/Bursa Efek Indonesia Indonesian Financial Accounting Standard IFRS IGG IHSG IIA IICD IKM IMF IMS IOH IoT IPLC IPO IPR ISAK ISO ISP IT ITDRI International Financial Reporting Standard Indonesia Global Gateway Indeks Harga Saham Gabungan or Composite Stock Price Index Institute of Internal Auditor Indonesia Institute for Corporate Directorship Indeks Kepuasan Masyarakat or Community Satisfaction Index International Monetary Fund Integrated Management System Indosat Ooredoo Hutchsion Internet of Things International Data Center or International Connectivity Initial Public Offering Intellectual Property Rights Interpretasi Standar Akuntansi Keuangan or Interpretation of Statements of Financial Accounting Standards International Organization for Standardization Internet Service Provider Information Technology Indonesia Telecommunication and Digital Research Institute JaKaLaDeMa Jawa Kalimantan Sulawesi Denpasar Mataram Jo. KAP KDK KEKD KEMPR Juncto Kantor Akuntan Publik or Public Accountant Firm Komite Disiplin Karyawan Ethics and Compliance & Discipline Committee Komite Evaluasi dan Monitoring Perencanaan dan Risiko or Committee for Planning and Risk Evaluation and Monitoring KEU Keuangan or Finance 286 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIXKeywords Description Keywords Description KIPAS KNKG KNR KPI KPK KPPU KTI kWh LED LSE LTE LTI M&A MDI MDM MNO MSOP MSE MTN MTTI MTTR MVNO NAP NIB NITS NPS NPWP Komunitas Provokasi Aktivasi or Community Cultural Activation Provocation Komite Nasional Kebijakan Governance or Governance Policy National Committee Komite Nominasi dan Remunerasi or Committee for Nomination and Remuneration Key Performance Indicator Komisi Pemberantasan Korupsi or Corruption Eradication Commission Komisi Pengawasan Persaingan Usaha or Commission for the Supervision of Business Competition Kawasan Timur Indonesia or Eastern Indonesia KiloWatt Hour Light Emitting Diode London Stock Exchange Long Term Evolution Long Term Incentive Merger & Acquisition Metra Digital Investama Metra Digital Media Mobile Network Operator Management Stock Ownership Program Micro and Small Enterprise Medium-Term Notes Mean Time to Install Mean Time to Repair Mobile Virtual Network Operator Network Access Point Business Identification Number Network & IT Solution Net Promoter Score Nomor Pokok Wajib Pajak or Tax Identification Number NSP Personal Dialing Tone NYSE OECD OJK OLO OTT PaDi PAYU New York Stock Exchange Organization for Economic Co-operation and Development Otoritas Jasa Keuangan or Financial Services Authority Other Licensed Operator Over the Top Pasar Digital Pay As You Use PEFINDO PT Pemeringkat Efek Indonesia PKBL PN POJK PoP POTS PPID PPKM PPMP PSAK PSTN QMS QoS RJPP RKAP ROA ROE RPT SaaS Program Kemitraan dan Bina Lingkungan or Partnership and Community Development Program Perusahaan Negara or State Company Peraturan Otoritas Jasa Keuangan or Regulation of Indonesia Financial Services Authority Point of Presence Plain Old Telephone Service Pejabat Pengelola Informasi dan Dokumentasi or Information Management and Documentation Officer Enforcement of Restrictions on Community Activities Defined Benefit Pension Plan Pernyataan Standar Akuntansi Keuangan or Statements of Financial Accounting Standards Public Switched Telephone Network Quality Management System Quality of Service Rencana Jangka Panjang Perseroan or Company’s Long Term Plan Rencana Kerja Anggaran dan Pendapatan or Budgeting and Revenue Work Plan Return on Asset Return on Equity Related Party Transaction Software as a Service 287 Annual Report 2022 PT Telkom Indonesia (Persero) TbkKeywords Description Keywords Description SAK SASB SDG Standar Akuntansi Keuangan or Financial Accounting Standard Sustainability Accounting Standards Board Sustainable Development Goals SD-WAN Software Defined-Wide Area Network SEA-ME-WE 5 Southeast Asia-Middle East -Western Europe 5 SEA-ME-WE 6 Southeast Asia-Middle East -Western Europe 6 SEA-US Southeast Asia-United States SEC SEM SEOJK SFH SGM SIUP SKKL SKSO SLI SMAP SMB SME SMK Securities and Exchange Commission Structural Equation Modeling Surat Edaran Otoritas Jasa Keuangan or Circular Letter of Indonesia Financial Service Authority School from Home Senior General Manager Surat Izin Usaha Perdagangan or Business Permit Sistem Komunikasi Kabel Laut or Submarine Communications Cable System Sistem Komunikasi Serat Optik or Fiber Optic Communication System Sambungan Langsung Internasional or International Direct Dialing Sistem Manajemen Anti Penyuapan or Anti-Bribery Management System Small Medium Business Small and Medium Enterprise Sekolah Menengah Kejuruan or Vocational School SMK3/OHSAS Sistem Manajemen Keselamatan dan Kesehatan Kerja or Occupational Health and Safety Assessment System SOX SP Sarbanes Oxley Act Strategic Portfolio SPI SROI SSO TAM THR TIOC TKDN TLK TLKM USO VAR VF VOD VOD VoIP VP VPN WBS WFH WIB WINS WPO VP VPN WBS WEO WFH WIB WINS WPO Sistem Pengendalian Internal or Internal Control System Social Return on Investment Shared Service Operation Tele Account Management Tunjangan Hari Raya or Religious Holiday Allowance Telkom Integrated Operation Center Domestic Component Level Telkom Ticker in New York Stock Exchange Telkom Ticker in Bursa Efek Indonesia Universal Service Obligation Value Added Reseller Volatile Food Video on Demand Voice over Data Voice over Internet Protocol Vice President Virtual Private Network Whistleblowing System Work from Home Wholesale and International Business Wholesale and International Service Whistleblower Protection Officer Vice President Virtual Private Network Whistleblowing System World Economic Outlook Work From Home Wholesale and International Business Wholesale and International Service Whistleblower Protection Officer 288 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIXAPPENDIX 3: CROSS REFERENCE TO THE CIRCULAR LETTER BY THE FINANCIAL SERVICES AUTHORITY NO. 16/SEOJK.04/2021 No. CRITERIA EXPLANATION PAGES I 1. 2. 3. 4. II 1. 2. a. FORM OF ANNUAL REPORT Annual Report is presented in the form of printed documents and electronic copies of documents. Annual Report presented as printed document should be printed on light-colored, good quality, A4 sized paper, bound and possible to be reproduced in good quality. Annual Report can present information in the form of pictures, graphs, tables, and/or diagrams by including clear titles and/or descriptions, thus they are easy to read and understand. Annual Report presented in the form of a copy of an electronic document is the Annual Report converted in PDF format. CONTENT OF ANNUAL REPORT Annual Report should at least contain information about: 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) key financial data highlight; stock information (if any); Board of Commissioners’ report; Directors’ report; Issuer or Public Company’s profile; management discussion and analysis; Issuer or Public Company’s governance; Issuer or Public Company social and environmental responsibility; audited annual financial report; and statement of Directors and board of Commissioners on the responsibility for the Annual Report. Description of The Contents of Annual Report Key Financial Data Highlight Highlights of Key Financial Data presents information in comparative form over a period of 3 (three) financial years or since the commencement of business if the Issuer or Public Company has been running for less than 3 (three) years, and should at least contain: 12-15 16-18 22-27 28-33 6-7 85-141 143-257 259-277 329 34-35 12-15 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) revenue; gross profit; profit (loss); (loss) profit non-controlling interests; attributable to parent and comprehensive profit (loss); comprehensive profit (loss) attributable to parent and non-controlling interests; net profit (loss) per share; total assets; total liabilities; total equity; profit (loss) to total asset ratio; profit (loss) to equity ratio; profit (loss) to revenue ratio; 289 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo. CRITERIA EXPLANATION PAGES 14) 15) 16) 17) current ratio; liabilities to equity ratio; liabilities to total asset ratio; and other financial information and ratios relevant to Issuer or Public Company and their industry type. b. Stock Information Information of stock for Public Company shall at least contains: 1) stock issued for three months period (if any) presented in comparative form in the last 2 (two) financial years at least contain: 16-18 a) outstanding stock; b) market capitalization by the price in the Stock Exchange where the stock is listed; c) d) e) highest, lowest, and closing stock price by the price in the Stock Exchange where the stock is listed; and traded volume in the Stock Exchange where the stock is listed; stock prices before and after corporate actions; in the event of corporate actions such as stock split, reverse stock, stock dividend, stock bonus, and par value decrease, stock price information referred to in point 1) should then include explanation concerning at least: date of corporate actions; a) b) c) d) date of corporate actions; ratio of stock split, reverse stock, stock dividend, stock bonus, and the changes of par value; amount of outstanding stock before and after corporate actions; and number of conversion effects executed (if any); and e) stock price before and after corporate actions; in the event that the company’s stock trade is suspended and/or delisted during the year reported, Issuer or Public Company should explain the reason for such suspension and/or delisting; and in the event that the suspension as referred to in number 3) and/or the process of delisting is still ongoing until the final period of the Annual Report, the Issuer or Public Company should explain the actions taken to resolve the matter. 2) 3) 4) 18 No suspension/ delisting No suspension/ delisting c. Board of Directors’ Report Board of Directors’ Report shall at least contain: 28-33 1) brief description about the performance of Issuer or Public Company, that at least include: a) strategies and strategic policies of Issuer or Public Company; 290 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIXNo. CRITERIA EXPLANATION PAGES b) c) d) e) Board of Directors' role in strategy formulation and the strategic policy of the Issuer or Public Company; the process carried out by the Board of Directors to ensure the implementation of the Issuer's or Company's strategy Public; comparison between the results achieved with those targeted by the Issuer or Public Company; and constraints experienced by Issuers or Public Company; 2) 3) description of the Issuer or Public Company's business prospects; and implementation of Issuer or Public Company’s governance. d. Board of Commissioners’ Report Board of Commissioners’ Report shall at least contains: 22-27 1) 2) 3) assessment on the performance of the Directors in managing the Issuer or Public Company, including supervision of the Board of Commissioners in the formulation and implementation of the Issuer's or Public Company's strategy by the Board of Directors; overview on the business prospects of Issuer or Public Company established by the Board of Directors; overview on the implementation of Issuer or Public Company’s governance; e. Profile of Issuer or Public Company The Issuer or Public Company’s Profile at least contains: 1) 2) 3) 4) 5) 6) name of Issuer or Public Company, including, if any, changes in names, reasons for such changes, and the effective date of name; access to Issuer or Public Company, including branch or representative offices that enables people to obtain the information of: 6 6 a) b) c) address; telephone number; e-mail address; and d) website address; brief history of the Issuer or Public Company; vision and mission of Issuer or Public Company and corporate culture or company values; business activities according to the latest articles of association, business activities conducted during the financial year, and as well as types of goods and/or services produced; the operational area of Issuer or Public Company; is an area for the implementation of operational activities or the range of the company’s operational activities. 44-45 38-39 46-47 10-11 291 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo. CRITERIA EXPLANATION 7) 8) 9) organizational structure of Issuer or Public Company in a form of chart, of at least to 1 (one) structural level under Board of Directors including the committees under Board of Directors (if any) and committees under the Board of Commissioners, accompanied by name and position; a list of industry association memberships both on a national and international scale related to the implementation of sustainable finance; a list of industry association memberships both on a national and international scale related to the implementation of sustainable finance; a) b) c) d) e) f) g) h) name and position that corresponds to the duties and responsibilities; latest photograph; age; nationality; educational background; employment record, consisting of: (1) (2) legal basis of Board of Directors members appointment for the first time at the related Issuer or Public Company; double position, either as member of Directors, Commissioners, and/or committee as well as other positions (if any); and (3) work experience and the time period both inside and outside the Issuer or Public Company; affiliation with other members of the Board of Directors, members of the Board of Commissioners, major shareholders, and controllers either directly or indirectly to individual owners, including the names of affiliated parties. In the event that a member of the Board of Directors has no affiliation, the Issuer or Public Company shall disclose this matter; and changes in the composition of the members of the Board of Directors and the reasons for the changes. In the event that there is no change in the composition of the members of the Board of Directors, it will be disclosed regarding this matter PAGES 48-49 50-51 58-62 63 63 10) profile of Board of Commissioners, consisting of: 52-56 a) b) c) name and title; latest photograph; age; 292 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIXNo. CRITERIA EXPLANATION PAGES d) e) f) g) h) i) nationality; educational background and/or certification; employment record, consisting of: (1) (2) (3) legal basis for the appointment as a member of the Board of Commissioners; legal basis for the first appointment as a member of the Board of Commissioners who is an independent commissioner of the related Issuer or Public Company; double position, either as member of Board of Commissioners, Directors, and/ or committee, as well as other positions, both inside and outside the Issuer or Public Company. In the event that a member of the Board of Commissioners does not have double positions, then this is disclosed; and (4) work experience and the time period both inside and outside the Issuer or Public Company; affiliation with other members of the Board of Commissioners, major shareholders, and controllers either directly or indirectly to individual owners, including names of affiliated parties; In the event that a member of the Board of Commissioners does not have any affiliation, the Issuer or Public Company shall disclose this matter; of independence the statement independent commissioner in the event that the independent commissioner has served more than 2 (two) terms; and of changes in the composition of the members of the Board of Commissioners and the reasons for the changes. In the event that there is no change in the composition of the members of the Board of Commissioners, this matter shall be disclosed; 11) 12) in the event of a change in the composition of the Board of Commissioners and/or Directors taking place after the fiscal year until the deadline of Annual Report submission, management composition stated in the Annual Report is then the composition of the Board of Commissioners and/or Directors both the latest and the previous one; number of employees by gender, position, level, and employment status age, education (permanent/contracted) in the financial year. Disclosure of information can be presented in tabular form. 57 175 57 57 67-69 293 Annual Report 2022 PT Telkom Indonesia (Persero) TbkPAGES 70-71 70 71 70 72-77 No. CRITERIA EXPLANATION 13) name of shareholders and ownership percentage at the end of financial year, information includes among others: a) shareholders having 5% (five percent) or more shares of Issuer or Public Company; b) member of Directors and Board of Commissioners owning shares of Issuer or Public Company. In the event that all members of the Board of Directors and/or all members of the Board of Commissioners do not own shares, then this matter is disclosed; and c) group of public shareholders each having less than 5% (five percent) share ownership of Issuer or Public Company; The above information can be presented in tabular form. the percentage of indirect ownership of the shares of the Issuer or Public Company by members of the Board of Directors and members of the Board of Commissioners at the beginning and end of the financial year, including information on shareholders registered in the shareholder register for the benefit of indirect ownership of members of the Board of Directors and members of the Board of Commissioners; In the event that all members of the Board of Directors and/or all members of the Board of Commissioners do not have indirect ownership of the shares of the Issuer or Public Company, this matter shall be disclosed. of shareholders number ownership percentage at the end of financial year presented in the following classifications: and a) b) c) d) local institution ownership; foreign institution ownership; local individual ownership; and foreign individual ownership; information concerning major and controlling shareholder of Issuer or Public Company, both direct and indirect, until the individual owner, presented in the form of scheme or diagram; names of subsidiaries, associated companies, joint ventures in which Issuer or Public Company owns control with the entities, along with the percentage of share ownership, line of business, total asset, and operating status of such companies (if any); For subsidiaries, information of company’s address should be added; 14) 15) 16) 17) 294 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIXPAGES 78-79 80-81 82-83 No. CRITERIA EXPLANATION 18) 19) chronology of stock listing, number of stock, par value, and offering price from the beginning of listing up to the end of the financial year and name of Stock Exchange where Issuer or Public Company’s stock are listed including stock splits, reverse stock, stock dividends, shares bonuses, and changes in the nominal value of shares, implementation of conversion effects, implementation of capital additions and subtractions (if any); information of other securities listing other than the securities referred to in point 18) which have not matured in the financial year at least contain the name of the securities, year of issue, interest rate/yield, maturity date, offering value, and rating of securities (if any); 20) information on the use of public accounting services (AP) and public accounting firms (KAP) and their networks/associations/allies include: a) b) c) d) e) name and address; assignment period; information on audit and/or non-audit services provided; audit and/or non-audit for each assignment given during the financial year; and fee in the event that AP and KAP and their networks/associations/allies, are appointed do not provide non-audit services, then the information is disclosed; and which Disclosure of information on the use of AP and KAP services and their networks/associations/allies can be presented in tabular form. f. Management Discussion and Analysis 21) name and address of capital market supporting institutions and/or professions other than AP and KAP. 82-83 Annual Report must contain discussion and analysis of Financial Report and other significant information by emphasizing material changes taking place during the year under review. It should at least contain: 1) 2) operational review by business segment in accordance with the industry of Issuer or Public Company, consisting of at least: 89-105 a) b) c) Production, which includes process, capacity and its development; Revenue; and Profitability; comprehensive financial performance including a comparison between the financial performance of the last two financial years, explanation on the causes of such changes and their impact, which among others includes: 115-126 295 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo. CRITERIA EXPLANATION PAGES 3) 4) 5) 6) a) b) c) d) current assets, non-current assets, and total assets; Short-term liabilities, long-term liabilities, and total liabilities; equity; revenue, expenses and profit (loss), other comprehensive revenue and comprehensive income (loss); and e) cash flow; capability to pay debts by presenting relevant ratio; account receivables collectability of Issuer or Public Company receivable by presenting relevant ratio; capital structure and management’s policies on the capital structure, as well as basis of the policy making; for the discussion on material commitment investment of capital expenditure with explanation concerning: a) b) c) d) purpose of such commitment; sources of funds expected to fulfill to the commitment; currency of denomination; steps taken by the Issuer or Public Company to protect the position of related foreign currency against risks; 127 131 128 130 7) discussion on realization of investment of capital expenditure within the last Financial year, that at least contains: 129 8) 9) 10) a) b) c) type of capital expenditure investments; purpose of capital expenditure investments; value of capital expenditure issued; investments material information and facts occurring after the date of accountant’s report (if any); business prospects of Issuer or Public Company in relation to the industry, economy in general, and international market, and accompanied with the supporting quantitative data from reliable Data resource; 132 133-134 comparison between target/projection at the beginning of financial year and the realization, that includes: 134 a) b) c) d) revenue; profit (loss); capital structure; or other information deemed necessary by the Issuer or Public Company; 296 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIXNo. CRITERIA EXPLANATION 11) target/projection of the Issuer or Public Company within 1 (one) year, that includes: PAGES 135 a) b) c) d) e) revenue; profit (loss); capital structure; dividend policy; or other information deemed necessary by the Issuer or Public Company; 12) marketing aspects of the goods and/or services of Issuer or Public Company, including among others marketing strategies and market Share; 13) description of dividend during the past 2 (two) financial years (if any), includes at least: 106-114 136 a) b) c) dividend policy; including information on the percentage of dividends distributed to net income; date of cash dividend payment and/or date of non-cash dividend Distribution; amount of dividend per share (cash and/or non-cash); and d) amount of dividend paid per year; Disclosure of information can be presented in tabular form. In the event that the Issuer or Public Company does not distribute dividends in the last 2 (two) years, this matter shall be disclosed. 14) realization of the use of proceeds from Public Offering is under the Following conditions: 137 a) b) in the event that during the financial year reported, the Issuer is obliged to submit report on realization of use of proceeds, then Annual Report should disclose accumulated realization of use of Proceeds until the end of the financial year; and in the event that there is a change in the use of proceeds as stipulated in Financial Services Authority Regulation on Report on Realization of Use of Proceeds, the Issuer should then explain such change; 15) material information (if any) concerning, among others investment, expansion, divestment, merge, acquisition, debt/capital restructuring, affiliated transaction, and transaction with conflict of interests, taking place during the financial year (if any). Information includes: 138 a) b) c) d) date, value and object of transaction; name of transacting parties; nature of Affiliated relation (if any); explanation of fairness of transaction; and 297 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo. CRITERIA EXPLANATION PAGES e) f) compliance with related rules and regulations; in the event that there is an affiliation relationship, in addition to disclosing the information as referred to in letter a) to letter e), the Issuer or Public Company also discloses information: (1) (2) a statement from the Board of Directors that the affiliate transaction has gone to through adequate procedures ensure that the affiliated transaction is carried out in accordance with generally accepted business practices, among others, by complying with the arms-length principle; and the role of the Board of Commissioners and the audit committee in carrying out adequate procedures to ensure that affiliated transactions are carried out in accordance with generally accepted business practices, among others, by complying with the arms- length principle; g) h) i) and/or for affiliated transactions or material transactions which are business activities carried out in order to generate business regularly, income and are carried out repeatedly an explanation is added that the affiliated transactions or material transactions are business activities carried out in order to generate business income and are carried out repetitive, and/or continuous; continuously, regularly. routine, In the case of affiliate transactions or material transactions referred to has been disclosed in report annual financial, added information regarding disclosure references in reports the annual finances. the for disclosure of affiliated transactions and/or conflict of interest transactions resulting from the implementation of affiliated transactions and/or conflict of transactions that have been approved by independent information additional shareholders, regarding the date of the GMS which approved the affiliated transactions and/or conflict of interest transactions is added; interest in the event that there are no affiliated transactions and/or conflict of interest transactions, then such matters shall be disclosed; 16) description of changes in regulation which have a significant effect on the Issuer or Public Company and its impacts on the financial report (if any); and 139 298 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIXNo. CRITERIA EXPLANATION g. Governance of Issuer or Public Company Governance of Issuer or Public Company at least contains brief description of: 17) changes in the accounting policy, rationale and impacts on the financial statement (if any). PAGES 140-141 1) General Meeting of Shareholders (GMS) shall at least contain: 152-161 a) Information regarding the resolutions of the GMS in the financial year and 1 (one) year prior to the financial year includes: (1) (2) resolutions of the GMS in the financial year and 1 (one) year before the financial year are realized in the financial year; and resolutions of the GMS for the financial year and 1 (one) year before the financial year that have not been realized and the reasons for not realizing them; b) in the event that the Issuer or Public Company uses an independent party in the conduct of the GMS to calculate the votes, then this matter shall be disclosed; 2) Directors, consisting of among others: 203-216 a) scope of work and responsibility of each member of the Directors; b) c) regarding Information the duties and responsibilities of each member of the Board of Directors is described and can be presented in tabular form. disclosure that the Directors have Directors’ charter; implementation policies and regarding the frequency of meetings of the Board of Directors, joint meetings of the Board of Commissioners, and the level of attendance of members of the Board of Directors in such meetings including attendance at the GMS; Information on the level of attendance of members of the Board of Directors at the meeting of the Board of Directors, the meeting of the Board of Directors with the Board of Commissioners, or the GMS can be presented in tabular form. d) training and/or competency improvement of members of the Board of Directors: (1) (2) policies on training and/or improving the competence of members of including the Board of Directors, for newly an orientation program appointed members of the Board of Directors (if any); and 299 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo. CRITERIA EXPLANATION PAGES e) f) and/or training competency improvement attended by members of the Board of Directors in the financial year (if any);. The Board of Directors’ assessment of the performance of the committees that support the implementation of the Board of Directors’ duties for the financial year shall at least contain: 1) 2) performance appraisal procedures; and criteria used such as performance achievement during the financial year, competence and attendance in a meeting; and in the case that the Issuer or Public Company does not have a committee that supports the implementation of tasks the Board of Directors, then it is disclosed regarding this matter. 3) Board of Commissioners, consisting of among others: 162-185 a) b) c) description of responsibility of the Board of Commissioners; disclosure that the Board of Commissioners has Board of Commissioners’ charter; policies and implementation of the frequency of meetings of the Board of Commissioners, meetings of the Board of Commissioners with the Board of Directors and the level of attendance of members of the Board of Commissioners in the meeting including attendance at the GMS; Information on the level of attendance of members of the Board of Commissioners at the meeting of the Board of Commissioners, the meeting of the Board of Commissioners with the Board of Directors, or the GMS can be presented in tabular form. d) training and/or competency improvement of members of the Board of Commissioners: (1) (2) policies on training and/or improving the competence of members of the including Board of Commissioners, orientation newly programs appointed members of the Board of Commissioners (if any); and for and/or training competency improvement attended by members of the Board of Commissioners in the financial year (if any); 300 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIXNo. CRITERIA EXPLANATION PAGES e) performance appraisal of the Board of Directors and the Board of Commissioners as well as each member of the Board of Directors and the Board of Commissioners, including among others: (1) (2) procedure of performance assessment implementation; the criteria used are performance the financial achievements during year, competence and attendance at meetings; and (3) parties conducting the assessment; f) The Board of Commissioners’ assessment of the performance of the Committees that support the implementation of the duties of the Board of Commissioners in the financial year includes: (1) (2) performance appraisal procedures; and the criteria used are performance achievements during the financial year, competence and attendance at meetings; 4) The nomination and remuneration of the Board of Directors and the Board of Commissioners shall at least contain: 197-198 a) b) nomination procedure, including a brief description of the policies and process for nomination of members of the Board of Directors and/or members of the Board of Commissioners; and and procedures of remuneration for the Board of Directors and the Board of Commissioners, among others: implementation (1) (2) (3) procedures determining for remuneration for the Board of Directors and the Board of Commissioners; the remuneration structure of the Board of Directors and the Board of Commissioners such as salaries, allowances, bonuses and others; and the amount of remuneration for each member of the Board of Directors and member of the Board of Commissioners; Disclosure of information can be presented in tabular form. 5) Syariah supervisory board, for Issuer or Public Company running business under the principles of Syariah as expressed in the Articles of Association, contains at least: Tidak relevan a) name; 301 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo. CRITERIA EXPLANATION PAGES b) c) d) e) the legal basis for the appointment of the syariah supervisory board; period of assignment of supervisory board; the syariah tasks and supervisory board; and responsibilities of syariah frequency and method of advising and supervisory on the compliance of syariah principles in capital market toward the Issuer or Public Company; 6) Audit Committee, consisting of among others: 186-193 a) b) c) d) e) f) g) h) i) j) name and position in the committee; age; nationality; educational background; employment record, consisting of: (1) (2) legal basis of appointment as member of committee; double position, either as member of Board of Commissioners, Directors, and/or committee and other positions (if any); and (3) work experience and the time period, both inside and outside the Issuer or Public Company; period of service of Audit Committee members; disclosure of Committee; independence of Audit training and/or competency improvement that have been followed in the financial year (if any); disclosure of company policies and the implementation on frequency of Audit Committee meetings and the attendance of Audit Committee members in such meetings; and brief description activities carried out by Audit Committee during the financial year based on what is stated in Audit Committee Charter; 7) Committee or function of nomination and remuneration of Issuers or Public Companies, consisting of among others: 194-198 a) b) c) d) e) name and position in the committee; age; nationality; educational background; employment record, consisting of: 302 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIXNo. CRITERIA EXPLANATION PAGES (1) (2) legal basis committee member; of appointment as double position, either as member of Board of Commissioners, Directors and/ or committee and the other positions (if any); and f) g) h) i) j) k) l) m) (3) work experience and the time period both inside and outside the Issuer or Public Company; period of service of committee members; disclosure of independence of committee; training and/or competency improvement that have been followed in the financial year (if any); description of duties and responsibilities; disclosure that the committee has charter of committee; disclosure of company policies and the implementation on frequency of committee meetings and the attendance of committee members in such meetings; brief description activities during the financial year; in the event that no nomination and remuneration committee formed, the Issuer or Public Company is sufficient to disclose the information as referred to in letter i) to letter l) and disclose: is (1) (2) reasons for not forming the committee; and the party carrying out the nomination and remuneration function; 8) other committees the Issuer or Public Company has in order to support the function and tasks of Directors (if any) and/or committees that support the functions and duties of the Board of Commissioners, consisting of among others: 199-202 a) b) c) d) e) name and position in the committee; age; nationality; educational background; employment record, consisting of: (1) (2) legal basis committee member; of appointment as double position, either as member of Board of Commissioners, Directors and/ or committee and the other positions (if any); and 303 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo. CRITERIA EXPLANATION PAGES (3) work experience and the time period both inside and outside the Issuer or Public Company; period of service of committee members; disclosure of independence of committee; training and/or competency improvement that have been followed in the financial year (if any); description of duties and responsibilities; disclosure that the committee has charter of committee; disclosure of company policies and the implementation on frequency of committee meetings and the attendance of committee members in such meetings; and brief description activities during the financial year; f) g) h) i) j) k) l) 9) Corporate Secretary, consisting among others: 217-220 a) b) c) d) e) f) name; domicile; employment record, consisting of: (1) legal basis of appointment as Corporate Secretary; and (2) work experience and the time period both inside and outside the Issuer or Public Company; educational background; training and/or competency improvement that have been followed in the financial year; and brief description activities carried out by Corporate Secretary during the financial year; 10) Internal audit unit, consisting among others: 221-225 a) b) c) d) e) f) g) name of internal audit unit’s chief; employment record, consisting of: (1) legal basis of appointment as internal audit unit’s chief; and (2) work experience and the time period both inside and outside the Issuer or Public Company; qualification/certification as an internal audit (if any); training and/or competency improvement that have been followed in the financial year; structure and position of internal audit unit; description of tasks and responsibilities of internal audit unit; disclosure that the unit has charter internal audit unit; and 304 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIXNo. CRITERIA EXPLANATION PAGES h) brief description of the implementation of the duties of the internal audit unit in the financial year including the policy and implementation of the frequency of meetings with the Board of Directors, Board of Commissioners, and/or audit committee; 11) description of internal control system implemented by Issuer or Public Company, consisting of at least: 226-228 a) b) c) operational and financial control, along with compliance with other prevailing rules and regulations; and review on effectiveness of internal control system; statement of the Board of Directors and/or Board of Commissioners on the adequacy of the internal control system; 12) risk management system implemented by Issuer or Public Company, consisting of at least: 229-245 a) b) c) d) general description of risk management system of Issuer or Public Company; types of risks and efforts to manage such risks; and review on effectiveness of risk management system of Issuer or Public Company; the statement of the Board of Directors and/or Board of Commissioners on the adequacy of the internal control system; legal cases that have a material impact faced by Issuers or Public Companies, subsidiaries, members of the Board of Directors and members of the Board of Commissioners (if any), at least contain: a) material of the case/claim; b) c) status of settlement of case/claim; and impacts on the financial condition of the Issuer or Public Company; information on administrative sanctions to Issuer or Public Company, members of the Board of Commissioners and Directors, by Financial Service Authority and other authorities during the fiscal year (if any); 13) 14) 253 253 15) information on code of conducts and culture of Issuer or Public Company (if any) consisting of: 255-256 a) main points of code of conducts; b) c) form of socialization of code of conducts and efforts to enforce it; and is disclosure of that code of conducts applicable to member of Directors, Board of Commissioners, and employers of Issuer or Public Company; 305 Annual Report 2022 PT Telkom Indonesia (Persero) TbkPAGES 252-253 No. CRITERIA EXPLANATION 16) a brief description of the policy of providing long-term performance-based compensation to management and/or employees owned by the Issuer or Public Company (if any), including the management stock ownership program (MSOP) and/or share ownership program by employees (employee stock ownership program/ESOP); In terms of providing compensation in the form of a management stock ownership program (MSOP) and/or an employee stock ownership program (ESOP), the information disclosed must at least contain: a) b) c) amount of stock and/or options; time period of exercise; requirements for eligible employees and/or Management; and d) exercise price; 17) brief description of disclosure policy information regarding: 251 a) the share ownership of members of Board of Directors and members Board of Commissioners no later than 3 (three) working days after the occurrence of ownership or any change of ownership of the Company's shares Open; and b) implementation of the said policy; 18) explanation on Whistleblowing System at the Issuer or Public Company to report misconducts causing potential loss to the company or the stakeholders (if any), consisting of among others: 246-251 a) b) c) d) e) procedure to submit whistleblowing report; protection for whistleblower; handling of whistleblowing; party managing whistleblowing; and results of whistleblowing handling, consisting of at least: (1) number of whistleblowing registered and processed in financial year; and (2) follow up of whistleblowing; In the event that the Issuer or Public Company does not have a whistleblowing system, it is disclosed regarding this matter. 19) a description of the anti-corruption policy of the Issuer or Public Company, at least containing: 257 a) programs and procedures implemented in overcoming the practice of corruption, kickbacks, fraud, bribery and/or gratuities in Issuers or Public Companies; and 306 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIXNo. CRITERIA EXPLANATION PAGES b) anti-corruption employees of Issuers or Public Companies; training/socialization to In the event that the Issuer or Public Company does not have an anti-corruption policy, the reasons for not having the said policy are explained. 20) implementation of Public Company Governance Guidelines for Issuer that issues Equity Securities or Public Company, consisting of: 144-149 a) b) disclosure recommendations; and/or of implemented explanation concerning unimplemented recommendation, including reasons for such conditions and alternatives (if any). Disclosure of information can be presented in tabular form. h. Social and Environmental Responsibility of Issuer or Public Company 1) in the social section and Information disclosed environmental a responsibility Sustainability Report as referred to in the Financial Services Authority’s Regulation No. 51/POJK.03/2017 concerning the Implementation of Sustainable Finance for Financial Services Institutions, Issuers, and Public Companies, containing at least : is Telkom will publish the 2022 Sustainability Report separately a) b) c) d) e) f) explanation of the sustainability strategy; an overview of (economic, social, and environmental); sustainability aspects brief profile of the Issuer or Public Company; explanation of the Board of Directors; sustainability governance; sustainability performance; g) written verification from an independent party, if any; h) i) feedback sheet for readers, if any; and the response of the Issuer or Public Company to the previous year's report feedback; in The Sustainability Report as referred to number 1), must be prepared in accordance with the Technical Guidelines for the Preparation of a Sustainability Report for Issuers and Public Companies as contained in Appendix II which is an integral part of this Financial Services Authority Circular Letter; 2) 3) Information on the Sustainability Report in number 1) could be: a) disclosed in other relevant sections outside of the social and environmental responsibility section, such as the Directors’ explanation regarding the Sustainability Report disclosed in the section related to the Directors’ Report; and/or Information available on Sustainability Report 2022 307 Annual Report 2022 PT Telkom Indonesia (Persero) TbkNo. CRITERIA EXPLANATION PAGES b) refers to other sections outside the social and environmental responsibility section while still referring to the Technical Guidelines for the Preparation of Sustainability Reports for Issuers and Public Companies as listed in Appendix II which is an integral part of this Financial Services Authority Circular Letter, such as profiles Issuer or Public Company; The Sustainability Report as referred to in number 1) is an inseparable part of the Annual Report but can be presented separately from the Annual Report; Telkom will publish the 2022 Sustainability Report separately 4) 5) 6) 7) In the event that the Sustainability Report is presented separately from the Annual Report, the information disclosed in the said Sustainability Report must: a) b) contains all the information as referred to in number 1); and for prepared in accordance with the Technical Guidelines the Preparation of a Sustainability Report for Issuers and Public Companies as contained in Appendix II which is an integral part of this Circular Letter of Financial Services Authority; In the event that the Sustainability Report is presented separately from the Annual Report, then the social and environmental responsibility section contains information that information regarding social and environmental responsibility has been disclosed in the Sustainability Report which is presented separately from the Annual Report; and Submission of the Sustainability Report which is presented separately from the Annual Report must be submitted together with the submission of the Annual Report. 260 329 34-35 The annual financial statements contained in the Annual Report are prepared in accordance with financial accounting standards in Indonesia and have been audited by a public accountant registered with the Financial Services Authority. The said annual financial report contains a statement regarding the accountability for financial statements as regulated in the Financial Services Authority Regulation regarding the Board of Directors' responsibility for financial reports or the laws and regulations in the capital market sector which regulates the periodic reports of securities companies in the event that the Issuer is a securities company. Statement of members of Directors and Board of Commissioners on the responsibility for the Annual Report is composed in accordance to the format of Statement of Members of Directors and Board of Commissioners on the Responsibility for the Annual Report as attached in the Appendix I as an inseparable part of the Circular Letter of FSA. i. Audited Financial Statement j. Statement of Members Board of Directors and Board of Commissioners on The Responsibility for the Annual Report 308 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIXThis page is intentionally left blank 309 Annual Report 2022 PT Telkom Indonesia (Persero) TbkAPPENDIX 4: AFFILIATE TRANSACTIONS LIST r e v i e c e R e c i v r e S m o k e T l i a k d e M d A t e n n F i H S I t a b e a B l I D M S Y G t e n a r t e M h c e t u N l l j I t a S m o k e T l a r f n m o k e T i r i d n a M s e b e e C k o o P T L T l e t a r t i M D S G a i d e m o f n I n o u N a r t e M m o k l e T o d n i m a r P l e s m o k l e T n i l e T K H n i l e T G S n i l e T a k i d e m o k l e T I S S s e s k A m o k l e T M D M N G S T a i s y a l a m n i l e T a k o S a d a s r e P p u o r G a m g i S a i l a r t s u A n i l e T 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 17 18 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38                        Telkom SHL Interest Advertising/Printing Service APP2P Service Technical Assistance/Investigation Survey Service Call Center/Contact Center Service - Outsourcing Colocation/Maintenance/Supporting Service CPE Managed Application Service CPE Managed Network Service Credit Voucher Fee Service/RITNAS Health Service I/C SLI 007 Service Ii_007 - Signaling Service Domestic Incoming Service (Interconnection) Device Installation Service Access Network Service Construction Service Content Service/PIB IoT Service Lease & Trade Service License/Application Service Maintenance Service 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. Manage Capacity Service 23. Management Service 24. 25. 26. 27. 28. Outsourcing Service PE2PE Service Building Management Service/Site Building Rental Service/Tower Telecommunication Facilities Service: CINOP, GRX, etc 310 e t s e L r o m i T n i l e T a m a t a r P i t n I a g e l l o C l a b o l G a t a D a r a t n a s u N a i d e M   a k a r a C a t p i C a m g i S   o d n i s p a N   m e t s i s o k E a t a D m o k l e T           16    19                 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIX r e v i e c e R e c i v r e S m o k l e T a k i d e M d A t e n n i F H S I t a b e l a B I D M S Y G t e n a r t e M h c e t u N t a S m o k l e T a r f n I m o k l e T T L T l e t a r t i M D S G i r i d n a M s e b e l e C k o j o P 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15       Telkom SHL Interest Advertising/Printing Service APP2P Service Technical Assistance/Investigation Survey Service Service Call Center/Contact Center Service - Outsourcing Colocation/Maintenance/Supporting CPE Managed Application Service CPE Managed Network Service Credit Voucher Fee Service/RITNAS  Health Service I/C SLI 007 Service Ii_007 - Signaling Service Domestic Incoming Service (Interconnection) Device Installation Service Access Network Service Construction Service Content Service/PIB IoT Service Lease & Trade Service License/Application Service Maintenance Service 22. Manage Capacity Service 23. Management Service Outsourcing Service PE2PE Service Building Management Service/Site Building Rental Service/Tower Telecommunication Facilities Service: CINOP, GRX, etc 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 24. 25. 26. 27. 28.              i a d e m o f n I n o u N a r t e M m o k e T l i o d n m a r P l e s m o k e T l n i l e T K H n i l e T G S n i l e T a k a r a C a t p C a m g S i i i a k d e m o k e T l I S S s e s k A m o k e T l e t s e L r o m T n i i l e T a m a t a r P i t n I a g e l l o C l l a b o G a t a D a r a t n a s u N a d e M i M D M a i s y a a m n l i l e T N G S T a k o S a d a s r e P o d n i s p a N p u o r G a m g S i a i l a r t s u A n i l e T m e t s i s o k E a t a D m o k e T l 16  17 18 19           20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38                            311 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk l j i r i d n a M s e b e e C k o o P 1 2 3 4 5 6 7 8 9 10                     r e v i e c e R e c i v r e S m o k e T l i a k d e M d A t e n n F i H S I t a b e a B l I D M S Y G t e n a r t e M h c e t u N 29. 30. 31. 32. 33. 34. 35. SARTEL-SARPEN Service SARTEL-SARPEN Service (IDR) SARTEL-SARPEN Service-CALLCENTER SARTEL-SARPEN Service-WIFI.ID (IDR) Satellite Link/Transponder/VISAT/Sirkit Service Satellite Service & VAS Service Rental Link : Metroethernet, Astinet, VPN IP, DINACCESS Service I a r f n m o k e T l T L T l e t a r t i M D S G a i d e m o f n I n o u N a r t e M m o k l e T o d n i m a r P l e s m o k l e T n i l e T K H n i l e T G S n i l e T a k i d e m o k l e T I S S s e s k A m o k l e T M D M N G S T a i s y a l a m n i l e T a k o S a d a s r e P o d n i s p a N p u o r G a m g i S a i l a r t s u A n i l e T 12 13 14 15 16 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 17     t a S m o k e T l 11   e t s e L r o m i T n i l e T a m a t a r P i t n I a g e l l o C l a b o l G a t a D a r a t n a s u N a i d e M  a k a r a C a t p i C a m g i S                 m e t s i s o k E a t a D m o k l e T   36. Training/Assesment Service                       AdMedika 1. Health Service Finnet Collection Service Colocation/Maintenance/Supporting Service CPE Managed Platform Service Credit Voucher Fee Service/RITNAS Injapati Service/VAS: call center, calling card, vas E_Payment/Money Service Building Management Service/Site Jasa Layanan e_Payment/Money ISH Colocation/Maintenance/Supporting Service Outsourcing Service MDI Incubation Service GYS Building Management Service/Site 1. 2. 3. 4. 5. 6. 7. 8. 1. 2. 1. 1.        312 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIX l a b o G a t a D a r a t n a s u N a d e M m e t s i s o k E a t a D m o k e T l i i i l l i i l a i l e T a r t s u A n a k d e m o k e T a k a r a C a t p C a m g S I S S s e s k A m o k e T l e t s e L r o m T n i i l e T a m a t a r P i t n I a g e l l o C M D M a i s y a a m n l i l e T N G S T a k o S a d a s r e P o d n i s p a N p u o r G a m g S i r e v i e c e R e c i v r e S m o k l e T a k i d e M d A t e n n i F H S I t a b e l a B I D M S Y G t e n a r t e M h c e t u N t a S m o k l e T a r f n I m o k l e T T L T l e t a r t i M D S G i a d e m o f n I n o u N a r t e M m o k e T l i o d n m a r P l e s m o k e T l n i l e T K H n i l e T G S n i l e T i r i d n a M s e b e l e C k o j o P 11     29. 30. 31. 32. 33. 34. 35. 1. 2. 3. 4. 5. 6. 7. 8. 1. 2. 1. 