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 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 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 wage remuneration of internal auditors are in accordance with the “Internal Audit Implementation Rules”, ” Wage 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 wage 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.
The independent directors and the accountants meet regularly at least twice a year at the Audit Committee meetings. The accountants report to the independent directors on the audit of the Company and its domestic and overseas subsidiaries and communicate adequately on any significant adjustments to the records. The head of internal audit reports to the independent directors at each Audit Committee meeting on the implementation of the Company’s internal audit and internal control operations.
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.
| Type | Frequency | Communication Highlights |
| Internal Audit Performance Report | Every Quarter | Audit report on internal audit of business execution, self-assessment of internal control and improvement of audit findings. |
| Internal Audit Report | Every Year | The audit supervisor conducts an internal audit and reports the result to the independent director. |
| Audit Program | Every Year | The audit supervisor proposes an annual audit plan. |
Summary of Communication between Independent Directors and Accountants
| Date | Communication Matters | Recommendations and Results |
| 2022.02.25 | Audit matters and regulatory updates for the 2021 financial reports, as well as updates on securities regulations and tax laws. Introduction of revisions to the 9th session corporate governance evaluation system. | No objection |
| 2022.08.16 | Key audit matters regarding the financial statements of the first quarter in 2022, as well as explanation of significant accounting and audit issues. Updates on securities regulations and tax laws The latest trends on sustainable development. | No objection |
| 2022.01.11 | Key reviews regarding the financial statements of the third quarter in 2022, as well as explanation of significant accounting and audit issues. Updates on securities regulations and tax laws. | No objection |
Summary of the communication between independent directors and the internal auditor at separate communication meetings or other meetings
| Date | Communication Matters | Recommendations and Results |
| 2022.02.25 | 2021 Internal Control System Statement. 2021 Internal Control System Self-Assessment Implementation Report. | No objection |
| 2022.03.25 | Internal Audit Performance Report for the first quarter of 2022. Follow-up report for performance improvement of 2022. | No objection |
| 2022.04.28 | Internal Audit Performance Report for the first quarter of 2022. Follow-up report for performance improvement of 2022. | No objection |
| 2022.06.10 | Internal Audit Performance Report for the second quarter of 2022. Follow-up report for performance improvement of 2022. | No objection |
| 2022.08.16 | Internal Audit Performance Report for the second quarter of 2022. Follow-up report for performance improvement of 2022. | No objection |
| 2022.11.01 | Internal Audit Performance Report for the third quarter of 2022. Follow-up report for performance improvement of 2022. | No objection |
| 2022.12.30 | Summary of self-assessment for internal control. Proposal for internal control plans in 2023. | No objection |