Group Overview Operation and Financial Review Financials Other Information Sustainability and Governance Indofood Agri Resources Ltd. 148 Notes to the financial statements For the financial year ended 31 December 2025 35. Financial risk management objectives and policies The Group and the Company is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include interest rate risk, market risk (including foreign currency risk and commodity price risk), credit risk and liquidity risk. The Audit & Risk Management Committee provides independent oversight to the effectiveness of the risk management process. It is, and has been throughout the current and previous financial year, the Group’s policy that no trading in financial instruments shall be undertaken. The following sections provide details regarding the Group and Company’s exposure to the abovementioned financial risks and the objectives, policies and processes for the management of these risks. There has been no change to the Group’s exposure to these financial risks or the manner in which it manages and measures the risks. (a) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates. The Group’s and the Company’s exposure to interest rate risk mainly arises from loans and borrowings for working capital and investment purposes. There are no loans and borrowings of the Group at fixed interest rates. Currently, the Group does not have a formal hedging policy for interest rate exposures. Sensitivity analysis for interest rate risk Based on a sensible simulation, with all other variables held constant, sensitivity analysis on the floating interest rate of borrowings are as follows: 2025 2024 Variable Increase/ (decrease) (Decrease)/increase in profit before tax Rp million (Decrease)/increase in profit before tax Rp million Floating interest rate 50/(50) basis points (Rp13,928)/Rp13,928 (Rp17,624)/Rp17,624 (b) Foreign currency risk The Group’s reporting currency is Indonesian Rupiah. The Group faces foreign exchange risk as its export sales and the costs of certain key purchases which are either denominated in the United States Dollars (“USD”) or whose price is significantly influenced by their benchmark price movements in foreign currencies (mainly USD) as quoted on international markets. To the extent that the revenue and purchases of the Group are denominated in currencies other than Indonesian Rupiah, and are not evenly matched in terms of quantum and/or timing, the Group has exposure to foreign currency risk. The Group does not have any formal hedging policy for foreign exchange exposure. Whenever possible, the Group seeks to maintain a natural hedge through the matching of liabilities against assets in the same currency to minimise foreign exchange exposure.
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