4. 2. Location of the supply base No. 4. 3. Statistic of supply base No. 5. Organizational Information and Contact Person Assessment Process 1. Certification Body

SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 6of 135 A.4. Description of Supply Base

A. 4. 1. General description

PT. Kresna Duta Agroindo operates 2 palm oil mills under PT. Kresna Duta Agroindo, named PT. Kresna Duta Agroindo - Jelatang Mill JLTM and PT. Kresna Duta Agroindo – Langling Mill LNGM. This report scope is only for PT Kresna Duta Agroindo - Langling Mill and its supply bases. The raw material FFB for PT. Kresna Duta Agroindo - Langling Mill is supplied from the 1. Bangko Estate Division 5, and 2. Batang Gading estate. Totally supplied FFB from these two 2 estates are 23,100.79 MT. All estates are operated under one management of PT. Kresna Duta Agroindo. All estates located in Jambi, Indonesia. PT. Kresna Duta Agroindo is a member of RSPO and they are implementing a program to achieve RSPO Certified Palm Oil for all its production. There is no plan to expand the land holding and therefore Principles 7 is not applicable to this assessment.

A. 4. 2. Location of the supply base No.

Estate Name Location GPS Latitude Longitude 1 Bangko Estate Desa Langling, Kecamatan Bangko, Kabupaten Merangin, Provinsi Jambi, Indonesia 02 o 05‟ 50” 102 o 21‟ 58”

A. 4. 3. Statistic of supply base No.

Estate Name Planting Year AreaPlanting Year AgePlanting Year Estimated FFBYear Estimated CPOYear 1 Bangko Estate Divisi 5 1994 514,46 19 14,506.84 3,062.31 1995 123,65 18 2,940.54 620.73 1997 223,75 16 5,653.41 1,193.40 TOTAL 23,100.79 4,876.44 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 7of 135

A. 5. Organizational Information and Contact Person

1 Company Name PT. KRESNA DUTA AGROINDO 2 Personal Contact Ismu Zulfikar 3 Vice Management Eldimart 4 Company Address Sinarmas Land Menara 2 Lantai 30, Jalan M. H. Thamrin No. 51, Jakarta, Indonesia 5 Company Status PMDN 7 Phone Fax 021 50338899 8 E-mail ismu.zulfikarsinarmas-agri.com 9 Website www.smart-tbk.com 10 RSPO membership number 1-0019-05-000-00 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 8of 135

A. 5. 1. Audit Again the Rules for Partial Certification 1. Introduction

The audit team has visited Head office at Sinarmas Land Plaza, Tower 2, 30 th Floor, Jalan M. H. Thamrin No. 51, Jakarta, Indonesia to find out the compliance with the rules for partial certification standard in the whole group of PT Sinar Mas Agro Resources and Technology, Tbk SMART. There are 14 mills, 40 own estates and14plasma associated smallholders within this group. The team found a major and a minor non conformity refer to the RSPO requirements for partial certification as stated in the final RSPO certification Systems documents, June 2007, section 4.2.4 as describe below :

