Country Heights Holdings Berhad

AUDIT & RISK MANAGEMENT COMMITTEE

must be a member of the Malaysian Institute of Accountants; or
if he is not a member of the Malaysian Institute of Accountants, he must have at least three years working experience and;
- he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967;
- he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or
- fulfils such other requirements as prescribed or approved by the Bursa Malaysia Securities Berhad.

to seek any information relevant to its activities from employees of the Company;
the necessary resources required to carry out its duties and to obtain independent professional advice it considers necessary; and
full and unlimited access to any information and documents pertaining to the Company.

A. Financial Statements, External Audit and Other Information

to make appropriate recommendations to the Board on matters pertaining the nomination, appointment and dismissal of external auditors and the fee thereof;
to review and discuss with the external auditors and internal auditors before the commencement of audit, the nature and scope of the audit;
to review the quarterly and year-end financial statements of the Group and Company prior to submission to the Board of Directors, focusing particularly on:

to discuss problems and reservations arising from the interim and final audits, and any other matters the external auditors may wish to discuss (in the absence of Management where necessary);
to review any external auditors’ letter to management (if any) and management’s response;
to review the adequacy of the scope, functions, competency and resources of the internal audit function and that it has the necessary authority to carry out its work;
review the internal audit planning memorandum and results of the internal audit process and where necessary ensure that appropriate action is taken on the recommendations of the internal audit function;
review any appraisal or assessment of the performance of Head of the internal audit function;
approve any appointment or dismissal of the Head of internal auditors;
inform itself of resignation of the Head of internal auditors and provide him/her an opportunity to submit reasons for resigning;
to consider any related party transactions and conflict of interest situation that may arise within the Company or Group that may raise questions over management’s integrity; and
to consider the findings of internal audit investigations and management’s response.

B. Risk Management, Internal Control and Information Systems

to advise the board on the Group’s overall risk appetite, tolerance and strategy, taking account of the current and prospective macroeconomic and financial environment drawing on financial stability assessments and other authoritative sources that may be relevant for the Group’s risk policies;
to champion and promote the Enterprise Risk Management and to ensure that the risk management process and culture are embedded throughout the Group;
to provide routine monthly and quarterly reporting and update the Board on key risk management issues and Potential Loss Event;
to review Risk Management Framework and Policy & Guide annually;
to oversee and advise the board on the current risk exposures of the Group and future risk strategy to ensure development and growth of the Group on a sustainable basis;
in relation to risk assessment:

to keep under review the Group’s overall risk assessment processes that inform the board’s decision making, ensuring both qualitative and quantitative metrics are used;
to review regularly and approve the parameters used in these measures and the methodology adopted;
to set a standard for the accurate and timely monitoring of large exposures and certain risk types of critical importance; and
to consider whether the Group has effective management systems in place to identify, assess, monitor and manage its key risk areas;

to review the Group’s capability to identify and manage new risk types;
to review reports on any material breaches of risk limits and the adequacy of proposed action;
to follow up on management action plans based on the status of implementation compiled by the management;
to review the Business Risk Analysis & Evaluation and Mitigation Plans to be escalated to the Board on an annual basis and to report any major breach of Risk policies and tolerance limits and ensure Risk Mitigants are in place;
to give a view on proposal/feasibility studies prepared by project sponsor or project consultants which meet the requisite threshold before recommending to the Board for final decision;
to keep under review the effectiveness of the Group’s internal financial controls and internal controls and risk management systems and review and approve the statements to be included in the annual report concerning internal controls and risk management;
to review the Group’s procedures for preventing fraud; and
to consider and approve the remit of the risk management function and ensure it has adequate resources and appropriate access to information to enable it to perform its function effectively and in accordance with the relevant professional standards. The Committee shall also ensure the function has adequate independence and is free from management or other restrictions.

C. Internal Audit Function

appraising the adequacy and integrity of the internal control and management information system of the Group;
ascertaining the effectiveness of operating management in identifying principal risks and to manage such risks through appropriate systems of internal control set-up by the Group;
ascertaining the level of compliance with Group’s plans, policies, procedures and adherence to laws and regulations;
appraising the effectiveness of administrative and financial controls applied and the reliability and integrity of data that is produced within the Group;
ascertaining the adequacy of controls for safeguarding Group’s assets;
conducting special reviews or investigations requested by Management or by the Audit & Risk Management Committee; and
in consultation with Management, reviewing operations as a whole from the viewpoint of economy and productivity, with which resources are employed and making cost effective recommendations to Management.

TERM OF REFERENCE