PT Bank OCBC NISP Tbk PT Bank OCBC NISP Tbk continued US40,000 Facility Agreement

u r p r o F Il E o u r M E SSA g E S o u r B u S In E S S o u r pE o pl E o u r g o v Ern A n C E o ur C o M M un IT IE S o u r I n v E S T o r S o u r F In An C E S 1 DAro EnErgy 2013 AnnuAl rEporT 207 PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 547 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012 Expressed in thousands of 2 S Dollars, unless otherwise stated

21. LONG-TERM BANK LOANS continued

e. US380,000 Facility Agreement continued

In accordance with the loan agreement, Adaro is required to maintain certain financial ratios, with which Adaro was in compliance as at 31 December 2013. Adaro is also required to comply with certain terms and conditions with regard to its Articles of Association, the nature of the business, dividends, corporate actions, financing activities and other matters. Adaro is in compliance with the related terms and conditions.

f. US160,000 Facilities Agreement

On 29 May 2012, MBP, as the Borrower, entered into a syndicated loan facility agreement with several banks, which consisted of The Hongkong and Shanghai Banking Corporation Limited Jakarta branch, Oversea-Chinese Banking Corporation Limited, The Bank of Tokyo-Mitsubishi UFJ Ltd Jakarta branch, DBS Bank Ltd, Sumitomo Mitsui Banking Corporation, Mizuho Corporate Bank Ltd, CIMB Bank Berhad Singapore branch, PT Bank ANZ Indonesia and Standard Chartered Bank as Mandated Lead Arrangers, Chinatrust Commercial Bank Co Ltd Singapore branch as Lead Arranger, Oversea-Chinese Banking Corporation Limited as Facility Agent and The Bank of Tokyo- Mitsubishi UFJ Ltd Jakarta branch as Security Agent. These facilities consist of a term loan facility of US140,000 and a revolving loan facility of US20,000, with interest rates at LIBOR plus a certain percentage. These facilities were used for refinancing the intra-group loans from the Company, capital expenditure and other general corporate purposes. The Company acts as the guarantor of this syndicated loan. The term loan facility is payable quarterly with the first installment due on 19 August 2015. Both the term loan facility and the revolving loan facility have a maturity date of the seventh anniversary of the date of the loan agreement. The outstanding balance of the revolving loan facility was US5,000 and the outstanding balance of the term loan facility was US140,000, which is repayable according to the following schedule: Payment schedule year Payment amount 2015 US12,000 2016 US24,000 2017 US28,000 2018 US36,000 2019 US40,000 US140,000 In accordance with the loan agreement, MBP is required to maintain certain financial ratios, with which MBP was in compliance as at 31 December 2013. MBP is also required to comply with certain terms and conditions relating to its Articles of Association, the nature of the business, dividends, corporate actions, financing activities and other matters. MBP is in compliance with the related terms and conditions.

g. PT Bank OCBC NISP Tbk

On 3 December 2009, SDM obtained a term loan facility of US15,000 from PT Bank OCBC NISP Tbk. This credit facility was used for the purpose of refinancing a portion of the Barito Channel project cost which was previously financed by ATA. The facility has a final maturity date of five years after first withdrawal and is payable on a semester basis. The loan bears interest at the three-month Singapore Interbank Offered Rate “SIBOR” plus a certain percentage and is payable on a quarterly basis. The loan is collateralised by: - all trade receivables owned by SDM at the maximum of US15,000; - an insurance claim which covers the risk of operating loss; and - a Letter of Comfort from Adaro. 208 345 IABlE, STrong, EFFICIEnT PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 548 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012 Expressed in thousands of 6 S Dollars, unless otherwise stated

21. LONG-TERM BANK LOANS continued

g. PT Bank OCBC NISP Tbk continued

As at 31 December 2013, the outstanding balance of this facility was US4,999 2012: US8,499 which is repayable in 2014. Under the loan agreement, SDM is required to maintain certain financial ratios, with which SDM was in compliance as at 31 December 2013. SDM is also required to comply with certain terms and conditions regarding its Articles of Association, the nature of the business, corporate actions, financing activities and other matters. SDM is in compliance with the related terms and conditions.