1. SARTEL-SARPEN Service SARTEL-SARPEN Service (IDR) SARTEL-SARPEN Service-CALLCENTER SARTEL-SARPEN Service-WIFI.ID (IDR) Satellite Link/Transponder/VISAT/Sirkit Service Satellite Service & VAS Service Rental Link : Metroethernet, Astinet, VPN IP, DINACCESS Service AdMedika 1. Health Service Finnet Collection Service Colocation/Maintenance/Supporting Service CPE Managed Platform Service Credit Voucher Fee Service/RITNAS Injapati Service/VAS: call center, calling card, vas E_Payment/Money Service Building Management Service/Site Jasa Layanan e_Payment/Money Colocation/Maintenance/Supporting ISH Service MDI GYS Incubation Service Building Management Service/Site        1 2 3 4 5 6 7 8 9 10 12 13 14 15   36. Training/Assesment Service                   18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38    17  16                          Outsourcing Service               313 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk l l j I t a S m o k e T l a r f n m o k e T i r i d n a M s e b e e C k o o P T L T l e t a r t i M D S G r e v i e c e R e c i v r e S m o k e T l i a k d e M d A t e n n F i H S I t a b e a B l I D M S Y G t e n a r t e M h c e t u N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Metranet Advertising/Printing Service Colocation/Maintenance/Supporting Service CPE Managed Device Service License/Application Service Management Service Building Rental Service/Tower Supporting Service Nutech CPE Managed Device Service E_Payment/Money Service License/Application Service EDC Cooperative Sharing Pojok Celebes Mandiri E-Ticketing Service Telkomsat Incubation Service Maintenance Service Manage Capacity Service Management Service Telecommunication Facilities Service: CINOP, GRX, etc SARTEL-SARPEN Service Satellite Link/Transponder/VISAT/Sirkit Service Telkom Infra (Infratel) Device Installation Service Maintenance Service Manage Capacity Service Management Service Supporting Service 1. 2. 3. 4. 5. 6. 7. 1. 2. 3. 4. 5. 6. 1. 2. 3. 4. 5. 6. 7. 1. 2. 3. 4. 5.               314        a i d e m o f n I n o u N a r t e M m o k l e T o d n i m a r P l e s m o k l e T n i l e T K H n i l e T G S n i l e T a k a r a C a t p i C a m g i S a k i d e m o k l e T I S S e t s e L r o m i T n i l e T a m a t a r P i t n I a g e l l o C l a b o l G a t a D a r a t n a s u N a i d e M M D M N G S T a i s y a l a m n i l e T a k o S a d a s r e P o d n i s p a N p u o r G a m g i S a i l a r t s u A n i l e T   m e t s i s o k E a t a D m o k l e T  s e s k A m o k l e T                 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIX l a b o G a t a D a r a t n a s u N a d e M m e t s i s o k E a t a D m o k e T l i l i i l i i l a i l e T a r t s u A n a k d e m o k e T a k a r a C a t p C a m g S I S S s e s k A m o k e T l e t s e L r o m T n i i l e T a m a t a r P i t n I a g e l l o C M D M a i s y a a m n l i l e T N G S T a k o S a d a s r e P o d n i s p a N p u o r G a m g S i r e v i e c e R e c i v r e S m o k l e T a k i d e M d A t e n n i F H S I t a b e l a B I D M S Y G t e n a r t e M h c e t u N t a S m o k l e T a r f n I m o k l e T T L T l e t a r t i M D S G i a d e m o f n I n o u N a r t e M m o k e T l i o d n m a r P l e s m o k e T l n i l e T K H n i l e T G S n i l e T i r i d n a M s e b e l e C k o j o P       Metranet Advertising/Printing Service Colocation/Maintenance/Supporting Service CPE Managed Device Service License/Application Service Management Service Building Rental Service/Tower Supporting Service Nutech CPE Managed Device Service E_Payment/Money Service License/Application Service EDC Cooperative Sharing Pojok Celebes Mandiri E-Ticketing Service Telkomsat Incubation Service Maintenance Service Manage Capacity Service Management Service Telecommunication Facilities Service: CINOP, GRX, etc SARTEL-SARPEN Service Satellite Link/Transponder/VISAT/Sirkit Service Telkom Infra (Infratel) Device Installation Service Maintenance Service Manage Capacity Service Management Service Supporting Service 1. 2. 3. 4. 5. 6. 7. 1. 2. 3. 4. 5. 6. 1. 2. 3. 4. 5. 6. 7. 1. 2. 3. 4. 5.               1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38                     315 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk l l j I t a S m o k e T l a r f n m o k e T i r i d n a M s e b e e C k o o P r e v i e c e R e c i v r e S m o k e T l i a k d e M d A t e n n F i H S I t a b e a B l I D M S Y G t e n a r t e M h c e t u N T L T l e t a r t i M D S G a i d e m o f n I n o u N a r t e M m o k l e T o d n i m a r P l e s m o k l e T n i l e T K H n i l e T G S n i l e T a k i d e m o k l e T I S S s e s k A m o k l e T M D M N G S T a i s y a l a m n i l e T a k o S a d a s r e P o d n i s p a N p u o r G a m g i S a i l a r t s u A n i l e T e t s e L r o m i T n i l e T a m a t a r P i t n I a g e l l o C l a b o l G a t a D a r a t n a s u N a i d e M a k a r a C a t p i C a m g i S                                     m e t s i s o k E a t a D m o k l e T          1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38       TLT Credit Voucher Fee Service/RITNAS Building Management Service/Site Building Rental Service/Tower Supporting Service Mitratel Technical Assistance Service/Investigation Survey Device Installation Service Manage Capacity Service Building Rental Service/Tower GSD Construction Service Lease & Trade Service         Building Management Service/Site        Building Rental Service/Tower Supporting Service Transport Management Service Infomedia Nusantara Advertising/Printing Service Call Center/Contact Center Service - Outsourcing Colocation/Maintenance/Supporting Service Access Network Service Management Service Outsourcing Service Building Management Service/Site Supporting Service Melon Content Service/PIB SARTEL-SARPEN Service                  1. 2. 3. 4. 1. 2. 3. 4. 1. 2. 3. 4. 5. 6. 1. 2. 3. 4. 5. 6. 7. 8. 1. 2. 316 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIX r e v i e c e R e c i v r e S m o k l e T a k i d e M d A t e n n i F H S I t a b e l a B I D M S Y G t e n a r t e M h c e t u N t a S m o k l e T a r f n I m o k l e T T L T l e t a r t i M D S G i r i d n a M s e b e l e C k o j o P i a d e m o f n I n o u N a r t e M m o k e T l i o d n m a r P l e s m o k e T l n i l e T K H n i l e T G S n i l e T a k a r a C a t p C a m g S i i i a k d e m o k e T l I S S s e s k A m o k e T l e t s e L r o m T n i i l e T a m a t a r P i t n I a g e l l o C l l a b o G a t a D a r a t n a s u N a d e M i M D M a i s y a a m n l i l e T N G S T a k o S a d a s r e P o d n i s p a N p u o r G a m g S i a i l a r t s u A n i l e T m e t s i s o k E a t a D m o k e T l 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38            Building Management Service/Site                                 Building Management Service/Site       TLT Credit Voucher Fee Service/RITNAS Building Rental Service/Tower Supporting Service 1. Technical Assistance Service/Investigation Mitratel Survey 1. 2. 3. 4. 2. 3. 4. 1. 2. 3. 4. 5. 6. 1. 2. 3. 4. 5. 6. 7. 8. 1. 2. Device Installation Service Manage Capacity Service Building Rental Service/Tower GSD Construction Service Lease & Trade Service Building Rental Service/Tower Supporting Service Transport Management Service Infomedia Nusantara Advertising/Printing Service Call Center/Contact Center Service - Outsourcing Service Colocation/Maintenance/Supporting Building Management Service/Site Access Network Service Management Service Outsourcing Service Supporting Service Melon Content Service/PIB SARTEL-SARPEN Service                                   317 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk l l j I t a S m o k e T l a r f n m o k e T i r i d n a M s e b e e C k o o P r e v i e c e R e c i v r e S m o k e T l i a k d e M d A t e n n F i H S I t a b e a B l I D M S Y G t e n a r t e M h c e t u N T L T l e t a r t i M D S G a i d e m o f n I n o u N a r t e M m o k l e T o d n i m a r P l e s m o k l e T n i l e T K H n i l e T G S n i l e T a k i d e m o k l e T I S S s e s k A m o k l e T M D M N G S T a i s y a l a m n i l e T a k o S a d a s r e P o d n i s p a N p u o r G a m g i S a i l a r t s u A n i l e T m e t s i s o k E a t a D m o k l e T a k a r a C a t p i C a m g i S     e t s e L r o m i T n i l e T a m a t a r P i t n I a g e l l o C l a b o l G a t a D a r a t n a s u N a i d e M                 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Telkom Metra SHL Interest Advertising/Printing Service Colocation/Maintenance/Supporting Service Content Service/PIB Management Service Building Rental Service/Tower Supporting Service Satellite Link/Transponder/VISAT/Sirkit Service Pramindo Ikat Nusantara CPE Managed Application Service CPE Managed Device Service CPE Managed Network Service Credit Voucher Fee Service/RITNAS Maintenance Service Building Management Service/Site Supporting Service 1. 2. 3. 4. 5. 6. 7. 8. 1. 2. 3. 4. 5. 6. 7. 8. Work Facilities Rental Service/Seat Management 9. Server Rental Service Telkomsel Advertising/Printing Service APP2P Service Collection Service Colocation/Maintenance/Supporting Service Credit Voucher Fee Service/RITNAS I/C SLI 007 Service Domestic Incoming Service (Interconnection) Content Service/PIB E_Payment/Money Service 1. 2. 3. 4. 5. 6. 7. 8. 9.                   318           PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIX l a b o G a t a D a r a t n a s u N a d e M m e t s i s o k E a t a D m o k e T l i i i i l l i l a i l e T a r t s u A n a k d e m o k e T a k a r a C a t p C a m g S I S S s e s k A m o k e T l e t s e L r o m T n i i l e T a m a t a r P i t n I a g e l l o C M D M a i s y a a m n l i l e T N G S T a k o S a d a s r e P o d n i s p a N p u o r G a m g S i r e v i e c e R e c i v r e S m o k l e T a k i d e M d A t e n n i F H S I t a b e l a B I D M S Y G t e n a r t e M h c e t u N t a S m o k l e T a r f n I m o k l e T T L T l e t a r t i M D S G i a d e m o f n I n o u N a r t e M m o k e T l i o d n m a r P l e s m o k e T l n i l e T K H n i l e T G S n i l e T i r i d n a M s e b e l e C k o j o P           Telkom Metra SHL Interest Advertising/Printing Service Colocation/Maintenance/Supporting Service Content Service/PIB Management Service Building Rental Service/Tower Supporting Service Satellite Link/Transponder/VISAT/Sirkit Service Pramindo Ikat Nusantara CPE Managed Application Service CPE Managed Device Service CPE Managed Network Service Credit Voucher Fee Service/RITNAS Maintenance Service Building Management Service/Site Supporting Service 8. Work Facilities Rental Service/Seat Management 9. Server Rental Service Telkomsel Advertising/Printing Service APP2P Service Collection Service Colocation/Maintenance/Supporting Service Credit Voucher Fee Service/RITNAS I/C SLI 007 Service Domestic Incoming Service (Interconnection) Content Service/PIB E_Payment/Money Service 1. 2. 3. 4. 5. 6. 7. 8. 1. 2. 3. 4. 5. 6. 7. 1. 2. 3. 4. 5. 6. 7. 8. 9.                   1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38                     319 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk l l j I t a S m o k e T l a r f n m o k e T i r i d n a M s e b e e C k o o P r e v i e c e R e c i v r e S m o k e T l i a k d e M d A t e n n F i H S I t a b e a B l I D M S Y G t e n a r t e M h c e t u N T L T l e t a r t i M D S G a i d e m o f n I n o u N a r t e M m o k l e T o d n i m a r P l e s m o k l e T n i l e T K H n i l e T G S n i l e T a k i d e m o k l e T I S S s e s k A m o k l e T M D M N G S T a i s y a l a m n i l e T a k o S a d a s r e P o d n i s p a N p u o r G a m g i S a i l a r t s u A n i l e T a k a r a C a t p i C a m g i S e t s e L r o m i T n i l e T a m a t a r P i t n I a g e l l o C m e t s i s o k E a t a D m o k l e T l a b o l G a t a D a r a t n a s u N a i d e M           10. 11. 12. 13. 14. 1  PE2PE Service Building Management Service/Site Building Rental Service/Tower Supporting Service Rental Link : Metroethernet, Astinet, VPN IP, DINACCESS Service  15. SMS KA Service Telin 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38    Technical Assistance Service/Investigation Survey Colocation/Maintenance/Supporting Service Hosting Service/CDN Content Service/PIB International Service IPLC/SIMBOX SARTEL-SARPEN Service -WIFI ROAMING (IDR) SARTEL-SARPEN Service -WIFI ROAMING (USD) SARTEL-SARPEN Service -WIFI.ID (IDR) Satellite Litnk/Transponder/VISAT/Sirkit Service Telin HK I/C SLI 007 Service Content Service/PIB Supporting Service Satellite Link/Transponder/VISAT/Sirkit Service Telin SG I/C SLI 007 Service Supporting Service Sigma Cipta Caraka           Colocation/Maintenance/Supporting Service                   1. 2. 3. 4. 5. 6. 7. 8. 9. 1. 2. 3. 4. 1. 2. 1. 320 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIX r e v i e c e R e c i v r e S m o k l e T a k i d e M d A t e n n i F H S I t a b e l a B I D M S Y G t e n a r t e M h c e t u N t a S m o k l e T a r f n I m o k l e T T L T l e t a r t i M D S G i r i d n a M s e b e l e C k o j o P i a d e m o f n I n o u N a r t e M m o k e T l i o d n m a r P l e s m o k e T l n i l e T K H n i l e T G S n i l e T a k a r a C a t p C a m g S i i i a k d e m o k e T l I S S s e s k A m o k e T l e t s e L r o m T n i i l e T a m a t a r P i t n I a g e l l o C l l a b o G a t a D a r a t n a s u N a d e M i M D M a i s y a a m n l i l e T N G S T a k o S a d a s r e P o d n i s p a N p u o r G a m g S i a i l a r t s u A n i l e T m e t s i s o k E a t a D m o k e T l    10. 11. 12. 13. 14. 1. 2. 3. 4. 5. 6. 7. 8. 9. 1. 2. 3. 4. 1. 2. PE2PE Service Building Management Service/Site Building Rental Service/Tower Supporting Service Rental Link : Metroethernet, Astinet, VPN IP, DINACCESS Service 15. SMS KA Service Technical Assistance Service/Investigation Colocation/Maintenance/Supporting Hosting Service/CDN Content Service/PIB International Service IPLC/SIMBOX SARTEL-SARPEN Service -WIFI ROAMING SARTEL-SARPEN Service -WIFI ROAMING SARTEL-SARPEN Service -WIFI.ID (IDR) Satellite Litnk/Transponder/VISAT/Sirkit Telin Survey Service (IDR) (USD) Service Telin HK I/C SLI 007 Service Content Service/PIB Supporting Service Service Telin SG I/C SLI 007 Service Supporting Service Sigma Cipta Caraka 1            Satellite Link/Transponder/VISAT/Sirkit  2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38           1. Colocation/Maintenance/Supporting Service                   321 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk m e t s i s o k E a t a D m o k l e T    a k a r a C a t p i C a m g i S    r e v i e c e R e c i v r e S m o k e T l i a k d e M d A t e n n F i H S I t a b e a B l I D M S Y G t e n a r t e M h c e t u N i r i d n a M s e b e e C k o o P j l t a S m o k e T l I a r f n m o k e T l T L T l e t a r t i M D S G a i d e m o f n I n o u N a r t e M m o k l e T o d n i m a r P l e s m o k l e T n i l e T K H n i l e T G S n i l e T a k i d e m o k l e T I S S s e s k A m o k l e T M D M N G S T a i s y a l a m n i l e T a k o S a d a s r e P o d n i s p a N p u o r G a m g i S a i l a r t s u A n i l e T e t s e L r o m i T n i l e T a m a t a r P i t n I a g e l l o C l a b o l G a t a D a r a t n a s u N a i d e M 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38                        License/Application Service Maintenance Service TelkomMedika Health Service Health Equipment Sales SSI Colocation/Maintenance/Supporting Service Satellite Link/Transponder/VISAT/Sirkit Service Bosnet Management Service Telkom Akses Technical Assistance Service/Investigation Survey Access Network Service Construction Service Lease & Trade Service Maintenance Service Manage Capacity Service Management Service Transport Management Service Telin Timor Leste I/C SLI 007 Service Content Service/PIB Collega Inti Pratama License/Application Service Telin USA           Technical Assistance Service/Investigation Survey  2. 3. 1. 2. 1. 2. 1. 1. 2. 3. 4. 5. 6. 7. 8. 1. 2. 1. 1. 322 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIX r e v i e c e R e c i v r e S m o k l e T a k i d e M d A t e n n i F H S I t a b e l a B I D M S Y G t e n a r t e M h c e t u N t a S m o k l e T a r f n I m o k l e T T L T l e t a r t i M D S G i r i d n a M s e b e l e C k o j o P i a d e m o f n I n o u N a r t e M m o k e T l i o d n m a r P l e s m o k e T l n i l e T K H n i l e T G S n i l e T a k a r a C a t p C a m g S i i i a k d e m o k e T l I S S s e s k A m o k e T l e t s e L r o m T n i i l e T a m a t a r P i t n I a g e l l o C l l a b o G a t a D a r a t n a s u N a d e M i M D M a i s y a a m n l i l e T N G S T a k o S a d a s r e P o d n i s p a N p u o r G a m g S i a i l a r t s u A n i l e T m e t s i s o k E a t a D m o k e T l   Management Service   2. 3. 1. 2. 1. 2. 1. 1. 2. 3. 4. 5. 6. 7. 8. 1. 2. 1. 1. License/Application Service Maintenance Service TelkomMedika Health Service Health Equipment Sales Colocation/Maintenance/Supporting Satellite Link/Transponder/VISAT/Sirkit SSI Service Service Bosnet Technical Assistance Service/Investigation Telkom Akses Survey Access Network Service Construction Service Lease & Trade Service Maintenance Service Manage Capacity Service Management Service Telin Timor Leste I/C SLI 007 Service Content Service/PIB Collega Inti Pratama License/Application Service Telin USA Survey           Technical Assistance Service/Investigation  Transport Management Service  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38                         323 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk l l j I t a S m o k e T l a r f n m o k e T i r i d n a M s e b e e C k o o P r e v i e c e R e c i v r e S m o k e T l i a k d e M d A t e n n F i H S I t a b e a B l I D M S Y G t e n a r t e M h c e t u N T L T l e t a r t i M D S G a i d e m o f n I n o u N a r t e M m o k l e T o d n i m a r P l e s m o k l e T n i l e T K H n i l e T G S n i l e T a k i d e m o k l e T I S S s e s k A m o k l e T M D M N G S T a i s y a l a m n i l e T a k o S a d a s r e P o d n i s p a N p u o r G a m g i S a i l a r t s u A n i l e T e t s e L r o m i T n i l e T a m a t a r P i t n I a g e l l o C l a b o l G a t a D a r a t n a s u N a i d e M m e t s i s o k E a t a D m o k l e T a k a r a C a t p i C a m g i S  21           2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38            Media Nusantara Data Global Colocation/Maintenance/Supporting Service Data Center Service MDM Advertising/Printing Service APP2P Service Colocation/Maintenance/Supporting Service Management Service Satellite Service & VAS Service SMS KA Service Telin Malaysia Satellite Link/Transponder/VISAT/Sirkit Service Persada Soka Technical Assistance Service/Investigation Survey Manage Capacity Service Building Rental Service/Tower Sigma Group Colocation/Maintenance/Supporting Service Supporting Service Telkom Data Ekosistem Colocation/Maintenance/Supporting Service CPE Managed Application Service Incubation Service Content Service/PIB Data Center Service License/Application Service Management Service 1                 1. 2. 1. 2. 3. 4. 5. 6. 1. 1. 2. 3. 1. 2. 1. 2. 3. 4. 5. 6. 7. 324 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIX l a b o G a t a D a r a t n a s u N a d e M m e t s i s o k E a t a D m o k e T l l l i i i i i l a i l e T a r t s u A n a k d e m o k e T a k a r a C a t p C a m g S I S S s e s k A m o k e T l e t s e L r o m T n i i l e T a m a t a r P i t n I a g e l l o C M D M a i s y a a m n l i l e T N G S T a k o S a d a s r e P o d n i s p a N p u o r G a m g S i r e v i e c e R e c i v r e S m o k l e T a k i d e M d A t e n n i F H S I t a b e l a B I D M S Y G t e n a r t e M h c e t u N t a S m o k l e T a r f n I m o k l e T T L T l e t a r t i M D S G i a d e m o f n I n o u N a r t e M m o k e T l i o d n m a r P l e s m o k e T l n i l e T K H n i l e T G S n i l e T i r i d n a M s e b e l e C k o j o P        Media Nusantara Data Global Colocation/Maintenance/Supporting Data Center Service Service MDM Advertising/Printing Service APP2P Service Colocation/Maintenance/Supporting Service Management Service Satellite Service & VAS Service SMS KA Service Telin Malaysia Service Persada Soka Survey 1. Satellite Link/Transponder/VISAT/Sirkit Technical Assistance Service/Investigation Manage Capacity Service Building Rental Service/Tower Colocation/Maintenance/Supporting Sigma Group Service Supporting Service Telkom Data Ekosistem 1. Colocation/Maintenance/Supporting Service CPE Managed Application Service Incubation Service Content Service/PIB Data Center Service License/Application Service Management Service 1. 2. 1. 2. 3. 4. 5. 6. 1. 2. 3. 1. 2. 2. 3. 4. 5. 6. 7. 1                 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 21                325 Annual Report 2022 PT Telkom Indonesia (Persero) Tbk 08 CONSOLIDATED FINANCIAL STATEMENTS 326 PT Telkom Indonesia (Persero) TbkAnnual Report 2022Chapter 07 APPENDIX08 CONSOLIDATED FINANCIAL STATEMENTS 329 Audited Consolidated Financial Statements 2022 and Audited Financial Statements 2022 for Program Pendanaan Usaha Mikro dan Usaha Kecil 327 Annual Report 2022 PT Telkom Indonesia (Persero) TbkThis page is intentionally left blank Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk. and its subsidiaries Consolidated financial statements as of December 31, 2022 and for the year then ended with independent auditor’s report PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2022 AND FOR THE YEAR THEN ENDED WITH INDEPENDENT AUDITOR’S REPORT TABLE OF CONTENTS Statement of the Board of Directors Report of Independent Registered Public Accounting Firm Consolidated Statement of Financial Position Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Page 1 2 3 4 5-114 This report is originally issued in the Indonesian language. Independent Auditor’s Report Report No. 00351/2.1032/AU.1/06/0687-1/1/III/2023 The Shareholders and the Boards of Commissioners and Directors Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk. Report on the Audit of the Consolidated Financial Statements Opinion We have audited the accompanying consolidated financial statements of Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk. (the “Company”) and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated statement of financial position as of December 31, 2022, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity, and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2022, and its consolidated financial performance and cash flows for the year then ended, in accordance with Indonesian Financial Accounting Standards. Basis for opinion We conducted our audit in accordance with Standards on Auditing established by the Indonesian Institute of Certified Public Accountants (“IICPA”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the consolidated Financial Statements paragraph of our report. We are independent of the Group in accordance with the ethical requirements relevant to our audit of the consolidated financial statements in Indonesia, and we have fulfilled our other ethical responsibilities in accordance with such requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matter Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. Such key audit matters were addressed in the context of our audit of the consolidated financial statements taken as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on such key audit matters. For the key audit matter below, our description of how our audit addressed such key audit matter is provided in such context. i This report is originally issued in the Indonesian language. Independent Auditor’s Report (continued) Report No. 00351/2.1032/AU.1/06/0687-1/1/III/2023 (continued) Key audit matter (continued) We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements paragraph of our report, including in relation to the key audit matter communicated below. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the accompanying consolidated financial statements. The results of our audit procedures, including the procedures performed to address the key audit matter below, provide the basis for our opinion on the accompanying consolidated financial statements. Evaluation of property and equipment estimated useful lives Description of the key audit matter: As of December 31, 2022, the balance of consolidated property and equipment of the Group was Rp173,329 billion. As discussed in Notes 2ac and 11 to the accompanying consolidated financial statements, the Group reviews the estimated useful lives of its property and equipment at least annually and such estimates are updated if expectations differ from previous estimates due to changes in expectation of physical wear and tear, technical or commercial obsolescence, and legal or other limitations on the continuing use of the property and equipment. Auditing the Group's estimated useful lives of property and equipment is complex and requires significant judgment because the determination of the estimated useful lives considers a number of factors, including strategic business plans, expected future technological developments, and market behavior. Audit response: We obtained an understanding and evaluated the design and tested the operating effectiveness, of internal controls over the Group’s process of estimating the useful lives of its property and equipment. For example, we tested management’s review control on checking the completeness and accuracy of the assets classification data and assessing the appropriateness of the judgments regarding the most relevant data to be considered in determining useful lives. To test whether the estimated useful lives of property and equipment used by management was reasonable, our audit procedures included, among others, obtaining an understanding of management’s strategy related to assets replacement and assessed the reasonableness of such assumptions by considering external sources, such as telecommunication technology growth, changes in market demand, and current economic and regulatory trends. We assessed whether there were any potential sources of contrary information by performing benchmarking analysis on the estimated useful lives of property and equipment against other public companies within the telecommunication industry. ii This report is originally issued in the Indonesian language. Independent Auditor’s Report (continued) Report No. 00351/2.1032/AU.1/06/0687-1/1/III/2023 (continued) Other information Management is responsible for the other information. Other information comprises the information included in the 2022 Annual Report (“The Annual Report”). The Annual Report is expected to be made available to us after the date of this independent auditor’s report. Our opinion on the accompanying consolidated financial statements does not cover the Annual Report, and accordingly, we do not express any form of assurance on the Annual Report. In connection with our audit of the accompanying consolidated financial statements, our responsibility is to read the Annual Report when it becomes available and, in doing so, consider whether the Annual Report is materially inconsistent with the accompanying consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate actions based on the applicable laws and regulations. Responsibilities of management and those charged with governance for the consolidated financial statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Indonesian Financial Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern, and using the going concern basis of accounting, unless management either intends to liquidate the Group or to cease its operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group’s financial reporting process. Auditor’s responsibilities for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements taken as a whole are free from material misstatement, whether due to fraud or error, and to issue an independent auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing established by the IICPA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. iii Independent Auditor’s Report (continued) Report No. 00351/2.1032/AU.1/06/0687-1/1/III/2023 (continued) This report is originally issued in the Indonesian language. Auditor’s responsibilities for the audit of the consolidated financial statements (continued) As part of an audit in accordance with Standards on Auditing established by the IICPA, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:  Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to such risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may intentional omissions, misrepresentations, or override of internal control. involve collusion, forgery,  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.  Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.  Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our independent auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusion is based on the audit evidence obtained up to the date of our independent auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.  Evaluate the overall presentation, structure, and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. iv These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION As of December 31, 2022 (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) Notes 2022 2021 ASSETS CURRENT ASSETS Cash and cash equivalents - net Other current financial assets - net Trade receivables - net allowance for expected credit losses Related parties Third parties Contract assets - net Other receivables - net Inventories - net Assets held for sale Contract costs Prepaid taxes Claim for tax refund Other current assets Total Current Assets NON-CURRENT ASSETS Contract assets - net Long-term investments Contract costs Property and equipment Right-of-use assets Intangible assets Deferred tax assets - net Other non-current assets Total Non-current Assets TOTAL ASSETS LIABILITIES AND EQUITY CURRENT LIABILITIES Trade payables Related parties Third parties Contract liabilities Other payables Taxes payable Accrued expenses Customer deposits Short-term bank loans Current maturities of long-term loans and other borrowings Current maturities of lease liabilities Total Current Liabilities NON-CURRENT LIABILITIES Deferred tax liabilities - net Contract liabilities Long service award provisions Pension benefits and other post-employment benefits obligations Long-term loans and other borrowings Lease liabilities Other liabilities Total Non-current Liabilites TOTAL LIABILITIES EQUITY Capital stock Additional paid-in capital Other equity Retained earnings Appropriated Unappropriated Net equity attributable to: Owners of the parent company Non-controlling interests TOTAL EQUITY TOTAL LIABILITIES AND EQUITY 3,32,37 4,32,37 5,32,37 5,37 6,32,37 37 7 11b 9 27a 27b 8,32 6,32,37 10,37 9 11,32,35a 12 14 27f 13,27,32,37 15,32,37 15,37 17a,32 37 27c 16,32,37 32 18a,32,37 18b,32,37 12,37 27f 17b,32 31 30 19,32,37 12,37 21 22 29 20 31,947 1,349 1,620 7,014 2,457 245 1,144 6 671 1,464 380 6,760 55,057 34 8,653 1,741 173,329 20,336 8,302 4,117 3,623 220,135 275,192 431 18,026 6,295 463 5,372 15,445 2,382 8,191 8,858 4,925 70,388 1,023 1,561 1,031 10,272 27,331 13,736 588 55,542 125,930 4,953 2,711 9,697 15,337 96,560 129,258 20,004 149,262 275,192 38,311 493 961 7,549 2,330 195 779 818 656 2,144 690 6,351 61,277 143 13,800 1,608 165,026 18,469 7,506 3,824 5,531 215,907 277,184 497 16,673 6,795 609 3,923 15,885 2,416 6,682 9,690 5,961 69,131 1,158 1,283 1,206 11,563 36,319 10,426 699 62,654 131,785 4,953 2,711 9,395 15,337 89,250 121,646 23,753 145,399 277,184 The accompanying notes form an integral part of these consolidated financial statements. 1 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME For the Year Ended December 31, 2022 (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) REVENUES COST AND EXPENSES Operation, maintenance, and telecommunication service expenses Depreciation and amortization expenses Personnel expenses General and administrative expenses Interconnection expenses Marketing expenses Unrealized (loss) gain on changes in fair value of investments Other income - net Gain on foreign exchange - net OPERATING PROFIT Finance income Finance cost Share of loss of long-term investment in associates PROFIT BEFORE INCOME TAX INCOME TAX (EXPENSE) BENEFIT Current Deferred PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME Other comprehensive income to be reclassified to profit or loss in subsequent periods: Foreign currency translation Changes in fair value of investments Share of other comprehensive income of long-term investment in associates Other comprehensive income not to be reclassified to profit or loss in subsequent periods: Defined benefit actuarial gain - net Other comprehensive income - net TOTAL COMPREHENSIVE INCOME FOR THE YEAR Profit for the year attributable to: Owners of the parent company Non-controlling interests Total comprehensive income for the year attributable to: Owners of the parent company Non-controlling interests BASIC EARNINGS PER SHARE (in full amount) Net income per share Net income per ADS (100 Series B shares per ADS) Notes 23,32 2022 147,306 2021 143,210 25,32 11,12,14 24 26,32 32 32 10 32 32 10 27d 22 10a 10b 30 20 28 (38,184) (33,255) (14,907) (5,854) (5,440) (3,929) (6,438) 26 256 39,581 878 (4,033) (87) 36,339 (9,259) 600 (8,659) 27,680 299 3 1 1,464 1,767 29,447 20,753 6,927 27,680 22,468 6,979 29,447 (38,133) (31,816) (15,524) (5,016) (5,181) (3,633) 3,432 174 50 47,563 558 (4,365) (78) 43,678 (9,556) (174) (9,730) 33,948 28 (2) (1) 1,955 1,980 35,928 24,760 9,188 33,948 26,767 9,161 35,928 209.49 20,949.46 249.94 24,994.39 The accompanying notes form an integral part of these consolidated financial statements. 2 3 6 4 , 8 1 ) 5 8 8 , 9 2 ( 0 8 9 , 1 8 4 9 , 3 3 9 9 3 , 5 4 1 4 9 8 8 , 0 2 1 y t i u q e l a t o T 5 7 2 6 3 , 8 1 ) 7 2 ( 7 9 3 , 9 ) 2 4 2 , 3 1 ( 8 8 1 , 9 3 5 7 , 3 2 g n i l l o r t n o c - n o N s t s e r e t n i ) 1 7 ( 7 2 5 , 2 0 1 6 6 0 , 9 ) 3 4 6 , 6 1 ( 7 0 0 , 2 0 6 7 , 4 2 6 4 6 , 1 2 1 - - ) 3 4 6 , 6 1 ( 1 8 9 , 1 0 6 7 , 4 2 0 5 2 , 9 8 9 9 3 , 5 4 1 3 5 7 , 3 2 6 4 6 , 1 2 1 0 5 2 , 9 8 5 4 1 1 ) 1 8 6 ( ) 9 5 9 , 4 2 ( 7 6 7 , 1 0 8 6 , 7 2 2 6 2 , 9 4 1 5 4 1 1 ) 3 0 1 , 0 1 ( 2 5 ) 1 8 6 ( 7 2 9 , 6 4 0 0 , 0 2 - - ) 6 5 8 , 4 1 ( - 5 1 7 , 1 3 5 7 , 0 2 8 5 2 , 9 2 1 - - ) 6 5 8 , 4 1 ( - 3 1 4 , 1 3 5 7 , 0 2 0 6 5 , 6 9 2 5 1 , 9 7 7 3 3 , 5 1 i s g n n r a e d e n i a t e R y n a p m o c t n e r a p e h t f o s r e n w o o t l e b a t u b i r t t A l a n o i t i d d A t e N d e t a i r p o r p p a n U d e t a i r p o r p p A y t i u q e r e h t O l a t i p a c n i - d a p i k c o t s l a t i p a C s e t o N n o i t p i r c s e D ) d e t a t s e s i w r e h t o s s e l n u , i h a p u R n a s e n o d n i I f o s n o i l l i b n i d e s s e r p x e s e b a t e h t n l i s t n u o m A ( I I I S E R A D S B U S S T I D N A . I k b T A S E N O D N I I I S A K N U M O K E L E T T P I Y T U Q E N I S E G N A H C F O T N E M E T A T S D E T A D L O S N O C I 2 2 0 2 , 1 3 r e b m e c e D d e d n E r a e Y e h t r o F ) O R E S R E P ( N A O R E S R E P N A A H A S U R E P . e g a u g n a l i n a s e n o d n I e h t n i d e u s s i y l l i a n g i r o e r a s t n e m e t a t s l i a c n a n i f d e t a d i l o s n o c e s e h T - - - - - 7 3 3 , 5 1 7 3 3 , 5 1 - - - - - - 7 3 3 , 5 1 ) 1 7 ( 4 7 3 - - 6 2 6 6 0 , 9 5 9 3 , 9 5 9 3 , 9 - - - - - 2 0 3 7 9 6 , 9 1 1 7 , 2 3 5 9 , 4 - - - - - 1 1 7 , 2 1 1 7 , 2 - - - - - - - - - - - 3 5 9 , 4 3 5 9 , 4 - - - - - - 1 1 7 , 2 3 5 9 , 4 e 1 9 2 0 2 9 2 e 1 0 2 s t s e r e t n i g n i l l o r t n o c - n o n m o r f t n e m t s e v n I 2 2 0 2 , 1 y r a u n a J , e c n a l a B t e n - e m o c n i i e v s n e h e r p m o c r e h t O 1 2 0 2 , 1 3 r e b m e c e D , e c n a l a B r a e y e h t r o f t i f o r P i y r a d s b u s i t c e r i d n i d e h s i l b a t s e l y w e n r o f s t s e r e t n i g n i l l o r t n o c - n o n n i s e g n a h C d n e d v d i i h s a C s e r a h s s t s e r e t n i g n i l l o r t n o c - n o n f o e s a h c r u p e R t e n - e m o c n i i e v s n e h e r p m o c r e h t O 2 2 0 2 , 1 3 r e b m e c e D , e c n a l a B r a e y e h t r o f t i f o r P m o r f s t s e r e t n i g n i l l o r t n o c - n o n n i s e g n a h C s t s e r e t n i g n i l l o r t n o c - n o n f o t n e m t s u d A j 1 2 0 2 , 1 y r a u n a J , e c n a l a B i y r a d s b u s i f o g n i r e f f o c i l b u p l a i t i n i d n e d v d i i h s a C . s t n e m e t a t s l i a c n a n i f d e t a d i l o s n o c e s e h t f o t r a p l a r g e t n i n a m r o f s e t o n i g n y n a p m o c c a e h T 3 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS For the Year Ended December 31, 2022 (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) Notes 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from customers and other operators Cash receipts from tax refund Cash receipts from finance income Cash payments for expenses Cash payments to employees Cash payments for corporate and final income taxes Cash payments for finance costs Cash payments for short-term and low-value lease assets Cash payments for value added taxes - net Cash receipts from (payments for) others - net Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property and equipment Proceeds from insurance claims Dividend received from associated company Purchase of property and equipment Purchase of intangible assets Addition of long-term investment in financial instrument Increase (decrease) in advances and other assets (Placement in) proceeds from other current financial assets - net Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from bank loans and other borrowings Proceeds from initial public offering of subsidiary Proceeds from issuance of new shares of subsidiaries Repayments of bank loans and other borrowings Cash dividend paid to the Company's stockholders Cash dividend paid to non-controlling interests of subsidiaries Repayments of principal portion of lease liabilities Placement in shares buyback from non-controlling interests by subsidiary 12 11 11 10 11,39 14,39 10 13 18,19 1e 18,19 21 20 146,268 2,411 865 (45,559) (14,052) (8,465) (4,064) (3,873) (515) 338 143,902 3,768 564 (44,811) (13,262) (9,679) (4,426) (5,308) (2,084) (311) 73,354 68,353 526 299 17 (35,138) (3,259) (1,401) 560 (854) 756 133 - (29,712) (2,845) (6,400) (442) 807 (39,250) (37,703) 35,958 - 45 (44,304) (14,856) (10,103) (6,896) (681) 46,612 18,463 - (43,740) (16,643) (13,242) (4,436) - Net cash used in financing activities (40,837) (12,986) NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (6,733) 17,664 EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS ALLOWANCE FOR EXPECTED CREDIT LOSSES CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT END OF THE YEAR 3 3 370 (1) 38,311 31,947 59 (1) 20,589 38,311 *Information on non-cash transactions are presented in Note 39 The accompanying notes form an integral part of these consolidated financial statements. 4 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 1. GENERAL a. Establishment and general information Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk. (the “Company”) was originally part of “Post en Telegraafdienst”, which was established and operated commercially in 1884 under the framework of Decree No. 7 dated March 27, 1884 of the Governor General of the Dutch Indies which was published in State Gazette No. 52 dated April 3, 1884. In 1991, the status of the Company was changed into a state-owned limited liability corporation (“Persero”) based on Government Regulation No. 25/1991. The ultimate parent of the Company is the Government of the Republic of Indonesia (the “Government”) (Note 21). The Company was established based on Notarial Deed No. 128 dated September 24, 1991 of Imas Fatimah, S.H. The deed of establishment was approved by the Ministry of Justice of the Republic of Indonesia in its Decision Letter No. C2-6870.HT.01.01.Th.1991 dated November 19, 1991 and was published in State Gazette No. 5 dated January 17, 1992, Supplement No. 210. The Company's Articles of Association have been amended several times, the latest amendments made is in relation with adjustments of the Company’s business activities in the Articles of Association with the Standard Classification of Indonesian Business Fields in 2020. Amendments to the Articles of Association as stated in the Notary Deed of Ashoya Ratam, S.H., M.Kn. No. 37 dated June 22, 2022, the amendment has been received and approved by the Minister of Law and Human Rights of the Republic of Indonesia (“MoLHR”) based on letter No. AHU-0044650.AH.01.02. Year of 2022 dated June 29, 2022, concerning Acceptance of Notification Approval of Amendment to the Articles of Association of the Limited Liability Company (Persero) PT Telekomunikasi Indonesia Tbk. In accordance with Article 3 of the Company’s Articles of Association, the scope of its activities is to provide telecommunication network and telecommunication and information services, and to optimize the Company’s resources to provide high quality and competitive goods and/or services to gain/pursue profit in order to increase the value of the Company by applying the Limited Liability Company principle. In regard to achieving its objectives, the Company is involved in the following activities: i. Main business: (a) Planning, building, providing, developing, operating, marketing or selling or leasing, and maintaining telecommunications and information networks in a broad sense in accordance with prevailing laws and regulations. (b) Planning, developing, providing, marketing or selling, and improving telecommunications and information services in a broad sense in accordance with prevailing laws and regulations. (c) Investing, including in the form of equity capital in other companies in line with and to achieve the purposes and objectives of the Company. ii. Supporting business: (a) Providing payment transactions and money transferring services through telecommunications and information network. (b) Performing other activities and undertakings in connection with the optimization of the Company's resources, among which including the utilization of the Company's property and equipment and movable assets, information systems, education and training, and repairs and maintenance facilities. (c) Collaborating with other parties in order to optimize the information, communication or technology resources owned by other parties as services provider in the information, communication and technology industry, as to achieve the purposes and objectives of the Company. 5 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 1. GENERAL (continued) a. Establishment and general information (continued) The Company is domiciled and headquartered in Bandung, West Java, located at Jalan Japati No. 1, Bandung. The Company was granted several networks and/or services provision licenses by the Government which are valid for an unlimited period of time as long as the Company complies with prevailing laws and regulations and fulfills the obligation stated in those licenses. For every license issued by the Ministry of Communication and Information (“MoCI”), an evaluation is performed annually and an overall evaluation is performed every five years. The Company is obliged to submit reports of networks and/or services annually to the Indonesian Directorate General of Post and Informatics (“DGPI”), replacing the previously known as Indonesian Directorate General of Post and Telecommunications (“DGPT”). The reports comprising of several informations, such as network development progress, service quality standard achievement, number of customers, license payment, and universal service contribution. Meanwhile, for internet telephone services for public purpose, internet interconnection service, and internet access service, additional information is required, such as operational performance, customer segmentation, traffic, and gross revenue. Details of these licenses are as follows: License License No. Type of service License to operate internet telephone services for public purpose License to operate internet service provider License to operate content service provider License for the implementation of internet interconnection services License to operate data communication system services License to operate IPTV service provider License of electronics money issuer and money transfer License of operate fixed network long distance direct line License to operate fixed international network License to operate fixed closed network License of operate circuit switched-based local fixed line network 127/KEP/DJPPI/ Internet telephone KOMINFO/3/2016 services for public purpose 2176/KEP/M.KOMINFO/ Internet service 12/2016 1040/KEP/M.KOMINFO/ Content service 16/2017 1004/KEP/M.KOMINFO/ Internet interconnection 2018 provider provider services Grant date/latest renewal date March 30, 2016 December 30, 2016 May 16, 2017 December 26, 2018 046/KEP/M.KOMINFO/ 02/2020 Data communication system services August 3, 2020 022/KEP/M.KOMINFO/ 02/2021 Bank Indonesia License Electronics money and 23/587/DKSP/Srt/B Multimedia IPTV service provider money transfer February 25, 2021 July 1, 2021 073/KEP/M.KOMINFO/ 02/2021 Fixed network long distance direct line August 23, 2021 service 082/KEP/M.KOMINFO/ 02/2021 094/KEP/M.KOMINFO/ 02/2021 095/KEP/M.KOMINFO/ 02/2021 Fixed international network Fixed closed network Circuit switched-based and packet switched-based local fixed line network October 8, 2021 December 9, 2021 December 9, 2021 6 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 1. GENERAL (continued) b. Company’s Board of Commissioners, Board of Directors, Audit Committee, Corporate Secretary, Internal Audit, and Employees i. Boards of Commissioners and Directors Based on resolutions made at Annual General Meeting (“AGM”) of Stockholders of the Company as covered by Notarial Deed of Ashoya Ratam, S.H., M.Kn., No. 34, dated June 18, 2021, the composition of the Company’s Boards of Commissioners and Directors as of December 31, 2022 and 2021, respectively, were as follows: 2022 2021 Bambang Permadi Soemantri Brojonegoro Bambang Permadi Soemantri Brojonegoro Arya Mahendra Sinulingga Arya Mahendra Sinulingga Rizal Mallarangeng Isa Rachmatarwata Ismail Marcelino Rumambo Pandin Marcelino Rumambo Pandin Bono Daru Adji Wawan Iriawan Abdi Negara Nurdin Ririek Adriansyah Bono Daru Adji Wawan Iriawan Abdi Negara Nurdin Ririek Adriansyah Rizal Mallarangeng Isa Rachmatarwata Ismail President Commissioner/ Independent Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Independent Commissioner Independent Commissioner Independent Commissioner President Director Director of Finance dan Risk Management Director of Digital Business Director of Strategic Portfolio Director of Enterprise & Business Service* F.M. Venusiana R. Director of Wholesale & International Services Bogi Witjaksono Director of Human Capital Management Afriwandi Director of Network & IT Solution Director of Consumer Service Herlan Wijanarko F.M. Venusiana R. Heri Supriadi Muhamad Fajrin Rasyid Budi Setyawan Wijaya Heri Supriadi Muhamad Fajrin Rasyid Budi Setyawan Wijaya Edi Witjara Bogi Witjaksono Afriwandi Herlan Wijanarko F.M. Venusiana R. * On July 8, 2022, Mr. Edi Witjara was appointed as President Director of PT Industri Telekomunikasi Indonesia (Persero) and based on the Company's Board of Commissioners Letter No. 073/SRT/DK/2022 dated July 11, 2022, Mrs. F.M. Venusiana R. was appointed as Temporary Replacement Officer for Director of Enterprise & Business Service, whose term of service has been extended based on the Letter of the Company's Board of Commissioners No. 167/SRT/DK/2022 dated December 6, 2022 regarding the Extension of Term of Service for Mrs. F.M. Venusiana R. as Officer (PLT) for Director of Enterprise & Business Service. ii. Audit Committee, Corporate Secretary, and Internal Audit The composition of the Company’s Audit Committee, Corporate Secretary, and Internal Audit as of December 31, 2022 and 2021, respectively, were as follows: 2022 2021 Chairman Member Member Member Member Member Corporate Secretary* Internal Audit Bono Daru Adji Bambang Permadi Soemantri Brojonegoro Wawan Iriawan Abdi Negara Nurdin Bono Daru Adji Bambang Permadi Soemantri Brojonegoro Wawan Iriawan Abdi Negara Nurdin Emmanuel Bambang Suyitno Emmanuel Bambang Suyitno Edy Sihotang R. Achmad Faisal Daru Mulyawan Edy Sihotang Andi Setiawan Harry Suseno Hadisoebroto * On January 2, 2023, Mr. R. Achmad Faisal was replaced by Mr. Edwin Julianus Sebayang as Corporate Secretary. 7 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 1. GENERAL (continued) b. Company’s Board of Commissioners, Board of Directors, Audit Committee, Corporate Secretary, Internal Audit, and Employees (continued) iii. Employees As of December 31, 2022 and 2021, the Company and its subsidiaries (collectively referred to as the “Group”) had 20,951 employees and 20,884 employees, respectively. c. Public offering of securities of the Company The Company’s number of shares prior to its Initial Public Offering (“IPO”) totalled 8,400,000,000, consisting of 8,399,999,999 Series B shares and 1 Series A Dwiwarna share, and were wholly- owned by the Government. On November 14, 1995, 933,333,000 new Series B shares and 233,334,000 Series B shares owned by the Government were offered to the public through an IPO and listed on the Indonesia Stock Exchange (“IDX”) and 700,000,000 Series B shares owned by the Government were offered to the public and listed on the New York Stock Exchange (“NYSE”) and the London Stock Exchange (“LSE”) in the form of American Depositary Shares (“ADS”). There were 35,000,000 ADS and each ADS represented 20 Series B shares at that time. In December 1996, the Government had a block sale of its 388,000,000 Series B shares, and in 1997, distributed 2,670,300 Series B shares as incentive to the Company’s stockholders who did not sell their shares within one year from the date of the IPO. In May 1999, the Government further sold 898,000,000 Series B shares. To comply with Law No. 1/1995 on Limited Liability Companies, at the AGM of Stockholders of the Company on April 16, 1999, the Company’s stockholders resolved to increase the Company’s issued share capital by the distribution of 746,666,640 bonus shares through the capitalization of certain additional paid-in capital, which was made to the Company’s stockholders in August 1999. On August 16, 2007, Law No. 1/1995 on Limited Liability Companies was amended by the issuance of Law No. 40/2007 on Limited Liability Companies which became effective on the same date. Law No. 40/2007 has no effect on the public offering of shares of the Company. The Company has complied with Law No. 40/2007. In December 2001, the Government had another block sale of 1,200,000,000 shares or 11.9% of the total outstanding Series B shares. In July 2002, the Government further sold a block of 312,000,000 shares or 3.1% of the total outstanding Series B shares. At the AGM of Stockholders of the Company held on July 30, 2004, the minutes of which were covered by Notarial Deed No. 26 of A. Partomuan Pohan, S.H., LLM., the Company’s stockholders approved the Company’s 2-for-1 stock split for Series A Dwiwarna and Series B share. The Series A Dwiwarna share with par value of Rp500 per share was split into 1 Series A Dwiwarna share with par value of Rp250 per share and 1 Series B share with par value of Rp250 per share. The stock split resulted in an increase of the Company’s authorized capital stock from 1 Series A Dwiwarna share and 39,999,999,999 Series B shares to 1 Series A Dwiwarna share and 79,999,999,999 Series B shares, and the issued capital stock from 1 Series A Dwiwarna share and 10,079,999,639 Series B shares to 1 Series A Dwiwarna share and 20,159,999,279 Series B shares. After the stock split, each ADS represented 40 Series B shares. During the Extraordinary General Meeting (“EGM”) held on December 21, 2005 and the AGMs held on June 29, 2007, June 20, 2008, and May 19, 2011, the Company’s stockholders approved phase I, II, III, and IV plan, respectively, of the Company’s program to repurchase its issued Series B shares. 