The risk of coal price luctuation The risk of fuel price The risk of interest rate Weather risk Risiko luktuasi harga batu bara

191 PT TOBA BARA SEJAHTRA TBK 2016 ANNUAL REPORT

1. The risk of coal price luctuation

The Company income depends on the sale price which is referred to the luctuated world coal price index. The Company sells the majority of the coal production plan to highly qualiied buyers according to ixed price contract.

2. The risk of fuel price

The Company faces fuel price as the result of luctuating fuel price and luctuating cost of fuel price provided by the Company to the mining contractors. The increase of fuel price might be less beneicial for the business proit and company proit margin. Besides, the Company performs value protection transaction of required number of fuel.

3. The risk of interest rate

The risk of interest rate of cash low is a risk where future cash low of inance instrument luctuates as a result of the change of interest rate in the market. The exposure today is from the long term loan of the syndicate bank loan with loating interest rates. This potentially promotes risk for the Company cash low. The Company manages the interest rate risk by utilising interest rate cap instrument during the period of syndicate bank loan. Through this instrument, the Company will be able to limit the exposure towards loating interest rate in particular degree.

4. Weather risk

Weather situation in some mining concession areas of the Company can affect the mining activities of the Company signiicantly. All concession area of the Company are located in the Eastern Kalimantan, which are areas under the great inluence of seasonal weather. Generally, dry weather situation occurs in the second and third quarter. This provokes more conducive situation for mining while high rainfall index occurs from November

1. Risiko luktuasi harga batu bara

Pendapatan usaha Perseroan bergantung pada harga penjualan batu bara yang mengacu pada indeks harga batu bara dunia yang berluktuasi. Perseroan menjual sebagian besar rencana produksi batu baranya kepada pembeli berkualitas baik berdasarkan kontrak dengan harga tetap.

2. Risiko harga bahan bakar