Risk Factors

5. RISK FACTORS 5. RISK FACTORS Before investing in our Shares, you should pay particular attention to the fact that our Group, and to a large extent, our activities, are governed by the legal, regulatory and business environment in Malaysia whether presently or in the future. Our business is subject to a number of factors, many of which are outside our control. Prior to making an investment decision, you should carefully consider, along with the other matters set forth in this Prospectus, the risks and investment considerations below. You should note that the following list is not an exhaustive list of all the risks that we face or risks that may develop in the future. Additional risks, whether known or unknown, may in the future have a material and adverse effect on us or our Shares. Risks affecting our business and operations 5.1.1 Our success depends on our ability to secure optimal outlet locations As a press and convenience retailer, one of the key factors to the performance of our outlets is our ability to secure outlet locations with high foot traffic that are optimal to our retail business. This is done through our business development team that focuses on store acquisition and store development. Our established brand equity enhances our ability to secure optimal outlet locations as property owners are more likely to rent their premises to tenants that have established and easily recognisable brands. However, we cannot assure you that we will be able to secure optimal retail locations for our new outlets. If we are unable to secure optimal retail locations, our ability to expand our retail network may be hindered and if our outlets become sub-optimal in the future in terms of declining foot traffic, the financial viability from operating such outlets may be adversely impacted due to lower sales performance, which may then materially impact our Group’s overall financial performance and business profitability.
5.1.2 Our success depends on the value of our “myNEWS.com” brand As at the LPD, out of our 255 outlets, 223 outlets operate under our homegrown trade name of “myNEWS.com”. Maintaining consumer recognition for “myNEWS.com” is critical in attracting and expanding our customer base and ensuring customer loyalty. Our “myl\lEWS.com” brand is built on several key factors such as our clean and inviting outlet concept, quality of customer service and optimum product mix of print media and convenience retail items, all of which are aimed at bringing a contemporary press and convenience shopping experience to our customers. The value of our “myNEWS.com” brand is dependent on us being able to continuously improve and build on these key factors to ensure continued consumer recognition. Failure to do so may adversely affect our brand equity, which in turn may result in a material adverse effect on our business and financial performance. Despite our efforts, there is no assurance that our brand equity will not be eroded or adversely affected due to circumstances and events beyond our control. In such a situation, our sales and financial performance may be adversely affected and our ability to expand our retail network may also be hindered.
5.1.3 Our business is dependent on customer loyalty Most of our customers are end consumers, and as such, our business is generally affected by consumer spending and behaviour. Our success depends on our customers’ continuous loyalty to our brand. We believe that the key factors which will attract and retain customers include: (i) our ability to enhance our brand presence and brand value;
(ii) successful promotional, advertising and marketing strategies;

(iii) the quality of products and services offered at our outlets; and (iv) the ability for us to competitively price the products and services offered at our outlets. 5. RISK FACTORS (cant’d) Nonetheless, we cannot guarantee that our efforts to establish customer loyalty will continue to be effective. If we are unable to establish continuous customer loyalty to our brand, products and services that we carry, our customers may turn to our direct competitors. This may result in a material adverse impact on our business and financial performance. 5.1.4 Our business depends on our ability to identify and match customer preferences for our products and services Our business performance largely depends on our ability to identify a suitable mix of products and services to match consumer demands and preferences in different localities and across different demographics, as well as our ability to respond to such demands and preferences in a timely manner. If we are unable to predict our target markets’ demands, respond to our customers’ needs and preferences, as well as execute necessary adjustments to our merchandise and services in a timely manner, we may suffer revenue loss and our prospects and financial performance may be materially and adversely impacted. By leveraging on IT to provide us with on-demand information, we are able to systematically monitor and analyse sales trends, margins and SKU movements throughout our retail network to regularly identify sales patterns and trends. This allows us to respond to our target markets’ demands in a timely manner and to optimise our sales performance. Also, as we have been in the press and convenience retailing business over the past 19 years, we have established long-standing relationships with our suppliers. This assists us to access a wide variety of products and consumer services, from which we are able to select in order to ensure that our customers get a wide variety of their preferred products and services. Nevertheless, we cannot guarantee that we will be able at all times to predict accurately our product mix and services that match our customer preferences and demands. Any failure to do so may materially and adversely affect our business and financial performance.