8 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 1. GENERAL (continued) c. Public offering of securities of the Company (continued) During the period of December 21, 2005 to June 20, 2007, the Company had bought back 211,290,500 shares from the public (stock repurchase program phase I). On July 30, 2013, the Company had sold all such shares. At the AGM held on April 19, 2013 as covered by Notarial Deed No. 38 dated April 19, 2013 of Ashoya Ratam, S.H., M.Kn., the stockholders approved the changes to the Company’s plan on the treasury stock acquired under phase III. At the AGM held on April 19, 2013, the minutes of which were covered by Notarial Deed No. 38 of Ashoya Ratam, S.H., M.Kn., the stockholders approved the Company’s 5-for-1 stock split for Series A Dwiwarna and Series B shares. Series A Dwiwarna share with par value of Rp250 per share was split into 1 Series A Dwiwarna share with par value of Rp50 per share and 4 Series B shares with par value of Rp50 per share. The stock split resulted in an increase of the Company’s authorized capital stock from 1 Series A Dwiwarna and 79,999,999,999 Series B shares to 1 Series A Dwiwarna and 399,999,999,999 Series B shares. The issued capital stock increased from 1 Series A Dwiwarna and 20,159,999,279 Series B shares to 1 Series A Dwiwarna and 100,799,996,399 Series B shares. After the stock split, each ADS represented 200 Series B shares. Effective from October 26, 2016, the Company change the ratio of Depositary Receipt from 1 ADS representing 200 series B shares to become 1 ADS representing 100 series B shares (Note 21). Profit per ADS information have been retrospectively adjusted to reflect the changes in the ratio of ADS. On May 16 and June 5, 2014, the Company deregistered from Tokyo Stock Exchange (“TSE”) and delisted from the LSE, respectively. As of December 31, 2022, all of the Company’s Series B shares are listed on the IDX and 38,896,686 ADS shares are listed on the NYSE (Note 21). On June 16, 2015, the Company issued Continuous Bonds I Telkom Phase I 2015, with a nominal amount of Rp2,200 billion for Series A with a seven-year period, Rp2,100 billion for Series B with a ten-year period, Rp1,200 billion for Series C with a fifteen-year period, and Rp1,500 billion for Series D with a thirty-year period, which respectively are listed on the IDX (Note 19b). On December 21, 2015, the Company sold the remaining shares of treasury shares phase III. On June 29, 2016, the Company sold the treasury shares phase IV. At the AGM held on April 27, 2018 which were covered by Notarial Deed No. 54 of Ashoya Ratam, S.H., M.Kn., the stockholders approved for cancellation of 1,737,779,800 shares of treasury stock by reducing the Company’s capital stock. 9 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 1. GENERAL (continued) d. Subsidiaries As of December 31, 2022 and 2021, the Company has consolidated the following directly and indirectly owned subsidiaries (Notes 2b and 2d): i. Direct subsidiaries: Subsidiary PT Telekomunikasi Selular (“Telkomsel”) Nature of business Mobile telecommunication networks and service Start year of operation commencement 1995 Percentage of ownership* 2022 2021 65 65 Total assets before elimination 2022 100,991 2021 101,302 PT Dayamitra Leasing of towers and other 1995 72 72 56,072 57,728 Telekomunikasi Tbk. (“Mitratel”) telecommunication services PT Multimedia Nusantara (“Metra”) Network telecommunication services and multimedia 1998 100 100 18,710 18,758 PT Telekomunikasi International telecommunication 1995 100 100 13,949 12,705 Indonesia International (“Telin”) PT Sigma Cipta Caraka (“Sigma”), previously consolidated under Metra PT Telkom Satelit Indonesia (“Telkomsat”) and information services Consultation service of hardware, computer software, and data center Telecommunication - provides satellite communication system and its related services and infrastructures 1988 100 100 8,522 5,093 1996 100 100 6,470 5,515 PT Graha Sarana Duta ("GSD") Developer, trade, service, and transportation PT Telkom Akses (“Telkom Akses”) Construction, service and trade in the field of telecommunication 1982 2013 100 100 5,865 5,884 100 100 5,308 4,973 PT Telkom Data Ekosistem (“TDE”), previously was PT Sigma Tata Sadaya PT Metra-Net (“Metra-Net”) PT Infrastruktur Telekomunikasi Indonesia (“Telkom Infra”) Data center 1996 100 100 3,202 3,411 Multimedia portal service Construction, service and trading in the field of telecommunication 2009 2014 100 100 1,731 1,640 100 100 1,360 1,259 *Percentage of ownership amounting to 99.99% is presented with rounding of 100%. All direct subsidiaries are domiciled in Indonesia. 10 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 1. GENERAL (continued) d. Subsidiaries (continued) i. Direct subsidiaries (continued): Subsidiary PT PINS Indonesia Nature of business Telecommunication (“PINS”) construction and services PT Napsindo Primatel Internasional (“Napsindo”) Telecommunication - provides Network Access Point ("NAP"), Voice Over Data ("VOD"), and other related sevices 1999; ceased operations on January 13, 2006 *Percentage of ownership amounting to 99.99% is presented with rounding of 100%. All direct subsidiaries are domiciled in Indonesia. Start year of operation commencement 1995 Percentage of ownership* Total assets before elimination 2022 2021 2022 100 100 797 2021 1,589 60 60 5 5 ii. Indirect subsidiaries: Subsidiary PT Metra Digital Nature of business Trading service related to Investama (“MDI”) Telekomunikasi Indonesia International Pte. Ltd. ("Telin Singapore"), domiciled in Singapore information and technology, multimedia, entertainment, and investment Telecommunication and related services Telekomunikasi Indonesia International Ltd. ("Telin Hong Kong"), domiciled in Hong Kong Investment holding and telecommunication services Start year of operation commencement 2013 Percentage of ownership* 2022 100 2021 100 Total assets before elimination 2022 9,019 2021 5,784 2008 100 100 3,678 3,272 2010 100 100 2,981 2,998 PT Infomedia Nusantara (“Infomedia”) Data and information 1984 100 100 2,268 2,359 service - provides telecommunication information services and other information services in the form of print and electronic media and call center services PT Telkom Landmark Tower (“TLT”) Property development and management services 2012 55 55 2,100 2,139 PT Persada Sokka Leasing of towers and other 2008 100 100 1,401 1,097 Tama ("PST") telecommunication services PT Finnet Indonesia Information technology 2006 60 60 1,248 1,294 (“Finnet”) services PT Nuon Digital Indonesia Digital content exchange 2010 100 100 1,199 1,187 (“Nuon”), previously was PT Melon Indonesia hub services *Percentage of ownership amounting to 99.99% is presented with rounding of 100%. Other than those specifically stated, indirect subsidiaries are domiciled in Indonesia. 11 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 1. GENERAL (continued) d. Subsidiaries (continued) ii. Indirect subsidiaries (continued): Subsidiary Nature of business Telecommunication information and other information services PT Metra Digital Media (“MD Media”) PT Telkomsel Mitra Inovasi (“TMI”) Start year of operation commencement 2013 Percentage of ownership* Total assets before elimination 2022 2021 2022 100 100 986 2021 1,201 Business management 2019 100 100 945 692 consulting and investment services Telekomunikasi Indonesia International (TL) S.A. ("Telkomcel"), domiciled in Timor Leste Telecommunication networks, mobile, internet, and data services PT Telkomsel Ekosistem Digital ("TED") PT Administrasi Medika (“Ad Medika”) Provides service related to information and technology, multimedia, entertainment, and investment Health insurance administration services 2012 100 100 836 708 2021 100 100 807 197 2002 100 100 632 543 TS Global Satellite services 1996 70 70 566 596 Network Sdn. Bhd. (“TSGN”), domiciled in Malaysia PT Swadharma Sarana Informatika (“SSI”) Cash replenishment services and ATM maintenance 2001 51 51 458 489 PT Digital Aplikasi Communication system 2014 100 100 384 389 Solusi ("Digiserve") services PT Nusantara Sukses Service and trading 2014 100 100 301 313 Investasi (“NSI”) Telekomunikasi Indonesia International Inc. (“Telin USA”), domiciled in USA Telecommunication and information services 2014 100 100 294 191 PT Graha Yasa Selaras Tourism service (”GYS”) PT Nutech Integrasi (“Nutech”) System integrator service provider PT Graha Telkomsigma Management and ("GTS") consultation services PT Collega Inti Pratama Trading and services ("CIP") Telekomunikasi Indonesia Intl (Malaysia) Sdn. Bhd. (”Telin Malaysia”), domiciled in Malaysia Telecommunication and information services 2012 2001 1999 2001 2013 51 51 285 283 60 60 273 198 100 100 190 205 70 70 70 173 170 70 125 27 PT Media Nusantara Consultation services 2012 55 55 116 119 Data Global ("MNDG") *Percentage of ownership amounting to 99.99% is presented with rounding of 100% Other than those specifically stated, indirect subsidiaries are domiciled in Indonesia. 12 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 1. GENERAL (continued) d. Subsidiaries (continued) ii. Indirect subsidiaries (continued): Subsidiary Nature of business PT Bosnet Distribution Trade and consultation Start year of operation commencement 2012 Percentage of ownership* Total assets before elimination 2022 2021 2022 2021 60 60 36 36 Indonesia (“BDI”) PT Metra TV (“Metra TV”) services Subscription broadcasting 2013 100 100 34 services PT Pojok Celebes Travel agent services 2008 100 100 33 26 45 Mandiri ("PCM") Telecommunication and information services Telekomunikasi Indonesia International (Australia) Pty. Ltd. (“Telin Australia”), domiciled in Australia 2013 100 100 33 34 PT Metraplasa (“Metraplasa”) Network and e-commerce 2012 60 60 30 61 services PT Teknologi Data Telecommunication service 2013 100 100 7 8 and data center Infrastruktur (“TDI”), previously was PT Satellit Multimedia Indonesia *Percentage of ownership amounting to 99.99% is presented with rounding of 100%. Other than those specifically stated, indirect subsidiaries are domiciled in Indonesia. e. Initial public offering and acquisition transactions in subsidiaries i. Mitratel Based on the Deed of Decision of the Shareholders Outside the General Meeting of Shareholders (Circular) No. 31 dated August 21, 2021 from Notary Ashoya Ratam, S.H., M.Kn., the shareholders of Mitratel decided and approved the change of Mitratel's status from a private company to a public company under the name of PT Dayamitra Telekomunikasi Tbk. On November 12, 2021, Mitratel received an effective statement from the Financial Services Authority ("OJK") with letter No. S-201/D.04/2021 to conduct an initial public offering (“IPO”) of 23,493,524,800 ordinary shares with a par value of Rp228 per share and an offering price of Rp800 per share. On November 22, 2021, Mitratel's shares have been listed on IDX based on Letter No. S-08617/BEI.PP3/11-2021 regarding Approval of Securities Listing dated November 15, 2021. Mitratel obtained IPO funds amounting to Rp18,463 billion (after deducted by share issuance costs), so that the Company's share ownership in Mitratel diluted from 99.99% to 71.87%. Hence, the Company still controls Mitratel. For this transaction, the Company has been accounted the difference in non-controlling ownership transactions are as follows: Proceeds from IPO of 28.13% ownership interests Net assets attributable to non-controlling interests Increase in equity attributable to parent company 18,463 (9,397) 9,066 On June 2, 2022, Mitratel announced to buyback its shares with a maximum amount of Rp1,000 billion. The buyback period of Mitratel's shares is for three months starting from June 2, 2022 to September 2, 2022. Mitratel has exercised buyback of 885,200,000 of its shares or equivalent to Rp681 billion. 13 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 1. GENERAL (continued) e. Initial public offering and acquisition transactions in subsidiaries (continued) ii. Metra On August 29, 2014, Metra and Telstra Holding Singapore Pte. Ltd. established PT Teltranet Aplikasi Solusi (“Teltranet”), currently known as PT Digital Aplikasi Solusi (“Digiserve”). Metra's share ownership in Teltranet was 51%. Metra had no control in determining the financial and operating policies of Teltranet, hence it was recognized as ownership in associates. Based on the Share Purchase Agreement dated August 31, 2021, Metra purchased Digiserve's shares owned by Telstra Holdings Singapore Pte. Ltd. as many as 13,115,477 shares or equivalent to 49% share ownership with an acquisition value of AU$1, thus becoming a subsidiary of Metra. As of December 31, 2021, Metra has recorded the difference between the acquisition value and fair value, resulting in goodwill recognized amounted to Rp64 billion (Note 14). iii. TDE TDE was previously Sigma’s subsidiary. Based on Share Acquisition Deed No. 388 dated December 27, 2021 of Jimmy Tanal, S.H., M.Kn., the Company entered into a takeover of TDE’s shares, so that the Company's ownership in TDE became 99.89%, impacting Sigma’s ownership which diluted to 0.11%. The Company purchased 2,106,465,158,910 series B shares of TDE or equivalent to Rp2,106 billion. The Company has made cash payments of Rp1,250 billion and paid-up capital in other forms (“inbreng”) of Rp856 billion for the takeover of TDE’s shares. iv. Telkomsel Based on the Resolution of Shareholders on December 14, 2021, Telkomsel established a subsidiary, namely PT Telkomsel Ekosistem Digital (“TED”), which was formalized by Notarial Deed No. 19 dated December 16, 2021 of Bonardo Nasution, S.H. The total paid-up capital of TED were 197,000 shares (Rp1,000,000 par value per share). Telkomsel own 196,989 shares and paid Rp197 billion on December 29, 2021. v. Sigma Based on Notarial Deed No. 120 dated April 19, 2022 of Jimmy Tanal, S.H., M.Kn., the Company acquired Sigma shares from Metra, resulted in 56.39% ownership by the Company and diluting Metra’s ownership into 43.61%. f. Completion and authorization for the issuance of the consolidated financial statements The Company’s management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Indonesian Financial Accounting Standards, which have been completed and authorized for issuance by the Board of Directors of the Company on March 24, 2023. 14 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Group consolidated financial statements have been prepared in accordance with Financial Accounting Standards ("Standar Akuntansi Keuangan” or “SAK") including Indonesian Statement of Financial Accounting Standards ("Pernyataan Standar Akuntansi Keuangan" or “PSAK”) and interpretation of Financial Accounting Standards ("Interpretasi Standar Akuntansi Keuangan" or “ISAK”) in Indonesia published by the Financial Accounting Standards Board of Institute of Indonesian Chartered Accountants and Regulation No. VIII.G.7 of the Capital Market and Financial Institution Supervisory Agency (“Bapepam-LK”) regarding the Presentation and Disclosure of Financial Statements of Issuers or Public Companies, enclosed in the decision letter KEP-347/BL/2012. a. Basis of preparation of consolidated financial statements The consolidated financial statements, except for the consolidated statements of cash flows, are prepared on accrual basis. The measurement basis used is historical cost, except for certain accounts which are measured using the basis mentioned in the relevant notes herein. The consolidated statements of cash flows are prepared using the direct method and present the changes in cash and cash equivalents from operating, investing, and financing activities. Figures in the tables of the consolidated financial statements are presented and rounded to billions of Indonesian rupiah (“Rp”) and millions of US$, unless otherwise stated. Figures in the consolidated financial statements which still contain values but below Rp1 billion and US$ 1 million, are presented with zero. New accounting standards On January 1, 2022, the Group adopted the new and revised statement of financial accounting standards and interpretations of financial accounting standards effective from that date. Adjustments to the Group's accounting policies have been made as required, in accordance with the transitional provisions of the respective standards and interpretations. The adoption of the new and revised standards and interpretations did not result in major changes to the Group's accounting policies and had no material effect on the amounts reported for the current or prior financial year: i. Amendment to PSAK 22: Business Combinations ii. Amendments to PSAK 57: Provisions, Contingent Liabilities, and Contingent Assets iii. Annual Improvement of PSAK 71: Financial Instruments iv. Annual Improvement of PSAK 73: Leases Accounting standards issued but not yet effective Effective January 1, 2023 i. Amendment PSAK 1: Presentation of Financial Statements This amendment changes the term “significant” to “material” and provides an explanation regarding material accounting policies. ii. Amendment PSAK 16: Fixed Assets This amendment regulates the treatment of results before the intended use. iii. Amendment PSAK 25: Accounting Policies, Changes in Accounting Estimates, and Errors This amendment provides a new definition of “accounting estimates” and explanations. iv. Amendment to PSAK 46: Income Tax on Deferred Tax on Assets and Liabilities arising from a Single Transaction This amendment provides for the recognition of a deferred tax asset or liability on initial recognition of a transaction that gives rise to an equal amount of asset and liability. 15 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) a. Basis of preparation of consolidated financial statements (continued) Accounting standards issued but not yet effective (continued) Effective January 1, 2024 i. Amendment PSAK 1: Presentation of Financial Statements This amendment clarifies long-term liabilities with covenant and the classification of liabilities as short-term liabilities or long-term liabilities ii. Amendment PSAK 73: Leases This amendment regulates lease liabilities in sale and leaseback transactions. b. Principles of consolidation The consolidated financial statements consist of the financial statements of the Company and the subsidiaries over which it has control. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has the power over the investee, exposure or rights, to variable returns from its involvement with the investee, and the ability to use its power over the investee to affect its returns. Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: i. The contractual arrangement with the other vote holders of the investee, ii. Rights arising from other contractual arrangements, and iii. The Group's voting rights and potential voting rights. The Group re-assesses whether it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control over the subsidiary. Assets, liabilities, income and expenses, of a subsidiary acquired or disposed of during the year are included in the consolidated statements of profit or loss and other comprehensive income from the date the Group gain control until the date the Group ceases to control the subsidiary. Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the equity holders of the Company and to the non-controlling interests, even if this results in the non- controlling interests having a deficit balance. All intra-Group assets and liabilities, equity, revenue and expenses and cash flow relating to transactions within Group are fully eliminated on consolidation. In case of loss of control over a subsidiary, the Group: i. derecognizes the assets (including goodwill) and liabilities of the subsidiary at the carrying amounts on the date when it loses control; ii. derecognizes the carrying amounts of any non-controlling interests of its former subsidiary on the date when it loses control; iii. recognizes the fair value of the consideration received (if any) from the transaction, events, or condition that caused the loss of control; iv. recognizes the fair value of any investment retained in the subsidiary at fair value on the date of loss of control; and v. recognizes any surplus or deficit in profit or loss that is attributable to the Company’s owner. 16 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) c. Transactions with related parties The Group has transactions with related parties. The definition of related parties used is in accordance with the Bapepam-LK’s Regulation No. VIII.G.7 regarding the Presentations and Disclosures of Financial Statements of Issuers or Public Companies, enclosed in the decision letter No. KEP-347/BL/2012. The party which is considered as a related party is a person or entity that is related to the entity that is preparing its financial statements. Under the Regulation of Bapepam-LK No. VIII.G.7, a government-related entity is an entity that is controlled, jointly controlled or significantly influenced by the government. Government in this context is the Minister of Finance or the Local Government, as the shareholder of the entity. Key management personnel are identified as the persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of the Group. The related party status extends to the key management of the subsidiaries to the extent they direct the operations of subsidiaries with minimal involvement from the Company’s management. d. Business combinations and goodwill Business combination is accounted for using the acquisition method. The consideration transferred is measured at fair value, which is the aggregate of the fair value of the assets transferred, liabilities incurred or assumed, and the equity instruments issued in exchange for control of the acquiree. For each business combination, non-controlling interest is measured at fair value or at the proportionate share of the acquiree’s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Acquisition-related costs are expensed as incurred. The acquiree’s identifiable assets and liabilities are recognized at their fair values at the acquisition date. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed, and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the re- assessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss. When the determination of consideration from a business combination includes contingent consideration, it is measured at its fair value on acquisition date. Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognized in profit or loss when adjustments are recorded outside the measurement period. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments made against goodwill. Measurement-period adjustments are adjustments that arise from additional information obtained during the measurement period, which cannot exceed one year from the acquisition date, about facts and circumstances that existed at the acquisition date. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group shall report in its consolidated financial statements provisional amounts for the items for which the accounting is incomplete. During the measurement period, the Group shall retrospectively adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognized as of that date. The measurement period ends immediately after the Company receives the information about the facts and circumstances that existed at the acquisition date or learns that additional information cannot be obtained. However, the measurement period must not exceed one year from the date of acquisition. 17 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) d. Business combinations and goodwill (continued) In a business combination achieved in stages, the acquirer remeasures its previously held equity interest in the acquiree at its acquisition-date fair value and recognizes the resulting gain or loss, if any, in profit or loss. Based on PSAK 38 (Revised 2012), “Common Control Business Combination”, the transfer of assets, liabilities, shares or other ownership instruments among the companies under common control would not result in a gain or loss for the Company or individual entity in the same group. Since the restructuring transaction between entities under common control does not result in a change of the economic substance of the ownership of assets, liabilities, shares, or other instruments of ownership, which are exchanged, assets or liabilities transferred are recorded at book value using the pooling-of-interests method. In applying the pooling-of-interests method, the components of the financial statements for the period during the restructuring occurred must be presented in such a manner as if the restructuring has occurred since the beginning of the earliest period presented. The excess of consideration paid or received over the carrying value of interest acquired, net of income tax, is directly recognized to equity and presented as “Additional Paid-in Capital” under the equity section of the consolidated statement of financial position. At the initial application of PSAK 38 (Revised 2012), all balances of the Difference In Value of Restructuring Transactions of Entities under Common Control was reclassified to “Additional Paid- in Capital” in the consolidated statement of financial position. e. Cash and cash equivalents Cash and short-term deposits in the statement of financial position comprise cash in banks and on hand and short-term highly liquid deposits with a maturity of three months or less, that are readily convertible to a known amount of cash and subject to an insignificant risk of changes in value. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group’s cash management. Time deposits with maturities of more than three months but not more than one year are presented as part of “Other current financial assets” in the consolidated statements of financial position (Note 2u). f. Investments in associates An associate is an entity over which the Group (as investor) has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but does not include control or joint control over those operating policies. The considerations made in determining significant influence are similar to those necessary to determine control over subsidiaries. Holding of 20% or more of the voting power of the investee (held directly or indirectly, through subsidiaries) is presumed to give rise to significant influence, unless it can be clearly demonstrated that this is not the case. Conversely, a holding of less than 20% of the voting power is presumed not to give rise to significant influence, unless it can be clearly demonstrated that there is in fact significant influence. 18 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) f. Investments in associates (continued) The existence of significant influence will usually be evidenced in one or more of the following ways: representation on the boards of directors and commisioners or equivalent governing body of i. the investee; ii. participation in policy-making processes, including participation in decisions about dividends and other distributions; iii. material transactions between the investor and the investee; iv. interchange of managerial personnel; v. provision of essential technical information. The Group’s investments in its associates are accounted for using the equity method. Under the equity method, the investment in an associate is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the investor’s share of the net assets of the associate since the acquisition date. On acquisition of the investment, any difference between the cost of the investment and the entity's share of the net fair value of the investee's identifiable assets and liabilities is accounted for as follows: i. Goodwill relating to an associate, or a joint venture is included in the carrying amount of the investment and is neither amortized nor individually tested for impairment, and ii. Any excess of the entity's share of the net fair value of the investee's identifiable assets and liabilities over the cost of the investment is included as income in the determination of the entity's share of the associate or joint venture's profit or loss in the period in which the investment is acquired. The consolidated statements of profit or loss and other comprehensive income reflect the Group’s share of the results of operations of the associate. Any change in the other comprehensive income of the associate is presented as part of other comprehensive income. In addition, when there has been a change recognized directly in the equity of the associate, the Group recognizes its share of the change in the consolidated statements of changes in equity. Unrealized gain and losses resulting from transactions between the Group and the associate are eliminated to the extent of the interest in the associate. The Group determines at each reporting date whether there is any objective evidence that the investments in associated companies are impaired. If there is, the Group calculates and recognizes the amount of impairment as the difference between the recoverable amount of the investments in the associates and their carrying value. These assets are included in “Long-term investments” in the consolidated statements of financial position. For the reporting purpose of investment in associates using the equity method, the assets and liabilities as of the statement of financial position date with functional currency other than Rupiah are translated into Indonesian rupiah using the rate of exchange prevailing at that date, while revenues and expenses are translated into Indonesian rupiah at the average rates of exchange for the year. The resulting translation adjustments are reported as part of “translation adjustment” in the equity section of the consolidated statements of financial position. g. Trade and other receivables Trade and other receivables are recognized initially at fair value and subsequently measured at amortized cost, less a loss allowance based on lifetime expected credit losses at each reporting date. The Group has made allowance for expected credit losses based on the collective assessment of historical impairment rates and individual assessment of its customers’ credit history, adjusted for forward-looking factors specific from the customers and the economic environment. Receivables are written-off in the year are determined to be uncollectible (Note 2u). 19 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) h. Inventories Inventories consist of components, which represent telephone terminals, cables, and other spare parts. Inventories also include Subscriber Identification Module ("SIM") cards, handsets, wireless broadband modems, and prepaid vouchers which are expensed upon sale. Inventories are valued at the lower of cost and net realizable value. Net realizable value is determined by either estimating the selling price in the ordinary course of business, less estimated cost to sell or determining the prevailing replacement costs. The costs of inventories consist of the purchase price, import duties, other taxes, transport, handling, and other costs directly attributable to their acquisition. Cost is determined using the weighted average method. The amounts of any write-down of inventories below cost to net realizable value and all losses of inventories are recognized as an expense in the period in which the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realizable value, is recognized as a reduction in the amount of general and administrative expenses in the year in which the reversal occurs. Provision for obsolescence is primarily based on the estimated forecast of future usage of these inventory items. i. Prepaid expenses Prepaid expenses are amortized over their future beneficial periods using the straight-line method. j. Assets held for sale Assets (or disposal groups) are classified as held for sale when their carrying amount is to be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. Assets held for sale are stated at the lower of carrying amount and fair value less costs to sell. Assets that meet the criteria to be classified as held for sale are reclassified from property and equipment and depreciation on such assets is ceased. k. Intangible assets Intangible assets mainly consist of software. Intangible assets are recognized if it is highly probable that the expected future economic benefits that are attributable to each asset will flow to the Group, and the cost of the asset can be reliably measured. Intangible assets are stated at cost less accumulated amortization and impairment losses, if any. Intangible assets are amortized over their estimated useful lives. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. When the carrying amount of an intangible asset exceeds its estimated recoverable amount, the asset is written down to its estimated recoverable amount. 20 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) k. Intangible assets (continued) Intangible assets except goodwill, are amortized using the straight-line method, based on the estimated useful lives of the intangible assets as follows: Software License Other intangible assets Years 3-6 3-20 1-30 Intangible assets are derecognized on disposal, or when no further economic benefits are expected, either from further use or from disposal. The difference between the carrying amount and the net proceeds received from disposal is recognized in the consolidated statements of profit or loss and other comprehensive income. l. Property and equipment Property and equipment are stated at cost less accumulated depreciation, and impairment losses, if any. The cost of an item of property and equipment includes: (a) purchase price, (b) any costs directly attributable to bringing the asset to its location and condition, and (c) the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Each part of an item of property and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. Property and equipment, except land rights, are depreciated using the straight-line method based on the estimated useful lives of the assets as follows: Buildings Leasehold improvements Switching equipment Telegraph, telex, and data communication equipment Transmission installation and equipment Satellite, earth station, and equipment Cable network Power supply Data processing equipment Vehicles Other telecommunication peripherals Office equipment Other equipment Years 15-50 2-15 3-15 5-15 3-40 3-20 5-25 3-20 3-20 4-8 5 2-5 2-5 Significant expenditures related to leasehold improvements are capitalized and depreciated over the lease term. The depreciation method, useful life, and residual value of an asset are reviewed at least at each financial year-end and adjusted, if appropriate. Based on review the useful life of towers in Indonesia are changed from previous year in line with technological development and changes in the level of usage expectations. The residual value of an asset is the estimated amount that the Group would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset is already of the age and in the condition expected at the end of its useful life. 21 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) l. Property and equipment (continued) Property and equipment acquired in exchange for a non-monetary asset or for a combination of monetary and non-monetary assets are measured at fair value unless, (i) the exchange transaction lacks commercial substance; or (ii) the fair value of neither the asset received, nor the asset given up is measured reliably. Major spare parts and standby equipment that are expected to be used for more than 12 months are recorded as part of property and equipment. When assets are retired or otherwise disposed of, their cost and the related accumulated depreciation are derecognized from the consolidated statement of financial position and the resulting gains or losses on the disposal or sale of the property and equipment are recognized in the consolidated statements of profit or loss and other comprehensive income. Certain computer hardware can not be used without the availability of certain computer software. In such circumstance, the computer software is recorded as part of the computer hardware. If the computer software is independent from its computer hardware, it is recorded as part of intangible assets. The cost of maintenance and repairs are charged to the consolidated statements of profit or loss and other comprehensive income as incurred. Significant renewals and betterments are capitalized to the related property and equipment account. Property under construction is stated at cost less impairment (if any), until the construction is completed, at which time it is reclassified to the property and equipment account to which it relates. During the construction period until the property is ready for its intended use or sale, borrowing costs, which include interest expense and foreign currency exchange differences incurred on loans obtained to finance the construction of the asset, as long as it meets the definition of a qualifying asset are, capitalized in proportion to the average amount of accumulated expenditures during the period. Capitalization of borrowing cost ceases when the construction is completed, and the asset is ready for its intended use or sale. m. Leases The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The lease term corresponds to the non-cancellable period of each contract, except in cases where the Group is reasonably certain of exercising renewal options contractually foreseen. The Group has made use of the package of practical expedients available under PSAK 73, which among other things: • • the use of a single discount rate to a portfolio of leases with reasonably similar characteristics; the accounting for operating leases with a remaining lease term of less than 12 months as short-term leases; the exclusion of initial direct costs for the measurement of the right-of-use assets (“ROU”) as short-term leases; the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease; • • • not to separate non-lease components from lease components, and instead, account for both as a single lease component; and • not to recognize a lease liability and a ROU asset for leases where the underlying assets are low-value assets (i.e. underlying assets with a maximum value of US$5,000 or Rp50 million when it is new). 22 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) m. Leases (continued) The Group applies the definition of a lease and related guidance set out in PSAK 73 to all lease contracts. i. The Group as lessee The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognizes lease liabilities to make lease payments and ROU assets representing the right to use the underlying assets. The Group recognizes ROU assets at the commencement date of the lease. ROU assets are measured at cost, less any accumulated amortization and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of ROU assets includes the amount of lease liabilities recognized, initial direct costs incurred, restoration costs and lease payments made at or before the commencement date less any lease incentives received. ROU assets are amortized on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows: Land rights Buildings Transmission installation and equipment Vehicles Others Years 1-33 1-15 3-25 4-8 2-25 If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The ROU assets are subject to impairment in accordance with PSAK 48 Impairment of Assets. Lease liabilities At the commencement date of the lease, the Group recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognized as expenses in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments, or a change in the assessment of an option to purchase the underlying asset. Short-term leases with a duration of less than 12 months and low-value assets leases, as well as those lease elements, partially or totally not complying with the principles of recognition defined by PSAK 73 will be treated similarly to operating leases. The Group will recognize those lease payments on a straight-line basis over the lease term in the consolidated statements of profit or loss and other comprehensive income. 23 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) m. Leases (continued) ii. The Group as lessor Under PSAK 73, a lessor continues to classify leases as either finance leases or operating leases and account for those two types of leases differently. Leases in which the Group transfers substantially all the risks and rewards incidental to ownership of an asset are classified as finance leases, otherwise it will be classified as operating leases. Lease classification is made at the inception date and is reassessed only if there is a lease modification. At the commencement date, the Group recognizes assets held under a finance lease at an amount equal to the net investment in the lease and present it as finance lease receivable. The net investment in the lease includes fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and residual value guarantees provided to the lessor by the lessee. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the lessee and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. As required by PSAK 71, an allowance for expected credit loss has been recognized on the finance lease receivables and presented under “Other receivables”. Rental income arising from operating leases is accounted for on a straight-line basis over the lease terms and is included in revenue in the consolidated statement of profit or loss and other comprehensive income due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the underlying assets and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned. If an arrangement contains lease and non-lease components, the Group applies PSAK 72 Revenue from Contracts with Customers to allocate the consideration in the contract. Revenue arising from operating lease is recorded as Revenue from lessor transactions (Note 2r). n. Deferred charges - land rights Costs incurred to process the initial legal land rights are recognized as part of the property and equipment and are not amortized. Costs incurred to process the extension or renewal of legal land rights are deferred and amortized using the straight-line method over the shorter of the legal term of the land rights or the economic life of the land. o. Trade payables Trade payables are obligations to pay for goods and/or services that have been acquired from suppliers in the ordinary course of business. Trade payables are classified as current liabilities if the payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. 24 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) p. Borrowings Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the consolidated statements of profit or loss and other comprehensive income over the period of the borrowings using the effective interest method. Fees paid on obtaining loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facilities will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facilities will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized over the period of the facilities to which it relates. q. Foreign currency translations The functional currency and the reporting currency of the Group are both in Indonesian rupiah, except for the functional currency of Telekomunikasi Indonesia International Ltd., Hong Kong, Telekomunikasi Indonesia International Inc., USA and Telekomunikasi Indonesia International S.A., Timor Leste whose functional currency is maintained in U.S. Dollar and Telekomunikasi Indonesia International, Pty. Ltd., Australia whose functional currency is Australian Dollar, TS Global Network Sdn. Bhd., and Telekomunikasi Indonesia International Sdn. Bhd. whose functional currency is Malaysian ringgit. International Pte. Ltd., Singapore, Telekomunikasi Indonesia Transactions in foreign currencies are translated into Indonesian rupiah at the rates of exchange prevailing at transaction date. At the consolidated statements of financial position dates, monetary assets and liabilities denominated in foreign currencies are translated into Indonesian rupiah based on the buy and sell rates quoted by Reuters prevailing at the consolidated statements of financial position dates, as follows (in full amount): United States Dollar (“US$”) 1 Australian Dollar (“AU$”) 1 Singapore Dollar (“SGD”) 1 New Taiwan Dollar (“TWD”) 1 Euro (“EUR”) 1 Japanese Yen ("JPY") 1 Malaysian Ringgit ("MYR") 1 Hong Kong Dollar (“HKD”) 1 2022 2021 Buy Sell Buy Sell 15,567 10,583 11,614 508.15 16,623 118.12 3,529 1,996 15,571 10,589 11,622 508.47 16,635 118.17 3,539 1,997 14,250 10,353 10,555 515.04 16,125 123.81 3,420 1,828 14,255 10,359 10,561 515.40 16,137 123.86 3,424 1,828 The result of foreign exchange gains or losses, realized and unrealized, are credited or charged to the consolidated statements of profit or loss and other comprehensive income of the current year, except for foreign exchange differences incurred on borrowings during the construction of qualifying assets which are capitalized to the extent that the borrowings can be attributed to the construction of those qualifying assets (Note 2l). 25 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) r. Revenue and expense recognition Revenue from contract with customers PSAK 72 establishes a comprehensive framework to determine how, when, and how much revenue is to be recognized. The standard provides a single principles-based five-step model for the determination and recognition of revenue to be applied to all contracts with customers. The standard also provides specific guidance requiring certain types of costs to obtain and/or fulfil a contract to be capitalized and amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the capitalized cost relates. Below is the summary of the Group’s revenue recognition accounting policy for each revenue stream: i. Mobile Revenue from mobile primarily comprises of revenue from cellular service which among others: telephone service, interconnection service, internet and data service and Short Messaging Services (“SMS”) service. Those services are offered on postpaid or prepaid basis. For prepaid services, initial package sales (also known as SIM cards and initial charging vouchers) and top up vouchers are initially recognized as contract liabilities. The Group recognizes contract assets for the services from postpaid customers that have not been billed. All mobile services revenues are recognized based on output method, either per actual usage or allowance unit used (if services sold in plan basis), because the customer simultaneously receives and consumes the benefits provided by the Group. For services sold in bundled plan, total consideration is allocated to performance obligations based on stand-alone selling price for each of product and/or service. The Group estimates the stand-alone selling price using the price enacted if the services are sold on a stand-alone basis. Most bundled plans sold by the Group only include services which are generally satisfied over the same period of time. Therefore, the revenue recognition pattern is generally not impacted by the allocation. The consideration that is received is allocated between the telecommunication services sold and the points issued, with the consideration allocated to the points that are equal to its fair value. The fair value of points issued is deferred and recognized as revenue when the points are redeemed, expired, or when the program is terminated. ii. Consumer Revenue from consumer primarily comprises of revenue from fixed telephone and Indihome services. Revenues from fixed telephone service are derived from customer who subscribes to fixed telephone service only, while revenues from Indihome service are derived from customer who subscribes to internet services or to bundled package with combination of consumer service (i.e. telephone, internet and data, and paid TV). Those services are offered on a postpaid basis and billed in the following month. In 2021, the Group has applied a new term and condition that the contract with customer is an open-ended contract with minimum 12-month contract and substantive early termination penalty. The contract duration under PSAK 72 is 12-month contract and can be renewed in monthly contract basis afterward. All consumer services are recognized using the output method based on the customer's actual usage or time elapsed basis as the customer simultaneously receives and consumes the benefits provided by the Group. 26 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) r. Revenue and expense recognition (continued) Revenue from contract with customers (continued) ii. Consumer (continued) Customers may be required to pay an upfront fee at the commencement of the contract. The upfront fee is considered to be a material right because the customer is not required to pay an upfront fee when the customer renews the service beyond the original contract period. The Group values the renewal option in the amount of the consideration received from the upfront fee for the installation service. The Group defers the amount of renewal option as contract liabilities and recognizes it as revenue on a straight-line basis over the expected term of the customer relationships. The Group estimates the expected customer life based on the historical information and customer trends and updates the evaluation on an annual basis. iii. Enterprise Revenue from enterprise customers primarily comprises of revenue from providing telephone service, internet and data, information technologies, and other services (e.g. manage service, call center service, e-health, e-payment, and others). Some of the contracts with enterprise customers are bespoke in nature. Revenues from enterprise customers are recognized overtime using output method based on actual usage or time elapsed if the provision of service does not depend on usage (i.e. minute of voice, kilobyte of data, etc.), except for sales of goods which are recognized at a point in time, because the customer simultaneously receives and consumes the benefits provided by the Group. Revenues for performance obligations that are satisfied at a point in time is recognized when control of goods is transferred to the customer, typically when the customer has physical possession of the goods. Some of the arrangements in enterprise customers are offered as bundled arrangements. For bundled arrangements, the product and/or service in the contract is accounted for as a single performance obligation when it is separately identifiable from other promises in the contract and the customer can benefit from the product/service on its own. The total consideration is allocated to each distinct performance obligation that has been included in the contract, based on its stand-alone selling price. The stand-alone selling price is determined according to the observable prices at which individual product and/or service are sold separately, adjusted for market conditions and normal discounts as appropriate. Alternatively, when the observable prices are not available, the expected cost-plus margin approach is used to determine the stand-alone selling prices. Certain contracts with enterprise customers may give rise to variable consideration as the contract price depends on a future event (e.g. usage based contract or revenue-share based contract). In estimating the variable consideration, the Group is required to use either the expected value method or the most likely amount method based on the method that better predicts the amount of consideration to which it will be entitled. The Group determines that the most expected value method is the appropriate method to use in estimating the variable consideration for a single contract with a large number of possible outcomes. Before including any amount of variable consideration in the transaction price, the Group considers whether the amount of variable consideration is constrained. The Group determines that the estimates of variable consideration are not constrained based on its historical experience, business forecast, and the current economic conditions and only includes variable consideration to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. 27 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) r. Revenue and expense recognition (continued) Revenue from contract with customers (continued) iii. Enterprise (continued) When another party is involved in providing products and/or services to a customer, the Group is the principal if it controls the specified products and/or services before those products and/or services are transferred to the customer. Revenues are recorded on the net amount that has been retained (the amount paid by the customer less the amount paid to the suppliers), when, in substance, the Group has acted as agent and earned commission from the suppliers of the products and/or services sold. iv. Wholesale and International Business (“WIB”) Revenue from WIB is mainly comprises of interconnections service for interconnection of other telecommunications carriers’ subscriber calls to the Group’s subscribers (incoming call) and calls between other telecommunications carriers subscribers through the Group’s network (transit) and network service with other telecommunications carriers. All of these services are recognized based on output method using the basis of the actual recorded traffic for the month. Contract assets A contract asset is initially recognized for revenue earned from delivery of goods or services because the receipt of consideration is conditional on certain milestones or upon completion of the project. Upon completion of the milestones or the project, the amount recognized as contract assets is reclassified to trade receivables. Contract assets are subject to impairment assessment. Contract liabilities A contract liability is recognized if a payment is received or a payment is due (whichever is earlier) from a customer before the Group transfers the related goods or services. Contract liabilities are recognized as revenue when the Group performs under the contract (i.e., transfers control of the related goods or services to the customer). Incremental cost of obtaining/fulfilling contract with customers The incremental costs of obtaining/fulfilling contracts with customers, which principally are comprised of sales commissions and contract fulfilment costs, are initially recognized on the consolidated statements of financial position as contract costs. These costs are subsequently amortized on a systematic basis that is consistent with the period and pattern of transfer to the customer of the related products or services. Costs that do not qualify as costs of obtaining/fulfilling contract with customers are expensed as incurred or in accordance with other relevant standards. At the end of each reporting year, the Group evaluates whether there is an indication that capitalized contract costs may be impaired. An impairment exists when the carrying amount of the contract costs exceeds the amount expected to be received in exchange for goods and services. When impairment exists, an impairment loss is recognized in profit or loss. 28 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) r. Revenue and expense recognition (continued) Revenue from lessor transactions Revenue from lessor transactions comprises of revenue from telecommunication tower operating leases and other rental. Rental income is recognized on a straight-line basis over the lease term and is included in revenue in the statement of profit or loss due to its operating nature. Expenses Expenses are recognized as they are incurred. s. Employee benefits i. Short-term employee benefits All short-term employee benefits which consist of salaries and related benefits, vacation pay, incentives and other short-term benefits are recognized as expense on undiscounted basis when employees have rendered service to the Group. ii. Post-employment benefit plans and other long-term employee benefits Post-employment benefit plans consist of funded and unfunded defined benefit pension plans, defined contribution pension plan, other post-employment benefits, post-employment health care benefit plan, defined contribution health care benefit plan and obligations under the Labor Law. Other long-term employee benefits consist of Long Service Awards (“LSA”), Long Service Leave (“LSL”), and pre-retirement benefits. The cost of providing benefits under post-employment benefit plans and other long-term employee benefits calculation is performed by an independent actuary using the projected unit credit method. The net obligations in respect of the defined pension benefit plans and post-retirement health care benefit plans are calculated at the present value of estimated future benefits that the employees have earned in return for their service in the current and prior periods less the fair value of plan assets. