46 GROUP OVERVIEW OPERATION AND FINANCIAL REVIEW SUSTAINABILITY & GOVERNANCE FINANCIALS OTHER INFORMATION Indofood Agri Resources Ltd Corporate Governance Key Audit Matters Key Considerations and Decisions made by the AC & RMC Impairment assessment of goodwill The AC & RMC considered the methodology applied by (i) the independent valuer engaged by the Management to determine the recoverable amount of the goodwill and the underlying assets associated with Lonsum using the income approach, and (ii) the management’s internal assessment of the recoverable amount of other goodwill from other acquisitions. They also reviewed the appropriateness and reasonableness of the underlying assumptions applied in determining the recoverable amount of the goodwill impairment, as well as the audit findings report presented by the external auditor during the year-end meeting. The AC & RMC concurred with the Management’s assessment of goodwill impairment for the financial year ended 31 December 2023. Impairment assessment of property, plant and equipment The AC & RMC reviewed the methodology and key assumptions used by the Management in determining the recoverable amount for the impairment assessment of rubber bearer plants included under the property, plant and equipment using the income approach. They also considered the appropriateness and reasonableness of the underlying assumptions in determining the recoverable amount of rubber bearer plants, as well as the audit findings report presented by the external auditor during the year-end meeting. The AC & RMC concurred with the Management’s impairment assessment of rubber bearer plants for the financial year ended 31 December 2023. Recoverability of plasma receivables The AC & RMC reviewed the methodology and key assumptions used by the Management in determining the recoverability of plasma receivables by estimating the allowance for expected credit loss (“ECL”) using the general approach as these receivables contain a significant financing component. They also considered the appropriateness and reasonableness of the underlying assumptions in determining the allowance for ECL, as well as the audit findings report presented by the external auditor during the year-end meeting. The AC & RMC concurred with the Management’s assessment of the recoverability of plasma receivables for the financial year ended 31 December 2023. The key audit matters listed in the external auditor’s report for the financial year ended 31 December 2023, together with a detailed description of the audit procedures adopted, can be found on pages 57 to 60 of this Annual Report. PRINCIPLE 10: Audit Committee Composition of the AC & RMC: The AC & RMC is chaired by Mr Goh Kian Chee (ID), with Messrs Lim Hock San (ID) and Tjhie Tje Fie (NED) as members. The AC & RMC possesses sound expertise in financial management and is fully qualified to discharge its powers and duties. None of the AC & RMC members were previous partners, employees or Directors of the Company’s external auditor, Messrs Ernst & Young LLP, within the last 24 months or hold any financial interest in Messrs Ernst & Young LLP. The Board considers Mr Goh Kian Chee, who has extensive and practical accounting and financial management knowledge and experience, well qualified to chair the AC & RMC. Powers and Duties of the AC & RMC The key responsibility of the AC & RMC is to support the Board in risk management, internal controls and governance processes as well as to conduct an independent review of the effectiveness of the ERM framework and the adequacy of internal control measures in addressing the financial, operational, compliance and information technology risks. The AC & RMC is empowered to review and investigate any matters under its terms of reference listed below, with full access to the Directors, the Management, employees, internal auditors and the external auditor. The members of the AC & RMC collectively have strong accounting and related financial management expertise and experience. They keep abreast of relevant changes to accounting standards and issues which have a direct impact on the financial statements. The terms of reference for the AC & RMC are as follows: • Review the audit plan, internal accounting controls, audit report, management letter and the Management’s response to the external auditor; • Review the half-yearly and annual financial statements, paying special attention to changes in accounting policies and practices, major risk areas, and rectifications arising from the audit, before submitting the financial reports to the Board for approval;
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