{"url_path":"/sec/tlk/10-k/2026/item-10","section_key":"item-10","section_title":"Item 10 ADDITIONAL INFORMATION**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1001807/0001104659-26-062051-index.html","accession_number":"0001104659-26-062051","cik":"0001001807","ticker":"TLK","issuer_name":"PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA TBK","edgar_url":"https://www.sec.gov/Archives/edgar/data/1001807/0001104659-26-062051-index.html","primary_entity_key":"0001001807","primary_entity_name":"PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA TBK"},"word_count":17474,"has_tables":true,"body_markdown":"**ITEM 10.             ADDITIONAL INFORMATION**\n\n**A.**                         **SHARE CAPITAL**\n\nNot applicable.\n\n**B.**                         **MEMORANDUM AND ARTICLES OF ASSOCIATION**\n\n**Description of Articles of Association**\n\nOur Articles of Association are registered in accordance with Law No. 1 of 1995 on Limited Liability Companies and have been approved by Ministerial Decree No. C2-7468.HT.01.04.Th.97 of 1997. Following the enactment of the Indonesian Company Law, we amended our Articles of Association which were approved by the MoL pursuant to the Decree of the MoL No. AHU.46312.AH.01.02 of 2008 dated July 31, 2008 and registered in the State Gazette of the Republic of Indonesia No. 84 dated October 17, 2008, Supplement to State Gazette No. 20155.\n\n172\n\n[Table of Contents](#TOC)\n\nOur Articles of Association have been amended several times, the latest amendment of which primarily related to the alignment with Law Number 16 of 2025 on the Fourth Amendment to Law Number 19 of 2003 on State Owned Enterprises, which was approved by our shareholders at an Extraordinary General Meeting of Shareholders held on December 12, 2025, and restated in full pursuant to Notarial Deed No. 07 dated January 6, 2026.**The latest amendment has been notified to and registered with the MoL in its letter No. AHU-AH.01.03-0033590 dated February 5, 2026.\n\nIn accordance with Article 3 of our Articles of Association, the scope of our business activities is to provide telecommunications network and telecommunications and information services, as well as to optimize our Company’s resources in producing high quality and competitive products and services to enhance profitability and increase the value of our Company. To achieve the aforementioned objectives, we may undertake business activities that incorporate, among other things, the following:\n\n​\n\n1.\n\nMain Business\n\n​\n\n​\n\na.\n\nPlanning, building, providing, developing, operating, marketing/selling/leasing, and maintaining telecommunications and IT networks in the broadest sense with due, in accordance with the laws and regulations;\n\n​\n\n​\n\nb.\n\nPlanning, developing, providing, marketing/selling, and improving telecommunications and IT services in the broadest sense in accordance with the laws and regulations;\n\n​\n\n​\n\nc.\n\nInvesting, including equity participation, in other companies in line with and to achieve our objectives and purposes; and\n\n​\n\n​\n\nd.\n\nIn connection with the business activities specified in 1(a) and 1(b) above, our business activities include but are not limited to construction of telecommunications central construction, irrigation, communication, and other waste network construction, electrical installations, telecommunications installation, air conditioning and ventilation installation, fee-based pr contract-based wholesale trading, wholesale of computers and computer equipment, wholesale of software, wholesale of telecommunications equipment, wholesale of office and industrial machinery, spare parts and equipment, wholesale of other unclassifiable products, retail of software, retail of telecommunications equipment, publishing directories and mailing lists, publishing of software, film, video and television program production activities by the private companies, wired telecommunications activities, wireless telecommunications activities, satellite telecommunications activities, premium call services, premium SMS content services, managed call services (calling card), other value-added telephony services, internet service provider, data communication system services, internet telephony service for public purposes (ITKP), internet interconnection services (NAP), other unclassifiable information services activities, other multimedia services, video game development activities, e-commerce application activities, immersive media content programming and production activities, blockchain technology development activities, AI-based programming activities, other computer programming activities, information security consulting activities, digital identity provisioning activities, electronic certificate provision activities and services using electronic certificates, IoT consulting and design activities, computer consulting and other computer facilities management activities, IT activities and other computer services, data processing activities, hosting and its related activities, web portals and/or digital platforms with no commercial purposes, web portals and/or digital platforms with commercial purposes, retail trade of computers and its equipment, retail trade of video game equipment and the like, retail trade of office machines, retail trade of audio and video equipment in stores, other unclassifiable telecommunications, telecommunications service resale services, calibration/metrology services, and private film, video, and television programs distribution activities.\n\n173\n\n[Table of Contents](#TOC)\n\n​\n\n2.\n\nSupporting Businesses\n\n​\n\n​\n\na.\n\nProvide payment transactions and money transfer services through telecommunications and IT networks;\n\n​\n\n​\n\nb.\n\nCarry out other activities and business to optimize our resources, including the utilization of fixed and movable assets, information system facilities, education and training facilities, maintenance, and repair facilities;\n\n​\n\n​\n\nc.\n\nCooperating with other parties in order to optimize ICT resources owned by other parties in the ICT industry, in line with and to achieve the goals and objectives of our Company; and\n\n​\n\n​\n\nd.\n\nIn connection with the business activities specified in 2(a) and 2(b) above, our business activities include, but are not limited to general printing industry, residential building construction, office buildings construction, other buildings construction, electrical civil construction, civil construction of telecommunications structures for transportation infrastructure, other unclassifiable civil construction, marine, river, and air navigation construction installation services, electronic installation, plumbing installation, heating and geothermal installation, mechanical installations, other unclassifiable construction installations, interior decoration, wholesale of printing and publishing goods in various forms, wholesale trade of laboratory equipment, pharmaceutical equipment and medical devices for humans, pharmaceutical equipment and medical devices for veterinary use, retail trade of laboratory equipment, specialized retail trade of pharmaceutical goods and drugs, medical devices, perfumes, and other cosmetics, audio recording activities, special telecommunications activities for defense and security purposes, music publishing and music book activities, other monetary intermediaries, payment service provider (PJP), transportation consulting activities, industrial management consulting activities, other management consulting activities, certification services, laboratory testing services, technical installation inspection services, advertising, other related and unclassifiable reservation services, tourism information services, call center activities, other unclassifiable business support services, special event organization services, meetings, incentive travel, conference and exhibition (MICE) organizing services, private education tutoring and counseling, and computers and similar equipment repair.\n\nIn accordance with our Articles of Association and in compliance with Indonesian Company Law, we have a Board of Commissioners and a Board of Directors. These boards are separate, and no individual may be a member of both boards. Each of the Board of Directors and Board of Commissioners receives a tantiem if we surpass certain financial and operating targets, the amounts of which are determined by the shareholders at the AGMS.\n\nA member of the Board of Directors shall have no right to represent our Company if such member has a conflict of interest with our Company. To take any corporate actions in which a conflict of interest exists between the personal economic interest of a Director, a Commissioner or a principal shareholder and our Company’s economic interest, the Board of Directors must obtain the approval of a GMS with due observance of the laws and regulations in the capital markets sector. Such GMS must be attended by independent shareholders (*i.e*., those shareholders having no conflict of interest) who hold more than one-half of the total number of shares with valid voting rights held by all independent shareholders and the resolution must be passed by the affirmative votes of independent shareholders holding more than one-half of the total number of shares with valid voting rights. In passing any resolutions, the principal shareholders, the Directors, and Commissioners who have conflicts of interest in the transaction that is being decided are not entitled to give any recommendation or opinion. Any resolution passed by independent shareholders shall be confirmed by the entire quorum of the meeting to be followed by all shareholders present in the meeting, including those having conflicts of interest..\n\nOur Articles of Association require our Board of Directors to obtain the written approval of our Board of Commissioners in order to, among other things:\n\n174\n\n[Table of Contents](#TOC)\n\na.Write off our Company's assets within a certain value limit determined by the Board of Commissioners with due observance to the provisions of laws and regulations governing State Owned Enterprises, as follows:\n\n1)Write off due to the transfer/assignment of our Company's fixed assets;\n\n2)Write off due to the transfer/assignment of other Company assets;\n\n3)Write off our Company's fixed assets and/or other assets other than due to transfer/assignment, including write-offs of bad debts;\n\nb.Relinquish the right to collect or not collect bad principal receivables, interest receivables, fines, fees, and other receivables other than the principal receivables, carried out for the purpose of restructuring and/or settlement of receivables, as well as other actions to settle our Company's receivables that have been written off, either in part or in whole, within a certain value limit determined by the Board of Commissioners, provided that the write-off shall first obtain the approval of BPI Danantara in accordance with laws and regulations in the field of State Owned Enterprises;\n\nc.Encumber our Company's assets as collateral with a certain value limit determined by the Board of Commissioners;\n\nd.Bind our Company as guarantor (*borg* or *avalist*) with a certain value determined by the Board of Commissioners, with due observance to the capital market regulations;\n\ne.Receive medium-term/long-term loans and provide medium-term/long-term loans with a certain value determined by the Board of Commissioners with due observance to the capital market regulations;\n\nf.Provide loans to subsidiaries as referred to in laws and regulations governing State Owned Enterprises with a certain value limit determined by the Board of Commissioners;\n\ng.Enter into partnerships with business entities or other parties in the form of licensing agreements, management contracts, asset leases, Joint Operations (KSO), Build Operate Transfer (BOT), Build Own Transfer (BowT), Build Transfer Operate (BTO), and other similar partnerships that are not part of our Company's daily business as usual activities, with a specific value or time period determined by the Board of Commissioners;\n\nh.Make equity participation in subsidiaries, joint ventures, and/or other companies, including participation to establish subsidiaries and/or joint ventures with certain value limits determined by the Board of Commissioners, except for the purpose of rescuing receivables, with due observance to the capital market regulations;\n\ni.Decrease equity participation, including dilution, in subsidiaries, joint ventures, and/or other companies with certain value limits determined by the Board of Commissioners, except for the purpose of rescuing receivables, with due observance to the capital market regulations;\n\nj.Divest equity participation in subsidiaries, joint ventures, and/or other companies with certain value limits determined by the Board of Commissioners, except for the purpose of rescuing receivables with due observance to the capital market regulations;\n\nk.Carry out actions that constitute material transactions as defined by laws and regulations in the capital market with certain values determined by the Board of Commissioners, unless such actions constitute material transactions exempted by applicable laws and regulations in the capital markets;\n\n175\n\n[Table of Contents](#TOC)\n\nl.Carry out mergers, amalgamations, acquisitions, separations, and dissolutions of subsidiaries and joint ventures with certain values determined by the Board of Commissioners with due observance to the capital market regulations;\n\nm.Carry out investments with certain value limits and/or criteria determined by the Board of Commissioners, with due observance to the capital market regulations;\n\nn.Establish and change our Company's logo;\n\no.Establish an organizational structure one level below the Board of Directors;\n\np.Approve the establishment of foundations, organizations, and/or associations with legal entities, whether directly or indirectly related, formed by subsidiaries;\n\nq.Approve the imposition of fixed and routine costs and obligations for foundations, organizations, and/or associations with legal entities formed by subsidiaries;\n\nr.Establish guidelines and/or policies for the governance of investment activities; and\n\ns.Actions not yet stipulated in our Company's Work Plan and Budget (RKAP).