Agency fees Adaro Energy 2009 Annual Report English

198 Adaro Energy Annual Report 2009 From Us to Y ou Running Adaro Management Report Owning Adaro Governing Adaro Financial Report Contact Us Corporate Social Responsibility Adaro in Summary www.adaro.com PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 560 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 r.

New mining law No. 42009 continued In February 2010, the Government of Indonesia released two implementing regulations for Mining Law No. 42009, i.e. Government Regulation No. 222010 and 232010 “GR No. 22” and “GR No. 23”. GR No. 22 deals with the establishment of the mining areas under the new mining business license “Ijin Usaha Pertambangan” or “IUP”. GR No. 23 provides clarifications surrounding the procedures to obtain the new IUP. GR No. 23 indicates that existing CCAs will be honoured by the Government although any extension of existing CCAs will be through the issuance of an IUP. The Group is closely monitoring the progress of the implementing regulations for the Law, and will consider the impact on its operation, if any, once these regulations are issued.

s. New Ministerial Regulation No. 282009

In September 2009, the Minister of Energy and Mineral Resources issued Ministerial Regulation No. 282009, which, among others, requires directorate general’s approval to use an affiliate as a mining service contractor. The regulation provides the definition of affiliates and provides exception only when there are no other capable mining services companies operate in the area. The regulation requires mining concession companies to conduct all coal extraction activities themselves within three years of the issuance of the regulation. Accordingly, Adaro will be required to develop its own extraction capabilities in lieu of relying on third party contractors. Management believes that carrying out coal extraction activity by Adaro will not materially change the operating structure of Adaro’s operations or SIS’s as a result of changes at Adaro or similar other customers of SIS. The regulation provides a three year transition period for changes to existing arrangements. The Group is currently considering the implications of this regulation, given that SIS provides mining services to Adaro.

t. New Ministerial Regulation No. 342009

In December 2009, the Minister of Energy and Mineral Resources issued another regulation, Ministerial Regulation No. 342009, which provides a legal framework to require mining companies to sell a portion of their output to the domestic customers “Domestic Market Obligation” or “DMO”. The DMO volume is based on a minimum percentage of domestic coal sales which will be determined by the Minister of Energy and Mineral Resources. The minimum DMO percentage and the price to be used for the DMO sales, which will follow international indices as the benchmark, will be determined by the Minister of Energy and Mineral Resources. As of the date of this report, the mining industry is waiting for further implementation guidelines and instructions from the MoEMR.

40. EXTRAORDINARY ITEM 2009

2008 Demurrage - 677,711 Income tax expense - 304,970 Net loss after tax - 372,741 The amounts represent the demurrage which was incurred beyond normal activity of Adaro due to the bad weather in January to April 2008, which delayed coal loading and shipment.

41. RECLAMATION GUARANTEE

On 29 May 2008, the Minister of Energy and Mineral Resources announced a new regulation regarding mine reclamation and mine closure as detailed in Ministerial Regulation No. 182008. It is stated that a company is required to provide mine reclamation and mine closure guarantees which may be in the form of a time deposit, bank guarantee or insurance, all of which with a duration according to the reclamation schedule. The mine reclamation guarantee may also be in the form of an accounting reserve, if the company is either a publicly listed company or the company has paid up capital of at least US25,000,000 as stated in the audited financial statements. If a time deposit, the mine closure guarantee may be placed in Rupiah or US funds, with a state owned bank in Indonesia on behalf of the Minister of Energy and Mineral Resources, Governor or Mayor qq the relevant company with a duration according to the mine closure schedule. Based on Decree of the Director General of Mineral, Coal and Geothermal No. 192037.06DJB2008 dated 26 August 2008 and No. 101237.03DJB2009 dated 19 March 2009, Adaro is required to provide a Reclamation Guarantee in the form of performance bonds. As at the balance sheet date, Adaro had placed reclamation guarantees in the form of performance bonds amounting to Rp 30,515 2008: Rp 26,449.