Fujitsu 2010 Annual Report Download - page 88

7. Natural Disasters and Unforeseen Incidents
Natural disasters and other unforeseen situations could have a major
impact on the business results and financial standing of the Fujitsu
Group. Examples of the potential risks posed are found below.
1) Damage from Earthquakes, Other Natural Disasters
and Accidents
The Fujitsu Group has instituted a Business Continuity Plan (BCP) to
ensure that even in the event of natural disasters like earthquakes,
major floods, or volcanic eruptions, as well as accidents or the
outbreak of infectious diseases like new forms of influenza, we can
continue to provide a stable flow of high quality, highly reliable
products and services, which our customers rely on for their busi-
ness. As part of this initiative, we have taken steps to make our sites
resistant to earthquakes and we conduct regular site inspections,
along with disaster readiness drills. Nevertheless, there is a possibil-
ity that the Group may be forced to suspend the delivery of prod-
ucts and services to customers or its support to customer
information systems in the event an unforeseen natural disaster or
accident forces sites to suspend operations, damages to facilities
and equipment, or causes interruptions in the supply of electricity
or water or disruption to public transportation infrastructure.
We have a well-developed system in place to ensure the integ-
rity and stable operation of critical in-house networks, which are a
key element of our business infrastructure. However, the Group
cannot guarantee its ability to prevent invasive computer viruses
and other disruptions from impeding network operations.
2) Geopolitical Risk
Armed conflicts, terrorism, political instability, currency crises, and
other events in nations or regions where the Fujitsu Group oper-
ates could have a significant impact on its businesses.
8. Risks Associated With Financial Statements
For details, please refer to “Critical Accounting Policies and Esti-
mates” on page 96.
or technologies may be found to infringe on other companies’
intellectual property, and that earnings may be impacted by such
consequences as the need to pay for usage rights or cover costs
associated with modifying designs. In addition, the Group has
previously instituted a program to compensate employees for
innovations that they make in the course of their work, and will
continue to implement this program in the future in accordance
with related laws and regulations. Nevertheless, the Group faces
potential risk from lawsuits initiated by employees in regard to
compensation for innovation created in the workplace.
5) Human Resources
The growth and profitability of the Fujitsu Group depends heavily
on human resources. As such, a major issue for the Group is the
ability to recruit, foster, and prevent the attrition of talented techni-
cal experts, system engineers, managers and other key personnel.
The inability to do so could negatively impact the Group’s growth
and profitability.
6) Environment-related Risks
Making contributions to society and protecting the environment
are part of the corporate values of the Fujitsu Group, as set forth in
the Fujitsu Way. While committed to minimizing environmental
burden and preventing environmental pollution in accordance
with the Fujitsu Group Environmental Policy, the Group cannot
guarantee that environmental pollution will not occur as a result of
its operations. Moreover, although we monitor soil and wastewater
as well as engage in clean-up activities at former factory sites, this
does not mean that pollution will not be found at such sites in the
future. In the event that environmental pollution were to occur or
be identified, social trust in the Group may weaken, and clean up
and other costs could be incurred, which would adversely affect
the Group’s earnings.
7) Information Management
In order to safeguard the personal and confidential information of
customers, business partners, and the Fujitsu Group itself, the
Group has taken such measures as establishing strict regulations,
instituting training programs for employees, and providing consul-
tation to business subcontractors. Nevertheless, the Group cannot
guarantee that information will not be leaked. In the unlikely event
that this should occur, trust in the Fujitsu Group could decline and
the Group may be obligated to pay damages to customers.
8) Credit Ratings and Other Factors that Affect the
Group’s Credit
In addition to having a major influence on financing, credit ratings
by outside institutions serve as reliable sources of information for
our customers when they conduct transactions with us. Lower
credit ratings caused by failure to meet earnings targets, deteriorat-
ing financial conditions and other reasons could influence our
ability to secure financing and place the Group at a disadvantage
in bidding for projects and in other business dealings.
086 FUJITSU LIMITED Annual Report 2010
Business and Other Risks