REG-XP Power Ltd: Final Results <Origin Href="QuoteRef">XPP.L</Origin> - Part 2

XP PowerAnnouncement

08/03/2017 07:05

- Part 2: For the preceding part double click  ID:nPRr780C6a 

effect
on their businesses.

Risk mitigation – The Group undertakes performance evaluations and reviews
to help it stay close to its key personnel. Where considered appropriate the
Group also makes use of financial retention tools such as equity awards.

Loss of key customers/suppliers
The Group is dependent on retaining its key customers and suppliers. Should
the Group lose a number of its key customers or a key supplier this could have
a material impact on the Group’s business financial condition and results of
operations. However, for the year ended 31 December 2016, no one customer
accounted for more than 7% of revenue.

Risk mitigation – The Group mitigates this risk by providing excellent
service. Customer complaints and non-conformances are reviewed monthly by
members of the Executive Management team. On the supply side we conduct
regular audits of our key suppliers and in addition keep large amounts of
safety inventory of key components.

Product recall
A product recall due to a quality or safety issue would have serious
repercussions to the business in terms of potential cost and reputational
damage as a supplier to critical systems.

Risk mitigation – We perform 100% functional testing on all own manufactured
products and 100% hi-pot testing, that determines the adequacy of electrical
insulation, on own manufactured products. This ensures the integrity of the
isolation barrier between the mains supply and the end user of the equipment.
We also test all the medical products we manufacture to ensure the leakage
current is within the medical specifications.

Where we have contracts with customers we always limit our contractual
liability regarding recall costs.

Fluctuations of revenues, expenses and operating results due an economic
downturn or external shock

The revenues, expenses and operating results of the Group could vary
significantly from period to period as a result of a variety of factors, some
of which are outside our control. These factors include general economic
conditions, adverse movements in interest rates, conditions specific to the
market, seasonal trends in revenues, capital expenditure and other costs, the
introduction of new products or services by the Group, or by our competitors.
In response to a changing competitive environment, the Group may elect from
time to time to make certain pricing, service, marketing decisions or
acquisitions that could have a short term material adverse effect on the
Group’s revenues, results of operations and financial condition.

Risk mitigation – Although not immune from an economic downturn or the
cyclicality of the capital equipment markets, the Group’s diverse customer
base, geographic spread and revenue annuities reduces exposure to this risk.

The Group’s business model is not capital intensive and the strong profit
margins lead to healthy cash generation which also helps mitigate risks from
these external factors.

Information Technology Systems
The business of the Group relies to a significant extent on information
technology systems used in the daily operations of its operating subsidiaries.
Any failure or impairment of those systems or any inability to transfer data
onto any new systems introduced could cause a loss of business and/or damage
to the reputation of the Group together with significant remedial costs. The
Group is also potentially exposed to cyber-attacks of its internal systems or
website or software viruses in general which could have an adverse impact on
the business

Risk mitigation – The Group has disaster recovery plans in place to help
deal with disruption including information technology issues.

The Group’s key data is replicated on different sites and backed up or is
held in the cloud. The Group has firewall and other data security
infrastructure to protect ourselves from outside threats. It also operates
policies to prevent employees using unauthorised software inside the
Company’s premises which could introduce a virus or malware into the
Group’s internal systems.

Risks relating to regulation and taxation
The Group operates in multiple jurisdictions with applicable trade and tax
regulations that vary. Failing to comply with local regulations or a change in
legislation could impact the profits of the Group. In addition, the effective
tax rate of the Group is affected by where its profits fall geographically.

The Group’s effective tax rate could therefore fluctuate over time and have
an impact on earnings and potentially its share price.

Risk mitigation – The Group hires employees with relevant skills and uses
external advisors to keep up-to-date with changes in regulations and to remain
compliant.

The Group also employs a treasurer who keeps our taxation position under
continual review.

10.    Responsibility Statement

The Directors confirm to the best of their knowledge and believe that this
condensed set of financial statements:

- Gives a fair view of the assets, liabilities, financial position and profit
of the Group; and

- Includes a fair review of the information required by the Disclosure and
Transparency Rules.

11.    Other information

XP Power Limited (the “Company”) is listed on the London Stock Exchange
and incorporated and domiciled in Singapore. The address of its registered
office is 401 Commonwealth Drive, Lobby B, #02-02, Haw Par Technocentre,
Singapore 149598.

The financial information set out in this announcement does not constitute the
Company’s statutory accounts for the years ended 31 December 2015 or 2016.
The financial information for the year ended 31 December 2015 is derived from
the XP Power Limited statutory accounts for the year ended 31 December 2015,
which have been delivered to the Accounting and Corporate Regulatory Authority
in Singapore. The auditors reported on those accounts; their report was
unqualified. The statutory accounts for the year ended 31 December 2016 will
be finalised on the basis of the financial information presented by the
Directors in this preliminary announcement and will be delivered to the
Accounting and Corporate Regulatory Authority in Singapore following the
Company’s Annual General Meeting.

Whilst the financial information included in this preliminary announcement has
been computed in accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union, this announcement does not itself
contain sufficient information to comply with IFRS as adopted by the European
Union. The Company expects to publish full financial statements that comply
with IFRS as adopted by the European Union later this month.

This announcement was approved by the Directors on 8 March 2017.



Copyright (c) 2017 PR Newswire Association,LLC. All Rights Reserved