5.1.5 We depend on IT in managing our business operations We use IT as a competitive platform to place effective business and operating controls for our retail business. The application of our integrated IT system, consisting of our Bisonet System and WIVlS, spans across our business operations, human resources management, logistics and warehouse management, and to our front end over-the-counter pas. We are therefore reliant on the performance of our IT system to control, manage and monitor, amongst others, our retail and procurement activities. Further details of the technologies that we use and the capabilities of our IT platform are set out in Section 7.7 of this Prospectus. We also use barcoding for all our inventories and SKUs, which is applied throughout our Bison DC, logistics distribution system and outlets. In addition, we are also dependent on the computer hardware and network to support our IT platform. As such, there is a risk of interruption to our business operations and loss of data if we experience any malfunctions or system failure in our IT systems as well as our computer hardware or network. Such interruption, malfunction or system failure may have a material adverse impact on our Group’s business operations and in such a situation, our sales and financial performance may be materially and adversely affected. 5. RISK FACTORS (cont’d)
5.1.6 We rely on our Bison DC As at the LPD, approximately 86.7% of our SKUs received from our suppliers, managed and distributed to our network of outlets are from our Bison DC. Our Bison DC is supported by a logistics team consisting of 85 employees who are located on­site and a fleet of 13 delivery trucks which services all of our outlets nationwide. Due to the concentration of our distribution network around our Bison DC, any significant disruption in the operations of our Bison DC due to natural disasters or calamities such as flooding or events such as fire, accidents, prolonged power outages, system failures or other unforeseen circumstances could severely damage our inventory, rendering the inventory unsaleable. In such an event, it could adversely affect our product distribution and sales until such time we secure an alternative facility or arrangements with our product principal and suppliers. We cannot guarantee that our product principals or suppliers will agree to deliver those inventory that were distributed through Bison DC, directly to our outlets nor can we guarantee that we will be able to secure an alternative facility in a timely manner and on terms and conditions which are commercially acceptable to us. Furthermore, if we encounter difficulties, delays or problems arising from the operations of our Bison DC, we cannot ensure that the critical systems and operations will be restored in a timely manner, resulting in delayed deliveries to our outlets or delivery scheduling conflicts, thereby affecting our ability to restock our outlets in a timely manner. Any disruption or disasters affecting our Bison DC or delays from the operations of our Bison DC may consequently result in a material adverse impact on our business operations, financial performance and profitability.
5.1.7 We may be affected by inventory management issues Our Group’s principal business as a press and convenience retailer depends very much on our ability to procure optimal SKUs at our outlets at competitive costs and in a timely and satisfactory manner to meet our customers’ demands. In case of delay or other problems in placing of stock orders by our outlets due to, amongst others, human error, or delay in receiving supply of products from our suppliers, shortages or oversupply may occur. If we are unable to meet our customers’ demands due to shortage of SKUs at our outlets, we will lose sales. On the other hand, in the case of overstocking SKUs, we may face shortage of retail space and consequently increase in our inventory holding costs. Our existing business operations is set up to enable us to respond in a timely manner to maintain optimal levels and range of SKUs at each particular outlet and to minimise obsolete or slow-moving SKUs. Despite our established network of suppliers and proactive management of our inventory, we are unable to guarantee that shortage in supply or obsolete or slow-moving SKUs will not occur. In such a situation, our sales and financial performance may be materially and adversely affected.
