Financing Expenses

CLEO’s 2017 financing expenses in the commercial income statement consist of interest loans in the
amount of Rp21.023.797.769, and provisions and bank administrative charges in the amount of
Rp413.825.731. The total of financing expenses is Rp21.437.623.500. Fiscal reconciliation for tax
reporting is required on the provisions and bank administrative charges account because of temporary
differences in form of allowance for impairment of trade receivables – net. The negative correction of
the account is Rp60.800.390, increasing the provisions and bank administrative charges in the fiscal
income statement to Rp474.626.121.

Legal Basis for the fiscal reconciliation

The commercial imposition of uncollectible receivables by taxpayers is the object of fiscal reconciliation
before determining taxable income. Basically, in fiscal terms there is no known method of reserve
provision / formation as confirmed in Article 9 paragraph (1) letter c of Law Number 36 Year 2008
concerning Income Tax, except for certain business sector taxpayers. So that the component of costs
formed due to the establishment or allowance for reserve funds may not be deducted from gross profit.
This means that the allowance for doubtful accounts that have not been decided as Non-collectible
Receivables may not be used as deductible costs in calculating Taxable Income.

If viewed from the point of view of income tax, the legal basis for imposing losses on accounts receivable
as a deduction from taxable income is regulated in Article 6 paragraph (1) letter h of Law No. 36 of 2008
concerning the fourth amendment to law number 7 of 1983 concerning income tax:

The amount of taxable income for domestic taxpayers and permanent establishments is determined
based on gross income less costs to obtain, collect and maintain income.

Rent Income
CLEO’s 2017 rent income in the commercial income statement has the amount of Rp5.488.353.240.
There is no difference in treatment of rent income between the PSAK for commercial income statement
and the tax law for fiscal income statement.

Foreign Exchange Differentials – net

CLEO’s 2017 foreign exchange differentials - net in the commercial income statement has the amount of
Rp155.705.090. There is no difference in treatment of rent income between the PSAK for commercial
income statement and the tax law for fiscal income statement.

Loss on Sale and Disposal of Fixed Assets

CLEO’s 2017 loss on sale and disposal of fixed assets in the commercial income statement consist of
costs in the amount of Rp11.733.822.996, accumulated depreciation in the amount of Rp5.813.598.865,
book value in the amount of Rp5.920.224.131, and proceeds from sales in the amount of
Rp1.494.895.834. The total of loss on sale and disposal of fixed assets is Rp4.425.328.297. There is no
difference in treatment of loss on sale and disposal of fixed assets between the PSAK for commercial
income statement and the tax law for fiscal income statement.

Miscellaneous – net
CLEO’s 2017 miscellaneous - net in the commercial income statement has the amount of
Rp5.869.054.062. Fiscal reconciliation for tax reporting is required on this account because of
permanent differences in form of allowance stock issuance costs. The negative correction of the account
is Rp2.333.128.035, deducting the amount of miscellaneous - net in the fiscal income statement to
Rp3.535.926.027.

Legal Basis for the fiscal reconciliation

Director General of Tax Circular Number SE18 / PJ.31 / 1989 dated 31 October 1989 item (2) which reads:
"Expenditures shares, including the cost of stock listing, appraisal advertising, underwriting, prospectus,
issued in the framework of issuing shares is fees for obtaining, collecting and maintaining income as
intended in Article 6 paragraph (1) letter b of Law Number 7 of 1983 concerning Taxes Income, and can
be deducted from gross income in accordance with the provisions in Article 11 paragraph (11) of Law
Number 7 of 1983 concerning Taxes Income;

According to Article 11A paragraph (3) Income Tax Law, Stock Issuance Costs (IPO) can be charged as a
fee and taxpayers are given the freedom to choose whether the expenditure is charged at the same
time in the year it occurs expenditure or amortized;

Share issuance costs, are related costs in order to obtain, collect and maintain income as referred to in
Article 6 paragraph (1) letter b of Act Number 7 of 1983 concerning Income Tax as amended by Act
Number 17 of 2000 and Article 11A paragraph (3) which regulates: "Expenditures for establishment
costs and expansion costs of a company's capital are charged in the year of expenditure or amortized in
accordance with the provisions referred to in paragraph (2).