Megachem Limited Annual Report 2015 56 Corporate Governance Report 12.8 The Audit Committee is updated annually on any changes in accounting standards by the external auditor. A copy of the Guidebook for Audit Committee is also made available for reference when clarifications need to be sought on responsibilities of the audit committee. The Audit Committee conducted two meetings in the FY2015, during which results announcements, external audit report, internal audit report, independence of auditors, appointment of auditors and interested person transactions were reviewed, and the duties as described above were carried out. 12.9 No former partner or director of the Company’s auditing firm has acted as a member of the Company’s Audit Committee. INTERNAL AUDIT Principle 13 The Company should establish an effective internal audit function that is adequately resourced and independent of the activities it audits. 13.1 The internal auditor’s primary line of reporting is to the Audit Committee. The Company cooperates fully with the internal auditor in terms of allowing access to documents and information. 13.2 The Company outsourced its internal audit function to an internationally recognized third party professional firm. 13.3 The internal auditor appointed by the Company has adequate resources and experience. 13.4 The Audit Committee reviews annually the adequacy and effectiveness of the internal audit function. SHAREHOLDERS RIGHTS Principle 14 Companies should treat all shareholders fairly and equitably, and should recognize, protect and facilitate the exercise of shareholders’ rights, and continually review and update such governance arrangements. 14.1 The Company ensures that timely and adequate disclosure of information on matters of material impact on the Company are made to shareholders of the Company, in compliance with the requirements set out in the Catalist Rules. In this respect, the Company announces its financial results to shareholders on a half-yearly basis. The Company notifies the public in advance of the date of release of its financial results through an announcement on SGXNET. 14.2 Shareholders are given the opportunity to participate in and vote at general meetings. 14.3 The Company’s Articles of Association currently allows shareholder to appoint up to two proxies to attend and vote at general meetings without differentiating corporation that provide nominee or custodial services and individual shareholder. On 3 January 2016, the legislation was amended, among other things to allow certain members, defined as “relevant intermediary” under Section 181(1C) of the Companies Act, Chapter 50, to attend and participate in general meetings without being constrained by the two-proxy requirement. Relevant intermediary includes person or corporation holding licences in providing nominee and custodial services and CPF Board which purchases shares on behalf of the CPF investors.
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