5.1.8 We are dependent on our major suppliers During the FYEs 31 October 2013,31 October 2014 and 31 October 2015, each of our major suppliers as set out in Section 7.15 of this Prospectus who accounted for more than 10% of our total purchases were tobacco suppliers. These tobacco suppliers are also key suppliers in Malaysia. Any disruption to or cessation in the supply of products from these major suppliers, or any changes in our business relationship with these major suppliers may have an adverse effect on our business. We may incur additional costs, time and resources to seek alternative supply sources on terms that are commercially acceptable to us. This will in turn affect our profit margins and our price competitiveness against other tobacco retailers. 5. RISK FACTORS (cont’d) Any disruption or cessation of supply from these major suppliers may result in shortage of supply to our outlets and as such may affect our outlets’ sales performance as tobacco sales is one of our largest revenue contributors. Despite our long-standing relationship with these major suppliers, there can be no assurance that these major suppliers will continue to supply their products to us, and any disruption in the supply of tobacco products from the above major suppliers may have a material adverse effect on the business of our Group. 5.1.9 We are dependent on skilled and experienced personnel and the loss of their continued services may affect our business Our Group’s continued success, future business growth and expansion depend on our Key Management’s experience, expertise and continued efforts. Our Executive Directors, who are also our Promoters, play an active role in the management and operations of our Group. Specifically, DTL and DTW have been actively involved in our Group’s operations, and their long service, in-depth knowledge on all aspects of our Group’s operations, as well as their retail sector experience (19 years for DTL and 17 years for DTW) is invaluable to our Group and our Group’s future plans. Our Executive Directors are assisted by our other Key Management who also have extensive knowledge and experience in the retail business. The loss of any of our Key Management may adversely affect our ability to maintain and/or improve our performance. As such, our ability to retain and also attract competent and skilled personnel is crucial for our continued success, future business growth and expansion. Nonetheless, there can be no assurance that the loss of any of our Key Management and the ensuing impact arising from the transition of key management functions will not have a material adverse effect on our Group’s operations. 5.1.10 We may face human resource challenges which could lead to issues in the quality of our customer service The retail convenience store market requires the need for human resources, and thus the market is reliant on the employment of efficient personnel. As a press and convenience retailer and an operator of a food and beverage outlet, our business is very much service oriented. It is therefore important to ensure that suitable front-line or front-desk personnel are hired. Any customer service issues such as inefficient or unfriendly customer service could have an overall unpleasant experience for customers. For example, any customer service issues leading to longer queues or longer check-out time could have a negative impact on our customers’ convenience shopping experience. This may in turn result in loss of sales or loss of repeat customers.. In the event of the above, our brand equity, business and results of operations may be materially and adversely affected. As at the LPD, we have 464 contractual foreign workers. Factors such as language and cultural barriers in respect of our foreign workers may pose a challenge in our efforts to deliver quality customer service which is consistent with our objectives of bringing a contemporary press and convenience shopping experience to our customers. Furthermore, while the employment of foreign workers in the retail market is presently allowed, the countries from which retail operators may source foreign workers as well as the ensuing conditions related to their employment are subject to governmental policies, directives and regulations from time to time. In general, approval is granted based on the merits of each case and is subject to conditions imposed by the relevant authorities from time to time. For example, under the current policies issued by MOHA, foreign workers are not allowed to work as front-line workers, which include having a role as a cashier. Additionally, the Government may amend policies relating to the employment of foreign workers in the retail market and/or introduce new conditions from time to time. 5. RISK FACTORS (cont’d) As such, any shortage in the supply of foreign workers could adversely affect our business operations. In addition, we may also be subjected to increased costs and retail overheads if there are any increases in the levy or minimum wages for foreign workers or any other costs imposed by the Government in relation to their employment. Based on our Group’s experience, we have found it difficult to recruit and retain domestic employees to fill in front-line positions due to the transitory nature of the role. This places constraints on our ability to increase the pool of domestic manpower to manage front-line work at our outlets. As at the LPD, we have an average of 1.4 domestic employees for each outlet. Although we try to ensure that all front-line positions at our outlets are manned by domestic employees, there is no assurance that all front-line positions at our outlets will be manned by domestic employees at all times. To the extent that we are unable to attract and retain a wider pool of domestic employees, we may experience constraints in growing our network of outlets in compliance with the above policy by MOHA. With an aim to attract a wider pool of employees to counter the risk of labour shortage which may disrupt our outlet operations, we have put in place competitive remuneration packages, benefits and incentive for our outlet staff. Also, to such extent that we are unable to arrange for contractual, part time or temporary staff in event of disruption to labour supply, we may experience loss of sales due to disruption to the affected outlets as well as increased operating costs, or constraints in growing our network of outlets. As a result of the above, we cannot assure you that the above factors will not materially and adversely impact our financial performance, results of operations and business prospects. 