2. Assessment agenda partial Certification Audit

3. Audit Team Findings in Correlation to the Rules Partial Certifications

a. The Organization is a member of RSPO PT Kresna Duta Agroindo has confirmed membership of the RSPO under PT SMART Tbk with no. 1-0019-05-000-00 b. A Time Bound Plan for achieving certification within relevant entities No Name of Mill Supply Base Company Location Estimate time of Certifica tion 1 Padang Halaban Mill Padang Halaban Estate Pernantian Estate Adipati Estate Kanopan Ulu Estate PT. SMART TBK North Sumatera 2011 2 Batu Ampar Mill Batu Ampar Estate Batu Mulia Estate Sungai Panci Estate PT. SMART TBK South Kalimantan 2012 Date Location Agenda 19 November 2013 BangkoEstate Verifying legal documents, meeting with Human resources department for Labor Union and workers information SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 9of 135 Sungai Panci KKPA 3 Tanah Laut Mill Tanah Laut Estate Kintapura Estate PT. SMART TBK South Kalimantan 2012 4 Langga Payung Mill Langga Payung Estate Paya Baung Estate Normak Estate PT. Tapian Nadenggan North Sumatera 2012 5 Hanau Mill Hanau Estate Tasik Mas Estate Tanjung Paring Estate Langadang Estate Medang Sari Estate PT. Tapian Nadenggan PT. Satya Kisma Usaha Central Kalimantan 2012 2015 6 Leidong West Mill Leidong West Utara Estate Leidong West Selatan Estate Bukit Intan Estate Bukit Mas Estate PT. Leidong West Indonesia Bangka 2013 7 Semilar Mill Semilar Estate Sei Rindu Estate Mandang Estate Puri Estate PT. Tapian Nadenggan Central Kalimantan 2013 8 Jak Luay Mill Pantun Mas Estate Pantun Mas KKPA Jak Luay Estate Jak Luay KKP Long Buluh Estate Bukit Subur Estate Bukit Subur KKPA PT. Tapian Nadenggan East Kalimantan 2014 9 Gunung Kombeng MillMuara Wahau Mill Gunung Kombeng Estate Gunung Kombeng KKPA Muara Wahau Estate Rantau Panjang Estate Rantau Panjang KKPA PT. Kresna Duta Agroindo East Kalimantan 2014 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 10of 135 10 Jelatang Mill Bangko Inti Estate Tiga Serumpun KKPA Pamenang Plasma Bukit Bungkul KKPA PT. Kresna Duta Agroindo Jambi 2014 2014 2015 2015 11 Pelakar Mill Pelakar Estate Tiga Serumpun KKPA Batang Merangin Estate Batang Tembesi Estate Kubang Ujo Plasma PT. Kresna Duta Agroindo Jambi 2014 2014 2014 2014 2015 12 Langling Mill Bangko Inti Estate Bangko Plasma Bukit Bungkul KKPA Pamenang Plasma Batang Gading Estate Batang Gading KKPA PT. Kresna Duta Agroindo PT. Satya Kisma Usaha Jambi 2014 2015 2015 2015 2015 2015 13 Sungai Bengkal Mill Sungai Bengkal Estate Sungai Bengkal KKPA Kilis Estate Kilis KKPA PT. Satya Kisma Usaha Jambi 2014 14 Bukit Kapur Mill Sungai Cantung Estate Bukit Kapur Estae PT. SMART TBK South Kalimantan 2015 The raw material for POM PT. Kresna Duta Agroindo KDA – Langling Mill is supplied from the FFB which are 1. Bangko Inti Estate; 2. Bangko Plasma; 3. Bukit Bungkul KKPA; 4. Pamenang Plasma; 5. Batang Gading Estate PT. Satya Kisma Usaha; 6. Batang Gading KKPA PT. Satya Kisma Usaha and 2 two from associated smallholders. The application of Certification audit was Langling Mill and Bangko Estate Division 5 as a supply base. During the preliminary audit, it was informed that the supply base from main estate is only Bangko estate. At the time of certification audit, it was found that Langling estate also receives continually from other own estate named Batang Gading estate. The Batang gading estate supplies about 84,48 meanwhile Bangko estate supplies for 15,52. The Batang gading SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 11of 135 estate belongs to PT SKU time bound plan which will be certified by other certification body. Refers to the RSPO SCC system and RSPO Certification system, the Batang gading estate should be within the scope of KDA-Langling mill certification. Team audit decide to issue the Major non-conformace considering to requirements as belows : 1. RSPO Certification System clause 4.2.3 that the unit of certification shall be the mill and its supply base , 2. RSPO Certification System clause 4.2.4 the management has set up the time-bound plan of Batang Gading Estate as the Supply Base of PT SKU Mill which will be certified by other Certification Body. This is not accepted the appropriateness of the time bound plan at the moment. 3. RSPO SCC Standard module E – CPO Mills: Mass Balance, clause E.3.3: a The Facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSP certified CPO, PKO and palm kernel meal on a three-monthly basis. In identification and traceability procedure SOPLNGMSIK, Mass Balance included in the calculation of monthly, quarterly and yearly. At the time of the audit, the company doesnt have quarterly report to the recording and balance of certified FFB and CPO. This is issued as non-conformity major. 4. RSPO Supply Chain Certification System clause and 5.3.16 that all non-conformances observed during an audit shall be classified as „major‟ since all requirements for Supply Chain Certification have to be met before granting certification. Please see the Appendix 1: RSPO Supply Chain Checklist – Mass Balance Module and Attachment1: Non-Conformity Observation Report. Conclusion : Major Non Conformities Team has been verified documents during partial certification audit. The companyhas conducted Gap analysis to the whole group compare to P C RSPO requirement. The Gap Analysis conducted by other Certification Body. Randomly, the team checked the content of reports to ensure the fulfillment of partial certification. From the sampling report, the team found that not all report has the conclusion for the fulfillment regards to partial certification requirement. The company has made the self declaration for partial certification rule and signed by management. The self declaration stated as belows a-d : a. Significant Conflicts The company has the SOP for Conlict Land Resolution refers to RSPO criteria 6.4, 7.5 SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 12of 135 and 7.6. All the conflicts so far has been resolved with mutual agreement. GAR also registerd as member of RSPO Dispute Settlement Facility Advisory Group as a representative of grower. Supporting document is DSF RSPO member as a grower dated 22 April 2013. b. No replacement of primary forest and or area with HCV’s since November 2005 or year 2007 National Interpretation PT SMART Tbk has conducted Historical HCV Assesment HHA in collaboration with Faculty of Forestry, Institut Pertanian Bogor IPB April 2011. Historical HCV Assesment HHA Report has been submitted to RSPO on May 2011. As a follow up from the Historical HCV Assesment HHA Report, GAR has been proposed HCV Remediation Plan to RSPO. Revisions of HCV Remediation Plan are on going process discussion with RSPO Biosdiversity and HCV Working Group BHCV WG. Supporting documents is Historical HCV Assesment HHA report. c. No labor disputes that are not being resolved through an agreed The company has the SOP and menchanism to resolve dispute with union labour with mutually agreement. The last data shows that there was a labor dispute in Jambi in 2012. The dispute has been resolved by related parties and has been final through Jambi Industrial Relation Court. There is the Decision of the Supreme Court of the Republic of Indonesia No. 1007 KPdt.Sus2010 related to the case of the industrial relation dispute. d. No evidence of non-compliance with law in any of the non-certified holdings There are no land dispute or court cases. The last case was in 2012 relating to the PT SMART Tbk land located in North Sumatera. The people occupied land under the company‟s HGU and the case was won by the company. A.6. Date Certificate Issued and Scope of Certificate Name of Client PT KRESNA DUTA AGROINDO Client Number RSPO 00007 Certificate Number RSPO 00007 Certification Decision Date Issued by PT SUCOFINDO, SBU SICS Address GrahaSucofindo, SBU SICS. Jl Raya Pasar Minggu SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 13of 135 Kav. 34 Jakarta 13640 Telephone Fax Tel.: +62-21-7983666 Fax.: +62-21-7987015 Email tutisucofindo.co.id Website www.sucofindo.co.id Scope : Mill Langling Mill Estate Bangko Estate Projected mass balance CPO PK CPO : 60,014.366 MT and PK : 14,931.666 MT Certification Registration Code SICS-00003 Type of Certification Single site Certifier TriyanAidilfitri Signed