\n\nThese actions may only be taken by the Board of Directors after receiving a written response from the Board of Commissioners and the holder of the highest number of Series B shares and approval from the holder of the Series A *Dwiwarna* share to: a) propose representatives of our Company as candidates for members of the Board of Directors and Board of Commissioners of joint ventures and/or subsidiaries that are state owned enterprises; b) Propose representatives of our Company as candidates for members of the Board of Directors and Board of Commissioners of certain joint ventures and/or subsidiaries that are not state owned enterprises as determined by the holder of the highest number of Series B shares.\n\nThe Board of Commissioners shall determine the limits and/or criteria for matters as contemplated in letters a, b, c, d, e, f, g, h, i, j, k, l, and m above after obtaining the approval of the Series B majority shareholders. The approval of the Board of Commissioners specifically regarding letters a, b, c, d, e, f, g, h, i, j, k, l, and m above, with certain limits and/or criteria, shall be determined after obtaining the approval of the Series A *Dwiwarna* Shareholder or the Series B majority shareholders. The actions of the Board of Directors as referred to in letter g above, to the extent necessary for the implementation of the main business activities commonly carried out in the relevant business sector, subject to the provisions of laws and regulations, do not require the approval of the Board of Commissioners and/or the GMS. The actions of the Board of Directors as referred to in letters g and h above, to the extent necessary for participating in tenders and/or implementing projects and/or fulfilling requirements and/or carrying out core business activities commonly carried out in the relevant business sector, subject to the provisions of laws and regulations, do not require the approval of the Board of Commissioners and/or the GMS. The approval of the Board of Commissioners regarding letters r and s above shall be determined after obtaining the approval of the Series B majority shareholders.\n\nActions of the Board of Directors to transfer or collateralize the assets of our Company (in one or a series of transactions, whether related to each other or not) the value of which exceed 50% of the total net assets of our Company (based on our Consolidated Financial Statements) would require approval of a GMS, except for those that are business activities of our Company as stipulated in the Articles of Association.\n\nThe Board of Directors is responsible for leading and managing our Company in accordance with our objectives and purposes and to control, preserve and manage the assets of our Company.\n\n176\n\n[Table of Contents](#TOC)\n\nOur Articles of Association do not contain any requirement for our Directors to: (i) retire by a specified age, or (ii) to own any or a specified number of shares of our Company. The rights, preferences and restrictions attaching to each class of shares of our Company in respect of specified matters are set forth below:\n\na.*Dividend rights*. Dividends are to be paid based upon our financial condition and in accordance with the resolution of the shareholders in a GMS, which will also determine the form of and time of payment of the dividend;\n\nb.*Voting rights*. The holder of each voting share is entitled to one vote at a GMS;\n\nc.*Rights to share in our**Company’s**profits*. See “— *Dividend rights*” above;\n\nd.*Rights to share in any surplus in the event of liquidation*. Shareholders are entitled to surplus in the event of liquidation in accordance with their proportion of shareholding, provided the nominal value of the common stock that they hold is fully paid-up;\n\ne.*Redemption provisions*. There are no stock redemption provisions in our Articles of Association. However, based on Article 37 of the Indonesian Company Law, we may buy back up to 10% of our issued and outstanding shares;\n\nf.*Reserved fund provisions*. We are required to set aside retained earnings in the amount of at least 20% of our issued capital to cover potential losses. If the amount in the reserved fund exceeds 20% of our issued capital, a GMS may authorize us to utilize such excess funds for the purposes of our Company;\n\ng.*Liability for further capital calls*. Our shareholders may be asked to subscribe for new shares in our Company from time to time. Such rights are to be offered to shareholders prior to being offered to third parties and may be transferred at the option of the shareholder. Our Board of Directors is authorized to offer the new shares to third parties in the event that an existing shareholder is unable or unwilling to subscribe for such new shares; and\n\nh.Our Articles of Association do not contain any provisions discriminating against any existing or prospective holder of such securities because of such shareholder owning a substantial number of shares. Additionally, our Articles of Association do not provide for staggered boards, cumulative voting or sinking a fund.\n\nAny change to the rights of shareholders requires (i) a GMS resolution with an attendance quorum of at least three-quarters of the total shares in the affected class of shares and approval by at least three-quarters of the shares in the affected class of shares present or represented at the meeting, and (ii) that the GMS be attended and the resolution be approved by the holder of the Series A Dwiwarna Share. If the attendance quorum is not met, a second meeting may be held and shall be valid and entitled to adopt resolutions if attended by at least two-thirds of the total shares in the affected class of shares present or represented at the meeting, subject to the same approval threshold.\n\nA GMS may only be convened upon the issuance of the requisite announcement by us. The Board of Directors may convene an EGMS following a written request by (i) the holder of the Series A Dwiwarna Share; (ii) one or more shareholders holding at least 1/10 (10%) of our shares in the aggregate; or (iii) the Board of Commissioners. GMS announcements are required to be published on the website of the e-RUPS provider, the Indonesia Stock Exchange website, and our corporate website, in both Bahasa Indonesia and at least one foreign language (English). An announcement of the GMS must be issued to shareholders at least 14 calendar days (excluding the date of announcement and the date of notice) prior to the notice for the GMS. The formal notice for the GMS must be issued at least 21 calendar days (excluding the date of notice and the date of the GMS) prior to the meeting. GMS meetings may also be held electronically via the Electronic General Meeting of Shareholders System (e-RUPS) provided by PT Kustodian Sentral Efek Indonesia (KSEI) through its eASY.KSEI platform, or through another e-RUPS provider approved by the OJK.\n\n177\n\n[Table of Contents](#TOC)\n\nA GMS may only be convened upon the issuance of the requisite announcement by us. The Board of Directors may convene an EGMS following a written request by (i) the holder of the Series A Dwiwarna Share; (ii) one or more shareholders holding at least 1/10 (10%) of our shares in the aggregate; or (iii) the Board of Commissioners. GMS announcements are required to be published on the website of the e-RUPS provider, the Indonesia Stock Exchange website, and our Company's website, in both Bahasa Indonesia and at least one foreign language (English). An announcement of the GMS must be issued to shareholders at least 14 calendar days (excluding the date of announcement and the date of notice) prior to the notice for the GMS. The formal notice for the GMS must be issued at least 21 calendar days (excluding the date of notice and the date of the GMS) prior to the meeting. GMS meetings may also be held electronically via the Electronic General Meeting of Shareholders System (e-RUPS) provided by PT Kustodian Sentral Efek Indonesia (KSEI) through its eASY.KSEI platform, or through another e-RUPS provider approved by the OJK.\n\nUnless otherwise specified by law or the Articles of Association, the quorum for an AGMS or EGMS requires shareholders representing more than one-half of the total shares with valid voting rights, and binding resolutions may be passed if approved by the holders of more than one-half of the shares with valid voting rights present at the GMS. If the attendance quorum is not met at the first meeting, a second meeting notice must be issued at least seven calendar days prior to the second meeting (excluding the notice date and meeting date), and the second meeting shall be valid if attended by shareholders representing at least one-third of the total shares with valid voting rights; resolutions may be passed by the affirmative vote of more than one-half of the shares with valid voting rights present. The second meeting may be held no sooner than ten calendar days and no later than 21 calendar days after the first meeting. If the quorum is not met at the second meeting, a third meeting may be held upon our application to the OJK, which shall determine the applicable attendance and resolution requirements.\n\nShareholders may vote by proxy. Electronic proxy is available through the e-RUPS system, and electronic proxies must be granted no later than one business day prior to the GMS. All resolutions are to be passed by consensus and deliberation. If consensus cannot be reached, resolutions are passed by simple majority, unless a larger majority is required by our Articles of Association. Our Articles of Association do not contain any limitations on the right of any person to own our shares or to exercise their voting rights, and Indonesian capital markets regulations do not limit share ownership in IDX-listed companies by local or foreign persons.\n\nAny merger, consolidation, acquisition, separation, or petition for our Company to be declared bankrupt, or dissolution of our Company requires (i) a GMS resolution attended by the holder of the Series A Dwiwarna Share and the other shareholders and/or their valid proxies representing at least three-quarters of the total shares with valid voting rights, and approved by the holder of the Series A Dwiwarna Share and the other shareholders and/or their valid proxies representing at least three-quarters of the total shares with valid voting rights present at the meeting; and (ii) the GMS must be attended and the resolution be approved by the holder of the Series A Dwiwarna Share. If the attendance quorum is not met, a second meeting may be held and shall be valid if attended by the holder of the Series A Dwiwarna Share and the other shareholders and/or their valid proxies representing at least two-thirds of the total shares with valid voting rights, and resolutions shall be valid if approved by the holder of the Series A Dwiwarna Share and the other shareholders and/or their valid proxies representing more than three-quarters of the total shares with valid voting rights present at the meeting. There are no other provisions in our Articles of Association that would have the effect of delaying, deferring, or preventing a change in control of our Company.\n\nUnder OJK Regulation No. 4 of 2024 on Report on Ownership or Any Change in Ownership of Shares of a Public Company and Report on Activities Involving the Pledging of Shares of a Public Company, each Director and Commissioner has an obligation to report to the OJK to their ownership and any changes in their ownership of our Company. This obligation also applies to shareholders who, directly and indirectly, own of 5% or more of our paid-up capital. Those shareholders would also have to report to OJK changes in their ownership of, or in excess of 0.5% of our paid-up capital.\n\n**Differences in Corporate Law**\n\n178\n\n[Table of Contents](#TOC)\n\nThe laws of Indonesia applicable to Indonesian limited liability companies differ from the laws applicable to U.S. corporations and their shareholders in certain respects. Set forth below is a summary of certain differences between the provisions of Indonesian laws applicable to us and the comparable provisions of the Delaware General Corporation Law relating to shareholders’ rights and protections.\n\nThis summary is not intended to be a complete discussion of the respective rights under either Delaware General Corporation law or Indonesian law.