Risk Factors

4. RISK FACTORS 4. RISK FACTORS NOTWITHSTANDING THE PROSPECTS OF OUR GROUP AS OUTLINED IN THIS PROSPECTUS, YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS THAT MAY HAVE A SIGNIFICANT IMPACT ON OUR FUTURE PERFORMANCE, IN ADDITION TO OTHER INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS PRIOR TO INVESTING IN OUR SHARES. If you are in any doubt as to the information contained in this section, you should consult your stockbrokers, bank managers, solicitors, accountants or other professional advisers. 4.1 Risks in Relation to Our Business 4.1.1 Dependency on the Continued Services of Our Key Management, Skilled and Qualified Personnel We believe that our Group’s continuing success is largely dependent upon the continued services of our key management. Further, the players in the food service industry, including our Group generally, are dependent to a certain extent on the experience of their skilled and qualified personnel, which include chefs. Our key management comprises amongst others, our Managing Director / Group Chief Executive Officer, Dato’ Koh Cheng Keong and Executive Director / Group Chief Operating Officer, Datin Chew Lean Hong, both of whom have been successfully supporting the operations and determining the strategic direction and business development of our Group over the years. The loss of any of our key management, skilled and qualified personnel without suitable and timely replacement may adversely affect our Group’s continued ability to compete and expand in our business operations and subsequently impact our financial performance. As such, our Group’s future success will depend upon our ability to attract, retain and motivate our key management as well as our skilled and qualified personnel. In order to ensure smooth sllccession planning, we have in place human resource strategies, which include competitive remuneration packages, incentive schemes and a variety of on-going training and development programmes for the key management, skilled and qualified personnel. Further, our Group has a pool of well­trained assistant chefs who would be able to assume the responsibilities of the head chefs, if the need arises. Notwithstanding our efforts in seeking to limit and minimise this risk, there can be no assurance that the abovementioned measures will be successful in retaining our key management as well as our skilled and qualified personnel or in ensuring a smooth management succession plan. Further details of our key management are set out in Sections 8.2 and 8.4 of this Prospectus. 4.1.2 Dependency on Strategic Locations In general, the success of all established players in the food service industry, including our Group, is highly dependent on the strategic locations of their food service outlets. Our Group’s business strategy is focused on integrating our food service outlets at places with high customer traffic flow such as amusement parks, family attractions and shopping areas. As at the LPD, our Group operates a total of twenty seven (27) food service outlets tllroughout Malaysia, with twenty (20) located in Genting Highlands (which is an integrated amusement park, family attraction and shopping area), three (3) in Shah Alam, Selangor Darul Fhsan, one (J) in Batu Pahat and one (I) in Kota Tinggi, Johor Darul Takzim, one (I) in Mukim Pedas, Negeri Sembilan Darul Khusus and one (1) in Kuching, Sarawak. -35 ­4. RISK FACTORS (Conl’d) Notwithstanding our Group’s number of food service outlets may not be significant as compared to other established players, our Group’s food service outlets are strategically locatcd in areas such as Genting Highlands. In addition to our Group’s food service outlets, our family attractions and other retail outlets providing services such as souvenir imaging, beautification, healthcare and wellness as well as children entertainment are located in Genting Highlands. OUf Group’s operations in Genting Highlands contributed 80.75% to 85.46% to our Group’s revenue for the financial years under review:
<————–FYE 30 June——-> Revenue from the operations in Genting Highlands: -Food service operations -Family attractions -Other retail outlets Sub·total Revenue from the operations in other locations: -Food service operations -Water amusement parks -Resort Sub-total Total revenue 2012 2013 RM’OOO

RM’OOORM’OOO 55,47755,192 62,109 4,702 4,479 3,270 8,3444,884 9,361 75,94964,778 67,091 2,224 1,654 3,813 9,856 9,157 10,314 2,217 1,8662,113 14,297 12,924 15,993 88,873 83,08479,075 I Even though our Group’s operations are located in current strategic locations such as Genting Highlands, there is no assurance that these current strategic locations could maintain similar high customer traffic flow and / or our Group would be able to continue to secure renewals of the tenancies.

