REVENUE 2009 Minority interest in net incomeloss of subsidiaries

184 Adaro Energy Annual Report 2009 From Us to Y ou Running Adaro Management Report Owning Adaro Governing Adaro Financial Report Contact Us Corporate Social Responsibility Adaro in Summary www.adaro.com PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 546 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008 Expressed in million Rupiah, unless otherwise stated

33. OPERATING EXPENSES continued b.

General and administrative 2009 2008 Employee costs 211,073 105,668 Others 260,920 97,390 471,993 203,058

34. TAXATION a.

Prepaid taxes 2009 2008 Company Corporate income tax 7,378 1,878 VAT 118 - 7,496 1,878 Subsidiaries Corporate income tax 228,631 192,795 VAT 50,709 92,153 Income tax article 15 17,635 - Final tax article 42 311 - 297,286 284,948 304,782 286,826

b. Recoverable taxes

2009 2008 VAT input 295,856 429,690 Vehicle fuel tax receivable 207,473 130,032 Deposit to Government 150,000 150,000 653,329 709,722 VAT input receivable represents the balance of VAT input to be offset against the production sharing payment government royalty due to the Government of Indonesia. According to Government Regulation No. 1442000 which has been effective from 1 January 2001, raw coal prior to processing to briquettes is no longer subject to VAT. Since that date, Adaro has been unable to seek restitution for VAT input. The Coordinating Minister for Economic has requested that the Minister of Finance postpone the implementation of this regulation. The final decision regarding this matter cannot be predicted at present. For the year ended 31 December 2009, Adaro has offset the claim for r ecoverable VAT input amounting to US100.2 million 31 December 2008: US50.9 million, 2007: US39.7 million, 2006: US36.4 million, 2005: US20.6 million, 2004: US22.4 million, 2003: US18.9 million, 2002: US25.5 million and 2001: US0.9 million against royalty payments due to the Government of Indonesia. Until 31 December 2009, Adaro was offsetting the claim for recoverable VAT input against royalty payments totalling US315.5 million or equivalent to Rp 3,063,680. Based on the CCA, Adaro was subject to sales tax on services received, in accordance with prevailing laws and regulations. However, with the enforcement of Law No. 8 of 1983 regarding VAT, the regulations on sales tax were no longer valid. Adaro is of the opinion that the sales tax is different from VAT in both form and substance, and therefore VAT is a new tax. According to the provisions of the CCA, the Government shall pay and assume and hold Adaro harmless from this new tax. As such, management believes that Adaro can recover its VAT input in this manner and expects that the outstanding balance will be recovered in full. These consolidated financial statements do not include any adjustments that might ultimately result from the decision made by the Government regarding this matter. Refer to Note 39d for further details. Adaro Energy Annual Report 2009 185 www.adaro.com PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 547 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008 Expressed in million Rupiah, unless otherwise stated

34. TAXATION continued b.

Recoverable taxes continued In 2008, the Government of Indonesia through the Financial and Development Supervisory Board “BPKP” commenced an audit to resolve this dispute on VAT paid offsetting royalties payable for the period from 2001 to 2007. However, as at the date of this report, the formal result of this audit has not been issued by the Government of Indonesia. In September 2008, Adaro has placed a fund amounting to Rp 150,000 as a deposit in relation to the settlement of this dispute. In August 2009, BPKP continued its audit in relation to VAT and sales tax for the fiscal periods prior to 2001, as well as the 2008 fiscal period. As at the date of this report, the audit is still ongoing. Management is of the opinion that the audit result will not have a material impact on the Groups financial position and cash flow. Vehicle fuel tax Pajak Bahan Bakar Kendaraan Bermotor“PBBKB” receivable represents the balance of PBBKB that may b e compensated by the Goverment of Indonesia, since PBBKB is a new tax according to the provisions of the CCA..

c. Taxes payable

2009 2008 The Company Income tax articles 23 and 26 9,103 37 Final tax article 42 2,011 - Income tax article 21 197 876 VAT output - 365 11,311 1,278 Subsidiaries Corporate income tax 2,183,082 1,115,479 VAT 28,105 156 Income tax articles 23 and 26 20,075 28,946 Income tax article 21 9,049 5,214 Final tax article 42 436 124 Income tax article 15 - 17 2,240,747 1,149,936 2,252,058 1,151,214

d. Income tax expense

2009 2008 The Company Current - - Deferred 9,293 9,268 9,293 9,268 Subsidiaries Current 4,162,623 1,635,581 Deferred 52,815 42,873 4,109,808 1,592,708 Consolidated Current 4,162,623 1,635,581 Deferred 43,522 33,605 4,119,101 1,601,976