APPROPRIATED RETAINED EARNINGS 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 However, with the enforcement of Law No. 8 of 1983 regarding VAT, the regulations on sales tax were no longer valid.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.