Experian 2009 Annual Report Download - page 31

29Experian Annual Report 2009
Introduction
2 – 7
Business review Risks and uncertainties
Governance 44 – 72
Financial statements 73 – 148
29
General economy
Macro economic factors impact
the demand for customer credit
in particular
Experian could be adversely affected
by worsening economic conditions
globally or in certain individual markets
such as the United Kingdom or United
States. However, prudent expense
management along with the breadth of
Experian’s portfolio by geography, by
product, by sector and by client partly
reduces the impact of this risk.
Consolidation among Experian’s
clients may cause price
compression and a reduction
in its revenue and prots
No single client accounts for more
than 2% of Experian’s revenue, which
reduces the probability of this potential
risk having a signicant impact on
the business. However, in light of the
global economic downturn, Experian
continues to respond with a wide
range of countercyclical products and
solutions, across all relevant business
lines.
Experian could fail to protect
adequately against its exposure to
nancial risks
Experian’s nancial risk management
focuses on the unpredictability
of nancial markets and seeks to
minimise potential adverse effects on
the Group’s nancial performance.
Counterparties could fail
Counterparty risk is a new principal
risk. Experian’s ability to engage
in routine transactions to fund its
operations and manage its risks
could be adversely affected by
the commercial soundness of our
counterparties. We continue to
monitor counterparty positions
regularly. Treasury and insurance
activities are conducted only with
nancial and insurance institutions
with strong credit ratings, within limits
set for each organisation.
Other risks
Experian could face increased
competition, especially in the credit
reporting industry
Experian mitigates this risk through
continued research and investment in
people, technology and products as
prioritised by its strategic plan.
Acquisitions may not meet
expectations
Experian assesses all acquisitions
rigorously, using both in-house
experts and professional advisers. In
addition, the Group conducts extensive
post-acquisition reviews to ensure
performance remains consistent with
the acquisition buy-plan.
The outcome of litigation could be
unfavourable to Experian
Experian carries insurance and
employs expert legal personnel in-
house, as well as retaining the services
of several leading legal practices, to
assist in the effective management and
disposal of legal proceedings.
Experian could fail to protect
adequately its valuable intellectual
property rights or face claims
for intellectual property right
infringement
Experian seeks patent protection and
appropriate agreements regarding
its intellectual property rights,
where appropriate and feasible, and
continues to monitor this situation.
Experian is dependent upon highly
skilled personnel, especially its
senior management and other
experienced staff