Nonetheless, in order to limit our Group’s dependency on a particular strategic location such as Genting Highlands, we have further expanded our geographical presence within Malaysia to Penang via the KOMTAR Tower Revitalisation Project. In addition, we will continue with our efforts to identify other suitable and strategic locations to further mitigate this risk. Details of the KOMTAR Tower Revitalisation Project are set out in Section 6.21.2 of this Prospectus. -36 ­4. RISK FACTORS (Colt/’dj 4.1.3 Fluctnations in Rental Rates and Renewal of Existing Tenancies :Most of our Group’s food service outlets and premises where we operate our family attractions businesses are rented from third parties with tenancy terms of up to three (3) years with an option to further extend for an additional term of three (3) years. Our Group generally commences negotiations of new tenancy terms with the respective landlords at least three (3) months before the expiry of an existing tenancy_ During the negotiation process, the landlords have the absolute right to review and revise the terms and conditions of the tenancy agreements. As at the LPD, our Group has not encountered any difficulties in securing renewals for tenancies of OUf existing outlets. In addition, our Group has a long-term relationship with the landlords, whero OIlr Group has been their tenant for approximately five (5) to fifteen (IS) years. Notwithstanding the above, there is no assurance that the landlords will not increase the rental rates unfavourably or refuse to extend the tenure of the abovementioned tenancies. If so, (Jur Group may have to cease its operations in the said applicable outlets and relocate to a new location. This may have an adverse impact on OUf Group’s operations and profitability. We wish to highlight that on 26 July 2013, Genting Malaysia Bcrhad announced the closure of the Outdoor Theme Park, Genting Highlands with effect from I September 2013 to facilitate the construction of a Twentieth Century Fox theme park, which is part of the GITP (as defined in the ensuing paragraph) (“Closure of Outdoor Theme Park”). The Closure of Outdoor Theme Park had resulted in the non-renewal of the tenancy agreement for some food service und retail outlets. For the past three (3) financial years up to the FYE 30 June 2014, these affected food service and retail outlets had contributed 0.92% to 4.10% to our Group’s total revenue and L 12% to 4.93% to our Group’s PBT for the respective financial years under review. Thus, the Closure of Outdoor Theme Park is not expected to materially impact the operating results and financial positlon of our Group moving forward. Further, on 17 December 2013, Genting Malaysia Berhad announced the Genting Integrated Tourism Plan, which comprises a major ten (lO)-year master plan fur develupment, expansion, enhancement and refurbishment of hotels, theme park and infraSlnlCture at Resort World Genting (“GITP”). The GITP, which will be carried out in phases, had resulted in the closure of certain sections of the First World Plaza, Genting Highlands for facilitation in the upgrading and development works (‘Tpgrnding & Development Works”). Notwithstanding that the Upgrading & Development Works had resulted in the corresponding closure of some of our food service and retail outlets, the landlord had offered new premises to our Group for relocation of these food ~ervice and retail outlets. As at the date hereof, the landlord and our Group are still in the midst of finalising the terms of the new tenancy agreements for the relocated outlets as well as some of the existing tenancy agreements for our other food service and retail outlets as a result of the Upgrading & Development Works. F\lrther details of the Closure of Outdoor Theme Park and Upgrading & Development Works are set out in Sections 6.2.4 and 6.2.5 of this Prospechls. -37­4. RISK FACTORS (Cont’d) 4.1.4 4.1.5 4.1.6 Non-Renewal and Revocation of Permits and I or Business Licences If our pClmits and I or business licences are not renewed or revoked, there will be a material adverse impact on our business operations as we will not be able to carryon our business without such valid pemlits and business licences. We recognise the importance of timely renewal of the permits and I or business licences .and our Board shall endeavour to fulfil all conditions imposed by the relevant authorities for the aforesaid renewal. In the past, our permits and / or business licences have been renewed by the authorities as and when they are due for renewal. Further details of our permits and / or business licences are set out in Section 6.16 of this Prospectus. Default or Loss of Franchise Licences Two (2) of our Group’s food service outlets under the brand of Marrybrown are operating under a franchise agreement with Marrybrown Sdn Bhd (formerly known as Marrybrown Fried Chicken Sdn Bhd). The aforesaid food service outlets contributed 11.87%, 11.25% and 9.04% to our Group’s total revenue for the FYE 30 June 2012, FYE 30 June 2013 and FYE 30 June 2014, respectively. 1n addition to the above, our Group also operates RIPLEY’S Believe It or Not under a franchise agreement entered into with Ripley’s Attractions, Inc. RIPLEY’S Believe It or Not contributed 1.95%, 2.21 % and 1.85% to our Group’s total revenue for the FYE 30 June 2012, FYE 30 June 2013, FYE 30 June 2014, respectively.
