Principal Risks

Description

The development of new products and the enhancing of existing requires continual appraisal of investments and the returns. Changes in customer requirements, industry and technological innovation contribute to the challenges of developing complex software products.

Mitigation

Product development is planned, reported and reviewed frequently. Elecosoft works closely with key customers and channel partners while monitoring industry trends to ensure that new products and features align to market needs and expectations.

Description

The health of domestic and global economies strongly influences the commercial construction business cycle. A downturn in the construction business cycle can adversely affect Elecosoft’s performance.

Mitigation

The risk is mitigated by existing operations spread between countries with plans to expand the geographical reach further through reseller channels. Elecosoft continues to seek opportunities to market its software solutions outside of the construction industry.

Description

The Group earns a proportion of its revenue in currencies other than Sterling. The two other largest currencies in which it trades are Swedish Krona (“SEK”) and Euro (“EUR”). Changes in these exchange rates can expose Elecosoft to exchange gains and losses.

Mitigation

Our businesses predominantly trade in their own local currencies and have local operational and development staff which create a natural hedge against currency movements. In addition, we will continue to review foreign exchange contracts to manage risk.

Description

Elecosoft’s success is built upon the development of sophisticated software which requires continual protection from competitive businesses who may seek to copy or otherwise replicate the software.

Mitigation

Elecosoft uses a variety of licensing technologies and defines the rights of customers in licence agreements. In addition, the Group seeks to ensure its intellectual property rights are protected by appropriate means and defends its rights where practical.

Description

Elecosoft’s reputation depends upon its products and services and, in turn, these are built upon the innovation and dedication of its employees.

Mitigation

Elecosoft endeavours to ensure that employees are motivated in their work and there is regular feedback on their performance. There are pay reviews and a range of incentive schemes to reward achievement over different time periods.

Elecosoft attracts new talent by maintaining its focus on developing new and innovative applications.

Description

There is an increasing reliance on IT systems, local and cloud, to perform the daily operations of a business. Exposure to technology in general is rapidly increasing with cloud offerings and remote connections.

Mitigation

Good, effective technology risk management and close monitoring is essential to robustly handle potential IT security incidents and system failures, as well as ensuring customer information is protected from unauthorised access or disclosure. Continued investment and adhering to regulatory standards mitigates these risks.