In order to ensure the implementation of honest and trustworthy operation. Eurocharm Holdings has established an audit office according to the “Regulations Governing Establishment of Internal Control Systems by Public Companies”. The internal audit unit is directly under the Board of Directors and is responsible for auditing the company’s management system and operating procedures, establishing an effective accounting system and internal control system, and the internal auditors regularly check the compliance of the former system. The internal audit procedures specify that the internal audit reviews the internal controls of the Company’s operating procedures and reports on the appropriateness, effectiveness and efficiency of the design and routine operation of such controls; its scope covers all operations of the Company and its subsidiaries. Internal audits are performed in accordance with the audit plan approved by the Board of Directors, and also conduct audits or reviews as necessary. These general audits and project audits are performed to provide management with information on the status of the internal control function and to provide management with timely information on additional channels to understand existing or potential deficiencies. Internal audits review the self-inspections performed by each unit, including checking whether the operation has been performed and reviewing the documents to ensure the quality of the performance, and consolidate the results of the self-inspections and report them to the Board of Directors.

The Company has an audit office directly under the Board of Directors, with a supervisor and an appropriate number of full-time internal auditors. The appointment, evaluation and salary remuneration of internal auditors are in accordance with the “Internal Audit Implementation Rules”, “Salary Management Rules”, “Evaluation Rules” and “Transfer Rules”. The appointment and removal of the internal audit supervisor is subject to the approval by the board of directors, and the evaluation is conducted twice a year. The evaluation and salary remuneration are submitted to the chairman of the board of directors for approval in accordance with the approval process. The aforementioned rules and regulations are disclosed in the Company’s internal regulations. The appointment of the Company’s internal audit supervisor and audit supervisor’s agent was approved by the Audit Committee on September 23, 2013, and submitted to the Board of Directors for approval.

Communication between the independent directors and the internal audit manager and the accountant

Communication policy between the independent directors and the internal audit manager and the accountant

  • The independent directors and the accountants meet regularly at least twice a year at the Audit Committee meetings, and the accountants report to the independent directors on the audit of the Company and its domestic and overseas subsidiaries, and communicate adequately on any material adjustments to the records.
  • The internal audit manager reports to the independent directors at each Audit Committee meeting on the performance of the Company’s internal audit and internal control operations.

Summary of Communication between Independent Directors and Accountants

DatesItemRecommendations and Results
2020.02.26.2019 Annual Financial Report Highlights.
.2019 Internal Control Audit Recommendations.
.Certificate and tax law updates.
.Introduction of the 7th Corporate Governance Evaluation System Revision.
No objection
2020.08.04.2020 First Half Financial Report Highlights.
.Certificate and tax law updates.
No objection
2020.12.25.2020 Internal Accounting Control System Audit Recommendations.
.Certificate and tax law updates.
No objection

Summary of Communication between the Independent Directors and the Auditors

DatesItemRecommendations and Results
2021.02.26Statement of Internal Control System for FY 2020
Self-testing results for the year 2020
No objection
2021.04.30The findings of the internal audit reports for the first quarter of 2021No objection
2021.08.19The findings of the internal audit reports for the second quarter of 2021 No objection
2021.11.02The findings of the internal audit reports for the third quarter of 2020No objection