RISK MANAGEMENT MATERIAL RISKS KEY MITIGATING ACTIONS Investment & Divestment Deployment of capital into lossmaking or below- target return investments due to wrong underwriting assumptions or poor execution Inadequate planning to identify suitable divestment opportunities › Evaluate all investment and divestment proposals against a rigorous set of criteria which includes potential for value creation and DPS accretion, review key financial assumptions and perform sensitivity analysis on key variables. All proposals are subject to a robust approval process and undergo comprehensive due diligence by engaging the support of an inter-disciplinary internal team, and/or local independent consultants to advise on the following aspects: legal, tax, building design, quality, environmental, health & safety and security, and compliance with local laws and regulations. › The Boards review and approve all major investment and divestment decisions. › Identify potential risks associated with proposed projects and the issues that may prevent smooth implementation or attainment of projected outcomes at the evaluation stage and devise action plans to mitigate such risks as early as possible. › Integrate sustainability in the real estate life cycle, from the earliest stage of our investment, redevelopment and divestment processes. Geopolitical Instability or political changes in a country, changes in international policies or relations between countries that could lead to sudden changes in real estate related regulations and sentiment in major economies and key markets where CLAS operates › Actively monitor the geopolitical environment, government policies and regulatory changes to anticipate shifts in trade, growth and innovation in our key markets. › Local management teams establish good working relationship with local authorities to keep abreast of regulatory and policy changes, and lobby or engage with local authorities. Regulatory & Compliance Non-compliance with applicable laws, regulations and rules, relating to tax, data protection and privacy, financial crimes and sanctions in the key markets where CLAS operates › Maintain a framework that proactively identifies the applicable laws, regulations and rules, assesses the regulatory and compliance risks, and embeds compliance risk mitigation measures into day-to-day operations. › Leverage in-house specialised teams such as legal, compliance and tax, and external consultants to provide advisory services and updates on changes to laws, regulations and rules. › Establish Group-wide policies and procedures to address the requirements of the applicable laws, regulations and rules such as Personal Data Protection Policy, Anti-Money Laundering and Countering the Financing of Terrorism Policy, Global Sanctions Compliance Policy and Tax Strategy. › Ongoing mandatory e-learning modules to raise awareness and train employees on ways to avoid or prevent non-compliant behaviour. 92 CAPITALAND ASCOTT TRUST
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