5.1.11 We are susceptible to pilferage and robbery, particularly at our outlets The operational risks of pilferage and robbery will cause loss to our inventory which may in turn disrupt and/or affect our operations and financial condition. As a retail business, cash receipts constitute a significant proportion of our sales transactions at our outlets and as such, our outlets are particularly subject to the risk of pilferage and robbery. As preventive measures to deter pilferage and robbery, all our outlets are installed with alarm systems, security cameras and safes. We also have in place our internal control team that is responsible for, amongst others, monitoring and investigating pilferage, cash variances and carrying out random spot checks on our outlets. Other efforts taken to mitigate these risks include applying various monitoring and tracking systems and standardised cash management practices to minimise any fraud, mismanagement or mishandling of cash and for safety purposes. Although we have taken all reasonable steps to mitigate the operational risks above, we cannot assure you that the above measures taken will be adequate or that should such events occur they will not have a material adverse impact on our business, financial condition and operations.
5.1.12 Our operations may be affected due to changes in tenancy arrangements and rental costs, as well as outlet refurbishment costs We do not own the properties on which our outlets operate from. Our outlets located at shopping malls, hypermarkets, high streets, office spaces, transportation hubs, resorts and medical centres are rented from third parties. Most of our tenancies do not exceed 3 years. The terms and conditions of our tenancies may be subject to review and modification by our landlords, depending on the provisions of the respective tenancy agreements. 5. RISK FACTORS (cant’d) There can be no assurance that our landlords will not increase the rental rates or that our landlords will renew our tenancies upon expiry of the tenancy periods. If our landlords choose not to renew our tenancies, our operations in these affected outlets will have to be relocated to a new location, and there can be no assurance that we will be able to find a comparable location optimal to our business, especially for our outlets located at shopping malls or transportation hubs where the availability of retail space is competitive. This may result in a material adverse impact on our Group’s operations and profitability. In addition, from time to time, we may refurbish or our landlords may require us to refurbish our outlets, to improve our storefront appearance and to comply with our landlords’ storefront appearance requirements. Any disruption to the operations and business of these outlets arising from such refurbishment may affect our sales and financial performance.
5.1.13 We may face risks of non-compliance with land laws, rules and regulations for our tenanted properties In respect to our tenanted properties, we are not in a position to ascertain if our landlords have complied with all applicable land laws, regulations and rules. As such, we are susceptible to the risks of fines and penalties of any non-compliance of applicable land laws, regulations and rules to such extent it affects us as occupiers of the outlets. All outlets operated by our Group are rented from property owners. These property owners comprise shopping malls, office or commercial property owners as well as individual property owners. Therefore, there can be no assurance that we will not be subject to any penalties or fines as an occupier of such properties or spaces. Even if the fines and penalties for any breach of laws in respect of the properties are incurred and paid for by our landlords, we may be required to indemnify the landlords against such fines and penalties to the extent such breach is caused by us as tenants in accordance with the tenancy agreements that we entered into in respect of such properties. These fines, penalties and any indemnification may materially and adversely affect our business, financial condition and results of operations. As part of our efforts to fully comply with the relevant land laws, rules and regulations relating to properties, which we rent and occupy, our business development team, in the course of site acquisition for our new outlets, will take into account the status of compliance as one of the evaluating factors. For non-compliances, though we may request our landlords, in our capacity as tenants, to procure the CF/CCC, or rectify any non-compliance of the category of land use and/or express condition or approved use of land on which the tenanted outlets are located, we are unable to guarantee that we will succeed in doing so or that the non-compliances may be rectified in a timely manner. As such, any disruption to the operations and business of the affected outlets, or if we will need to relocate the affected outlet, our business operations, sales and financial performance may be materially and adversely affected. Please refer to section 7.23.2(i) for a description of the relevant land laws, rules and regulations relating to the properties which we rent and occupy and the status of compliance of our rented outlets with the CF/CCC requirements.
