SIGNIFICANT CHANGES TO LAW REGULATION

October 29, 2021, the Government of Indonesia ratified Law No. 7 of 2021 concerning the Harmonization of Tax Regulations (HPP), which among other things regulate the domestic corporate income tax for Taxpayers and Permanent Business Entities of 22% for the fiscal year 2022 and so on. The HPP Law also regulates changes to the Law on Value Added Tax (VAT) on Goods and Services and Sales Tax on Luxury Goods (UU PPN and UU PPN BM), which are as follows:

a. VAT rate increases to 11% effective April 1, 2022;

b. At the latest on January 1, 2025, the VAT rate will be 12%

On December 31, 2024, the Government issued PMK number 131 year 2024, in the PMK the Government stipulated a policy of adjusting the Tax Basis (DPP) in calculating VAT payable to remain the same at a rate of 11%.

The following is the calculation of the Tax Basis (DPP), which is regulated in PMK number 131 of 2024:

• Luxury Goods subject to PPnBM are calculated from the DPP in the form of selling price or import value VAT calculation: 12% x selling price or import value
• Goods and Services other than luxury goods are calculated from the DPP in the form of other values, which is 11/12 of the value of imports, selling prices, or replacements.

With the issuance of PMK Number 131 year 2024, the increase in VAT rates since January 1, 2025 as stipulated in Law No. 7 year 2021, has no impact on the operations of the Company and its subsidiaries.

On October 18, 2024, the Ministry of Finance of the Republic of Indonesia has issued Minister of Finance Regulation (PMK) No. 81/2024 which regulates the provisions for the implementation of the Core Tax Administration System (SIAP) or commonly known as the Core Tax Administration System (CTAS) which is an information technology system designed to integrate all tax administration processes, including registration, reporting, payment, and supervision.

This PMK aims to reorganize business processes, information technology, and tax administration databases to be more transparent, effective, efficient, accountable, and flexible. PMK 81/2024 will come into effect on January 1, 2025.

In 2025, Indonesia’s tax administration system underwent major changes through the launch of the Coretax system and the issuance of the latest technical regulation: PER- 11/PJ/2025 which came into effect on May 22, 2025. This regulation was issued by the Directorate General of Taxes (DGT) as a follow-up to the digital transformation and modernization of national tax governance. PER-11/ PJ/2025 specifically regulates the latest tax reporting and withholding mechanisms for Individual and Corporate Taxpayers, as well as the alignment of the reporting system with the Coretax platform. full integration into Coretax.

SIGNIFICANT ACCOUNTING POLICIES CHANGES

The consolidated financial statements have been prepared and presented in accordance with Indonesian Financial Accounting Standards (“SAK”), which comprise the Statements and Interpretations issued by the Financial Accounting Board of the Indonesian Institute of Accountants (DSAK) and the Regulations and Guidelines on Financial Statement Presentation and Disclosures issued by Financial Service Authority (“OJK”).

The Company applied for the first-time certain amendment, which are effective for annual periods beginning on or after 1 January 2025 (unless otherwise stated). The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

Amendment of PSAK 221: Lack of Exchangeability

The amendments specifies how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity’s financial performance, financial position and cash flows.

Amendment to PSAK 109 and PSAK 107: Contracts Referencing Nature-dependent Electricity

The amendments clarify the application of the ‘ownuse’ requirements for in-scope contracts, amend the designation requirements for a hedged item in a cash flow hedging relationship for in-scope contracts, and add new disclosure requirements to enable investors to understand the effect of these contracts on a company’s financial performance and cash flows.

The amendments will take effect for annual reporting periods starting on or after January 1, 2026. Early adoption is allowed, but it must be disclosed. The amendments concerning the own-use exception are to be applied retrospectively, while the hedge accounting amendments should be applied prospectively to new hedging relationships designated from the initial application date. Additionally, the PSAK 107 disclosure amendments must be implemented alongside the PSAK 109 amendments. The Company does not anticipate that the amendments will have a material effect on the Company’s consolidated financial statements.

PSAK 338: Business Combination under Common Control (2025 Revision)

On October 2025, DSAK IAI issued revisions to PSAK 338: Business Combinations of Entities Under Common Control. The revisions cover the scope and application of the pooling of interest method and disposal in equity as the accounting concepts used in PSAK 338. The key changes include the exclusion of investment entities from the scope of PSAK 338, as well as the addition of definitions for transferred business, receiving entity, and transferring entity. The revision also includes references to the carrying amount of the transferred business and the presentation of pre‑combination information when applying the pooling of interest method is impracticable. The revision is effective on January 1, 2026 with early adoption permitted.

The Company does not anticipate that the amendments will have a material effect on the Company’s consolidated financial statements.

T The DSAK IAI issued Annual Improvements 2024 to SAK Indonesia which include clarifications, simplifications, corrections or changes to improve consistency in, PSAK 107 Financial instruments: Disclosure, PSAK 109 Financial Instruments, PSAK 110 Consolidated Financial Statements and PSAK 207 Statements of Cash Flows. The amendments will be effective for reporting periods beginning on or after 1 January 2026. Earlier application is permitted and must be disclosed. The amendments are not expected to have a material impact on the Company’s consolidated financial statements.

Effective beginning on or after January 1, 2027

PSAK 118: Presentation and Disclosure in Financial Statements

PSAK 118 will replace PSAK 201. The new standard introduces new requirements for presentation within the statement of profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations.

The standard requires disclosure of newly defined management-defined performance measures, subtotals of income and expenses, and it also includes new requirements for aggregation and disaggregation of financial information.

PSAK 118 are effective for reporting periods beginning on or after January 1, 2027, but earlier application is permitted and must be disclosed. PSAK 118 will apply retrospectively.

The Company is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the consolidated financial statements.

PSAK 119: Subsidiaries without Public Accountability – Disclosures

The new standard allows eligible entities to elect to apply its reduced disclosure requirements and still applying the recognition, measurement and presentation requirements in other accounting standards. To be eligible, at the end of the reporting period, an entity must be a subsidiary as defined in PSAK 110, cannot have public accountability and must have a parent (ultimate or intermediate) that prepares consolidated financial statements, available for public use, which comply with SAK Indonesia, SAK Internasional or IFRS accounting standards.

PSAK 119 will become effective for reporting periods beginning on or after January 1, 2027, with early application permitted. The Company anticipates that the new standard will have no material effect on the Company’s consolidated financial statements.