Report of the Board of Directors

Dear Shareholders and Stakeholders,
Company Performance 2024

The company's financial performance in the 2024 period shows decreasing profitability; this is because management implements "impairment policies" to obtain fair value for the company's financial assets, in order to prepare the company to carry out corporate actions in 2025. Based on this accounting treatment, the company's bottom line shows an increase in the amount of losses, amounting to Rp25.88 billion; when compared to the loss in the 2023 period of Rp8.05 billion. The loss per share reached Rp9.00, - / share, increasing from Rp3.06, - / share.

The increase in losses in the 2024 period was Rp17.34 billion or an increase of 203.07% compared to the 2023 period; mainly due to the provision for impairment of receivables of Rp5.52 billion and the imposition of an impairment of goodwill of Rp5.11 billion and other expenses of Rp1.57 billion.

The company's total assets also showed a decrease of 2.84% or a decrease of Rp13.42 billion, from Rp472 billion at the end of 2023, down to Rp444 billion at the end of 2024. The decrease in the company's assets was mainly due to the implementation of "impairment policies" and the company has not been able to generate revenue.

Current Assets decreased by 11.79% or decreased by Rp1.85 billion, from Rp15.70 bllion at the end of 2023, down to Rp13.85 billion at the end of 2024. On the short-term liabilities side, it increased by Rp10.16 billion, mainly due to the recognition of additional debt from the counter collateral for the bank guarantee issued for the Batang Toru-4 PLTM project of Rp11.60 billion.

The Company’s Business Prospects

Based on the agreement between the Board of Directors and Strategic Partners to achieve 1,000 megawatts in the hydropower plant portfolio over the next 5 years, since 2025; The Board of Directors believes that this target is quite realistic, with the note that currently the company already has 510.8 megawatts in the company's hydropower plant portfolio.

As per the corporate plan that has been prepared since December 5, 2024, management has several important agendas in 2025; namely:

  1. Acquisition Plan for 10 (ten) Mini Hydropower Plants that are already operating, with a total capacity of 34.7 megawatts. The acquisition plan will be carried out in the second quarter of 2025. The aim is to create revenue for the company, with an estimate of US$8.27 million or Rp136.45 billion per year.
  2. Construction of 5 Mini Hydropower Plants owned by the company, which already have a Power Purchase Agreement (PJBL) with PT PLN UID North Sumatra Region; with a total capacity of 43.8 megawatts; with an estimated revenue that can be created by these 5 projects when operating will reach US$20.57 million or Rp318.83 billion per year for stage-1 of the contract period with PT PLN (Persero). The construction of these 5 PLTMs is planned to begin in Quarter-II and Quarter-III of 2025, from the original plan of Quarter-I 2025 for 1 PLTM, namely PLTM Sisira, and Quarter-II 2025 2 PLTMs, and Quarter-IV 2025 2 PLTMs.
  3. Construction of 2 Large Hydropower Plants in Aceh, owned by a company that has been registered in the RUPTL (General Plan for Electricity Supply) of PT PLN (Persero), with a total capacity of 467 megawatts. Operational target in 2035 with an estimated revenue of US$127.85 million or Rp1.98 trillion per year. Construction preparation will begin in 2025, preceded by a re-feasibility study and project design. The tender is planned for 2026-2027. And construction will be carried out from 2028 to 2035
  4. and acquire 2 (two) large hydro power plant projects in Aceh and North Sumatra with a capacity of 400 megawatts.
  5. Issue new shares through a rights issue with Pre-emptive Rights (HMEDT), to strengthen the capital structure, with a target of obtaining funds reaching IDR2.3 trillion.

Based on the corporate plan presented above, management is optimistic that the company has very good prospects in this industry, if the corporate plans receive positive support from strategic partners who are currently in the process of finalizing investment agreements.

The Board of Directors’ Role in Formulating Strategies, Policies, and Processes to Ensure the Implementations

In the 2024 period, the Company's Board of Directors focused on the negotiation process with prospective Strategic Partners who will invest in the Company by providing equity financing for the construction of hydropower plant projects in the Company's portfolio, and negotiations with financing institutions for financing with investment loan instruments, as well as negotiations with prospective contractors who will work on the Company's hydropower plant projects.

Up to the time of this report, the finalization of the investment agreement with the Strategic Partner was almost complete.

From the results of the negotiations with the Strategic Partner, the 2025-2030 Corporate Plan was prepared as outlined above.

Comparison of Target and Realization

The company's board of directors has set a target for 2024, namely to obtain a Strategic Partner and carry out several corporate action plans, including: construction of 5 PLTMs, carrying out 2 corporate actions on the Indonesia Stock Exchange, namely: rights issue with Pre-emptive Rights (HMETD) and Issuance of Green Bonds of Rp500 billion.

