Risk management is an integral part of CapitaMall Trust and its subsidiaries (CMT Group)’s business
at both the strategic and operational level. A proactive approach towards risk management supports
the attainment of the CMT Group’s business objective and corporate strategy, thereby creating and
preserving value.
The manager of CMT (Manager) recognises that risk management is about opportunities as much as
it is about threats. To capitalise on opportunities, the Manager has to take risks. Therefore, risk
management is not about pursuing risk minimisation as a goal but rather optimising the risk-reward
relationship, within known and agreed risk appetite levels. The Manager therefore takes risks in a
prudent manner for justifiable business reasons.
The Board of Directors of the Manager (Board) is responsible for the governance of risk across CMT
Group. The responsibilities include determining CMT Group’s risk appetite, overseeing CMT Group’s
Enterprise Risk Management (ERM) Framework, regularly reviewing CMT Group’s risk profile,
material risks and mitigation strategies, and ensuring the effectiveness of risk management policies
and procedures. For these purposes, it is assisted by the Audit Committee (AC) which provides
dedicated oversight of risk management at the Board level.
The AC currently comprises three independent board members and meets on a quarterly basis. The
meetings are attended by the Chief Executive Officer and the key management staff of the Manager.
The Board has approved CMT Group’s risk appetite which determines the nature and extent of
material risks which CMT Group is willing to take to achieve its strategic objectives. CMT Group’s Risk
Appetite Statement (RAS) is expressed via formal high-level and overarching statements and
incorporates accompanying risk limits which determine specific risk boundaries established at an
operational level. Having considered key stakeholders’ interests, CMT Group’s RAS sets out explicit,
forward-looking views of CMT Group’s desired risk profile and is aligned to CMT Group’s strategy and
business plans.
ENTERPRISE RISK MANAGEMENT FRAMEWORK
ERM Framework
Risk Strategy
Board Oversight & Senior Management Involvement
Internal Control System
Independent Review & Audit
Risk
Identification
& Assessment
Risk Monitoring
& Reporting
Risk
Response
• Key Risk Indicators
Risk-Aware Culture
• Accept
• Avoid
• Mitigate
• Transfer
• Risk Appetite
• Risk & Control
Self-Assessment
• Investment Risk Evaluation
• Scenario Analysis
• Whistle-blowing/
Business Malpractice
Enterprise Risk Management
54 | CapitaMall Trust Annual Report 2014
