SUNSHINE HOLDINGS PLC
Annual Report 2020/21
| Serial number | Headline risk | Related risk | Risk | Risk control measure/mitigation action |
| 1. | Political/Regulatory | Changes in Government policies | Price control of pharmaceutical and medical devices products by the Government | (a) Continuous negotiations with the principals to transfer the risk on price control to them through CIF reduction (b) Balance with volume driven revenue growth. (c) Continuous lobbying and discussion with Regulator to increase the MRP of the products to mitigate the currency devaluation risks of the business (d) Exploring the opportunities in local manufacturing of pharmaceutical products |
| 2. | External | Foreign Currency Exchange rate risk Interest Rate Risk | Potential losses as a result of adverse exchange movement Potential increase in interest rates and cost of borrowing | (a) Negotiation with principals to fix the exchange rate through the contracts (b) Hedging techniques – E.g: Forward booking (c) Premature settling of bills at favourable exchange rates (d) Settlement in US Dollars when available (e) Negotiation with banks for fixed rates while rates are low and diversification of the funding pool |
| 3. | Strategic | Government policy on oil palm expansion/ Cultivation | Obstacles to palm oil expansion due to new regulations on the ban of replanting and social pressure | (a) Diversification into other crops (b) Engagement with government agencies and Planters Association, Palm Oil Industry Association for constructive discussions on best practices of cultivations and protection of environment (c) RSPO certification (Roundtable on Sustainable Palm Oil) (d) Public awareness programme |
| 4. | External | Global Pandemics – E.g. COVID-19 | Disruptions to the business operations due to lockdown, movement restrictions to field staff, health issues to workforce, work from home arrangements Disruptions to the value chain Health and Safety | (a) Strict compliances and adherence on the health guidelines issued by the health authorities (b) Regular awareness and health precautions for staff members and work arrangements (c) Supplying of adequate logistics and infrastructure to staff where necessary to perform their tasks (d) Management of cash flows, Treasury and supply chain proactively to avoid any disruptions (e) Regular assessment of business risks and take necessary precautions |
| 5. | Business | Increase in raw material prices | Potential impact to the costs structure due to trend of requesting higher prices for packing materials, and other ancillary services. Potential increasing trends on the tea and sugar prices | (a) Weekly tea buying strategy meeting with experts to take buying decisions on time, and private purchases where necessary (b) Contract purchasing (c) Competitive bidding process and also moved on to digital platform, E-Tender (d) Research and study to trigger the changes of market fundamentals affecting material prices and take immediate action appropriately |
| 6. | External | Damages or destruction to the Company’s assets/ properties | Financial losses due to damages to the assets/ properties of the group and also business interruptions | (a) Periodic risk assessment in manufacturing, distribution sites and warehouses and take preventive controls (b) Comprehensive insurance covers/ policies for Fire and Property All risk, Electronic equipment All risks, Marine Goods in Transit (c) Insurance policies covering business interruptions (d) Regular review of adequacy of Sum Insured and coverage (e) Regular awareness programmes, fire and safety drills, emergency evacuations |
| 7. | Technological Reputational | Cybersecurity Information Security | Business continuity challenges due to data/ Information breach of the business entities, Potential cyberattacks for internal IT system and technical infrastructure, reputational risks | (a) IT audit and IT control and compliance reviews (b) IT Governance framework on security controls, policies and procedures, user awareness and trainings, business continuity and disaster recovery protocols (c) IT security; Performing regular vulnerability risk assessments, penetration testing and networking scanning assessments for group application systems and websites, Review and support group firewalls, anti-virus software, patch management systems (d) Cloud services management |