h. US40,000 Facility Agreement

On 6 July 2012, MBP, as the Borrower, entered into a syndicated loan facility agreement with several banks, which consisted of Mizuho Corporate Bank Ltd, Oversea-Chinese Banking Corporation Limited, Sumitomo Mitsui Banking Corporation, DBS Bank Ltd and The Hongkong and Shanghai Banking Corporation Limited Jakarta branch as Mandated Lead Arrangers, with certain financial institutions as Lenders, with Oversea-Chinese Banking Corporation Limited as Facility Agent and The Bank of Tokyo-Mitsubishi UFJ Ltd Jakarta branch as Security Agent. The facility is a revolving loan facility of US40,000, with interest rates at LIBOR plus a certain percentage. The facility is to be used for capital expenditure, transaction costs related to this facility and other general corporate purposes. The Company acts as the guarantor of this syndicated loan. In accordance with the loan agreement, MBP is required to maintain certain financial ratios, with which MBP was in compliance as at 31 December 2013. MBP is also required to comply with certain terms and conditions relating to its Articles of Association, the nature of the business, dividends, corporate actions, financing activities and other matters. MBP is in compliance with the related terms and conditions. As at 31 December 2013, MBP has not yet drawn down on this loan facility.

22. SENIOR NOTES

2013 2012 Face value 800,000 800,000 Discount and issuance cost 15,161 15,161 Amortisation of discount and issuance cost 5,031 3,691 789,870 788,530 On 22 October 2009, Adaro issued Guaranteed Senior Notes the “Senior Notes” amounting to US800,000, with a selling price of 99.141. The Senior Notes will mature in 2019. The Senior Notes bear a fixed interest rate of 7.625, which is payable semi-annually in arrears on 22 April and 22 October of each year commencing on 22 April 2010. The Senior Notes are unconditionally and irrevocably guaranteed by the Company. The Senior Notes were issued under an indenture between Adaro, the Company and The Bank of New York Mellon, as the trustee. The Senior Notes are currently rated “Ba1” by Moody’s and “BB+” by Fitch. The ratings reflect the rating agencies’ assessments of the likelihood of timely payment of the principal and interest on the Senior Notes. The proceeds of the Senior Notes were used primarily to finance the expansion of the Group’s infrastructure in support of the expansion of Adaro’s coal production capacity. 7 u r p r o F Il E o u r M E SSA g E S o u r B u S In E S S o u r pE o pl E o u r g o v Ern A n C E o ur C o M M un IT IE S o u r I n v E S T o r S o u r F In An C E S 8 DAro EnErgy 2013 AnnuAl rEporT 209 PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 549 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012 Expressed in thousands of 9 S Dollars, unless otherwise stated

22. SENIOR NOTES continued

The Senior Notes and the guarantee of the Senior Notes are unsecured and rank equally with all existing and future unsecured senior debt of Adaro and the Company, respectively. The Senior Notes and the guarantees of the Senior Notes are effectively subordinated to all of Adaro’s and the Company’s existing and future secured debt to the extent of the assets securing this debt. The Company’s guarantee of the Senior Notes is structurally subordinated to all liabilities including trade payables of all of the Company’s other subsidiaries, which did not initially issue guarantees for the Senior Notes. The Company may in future designate its subsidiaries to guarantee the Senior Notes. The Senior Notes are listed on the Singapore Exchange Securities Trading. At any time, depending on the circumstances specified in the indenture, Adaro may on any one or more occasions redeem all or a part of the Senior Notes, at predetermined redemption prices, plus accrued and unpaid interest. Adaro and the Company are required to comply with certain terms and conditions on the incurring of indebtedness and the issue of disqualified stock, the designation of the Subsidiary Guarantor, mergers, consolidations and sales of assets, certain transactions with affiliates, business activities and other matters. As at 31 December 2013, Adaro and the Company are in compliance with the related terms and conditions.