If the above franchise agreements are terminated, our Group will not be able to continue operating the Marrybrown food service outlets as well as RIPLEY’S Believe It or Not and this may have a negative impact on our financial performance. However, our Group has long-term relationships with both the franchisors as our Group has been operating under the Manybrown and RIPLEY’S Believe [t or Not brand names for more than ten (10) years. Further details of the salient terms of the franchise agreements are set out in Section

 

6.13 of this Prospectus. Disruption at Our Centralised Kitchen Facility and Food Service Outlets Our Group’s centralised kitchen facility, which is located in Shah Alam, Selangor Darul Ehsan and food service outlets may face disruptions such as fire hazards or power failures which may result in the damage of our assets which includes equipment, machinery, food ingredients and I or prepared F&B products necessary for the continuity of our food service operations. Thus, any disruptions to our centralised kitchen facility and food service outlets may have an adverse effeet on our business operations and finaneial perfonnanee. Our food service outlets have individual kitchens and food preparation facilities, which allow the preparation ofF&B items that are on the food service outlets’ menu on-premise. Our food service outlets have food storage facilities and our Group has a centralised food storage area at First World Plaza, Genting Highlands, thus allowing our Group to maintain a buffer of food items, including those supplied by our centralised kitchen facility. In addition, we can purchase some of the food items that arc nonnally supplied by our centralised kitchen facility from third-party suppliers to supply to our food service outlets if we encounter an operational disruption. As a result, our food service outlets have the capability to sustain normal operations for a period of time should there be a disruption in our centralised kitchen facility’s operations. -38 ­4. RISK FACTORS (Cont’d) 4.1.7 4.1.8 Whilst we maintain insurance policies covering certain losses such as losses due to fire, theft and burglary, which we deemed adequate, we are not insured against business interruption. Therefore, we cannot provide any assurance that our insurance policies can adequately cover all of our Group’s potential losses. As at the LPD, there has not been any material disruption at our centralised kitchen facility and I or food service outlets. Food Contamination Contamination of our F&B products, whether actual or alleged, deliberate Or accidental, could potentially harm our business or reputation. As we are dealing with fresh and processed food, we are exposed to the risk of food contamination while preparing and serving food at our food service outlets. Any such incident of contamination may have an adverse impact on our Group’s reputation and brand name which in tilln may have an adverse impact on our business performance. Furthermore, this may result in inspection of premises by the local authorities and I or government health bodies, which may result in monetary fines and I or directives to temporarily close down our Group’s operations for cleaning and de­contamination. Our Group continuously ensures safe and proper handling of fresh and processed food by constantly educating and training our employees to adopt the highest food handling standards. Moreover, our Group’s policies to ensure cleanliness throughout our food service outlets and food storage areas have greatly reduced the risk of food contamination. Further, as an assurance of our product quality, we have obtained food safety management systems celtifications such as ISO 22000:2005 Food Safety Management Systems certification. As at the LPD, none of our businesses and operations has been affected by any food contamination incident or consumer scare. Continued Usage of the Lands for the Operations of Our Group’s Water Amusement Parks and a Resort Our Group operates its water amusement parks, namely Wet World Water Park Shah Alam, Wet World Batll Pahat Village Resort, Wet World Air Panas Pedas Resort and a resort, namely Kota Tinggi Waterfalls Resort On parcels of land via two (2) registered leases, one (l) privatisation agreement and one (1) management agreement with the respective local state governments. The table below sets out the lease period (length of agreements for the Wet World Water Park Shah Alam, Wet World Batu Pahat Village Resort, Wet World Air Panas Pedas Resort and Kota Tinggi Waterfalls Resort: Water Amusement Parks / Resort Kota Tinggi Water/an’) Resort, Wet World Balli Fahat Village Resort ,  Lease pedod I Length of agreement (years)  Expiry date  30 + 30@  @  30  28 May 2023  Wet World Water Park Shah Alami! If’et World Air Panas Pedas Resort,  20  31 December 2029  60  31 March 2058
-39 ­4. RISK FACTORS (Cont’d) 4.1.9 Notes:  •  Operating on a parcel ofland via a privatisalion agreement.  Operating on parcels ofland via registered leases.  #  Operating on a parcel ofland via a management agreement.  @  Lease period granted is thirty (30) years with an option to renew for aful’Iher thirty (30) years from the date a/registration of the lease. The lease 0/1 the land a/which Kola Tinggi Wateifalls Resort is situated has not been presented/or registration as the title to the said land has been alienated and Kola Tinggi Resorts is liaising with Ihe State Government ofJohor to register the lease in favour ojKola Tinggi Resorts.