\n\n**Delaware Law**\n\n**Indonesian Law**\n\nMergers and similar arrangements\n\n​\n\nUnder the Delaware General Corporation Law (the “**DGCL**”), a merger, consolidation, or the sale, lease or transfer of all or substantially all of the assets of a corporation requires approval by the board of directors and, with certain exceptions, a majority of the outstanding shares entitled to vote thereon. The merger agreement must state, among other things, the terms of the merger and the method of carrying it out. Delaware law permits a merger agreement to contain a provision allowing for its termination by the board of directors of either corporation at any time prior to the filing of the agreement with the Delaware Secretary of State (or, if a post-filing effective time is specified, before such effective time), notwithstanding prior stockholder approval. The merger agreement may also be amended by the board of directors after stockholder approval, provided that any such amendment does not adversely affect the rights of the stockholders or change any term in the certificate of incorporation of the surviving corporation.\n\nThe DGCL provides for a “short-form” merger procedure, pursuant to which a parent corporation that owns at least 90.0% of each class of the capital stock of a subsidiary may, by a resolution of its board of directors, merge with such subsidiary without a vote by the stockholders of the subsidiary.\n\nA stockholder of a Delaware corporation participating in certain major corporate transactions, including a merger or consolidation, may, under certain circumstances, be entitled to appraisal rights. If appraisal rights are available for a proposed merger or consolidation, the corporation must provide notice of such rights to its stockholders at least 20 days prior to the stockholder meeting. A stockholder wishing to exercise appraisal rights must (i) not vote in favor of the\n\nUnder the Indonesian Company Law, a merger or consolidation may only be completed if a merger/consolidation plan, containing the prescribed elements together with the draft deed of merger or draft deed of consolidation, is approved by a general meeting of shareholders of each of the companies involved. A three-quarters vote cast at the meeting is required at a general meeting of shareholders where a quorum of three-quarters of the shares with valid voting rights is present. Before the transaction is submitted for approval to the general meeting of shareholders, the directors must publish a summary of the merger or consolidation plan in one national newspaper and make an announcement in writing to the employees at least 30 days prior to the “summoning” of the general meeting of shareholders.\n\nShareholders who do not agree with the proposed merger or consolidation will have the right to require the company to purchase their shares at the fair market value (appraisal rights). Such share repurchases by the company are limited to a maximum of 10% of its issued and paid-up capital. If the number of shares requested to be repurchased exceeds this threshold, the company is required to procure the purchase of the remaining shares by a third party.\n\nAdditional requirements are applicable for mergers or consolidations involving public companies (e.g., OJK Regulation No. 74/POJK/04/2016 on Business Merger or Business Consolidation of Public Companies) and SOE (e.g., Government Regulation No. 43 of 2005 on Merger, Consolidation, Acquisition and Change of the Legal Form of State-Owned Enterprises).\n\n​\n\n179\n\n[Table of Contents](#TOC)\n\n**Delaware Law**\n\n**Indonesian Law**\n\ntransaction, (ii) continuously hold the shares of record from the date of making the demand through the effective date of the transaction, and (iii) deliver a written demand for appraisal to the corporation before the stockholder vote is taken. If these conditions are met, the stockholder is entitled to have the “fair value” of their shares (exclusive of any value arising from the accomplishment or expectation of the merger) judicially determined by the Delaware Court of Chancery and paid in cash.\n\nShareholder’s suits\n\n​\n\nClass actions and derivative actions generally are available to shareholders of a Delaware corporation for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In such actions, the court has discretion to permit the winning party to recover attorneys' fees incurred in connection with such action.\n\nUnder the DGCL, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation.\n\nUnder the Indonesian Company Law, any shareholder has a right to file a lawsuit with the district court whose jurisdiction covers the domicile of the company if the company’s actions have caused damage to the shareholder on the ground that such actions, undertaken by virtue of a general meeting of shareholders, board of directors’ or board of commissioners’ resolution, were unfair and with no reasonable ground. Such actions must have resulted from resolutions of a general meeting of shareholders, board of directors’ meetings or board of commissioners’ meetings. Additionally, one or more shareholders holding at least 10% of the total number of issued shares with lawful voting rights are entitled to file a lawsuit with the relevant district court on behalf of the company against the board of directors or members of the board of directors and the board of commissioners or members of the board of commissioners, whose fault or negligence caused losses to the company.\n\nShareholder vote on board and management compensation\n\n​\n\nUnder the Delaware General Corporation Law, the board of directors has the authority to fix the compensation of directors, unless otherwise restricted by the certificate of incorporation or bylaws.\n\nUnder the Indonesian Company Law and MSOE Regulation No. 03/MBU/03/2023 on Organs and Humans Resources of State-Owned Enterprises (“**MSOE Regulation No. 3/2023**”), the salaries and allowances of members of the board of directors are determined by the general meeting of shareholders. Under Indonesian Company Law, the general meeting of shareholders may delegate its authority to approve\n\n180\n\n[Table of Contents](#TOC)\n\n**Delaware Law**\n\n**Indonesian Law**\n\nsuch salaries and allowances to the board of commissioners.\n\nThe salaries and allowances of members of the board of commissioners are determined by the general meeting of shareholders.\n\nFor Indonesian public companies, a remuneration and nomination committee (in practice, a committee under the board of commissioners) can assist the general meeting of shareholders in determining the amount of the remuneration of the members of the board of directors and board of commissioners. If a committee has not been formed for this purpose, the board of commissioners shall determine the remuneration of the board of directors and board of commissioners in accordance with the prevailing capital market rules. Any such amount, however, must be approved by the general meeting of shareholders.\n\nAnnual vote on board renewal\n\n​\n\nUnder the DGCL, unless directors are elected by written consent in lieu of an annual meeting, directors are elected at an annual meeting of shareholders on a date and at a time designated by or in the manner provided in the bylaws. Re-election is possible. Cumulative voting in the election of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for such a right.\n\nThe DGCL permits corporations to establish a classified board of directors. A director of a corporation with a classified board may be removed only for cause by the affirmative vote of a majority of the outstanding shares entitled to vote at an election of directors, unless the certificate of incorporation provides otherwise.\n\nUnder the Indonesian Company Law, member of the board of directors or board of commissioners is appointed by a general meeting of shareholders for a fixed duration. If the term of office has lapsed, the relevant director or commissioner can be re-appointed at a general meeting of shareholders.\n\nSpecifically for public companies, OJK Regulation No. 33 of 2014 on Board of Directors and The Board of Commissioners of Issuers or Public Companies (“**OJK Regulation No. 33/2014**”) stipulated that directors and commissioners may not be appointed for a term of more than five years. Based on MSOE Regulation No. 3/2023 (specifically for SOE), re-election is permitted, provided that the directors and commissioners have only served one term.\n\nIndemnification of directors and executive management and limitation on liability\n\n​\n\n181\n\n[Table of Contents](#TOC)\n\n**Delaware Law**\n\n**Indonesian Law**\n\nThe DGCL provides that a certificate of incorporation may contain a provision eliminating or limiting the personal liability of directors for monetary damages for breach of a fiduciary duty as a director. Effective August 1, 2022, the DGCL was amended to permit a similar provision for certain corporate officers, including the president, chief executive officer, chief operating officer, chief financial officer, chief legal officer, controller, treasurer or chief accounting officer.\n\nHowever, no provision in the certificate of incorporation may eliminate or limit the liability of a director or officer for:\n\n●\n\nany breach of the duty of loyalty to the corporation or its stockholders;\n\n●\n\nacts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; or\n\n●\n\nany transaction from which the director or officer derived an improper personal benefit.\n\nA provision exculpating directors may also not limit liability for the unlawful payment of dividends or unlawful stock purchase or redemption. Furthermore, a provision exculpating officers may not limit the liability of such an officer for any action by or in the right of the corporation, including derivative claims.\n\nA Delaware corporation may indemnify any person who was or is a party or is threatened to be made a party to any proceeding, other than an action by or on behalf of the corporation, because the person is or was a director or officer, against liability incurred in connection with the proceeding if the director or officer acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.\n\nUnless ordered by a court, any such indemnification is subject to a determination that the director or officer has met the applicable standard of conduct, which may be made:\n\nUnder the Indonesian Company Law, a member of the board of directors cannot be held liable for the company’s losses if he/she can prove that:\n\n●\n\nthe losses were not caused by his/her own fault or negligence;\n\n●\n\nhe/she acted in good faith, prudently, and in furtherance of and in accordance with the purposes of the company;\n\n●\n\nhe/she does not have any direct or indirect conflict of interest in connection with the management action which caused the loss; and\n\n●\n\nhe/she has taken actions to prevent such losses or the continuation thereof.\n\nUnder the Indonesian Company Law, the term \"*take actions to prevent such losses or the continuation thereof*\" includes obtaining sufficient information with regard to the management action that may cause the losses, including through convening a meeting of the board of directors. These principles are further expressly reinforced by state-owned enterprises under the SOE Law. Notwithstanding the foregoing, the statutory protection afforded under the Indonesian Company Law may not be available in circumstances where a member of the board of directors’ actions is taken in bad faith, involve conflicts of interest, or constitute violations of applicable laws and regulations, including in the context of derivative actions brought on behalf of the company.\n\n182\n\n[Table of Contents](#TOC)\n\n**Delaware Law**\n\n**Indonesian Law**\n\n●\n\nby a majority vote of the directors who are not parties to the proceeding, even if less than a quorum;\n\n●\n\nby a committee of such directors designated by a majority vote of such directors, even if less than a quorum;\n\n●\n\nby independent legal counsel in a written opinion if there are no such directors, or if such directors so direct; or\n\n●\n\nby the stockholders.\n\nA Delaware corporation may not indemnify a director or officer in connection with any proceeding in which the director or officer has been adjudged to be liable to the corporation unless and only to the extent that a court determines that, despite the adjudication of liability but in view of all the circumstances of the case, the director or officer is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.\n\nInsofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.\n\nA Delaware corporation may not indemnify a director or officer in connection with any proceeding in which the director or officer has been adjudged to be liable to the corporation unless and only to the extent that a court determines that, despite the adjudication of liability but in view of all the circumstances of the case, the director or officer is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.\n\nInsofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been advised that in the opinion of the SEC, such indemnification is against public policy\n\n​\n\n183\n\n[Table of Contents](#TOC)\n\n**Delaware Law**\n\n**Indonesian Law**\n\nas expressed in the Securities Act and is therefore unenforceable.\n\nDirectors’ fiduciary duties\n\n​\n\nA director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has two primary components: the duty of care and the duty of loyalty.\n\nThe duty of care requires that a director, in discharging corporate duties, act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances and in a manner the director reasonably believes to be in the best interests of the corporation. Under this duty, a director must inform themselves of all material information reasonably available regarding a significant transaction.\n\nThe duty of loyalty requires that a director act in a manner the director reasonably believes to be in the best interests of the corporation and its stockholders. A director must not use their corporate position for personal gain or advantage. This duty prohibits self-dealing and mandates that the best interest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder that is not shared by the stockholders generally.