SUNSHINE HOLDINGS PLC

Annual Report 2021/22

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
  1. Continuous negotiations with the principals to transfer the risk on price control to them through CIF reduction.
  2. Volume driven revenue growth
  3. Continuous lobbying and discussion with Regulator to increase the MRP of the products to mitigate the currency devaluation risks of the business
  4. Lobbing through Industry Associations/ memberships for a pricing formula for pharmaceuticals and healthcare products
2. External Exchange rate movements and limited foreign currency reserves Interest rate risk Potential loss as a result of the adverse exchange movements Unavailability of US Doller in the banking system to make foreign payments which interrupt the supply chain Increase in interest rates and costs of borrowings
  1. Negotiation with principals to fix the exchange rate through the contracts
  2. Hedging techniques – Eg: Forward booking if permitted
  3. Premature settling of bills at favorable exchange rates or advance payments to the suppliers,
  4. Managed foreign currency inflows to the group diligently and getting the priority for the availability of foreign currency/US Dollars for life saving pharmaceuticals and healthcare products
  5. Focusing on the financial institutes/banks which offers competitive rates for short-term and medium-term financing based on their liquidity levels
  6. Pooling on group cash within the preview and framework of arm’s length principle
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
  1. Diversification into other crops,
  2. Engagement with government agencies and Planter Association for constructive discussions on best practices of cultivations and protection of environment.,
  3. ;RSPO certification
  4. Public awareness program
4. Business Cost escalation risk The rise in the inflation will result in a significant increase in business operational costs such as people, utilities, maintenance, fuel, electricity, selling and distribution expenses
  1. Costs rationalisation across business units, and freezing some of costs items, evaluation alternative options to manage operational costs
  2. Re-skilling existing cadre as necessary to minimise new recruitments
  3. Products pricing
5. Business Increase in raw material prices Potential impact to the cost structure and availability issues
  1. Weekly tea buying meetings with Tea Consultants to focus on buying plan.
  2. Managing inventory levels optimally and evaluating the possibility of local sourcing for some of raw materials
  3. Exploring alternative options for packings and materials
  4. Competitive bidding process
6. External Damages or destruction to
the company’s assets/properties
Financial losses due to damages to the assets/ properties of the group and business interruptions
  1. Periodic risk assessment in manufacturing, distribution sites and warehouses and take preventive controls
  2. Comprehensive Insurance covers for Fire and Property covering all risks., Electronic equipment covering all risks and Marine Goods in Transit
  3. Insurance Policies covering Business Interruptions
  4. Regular review of adequacy of Sum Insured and coverage
  5. Regular awareness programs, fire & safety drills, emergency evacuations
7. Technological Reputational Cyber Security. Information Security Business continuity challenges due to data/ Information breach of the business entities, Potential cyber-attacks in internal IT system and technical infrastructure,
reputational risks
  1. IT audit an IT control and compliance reviews
  2. IT Governance framework on security controls, policies and procedures, user awareness and trainings, business continuity and disaster recovery protocols
  3. IT security; performing regular vulnerability risk assessments, penetration testing and networking scanning assessments for group application systems & websites, Review and support group firewalls, anti-virus software, patch management systems
  4. Cloud services management
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