CapitaLand Malaysia Mall Trust | Annual Report 2020

ENTERPRISE RISK MANAGEMENT CMMT Group takes a proactive approach to risk management, making it an integral part of CMMT Group’s business – both strategically and operationally. The objective is not risk minimisation, but rather the optimisation of opportunities within the known and agreed risk appetite levels set by the Board. The Board takes measured risks in a prudent manner for justifiable business reasons. GOVERNANCE The Board is responsible for the governance of risks across CMMT Group. The role of the Board includes determining CMMT Group’s risk appetite; overseeing the Manager’s Enterprise Risk Management (ERM) Framework; regularly reviewing CMMT Group’s risk profile, material risks and mitigation strategies; and ensuring the adequacy and effectiveness of the risk management framework and policies. For these purposes, the Board is assisted by the AC and Exco which provide dedicated oversight of risk management at the Board level, including ad hoc risk matters referred to them by the Board. The Exco is made up of three non-independent Board members while the AC comprises of three independent Board members and one non-independent Board member. Both the AC and Exco meet on a quarterly basis. The AC and Exco meetings are attended by the CEO as well as other key management personnel of the Manager. The Board approves CMMT Group’s risk appetite, which determines the nature and extent of material risks that the Manager is willing to take to achieve CMMT Group’s strategic and business objectives. CMMT Group’s Risk Appetite Statement (RAS) is expressed via formal, high- level and overarching statements and accompanying risk limits which determine specific risk boundaries established at an operational level. Taking the interests of all key stakeholders into consideration, the RAS sets out explicit and forward-looking views of CMMT Group’s desired risk profile and ensures it is aligned with CMMT Group’s strategies and business plans. ERM FRAMEWORK Risk Strategy Board Oversight & Management Involvement Internal Control System Independent Review and Audit Risk-Aware Culture RISK IDENTIFICATION & ASSESSMENT RISK MONITORING & REPORTING RISK RESPONSE › Risk Appetite › Risk & Control Self-Assessment › Investment Risk Evaluation › Quantitative Analysis › Scenario Analysis › Whistle-blowing › Key Risk Indicators › Quarterly Risk Reporting › Portfolio Monitoring of Financial Risks › Accept › Avoid › Mitigate › Transfer 118 CAPITALAND MALAYSIA MALL TRUST • ANNUAL REPORT 2020