In line with provision C.2.2 of the code the Directors need to assess the prospects of the Company taking into account the current position and principal risks to determine whether there is a reasonable expectation that the Group will be able to meet its liabilities as they fall due over a specified period of time.
The Directors have carried out this longer term viability assessment over a period of three years as this aligns with the Group's detailed forecast which is approved at Board level. Three years is considered an appropriate period of time for the Group as it strikes the right balance between the need to plan for the long term whilst considering the uncertainty that arises in relation to assumptions the further you look ahead. The period is also within the term of the new banking facilities which have been discussed in the Business Review.
In conducting the assessment the Directors have considered the principal risks to perform stress testing on the forecast to determine the impact on the financial position and performance of the Company. These risks have been identified by the Board, and are actively monitored on an ongoing basis, as the key ones the Group faces which could have a material adverse impact on future performance if they materialise.
After considering the assessment, the Directors believe that there is a reasonable expectation that the Company will be able to continue to operate and meet its liabilities as they fall due over the next three years.
IT resource for Trifast plc
TR Systems has been supporting and developing the IT resources of Trifast and its subsidiaries for over 25 years.
The department oversees all the business IT requirements whether that be developing and supporting our current ERP Solution or protecting the Group from cyber threats using a range of experience and skills from all members of the team. This breadth of knowledge allows us to advise the Main Board on future developments that will keep the Group at the forefront of technological 'best practice'.
This year, TR Systems' focus is enhancing its Group resource.Visits to all subsidiary companies are planned in order for the IT Team to carry out health checks and feasibility studies at each location.The outcome of this work is to ensure that the Trifast Group remains secure from potential malicious threats and is adhering to consistent best practice.
The standard Company employee's workstation is totally unrecognisable today from how it looked 25 years ago. On the desk you will now find modern, 'Thin Client' technology running the latest Citrix desktop solution.This will be displayed on one, or maybe two, 23inch HD screens.This is a far cry from the 'dumb' terminals running 14-inch screens in two colours. In addition, the latest modern IP phones run on a virtual phone switch, breaking out over internet based phone lines (SIP).
TR Systems is constantly improving our security measures. We have recently made a large investment in the latest security solutions. Yearly penetration tests are carried out by an independent organisation to test TR's internal and external infrastructures"
The IT needs of the business are constantly under review and one of the main topics of discussion is the increasing threat to cyber security.
Threats are becoming more prevalent in today's society; it is common to hear in the news that there has been a 'cyber-attack'. This can include company computers being hacked, or important information being stolen or published on the internet. When you hear that there has been a cyber-attack, your first thought may be that someone has hacked into a computer system from another computer system. Surprisingly, cyber-attacks are not solely technology based.Only around 50% of attacks are from a computer; the remaining 50% take many forms such as social engineering.
TR Systems is constantly improving our security measures, and we have recently made a large investment in the latest security solutions. Yearly penetration tests are carried out by an independent organisation to test TR's internal and external infrastructures.
Safety is always factored in when developing new web facing software or when releasing new hardware, and the Company also keeps up-to-date with the latest risks and viruses.Updates are also automatically pushed out to our security software on all Company laptops.
Accreditation in the IT Security standard ISO 27001 is being worked towards and is on-track to be achieved in 2016/17. Accreditation will ensure that the Group has a systematic approach to managing sensitive company information, and to make sure it remains secure by applying a risk management process that is considered best practice.
Colin Coddington |
Head of IT
Peter Webb |
Software Development Manager
Stephen Whittle |
Stephen Maxwell |
Stephen Hopkins |
Damian White |
Kerry Moran |
Support Desk Manager
Chris Tull |
Support Desk Analyst
Sylvia Milsom |
Support Desk Analyst
Graham Morrison |
Support Desk Analyst
How the business manages risk
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 to meet its objective to create 'stakeholder value'.
