Oki 2015 Annual Report Download - page 31

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Annual Report 2015
(10) Natural and Other Disasters
The OKI Group conducts periodic inspections and implements a va-
riety of accident, disaster and fi re prevention measures to minimize
stoppages of its production lines. However, there is no guarantee
that the OKI Group will be able to completely prevent accidents as
well as natural and other disasters that negatively affect the opera-
tions of its production facilities. Moreover, accidents in production
lines due to earthquake, wind or fl ood damage or electric outages
as well as natural and other disasters in the countries where the
OKI Group conducts marketing operations may adversely impact
the Group’s performance and fi nancial position.
(11) Information Management
Although the OKI Group implements defense measures to protect
its internal systems against computer viruses and the leakage of
information, the Group cannot guarantee complete protection from
system failure and information leakage attributable to human error,
new virus strains other like causes. The Group, therefore, faces
the risk of cumulative losses should there be a breech in the infor-
mation management structure.
(12) Procurement and Training of Human Resources
The ability to secure and foster high-quality human resources is a
key factor in ensuring further growth as a stable earnings company.
Accordingly, the OKI Group strives to recruit capable employees at
every level, including new graduates and mid-career employees.
In an effort to foster exceptional human resources, the OKI Group
also conducts on-the-job training, education and a variety of training
activities. In the event the OKI Group is unable to secure and foster
high-quality human resources or a number of key employees leave
the OKI Group, future growth may be affected.
(13) Interest-Rate Fluctuations
The OKI Group maintains interest-bearing debt that is subject to
the impact of fl uctuations in interest rates. The OKI Group utilizes
interest-rate swaps and other instruments to manage the risks
of interest-rate fluctuations. However, there is a possibility that
interest charges may suffer an increase associated with a rise in
interest rates and that the increased cost of raising capital would
adversely affect the Group’s ability to raise working capital.
(14) Changes to Accounting Standards
The OKI Group makes consolidated and non-consolidated fi nancial
statements in accordance with accounting standards generally
recognized as fair and accurate. Should changes to accounting
standards occur, there is a possibility that the OKI Group’s perfor-
mance and fi nancial position may be adversely affected.
(15) Debt Recovery
While the OKI Group constantly appraises the fi nancial situation of
its customers and sets aside an adequate amount of allowances
based on its provision for bad debts after the Balance Sheet date, a
sudden deterioration in the fi nancial condition of a major customer
could exert a negative infl uence on the OKI Group’s performance.
(16) Impairment Loss on Fixed Assets
In the event that it becomes necessary for the OKI Group to dis-
pose of impairment loss on fixed assets, such as tangible and
intangible fi xed assets, investment and other assets, the Group’s
performance and fi nancial position may be adversely affected.
(17) Deferred Tax Assets
The OKI Group amortizes deferred assets against retained losses
carried forward and temporary differences as appropriate. In the
event the OKI Group is unable to liquidate deferred tax assets due
to the decline in taxable income brought on by fl uctuations in its
business results, the OKI Group’s performance may be affected.
(18) Retirement Benefi t Obligations
The OKI Group provides for retirement benefi t obligations based on
a discount rate established using actuarial calculations and on long-
term expected rate of return on pension assets. However, such
preconditions and assumptions are susceptible to changes in mar-
ket interest rates and stock market trends, which may cause actual
results to differ from such preconditions and assumptions. Such an
event could lead to an increase in retirement benefi t obligations and
impact the OKI Group’s performance and fi nancial position.
(19) Stock Price Fluctuations
The OKI Group holds shares in listed companies as part of its invest-
ment securities portfolio. Falling share prices may lead to valuation
losses or declines in unrealized gains on such holdings, which may
impact the OKI Group’s performance and fi nancial position.
FINANCIAL REVIEW