5.1.14 We are subject to risks of legal, employment, consumer, public liability claims, other disputes and negative publicity arising from our business operations We are subject to risks of legal, employment, consumer claims, public liability claims and other disputes arising from our business operations. As most of our product and service offerings are third party consumer goods, we may be subject to consumer claims in the case of sale of substandard or defective products, and contaminated or deteriorated food and beverage products sold to our customers. As a mitigating measure, we are in the process of incorporating product indemnity terms within our standard trading terms with our product principals and suppliers. 5. RISK FACTORS (cont’d) We also offer fresh food and beverages at our Bison Cafe. As such, we are subject to risks of food contamination and deterioration, which are inherent risks to food industry partici pants. Any negative publicity arising from consumer claims and negative media reports which we may be directly or indirectly associated with may affect our brand equity and reputation and subsequently our sales. In the course of our retail business operations, we are also susceptible to the risk of public liability claims such as public liability claims arising from accidents and/or injuries sustained by customers within our outlets. Litigation or dispute resolution processes arising from these claims may be costly and time consuming. Due to the vagaries of litigation and dispute resolution proceedings, we are also unable to guarantee that the outcome of any such dispute resolution will be in our favour. If the outcome of dispute resolution is against us, we cannot assure you that we will have sufficient funds or be in a position to make sufficient provisions for such liabilities. As a result of the abovementioned claims, we may be exposed to the risk of revocation, suspension or non-renewal of our business licences by the authorities. As such, these claims may materially and adversely affect our reputation, business, future growth and expansion, and financial performance. Hence, any legal, employment, consumer, public liability claims, other disputes and negative publicity arising from our business operations may have a material adverse effect on our business, financial performance and results of operations. Although we have not experienced any negative publicity that has materially affected our business, sales or financial performance as at the LPD, there is no guarantee that we will not be affected by negative publicity which may lead to a material adverse effect on our sales and financial position.
5.1.15 There is no assurance that our insurance coverage is adequate We have purchased insurance policies for fire, burglary, money in transit, public liability, fidelity insurance and product liability insurance for consumables such as food and beverage products sold by us. We believe our current insurance coverage undertaken is adequate for our business and level of operations. Nonetheless, we are unable to guarantee that the insurance coverage would be adequate to cover the losses, damages or liabilities, which we may incur in the course of our business operations. To such extent any such risks are uninsured, not covered under our insurance policies, or where the insurance protection is not sufficient to cover such risks, we may have to bear such losses, damages or liabilities and consequently our business and financial condition may suffer a material adverse impact.
5.1.16 There is no assurance that our future plans will be commercially successful We currently focus on expanding our network of outlets in major urban centres such as the Klang Valley, Johor Bahru and Penang. Our future plans and strategies focus on key areas of enhancing our revenue generation and margin optimisation, as well as the corresponding business and operational support functions. It is our plan to expand our market presence through expansion of our network of outlets. We may also explore overseas markets. In order to stay competitive, we believe in the importance of continuous diversification and enhancement of our product range, and improving our business functions and back-end operations such as logistics capabilities and IT capabilities to support our growing network and product base. Please refer to Section 7.3.4 of this Prospectus for further details of our future plans and strategies. Our expansion plans involve a number of risks, including but not limited to capital expenditure incurred to expand our outlets and to enhance our existing outlets, the costs of acquiring suitable land or properties and/or construction costs (if required) to expand our distribution and logistics capabilities that may include new distribution 5. RISK FACTORS (cont’d) centres, warehouses or other facilities, the cost to improve our Bison DC and its logistics and IT capabilities, the working capital tied up in inventories, increased advertising, marketing and promotional expenses as well as other working capital requirements. While we believe that we have sufficient resources at our disposal to execute our business expansion plans after the Public Issue and Listing, we are not able to guarantee that we will be successful in executing our business expansion plans, nor can we assure you that we will be able to anticipate all the business and operational risks arising from our future business plans. Any failure to do so may lead to a material adverse effect on our financial performance and position. Any failure or inefficiency to manage our business growth and the expanding demand for personnel stemming from our future business expansion may also have a material adverse impact on our business operations and financial performance.

