The goal of Lemonsoft’s internal control and risk management is to ensure the efficiency and productivity of the company’s business and the reliability of information. Regulations and operating principles are followed throughout the Group. The key principle is continuous and preventive action to identify and prepare for risks. Lemonsoft’s strategic and operational objectives are used to identify risks. Risk analyzes are carried out as self-assessments.
Lemonsoft’s Board of Directors confirms the principles of risk management and assesses the adequacy and appropriateness of risk management. Risks are reviewed by the Management team and the Board of Directors annually during the first quarter. Significant risks require action plan. Quickly changin risks are not typical for the industry, but if new risk is identified, it will be brought to the immediate attention of the Board of Directors and the Management team.
– Intensifying competition in the Company’s markets could affect the Company’s ability to maintain or increase its market share, to improve the profitability of its operations or to retain current customers or acquire new customers, and therefore intensifying competition could have an adverse effect on the Company’s net sales, profitability and market share
– Uncertainty on the Company’s key markets, financial markets and general economic situation or geopolitical situation could affect the investments and financial position of the Company’s customers, which could have an adverse effect on the Company’s business operations, results of operations and financial position
– The Company’s business operations and financial position are partially dependent on the continuation of customer relationships as well as on the Company’s success in the sale of software solutions, and loss of customers of the Company, failure in additional or cross-sales as well as potential decreases in the sales of the Company’s software solutions could have a material adverse effect on the Company’s business operations, results of operations and financial position
– The competitiveness of the Company’s software solutions could weaken if the Company fails to meet the requirements arising from changes in the operational environment or in customer demand, and the weakening of competitiveness could have an adverse effect on the Company’s business operations, results of operations and financial position
– The Company could fail in choosing its strategy or in its implementation, which could have an adverse effect on the Company’s profitability and business growth, and the Company may not necessarily succeed in reaching it financial targets
– The Company’s operations and software solutions largely rely on IT systems, and any malfunctions and breaches in such networks and solutions as well as potential failures in customer information system development projects may adversely affect the reputation, business operations and financial position of the Company
– The Company collects and processes personal data as part of its daily business and the leakage of such data or failure to process the data in accordance with applicable regulation may have a material adverse effect on the Company’s business and reputation and result in claims for damages as well as fines and orders imposed by the authorities
– The Company’s business is partially dependent on third-party technologies and software, and changes, interruptions and disruptions in such technologies and software could have an adverse effect on the functionality of the Company’s software solutions and therefore have an adverse effect on the Company’s customer satisfaction, reputation and business operations
– The loss of key persons and skilled personnel could have an adverse effect on the Company’s business operations and financial position, and the Company may not necessarily succeed in recruiting and retaining people with the required skill set
– The Company could fail to find potential acquisition targets or to integrate possible acquisitions, and acquisitions could involve unforeseen challenges and liabilities
Internal control is a process that protects the company from misconduct. Internal control ensures data protection, correctness of accounting, correctness of financial transactions and various access rights.
– Ensuring data protection means auditing the interfaces of programs so they cannot be misused. This is the responsibility of information management.
– Accounting audit trail, data change logging and access rights ensure the accuracy of accounting data. This is the responsibility of the finance department.
– Purchase invoices cannot be paid without three pairs of eyes, and nothing is paid past the payroll or purchase ledger. This is the responsibility of the finance department.
The Board of Directors appoints an Audit Committee from among its members, to assist it in performing its supervisory duties. The duties of the Audit Committee are, inter alia:
– monitor and assess the financial reporting system;
– monitor and assess the effectiveness of internal control, internal audit and risk management systems;
– monitor and assess the compliance of agreements and other legal transactions between the company and its related parties with the requirements of relating to the ordinary course of business and market conditions;
– to monitor and assess the independence of the auditor and, in particular, the non-audit services provided by the auditor; and
– monitor the company’s audit and prepare the election of the company’s auditor.