The written terms of reference of the AC have been approved and adopted, and they include the following:– (a) reviewing the audit plans and scope of work of the external auditors and the internal auditors, including the results of the external and internal auditors’ review and evaluation of the Group’s system of internal controls, the management letters on the internal controls and the Management’s response, and monitoring the implementation of the internal control recommendations made by the external and internal auditors; (b) reviewing and reporting to the Board at least annually the adequacy and effectiveness of the Group’s internal controls, including financial, operational, compliance and information technology controls and risk management systems, prior to the incorporation of such results in the Company’s annual report; (c) reviewing the interim financial results and annual consolidated financial statements and the external auditors’ report on the annual consolidated financial statements, and discussing any significant adjustments, major risk areas, changes in accounting policies and practices, significant financial reporting issues and judgements, compliance with Singapore financial reporting standards as well as compliance with the Catalist Rules and other statutory or regulatory requirements, concerns and issues arising from their audits including any matters which the auditors may wish to discuss in the absence of Management to ensure the integrity of the financial statements of the Group and any announcements relating to the Company’s financial performance, where necessary, before submission to the Board for approval; (d) reviewing and discussing with the external and internal auditors, any suspected fraud, irregularity or infringement of any relevant laws, rules or regulations, which has or is likely to have a material impact on the Group’s operating results or financial position and the Management’s response; (e) reviewing and ensuring the co-ordination between internal auditors, external auditors and the Management, including the assistance given by the Management to the auditors; (f) reviewing the audit plan of the external auditor and the result of the external auditor’s review and evaluation of the Group’s system of internal accounting controls that are relevant to the statutory audit; (g) making recommendations to the Board on the proposals to the shareholders with regard to the appointment, re-appointment and removal of the external auditors, and approving the remuneration and terms of engagement of the external auditors; (h) reviewing the audit plan of the internal auditor, including the results of the internal auditor’s review and evaluation of the Group’s system of internal controls; (i) reviewing and ratifying where appropriate any interested person transactions; (j) reviewing potential conflicts of interests (if any); (k) reviewing the policy and arrangements by which employees of the Group and any other persons may, in confidence, report to the Chairman of the AC, concerns about possible improprieties in financial reporting or other matters and ensuring that there are arrangements in place for such concerns to be safely raised and independently investigated, and for appropriate follow-up action to be taken; (l) reviewing the adequacy, effectiveness, independence, scope and results of the external audit and the Company’s internal audit function; MEGACHEM LIMITED ANNUAL REPORT 2025 66 CORPORATE GOVERNANCE REPORT
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