Disposal of PT Anugerah Buminusantara Abadi by PT Saptaindra Sejati

Adaro Energy Annual Report 2008 www.adaro.com 157 Contact Us Governing Adaro Financial Report Corporate Social Responsibility PT ADARO ENERGY Tbk Schedule 525 FORMERLY PT PADANG KARUNIA AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2008 AND 2007 Expressed in million Rupiah, unless otherwise stated

3. ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES continued

t. Acquisition and disposal of PT Nusantara Power Energy by PT Jasapower Indonesia

On 3 December 2007, JPI acquired 70 interest in PT Nusantara Power Energy “NPE” for Rp 700,000. The details of the net assets acquired are as follows: 2007 Purchase consideration through cash payment 700 Net assets acquired 700 Goodwill - Other assets 1,000 Net assets 1,000 Interest acquired 70 Net assets acquired 700 Goodwill - Cash and cash equivalents in NPE - Net cash outflow from acquisition of subsidiary 700 On 30 April 2008, JPI disposed of all of its interest in NPE for Rp 700,000. The details of the net assets disposed of are as follows: 2008 Other assets 5,000 Net assets 5,000 Interest disposed 70 Net assets disposed 3,500 Adjustment to net assets disposed of: - Loss on disposal of subsidiary 2,800 - Other receivable from disposal of subsidiary 700 Cash received from disposal of investments - Cash and cash equivalents in NPE - Net cash outflow from disposal of subsidiary -

4. RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

As disclosed in Note 3, acquisitions of additional interest in SIS, ATA and MSW were accounted for using the pooling-of-interests method as required under SFAS No. 38 Revised 2004. Therefore, the 31 December 2007 consolidated financial statements were restated as if the restructuring transactions had already occurred as at 1 January 2007. In addition, the Board of Directors of Adaro is of the opinion that a restatement of the 31 December 2007 consolidated financial statements is required resulting from adjustments to the Corporate Income Tax expense for fiscal years 2004, 2005, 2006 and 2007, amounting to US11,304,782, US33,233,919, US36,818,114 and US9,785,299, respectively, due to the different interpretations of taxation regulations relating to Leveraged Buy-Out “LBO” transactions executed by the Group. The adjustments were related to taxes payable, accrued expenses and retained earnings. The restatement of Adaro’s financial statements resulted in the restatement of these consolidated financial statements.