Epson 2009 Annual Report Download - page 27

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26
It is also possible that the interests of these major shareholders might conflict with the interests of other
shareholders. For example, because the Hattori family is the majority shareholder of Seiko Holdings
Corporation and Seiko Instruments Inc., which are related in their businesses to Epson, it is possible that a
conflict of interest might arise between those companies and Epson in transactions or competing
businesses. In particular, Seiko Holdings delegates a large portion of the manufacturing of its watches, its
primary business, to Epson.
24. Laws and regulations pose risks for Epson
Epson has businesses in which products require permission or licenses under laws and regulations, such as
its plastic corrective lenses, which are subject to regulations of relevant authorities as they are considered
medical equipment in Japan. Such products do not represent a high percentage of Epson’ s overall sales or
profit, but Epson is subject to the permission and other regulations of relevant authorities in its
manufacturing and manufacturing/sales of those products in Japan.
Also, because the plastic corrective lenses, which are manufactured by Epson, are sold in the United
States, Europe and Asia by a distributor subsidiary of Seiko Holdings, Epson is also subject to certain
regulations in these regions. For example, relevant authorities in the United States generally make it
compulsory to carry out tests of new products and to keep designated records relating to those products.
Regulations governing medical devices in Japan, the United States and other regions have changed in the
past, so there is a possibility that they will change again in the future. If they do, there is a possibility the
changes might impede the manufacture and sale of Epson’ s products and thereby adversely affect Epson’ s
results.