Group Overview Financials Other information Sustainability and Governance Operation and Financial Review Annual Report 2024 47 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 from the acquisition of Lonsum and the underlying assets associated with it using the income approach, and (ii) the management’s internal assessment of the recoverable amount of the 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, 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 2024. 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 of rubber bearer plants, and the underlying fixed assets associated with these rubber plantations with impairment indicators using the income approach. They also considered the appropriateness and reasonableness of the underlying assumptions in determining the recoverable amount of the rubber bearer plants and its related assets, 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 the rubber bearer plants and its related assets for the financial year ended 31 December 2024. 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 2024. The key audit matters listed in the external auditor’s report for the financial year ended 31 December 2024, together with a detailed description of the audit procedures adopted, can be found on pages 58 to 61 of this Annual Report. PRINCIPLE 10: Audit Committee Composition of the AC & RMC: The AC & RMC is chaired by Mr David Sungkoro (ID), with Messrs Goh Kian Chee (NED) and Andreas Tan (ID) 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 David Sungkoro, 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.
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