OUf Group was given the first option and priority to renew the abovementioned leases and agreements, provided a sufficient notice period is given to the respective local state governments. However, the grant of any renewal will be at the sole discretion ofthe local state governments. In 20I0, we had successfully renewed the management agreement to operate Wei World Water Park Shah Alam for another Iwenty (20) years. Notwithstanding the above, there can be no assurance that our Group will be able to operate these water amusement parks and the resort should the negotiated lease rental rates / service amount and conditions imposed become unfavourable upon renewal or ifthe registration of the lease on the land in our favour is unsuccessful. In such event, the operations of our Group in these businesses may be adversely affected. It should be noted that the lease agreement for Wet World Balu Pahat Village Resort may be terminated if Platinum Attractions, being the lessee did not within fourteen (14) days from the stipulated date pay the rental or is wound up or dissolved, eilher voluntarily or by court order or by creditors, or breaches any provisions of the lease agreement and such breach has not been remedied within fourteen (14) days after the receipt of written notice from the lessor. Further, the lease agreement for Wet World Air Panas Pedas Resort may be terminated if Pedas Hot Spring, being Ihe lessee did not within thirty (30) days after the receipt of written notice from the lessor, remedy the breach due to the non­compliance of the terms and conditions of the lease agreement which may result the lessor being charged or fined by the state authority, municipal councilor any relevant authorities or court or tribunal and fails to pay the rental within thilly (30) days from the stipulated date or the lessee fail to remedy any provision stated in the lease agreement. The management agreement for Wet World Water Park Shah Alam may be terminated if Mercu Jutaan, being the operator breaches or fails to observe any covenant in the lease agreement and such breach or failure has not been remedied after the expiry ofthirty (30) working days upon service ofa notice on the lessee. Details of the salient terms of the respective lease and management agreements are set out in Section 6.13 of this Prospectus. Infringement of Trademarks Our Group’s proprietary brand names arc one of the critical factors that differentiate us fro111 our competitors and we have taken the necessary steps to protect our rights by registering our existing brands in Malaysia and in other countries such as Vietnam, Indonesia, Singapore and India. -40 ­4. RISK FACTORS (Cont’d) 4.1.10 4.1.11 The existing intellectual property laws in the various jurisdictions provide only limited protection to OUf trademarks and such protection is required to be renewed periodically and generally does not have extraterritorial coverage. As at the LPD, our Group has not encountered any case of infringement, counterfeiting, unauthorised third party usc or exploitation, any of which would reflcct ncgatively on the image of our brand names. Although some of our Group’s trademarks are registered, there can be no assurance that our Group will bc able to protect its trademarks against infringement, counterfeiting, unauthorised third party use or exploitation, any of which would reflect negatively on the image of our brand names and may also result in an adverse impact on the operating results and financial position of our Group. Mishaps or Accidents at Our Water Amusement Parks and Family Attractions Patrons enjoy the attractions available at our water amusement parks and family attractions by using the equipments, facilities and amenities provided to them. As such, there is a risk of equipment failure or incidences leading to injuries or loss of lives. Our Group implements strict safety measures, procedures and training for our employees, routine safety maintenance and upgrades at these locations, as well as posts warning signs for patrons at rides and attractions to minimise the risks of accidents or