From the set of targets, only one program can be implemented, namely obtaining a Strategic Partner. We cannot disclose the Strategic Partner in this report because it is still in the finalization of the investment agreement. Meanwhile, other programs have not been realized. The failure to realize these programs is because all of these programs rely on obtaining a Strategic Partner, as the mainstay of all programs that have been prepared.

The Board of Directors realizes that the realization of the 2024 program has not been achieved; so the Board of Directors is trying to immediately obtain an investment agreement with the Strategic Partner which has begun intensive discussions since the second quarter of 2024 until December 2024, an agreement was reached on the corporate plan, as briefly stated above.

During the 2024 period, in addition to conducting negotiations with strategic partners, the board of directors is trying to maintain the validity period of the electricity purchase agreement with PT PLN (Persero) UID North Sumatra, while waiting for the realization of equity financing from Strategic Partners. Meanwhile, regarding debt financing prospects, the board of directors has negotiated with domestic financing institutions.

Existing Obstacles and Solutions

Throughout 2024, several obstacles that affect business performance are:

  1. It is not easy to get Strategic Partners who meet the capacity needed by the company.
  2. Current Shareholders are in a waiting position rather than taking part in jointly building the company's prospects.
  3. The amount of equity owned by the company since going public on May 17, 2017 is insufficient to obtain debt financing to finance projects that already have electricity purchase contracts with PT PLN (Persero) UID North Sumatra.

The board of directors is making efforts to overcome a number of these obstacles, including:

  1. Efficiency is one of the main strategies;
  2. Obtain additional financing with the Board of Directors' resources, to finance the company's operations, to maintain the company's existence;
  3. Conduct continuous negotiations with prospective Strategic Partners, since the beginning of the second quarter of 2024;
  4. Maintain the continuity of the Electricity Sale and Purchase Agreement from 5 (five) hydropower plant projects owned by the company with PT PLN (Persero) UIS North Sumatra;
  5. Conduct negotiations with domestic financing institutions to obtain debt financing, after obtaining equity financing from Prospective Strategic Partners.

Until the end of 2024, the company's management has reached the finalization stage of the investment agreement with Prospective Strategic Partners, and has obtained agreement from domestic financing institutions to finance the company's projects when the Strategic Partners successfully prepare equity financing to support the financing of all the company's projects, including the planned acquisition of third-party Mini Hydropower plant projects that are already operating.

Good Corporate Governance Practices in 2024

Implementation of Good Corporate Governance Practices consistency and sustainability is the commitment of the Board of Directors in managing the company, maintaining a balance between the interests of shareholders and other stakeholders. Not just obeying against laws and regulations, however be serious applying GCG principles in each of its operations.

In 2024, the Company will improve performance with a decision-making process who are better and prudent, always pay attention to compliance with Applicable laws and regulations and control the risks that arise, as well as avoid conflict of interest. Ensuring prudent and controlled financial management, report preparation finances are carried out accurately and can be accounted for.

In 2024, the Company will also improve professionalism and human resource development by conducting performance assessments more objective, transparent and reasonable, as well as adjusting a more efficient organizational structure with the main tasks, functions, systems and full of responsibility. The various steps taken are solely to increase investor and shareholder confidence.

Always do Updating material and relevant data/information transparently, accurately, with quality and can be accounted for. In its operations, the company is always Paying attention to the interests of stakeholders interests, by clarifying the rights and obligations, as well as carrying out healthy and responsible business relationships. One of them is carrying out community empowerment and playing an active role in supporting humanitarian social activities.

Social and Environmental Sustainability and Responsibility

The Company is committed to social responsibility and sustainability. Through the Corporate Social program Responsibility (CSR), the company focuses on the development of rural areas with supporting the education sector and the surrounding community

In 2024, the Company supports government programs in the Company’s operational areas, maintenance or development of social facilities and the environment of local residents. Always carry out environmental management and monitoring around the project site to prevent any damage, such as water, air, noise and other pollution that disrupting the health, comfort and safety of employees and the community

Composition of the Board of Directors

Throughout the company's business journey in 2024, there will be no change in the composition of the Board of Directors of PT Terregra Asia Energy Tbk. This composition is expected to continue to be able to carry out its duties and responsibilities optimally for the sake of business sustainability in the future.

Closing

All efforts by management and the Board of Commissioners to bring the company out of liquidity and profitability problems, of course require the support of all parties, especially Shareholders, all levels of employees and other interested parties.

Management would like to thank the employees, Directors and Commissioners of subsidiary companies, the Board of Commissioners and Shareholders, the Directors of PT PLN (Persero) and the General Manager as well as all levels of PT PLN UID North Sumatra and Nanggroh Aceh Darussalam, and especially the Financial Services Authority, The Indonesian Stock Exchange has provided its support so far.

Jakarta, 26 Juni 2025

Djani Sutedja
President Director