For the half year ended 30 June 2008
- 16. Trade and other payables: amounts falling due after more than one year
- 17. Reconciliation of movements in consolidated equity share owners' funds
- 18. Related party transactions
- 19. Non-GAAP measures of performance
- 20. Principal risks and uncertainties
20. Principal risks and uncertainties
The directors have considered the principal risks and uncertainties affecting the Group for the second half of 2008 and determined that these are unchanged from those presented in the Group's published Annual Report and Accounts and Form 20-F for the year ended 31 December 2007, other than point (m) below, which the Group now considers a further risk. The Annual Report and Form 20-F are published in the Investor Relations section of the Group website (www.wpp.com) and are available from the Group on request.
WPP Group plc has specific policies in place to ensure that risks are properly evaluated and managed at the appropriate level within the business. These are presented on pages 116 and 117 of the published 2007 Annual Report and Accounts. Pages 5 to 8 of the Group's Form 20-F contain a detailed explanation of the risk factors identified by the Group for the year ended 31 December 2007 and these are summarised below:
- The Group competes for clients in a highly competitive industry, which may reduce market share and decrease profits.
- The Group receives a significant portion of its revenues from a limited number of large clients, and the loss of these clients could adversely impact the Group's prospects, business, financial condition and results of operations.
- The Group may be unable to collect balances due from any client that files for bankruptcy or becomes insolvent.
- The Group is dependent on its employees and, like all service providers, is vulnerable to adverse consequences from the loss of key employees due to competition among providers of advertising and marketing services.
- The Group is exposed to the risks of doing business internationally.
- Currency exchange rate fluctuations could adversely affect the Group's consolidated results of operations.
- The Group may have difficulty repatriating the earnings of its subsidiaries.
- The Group is subject to recessionary economic cycles.
- The Group may be unsuccessful in evaluating material risks involved in completed and future acquisitions.
- The Group may be unsuccessful in integrating any acquired operations with its existing businesses.
- Goodwill and other acquired intangible assets recorded on the Group's balance sheet with respect to acquired companies may become impaired.
- The Group may be subject to certain regulations that could restrict the Group's activities.
- Changes in tax laws or their application may adversely affect the Group's reported results.
- The Group may be exposed to liabilities from allegations that certain of its clients' advertising claims may be false or misleading or that its clients' products may be defective.
- Civil liabilities or judgments against the Group or its directors or officers based on US federal or state securities laws may not be enforceable in the US or in England.
The Group's treasury activities are principally concerned with monitoring of working capital, managing external and internal funding requirements and monitoring and managing the financial market risks, in particular interest rate and foreign exchange exposures.
The Group's risk management policies relating to foreign currency risk, interest rate risk, liquidity risk, capital risk and credit risk are presented in the notes to the consolidated financial statements of the 2007 Annual Report and Accounts and in the opinion of the Board remain relevant for the remaining six months of the year.