Fraser & Neave Holdings Bhd Annual Report 2021

Material Issues of F&N Opportunities for F&N if issue is addressed Potential Risks for F&N if issue is not addressed Governance & Ethics Business policies and practices to ensure ethical, transparent and responsible governance. • Upholding F&N’s reputation as a responsible business maintains trust amongst all stakeholders • A reputational risk is failing to put in place transparent and sound governance Policy & Regulation Regulatory compliance across our operations and engaging with policy-makers in a responsible and transparent manner. • Engaging with regulators allows F&N to prepare for emerging legislation and ensure compliance • Risk of lack of preparation to comply with emerging regulations • Reputational risk is failing to put in place transparent and sound policies Economic Performance Financial performance to deliver shareholder value and secure long-term viability of the company. • Sustainable f inancial per formance c r ea t es l ong - t e rm v a l ue f o r a l l stakeholders • Hinder F&N’s business continuity Product Quality & Safety Delivering products to consumers which meet the highest quality and safety standards. • Deli ver F&N ’s b rand p romise to consumers through product excellence • Retain and increase market share through product range expansion and portfolio diversity • Reputational risk and customer claims arising from a break in the supply chain or compromised packaging outside the factory • Regulatory changes that may affect product recipe and/or packaging Product & Service Labelling Labelling our products and services in a responsible and transparent way for consumers. • Meet regulatory requirements • Meet consumer expectations relating to product and ingredient communication • Failure to meet stakeholder expectations on transparency of product information Innovation Building competitive advantage through innovative products and solutions to meet consumer and societal needs. • Meet customer and consumer demands and stay relevant • Adoption of emerging and disruptive technologies increases competitive edge • High investment cost in R&D and equipment with uncertain commercial returns • Ba l anci ng be t ween r i sk of non - acceptance by consumers and risk of being overtaken by competitors Supply Chain Stewardship Procurement policies, contractor management and supplier relationships which address material issues across the value chain. • Elevate vendors’ productivit y and performance in sustainability practices and compliance with food safet y standards. • Cost savings with stronger collaboration • Establish robust policies and systems to en su r e compe t i t i ve p r i c i ng and safeguard vendors from corruption and malpractice • Many ESG risks are present in F&N’s supply chain (e.g. human rights, product quality); unethical practice leads to regulatory violations, monetary fines and reputational risk • Disruption to operations • Price fluctuation as a result of global economic performance and foreign exchange exposure MATERIAL ISSUES & IMPORTANCE Better Business pportunities for F& if issue is addressed Potential Risks for F&N if issue is not addressed Management Discussion & Analysis 053 Fraser & Neave Holdings Bhd ! Annual Report 2021