Fraser & Neave Holdings Bhd Annual Report 2019

A N N U A L R E P O R T 2 0 1 9 03 Management Discussion & Analysis 071 INCREASING AWARENESS ASSOCIATED WITH EXCESSIVE SUGAR CONSUMPTION Consumers are becoming more informed on possible health effects associated with excessive sugar consumption. While adapting to the recently implemented and/or impending policy changes on sugar tax within the region, the challenge faced by the Group today is how do we move beyond sugar reduction. Should we fail to address the shift in the consumer trends nimbly and effectively, it may result in financial as well as reputational impact in the longer term. • Continuous improvement on the offerings of healthier choice products in our innovations roadmap with target to offer a healthy option in every product category that we are in by 2020. • Prioritise R&D on developing new products and further improve existing products to meet consumers’ demand for healthier choices such as low-sugar, non-sugar added and mid-calorie beverages, without compromising on taste. • Proactively decrease our sugar index (amount of sugar contained per millilitre of all our beverages). • Introduce new pack size as part of our portion control commitment. • Promote sports and active lifestyles through programmes that target schools and communities. OPERATIONAL DISRUPTION IN THE EVENT OF CRISIS OR DISASTER The Group is exposed to risks associated with anticipated or unanticipated disruption to the normal operations of the Group which could be due to internal or external factors. • Group Business Continuity Management Framework (BCMF) has been established which sets out the policies and procedures in relation to response, recovery and restoration of business in the event of a crisis or disaster. • Business Continuity Plans (BCP) are in place and being tested in accordance with the BCMF. CYBER SECURITY THREATS Amid the evolving technology-reliant business environment, the Group is exposed to cyber security threats from cyber criminals which may compromise data integrity and even leakage of confidential and sensitive information which is valuable to the Group. Loss of data can also result in operational disruption and have financial impact. • The Group has developed Cybersecurity Framework to provide guidance to businesses on managing cyber security risks. • Regular trainings and constant updates related to cyber threats are provided to all employees to maintain awareness level. • Strengthen security measures through system hardening, multi factor authentication, stringent password policy, regular vulnerability scanning and close monitoring of suspicious activities. • Robust data backup procedures to protect critical information for business continuity. FALSE ALLEGATIONS RELATING TO P RODU C T S A F E T Y AND HA L A L COMPLIANT STATUS Living in the age of social media and instant messaging platform, it is difficult to be immune from false allegations in particularly where the Group’s food safety and Halal compliant status are concerned. It is also challenging to fully monitor social media due to users’ privacy settings. The effect from reputational damage could potentially bring serious implication to the Company financially. • Halal Governance and Assurance Framework is put in place with dedicated resources to implement the framework and uphold the Halal standards. • Stringent compliance with Halal standards from sourcing of raw materials to delivery of products. • Continuous engagement with key agencies and relevant authorities like JAKIM and Ministry of Health. • Close monitoring of news published in the media and response procedures are in place to manage situations. • Established response and recovery plan in managing social media issues. • Mitigation actions relating to product safety are included under “Exposure & Food Safety Risk”. RISK MITIGATION ACTIONS LINK TO MATERIAL ISSUES