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ANNUAL REPORT 2012 GVC H o l d i n g s PRINCIPAL RISKS, UNCERTAINTIES AND BUSINESS MODEL PRINCIPAL RISKS AND UNCERTAINTIES Risk description Potential impact Mitigation ECONOMIC RISK - Customer base becomes less confident about their ability to spend leisure euros Lower revenues and consequently profits bull; Customer retention programmes bull; Broader geographic spread of products bull; Migration of third party costs to be aligned with revenues REGULATORY RISK - Conflict between jurisdictions in which the customer resides and where the service is provided Reduction in market size bull; Diversified product portfolio bull; Strict adherence to the laws of the jurisdiction in which the service is provided bull; Close monitoring of regulatory developments and assessment of their longer-term impact FINANCIAL - Foreign exchange risks - Withdrawal of payment processing facilities Lower or more volatile profits Short-term interruption of funds deposited by customers bull; Group tries to match its income and cost exposures to create a natural hedge bull; Regular evaluation of low cost hedging opportunities bull; Multiple payment processing methods used by the Group OPERATIONAL - Dependence on third party software - Dependence on key personnel Reduction of revenue streams GVC is highly dependent on Boss Media with whom it has a long-term contract, but also legal disputes Interruption of business continuity bull; Long-term contracts entered into with suppliers of a good financial covenant bull; In some cases it is not practicable to mitigate the software reliance risk without significant business and economic disruption bull; Broader base of Executives below Board level 14