The principal risks and uncertainties of the Group were published in the Dialight Annual Report and Accounts for the year ended 31 December 2016. They were aligned to the Group’s strategic objectives. The risks disclosed are as follows:

Production capacity

Production capacity needs to be scalable in line with growth

Concentration of Lighting production at a single third party location reduces control and changes the order fulfilment process

Operational programme risk There is a risk that operational capability could be impacted during the period of transition of the products and production platforms and changes to the demand planning process
IT systems The Group uses IT systems to operate and control its business; any disruption
to this would have an adverse impact on the business. The Group also needs
to ensure the protection and integrity of its data
Political conditions The Group’s main manufacturing plants are in Mexico and its main market is
North America. Proposed import tariffs could impact the Group’s business model. “Brexit” has introduced uncertainty to the level of tariffs on goods imported
from Europe
Succession planning
and staff calibre
Group performance is dependent on attracting and retaining high-quality staff across all functions
Intellectual property Theft or violation of intellectual property (“IP”) by third parties or third parties taking legal action for IP infringement
Market trends To continue to lead the market, the Group must be able to identify where customer demand is trending and ensure that we have the products to match. The Group’s sales strategy is based on the cumulative LED adoption rate being 6% in industrial lighting markets by 2019
Compliance The Group needs to ensure that as the business expands, proper controls are 
put in place to ensure compliance with regulatory requirements relating to tax,
trade and general code of conduct
Reputational Corporate profile and products need to retain brand equity
Competition Failure to deliver technologically advanced products or to execute sales strategy could result in loss of market share 
Economic conditions The Group’s operations are located across a number of jurisdictions, which exposes the Group to a range of economic conditions 
Supply chain The Group’s ability to supply high-quality finished goods is dependent on having a robust supply chain 
Funding The Group needs to ensure that it has access to sufficient cash in order to fund working capital and expansion 
Foreign exchange Foreign currency risk is the most significant treasury related risk for the Group.
In times of significant volatility this can have a material impact on performance

To read the full Risk descriptions, impacts and mitigations as featured in the Annual Report and Accounts 2016 click here.