Adaro Energy Annual Report 2009 195 www.adaro.com
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 557
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008
Expressed in million Rupiah, unless otherwise stated
39. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES continued c.
Litigation continued
On 21 September 2007, the Singapore High Court rejected all Beckkett’s claims on Dianlia. On 27 April 2009, the Singapore Court of Appeal made its final and binding decision, in favour of Dianlia and found that the purchase of the Pledged Shares
was lawful. The court also ordered Beckkett to pay Dianlia all associated legal costs. However, there is no assurance that Beckkett will not file other claims of a similar nature in the future.
d. Royalty claim
In May 2006, MoEMR alleged that Adaro had underpaid the royalties due from coal sales for th e period from 2001 and demanded payment. Adaro strongly rejected the allegation because it had discharged its obligation to pay such royalties by
way of offsetting it against the Government’s obligation to reimburse Adaro for its VAT payment as prescribed under the CCA. In May 2006, Adaro filed an objection with the Jakarta Administrative Court against MoEMR. Upon Adaro’s application, in May
2006, the Jakarta Administrative Court granted an order restricting MoEMR from taking any further administrative steps on the issue until a final and binding judgment was delivered.
In September 2006, the Jakarta Administrative Court issued a decision in favour of Adaro. The Jakarta High Administrative Court concurred with the Jakarta Administrative Court in February 2007. On 26 September 2008, the Indonesian Supreme
Court concurred with the decision of the Jakarta High Administrative Court and the decision of the Indonesian Supreme Court is final and binding.
In June 2006, MoEMR granted authority to the Committee for State Claim Affairs the “Committee” to pursue alleged underpayment on its behalf. In July 2007, the Committee issued a demand for payment to Adaro. As this is an industry-wide
problem, similar demands have been made by the Committee to other first-generation companies. In September 2007, Adaro filed an objection with the Jakarta Administrative Court against the Committee. Upon Adaro’s
application, in September 2007 the Jakarta Administrative Court granted an order restricting the Committee from taking any further administrative steps on the issue until a final and binding judgment was delivered. On 15 February 2008, the Jakarta
Administrative Court issued a decision in favour of Adaro. The Jakarta High Administrative Court concurred with the Jakarta Admistrative Court on 1 July 2008. On 22 July 2009, the Indonesian Supreme Court concurred with the decision of the Jakarta
High Administrative Court and the decision of the Indonesian Supreme Court is final and binding. On 29 January 2010, the Committee filed a civil review Peninjauan Kembali on the decision of the Indonesian Supreme Court. As at the date of this
report, there is no result yet from the civil review Peninjauan Kembali.
As management believes that Adaro has strong grounds supporting the case and the recent court decision was in favour of Adaro, no provision has been booked to the consolidated financial statements.
e. Capital expenditures
As at 31 December 2009, Adaro has outstanding purchase orders for mining equipments amounting to US68.7 million and SIS for operational equipments amounting to US18.5 million.
f. Banking facility
On 5 September 2007, Adaro entered a bank facility agreement with HSBC to issue a bank guarantee with a total limit of US15,000,000 which includes Standby Documentary Credit amounting to US15,000,000, performance bonds amounting to
US5,000,000 and tender bonds amounting to US5,000,000. This agreement has been amended and extended to 31 July 2010. This facility is not bound by any collateral.
On 20 August 2008, Adaro entered into a banking facility amendment agreement with PT Bank DBS Indonesia for the banking facility in bank guarantee, bid bonds, performance bonds and standby letters of credit, with a total limit of US15,000,000.
This agreement has been amended and extended to 14 July 2010. This facility is not bound by any collateral. The use of certain banking facilities require Adaro to maintain time deposits refer to Note 5.
As at 31 December 2009, the total bank facilities used by Adaro which wer e obtained from HSBC and PT Bank DBS Indonesia and from other financial institutions obtained without any facility in various currencies were equal to US26.4
million 2008: US18.9 million. Those facilities had been issued in relation to sales contracts and reclamation guarantees.
g. Sales commitment
As at 31 December 2009, Adaro had various commitments to deliver 259.8 million metric tonnes of coal to various buyers, subject to price agreement. The coal will be periodically delivered from 2010 until 2022.
