(m) reviewing and reporting to the Board at least annually the adequacy and effectiveness of the Company’s internal controls, including financial, operational, compliance and information technology controls, and risk management systems; (n) reviewing the scope and results of the external audit and its cost effectiveness and the independence and objectivity of the external auditor, and where the external auditor also provides a substantial volume of non- audit services to the Company, keeping the nature and extent of such services under review, seeking to maintain objectivity; (o) reviewing the assurance from the Managing Director and the Chief Financial Officer on the financial records and financial statements; and (p) undertaking such other reviews and projects as may be requested by the Board and reporting to the Board its findings from time to time on matters arising and requiring the attention of the AC. The AC has full authority to investigate any matter within its terms of reference, full access to and cooperation from the Management, and full discretion to invite any Director, executive officer or other employee of the Group to attend its meetings, and is given reasonable resources to enable it to discharge its functions properly and effectively. The Group has implemented a whistle-blowing policy which aims to provide an avenue for employees and external parties to raise concerns about misconduct or improprieties in the Group and at the same time assure them that they will be protected from victimization for whistle-blowing in good faith. Cases that are significant will be reviewed by the AC for adequacy or investigation actions and resolutions. Details of the whistle-blowing policy are disseminated to the employees of the Group, and is available on the Company’s website. All concerns about possible improprieties can be communicated directly to the AC. As at the date of this Annual Report, there are no reports received through the whistle-blowing channel. The external auditors update the AC on any changes in accounting standards impacting on the financial statements of the Group before an audit commences. Significant matter that was discussed with the Management and the external auditors have been included as key audit matter in the Auditors’ Report for FY 2025 on pages 115 to 116 of this Annual Report. Significant matter How does the Audit Committee address the matter Impairment of Inventories The Audit Committee had considered the methodology and management’s technical judgement in assessing inventory obsolescence, which includes a review of the ageing of inventory, tested the net realisable value of the inventories and adequacy of the disclosures made The Audit Committee was satisfied that management’s methodology was reasonable and carrying value of inventory was appropriate. The external auditor has included this item as a key audit matter in the audit report for FY 2025. Please refer to pages 115 to 116 of this Annual Report. The AC undertook a review of the independence and objectivity of the external auditors through discussions with the external auditors as well as reviewing the non-audit fees paid to them. The AC received an audit report from the external auditors setting out the non-audit services provided and the fees charged for FY 2025. A breakdown of the audit and non-audit fees paid to the Company’s auditors is disclosed on page 175 of this Annual Report. MEGACHEM LIMITED ANNUAL REPORT 2025 67 CORPORATE GOVERNANCE REPORT
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