Square Enix 2013 Annual Report Download - page 35

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(6) Exchange rate fluctuations
The Group includes consolidated subsidiaries located in North
America, Europe and Asia. The risk of foreign exchange loss has
been reduced as foreign currency gained by those subsidiaries is
expended for settlement or reinvestment in the applicable countries.
However, sales, expenses, assets, liabilities and net assets of the
foreign subsidiaries are converted into Japanese yen amounts in the
consolidated financial statements. Consequently, exchange rates
may affect the Group’s financial results if they fluctuate beyond
management forecasts.
(7) Entertainment industry laws
The operation of amusement facilities is subject to government
control under the Law for Proper Control of Entertainment and
Amusement Businesses and other related laws and regulations.
These laws and regulations include an approval and licensing
system for the opening and operation of amusement facilities,
regulations on business hours (ordinances vary, but operation is
generally prohibited from midnight to 10 a.m.), age restrictions
(ordinances vary, but the admittance of persons under 16 years of
age after 6 p.m. and persons under 18 years of age after 10 p.m.
is generally prohibited), area restrictions on outlet opening, and
regulations concerning facility structures, interiors, lighting and
noise. While strictly complying with the laws and regulations, the
Group has actively pursued the establishment of new amusement
facilities.
However, if regulations were to change owing to the establishment of
new laws or other reasons, the Group’s business performance may
be affected.
(8) Management of personal information
With regard to the management of personal information, in
conjunction with the enactment of the Personal Information
Protection Law, the Group has bolstered employee training with the
aim of increasing awareness about the handling of personal
information. The Group has also identified all personal information
obtained by the Group, and improved the timeliness of its personal
information management systems. The Group has undertaken a full
range of measures to strengthen its internal control systems,
including ongoing improvements to technology controlling access to
its customer database and to its data security systems, restrictions
on personnel permitted to access information and establishment of
a monitoring system, and appropriate management of customer
inquiries. The Group intends to maintain its stringent management
systems for personal information by reviewing current systems and
enhancing employee training. However, if a leak of personal
information were to occur from the Group, the Group’s business
performance may be affected.
(9) Accidents and disasters
The Group periodically carries out accident prevention checks, facility
inspections, emergency drills and administers policies on infectious
diseases to minimize accidents and the potential impact of disasters,
including terrorist attacks, infectious diseases, food poisoning, fires,
electrical blackouts, computer system or server malfunctions,
earthquakes, typhoons, flood damage and other accidents. However,
in the event that an accident, disaster or infectious disease affects
the Group, there is no guarantee that preventative measures will fully
prevent or lessen the adverse effects associated with such events.
Major earthquakes, accidents and disasters, and diseases that might
impede Group operations for a continuous period of time could affect
business performance.
(10) Litigation and other claims
The Group is being managed strictly in compliance with laws and
regulations and with full respect for third parties’ rights while carrying
out its operations. However, in the course of its business activities in
the global arena, the risk of the Group becoming a defendant in
litigation exists. If such litigation were to occur, the Group’s business
performance may be affected.