Fujitsu 2014 Annual Report Download - page 104

Group has taken such measures as establishing strict regulations,
instituting training programs for employees, upgrading its infor-
mation infrastructure and providing consultation 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 whose
information is leaked.
The Fujitsu Group has 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 the ability to prevent
computer viruses, unauthorized access, including cyber attacks,
or other disruptions from impeding network operations and
leaking information.
8) Fujitsu Group Facilities
The Fujitsu Group owns or rents a variety of facilities inside and
outside Japan, including offices, manufacturing facilities, and
datacenters. These facilities comply with building standards and
other regulations in their respective countries. The Fujitsu Group
has also established its own set of safety standards, but in the
event of an earthquake, major flooding, fire, radioactive con-
tamination, or other disasters; terrorist attacks, demonstrations,
or strikes, or faulty construction quality; or the occurrence of
operational errors, among other factors, a facility’s operations,
including production lines, may need to be discontinued. In such
a case, this may lead to the possibility of adverse effects on the
Fujitsu Group’s business or that of our customers.
9) 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, or 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.
10) Litigation
The Fujitsu Group may become the subject of litigation in the
course of executing its operations, resulting in an obligation to
pay unforeseen damages. Depending upon the amount of
damages the profit and loss of the Fujitsu Group may be mate-
rially impacted.
11) Compliance Issues
The Fujitsu Group promotes the thorough diffusion and imple-
mentation of internal company rules, nurturing a corporate
culture of strict adherence to these rules, and has constructed the
necessary internal systems and structures for adherence. The
Fujitsu Group has defined the behavior to which all Fujitsu Group
employees must strictly adhere in the Code of Conduct of the
Fujitsu Way. The Fujitsu Group has also instituted uniform Global
Business Standards, which provide more detailed guidance on
the behavior expected of each employee. In addition, as one
committee within the Internal Control Division, which reports
directly to the Fujitsu Group Management Council, the Risk and
Compliance Committee has been established to promote compli-
ance throughout the Fujitsu Group. Even with these measures in
place, however, there is a possibility that the Fujitsu Group will
be unable to completely eliminate compliance-related risks. In
the event that there is a violation of relevant laws or regulations
inside or outside Japan, society’s trust in the Fujitsu Group may
be damaged, or there may be demands for payment of signifi-
cant penalties or compensation for damages, leading to the
possibility of adverse impact on the Fujitsu Group’s business.
Also, in the course of troubleshooting ATM software as a part
of ongoing maintenance under contract from a customer, there
was an incident in fiscal 2013 in which a former employee of a
Group company illegally obtained internal ATM information and
produced counterfeit cards, using those cards to withdraw cash.
Fujitsu deeply regrets the trouble and distress that this incident
has caused to affected individuals and financial institutions, and
is making every effort to prevent a recurrence.
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), which is continually reviewed and improved, to ensure
that, even in the event of natural disasters like earthquakes,
major floods, or volcanic eruptions, as well as accidents or the
outbreak of infectious diseases like new forms of influenza, we
can continue our critical business operations to fulfill our corpo-
rate social responsibility, while at the same time continuing to
provide a stable flow of high-quality, highly reliable products and
services, which our customers rely on for their business. In recent
years there have been several large-scale disasters, including the
Great East Japan Earthquake, the nuclear power plant accidents
and the ensuing electrical power shortages, and the floods in
Thailand. Going forward, there is also a possibility that unfore-
seen events may occur, such as major earthquakes in the Tokyo
metropolitan area, the Tohoku region or along the Nankai Trough
or a prolongation of power shortages in Japan. Based on the fact
that such events could disrupt operations, the company is
making every effort to ensure the continuity of key businesses.
Having dealt with the Great East Japan Earthquake, 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 cus-
tomers or its support for customer information systems in the
event an unforeseen natural disaster or accident forces sites to
suspend operations, inflicts damage to facilities and equipment,
interrupts the supply of electricity or water, disrupts public trans-
portation or communications infrastructure, or causes damage to
our supply chains.
2) Geopolitical Issues
Armed conflicts, terrorism, demonstrations, strikes, 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. Financial Statements
For details, please refer to “7. Critical Accounting Policies and
Estimates“ on page 115.
102 FUJITSU LIMITED ANNUAL REPORT 2014
BUSINESS AND OTHER RISKS