LONG-TERM BANK LOANS 2009 Liquidation Adaro Finance B.V., MEC Indo Coal B.V. and Arindo Global Netherland B.V.

Adaro Energy Annual Report 2009 177 www.adaro.com PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 539 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008 Expressed in million Rupiah, unless otherwise stated

22. SENIOR NOTES 2009

2008 Face Value 7,520,000 - Discount and issuance cost 142,518 - Amortisation of discount and issuance cost 2,617 - Exchange difference due to financial statement translation 251 - 7,379,848 - On 22 October 2009, Adaro issued a Guaranteed Senior Notes “Senior Notes” amounting to US800,000,000, with a selling price of 99.141. The Senior Notes will mature in 2019. The Senior Notes bear a fixed interest rate of 7.625 and be payable semi - annually in arrears on 22 April and 22 October of each year commencing on 22 April 2010. The Senior Notes are unconditionally and irrevocably guaranteed by the Company. The Senior Notes were issued under an indenture between Adaro, the Company and The Bank of New York Mellon, as the trustee. The Senior Notes have been rated “Ba1” by Moody’s and “BB+” by Fitch. The ratings reflect the rating agencies assessments of the likelihood of timely payment of the principal and interest on the Senior Notes. The proceeds of the Senior Notes will be used primarily to finance the expansion of the Group’s infrastructure to support the expansion of Adaro’s coal production capacity The Senior Notes and the guarantee of the Senior Notes are unsecured and rank equally with all existing and future unsecured senior debt of Adaro and the Company, respectively. The Senior Notes and the guarantee of the Senior Notes are effectively subordinated to all of Adaro’s and the Company’s existing and future secured debt to the extent of the assets securing the debt. The Company’s guarantee of the Senior Notes are structurally subordinated to all liabilities including trade payables of all of the Company’s other subsidiaries, which are not initially issuing guarantees for the Senior Notes. The Company may in the future designate its subsidiaries to guarantee the Senior Notes. The Senior Notes were listed on the Singapore Exchange Securities Trading. Adaro and the Company are required to comply with certain terms and conditions on incurrence of indebtedness and issuance of disqualified stock, designation of Subsidiary’s Guarantor, merger, consolidation and sales of assets, certain transactions with affiliates, business activities and others.

23. DERIVATIVE INSTRUMENT

As at 31 December 2009, the derivative contracts had an unvafourable fair value as follows: 2009 2008 Interest rate swap 159,437 208,745 Fuel swap 8,231 - 167,668 208,745 Less: current portion 127,163 51,112 Non-current portion 40,505 157,633

a. Interest rate swap

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 Loan facility agreement amounting to