MATERIAL RISKS KEY MITIGATING ACTIONS Cyber Security & Information Technology Ongoing business digitalisation exposes the business to ITrelated threats, which may result in compromising the confidentiality, integrity and availability of the CLAS’ information assets and/or systems › The outsourced information technology (IT) function from CLI executes its Cyber Security Strategy through ongoing review against existing/ evolving threat landscapes, and institute measures to minimise vulnerability exposure and manage threat vectors. › Ongoing mandatory staff IT Security Awareness Training to counter human intervention in the information security chain. › Periodically review and update Group-wide IT Security Policy and Data Protection Framework to ensure relevancy. › Maintain and test IT Security Incident Management Procedure to ensure prompt response to and timely remediation of cyber security incidents. › Conduct third party vulnerability testing and annual Disaster Recovery Plan exercise to ensure IT infrastructure/management system security and timely recoverability of business-critical IT systems. › Put in place enhanced protection controls for systems that hold personal data. › Board oversight with regular updates to the ARC on the state of Cyber Security risk activities and key control improvements. Economic Economic instability or changes in macroeconomic factors such as inflation or unemployment, which results in challenging business conditions › Adopt a disciplined approach to financial management. › Diversify our portfolio across asset classes and geographies in accordance with Board-approved country limits. › Focus on markets where CLAS or its Sponsor, The Ascott Limited (Ascott), has operational scale and where the underlying economic fundamentals are more robust. › Actively monitor macroeconomic trends, policies and regulatory changes in key markets. › To mitigate inflationary pressures and rising operating costs, enter into fixed-rate utility contracts, employ energy-saving technology or go-green initiatives where possible. › CLAS’ predominantly long-stay properties have lower manning requirements and leaner cost structures compared to the typical full-service hospitality property. › Properties under master leases receive stable rent and are not directly impacted by rising costs, while utility costs are passed through to rental housing and student accommodation tenants. Financial Exposure to financial risks involving liquidity, foreign currency and interest rates given CLAS’ diversified portfolio of businesses Volatility of cash flow negatively impacting planned cash generation and cash usage profile Volatility of foreign currencies and interest rates resulting in realised/unrealised losses › Actively monitor CLAS’ debt maturity profile, operating cash flows and the availability of funding to ensure that there are sufficient liquid reserves, in the form of cash and banking facilities, to finance CLAS’ operations. › Access to various sources of funds from both banks and capital markets to minimise over-reliance on a single source of funds for any funding or refinancing requirements. › Adopt natural hedging, where possible, by borrowing in the same currency as the revenue streams generated from CLAS’ investments. › Actively review and maintain an optimal mix of fixed and floating interest rate borrowings, taking into consideration the investments’ holding period and nature of the assets. › For more details, please refer to the Financial Risk Management section on page 265 of this Annual Report. ANNUAL REPORT 2023 91 Overview Leadership Portfolio & Performance Sustainability & Governance Financial Statements and Other Information
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