Casio 2016 Annual Report Download - page 20

Annual Report 2016 / 4619
CONTENTS
To Our Stakeholders Prole Special Features ESG Information Financial Section Corporate Data
Business Risks
(8) Intellectual property
The Group principally uses proprietary technologies, and protects these proprietary
technologies through a combination of patents, registered trademarks and other intellectual
property.
The following is a list of associated risks:
• Competitors might develop the same technologies as the Group’s proprietary technologies;
• The Group’s patent applications might not be approved;
• The Group’s measures to prevent the misuse or violation of its intellectual property rights
might be ineffective;
• Intellectual property laws and regulations might not adequately protect the Group’s
intellectual property;
• The Group’s future products and technologies might violate another company’s intellectual
property rights.
(9) Defective products and lawsuits
The Group rigorously controls the quality of the products it manufactures and markets, and has
not experienced significant complaints or negative publicity since its founding. However, the
Group could be exposed to product liability or safety complaints in the future.
(10) Information management risk
The Group has acquired a large volume of personal and confidential information in the course
of its business. Internal rules govern the use of this information, and each Group company
enhances the control of this information through employee training programs. However,
information leaks might occur that could negatively affect the Group’s business, financial
position and results.
(11) Alliances, mergers and strategic investments
The Group may implement alliances, mergers or strategic investments in Japan or overseas to
expand its business operations or raise management efficiency. Changes in the management
environment, business strategies, or operating environment of counterparties could negatively
affect the Group’s business, financial position and results.
(12) Foreign exchange and interest rate risk
Exchange rate fluctuations significantly affect the Group because it operates internationally.
Fluctuations in the exchange rates of foreign currencies against the yen could negatively affect
the Group’s earnings. The Group is also exposed to risks associated with interest rate changes
that could affect overall operating costs, procurement costs, and the value of financial assets
and liabilities, particularly long-term debt.
(13) Other risks
The following are other factors that could affect the Group’s business and results:
• Cyclical trends in the information technology industry;
• The ability to procure required equipment, raw materials, facilities, and electricity at
reasonable prices;
• A decline in the value of securities held by the Group;
• Revisions to laws and regulations regarding the accounting standards for retirement benefits,
pension plan revisions, and abrupt changes affecting pension plan asset management;
• Accidents and disasters, including fires and earthquakes;
• Social unrest caused by wars, terrorist attacks, or epidemics.