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of Government bonds that are denominated in the currencies in which the benefits will be paid and that have terms to maturity approximating the terms of the related retirement benefit obligation. Government bonds are used as there are no deep markets for high quality corporate bonds. Plan assets are assets owned by defined benefit pension plan and post-retirement health care benefits plan as well as qualifying insurance policy. The assets are measured at fair value as of reporting dates. The fair value of qualifying insurance policy is deemed to be the present value of the related obligations (subject to any reduction required if the amounts receivable under the insurance policies are not recoverable in full). Remeasurement, comprising of actuarial gain and losses, the effect of the asset ceiling (excluding amounts included in net interest on the net defined benefit liability (asset)) and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability (asset)) are recognized immediately in the consolidated statements of financial position with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods. Past service costs are recognized immediately in profit or loss on the earlier of: (a) the date of plan amendment or curtailment; and (b) the date that the Group recognized restructuring-related costs. 29 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) s. Employee benefits (continued) ii. Post-employment benefit plans and other long-term employee benefits (continued) Net interest is calculated by applying the discount rate to the net defined benefit liabilities or assets. Gains or losses on curtailment are recognized when there is a commitment to make a material reduction in the number of employees covered by a plan or when there is an amendment of defined benefit plan terms such as that a material element of future services to be provided by current employees will no longer qualify for benefits, or will qualify only for reduced benefits. Gains or losses on settlement are recognized when there is a transaction that eliminates all further legal or constructive obligation for part or all of the benefits provided under a defined benefit plan (other than the payment of benefit in accordance with the program and included in the actuarial assumptions). For defined contribution plans, the regular contributions constitute net periodic costs for the period in which they are due and, as such, are included in “personnel expenses” as they become payable. In April 2022, the Institute of Indonesia Chartered Accountants’ Accounting Standard Board issued a press release regarding attribution of benefits to periods of service in accordance with PSAK 24: Imbalan Kerja which was adopted from IAS 19 Employee Benefits. The press release conveyed the information that the fact pattern of the pension program based on the Labor Law currently enacted in Indonesia is similar to those responded and concluded in the IFRS Interpretation Committee (“IFRIC”) Agenda Decision Attributing Benefit to Periods of Service IAS 19. The Group has adopted the said press release and accordingly changed its accounting policy regarding attribution of benefits to periods of service previously applied. In prior years, the Group attributed benefits under the defined benefit plan’s benefit formula to periods of service from the date when employees provide their services until their retirement age. The Group changed the policy for attributing benefits under the plan to the date when employee service first leads to benefits under the plan until the date when further employee service will lead to no material amount of further benefits under the plan. iii. Share-based payments The Company operates an equity-settled share-based compensation plan. The fair value of the employee’s services rendered which are compensated with the Company’s shares is recognized as an expense in the consolidated statements of profit or loss and other comprehensive income and credited to additional paid-in capital at the grant date. iv. Early retirement benefits Early retirement benefits are accrued at the time the Group makes a commitment to provide early retirement benefits as a result of an offer made in order to encourage voluntary redundancy. A commitment to a termination arises when, and only when a detailed formal plan for the early retirement cannot be withdrawn. 30 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) t. Taxes Income tax Current and deferred income taxes are recognized as income or an expense and included in the consolidated statements of profit or loss and other comprehensive income, except to the extent that the income tax arises from a transaction or event which is recognized directly in equity, in which case, the income tax is recognized directly in equity. Current income tax assets and liabilities are measured at the amounts expected to be recovered or paid by using the tax rates and tax laws that have been enacted or substantively enacted at each reporting date. Management periodically evaluates positions taken in Annual Tax Returns ("Surat Pemberitahuan Tahunan"/"SPT Tahunan") with respect to situations in which applicable tax regulation is subject to interpretation. Where appropriate, management establishes provisions based on the amounts expected to be paid to the Tax Authorities. Tax assessment Amendment to taxation obligation is recorded when an assessment letter (“Surat Ketetapan Pajak” or “SKP”) is received or, if appealed against, when the results of the appeal have been determined. The additional taxes and penalty imposed through an SKP are recognized as revenue or expense in the current year profit or loss, unless objection/appeal is taken. The additional taxes and penalty imposed through the SKP are deferred as long as they meet the asset recognition criteria. Deferred tax The Group recognizes deferred tax assets and liabilities for temporary differences between the financial and tax bases of assets and liabilities at each reporting date. The Group also recognizes deferred tax assets resulting from the recognition of future tax benefits, such as the benefit of tax losses carried forward to the extent their future realization is probable. Deferred tax assets and liabilities are measured using enacted or substantively enacted tax rates and tax laws at each reporting date which are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced if it is no longer probable that sufficient taxable profit will be available to compensate part or all of the benefits of deferred tax assets. Unrecognized deferred tax assets are re-assessed at each reporting date and recognized if it is probable that future taxable profits will be available for recovery. Tax deductions arising from the reversal of deferred tax assets are excluded from estimates of future taxable income. Deferred tax transactions which are recognized outside profit or loss. Therefore, deferred taxes on these transactions are recognized either in other comprehensive income or recognized directly in equity. Deferred tax assets and liabilities are offset in the consolidated statements of financial position, if and only if it has a legally enforceable right to set off current tax assets and liabilities and the deferred tax assets and liabilities relate to income taxes levied by the same Tax Authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. 31 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) t. Taxes (continued) Value Added Tax (“VAT”) Revenues, expenses and assets are recognized net of the VAT amount except: i. VAT arising from the purchase of assets or services that cannot be credited by the Tax Office, which VAT is recognized as part of the acquisition cost of the asset or as part of the applied expenses; and ii. Receivables and payables are presented including the amount of VAT. Uncertainty over income tax ISAK 34: Uncertainty Over Income Tax Treatments stated that the recognition and measurement of tax assets and liabilities that contain uncertainty over income tax are determined by considering whether to be treated separately or together, the assumptions used in the examination of tax treatments by the Tax Authorities, consideration the probability that the Tax Authorities will accept uncertain tax treatment and re-consideration or estimation if there is a change in facts and circumstances. If the acceptance of the tax treatment by the Tax Authorities is probable, the measurement is in line with income tax fillings. If the acceptance of the tax treatment by the Tax Authorities is not probable, the Group measures its tax balances using the method that provides the better predict of resolution (i.e. most likely amount or expected value). Final tax Indonesian tax regulations impose final tax on several types of transactions based on the gross value of the transaction. Therefore, final tax which is charged based on such transaction remains subject to tax even though the tax payer incurred a loss on the transaction. Final tax on construction services and lease are presented as part of “Other income - net”. u. Financial instruments The Group classifies financial instruments into financial assets and financial liabilities. A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. i. Financial assets Initial recognition and measurement Financial assets are classified, at initial recognition, and subsequently measured at amortized cost, fair value through OCI (“FVTOCI”), and fair value through profit or loss (“FVTPL”). The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component of for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at FVTPL, transactions costs. Trade receivables that do not contain a significant financing component or which the Group has applied the practical expedient are measured at the transaction price in determined under PSAK 72. 32 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) u. Financial instruments (continued) i. Financial assets (continued) In order for a financial asset to be classified and measured at amortized cost or FVTOCI, it needs to give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding. This assessment is referred to as the solely payments of principal and interest (“SPPI”) test and is performed at instrument level. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the trade date, i.e., the date that the Group commits to buy or sell the asset. Subsequent measurement For purposes of subsequent measurement, financial assets are classified in four categories: (a) Financial assets at amortized cost (debt instruments) The Group measures financial assets at amortized cost if both of the following conditions are met: • The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and • The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortized cost are subsequently measured using the effective interest rate (“EIR”) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired. The Group’s financial assets at amortized cost consist of cash and cash equivalents, other current financial assets, trade and other receivables, and other non-current assets. (b) Financial assets at FVTOCI with recycling of cumulative gains and losses (debt instruments) The Group measures debt instruments at FVTOCI if both of the following conditions are met: • The financial asset is held within a business model with the objective of both holding to collect contractual cash flows and selling; and • The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. For debt instruments at FVTOCI, interest income, foreign exchange revaluation, and impairment losses or reversals are recognized in the statement of profit or loss and computed in the same manner as for financial assets measured at amortized cost. The remaining fair value changes are recognized in OCI. Upon derecognition, the cumulative fair value change recognized in OCI is recycled to profit or loss. The Group has no debt instruments classified at FVTOCI with recycling of cumulative gains and losses as of December 31, 2022 and 2021. 33 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) u. Financial instruments (continued) i. Financial assets (continued) Subsequent measurement (continued) (c) Financial assets designated at FVTOCI with no recycling of cumulative gains and losses upon derecognition (equity instruments) Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments designated at FVTOCI when they meet the definition of equity under PSAK 71 and are not held for trading. The classification is determined on an instrument- by-instrument basis. Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognized as other income in the statement of profit or loss when the right of payment has been established, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at FVTOCI are not subject to impairment assessment. The Group’s financial assets at this category consists of long- term investment in financial instruments. (d) Financial assets at FVTPL Financial assets at FVTPL include financial assets held for trading, financial assets designated upon initial recognition at FVTPL, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not solely payments of principal and interest (“SPPI”) are classified and measured at FVTPL, irrespective of the business model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at FVTOCI, as described above, debt instruments may be designated at FVTPL on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch. Financial assets at FVTPL are carried in the statement of financial position at fair value with net changes in fair value recognized in the statement of profit or loss. The Group’s financial assets at FVTPL consists of other long-term investment in financial instruments and other current financial assets. Expected credit losses (“ECL”) The Group recognizes an allowance for ECL for all debt instruments not held at FVTPL. ECL are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. 34 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) u. Financial instruments (continued) i. Financial assets (continued) Expected credit losses (“ECL”) (continued) ECL are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECL are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). For trade receivables and contract assets, the Group applies a simplified approach in calculating ECL. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECL at each reporting date. The Group has established a provision model that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. Trade receivables are written-off when there is low possibility of recovering the contractual cash flow, after all collection efforts have been done and have been fully provided for allowance. ii. Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loan and borrowings and payables, net of directly attributable transaction costs. The Group classifies its financial liabilities as: (a) financial liabilities at FVTPL or (b) financial liabilities measured at amortized cost. The Group’s financial liabilities include trade and other payables, accrued expenses, customer deposits, Interest-bearing loans, and lease liabilities. Interest-bearing loans consist of short- term bank loans, two-step loans, bonds, long-term bank loans, and other borrowings. 35 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) u. Financial instruments (continued) ii. Financial liabilities (continued) Subsequent measurement The measurement of financial liabilities depends on their classification, as described below: (a) Financial liabilities at FVTPL Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognized in the statement of profit or loss. Financial liabilities designated upon initial recognition at FVTPL are designated at the initial date of recognition, and only if the criteria in PSAK 71 are satisfied. The Group has not designated any financial liability as at FVTPL. (b) Financial liabilities measured at amortized cost This is the category most relevant to the Group. After initial recognition, interest-bearing loans and other borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit or loss. This category generally applies to interest-bearing loans and other borrowings. For more information, refer to Note 19 Long-Term Loans and Other Borrowings. iii. Offsetting financial instruments Financial assets and liabilities are offset and the net amount is reported in the consolidated statements of financial position when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle them on a net basis, or realize the assets and settle the liabilities simultaneously. The right of offset must not be contingent on a future event and must be legally enforceable in all of the following circumstances: (i) (ii) the event of default; and (iii) the event of insolvency or bankruptcy of the Group and all of the counterparties. the normal course of business; iv. Derecognition of financial instruments The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or when the Group transfers substantially all the risks and rewards of ownership of the financial asset. The Group derecognizes a financial liability when the obligation specified in the contract is discharged or cancelled or has expired. 36 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) v. Treasury stock Reacquired Company’s shares of stock are accounted for at their reacquisition cost and classified as “Treasury Stock” and presented as a deduction in equity. The cost of treasury stock sold/transferred is accounted for using the weighted average method. The portion of treasury stock transferred for employee stock ownership program is accounted for at its fair value at grant date. Any difference between the carrying amount and consideration from future re-sale of treasury stocks, is recognized as part of additional paid-in capital in the equity. w. Dividends Dividend for distribution to the stockholders is recognized as a liability in the consolidated financial statements in the year in which the dividend is approved by the stockholders. The interim dividend is recognized as a liability based on the Board of Directors’ decision supported by the approval from the Board of Commissioners. x. Basic and diluted earnings per share and earnings per ADS Basic earnings per share is computed by dividing profit for the year attributable to owners of the parent company by the weighted average number of shares outstanding during the year. Income per ADS is computed by multiplying the basic earnings per share by 100, the number of shares represented by each ADS. The Company does not have potentially dilutive financial instruments. y. Segment information The Group's segment information is presented based upon identified operating segments. An operating segment is a component of an entity: i. that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity); ii. whose operating results are regularly reviewed by the Group’s Chief Operating Decision Maker (“CODM”) i.e., the Directors, to make decisions about resources to be allocated to the segment and assess its performance; and iii. for which discrete financial information is available. z. Provisions Provisions are recognized when the Group has present obligations (legal or constructive) arising from past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligations and the amount can be measured reliably. Provisions for onerous contracts are recognized when the contract becomes onerous for the lower of the cost of fulfilling the contract and any compensation or penalties arising from failure to fulfill the contract. aa. Impairment of non-financial assets At the end of each reporting period, the Group assesses whether there is an indication that an non- financial assets may be impaired. These assets include property and equipment, current assets, and other non-current assets, including intangible assets. If such indication exists, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the Group determines the recoverable amount of the Cash-Generating Unit (“CGU”) to which the asset belongs (“the asset’s CGU”). 37 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) aa. Impairment of non-financial assets (continued) The recoverable amount of an asset (either individual asset or CGU) is the higher of the asset’s fair value less costs to sell and its value in use (“VIU”). Where the carrying amount of the asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing the value in use, the estimated net future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transaction prices are taken into account, if available. If no such transactions can be identified, the Group uses an appropriate valuation model to determine the fair value of the asset. These calculations are corroborated by multiple valuations or other available fair value indicators. Impairment losses of continuing operations are recognized in the consolidated statements of profit or loss and other comprehensive income. At the end of each reporting period, the Group assesses whether there is any indication that previously recognized impairment losses for an asset, other than goodwill, may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss for an asset, other than goodwill, is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited such that the carrying amount of the asset does not exceed its recoverable amount, nor exceeds the carrying amount that would have been determined, net of depreciation, had no impairment been recognized for the asset in prior periods. Reversal of an impairment loss is recognized in the consolidated statement of profit or loss and other comprehensive income. Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognized. Impairment loss relating to goodwill can not be reversed in future periods. ab. Current and non-current classifications The Group presents assets and liabilities in the statement of financial position based on current and non-current classification. An asset is presented as current when it is: i. expected to be realized or intended to be sold, or consumed in the normal operating cycle; ii. held primarily for the purpose of trading; or iii. expected to be realized within twelve months after the reporting period; or iv. cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. Assets which do not meet above criteria are classified as non-current assets. A liability is presented as current when: i. ii. iii. iv. there is no unconditional right to defer the settlement of the liability for at least twelve months it is expected to be settled in the normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within twelve months after reporting period; or after the reporting period. The terms of liability that could, at the option of counterparty, result in its settlement by the issue of equity instruments do not affect its classification. Liabilities which do not meet above criteria are classified as long-term liabilities. Deffered tax assets and liabilities are classified as non-current assets and liabilities. 38 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) ac. Significant accounting judgements, estimates and assumptions The preparation of the Group's consolidated financial statements requires management to make judgements, estimates, and assumptions that affect the reporting amounts of revenue, expenses, assets and liabilities, and the accompanying disclosures, and disclosures of contingent liabilities, at the end of the reporting period. Uncertainty about these assumptions and estimates can produce results that require a material adjustment to the carrying amounts of assets and liabilities affected in the coming periods. i. Judgements The following judgements were made by management in applying the Group's accounting policies that have the most significant influence on the amounts recognized in the consolidated financial statements: Income taxes Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income could necessitate future adjustments to tax income and expense already recorded. Judgment is also involved in determining the provision for corporate income tax. There are certain transactions and computation for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the year in which such determination is made. ii. Estimates and assumptions Estimates and assumption are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. (a) Retirement benefits The present value of the retirement benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate and return on investment (“ROI”). Any changes in these assumptions will impact the carrying amount of the retirement benefit obligations. The Group determines the appropriate discount rate at the end of each reporting period. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the obligations. In determining the appropriate discount rate, the Group considers the interest rates of Government bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related retirement benefit obligations. If there is an improvement in the ratings of such Government bonds or a decrease in interest rates as a result of improving economic conditions, there could be a material impact on the discount rate used in determining the post-employment benefit obligations. Other key assumptions for retirement benefit obligations are based in part on current market conditions. Additional information is disclosed in Notes 30 and 31. 39 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) ac. Significant accounting judgements, estimates and assumptions (continued) ii. Estimates and assumptions (continued) (b) Useful lives of property and equipment The Group estimates the useful lives of its property and equipment based on expected asset utilization, considering strategic business plans, expected future technological developments and market behavior. The estimates of useful lives of property and equipment are based on the Group’s collective assessment of industry practice, internal technical evaluation, and experience with similar assets. The Group reviews its estimates of useful lives at least each financial year-end and such estimates are updated if expectations differ from previous estimates due to changes in expectation of physical wear and tear, technical or commercial obsolescence, and legal or other limitations on the continuing use of the assets. The amounts of recorded expenses for any year will be affected by changes in these factors and circumstances. A change in the estimated useful lives of the property and equipment is a change in accounting estimates and is applied prospectively in profit or loss in the period of the change and future periods. In 2021, the Company accelerated the useful lives of Multi-Service Access Node (“MSAN”) assets until 2022. In 2022, the Group changed the estimated useful lives of towers in Indonesia (Note 11). Details of the nature and carrying amounts of property and equipment are disclosed in Note 11. (c) Determining the lease term of contracts with renewal and termination options - Group as lessee The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Group has several lease contracts that include extension and termination options. The Group applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate. (d) Allowance for expected credit losses for financial assets For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established an allowance for expected credit losses methodology that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors, and the economic environment. For term deposits and debt instruments at FVTOCI, the Group applies the low credit risk simplification. At every reporting date, the Group evaluates whether the deposits or debt instrument are considered to have low credit risk using all reasonable and supportable information that is available without undue cost or effort. In making that evaluation, the Group reassesses the internal credit rating of the debt instrument. In addition, the Group considers that there has been a significant increase in credit risk when contractual payments are more than 30 days past due. 40 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) ac. Significant accounting judgements, estimates and assumptions (continued) ii. Estimates and assumptions (continued) (d) Allowance for expected credit losses for financial assets (continued) The Group assesses whether there is objective evidence that other receivables or other financial assets have been impaired at the end of each reporting period. Allowance for expected credit losses of receivables is calculated based on a review of the current status of existing receivables and historical collection experience. Such allowances are adjusted periodically to reflect the actual and anticipated experience. Details of the nature and carrying amounts of allowance for expected credit losses of receivables are disclosed in Note 5. The Group also closely monitors the changes in shared risk characteristics of certain account receivables by evaluating the customer segmentations portfolios which the respective customers might engage in business industries, or locate in areas, which have become affected, or are more prone to be affected, by the pandemic. The Group has reassessed the model used to calculate ECLs based on the latest reasonable and supportable data to better reflect the current change in circumstances. Methods and approaches will continue to be monitored and updated if additional reasonable and supportable data and information are available; including forward-looking information and other input in the future. (e) Revenue (i) Critical judgements in determining the performance obligation, timing of revenue recognition and revenue classification The Group provides information technology services that are bespoke in nature. Bespoke products consist of various goods and/or services bundled together in order to provide integrated solution services to customers. In addition to the bespoke service, Group also provide multiple standard product as bundling product in contract with customer. Significant judgment is required in determining the number and nature of performance obligations promised to customers in those contracts. The number and nature of performance obligations will determine the timing of revenue recognition for such contract. The Group reviews the determination of performance obligations on a contract-by- contract basis. When a contract consisting of several goods and/or service is assessed to have one performance obligation, the Group applies a single method of measuring progress for the performance obligation based on the measurement method that best depicts the economics of the contract, which in most cases is over time. The Group also presents the revenue classification using consistent approach. When a contract consisting of several goods and/or service is assessed to have one performance obligation, the Group presents that performance obligations in one financial statement line items which best represent the main service of the Group, which in most cases is the internet, data and information technology services. (ii) Critical judgements in determining the stand-alone selling price The Group provides wide array of products related to telecommunication and technology. To determine the stand-alone selling price for goods and/or services that do not have any readily available observable price, the Group uses the expected cost- plus margin approach. The Group determines the appropriate margin based on historical achievement. 41 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) ac. Significant accounting judgements, estimates and assumptions (continued) ii. Estimates and assumptions (continued) (f) Test for impairment of non-current assets and goodwill The application of the acquisition method in a business combination requires the use of accounting estimates in allocating the purchase price to the fair market value of the assets and liabilities acquired, including intangible assets. Certain business acquisitions by the Group resulted goodwill, which is not amortized but is tested for impairment annually and every indication of impairment exists. The calculation of future cash flows in determining the fair value of property and equipment and other non-current assets of the acquired entity at the acquisition date involves significant estimation. Although management believes that the assumptions used are appropriate, significant changes to those assumptions can materially affect the evaluation of recoverable amounts and may result in impairment according to PSAK 48: Impairment of Assets. (g) Fair value measurement of financial instruments When the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow (“DCF”) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors could affect the reported fair value of financial instruments (h) Acquisition The Group evaluates each acquisition transaction to determine whether it will be treated as an asset acquisition or business combination. For transactions that are treated as an asset acquisition, the purchase price is allocated to the assets obtained, without the recognition of goodwill. For acquisitions that meet the business combination definition, the Group applies the accounting for business acquisiton method for assets acquired and liabilities assumed which are recorded at fair value at the acquisition date, and the results of operations are included with the Group's results from the date of each acquisition. Any excess from the purchase price paid for the amount recognized for assets acquired and liabilities incurred is recorded as goodwill. The Group continues to evaluate acquisitions that are counted as a business combination for a period not exceeding one year after the applicable acquisition date of each transaction to determine whether additional adjustments are needed to allocate the purchase price paid for the assets acquired and liabilities assumed. The fair value of assets acquired and liabilities incurred are usually determined using either an estimated replacement cost or a discounted cash flow valuation method. When determining the fair value of tangible assets acquired, the Group estimates the cost of replacing assets with new assets by considering factors such as the age, condition, and economic useful lives of the assets. When determining the fair value of the intangible assets obtained, the Group estimates the applicable discount rate and the time and amount of future cash flows, including the rates and terms for the extension and reduction. 42 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 3. CASH AND CASH EQUIVALENTS - NET 2022 Balance 2021 Balance Cash on hand Cash in bank Related parties PT Bank Mandiri (Persero) Tbk. (“Bank Mandiri”) Currency Rp PT Bank Negara Indonesia (Persero) Tbk. (“BNI”) PT Bank Rakyat Indonesia (Persero) Tbk. (“BRI”) PT Bank Tabungan Negara (Persero) Tbk. ("BTN") PT Bank Syariah Indonesia Tbk. (“BSI”) Others (each below Rp100 billion) Sub-total Third parties PT Bank CIMB Niaga Tbk. (”Bank CIMB Niaga”) The Hongkong and Shanghai Banking Corporation Ltd. ("HSBC Hongkong") PT Bank Permata Tbk. (“Bank Permata”) Standard Chartered Bank (“SCB”) JPMorgan Chase & Co. Others (each below Rp100 billion) Sub-total Total of cash in banks Time deposits Related parties BTN Bank Mandiri BSI BRI BNI Sub-total Currency (in million) - - 49 2 6 3 0 - 7 0 0 - 11 - - - 0 - - 0 55 5 - 16 5 9 - 8 58 5 2 386 2 0 - - 31 - - 21 - 9 Rupiah equivalent 11 Currency (in million) - Rupiah equivalent 12 6,413 758 34 1 5 0 4,298 111 0 0 2,691 179 2,713 - 229 0 1 17,433 1,379 5 861 10 412 245 53 140 405 130 29 17 23 3 29 0 3,741 - 32 2 1 3 0 - 2 0 0 - 0 - 0 - - - - 5 44 23 - 21 8 7 - 6 46 6 0 - 2 0 8,660 459 30 0 5 0 2,859 34 0 0 6,035 6 1,368 0 37 - - 19,493 570 74 628 42 2,326 300 83 96 541 90 24 19 5 - 19 0 4,817 21,174 24,310 1,655 844 489 1,220 845 319 378 145 5,895 - - 31 - - 47 - 43 580 604 441 210 544 675 6,739 610 10,403 Rp US$ EUR JPY HKD AU$ Rp US$ SGD EUR Rp US$ Rp US$ Rp US$ Rp Rp US$ US$ HKD Rp US$ SGD US$ Rp US$ TWD MYR AU$ MMK SGD EUR Rp Rp US$ Rp Rp US$ Rp US$ 43 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 3. CASH AND CASH EQUIVALENTS - NET (continued) 2022 Balance 2021 Balance Currency Currency (in million) Rupiah equivalent Currency (in million) Rupiah equivalent Time deposits (continued) Third parties PT Bank Mega Tbk. (“Bank Mega”) PT Bank Pembangunan Daerah Jawa Barat dan Banten Tbk. (“BJB”) PT Bank Maybank Indonesia Tbk. ("Maybank") Bank CIMB Niaga PT Bank Muamalat Indonesia Tbk. PT Bank Danamon Indonesia Tbk. (“Bank Danamon”) Others (each below Rp100 billion) Sub-total Total of time deposits Allowance for credit expectation losses Total Rp US$ Rp US$ Rp US$ MYR Rp US$ Rp Rp US$ Rp - 12 - - - 14 2 - 11 - - 9 - 1,986 181 1,423 - 220 224 6 122 168 295 40 133 70 4,868 10,763 (1) 31,947 - 17 - 11 - 8 2 - - - - - - 1,689 235 910 153 197 107 7 0 - - 0 - 289 3,587 13,990 (1) 38,311 Interest rates per annum on time deposits are as follows: Rupiah Foreign currency 2022 1.95% - 6.50% 0.25% - 4.05% 2021 1.25% - 7.75% 0.20% - 1.75% The Group placed the majority of its cash and cash equivalents in state-owned (related party) banks because they have the most extensive branch networks in Indonesia and are considered to be financially sound banks, as they are owned by the State. 44 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 4. OTHER CURRENT FINANCIAL ASSETS Time deposit Related parties BSI Bank Mandiri Others (each below Rp100 billion) Third parties PT Bank UOB Indonesia (“UOB”) SCB Others (each below Rp100 billion) Total time deposits Escrow accounts Total escrow accounts Mutual funds Related parties Others (each below Rp100 billion) Third parties PT Henan Putihrai Asset Management (“HPAM”) Total mutual funds Others (each below Rp100 billion) Total others Allowance for expected credit losses Total 2022 Balance 2021 Balance Foreign currency (in millions) Rupiah equivalent Foreign currency (in millions) Rupiah equivalent Currency Rp Rp US$ Rp US$ US$ Rp US$ Rp US$ Rp Rp Rp US$ - - 5 - 100 10 79 130 - - 160 - 71 5 20 - 12 7 - 2 - 2 - - - 0 0 182 102 18 32 653 383 30 413 81 200 281 0 2 0 2 (0) 1,349 3 - - 2 - 1 - - - - - - 44 - 18 29 342 43 21 64 78 - 78 9 - - 9 (0) 493 The time deposits have maturities of more than three months but not more than one year, with interest rates as follows: Rupiah Foreign currency 2022 2021 2.50% - 5.00% 1.95% - 5.06% 2.50% - 3.75% 0.06% - 0.50% 45 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 5. TRADE RECEIVABLES - NET Trade receivables arise from services provided to both retail and non-retail customers, with details as follows: a. By debtor (i) Related parties State-owned enterprises PT Indonusa Telemedia ("Indonusa") PT Indosat Tbk. (“Indosat”) Others (each below Rp100 billion) Total Allowance for expected credit losses Net (ii) Third parties Individual and business subscribers Overseas international carriers Total Allowance for expected credit losses Net b. By age (i) Related parties Up to 3 months 3 to 6 months More than 6 months Total Allowance for expected credit losses Net (ii) Third parties Up to 3 months 3 to 6 months More than 6 months Total Allowance for expected credit losses Net 46 2022 2021 1,985 385 175 156 2,701 (1,081) 1,620 2022 2021 12,517 984 13,501 (6,487) 7,014 1,336 439 148 176 2,099 (1,138) 961 13,323 890 14,213 (6,664) 7,549 2022 2021 1,522 183 996 2,701 (1,081) 1,620 2022 2021 7,116 481 5,904 13,501 (6,487) 7,014 952 164 983 2,099 (1,138) 961 7,120 760 6,333 14,213 (6,664) 7,549 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 5. TRADE RECEIVABLES - NET (continued) b. By age (continued) (iii) Aging of total trade receivables 2022 2021 Allowance for Expected expected credit losses credit loss rate Allowance for Expected expected credit losses credit loss rate Gross Gross Not past due Past due up to 3 months Past due more than 3 to 6 months Past due more than 6 months Total 6,964 1,674 664 6,900 16,202 399 349 222 6,598 7,568 5.7% 20.8% 33.4% 95.6% 5,625 2,447 924 7,316 16,312 532 328 253 6,689 7,802 9.5% 13.4% 27.4% 91.4% The Group has made allowance for expected credit losses based on the collective assessment of historical impairment rates and individual assessment of its customers’ credit history, adjusted for forward-looking factors specific from the customers and the economic environment. The Group does not apply a distinction between related party and third party receivables in assessing amounts past due. As of December 31, 2022 and 2021, the carrying amounts of trade receivables of the Group considered past due but not impaired amounted to Rp2,069 billion and Rp3,417 billion, respectively. Management believes 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 Rupiah U.S. Dollar Total Allowance for expected credit losses Net (ii) Third parties Rupiah U.S. Dollar Singapore Dollar Others (each below Rp100 billion) Total Allowance for expected credit losses Net 2022 2021 2,694 7 2,701 (1,081) 1,620 2022 2021 12,020 1,352 89 40 13,501 (6,487) 7,014 d. Movements in the allowance for expected credit losses Beginning balance Allowance for expected credit losses Receivables written off Ending balance 2022 2021 7,802 567 (801) 7,568 2,098 1 2,099 (1,138) 961 12,517 1,606 56 34 14,213 (6,664) 7,549 8,360 474 (1,032) 7,802 The receivables written-off relate to both related party and third party trade receivables. Management believes that the allowance for expected credit losses of trade receivables is adequate to cover losses on uncollectible trade receivables. As of December 31, 2022 and 2021, certain trade receivables of the subsidiaries amounting to Rp1,129 billion and Rp2,330 billion, respectively, have been pledged as collateral under lending agreements (Notes 18a and 19c). 47 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 6. CONTRACT ASSETS - NET Contract assets Allowance for expected credit losses Net Current portion Non-current portion 2022 2021 2,610 (119) 2,491 (2,457) 34 2,588 (115) 2,473 (2,330) 143 Management believes that the allowance for expected credit losses of contract assets is adequate to cover losses on uncollectible contract assets. Refer to Note 32 for details of related party transactions. 7. INVENTORIES - NET Inventories, all recognize at net realizable value, consist of: Components SIM cards and prepaid vouchers Others (each below Rp100 billion) Total Provision for obsolescence Net 2022 2021 588 321 294 1,203 (59) 1,144 578 148 122 848 (69) 779 Management believes the provision is adequate to cover losses from the decline in inventory value due to obsolescence. The inventories recognized as expenses included in operations, maintenance and telecommunication service expenses in 2022 and 2021 amounted to Rp747 billion and Rp739 billion, respectively (Note 25). Certain inventories of the subsidiaries have been pledged as collateral under lending agreements as of December 31, 2022 and 2021 amounted to RpNil and Rp557 billion, respectively. As of December 31, 2022 and 2021, modules (part of property and equipment) and components held by the Group with book value amounting to Rp94 billion and Rp122 billion, respectively, have been insured against fire, theft, and other specific risks. The total sum insured as of December 31, 2022 and 2021 amounted to Rp111 billion and Rp133 billion, respectively. Management believes the insurance coverage is adequate to cover potential losses of inventories arising from the insured risks. 48 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 8. OTHER CURRENT ASSETS The breakdown of other current assets are as follows: Prepaid frequency license fees - current portion (Note 35c.i) Advances Prepaid salaries Others (each below Rp100 billion) Total 9. CONTRACT COSTS Movements of contract costs are as follows: At January 1, 2022 Amortization during the year Addition current year At December 31, 2022 Current Non-current At January 1, 2021 Amortization during the year Addition current year At December 31, 2021 Current Non-current 2022 2021 5,289 679 218 574 6,760 4,923 683 185 560 6,351 Cost to obtain 1,532 (338) 360 1,554 (354) 1,200 Cost to obtain 1,245 (281) 568 1,532 (312) 1,220 2022 Cost to fulfill 732 (514) 640 858 (317) 541 2021 Cost to fulfill 463 (488) 757 732 (344) 388 Total 2,264 (852) 1,000 2,412 (671) 1,741 Total 1,708 (769) 1,325 2,264 (656) 1,608 There is no provision for impairment of contract costs as of December 31, 2022 and 2021, respectively. 10. LONG-TERM INVESTMENTS The breakdown of long-term investments are as follows: Financial instruments At fair value through profit or loss: Equity Convertible bonds At fair value through other comprehensive income: Equity Associates PT Jalin Pembayaran Nusantara ("Jalin") Others (each below Rp100 billion) Total long-term investments 49 2022 2021 7,624 884 22 8,530 115 8 123 8,653 12,962 681 18 13,661 107 32 139 13,800 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 10. LONG-TERM INVESTMENTS (CONTINUED) a. Long-term investment in financial instrument Investments in equity at fair value through profit or loss are long-term investments in the form of shares in various start-up companies engaged in information and technology. The Group does not have significant influence in these start-up companies. The investments include Telkomsel's investment in PT GoTo Gojek Tokopedia Tbk. (“GOTO”). As of December 31, 2022, Telkomsel assessed the fair value of the investment in GOTO was Rp91 per share. The total unrealized loss from changes in fair value of Telkomsel’s investment in GOTO as of December 31, 2022, amounted to Rp6,741 billion and was presented as unrealized loss on changes in fair value of investments in the consolidated statement of profit or loss. Investments in equity at fair value through profit or loss also included investments by MDI in several start-up entities engaged in the information and technology sector. The additional investments during the year by MDI amounted to Rp1,362 billion. The total unrealized gain from changes in fair value of MDI’s investment amounted to Rp54 billion as of December 31, 2022 and was presented as unrealized gain arising from change of valuation of investment in the consolidated statement of profit or loss. Investments in convertible bonds at fair value through profit or loss represent long-term investments owned by Telkomsel and MDI in the form of convertible bonds in various start-up companies engaged in information and technology, which will be immediately converted into shares when they mature. b. Long-term investment in associates Investment in others which include investment in: (i) Jalin was previously a subsidiary, on June 19, 2019, the Group sold of its 67.00% ownership, thus ownership in Jalin is 33.00%. (ii) PT Fintek Karya Nusantara (“Finarya”) of 24.83%. Finarya was previously a subsidiary of Telkomsel. In 2019, there was an increase in issued and paid up capital made by various investors hence Finarya became associate entity of Telkomsel. (iii) PT Omni Inovasi Indonesia Tbk. (“Omni Inovasi Indonesia”) (previously PT Tiphone Mobile Indonesia Tbk.) of 24.00%. Since 2019, management has recognized full impairment of investment in PT Omni Inovasi Indonesia Tbk. The unrecognized share in losses in other investments cumulatively as of December 31, 2022 and 2021 was amounting to Rp346 billion and Rp341 billion, respectively. 50 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 11. PROPERTY AND EQUIPMENT The details of property and equipment are as follows: December 31, 2021 Additions Deductions Reclassifications/ Translations December 31, 2022 At cost: Directly acquired assets Land rights Buildings Leasehold improvements Switching equipment Telegraph, telex, and data communication equipment Transmission installation and equipment Satellite, earth station, and equipment Cable network Power supply Data processing equipment Other telecommunication peripherals Office equipment Vehicles Other equipment Property under construction Total Accumulated depreciation and impairment losses: Directly acquired assets Buildings Leasehold improvements Switching equipment Telegraph, telex, and data communication equipment Transmission installation and equipment Satellite, earth station, and equipment Cable network Power supply Data processing equipment Other telecommunication peripherals Office equipment Vehicles Other equipment Total Net book value 1,821 17,296 1,477 18,324 1,583 165,621 10,528 67,559 22,035 19,258 9,121 2,352 537 47 2,950 340,509 5,537 1,163 12,225 1,582 94,532 5,199 18,735 15,874 14,130 4,330 1,866 270 40 175,483 165,026 10 778 80 1,066 - 4,494 155 7,807 433 877 1,261 157 100 2 16,936 34,156 632 130 1,985 - 12,087 830 4,388 1,699 1,806 1,717 261 38 3 25,576 - (1) (86) (130) - (9,501) (5) (9) (719) (390) - (85) (165) (3) - (11,094) (1) (86) (127) - (9,362) (5) (9) (712) (388) - (79) (135) (2) (10,906) 7 874 100 823 - 10,492 126 (662) 1,527 1,209 20 201 133 5 (15,288) (433) 60 - 17 - 78 17 (604) 29 (58) 20 25 69 3 (344) 1,838 18,947 1,571 20,083 1,583 171,106 10,804 74,695 23,276 20,954 10,402 2,625 605 51 4,598 363,138 6,228 1,207 14,100 1,582 97,335 6,041 22,510 16,890 15,490 6,067 2,073 242 44 189,809 173,329 51 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 11. PROPERTY AND EQUIPMENT (continued) The details of property and equipment are as follows (continued): December 31, 2020 Additions Deductions Reclassifications/ Translations December 31, 2021 At cost: Directly acquired assets Land rights Buildings Leasehold improvements Switching equipment Telegraph, telex, and data communication equipment Transmission installation and equipment Satellite, earth station, and equipment Cable network Power supply Data processing equipment Other telecommunication peripherals Office equipment Vehicles Other equipment Property under construction Total Accumulated depreciation and impairment losses: Directly acquired assets Buildings Leasehold improvements Switching equipment Telegraph, telex, and data communication equipment Transmission installation and equipment Satellite, earth station, and equipment Cable network Power supply Data processing equipment Other telecommunication peripherals Office equipment Vehicles Other equipment Total Net book value 1,800 16,137 1,410 17,506 2,012 159,196 10,423 60,796 20,988 17,663 7,513 2,125 551 68 2,524 320,712 4,872 1,061 11,621 1,582 87,991 4,412 15,978 14,757 12,780 2,885 1,574 229 47 159,789 160,923 20 197 45 1,112 - 3,829 359 8,722 303 250 1,646 205 34 6 13,613 30,341 652 132 1,871 - 11,554 743 4,210 1,546 1,708 1,492 357 71 4 24,340 - (5) (35) (1,223) - (3,479) (15) (33) (390) (314) - (57) (43) - (29) (5,623) (2) (30) (1,223) - (3,227) (16) (11) (383) (301) - (57) (26) - (5,276) 1 967 57 929 (429) 6,075 (239) (1,926) 1,134 1,659 (38) 79 (5) (27) (13,158) (4,921) 15 - (44) - (1,786) 60 (1,442) (46) (57) (47) (8) (4) (11) (3,370) 1,821 17,296 1,477 18,324 1,583 165,621 10,528 67,559 22,035 19,258 9,121 2,352 537 47 2,950 340,509 5,537 1,163 12,225 1,582 94,532 5,199 18,735 15,874 14,130 4,330 1,866 270 40 175,483 165,026 a. Gain on sale of property and equipment Proceeds from sale of property and equipment Net book value Gain on disposal or sale of property and equipment 2022 2021 526 (129) 397 756 (36) 720 b. Others (i) During 2022 and 2021, the CGUs that independently generate cash inflows are fixed wireline, cellular, and others. Management believes that there is no indication of impairment in the assets of such CGUs as of December 31, 2022 and 2021. (ii) Interest capitalized to property under construction amounted to Rp79 billion and Rp52 billion for the year ended December 31, 2022 and 2021, respectively. The capitalization rate used to determine the amount of borrowing costs eligible for capitalization ranged from 5.63% to 7.90% and 5.63% to 8.70% for the year ended December 31, 2022 and 2021, respectively. (iii) No foreign exchange loss was capitalized as part of property under construction for the year ended December 31, 2022 and 2021. 