b'42 Mercia Asset Management PLC Annual Report & Accounts 2022Principal risks and uncertaintiesRisk management frameworkResponsibleThe Board considers that the risks detailed in this Annual Report represent the current key potential obstacles to achieving the Groups strategic objectives. They form part of 42 separately identified risks which are being monitored. The key controls over the Groups principal risks and uncertainties are documented in Mercias risk register, which includes an assessment of the risk including the potential severity of impact, likelihood of occurrence and mitigating actions. An assessment of the strength ofThe Board monitors, evaluates and mitigating actions determines the netmitigates key risks to ensure that risk score for each identified risk andappropriate measures are in place any further actions required. to minimise the likely occurrence and impact of those risks identified. The Groups risk framework has beenThere may be additional risks and further developed over the course ofuncertainties that are not known the financial year, with the creation ofto the Board, or deemed to be less a risk dashboard in order to providematerial, which may also adversely the Board with greater visibility of theimpact performance and thus are risks identified, categorised as Strategicmonitored within the Groups overall or Operational as to their nature, withrisk management framework. The their origin being categorised as eitherframework provides reasonable, but not External or Internal.absolute, assurance that the Groups principal risks are managed to an Mercias risk dashboard is drawn fromacceptable level, whilst acknowledging the overall net risk score of each risk.that the specialist asset management New risks added or monthly updates tosectors in which Mercia operates have risk scores will result in movement ofinvestment risk inherent within them. the dials to give the Board an immediate visual awareness of our changing risk profile, when compared with the previous months dashboard.We can extract multiple reports from theMercias Risk Dashboard underlying data, such as those risks that score highest at a gross level, in orderas at 31 March 2022to provide assurance that our ongoing assessment is evaluating the mitigatingStrategic riskscontrols in place and the strength ofinclude longer-term, structural risks such as those controls. geopolitical risks and changes to individual investor tax reliefs available.Operational risksinclude internal systems and controls, people and talent and compliance risks such as staff retention, financial crime and reputational risks.External risksinclude cyber, regulatory, competitor, legal, force majeure, long-term pandemic-related risks and inflationary pressures.Internal risksinclude the successful execution of the Groups strategy and conflicts of interest.'