\n\nIn general, the actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. This is known as the business judgment rule. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented, a director must prove the “entire fairness” of the transaction to the corporation, which requires a showing of both fair dealing (procedural fairness) and fair price (substantive fairness). \n\nUnder the Indonesian Company Law, the board of directors is responsible for the management of the company and must act in good faith. The board of directors must act in the best interest of the company and in accordance with the company’s purposes and objectives. The board of directors also not allowed to put him/herself in a position that his/her interests conflicts with their duty to the company or stakeholders.\n\n​\n\nDirector action by written consent\n\n​\n\n184\n\n[Table of Contents](#TOC)\n\n**Delaware Law**\n\n**Indonesian Law**\n\nUnder the DGCL, unless otherwise restricted by the certificate of incorporation or bylaws, any action required or permitted to be taken at a meeting of the board of directors may be taken without a meeting if all members of the board consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board.\n\nUnder the Indonesian Company Law, a director may undertake certain legal action upon obtaining approval from general meeting of shareholders. Furthermore, Indonesian Company Law also allows a company’s article of association to grant authority to the board of commissioners to provide approval to the board of directors for certain legal actions.\n\nShareholder action by written consent\n\n​\n\nUnder the DGCL, unless otherwise restricted by the certificate of incorporation or bylaws, any action required or permitted to be taken at a meeting of the board of directors may be taken without a meeting if all members of the board consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board.\n\n​\n\nShareholders of an Indonesian limited liability company may only exercise their voting rights in a general meeting of shareholders and may not act by written consent. Alternatively, voting rights may also be exercised by way of a written resolution provided that such resolution is signed by all of the shareholders of the company.\n\nShareholder proposals\n\n​\n\nUnder the DGCL, an annual meeting of stockholders must be held for the election of directors. While the DGCL does not grant stockholders a statutory right to bring any proposal before an annual meeting, it provides that any other proper business may be transacted at the annual meeting. A stockholder’s ability to submit proposals or director nominations at an annual meeting is generally governed by the corporation’s certificate of incorporation and bylaws, which typically include advance notice provisions requiring stockholders to provide timely notice and certain information regarding the proposed business or nomination.\n\nThe DGCL provides that a special meeting of stockholders may be called by the board of directors or by such other person or persons as may be authorized by the certificate of incorporation or the bylaws. The right of stockholders to call a special meeting must be explicitly granted in the certificate of incorporation or bylaws.\n\nUnder the Indonesian Company Law, one or more shareholders holding at least 10% of the total number of issued voting shares, unless the company’s articles of association call for a smaller number of voting shares, are entitled to request that a general meeting of shareholders be convened by the board of directors. If the board of directors fails to convene the general meeting of shareholders, shareholders are entitled to request the board of commissioners to convene a general meeting of shareholders.\n\nIf the board of directors or the board of commissioners (as the case may be) fails to convene a general meeting of shareholders as explained above, the shareholders may file an application with the district court having jurisdiction over the domicile of the company to allow them to call and convene a general meeting of shareholders.\n\nCumulative voting\n\n​\n\n185\n\n[Table of Contents](#TOC)\n\n**Delaware Law**\n\n**Indonesian Law**\n\nUnder the DGCL, cumulative voting in the election of directors is not permitted unless a corporation’s certificate of incorporation specifically provides for such a right.\n\nUnder the Indonesian Company Law, cumulative voting is not permitted for the election of directors.\n\nRemoval of directors\n\n​\n\nUnder the DGCL, a director may be removed from office, with or without cause, by the affirmative vote of the holders of a majority of the outstanding shares entitled to vote at an election of directors. In the case of a corporation with a classified board of directors, however, directors may be removed only for cause, unless the certificate of incorporation provides otherwise.\n\nUnder the Indonesian Company Law, a director may be dismissed at any time and must be approved by the general meeting of shareholders, provided that the causes for the dismissal are stated. Such a general meeting of shareholders must be attended by the holders of more than one-half of the total number of the company’s issued voting shares, and the decision must be approved by the holders of more than one-half of the total votes validly cast at the meeting.\n\n​\n\nTransactions with interested shareholders\n\n​\n\nThe DGCL generally prohibits a corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following the date that such person becomes an interested stockholder. An interested stockholder is generally defined as a person or group who owns 15.0% or more of the corporation’s outstanding voting stock or is an affiliate or associate of the corporation and was the owner of 15.0% or more of the corporation’s outstanding voting stock at any time within the three-year period immediately preceding the date on which it is sought to be determined whether such person is an interested stockholder.\n\nThis prohibition does not apply if:\n\n●\n\nprior to the date the person became an interested stockholder, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;\n\n●\n\nupon consummation of the transaction which resulted in the stockholder becoming an\n\nFor Indonesian public companies, affiliated party transaction and conflict of interest transaction rules may apply to transactions between public companies and any of their principal shareholders (where a “principal shareholder” is defined as the owner, directly or indirectly, of at least 20% of the outstanding shares in a public company) or “controlling persons” (*pengendali*) (defined as persons who (i) own more than 50% of the issued and paid-up shares in a company or (ii) have the ability to determine, directly or indirectly, in whatsoever manner, the management and/or policies of a company).\n\nAffiliated Party Transaction\n\nAn affiliated party transaction is defined as any activity or transaction conducted by a public company or a controlled company: (i) with an affiliate (a category defined under Indonesian capital market rules which includes principal shareholders) of the public company or an affiliate of a member of the board of directors, the board of commissioners, a principal shareholder or a controlling person (pengendali) of such public company, or (ii) in the interest of an affiliate of a member of the board of directors, the board of\n\n186\n\n[Table of Contents](#TOC)\n\n**Delaware Law**\n\n**Indonesian Law**\n\ninterested stockholder, the interested stockholder owned at least 85.0% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or\n\n●\n\non or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.\n\ncommissioners, a principal shareholder or a controlling person (pengendali) of such public company.\n\nAffiliated party transactions must be, among other things, in compliance with the public company’s internal policy governing related party transactions, disclosed to the public, reported to the relevant authority, and supported by a fairness opinion issued by a registered independent appraiser, unless it is an exempt transaction.\n\nConflict of Interest Transaction\n\nA conflict of interest is defined as the difference between the economic interests of a public company and the personal economic interests of its directors, commissioners, principal shareholders or controlling persons (pengendali), which may cause losses to such company. In practice, fairness opinions by a registered independent appraiser are used to assess whether a transaction may be affected by a conflict of interest. By law, OJK has discretion to determine if certain affiliated party transactions involve any conflict of interest, and would therefore require the approval of independent shareholders and disclosed the related information to the public, unless exempted.\n\nIf the transaction between the public company and a principal shareholder is deemed a conflict-of-interest transaction, the public company needs to, among other things, obtain the approval of its independent shareholders in a general meeting of shareholders, unless exempted. Independent shareholders are defined as shareholders having no conflict of interest in respect of the transaction, and the independent shareholders must make a declaration to that effect and is not a member of the board of directors, a member of the board of commissioners, a principal shareholder or a controlling person (*pengendali*) (or an affiliate of the foregoing persons or entities) of such public company.\n\nDissolution; Winding up\n\n​\n\nUnder the DGCL, the dissolution of a corporation is typically initiated by its board of directors. If the board adopts a resolution to dissolve, the proposal must be submitted to the stockholders for approval. The\n\nDissolution of a company must be approved by a general meeting of shareholders; such meeting has to be attended by shareholders holding at least three-quarters of the total number of outstanding shares in the company\n\n187\n\n[Table of Contents](#TOC)\n\n**Delaware Law**\n\n**Indonesian Law**\n\ndissolution must then be approved by the holders of a majority of the corporation’s outstanding stock entitled to vote thereon. A Delaware corporation may, however, include in its certificate of incorporation a provision requiring a greater vote (i.e., a supermajority) to approve a dissolution.\n\nAlternatively, unless otherwise provided in the certificate of incorporation, a dissolution may be approved without action by the board of directors if all stockholders entitled to vote thereon consent in writing to the dissolution.\n\ncarrying valid voting rights. The approval must be obtained by a majority of at least three-quarters of the total votes validly cast at the meeting.\n\nSale of assets\n\nUnder the DGCL, a sale, lease or exchange of all or substantially all of a corporation’s assets requires approval by the corporation’s stockholders. The process must be initiated by the board of directors, which must adopt a resolution declaring that the proposed transaction is advisable. The proposal must then be submitted to the stockholders for approval, which requires the affirmative vote of the holders of a majority of the outstanding stock of the corporation entitled to vote thereon.\n\n​\n\nUnder Indonesian Company Law, shareholder approval must be obtained for the transfer of assets valued at more than 50% of the company’s net assets in one or more transactions, except for transfers made in the ordinary course of business activities.\n\nVariation of rights of shares\n\n​\n\nUnder the DGCL, a Delaware corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise.\n\nThe Indonesian Company Law allows companies to issue different classes of shares. Varying rights of existing shares or issuing new classes of shares with different rights requires amending the company’s articles of association. Such amendment must be approved by a general meeting of shareholders.\n\nRedemption of shares\n\n​\n\nUnder the DGCL, a corporation may issue shares of stock that are redeemable at the option of the corporation, at the option of the holder, or upon the happening of a specified event. Such stock may be made redeemable for cash, property, or rights, including securities of the same or another corporation, as specified in the certificate of incorporation or in a\n\nThe Indonesian Company Law stipulates that the redemption of shares applies to shares that have been repurchased by the company or to shares classified as redeemable shares. The Indonesian Company Law imposes a restriction whereby the redemption of repurchased shares shall not cause the company’s net\n\n188\n\n[Table of Contents](#TOC)\n\n**Delaware Law**\n\n**Indonesian Law**\n\nresolution of the board of directors providing for the issuance of such stock.\n\nHowever, the DGCL provides that no redeemable common stock may be issued by a corporation unless the corporation has outstanding at least one class of common stock that is not subject to redemption. Furthermore, a corporation may not redeem all of its outstanding common stock unless it has outstanding at least one class of non-redeemable stock with full voting powers.\n\nassets to be less than the total amount of issued capital plus statutory reserves that have been set aside.\n\nAmendment of governing documents\n\n​\n\nUnder the DGCL, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.