B. Assessment Process

B. 1. Certification Body

SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES SUCOFINDO ICS, which was formed in 1994, is one of the strategic business unit that provides certification services for leading companies.SucofindoCertification by International Certification Services is recognized nationally and international.Quality Management System Certification by SUCOFINDO ICS has obtained accreditation from National Accreditation Committee KAN-Indonesia. Lead Auditors and Auditors of SUCOFINDO ICS are trained professionals in the field of international standards, auditing and management systems and are registered in the IRCA International Register of Certified Auditors and IEMA Institute of Environmental Management Assessment, UK. SUCOFINDO ICS certification process is supported by experts at PT. SUCOFINDO who understand the industry sectors and services in Indonesia. SUCOFINDO ICS Operational is supported by a network of branch and representative offices of PT. SUCOFINDO spread in 45 cities across Indonesia. The services provided by International Certification Services Sucofindo are:  Quality Management System Certification SUCOFINDO INTERNATIONAL CERTIFICATION SERVICES Sucofindo ICS FRM 3.04 Issue 04 Rev. 6 14of 135  Environmental Management System  ISO 22000 :2005  OHSAS 18000 Certification  Hazard Analytical Critical and Control Point HACCP Certification  Good Manufacturing Practice GMP Audit  Product Certification  Sustainable Forest Management Certification  Products Organic Food Certification  RSPO certification  ISPO Certification  Certification of Integrated Management System Certification SMT  Training

B. 2. Qualifications of the Assessment Team