Fujitsu 2011 Annual Report Download - page 92

technical experts, system engineers, managers and other key
personnel. The inability to do so could negatively impact the
Group’s growth and profitability.
6) Environment-related Risks
Making contributions to society and protecting the environment
are part of the corporate values of the Fujitsu Group, as set forth
in the Fujitsu Way. While committed to minimizing environmen-
tal burden and preventing environmental pollution in accordance
with the Fujitsu Group Environmental Policy, the Group cannot
guarantee that environmental pollution will not occur as a result
of its operations. Moreover, although we monitor soil and waste-
water as well as engage in clean-up activities at former factory
sites, this does not mean that pollution will not be found at such
sites in the future. In the event that environmental pollution
were to occur or be identified, social trust in the Group may
weaken, and clean up and other costs could be incurred, which
would adversely affect the Group’s earnings.
7) Information Management
In order to safeguard the personal and confidential information of
customers, business partners, and the Fujitsu Group itself, the
Group has taken such measures as establishing strict regulations,
instituting training programs for employees, and providing consul-
tation to business subcontractors. Nevertheless, the Group cannot
guarantee that information will not be leaked. In the unlikely event
that this should occur, trust in the Fujitsu Group could decline and
the Group may be obligated to pay damages to customers.
8) Credit Ratings and Other Factors that Affect the
Group’s Credit
In addition to having a major influence on financing, credit ratings
by outside institutions serve as reliable sources of information for
our customers when they conduct transactions with us. Lower
credit ratings caused by failure to meet earnings targets, deterio-
rating financial conditions and other reasons could influence our
ability to secure financing and place the Group at a disadvantage
in bidding for projects and in other business dealings.
7. Natural Disasters and Unforeseen Incidents
Natural disasters and other unforeseen situations could have a
major impact on the business results and financial standing of
the Fujitsu Group. Examples of the potential risks posed are
found below.
1) Damage from Earthquakes, Other Natural Disasters
and Accidents
The Fujitsu Group has instituted a Business Continuity Plan (BCP)
to ensure that, even in the event of natural disasters like earth-
quakes, major floods, or volcanic eruptions, as well as accidents
or the outbreak of infectious diseases like new forms of influ-
enza, we can continue our critical business operations to fulfill
our corporate social responsibility, while at the same time con-
tinuing to provide a stable flow of high-quality, highly-reliable
products and services, which our customers rely on for their
business. As part of this initiative, we have taken steps to make
our sites resistant to earthquakes and we conduct regular site
inspections, along with disaster-readiness drills. Nevertheless,
there is a possibility that the Group may be forced to suspend the
delivery of products and services to customers or its support for
customer information systems in the event an unforeseen natu-
ral disaster or accident forces sites to suspend operations, inflicts
damage to facilities and equipment, interrupts the supply of
electricity or water, disrupts public transportation or communica-
tions infrastructure, or causes damage to our supply chains.
Immediately following the Tohoku Earthquake on Friday,
March 11, 2011, a disaster response headquarters was estab-
lished, with the company president acting as chief, and informa-
tion was collected about the status of all Fujitsu Group facilities
in eastern Japan and the status of customers. At the same time,
the Group restored critical business operations in accordance
with its BCP, and in order to restore the supply of products and
services to customers and to uphold the Fujitsu Group’s role in
society, we have pursued business continuity initiatives, includ-
ing temporarily transferring a portion of the production lines for
PCs, semiconductors, and other products to alternate facilities.
Despite these recovery efforts, in the event of a major aftershock
or other event, there is a possibility that the Group’s business
activities may be affected by interruptions to public infrastruc-
ture, fuel shortages, damage to facilities and equipment,
damage to supply chains, and other circumstances.
In response to power shortages caused by the Tohoku Earth-
quake, the Fujitsu Group is fulfilling its corporate responsibility by
appropriately responding to government and industry demands.
Furthermore, in order to evaluate the Group’s energy usage from
a medium- and long-term perspective, we have established a
power conservation committee, with the company president as
chairman. The committee is monitoring government develop-
ments while implementing an energy-conservation strategy for
the entire Fujitsu Group. There is a possibility that the Group’s
business activities may be affected by necessary changes in
business operations due to power shortage counter-measures,
particularly during the summertime, as well as scheduled power
outages and unpredictable large-scale power outages.
We have a well-developed system in place to ensure the
integrity and stable operation of critical in-house networks, which
are a key element of our business infrastructure. However, the
Group cannot guarantee its ability to prevent invasive computer
viruses and other disruptions from impeding network operations.
2) Geopolitical Risk
Armed conflicts, terrorism, political instability, currency crises,
and other events in nations or regions where the Fujitsu Group
operates could have a significant impact on its businesses.
8. Risks Associated with Financial Statements
For details, please refer to “Critical Accounting Policies and Esti-
mates” on page 100.
FUJITSU LIMITED ANNUAL REPORT 2011090
BUSINESS AND OTHER RISKS