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SUNSHINE HOLDINGS PLC

ANNUAL REPORT 2023/24

Stewardship

Risk Management

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Serial Number	Headline Risk	Related Risk	Risk	Risk Control Measure/Mitigation Action
1.	Political/Regulatory	Changes in Government policies	The government regulates the prices of pharmaceutical and medical device products to ensure they remain affordable and accessible The government’s policy supporting local manufacturing may impact procurement practices, potentially prioritising domestically produced goods	Ongoing negotiations with principals to transfer price control risk by reducing CIF Revenue growth driven by volume Lobbying and discussions with regulators to derive at product MRP to mitigate currency devaluation risks Advocacy through industry associations/memberships for pricing formula for pharmaceuticals and healthcare products
2.	Political/Regulatory	Government policy on oil palm expansion/cultivation	Challenges to expanding palm oil production include new regulations banning replanting and increasing social pressure. These regulations restrict the ability to renew plantations, limiting growth opportunities	Engaging with government agencies and Planter Association for constructive discussions on cultivation best practices and environmental protection Obtaining RSPO certification Implementing public awareness programs
3.	External	Exchange rate movements and limited foreign currency reserves	Potential loss due to adverse exchange rate fluctuations Limited availability of US dollars in the banking system, disrupting the supply chain	Negotiating with principals to establish fixed exchange rates in contracts Settling bills prematurely at favorable exchange rates or making advance payments to suppliers Diligently managing foreign currency inflows within the group and prioritising availability of foreign currency/US dollars for life-saving pharmaceuticals and healthcare products
4.	Business	Debtors – Government	Potential debtor write-offs occur when debts cannot be recovered, impacting the company’s profitability and cash flow	Establishment of a focused recovery team for the government sector Integration of ECL calculation into Audited Financials
5.	Business	Increase in raw material prices	Potential impacts on cost structure and availability may affect quality tea, fertilizers, and confectionery raw materials	Holding weekly tea buying meetings to concentrate on purchasing plans Optimising inventory levels and considering local sourcing for certain raw materials Investigating alternative packaging and materials options Implementing a competitive bidding process Reviewing product pricing strategies
6.	Business	Volume degrowth in Private Sector	Consumption may drop as people prioritize essential purchases over non-essentials	Emphasizing key institutional relationships and offering tactical pricing strategies to regain volume
7.	Technology	Cyber Security Information Security	Businesses face continuity challenges due to potential data breaches, cyber-attacks on internal IT systems and infrastructure, and associated reputational risks	Conducting IT audits for control and compliance reviews Establishing an IT governance framework covering security controls, policies, user awareness and training, and business continuity and disaster recovery protocols Ensuring IT security through regular vulnerability risk assessments, penetration testing, and network scanning assessments for group application systems and websites. Also, reviewing and supporting group firewalls, anti-virus software, and patch management systems Managing cloud services effectively