|Risk||Description and potential impact||Mitigation||Has the risk materialised?||Trend|
|Personnel||Without appropriate investment in our people and succession planning across all levels of the business from the Board down, we may not be able to deliver our future plans and long term success||Our succession planning processes identify key employees and are designed to broaden our specialist knowledge and skills base. Succession planning at Board and senior level is discussed in more detail in the Nominations Committee Report in our Governance and financial report|
We invest heavily in our people via ongoing training and our Group wide Performance Development Programme. Rewards are reviewed annually to ensure they remain at levels that are competitive within the market place
|The Group enjoys extremely high retention levels with over 50% of staff having been in the Group for more than 10 years. All key succession risks are appropriately managed|
|Quality and manufacturing||We recognise that the quality of our manufactured and externally sourced products is of critical importance. Any major failure will affect customer confidence and may lead to immediate financial penalties||Our established global quality team maintains our Group wide quality compliance protocols. Quality inspection processes across our manufacturing and distribution sites are robust, allowing us to offer zero-defect supplies to customers where required and appropriate insurance is maintained and reviewed annually||The Group has not experienced any substantial quality issues, but quality is moving further up the agenda across all sectors of our client base|
|Foreign exchange volatility||A significant portion of the Group's revenue and profit is generated outside of the UK. Due to translation risk, the Group results could be adversely impacted by an increase in the value of sterling relative to foreign currencies. In addition, a transactional risk exists as the Group sources certain products from the Far East for sale across Europe||Transactional hedging is achieved via the commercial matching of transactions wherever possible. Non-functional currency balance sheet items are minimised and net investment hedging is used for any significant acquisition finance|
Foreign exchange volatility has been much higher over the year in two of the Group's key currencies, € and US$
Information in respect of the Group's policies on financial risk management objectives including policies to manage foreign exchange is given in note 26
|Macro-economics||Traditionally distribution/manufacturing sectors bear the effect of inventory reduction in challenging economic periods earlier than other industries||By operating globally and across a number of sectors, the Group is better able to manage the risk of regional or industry contractions. As customers move, or expand, we have the capability to move with them, whilst our first class customer service works to protect us from rapid supplier changeover. We hold less than 1% of a £25bn target market meaning growth via market share remains credible even in a falling market||The global economy remains in a period of growth, albeit that current conditions have become less settled than in previous years|
|Inventories obsolescence||The Group holds substantial inventory balances across the world. As the business grows these levels will increase to meet both transactional needs and the requirements of our multinational OEM customers. Higher stock levels lead to an increased exposure to obsolete inventory||Stock management processes are a key part of the Group's internal controls and stock days are a KPI, monitored locally and at Board level. We continue to invest in stock management processes and systems to ensure we keep optimum levels across the world. Our multi-locational set up, allows us to reduce lead times and therefore stock holding as far as possible||Customers' requirements and our product mix are ever evolving. Our tight stock management and engineering know-how allow us to view these changes as an opportunity to develop and sell new lines, rather than as a risk to the business|
|Customer failure and debtor exposure||Increased trading levels lead to higher debtor balances, raising our exposure to customer failure and bad debt write downs||We maintain strong credit control procedures from new customer set up, through to regular monitoring as trade develops. Our multinational OEM focus means we build head office relationships, improving our supplier power and helping us to manage credit relationships with our larger customers. We also have global catastrophe credit insurance cover||The Group has not in recent years experienced any substantial credit issues|
|Interruption of supply||The Group sources products both internally and externally for customers around the world. If we were unable to supply a customer in line with their ongoing manufacturing requirements, the risk both to our reputation and in terms of potential stoppage penalties would be substantial||We hold appropriate stock levels to service our customers' needs at all times. Our pan-global presence means we are able to operate along multiple transport routes, shielding us from localised issues. For all key products we maintain multiple sources to ensure adequacy of supply. Our approved vendor due diligence processes also help to mitigate the risk of a supply chain breakdown||In recent times, political and climatic instability have increased in a number of areas within the world. Where we have encountered issues, our established and flexible logistics have allowed us to continue to offer timely and reliable supply to our customers|
|Cyber security||Unauthorised access to, or a breach of, our systems, networks or premises, could immediately and materially affect our reputation with possible implications for revenue and growth over the short to medium term. Such a breach may also cause financial loss||We have undertaken a review of our cyber security controls worldwide. Additional investment has been made where required to manage our risk. Our IT policies are managed by a dedicated in-house team and access to systems is strictly limited to appropriate personnel||The Group has not to date experienced any significant cyber security threats|