RISK MANAGEMENT Risk-Aware Culture CapitaLand China Trust and its subsidiaries (CLCT Group) maintains a robust risk management framework that allows us to proactively identify, assess and respond to material risks that can impact our objectives of delivering stable distributions and sustainable total returns to Unitholders. CLCT Group is positioned for long-term sustainable results by pursuing a risk strategy of optimisation of opportunities within the approved risk appetite levels. ENSURING BEST-IN-CLASS RISK MANAGEMENT, CORPORATE GOVERNANCE AND COMPLIANCE TO BUILD A SUSTAINABLE BUSINESS The Manager’s Enterprise Risk Management (ERM) Framework is adapted from the International Organisation for Standardisation (ISO) 31000 International Risk Management Standards and is benchmarked against other relevant best practices and guidelines. It is reviewed annually to ensure its continued relevance and practicality. It sets out the required environmental and organisational components needed to identify, assess, respond, monitor and report material risks in an integrated, systematic and consistent manner as depicted below. ERM FRAMEWORK RISK STRATEGY Board Oversight & Senior Management Involvement Internal Control System Independent Review and Audit • 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 RISK IDENTIFICATION & ASSESSMENT RISK MONITORING & REPORTING RISK RESPONSE • Accept • Avoid • Mitigate • Transfer 104 CAPITALAND CHINA TRUST
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