mishaps occurring at our water amusement parks and family attractions. Whilst our Group maintains insurance policies that cover losses against public liability, fire and perils, which we deem adequate, there can be no assurance that mishaps or accidents will not occur. If accidents or mishaps do occur, our Group’s reputation, business operations and financial performance may be negatively affected. As at the LPD, there have not been any severe accidents or mishaps at our water amusement parks and family attractions that have caused disruption to our Group’s operations. Our Group has not encountered any case of outbreak of contagious or virulent diseases that has materially affected our operations. However, we will seek advice from professionals or relevant government department as and when necessary and appropriate action will be taken to prevent and reduce the risk of exposure to such diseases, Expansion of Business via the KOMTAR Tower Revitalisation Project Our Group has envisaged various well~strllctured expansion plans to further penetrate the consumer markets and to expand into new geographical markets within Malaysia as well as to diversify our range of services. These include our planned KOMTAR Tower Revitalisation Project. Substantial financial and management resources will be devoted to launch our services and expand our operations in this new geographical market and we intend to use 60,44% from our IPO proceeds to fund part of the total cost ofthe KOMTAR Tower Revitalisation Project, which amounts to approximately RM60.00 million. The remaining cost of the KOMTAR Tower Revitalisation Project will be funded via internally generated funds and bank borrowings. Further details relating to thc KOMTAR Tower Revitalisation Project is set out in Section 6.21 of this Prospectus. In order to limit our risk associated with the KOMTAR Tower Rcvitalisation Project, our Group had engage professionals to conduct detailed analysis of thc KOMTAR Tower Revitalisation Project and various possible aspects of the penetration strategy and feasibility have been reviewed in respect of the target markets for the KOMTAR Tower Revitalisation Project. -41 ­4. RISK FACTORS (Cont’d) Nonetheless, there is no guarantee that our Group will be able to successfully penetrate the new targct markets via the KOMTAR Tower Revitalisation Project or that we can expand our existing market share within Malaysia. 4.2 Risks in Relation to Our Industry 4.2.1 Pilferage by Employees A large proportion of our transactions are based on cash payments through the operation of our food service outlets, water amusement parks and family attractions. There is a risk of pilferage of cash by employees in our daily operations, which may materially affect our financial performance. However, to mitigate such risk, we have put in place various operational procedures and controls to minimise the possibility of pilferage by employees. These include: (i) customer’s orders at our food service outlets and entry tickets for our water amusement parks and family attractions as well as our other business operations are entered into a Point-of-Sale (“POS”) system. The customer pays the amount stated on the official receipt generated from the POS system. This ensures that all customers’ payments are captured in the POS system; (ii) all cash collected for the day are deposited daily into a bank and / or once reached the pre-set threshold, by each outlet manager; (iii) daily bank-in slips are faxed to our Group’s head office on a daily basis. These are then verified against the sales summary report generated by the POS system for each food service outlet, water amusement park, family attraction and other business operations at our Group’s corporate office; and (iv) all daily cash sales are reconciled to the amount stated in the sales summary report. With the above controls) we have not encountered any material pilferage by the employees for the past three (3) years. Notwithstanding the above, therc is no assurance that our financial performance in the future will not be affected by pilferage by employees.