23. RETIREMENT BENEFITS OBLIGATION

Provision for employee benefits as at 31 December 2013 was calculated by Padma Radya Aktuaria, independent actuaries, in various actuarial reports issued in 2014. The principal assumptions used in determining the Group’s provision for employee benefits are as follows: 2013 2012 Discount rate 8.8 - 9 Rp, 6 - 6.5 Rp, 2.4 US 1.5 US Salary growth rate 5 - 15 5 - 15 Expected return on plan assets 7 7 Normal retirement age 55 55 Mortality rate from the Indonesian 100 TMI3 100 TMI3 Mortality Table and TMI2 Provision for employee benefits recognised in the consolidated statements of financial position is computed as follows: 2013 2012 Present value of funded obligation 11,731 16,978 Fair value of plan assets 1,225 1,482 Deficit of funded plans 10,506 15,496 Present value of unfunded obligations 27,135 24,860 Total 37,641 40,356 Unrecognised actuarial gainlosses 5,457 6,073 Unrecognised past service cost 30 2 Net liability 43,068 34,281 210 :; IABlE, STrong, EFFICIEnT PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 550 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012 Expressed in thousands of = S Dollars, unless otherwise stated

23. RETIREMENT BENEFITS OBLIGATION continued

The movement in the Group’s fair value of plan assets of the year is as follows: 2013 2012 At the beginning of the year 1,482 1,538 Expected return on plan assets 79 83 Actuarial losses 26 37 Foreign exchange difference 310 102 At end of the year 1,225 1,482 The movement in the Group’s present value of obligation is as follows: 2013 2012 At the beginning of the year 41,838 24,974 Current service cost 13,574 8,085 Interest cost 2,724 1,747 Actuarial gainlosses 13,971 5,049 Past service cost 960 4,424 Benefits paid 842 2,445 Foreign exchange difference 5,417 462 Liabilities acquired in business combination - 466 At end of the year 38,866 41,838 The amount recognised in profit or loss is as follows: 2013 2012 Current service cost 13,574 8,085 Interest cost 2,724 1,747 Expected return on plan assets 79 83 Net actuarial lossesgain gainlosses recognised in current year 460 1,531 Foreign exchange difference 5,107 360 Past service cost 960 4,425 11,612 15,345 The actual return on plan assets as at 31 December 2013 was US53 2012: US21. As at 31 December 2013 and 2012, the plan assets are fully invested in the money market. Expected returns on money market are based on expected future fair value as at reporting date. Expected contributions to post employment benefit plans for the next year are US1,476. 2013 2012 Experience adjustment on plan liabilities 3,656 1,538 Experience adjustment on plan assets 26 37 u r p r o F Il E o u r M E SSA g E S o u r B u S In E S S o u r pE o pl E o u r g o v Ern A n C E o ur C o M M un IT IE S o u r I n v E S T o r S o u r F In An C E S ? DAro EnErgy 2013 AnnuAl rEporT 211 PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 551 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012 Expressed in thousands of S Dollars, unless otherwise stated

24. PROVISION FOR MINE RECLAMATION AND CLOSURE

2013 2012 Beginning balance 16,211 12,720 Addition 27,166 10,497 Realisation 3,341 7,014 Accretion 401 695 Foreign exchange difference 82 687 Ending balance 40,355 16,211

