Konica Minolta 2012 Annual Report Download - page 23

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or delay production and shipments. Such disasters could also
disrupt or restrict use of essential utilities such as electricity, gas
and water; cause supply shortages of components and raw
materials by damaging suppliers; halt distribution; or disrupt
markets. Such circumstances could reduce net sales below
initial plans, incur signifi cant expenses to restore damaged
facilities, or have other outcomes that could adversely affect the
Group’s results.
The Group essentially resolved the component and raw
material procurement problems caused by the Great East
Japan Earthquake by the end of the second quarter of the fi scal
year ended March 31, 2012. Moreover, the fl ooding in Thailand
did not directly affect Group operations because the Group
does not have a production base there. However, the Group
has experienced increased procurement costs, suspended
orders and other issues resulting from supply chain disruptions
caused by the fl ooding. In the future, the impact of disasters on
suppliers or customers or the impact of issues such as
electricity shortages could adversely affect the Group’s results.
(17) Impairment of Long-Lived Assets
Effective the fi scal year ended March 31, 2006, the Group
adopted accounting standards for impairment of long-lived
assets including property, plant, equipment and goodwill. The
Group periodically evaluates the carrying value of long-lived
assets on the consolidated balance sheets to determine if their
residual value is recoverable with expected future cash fl ows
from the asset. The Group recognizes impairment when the
asset no longer generates suffi cient cash fl ow because its
operating profi tability has decreased due to competition or
other reasons, which could adversely affect the Group’s results.
Management’s Discussion and Analysis
22