Regulations on domestic value-add for minerals

PT TIMAH Persero Tbk DAN ENTITAS ANAKAND SUBSIDIARIES Lampiran 598Schedule CATATAN ATAS LAPORAN KEUANGAN KONSOLIDASIAN INTERIM 31 MARET 2015 DAN 31 DESEMBER 2015 SERTA UNTUK PERIODE TIGA BULAN YANG BERAKHIR 31 MARET 2016 DAN 2015 Nilai dinyatakan dalam jutaan Rupiah, kecuali dinyatakan lain NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 31 MARCH 2015 AND 31 DECEMBER 2015 FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2016 AND 2015 Expressed in millions of Rupiah, unless otherwise stated 34. KOMITMEN lanjutan 34. COMMITMENTS continued e. Peraturan mengenai peningkatan nilai tambah mineral lanjutan

e. Regulations on domestic value-add for minerals continued

Mengenai spesifikasi dan jenis-jenis timah yang dapat diekspor dan ketentuan-ketentuan yang harus dipenuhi untuk dapat melaksanakan ekspor timah, pada tanggal 24 Juli 2014 Menteri Perdagangan mengeluarkan Peraturan No. 44M-DAGPER72014 yang diamandemen dengan Peraturan Menteri Perdagangan No. 33M-DAGPER52015 tanggal 12 Mei 2015 yang berlaku efektif mulai tanggal 1 Agustus 2015. Peraturan baru ini melarang ekspor timah kecuali jenis timah yang dapat diekspor, yaitu timah murni batangan, timah solder, dan produk timah lain yang ditetapkan. Regarding the specifications and types of tin which are allowed to be exported and the requirements that must be met in order to export tin, on 24 July 2014 the Ministry of Trade issued Regulation No. 44M-DAGPER72014 which was amended with Regulation of the Minister of Trade No. 33M-DAGPER52015 dated 12 May 2015 which will be effective on 1 August 2015. This new regulation prohibits the export of tin except tin with approved specification, such as pure tin bars, tin solder and other specified tin products. Manajemen berpendapat bahwa produk Grup telah memenuhi ketentuan ekspor ini. Namun, Grup masih terus mengevaluasi dampak dari peraturan ini terhadap kegiatan operasinya. Management believes that the Group‟s products have met the export requirements. However, the Group is currently assessing the impact of these regulations on its operations.

35. KONTINJENSI

35. CONTINGENCIES

a. Tumpang tindih IUP a. Overlapping of Mining Business Permits Grup memiliki IUP atas daerah seluas 19.594 Ha yang terletak di wilayah Kabupaten Kepulauan Meranti dan Kabupaten Karimun di provinsi Riau berdasarkan Surat Keputusan Menteri ESDM No. 2928K30MEM2011 tanggal 14 November 2011. Namun IUP tersebut tumpang tindih dengan IUP PT Rajwa Internasional yang diterbitkan Gubernur Kepulauan Riau dan IUP PT Wahana Perkit Jaya yang diterbitkan Bupati Kabupaten Kepulauan Meranti. The Group owned mining business permits covering an area of 19,594 Ha that located in Meranti Island Region and Karimun Region in Province of Riau Islands in accordance with Decision Letter from Menteri ESDM No. 2928K30MEM2011 dated 14 November 2011. However, those mining business permits were overlapped with other mining business permits owned by PT Rajwa that issued by Governor of the Province of Riau Islands, and with mining business permits owned by PT Wahana Perkit Jaya which issued by Head of Meranti Island Region. Atas permasalahan tersebut, Grup telah mengirimkan surat kepada Direktur Jenderal Minerba “Dirjen Minerba” dengan Surat Perusahaan No. 767.PWJTbkUM-0000-2012- SO tanggal 10 Desember 2012. Berdasarkan surat tersebut, Dirjen Minerba mengirimkan surat ke pihak berwajib dengan Surat Dirjen Minerba No. 442530DJB2012 tanggal 18 Desember 2012 yang pada pokoknya menyatakan bahwa IUP yang diterbitkan Gubernur Kepulauan Riau dan Bupati Kepulauan Meranti tidak sesuai dengan undang-undang dan perlu ditindaklanjuti. In response of these matters, Group have sent a letter to Director General of Mineral and Coal “Dirjen Minerba” with Company Letter No. 767.PWJTbkUM-0000-2012-SO dated 10 December 2012. Based on those letter, Dirjen Minerba have also send letter to the authorities with Letter Dirjen Minerba No. 442530DJB2012 dated 18 December 2012 on which stated that the mining business permits that had been issued by Governor of Riau Islands and Meranti Islands Regent was not aligned with laws and regulation and need to be investigated. PT TIMAH Persero Tbk DAN ENTITAS ANAKAND SUBSIDIARIES Lampiran 599Schedule CATATAN ATAS LAPORAN KEUANGAN KONSOLIDASIAN INTERIM 31 MARET 2015 DAN 31 DESEMBER 2015 SERTA UNTUK PERIODE TIGA BULAN YANG BERAKHIR 31 MARET 2016 DAN 2015 Nilai dinyatakan dalam jutaan Rupiah, kecuali dinyatakan lain NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 31 MARCH 2015 AND 31 DECEMBER 2015 FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2016 AND 2015 Expressed in millions of Rupiah, unless otherwise stated 35. KONTINJENSI lanjutan 35. CONTINGENCIES continued a. Tumpang tindih IUP lanjutan

