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Stewardship
Risk Management
SUN Risk Management Policy serves as an overarching mandate for the effective management of risks within the Group. The Risk Management Policy was implemented in line with section 9 of the new CSE listing rules on Corporate Governance.
Overview
Given the highly dynamic nature of its operations, SUN Group risk universe is constantly evolving, influenced by changes in the regulatory landscape, economic conditions, technological advancements, and emerging market trends, making effective management of risks imperative to achieving the Group’s business objectives, over the short, medium, and long term. As risks become increasingly interconnected, SUN has discovered that multiple risks can converge to impact a single business objective, requiring careful coordination and mitigation strategies. On the other hand, a single risk may have far-reaching consequences across several objectives, underscoring the importance of early identification, continuous monitoring, and proactive responses. Acknowledging the complexity of its risk universe, SUN adopts a holistic and forward-looking approach to risk management to strike a balance between resilience and sustainable value creation.
Approach to Risk Management
SUN’s Risk Management Policy serves as an overarching mandate for the effective management of risks within the Group. The Risk Management Policy was implemented in line with section 9 of the new CSE listing rules on Corporate Governance. The Board approved Policy formalises the Integrated Risk Management Framework to support effective decision-making in order to mitigate potential threats, while leveraging opportunities for sustained business growth. To that end the framework establishes a comprehensive system of policies, procedures and protocols for identifying, assessing, and mitigating all financial and non-financial risks as well as emerging risks, ensuring all significant risks are considered, and every potential threat is evaluated within the context of its possible impact on the Group.
Continuous management of Risks
- Group CEO
- Executive Committee Members
- Business Unit Heads
The first-line-of-defence is represented by various business units who are tasked with managing operational risks within their functional areas. They are responsible for implementing established risk policies and procedures while identifying potential vulnerabilities in the day to day company operations. Part of the responsibilities of the first line of defence includes cross-functional collaboration to identify, assess, and manage risks, ensuring a cohesive and unified approach to risk mitigation.
Risk Management
- Risk and Compliance Unit
- Management committees for setting up framework and policies
The second line of defence comprises Group Compliance Department and Risk and Compliance of Each Business Unit. They are primarily responsible for developing methodologies, policies, and procedures for risk management in line with the Board approved Risk Management policy, and monitoring various risk exposures within the Board approved risk appetite and tolerance limits. The Internal Audit and Compliance Officer provides the Board with quarterly updates on the Company’s compliance with applicable regulations, policies, and procedures, along with a quarterly risk dashboard capturing key risk exposures, which is submitted to the Group Risk and Compliance Committee. As part of its responsibilities, Each Business Unit conducts PEST (Political, Economic, Social, and Technological) analysis to determine necessary improvements to risk-related policies and procedures in line with the evolving external environment. These recommendations are reported to the Board Audit Committee for necessary action.
Third Line Defence
- Internal Audit
- External Audit
The Company’s Internal Audit function serves as the third line of defence, providing independent assurance regarding the efficacy of the Company’s risk management framework. In its capacity as an independent observer, the Internal Audit function reports directly to the Board Audit Committee (BAC). The Company’s external auditors and regulators also play a role in providing independent assurance.
Managing Sunshine Holdings Plc Key Risks
| 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 |
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| 2 | 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 |
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| 3 | Strategic | 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 |
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| 4 | Strategic | Debtors – Government | Potential debtor write-offs occur when debts cannot be recovered, impacting the Company's profitability and cash flow |
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