\n\nTo amend the articles of association of an Indonesian limited liability company, a general meeting of shareholders is required. Unless the existing articles of association stipulate a higher quorum, a general meeting of shareholders can be held if attended by shareholders representing at least two-thirds of the total issued voting shares. The general meeting of shareholders may adopt valid resolutions with affirmative votes of at least two-thirds of the total votes validly cast at the meeting. For public companies, affirmative votes representing more than two-thirds of the total votes validly cast in the meeting are required.\n\nInspection of books and records\n\n​\n\nUnder the DGCL, any stockholder, upon written demand under oath stating a proper purpose, has the right to inspect for any proper purpose, and to make copies and extracts from:\n\n●\n\nthe corporation’s stock ledger, a list of its stockholders, and its other books and records; and\n\n●\n\na subsidiary’s books and records, to the extent that the corporation has actual possession and control of such records and the corporation could obtain such records through the exercise of control over such subsidiary.\n\nExamination of documents and information pertaining to the company may be requested for the purpose of obtaining data or information whether a director’s or a commissioner’s unlawful act is suspected to have caused losses to the company, its shareholders or third parties. An application must be made to the district court that has jurisdiction over the domicile of the company. The application requesting the right to examine the company must be made in good faith and based on fair reasoning.\n\n​\n\n189\n\n[Table of Contents](#TOC)\n\n**Delaware Law**\n\n**Indonesian Law**\n\nA proper purpose is defined in the DGCL as a purpose reasonably related to the demanding stockholder’s interest as a stockholder. Where a stockholder seeks to inspect the stock ledger or list of stockholders, the burden of proof is on the corporation to establish that the inspection is sought for an improper purpose. Where the stockholder seeks to inspect other books and records, the stockholder has the burden of proof to establish that the inspection is sought for a proper purpose.\n\nPayment of dividends\n\n​\n\nUnder the DGCL, the board of directors may authorize and declare dividends without stockholder approval, subject to any restrictions contained in the corporation’s certificate of incorporation. The DGCL provides that dividends may be paid either:\n\n●\n\nout of the corporation’s surplus; or\n\n●\n\nif there is no surplus, out of the corporation’s net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year (the “nimble dividend”).\n\nA dividend may not be paid out of net profits, however, if the capital of the corporation is less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets.\n\nSeparately, stockholder approval is required to amend the certificate of incorporation to increase the number of authorized shares of capital stock. Once stock is authorized, the board of directors may generally approve the issuance of such shares without further stockholder approval, unless such approval is required by the certificate of incorporation or applicable stock exchange rules.\n\nIndonesian Company Law provides that dividends can be paid to shareholders from the company’s cumulative net profits (after deductions for allocation to the reserve fund). If a loss is booked by the company in a preceding fiscal year and cannot be covered by the reserve fund, such loss should be carried forward and in the current fiscal year, the company will still be deemed to be making a loss if this carried over loss cannot be covered by the current fiscal year’s profit. Under such circumstances, the company is not be able to distribute dividends from profits it earned in the current fiscal year.\n\nBefore the company pays dividends, the company must reserve its profits until it reaches an amount equal to at least 20% of the company’s subscribed and paid-up capital. This means that if the company already has a compulsory reserve, the rest of the accumulated net profit can be distributed as dividends.\n\nInterim dividends may also be distributed, provided that:\n\n●\n\nthe company’s articles of association allow it;\n\n●\n\nthe amount of the company’s net profit exceeds the amount of the issued and paid-up capital plus the reserve fund; and\n\n●\n\nthe distribution of the interim dividends will neither cause the company to be unable to pay its obligations to its creditors, nor disrupt the company’s operations.\n\n190\n\n[Table of Contents](#TOC)\n\n**Delaware Law**\n\n**Indonesian Law**\n\nCreation and issuance of new shares\n\n​\n\nUnder the DGCL, a corporation’s authority to issue shares of capital stock is a two-step process involving the authorization of shares and the subsequent issuance of such authorized shares.\n\nFirst, the maximum number of shares that a corporation is authorized to issue must be specified in its certificate of incorporation. Increasing the number of authorized shares requires an amendment to the certificate of incorporation, which must be approved first by a resolution of the board of directors and then by the affirmative vote of the holders of a majority of the corporation’s outstanding stock entitled to vote.\n\nSecond, once a sufficient number of shares is authorized, the board of directors generally has the authority to issue shares from time to time on such terms and for such consideration as it may determine, without further stockholder approval, unless such approval is required by the certificate of incorporation or applicable stock exchange rules\n\nIssuance of new shares in an amount that is still within the company’s authorized capital must be approved by a general meeting of shareholders attended by shareholders representing more than one-half of the total number of issued voting shares in the company, and the decision must be approved by shareholders representing more than one-half of the total votes validly cast at the meeting.\n\nIssuance of new shares in an amount that exceeds the company’s authorized capital must be approved by a general meeting of shareholders attended by shareholders representing at least two-thirds of the total number of issued voting shares. The general meeting of shareholders may adopt valid resolutions with affirmative votes representing at least two-thirds of the total votes validly cast at the meeting (or more than two-thirds for public companies).\n\nIn general, the issuance of new shares must also be accompanied by the issuance of pre-emptive rights to existing shareholders. However, for public companies, under OJK Regulation No. 32/POJK.04/2015 on Capital Increases of Public Companies with the Issuance of Pre-emptive Rights, as amended by OJK Regulation No. 14/POJK.04/2019, and under certain conditions, the issuance of shares can be carried out without issuing pre-emptive rights, provided that the issuance of shares must not be in excess of 10% of the issued and paid-up capital of the company, among other things. In addition, unless certain exemptions apply, prior approval by the independent shareholders is generally required for the issuance of new shares without pre-emptive rights.\n\nAnti-takeover measures****\n\n​\n\nUnder the DGCL the certificate of incorporation of a corporation may give the board of directors the right to issue new classes of preferred stock with voting, conversion, dividend distribution, and other rights to be determined by the board at the time of issuance, which could prevent a takeover attempt and thereby preclude\n\nThe Indonesian Company Law does not provide for a prohibition on takeovers, but rather emphasizes that the act of acquiring shares or companies must take into account the interests of the public and fair competition, to prevent the possibility of a monopoly that is detrimental to the public.\n\n191\n\n[Table of Contents](#TOC)\n\n**Delaware Law**\n\n**Indonesian Law**\n\nshareholders from realizing a potential premium over the market value of their shares.\n\nIn addition, Delaware law does not prohibit a corporation from adopting a stockholder rights plan, or “poison pill,” which could prevent a takeover attempt and also preclude shareholders from realizing a potential premium over the market value of their shares.\n\n​\n\n**C.**                         **MATERIAL CONTRACTS**\n\nIn 2023, in line with our FMC initiative, we entered into the following contracts with Telkomsel to combine our fixed broadband and mobile broadband services into a single business entity, by transferring a portion of our assets and liabilities allocated to the IndiHome business segment to Telkomsel:\n\n●Wholesale Agreement between Telkom and Telkomsel dated April 6, 2023 (the “**Wholesale Agreement**”);\n\n●Fixed Broadband Core Transition Services Agreement between Telkom and Telkomsel dated April 6, 2023 (the “**Fixed Broadband Core TSA**”);\n\n●IT System Transition Services Agreement between Telkom and Telkomsel dated April 6, 2023 (the “**IT System TSA**”); and\n\n●Deed of Spin-off of IndiHome Business Segment by Telkom into Telkomsel dated June 27, 2023 (the “**Deed of Transfer**”).\n\nThe Wholesale Agreement sets forth the terms and conditions of Telkom’s provision of infrastructure, devices, professional services, and network capacity to Telkomsel for an initial period of five years commencing on the Effective Date (as defined therein) of the Wholesale Agreement, in respect of Telkomsel’s IndiHome customers. Such services shall include connectivity and transport to deliver fixed broadband and IPTV, voice service, and service level agreement, as described in Article 3 of this Agreement.\n\nThe IT System TSA sets forth the terms and conditions of Telkom’s provision of transitional IT system services to Telkomsel for its IndiHome service (fixed broadband, IPTV, and voice) for an initial period of two years commencing on the Effective Date (as defined therein) of the IT System TSA. Such services shall include the IT service (provision of service and platform maintenance, technical operations, support and management, application enhancement/expansion, audit and compliance, system and data migration, and coordination and reporting) and billing and collecting system operation (billing and collection operation support, revenue assurance, and fraud management), as described in Article 3 of this Agreement.\n\nThe Fixed Broadband Core TSA sets forth the terms and conditions of Telkom’s provision of transitional fixed broadband core services to Telkomsel for its IndiHome service (fixed broadband, IPTV, and voice) for an initial period of two years commencing on the Effective Date (as defined therein) of the Fixed Broadband Core TSA. Such services shall include the provision of operational equipment and services & deliverables (technical support, supporting tools, and reporting and performance evaluation), as described in Article 3 of this Agreement.\n\n192\n\n[Table of Contents](#TOC)\n\nThe Deed of Transfer sets forth the terms and conditions of the transfer of the IndiHome business segment from Telkom to Telkomsel, which involved the transfer of assets and liabilities associated with IndiHome from Telkom to Telkomsel, against which Telkomsel will issue new shares to Telkom. Telkom has disclosed the IndiHome Integration to the public, its employees, and creditors, in line with applicable laws, regulations, and the articles of association of the respective parties involved.\n\n**D.**                         **EXCHANGE CONTROLS**\n\nCurrently, Indonesia has limited foreign exchange controls. The Indonesian Rupiah has been, and in general is, freely convertible. However, in order to maintain the stability of the Indonesian Rupiah and prevent utilization of the Indonesian Rupiah for speculative purposes by non-residents, BI has introduced regulations to restrict the movement of Indonesian Rupiah from (i) banks within Indonesia to offshore banks or to an offshore branch or office of an Indonesian bank, and (ii) investments denominated in Indonesian Rupiah with foreign parties and/or Indonesian parties domiciled or permanently residing outside Indonesia (without underlying trade or investment reasons), both of which thereby limit offshore trading to existing sources or liquidity. Furthermore, under BI Regulation No. 21/15/PBI/2019 on the Supervision of Foreign Exchange Activities Between Banks and Customers, (“**PBI 21/15/PBI/2019**”), any outgoing transfer from Indonesia to offshore in foreign currency (non-Rupiah) exceeding US$100,000 or its equivalent by any party through an Indonesian bank (save for transfers of a party’s own bank deposit to its own offshore bank account) must be supported by valid underlying and supporting documentation as prescribed in PBI 21/15/PBI/2019. Such documentation includes copies of import duty (*pemberitahuan pabean impor*), letters of credit and invoices. The maximum amount of outgoing transfer must not exceed the amount stated in the supporting documentation plus 2.5%. In addition, BI has the authority to request information and data concerning foreign currency activities of all people and legal entities that are either domiciled in Indonesia or who plan to reside in Indonesia for at least one year.