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.

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 revised nomenclature is reordered and amended based on those as published by DSAK IAI for financial periods beginning on and after January 1, 2024.

Amendment of PSAK 201: Non-current Liabilities with Covenants

The amendments specify the requirements for classifying liabilities as current or non-current and clarify:

• what is meant by a right to defer settlement,
• the right to defer must exist at the end of the reporting period,
• classification is not affected by the likelihood that an entity will exercise its deferral right, and
• that if an embedded derivative in a convertible liability is considered as an equity instrument, the terms of the liability would not affect its classification as current or non-current

In addition, an entity is required to disclose when a liability, arising from a loan agreement, is classified as non-current and the entity’s right to defer settlement is subject to compliance with future covenants within twelve months.

This amendment had no impact on the consolidated financial statements of the Company.

Amendment of PSAK 116: Lease Liability in a Sale and Leaseback

The amendment specifies the requirements that a sellerlessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the sellerlessee does not recognise any amount of the gain or loss that relates to the right of use it retains.

This amendment had no impact on the consolidated financial statements of the Company.

Amendments of PSAK 207 and PSAK 107: Supplier Finance Arrangements

The amendments clarify the characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity’s liabilities, cash flows and exposure to liquidity risk.

Accounting standards issued but not yet effective

The following are the accounting standards that have been issued up to the date of completion of the Company’s consolidated financial statements, but not yet effective and will come into effect on or after January 1, 2025. The management intends to adopt these standards that are considered relevant to the Company when they become effective, and the impact to the financial position and performance of the Company is still being estimated as of the date of completion of these consolidated financial statements.

Amendment of PSAK 221: Lack of Exchangeability

The amendments require disclosure of information that enables users of financial statements to understand the impact of a currency not being exchangeable into the other currency affects, or is expected to affect, the entity’s financial performance, financial position and cash flows. The amendments apply for annual reporting periods beginning on or after January 1, 2025. Earlier application is permitted which an entity is required to disclose that fact.

The Company is currently assessing the impact of the amendment on the Company’s financial reporting.

PSAK 117: Insurance Contracts

A comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure, upon its effective date, PSAK 117 will replace PSAK 104: Insurance Contracts. PSAK 117 applies to all types of insurance contracts, life, non-life, direct insurance and re-insurance, regardless of the entities issuing them, as well as to certain guarantees and financial instruments with discretionary participation features, while a few scope exceptions will apply. The overall objective of PSAK 117 is to provide an accounting model for insurance contracts that is more useful and consistent for insurers.

PSAK 117 is effective for reporting periods beginning on or after 1 January 2025, with comparative figures required. Early application is permitted, provided the entity also applies PSAK 109 and PSAK 115 on or before the date of initial application of PSAK 117. This standard is not expected to have any impact to the financial reporting of the Group upon first-time adoption.