33 ANNUAL REPORT 2024 MST GOLF GROUP BERHAD KEY RISKS The Group operates in a dynamic and evolving environment, with global macroeconomic and geopolitical uncertainties that could impact our operational and financial performance. As a specialty golf retailer and wholesaler dependent on the import of finished goods, we face inherent risks arising from adverse changes in the supply chain, foreign currency fluctuations, cybersecurity breaches, or negative publicity, all of which could affect our intended outcomes and performance. The Board regularly reviews the potential impact of these risks and has adopted an Enterprise Risk Management (“ERM”) policy to manage key business risks in a systematic and consistent manner. In FY2024, the Board reviewed the ERM policy on a biannual basis, as part of the risk management report by the Head of Risk and Control (“HRC”). On a quarterly basis, the Governance, Risk and Sustainability Committee (“GRSC”) was briefed by the HRC on the Group’s enterprise risk landscape, including updates from the risk register and the corresponding risk mitigation action plans. OUTLOOK FOR 2025 Southeast Asia, with its growing population of more than 600 million, is emerging as a key growth market, driven by a rising middle class and favourable macroeconomic trends. The increasing investment in hightech golf entertainment reflects this potential, as Topgolf, the US-based world-leading high-tech leisure and indoor golf provider continue to invest and expand its presence across this region, signalling strong confidence in the Southeast Asian golf market. Overall, the industry remains robust, fuelled by growing youth participation and rising interest in golf, from casual leisure play to competitive formats. The Group continues to strengthen its presence in Indonesia, where it successfully opened five stores in its first year of operations, with further store openings planned for 2025. In Thailand, the Group is working towards establishing its business and aims to open its first retail store within the year. The Group is also actively pursuing market entry into Vietnam to solidify its presence across Southeast Asia. In Malaysia, business remains stable, and the Group continues to reinforce its market leadership. Our retail strategy is focused on improving store efficiency at key locations, optimising product mix based on current market conditions and implementing more targeted marketing to drive higher sell-through. Notwithstanding persistent economic uncertainties, the Board remains cautiously optimistic that the Group’s strategic actions will lead to improved profitability and results in FY2025. • Further details on the Group’s risk management are available in the Statement on Risk Management and Internal Control on pages 123 to 125 of this report. • Refer to Section 5 – Risk Factors of our IPO Prospectus at mstgolfgroup.com for further details on risks and potential risks the Group is exposed to.
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