52 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 11. PROPERTY AND EQUIPMENT (continued) b. Others (continued) (iv) During 2022 and 2021, the Group obtained proceeds from the insurance claim on lost and broken property and equipment, with a total value of Rp299 billion and Rp133 billion, respectively, and were recorded as part of “Other income - net” in the consolidated statements of profit or loss and other comprehensive income. During 2022 and 2021, the net carrying values of those assets of Rp270 billion and Rp103 billion, respectively, were charged to the consolidated statements of profit or loss and other comprehensive income. (v) In 2022, the estimated useful lives of Group towers were changed from 30 to 40 years. The impact of reduction in the depreciation expense for the year ended December 31, 2022 and the estimate for the year ended 2023 amounted to Rp93 billion and Rp373 billion, respectively. Towers are presented as part of transmission installation and equipment. (vi) As of December 31, 2022 and 2021, the equipment units of Telkomsel with the carrying amount of Rp6 billion and Rp818 billion, respectively, to be exchanged, and therefore the equipment units were reclassified as assets held for sale in the consolidated statement of financial position. In 2022 and 2021, the equipment units of Telkomsel with the net carrying amount of Rp909 billion and Rp258 billion, respectively, had been exchanged with equipment units of PT ZTE Indonesia. There is no provision for impairment of assets held for sale as of December 31, 2022 and 2021. (vii) In 2021, the Company decided to discontinue the use of MSAN assets and accelerate the depreciation of the MSAN assets, which have been fully depreciated in 2022. The impact of accelerated depreciation of MSAN assets for the year ended December 31, 2022 and 2021 amounted to Rp1,494 billion and Rp1,603 billion, respectively. MSAN assets are presented as part of cable network. (viii) The Group owns several pieces of land located throughout Indonesia with Right to Build (“Hak Guna Bangunan” or “HGB”) for a period of 8-50 years which will expire between 2023 and 2071. Management believes that there will be no issue in obtaining the extension of the land rights when they expire. (ix) As of December 31, 2022 and 2021, the Group’s property and equipment excluding land rights, with net carrying amount of Rp172,112 billion and Rp161,287 billion, respectively, were insured againts fire, theft, earthquake and other specified risks, including business interruption, under blanket policies totalling Rp36,319 billion and Rp29,601 billion, HK10 million and HK8 million, SG$373 million and SG$360 million, and MYR54 million and MYR72 million, respectively, and first loss basis amounted to Rp2,750 billion, respectively. Management believes that the insurance coverage is adequate to cover potential lossess from the insured risks. (x) As of December 31, 2022 and 2021, the percentage of completion of property under construction was approximately 55.91% and 75.63% respectively, of the total contract value, with estimated dates of completion until August 2025 and February 2025, respectively. The balance of property under construction mainly consist of buildings, transmission installation and equipment, cable network, and power supply. Management believes that there is no impediment to the completion of the construction in progress. (xi) As of December 31, 2022 and 2021, all assets owned by the Company have been pledged as collateral for bonds (Note 19b) while certain property and equipment of the Company’s subsidiaries with gross carrying value amounting to Rp18,370 billion and Rp22,939 billion, respectively, have been pledged as collateral under lending agreements (Notes 18a and 19c). 53 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 11. PROPERTY AND EQUIPMENT (continued) b. Others (continued) (xii) As of December 31, 2022 and 2021, the cost of fully depreciated property and equipment of the Group that are still used in operations amounted to Rp67,979 billion and Rp67,355 billion, respectively. The Group is currently conducting modernization of network assets to replace the fully depreciated property and equipment. (xiii) In 2022 and 2021, the total fair values of land rights and buildings of the Group amounted to Rp49,014 billion and Rp45,604 billion, respectively. 12. RIGHT-OF-USE ASSETS The carrying amounts of right-of-use assets recognized and the movement during the year: Land rights Buildings Transmission installation and equipment Vehicles Others Total As at January 1, 2021 Additions Deductions and reclassifications Depreciation expense As at December 31, 2021 Additions Deductions and reclassifications Depreciation expense As at December 31, 2022 4,100 968 (111) (955) 4,002 1,169 (217) (867) 4,087 568 532 (25) (346) 729 121 17 (204) 663 12,912 4,341 (850) (3,283) 13,120 8,205 (2,399) (4,067) 14,859 535 82 (10) (197) 410 488 (197) (178) 523 451 66 16 (325) 208 23 8 (35) 204 18,566 5,989 (980) (5,106) 18,469 10,006 (2,788) (5,351) 20,336 The carrying amounts of the lease liabilities and the movements are as follows: 2022 2021 As at January 1 Accretion of interest Additions (Note 39a) Deductions As at December 31 Current maturities Non-current Maturity analysis of lease payments are as follows: Less than 1 year 1-5 years More than 5 years Total lease payments Interest Net present value of lease payments Current maturities Non-current 54 16,387 931 10,006 (8,663) 18,661 (4,925) 13,736 15,617 1,784 4,783 (5,797) 16,387 (5,961) 10,426 2022 5,893 11,272 4,888 22,053 (3,392) 18,661 (4,925) 13,736 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 12. RIGHT-OF-USE ASSETS (continued) The Group leases several assets including land rights, building, transmission installation and equipment, vehicles, and others which used in operations, which generally have lease term between 1 and 33 years. The Group also has certain leases with lease terms of twelve months or less and low-value leases. The Group applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these leases. There are no lease contracts with variable lease payments. Detail of expenses related to leases are as follows: Depreciation expense of right-of-use assets Expense relating to short-term leases Interest expense on lease liabilities Expense relating to leases of low-value assets 2022 2021 5,351 3,821 931 52 5,106 5,251 1,784 57 13. OTHER NON-CURRENT ASSETS The breakdown of other non-current assets is as follows: Prepaid frequency license fees - net of current portion (Note 35c.i) Advances Claims for tax refund - net of current portion (Note 27b) Prepaid expenses Security deposit Prepaid taxes - net of current portion (Note 27a) Others (each below Rp100 billion) Total 2022 2021 1,291 781 621 446 144 - 340 3,623 1,572 868 1,488 454 102 601 446 5,531 14. INTANGIBLE ASSETS The details of intangible assets are as follows: Gross carrying amount: Balance, January 1, 2022 Additions Deductions Reclassifications/translations Balance, December 31, 2022 Accumulated amortization and impairment losses: Balance, January 1, 2022 Amortization Deductions Reclassifications/translations Balance, December 31, 2022 Net book value Goodwill Software License Other intangible assets Total 1,492 - - - 1,492 17,458 2,527 (175) (31) 19,779 (402) - - - (402) 1,090 (11,714) (2,063) 175 (14) (13,616) 6,163 174 440 - 6 620 (125) (26) - (1) (152) 468 1,512 49 (70) - 1,491 20,636 3,016 (245) (25) 23,382 (889) (91) 70 - (910) 581 (13,130) (2,180) 245 (15) (15,080) 8,302 55 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 14. INTANGIBLE ASSETS (continued) The details of intangible assets are as follows: Gross carrying amount: Balance, January 1, 2021 Additions Deductions Reclassifications/translations Balance, December 31, 2021 Accumulated amortization and impairment losses: Balance, January 1, 2021 Amortization Impairment Deductions Reclassifications/translations Balance, December 31, 2021 Net book value Goodwill Software License Other intangible assets Total 1,428 64 - - 1,492 (125) - (277) - - (402) 1,090 14,688 2,938 (19) (149) 17,458 (9,863) (1,828) - 11 (34) (11,714) 5,744 94 80 - - 174 (94) (31) - - - (125) 49 1,474 11 - 27 1,512 (756) (143) - - 10 (889) 623 17,684 3,093 (19) (122) 20,636 (10,838) (2,002) (277) 11 (24) (13,130) 7,506 (i) Goodwill resulted from the acquisition of Sigma (2008), Admedika (2010), data center PT Bina Data Mandiri (“BDM”) (2012), Contact Centres Australia Pty. Ltd. (2014), MNDG (2015), Melon and PT Griya Silkindo Drajatmoerni (“GSDm”) (2016), TSGN and Nutech (2017), SSI, CIP, and Telin Malaysia (2018), PST (2019), and Digiserve (2021) (Note 1e). (ii) As of December 31, 2021, the impairment of goodwill arising from the acquisition of Contact Centres Australia Pty. Ltd., SSI and Telin Malaysia amounted to Rp37 billion, Rp179 billion, and Rp61 billion, respectively. The impairment losses are presented as part of "Depreciation and amortization expenses” in the consolidated statements of profit or loss and other comprehensive income. (iii) The remaining amortization periods of software range for the years ended December 31, 2022 and 2021 are from 1-6 years, respectively. The amortization is presented as part of “Depreciation and amortization expenses” in the consolidated statements of profit or loss and other comprehensive income. (iv) As of December 31, 2022 and 2021, the cost of fully amortized intangible assets that are still used in operations amounted to Rp9,640 billion and Rp7,910 billion, respectively. 15. TRADE PAYABLES The breakdown of trade payables is as follows: Related parties Purchases of equipments, materials, and services Payables to other telecommunication providers Sub-total Third parties Purchases of equipments, materials, and services Payables to other telecommunication providers Radio frequency usage charges, concession fees, and Universal Service Obligation (“USO”) charges Sub-total Total 56 2022 2021 262 169 431 14,453 2,231 1,342 18,026 18,457 385 112 497 12,806 2,538 1,329 16,673 17,170 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 15. TRADE PAYABLES (continued) Trade payables by currency are as follows: Rupiah U.S. Dollar Others Total 2022 2021 16,727 1,636 94 18,457 15,584 1,506 80 17,170 Terms and conditions of the above trade payables: a. The Group’s trade payables are non-interest bearing and are normally settled on 1 year term. b. Refer to Note 32 for details on related party transactions. c. Refer to Note 37b.v for the Group’s liquidity risk management. 16. ACCRUED EXPENSES The breakdown of accrued expenses is as follows: Operation, maintenance, and telecommunication services Salaries and benefits General, administrative, and marketing expenses Interest and bank charges Total Refer to Note 32 for details of related party transactions. 17. CONTRACT LIABILITIES a. Current portion Advances from customers for Mobile Advances from customers for WIB Advances from customers for Enterprise Advances from customers for Consumer Others (each other below Rp100 billion) Total b. Non-current portion Advances from customers for Consumer Advances from customers for WIB Advances from customers for Enterprise Total 2022 2021 8,183 4,014 3,067 181 15,445 8,978 4,180 2,583 144 15,885 2022 2021 3,577 1,188 1,126 233 171 6,295 2022 2021 844 700 17 1,561 4,155 1,138 1,161 185 156 6,795 787 457 39 1,283 Contract liabilities at the beginning period which were recognized as revenue in 2022 and 2021 amounted to Rp6,795 billion and Rp7,834 billion, respectively. Refer to Note 32 for details of related party transactions. 57 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 18. SHORT-TERM BANK LOANS AND CURRENT MATURITIES OF LONG-TERM LOANS AND OTHER BORROWINGS a. Short-term bank loans Lenders Related parties Bank Mandiri BNI Sub-total Third parties PT Bank HSBC Indonesia ("HSBC") MUFG Bank ("MUFG") PT Bank DBS Indonesia ("DBS") UOB PT Bank Central Asia ("BCA") Others (each below Rp100 billion) Sub-total Total Outstanding 2022 2021 3,483 979 4,462 1,836 1,349 475 - - 69 3,729 8,191 550 1,028 1,578 1,937 1,853 545 400 350 19 5,104 6,682 Other significant information relating to short-term bank loans as of December 31, 2022 is as follows: Total facility (in billions)* Borrower Maturity date Interest rate Interest rate per annum Security** Mandiri 2021 - 2022 Nutech, Mitratel 3,100 July 26, 2023 - September 27, 2023 Monthly 3.85% - 9.00% 2020 Finnet 500 April 28, 2023 Monthly 1 month JIBOR + 1.30% BNI 2014 - 2017 GSD, Sigmaa 350 November 7, 2023 - January 9, 2024 Monthly 7.90% - 8.50% 2017 - 2021 HSBC 2014 2018 - 2019 MUFG Bank 2018 - 2022 DBS 2018 Sigmad, Metra, PINS, Metranet, Telkomsat, GSD, Melon Infomedia, Metra, GSD, Telkom Infra, Mitratel Telkom Infra, Infomedia Metranet, Telkom Infra, Infomediab 1,135 February 18, 2023 - June 6, 2023 Monthly 1 month JIBOR + 2.00% - 2.50% Sigmac,e 400 November 17, 2023 Monthly Under BLR 7.40% 2,250 January 31, 2023 - December 31, 2023 Monthly, Quarterly 2,430 June 21, 2023 - October 31, 2023 Monthly 1 month JIBOR + 0.80% 3 month JIBOR + 1.00% 1 month JIBOR + 0.70% 3 month JIBOR + 0.40% 475 July 31, 2023 Monthly 1 month JIBOR + 1.20% - 1.45% Trade receivables 58 Trade receivables and property and equipment None Trade receivables and property and equipment Trade receivables Trade receivables None None These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 18. SHORT-TERM BANK LOANS AND CURRENT MATURITIES OF LONG-TERM LOANS AND OTHER BORROWINGS (continued) a. Short-term bank loans (continued) Other significant information relating to short-term bank loans as of December 31, 2022 is as follows (continued): * In original currency ** Refer to Note 5 and Note 11 for details of trade receivables and property and equipment pledged as collateral. a Based on the latest amendment on July 28, 2022. b Based on the latest amendment on March 28, 2018 and July 6, 2018. c Based on the latest amendment on July 16, 2018 and November 17, 2021 d Based on the latest amendment on April 23, 2021. e Unsettled loan will be automatically extended. As stated in the agreements, the Group is required to comply with all covenants or restrictions such as limitation that the Company must have a majority shareholding of at least 51% of the subsidiaries and maintaining financial ratios. As of December 31, 2022, the Group has complied with all covenants. The credit facilities were obtained by the Group for working capital purposes. b. Current maturities of long-term loans and other borrowings Two-step loans Bonds Bank loans Other borrowings Total Notes 19a 19b 19c 19d 2022 2021 118 - 7,788 952 8,858 138 2,200 6,311 1,041 9,690 19. LONG-TERM LOANS AND OTHER BORROWINGS Two-step loans Bonds Bank loans Other borrowings Total Notes 19a 19b 19c 19d 2022 2021 91 4,793 22,085 362 27,331 217 4,793 29,745 1,564 36,319 Scheduled principal payments as of December 31, 2022 are as follows: Notes 19a 19b 19c 19d Total 91 4,793 22,085 362 27,331 2024 91 - 6,720 362 7,173 Year 2025 - 2,098 5,785 - 7,883 Two-step loans Bonds Bank loans Other borrowings Total a. Two-step loans 2026 2027 - - 4,226 - 4,226 Thereafter - 2,695 3,187 - 5,882 - - 2,167 - 2,167 Two-step loans are unsecured loans obtained by the Government from overseas banks which are then re-loaned to the Company. Loans obtained up to July 1994 are payable in Rupiah based on the exchange rate at the date of drawdown. Loans obtained after July 1994 are payable in their original currencies and any resulting foreign exchange gain or loss is borne by the Company. 59 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 19. LONG-TERM LOANS AND OTHER BORROWINGS (continued) a. Two-step loans (continued) 2022 Outstanding 2021 Outstanding Lenders Overseas banks Total Current maturities (Note 18b) Long-term portion Currency Yen US$ Rp Foreign currency (in millions) 1,536 - - Rupiah Rupiah Foreign currency (in millions) 2,304 1 - equivalent 181 - 28 209 (118) 91 equivalent 285 14 56 355 (138) 217 Lenders Overseas banks Principal payment Currency Yen Rp schedule Semi-annually Semi-annually Interest payment period Semi-annually Semi-annually Interest rate per annum 2.95% 7.125% The loans were intended for the development of telecommunications infrastructure and supporting telecommunications equipment. The loans will be settled semi-annually and due on various dates until 2024. The Company had used all facilities under the two-step loans program since 2008 and the withdrawal period for the two-step loan has ended. Under the loan covenants, the Company is required to maintain financial ratios as follows: i. Projected net revenue to projected debt service ratio should exceed 1, 2:1 for the two-step loans originating from Asian Development Bank (“ADB”). ii. Internal financing (earnings before depreciation and finance costs) should exceed 20% compared to annual average capital expenditures for loans originating from the ADB. As of December 31, 2022, the Company has complied with the above-mentioned ratios. b. Bonds 2015 Series A Series B Series C Series D Total Unamortized debt issuance cost Total Current maturities (Note 18b) Long-term portion Outstanding 2022 2021 - 2,100 1,200 1,500 4,800 (7) 4,793 - 4,793 2,200 2,100 1,200 1,500 7,000 (7) 6,993 (2,200) 4,793 2015 Bonds Series A Series B Series C Series D Total Principal Issuer 2,200 The Company 2,100 The Company 1,200 The Company 1,500 The Company 7,000 Issuance date Listed on IDX IDX IDX IDX Maturity date June 23, 2015 June 23, 2022 June 23, 2015 June 23, 2025 June 23, 2015 June 23, 2030 June 23, 2015 June 23, 2045 Interest payment period Quarterly Quarterly Quarterly Quarterly Interest rate per annum 9.93% 10.25% 10.60% 11.00% 60 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 19. LONG-TERM LOANS AND OTHER BORROWINGS (continued) b. Bonds (continued) The bonds are not secured by specific security but by all of the Company’s assets, movable or non- movable, either existing or in the future (Note 11b.xi). The underwriters of the bonds are PT Bahana TCW Management Investment (“Bahana TCW”), PT BRI Danareksa Sekuritas, PT Mandiri Sekuritas, and PT Trimegah Sekuritas Indonesia, Tbk. and the trustee is Bank Permata. The Company received the proceeds from the issuance of bonds on June 23, 2015. The funds received from the public offering of bonds net of issuance costs, were used to finance capital expenditures which consisted of wave broadband, backbone, metro network, regional metro junction, information technology application and support, and acquisition of some domestic and international entities. As of December 31, 2022, the rating of the bonds issued by Pefindo is idAAA (Triple A). Based on the Indenture Trusts Agreement, the Company is required to comply with all covenants or restrictions, including maintaining financial ratios as follows: (a) Debt to equity ratio should not exceed 2:1. (b) EBITDA to interest ratio should not be less than 4:1. (c) Debt service coverage is at least 125%. As of December 31, 2022, the Company has complied with the above-mentioned ratios. c. Bank loans Lenders Related parties BNI Bank Mandiri BRI BSI Sub-total Third parties BCA Bank CIMB Niaga DBS Bank Permata Bank of China Syndication of banks HSBC MUFG Bank Bank Danamon UOB Singapore PT Bank ANZ Indonesia ("Bank ANZ") Others (each below Rp100 billion) Sub-total Total Unamortized debt issuance cost Current maturities (Note 18b) Long-term portion 2022 Outstanding Foreign currency (in millions) Rupiah Currency 2021 Outstanding Foreign Rupiah currency (in millions) equivalent - - - - - - 0 - - - - 24 - - - 22 - - 11 7,500 7,374 2,223 533 17,630 8,651 194 5 3,887 1,188 400 350 338 750 1,972 - 314 286 152 36 18,523 36,153 (97) 36,056 (6,311) 29,745 equivalent 5,472 4,381 1,409 22 11,284 9,757 2,221 61 1,500 1,021 1,000 680 265 750 500 455 205 198 60 34 18,707 29,991 (118) 29,873 (7,788) 22,085 - - - - - - 4 - - - - 17 - - - 13 - - 10 Rp Rp Rp Rp Rp Rp US$ Rp Rp Rp Rp US$ Rp Rp Rp US$ Rp Rp MYR 61 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 19. LONG-TERM LOANS AND OTHER BORROWINGS (continued) c. Bank loans (continued) Other significant information relating to bank loans as of December 31, 2022 is as follows: Borrower Currency Total facility (in billions)* Current period payment (in billions)* Principal payment schedule Interest payment period Interest rate per annum Security** GSD The Company, GSD, TLT, Sigma, Mitratel The Company, GSD, Mitratel, The Company SSI The Company, Mitratel, PST, GSD Rp Rp Rp Rp 182 8,175 32 2020 - 2024 Monthly 8.75% 1,384 2016 - 2033 Monthly, Quarterly 1 month JIBOR + 2.25%; 3 months JIBOR + 1.70% - 1.85% Rp 6,693 1,128 2019 - 2027 Quarterly 3 months JIBOR + 1.50% - 1.85% Trade receivables Trade receivables and property and equipment None Rp 2,500 455 2019 - 2026 Quarterly 3 months JIBOR + 1.70% - 1.85% None 55 11 2019 - 2024 Monthly 7.50% None 15,986 2,880 2020 - 2030 Quarterly, Semi- annually 3 months JIBOR + 1.50% GSD, PINS, Mitratel Telin Rp 2,500 65 2020 - 2029 US$ 0 - 2024 - 2030 Mitratel Rp 3,500 2,000 2023 - 2028 Mitratel Rp 1,500 167 2021 - 2028 Quarterly 3 months JIBOR + 1.30% - 1.95% 6 months SOFR + 1.82% Semi- annually Semi- annually 3 months JIBOR + 1.70% Semi- annually 3 months JIBOR + 1.50% - 2.40% Telkomsel Rp 1,000 900 2021 - 2023 Quarterly 1 month JIBOR + 2.00% Mitratel Rp 2,500 - 2024 - 2030 Telin US$ 0 0 2019 - 2025 Mitratel Rp 750 - 2023 - 2028 Semi- annually Semi- annually 7.68% 6 months LIBOR + 1.25% Semi- annually 3 months JIBOR + 1.50% MUFG Bank 2021 Bank Danamon 2022 UOB Singapore 2018 ANZ 2015 Mitratel Rp 500 - 2022 - 2028 Quarterly Mitratel Rp 636 182 2022 - 2025 Quarterly 3 months JIBOR + 1.60% 3 months JIBOR + 1.50% Telin US$ 0 0 2019 - 2024 Semi- annually 6 months LIBOR + 1.25% GSD, PINS Rp 740 88 2020 - 2025 Quarterly 3 months JIBOR + 1.40% - 2.00% 62 Trade receivables and property and equipment None None Property and equipment Property and equipment None None None Property and equipment None None None None BNI 2018 2013 - 2021 Bank Mandiri 2017 - 2020 BRI 2017 - 2019 BSI 2019 BCA 2020 - 2021 Bank CIMB Niaga 2019 - 2022 2021 - 2022 DBS 2021 Bank Permata 2020 - 2021 Bank of China 2019 Syndication of banks 2022 2018 HSBC 2021 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 19. LONG-TERM LOANS AND OTHER BORROWINGS (continued) c. Bank loans (continued) Other significant information relating to bank loans as of December 31, 2022 is as follows (continued): * In original currency ** Refer to Note 5 and Note 11 for details of trade receivables and property and equipment pledged as collateral. a Telkomsel has no collateral for its bank loans, or other credit facilities. The terms of the various agreements with Telkomsel’s lenders and financiers require compliance with a number of covenants and negative covenants as well as financial and other covenants, which include, among other things, certain restrictions on the amount of dividends and other profit distributions which could adversely affect Telkomsel’s capacity to comply with its obligation under the facility. The terms of the relevant agreements also contain default and cross default clauses. As of December 31, 2022, Telkomsel has complied with the above covenants. As stated in the agreements, the Group is required to comply with all covenants or restrictions such as dividend distribution, obtaining new loans, and maintaining financial ratios. As of December 31, 2022, the Group obtained waiver from lenders for the non-fulfillment financial ratios in Metra, Sigma, GSD, and TLT. The waivers from HSBC, Bank DBS, BNI, and Bank Mandiri were received on December 19, 2022, December 22, 2022, December 23, 2022, December 29, 2022, and December 26, 2022. As of December 31, 2022, the Group has complied with all covenants. The credit facilities were obtained by the Group for working capital purposes and investment purposes. d. Other borrowings Lenders PT Sarana Multi Infrastruktur (Persero) ("Sarana Multi Infrastruktur") Unamortized debt issuance cost Total Current maturities (Note 18b) Long-term portion Outstanding 2022 2021 1,315 (1) 1,314 (952) 362 2,609 (4) 2,605 (1,041) 1,564 Other significant information relating to other borrowings as of December 31, 2022, is as follows: Sarana Multi Infrastruktur November 14, 2018 March 29, 2019* March 29, 2019* Borrower Currency Total facility (in billions) Current period payment (in billions) Principal payment schedule Interest rate per annum Security The Company The Company Telkomsat Rp Rp Rp 1,000 2,836 220 700 164 23.5 Semi-annually (2019 - 2023) Semi-annually (2020 - 2024) Semi-annually (2020 - 2024) 3 months JIBOR + 1.75% 3 months JIBOR + 1.75% 3 months JIBOR + 1.75% None None None * Based on the latest amendment on June 15, 2020. Under the agreement, the Company and Telkomsat are required to comply with all covenants or restrictions, including maintaining financial ratios as follows: (a) Debt to equity ratio should not exceed 2:1 (b) Net debt to EBITDA ratio should not exceed 4:1 (c) Minimal debt service coverage at least 125% As of December 31, 2022, the Company and Telkomsat have complied with the above-mentioned ratios. 63 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 20. NON-CONTROLLING INTERESTS The details of non-controlling interests are as follows: Non-controlling interests in net assets of subsidiaries: Telkomsel Mitratel Others Total Non-controlling interests in profit (loss) of subsidiaries: Telkomsel Mitratel Others Total Material partly-owned subsidiaries 2022 2021 10,535 9,038 431 20,004 13,804 9,464 485 23,753 2022 2021 6,419 502 6 6,927 9,155 64 (31) 9,188 The non-controlling interest which are considered material to the company are the non-controlling interest in Telkomsel and Mitratel. On December 31, 2022 and 2021, The non-controlling interest in Telkomsel holds 35.00% and 35.00% and Mitratel holds 28.15% and 28.13%, respectively. The summarized financial information of Telkomsel and Mitratel are provided below. This information is based on amounts before intercompany eliminations. Summarized statements of financial position: Current assets Non-current assets Current liabilities Non-current liabilities Total equity Attributable to: Telkomsel Mitratel 2022 16,290 84,701 (32,241) (38,708) 30,042 2021 12,288 89,014 (31,654) (30,205) 39,443 2022 7,886 48,185 (10,200) (12,064) 33,807 2021 21,303 36,426 (6,476) (17,607) 33,646 Owners of the parent company Non-controlling interests 19,507 10,535 25,639 13,804 24,769 9,038 24,182 9,464 64 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 20. NON-CONTROLLING INTERESTS (continued) Summarized statements of profit or loss and other comprehensive income: Revenues Operation expenses Other expenses - net Profit before income tax Income tax expense - net Profit for the year Other comprehensive income (loss) - net Total comprehensive income for the year Attributable to non-controlling interests Dividends paid to non-controlling interests Summarized statements of cash flows: Operating Investing Financing Net increase (decrease) in cash and cash equivalents CF 21. CAPITAL STOCK Telkomsel 2022 89,039 (59,574) (5,343) 24,122 (5,755) 18,367 2021 87,506 (52,437) (1,932) 33,137 (6,977) 26,160 Mitratel 2022 2021 7,729 (4,576) (1,193) 1,960 (175) 1,785 6,869 (4,129) (1,129) 1,611 (230) 1,381 145 (75) (1) 8 18,512 26,085 1,784 1,389 6,419 9,155 9,784 13,204 502 272 64 - Telkomsel Mitratel 2022 42,970 (8,652) (30,783) 2021 40,789 (12,943) (34,239) 2022 6,020 (10,893) (7,921) 2021 5,363 (12,597) 25,851 3,535 (6,393) (12,794) 18,617 Description Number of shares 2022 Percentage of ownership Total paid-in capital Series A Dwiwarna share Government Series B shares Government The Bank of New York Mellon Corporation* Directors (Note 1b): Ririek Adriansyah Budi Setyawan Wijaya Afriwandi Herlan Wijanarko Heri Supriadi Commisioner (Note 1b): Arya Mahendra Sinulingga Public (individually less than 5%) Total 1 51,602,353,559 3,889,668,580 1,156,955 275,000 42,500 42,500 40,000 87,500 43,568,550,005 99,062,216,600 0 52.09 3.93 0 0 0 0 0 0 43.98 100.00 0 2,580 194 0 0 0 0 0 0 2,179 4,953 65 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 21. CAPITAL STOCK (continued) Description Number of shares 2021 Percentage of ownership Total paid-in capital Series A Dwiwarna share Government Series B shares Government The Bank of New York Mellon Corporation* Directors (Note 1b): Ririek Adriansyah Budi Setyawan Wijaya Afriwandi Herlan Wijanarko Heri Supriadi Edi Witjara Public (individually less than 5%) Total 1 51,602,353,559 4,829,039,080 1,156,955 275,000 42,500 42,500 40,000 32,500 42,629,234,505 99,062,216,600 0 52.09 4.87 0 0 0 0 0 0 43.04 100.00 0 2,580 241 0 0 0 0 0 0 2,132 4,953 * The Bank of New York Mellon Corporation serves as the Depositary of the registered ADS holders for the Company’s ADSs. The Company issued only 1 Series A Dwiwarna share which is held by the Government and cannot be transferred to any party, and has a veto right in the General Meeting of Stockholders of the Company with respect to election and removal of the Boards of Commissioners and Directors, issuance of new shares, and amendments of the Company’s Articles of Association. 22. OTHER EQUITY Difference due to acquisition of non controlling interests In subsidiaries Translation adjustment Effect of change in equity of associated companies Unrealized holding gain on available-for-sale securities Other equity components Total 2022 2021 8,358 910 386 6 37 9,697 8,358 611 386 3 37 9,395 66 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 23. REVENUES The Group derives revenues in the following major product lines: 2022 Mobile Consumer Enterprise WIB Others Consolidated revenue Telephone revenues Cellular Fixed lines Total telephone revenues Interconnection revenues Data, internet, and information technology service revenues Cellular data and internet Internet, data communication, and information technology services SMS Others Total data, internet, and information technology service revenues Network revenues Indihome revenues Other services Call center service Manage service and terminal E-health E-payment Others Total other services Total revenues from contract with customer Revenues from lessor transactions Total revenues Adjustments and eliminations Total external revenues as reported in note operating segment 11,905 - 11,905 285 69,006 - 4,260 9 73,275 3 - - - - 20 5 25 - 757 757 - - 308 - - 308 - 25,232 - - - - 52 52 85,493 - 85,493 - 26,349 - 26,349 5 - 604 604 - 147 175 322 8,187 - - 7,750 49 1,733 9,532 1,438 2,788 1,139 1,156 729 454 1,309 4,787 19,149 - 19,149 12 2,228 - 860 3,088 937 - 25 1 - - 280 306 12,840 2,604 15,444 (2) 85,493 26,354 19,161 15,442 - - - - - - - 207 207 - - - - - - 664 664 871 - 871 (632) 239 12,052 1,536 13,588 8,472 69,006 10,286 4,309 2,809 86,410 2,378 28,020 1,164 1,157 729 474 2,310 5,834 144,702 2,604 147,306 2021 Mobile Consumer Enterprise WIB Others Consolidated revenue Telephone revenues Cellular Fixed lines Total telephone revenues Interconnection revenues Data, internet, and information technology service revenues Cellular data and internet Internet, data communication, and information technology services SMS Others Total data, internet, and information technology service revenues Network revenues Indihome revenues Other services Call center service Manage service and terminal E-health E-payment Others Total other services Total revenues from contract with customer Revenues from lessor transactions Total revenues Adjustments and eliminations Total external revenues as reported in note operating segment - 649 649 - - 7,976 26 1,596 9,598 1,087 2,605 1,012 2,047 640 459 1,036 5,194 19,133 - 19,133 8 19,141 73 185 258 7,419 - 2,056 - 922 2,978 789 - 69 1 - - 325 395 11,839 2,412 14,251 4 14,255 - - - - - - - 180 180 - - - - - 25 426 451 631 - 631 (426) 205 14,737 1,730 16,467 7,787 64,500 10,272 4,754 2,698 82,224 1,880 26,325 1,081 2,048 640 487 1,859 6,115 140,798 2,412 143,210 14,664 - 14,664 368 64,500 - 4,728 - 69,228 4 - - - - 3 - 3 84,267 - 84,267 - 84,267 - 896 896 - - 240 - - 240 - 23,720 - - - - 72 72 24,928 - 24,928 2 24,930 67 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 23. REVENUES (continued) Management expects that most of the transaction price allocated to the unsatisfied contracts as of December 31, 2022 will be recognized as revenue during the next reporting periods. Unsatisfied performance obligations as of December 31, 2022, which management expect to be realised within one year is Rp6,455 billion, and more than one year is Rp4,703 billion. The Group entered into non-cancellable lease agreements as a lessor. The lease agreements cover leased lines, telecommunication equipment, and land and building. These leases have terms of between 1 to 10 years. All leases include a clause to enable an upward revision of the rental charge on an annual basis according to the prevailing market conditions. These lessees are also required to provide a residual value guaranted on the properties. There is no revenue from major customers which exceeds 10% of total revenues for the year ended December 31, 2022 and 2021. Refer to Note 32 for details of related parties transactions. 24. PERSONNEL EXPENSES The breakdown of personnel expenses is as follows: Salaries and related benefits Vacation pay, incentives, and other benefits Pension and other post-employment benefits (Note 30) LSA expense (Note 31) Others Total 2022 2021 9,360 3,835 1,585 92 35 14,907 8,661 4,999 1,680 153 31 15,524 Refer to Note 32 for details of related parties transactions. 25. OPERATION, MAINTENANCE, AND TELECOMMUNICATION SERVICE EXPENSES The breakdown of operation, maintenance, and telecommunication service expenses is as follows: 2022 2021 Operation and maintenance Radio frequency usage charges (Note 35c.i) Leased lines and Customer Premise Equipment ("CPE") Concession fees and USO charges (Note 15) Electricity, gas, and water Cost of SIM cards, vouchers, and sales of peripherals (Note 7) Project management Vehicles rental and supporting facilities Insurance Others (each below Rp100 billion) Total Refer to Note 32 for details of related parties transactions. 22,746 6,510 3,530 2,601 904 747 400 343 230 173 38,184 21,467 6,097 5,003 2,472 898 739 519 305 432 201 38,133 68 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 26. GENERAL AND ADMINISTRATIVE EXPENSES The breakdown of general and administrative expenses is as follows: General expenses Professional fees Allowance for expected credit losses Traveling Training, education, and recruitment Meeting Social contribution Collection expenses Research and development Others (each below Rp100 billion) Total Refer to Note 32 for details of related parties transactions. 27. TAXATION a. Prepaid taxes The Company: Income Tax Article 22 - Witholding tax on goods delivery and imports Article 23 - Witholding tax on service delivery VAT Subsidiaries: Income Tax Corporate Income Tax Article 4(2) - Final tax Article 23 - Witholding tax on service delivery VAT Total prepaid taxes Current portion Non-current portion (Note 13) b. Claims for tax refund The Company Corporate Income Tax Article 21 - Individual income tax VAT Subsidiaries Income Tax Corporate income tax Article 23 - Witholding tax on services delivery VAT Total claims for tax refund Current portion Non-current portion (Note 13) 69 2022 2021 2,259 1,097 563 421 371 312 218 173 108 332 5,854 2,043 789 477 321 284 249 213 212 82 346 5,016 2022 2021 1 97 - 3 24 16 1,323 1,464 (1,464) - - 81 601 - 5 19 2,039 2,745 (2,144) 601 2022 2021 19 3 155 578 8 238 1,001 (380) 621 500 - 403 662 17 596 2,178 (690) 1,488 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 27. TAXATION (continued) c. Taxes payable The Company: Income taxes 2022 2021 Article 4(2) - Final tax Article 21 - Individual income tax Article 22 - Withholding tax on goods delivery and imports Article 23 - Withholding tax on services Article 25 - Installment of corporate income tax Article 26 - Withholding tax on non-resident income Article 29 - Corporate income tax VAT VAT - Tax collector Subsidiaries: Income taxes Article 4(2) - Final tax Article 21 - Individual income tax Article 22 - Withholding tax on goods delivery and imports Article 23 - Withholding tax on services Article 25 - Installment of corporate income tax Article 26 - Withholding tax on non-resident income Article 29 - Corporate income tax VAT VAT - Tax collector Total taxes payable 50 79 7 48 190 5 575 244 286 1,484 287 206 5 68 260 262 1,782 493 525 3,888 5,372 d. The components of consolidated income tax expense (benefit) are as follows: Current The Company Subsidiaries Deferred The Company Subsidiaries Net income tax expense 2022 2021 2,134 7,125 9,259 (103) (497) (600) 8,659 53 97 8 47 211 3 455 505 409 1,788 215 151 3 65 23 14 919 745 - 2,135 3,923 2,236 7,320 9,556 (614) 788 174 9,730 70 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 27. TAXATION (continued) d. The components of consolidated income tax expense (benefit) are as follows (continued): The reconciliation between the profit before income tax and the estimated taxable income of the Company for the years ended December 31, 2022 and 2021 are as follows: 2022 2021 Profit before income tax consolidation Add back consolidation eliminations Consolidated profit before income tax and eliminations Less: profit before income tax of the subsidiaries Profit before income tax attributable to the Company before deduction of income subject to final tax Less: income subject to final tax Profit before income tax attributable to the Company after deduction of income subject to final tax Temporary differences: Allowance for expected credit losses Deferred installation fee Leases Provision for employee benefits Land rights, intangible assets, and other Net periodic pension and other post-employment benefits costs Difference between book value of accounting and tax property equipment Accrued expenses and provision for inventory obsolescence Contract cost Net temporary differences Permanent differences: Net periodic post-retirement health care benefit costs Donations Employee benefits Expense related to income subject to final tax Equity in net income of associates and subsidiaries Other (income) expense from tax assesment result Others Net permanent differences Taxable income of the Company Current corporate income tax expense Final income tax expense Total current income tax expense of the Company Current income tax expense of the subsidiaries Total current income tax expense 36,339 28,617 64,956 (38,892) 26,064 (414) 25,650 (54) 104 7 (507) 7 (131) 209 68 125 (172) 212 239 169 168 (15,304) 4 73 (14,439) 11,039 2,098 36 2,134 7,125 9,259 43,678 33,098 76,776 (46,954) 29,822 (1,144) 28,678 (84) 273 7 586 (8) 91 696 (19) 132 1,674 263 228 163 148 (19,731) 32 138 (18,759) 11,593 2,202 34 2,236 7,320 9,556 71 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 27. TAXATION (continued) d. The components of income tax expense (benefit) are as follows (continued): The reconciliation between the income tax expense calculated by applying the applicable tax rate of 19% to the profit before income tax less income subject to final tax, and the net income tax expense as shown in the consolidated statements of profit or loss and other comprehensive income is as follows: 8 Profit before income tax consolidation Less consolidated income subject to final tax - net 2022 2021 36,339 (5,812) 30,527 43,678 (2,383) 41,295 Income tax expense calculated at the Company’s applicable statutory tax rate Difference in applicable statutory tax rate for subsidiaries Non-deductible expenses Final income tax expense Changes of tax rates Deferred tax adjusment Unrecognized deferred tax Others Net income tax expense 5,800 694 1,992 36 - (508) (61) 706 8,659 7,846 1,068 71 36 (233) - 18 924 9,730 In October 2021, the Government issued Law No. 7/2021 concerning Harmonization of Tax Regulations (HPP Law). In Chapter III Article 3 of the HPP Law, amendments to the Income Tax Law have been regulated, including amendments to Article 17 paragraph (1) letter b which stipulates that the tax rate applied to Taxable Income for domestic corporate taxpayers and permanent establishments is 22%, which comes into force in the 2022 tax year, and for corporate taxpayers in the form of a limited liability company with a total number of paid-up shares is traded on a stock exchange in Indonesia of at least 40% and meeting certain requirements can receive 3% tax rate lower than the expected rate. The Company has applied the tax rate of 19% for the year ended December 31, 2022 and 2021. The subsidiaries applied the tax rate of 22% for the year ended December 31, 2022 and 2021. The Company has submitted the above taxable income and current income tax expense computation in its income tax return (“Surat Pemberitahuan Tahunan” or Annual Tax Return) for fiscal year 2021 that will be reported to the tax office based on prevailing regulations. e. Tax assessment (i) The Company Income tax and VAT fiscal year 2015 On April 25, 2017, the Tax Authorities issued Tax Overpayment Assessment Letter (“SKPLB”) for corporate income tax amounting to Rp147 billion, and SKPKBs for underpayment of VAT amounting to Rp13 billion (including penalty of Rp4.1 billion), underpayment of VAT on tax collected amounting to Rp6 billion (including penalty of Rp1.5 billion), underpayment of self- assessed offshore VAT amounting to Rp55.3 billion (including penalty of Rp16.8 billion). The Company also received STP for VAT amounting to Rp34 billion, VAT on tax collected amounting to Rp7 billion, and self-assessed offshore VAT amounting to Rp8 billion. The Company accepted tax audit decision amounting to Rp17 billion for corporate income tax, to transfer deductible temporary differences related to provision for incentives to fixed wireless (Flexi) subscribers’ migration amounting to Rp42 billion from Annual Tax Return of corporate income tax fiscal year 2015 to Annual Tax Return of corporate income tax fiscal year 2016. 72 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 27. TAXATION (continued) e. Tax assessments (continued) (i) The Company (continued) Income tax and VAT fiscal year 2015 (continued) The Company also accepted underpayment of VAT, underpayment of VAT on tax collected, and STP for VAT on tax collected amounting to Rp26 billion. The accepted portion was charged to the 2017 consolidated statements of profit or loss and other comprehensive income. On July 24, 2017, the Company filed Objection Letter to the Tax Authorities for corporate income tax amounting to Rp210.5 billion and self-assessed offshore VAT amounting to Rp55.3 billion. On May 3 and 22, 2018, the Tax Authorities issued decision letter on Company’s objections for SKPLB of self-assessed offshore VAT amounting to Rp54.6 billion, wherein Tax Authorities reduced the Company’s underpayment and granted all the Company’s objection. The Company agreed with the Tax Authorities decision regarding SKPLB of self-assessed offshore VAT amounting to Rp793 million and charged in the 2018 consolidated statements of profit or loss and other comprehensive income. On July 18, 2018, the Tax Authorities issued Decision Letter on Company’s objections for SKPLB of corporate income tax, wherein the Tax Authorities has granted the several Company’s objection and additional amount of overpayment which should be received amounting to Rp76 billion. On October 10, 2018, the Company filed an appeal. On July 8, 2020, the Company received appeal decision from the Tax Court regarding corporate income tax dispute for fiscal year 2015. The Tax Court partially approved the appeal filed by the Company. On September 9, 2020, the Company received tax refund of additional overpayment of corporate income tax amounting to Rp90.9 billion. On October 26, 2020, the Company received notification letter from Tax Court that Tax Authorities filed a judicial review of corporate income tax dispute for fiscal year 2015. On December 2, 2020, the Company filed a contra memorandum for judicial review as response of Tax Authorities judicial review. As of the date of approval and authorization for the issuance of these consolidated financial statements, the Company did not received verdict from the Supreme Court. In accordance with taxation law, for all withholding income tax and VAT except for corporate income tax has passed tax assessment period, therefore all tax liabilities for fiscal year 2015 considered final and has permanent legal force. The entire file of the Judicial Review Memorandum submitted by the Judicial Review Applicant (DGT) and the Judicial Review Counter Memorandum file sent by the Respondent (Telkom) have been forwarded by the Secretariat of the Tax Court to the Supreme Court on December 13, 2022, with a letter of introduction number PKMA-1594/XII/ PAN.Wk/2022. As of the issuance date of these financial statements, the Company still has not received the Supreme Court decision on the DGT’s request for review. Thus, all tax obligations for 2015 other than the type of corporate income tax can be considered final and have permanent legal force because at the time of issuance of these consolidated financial statements, the 2015 tax obligations have passed the expiration date for tax determination as stipulated in the tax laws and regulations. 73 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 27. TAXATION (continued) e. Tax assessments (continued) (i) The Company (continued) Income tax and VAT fiscal year 2018 On December 16, 2020, the Company received Tax Assessment Letter (“SKP”) and STP as result of 2018 tax audit. The DGT issued SKPLB of corporate income tax amounting to Rp101.5 billion, SKPLB of withholding tax article 21 amounting to Rp1.9 billion (include penalty Rp573.9 million), SKPLB of withholding tax article 23 amounting to Rp4 million (include penalty Rp1.2 million) and SKPLB of VAT for fiscal period January to August and October to December amounting to Rp85.3 billion). Furthermore, the DGT issued SKPKB of VAT for fiscal period September amounting to Rp240.5 billion (include penalty Rp59.5 billion), SKPKB of VAT WAPU amounting to Rp15.17 billion (include penalty Rp4.6 billion) and STP of VAT WAPU amounting to Rp1.2 billion. The Company agreed to receive tax audit correction of corporate income tax amounting Rp1.1 billion, underpayment of withholding tax article 21 amounting to Rp1.9 billion, underpayment of withholding tax article 23 amounting to Rp4 million, VAT tax credit amounting to Rp4.8 billion, STP of VAT WAPU amounting Rp1.2 billion and underpayment of VAT WAPU amounting to Rp15.17 billion. These corrections that have been approved have been charged to the 2020 profit or loss income statement. The Company did not agree with the correction from tax auditor who imposes VAT on the transaction of submitting the space segment component (asset in constructive) of the Satelit Merah Putih to Telkomsat. In March 2021, the Company has submitted a tax objection letter to the Tax Authority for the correction of the tax auditor. On March 4, 2022, the Company received notification letter from Tax Authority number KEP-00253/KEB/PJ/WPJ.19/2022 that approved the objection filed by the Company. On April 8, 2022, the Company has received a refund of Rp270.4 billion in accordance with the Decree. Thus, for all types of taxes in 2018 the Company has received all decisions that are final and have permanent legal force. VAT fiscal year 2019 On May 12, 2022, the Company received a notice of field audit for overpayment of domestic VAT for period January to December 2019. On November 30, 2022, the Company received SKPKB and STP WAPU VAT for the period January to December 2019 amounting to Rp6.3 billion (including a fine of Rp3.1 billion) and domestic VAT SKPLB for January to December 2019 amounting to Rp 60.8 billion. The company agrees to accept the auditor's tax correction and has charged fines and audit corrections to the 2022 income statement. Thus, for the 2019 VAT tax type, the Company has received a decision that is final and has permanent legal force. VAT fiscal year 2020 On September 1, 2022, the Company received a notice of field audit for overpayment of domestic VAT for period May 2020. As at the authorization date of these consolidated financial statements, the tax audit process is still ongoing. (ii) Telkomsel Income tax and VAT fiscal year 2014 On May 31, 2019, Telkomsel received the SKPKB and STP for the fiscal year 2014 amounting to Rp150.6 billion (including penalty of Rp54.6 billion). Telkomsel accepted and paid the portion of Rp16.5 billion on June 27, 2019 and recorded it as other expense. On August 20, 2019, Telkomsel has paid amounting to Rp99.1 billion and recorded it as claim for tax refund. Subsequently, on August 23, 2019, Telkomsel filed an objection to the Tax Authorities amounting to Rp134.1 billion. 74 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 27. TAXATION (continued) e. Tax assessments (continued) (ii) Telkomsel (continued) Income tax and VAT fiscal year 2014 (continued) On July 15 and July 22, 2020, Telkomsel received objection decision letter from Tax Authorities which accepted Rp27.2 billion and rejected Rp106.8 billion. In August 27, 2020 Telkomsel received partially the tax refund Rp27.2 billion. On September 28, 2020, Telkomsel filed an appeal to the Tax Court for the 2014 corporate income tax, withholding tax, and VAT. In April and May 2022, Telkomsel received the Tax Court’s Verdict for the 2014 underpayment of withholding tax and VAT which fully accepted Telkomsel’s appeal amounting to Rp13.7 billion and Rp52.3 billion. Telkomsel received the tax refund in May and June 2022, and recorded the remaining tax assessment of Rp3.6 billion as expense in 2022 consolidated statements of profit or loss. In August 2022, Telkomsel received notifications that the Tax Authorities had filed judicial reviews to the Supreme Court for the Tax Court's decision on VAT 2014 amounting Rp8 billion. Telkomsel submitted its contra memorandums for judicial review in September 2022. As at the authorization date of these consolidated financial statements, the results of appeal for corporate income tax and judicial review for VAT have not yet been decided. Income tax and VAT fiscal year 2015 On August 1, 2019, Telkomsel received the SKPKB and STP for fiscal year 2015 amounting to Rp384.8 billion (including penalty of Rp128.6 billion). On August 28, 2019, Telkomsel has paid the whole amount (including penalty). For the amount of Rp34.6 billion was charged to the statement of profit or loss and other comprehensive income and for the remaining portion amounting to Rp350.2 billion was recorded as claim for tax refund. On September 24, 2019, Telkomsel filed an objection to the Tax Authorities amounting to Rp350.2 billion. On July 13, 2020, Telkomsel received objection decision letter from Tax Authorities that rejected all Company’s objection. On September 28, 2020, Telkomsel filed an appeal to the Tax Court for the 2015 CIT, WHT, and VAT. In April and May 2022, Telkomsel received the Tax Court’s Verdict for the 2015 underpayment of withholding tax and VAT which partially accepted Telkomsel’s appeal amounting to Rp52.9 billion. Telkomsel received the tax refund in April and May 2022 and charge the rejected portion of Rp3 billion as expense in 2022 consolidated financial statements of profit or loss. In August 2022, Telkomsel received notifications that the Tax Authorities had filed judicial reviews to the Supreme Court for the Tax Court's decision on VAT. Telkomsel submitted its contra memorandums for judicial review in August 2022. As at the authorization date of these consolidated financial statements, the results of appeal for corporate income tax and judicial review for VAT have not yet been decided. Income tax and VAT fiscal year 2018 On September 22, 2022, Telkomsel received tax underpayment assessment letters and tax collection letters for the 2018 corporate income tax, VAT on taxable goods and withholding tax article 26 amounting to Rp159.8 billion (including penalty of Rp48.6 billion) in total. At the same date, Telkomsel also received tax assessment letters for 2018 VAT on taxable services confirming tax overpayments in the amount of Rp40 billion. 