TO THE MEMBERS OF GEO ENERGY RESOURCES LIMITED INDEPENDENT AUDITOR’S REPORT Key audit matters How the matter was addressed in the audit Management has obtained the Resource and Reserve reports (the “Reports”) for all mines held by the Group which give an indication of the reserve volumes used in the value in use calculations. These Reports are issued by independent qualified persons in accordance with The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Using the above Reports, management’s assessment of the recoverable amounts of the deferred stripping costs and mining properties, determined based on the value in use calculations of the underlying mines, is a judgmental process which requires the estimation of the forecasted coal prices, projected production volumes and discount rates. Inappropriate management estimates made in the impairment assessment may result in a significant impact on the carrying amounts of the deferred stripping costs and mining properties. The Group has made disclosures on the above critical judgement and key sources of estimation uncertainty in Note 3 to the financial statements respectively. • We obtained the Reports issued by the independent qualified persons appointed by the Group and based on the Reports, assessed if there is any unexpected reduction in reserve volumes used in the value in use calculations. • We obtained and challenged the assumptions used in the value in use calculations of the underlying coal mines (forecasted coal prices, projected production volumes and discount rates) and evaluated the reasonableness of these assumptions by comparing them to available industry, economic and financial data. • We engaged our internal valuation specialist to review the appropriateness of the discount rates used by management in the value in use calculations. For the forecasted coal prices, we leveraged on the review performed by the internal valuation specialist in preceding year and assessed to remain appropriate for the current period. • We reviewed management’s budget process by comparing the actual financial performance against previously forecasted results. • We performed independent sensitivity analysis in regard to the discount rates and forecasted coal prices as these are the significant key assumptions in the value in use calculations. • We assessed the adequacy and appropriateness of the disclosures made by the Group in accordance with SFRS(I) 1-36 Impairment of Assets in the consolidated financial statements including the key estimation uncertainties used in determining the useful life and carrying amount of the deferred stripping costs and mining properties. Tax Recoverable [Note 8 (e)] As at 31 December 2025, the Group has tax recoverable totalling US$18,845,182 of which US$17,570,014 relates to a subsidiary of the Company. The balances arise primarily from payments made in relation to tax underpayment assessments by the Indonesian Tax Office (“ITO”) for payments made to an independent third party for land-use-rights for a mining concession, which the ITO has treated as related party transaction. Due to the complexity of the Indonesian tax regulations, the eventual conclusion of the assessment of the related party transaction and other expenses depends upon the technical interpretation and judgment by the ITO and Indonesian Tax Court. There hence exist a risk that the amounts paid and claimed may not be recoverable. Consequently, there is a potential uncertainty over the collectability of these receivables, and the amounts ultimately recoverable may differ from the carrying amounts recognised in the financial statement. Management has engaged external tax consultants to evaluate the technical merits of the tax positions and to assist in the objection and appeal processes. Our audit procedures on the assessment of tax recoverable include, among others: • We obtained and reviewed management’s assessment of tax recoverable and ensured that the amount recognised is sufficient and appropriate in accordance with SFRS(I) 12 Income Taxes and SFRS(I) INT 23 Uncertainty over Income Tax Treatments. • We reviewed the disclosure of management’s estimates used in deriving the tax recoverable in the Group’s financial statements. • We obtained updates from the management and tax advices from the external tax consultants on the status of the Group’s ongoing tax objection and appeal processes. 49 GEO ENERGY | ANNUAL REPORT 2025
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