Nikon 2012 Annual Report Download - page 31

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NIKON CORPORATION ANNUAL REPORT 2012
To minimize the impact of such a loss of knowledge and
expertise, the Company encourages the passing along,
standardization, and sharing of proprietary technologies
and skills internally. In overseas locations as well, retaining
exceptional local personnel is important, but there is a
strong possibility of personnel loss in regions with high
labor mobility.
In the Nikon Group’s business, technical innovation is
rapid, and long-term education and training are essential
to personnel development. Difficulties in replacing lost
key personnel could have a negative impact on the future
growth, earnings, and financial position of the Nikon Group.
11. Information Leaks
The Nikon Group possesses technical data and other
important information, corporate data on its trading
partners, and personal information on many customers
and other related persons. The Company strictly limits
external access to this information and has raised the
security level for data storage. Internal regulations on the
handling of information have been established, and the
Company conducts employee training. However, a leak of
technical data or other confidential corporate information
could be detrimental to the corporate value of the Group.
Further, should there be a leak of corporate data or personal
information, not only would it be detrimental to the trust in
the Group, but there is a possibility that trading partners,
customers, employees or other related parties affected by
the leak would demand damages. In such circumstances it
would be necessary to take various actions to regain trust,
provide compensation to affected companies or individuals,
and implement measures to prevent a reoccurrence of the
leak, which could require considerable expenditure. This
may have a negative impact on the earnings and financial
position of the Nikon Group.
12. Defects in Products or Services
The Nikon Group has established advanced quality
assurance systems at its Group companies in Japan
and overseas, as well as at the companies with which it
contracts for production, and provides its customers with
products and services with sophisticated functions and
high reliability. However, should customers incur losses as
a result of a product or service defect, the Company could
sustain considerable costs for repair, liability indemnity,
recalls, or the disposal of products or other items. The loss
of trust in the Nikon brand could also lead to diminishment
of customer enthusiasm to purchase the Group’s products
and services. This could have a negative impact on the
earnings and financial position of the Nikon Group.
13. Natural Disasters and Other Calamities
The Nikon Group takes ample precautions with regard to
natural disasters such as major earthquakes, fires and
floods, and to preventing the spread of infectious diseases
such as new strains of influenza. Particular priority
has been placed on formulating a business continuity
plan (BCP) to cope with earthquakes. However, should
catastrophic damage occur to the Group’s development or
production facilities, or to its suppliers, this could result
in the suspension of operations, or delays in production
and shipments. Should this lead to a sales decline, or the
incurring of large expenditures for business restoration, it
could have a negative impact on the earnings and financial
position of the Nikon Group.
14. Defamation of Brand Value
The Nikon Group has established the Nikon brand through
many years of sincere business management and by
providing products and services trusted by customers, and
the Group takes sufficient steps to protect and enhance that
value. However, should there be a loss of trust, as a result of
negative perceptions becoming widely established regarding
the Group’s technologies, products or services, and the
value of the Nikon brand be damaged, this could have a
negative impact on the earnings and financial position of the
Nikon Group.
FINANCIAL SECTION