75 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 27. TAXATION (continued) e. Tax assessments (continued) (ii) Telkomsel (continued) Income tax and VAT fiscal year 2018 (continued) On October 14, 2022, Telkomsel paid and accepted a portion of the CIT tax assessment of Rp164.79 million and recorded it as expense in the consolidated statements of profit or loss. Telkomsel also paid the remaining amount of tax assessment for CIT and VAT amounting to Rp57.03 billion, after deducted with overpayment of Rp40.05 billion. Telkomsel recorded it as claim for tax refund in the consolidated statements of financial position. On December 13, 2022, Telkomsel filed an objection to the Tax Authorities amounting to Rp119.54 billion for CIT, VAT and WHT. As at the authorization date of these consolidated financial statements, the results of objection have not yet been received. f. Deferred tax assets and liabilities The details of the Group's deferred tax assets and liabilities are as follows (continued): The Company Allowance for expected credit losses Net periodic pension and other post-employment benefit costs Difference between accounting and tax bases of property and equipment Provision for employee benefits Deferred installation fee Land rights, intangible assets and others Accrued expenses and provision for inventory obsolescence Leases Contract cost Total deferred tax assets Telkomsel Provision for employee benefits Allowance for expected credit losses Leases Fair value measurement of financial instruments Difference between accounting and tax bases of property and equipment License amortization Other financial instruments Deferred tax assets (liabilities) of Telkomsel - net Deferred tax assets of the other subsidiaries - net Deferred tax liabilities of the other subsidiaries - net Deferred tax expense (income) Total deferred tax assets - net Total deferred tax liabilities - net Deferred tax asset and liabilities in financial position (Charged) credited to profit or loss 2022 2021 2022 2021 885 981 806 292 203 23 85 (1) (49) 3,225 1,220 144 468 895 1,110 631 388 183 22 72 (2) (73) 3,226 1,228 179 675 (10) (25) 175 (96) 20 1 13 1 24 103 33 (35) (207) 71 134 217 111 64 (1) - 1 17 614 128 (103) 100 (7) (549) 542 (549) (1,445) (146) (119) 115 777 (1,023) 4,117 (1,023) (1,623) (152) (92) (334) 598 (824) 3,824 (1,158) 178 6 (27) 490 164 (157) 600 (100) (28) (23) (575) 80 (293) (174) As of December 31, 2022 and 2021 the aggregate amounts of temporary differences associated with investments in subsidiaries and associated companies, for which deferred tax liabilities have not been recognized were Rp23,915 billion and Rp25,810 billion, respectively. Realization of the deferred tax assets is dependent upon the Group’s capability in generating future profitable operations. Although realization is not assured, the Group believes that it is probable that these deferred tax assets will be realized through reduction of future taxable income when temporary differences reverse. The amount of deferred tax assets is considered realizable, however it can be reduced if actual future taxable income is lower than estimates. 76 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 27. TAXATION (continued) g. Administration In October 2021, the Government also issued Law No.7/2021 on the Harmonization of Tax Regulations, which, among other things, regulates the rates of income tax and VAT. Starting January 1, 2022, the Group applies the income tax rate on employee taxable income in accordance with paragraph (1) letter a of Article 17 Chapter III, and starting April 1 2022 the VAT rate changes to 11%. The company ensures the readiness of the surrounding billing system, administrative and legal aspects of transactions, and builds intensive coordination between units. concerned to prepare for the implementation of these rules. In February 2022, the Government issued Government Regulation No. 9/2022 concerning the Second Amendment to Government Regulation No. 51/2008 concerning Income Tax on Income from Construction Services Business. The company ensures administrative and legal aspects of transactions and builds solid coordination between related units to prepare for the application of the income tax rate rule for construction service businesses as stipulated in article 3 paragraph (1) of the regulation. In December 2022, the Government issued Government Regulation No. 55/2022 concerning adjustments to regulations in the field of income tax. The provision of compensation in kind and/or benefits since the 2022 tax year is a tax object for the recipient, and for the Company it can be financed fiscally as long as it is a cost to earn, collect and maintain income (3M). The obligation to withhold income tax for the provision of in-kind and/or benefits is enforced starting January 1, 2023. In this regard, the Company needs to immediately identify the provision of employee benefits in kind and/or enjoyment in accordance with what has been agreed by the Company to employees/employee unions. Next is determining the tax treatment, both in Corporate Income Tax and Article 21 Income Tax. Employees then prepares or adjusts the income tax withholding system so that they can carry out appropriate and valid withholding obligation. 28. BASIC EARNINGS PER SHARE Basic earnings per share is computed by dividing profit for the years attributable to owners of the parent company amounting to Rp20,753 billion and Rp24,760 billion by the weighted average number of shares outstanding during the period totaling 99,062,216,600 shares for the years ended December 31, 2022 and 2021, respectively. The weighted average number of shares takes into account the weighted average effect of changes in treasury stock transaction during the year. Basic earnings per share amounting to Rp209.49 and Rp249.94 (in full amount) for the years ended December 31, 2022 and 2021, respectively. The Company does not have potentially dilutive financial investments for the years ended December 31, 2022 and 2021. 29. CASH DIVIDENDS AND GENERAL RESERVE Pursuant to the AGM of Stockholders of the Company as stated in Notarial Deed No. 37 dated May 28, 2021 of Utiek R. Abdurachman, S.H., M.Li., M.Kn., the Company’s stockholders approved the distribution of cash dividend and special cash dividend for 2020 amounting to Rp12,482 billion (Rp126.01 per share) and Rp4,161 billion (Rp42.00 per share), respectively. Pursuant to the AGM of Stockholders of the Company as stated in Notarial Deed No. 29 dated May 27, 2022 of Ashoya Ratam, S.H., M.Kn., the Company’s stockholders approved the distribution of cash dividend for 2021 amounting to Rp14,856 billion (Rp149.97 per share). The Company paid cash dividend on July 1, 2022. Under the Limited Liability Company Law, the Company is required to establish a statutory reserve amounting to at least 20% of its issued and paid-up capital. The balance of the appropriated retained earnings of the Company as of December 31, 2022 and December 31, 2021 amounting to Rp15,337 billion, respectively. 77 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 30. PENSION AND OTHER POST-EMPLOYMENT BENEFITS The details of pension and other post-employment benefit liabilities are as follows: Notes 2022 2021 Pension benefit and other post-employment benefit obligations Pension benefit The Company - funded Defined pension benefit obligation Additional pension benefit obligation The Company - unfunded Telkomsel Others Projected pension benefit obligations Net periodic post-employment health care benefit Other post-employment benefit Long service employee benefit Obligation under the Labor Law Total 30a.i.a 30a.i.a.i 30a.i.a.ii 30a.i.b 30a.ii 30b 30c 30d 30e 4,234 44 522 4,275 - 9,075 - 268 1 928 10,272 4,891 - 613 4,188 3 9,695 638 300 4 926 11,563 The details of net pension benefit expense recognized in the consolidated statements of profit or loss and other comprehensive income is as follows: Notes 2022 2021 Pension benefit cost The Company - funded Defined pension benefit obligation Additional pension benefit obligation The Company - unfunded Telkomsel Total periodic pension benefit cost Net periodic post-employment health care benefit cost Other post-employment benefit cost Long service employee benefit cost Obligation under the Labor Law Total 30a.i.a 30a.i.a.i 30a.i.a.ii 30a.i.b 30a.ii 24 24,30b 24,30c 24,30d 24,30e 577 37 58 596 1,268 213 25 1 78 1,585 732 0 74 331 1,137 263 23 3 254 1,680 78 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 30. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued) The amounts recognized in OCI are as follows: Notes 2022 2021 Defined benefit plan actuarial gain The Company - funded Defined pension benefit obligation Additional pension benefit obligation The Company - unfunded Telkomsel Others Post-employment health care benefit cost Other post-employment benefit Obligation under the Labor Law Sub-total Deferred tax effect at the applicable tax rates Defined benefit plan acturial gain - net of tax 30a.i.a 30a.i.a.i 30a.i.a.ii 30a.i.b 30a.ii 30b 30c 30e 27f 467 (7) 55 218 1 851 14 13 1,612 (148) 1,464 1,123 0 82 (110) (3) 1,032 2 42 2,168 (213) 1,955 The following table presents the changes in projected post-employment health care benefit provision, changes in post-employment health care benefit plan assets, funded status of the post-employment health care benefit plan, and net amount recognized in the Company’s consolidated statement of financial position as of December 31, 2022 and 2021: Funded Defined pension benefit obligation The Company Telkomsel Post-employment health care benefit The Company Projected pension benefit Pension benefit Projected pension benefit Pension benefit Projected post- employment health care health care benefit Post- employment benefit Balance, January 1, 2022 Service costs Interest costs (income) Plan administration cost Additional welfare benefits Cost recognized in the consolidated obligations plan assets obligations plan assets obligation plan assets (12,778) - (933) 164 - (18,947) - (1,347) 63 - 13,416 - 982 - - 23,838 178 1,635 - 65 5,020 326 328 - - (832) - (58) - - Total 9,717 504 607 227 65 statement of profit or loss 1,878 (1,284) 654 (58) 982 (769) 1,403 Actuarial (gain) loss on: Experience adjustments Changes in demographic assumptions Changes in financial assumptions Return on plan assets (excluding amount included in net interest expense) Changes in asset ceiling Cost recognized in OCI Employer’s contributions Pension plan participants’ contributions Benefits paid from plan assets Benefits paid by employer Balance, December 31, 2022 Projected pension benefit obligation at end of year - - - 300 - 300 (719) (19) 1,767 - (18,902) (737) - (30) - - (767) - 19 (1,767) (65) 23,136 4,234 (1) (1) (67) (186) - (255) - - (291) - 5,128 4,275 - - - 37 - 37 - - - - (853) (730) - (136) - - (866) - - - (654) 12,878 - - - - (1,468) (1) (233) (69) 84 15 - - - 654 (12,878) 82 84 (1,536) (719) - (291) (65) 8,509 8,509 79 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 30. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued) The following table presents the changes in projected post-employment health care benefit provision, changes in post-employment health care benefit plan assets, funded status of the post-employment health care benefit plan, and net amount recognized in the Company’s consolidated statement of financial position as of December 31, 2022 and 2021 (continued): Funded Defined pension benefit obligation The Company Telkomsel Post-employment health care benefit The Company Projected pension benefit Projected pension benefit obligations plan assets obligations plan assets obligation Pension benefit Pension benefit benefit Balance, January 1, 2021 Service costs Interest costs (income) Plan administration cost Additional welfare benefits Cost recognized in the consolidated 25,103 269 1,577 - 80 (19,546) - (1,223) 60 - 4,651 84 299 - - (799) - (52) - - Projected post- employment health care health care Post- employment benefit plan assets (13,036) - (860) 168 - 14,443 - 955 - - Total 10,816 353 696 228 80 statement of profit or loss 1,926 (1,163) 383 (52) 955 (692) 1,357 Actuarial (gain) loss on: Experience adjustments Changes in demographic assumptions Changes in financial assumptions (340) (1,122) - - - - Return on plan assets (excluding amount included in net interest expense) Cost recognized in OCI Employer’s contributions Pension plan participants’ contributions Benefits paid from plan assets Benefits paid by employer Balance, December 31, 2021 Projected pension benefit obligation at end of year 339 339 (226) (21) 1,670 - (18,947) - (1,462) - 21 (1,670) (80) 23,838 4,891 324 - (233) - 91 - - - (105) 5,020 4,188 - - - (105) - (1,289) - - - (121) (1,122) (1,522) 19 19 - - - - (832) - (1,394) - - (588) - 13,416 638 362 362 720 (2,045) - - 588 - (12,778) (226) - - (185) 9,717 9,717 The following table presents the changes in projected post-employment health care benefit provision, changes in post-employment health care benefit plan assets, funded status of the post-employment health care benefit plan, and net amount recognized in the Company’s consolidated statement of financial position as of December 31, 2022 and 2021: The Company Other The Company and its subsidiaries Additional pension benefit post-employment Long service benefit obligations employee benefit 300 8 17 25 (14) (43) 268 4 1 - 1 - (4) 1 Obligations under the labor law Total 926 1,843 78 - 78 (13) (63) 928 148 51 199 (75) (204) 1,763 Unfunded obligations Balance, January 1, 2022 Service costs Interest costs Cost recognized in the consolidated statement of profit or loss Actuarial (gain) loss recognized in OCI Benefits paid by employer Balance, December 31, 2022 613 24 34 58 (55) (94) 522 - 37 - 37 7 - 44 80 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 30. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued) The following table presents the changes in projected post-employment health care benefit provision, changes in post-employment health care benefit plan assets, funded status of the post-employment health care benefit plan, and net amount recognized in the Company’s consolidated statement of financial position as of December 31, 2022 and 2021 (continued): The Company The Company and its subsidiaries Additional pension benefit obligations Other post-employment benefit obligations Long service employee benefit Obligations under the labor law - - - - 6 (6) - - - 367 7 16 23 - - (2) (88) 300 1 3 - 3 - - - - 4 777 254 - Total 2,107 289 65 254 354 - - (42) (63) 926 6 (6) (126) (492) 1,843 Balance, January 1, 2021 Unfunded 962 Service costs Interest costs Cost recognized in the consolidated statement of profit or loss Fair value of pension plan assets at beginning of year Changes in asset ceiling Actuarial gain recognized in OCI Benefits paid by employer Balance, December 31, 2021 25 49 74 - - (82) (341) 613 a. Pension benefit costs i. The Company (a) Funded pension plan (i) Defined pension benefit obligation The Company sponsors a defined benefit pension plan for employees with permanent status prior to July 1, 2002. The plan is governed by the pension laws in Indonesia and managed by Telkom Pension Fund (“Dana Pensiun Telkom” or “Dapen”). Pension Fund Management in accordance with the Pension Fund and Investment Directives Regulations determined by the Founder is carried out by the Board of Management. The Board of Management is monitored by the Oversight Board consisting of representatives of the Company and participants. The pension benefits are paid based on the participating employees’ latest basic salary at retirement and the number of years of their service. The participating employees contribute 18% (before March 2003: 8.4%) of their basic salaries to the pension fund. The Company made contributions to the pension fund amounted to Rp719 billion and Rp226 billion, for the year ended December 31, 2022 and 2021, respectively. Risks exposed to defined benefit programs are risks such as asset volatility and changes in bond yields. The project liabilities are calculated using a discount rate that refers to the level of government bond yields, if the return on program assets is lower, it will result in a program deficit. A decrease in the yield of government bonds will increase the program liabilities, although this will be offset in part by an increase in the value of the program bonds held. The Company ensures that the investment position is set within the framework of asset-liability matching ("ALM") that has been formed to achieve long-term results that are in line with the liabilities in the defined benefit pension plan. Within the ALM framework, the Company's objective is to adjust its pension assets and liabilities by investing in a well diversified portfolio to produce an optimal rate of return, taking into account the level of risk. Investment in the program has been well diversified, so that one investment's poor performance will not have a material impact on all asset groups. 81 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 30. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued) a. Pension benefit costs (continued) i. The Company (continued) (a) Funded pension plan (continued) (i) Defined pension benefit obligation (continued) As of December 31, 2022 and 2021, plan assets consist of: Cash and cash equivalents Equity instruments*: Financials Consumer non-cyclicals Basic material Infrastructures Energy Technology Industrials Consumer cyclicals Properties and real estate Healthcare Transportation and logistic Equity-based mutual fund Fixed income instruments: Corporate bonds Government bonds Fixed income mutual funds Midterm notes Asset-backed securities Sukuk Non-public equity: Direct placement Property Others Total 2022 Quoted in active market Unquoted 2021 Quoted in active market Unquoted 1,320 1,638 505 271 639 141 89 315 115 98 208 8 410 - 7,884 - - - - - - - 13,641 - - - - - - - - - - - - - 3,117 - 122 100 30 1,090 368 187 247 5,261 762 1,571 558 300 838 118 43 421 112 143 202 16 321 - 7,736 161 - - - - - - 13,302 - - - - - - - - - - - - - 4,558 - - - - - 355 186 545 5,644 *Since January 25, 2021, the Jakarta Stock Industrial Classification (JASICA) has been officially replaced by the IDX Industrial Classification (IDX - IC) Pension plan assets include Series B shares issued by the Company with fair values totalling to Rp336 billion and Rp409 billion, representing 1.78% and 2.16% of total plan assets as of December 31, 2022 and 2021, respectively, and bonds issued by the Company with fair value totalling to Rp348 billion and Rp356 billion representing 1.84% and 1.88% of total plan assets as of December 31, 2022 and 2021, respectively. The expected return is determined based on market expectation for returns over the entire life of the obligation by considering the portfolio mix of the plan assets. The actual return on plan assets was Rp984 billion and Rp822 billion for the years ended December 31, 2022 and 2021, respectively. Based on the Company’s policy issued on January 14, 2014 regarding Dapen’s Funding Policy, the Company will not contribute to Dapen when Dapen’s Funding Sufficiency Ratio (“FSR”) is above 105%. Based on Dapen’s financial statement as of December 31, 2022, Dapen’s FSR is below 105%. Therefore, the Company will contribute to the defined benefit pension plan. 82 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 30. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued) a. Pension benefit costs (continued) i. The Company (continued) (a) Funded pension plan (continued) (i) Defined pension benefit obligation (continued) Based on the Company Regulations issued on September 30, 2022, regarding the Pension Fund Regulations from the Telkom Pension Fund, the Company stipulates that retirees who quit other than because of Disciplinary Punishment, Early Retirement, and at their own request and receive Pension Benefits of less than Rp1 million per month are given increase in monthly Pension Benefits to Rp1 million. In 2022 and 2021, the Company provided employee welfare benefit to pensioners and pension beneficiaries who entered their retirement period before June 30, 2002 amounting to Rp65 billion and Rp80 billion. The actuarial valuation for the defined benefit pension plan was performed based on the measurement date as of December 31, 2022 and 2021, with reports dated March 18, 2023 and March 24, 2022, respectively, by KKA I Gde Eka Sarmaja, FSAI and Partner and KKA Santhi Devi and Ardianto Handoyo, an independent actuary in association with Willis Towers Watson (“WTW”). The principal actuarial assumptions used by the independent actuary for years December 31, 2022 and 2021 are as follows: Discount rate Rate of compensation increases Indonesian mortality table (ii) Additional pension benefit obligation 2022 2021 7.25% 8.00% 2019 7.00% 8.00% 2019 Based on the Company Regulations issued on September 30, 2022, regarding the Regulations on Pension Funds from Telkom Pension Funds, the Company organizes a Defined Contribution Other Benefit Program (“PMLIP”) in the form of Additional Benefits. PMLIP participants are entitled to receive Periodic Pension Benefits every month in accordance with the provisions in the Pension Fund Regulations. Additional Benefit Funds are sourced from Employer Additional Benefit contributions and provision for investment development proceeds if the FSR is achieved above 102% and the rate of Return On Investment (“ROI”) is above the actuarial interest rate for funding. The employer's additional benefit contribution for each PMLIP participant is set at Rp120 thousand for annual contribution period which is calculated proportionally according to the amount received. The actuarial valuation for additional pension benefit plan was performed based on the measurement date as of December 31, 2022 and 2021, with reports dated March 18, 2023 and March 24, 2022, respectively, by KKA I Gde Eka Sarmaja, FSAI and Partner and KKA Santhi Devi and Ardianto Handoyo, an independent actuary in association with WTW. The principal actuarial assumptions used by the independent actuary for years December 31, 2022 and 2021 are as follows: Discount rate Indonesian mortality table 2022 7.25% 2019 2021 7.00% 2019 Additional pension benefit obligation have been set aside since 2018 according to the approval by the Oversight Board. As of December 31, 2022, the additional pension benefit obligation have been fully paid to the pension recipients and no additional obligations have been set aside because the requirements for recognizing additional benefits as mentioned above have not been fulfilled. 83 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 30. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued) a. Pension benefit costs (continued) i. The Company (continued) (b) Unfunded pension plan The Company sponsors unfunded defined benefit pension plans and a defined contribution pension plan for its employees. The defined contribution pension plan is provided to employees with permanent status hired on or after July 1, 2002. The plan is managed by Financial Institutions Pension Fund (Dana Pensiun Lembaga Keuangan or “DPLK”). The Company’s contribution to DPLK is determined based on a certain percentage of the participants’ salaries and amounted to Rp48 billion and Rp44 billion, for the years ended December 31, 2022 and 2021, respectively. Since 2007, the Company has provided pension benefit based on uniformization for both participants prior to and from April 20, 1992 effective for employees retiring beginning February 1, 2009. In 2010, the Company replaced the uniformization with Manfaat Pensiun Sekaligus (“MPS”). MPS is given to those employees reaching retirement age, upon death or upon becoming disabled starting from February 1, 2009. The Company also provides benefits to employees during a pre-retirement period in which they are inactive for 6 months prior to their normal retirement age of 56 years, known as pre-retirement benefits (Masa Persiapan Pensiun or “MPP”). During the pre-retirement period, the employees still receive benefits provided to active employees, which include, but are not limited to, regular salary, health care, annual leave, bonus, and other benefits. Since April 1, 2012, the employee is required to file a request for MPP and if the employee does not file the request, such employee is required to work until the retirement date. The actuarial valuation for the defined benefit pension plan was performed, based on the measurement date as of December 31, 2022 and 2021, with reports dated March 8, 2023 and March 24, 2022, respectively, by KKA I Gde Eka Sarmaja, FSAI and Partner and KKA Santhi Devi and Ardianto Handoyo, an independent actuary in association with WTW. The principal actuarial assumptions used by the independent actuary for the years ended December 31, 2022 and 2021 are as follows: Discount rate Rate of compensation increases Indonesian mortality table ii. Telkomsel 2022 7.00%-7.25% 6.10%-8.00% 2019 2021 5.75%-7.00% 6.10%-8.00% 2019 Telkomsel provides a defined benefit pension plan to its employees. Under this plan, employees are entitled to pension benefits determined based on their latest basic salary or take-home pay (exclusive of functional allowances) and number of service years. The plan is managed by PT Asuransi Jiwasraya (Persero) (“Jiwasraya”), a state-owned life insurance company, through an annuity insurance contract. Until 2004, employees contributed 5% of their monthly salaries to the plan, while Telkomsel contributed the remaining part required under the plan. Beginning in 2005, Telkomsel has been taking the responsibility for the full amount of the contributions. 84 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 30. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued) a. Pension benefit costs (continued) ii. Telkomsel (continued) On April 23, 2021, Telkomsel and Jiwasraya agreed to terminate the insurance program contract (as mentioned above) and entered into restructuring agreement. The agreement replaced the benefit plan from annuities to lumpsum benefit. Based on this agreement, both parties agreed to determine the Cash Value (“CV”) at the termination date which divided into CV for active participant and passive participant amounting to Rp857 billion and Rp73 billion, respectively. There was a 5% cut from CV for active participant, hence the 95% of Rp857 billion (or equal to Rp814 billion) plus Rp73 billion will be the amount that subsequently taken over by IFG Life when the agreement with IFG Life become effective and accordingly, the restructuring agreement will be terminated. On December 31, 2021, the CV of active participant amounted to Rp853 billion. The actuarial valuation for the defined benefit pension plan was performed based on the measurement date as of December 31, 2022 and 2021 with reports dated February 28, 2023 and March 24, 2022, respectively, by KKA Halim and Partner, an independent actuary in association with Milliman, and KKA Santhi Devi and Ardianto Handoyo, an independent actuary in association with WTW. The principal actuarial assumptions used by the independent actuary as of December 31, 2022 and 2021, are as follows: Discount rate Rate of compensation increases Indonesian mortality table b. Post-employment health care benefit cost 2022 2021 7.15% 8.00% 2019 7.00% 8.00% 2019 The Company provides post-employment health care benefits to all of its employees hired before November 1, 1995 who have worked for the Company for 20 years or more when they retire, and to their eligible dependents. The requirement to work for 20 years does not apply to employees who retired prior to June 3, 1995. The employees hired by the Company starting from November 1, 1995 are no longer entitled to this plan. The plan is managed by Yayasan Kesehatan Telkom (“Yakes Telkom”). The defined contribution post-employment health care benefit plan is provided to employees with permanent status hired on or after November 1, 1995 or employees with terms of service less than 20 years at the time of retirement. The Company did not make contributions to Yakes Telkom for the years ended December 31, 2022 and 2021. 85 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 30. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued) b. Post-employment health care benefit cost (continued) As of December 31, 2022 and 2021, plan assets consists of: Cash and cash equivalents Equity instruments*: Financials Consumer non-cyclicals Basic material Infrastructures Energy Technology Industrials Consumer cyclicals Properties and real estate Healthcare Transportation and logistic Equity-based mutual funds Fixed income instruments: Government obligations Fixed income mutual funds Unlisted shares: Private placement Total 2022 Quoted in active market Unquoted 2021 Quoted in active market Unquoted 1,085 1,368 114 264 598 221 63 185 457 95 233 3 1,035 82 6,761 - - - - - - - - - - - - - - - 527 1,254 100 256 574 171 24 274 483 93 232 5 569 - 7,858 - - - - - - - - - - - - - - - - 12,564 398 398 - 12,420 358 358 *Since January 25, 2021, the Jakarta Stock Industrial Classification (JASICA) has been officially replaced by the IDX Industrial Classification (IDX - IC) Yakes Telkom plan assets also include Series B shares issued by the Company with fair value totalling Rp228 billion and Rp229 billion, representing 1.76% and 1.79% of total plan assets as of December 31, 2022 and 2021, respectively. The expected return is determined based on market expectation for the returns over the entire life of the obligation by considering the portfolio mix of the plan assets. The actual return on plan assets was Rp839 billion and Rp329 billion for the years ended December 31, 2022 and 2021, respectively. The actuarial valuation for the post-employment health care benefits plan was performed based on the measurement date as of December 31, 2022 and 2021, with reports dated March 8, 2023 and March 24, 2022, respectively, by KKA I Gde Eka Sarmaja, FSAI and Partner and KKA Santhi Devi and Ardianto Handoyo, an independent actuary in association with WTW. The principal actuarial assumptions used by the independent actuary as of December 31, 2022 and 2021 are as follows: Discount rate Health care costs trend rate assumed for next year Ultimate health care costs trend rate Year that the rate reaches the ultimate trend rate Indonesian mortality table 2022 2021 7.25% 7.00% 7.00% 2022 2019 7.50% 7.00% 7.00% 2021 2019 86 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 30. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued) c. Other post-employment benefits cost The Company provides other post-employment benefits in the form of cash paid to employees on their retirement or termination. These benefits consist of final housing allowance (Biaya Fasilitas Perumahan Terakhir or “BFPT”) and home passage leave (Biaya Perjalanan Pensiun dan Purnabhakti or “BPP”) and death allowance (Meninggal Dunia or “MD” allowance) is given to employees who have passed away with an amount of 12 times from the last salary. The actuarial valuation for the other post-employment benefits plan was performed based on measurement date as of December 31, 2021 and 2020, with reports dated March 8, 2023 and March 24, 2022, respectively, by KKA I Gde Eka Sarmaja, FSAI and Partner and KKA Santhi Devi and Ardianto Handoyo, an independent actuary in association with WTW. The principal actuarial assumptions used by the independent actuary as of December 31, 2022 and 2021, are as follows: Discount rate Indonesian mortality table d. Long service employee benefits 2022 2021 6.75% 2019 6.25% 2019 The company provides long service employee benefits to employee hired before July 1, 2002 and have a service period of more than 30 years and retired after September 19, 2019. Total obligation recognized as of December 31, 2022 and 2021 amounted Rp4 billion, respectively. The related long service employee benefits cost charged to expense amounted to Rp1 billion and Rp3 billion for the years ended December 31, 2022 and 2021, respectively. to Rp1 billion and e. Obligation under the Labor Law Under Law No. 11 Year 2020, the Group is required to provide minimum pension benefits, if not covered yet by the sponsored pension plans, to its employees upon retirement. Total obligation recognized as of December 31, 2022 and 2021 amounted to Rp928 billion and Rp926 billion, respectively. The related pension employee benefits cost charged to expense amounted to Rp78 billion and Rp254 billion for the years ended December 31, 2022 and 2021, respectively. The actuarial gain in OCI amounted to Rp13 billion and Rp42 billion for the years ended December 31, 2022 and 2021, respectively. 87 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 30. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued) f. Maturity Profile of Defined Benefit Obligation (“DBO”) The timing of benefits payments and weighted average duration of DBO for 2022 and 2021 are as follows: Expected Benefits Payment The Company Funded Defined Additional pension benefit pension benefit Time Period obligation obligation Unfunded Telkomsel Post-employment Other post- Post-employment employment benefits benefits UUCK (Telkom) health care benefits 2022 Within next 10 years Within 10-20 years Within 20-30 years Within 30-40 years Within 40-50 years Within 50-60 years Within 60-70 years Within 70-80 years Weighted average duration of DBO 2021 Within next 10 years Within 10-20 years Within 20-30 years Within 30-40 years Within 40-50 years Within 50-60 years Within 60-70 years Within 70-80 years Weighted average duration of DBO 21,232 16,485 10,414 4,209 882 77 2 - 40 31 18 6 1 - - - 705 229 430 96 - - - - 5,111 11,178 7,827 473 - - - - 8,092 12,746 12,019 5,491 970 59 6 1 324 123 83 6 - - - - 59 414 497 80 - - - - 8.48 years 8.48 years 5.52 years 9.45 years 12.40 years 4.62 years 11.69 years 20,809 23,096 21,308 16,537 3,965 2,803 16 - - - - - - - - - 691 92 85 17 - - - - 4,224 10,849 8,385 901 - - - - 5,959 6,697 5,117 2,025 259 1 - - 357 121 92 5 - - - - 15 14 1 - - - - - 10.50 years 10.50 years 5.75 years 10.30 years 14.13 years 4.88 years 7.41 years g. Sensitivity Analysis As of December 31, 2022 and 2021, 1% change in discount rate and rate of compensation would have effect on DBO, are as follows: Sensitivity 2022 Funded: Defined pension benefit obligation Unfunded Telkomsel Post-employment health care benefits Other post-employment benefits Post-employment benefits UUCK (Telkom) 2021 Funded: Defined pension benefit obligation Unfunded Telkomsel Post-employment health care benefits Other post-employment benefits Post-employment benefits UUCK (Telkom) Discount Rate Rate of Compensation 1% Increase 1% Decrease 1% Increase 1% Decrease Increase (decrease) in amounts Increase (decrease) in amounts (1,948) (24) (430) (1,413) (12) (8) (2,040) (27) (434) (1,605) (13) (1) 2,291 27 491 1,703 13 10 2,419 30 465 1,964 14 1 268 29 536 1,629 - 27 1,571 33 455 1,985 - 6 255 (27) (477) 1,380 - (24) (1,439) (30) (429) (1,686) - (3) 88 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 30. PENSION AND OTHER POST-EMPLOYMENT BENEFITS (continued) g. Sensitivity Analysis (continued) The sensitivity analysis has been determined based on a method that extrapolates the impact on DBO as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The sensitivity results above determine the individual impact on the Plan’s DBO at the end of the year. In reality, the Plan is subject to multiple external experience items which may move the DBO in similar or opposite directions, and the Plan’s sensitivity to such changes can vary over time. There are no changes in the methods and assumptions used in preparing the sensitivity analysis from the previous period. 28. 31. LONG SERVICE AWARDS (“LSA”) PROVISIONS Telkomsel and Telkomsat provide certain cash awards or certain number of days leave benefits to their employees based on the employees’ length of service requirements, including LSA and Long Service Leaves (“LSL”). LSA are either paid at the time the employees reach certain years of employment, or at the time of termination. LSL are either certain number of days leave benefit or cash, subject to approval by management, provided to employees who meet the requisite number of years of service and reach a certain minimum age. The obligation with respect to these awards which was determined based on an actuarial valuation using the Projected Unit Credit method amounted to Rp1,031 billion and Rp1,206 billion as of December 31, 2022 and 2021, respectively. The related benefit costs charged to expense amounted Rp92 billion and Rp153 billion for the years ended December 31, 2022 and 2021, respectively (Note 24). 89 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 32. RELATED PARTIES TRANSACTIONS a. Nature of relationships and accounts/transactions with related parties Details of the nature of relationships and accounts/transactions with significant related parties are as follows: Related parties The Government Ministry of Finance Nature of relationships parties Majority stockholder Nature of accounts/transactions Internet and data service revenues, other State-owned enterprises Entity under common control Indosat Entity under common control telecommunication service revenues, finance costs, and investment in financial instruments Internet and data service revenues, other telecommunication services revenues, operating expenses, and purchase of property and equipments Interconnection revenues, leased lines revenues, satellite transponder usage revenues, interconnection expenses, telecommunication facilities usage expenses, operating and maintenance expenses, and usage of data communication network system expenses PT Pertamina (Persero) (“Pertamina”) Entity under common control Internet and data service revenues, and other State-owned banks Bank Mandiri Entity under common control Entity under common control telecommunication service revenues Finance income and finance costs Internet and data service revenues, other telecommunication service revenues, finance income, and finance costs BNI BRI BTN Entity under common control Internet and data service revenues, other telecommunication service revenues, finance income, and finance costs Entity under common control Internet and data service revenues, other telecommunication service revenues, finance income, and finance costs Entity under common control Internet and data service revenues, other telecommunication service revenues, and finance income PT Pegadaian (Persero) Entity under common control Internet and data service revenues, and other (“Pegadaian”) telecommunication service revenues PT Perkebunan Nusantara III Entity under common control Internet and data service revenues, and other (Persero) (“PTPN III”) telecommunication service revenues PT Kereta Api Indonesia (Persero) Entity under common control Internet and data service revenues, and other (“KAI”) telecommunication service revenues PT Kimia Farma (Persero) (“Kimia Entity under common control Internet and data service revenues, and other Farma”) PT Perusahaan Listrik Negara Entity under common control (“PLN”) telecommunication service revenues Internet and data service revenues, other telecommunication service revenues, and electricity expenses PT Asuransi Jasa Indonesia Entity under common control Fixed assets insurance expenses and personal (“Jasindo”) insurance expenses PT Inti Telekomunikasi Indonesia Entity under common control Purchase of property and equipments (Persero) (“INTI”) Bahana TCW Sarana Multi Infrastruktur Omni Inovasi Indonesia Finarya Padi UMKM Entity under common control Entity under common control Associated company Mutual funds Other borrowing and finance costs Distribution of SIM cards and pulse reload Associated company Other related entities voucher Marketing expenses and distribution of SIM cards and pulse reload voucher Operational and maintenance expenses, collection fees, training expenses, internal security expenses, research and development expenses, printing expenses, meeting expenses, general and other administrative expenses, promotion expenses, advertising expenses, sales fees, customer education expenses, and marketing expenses Directors Commissioners Key management personnel Supervisory personnel Honorarium and facilities Honorarium and facilities The outstanding balances of trade receivables and payables at year-end are unsecured and interest- free and the settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. As of December 31, 2022 and 2021 the Group recorded a (decrease) increase impairment loss from trade receivables of related party amounted to Rp(57) billion and Rp82 billion. Impairment assessment is undertaken each financial year by examining the current status of existing receivables and historical collection experience. 90 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 32. RELATED PARTIES TRANSACTIONS (continued) b. Significant transactions with related parties Revenues Majority Stockholder Ministry of Finance Entities under common control Indosat Pertamina BNI Bank Mandiri Pegadaian PLN KAI PTPN III Kimia Farma BRI Others (each below Rp100 billion) Sub-total Other related entities Associated companies Total Expenses Entities under common control PLN Indosat Jasindo Others (each below Rp100 billion) Sub-total Other related entities Padi UMKM Others (each below Rp100 billion) Sub-total Associated companies Finarya Others (each below Rp100 billion) Sub-total Total Finance income Entities under common control State-owned banks Total Finance cost Majority stockholder Ministry of Finance Entities under common control State-owned banks Sarana Multi Infrastruktur Total 2022 % of total revenues Amount 2021 % of total revenues Amount 199 1,923 752 493 180 160 158 143 114 107 104 743 4,877 52 6 5,134 0.14 1.31 0.51 0.33 0.12 0.11 0.11 0.10 0.08 0.07 0.07 0.50 3.31 0.04 0.00 3.49 212 1,056 631 404 212 148 153 84 99 120 341 944 4,192 33 16 4,453 0.15 0.74 0.44 0.28 0.15 0.10 0.11 0.06 0.07 0.08 0.24 0.66 2.93 0.02 0.01 3.11 2022 % of total expenses Amount 2021 % of total expenses Amount 2,473 537 296 228 3,534 626 98 724 110 37 147 4,405 2.43 0.53 0.29 0.22 3.47 0.62 0.10 0.72 0.11 0.04 0.15 4.34 2,349 467 385 208 3,409 269 115 384 125 344 469 4,262 2.37 0.47 0.39 0.21 3.44 0.27 0.12 0.39 0.13 0.34 0.47 4.30 2022 2021 Amount % of total finance income Amount % of total finance income 459 459 52.28 52.28 348 348 62.37 62.37 2022 Amount % of total finance cost Amount 2021 % of total finance cost 10 1,004 109 1,123 91 0.25 24.89 2.70 27.84 17 1,247 192 1,456 0.39 28.57 4.40 33.36 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 32. RELATED PARTIES TRANSACTIONS (continued) b. Significant transactions with related parties (continued) Purchase of property and equipments Entities under common control INTI Others Total Distribution of SIM card and voucher Associated companies Omni Inovasi Indonesia Finarya Total 2022 2021 Amount % of total purchases Amount % of total purchases 117 4 121 0.34 0.01 0.35 104 309 413 0.34 1.02 1.36 2022 % of total revenues Amount 2021 % of total revenue Amount 981 141 1,122 0.67 0.10 0.77 959 - 959 0.67 - 0.67 c. Balance of accounts with related parties 2022 % of total assets Amount Cash and cash equivalents (Note 3) Other current financial asset (Note 4) Trade receivables - net (Note 5) Contract assets Majority stockholder Government Entities under common control Associated companies Other related entities Total Other current asset Other non-current asset Trade payables (Note 15) Majority stockholder Ministry of Finance Entities under common control State-owned enterprises Indosat Others Sub-total Other related entities Total 23,328 400 1,620 24 248 1 1 274 98 15 8.48 0.15 0.59 0.01 0.09 0.00 0.00 0.10 0.04 0.01 2021 Amount 29,896 329 961 7 374 1 - 382 49 25 % of total assets 10.79 0.12 0.35 0.00 0.13 0.00 - 0.13 0.02 0.01 2022 2021 Amount % of total liabilities Amount % of total liabilities 0.00 0.16 0.11 0.03 0.30 0.05 0.35 8 317 144 23 484 5 497 0.01 0.24 0.11 0.02 0.37 0.00 0.38 0 197 140 37 374 57 431 92 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 32. RELATED PARTIES TRANSACTIONS (continued) c. Balance of accounts with related parties (continued) 2022 2021 Amount % of total liabilities Amount % of total liabilities Accrued expenses Majority stockholder Government Entities under common control State-owned enterprises State-owned banks Others Sub-total Total Contract liabilities Majority stockholder Government Entities under common control State-owned enterprises Others Sub-total Associated companies Other related entities Total 1 57 74 2 133 134 34 170 0 170 2 3 209 Customer deposits Short-term bank loans (Note 18) Two-step loans (Note 19a) Long-term bank loans (Note 19c) Other borrowings (Note 19d) 19 4,462 209 11,284 1,314 d. Significant agreements with related parties i. The Government 0.00 0.05 0.06 0.00 0.11 0.11 0.03 0.13 0.00 0.13 0.00 0.00 0.16 0.02 3.54 0.17 8.96 1.04 3 81 40 7 128 131 19 228 1 229 2 1 251 19 1,578 355 17,630 2,605 0.00 0.06 0.03 0.01 0.10 0.10 0.01 0.17 0.00 0.17 0.00 0.00 0.18 0.01 1.20 0.27 13.38 1.98 The Company obtained two-step loans from the Government (Note 19a). ii. Indosat The Company has an agreement with Indosat to provide international telecommunications services to the public. The Company has also entered into an interconnection agreement between the Company’s fixed line network (Public Switched Telephone Network or “PSTN”) and Indosat’s Global System for Mobile (“GSM”) cellular telecommunications network in connection with the implementation of Indosat Multimedia Mobile services and the settlement of related interconnection rights and obligations. The Company also has an agreement with Indosat for the interconnection of Indosat's GSM mobile cellular telecommunications network with the Company's PSTN, which enable each party’s customers to make domestic calls between Indosat’s GSM mobile network and the Company’s fixed line network, as well as allowing Indosat’s mobile customers to access the Company’s IDD service by dialing “007”. 93 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 32. RELATED PARTIES TRANSACTIONS (continued) d. Significant agreements with related parties (continued) ii. Indosat (continued) The Company has been handling customer billings and collections for Indosat. Indosat is gradually taking over the activities and performing its own direct billing and collection. The Company has received compensation from Indosat computed at 1% of the collections made by the Company starting from January 1, 1995, as well as the billing process expenses which are fixed at a certain amount per record. On December 11, 2008, the Company and Indosat agreed to implement IDD service charge tariff which already took into account the compensation for billing and collection. The agreement is valid and effective in the current year and can be applied until a new agreement becomes available. On December 18, 2017, the Company and Indosat signed amendments to the interconnection agreements for the fixed line networks (local, long distance direct connection and international) and mobile network for the implementation of the cost-based tariff obligations under the MoCI Regulation No.8/Year 2006. These amendments took effect starting on January 1, 2018. Telkomsel also entered into an agreement with Indosat for the provision of international telecommunications services to its GSM mobile cellular customers. The Company provides leased lines to Indosat and its subsidiaries, namely PT Indosat Mega Media and PT Aplikanusa Lintasarta (“Lintasarta”). The leased lines can be used by these companies for telephone, telegraph, data, telex, facsimile, or other telecommunication services. iii. Others The Company entered into an agreement with Lintasarta for the use of satellite transponders or the Company's subscribed circuit telecommunication satellite frequency channels. e. Remuneration of key management and supervisory personnel Key management personnel consists of the Directors of the Company and supervisory personnel consists of Board of Commissioners. The Company provides remuneration in the form of salaries/honorarium and facilities to support the governance and oversight duties of the Board of Commissioners and the leadership and management duties of the Directors. The total of such remuneration is as follow: 2022 2021 Board of Directors Board of Commissioners Amount 401 164 % of total expenses Amount % of total expenses 0.39% 0.16% 347 140 0.35% 0.14% The amounts disclosed in the table are the amounts recognized as an expense during the reporting periods. 94 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 33. OPERATING SEGMENTS The Group has four primary reportable segments, namely mobile, consumer, enterprise, and WIB. The mobile segment provides mobile voice, SMS, value added services, and mobile broadband. The consumer segment provides Indihome services (bundled service of fixed wireline, pay TV, and internet) and other telecommunication services to home customers. The enterprise segment provides end-to-end solution to corporate and institutions. The WIB segment provides interconnection services, leased lines, satellite, Very Small Aperture Terminal (“VSAT”), broadband access, information technology services, data, and internet services to other licensed operator companies and institutions. Other segment provides digital content products (music and games), big data, Business to Business (“B2B”) Commerce, and financial services to individual and corporate customers. There is no operating segments that have been aggregated to form the reportable segments. Management monitors the operating results of the business units separately for the purpose of decision-making about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the consolidated financial statements. However, the financing activities and income taxes are managed on a group basis and are not separately monitored and allocated to operating segments. Segment revenues dan expenses include transactions between operating segments and are accounted at prices that management believes represent market prices. Mobile Consumer Enterprise WIB Others Total segment Adjustment and Total elimination consolidated 2022 Segment result Revenues External revenues Inter-segment revenues Total segment revenues Segment results Other information Capital expenditures Depreciation and amortization Provision recognized in current year Segment result Revenues External revenues Inter-segment revenues Total segment revenues Segment results Other information Capital expenditures Depreciation and amortization Provision recognized in current year 85,493 3,344 88,837 26,122 (12,343) (21,028) 26,354 195 26,549 7,579 (9,038) (6,738) 19,161 24,646 43,807 15,442 19,658 35,100 239 2,486 2,725 146,689 50,329 197,018 617 (50,329) (49,712) 147,306 - 147,306 831 8,925 (1,063) 42,394 (6,055) 36,339 (128) (434) (45) 34 (5,983) (3,999) (6,612) (5,805) (5) (19) (5) (33,981) (37,589) (175) 4,334 (34,156) (33,255) (578) 11 (567) Mobile Consumer Enterprise WIB Others Total segment Adjustment and elimination Total consolidated 2021 84,267 3,097 87,364 34,435 24,930 187 25,117 5,894 19,141 22,395 41,536 14,255 18,072 32,327 205 2,395 2,600 142,798 46,146 188,944 412 (46,146) (45,734) 143,210 - 143,210 (307) 9,192 199 49,413 (5,735) 43,678 (10,548) (20,333) (10,444) (6,566) (4,514) (3,909) (4,756) (4,702) (99) (285) (13) 5 (13) (20) (33) (30,275) (35,530) (66) 3,714 (30,341) (31,816) (425) (49) (474) Adjustments and eliminations: a. Revenue reconciliation Total segment revenues Revenue from other non-operating segments Inter-segment elimination Consolidated revenues 2022 2021 197,018 617 (50,329) 147,306 188,944 412 (46,146) 143,210 95 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 33. OPERATING SEGMENTS (continued) b. Segment result reconciliation Total segment results Loss from other non-operating segments Adjustment and inter-segment elimination Finance income Finance cost Share of loss of long-term investment in associates Consolidated profit before income tax c. Capital expenditure reconciliation Total segment capital expenditure Capital expenditure from other non-operating segments Consolidated capital expenditure d. Depreciation and amortization reconciliation Total segment depreciation and amortization Depreciation and amortization from other non-operating segments Adjustment and inter-segment elimination Consolidated depreciation and amortization e. Provision recognized in current year Total segment provision Provision recognized from other non-operating segments Adjustment and inter-segment elimination Consolidated provision recognized in current year Geographic information: External revenues Indonesia Foreign countries Total 2022 2021 42,394 (1,772) (1,041) 878 (4,033) (87) 36,339 49,413 (1,237) (613) 558 (4,365) (78) 43,678 2022 2021 (33,981) (175) (34,156) (30,275) (66) (30,341) 2022 2021 (37,589) (263) 4,597 (33,255) (35,530) (280) 3,994 (31,816) 2022 2021 (578) (7) 18 (567) (425) (3) (46) (474) 2022 2021 139,983 7,323 147,306 136,482 6,728 143,210 The revenue information above is based on the location of the customers. There is no revenue from major customer which exceeds 10% of total revenues for the year ended December 31, 2022 and 2021. Non-current operating assets Indonesia Foreign countries Total 2022 2021 178,424 3,207 181,631 169,823 2,709 172,532 Non-current operating assets for this purpose consist of property and equipment and intangible assets. 