4.2.2 Availability, Quality and Price of Food Ingredients Our Group’s food service outlets are dependent on the consistent supply of food ingredients that meet our quaJity requirements. The food ingredients that we use to prepare our food items comprise mainly of meats, poultry, seafood products, fruits and vegetables. The supply of food ingrcdients may be affected by extemal factors such as the outbreak of diseases and the occurrence of natural disasters. Fluctuations in the supply of food ingredients will correspondingly affect the market price of these food ingredients. A significant increase in the market prices of food ingredients will have an adverse effect on our Group’s profit margins and financial perfOlmancc should our Group be unable to pass on such increase to our customers. -42 ­I 4. RISK FACTORS (Cont’d) 4.2.3 4.2.4 Our Group procures all the food ingredients from third party suppliers. The cessation of the relationship with these third party suppliers may result in our Group having to incur additional time in sourcing for new suppliers, OUf Group is also dependent on the prompt delivery and high quality of food ingredients. Disruptions such as adverse weather conditions could lead to delayed or lost deliveries to our Group’s centralised kitchen facility, where the quality of fresh, chilled or frozen food products may deteriorate. The food ingredients supplied that do not satisfy our quality requirements may result in the failure of our Group to provide quality food to customers, thereby damaging OUf Group’s reputation. As at the LPD, we have not encountered any shortage or disruption in the supply of food ingredients. Further, our Group is not dependent on any particular suppliers as these food ingredients are widely available and with our Group’s R&D team, we are able to source for alternative food ingredients within a short span of time. Details of our production process and quality control procedures are set out in Sections 6.4 and 6.10 of this Prospectus. Dependency on Foreign Labour Supply Our business operations are dependent on the continued supply of foreign labour. As at the LPD, we had, in aggregate, ninety five (95) foreign workers in our Group’s payroll which accounted for 26.39% of our total Group’s employees. Any substantial shortage in the foreign labour supply or restriction on the foreign labour usage may lead to a dismption in our Group’s daily operations. We have taken numerous efforts to ensure that there is sufficient workforce for our Group’s daily operations. Such efforts include looking after our Group’s foreign workers’ welfare and ensuring compliance with the policies set up by the Ministry of Human Resource, Malaysia such as the minimum wages policy and other relevant labour and immigration laws that govem the employment of our foreign employees. As at the LPD, oW’ Group has not experienced any shortages on the supply of foreign labour for our daily operations. In addition, we currently have a relatively diverse base of foreign workers from different countries. Notwithstanding the above, there can be no assurance that the aforementioned cfforts will be able to mitigate the risk arising trom the dependency on foreign labour supply. Increased Competition In general, our Group’s business opcrations are exposed to the threat of competition from existing and new operators, particularly in the areas where we operate our food service outlets, water amuscmcnt parks and family attractions. The list of existing operators in the food service industry and amusement parks in Malaysia is set out in Items 7.3.1 and 7.3.2, Section 7 of this Prospectus. The expansion of existing operators and entry of new operators may rcsult in reduced patronage to our Group’s operations, which may in turn negatively affect our financial performance. To maintain our competitiveness, we use our in-house R&D facilities and test kitchen to develop new recipes, improve and enrich existing recipes to ensure that our menus are in line with evolving consumer tastes and preferences. We periodically renovate and upgrade the facilities at our food service outlets to ensure customer satisfaction. We also continuollsly upgrade and improve our water amusement parks and family attractions by installing new rides and facilities. Nevertheless, there can be no assurance that our efforts can ensure that we remain competitive and that increased competition will not adversely affect our financial performance. -43­4. RISK FACTORS (Conl’dj

4.2.5 Changes in Consumer Preference and Perception Our business is dependent on the goodwill and market receptiveness associated with our Own brands, including those in our food service outlets, water amusement parks and family attractions. Consumer preference and perception may change in the fUhlre, and there is no assurance that the market will continue to be receptive to our brauds aud products. To mitigate this, through our in-house R&D facilities and test kitcheu, we have the ability to continually improve, enrich and develop new menus and recipes to meet changing market preferences. Nonetheless, we will also continue to develop new concepts within our portfolio of food service outlets to cater to the diverse preferences in food products. As for our water amusement parks and family attractions, we will continue to carry out periodic renovations and refurbishments whilst introducing new attractions to attract new customers as well as maintain the old customer base. Nevertheless, there can be no assurance that our Group will be able to adapt to changes in consumer preference and market perception.
4.2.6 Outbreak of any Contagious or Virulent Disease Our food service outlets, water amusement parks and family attractions are dependent on continuing patronage by members of the public. As a result, the spread or outbreak of any contagious Or virulent disease in Malaysia or in the region could have an adverse impact on our Group’s operations. If any of our employees, suppliers and I or customers is infected with such diseases, we may be required to temporarily cease operation of the affected outlets to prevent the spread of the disease. This would have a negative impact on our financial performance and profitability. As at the LPD, our Group has not encountered any Case of outbreak of contagious or virulent diseases that has materially affected our operations. However, we wiU seek advice from professionals or relevant government department as and when necessary and appropriate action will be taken to prevent and reduce the risk of exposure to such diseases.