a. Overlapping of Mining Business Permits

continued Sampai dengan tanggal laporan keuangan konsolidasian ini diterbitkan proses hukum terhadap area yang tumpang tindih ini masih berlangsung. At the date of theseconsolidated financial statements, the legal process on this overlapping land is still in progress.

b. Permasalahan hukum dengan PT Sumber Cahaya Hasil Gemilang

b. Legal issues with PT Sumber Cahaya Hasil Gemilang

Pada tahun 2013, PT Sumber Cahaya Hasil Gemilang “SCHG” mengajukan gugatan kepada Pengadilan Negeri Tanjungpandan atas permasalahan pengrusakan dan tumpang tindih kebun kelapa sawit milik SCHG dengan IUP yang dimiliki Perusahaan seluas 85,6 Ha yang terletak di daerah Mempaya, Belitung Timur. Pada tanggal 13 Oktober 2013, Pengadilan Negeri Tanjungpandan perkara tersebut telah diputus dengan Amar Putusan yang pada pokoknya mengabulkan sebagian gugatan SCHG dan menyatakan Perusahaan telah melakukan perbuatan melanggar hukum. In 2013, PT Sumber Cahaya Hasil Gemilang “SCHG” filed a lawsuit on Tanjungpandan District Court related to a claim for damaging and overlapping area between palm oil plantations owned by SCHG with mining business permits covering an area of 85.6 Ha owned by the Company located in the area of Mempaya, East Belitung. On 13 October 2013, Tanjungpandan District Court has essentially granted some of SHCG claim and determined the Company hasviolated the law. Perusahaan telah mengajukan banding atas putusan Pengadilan Negeri pada tanggal 16 Oktober 2013. Pada tahun 2014, Pengadilan Tinggi telah menerbitkan keputusan yang menguatkan putusan Pengadilan Negeri. Perusahaan menindaklanjuti dengan mengajukan kasasi ke Mahkamah Agung. Sampai dengan tanggal laporan keuangan konsolidasian ini diterbitkan, Perusahaan masih menunggu putusan dari Mahkamah Agung. Meskipun permasalahan tersebut masih dalam proses pengadilan, SCHG telah mengajukan gugatan kembali di Pengadilan Negeri Tanjungpandan. Sampai dengan tanggal laporan keuangan konsolidasian ini diterbitkan, proses hukum terhadap area yang tumpang tindih ini masih berlangsung. On 16 October 2013, the Company has filed an appeal against the High Court decision. In 2014, the High Court has issued a decision that confirms the District Court Decision, and therefore the Company has filed an appeal to the Supreme Court. At the date of theseconsolidated financial statements, the Company is still awaitingthe verdict from the Supreme Court. Although the trial is still in process, SCHG has re- filed the lawsuit to the Tanjungpandan District Court. At the date of theseconsolidated financial statements, the legal process in relation to overlapping land is still in progress.