96 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 34. TELECOMMUNICATIONS SERVICE TARIFFS Under Law No. 36 Year 1999 and Government Regulation No. 52 Year 2000, tariffs for operating telecommunications network and/or services are determined by providers based on the tariff type, structure, and with respect to the price cap formula set by the Government. a. Fixed line telephone tariffs The Government has MoCI Regulation No. 5/2021 dated March 31, 2021 concerning “Telecommunication Operation”. This Decree replaced the previous Decree No. 15/PER/M.KOMINFO/4/2008 dated April 30, 2008.. issued a new adjustment formula which is stipulated tariff in Under the Decree, tariff structure for basic telephony services connected through fixed line network consists of the following: i. Activation fee ii. Monthly subscription charges iii. Usage charges, and iv. Additional facilities fee. b. Mobile cellular telephone tariffs On March 31, 2021, MoCI issued MoCI Regulation No. 5/2021, which provides guidelines to determine cellular tariffs with a formula consisting of network element cost and retail services activity cost. Under MoCI Regulation No. 5/2021, cellular tariffs for the operation of telecommunication services connected through mobile cellular network consist of the following: (i) Basic telephony services tariff (ii) Roaming tariff, and/or (iii) Multimedia services tariff with the following traffic structure: (i) Activation fee (ii) Monthly subscription charges, and/or (iii) Usage charges c. Interconnection tariffs The Indonesian Telecommunication Regulatory Body (“ITRB”), in its letter No. 262/BRTI/XII/2011 dated December 12, 2011, decided to change the basis for SMS interconnection tariff to cost basis with a maximum tariff of Rp23 per SMS effective from June 1, 2012, for all telecommunication provider operators. Based on letter No.118/KOMINFO/DJPPI/PI.02.04/01/2014 dated January 30, 2014 of the Director General of Post and Informatics, the Director General of Post and Informatics decided to implement new interconnection tariff effective from February 1, 2014 until December 31, 2016, subject to evaluation on an annual basis. Pursuant to the Director General of Post and Informatics letter, the Company and Telkomsel are required to submit the Reference Interconnection Offer (“RIO”) proposal to ITRB to be evaluated. ITRB Subsequently, letters No. 60/BRTI/III/2014 dated March 10, 2014 and No. 125/BRTI/IV/2014 dated April 24, 2014 approved Telkomsel and the Company’s revision of RIO regarding the interconnection tariff. Based on the letter, ITRB also approved the changes to the SMS interconnection tariff to Rp24 per SMS. its in On January 18, 2017, ITRB in its letters No. 20/BRTI/DPI/I/2017 and No. 21/BRTI/DPI/I/2017, decided to use the interconnection tariff based on the Company and Telkomsel’s RIO in 2014 until the new interconnection tariff is set. 97 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 34. TELECOMMUNICATIONS SERVICE TARIFFS (continued) d. Network lease tariffs In 2008, the Director General of Post and Telecommunication issued Decree No. 115 of 2008 which stated its agreement on Agreement on Network Lease Service Type Document, Network Lease Service Tariff, Available Capacity of Network Lease Service, Quality of Network Lease Service, and Provision Procedure of Network Lease Service Owned by Dominant Network Lease Service Provider in conformity with the Company’s proposal. Through MoCI Regulation No. 5/2021, the Government regulated the form, type, tariff structure, and tariff formula for services of network lease. e. Tariff for other services The tariffs for satellite lease, telephony services, and other multimedia are determined by the service provider by taking into account the expenditures and market price. The Government only determines the tariff formula for basic telephony services. There is no stipulation for the tariff of other services. 35. SIGNIFICANT COMMITMENTS AND AGREEMENTS a. Capital expenditures As of December 31, 2022, capital expenditures committed under the contractual arrangements are Rp10,046 billion and US$267 million. The above balance includes the following significant agreements: Contracting parties The Company and NEC Corporation Date of agreement May 12, 2016 - March 31, 2023 Telkomsel and PT Phincon September 12, 2019 - September 12, 2024 Significant part of the agreement Procurement and Installation Agreement of Sistem Komunikasi Kabel Laut ("SKKL") Indonesia Global Gateway Platform Development and Rollout Agreement Support ("DRA") Customer Agreement ("CRM") Relationship Management Solution System Integrator Technical ("TSA") and Telkomsel, PT Ericsson Indonesia, PT Huawei Tech Investment, and PT ZTE Indonesia The Company and PT Mastersystem Infotama Telkomsel, PT Sempurna Global Pratama, PT Lintas Teknologi and PT Ericsson Indonesia, Indonesia Software Amdocs Telkomsel, Solutions Liability Limited Company, and PT Application Solutions Telkomsel and PT Application Solutions Telkomsat and Thales Alenia Space France ("TAS") Telkomsel Indonesia Telkomsel and PT Lintas Teknologi Indonesia and PT Ericsson February 1, 2021 - January 31, 2024 Procurement Agreement Ultimate Solution ("ROA") and TSA for Radio June 3, 2021 - April 6, 2023 Procurement and Installation Agreement of Expand IP Backbone Platform Cisco September 1, 2021 - September 1, 2024 Procurement of Next Generation of Gateway GPRS Support Node ("GGSN") (Virtualized EPC) Agreement October 8, 2021 - October 8, 2024 Agreement Online Charging System (“OCS”) and Service Control Points (“SCP”) System Solution Development October 8, 2021 - October 8, 2024 October 28, 2021 - October 27, 2037 February 13, 2022 - February 12, 2025 February 13, 2022 - February 12, 2025 TSA for OCS and SCP Procurement and Installation Agreement of HTS 113BT Satellite System Procurement Agreement for CS Core Solution ROA and TSA Procurement Agreement for CS Core Solution ROA and TSA 98 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 35. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued) a. Capital expenditures (continued) Contracting parties Telkomsel and PT Huawei Tech Investment Telkomsat and Space Exploration Technologies Corporation ("SpaceX") Date of agreement March 24, 2022 - March 24, 2025 April 19, 2022 - June 30, 2025 The Company and PT Lintas Teknologi Indonesia July 22, 2022 - March 19, 2023 Significant part of the agreement Procurement Agreement for GGSN for Launch Procurement Agreement Services of HTS 113BT Satellite Procurement and Installation Agreement of Nokia Dense wavelength-division multiplexing (“DWDM”) Platform b. Borrowings and other credit facilities (i) As of December 31, 2022, the Company has bank guarantee facilities for tender bonds, performance bonds, maintenance bonds, deposit guarantee, and advance payment bonds for various projects of the Company, as follows: Lenders BRI BNI Bank Mandiri Total Total facility Maturity March 14, 2024 March 31, 2023 500 500 500 December 23, 2023 1,500 Currency Rp Rp Rp Facility utilized 294 129 236 659 (ii) As of December 31, 2022, Telkomsel has bank guarantee facilities for various projects, as follows: Total facility Lenders BRI BNI Total *) Bank guarantee facility with BRI is on extension process 1,000 September 25, 2022*) 2,100 December 11, 2022 3,100 Maturity Currency Rp Rp Facility utilized 23 1,577 1,600 Bank guarantee facility with BRI and BNI are mainly for performance bond and surely bond of radio frequency (Note 35c.i). (iii) Telin has a US$15 million or equal to Rp233 billion bank guarantee from Bank Mandiri and has been renewed on December 23, 2022, with a maximum credit limit of US$25 million or equal to Rp389 billion. The facility will expire on December 23, 2023. As of December 31, 2022, Telin has not had outstanding bank guarantee facility. c. Others (i) Radio frequency usage With reference to Telecommunication Law No. 36 Year 1999, based on the Decision Letter No. 025/TEL.01.02/2022 Year 2022 dated January 28, 2022 of the MoCI, the MoCI granted Telkomsel the rights to provide: 1. Mobile telecommunication services with radio frequency bandwidth in the 800 MHz, 900 MHz, 1,800 MHz, 2.1 GHz and 2.3 GHz; and 2. Basic telecommunication services. 99 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 35. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued) c. Others (continued) (i) Radio frequency usage (continued) With reference to Decision Letters No. 191 Year 2013, No.509 Year 2016, No. 1896 year 2017, No. 806 Year 2019, No.620 Year 2020, No. 178 Year 2021, and No. 479 Year 2022 of the MoCI, Telkomsel is required, among other things, to: 1. Issue a performance bond each year amounting to Rp20 billion and a surety bond amounting Rp617.15 billion for spectrum 2.1 GHz. 2. Issue a surety bond each year amounting Rp1.03 trillion for spectrum 2.3 GHz. 3. Issue a surety bond each year amounting Rp360 billion for both spectrum 2.3 GHz Block A and C. 4. Pay an annual right of usage (“BHP”) as set forth in the decision letters. The BHP is payable upon receipt of Surat Pemberitahuan Pembayaran (notification letter) from the DGPI. The BHP fee is payable annually up to the expiry period of the license. The following are radio frequency band licenses owned by Telkomsel along with the BHP fees paid during current year: 1. Radio frequency for band 800 MHz, 900 MHz, and 1,800 MHz Based on Decree No. 620 Year 2020 of the MoCI, concerning the extension of the determination of radio frequency bands 800 MHz, 900 MHz and 1,800 MHz, Telkomsel should pay annual frequency usage fees from 2020 to 2030. 2. Radio frequency for band up to 2.1 GHz Based on Decree No. 191 Year 2013 of the MoCI, concerning the appointment of PT Telekomunikasi Selular to use 2.1 GHz radio frequency for band 1,970 - 1,975 MHz paired with 2,160 - 2,165 MHz, the MoCI granted to utilize the license until March 18, 2023. Based on Decree No. 509 Year 2016 of the MoCI, concerning the extension of the determination of radio frequency 2.1 GHz for band 1,940 - 1,945 MHz paired with 2,130 - 2,135 MHz, the MoCI granted the extension of the license until March 28, 2026. Based on Decree No. 806 Year 2019 of the MoCI (previously was regulated on Decree No. 356 Year 2018), concerning the extension of the determination of radio frequency 2.1 GHz for band 1,935 - 1,940 MHz paired with 2,125 - 2,130 MHz, the MoCI granted the extension of the license until September 30, 2029. The aforementioned 2.1 GHz radio frequency band was rearranged in pursuant to the Decree No. 356 Year 2018 of the MoCI concerning the determination of 2.1 GHz radio frequency band for the purposes of mobile cellular network. Based on Decree No. 479 Year 2022 of the MoCI, concerning the appointment of Telkomsel as winner of auction of 2.1 GHz radio frequency for band 1,975 - 1,980 MHz paired with 2,165 - 2,170 MHz effective from January 11, 2023. In October 2022, the MoCI issued a Decree No. 480 Year 2022 concerning the rearrangement of the 2.1 GHz radio frequency band, including those used by Telkomsel. 3. Radio frequency for band up to 2.3 GHz Based on Decree No. 1896 Year 2017 of the MoCI, concerning the appointment of PT Telekomunikasi Selular to use 2.3 GHz radio frequency for band 2,300 - 2,330 MHz. 4. Radio frequency for band up to 2.3 GHz Block A and C Based on Decree No. 178 Year 2021 of the MoCI, concerning the appointment of PT Telekomunikasi Selular to use 2.3 GHz radio frequency for band 2,300 - 2,390 MHz, Telkomsel shall pay the annual BHP IPFR for Block A and Block C until 2030. 100 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 35. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued) c. Others (continued) (i) Radio frequency usage (continued) The following are radio frequency band licenses owned by Telkomsel along with the BHP fees paid during current year (continued): 4. Radio frequency for band up to 2.3 GHz Block A and C Based on Decree No. 445 Year 2021 of the MoCI, concerning the determination of radio frequency bands resulting from the rearrangement of the 2.3 GHz radio frequency band for the purposes of mobile cellular network, the aforementioned 2.3 GHz radio frequency band was rearranged. Based on Decree No. 487 Year 2022 of the MoCI, Telkomsel received a right to use reallocated 2.3 GHz radio frequency from PT Berca Hardayaperkasa effective from November 18, 2022. (ii) Receivable under non-cancelable lease agreements The Group entered into non-cancelable lease agreements with both third and related parties. The lease agreements cover leased lines, telecommunication equipment and land and building with terms ranging from 1 to 10 years and with expiry dates between 2023 and 2032. Periods may be extended based on the agreement by both parties. The minimum amount of future lease payments and receipts for operating lease agreements are as follows: 2022 2021 Less than 1 year 1-5 years More than 5 years Total (iii) USO 2,582 8,354 5,107 16,043 3,095 6,922 4,732 14,749 On December 27, 2011, Telkomsel (on behalf of Konsorsium Telkomsel, a consortium which was established with Mitratel on December 9, 2011) was selected by Balai Penyedia dan Pengelola Pembiayaan Telekomunikasi dan Informatika (“BPPPTI”), now has been renamed as Badan Aksesibilitas Telekomunikasi dan Informasi (“BAKTI”) as a provider of the USO Program in the border areas with a total price of Rp261 billion. In 2015, the Program was ceased. In January 2016, Telkomsel filed an arbitration claim to BANI for the settlement of the outstanding receivables of USO Programs. On June 22, 2017, Telkomsel received a decision letter from BANI No. 792/1/ARB-BANI/2016 requesting BAKTI to pay compensation to Telkomsel amounting to Rp218 billion, and as of the date of the issuance of these consolidated financial statements Telkomsel has received the payment from BAKTI amounting to Rp91 billion (before tax) and no additional payment. The MoCI issued Regulation No. 5 Year 2021 dated March 31, 2021 which replaced previous regulations regarding policies underlying the USO program. The regulation requires telecommunications operators in Indonesia to contribute 1.25% of gross revenues (with due consideration for bad debts and/or interconnection charges and/or connection charges and/or the exclusion of certain revenues that are not considered as part of gross revenues as a basis to calculate the USO charged) for USO development. 101 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 35. SIGNIFICANT COMMITMENTS AND AGREEMENTS (continued) c. Others (continued) (iii) USO (continued) Based on Decree No. 827/KOMINFO/BAKTI.31/KS.1/10/2021 dated October 4, 2021 of BAKTI granted Telkomsel as operating cooperation partners (“KSO”) for eight packages KSO, which cover Nusa Tenggara, Kalimantan, Sulawesi, Maluku, West Papua, West Central Papua, North Central Papua and South East Papua for period from 2021 until 2031. 36. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES Assets and liabilities denominated in foreign currencies are as follows: Assets Cash and cash equivalents Other current financial assets Trade receivables Related parties Third parties Contract assets Other receivables Other current assets Long-term investment in financial instruments Other non-current assets Total assets Liabilities Trade payables Related parties Third parties Other payables Accrued expenses Advances from customers Current maturities of long-term borrowings Long-term borrowings - net of current maturities Other liabilities Total liabilities Assets (liabilities) - net Assets Cash and cash equivalents Other current financial assets Trade receivables Related parties Third parties Contract assets Other receivables Other current assets Long-term investment in financial instruments Other non-current assets Total assets Liabilities Trade payables Related parties Third parties Other payables Accrued expenses Advances from customers Current maturities of long-term borrowings Long-term loans and other borrowings Other liabilities Total liabilities Assets (liabilities) - net U.S Dollar (in millions) Japanese Yen (in millions) Others* (in millions) Rupiah equivalent (in billions) 2022 261.09 27.06 0.47 86.06 30.91 0.92 0.30 372.84 0.43 780.08 (0.13) (104.25) (1.58) (39.41) (2.39) (15.78) (24.75) (2.00) (190.29) 589.79 5.74 - - - - - - - - 5.74 - (25.34) - (5.21) - (767.90) (767.90) - (1,566.35) (1,560.61) 13.60 0.02 - 8.24 - 1.11 0.46 6.22 0.55 30.20 - (5.82) (2.93) (2.31) (0.11) (4.72) (30.60) - (46.49) (16.29) 4,298 427 7 1,481 486 32 13 5,907 17 12,668 (2) (1,728) (70) (657) (38) (413) (958) (33) (3,899) 8,769 U.S Dollar (in millions) Japanese Yen (in millions) Others* (in millions) Rupiah equivalent (in billions) 2021 274.23 11.55 0.73 - 16.45 - 4,142 165 0.09 112.56 34.25 0.28 0.30 927.23 3,28 1,363.77 - - - 6.33 - - - - 0.06 0.59 - - 0.73 8.57 1,11 33.07 1 1,696 489 6 13 13,348 62 19,922 (0.01) (105.54) (3.07) (47.23) (0.17) (17.16) (37.14) (0.29) (210.61) 1,153.16 - (2.37) - (7.82) - (767.90) (1,535.80) - (2,313.89) (2,313.16) - (5.60) (1.54) (2.03) (0.68) (4.42) (34.51) - (48.78) (15.71) (0) (1,586) (66) (703) (12) (402) (1,212) (4) (3,985) 15,937 *Assets and liabilities denominated in other foreign currencies are presented as U.S. Dollar equivalents using the buy and sell rates quoted by Reuters prevailing at the end of the reporting period. The Group’s activities expose them to a variety of financial risks, including the effects of changes in debt and equity market prices, foreign currency exchange rates, and interest rates. 102 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 37. FINANCIAL INSTRUMENTS a. Fair value of financial assets and financial liabilities i. Classification (a) Financial asset Amortized cost Cash and cash equivalents Other current financial assets Trade receivables Other receivables Other non-current assets FVTPL Long-term investment in financial instruments Other current financial assets FVTOCI Long-term investment in financial instruments Total financial assets 2022 2021 31,947 1,268 8,634 245 186 8,508 81 22 50,891 38,311 415 8,510 195 151 13,643 78 18 61,321 (b) Financial liabilities Financial liabilities measured at amortized cost 2022 2021 Trade payables Other payables Accrued expenses Customers deposits Short-term bank loans Two-step loans Bonds Long-term bank loans Other borrowings Lease liabilities Other liabilities Total financial liabilities ii. Fair values 18,457 463 15,445 44 8,191 209 4,793 29,873 1,314 18,661 170 97,620 17,170 609 15,885 401 6,682 355 6,993 36,056 2,605 16,387 126 103,269 The following table presents comparison of the carrying amounts and fair values of the Company’s financial instruments, other than those the fair values are considered to approximate their carrying amounts as the impact of discounting is not significant: 2022 FVTPL Other current financial assets Long-term investment in financial instruments FVTOCI Long-term investment in financial instruments Financial liabilities at amortized cost Interest-bearing loans: Two-step loans Bonds Long-term bank loans Other borrowings Lease liabilities Other liabilities Total Fair value measurement at reporting date using Quoted prices in active markets Significant for identical assets or liabilities (level 1) other observable inputs (level 2) Significant unobservable inputs (level 3) Carrying value Fair value 81 2,172 - - 5,614 - - - - 7,867 - - - - - - - - - - - 6,336 22 207 - 29,860 1,311 18,661 170 56,567 81 8,508 81 8,508 22 22 207 5,614 29,860 1,311 18,661 170 64,434 209 4,793 29,873 1,314 18,661 170 63,631 103 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 37. FINANCIAL INSTRUMENTS (continued) a. Fair value of financial assets and financial liabilities (continued) ii. Fair values (continued) The following table presents comparison of the carrying amounts and fair values of the Company’s financial instruments, other than those the fair values are considered to approximate their carrying amounts as the impact of discounting is not significant (continued): 2021 FVTPL Other current financial assets Long-term investment in financial instruments FVTOCI Long-term investment in financial instruments Financial liabilities at amortized cost Interest-bearing loans: Two-step loans Bonds Long-term bank loans Other borrowings Lease liabilities Other liabilities Total Carrying value Fair value 78 13,643 78 13,643 18 18 355 6,993 36,056 2,605 16,387 126 76,261 351 8,019 36,176 2,610 16,387 126 77,408 Fair value measurement at reporting date using Quoted prices in active markets for identical assets or liabilities (level 1) Significant other inputs (level 2) inputs (level 3) observable unobservable Significant 78 - - - 8,019 - - - - 8,097 - 8,899 - - - - - - - 8,899 - 4,744 18 351 - 36,176 2,610 16,387 126 60,412 As of December 31, 2022, there was a transfer of the fair value hierarchy of financial assets from level 2 and level 3 to level 1 with the consideration that there was a quoted price in an active market condition for identical assets that could be accessed on the measurement date. Therefore, these financial assets can be categorized as level 1. These financial assets are long- term investments in shares in GOTO of Rp2,159 billion and in PT Global Sukses Solusi of Rp13 billion. Gain on fair value measurement recognized in consolidated statements of profit or loss and other comprehensive income for the years ended December 31, 2022 amounting to Rp282 billion. Reconciliations of the beginning and ending balances for items measured at fair value using significant unobservable inputs (level 3) for the years ended December 31, 2022 and 2021 are as follows: Beginning balance Gain recognized in consolidated statement of profit or loss and other comprehensive income Purchase/addition Settlement/deduction Ending balance 2022 2021 4,762 282 1,338 (24) 6,358 1,962 936 2,068 (204) 4,762 104 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 37. FINANCIAL INSTRUMENTS (continued) a. Fair value of financial assets and financial liabilities (continued) ii. Fair values (continued) The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurements: Industry Valuation technique Significant unobservable input Range (weighted average) Sensitivity of the input of fair value Subsidiaries investment Non-listed equity investment - technology OPM Backsolve method Volatility 30.00% - 93.99% 10% increase (decrease) in the percentage of volatility would result in an increase (decrease) Rp23 billion of the Investment value Exit timing 1.25 - 5 Years Increase (decrease) in 1 year exit timing would result increase (decrease) Rp22 billion of the Investment value in an CoCos Equity Volatility 20.00% - 93.99% 10% increase (decrease) in the percentage of volatility would result in an increase (decrease) Rp13 billion of the Investment value Exit timing 1 - 6 Years Equity value/revenue 2.36x - 4.36x multiple Probability-weighted Method IPO Probability 30% - 40% Non-listed equity investment - credit rating agency Discounted cash flow Weighted Average 12% - 22% Cost of Capital ("WACC") Terminal growth rate 1% - 5% 105 Increase (decrease) in 1 year exit timing would result increase (decrease) Rp10 billion of the Investment value in an Increase in 1x of equity value/revenue multiple would in an result increase Rp3 billion of the Investment value 50% increase (decrease) in IPO probability would result increase (decrease) Rp4 billion of the Investment value in an 1% decrease (increase) in the percentage of WACC would result in an increase (decrease) Rp9 billion of the Investment value 1% increase (decrease) in terminal growth rate would in an result increase (decrease) Rp6 billion of the Investment value These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 37. FINANCIAL INSTRUMENTS (continued) a. Fair value of financial assets and financial liabilities (continued) ii. Fair values (continued) The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurements (continued): Industry Non-listed equity investment - telecommunication Valuation technique Discounted cash flow WACC Significant unobservable input Range (weighted average) 3.4% - 14% Sensitivity of the input of fair value 0.5% decrease in WACC in an (decrease) the result (increase) would increase Rp6 of Investment value billion Convertible bonds Non-listed equity investment - technology OPM method Terminal growth rate 1.5% - 3.2% 1% increase (decrease) in terminal growth rate would in an result (decrease) increase Rp3 the of Investment value billion Backsolve Volatility 33.42% - 48.02% 10% increase (decrease) the in percentage of volatility would in an result (decrease) increase Rp2 the of Investment value billion Exit timing 3.25 - 3.33 Years Increase (decrease) in 1 year exit timing would result increase (decrease) Rp2 billion of the Investment value in an iii. Fair value measurement Fair value is the amount for which an asset could be exchanged, or a liability settled, between parties in an arm's length transaction. The fair values of short-term financial assets and financial liabilities with maturities of one year or less (cash and cash equivalents, trade and other receivables, other current financial assets, trade and other payables, accrued expenses, and short-term bank loans) and other non-current assets are considered to approximate their carrying amounts as the impact of discounting is not significant. The fair values of long-term financial assets (other non-current assets (long-term trade receivables and restricted cash) approximate their carrying amounts as the impact of discounting is not significant. 106 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 37. FINANCIAL INSTRUMENTS (continued) a. Fair value of financial assets and financial liabilities (continued) iii. Fair value measurement (continued) The Group determined the fair value measurement for disclosure purposes of each class of financial assets and financial liabilities based on the following methods and assumptions: (a) Fair value through profit or loss, primarily consist of stocks, mutual funds, corporate and government bonds, and convertible bonds. Stocks and mutual funds actively traded in an established market are stated at fair value using quoted market price or, if unquoted, determined using a valuation technique. The fair value of convertible bonds are determined using valuation technique. Corporate and government bonds are stated at fair value by reference to prices of similar at the reporting date. (b) The fair values of long-term financial liabilities are estimated by discounting the future contractual cash flows of each liability at rates offered to the Group for similar liabilities of comparable maturities by the bankers of the Group, except for bonds which are based on market price. The fair value estimates are inherently judgemental and involve various limitations, including: (a) Fair values presented do not take into consideration the effect of future currency fluctuations. (b) Estimated fair values are not necessarily indicative of the amounts that the Group would record upon disposal/termination of the financial assets and liabilities. b. Financial risk management objectives and policies The Group’s activities expose it to a variety of financial risks such as market risks (including foreign exchange risk, market price risk, and interest rate risk), credit risk, and liquidity risk. Overall, the Group’s financial risk management program is intended to minimize losses on the financial assets and financial liabilities arising from fluctuation of foreign currency exchange rates and the fluctuation of interest rates. Management has a written policy on foreign currency risk management mainly on time deposit placements and hedging to cover foreign currency risk exposures for periods ranging from 3 up to 12 months. Financial risk management is carried out by the Corporate Finance unit under policies approved by the Board of Directors. The Corporate Finance unit identifies, evaluates and hedges financial risks. i. Foreign exchange risk The Group is exposed to foreign exchange risk on sales, purchases and borrowings that are denominated in foreign currencies. The foreign currency denominated transactions are primarily in U.S. Dollars and Japanese Yen. The Group’s exposures to other foreign exchange rates are not material. Increasing risks of foreign currency exchange rates on the obligations of the Group are expected to be partly offset by the effects of the exchange rates on time deposits and receivables in foreign currencies that are equal to at least 25% of the outstanding current foreign currency liabilities. 107 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 37. FINANCIAL INSTRUMENTS (continued) b. Financial risk management objectives and policies (continued) i. Foreign exchange risk (continued) The following table presents the Group’s financial assets and financial liabilities exposure to foreign currency risk: U.S. Dollar (in billions) 0.78 (0.19) 0.59 Financial assets Financial liabilities Net exposure Sensitivity analysis 2022 (in billions) Japanese Yen U.S. Dollar (in billions) 1.36 (0.21) 1.15 0.01 (1.57) (1.56) 2021 Japanese Yen (in billions) 0.00 (2.31) (2.31) A strengthening of the U.S. Dollar and Japanese Yen, as indicated below, against the Rupiah at December 31, 2022 would have decreased equity and profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the reporting date. The analysis assumes that all other variables, in particular interest rates, remain constant. December 31, 2022 U.S. Dollar (1% strengthening) Japanese Yen (5% strengthening) Equity/profit (loss) 92 (9) A weakening of the U.S. Dollar and Japanese Yen against the Rupiah at December 31, 2022 would have had an equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant. ii. Market price risk The Group is exposed to changes in debt and equity market prices related to financial assets measured at FVTPL carried at fair value. Gains and losses arising from changes in the fair value of financial assets measured at FVTPL are recognized in the consolidated statements of profit or loss and other comprehensive income. The performance of the Group’s financial assets measured at FVTPL is monitored periodically, together with a regular assessment of their relevance to the Group’s long-term strategic plans. As of December 31, 2022, management considered the price risk for the Group’s financial assets measured at FVTPL to be immaterial in terms of the possible impact on profit or loss and total equity from a reasonably possible change in fair value. iii. Interest rate risk Interest rate fluctuation is monitored to minimize any negative impact to financial performance. Borrowings at variable interest rates expose the Group to interest rate risk (Notes 18 and 19). To measure market risk pertaining to fluctuations in interest rates, the Group primarily uses interest margin and maturity profile of the financial assets and liabilities based on changing schedule of the interest rate. 108 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 37. FINANCIAL INSTRUMENTS (continued) b. Financial risk management objectives and policies (continued) iii. Interest rate risk (continued) At reporting date, the interest rate profile of the Group’s interest-bearing borrowings was as follows: Fixed rate borrowings Variable rate borrowings 2022 2021 (27,767) (35,274) (25,444) (43,634) Sensitivity analysis for variable rate borrowings As of December 31, 2022, a decrease (increase) by 25 basis points in interest rates of variable rate borrowings would have increased (decreased) equity and profit or loss by Rp88.2 billion, respectively. The analysis assumes that all other variables, in particular foreign currency rates, remain constant. iv. Credit risk The following table presents the maximum exposure to credit risk of the Group’s financial assets: Cash and cash equivalents Other current financial assets Trade receivable Other receivable Other non-current assets Total 2022 2021 31,947 1,349 8,634 245 186 42,361 38,311 493 8,510 195 151 47,660 The Group is exposed to credit risk primarily from cash and cash equivalents and trade and other receivables. The credit risk is controlled by continuous monitoring of outstanding balance and collection. Credit risk from balances with banks and financial institutions is managed by the Group’s Corporate Finance Unit in accordance with the Group’s written policy. The Group placed the majority of its cash and cash equivalents in state-owned banks because they have the most extensive branch networks in Indonesia and are considered to be financially sound banks. Therefore, it is intended to minimize financial loss through banks and financial institutions’ potential failure to make payments. The customer credit risk is managed by continuous monitoring of outstanding balances and collection. Trade and other receivables do not have any major concentration of risk whereas no customer receivable balance exceeds 4.33% of trade receivables as of December 31, 2022 (2021: 5.05%) Management is confident in its ability to continue to control and sustain minimal exposure to the customer credit risk given that the Group has recognized sufficient provision for impairment of receivables to cover incurred loss arising from uncollectible receivables based on existing historical data on credit losses. v. Liquidity risk Liquidity risk arises in situations where the Group has difficulties in fulfilling financial liabilities when they become due. Prudent liquidity risk management implies maintaining sufficient cash in order to meet the Group’s financial obligations. The Group continuously performs an analysis to monitor financial position ratios, such as liquidity ratios and debt-to-equity ratios, against debt covenant requirements. 109 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 37. FINANCIAL INSTRUMENTS (continued) b. Financial risk management objectives and policies (continued) v. Liquidity risk (continued) The following is the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments: 2022 Trade and other payables Trade and other payables Accrued expenses Customer deposits Interest bearing loans: Short-term bank loans Two-step loans Bonds Long-term bank loans Other borrowings Lease liabilities Other liabilities Total 2021 Trade and other payables Trade and other payables Accrued expenses Customer deposits Interest bearing loans: Short-term bank loans Two-step loans Bonds Long-term bank loans Other borrowings Lease liabilities Other liabilities Total Carrying amount Contractual cash flows 2023 2024 2025 2026 2027 and thereafter 18,457 463 15,445 44 8,191 209 4,793 29,873 1,314 18,661 170 97,620 (18,457) (463) (15,445) (44) (18,457) (463) (15,445) (44) (8,191) (216) (10,096) (36,301) (1,394) (22,053) (196) (112,856) (8,191) (123) (509) (10,020) (1,027) (5,893) (20) (60,192) - - - - - (93) (510) (8,346) (367) (4,545) (44) (13,905) - - - - - - (2,574) (6,871) - (2,766) (44) (12,255) - - - - - - (293) (4,874) - (2,258) (44) (7,469) - - - - - - (6,210) (6,190) - (6,591) (44) (19,035) Carrying amount Contractual cash flows 2022 2023 2024 2025 2026 and thereafter 17,170 609 15,885 401 6,682 355 6,993 36,056 2,605 16,387 126 103,269 (17,170) (609) (15,885) (401) (17,170) (609) (15,885) (401) (6,682) (375) (12,821) (41,867) (2,801) (17,052) (148) (115,811) (6,682) (150) (2,817) (8,228) (1,164) (4,935) (11) (58,052) - - - - - (128) (507) (10,335) (1,115) (3,473) (34) (15,592) - - - - - (97) (507) (7,492) (522) (2,435) (34) (11,087) - - - - - - (2,500) (6,064) - (1,813) (34) (10,411) - - - - - - (6,490) (9,748) - (4,396) (35) (20,669) The difference between the carrying amount and the contractual cash flows is interest value. The interest value of variable-rate borrowings are determined based on the effective interest rates as of reporting date. 110 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 38. CAPITAL MANAGEMENT The capital structure of the Group is as follows: Short-term debts Long-term debts Total debts Equity attributable to owners of the parent company Total 2022 2021 Amount Portion Amount Portion 8,191 54,850 63,041 129,258 192,299 4.26% 28.52% 32.78% 67.22% 100.00% 6,682 62,396 69,078 121,646 190,724 3.50% 32.72% 36.22% 63.78% 100.00% The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for stockholders and benefits to other stakeholders and to maintain an optimum capital structure to minimize the cost of capital. Periodically, the Group conducts debt valuation to assess possibilities of refinancing existing debts with new ones with have more efficient cost that will lead to more optimized cost-of-debt. In case of idle cash with limited investment opportunities, the Group will consider buying back its shares of stock or paying dividend to its stockholders. In addition to complying with loan covenants, the Group also maintains its capital structure at the level it believes will not risk its credit rating and which is comparable with its competitors. Debt-to-equity ratio (comparing net interest-bearing debt to total equity) is a ratio which is monitored by management to evaluate the Group’s capital structure and review the effectiveness of the Group’s debts. The Group monitors its debt levels to ensure the debt-to-equity ratio complies with or is below the ratio set out in its contractual borrowings arrangements and that such ratio is comparable or better than that of regional area entities in the telecommunications industry. The Group’s debt-to-equity ratio as of December 31, 2022 and 2021, respectively were as follows: Total interest-bearing debts Less: cash and cash equivalents Net debts Total equity attributable to owners of the parent company Net debt-to-equity ratio 2022 2021 63,041 (31,947) 31,094 129,258 24.06% 69,078 (38,311) 30,767 121,646 25.29% As stated in Note 19, the Group is required to maintain a certain debt-to-equity ratio and debt service coverage ratio by the lenders. For the periods ended December 31, 2022 and 2021, the Group has complied with externally imposed capital requirements. 111 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 39. SUPPLEMENTAL CASH FLOWS INFORMATION a. The non-cash investing activities for the years ended December 31, 2022 and 2021 are as follows: Acquisition of property and equipment: Credited to trade payables Borrowing cost capitalization Addition of right of uses assets credited to leases (Note 12) Acquisition of intangible assets: Credited to trade payables 2022 2021 4,662 79 5,723 52 10,006 4,783 258 501 b. The changes in liabilities arising from financing activities is as follows: January 1, 2022 Cash flows Foreign exchange movement New leases Other Changes Non-cash changes 6,682 355 6,993 36,056 2,605 16,387 1,510 (144) (2,200) (6,218) (1,294) (6,896) (1) (2) - 55 - 60 - - - - - 10,006 December 31, 2022 8,191 209 4,793 29,873 1,314 18,661 - - - (20) 3 (896) 69,078 (15,242) 112 10,006 (913) 63,041 Short-term bank loans Two step loans Bonds Long-term bank loans Other borrowings Lease liabilities Total liabilities from financing activities 40. SUBSEQUENT EVENTS a. On February 6, 2023, Telkomsel paid the entire outstanding loans to Bank of China amounting to Rp1,000 billion. b. On February 15, 2023, Mitratel acquired 997 Indosat’s telecommunication towers amounting to Rp1,648 billion. c. On March 16, 2023, the Company withdrawn facilities from Bank of China amounting to Rp1,000 billion. 41. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”) These are summary of significant differences between PSAK and IFRS for the year 2022. Impact of significant differences between PSAK and IFRS on items in consolidated statements of financial position as of December 31, 2022 were as follows: Reference PSAK Reconciliation IFRS ASSETS Trade receivables - net allowance for expected credit losses Related parties Third parties Other receivables - net Total Current Assets Property and equipment - net of accumulated depreciation Right-of-use asset Deferred tax assets - net Total Non-current Assets b b d a a,d d 1,620 7,014 245 55,057 173,329 20,336 4,117 220,135 389 (389) 16 16 2,009 6,625 261 55,073 (1,838) 1,195 252 (391) 171,491 21,531 4,369 219,744 TOTAL ASSETS 275,192 (375) 274,817 112 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 41. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”) (continued) Impact of significant differences between PSAK and IFRS on items in consolidated statements of financial position as of December 31, 2022 were as follows (continued): Reference PSAK Reconciliation IFRS LIABILITIES AND EQUITY Trade payables Related parties Third parties Current maturities of lease liabilities Total Current Liabilities Lease liabilities Total Non-current Liabilites TOTAL LIABILITIES EQUITY Additional paid-in capital Other equity Retained earnings Net equity attributable to owners of the parent company Non-controlling interest TOTAL EQUITY b b d d c c c d d 431 18,026 4,925 70,388 13,736 55,542 1,344 (1,344) (153) (153) 1,775 16,682 4,772 70,235 (35) (35) 13,701 55,507 125,930 (188) 125,742 2,711 9,697 111,897 129,258 20,004 149,262 (734) (9,133) 9,833 (34) (153) (187) 1,977 564 121,730 129,224 19,851 149,075 TOTAL LIABILITIES AND EQUITY 275,192 (375) 274,817 Impact of significant differences between PSAK and IFRS on items in consolidated statements of profit or loss and other comprehensive income for the year ended December 31, 2022 were as follows: Reference PSAK Reconciliation IFRS Depreciation and amortization expenses Other income - net a,d d (33,255) 26 126 9 (33,129) 35 OPERATING PROFIT Finance cost PROFIT BEFORE INCOME TAX INCOME TAX (EXPENSE) BENEFIT PROFIT FOR THE YEAR TOTAL COMPREHENSIVE INCOME FOR THE YEAR Profit for the year attributable to: Owners of the parent company Non-controlling interests Total comprehensive income for the year attributable to: Owners of the parent company Non-controlling interests BASIC EARNING PER SHARE (in full amount) Net income per share Net income per ADS (100 Series B shares per ADS) 113 39,581 135 39,716 d (4,033) (44) (4,077) 36,339 (8,659) 27,680 29,447 20,753 6,927 27,680 22,468 6,979 29,447 91 36,430 (51) (8,710) 40 27,720 40 29,487 (17) 57 40 (19) 59 40 20,736 6,984 27,720 22,449 7,038 29,487 209.49 20,949.46 (0.17) 209.32 (17.16) 20,932.30 These consolidated financial statements are originally issued in the Indonesian language. PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk. AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2022 and For the Year Then Ended (Amounts in the tables expressed in billions of Indonesian Rupiah, unless otherwise stated) 41. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN PSAK AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”) (continued) a. Land rights According to PSAK, land rights are recorded as part of property and equipment and are not amortized, unless there is indication that the extension or renewal of land rights is not expected to be or will not be received. Costs incurred to process the extension or renewal of land legal rights are recognized as intangible assets and amortized over the shorter of the term of the land rights or the economic life of the land. According to IFRS, land rights are accounted and presented as part of right-of-use assets. Land rights are amortized over the lease period. b. Related party transactions According to Bapepam-LK Regulation No. VIII.G.7 regarding the Presentation and Disclosures of Financial Statements of Issuers or Public Companies, a government-related entity is an entity that is controlled, jointly controlled, or significantly influenced by a government. Government in this context is the Ministry of Finance or the Local Government, as the shareholder of the entity. According to IFRS, a government-related entity is an entity that is controlled, jointly controlled, or significantly influenced by a government. Government in this context refers to the Government of Indonesia, Government agencies, and similar bodies whether local, national, or international. c. Differences in entities under common control restructuring transactions According to PSAK, the difference between restructuring transactions between entities under common control is included in the grouping of additional paid-in capital in equity. Meanwhile, according to IFRS, the difference in restructuring transactions between entities under common control is included in the grouping of retained earnings. d. Timing difference in applying accounting standards The Group applied PSAK 73 Leases starting from January 1, 2020. It is equivalent with accounting standards in IFRS 16 Leases which was implemented in the beginning January 1, 2019. Timing difference in applying accounting standard results in differences in some of accounts in the consolidated financial statements. 114 Program Pendanaan Usaha Mikro dan Usaha Kecil Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk Laporan keuangan tanggal 31 Desember 2022 dan untuk tahun yang berakhir pada tanggal tersebut beserta laporan auditor independen Financial statements as of December 31, 2022 for year then ended with independent auditors’ report PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk LAPORAN KEUANGAN TANGGAL 31 DESEMBER 2022 DAN UNTUK TAHUN YANG BERAKHIR PADA TANGGAL TERSEBUT The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk FINANCIAL STATEMENTS AS OF DECEMBER 31, 2022 AND FOR THE YEAR THEN ENDED Daftar Isi Table of Contents Halaman/ Page Surat Pernyataan SGM CDC Laporan Auditor Independen SGM CDC’s Statement Independent Auditors’ Report Laporan Posisi Keuangan ............................................. Laporan Penghasilan Komprehensif .............................. Laporan Perubahan Aset Neto ...................................... Laporan Arus Kas ......................................................... 1 2 3 4 ................................ Statement of Financial Position ....................... Statement of Comprehensive Income ........................ Statement of Changes in Net Assets ......................................... Statement of Cash Flows Catatan Atas Laporan Keuangan .................................. 5 - 23 ............................ Notes to the Financial Statements ************************ PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk LAPORAN POSISI KEUANGAN TANGGAL 31 DESEMBER 2022 (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA Tbk STATEMENT OF FINANCIAL POSITION FOR THE YEAR DECEMBER 31, 2022 (Expressed in Rupiah) Tahun yang Berakhir pada tanggal 31 Desember/ Year Ended December 31 2022 Catatan/ Notes 2021 11.599.419.605 2b,4 7.445.080.497 ASET Aset Lancar Kas dan Setara Kas Pinjaman kepada Mitra Binaan setelah dikurangi penyisihan kerugian penurunan nilai sebesar Rp84.929.581.437 (2021: Rp83.373.615.274) 293.000.450.534 2c,2d,5 276.896.678.393 ASSETS Current Assets Cash and Cash Equivalents Loan to Foster Partners net of allowance for impairment losses of Rp84,929,581,437 (2021: Rp83,373,615,274) Jumlah aset lancar 304.599.870.139 284.341.758.890 Total Current Assets Aset Tidak Lancar Aset Lain-lain Pinjaman Bermasalah setelah dikurangi penyisihan penurunan nilai sebesar Rp289.951.899.219 (2021: Rp295.929.999.474) Jumlah aset tidak lancar Non Current Asset Other Asset Troubled Loan net of allowance for impairment losses of Rp289,951,899,219 2021: Rp295,929,999,474) Total Non Current Assets - - - 2f, 6 - JUMLAH ASET 304.599.870.139 284.341.758.890 TOTAL ASSETS LIABILITAS DAN ASET NETO LIABILITAS Liabilitas Lancar Utang dan Liabilitas Lancar Lainnya Kelebihan Pembayaran Angsuran 380.916.088 2i,7 2h,8 203.691.711 372.611.905 396.999.537 JUMLAH LIABILITAS 584.607.799 769.611.442 ASET NETO Tanpa Pembatasan dari Pemberi Sumber Daya Dengan Pembatasan dari Pemberi Sumber Daya 304.015.262.340 283.572.147.448 - - LIABILITIES AND NET ASSETS LIABILITIES Current Liabilities Payables and Other Current Liabilities Overpayment of Installments TOTAL LIABILITIES NET ASSETS Without Restrictions from Resource Provider With Restrictions from Resource Provider JUMLAH ASET NETO 304.015.262.340 283.572.147.448 TOTAL NET ASSETS JUMLAH LIABILITAS DAN ASET NETO 304.599.870.139 284.341.758.890 TOTAL LIABILITIES AND NET ASSETS Catatan atas laporan keuangan terlampir merupakan bagian integral dari laporan keuangan The accompanying notes form an integral part of these financial statements 1 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK LAPORAN PENGHASILAN KOMPREHENSIF Untuk Tahun yang Berakhir pada Tanggal 31 Desember 2022 (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK STATEMENT OF COMPREHENSIVE INCOME For the Year ended December 31, 2022 (Expressed in Rupiah) Tahun yang Berakhir pada tanggal 31 Desember/ Year Ended December 31 2022 Catatan/ Notes 2021 15.482.696.576 301.902.379 46.014.976 9 10 9.559.461.619 294.205.015 28.660.546 TANPA PEMBATASAN DARI PEMBERI SUMBER DAYA PENDAPATAN Pendapatan Jasa Administrasi Pinjaman Pendapatan Bunga Pendapatan Lain - lain JUMLAH PENDAPATAN 15.830.613.931 9.882.327.180 PENDAPATAN/(BEBAN) Pemulihan/(Kerugian) Penyisihan Penurunan Nilai Pinjaman Pendapatan/(Beban) Lainnya 4.422.134.092 190.366.869 5d (6.154.150.201) (168.114.440) WITHOUT RESTRICTIONS FROM RESOURCE PROVIDER REVENUES Loan Administration Service Income Interest Income Other Income TOTAL REVENUES INCOME/(EXPENSES) Recovery/(Allowance) for Impairment of Loan Other Income/(Expenses) JUMLAH PENDAPATAN/(BEBAN) 4.612.500.961 (6.322.264.641) TOTAL INCOME/(EXPENSES) SURPLUS 20.443.114.892 3.560.062.539 SURPLUS DENGAN PEMBATASAN DARI PEMBERI SUMBER DAYA PENGHASILAN KOMPREHENSIF LAIN TOTAL PENGHASILAN KOMPREHENSIF - - - - 20.443.114.892 3.560.062.539 WITH RESTRICTIONS FROM RESOURCE PROVIDER OTHER COMPREHENSIVE INCOME TOTAL COMPREHENSIVE INCOME Catatan atas laporan keuangan terlampir merupakan bagian integral dari laporan keuangan The accompanying notes form an integral part of these financial statements 2 The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK LAPORAN PERUBAHAN ASET NETO TANGGAL 31 DESEMBER 2022 (Disajikan dalam Rupiah) PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK STATEMENT OF CHANGES IN NET ASSETS FOR YEAR DECEMBER 31, 2022 (Expressed in Rupiah) Tahun yang Berakhir pada tanggal 31 Desember/ Year Ended December 31 2022 Catatan/ Notes 2021 ASET NETO TANPA PEMBATASAN DARI PEMBERI SUMBER DAYA NET ASSETS WITHOUT RESTRICTIONS FROM RESOURCE PROVIDER Saldo awal Surplus 283.572.147.448 20.443.114.892 280.012.084.909 3.560.062.539 Beginning balance Surplus Saldo akhir Penghasilan komprehensif lain 304.015.262.340 - 283.572.147.448 Ending balance Other comprehensive income - Jumlah 304.015.262.340 283.572.147.448 Total DENGAN PEMBATASAN DARI PEMBERI SUMBER DAYA - WITH RESTRICTIONS FROM RESOURCE PROVIDER - JUMLAH ASET NETO 304.015.262.340 283.572.147.448 TOTAL NET ASSETS Catatan atas laporan keuangan terlampir merupakan bagian integral dari laporan keuangan The accompanying notes form an integral part of these financial statements 3 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK LAPORAN ARUS KAS Untuk Tahun yang Berakhir pada Tanggal 31 Desember 2022 (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK STATEMENT OF CASH FLOWS For the Year ended December 31, 2022 (Expressed in Rupiah) AKTIVITAS OPERASI Rekonsiliasi surplus menjadi kas neto dari aktivitas operasi Surplus Rekonsiliasi: (Pemulihan)/penambahan penyisihan penurunan nilai pinjaman Perubahan aset dan liabilitas Pinjaman kepada mitra binaan Kelebihan pembayaran angsuran Utang dan liabilitas lancar lainnya Biaya yang masih harus dibayar Tahun yang Berakhir pada tanggal 31 Desember/ Year Ended December 31 2022 2021 20.443.114.892 3.560.062.539 (4.422.134.092) 6.154.150.201 (11.681.638.049) (193.307.826) 8.304.183 - (5.875.563.464) 237.720.533 (2.209.369) (541.750.000) OPERATING ACTIVITIES Reconciliation of surplus to net cash from operating activities Surplus Reconciliation: (Reversal)/additional allowance for impairment of loan Change in assets and liabilities Loan to fosters partners Overpayment of installments Payables and other current liabilities Accrued expenses KAS NETO DITERIMA UNTUK AKTIVITAS OPERASI 4.154.339.108 3.532.410.440 NET CASH FLOWS RECEIVED TO OPERATING ACTIVITIES KENAIKAN KAS DAN SETARA KAS KAS DAN SETARA KAS PADA AWAL TAHUN KAS DAN SETARA KAS PADA AKHIR TAHUN 4.154.339.108 3.532.410.440 CASH AND CASH EQUIVALENTS INCREASE IN 7.445.080.497 3.912.670.057 11.599.419.605 7.445.080.497 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR Catatan atas laporan keuangan terlampir merupakan bagian integral dari laporan keuangan The accompanying notes form an integral part of these financial statements 4 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 1. INFORMASI MENGENAI UNIT COMMUNITY DEVELOPMENT CENTER 1. INFORMATION DEVELOPMENT CENTER UNIT OF COMMUNITY a. Pendirian dan Informasi Umum a. Establishment and General Information dan Perseroan Lingkungan Indonesia Tbk Pusat Pengelolaan Program Tanggung Jawab (Community Sosial Development Center) (“CDC”) didirikan oleh (Persero) Perusahaan PT Telekomunikasi (BUMN Pembina) melalui Peraturan Perusahaan Nomor: KD. 61/ PS150/ CTG-10/ 2003 tentang Pembentukan Organisasi Pusat Pengelola Program Kemitraan dan Program Bina Lingkungan (Community Development Center). Peraturan Perusahaan ini telah beberapa kali diubah terakhir dengan Peraturan Direktur Human Nomor: Capital Management PR.202.60/ r.02/ HK200/ COP-A2000000/ 2021, tanggal 25 November 2021, tentang Organisasi Community Development Center. dan Perseroan Lingkungan Pusat Pengelolaan Program Tanggung Jawab (Community Sosial Development Center) (“CDC”) was established by (Persero) Perusahaan PT Telekomunikasi Indonesia Tbk (“Foster SOE”) based on Decree of the Directors Number: 61/ PS150/ CTG-10/ 2003 regarding Organization of Pusat Pengelola Program Kemitraan dan Program Bina Lingkungan (Community Center) Establishment. This company regulation has been amended several times, most recently with Decree of the Director of Human Capital r.02/ Management Number: PR.202.60/ HK200/ dated COP-A2000000/ November 25, 2021 regarding Organization of Community Development Center. Development 2021 CDC didirikan sebagai implementasi dari Keputusan Menteri Badan Usaha Milik Negara (“BUMN”) No. KEP-236/ MBU/ 2003 tanggal 17 Juni 2003 tentang Program Kemitraan BUMN dan Usaha Kecil dan Program Bina Lingkungan. Keputusan Menteri BUMN tersebut didasarkan pada Undang-Undang Republik Indonesia No. 19 Tahun 2003 tentang penyisihan laba untuk pembinaan usaha kecil/koperasi serta pembinaan masyarakat. CDC was established as an implementation from the Decree of Minister of State-Owned Enterprises (“SOE”) No. KEP-236/MBU/2003 dated June 17, 2003 regarding SOE’s Partnership Program and Small Enterprises and Community Development Program. The Decree of Minister SOE was based on The Law of Republic of Indonesia No. 19 Tahun 2003 regarding allowance from profit to develop small/cooperative business and community development. Indonesia Telekomunikasi Decree On April 27, 2007, Ministry of SOE issued PER- 05/MBU/2007 replaced the Decree of Minister of SOE No. KEP-236/MBU/2003. As an implementation of PER-05/MBU/2007, the Directors of Perusahaan Perseroan (Persero) Tbk PT issued Directors of No. KD. 30/PR000/COP-B0030000/2007 dated regarding Management of June 6, 2007 Partnership Community Development Program which then is amended No. by of KD.21/PR0000/COP-B0030000/2010 dated April 19, 2010 regarding Management of Community Partnership Development Program. Directors Program Program Decree and and the the Sebagai Perseroan Pada tanggal 27 April 2007, Kementerian BUMN memberlakukan PER-05/MBU/2007 menggantikan Keputusan Menteri BUMN No. KEP-236/MBU/2003. bentuk implementasi dari PER-05/MBU/2007, Direksi (Persero) Perusahaan PT Telekomunikasi Tbk mengeluarkan Keputusan Direksi No. KD. 30/ PR000/ COP - B0030000/ 2007 tanggal 6 Juni 2007 tentang Pengelolaan Program Kemitraan dan Program Bina Lingkungan yang kemudian diubah dengan Keputusan Direksi No. KD.21/ PR000/ COP-B0030000/2010 tanggal 19 April 2010 tentang Pengelolaan Program Kemitraan dan Program Bina Lingkungan. Indonesia 5 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 1. INFORMASI MENGENAI UNIT COMMUNITY DEVELOPMENT CENTER (lanjutan) 1. INFORMATION DEVELOPMENT CENTER UNIT (continued) OF COMMUNITY a. Pendirian dan Informasi Umum (lanjutan) a. Establishment and General Information (continued) pada perubahan PER-05/MBU/2007 telah diubah beberapa kali termasuk tanggal 10 September 2013, Kementerian BUMN mengeluarkan PER-08/MBU/2013 tentang perubahan keempat atas Peraturan Menteri BUMN No. PER-05/MBU/2007 tentang Program Kemitraan BUMN dengan Usaha Kecil dan Program Bina Lingkungan. Pada tanggal 22 Mei 2015, Kementerian BUMN telah menerbitkan Peraturan Menteri BUMN No: PER- 07/MBU/05/2015 tentang Program Kemitraan Badan Usaha Milik Negara dengan Usaha Kecil dan Program Bina Lingkungan sebagai pengganti PER-05/MBU/2007. Pada tanggal 3 Juli 2015, Kementerian BUMN menetapkan Peraturan Menteri BUMN No: PER-09/MBU/07/2015 menggantikan Peraturan Menteri BUMN No: PER- 07/MBU/05/2015. Pada tanggal 19 Desember 2016, Kementerian BUMN memberlakukan PER-03/MBU/12/2016 sebagai terhadap Peraturan Menteri BUMN No: PER- 09/MBU/07/2015. perubahan pertama Pada tanggal 5 Juli 2017, Kementerian BUMN memberlakukan PER-02/MBU/07/2017 sebagai perubahan kedua atas Peraturan Menteri BUMN No: PER-09/MBU/07/2015. Pada tanggal 2 April 2020, Kementerian BUMN memberlakukan PER-02/MBU/04/2020 sebagai perubahan ketiga atas Peraturan Menteri BUMN No: PER-09/MBU/07/2015. Pada tanggal 20 April 2021, Kementerian BUMN memberlakukan PER-05/MBU/04/2021 tentang Program Tanggung Jawab Sosial dan Lingkungan (TJSL). 