Adaro Energy Annual Report 2009 187 www.adaro.com
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 549
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008
Expressed in million Rupiah, unless otherwise stated
34. TAXATION continued d.
Income tax expense continued 2009
2008
Income tax calculated at prevailing tax rate 1,224,976
242,255 Income subject to final tax
3,244 1,919
Non-deductible expenses 7,734
2,437 Income from investments in subsidiaries and associates
1,231,675 226,427
Gain from sales of investments in subsidiaries -
11,484 Adjustment related to the changes of income tax rate
1,115 3,884
Unrecognised tax loss carryforward 12,617
522 Income tax expense - the Company
9,293 9,268
Income tax expense - subsidiaries 4,109,808
1,592,708 Consolidated income tax expense
4,119,101 1,601,976
e. Deferred tax assets
2009 2008
The Company Tax loss carried forward
9,117 19,417
Provision for employee benefits 1,007
- Deferred tax assets at the end of the year
10,124 19,417
Deferred tax assets at the beginning of the year 19,417
28,685 Charged to consolidated statement of income
9,293 9,268
Deferred tax assets at the end of the year 10,124
19,417
Subsidiaries Tax loss carried forward
370,292 496,885
Provision for employee benefits 833
4,572 Loss from changes in fair value of derivative instruments
6,830 -
Difference between commercial and tax net book value of fixed assets -
8,048 Difference in fixed assets under finance lease and lease instalments
- 16,471
377,955 476,938
Unrecognised deferred tax assets 350,492
452,531 Deferred tax assets at the end of the year
27,463 24,407
Deferred tax assets at the beginning of the year 24,407
8,138 Charged to equity
6,830 -
Charged to consolidated statement of income 14,096
16,269 Adjustment related to changes of reporting currency of the subsidiary -
charged to equity 17,870
- Deferred tax assets at the end of the year
27,463 24,407
Consolidated Tax loss carried forward
379,409 516,302
Provision for employee benefits 1,840
4,572 Loss from changes in fair value of derivative instruments
6,830 -
Difference between commercial and tax net book value of fixed assets -
8,048 Difference in fixed assets under finance lease and lease instalments
- 16,471
388,079 496,355
Unrecognised deferred tax assets 350,492
452,531 Deferred tax assets at the end of the year
37,587 43,824
188 Adaro Energy Annual Report 2009
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Governing Adaro
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www.adaro.com
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 550
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008
Expressed in million Rupiah, unless otherwise stated
34. TAXATION continued e.
Deferred tax assets continued 2009
2008
Deferred tax assets at the beginning of the year 43,824
36,823 Charged to equity
6,830 -
Charged to consolidated statement of income 4,803
7,001 Adjustment related to changes of reporting currency of the subsidiary -
charged to equity 17,870
- Deferred tax assets at the end of the year
37,587 43,824
Due to several subsdiaries are in a loss position and only as a head office, there is a possible limitation on the future use of tax loss carry forwards and uncertainty as to whether the deferred tax assets will be realised. Thus, a portion of deferred tax
assets relating to tax losses carried forwards have not been recognised in these consolidated financial state ments.
f. Deferred tax liabilities
2009 2008
Subsidiaries Tax loss carried forward
116,270 -
Provision for employee benefits 10,307
2,212 Mining properties
2,444,658 2,628,436
Difference between commercial and tax net book value of fixed assets 445,588
474,139 Deferred exploration and development expenditure
36,455 43,943
Loss from changes in fair value of derivative instruments 55,616
- Difference in fixed assets under finance lease and lease instalments
74,336 -
2,818,844 3,144,306
Unrecognised deferred tax assets 114,555
- Deferred tax liabilities at the end of the year
2,933,399 3,144,306
Deferred tax liabilities at the beginning of the year 3,144,306
473,922 Charged to equity
55,616 -
Charged to consolidated statement of income 38,719
26,604 Acquisition of subsidiaries
- 2,606,840
Reversal related to the changes of incomes tax rate in mining properties -
35,580 Exchange difference due to financial statement translation - charged to equity
116,572 125,728
Deferred tax liabilities at the end of the year 2,933,399
3,144,306
g. Administration
Under the taxation laws of Indonesia, the companies within the Group which are domiciled in Indonesia calculate and pay tax on the basis of self assessment. The Directorate General of Tax “DGT” may assess or amend taxes within ten years of the
time the tax becomes due, or until the end of 2013, whichever is earlier. There are new rules applicable to the fiscal year 2008 and subsequent years stipulating that the DGT may assess or amend taxes within five years of the time the tax becomes due.
h. Tax assessment letter
On 13 August 2008 and 12 September 2008, SIS received tax assessment letters for various taxes for the fiscal year 2006, which showed SIS as having overpaid corporate income tax and VAT amounting to Rp 15,486 US1,647,447 and Rp 46,471
US4,943,723, respectively, and underpaid income tax articles 21 and 23 amounting to Rp 5 US532 and Rp 142 US15,106, respecti vely. Management of SIS disagreed with the tax assessment of corporate income tax and income tax
article 23 and therefore filed objection letters to the DGT against the tax assessment amounting Rp 3,421 US363,829. On 21 April 2009, DGT accepted the objection on income tax article 23 of Rp 142 US15,106 and rejected the objection on
corporate income tax of Rp 3,279 US348,723. On 3 June 2009, SIS filed an appeal for the rejection amounting to Rp 3,279 US348,723. As at the date this report is issued, SIS has not received any result for this appeal.