\n\nBI Regulation No. 21/2/PBI/2019 on Reporting of Foreign Exchange Activities enacted on January 9, 2019, requires bank institutions, non-bank financial institutions, non-financial institutions, state/regional-owned companies, private companies, business entities and individuals to submit a report to BI on their foreign exchange activities. The report must include, among other things, information relating to (i) trade activities in goods, services and other transactions between Indonesian residents and non-residents of Indonesia, (ii) details of any offshore loans and/or risk participation transactions entered into and the supporting documents of the offshore loans such as loan agreements, (iii) details of plans in relation to the withdrawal and/or repayment of offshore loans and/or risk participation transactions, (iv) details of realization in relation to the withdrawal and/or repayment of offshore loans and/or risk participation transactions, (v) the entity’s position with respect to, or changes in, its offshore financial assets, offshore financial liabilities and/or risk participation transactions, and (vi) plans in relation to the incurrence of new offshore loans and/or amendments to existing offshore loans and/or risk-participating transactions.\n\nThe foreign exchange traffic report must be submitted to BI no later than the fifteenth day of the subsequent month. In the event that a correction must be made, the correction must be submitted no later than the twentieth day of the reporting month. Failure to submit the foreign exchange report is punishable in the form of a written warning to the borrower. BI may also issue a notice to the authorities, offshore lenders and/or the parent company of the borrower with respect to non-compliance.\n\nPursuant to Presidential Decree No. 59 of 1972 on the Acceptance of Foreign Credit, as partially revoked by Presidential Regulation No. 86 of 2006 on Granting of Government Guarantees for the Acceleration of the Development of Coal-Powered Power Plants, we are required to obtain approval from the MoF prior to entering into foreign commercial loans, in relation to which MoF may request additional documents from time to time as part of the approval process required before undertaking any foreign commercial loans. We are also required to submit periodic reports to the MoF during the term of such foreign commercial loans. Following the disbanding of the Foreign Commercial Loan Coordination Team (*Tim Pinjaman Komersial Luar Negeri*), a Government body that reviewed lending from offshore lenders, in 2020, and pending the issuance of the relevant implementing regulations, there is uncertainty as to the MoF’s approval process and how periodic reports on foreign commercial loans will be handled.\n\n193\n\n[Table of Contents](#TOC)\n\n**E.**                         **TAXATION**\n\nThe following summary contains a description of the principal Indonesian and United States federal income tax consequences of the purchase, ownership, and disposition of ADSs or shares of common stock. This summary does not purport to be a complete description of all of the tax considerations that may be relevant to a decision to acquire, own, or dispose of ADSs or shares of common stock.\n\nInvestors should consult their tax advisors about the Indonesian and United States federal, state, and local tax consequences to them of the acquisition, ownership, and disposition of ADSs or shares of common stock.\n\n**Indonesian Taxation**\n\nThe following is a summary of the principal Indonesian tax consequences of the ownership and disposition of common stock or ADSs to a non-resident individual or non-resident entity that holds common stock or ADSs (a “**Non-Indonesian Holder**”). A “non-resident individual” is a foreign national individual who does not reside in Indonesia and is not physically present in Indonesia for more than 183 days within a 12-month period, or an Indonesian citizen who is residing outside of Indonesia for more than 183 days within a 12-month period and fulfills certain requirements on her or his place of residency, main activities, habitual abode, tax status and/or other requirements, during which period such non-resident individual receives income in respect of the ownership or disposition of common stock or ADSs and a “non-resident entity” is a corporation or a non-corporate body that is established, domiciled or organized under the laws of a jurisdiction other than Indonesia and does not have a fixed place of business or otherwise conducts business or carries out activities through a permanent establishment in Indonesia during an Indonesian tax year in which such non-resident entity receives income in respect of the ownership or disposition of common stock or ADSs. In determining the residency of an individual or entity, consideration will be given to the provisions of any applicable double taxation treaty to which Indonesia is a party.\n\nDividends\n\nDividends declared by us out of retained earnings and distributed to a Non-Indonesian Holder in respect of common stock or ADSs are subject to Indonesian withholding tax, which, as of the date of this annual report on Form 20-F, is at the rate of 20%, on the amount of the distribution (in the case of cash dividends) or on the shareholders proportional share of the value of the distribution. A lower rate provided under double taxation treaties may be applicable, provided the recipient is able to comply with the following strict requirements:\n\n​\n\n1.\n\nIf the provisions under the tax treaty is different from those under Indonesian Income Tax Law.\n\n​\n\n2.\n\nThe income recipient is not an Indonesian tax resident.\n\n​\n\n3.\n\nThe non-resident income recipient is an individual or an entity who is a tax resident of the country under the concerned tax treaty partner.\n\n​\n\n4.\n\nThe non-resident income recipient submits a certificate of domicile that meets with the following administrative requirements and certain other requirements:\n\n​\n\n​\n\na.\n\nThe administrative requirements to be fulfilled by the non-resident income recipient in order to apply the tax treaty are as follows:\n\n​\n\n​\n\n​\n\n1.\n\nUses Form DGT (Indonesian Directorate General of Taxes Form);\n\n​\n\n​\n\n​\n\n2.\n\nthe form must be filled in correctly, completely, and clearly by the non-resident income recipient;\n\n194\n\n[Table of Contents](#TOC)\n\n​\n\n​\n\n​\n\n3.\n\nthe form must be signed by the non-resident income recipient or equivalent mark/stamp as normally used in its country;\n\n​\n\n​\n\n​\n\n4.\n\nthe form must be signed by the authorized official of the treaty country where the non-resident income recipient resides or equivalent mark/stamp as normally used;\n\n​\n\n​\n\n​\n\n5.\n\nthere is a statement made by the non-resident income recipient stating that there is no tax treaty abuse;\n\n​\n\n​\n\n​\n\n6.\n\nthere is a statement that the non-resident income recipient is the Beneficial Owner in case it is required by the tax treaty;\n\n​\n\n​\n\n​\n\n7.\n\nthe form must be used for the period stated in Form DGT; and\n\n​\n\n​\n\n​\n\n8.\n\nthe signing and marking by the competent tax authority officer must be done in Part II of Form DGT.\n\n​\n\n​\n\nb.\n\nCertain other requirements are that the certificate of domicile must explain the following information:\n\n​\n\n​\n\n​\n\n1.\n\nThere are relevant economic motives in relation to the establishment of the entity;\n\n​\n\n​\n\n​\n\n2.\n\nthe entity has its own management to conduct business and the management has independent discretion;\n\n​\n\n​\n\n​\n\n3.\n\nthe entity has sufficient assets to conduct business other than the assets generating income from Indonesia;\n\n​\n\n​\n\n​\n\n4.\n\nthe entity has sufficient and qualified personnel to conduct business; and\n\n​\n\n​\n\n​\n\n5.\n\nthe entity has business activities other than receiving dividends, interests, and/or royalties from Indonesia.\n\n​\n\n5.\n\nThere is no tax treaty abuse. To meet this condition, the non-resident income recipient shall comply with the requirements below:\n\n​\n\n​\n\na.\n\nIf the non-resident income recipient is an individual, he or she does not act as an agent or nominee; or\n\n​\n\n​\n\nb.\n\nIf the non-resident income recipient is an entity, it is required to:\n\n​\n\n​\n\n​\n\n1.\n\nhave economic substance in the establishment of the entity or the implementation of the transaction;\n\n​\n\n​\n\n​\n\n2.\n\nhave a legal form that reflects the economic substance in the establishment of the entity or the implementation of the transaction;\n\n​\n\n​\n\n​\n\n3.\n\nhave business activities which are managed by its own management and the management has sufficient authority to carry out the transactions (*i.e.*, has independent discretion);\n\n​\n\n​\n\n​\n\n4.\n\nhave fixed assets and non-fixed assets (other than the assets generating income from Indonesia), which are adequate and sufficient to conduct business activities in that treaty partner country;\n\n​\n\n​\n\n​\n\n5.\n\nhave sufficient employees with the expertise and certain skills in accordance with its line of business;\n\n​\n\n​\n\n​\n\n6.\n\nhave activities or an active business other than only receiving income in the form of dividends, interests, or royalties from Indonesia; and\n\n195\n\n[Table of Contents](#TOC)\n\n​\n\n​\n\n​\n\n7.\n\nthere is no arrangement of transactions either directly or indirectly with the objective to obtain benefits from implementation of a tax treaty, such as:\n\n- reduction of tax burden; and/or\n\n- double non-taxation in any country or jurisdiction;\n\nwhich contradicts the purpose and objectives of the double tax avoidance agreement.\n\n​\n\n6.\n\nThe non-resident income recipient is the beneficial owner of the income as required by the concerned tax treaty. The requirements for a beneficial owner are as follows:\n\n​\n\n​\n\na.\n\nIf the non-resident income recipient is an individual, he or she does not act as an agent or nominee; or\n\n​\n\n​\n\nb.\n\nIf the non-resident income recipient is an entity, it should comply with the following requirements:\n\n​\n\n​\n\n​\n\n1.\n\nIt does not act as an agent, nominee, or conduit;\n\n​\n\n​\n\n​\n\n2.\n\nIt must have control in using or enjoying funds, assets, or rights that can generate income from Indonesia;\n\n​\n\n​\n\n​\n\n3.\n\nNo more than 50% of the total non-consolidated income is used to fulfill obligations to other parties;\n\n​\n\n​\n\n​\n\n4.\n\nIt bears the risks of assets, capital, and/or liabilities; and\n\n​\n\n​\n\n​\n\n5.\n\nIt does not have written or unwritten obligation to provide part or all of the income derived from Indonesia to another party.\n\nCapital Gains\n\nThe sale or transfer of common stock through the IDX is subject to a final withholding tax at the rate of 0.1% of the gross value of the transaction. The broker executing the transaction is obligated to withhold such tax. The sale or transfer of founder shares through the IDX under current Indonesian tax regulations, be subject to additional income tax if the 0.5% final income tax has not been settled after the initial public offering.\n\nSubject to the promulgation of implementing regulations, the estimated net income received or accrued from the sale of movable assets in Indonesia, which may include common stock not listed on the IDX or ADSs, by a Non-Indonesian Holder (with the exception of the sale of assets under Article 4 paragraph (2) of the Law No. 7 of 1983 on Income Tax, as last amended by Job Creation Law 2023) may be subject to Indonesian withholding tax at the rate of 20%.\n\nThere is no specific tax regulation on the sale of listed shares outside the IDX. If the transfer of listed shares outside the IDX by a non-resident taxpayer is considered as the transfer of unlisted shares by a non-resident taxpayer, then general tax regulation will be applied, which is, withholding tax of 5% of the sales price (or may be subject to the double taxation treaty) will be applicable.\n\n196\n\n[Table of Contents](#TOC)\n\nUnder Indonesian tax laws, a purchaser or Indonesian broker is required to withhold tax on payment of the purchase price for common stock or ADSs through the IDX. Theoretically, that payment may be exempt from Indonesian withholding or other Indonesian income tax under applicable double taxation treaty to which Indonesia as a party (including the United States-Indonesia double taxation treaty). However, except for the sale or transfer of shares in a non-public company, the current Indonesian tax regulations do not provide specific procedures for the application of the tax treaty from the proceeds of such sale. To take advantage of the double taxation treaty relief, Non-Indonesian Holders may need to fulfill certain requirements including making a specific application accompanied by a specific form which is set by the Indonesian Tax Office as a Certificate of Residency and filled in by the recipient of the income and validated by the competent authority of the country where the recipients are resident. The original Certificate of Residency that has been validated by the competent authority must be provided to the custodian that will forward it to the withholding tax agent.\n\nStamp Duty\n\nSince January 1, 2021, pursuant to Law No. 10 of 2020 on Stamp Duty (“**Law No. 10/2020**”), the nominal amount of the Indonesian stamp duty is Rp10,000 for documents concerning civil matters and documents presented as evidence before a court of law. Law No. 10/2020 stipulates the triggering event for each type of document (*e.g.*, for agreements, the stamp duty becomes due and payable upon signing, and for documents relating to securities transactions effected through the stock exchange, the stamp duty becomes due and payable when the documents evidencing the transfer (*e.g.*, the trade confirmation for trading of stocks listed on the IDX) are made (*e.g.*, issued by the broker)). Such stamp duty is payable by the relevant party as set out in the law. For documents relating to listed stock transactions (*i.e.*, trade confirmations), the stamp duty is payable by the recipient of the document (*i.e.