Megachem Limited Annual Report 2015 55 12.5 The Audit Committee meets with the internal and external auditors annually to review the adequacy of audit arrangements, with particular emphasis on the scope and quality of their audits, and the independence and objectivity of the internal and external auditors. Where necessary, the Audit Committee may meet the external or the internal auditors without presence of management. 12.6 The Audit Committee reviews the independence of the external auditor annually. In the selection of suitable auditing firms, the Audit Committee takes into consideration several factors such as the adequacy of the resources, experience of the accounting auditing firm, the audit engagement partner assigned to the audit, the firm’s other audit engagements, the size and complexity of the Group being audited, and the number and experience of supervisory and professional staff assigned to the audit and its ability to provide audit service to our foreign subsidiaries and associated companies. The selected auditing firm based in Singapore is engaged as auditors for the Company as well as our Singapore-incorporated subsidiaries. A different auditing firm is engaged as auditors for its associated company for the financial year ended 31 December 2015 in relation to its proposed listing on the stock exchange of Thailand. The Audit Committee has considered the appointment of different auditing firms for its significant associated company and is satisfied that such appointment would not compromise the standard and effectiveness of the audit of these subsidiaries. The Company is thus in compliance with Rule 712 and 715 set out in Catalist Rules. The Audit Committee conducts an annual review of all non-audit services provided by the auditors and is satisfied that the nature of such services does not affect the independence of the external auditors. The fees for non-audit services rendered in FY2015 amounted to S$17,000 which is fee charged for acting as tax agent of the Company and its subsidiaries in Singapore. Fees on audit services to independent auditors: S$’000 - paid by Company 103 - paid by other entities of the Group 105 Total 208 Other fees to independent auditors: - paid by Company 17 - paid by other entities of the Group – Total 17 12.7 The Company has established a Code of Business Ethics that sets the principles of business ethics for the Group and covers areas such as business conduct, protection of Company’s assets, confidentiality of information and conflicts of interest. All staff of the Group are expected to uphold high standards of integrity that are in compliance with the Company’s Code as well as laws and regulations of the countries in which it operates. The Company has implemented a whistle blowing program. Under the program, employees may raise concerns about possible improprieties in financial reporting or other matters orally via a hotline or in writing. Report made anonymously will not be considered unless as directed by the Audit Committee, having taken into account factors such as the seriousness of the matter raised. Upon receipt of a concern, independent investigation and appropriate follow up action will be taken.
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