25. SHARE CAPITAL

All shares in the Company have been listed on the Indonesian Stock Exchange since 16 July 2008. The Company’s shareholders as at 31 December 2013 and 2012 based on the records maintained by PT Kustodian Sentral Efek Indonesia “KSEI”, the share administrator, were as follows: Percentage Number of of ownership Shareholders shares Amount 31 December 2013 PT Adaro Strategic Investments 14,045,425,500 43.91 150,589 Garibaldi Thohir President Director 1,986,032,654 6.21 21,293 Edwin Soeryadjaya President Commissioner 1,051,738,544 3.29 11,276 Theodore Permadi Rachmat Vice President Commissioner 724,420,430 2.26 7,767 Sandiaga Salahuddin Uno Director 640,838,202 2.00 6,871 Ir. Subianto Commissioner 435,000,120 1.36 4,664 Chia Ah Hoo Director 8,113,500 0.03 87 Public 13,094,393,050 40.94 140,393 31,985,962,000 100.00 342,940 Percentage Number of of ownership Shareholders shares Amount 31 December 2012 PT Adaro Strategic Investments 14,045,425,500 43.91 150,589 Garibaldi Thohir President Director 1,975,832,654 6.18 21,184 Edwin Soeryadjaya President Commissioner 1,359,777,646 4.25 14,579 Theodore Permadi Rachmat Vice President Commissioner 707,420,430 2.21 7,585 Sandiaga Salahuddin Uno Director 640,838,202 2.00 6,871 Ir. Subianto Commissioner 416,932,620 1.30 4,470 Chia Ah Hoo Director 4,815,500 0.02 52 Lim Soon Huat Commissioner 1,300,000 0.00 14 Public 12,833,619,448 40.13 137,596 31,985,962,000 100.00 342,940 Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of and amounts paid on the shares held. 212 BCD IABlE, STrong, EFFICIEnT PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 552 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012 Expressed in thousands of F S Dollars, unless otherwise stated

26. ADDITIONAL PAID-IN-CAPITAL, NET

2013 2012 Additional paid-in-capital from IPO 1,219,813 1,219,813 Share issuance costs 44,532 44,532 Difference in value from restructuring transactions of entites under common control 20,787 20,787 Additional paid-in-capital, net 1,154,494 1,154,494 The additional paid-in-capital from IPO represents the balance from the initial public offering in 2008.

27. RETAINED EARNINGS

Appropriated Unappropriated Total Balance as at 1 January 2012 37,731 904,269 942,000 Profit for the year - 385,347 385,347 Appropriation of retained earning 5,504 5,504 - Dividend - 260,686 260,686 Balance as at 31 December 2012 43,235 1,023,426 1,066,661 Profit for the year - 231,231 231,231 Appropriation of retained earning 3,853 3,853 - Dividend - 80,285 80,285 Balance as at 31 December 2013 47,088 1,170,519 1,217,607 Limited Liability Company Law of the Republic of Indonesia requires the establishment of a general reserve from net income amounting to at least 20 of a company’s issued and paid-up capital. This general reserve is presented as appropriated retained earnings in the consolidated statements of financial position. There is no time limit on the establishment of the reserve.

28. DIVIDENDS

At the Company’s AGMS held on 27 April 2012, a total cash dividend for 2011 of US259,086 US0.0081share-full amount was approved. This included interim cash dividend for 2011 of US75,167, was paid on 9 December 2011. The remaining US183,919, final cash dividend for 2011, was paid on 12 June 2012. At the Company’s Board of Commissioners and Directors Meeting held on 24 April 2012, a total interim cash dividend for 2012 of US41,582 US0.0013share-full amount, was approved. The interim cash dividend was paid on 12 June 2012. At the Company’s Board of Commissioners and Directors Meeting held on 21 November 2012, an interim cash dividend for 2012 of US35,185 US0.0011share-full amount was approved. The interim cash dividend was paid on 15 January 2013. At the Company’s AGMS held on 19 April 2013, a total cash dividend for 2012 of US117,069 US0.00366share – full amount was approved. This included interim cash dividend for 2012 of US76,767, which was paid on 12 June 2012 and 15 January 2013. The remaining US40,302, final cash dividend for 2012, was paid on 12 June 2013. At the Company’s Board of Commissioners and Directors Meeting held on 2 December 2013, an interim cash dividend for 2013 of US39,983 US0.00125share-full amount was approved. The interim cash dividend was paid on 16 January 2014. G u r p r o F Il E o u r M E SSA g E S o u r B u S In E S S o u r pE o pl E o u r g o v Ern A n C E o ur C o M M un IT IE S o u r I n v E S T o r S o u r F In An C E S H DAro EnErgy 2013 AnnuAl rEporT 213 PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 553 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012 Expressed in thousands of I S Dollars, unless otherwise stated