4.2.7 Reputation Risk Operators in the food service industry are sensItive to public perception as food served at food service outlets arc consumed directly by consumers. Incidents such as serving contaminated food that results in food poisoning or other illness, and actions that are intended to cause harm to an operator such as sabotage and the spread of malicious rumours, may damage the public’s perception of an operator. Incidents that damage the publie’s perception of an operator may harm its brand name and reputation, which in tum may have a negative effect on their performance. Operators in the food service industry can reduce the risk of food contamination by implementing food preparation processes that are certified to comply with recognised standards (such as the ISO 22000 Food Safety Mauagement Systems), continuously enforcing safe and proper food handling procedures at their food service outlets, and mainlaining clean and hygienic premises. (5iource: IMR Report) -44­4. RISK FACTORS (Conl’d) 4.2.8 4.2.9 As at the LPD, our Group has not experienced any negative publicity that has materially affected our financial performance, operations and brand names. While acts ofsabotage and the spread of malicious rumours are beyond our control, we may mitigate the harm caused, by ensuring that our food preparation and handling procedures are adhered to at all times, proactively investigating such incidents in a timely manner, and responding to public concerns as evidenced by our ISO 22000:2005 Food Safety Management Systems certification. Public Liability Operators in the amusement and recreation industry directly serve the general public. In many of the amusement and recreation venues, patrons use equipments, facilities and amenities. As such, there is a risk of equipment failure or incidences leading to injuries or loss of life. Any such incidents eaused on the premises could subject the operator to legal redress, which may impact the business financially, as well as contribute to bad publicity for the operator. Any bad publicity would discourage visitors to the venues. Similarly, operators of food service outlets also face potential incidences at their premises which may lead to consumers seeking legal redress against them. (Source: IMR Report) We have obtained sufficient public liability insurance to reduce our exposure to such risks. In addition, we do exercise due care, consideration and safety measures in the premises to mitigate the potential risks. For instance, we have implemented safety guidelines, procedures and training for employees, routine iIlspections and maintenance of equipment, as well as posted warning signs for patrons at rides and attractions. As for the food service outlets, we have implemented proper procedures on food handling and storage, designed the workplace and public areas to meet industry standards and implemented other proper customer interaction procedures. Emergency Risks and System Failures As with any business, our Group is susceptible to the usual emergencies and security risks in the fonn of breakout of fire, electricity disruptions, theft, computer viruses and other adverse events. Such incidences may affect the operational and financial perfonnance of our Group. Nonetheless, our Group has in pJace the following risk management practices and pre-emptive measures to further mitigate these risks: (i) our Group carries out regular service and maintenance of our equipment and safety systems to ensure that they are in good working condition and to minimise the frequency of breakdowns;
(ii) we have installed approved fire fighting systems such as hose reel, sprinklers and fire extinguishers in our respective offices;

(iii) all data in the main computer server are automatically backed up on a daily basis; and (iv) the corporate office IS guarded twenty four (24) hours dally. In addition to the above, our Group has taken reasonable measures to ensure that our assets are adequately covered by insurance in order to mitigate Hny losses which may arise as a result of insured contingencies. However, there can be no assurance that these mitigating factors will be able to entirely mitigate thc normal emergency risks and system failures. -45 ­4. RISK FACTORS (Conl’d) 4.2.10 4.2.11 Economic Slowdown Any widespread and / or prolonged economic slowdown would affect consumer confidence and income, and subsequently the consumer’s propensity to spend. The uncertainty over the global economies, particularly resulting from the cura zone debt crisis, may also affect the Malaysian economy. This may cause consumers to be more cautious in their spending, particularly in relation to discretionary items such as amusement attractions and food services, As sueh, the performance of operators in the food service, and amusement and recreation industries may be affected by the risk of economic slowdown. As for 2014, real GDP of the Malaysian economy is expected to grow between 5.5% and 6.0%. This is relatively higher than the projected real GDP growth rate for advanced economies* in 2014, which is estimated at 2,0%. Note: • Includes Australia, Austria, Belgium. Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Malta, Netherlands, New Zealand, Norway, Portugal, San Marino, Singapore. Slovakia, Slovenia, Spain, Sweden, Switzerland, Taiwan, the United Kingdom and the Unifed States ofAmerica. Various initiatives introduced by the Government such as the loth Malaysia Plan and Economic Transformation Plan will continue to provide opportunities for operators in the food service, and amusement and recreation industries, particularly through measures that encourage tourism, such as positioning Malaysia as a duty-free shopping destination for tourist goods, establishing Malaysia as a global biodiversity hub, and enhancing connectivity to priority medium-haul markets. These initiatives are expected to stimulate tourist arrivals and spending, which would help counter the negative effects of a slowdown in the local economy, should one occur, (Source: IMR Reporf) Political, Economic and Regulatory Considerations Like all other business entities, adverse developments in political, economic and regulatory conditions in Malaysia could unfavourably affect our financial position and business prospects. These risks include, amongst others, changes in political leadership, risk of war, changes in economic conditions, changes in interest rates, methods of taxation and unfavourable changes in govemment policies such as introduction of new regulations, import duties and tariffs. Our Group has taken efforts to diversify our range of services and markets, improve on marketing and distribution strategies as well as pre-empting certain regulations to mitigate any possible adverse impact on our Group from any adverse development in political, economic and regulatory authoritics. Whilst we strive to continue to take effective measures such as prudent financial management and cfficient operating procedures, there is no assurance that adverse political, economic and regulatory factors will not matcrially affect our operations, financial performance and futurc prospects. -46 ­4. RISK ~-ACTORS (Conl’d)
4.2.12 Seasonality OUf Group’s water amusement parks and family attractions are inherently seasonal in nature. The number of patrons who visit our water amusement parks and family attractions usually increases during weekends and the holiday seasons. Our Group seeks to mitigate this risk by adopting different marketing strategies such as collaborating with the state tourism boards to promote our water amusement parks and resort, periodically renovating and upgrading the facilities at OUf water amusement parks to create new experiences for our patrons and utilising cross-selling synergies to promote our water amusement parks and family attractions to our patrons at our food service outlets. Our in-house corporate marketing teams also participate in exhibitions and conventions to promote our business operations and brands. 4.3 Risks in Relation to Our Shares and Our IPO 4.3.1 No Prior Market for Our Shares Prior to our IPO, there has been no public market for our Shares. Accordingly, tbere can be no assurance that an active market for our Shares will develop upon our Listing or, if developed, that such market will be sustained. There can also be no assurance that our IPO Price will correspond to the price at which Our Shares will be traded on the Main Market upon or subsequent to our Listing or that an active market for our Shares will develop and continue upon or subsequent to our Listing. Our IPO Price was determined after taking into consideration a number of factors, including but not limited to, Our Group’s financial, operating history and position, our future plans and the prospects for the industry in which our Group operates. As such, the price at which our Shares will trade On the Main Market would be dependent upon market forces and many other factors, such as prevailing economic, political and financial conditions in Malaysia, our operating results and the markets for similar securities. There can be no assurance that the market for our Shares, if any, will not be subject to any disruptions, evident in the markets for securities that have caused intense volatility in the prices of securities similar to our Shares. Any disruptions in such markets may have a material and adverse effect on the price of our Shares.
4.3.2 Capital Market Risks and Share Price Volatility Movements in domestic and international securities market, economic conditions, foreign exchange rates and interest rates may affect the market price of and demand for our Shares. In particular, an increase in market interest rates may have an adverse impact on the market price of our Shares if the annual yield 011 the price paid for our Shares gives you a lower rctum as compared to other investments. Further, the market price of our Shares may be volatile and could fluctuate significantly and rapidly in response to, inter alia, the following factors, some of which arc beyond our control: (i) variations in our operating results and the differences between our actual financial operatmg results and those expected by you and analysts;
(ii) changes in securities analysts’ recommendations, perceptions or estimates of our financial performance;

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