Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Lower than expected order intake in the first half of 2018, leading to underutilization of staff and lower profitability.
• One key UK distributor ceasing trading, resulting in temporarily lower domestic sales.
• Slow start for Thomson Engineering Design Limited after acquisition, exacerbating group losses.
• Continuing reliance on financial support from the Executive Chairman.

Mitigation Strategies

• Restructuring of the mechanical engineering team to align skills with client requirements.
• Recruitment of additional mechanical design and software engineers.
• Focus on developing new sales opportunities within Thomson Engineering Design Limited.
• Integration of Thomson Engineering Design Limited into QM Systems.
• Widening of services offered by Thomson Engineering Design Limited.
• Establishment of a wider distribution network for Thomson Engineering Design Limited.
• Re-establishment of sales channels for e-Safe and e-Spade lite products.
• Increased presence at trade shows and continued press coverage.
• Development of a solution enabling overseas distribution partners to service client products.
• Renewed pledge from Gordon Watt to provide ongoing financial support for at least twelve months.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environment
• Community
• Employee well-being

Environmental Achievements

• Target for the next year is to reduce all waste by 50%

Social Achievements

• Various engagement mechanisms with employees (annual employee reviews, regular communication, training, social occasions)
• QM Systems achieved its best year ever both in terms of turnover and profit despite the Coronavirus disruption.

Governance Achievements

• Adopted the Corporate Governance Code published by the Quoted Company Alliance (QCA) on 27 September 2018.

Climate Goals & Targets

Environmental Challenges

• Coronavirus pandemic caused significant disruption across all business units.
• Brexit caused delays to orders in the European unit sales of eSafe technology.
• CAPEX restrictions across key markets affected UK unit sales.
• Continuing reliance on financial support from the Executive Chairman.

Mitigation Strategies

• Employees set up to work from home where possible.
• Adjusted to 'new normal' working practices.
• Opened new opportunities and kept previous opportunities live.
• Diversified client base.
• Exploring long-term/project-based hire opportunities.
• Using virtual communications and outdoor presentations for marketing.
• Adien adapted to remote working and new software.
• Reducing the size of survey teams and expanding single working.
• Realignment of vehicle fleet to more compact and economical vehicles.
• Secured a renewed pledge from Gordon Watt to provide ongoing financial support.

Supply Chain Management

Responsible Procurement

• Aim to promote collaborative engagement and build long-term partnerships with suppliers to minimize risk and optimize costs.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: QCA Corporate Governance Code

Certifications: ISO 9001, OHSAS 18001

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Hybrid working for staff in the Doncaster office and the rationalisation of the Scottish operation has resulted in efficiencies, cost reductions and reduced travel times as well as a reduction in the carbon footprint of the business. Recent investment in new vehicles that are more efficient, cost effective, greener

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Difficult market conditions, supply chain disruptions due to the COVID-19 pandemic, Russia's invasion of Ukraine, soaring fuel costs, and deferred contract decisions.
• QM Systems orderbook significantly below management expectation for a large part of the year.
• Rising inflationary pressure regarding raw material costs at TED.
• Rising facility costs and investment into new premises at TED.
• Work volumes dropping at Adien in the last few months of the year due to delayed starts from the 5G telecom sector.
• Continuing supply delays affecting sales of flagship products at UTSI.

Mitigation Strategies

• QM Systems moved into a far larger facility, increasing office space by 200% and manufacturing capacity by 600%. Secured two manufacturing contracts.
• TED re-balanced margin on material and labour to accommodate higher material content and increased overhead recovery.
• Adien implemented hybrid working and rationalised Scottish operations for efficiencies and cost reductions.
• UTSI moved from just-in-time to just-in-case supply to reduce exposure to supply chain issues.
• UTSI brought forward internal R&D timescales for near-term cost savings.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environment
• Community
• Employee well-being

Environmental Achievements

• Target for the next year is to reduce all waste by 50%
• Investment in new vehicles that are more efficient, cost effective, and greener

Social Achievements

• Hybrid working for staff in the Doncaster office and the rationalisation of the Scottish operation has resulted in efficiencies, cost reductions and reduced travel times as well as a reduction in the carbon footprint of the business
• Annual employee reviews are undertaken and regular communication takes place between management and staff to ensure that any concern or issues are identified and appropriately addressed. The Group provides training to employees as well as social occasions to promote the well-being and connectivity of the teams.

Governance Achievements

• The Board considers that they have fulfilled their duties in accordance with section 172(1) of the UK Companies Act 2006 and have acted in a way which is most likely to promote the success of the Group for the benefit of its stakeholders as a whole

Climate Goals & Targets

Environmental Challenges

• Difficult market conditions, including supply chain disruptions due to the COVID-19 pandemic and the war in Ukraine
• Rising fuel costs and material shortages
• Delays in receiving contract decisions
• Significant upwards inflationary pressure regarding raw material cost
• Rising facility costs and investment into new premises
• Supply chain issues, material costs, component shortages and delivery timescales

Mitigation Strategies

• Significant investment to take advantage of opportunities (expanding facilities for QM Systems and Thomson Engineering Design)
• Re-balancing margin on material and labour to accommodate higher material content and to provide for increased overhead recovery
• Moving from just in time supply to just in case, namely, the increased stockholding of major “at risk” and “long lead time” components
• Bringing forward internal R&D timescales to achieve near-term cost savings
• Multi-sourcing from several suppliers and allowing longer lead times for any potential delays
• Sharing and getting sign off on the proposed solution and by ensuring open lines of communication such that any challenges are identified at an early stage and are resolved with the customer prior to delivery
• Continued investment in research and development

Supply Chain Management

Responsible Procurement

• Aim to promote collaborative engagement and to build long term partnerships with our suppliers with an objective to minimise risk and optimise costs through the full lifecycle of our relationship. We seek to balance this with the need to ensure the company is not overly reliant on any single supplier.

Climate-Related Risks & Opportunities