NOTES TO FINANCIAL STATEMENTS 31 December 2025 8 TRADE AND OTHER RECEIVABLES (cont’d) (b) Receivables under Cooperation Agreement measured at FVTPL In January 2018, the Group entered into a Cooperation Agreement with certain debtors’ related corporations and a third party (collectively known as the “Vendors”) and a common controlling shareholder of the Vendors to conduct joint mining activities on the two coal mines owned by the Vendors’ related corporations. The joint mining activities was expected to commence after the completion of due diligence on the economical and technical feasibility of the underlying coal mines. Based on the Cooperation Agreement, a portion of the cash profit from the sale of coal shall be used by the Vendors to settle the outstanding trade and other receivables which amounted to US$19,385,118 (2024 : US$19,595,724) as at 31 December 2025. The Cooperation Agreement is secured by a personal guarantee of the controlling shareholder of the Vendors. In 2019, the Vendors obtained the renewal of the mining license in respect of the underlying coal mines to 2028 and 2029, respectively. The receivables are classified as financial instruments measured at FVTPL under SFRS(I) 9 Financial Instruments, as the receivables do not meet the solely payments of principal and interest (“SPPI”) test. SPPI test requires that the contractual terms of the financial asset (as a whole) give rise to cash flows that are solely payments of principal and interest on the principal amounts outstanding, that is cash flows that are consistent with a basic lending arrangement. Given the timing and amounts of the receivables to be recovered under Cooperation Agreement could not be fixed, and contingent upon the occurrence of the commencement of mining activities, the instrument does not meet SPPI test and hence is classified as financial instruments measured at FVTPL. As per Note 3(f) and Note 4(c)(vi), the fair value of the trade and other receivables is determined by the amount of coal produced upon commencement of operations and repayments received by the Group during the financial year, and using discounted cash flow method where future cash flows are estimated based on present value of expected payments, discounted using the entity’s discount rate. The expected payments are determined based on the coal sold from the underlying coal mines under the Cooperation Agreement as well as the timing of the commencement of the operations. During the year ended 31 December 2025, the Group received multiple tranches of repayments from the Vendors with total receipt of US$0.2 million (approximately IDR 3.4 billion) (2024 : US$0.4 million (approximately IDR 6.0 billion)). As of 31 December 2025, the fair value of the receivables amounted to US$4,759,182 (2024 : US$4,965,330) following the abovementioned receipts. There has been no change in the estimation techniques or significant assumptions made during the year in assessing the fair value of the receivables under Cooperation Agreement. Based on the assessment performed, management determined that there was no further fair value changes. The information about how the fair value of the receivables is determined (in particular, the valuation technique and inputs used) are set out on Note 4(c)(vi) to the financial statements. (c) The table below shows the movement in lifetime ECL that has been recognised for trade and other receivables in accordance to SFRS(I) 9: Lifetime ECL - credit-impaired US$ Group Balance as at 1 January 2024 36,931,128 Written off [Note 8(a)] (35,694,568) Reversal (226,332) Exchange differences (4,406) Balance as at 31 December 2024 1,005,822 Written off (455,108) Reversal (163,602) Disposal of subsidiaries (360,399) Exchange differences (13,578) Balance as at 31 December 2025 13,135 The Group’s trade and other receivables that are determined to be impaired at the end of the reporting period relate to debtors that have defaulted on payments. Except as mentioned in Notes 8(a) and 8(b), these trade and other receivables are not secured by any collateral or credit enhancements. (d) Prepaid taxes comprise the monthly tax instalments made by the Company’s Indonesian subsidiaries to the Indonesian Tax Office (“ITO”) being prepayment of their current year corporate income tax liabilities, and is based on the most recent corporate tax returns. During the year, the tax prepaid was based on the subsidiaries’ results for the year ended 31 December 2024. 88
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