29. NON-CONTROLLING INTERESTS

2013 Share in net Other Beginning income comprehensive Ending balance Acquisition Addition Deduction loss Dividend income balance PT Bhakti Energi Persada and subsidiaries 429,016 - - 989 4,742 - 899 424,184 Others each below US50,000 7,068 56,073 444 - 2,774 705 380 66,034 436,084 56,073 444 989 1,968 705 1,279 490,218 2012 Share in net Other Beginning income comprehensive Ending Balance Acquisition Deduction loss Dividend income balance PT Bhakti Energi Persada and subsidiaries - 432,524 - 3,497 - 11 429,016 Others each below US50,000 6,352 - 265 1,457 487 11 7,068 6,352 432,524 265 2,040 487 - 436,084

30. REVENUE

2013 2012 Sales of coal Export 2,452,832 2,574,064 Domestic 616,471 864,564 3,069,303 3,438,628 Mining services Domestic 147,748 210,317 Others Export 600 600 Domestic 67,491 72,944 68,091 73,544 3,285,142 3,722,489 All of the consolidated revenue was generated from third party transactions. As at 31 December 2013, there were no customers with which revenue transactions exceeded 10 of the total consolidated revenue 2012: 1 customer with value of US377,516. 214 JKM IABlE, STrong, EFFICIEnT PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 554 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012 Expressed in thousands of N S Dollars, unless otherwise stated

31. COST OF REVENUE

2013 2012 Sales of coal Mining 1,286,438 1,314,775 Coal processing 126,201 118,339 Total production costs 1,412,639 1,433,114 Royalties to Government 348,014 383,700 Freight and handling costs 268,794 275,659 Depreciation and amortisation 170,228 151,246 Amortisation of mining properties 78,991 68,588 Purchase of coal 74,949 90,421 Mine closure and reclamation costs 27,166 10,497 Coal inventory: Beginning balance 32,251 27,556 Ending balance 44,298 32,251 Increase in coal inventory 12,047 4,695 Total cost of revenue - sales of coal 2,368,734 2,408,530 Mining services Repair and maintenance 37,074 51,905 Depreciation and amortisation 31,726 36,062 Consumables 29,787 44,719 Employee costs 18,957 48,875 Subcontractors 6,976 11,748 Other costs each below US5,000 10,165 13,915 Total cost of revenue - mining services 134,685 207,224 Others Consumables 10,918 32,121 Depreciation and amortisation 8,490 6,894 Other costs each below US5,000 23,129 25,098 Total cost of revenue - others 42,537 64,113 2,545,956 2,679,867 Details of suppliers with transactions that represent more than 10 of the consolidated revenue are as follows: 2013 2012 Third parties: PT Pamapersada Nusantara 422,709 357,779 PT Shell Indonesia 469,864 400,710 892,573 758,489 Refer to Note 35 for details of related party balances and transactions. P u r p r o F Il E o u r M E SSA g E S o u r B u S In E S S o u r pE o pl E o u r g o v Ern A n C E o ur C o M M un IT IE S o u r I n v E S T o r S o u r F In An C E S Q DAro EnErgy 2013 AnnuAl rEporT 215 PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 555 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012 Expressed in thousands of S S Dollars, unless otherwise stated

32. OPERATING EXPENSES

2013 2012 Selling and marketing Sales commission 41,330 48,258 Others 937 2,524 42,267 50,782 General and administrative Employee costs 51,793 53,806 Others 79,029 68,479 130,822 122,285 173,089 173,067

33. OTHER INCOMEEXPENSES, NET

2013 2012 Negative goodwill from business acquisition Note 4b 145,578 - Loss on goodwill impairment Note 15 101,877 - Foreign exchange loss, net 53,198 12,315 Others 22,315 20,856 31,812 33,171

34. TAXATION

a. Prepaid taxes