NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2024 32. Commitments and contingencies (a) Plasma receivables The Indonesian government requires oil palm plantation companies to develop new plantations together with the local small landholders. This form of assistance to local small landholders is generally known as the “Plasma Scheme”. Once developed, the plasma plantations are transferred to the small landholders who then operate the plasma plantations under the supervision of the developer. In line with this requirement, certain subsidiary companies of the Group have commitments to develop plantations under the Plasma Scheme. The funding for the development of the plantations under the Plasma Scheme is provided by the designated banks and/or by the subsidiary companies. This includes the subsidiary companies providing corporate guarantees for the loans advanced by the banks. When the plasma plantations start to mature, the plasma farmers are obliged to sell all their harvests to the subsidiary companies and a portion of the resulting proceeds will be used to repay the loans from the banks or the subsidiary companies. In situations where the sales proceeds are insufficient to meet the repayment obligations to the banks, the subsidiary companies also provide temporary funding to the plasma farmers to develop the plasma plantations and to repay the instalment and interest payments to the banks. The plasma farmers will repay the temporary funding to the subsidiary companies once the plantations have positive cash flows. The loans advanced by the banks under the Plasma Scheme are secured by the sales proceeds of FFB of the respective plasma plantations and corporate guarantees from certain subsidiary companies for a maximum amount of Rp430.7 billion (2023: Rp375.6 billion) as at 31 December 2024. The Group recorded an allowance for uncollectible and adjustments of EIR amortisation of plasma receivables in its consolidated balance sheet amounting to Rp655.2 billion (2023: Rp1,474.2 billion). Plasma receivables allowance of Rp1,084.1 billion (2023: Rp0.07 billion) were written off during the financial year as management assessed that there is no reasonable expectation of recovering the cash flows based on the best available facts and circumstances as at the reporting date. Based on a review of the plasma receivables of each project as at 31 December 2024, management believes that the above-mentioned allowance for uncollectible plasma receivables is sufficient to cover possible losses arising from the uncollectible plasma receivables. An analysis of the movement in allowance for uncollectible and adjustments of EIR amortisation of plasma receivables are as follows: Group 2024 2023 Rp million Rp million At 1 January 1,474,190 1,358,003 Allowance charge for the year 264,453 52,757 Adjustments of EIR amortisation 677 63,499 Write-off (1,084,149) (69) At 31 December 655,171 1,474,190 Group Overview Financials Other information Sustainability and Governance Operation and Financial Review Indofood Agri Resources Ltd. 150
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