*, the purchaser of the securities). For other types of commercial papers (*e.g.*, collective share certificates evidencing ownership of non-listed securities), the stamp duty is payable by the issuer of such commercial papers when the document evidencing ownership of the commercial papers is made by the issuer of the securities.\n\n**Certain Material Considerations Regarding U.S. Federal Income Tax**\n\nThe following is a summary of certain material U.S. federal income tax considerations to U.S. Holders, as defined below, of ADSs or common stock that are held as “capital assets” (generally, property held for investment) under section 1221 of the U.S. Internal Revenue Code of 1986, as amended (the “**Code**”). This summary is based upon the Code, its legislative history, final, temporary and proposed U.S. Treasury regulations promulgated thereunder, published rulings and court decisions, as well as the Convention between the Government of the United States and the Government of the Republic of Indonesia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (the “**Treaty**”), each as in effect on the date hereof, all of which are subject to change, or changes in interpretation, possibly with retroactive effect. In addition, this discussion is based in part upon representations of the depositary and the assumption that each obligation in the Deposit Agreement and any related agreements will be performed according to its terms.\n\nThis summary does not discuss all aspects of U.S. federal income taxation which may be relevant to particular investors in light of their individual investment circumstances, including investors subject to special tax rules (including, but not limited to, a person who directly, indirectly or constructively owns 10% or more of the stock of ours measured either by voting power or value, a person who acquires ADSs or common stock pursuant to the exercise of any employee share option or otherwise as compensation, banks and other financial institutions, insurance companies, brokers or dealers in securities, a trader in securities who elects to use a mark-to-market method of accounting for its securities holdings, a person that may have been liable for alternative minimum tax, regulated investment companies, real estate investment trusts, S corporations, grantor trusts, partnerships and their partners, individual retirement and other tax-deferred accounts, certain former U.S. citizens or long-term residents, and tax-exempt organizations (including private foundations)), holders who are not U.S. Holders, investors that will hold ADSs or common stock as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for U.S. federal income tax purposes, investors that purchase or sell ADSs or common stock as part of a wash sale, investors subject to special tax accounting rules as a result of any item of gross income with respect to the ADSs or common stock being taken into account in an applicable financial statement, investors who are resident, or who are carrying on a trade, in Indonesia, or investors that have a functional currency other than the\n\n197\n\n[Table of Contents](#TOC)\n\nU.S. Dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this summary does not address U.S. federal estate and gift taxes, the U.S. federal tax on net investment income, or state, local, or non-U.S. tax considerations. Each U.S. Holder is urged to consult such holder’s tax advisor regarding the U.S. federal, state, local and non-U.S. income, and other tax considerations of their investment in the ADSs or common stock.\n\nFor purposes of this summary, a “**U.S. Holder**” is a beneficial owner of ADSs or common stock that is, for U.S. federal income tax purposes:\n\n(i)an individual who is a citizen or resident of the United States;\n\n(ii)a corporation, created in, or organized under the laws of, the United States or any state thereof or the District of Columbia;\n\n(iii)an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or\n\n(iv)a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (B) that has made a valid election to be treated as a U.S. person under the Code.\n\nIf a partnership (or other entity or arrangement that is treated as a partnership for U.S. tax purposes) is the beneficial owner of ADSs or common stock, the tax treatment of a partner in the partnership (or interest holder in the “tax transparent” entity) will generally depend on the status of the partner (or interest holder) and the activities of the partnership (or “tax transparent” entity). In general, for U.S. federal income tax purposes, U.S. Holders of ADSs will be treated as the beneficial owners of the underlying common stock represented by the ADSs.\n\nAs described in more detail below, based on our Consolidated Financial Statements and relevant market data, we believe that we did not meet the definition of a passive foreign investment company (a “**PFIC**”) for U.S. federal income tax purposes with respect to our 2025 taxable year. In addition, based on our Consolidated Financial Statements and our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market data, we do not anticipate we will be a PFIC for any future taxable year. However, our status for the 2025 taxable year and future taxable years will depend on our income and assets (which for this purpose depends in part on the market value of the ADSs or common shares) in those years. See the discussion below under “*Passive Foreign Investment Company*.”\n\nProspective purchasers should consult their own tax advisors concerning the U.S. federal, state, local, foreign and other tax consequences of acquiring, owning and disposing of ADSs or common stock, in light of their particular circumstances.\n\nDistributions on the Common Stock or ADSs\n\nSubject to the discussion below under “Passive Foreign Investment Company,” the gross U.S. Dollar amount of any distribution of cash or property (without deduction for any tax withheld), other than certain pro rata distributions of common stock, we make on the common stock or ADSs out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) will generally be includible in a U.S. Holder’s gross income as ordinary dividend income when the distribution is actually or constructively received by such U.S. Holder, or by the depositary in the case of ADSs. Distributions that exceed our current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of the U.S Holder’s basis in the common stock or ADSs and thereafter as capital gain. However, we do not calculate earnings and profits in accordance with U.S. tax principles. Accordingly, all distributions by us to U.S. Holders will generally be treated as ordinary dividend income. Any dividend will not be eligible for the dividends-received deduction generally granted to U.S. corporations in respect of dividends received from U.S. corporations. The amount of any distribution of property other than cash will be the fair market value of such property on the date of such distribution.\n\n198\n\n[Table of Contents](#TOC)\n\nThe U.S. Dollar amount of dividends received by certain non-corporate U.S. Holders will generally be taxable at favorable rates as opposed to being taxable at ordinary income rates if the dividends are “qualified dividends.” Dividends paid on ADSs or common stocks will be treated as qualified dividends if (i) the U.S. Holder has held the ADSs or common stock for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date, and is not obligated to make related payments with respect to positions in substantially similar or related property, (ii) either our Company qualifies for the benefits of the Treaty and the Treaty is a qualified treaty for purposes of the “qualified dividend” rules, or the dividends are with respect to ADSs readily tradable on a U.S. securities market, and (iii) we were not, in the taxable year prior to the year in which the dividend was paid, and are not, in the year in which the dividend is paid, a “passive foreign investment company,” or PFIC. The Treaty has been approved for purposes of the qualified dividend rules, and we expect to qualify for benefits under the Treaty so long as there is substantial and regular trading in our common stock on the IDX. We are considered a qualified foreign corporation with respect to the ADSs because our ADSs are listed on the NYSE.\n\nBased on our Consolidated Financial Statements and relevant market data, we believe that we did not meet the definition of a PFIC for U.S. federal income tax purposes with respect to our 2025 taxable year. In addition, based on our Consolidated Financial Statements and our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market data, we do not anticipate we will be a PFIC for any future taxable year. However, our status for the 2025 taxable year and future taxable years will depend on our income and assets (which for this purpose depends in part on the market value of the ADSs or common shares) in those years. See the discussion below under “*Passive Foreign Investment Company*.”\n\nU.S. Holders of ADSs or common stock should consult their own tax advisors regarding the availability of the reduced dividend tax rate in light of their own particular circumstances.\n\nThe amount of the dividend distribution paid in any foreign currency that a U.S. Holder must include in its income will be the U.S. Dollar value of the foreign currency payments made, determined at the spot rate on the date the dividend distribution is actually or constructively received, regardless of whether the payment is in fact converted into U.S. Dollars. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date the U.S. Holder includes the dividend payment in income to the date it converts the payment into U.S. Dollars will be treated as ordinary income or loss from U.S. sources.\n\nDividends paid by us generally will constitute income from sources outside the United States for U.S. foreign tax credit limitation purposes and will be categorized as “passive category income” or, in the case of certain U.S. Holders, as “general category income” for U.S. foreign tax credit purposes. Subject to certain complex limitations, it is possible that any Indonesian tax withheld from distributions to a U.S. Holder in accordance with the Treaty generally may be deductible or creditable, at such U.S. Holder’s option, in computing such U.S. Holder’s federal income tax liability. However, U.S. Treasury regulations released in January 2022 tightened the standards for determining whether a foreign tax is creditable, and the IRS has issued additional guidance with respect to those regulations since their release. We have not determined whether this Indonesian withholding tax would be creditable under these regulations or the IRS guidance. Accordingly, U.S. Holders should consult their tax advisors regarding the creditability of this Indonesian tax. If a U.S. Holder elects to claim a deduction, rather than a foreign tax credit, for a particular taxable year, such election will apply to all foreign taxes paid or accrued by or on behalf of the U.S. Holder in the particular year.\n\nA U.S. Holder may not be able to claim a foreign tax credit (and instead may claim a deduction) for non-U.S. taxes imposed on dividends paid on the ADSs or common stock if such U.S. Holder (i) held the ADSs or common shares for less than a specified minimum period during which such U.S. Holder was not protected from risk of loss with respect to such shares, or (ii) is obligated to make payments related to the dividends (for example, pursuant to a short sale). The rules relating to the U.S. foreign tax credits are complex and U.S. Holders may be subject to various limitations on the amount of foreign tax credits that are available. U.S. Holders should consult their own tax advisors regarding the effect of these rules in their particular circumstances.\n\n199\n\n[Table of Contents](#TOC)\n\nIn the event we are required to withhold Indonesian income tax on dividends paid to U.S. Holders on the ADSs or common stock (see discussion under “*Indonesian Taxation*”), a U.S. Holder may be able to claim a reduced rate of Indonesian withholding tax if such U.S. Holder is eligible for benefits under the Treaty. Any amount of tax withheld that could have been reduced under the Treaty will not be eligible for credit against the U.S. Holder’s U.S. federal income tax liability, even if the tax would otherwise be creditable. U.S. Holders should consult their own tax advisors about the eligibility for reduction of Indonesian withholding tax.\n\nSale or Other Disposition of ADSs or Common Stock\n\nSubject to the discussion below under “Passive Foreign Investment Company,” upon a sale, exchange or other disposition of the ADSs or common stock, a U.S. Holder will generally recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the U.S. Dollar value of the amount realized and the U.S. Holder’s adjusted tax basis, determined in U.S. Dollars, in such ADSs or common stock. Gain or loss recognized upon the sale or other disposition of ADSs or common stock will generally be long-term capital gain or loss if the U.S. Holder’s holding period for such ADSs or common stock exceeds one year. The deductibility of capital losses is subject to limitations.