Suppliers. The Group’s raw materials and semi-processed raw materials purchases accounted for approximately 73 per cent. of sales in 2019. The Group has a network of suppliers principally in relation to castings, gears, steel and bearings. Each supplier of the Group has to be validated as a supplier, such process consists in meeting certain quality requirements which are periodically monitored (see also “Competitive Strengths” below). The Group ensures that there are a number of suppliers who can provide any particular product at any time (in the case of very specialised products there would always be at least two suppliers validated to supply the Group). The Group has framework agreements with most suppliers which set out certain tariffs, delivery times and invoicing arrangements. Most of the framework agreements provide for renegotiation of tariffs in the event of changes in international market prices of key raw materials. The Group generally places orders with suppliers on the basis of orders the Group receives from clients (see “Key Clients” below), notifying suppliers of the expected pipeline of orders and placing firm orders once it receives a firm order from clients. In order to obtain better pricing from suppliers the Group may place bulk orders and hold some stock which it expects to be able to use to satisfy future client orders. Other than its own brand tractor range, the Group designs and develops the majority of its products in partnership with its clients. For the most part, the Group’s clients are original equipment manufacturers with which it has long- standing relationships and to whom it has supplied products for many years. The Group engages in active discussions with clients in order to design products specific to their needs, by adapting its basic product offering to satisfy their requirements. Each client validates the Group as a supplier in a similar way to the process used by the Group to validate its own suppliers, with a view to ensuring that quality requirements are met and maintained. Given the bespoke nature of most of the Group’s products, finding an alternative supplier would likely result in some delay and increased cost for clients. The Group has framework agreements with most of its clients which set out certain tariffs, delivery times and invoicing arrangements. Most of the framework agreements provide for renegotiation of tariffs in the event of changes in international market prices of key raw materials. Each client will generall...
Suppliers. Relationships with suppliers are based upon principles of transparency, integrity, loyalty, confidentiality, diligence, professionalism and objectivity of judgment. Purchasing processes are based upon seeking the maximum competitive advantage for the Company, on the granting of equal opportunities to each supplier, on integrity and on impartiality. The choice of suppliers and the purchase of goods and services are made by specific company departments based upon objective assessments regarding legality, expertise, competitiveness, quality, correctness, respectability, reputation and price. It is specifically prohibited to establish and maintain relationships: upon respect of fundamental human rights, international conventions and the laws in force; The Company recommends to its suppliers that they refrain from offering goods or services, particularly in the form of gifts, even by way of interposing person, to collaborators of the Company that exceed normal practices of courtesy; it also prohibits its employees from offering goods or services to personnel of other companies or entities in order to obtain confidential information or significant direct or indirect benefits for themselves or for the Company. Relationships with suppliers must also be based upon respect of shared values across the value chain, in every part of the world. In the event of a violation of the principles of legality, correctness, transparency, confidentiality and respect of individual dignity, TUXOR S.p.A. is entitled to take the appropriate measures, going so far as terminating the relationship with the supplier.