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DAro EnErgy 2013 AnnuAl rEporT
229
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 569
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012
Expressed in thousands of
S Dollars, unless otherwise stated
40. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES continued
c. Royalty claim continued
Furthermore, PMK 194 which is effective as of 1 January 2013, in its recitals mentioned that based on the First Generation CCA that had been signed prior to 1 April 1985, the Contractors are required to pay taxes as stated in
the agreement, among others, the Sales Tax in accordance with the prevailing tax laws and regulations in Indonesia.
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 in the consolidated financial statements in relation to this matter.
Adaro has offset the claim for recoverable VAT input and vehicle fuel tax against royalty payments due to the Government of Indonesia refer to Note 34b.
d. Banking facility
On 5 September 2007, Adaro entered into a banking facility agreement with HSBC to issue a bank guarantee. This agreement has been amended several times, with the last amendment to extend the maturity date of this
agreement to 31 July 2014. The facility represents combined limit facility amounting to US30,000 with treasury facility amounting to US25,000. 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 banking facilities in the form of bank guarantees, bid bonds, performance bonds and stand-by letters of credit, with
a total limit of US15,000. This agreement has been amended several times, with the last amendment to extend the maturity date of this agreement to 15 July 2014. This facility is not bound by any collateral.
On 11 November 2011, Adaro entered into a banking facility agreement with PT Bank ANZ Indonesia formely PT ANZ Panin Bank to issue a bank guarantee. The total limit of this facility is US10,000, which includes the issuing
of a bank guarantee to support bid bonds, performance bonds and payment guarantees amounting to US10,000 or stand-by letters of credit amounting to US10,000. This facility is not bound by any collateral. On 13 September
2013, the agreement has been amended to extend the maturity date to 11 November 2014.
As at 31 December 2013, the total bank facilities used by Adaro which were obtained from HSBC, PT Bank DBS Indonesia and from other financial institutions obtained without any facility in various currencies, aggregated to
US14,268 2012: US33,616. These facilities had been issued in relation to sales contracts and reclamation guarantees.
The use of certain banking facilities requires Adaro to maintain time deposits refer to Note 6.
e. Sales commitments
As at 31 December 2013, Adaro had various commitments to deliver approximately 172.6 million metric tonnes of coal to various buyers, subject to price agreements. The coal will be delivered periodically from 2014 until 2022.
f. Forestry fee
Based on Government Regulation No. 2 dated 4 February 2008, all companies that have activities in production and protected forest areas not related to forestry will have an obligation to pay a forestry fee ranging from Rp 1,200,000
full amount to Rp 3,000,000 full amount per hectare. This fee is effective from 2008. The Group has recognised this fee on an accrual basis.
230
IABlE, STrong, EFFICIEnT
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 570
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012
Expressed in thousands of
S Dollars, unless otherwise stated
40. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES continued
g. Engineering, Procurement and Construction Agreement
On 23 April 2008, MSW entered into an Engineering, Procurement and Construction “EPC” Agreement with PT Punj Lloyd Indonesia “Punj Lloyd Indonesia” and Punj Lloyd Pte Ltd “Punj Lloyd” with a total contract value of
approximately €18,068 thousand and €34,174 thousand, respectively. Under this agreement, Punj Lloyd Indonesia will provide construction services, while Punj Lloyd will supply equipment for the construction of the Tanjung
Tabalong 2x30 MW coal fired power plant project, located in Kalimantan, Indonesia.
As at 31 December 2013, one unit of the power plant has commenced its operation.
h. Legal proceedings
From time to time, the Group is involved in various legal proceedings as a normal incident to the Group’s business. The Group is of the opinion that adverse decisions in any pending or threatened proceedings, or that any amounts it
may be required to pay by reason thereof will not have a material adverse effect on its consolidated financial condition or the consolidated results of its operations.
i. Overland Conveyor Construction Contract
