Page 164 - CRC_One Report 2021_EN

Business Overview and Performance Corporate Governance Financial Statements Enclosure

The omnichannel strategy and the launch of Central App last year were significantly contributed to the growth
of online customers in next couple years. The growth of online customers base would increase online financial
transaction and customer privacy data’s collection. Therefore, the omnichannel will play major role in online operation,
but it will come with technology risks and increase cyber threats.

Cybersecurity threats can emerge in various forms, for instance, penetration to Central Retail’s data system by
the outsiders with an attempt to steal customer personal data and Central Retail’s confidential information,
ransomware attacks and data system damage, etc. The consequences of such threats are the leak of customer
personal data and Central Retail’s confidential information as well as disrupted data systems. This would financially
affect Central Retail in terms of the fine paid in case of law violation, the compensation paid to victim customers,
the revenue loss due to the leak of Central Retail’s confidential information to competitors, revenue loss due to
business disruption as a result of disrupted data systems, and an increase of expenditure paid for data system
recovery and threat management. This could also pose reputational risks to Central Retail. The loss of
stakeholder trust can eventually impact on Central Retail’s revenue.

Therefore, Central Retail has taken into account and prevented the potential technological risks, especially the
increase in the threat of cybersecurity and the problem of supporting digital infrastructure, to be able to achieve
its business goals and support sustainable growth for the organization in the future.

Another possible technological risk which might be posed to Central Retail in the future is the digital infrastructure
capacity to facilitate business operation via online channels, according to the omnichannel strategy,
which would increase the volume of usage and storage of Central Retail’s data system. Significantly,
Central Retail’s sales strategies would increase the number of website and application visitors and users
in the short run, which is the crucial period of generating sales and revenue for Central Retail. In case of inadequate
capacity of Central Retail’s digital infrastructure to facilitate the usage volume which might increase in the future,
possibly leading to website and application crashes, Central Retail will lose revenue as forecast, marketing costs,
reputation, stakeholder trust and customer base to the competitors. Furthermore, other possible risks include
unsuitable installation location, hardware failure of certain components, partially outdated software,
lack of knowledge and understanding in usage, and inadequate cybersecurity tools for IT systems. These cause
cybersecurity risks or gaps, ranging from the risk of Central Retail’s system or data prone to be penetrated
by cybercriminals, disrupted or malfunctioned systems and data loss, which might lead to the seller payment failure,
inventory oversupply, loss of customer trust or the delay in responding to customer tastes and demand.
Central Retail has gathered all its hardware equipment used for the main software system at the data warehouse
managed by RIS while the data backup system and other supporting systems are at the data warehouse managed
by Central Retail. Interruptions of Central Retail’s IT system or disaster data recovery system may negatively affect
Central Retail’s business, cash flow, operating results, financial position and business opportunities.

In this regard, Central Retail has established risk response measures to ensure risk is within the acceptable level.
The key actions include regular assessment, improvement of information technology capabilities, various upgrade
systems in respond to more efficiency in business operations and support future business expansion.
Moreover, Central Retail has increased the installation information security system to Central Retail’s network or
subsidiaries, which continuously provided service to customers, to reduce the risk of sensitive information leakage.
In addition, Central Retail sets up emergency support plans, backup restoration tests, contingency plans for some systems
and Information Technology Systems investment for omnichannel platforms and offline Sales development.
Central Retail emphasizes on research and innovation development investment, improvement of stable network
infrastructure, and efficient logistic system for customers to cater their needs including accurate and fast delivery
service to the branch of the Company’s group and subsidiaries. Furthermore, E-Tax system has been developed to
issue full tax documents which is modern system, paperless, and convenient for in-store and online customers,
related to Central Retail’s main strategy of omnichannel.

164 Annual Report 2021 (Form 56-1 One-Report)