The Group has undertaken various restructuring projects over the
last year, aimed at restoring the profitability of those Group
businesses which have suffered most from order delays.
Site optimisation plans continue to be refined to ensure that
the Group utilises its manufacturing facilities as efficiently as
possible, within the constraints imposed by export control
legislation and customer requirements.
-- Political risks- The Group is active in several countries
that are suffering from political, social and economic instability.
The Group's business in these countries may be adversely affected
in a way that is material to the Group's financial position and the
results of its operations.
In addition, political unrest and changes in the political
structure in certain non-NATO countries to which the Group
currently sells could impact on their future defence expenditure
strategy and the Group's ability to export products to these
countries.
During periods of unrest, delays in obtaining export licences
can result in delayed revenue.
The Group's businesses strive to maintain relationships at all
levels within the political structure of certain key countries, in
order to ensure that they are aware of and can react to changes, if
and when they occur.
The businesses implement financing arrangements for contracts
with high risk customers, which are intended to mitigate the impact
of a deterioration in the customer's financial position, and in
certain circumstances they may also procure political risks
insurance.
The Group is exploring opportunities for collaboration on the
establishment of local manufacturing operations in certain
countries, which may remove some of the uncertainty regarding
export of products.
-- Operational risks - The Group's manufacturing activities may
be exposed to business continuity risks, arising from plant
failures, supplier interruptions or quality issues. These could
result in financial loss, reputational damage and loss of future
business.
All of the Group's businesses are required to prepare business
continuity plans.
The Group has introduced new requirements in relation to the
reporting of operational key performance indicators, in order to
provide better visibility on operational performance and to
facilitate the identification of potential production and quality
issues at an early stage.
The Group insures certain business interruption risks where
appropriate.
-- Introduction of new products - The Group's approach to
innovation and continued emphasis on research and development
activity means that it is continually adding new products to the
range. There is a need to ensure that this new product development
is completed in a timely manner, and to a standard which allows
volume manufacturing to be undertaken and the production of
products against high reliability and safety criteria to meet
customers' requirements. Failure to achieve this may have both
financial and reputational impacts.
The Group also needs to ensure that it continues to upgrade its
existing product range to compete with emerging technologies, and
to avoid the risk of obsolescence or loss of business.
The Group has introduced a more focused product development and
technology investment approach, in order to ensure that resources
are applied appropriately across the Group in support of the three
year plan. A Technology Board has been established to review all
proposed research and development projects, to ensure that key
initiatives are being prioritised and to prevent possible
duplication of effort in different parts of the Group. Working
groups have been established to drive and co-ordinate technology
investment in certain key areas, such as cyber-security.
-- Product liability and other customer claims - The Group may
be subject to product liability and other claims from customers or
third parties, in connection with the non-compliance of these
products or services with the customer's requirements, due to
faults in design or production; the delay or failed supply of the
products or the services indicated in the contract; or possible
malfunction or misuse of products. As many of the Group's products
are single-use devices, it is often impossible to conduct
functional testing without destroying the product, and this
increases the risk of possible product failure, either in use or
during customers' own sample-based functional tests.
Substantial claims could harm the Group's business and its
financial position. In addition, any accident, failure, incident or
liability, even if fully insured, could negatively affect the
Group's reputation among customers and the public, thereby making
it more difficult for the Group to compete effectively.
Material breaches in the performance of contractual obligations
may also lead to contract termination and the calling of
performance bonds.
The businesses maintain rigorous control of their production
processes, monitoring critical parameters on a batch or unit basis.
State-of-the-art techniques, including statistical process control
or Six Sigma, are applied and, where appropriate, processes are
automated to reduce the scope for human error. Detailed assessments
of incoming components and materials are conducted to ensure
compliance with specifications.
Product liability claims from third parties for damage to
property or persons are generally covered by the Group's insurance
policies, subject to applicable insurance conditions.
-- Management resource - The Group requires competent management
to lead it through the next stage of its development. In
challenging markets and difficult times, there is a need to retain
and incentivise senior managers and key employees, in order to
ensure that the operations of the Group do not suffer from loss of
management expertise and knowledge. As the shape of the Group's
business also changes, with an increased focus on electronics,
there is a need to ensure that the businesses build an appropriate
skill base to enable them to compete successfully in new markets
and product areas.
Incentivisation arrangements have been streamlined and improved,
to ensure that employees are suitably incentivised to deliver key
strategic objectives.
-- Compliance and corruption risks - The Group operates in over
fifty countries worldwide, in a highly regulated environment, and
is subject to applicable laws and regulations in each of these
jurisdictions. The Group must ensure that all of its businesses,
its employees and third parties providing services on its behalf
comply with all relevant legal obligations, as non-compliance could
result in administrative, civil or criminal liabilities, and could
expose the Group to fines, penalties, suspension or debarment, and
reputational damage.
The nature of the Group's operations could also expose it to
government investigations relating to import-export controls, money
laundering, false accounting, and corruption or bribery.
The Group has a central legal and compliance function which
assists and monitors all Group businesses, supported by dedicated
internal legal resource in the US. The Group's internal audit
activities also incorporate a review of legal risks.
The Group operates under a Global Code of Business Principles,
which stipulates the standard of acceptable business conduct
required from all employees and third parties acting on the Group's
behalf. The Group has also adopted a Bribery Act Compliance Manual,
incorporating all of its anti-bribery policies and procedures.
A significant proportion of the Group's management have received
training in relation to ethics and anti-corruption.
-- Environmental laws and regulations - The Group's operations
and ownership or use of real property is subject to a number of
federal, state and local environmental laws and regulations,
including those relating to discharge of hazardous materials,
remediation of contaminated sites, and restoration of damage to the
environment. At certain sites that the Group owns or operates, or
formerly owned or operated, there is known or potential
contamination for which there is a requirement to remediate or
provide resource restoration. The Group could incur substantial
costs, including remediation costs, resource restoration costs,
fines and penalties, or be exposed to third party property damage
or personal injury claims, as a result of liabilities associated
with past practices or violations of environmental laws or
non-compliance with environmental permits.
All of the Group's businesses are certified to the environmental
management system ISO14001, which requires the setting of
environmental goals and objectives focused on local aspects and
impacts.
The Group has managed monitoring and remediation programmes at
certain sites, for which appropriate financial provision has been
made. In certain circumstances, the Group procures environmental
liability insurance, subject to insurance conditions.
-- Financial risks- Details of the financial risks to which the
Group is potentially exposed and details of mitigating factors are
set out in the financial review and note 24 of the Group financial
statements within the 2014 annual report.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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Chemring (LSE:CHG)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
Chemring (LSE:CHG)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024
