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Annual Report & Accounts 2015 - PRINCIPAL RISKS AND UNCERTAINTIES
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there are a number of potential risks and uncertainties which could have a material impact on the Group's future performance. to mitigate against these risks, the Group conducts a continuous process of assessments that examine whether any risk has increased, decreased or become obsolete; identify new risks; and evaluate the likelihood of each risk occurring and the impact it would have on the Group. the key risks and how we seek to manage them are set out below: Risks and uncertainties Mitigation technology the Group may be threatened by Denial of service attacks or similar. natural or man-made disasters may affect continuity of operations, undermining player confidence. with technological advances and continuous shifts in how consumers access our services, maintaining and improving technology may become more complex. following the acquisition of bwin.party, the Group is undertaking a significant technology platform migration, which carries a project risk. the Group has highly advanced preventative measures with world-class technology firms. Disaster recovery and business continuity solutions are in place and tested regularly. focus on developing customer experience, for example through an expanded mobile offering. Close monitoring by management; reporting up to the Board regularly. Regulatory Conflict between jurisdictions in which the customer resides and where the service is provided; risk of enforcement action. in some markets regulation is not clearly defined or adopted; there may be changes in regulation in all markets. strict adherence to the laws of the jurisdiction in which the service is provided and the rules and protocols in nationally regulated markets. Close monitoring of regulatory developments and assessment of their longer term impact. maintenance of a diversified product portfolio. taxation imposition of additional gaming or other indirect taxes. transfer pricing between group entities could be challenged by the tax authorities. Changes in vat rules within the eu impacting the digital economy. may not be possible to mitigate. however, payment of additional taxes may create opportunities to work with governments and gain market benefits. intra-group transactions are documented and take place on commercial terms. regular review of all tax arrangements and update transfer pricing when required. monitor the situation, as significant uncertainty remains. economic Conditions in the eurozone remain challenging and this may erode customer base confidence and spending power. foreign exchange movements; risk of certain countries exiting the euro. Customer retention programmes. Broader geographic spread of products. the Group tries to match its income and cost exposures to create a natural hedge. regular evaluation of low cost hedging opportunities. wherever practical, financial assets held within certain countries are limited so they do not exceed the financial liabilities in that jurisdiction. 26 PRinciPAL RisKs AnD UnceRtAinties GVC HOLDINGS PLC ANNUAL REPORT 2015