15 tanggal Pada 2022, Kementerian BUMN memberlakukan PER- 06/MBU/09/2022 tentang Program Tanggung Jawah Sosial dan Lingkungan (TJSL). September Kantor pusat CDC berdomisili di Graha Merah Putih PT Telkom Indonesia (Persero) Tbk, Jalan Gatot Subroto Kav. 52 Jakarta. Community Development (“CD”) Regional dan CD Witel berdomisili di Kantor Telkom Regional dan Kantor Telkom Wilayah (“Witel”) yang tersebar di seluruh Indonesia. 6 the regarding for PER-05/MBU/2007 has been amended several times including the amendment on September 10, 2013, Minister of SOE issued PER-08/MBU/2013 fourth amendment of regulation of Ministry of SOE No. PER-05/MBU/2007 regarding SOE Partnership Program with Small Business and Community Development Program. On May 22, 2015, Minister of SOE issued regulation No: PER- 07/MBU/2015 regarding SOE Partnership Program with Small Business and Community Development PER- 05/MBU/2007. replaced Program On July 3, 2015, Ministry of SOE issued PER-09/MBU/07/2015 replaced the Decree of Minister of SOE No. PER-07/MBU/2015. On December 19, 2016, Ministry of SOE issued PER-03/MBU/12/2016 as first amendments to Regulation of Ministry of SOE No: PER- 09/MBU/07/2015. On July 5, 2017, Ministry of SOE issued PER-02/MBU/07/2017 as second amendment to Ministry SOE Regulation No: PER-09/MBU/07/2015. of On April 2, 2020, Ministry of SOE issued PER-02/MBU/04/2020 as third amendment to Ministry SOE Regulation No: PER-09/MBU/07/2015. of On April 20, 2021, Ministry of SOE issued PER-05/MBU/04/2021 regarding Social and Environmental Responsibility Program (TJSL). On September 15, 2022, Ministry of SOE issued PER-06/MBU/09/2022 regarding Social and Environmental Responsibility Program (TJSL) CDC head office is located at Graha Merah Putih PT Telkom Indonesia (Persero) Tbk, Gatot Subroto Kav. Jakarta. Community Development (“CD”) Regional and CD Witel is located in Telkom Regional Office and Telkom Wilayah Office (“Witel”) Telkom which spread all over Indonesia. 52 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 1. INFORMASI MENGENAI UNIT COMMUNITY DEVELOPMENT CENTER (lanjutan) 1. INFORMATION DEVELOPMENT CENTER UNIT (continued) OF COMMUNITY b. Kegiatan Utama b. Primary Activities Salah satu kegiatan utama yang dilakukan CDC adalah pembiayaan dan pembinaan Usaha Mikro dan Usaha Kecil (UMK) melalui Program Pendanaan UMK (PUMK). One of CDC’s primary activities are financing and developing Micro and Small Business (SME) through Program Pendanaan UMK (PUMK). c. Sumber Dana c. Fund Resources Sumber dana Program PUMK berasal dari anggaran yang diperhitungkan sebagai biaya Perusahaan (Persero) PT Telekomunikasi Indonesia Tbk (BUMN Pembina) dan hasil pengembangan dana program. Perseroan PUMK program fund resources is from budget which has been allocated by Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk’s (Foster SOE) expenses and additional fund sourced from fund management activities. d. Susunan Pengelola d. Management Structures tanggal Susunan Pengelola CDC pada 31 Desember 2022 dan 2021 adalah sebagai berikut: Management structures of CDC as of December 31, 2022 and 2021 is as follows: 31 Desember/December 31 2022 2021 Hery Susanto Hery Susanto M. Wahyudi Soni Galih Riadi M. Wahyudi Soni Galih Riadi Senior General Manager Pengelola Fungsi Dukungan: Senior Manager Perencanaan dan Pengendalian Senior Manager Keuangan PGS Senior Manager Senior General Manager Supporting Management: Senior Manager of Planning and Controlling Senior Manager of Finance Senior Manager of Pemberdayaan UMK M. Wahyudi Romles Simanjuntak SME Empowerment Program - Senior Manager Pemberdayaan Sosial dan Lingkungan Senior Manager Suharsono Suharsono Rumah BUMN Bambang Febriansyah Bambang Febriansyah ad interim Senior Manager of Social and Environment Empowerment Senior Manager of Rumah BUMN 7 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 1. INFORMASI MENGENAI UNIT COMMUNITY DEVELOPMENT CENTER (lanjutan) 1. INFORMATION DEVELOPMENT CENTER UNIT (continued) COMMUNITY OF d. Susunan Pengelola (lanjutan) d. Management Structure (continued) Berdasarkan KD.21/PR000/COP-B0030000/ 2010 tentang Pengelolaan Program Kemitraan dan Program Bina Lingkungan yang telah diubah dengan PD.703.00/r.00/HK200/CDC-A1000000/ tentang 2021 tanggal 31 Desember 2021 Program Tanggung dan Lingkungan, dimana CDC adalah Unit Kerja Pengelola Program TJSL di bawah supervisi Direktur Human Capital Management (HCM). Pada tanggal 31 Desember 2022 dan 2021, Direktur HCM PT Telkom Tbk adalah Bapak Afriwandi. Jawab Sosial Based on KD.21/PR000/COP-B0030000/2010 of Partnership regarding Management Program and Community Development Program which was amended by PD.703.00/ r.00/ HK200/ CDC-A1000000/2021 dated December,31 2021 where CDC is the TJSL Program Management Unit is supervised by the Director of Human Capital Management (HCM). As of December 31, 2022 and 2021, the Director of HCM of PT Telkom Tbk is Mr. Afriwandi. Jumlah karyawan pada tanggal 31 Desember 2022 dan 2021 adalah sebagai berikut: Number of employees as of December 31, 2022 and 2021 are as follows: 31 Desember / December 31 2022 2021 CDC Pusat 33 31 CDC Corporate Seluruh pegawai adalah pegawai yang memperoleh gaji dan manfaat lainnya dari BUMN Pembina sehingga penerapan Imbalan Kerja (PSAK No. 24) dilaksanakan dan menjadi beban Pembina. Pemotongan dan penyetoran atas pajak penghasilan pasal 21 atas pegawai BUMN Pembina yang ditempatkan di CDC dilakukan oleh BUMN Pembina. All employees are employees who earn salaries and other benefits from the Foster SOE so that the Employee Benefits (PSAK No. 24) is implemented by and charged to the Foster SOE. Witholding and payment tax Article 21 of the Foster SOE’s employee who is assigned at CDC are performed by the Foster SOE. income for e. Otorisasi Penerbitan Laporan Keuangan e. Authorization of the Issuance of Financial Statement Laporan keuangan telah diselesaikan dan disahkan untuk diterbitkan oleh Pengelola CDC pada 21 Februari 2023. The financial statements were completed and authorized for issuance by CDC’s Management on February 21, 2023. 8 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 2. IKHTISAR KEBIJAKAN AKUNTANSI YANG SIGNIFIKAN 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Kebijakan akuntansi signifikan dan diterapkan dalam menyusun laporan keuangan untuk tahun yang berakhir pada tanggal 31 Desember 2022 adalah sebagai berikut: The significant accounting principles which are applied consistently in the preparation of the financial statements for year ended December 31, 2022 are as follows: a. Dasar Penyusunan Laporan Keuangan a. Basis of Preparation of Financial Statements disusun keuangan Laporan berdasarkan Standar Akuntansi Keuangan Entitas Tanpa Akuntabilitas Publik yang diterbitkan oleh Dewan Standar Akuntansi Keuangan - Ikatan Akuntan Indonesia. (SAK ETAP) Penerapan SAK ETAP atas penyusunan laporan keuangan didasarkan pada Surat Edaran Menteri Negara BUMN No: SE-02/MBU/Wk/ 2012 tentang tanggal 23 Februari 2012 Penetapan Pedoman Akuntansi Program Kemitraan dan Bina Lingkungan yang berlaku mulai tahun 2012. Laporan keuangan disusun dengan dasar akrual, kecuali untuk beberapa akun tertentu yang lain disusun sebagaimana kebijakan akuntansi terkait. pengukuran dalam berdasarkan diuraikan The financial statement is prepared based on Non - Publicly Accountable Entities Financial Accounting Standards (SAK ETAP) that was issued by The Financial Accounting Standard Board - Indonesian Institute of accountants. in of SOE Circular the implementation of SAK ETAP The preparation of the financial statement is based on Minister Letter No: SE-02/MBU/Wk/2012 dated February 23, 2012 regarding Determination Guidance of Accounting Standard for Partnership Program and Community Development that starting from 2012. The financial statements are prepared on the accrual basis, except for certain accounts that are prepared based on other measurement as explained in related accounting policy. Laporan arus kas yang disajikan dengan menggunakan metode langsung, menyajikan penerimaan dan pengeluaran kas dan setara kas yang diklasifikasikan ke dalam aktivitas operasi, investasi dan pendanaan. tidak The statements of cash flows are presented using the indirect method, presenting cash receipt and payment and cash equivalents that are classified into operating, investing and financing activities. Tahun buku CDC adalah 1 Januari 31 Desember. - The financial reporting period of CDC is January 1 - December 31. Mata uang yang digunakan pada laporan keuangan adalah Rupiah yang juga merupakan mata uang fungsionalnya. in Amounts the financial statements are presented in Rupiah which also represents its functional currency. b. Kas dan Setara Kas b. Cash and Cash Equivalents Kas dan setara kas terdiri atas bank. Cash and cash equivalents consist of cash in banks. 9 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 2. IKHTISAR KEBIJAKAN AKUNTANSI YANG SIGNIFIKAN (lanjutan) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) c. Pinjaman c. Loan Pinjaman pada awalnya diakui sebesar nilai wajar dan selanjutnya diukur pada biaya perolehan diamortisasi, setelah dikurangi penyisihan nilai. Penyisihan penurunan nilai dibentuk berdasarkan evaluasi Pengurus terhadap tingkat ketertagihan saldo pinjaman. penurunan Pinjaman kepada BUMN Pembina Lain atau Lembaga Penyalur merupakan pinjaman yang diberikan kepada unit TJSL atau Lembaga Penyalur sebagai bentuk sinergi antar unit TJSL. Pinjaman kepada mitra binaan dicatat sebagai pinjaman sebesar pokok pinjaman yang diberikan dan jasa administrasi pinjaman yang telah jatuh tempo sesuai dengan kontrak. Pendapatan jasa administrasi pinjaman dicatat sebagai pinjaman kepada mitra binaan dan pendapatan secara akrual untuk pinjaman yang berkualitas lancar dan kurang lancar. Pinjaman kepada mitra binaan dan BUMN Pembina Lain atau Lembaga Penyalur disajikan dalam laporan posisi keuangan pada kelompok aset lancar sebesar jumlah yang diharapkan dapat ditagih dari mitra binaan walaupun pengembalian pinjaman yang disepakati akan diterima melebihi satu tahun setelah akhir periode pelaporan. Penggolongan kualitas pinjaman ditetapkan sebagai berikut: i. tepat waktu atau pembayaran Lancar adalah pembayaran angsuran pokok dan jasa administrasi pinjaman terjadi dilakukan keterlambatan angsuran pokok dan/atau jasa administrasi yaitu selambat-lambatnya 30 (tiga puluh) hari tempo pembayaran dari angsuran, sesuai dengan perjanjian yang telah disepakati tanggal jatuh ii. Kurang Lancar apabila pembayaran terjadi keterlambatan angsuran pokok dan/atau jasa administrasi pinjaman yang telah melampaui 30 (tiga puluh) hari dan belum melampaui 180 (seratus delapan puluh) hari dari tanggal jatuh tempo pembayaran angsuran sesuai dengan perjanjian yang telah disepakati. Loan is initially measured based on fair values and subsequently measured at amortized cost, after deducted by allowance for impairment losses. The allowance for impairment is based on Management’s evaluation on the collectibility of these loans. Loan to Other Foster SOE or Distribution Partners represents loans given to TJSL unit or Distributing Partners as synergy form among TJSL’s units. Loan to foster partners are recognized in the amount of principal and administration service income earned as agreed in the contract. Administration service income are recorded as loan to foster partners and as revenues on accrual basis for loans classified as current and substandard loan. Loan to foster partners and Other Foster SOE or Distributing Partners are presented in statement of financial position as a current asset at its realizable value although the agreed repayment of loan may be more than one year after reporting period. The classification of collectibility are as follows: loan based on its i. Current represents principal installment and administration service income payment are paid on time or those late payments of maximum 30 (thirty) days from the payment due date as agreed with the agreement. ii. Substandard when late payment of principal and/or administration income payment are between 30 (thirty) days and 180 (one hundred and eighty) days from the payment due date of installment as agreed in the agreement. service 10 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 2. IKHTISAR KEBIJAKAN AKUNTANSI YANG SIGNIFIKAN (lanjutan) c. Pinjaman (lanjutan) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) c. Loan (continued) Penggolongan kualitas pinjaman ditetapkan sebagai berikut: (lanjutan) The classification of collectibility are as follows: (continued) loan based on its iii. Diragukan apabila terjadi keterlambatan pembayaran angsuran pokok dan/atau jasa administrasi pinjaman yang telah melampaui 180 (seratus delapan puluh) hari dan belum melampaui 270 (dua ratus tujuh puluh) hari dari tanggal jatuh tempo pembayaran angsuran sesuai dengan perjanjian yang telah disepakati. iv. Macet apabila terjadi keterlambatan pembayaran angsuran pokok dan/atau jasa administrasi pinjaman yang telah melampaui 270 (dua ratus tujuh puluh) hari tanggal jatuh tempo pembayaran dari angsuran sesuai dengan perjanjian yang telah disepakati. iii. Doubtful when late payment of principal and/or administration service income payment are between 180 (one hundred and eighty) days and 270 (two hundred and seventy) days from the payment due date of installment as agreed in the agreement. iv. Loss when late payment of principal and/ or administration service income payment over 270 (two hundred and seventy) days from the payment due date of installment as agreed in the agreement. d. Penyisihan Penurunan Nilai Pinjaman d. Allowance for Impairment of Loan Penyisihan pinjaman merupakan penyisihan atas pinjaman yang mungkin tidak tertagih. Penyisihan penurunan nilai pinjaman dibentuk berdasarkan taksiran Pengelola CDC terhadap tingkat ketertagihan saldo pinjaman. Allowance for impairment of loan represents allowance for doubtful loan. This allowance is calculated based on the Management’s CDC estimation of their collectibility. signifikan jumlahnya CDC pertama kali menentukan apakah terdapat bukti objektif mengenai penurunan nilai secara individual atas pinjaman yang signifikan secara individual atau secara kolektif untuk penerimaan yang secara tidak individual. Jika CDC menentukan tidak terdapat bukti objektif mengenai penurunan nilai atas aset keuangan yang dinilai secara individual, terlepas aset keuangan tersebut signifikan atau tidak, maka CDC memasukkan piutang tersebut ke dalam kelompok pinjaman yang memiliki karakteristik risiko kredit yang sejenis dan menilai penurunan nilai kelompok tersebut secara kolektif. CDC firstly determines whether there is objective evidence that there is impairment, individually for significat loan or collectively for loan which are insignificant. If CDC decides that there is no objective evidence of impairment, regardless loans are significant or insignificant, CDC classifies these loan as having similar credit risk characteristics and determining the impairment collectively. individual those Penyisihan pinjaman dihitung berdasarkan estimasi kerugian yang tidak dapat ditagih yaitu secara kolektif berdasarkan prosentase tertentu tingkat ketertagihan (collection) data historis yang ada (minimal 2 tahun). Pinjaman yang penurunan nilainya dinilai secara individual dan untuk itu kerugian penurunan nilai diakui, tidak termasuk dalam penilaian penurunan nilai secara kolektif. Allowance for impairment of loan is calculated based on estimated uncollectible loss, which collectively based on specific percentage of available historical collectibility rate (2 years of historical data at minimum). Loan which are impaired individually and of that loss are recognised, are not included in the collective impairment evaluation. 11 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 2. IKHTISAR KEBIJAKAN AKUNTANSI YANG SIGNIFIKAN (lanjutan) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) e. Aset Tetap Tidak Berfungsi e. Fixed Asset Not in Use Aset tetap diakui berdasarkan harga perolehan rugi dikurangi akumulasi penyusutan dan penurunan nilai. Aset tetap disusutkan dengan menggunakan metode garis lurus berdasarkan estimasi masa manfaat aset tetap dengan tarif penyusutan sebagai berikut: Fixed asset is recognized at their historical costs less accumulated depreciation and loss from impairment. Fixed asset is depreciated using straight-line method based on the estimated useful life and depreciation rate as follow: Jenis Aset Komputer Inventaris kantor Tarif Penyusutan/ Depreciation Rate Masa Manfaat/ Useful Life 50% 50% 2 2 Asset types Computers Office equipment Aset tetap yang sudah tidak dapat digunakan atau dioperasikan karena rusak atau sebab lain diklasifikasikan sebagai aset tidak berfungsi. tetap Seluruh aset tetap dalam kondisi tidak dapat digunakan. Dengan demikian, aset tetap tersebut diklasifikasikan ke dalam aset tetap tidak berfungsi. Fixed assets that can not be used or operated due to damaged or other reasons are classified as fixed assets not in use. All fixed assets are not in use. Therefore, such fixed assets classified as fixed assets not in use. Pada tanggal 31 Desember 2022, nilai perolehan aset tetap adalah Rp83.916.650 dan nilai buku bersih aset tetap adalah nihil. As of December 31, 2022, acquisition cost of fixed assets not in use is Rp83,916,650 and net book value of fixed asset is zero. dengan Terkait dengan aset tetap tidak berfungsi yang nilai bukunya telah nihil tersebut di atas, SGM CDC telah mengirim Surat kepada Kementerian BUMN No:Tel.243/KU710/CDC- A1000000/2012 tanggal 19 November 2012, perihal Permohonan Ijin Penghapusan Aset Tetap Unit TJSL Telkom tersebut. Namun demikian sampai dengan tanggal penyelesaian laporan keuangan belum diperoleh izin penghapusan tersebut. In relation to fixed assets not in use with zero book value, SGM CDC has submitted a Letter No: Tel. 243/KU710/CDC-A1000000/2012 dated November 19, 2012 to the Ministry of SOE requesting for Approval to write-off TJSL Telkom the Unit’s completion date of the financial statements, an approval has not been received. fixed assets. However, until f. Pinjaman Bermasalah f. Troubled Loan Pinjaman bermasalah merupakan pinjaman macet yang telah diupayakan pemulihannya dengan penjadwalan kembali (rescheduling) persyaratan dan peninjauan (reconditioning), namun terpulihkan. Pinjaman bermasalah disajikan sebesar nilai pokok pinjaman dengan besarnya alokasi penyisihan sebesar 100% dari saldo pinjaman bermasalah. kembali tidak cara Tata bermasalah mengacu Menteri BUMN. penghapusbukuan pinjaman kepada Peraturan Troubled loan represents loss loan which has been attempted to be recovered by rescheduling and reconditioning but cannot be recovered. Troubled loan will be represented at loan principal value with 100% of troubled loan balance. The procedures to write-off the troubled loan adhere to the Ministry of SOE’s regulations. 12 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 2. IKHTISAR KEBIJAKAN AKUNTANSI YANG SIGNIFIKAN (lanjutan) g. Beban Akrual 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) g. Accrued Expenses Beban akrual adalah beban yang masih harus dibayar CDC yang timbul karena diterimanya jasa namun belum dibayar. Accrued expenses are expenses that must be paid by CDC which occur due to service received but no payment was made. h. Kelebihan Pembayaran Angsuran h. Overpayment of Installments Kelebihan pembayaran angsuran adalah penerimaan angsuran yang melebihi saldo pinjaman kepada mitra binaan. Kelebihan pembayaran angsuran diakui dan disajikan sebagai liabilitas pada saat setoran diterima. Kelebihan pembayaran angsuran setiap Mitra Binaan sampai dengan nilai Rp100.000 diakui sebagai Pendapatan Lain-lain Program Kemitraan, sesuai dengan Peraturan Direktur Human Nomor: Capital Management PR.702.01.01/r.01/PR000/CDC-A1000000/ 2021 tanggal 1 April 2021 tentang Petunjuk Pelaksanaan Operasional Program Kemitraan dan Program Bina Lingkungan. of installments Overpayment represents repayment from foster partners which exceeds its is loan balance. This overpayment recognized and presented as liability when the installment is received. Overpayment of installment from each Foster Partners to maximum amount of Rp100,000 is recognized as Partnership Program Other Income, based on Decree of the Human Capital Number: Management PR.702.01.01/r.01/PR000/CDC-A1000000/ 2021 dated on April 1, 2021 regarding Operational Guidelines of Partnership Program and Community Development Program. Director i. Utang dan Liabilitas Lancar Lainnya i. Payables and Other Current Liabilities Utang dan liabilitas lancar lainnya diakui pada saat terjadinya transaksi atau saat perjanjian kontrak dan dicatat sebesar nilai transaksi atau perjanjian kontrak. Payables and other current liabilities are recognized when transactions occur or when contract are completed and recognized based on transaction amount or contracts. j. Aset Neto Aset neto diklasifikasikan menjadi aset neto tanpa pembatasan dari pemberi sumber daya dan aset neto dengan pembatasan dari pemberi sumber daya. Aset neto dengan pembatasan dari pemberi sumber daya adalah aset yang penggunaannya dibatasi untuk program tertentu yang tidak dapat digunakan untuk kegiatan lainnya. Aset neto tanpa pembatasan dari pemberi sumber daya adalah aset yang penggunaannya tidak dibatasi untuk tujuan tertentu. j. Net Assets Net assets are classified into net assets without restrictions from resource provider and net assets with restrictions from resource provider. Net assets with restrictions from resource provider represent assets that can only be utilized limited to spesific program purpose. Net assets without resource restrictions provider represent assets that can be utilized without being limited for specific purposes. from 13 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 2. IKHTISAR KEBIJAKAN AKUNTANSI YANG SIGNIFIKAN (lanjutan) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) k. Pendapatan dan Beban k. Revenue and Expenses Pendapatan Jasa Administrasi Pinjaman Loan Administration Service Income Pendapatan jasa administrasi pinjaman diukur dan dicatat sebesar nilai yang telah jatuh tempo sesuai dengan kontrak untuk pinjaman dengan status lancar dan kurang lancar. Administration service income is measured and recognized as incurred as stated in the contract for current and substandard loan. Pendapatan bunga Interest income Pendapatan bunga diakui secara akrual. Pendapatan bunga diukur dan dicatat sebesar nilai yang telah ditentukan. Interest income is recognized based on accrual is measured and basis. recorded amount stipulated determined. based on Interest income Beban Expenses Beban diakui pada saat terjadinya. Expense is recognised as incurred. Dana pembinaan kemitraan diakui saat pembayaran dana tersebut. Fostering partnership funds are recognized when the funds are distributed. Sebagai implementasi pemberlakuan PER- 05/MBU/04/2021, beban pembinaan kemitraan menjadi bagian dari biaya Program TJSL BUMN Pembina. As implementation of PER-05/MBU/04/2021, Fostering Partnership Funds become part of the expense of the Foster SOE’s TJSL Program. l. Perpajakan l. Taxation Pajak yang muncul dari seluruh transaksi yang terjadi di CDC menjadi beban CDC dan dilaporkan atas nama BUMN Pembina. Tax transactions in relation to CDC are charged to CDC and reported by the Foster SOE. 3. PENGGUNAAN PERTIMBANGAN, ESTIMASI 3. ACCOUNTING JUDGEMENTS, ESTIMATION, DAN ASUMSI a. Pertimbangan AND ASSUMPTION a. Judgements Penentuan mata uang fungsional The determination of functional currency Mata uang fungsional CDC adalah mata uang dari lingkungan ekonomi primer di mana CDC beroperasi. Mata uang tersebut adalah mata uang yang mempengaruhi pendapatan dan beban dari jasa yang diberikan. CDC menentukan bahwa mata uang fungsionalnya adalah Rupiah. CDC’s functional currency is currencies from premier economic environment where CDC operates. The related currency is currency that gives influence on revenues and expenses from services given. CDC determines that their functional currency is Rupiah. 14 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 3. PENGGUNAAN PERTIMBANGAN, ESTIMASI DAN ASUMSI (lanjutan) 3. ACCOUNTING JUDGEMENTS, ESTIMATION, AND ASSUMPTION (continued) a. Pertimbangan (lanjutan) a. Judgements (continued) Penyisihan penurunan nilai pinjaman Allowance for impairment of loan Apabila terdapat bukti objektif bahwa rugi penurunan nilai telah terjadi atas pinjaman, CDC mengestimasi penyisihan kerugian penurunan nilai pinjaman yang secara khusus tidak diidentifikasi tertagih. Tingkat penyisihan ditelaah oleh Pengelola berdasarkan faktor-faktor yang mempengaruhi tingkat tertagihnya pinjaman tersebut. kemungkinan terdapat If there is objective evidence that losses because of impairment have incurred on loan, CDC estimates an allowance for impairment loss of those loan specifically identified as uncollectible. The allowance examined by Management based several factors influencing of loan collectibility. CDC menggunakan pertimbangan berdasarkan fakta dan situasi yang tersedia, termasuk tetapi tidak terbatas pada, jangka waktu hubungan CDC dengan mitra binaan dan status kualitas pinjaman pelanggan (Catatan 5 dan 6). CDC uses judgements based on available facts and situations, including but not limited to, CDC’s period of relationship with foster partners and foster partner’s loan quality status (Notes 5 and 6). b. Estimasi dan Asumsi b. Estimations and Assumptions Penyisihan penurunan nilai pinjaman Allowance for impairment of loan terbaik yang CDC menggunakan pertimbangan berdasarkan fakta-fakta tersedia untuk mengakui penyisihan secara individu atas mitra binaan dan lembaga penyalur terhadap jumlah yang jatuh tempo untuk menurunkan pinjaman individu jumlah yang diharapkan dapat ditagih. Pencadangan secara individu ini ditelaah jika terdapat informasi tambahan yang diterima yang yang diestimasikan. mempengaruhi jumlah CDC uses judgement based on best facts available to recognize individual allowance for foster partners and distributing partners to adjust the individual loan to its realizable amount. This individual allowance will be assessed if there is additional information received which affect the estimated amount. MB, yang CDC juga melakukan penilaian penyisihan penurunan nilai secara kolektif terhadap risiko dikelompokkan pinjaman berdasarkan karakteristik pinjaman yang sama, tidak diidentifikasi secara yang meskipun spesifik memerlukan tertentu, memiliki risiko tidak tertagih yang lebih besar dibandingkan dengan pinjaman yang diberikan kepada MB lainnya. Penyisihan penurunan nilai pinjaman dihitung berdasarkan kajian nilai terkini dan historis tingkat ketertagihan dari pinjaman. cadangan loan risks, regardless the allowance CDC also assesses for impairment loss collectively, grouped by the requires same individually identified of allowance, have higher uncollectible risk compares to loan provided to other foster partners. Allowance for impairment of loan is measured based on the evaluation of loan current value and historical rate of collectability. 15 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 3. PENGGUNAAN PERTIMBANGAN, ESTIMASI DAN 3. ACCOUNTING JUDGEMENTS, ESTIMATION, ASUMSI (lanjutan) AND ASSUMPTION (continued) b. Estimasi dan Asumsi (lanjutan) b. Estimations and Assumptions (continued) Penyisihan pinjaman dihitung berdasarkan estimasi kerugian yang tidak dapat ditagih yaitu secara kolektif berdasarkan prosentase tertentu tingkat ketertagihan (collection) data historis yang ada (minimal 2 tahun). Penyisihan ini disesuaikan untuk mencerminkan hasil aktual dan estimasi (Catatan 5 dan 6). berkala secara Allowance for impairment of loan is recognised based on the estimation of uncollectible amount, which is done collectively based on a specific percentage of the two-year-minimum historical rate of loan collectibility. This allowance is adjusted periodically to reflect actual result and estimation (Notes 5 dan 6). 4. KAS DAN SETARA KAS 4. CASH AND CASH EQUIVALENTS 31 Desember / December 31 2022 2021 Kas di Bank: PT Bank Mandiri (Persero) Tbk PT Bank Negara Indonesia (Persero) Tbk 3.301.996.025 5.601.276.696 3.390.277.752 4.054.802.745 PT Bank Syariah Indonesia (Persero) Tbk 2.696.146.884 - Cash in Banks: PT Bank Mandiri (Persero) Tbk PT Bank Negara Indonesia (Persero) Tbk PT Bank Syariah Indonesia (Persero) Tbk Jumlah Kas dan Setara Kas 11.599.419.605 7.445.080.497 Total Cash and Cash Equivalents 5. PINJAMAN KEPADA MITRA BINAAN 5. LOAN TO FOSTER PARTNERS a. Pinjaman kepada Mitra Binaan berdasarkan a. Loan to Foster Partners Classified by CD CD Regional Regional Pinjaman kepada Mitra Binaan 31 Desember / December 31 2022 2021 CD Regional I Sumatera 78.869.801.420 CD Regional II DKI Jakarta dan Banten 55.370.480.606 CD Regional III Jabar CD Regional IV Jateng dan DIY CD Regional V Jatim dan Madura CD Regional VI Kalimantan CD Regional VII Kawasan Timur Indonesia 76.436.317.366 51.630.987.720 37.392.543.608 35.632.061.349 47.494.822.387 45.264.017.160 75.285.453.474 73.376.692.454 45.652.380.063 41.866.668.190 37.864.550.413 36.063.549.428 Loan to Foster Partners CD Regional I Sumatera CD Regional II DKI Jakarta and Banten CD Regional III Jabar CD Regional IV Jateng and DIY CD Regional V Jatim and Madura CD Regional VI Kalimantan CD Regional VII Kawasan Timur Indonesia 360.270.293.667 Jumlah Penyisihan Penurunan Nilai Pinjaman (84.929.581.437) (83.373.615.274) 377.930.031.971 Total Allowance for Impairment of Loan Jumlah Pinjaman kepada Mitra Binaan - Neto 293.000.450.534 276.896.678.393 Total Loan to Foster Partners - Net 16 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 5. PINJAMAN KEPADA MITRA BINAAN (lanjutan) 5. LOAN TO FOSTER PARTNERS (continued) b. Pinjaman kepada Mitra Binaan Menurut b. Loan to Foster Partners Classified by Sector Sektor (lanjutan) (continued) Perdagangan Industri Jasa Peternakan Pertanian Perikanan Perkebunan Lainnya 31 Desember / December 31 2022 2021 202.340.741.536 192.328.394.293 77.833.442.929 80.851.746.195 59.171.986.477 56.037.409.262 11.995.501.388 11.357.901.320 8.736.387.330 7.979.585.931 8.269.562.995 7.574.587.924 3.808.826.540 4.161.211.880 3.350.145.468 2.402.894.170 Trading Industry Service Farming Agriculture Fishing Plantation Others Jumlah Penyisihan penurunan nilai pinjaman 377.930.031.971 360.270.293.667 (83.373.615.274) (84.929.581.437) Total Allowance for impairment of loan Jumlah pinjaman kepada Mitra Binaan - Neto 293.000.450.534 276.896.678.393 Total Loan to Foster Partners - Net Manajemen berpendapat bahwa saldo penyisihan penurunan nilai pinjaman cukup untuk menutup kerugian atas tidak tertagihnya pinjaman. Termasuk di dalam saldo pinjaman kepada Mitra binaan adalah saldo pinjaman tambahan. Pinjaman tambahan disalurkan untuk membiayai kebutuhan dana pelaksanaan kegiatan usaha mitra binaan yang bersifat jangka pendek. Management believes that the balance of allowance for impairment of loan is adequate to cover losses from the uncollectible loan. Included in loans to foster partner is balance of additional loans are loans. Additional distributed to finance the short-term funding requirements for the business operations. c. Pendapatan Jasa Administrasi Pinjaman c. Loan Administration Service Income Sejak tahun buku 2008 besarnya prosentase pendapatan jasa administrasi pinjaman program kemitraan terhitung berdasarkan pada ketentuan pasal 12 ayat (2) Peraturan Menteri BUMN No: PER-05/MBU/2007 tanggal 17 April 2007 sebesar 6% per tahun dari pokok pinjaman. Berdasarkan PER-09/MBU/07/2015 yang efektif tanggal 3 Juli 2015, besarnya jasa administrasi pinjaman ditetapkan sebesar 6% per tahun dari saldo pinjaman awal tahun. Setelah pemberlakuan PER-02/MBU/07/2017 yang efektif tanggal 5 Juli 2017, besarnya jasa administrasi pinjaman ditetapkan sebesar 3% per tahun dari saldo pinjaman awal tahun. Since 2008, the percentage of administration service income of loan for partnership program was based on the Decree on article 12 (2) of The SOE Ministry No: PER-05/MBU/2007 dated April 17, 2007, which is 6% per annum from the principal of the loan. Regulation of Based on PER-09/MBU/07/2015 dated July 3, 2015, administration service income was determined by 6% per annum from the opening balance of the loan. After implementation of PER-02/MBU/07/2017 dated July 5, 2017, administration service income was determined by 3% per annum from the opening balance of the loan. Berdasarkan PER-05/MBU/04/2021 yang efektif tanggal 20 April 2021, besarnya jasa administrasi pinjaman ditetapkan sebesar 6% per tahun. Based on PER-05/MBU/04/2021 dated April 20, 2021, administration service income was determined by 6% per annum. 17 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 5. PINJAMAN KEPADA MITRA BINAAN (lanjutan) 5. LOAN TO FOSTER PARTNERS (continued) c. Pendapatan Jasa Administrasi Pinjaman c. Loan Administration Service Income (lanjutan) (continued) Berdasarkan PER-06/MBU/09/2022 yang efektif tanggal 15 September 2022, besarnya jasa administrasi pinjaman ditetapkan sebesar 3% per tahun dari saldo pinjaman awal tahun. dated on PER-06/MBU/09/2022 Based September 15, 2022, administration service income was determined by 3% per annum from the opening balance of the loan. d. Penyisihan Pinjaman Kepada Mitra Binaan d. Allowance for Impairment of Loan to Foster Partners Mutasi penyisihan penurunan nilai pinjaman adalah sebagai berikut: Movement of allowance for impairment of loan is as follow: Saldo awal Penambahan Pemulihan Reklasifikasi sebagai 31 Desember / December 31 2022 2021 83.373.615.274 124.569.408.120 10.902.288.650 62.350.505.930 (46.490.504.333) (4.278.571.317) Beginning balance additional Reversal pinjaman bermasalah (5.067.751.170) (57.055.794.443) Reclassification to troubled loan Saldo akhir 84.929.581.437 83.373.615.274 Ending balance 31 Desember 2022/ December 31, 2022 Umur Pinjaman (dari jatuh tempo)/ Loan Aging (from maturity date) Saldo Pinjaman/ Loan Balance % Penyisihan/ Allowance % Akumulasi Penyisihan/ Accumulated Allowance Beban (Pemulihan) Penyisihan/ Expense (Recovery) Allowance _ Loan Quality _ Foster Partners Collective assessment Kualitas Pinjaman Mitra Binaan Dinilai secara kolektif Lancar < 30 hari/ < 30 days 272.931.204.899 0,64% 1.733.220.983 (1.102.643.915) Current Kurang lancar Diragukan Macet Sub jumlah Bermasalah Mitra Binaan BUMN Pembina lain/ Lembaga Penyalur Sub jumlah Dinilai secara individual Mitra Binaan Pinjaman Tambahan Macet Jumlah > 30 hari ≤ 180 hari > 30 days < 180 days > 180 hari ≤ 270 hari > 180 days < 270 days 17.224.907.352 6,70% 1.154.332.749 (1.298.368.754) Substandard 6.555.940.180 12,57% 824.048.165 (1.877.558.648) > 270 hari/ > 270 days 81.207.661.205 100,00% 81.207.661.205 5.834.537.480 377.919.713.636 84.919.263.102 1.555.966.163 9.220.206.183 100,00% 9.220.206.183 (26.450.000) 280.731.693.036 100,00% 280.731.693.036 (5.951.650.255) Doubtful Loss Subtotal Troubled Foster Partner Other Foster SOE/ Distributing Partners 289.951.899.219 289.951.899.219 (5.978.100.255) Sub total 10.318.335 100,00% 10.318.335 - Individual assessment Additional Loan Foster Partners Substandard 667.881.931.190 374.881.480.656 (4.422.134.092) Total 18 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 5. PINJAMAN KEPADA MITRA BINAAN (lanjutan) 5. LOAN TO FOSTER PARTNERS (continued) d. Penyisihan Pinjaman Kepada Mitra Binaan d. Allowance for Impairment of Loan to Foster (lanjutan) Partners (continued) 31 Desember 2021/ December 31, 2021 Umur Pinjaman (dari jatuh tempo)/ Loan Aging (from maturity date) Saldo Pinjaman/ Loan Balance % Penyisihan/ Allowance % Akumulasi Penyisihan/ Accumulated Allowance Beban (Pemulihan) Penyisihan/ Expense (Recovery) Allowance _ Loan Quality _ Foster Partners Collective assessment Kualitas Pinjaman Mitra Binaan Dinilai secara kolektif Lancar < 30 hari/ < 30 days 251.133.632.662 1,13% 2.835.864.898 1.715.384.658 Current Kurang lancar Diragukan Macet Sub jumlah Bermasalah Mitra Binaan BUMN Pembina lain/ Lembaga Penyalur Sub jumlah Dinilai secara individual Mitra Binaan Pinjaman Tambahan Macet Jumlah 19.966.897.402 12,28% 2.452.701.503 1.475.933.369 Substandard > 30 hari ≤ 180 hari > 30 days < 180 days > 180 hari ≤ 270 hari > 180 days < 270 days 13.786.321.543 19,60% 2.701.606.812 2.103.394.196 > 270 hari/ > 270 days 75.373.123.726 100,00% 75.373.123.726 (46.500.823.404) 360.259.975.332 83.363.296.939 (41.206.111.181) 286.683.343.291 100,00% 286.683.343.291 47.350.443.047 9.246.656.183 100,00% 9.246.656.183 (500.000) Doubtful Loss Sub total Troubled Foster Partner Other Foster SOE/ Distributing Partners 295.929.999.474 295.929.999.474 47.349.943.047 Sub total Individual assessment Additional Loan Foster Partners 10.318.335 100,00% 10.318.335 10.318.335 656.200.293.141 379.303.614.748 6.154.150.201 Loss Total 6. ASET LAIN-LAIN 6. OTHER ASSET Pinjaman Bermasalah Kepada Mitra Binaan Menurut CD Regional Pada tanggal 31 Desember 2022 dan 2021, pinjaman bermasalah yang di klasifikasikan berdasarkan CD Regional adalah sebagai berikut: Troubled Loan to Foster Partners Classified by CD Regional As of December 31, 2022 and 2021, the troubled loan which classified per CD Regional is as follow: 31 Desember / December 31 2022 2021 CD Regional I Sumatera 61.593.873.574 63.714.943.461 40.391.500.941 CD Regional II DKI Jakarta dan Banten 41.801.966.503 46.951.230.032 45.798.422.935 CD Regional III Jabar 23.997.654.788 CD Regional IV Jateng dan DIY 24.544.425.328 45.974.823.576 48.195.049.801 CD Regional V Jatim dan Madura CD Regional VI Kalimantan 28.128.613.103 28.725.805.721 CD Regional VII Kawasan Timur Indonesia 33.693.997.022 33.902.729.542 CD Corporate PT Sang Hyang Seri (Persero) (“SHS”) Baitul Mal Wal Tamwil (“BMT Hidayah”) 7.602.387.468 1.617.818.715 7.627.387.468 1.619.268.715 CD Regional I Sumatera CD Regional II DKI Jakarta and Banten CD Regional III Jabar CD Regional IV Jateng and DIY CD Regional V Jatim and Madura CD Regional VI Kalimantan CD Area VII Kawasan Timur Indonesia CD Corporate PT Sang Hyang Seri (Persero) (“SHS”) Baitul Mal Wal Tamwil (“BMT Hidayah”) Jumlah Penyisihan Pinjaman Bermasalah 289.951.899.219 Total (289.951.899.219) (295.929.999.474) Allowance for Impairment of Troubled Loan 295.929.999.474 Jumlah Pinjaman Bermasalah-Neto - 19 - Troubled Loan Distribution-Net PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 6. ASET LAIN-LAIN (lanjutan) 6. OTHER ASSET (continued) Pinjaman Bermasalah Kepada Mitra Binaan Menurut CD Regional (lanjutan) Troubled Loan to Foster Partners Classified by CD Regional (continued) Mutasi penyisihan penurunan nilai pinjaman bermasalah adalah sebagai berikut: Movement of allowance for impairment of troubled loan is as follow: Saldo awal Penambahan Pemulihan Saldo akhir 31 Desember / December 31 2022 2021 295.929.999.474 248.580.056.427 5.067.751.170 57.055.794.443 (11.045.851.425) (9.705.851.396) 289.951.899.219 295.929.999.474 Beginning balance additional Reversal Ending balance CDC telah mengajukan surat usulan permohonan No. Tel.03/KU 000/CDC-A1000000/2023 tanggal 17 Januari 2023 kepada Kementerian BUMN untuk Penghapusan Piutang Bermasalah sampai dengan 31 Desember 2022 sebesar Rp289.951.899.219. CDC has submited a letter No. Tel.03/KU 000/CDC- A1000000/2023 on January 17, 2023 to Ministry of SOE to propose Written off of Troubled Loans until December to 2022 Rp289,951,899,219. amounting 31, 7. UTANG DAN LIABILITAS LANCAR LAINNYA 7. PAYABLES AND OTHER CURRENT LIABILITIES Pada tanggal 31 Desember 2022 dan 2021, akun ini merupakan uang titipan. As of December 31, 2022 and 2021, this account represents incidental deposit. 8. KELEBIHAN PEMBAYARAN ANGSURAN 8. OVERPAYMENT OF INSTALLMENTS 31 Desember / December 31 2022 2021 Saldo Awal Penambahan Pengembalian Saldo Akhir 396.999.537 43.480.772 159.279.004 Beginning Balance 328.385.968 Additional Refund (236.788.598) (90.665.435) 203.691.711 396.999.537 Ending Balance 20 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 9. PENDAPATAN JASA ADMINISTRASI PINJAMAN 9. LOAN ADMINISTRATION SERVICE INCOME Tahun yang Berakhir pada Tanggal 31 Desember/ Year Ended December 31 2022 2021 3.043.107.021 CD Regional I Sumatera 1.970.401.968 CD Regional II DKI Jakarta dan Banten 2.355.986.902 1.411.663.557 1.389.465.716 847.352.661 CD Regional III Jabar 1.994.521.838 1.321.872.364 CD Regional IV Jateng dan DIY 2.915.537.163 1.907.598.206 CD Regional V Jatim dan Madura CD Regional VI Kalimantan 2.189.135.166 1.208.978.706 CD Regional VII Kawasan Timur Indonesia 1.594.942.770 891.594.157 CD Regional I Sumatera CD Regional II DKI Jakarta and Banten CD Regional III Jabar CD Regional IV Jateng and DIY CD Regional V Jatim and Madura CD Regional VI Kalimantan CD Regional VII Kawasan Timur Indonesia Jumlah 15.482.696.576 9.559.461.619 Total 10. PENDAPATAN BUNGA 10. INTEREST INCOME Pada tanggal 31 Desember 2022 dan 2021, akun ini merupakan pendapatan bunga atas jasa giro. As of December 31, 2022 and 2021, this account represents interest income from current account. 11. TRANSAKSI DAN SALDO DENGAN PIHAK 11. TRANSACTIONS AND BALANCES WITH BERELASI RELATED PARTIES Hubungan dan sifat saldo akun/ transaksi dengan pihak - pihak berelasi adalah sebagai berikut: The relationship and nature of account balances/ transactions with related parties were as follows: ` Hubungan/ Relation Pihak-pihak berelasi/ Related parties Transaksi/ Transactions BUMN Pembina/ Foster SOE PT Telekomunikasi Indonesia (Persero) Tbk. Beban pembinaan kemitraan/ Fostering partnership expenses Perusahaan dibawah entitas sepengendali oleh Pemerintah/ Entity under common control of the Government PT Bank Negara Indonesia (Persero) Tbk. Jasa perbankan/ Banking services Perusahaan dibawah entitas PT Bank Mandiri (Persero) Tbk. Jasa perbankan/ Banking services sepengendali oleh Pemerintah/ Entity under common control of the Government Perusahaan dibawah entitas PT Bank Syariah Indonesia (Persero) Tbk. Jasa perbankan/ Banking services sepengendali oleh Pemerintah/ Entity under common control of the Government Perusahaan dibawah entitas sepengendali oleh Pemerintah/ Entity under common control of the Government PT Sang Hyang Seri (Persero) BUMN Penyalur lain/ Other Foster SOE 21 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 11. TRANSAKSI DAN SALDO DENGAN PIHAK 11. TRANSACTIONS AND BALANCES WITH BERELASI (LANJUTAN) RELATED PARTIES (CONTINUED) Hubungan dan sifat saldo akun/ transaksi dengan pihak - pihak berelasi adalah sebagai berikut: (lanjutan) The relationship and nature of account balances/ transactions with related parties were as follows: (continued) Rincian akun dan transaksi signifikan dengan pihak - pihak berelasi adalah sebagai berikut: The details of accounts and significant transactions with related parties are as follows: Aset Kas dan Setara Kas (Catatan 4) Kas di bank PT Bank Mandiri (Persero) Tbk. PT Bank Negara Indonesia (Persero) Tbk. PT Bank Syariah Indonesia (Persero) Tbk. Pinjaman kepada BUMN Pembina Lain atau Lembaga Penyalur (Catatan 6) 31 Desember/ 31 Desember 2022 2021 5.601.276.696 3.390.277.752 3.301.996.025 4.054.802.745 Assets Cash and Cash Equivalents (Note 4) Cash in banks PT Bank Mandiri (Persero) Tbk. PT Bank Negara Indonesia (Persero) Tbk. PT Bank Syariah Indonesia 2.696.146.884 - (Persero) Tbk. 11.599.419.605 7.445.080.497 Loan to Other Foster SOE or Distributing Partners (Note 6) PT Sang Hyang Seri (Persero) Penyisihan Pinjaman Bermasalah 7.602.387.468 (7.602.387.468) 7.627.387.468 (7.627.387.468) PT Sang Hyang Seri (Persero) Allowance for Impairment of Troubled Loan Jumlah pinjaman - - Total loan Jumlah aset pada pihak berelasi 11.599.419.605 7.445.080.497 Total assets in related parties Jumlah aset 304.599.870.139 284.341.758.890 Total assets Sebagai prosentase terhadap jumlah aset 3,81% 2,62% As percentage to total assets 22 PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN 31 Desember 2022 dan Tahun yang Berakhir pada Tanggal tersebut (Disajikan dalam Rupiah) The original financial statements included herein are in the Indonesian language. PROGRAM PENDANAAN USAHA MIKRO DAN USAHA KECIL (COMMUNITY DEVELOPMENT CENTER) PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS December 31, 2022 and For the Year Ended (Expressed in Rupiah) 11. TRANSAKSI DAN SALDO DENGAN PIHAK 11. TRANSACTIONS AND BALANCES WITH BERELASI (LANJUTAN) RELATED PARTIES (CONTINUED) Pendapatan Pendapatan Jasa Giro PT Bank Negara Indonesia (Persero) Tbk. PT Bank Mandiri (Persero) Tbk. PT Bank Syariah Indonesia (Persero) Tbk. 31 Desember/ 31 Desember 2022 2021 221.034.470 96.045.980 198.159.035 85.875.409 (5.007.500) - Revenues Interest from Current Account PT Bank Negara Indonesia (Persero) Tbk. PT Bank Mandiri (Persero) Tbk. PT Bank Syariah Indonesia (Persero) Tbk. Jumlah pendapatan jasa giro 301.902.379 294.205.015 Total interest from current account Jumlah pendapatan dari pihak berelasi 301.902.379 294.205.015 Total revenues from related parties Jumlah pendapatan 15.830.613.931 9.882.327.180 Total revenues Sebagai prosentase terhadap jumlah pendapatan 1,91% 2,98% As percentage to total revenues 12. LAPORAN ARUS KAS - METODE LANGSUNG 12. STATEMENT OF CASH FLOWS - DIRECT METHOD Tahun yang Berakhir pada Tanggal 31 Desember/ Year Ended December 31 2022 2021 AKTIVITAS OPERASI Pengembalian Pinjaman dari Mitra Binaan 226.749.898.042 (372.611.905) Pembayaran Utang 217.575.755.118 (374.821.274) Penerimaan Jasa Administrasi Pinjaman 9.409.437.016 Pendapatan Bunga 294.205.015 Penyaluran Dana Pinjaman ke Mitra Binaan (237.524.200.000) (223.281.500.000) (3.165.978.773) Dana Pembinaan Kemitraan - Pengembalian Dana Pembinaan Kemitraan - 3.165.978.773 Pengembalian Kelebihan Angsuran 15.236.139.190 301.902.379 OPERATING ACTIVITIES Loan Repayments from Foster Partners Payable Payment Receipt from Loan Administration Service Interest Income Fund transferred to Foster Partners Fostering Partnership Funds Refund of Fostering Partnership Funds ke Mitra Binaan (236.788.598) (90.665.435) Refund to Foster Partners KAS NETO DITERIMA UNTUK AKTIVITAS OPERASI KENAIKAN KAS DAN SETARA KAS KAS DAN SETARA KAS PADA AWAL TAHUN KAS DAN SETARA KAS PADA AKHIR TAHUN 4.154.339.108 3.532.410.440 4.154.339.108 3.532.410.440 NET CASH FLOWS RECEIVED TO OPERATING ACTIVITIES INCREASE IN CASH AND CASH EQUIVALENTS 7.445.080.497 3.912.670.057 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 11.599.419.605 7.445.080.497 CASH AND CASH EQUIVALENTS AT END OF YEAR 23 This page is intentionally left blank ANNUAL REPORT 2022 FEEDBACK FORM PT TELKOM INDONESIA (PERSERO) TBK Thank you for your willingness to read this 2022 Annual Report. As part of an effort to perfect the contents of the following year’s reporting. We look forward to hearing from you by answering the questions below. QUESTION 1. 2. 3. 4. In your opinion, this Annual Report has provided useful information regarding various activities carried out by PT Telkom Indonesia (Persero) Tbk. SA A OTA D SD In your opinion, the material in this report including the data and information presented is easy to understand and understand. SA A OTA D SD In your opinion, the material in this report including the data and information presented is quite complete, covering all sustainability issues. SA A OTA D SD In your opinion, the material in this report including the data and information presented is reliable for decision-making. SA A OTA D SD Remarks:: SA: Strongly Agree A: Agree OTA: On the Average D: Disagree SD: Strongly Disagree 5. In your opinion, what information has been submitted in this report and is felt to be useful? a. b. c. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. In your opinion, what information has been conveyed in this report and is felt to be of little use? a. b. c. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. In your opinion, what about the display of this report both from the contents, design and layout as well as photos included? a. b. c. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. In your opinion, what information is felt to be lacking and must be completed in the upcoming Annual Report? a. b. c. Your profile Full name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age and Gender : . . . . . . . . . . .Yo. M / F (cross the unnecessary ones) Institution / Company : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Type of Institution / Company : Government NGO Industry Public Media Etc Returning forms and other matters related to the 2022 Annual Report can be submitted to: Investor Relations The Telkom Hub, Telkom Landmark Tower Lantai 39 Jl. Jend. Gatot Subroto Kav. 52, Jakarta 12710 Tel Fax E-mail Website : (6221) 521 5109 : (6221) 522 0500 : investor@telkom.co.id : www.telkom.co.id

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