5.2 Risks affecting the industry in which we operate 5.2.1 We operate in a competitive environment (i) We are subject to competition within the retail convenience store market The retail convenience store market consists of owners and operators ranging from large corporations to small independently owned businesses. The number of retail convenience stores in Malaysia was 2,547 as at 2014 and is estimated to have grown to 2J76 outlets as at 2015. Some of these retail convenience stores have been in operation for more than a decade, and as such are more established than others. With the presence of these established retail convenience store industry players, competition is strong as most of these industry players have the ability to offer competitive pricing and effectively manage their inventories, as a result of their higher stock turnover and larger inventory spaces. Furthermore, the reputation that these industry players garnered over many years in operations also enables them to seek and negotiate more suitable and strategic locations for their stores. Some examples of the major retail convenience industry players which we compete with in the retail convenience store market are 7-Eleven Malaysia Holdings Berhad (under the trade name of “7-Eleven”), All Happy Sdn Bhd (under the trade name of “Happy lVIart”), Circle K (Malaysia) Sdn Bhd (under the trade name of “Circle K”), Point Convenience Shop Sdn Bhd (under the trade name of “Point”) and TCT Trading Sdn Bhd (under the trade name of “Orange”). (Source: IMR Report) (ii) We are also subject to competition from other retail format stores Apart from competition within the retail convenience market, we also face competition from other retail format outlets including traditional retail outlets (e.g. independent small grocery retailers and specialist retailers) and large modern retail format outlets (e.g. hypermarkets and supermarkets). Most of these traditional retail format outlets are still thriving in rural areas and to a certain extent residential neighbourhoods in suburban areas, where they have built their loyal customer base through their long years of service to the local community. (Source: IMR Report) Should we expand our network of outlets to these areas, we may compete with them for customers. Large format retail outlets have greater capacity to carry higher volumes of inventories, thus garnering the ability to offer lower prices. While customers are willing to pay slightly higher prices for products from retail convenience stores in exchange for convenience, there is a possibility that retail 5. RISK FACTORS (cont’d) convenience store industry players could lose out to large retail formats should there be a huge disparity in pricing. (Source: IMR Report) As such, we may not be able to compete directly with larger retail formats which operate on a different business model as compared to retail convenience stores. The IMR Report has identified several critical success factors in the retail convenience store market on which industry players’ branding and market reputation are built on. These critical success factors include: (i) extensive store network in suitable and strategic store locations; (ii) successful and cost-effective management of inventory, warehousing and logistics; (iii) attractiveness of the store layout and outlet concept; (iv) responsiveness to market demands and consumer preferences in determining the suitable product mix and range; and (v) maintenance of customer service quality. According to the IMR Report, we are the second largest retail convenience store industry player in Malaysia, with an estimated market share of 8.6% in terms of outlet numbers and 6.6% in terms of revenue in 2015. Any failure on our part to build on the differentiating factors above as competitive advantages may cause us to lose sales revenue and a decline in customer loyalty to our brand, resulting in a subsequent loss of our market share. Although we will continue to take measures to maintain our competitiveness through our competitive advantages and key strengths set out in Section 7.3.3 of this Prospectus, there is no assurance that our business, performance and results of operations will not be materially and adversely affected if we are unable to do so.
