In common with all businesses the Group faces risks which may affect its performance. The Board recognises that the management of risk is required to enable the business objective in creating 'stakeholder value'.

The Board and the Operational Management teams regularly monitor and develop a range of financial and non-financial performance indicators to allow them to measure performance against expected targets – these can be analysed under various categories; the following represents a selection of these indicators.

KEY RISKS AND UNCERTAINTIESMITIGATION
PERSONNEL
The Group's employees are its key asset as their skills and commitment provide the solid foundation that is important in delivering our future plans and long term success.

Training forms a key part of an individuals' personal development plan — with a clear HR strategy in place we operate an ongoing programme of rolling out new initiatives and modules to support both the Group's business plans and the personal goals of all our staff.

The Group also has in place an 'emergency plan' to cover short term issues, however the Group has also developed its 'Succession Planning Module' which provides detailed plans in the event of, for example, loss of key personnel; including key officers who the Board consider to be 'the next generation' leaders. In circumstances where more specialist skills at a senior/operational or Board level are needed, learning programmes and development modules are instigated to assist with career development and learning pathways and added to personal development programmes which are undertaken internally or externally by suitably qualified personnel.

QUALITY AND MANUFACTURING
The Group operates stringent 'Total Quality Management' (TQM) procedures and measures its performance.TR manufactures around 30% of its inventory, the balance being sourced from strategic manufacturing partners. As with key customers, TR regularly visit manufacturing operations to ensure that high standard operating procedure guidelines which cover production, security, logistics and quality are being adhered to.
CURRENCY
The business is exposed to currency movements relating to sales, purchases and cash borrowings particularly against the US Dollar and the Euro.Currently, as far as practicable, TR hedges operationally but monitors exchange rates and will buy and sell currencies in order to minimise its exposure. It is also reviewing instruments available through its banking partners to reduce the Group's open exposure to foreign exchange rates.
GLOBAL PROTECTIONISM
Increasing evidence of growing trade protectionism around the world.Geographically spread our supply chain sources.
KEY RISKS AND UNCERTAINTIESMITIGATION
WORKING CAPITAL AND INVENTORIES
As the business continues to grow TR is required to carry additional inventory to meet its transactional and OEM business which could lead to an increased exposure to obsolete inventory.From TR's involvement at the R&D entry point through the production life of a product and customer underwrite forms, control of obsolete inventory risk is kept to a minimum. The ongoing tight control over inventory purchases has seen us once again report a reduction in inventory weeks.
CUSTOMER FAILURE AND DEBTOR EXPOSURE
Serving over 5,000 customers in 50 countries bring complexity and inventory challenges.The business operates very tight controls on debtors and working capital. Monitoring systems and reports in place assist in highlighting and managing debtor defaults and customers' trading; the impact of these controls is reflected in the reported accounts which show less than 5% Group exposure in balances overdue.
MACRO ECONOMICS

Currently Group revenue comes from across the UK (49%) and Asia (30%) with the balance from Europe and the Americas.

Traditionally, whilst the distribution/manufacturing sectors bear the affect of inventory reduction in tough and challenging economic periods, TR protects itself to some extent from this by differentiating itself through 'added value' capabilities, such as, high levels of service, design & engineering support, customer partnerships and working practices.

The Global sales team and the Group's purchasing strategy provides TR with the opportunity to secure a larger market share despite a possible repeated reduction in overall market size; as previously stated in earlier publications, should another economic downturn be experienced across the world and TR was to secure as much as 1% of the global market it would see £500 million sales, so growth aspirations continue to be legitimate.
RAW MATERIAL PRICE INFLATION
Industrial businesses have to contend with fluctuating material prices, energy and freight costs, as well as 'cost down' pressures and inventory obsolescence.The Group is exposed to raw material price increases in relation to steel, plastics and fuel. TR is able to monitor costs effectively and has the ability to pass on cost increases to customers, although in the current markets there can be a 'lag' as old inventories and contracts feed through and new supply prices take effect.
COMPETITOR PRESSURES
TR benchmarks its operations and services against several leading logistics providers, both in and outside its sector to ensure it remains competitive in its service offering.As part of TR's business objectives it regularly addresses its logistics systems and focuses on reducing resource duplication where possible.
CYBER SECURITY
The Group recognise there is an increased exposure to cyber risk.Group management has undertaken reviews and engaged the services of a third party company to review the Group's cyber risk controls. Recommendations have been put in place where required.

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Organisational and OperationalOrganisational & Operational

FinancialFinancial

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