SHARE CAPITAL ADDITIONAL PAID-IN CAPITAL 2009

Adaro Energy Annual Report 2009 183 www.adaro.com PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 545 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008 Expressed in million Rupiah, unless otherwise stated

32. COST OF REVENUE 2009

2008 Coal mining and trading Mining 7,093,391 5,803,384 Coal processing 1,016,982 773,559 Total production costs 8,110,373 6,576,943 Freight and handling costs 2,691,722 2,857,401 Royalties to Government 2,706,940 1,458,307 Purchase of coal 184,696 647,635 Depreciation and amortisation 458,934 210,309 Amortisation of mining properties 485,178 196,602 Coal inventory: Begining balance 54,979 129,532 Acquisition of subsidiary - 30,665 Ending balance 76,520 54,979 Exchange difference due to financial statement translation 10,896 10,945 Increasedecrease in coal inventory 32,437 116,163 Total cost of revenue - coal mining and trading 14,605,406 12,063,360 Mining services Consumables 215,778 368,331 Depreciation and amortisation 223,033 165,899 Employee costs 129,457 126,473 Repair and maintenance 197,613 111,675 Subcontractors 97,933 57,956 Other costs each below Rp 30,000 62,270 67,501 Total cost of revenue - mining services 926,084 897,835 Others Consumables 240,986 138,945 Depreciation and amortisation 81,405 20,280 Other costs each below Rp 30,000 46,242 28,850 Total cost of revenue - others 368,633 188,075 Total cost of revenue 15,900,123 13,149,270 Details of the suppliers having transactions of more than 10 of total consolidated cost of revenue: 2009 2008 Third party: PT Pamapersada Nusantara 2,466,768 1,757,246 Refer to Note 35 for details of related party transactions and balances.

33. OPERATING EXPENSES a.

Selling and marketing 2009 2008 Sales commission 615,790 503,614 Others 21,667 24,702 637,457 528,316 184 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.