CapitaLand Malaysia Mall Trust | Annual Report 2020

The reports from CL IA, including the result of findings, recommendations and Management’s responses, were presented to the AC. During FY 2020, AC monitored and assessed the role, performance and effectiveness of the IA function by reviewing the IA process from time to time and recommended to the Board for approval any changes to the IA process. A quality assurance review on the CL IA’s function was performed by Ernst & Young Advisory Pte Ltd in 2018 and the assessment affirmed that CL IA conformed to the Standards. The next review will be due in 2023. The total costs incurred by the IA function for FY 2020 amounted to RM150,000. 4. Risk Management and Internal Control AC also assisted the Board in examining the adequacy and effectiveness of CMMT’s ERM Framework and the appropriateness of Management’s responses to key risk areas and recommendations for improvements to be implemented. Based on the RCSA exercise conducted annually as well as the quarterly key risk indicator reports presented to AC with insights on the areas of risks, their likelihood, impact and management action on CMMT’s operating business, ACwas thus able to keep under review the adequacy and effectiveness of CMMT’s risk management system along with its risk portfolio, risk levels and risk mitigation strategies. No significant irregularity or deficiency in internal controls came to the attention of AC during FY 2020. 5. Related Party Transactions and Conflicts of Interest The AC has: (a) reviewed and approved processes to regulate the RPT and RRPT (as defined in the Listing Requirements) and ensured compliance with the proper disclosure requirements in accordance with the REITs Guidelines and the Listing Requirements; (b) received reports from the Management and CL IA on RPT and RRPT, reviewed and approved RPT and RRPT as required by the internal approval processes; and (c) reviewed and assessed from time to time whether additional processes are required to be put in place to manage any material conflicts of interest within the CMMT Group and proposed, where appropriate, the relevant measures for the management of such conflicts for approval by the Board. AC was satisfied that all RPT and RRPT were in the best interest of CMMT, whereby the terms concluded were made on terms which were the best available for CMMT and which were no less favourable to CMMT than an arm’s length transaction between independent parties and the monitoring procedures to regulate such transactions were appropriate and sufficient. 6. Compliance The AC reviewed the level of compliance of the Manager and CMMT with the REITs Guidelines, Listing Requirements, Companies Act 2016, CMSA, the Deed as well as Corporate Liability Provision under Section 17A of the MACC Act. The AC was satisfied that there were no major non-compliances based on the compliance reports completed by the Management and as reported by the Compliance Officer at the quarterly meetings during FY 2020. 7. Other Matters (a) The AC has reviewed and is satisfied with the annual Statements on Corporate Governance, Risk Management and Internal Control and the AC Report for publication in CMMT’s Annual Report 2020. (b) The AC undertook an evaluation exercise to assess whether the AC has carried out their duties and responsibilities in accordance with its TOR. This is in addition to the annual assessment of the performance and effectiveness of the AC undertaken by the Board. The AC Report was approved by the Board on 10 February 2021. AUDIT COMMITTEE REPORT 114 CAPITALAND MALAYSIA MALL TRUST • ANNUAL REPORT 2020