Senior Credit Facility syndicated loan

176 Adaro Energy Annual Report 2008 www.adaro.com Adaro in Summary From Us to You Running Adaro Management Report Owning Adaro PT ADARO ENERGY Tbk Schedule 544 FORMERLY PT PADANG KARUNIA AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2008 AND 2007 Expressed in million Rupiah, unless otherwise stated

24. OTHER LONG-TERM LOANS - THIRD PARTIES 2008

2007 Rupiah Star Invest Corp - 12,000 US Dollars Star Invest Corp - 11,753 PT Paiton Energy - 6,594 - 18,347 Total other long-term loans - 30,347 Less: Portion due within one year - 6,594 Non-current portion - 23,753 The interest rates on other long-term loans are as follows: 2008 2007 US Dollars - 6.4-13.5 Rupiah - 15

a. Star Invest Corp

As at 31 December 2007, the outstanding balance of the loans were Rp 12,000 and US1,247,823. The loan facilities bear annual fixed interest rate and three-month SIBOR plus a certain percentage, respectively. In December 2008, all loan facilities were fully repaid by the Company.

b. PT Paiton Energy

A US7,000,000 non-interest bearing loan was granted by PT Paiton Energy “PE” to Adaro, to defray the construction costs associated with the Kelanis facility. The loan was repayable by Adaro in ten equal annual instalments commencing on 30 September 1999 which were to offset against service fees payable by PE to Adaro for exclusive use of the Kelanis facility under the Use of Kelanis Facility Agreement. As at 31 December 2007, the outstanding balance under this facility was US700,000. In December 2008, the loan facility from PE was fully repaid by Adaro.

25. DERIVATIVE INSTRUMENT

On 19 March 2008, Adaro entered into an interest rate swap contract with DBS Bank Ltd, with notional amounts of US600,000,000. The transaction underlying this contract is the syndicated credit facility agreement amounting to US750,000,000 refer to Note 23a. Based on this transaction, DBS Bank Ltd receives payments of quarterly fixed interest at a rate of 2.945 per annum and pays to Adaro a floating interest rate of US-LIBOR. This contract will be due on 7 December 2012. The notional amount of US600,000,000 will be reduced gradually to US70,588,235 on 7 December 2012. This transaction is an effective cashflow hedge for purposes of the accounting standards. As at 31 December 2008, this contract had a negative fair value of US19,063,426, net of current portion of US4,667,796.

26. SUBORDINATED LOAN 2008

2007 US Dollars Third party: Great Oasis Equities Ltd - 94,190 On 20 November 2006, SIS and GOE entered into subordinated loan agreements, whereby GOE agreed to subordinate its loan amounting to US8,000,000 and US2,000,000 to any of SIS’ debt to any other party. The loan bears interest at rate of 12 per annum. In August 2008, this subordinated loan was fully paid through refinancing using the Senior Credit Facility refer to Note 23b. Adaro Energy Annual Report 2008 www.adaro.com 177 Contact Us Governing Adaro Financial Report Corporate Social Responsibility PT ADARO ENERGY Tbk Schedule 545 FORMERLY PT PADANG KARUNIA AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2008 AND 2007 Expressed in million Rupiah, unless otherwise stated

27. ACCRUED STRIPPING COSTS 2008

2007 Carrying amount - beginning balance 421,522 4,273 Amortisation 29,370 275 Exchange difference due to financial statement translation 64,662 181 456,814 4,179 Movement of accrued stripping costs: Movement 123,388 404,803 Exchange difference due to financial statement translation 16,189 12,540 139,577 417,343 596,391 421,522 The actual average stripping ratio for the Tutupan area for the year ended 31 December 2008 was 4.14:1 2007: 3.3:1, and for the South Paringin area it was nil 2007: nil. The planned stripping ratio as at 31 December 2008 was 4.25:1 2007: 4.25:1.

28. MINORITY INTEREST a.

Minority interest in equity of subsidiaries 2008 2007 Adaro Percentage of minority interest - 33.93 Carrying amount - beginning balance 341,211 465,720 Share in net income of subsidiaries - 111,482 Share in net income of subsidiary before the additional acquisition by the Company 154,019 - Decrease due to fair value loss from cashflow hedges 716 - Decrease due to restatement in retained earnings of subsidiaries - 258,442 Exchange difference due to financial statement translation 5,688 22,451 Decrease due to acquisition of minority interest by the Group 488,826 - - 341,211 SIS Percentage of minority interest 14.08 18.93 Carrying amount - beginning balance 93,056 54,066 Share in net lossincome of subsidiaries 64,369 450 Increase due to issuance of new shares 12,978 39,607 Decrease due to acquisition of minority interest by the Group 24,382 - Decreaseincrease due to unrealised lossgain from available-for-sale investments 29 146 Decrease due to change in equity of subsidiaries - 1,213 17,254 93,056 Biscayne Percentage of minority interest - 36.06 Carrying amount - beginning balance 122,457 - Minority interest at acquisition - 66,640 Share in net income of subsidiaries - 51,604 Share in net income of subsidiary before additional acquisition by the Group 23,731 - Exchange difference due to financial statement translation 9,073 4,213 Decrease due to acquisition of minority interest by the Group 137,115 - - 122,457