5.2.2 Our financial performance is subject to regulatory changes in Malaysia Our business, prospects, financial condition and results of operations may be affected by unfavourable changes in Government laws, regulations and policies (such as licensing regulations, wage requirements and changes to tobacco policies and taxes) that are beyond our control. For instance, Thailand prohibits display of tobacco products at POS and Singapore is expected to introduce similar display ban measures in 2017. The implementation of such similar regulations or policies in Malaysia in particular towards restricting tobacco product display at POS will adversely affect our advertising and promotions revenue derived from tobacco principals, unless an alternative fee structure or arrangement is negotiated between us and the tobacco principals. Revenue from tobacco related advertising and promotions make up a substantial proportion of our Group’s advertising and promotions revenue of RM18.53 million for the FYE 31 October 2015. In addition, our income from retail sales of tobacco products may be adversely affected due to the above changes. For the FYE 31 October 2015, revenue from the sale of tobacco products was RM76.4 million or 35.1 % of our Group’s revenue. As such, any unfavourable changes in Government laws, regUlations and policies (such as licensing regulations, wage requirements and changes to tobacco policies and taxes) may have a material adverse effect on our business, financial performance and results of operations.
5.2.3 Our performance is dependent on the state of the Malaysian economy As a press and convenience retailer, our sales and business performance is dependent on the state of Malaysia’s economy. A growing economy indicates population growth with higher disposable income and as such greater spending power. This would in turn create demand for products and services sold in retail convenience stores. A decline in economic conditions in Malaysia may decrease consumers’ spending power, which will in turn have a negative impact on the retail convenience store market. 5. RISK FACTORS (cant’d) Any decline in the economic conditions in Malaysia may cause a reduction in sales volumes, which could have a negative impact on the overall financial condition of retail industry players. Nevertheless, we believe that products sold in retail convenience stores are generally inelastic against the backdrop of an adverse economic decline and as compared to other forms or types of retail products since these products are generic, broad-based in nature, and accessible to consumers at affordable price points. Although we will try to be sensitive to consumer preferences and sales trends, as well as increase our measures to ensure customer loyalty and brand recognition, and to improve our business operating efficiencies in order to maintain our competitiveness, we are unable to assure you that a decline in Malaysia’s economy will not materially and adversely affect our sales, results of operations and financial condition.
5.2.4 We are subject to political, economic and social developments in Malaysia Our business, prospects, financial condition and results of operations may be affected by political, economic and social developments that are beyond our control in Malaysia. Such developments include, but are not limited to, the risks of war, terrorism, riots, nationalisation, expropriation, renegotiation or nullification of contracts, changes in interest rates, economic recession, fiscal and monetary policies of the Government such as foreign exchange control regulations, inflation, deflation, methods of taxation and tax policy (including customs, excise, duties and tariffs), unemployment trends, deterioration of international bilateral relationships and other matters that influence consumer confidence and spending. Increasing volatility in financial markets may cause these factors to change with a greater degree of frequency and magnitude. Negative developments in the socio-political environment in Malaysia such as minimum wage increases and/or restrictions on bringing in foreign workers may materially and adversely affect our business, financial conditions, results of operations and prospects. Some types of losses such as from acts of war, terrorism and riots, may be either uninsurable or too prohibitive to justify insuring against. Should an uninsured loss or a loss in excess of incurred limits occur, our Group’s business, prospects, financial conditions and results of operations may be materially and adversely affected. There can be no assurance that adverse political, economic and social changes will not materially affect our Group’s business.

5.3 Risks affecting our Shares 5.3.1 No prior market for our Shares and it is uncertain whether a sustainable market will ever develop Prior to our IPO, there has been no public market for our Shares. Hence, there is no assurance that upon Listing, an active market for our Shares will develop, or if developed, that such a market can be sustained. There is also no assurance as to the liquidity of any market that may develop for our Shares, the ability of holders to sell our Shares or the prices at which holders would be able to sell our Shares. The Retail Price was determined after taking into consideration various factors and we believe that a variety of factors could cause our Share price to fluctuate which may adversely affect the market price of our Shares. There can be no assurance that the Final Retail Price will correspond to the price at which our Shares will trade on the Main Market upon our Listing and the market price of our Shares will not decline below the Final Retail Price.

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