Carphone Warehouse 2016 Annual Report Download - page 24

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Dixons Carphone plc Annual Report and Accounts 2015/16
Strategic Report
Principal risks to achieving the Group’s objectives
22
Specific risks and potential impacts
Principal risk Specific risks Potential impacts
6. Financial Conduct
Authority (‘FCA’)
regulation
• Failure to manage the business of the Group in compliance with
FCA regulation to which the Group is subject in a number of areas
including the mobile insurance operations of The Carphone
Warehouse Limited and the consumer credit activities of DSG
Retail Limited
• Reputational damage
• Financial penalties
• Reduced revenues and profitability
• Deteriorating cash flow
• Customer compensation
7. Colleague retention
and capability
• The organisational structure and related accountabilities
restrict the ability to run the business effectively and adapt
to market change
• Failure to attract, develop and retain quality and depth of
necessary leadership and management talent
• Maturing of long term incentive schemes may increase risk
of higher turnover in senior management population
• Reputational damage
• Reduced revenue and profitability
• Deteriorating cash flow
• Loss of competitive advantage
8. Business continuity
plans are not effective
and major incident
response is inadequate
• A major incident impacts the Group’s ability to trade and business
continuity plans are not effective resulting in an inadequate
incident response
• Reduced revenue and profitability
• Deteriorating cash flow
• Reputational damage
• Loss of competitive advantage
9. Fraud • Payment card fraud
• Manipulation or misuse of Electronic Point of Sale system and / or
other payment systems
• Customer false identity and other ‘no intention to pay’ frauds
in taking out network contracts
• Reduced revenue and profitability
• Reputational damage
10. Health and safety • Failure to effectively protect customers and / or colleagues from
injury or loss of life
• Employee / customer injury or loss of life
• Reputational damage
• Financial penalties
11. Impact of Brexit • Economic uncertainty and impact on consumer confidence caused
by the decision of the UK to leave the European Union (‘Brexit’)
• Further adverse exchange rate volatility
• Longer term changes in tax, regulation and other frameworks that
may impact our ability to operate across our European businesses
• Reduced revenue and profitability
• Deteriorating cash flow
00_DC 2016 Annual Report.pdf 22 11/07/2016 18:34