PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2004 and 2003 Expressed in rupiah, unless otherwise stated
44
21. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES continued
of the year. This minimum purchase requirement will not be valid if the total payments made for the gas transportation fee exceed US 10,000,000 plus interest and Rabana’s overhead. The
agreement will expire in 2014 or may be terminated if the total volume of natural gas consumed reaches the contractual volume as stipulated in the agreement. Total transportation fee and
technical fee paid to Rabana amounted to US 772,332 and US 464,641 for the nine months ended September 30, 2004 and 2003, respectively.
e. The Company also has agreements with PERTAMINA for the purchase of natural gas which provide for annual minimum purchase quantity. If the Company is unable to consume the agreed
volume of natural gas, the Company should pay for the unconsumed volume to PERTAMINA. However, such payment can be treated as prepayment and can be applied for future gas
consumption. Such agreements will expire in 2004 for the cement plants in Citeureup and 2014 for the power plant in Citeureup. Total purchases of natural gas from PERTAMINA for the nine
months ended September 30, 2004 and 2003 amounted to Rp 60,403,041,147 and Rp 27,011,011,993, respectively. The related outstanding payables arising from these purchases
amounting to US 1,254,047 equivalent to Rp 11,499,613,466 and US 1,069,258 equivalent to Rp 8,970,005,529 as of September 30, 2004 and 2003, respectively, are presented as part of
“Trade Payables - Third Parties” in the consolidated balance sheets.
f. The Company has an outstanding sale and purchase of electricity agreement with PT PLN Persero PLN wherein PLN agreed to deliver electricity to the Company’s Citeureup plants with
connection power of 80,000 KVA150 kV at a certain rate with a minimum consumption of 8,000,000 kWh per month. Under the agreement, the Company was required to pay connection
fee of Rp 8,000,000,000, build its own main tower and an incoming bay for PLN based on the standards and specifications of PLN. The price of the electricity will be based on the government
regulation. The Company also has an outstanding sale and purchase of electricity agreement with PLN
wherein PLN agreed to deliver electricity to the Company’s Cirebon plants with connection power of 45,000 KVA70 kV. Under the agreement, the Company was required to pay connection fee of
Rp 2,300,000,000. The price of the electricity will be based on the government regulation.
Total amounts paid for the purchase of electricity under the agreements amounted to Rp 134.6 billion and Rp 129.8 billion for the nine months ended September 30, 2004 and 2003, respectively.
g. The Company has an outstanding agreement with the Forestry Department FD for the exploitation of raw materials for cement, construction of infrastructure and other supporting
facilities over 3,733.97 hectares of forest located in Pantai - Kampung Baru, South Kalimantan. Based on the agreement, the FD agreed to grant a license to the Company to exploit the above
forest area for the above-mentioned purposes without any compensation. However, the Company is obliged to pay certain expenses in accordance with applicable regulations, to reclaim and
replant the unproductive area each year, to maintain the forest area borrowed by the Company and to develop local community livelihood. Such license is not transferable and will expire in May
2019.
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2004 and 2003 Expressed in rupiah, unless otherwise stated
45
21. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES continued