As at the date this report, the Company is being audited for all taxes for the fiscal year 2004, 2005, 2006, 2007 and 2008; and SIS is being audited for all taxes for the fiscal year 2008; and ATA is being audited for all taxes for the fiscal year 2005, 2006,
2007 and 2008. The Company, SIS and ATA have not yet received the audit results. Management is of the opinion that the audit results will not have a material impact on the Company’s, SIS’ and ATA’s financial position and cash flows.
Adaro Energy Annual Report 2009 189 www.adaro.com
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 551
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008
Expressed in million Rupiah, unless otherwise stated
34. TAXATION continued i.
Changes in taxation law
In September 2008, the House of Representatives approved amendments to the income tax law. These were signed into law by the President on 23 September 2008 and hence are considered enacted. One of these amendments stipulates that the
income tax for corporations will be set at a flat rate of 28 commencing 1 January 2009 and further reduced to 25 from 1 January 2010.
The reduction in tax rates does not impact on deferred tax balances that are expected to be reversed prior to 1 January 2009. However, it will impact on subsequent reversals.
The Group has performed an analysis of the periods in which its deferred tax assets and liabilities will be reversed and has revalued its deferred tax assets and liabilities accordingly. The net impact is a reduction in the balance of net deferred tax
liabilities as at 31 December 2009 of Rp 5,967 2008: balance of net deferred tax asset of Rp 6,862. This amount has been reflected in these consolidated financial statements.
35. TRANSACTIONS AND BALANCES WITH RELATED PARTIES
Details of the balances and transactions with related parties are as follows:
a. Other receivables - related party
2009 2008
Rupiah PT Anugerah Buminusantara Abadi
- 2,243
As a percentage of total assets -
0.01 Other receivables from related parties represents reimbursement of expenses incurred on behalf of related parties.
b. Trade payables to related parties
2009 2008
PT Rahman Abdijaya 95,365
61,581 PT Pulau Seroja Jaya
29,592 21,882
PT Pulau Seroja Jaya Pratama 12,995
16,428 PT Anugerah Buminusantara Abadi
4,831 1,756
Orchard Maritime Logistics Pte Ltd -
147,739 Total
142,783 249,386
As a percentage of total liabilities 0.57
1.27
c. Amounts due to related parties
2009 2008
Rupiah PT Persada Capital Investama
- 432
PT Saratoga Sentra Business -
432 -
864
US Dollars PT Rachindo Investments
4,700 5,475
Total 4,700
6,339 As a percentage of total liabilities
0.02 0.03
Amounts due to related parties arose from reimbursement of expenses paid by the related parties on behalf of the Group. Related parties re-charged expenses paid on behalf of the Group at cost.
190 Adaro Energy Annual Report 2009
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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 552
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008
Expressed in million Rupiah, unless otherwise stated
35. TRANSACTIONS AND BALANCES WITH RELATED PARTIES continued d.
Revenue 2009
2008
Orchard Maritime Logistics Pte Ltd -
2,135 PT Padangbara Sukses Makmur
- 260
Total -
2,395 As a percentage of total revenue
- 0.01
As at 30 April 2009, OML has been consolidated into the Group, and therefore balances and transactions between OML and the Group have been eliminated.
e. Cost of revenue
2009 2008
Cost of revenue from related parties: Mining service:
- PT Rahman Abdijaya 527,291
413,569 Coal barging services:
- PT Pulau Seroja Jaya 100,484
131,894 - PT Pulau Seroja Jaya Pratama
60,827 83,353
Rental: - PT Anugerah Buminusantara Abadi
33,906 20,281
Coal purchases: - PT Padangbara Sukses Makmur
- 16,693
- PT Padang Sejahtera -
8,070 Coal handling and barging services:
- Orchard Maritime Logistics Pte Ltd -
483,083 722,508
1,156,943 As a percentage of total cost of revenue
4.54 8.80
As at 30 April 2009, OML has been consolidated into the Group, and therefore balances and transactions between OML and the Group have been eliminated.
Refer to Note 39 for further description of the transaction.
f. Interest expense
2009 2008
PT Padangbara Sukses Makmur -
159 As a percentage of total interest expense and finance charges
- 0.03
g. The nature of relationships with related parties
Related parties Relationship with related parties
Orchard Maritime Logistics Pte Ltd
a
Indirect subsidiary PT Anugerah Buminusantara Abadi
Associates PT Rachindo Investments
Associates PT Persada Capital Investama
Shareholder PT Saratoga Sentra Business
Shareholder PT Padangbara Sukses Makmur
Affiliate PT Padang Sejahtera
Affiliate PT Pulau Seroja Jaya
Affiliate PT Pulau Seroja Jaya Pratama
Affiliate PT Rahman Abdijaya
Affiliate
a
Consolidated since 30 April 2009 The Group’s pricing policy related to the transactions with related parties is set based on contracted prices, which are in the
range of contracted fees charged to third parties.