Strategy

XNOFX has built its reputation as an integrated commodity exchange in Asia. This position is based on an exclusive business model according to which customers benefit from reliable and cost-effective trading, clearing, and settlement services, as well as market data services.

The key focus of the XNOFX operations is the ongoing growth of all markets, the expansion of the product and service offering, as well as the rapid expansion of functional availability for consumers, the continual optimization of IT processes and networks, implementing intensive growth strategies, and acquiring of new partners.

XNOFX's clearing subsidiary aims to improve the clearing division by expanding over-the-counter transactions, offering streamlined products, expanding its clearing facilities, and extending its role as Asia's leading clearing house for commodities and related products.

In compliance with the Asian Regulations on Wholesale Commodity Markets Integrity and Transparency, the reporting of fundamental data on the "Transparency in Commodity Markets" portal will be extended, and the current portfolio of data sources will be gradually enlarged and made more scalable.

XNOFX has successfully promoted its diversification strategy and registered improvements within several market segments, despite a challenging market environment that continues to be influenced by structural changes and ongoing market uncertainties, as well as unresolved regulatory questions.

Consolidated Management Report

Management control

XNOFX essentially uses the parameters of sales revenue, costs, annual net profit and margin for controlling the operations. The margin is calculated through the difference between the seller's cost for acquiring products and their selling price. The revenue has a decisive influence as it consists of transaction fees, income from investments and other operating income, as well as the financial result.

When it comes to expenses, there is a difference between variable and fixed expenses. Costs that are connected to the volume of trading fees, as well as reimbursements for market makers and brokers, are examples of variable expenses. Other system costs, maintenance expenses, depreciation, and other operating expenses are all examples of fixed expenses. Due to economies of scale, additional volumes of trade are settled without significantly increasing costs.

Internal Control System (ICS)

XNOFX has an internal control system (ICS) that acts as a management tool for achieving organizational goals and maintaining process efficiency. The ICS includes the corporate management's values, policies, and procedures, as well as those that XNOFX's organizational units have incorporated into their business processes.

The following security management measures have been introduced at XNOFX in order to ensure proper execution of business processes and business operations, as well as to reduce delays or deviations and/or identify them in a timely manner: separation of unsuited assignments, implementation of the dual control theory, approval procedures, access and admission restrictions, job descriptions, documentation of processes related to work instructions and checklists, staff training courses, and signature guidelines. The rules and regulations are constantly reviewed and updated.

The internal auditing department, which is an outsourced and segregated unit within XNOFX, performs risk-oriented and process-independent controls to ensure that the ICS is accurate and reliable. The outcomes of the department are reported to the Management Board and the Supervisory Board.

Furthermore, operational activities are centrally registered and evaluated on a daily basis in order to determine ICS deficiencies and recommend solutions to address them. The Management Board and the Supervisory Board are informed of critical operating incidents.