Internal control
Nelly Group’s procedures for internal control, risk assessment, control activities and monitoring regarding financial reporting are intended to ensure reliable overall financial reporting and external financial reporting in accordance with International Financial Reporting Standards (IFRS), applicable laws, regulations and other requirements for companies listed on Nasdaq Stockholm. This work involves the Board, executive management and other staff.
Control environment
rThe Board’s rules of procedure and instructions to the CEO and Board committees are designed to ensure a clear division of roles and responsibilities for effective management of operational risks. The Board also has several established basic guidelines that are important to its work with internal control activities. This includes control and monitoring of results as compared with plans and prior years. The Audit Committee assists the Board on various issues such as monitoring internal auditing and the accounting policies applied by the Group.
The responsibility for maintaining an effective control environment with risk assessment of ongoing activities and internal control over financial reporting is delegated to the CEO. Managers at different levels have this responsibility in their areas of responsibility. The company management regularly reports to the Board according to established procedures and in addition to the Audit Committee’s reports. The control environment is made up of defined responsibilities and authority, instructions, guidelines, manuals and policies, together with laws and regulations. All employees are accountable for compliance with these guidelines.
Risk assessment and control activities
The company has prepared a model for assessing risks in all areas, in which several parameters are identified and measured. These risks are reviewed regularly by the Board and the audit committee and include both the risk of loss of assets as well as irregularities and fraud. Special attention was paid to designing controls for preventing and discovering shortcomings in these areas. There is regular monitoring of important areas such as purchasing, logistics and inventory processes, development and performance of the web platform and IT security.
Information and communication
Guidelines that are significant for financial reporting are regularly updated and distributed to the employees concerned. There are formal as well as informal information channels to the executive management and Board for employees to transmit information of significance. Guidelines for external communication ensure that the company applies the highest standards for providing accurate information to the financial market.
Monitoring
The Board continuously evaluates the information submitted by company management and the audit committee. The Board receives regular updates between meetings as to the Group’s development. The Group’s financial position, strategies and investments are discussed at every ordinary Board meeting. The Audit Committee reviews all interim reports prior to publication. The Audit Ccommittee is also responsible for monitoring internal control activities.
This work includes ensuring that action is taken to deal with any deficiencies and to implement proposed improvements emerging from the external audit. The external auditors report to the Audit Committee at ordinary committee meetings, where relevant.