recoverability of the loan receivable, interest receivable and other intercompany receivable to the Parent are the
liquidity position and future cash flows of the Parent.
As such, the risk of a financial loss to the Company would be significant, if the Parent failed to meet its contractual
obligations towards the Company. Given this significant impact on the financial statements of the Company, we consider
the recoverability of the loan provided to the Parent, the interest receivable and intercompany receivable to be a key
audit matter.
Our response
In order to obtain sufficient and appropriate audit evidence on the recoverability of the loan, interest receivable and
other intercompany receivable to the Parent, our audit procedures included, amongst others, assessing the design and
implementation of the controls regarding the recoverability assessment by management in respect of the loan receivable,
interest receivable and other intercompany receivable as part of the financial closing process. Furthermore we
performed, amongst others, the following substantive audit procedures with respect to management's assessment of the
recoverability of the loan receivable and interest income receivable from R.E.A. Holdings plc:
? We inspected the terms and conditions of the loan agreement between the Parent and the Company and reconciled the
critical terms and conditions to the financial statements.
? We inquired with management about their recoverability assessment on the related party receivable (including: loan
receivable, interest receivable and intercompany receivable) to the Parent, including the key assumptions and
developments relevant for the recoverability such as the developments in the financial position and cash flows of
the Parent, the evolution of the Crude Palm Oil (CPO) price and the impact of the Covid-19 pandemic.
? We inspected and analysed the Parent's ability to meet its obligations under the loan agreement and the financial
position of the Parent.
Towards this goal, we evaluated the audited financial statements, including the consolidated cash flow statement of the
Parent for the year 2020.
? Furthermore, we held several conference calls with the group auditor to discuss their audit approach and findings
in relation to their assessment of the cash flows and the going concern of the Parent, supporting their audit
opinion on the 2020 consolidated financial statements of the Parent.
? We evaluated the appropriateness of the accounting principles applied for and the Company's disclosures as
presented in the accounting policies (section financial instruments), note 1 and the financial risk management
section of the financial statements.
Our observation
The result of our procedures on the recoverability of the loan receivable, interest receivable and intercompany
receivable from R.E.A. Holdings plc were satisfactory.
We concur with the aforementioned disclosures of the financial statements. Report on the other information included in the annual report In addition to the financial statements and our auditor's report thereon, the annual report contains other information.
Based on the following procedures performed, we conclude that the other information: ? is consistent with the financial statements and does not contain material misstatements; and ? contains the information as required by Part 9 of Book 2 of the Dutch Civil Code.
We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less than the scope of those performed in our audit of the financial statements.
Management is responsible for the preparation of the other information, including the information as required by Part 9 of Book 2 of Dutch Civil Code. Report on other legal and regulatory requirements Engagement We were appointed by the shareholder as auditor of REA Finance B.V. on 22 October 2020 for the audit for the year 2020. Description of responsibilities regarding the financial statements
Responsibilities of the Management Board of REA Finance B.V. and the Audit Committee of R.E.A. Holdings plc
The Management Board is responsible for the preparation and fair presentation of the financial statements in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Management Board is responsible for such internal control as the Management Board determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.
As part of the preparation of the financial statements, the Management Board is responsible for assessing the Company's ability to continue as a going concern. Based on the financial reporting frameworks mentioned, the Management Board should prepare the financial statements using the going concern basis of accounting unless the Management Board either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Management Board should disclose events and circumstances that may cast significant doubt on the Company's ability to continue as a going concern in the financial statements.
The Audit Committee of R.E.A. Holdings plc is responsible for overseeing the Company's financial reporting process. Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.
A further description of our responsibilities for the audit of the financial statements is located at the website of the "Koninklijke Nederlandse Beroepsorganisatie van Accountants" (NBA, Royal Netherlands Institute of Chartered Accountants) at: http://www.nba.nl/ENG_beursgenoteerd_01.
This description forms part of our independent auditor's report.
Amstelveen, 9 June 2021
KPMG Accountants N.V.
E.D.H. Vinke-Smits RA -----------------------------------------------------------------------------------------------------------------------
ISIN: GB00BYY8MM32, GB00B1FWDD12
Category Code: ACS
TIDM: RE20
LEI Code: 2138008NELEFK21TEZ94
Sequence No.: 110617
EQS News ID: 1206644
End of Announcement EQS News Service
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June 10, 2021 08:30 ET (12:30 GMT)