\n\nA U.S. Holder that receives foreign currency from a sale or disposition of ADSs or common stock generally will realize an amount equal to the U.S. Dollar value of the foreign currency determined on (i) the date of receipt of payment in the case of a cash-basis U.S. Holder, and (ii) the date of disposition in the case of an accrual-basis U.S. Holder. If our ADSs or common stock are treated as traded on an “established securities market,” a cash-basis taxpayer or, if it so elects, an accrual-basis taxpayer, will determine the U.S. Dollar value of the amount realized by translating the amount received at the spot rate of exchange on the settlement date of the sale. A U.S. Holder will have a tax basis in the foreign currency received equal to the U.S. Dollar amount realized. Any currency exchange gain or loss realized on a subsequent conversion of the foreign currency into U.S. Dollars for a different amount generally will be treated as ordinary income or loss from sources within the United States. However, if such foreign currency is converted into U.S. Dollars on the date received by the U.S. Holder, a cash-basis or electing accrual-basis U.S. Holder should not recognize any gain or loss on such conversion.\n\nThe creditability of any Indonesian taxes imposed on a disposition is subject to the same uncertainty described above in connection with the Indonesian withholding tax on dividends (see discussion under “*Distributions on the Common Stock or ADSs*”). Moreover, any gain or loss will generally be U.S. source gain or loss for foreign tax credit limitation purposes and as a result of the U.S. foreign tax credit limitation, foreign taxes, if any, imposed upon a disposition of the ADSs or common stock may not be creditable. U.S. Holders should consult their own tax advisors regarding the tax consequences if a foreign tax is imposed on a disposition of ADSs or common stock, including the creditability of such tax, and the availability of a foreign tax credit or deduction in respect of such tax.\n\nPassive Foreign Investment Company\n\nThe Code provides special, generally adverse, rules regarding certain distributions received by U.S. persons with respect to, and sales, exchanges, and other dispositions, including pledges, of shares of stock of, a PFIC. In general, a foreign corporation is a PFIC for any taxable year in which, after applying relevant look-through rules with respect to the income and assets of subsidiaries:\n\n•\n\n75% or more of its gross income for such year consists of passive income, such as dividends, interest, rents, royalties, and gains from the sale of assets that give rise to passive income; or\n\n•\n\n50% or more of the average quarterly value of its gross assets during such year consists of assets that produce, or are held for the production of passive income.\n\n“Passive income” for this purpose includes, for example, dividends, interest, royalties, rents and gains from commodities and securities transactions and the excess of gains over losses from the disposition of assets which produce\n\n200\n\n[Table of Contents](#TOC)\n\npassive income. Passive income does not include rents and royalties derived from the active conduct of a trade or business. If the stock of a non-U.S. corporation is publicly traded for the taxable year, the asset test is applied using the fair market value of the assets for purposes of measuring such corporation’s assets. If we own, directly or indirectly, at least 25% (by value) of the stock of another corporation, we will be treated, for purposes of the PFIC tests, as owning our proportionate share of the other corporation’s assets and receiving our proportionate share of the other corporation’s income for purposes of the PFIC income and asset tests.\n\nWe do not believe we were a PFIC for prior taxable years. Based on the current and anticipated composition of our assets and income and the current expectations regarding the price of the ADSs and common stock, we do not believe that we are a PFIC for our 2025 taxable year, and we do not expect to become a PFIC for future taxable years. This is a factual determination, however, that must be made annually at the end of the taxable year. Therefore, it may be possible that we are classified as a PFIC for our 2025 taxable year or for another future taxable year. Changes in the nature of our income or assets or a decrease in the trading price of the ADSs or common stock may cause us to be considered a PFIC in the current or any subsequent year.\n\nIf we were a PFIC in any taxable year that a U.S. Holder held the ADSs or common stock, and any entity in which we own or are treated as owning equity interests is also a PFIC (any such entity, a “**Lower-tier PFIC**”), the U.S. Holder will be deemed to own the U.S. Holder’s proportionate share of the Lower-tier PFIC and will be subject to U.S. federal income tax according to the rules described in the following paragraph on (i) certain distributions by the Lower-tier PFIC, and (ii) a disposition of equity interests of the Lower-tier PFIC, in each case as if the U.S. Holder owned its proportionate share of the Lower-tier PFIC directly, even though the U.S. Holder will not receive the proceeds of those distributions or dispositions.\n\nGenerally, if we are a PFIC for any taxable year during which a U.S. Holder owns ADSs or common stock, gain recognized by a U.S. Holder upon a sale or other disposition (including, under certain circumstances, a pledge) of the ADSs or common stock will be allocated ratably over the U.S. Holder’s holding period for such ADSs or common stock. The amounts allocated to the taxable year of the sale or other disposition and to the years before we became a PFIC will be taxed as ordinary income. The amount allocated to each other taxable year will be subject to tax at the highest rate in effect for that taxable year for individuals or corporations, as applicable, and an interest charge will be imposed on the resulting tax liability for each relevant taxable year. Further, such U.S. Holder generally would be subject to special rules with respect to “excess distributions” made by us on the ADSs or common stock and with respect to gain from a U.S. Holder’s disposition of the ADSs or common stock. An “excess distribution” generally is defined as the excess of the distributions a U.S. Holder receives with respect to the ADSs or common stock in any taxable year, over 125% of the average annual distributions that such U.S. Holder has received from us during the shorter of the three preceding years, or such U.S. Holder’s holding period for the ADSs or common stock. Generally, a U.S. Holder would be required to allocate any excess distribution or gain from the disposition of the ADSs or common stock ratably over such U.S. Holder’s holding period for the ADSs or common stock. The portion of the excess distribution or gain allocated to a prior taxable year, other than a year prior to the first year in which we became a PFIC, would be taxed at the highest U.S. federal income tax rate on ordinary income in effect for such taxable year, and a U.S. Holder would be subject to an interest charge (at the rate generally applicable to an underpayment of tax) on the resulting tax liability, determined as if the tax liability had been due with respect to such particular taxable year. The portion of the excess distribution or gain that is not allocated to prior taxable years, together with the portion allocated to the years prior to the first year in which we became a PFIC, would be included in a U.S. Holder’s gross income for the taxable years of the excess distribution or disposition and taxed as ordinary income.\n\nIf we were a PFIC in any year during a U.S. Holder’s holding period, we would generally continue to be treated as a PFIC with respect to such U.S. Holder’s investment unless the U.S. Holder has made certain elections under the PFIC rules, such as a mark-to-market election or a “qualified electing fund” (“QEF”) election. U.S. Holders should consult their tax advisors regarding the availability and advisability of making a mark-to-market election in their particular circumstances. There is no law, regulation or administrative guidance that provides for a right to make mark-to-market election for equity interests in any Lower-tier PFIC the shares of which are not regularly traded on a qualified exchange. As a result, even if a U.S. Holder makes a mark-to-market election with respect to such U.S. Holder’s ADSs or common\n\n201\n\n[Table of Contents](#TOC)\n\nstock, such U.S. Holder could nevertheless be subject to the PFIC rules described in the preceding paragraph with respect to such U.S. Holder’s indirect interest in any Lower-tier PFIC.\n\nIf we are a PFIC (or treated as a PFIC with respect to a U.S. Holder) for a taxable year in which we pay a dividend or for the prior taxable year, the favorable tax rate described above with respect to dividends paid to certain non-corporate U.S. Holders will not apply.\n\nProspective investors should assume, however, that a QEF election will not be available because we do not expect to provide U.S. Holders with the information needed to make such an election. U.S. Holders should consult with their own tax advisors concerning the consequences to them if we are or become a PFIC, including but not limited to any reporting requirements and the availability and applicability of any election that may be available to mitigate adverse consequences, in light of such U.S. Holders’ particular circumstances.\n\nIf we were regarded as a PFIC, a U.S. Holder of ADSs or common stock generally would be required to file an information return on Internal Revenue Service (“IRS”) Form 8621 for any year in which the U.S. Holder received a direct or indirect distribution with respect to the ADSs or common stock, recognized gain on a direct or indirect disposition of the ADSs or common stock, or made an election with respect to the ADSs or common stock, reporting distributions received and gains realized with respect to the ADSs or common stock. In addition, if we were regarded as a PFIC, a U.S. Holder would be required to file an annual information return (also on IRS Form 8621) relating to the U.S. Holder’s ownership of the ADSs or common stock. This requirement would be in addition to other reporting requirements applicable to ownership in a PFIC.\n\nThe rules applicable to owning stock of a PFIC are complex. We encourage U.S. Holders to consult their own tax advisors concerning the U.S. federal income tax consequences of holding the ADSs or common stock that would arise if we were considered a PFIC.\n\nBackup Withholding Tax and Information Reporting Requirements\n\nU.S. backup withholding tax and information reporting requirements generally apply to certain payments made to certain non-corporate holders of stock. Information reporting generally will apply to payments of dividends on and to proceeds from the sale or redemption of ADSs or common stock made within the United States or by a U.S. payor or U.S. middleman to a holder of ADSs or common stock (other than an “exempt recipient,” including a corporation, a payee that is not a U.S. person that provides an appropriate certification, and certain other persons).\n\nA payor will be required to withhold backup withholding tax from any payments of dividends on, or the proceeds from the sale or redemption of, ADSs or common stock within the United States or by a U.S. payor or U.S. middleman to a U.S. Holder, other than an exempt recipient, if such U.S. Holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with, or establish an exemption from, such backup withholding tax requirements. The backup withholding tax is not an additional tax and may be credited against a U.S. Holder’s regular U.S. federal income tax liability or, if in excess of such liability, refunded by the IRS if a timely refund claim is filed with the IRS.\n\nInformation With Respect To Foreign Financial Assets\n\nCertain U.S. Holders may be required to report information with respect to such holder’s interest in “specified foreign financial assets” (as defined in Section 6038D of the Code), including stock of a non-U.S. corporation that is not held in an account maintained by certain financial institutions, if the aggregate value of all such assets exceeds certain dollar thresholds. Persons who are required to report specified foreign financial assets and fail to do so may be subject to substantial penalties, and the period of limitations on assessment and collection of U.S. federal income taxes may be extended in the event of a failure to comply. U.S. Holders are urged to consult their own tax advisors regarding the foreign financial asset reporting obligations and their possible application to the holding of the ADSs or common stock.\n\n202\n\n[Table of Contents](#TOC)\n\nThe discussion above is a general summary only. It is not intended to constitute a complete analysis of all tax considerations applicable to an investment in ADSs or common stock. Each prospective U.S. Holder should consult with such U.S. Holder’s own tax advisor concerning the tax consequences to such U.S. Holder of an investment in ADSs or common stock, in light of such U.S. Holder’s particular circumstances.\n\n**F.**                         **DIVIDENDS AND PAYING AGENTS**\n\nNot applicable.\n\n**G.**                         **STATEMENT BY EXPERTS**\n\nNot applicable.\n\n**H.**                         **DOCUMENTS ON DISPLAY**\n\nAny material which is filed as an exhibit to this annual report on Form 20-F with the U.S. Securities and Exchange Commission is available for inspection at our offices. See also “*Item 4B. Information on the Company — History and Development of the Company — Profile**of**Telkom Indonesia*.”\n\nI.**SUBSIDIARY INFORMATION**\n\nNot applicable.\n\n​\n\n**J.**\n\n**ANNUAL REPORT TO SECURITY HOLDERS**\n\nIf we are required to provide an annual report to security holders in response to the requirements of Form 6-K, we will submit the annual report to security holders in electronic format in accordance with the EDGAR Filer Manual.\n\n​"}