GOOD CORPORATE GOVERNANCE

Risks & How We Manage

MAP is subject to variety of risks. It is crucial for the company to identify and control these risks to optimize shareholder value and ensure that a proper system of checks and balances is in place to effectively manage the risks without inhibiting business flexibility and operation.

Set forth below are some of the major risk factors associated with the Company. Additional risks not presently known to the Company, or currently deemed less material, may also have an adverse effect on the business.

Economic Risks

MAP’s operation is highly susceptible to the state of domestic, regional and global economic conditions. Changes in consumer confidence and the health of the economy may have a material adverse effect on our business in many ways, including slowing demand for our products and ultimately, our financial performance. To mitigate exposures to such risks, external economic outlook is carefully considered and continuously monitored when developing strategies. We have a planning and management review process (including periodic monitoring of budgets and expenditures) to respond to changes in economic conditions.

Political & Social Risks

MAP may be impacted by political and social changes, increased scrutiny by authorities and political developments relevant to the retail sector. The Company tries to anticipate and has specified insurance policies as well as crisis management processes involving our CEO and senior management team to respond to emergencies and/or catastrophic events. Apart from covering operational risks pertaining to health and safety of employees and customers, the Company is also protected by public liability insurance coverage. The Company is also covered up to a certain limit for possible business interruption.

Regulatory Risks

Our business and the retail sector as a whole are subject to a wide array of laws and regulations. Significant changes on prevailing laws and regulations to comply with applicable laws and regulations could adversely affect our financial performance and operations.

However, the Company continuously monitors legal and regulatory compliance. We also regularly participate in discussions with regulatory authorities as well as the industry to provide feedback on regulatory reforms and developments in the retail industry.

Competitive Risks

The Company engages in intense competition with other retail companies. If we are unable to positively differentiate ourselves from other retailers, our results could be adversely affected. To circumvent competition, we create and attractive value proposition through a careful combination of price, product assortment, convenience, customer service and marketing efforts. We also continue to invest heavily in innovation and technologies to build customer satisfaction and loyalty, providing many compelling reasons to shop with MAP.

New Business Risks

As part of our aggressive growth strategy, a substantial part of our business is dependent on our ability to invest in new growth areas to create new revenue streams, and make trend-right decisions. Failure to predict constantly changing consumer preferences, spending patterns and other lifestyle decisions may lead to deterioration in our financial results.

There is no guarantee that the Company will achieve success in all new ventures. However, to mitigate risks, we conduct market feasibility studies before acquiring new brands or venturing into new cities or malls.

Financial Risks

The principal financial risks faces by the Company include changes in foreign currency, interest rate, market liquidity/funding, and access to financing resources. To hedge exposure to these risks, the Company established policies, guidelines and control procedures to manage and report exposure to such risks.

Partnership Relations Risks

While we do not own many of the brands in our portfolio, MPA plays a highly significant role and much of our success depends on the relationship we uphold with principals as well as the strength and popularity of the respective brands.

Either with the brand, or with its principal, there is no assurance that the Company will be able to maintain these relationships. To address the possible risks of principal’s termination or failure to renew existing contracts, we set out a clearly defined partnership strategy – while improving relationships with our brands’ principals.

Natural Disasters & Disease Outbreak Risks

Severe weather or other natural disaster, including storms, floods, fires, earthquakes or terrorist attacks, as well as health pandemics that lead to declaration of state of emergency, lockdown, travel ban, closure of malls and quarantines, could adversely affect our business. Any such event affecting our stores or facilities could result in significant interruption and disruption of our business. Mitigating the risks and challenges of disasters takes extensive planning. It is critical for MAP to ensure there are crisis management plans and experienced real-time crisis response personnel in place to mitigate the potential impacts of a natural disaster or disease pandemic and return to normal operations as quickly as possible. In relation to the safeguarding of Company’s assets, the Company has a comprehensive insurance coverage for risks or perils that could damage any of the Company’s assets or facilities.

Data Security Risk

Due to our large network, most of our communication, data storage, and transactions, are handles through an IT system. Breach of our IT system is one of our business risks. To manage those risk, MAP has an extensive IT system that comprises of networks, servers and data storage infrastructure that are securely located in a tier-3 certified and ISO 27001-compliant data center and also at a secondary data center for Disaster Recovery Center. We conduct periodic IT vulnerability assessment to identify potential IT system disruption and security threats in real-time to mitigate disruption and data breaches. All incidents are investigated through root cause analysis to prevent future occurrence. For all business units that collect customer personal information, we have an established privacy policy that complies with government’s regulations on personal data protection.

Food Safety Risk

Food safety and integrity remain vital for our business. To ensure we always comply to changing food safety requirements, we impose strict control across all stages of our retailing process, from the raw material sourcing, storage, food preparation, serving and store cleanliness. MAP has attained the ISO 22000 on Food Safety Management System for central production of Cold Stone Creamery, Krispy Kreme and Domino’s Pizza. Our stores also implement clear Standard Operating Procedure (SOP), which outlines standards of food handling hygiene and sanitation. With the ever-growing demand for certified Halal products, MAP’s brands including Starbucks, Krispy Kreme, Cold Stone Creamery, Pizza Marzano, Subway, Domino’s Pizza, and Burger King have obtained Halal certificates from MUI. In order to receive and respond to our customer feedback, we also provide customer sevice support in each od our F&B business unit.

Litigation

We face risks of litigations, regulatory investigations and actions by regulators or private parties in connection with our operations. Any substantial legal liability or regulatory action could have a material adverse effect on our business, results of operations, financial condition, cash flows, reputation and credibility. To protect the Company from these risks, MAP takes great care in complying with regulations. The Company has also put in place contract policies to manage contractual agreements with principals, vendors, third party strategic partners and customers.