Group Overview Operation and Financial Review Financials Other Information Sustainability and Governance Indofood Agri Resources Ltd. 58 Independent auditor’s report For the financial year ended 31 December 2025 To the members of Indofood Agri Resources Ltd. Key audit matters (cont’d) (ii) Recoverability of plasma receivables Certain subsidiaries within the Group have commitments with several rural cooperatives representing plasma farmers, to develop plasma plantations as required by the Indonesian Government. As at 31 December 2025, the carrying amount of the Group’s plasma receivables amounted to Rp574.0 billion (2024: Rp663.8 billion), net of allowance for expected credit loss (“ECL”) and original effective interest (“EIR”) amortisation recognised during the financial year. Plasma receivables are classified as financial assets at amortised cost under SFRS(I) 9. The Group estimates allowance for ECL using general approach as these receivables contain significant financing component based on the expected cash flows discounted at an approximation of the original EIR. The estimation of ECL is significant to our audit because of the complexity of the estimation process which depends on management’s forecast of the future cash flows from the plasma plantations and discounted at an approximation of original EIR. The estimation of future cash flows requires the use of a number of significant operational assumptions such as fresh fruit bunch (“FFB”) yield rates, extraction rates, production costs, and predictive assumptions such as projected selling prices of FFB and inflation rates. We reviewed the discounted cash flow model to assess the appropriateness of the methodology employed by management and the reasonableness of the key assumptions made. We compared the operational assumptions against historical data and trend to assess their reasonableness. For the predictive assumptions, we checked and benchmarked against the assumptions that have been reviewed by our internal valuation specialist in relation to the other key audit matter on the impairment assessment of goodwill above. We also reviewed the adequacy of the note disclosures on plasma receivables. The Group’s disclosures on plasma receivables are in Note 32(a) to the consolidated financial statements. Other information Management is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
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