Overland Conveyor Construction Contract

Adaro Energy Annual Report 2009 199 www.adaro.com PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 561 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008 Expressed in million Rupiah, unless otherwise stated

41. RECLAMATION GUARANTEE continued

In 2009, Adaro has submitted its mine closure plan to the MoEMR. Adaro is still discussing the mine closure plan with MoEMR. The form of guarantee for mine closure will be decided once the MoEMR approved the Company’s mine closure plan.

42. RISK MANAGEMENT

The Group has conducted risk management procedures to identify, measure, monitor and manage its basic risks. In order to overcome the risk of operational revenue continuity into the Group in the future, the Group has long-term sales contracts with its customers. In addition, the Group also has long-term contracts with its mining contractors to ensure that the Group is able to meet the commitment of its long-term sales contracts. The Group has carried out most of its sales contracts in US Dollars, which indirectly represents a natural hedge on the risk of fluctuation in the exchange rate of Rupiah to US Dollars and on the Group’s loan in US Dollars. In order to reduce the risks caused by fluctuation in the interest rate which increase the uncertainty of the cash flow for interest payments in the future, the Group entered into an interest rate swap contract, under which the Group will pay a fixed interest rate and receive payments at a floating interest rate. The Group also faces commodity price risk relating to its purchases of fuel necessary to run its operations. On a selective basis, the Group enters into fuel hedging contracts for its fuel requirements, under which the Group will pay a fixed fuel price and receive floating fuel price on certain fuel volume for the next three months to one year.

43. SUBSEQUENT EVENTS Additional acquisition of 20 interest in JCI

On 27 January 2010, ATA acquired additional 20 interest in JCI for US10,000,000. As a result of this acquisition, ATA increased its direct and indirect ownership in JCI and SIS to 100.

44. NEW ACCOUNTING STANDARDS

The Indonesian Institute of Accountants has issued the following revised accounting standards that are applicable for the consolidated financial statements covering periods beginning on or after 1 January 2010: - SFAS 26 Revised 2008 - Borrowing Costs; - SFAS 50 Revised 2006 - Financial Instruments: Presentation and Disclosures; and - SFAS 55 Revised 2006 - Financial Instruments: Recognition and Measurement. The Indonesian Institute of Accountants has also issued the following revised accounting standards that may be applicable to the Group’s consolidated financial statements covering periods beginning on or after 1 January 2011: - SFAS 1 Revised 2009 - Presentation of Financial Statements; - SFAS 2 Revised 2009 - Statement of Cash Flows; - SFAS 4 Revised 2009 - Consolidated and Separate Financial Statements; - SFAS 5 Revised 2009 - Operating Segments; - SFAS 12 Revised 2009 - Interest in Joint Ventures; - SFAS 15 Revised 2009 - Investments in Associates; - SFAS 25 Revised 2009 - Accounting Policies, Changes in Accounting Estimates and Errors; - SFAS 48 Revised 2009 - Impairment of Assets; - SFAS 57 Revised 2009 - Provisions, Contingent Liabilities and Contingent Assets; and - SFAS 58 Revised 2009 - Non-current Assets Held for Sale and Discontinued Operations. The Group is still considering the impact of these revised standards on the consolidated financial statements.

45. RECLASSIFICATION OF ACCOUNTS

Comparative figures in the consolidated financial statements for the year ended 31 December 2008 have been amended to conform to the basis on which the consolidated financial statements for the year ended 31 December 2009 have been presented.