Casio 2011 Annual Report Download - page 18

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16 CASIO COMPUTER CO., LTD.
10) Risks related to information management
The Group maintains personal information and confidential business
information relating to the promotion and development of its business
operations. There are in-house rules governing the use of this informa-
tion, and each Group company raises awareness of the need for strict
control of such information in its employee training program. However,
there is always the possibility that information may be leaked, and such
a leak of information might have a negative impact on the Group’s
business, financial position and earnings performance.
11) Alliances, mergers and strategic investments
The Group may engage in alliances and mergers, or undertake strategic
investments, in Japan or overseas to expand its business operations or
raise the efficiency of management. Changes in the business partner’s
management environment, business strategies, or operating environ-
ment might have a negative impact on the Group’s business, financial
position and earnings performance.
12) Risks arising from fluctuations in foreign
exchange rates and interest rates
The Group maintains operations in numerous countries around the
world. Consequently, the Group is substantially affected by exchange
rate fluctuations. The Group’s gross profit might be negatively affected
as a result of movements in foreign currencies against the yen.
Moreover, the Group is exposed to risk associated with interest rate
changes. These risks could have an impact on overall operating costs,
procurement costs, value of monetary assets and liabilities (particularly
long-term liabilities).
13) Other risks
The following other factors might have an impact on the Group’s
business operations in the future.
• Cyclical trends in the IT sector
• Uncertainties as to whether the required equipment, raw materials,
facilities, and electricity can be procured at an appropriate price
• A decline in the value of securities held by the Group
• Revisions to laws and regulations regarding the accounting standards
for retirement benefits and rapid changes in pension fund operations
• Damage caused by fires, earthquakes and other natural disasters, as
well as other accidents that disrupt operations
• Social unrest caused by wars, terrorist attacks, and epidemics
Business Risks