TAXATION continued b. Recoverable taxes

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