PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Six months ended June 30, 2008 and 2007 Expressed in rupiah, unless otherwise stated
24
8. FIXED ASSETS continued
Construction in progress consists of:
2008 2007
Machineries under installation 104,764,979,490
345,237,458,845 Buildings and structures under construction
25,955,935,055 9,410,684,864
Others 27,046,711,729
20,097,336,290
Total 157,767,626,274
374,745,479,999
Below are the percentages of completion and estimated completion periods of the construction in progress as of June 30, 2008:
Estimated Percentage Estimated Completion of Completion
Period
Machineries under installation 15 - 99
2 to 24 months Buildings and structures under construction
25 - 97 3 to 24 months
Others 75 - 95
1 to 12 months The unpaid balances to contractors and suppliers for the construction, purchase, repairs and
maintenance of fixed assets amounting to Rp2,267,410,648 and Rp21,216,976,708 as of June 30, 2008 and 2007, respectively, are presented as part of “Other Payables to Third Parties” in the
consolidated balance sheets.
Depreciation, amortization and depletion charges amounted to Rp287,452,740,938 and Rp263,587,346,780 for the six months ended June 30, 2008 and 2007, respectively.
The Company and Subsidiaries insured their fixed assets and inventories against losses from fire and other insurable risks under several combined policies, with a total insurance coverage of
Rp119,637,467,550, US9,240,132, EUR1,332,999,620 and JP¥60,930,000 as of June 30, 2008. In management’s opinion, the above insurance coverage is adequate to cover any possible losses that
may arise from such risks.
Based on the review of asset values at the end of the year, management believes that there is no potential impairment in the values of the assets included in the consolidated financial statements.
The Company and Subsidiaries own buildingconstruction rights or “Hak Guna Bangunan” HGB, land use rights or “Hak Pakai” HP and land ownership rights or “Hak Milik” HM over land covering
approximately 3,277.32 hectares, and local mining rights or “Surat Izin Penambangan Daerah” SIPD covering approximately 9,581.40 hectares at several locations in Indonesia, with legal terms ranging
from 5 to 30 years. Management believes that such rights can be extended upon their expiration.
As of June 30, 2008, the Company is still in the process of obtaining the titles of ownership or rights over land covering a total area of approximately 408,835 square meters. The Company is also in the
process of acquiring land rights covering a total area of approximately 2,542,715 square meters. The total expenditures amounting to Rp48,254,769,495 as of June 30, 2008 incurred in relation to the
above land rights acquisition process are recorded as part of “Other Non-current Assets” in the consolidated balance sheets.
The Company made advance payments for the purchase of certain machinery, equipment and spare parts from several suppliers. The outstanding balances of the purchase advances as of
June 30, 2008 and 2007 amounting to Rp111,489,895 and Rp1,178,360,801, respectively, are presented as part of “Other Non-current Assets” in the consolidated balance sheets.
The assets under capital lease are collateralized to the related obligations under capital lease Note 12.
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Six months ended June 30, 2008 and 2007 Expressed in rupiah, unless otherwise stated
25
9. TRADE PAYABLES TO THIRD PARTIES
