Principal risks, uncertainties and related internal controls Effective risk management to capture value Principal risks Group 1. Liquidity risk GLI funds part of its operations through three different term facilities which have m aturity dates (refer Note14 ). Expansion of lending and investment activities will be constrained if existing debt is not re-financed, and debt facilities are not expanded. Russell Harte Chief Operating Officer 2. Regulatory Compliance risk Taking and managing credit and Compliance with regulation is a non-negotiable within the Group. investment risks is fundamental The Group is subject to the AIM rules, and although it isn’t subject to the UK Corporate Governance Code (April 2016), this has to the Group’s business model. been adopted. Given its offshore operations, in particular the compliance with Anti Money Laundering (AML) regulations is most important. Risk needs to be taken if value is to be created. The principal risks which the Group has consciously accepted in the pursuit of value creation are strategic risk, investment risk, liquidity risk and credit risk. In turn, exposure to investment risk is driven by the strategic, liquidity, credit and operational risks assumed by investee platforms. The Group considers that other risks, based on current assessment, pose lower levels of uncertainty: market, operational, regulatory compliance, and consequential risks. This section on the Group’s Principal Risks should be read together wi th the sections on the G roup’s Governance Framework , the operation of the Audit and Risk Committee, as well as Note 19 which describes the sensitivity of the Group’s financial results to its Financia l Risk exposures. The se sections explain how these 3. Market risk risks and managed, monitored and governed. The table on the right describes the Group’s assessment of the Although both interest rate risk and foreign exchange risks do principal risks which could have a significant impact on the impact on the Group’s results, they are not critical to its positions Group’s financial results. as a going concern. More information on the sensitivity of earnings to these risks is contained in Note 19. 4. Operational risk – Senior staff retention The Group employs a limited number of senior staff who all play critical roles in strategic management, revenue generation, financial and risk management. The loss of one or more of the senior team could potentially have a negative impact on the Group. 30 GLI Finance Annual Report 2016