Before the current spelling system, Indonesian adopted a system based on the Dutch spelling system or Spelling van Ophuijsen. 

I cannot find a good example for kh in English words, but imagine the sound of k and h put together. Most of the time, it will sound more like h, but if you want to sound a little more sophisticated, you can emphasize the k sound a little bit. In Arabic, it sounds like the letter خ, and in German it sounds like the word achtung.

So in textbooks, media, and daily conversation, this old spelling system is no longer used. But some people, especially old people, still have this old spelling in their names. The former president of Indonesia’s name is spelled Soeharto, but it is pronounced Suharto. And some places or roads still have names with the old spelling. There is Rantjah (pronounced Rancah), Sidaredja (pronounced Sidareja), Babakananjar (pronounced Babakananyar), etc.