DEFERRED EXPLORATION AND DEVELOPMENT EXPENDITURE 2009

Adaro Energy Annual Report 2009 169 www.adaro.com PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 531 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008 Expressed in million Rupiah, unless otherwise stated

12. FIXED ASSETS continued 2008

Exchange difference due to financial Beginning Disposals statement Ending balance Additions Acquisition reclassification translation balance Acquisition costs Direct ownership Land 26,365 578,944 - 26 - 605,283 Buildings 82,289 7,909 - 49,985 7,167 147,350 Infrastructure 207,275 - - - 33,692 240,967 Machinery, operational equipment and vehicles 2,302,174 373,279 - 80,703 157,436 2,913,592 Vessels - - - - - - Mining equipment 3,908 327 - - - 4,235 Project equipment 7,218 5,178 - - - 12,396 Office equipment 44,185 7,939 1,765 2,897 3,225 60,011 Crushing and handling facilities 664,321 72,674 - 5,368 118,221 860,584 Roads and bridges 830,444 1,103 - 94,087 147,472 1,073,106 Stockpile facilities 57,462 - - - 9,340 66,802 Dock facilities 20,477 - - - 3,328 23,805 4,246,118 1,047,353 1,765 233,014 479,881 6,008,131 Construction in progress 73,589 423,013 298,960 154,865 11,583 652,280 Leased assets Operational equipment 603,794 722,255 - 97,601 - 1,228,448 Vessels - - - - - - Vehicles 191 - 234 149 - 276 603,985 722,255 234 97,750 - 1,228,724 4,923,692 2,192,621 300,959 19,601 491,464 7,889,135 Accumulated depreciation Direct ownership Buildings 21,074 6,517 - 115 3,247 30,723 Infrastructure 66,253 6,606 - - 11,633 84,492 Machinery, operational equipment and vehicles 640,759 213,624 - 29,162 70,655 954,200 Vessels - - - - - - Mining equipment 2,543 789 - - - 3,332 Project equipment 2,969 2,063 - - - 5,032 Office equipment 21,811 9,238 1,287 1,756 2,915 33,495 Crushing and handling facilities 208,939 41,912 - - 39,460 290,311 Roads and bridges 271,420 40,007 - - 49,366 360,793 Stockpile facilities 31,377 2,959 - - 5,488 39,824 Dock facilities 14,920 1,052 - - 2,563 18,535 1,282,065 324,767 1,287 27,291 185,327 1,820,737 Leased assets Operational equipment 82,816 98,807 - 37,453 - 144,170 Vessels - - - - - - Vehicles 113 42 19 130 - 44 82,929 98,849 19 37,583 - 144,214 1,364,994 423,616 1,306 10,292 185,327 1,964,951 Net book value 3,558,698 5,924,184 170 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 532 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008 Expressed in million Rupiah, unless otherwise stated

12. FIXED ASSETS continued

Depreciation expense was allocated as follows: 2009 2008 Cost of revenue 775,872 417,563 General and administrative expenses 21,083 6,053 796,955 423,616 The calculation of loss on disposals of fixed assets was as follows: 2009 2008 Acquisition costs 45,518 19,601 Accumulated depreciation 32,582 10,292 Carrying value of fixed assets 12,936 9,309 Proceeds from disposals of fixed assets 6,286 6,250 Loss on disposals of fixed assets 6,650 3,059 In accordance with the CCA, the fixed assets of Adaro as at 31 December 2009 amounting to Rp 1,431,539 2008: Rp 1,445,829 remain the property of the Government of the Republic of Indonesia. However, Adaro has an exclusive right to use these assets over the contract period, or their useful lives, whichever is shorter. In accordance with the Cooperation Agreement, the fixed assets of IBT as at 31 December 2009 amounting to Rp 690,681 2008: Rp 763,557, in the coal port operation become the property of Pelindo III at the end of the 30-year operation period. The Group owns 27 plots of land with “Hak Guna Bangunan” titles “Building-Use Titles” or “HGB” with remaining useful lives of between 10 and 29 years. The Group’s management believes that there will be no difficulty in extending the land rights as the land was acquired legally and this is supported by sufficient evidence of ownership. In August 2008, ATA paid land compensation amounting to US60,000,000 to PT Cakung Permata Nusa “Cakung”, PT Cakradenta Agung Pertiwi “Cakradenta” and PT Astra Agro Lestari Tbk “AAL” to settle the status of overlapping land plots between the mining area owned by Adaro and the plantation areas owned by Cakung and Cakradenta of 7,163 hectares. Currently, the land title is in the process of being transferred to ATA. As at 31 December 2009, the Group’s fixed assets were insured from all risks for damage with total coverage of approximately Rp 8,579,097, which also includes construction for Project Tanjung Tabalong coal fired power plant by MSW. Management believes that the fixed assets as at 31 December 2009 were adequately insured. The moveable fixed assets owned by SIS and the land and building owned by SMP were pledged as collateral for the Senior Credit Facility refer to Note 21b. Construction in progress Construction in progress represents projects that have not been completed at the balance sheet date as follows: 2009 Percentage of Accumulated Estimated Construction in progress completion costs completion Power plant 28 159,518 November 2011 Vessels 40 - 50 78,787 July 2010 Roads and bridges 13 - 98 72,126 January 2010 - 2011 Infrastructure 75 77,104 April 2010 Conveyor belt 10 102,122 December 2011 Coal crushing and handling facilities 63 - 95 32,720 January – April 2010 Others each below Rp 30,000 10 - 98 55,897 January – July 2010 578,274