Omron 2004 Annual Report Download - page 39

Download and view the complete annual report

Please find page 39 of the 2004 Omron annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 72

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72

37
components and materials that do not contain regulated chemical
substances. Although we are thus proceeding with a project to make
Omron Group products throughout the world “environmentally war-
ranted products” by the end of March 2006, delays in the switchover
due to shortages of substitute parts and materials could impact nega-
tively on our operating results and financial condition.
7. Information Leakage
All aspects of the operations of the Omron Group depend on personal
computers and an IT environment, including production, R&D, sales,
and management, with external data exchange being conducted in the
course of sales and procurement activities. With recent rapid
advances in the Internet and large-capacity media, moreover, there is
an increasing possibility that important internal information such as
customer information could be leaked to the outside of the Group.
The Omron Group is strengthening its security measures to prevent
external entry into its internal information systems, and a special com-
mittee has been established centering on the Corporate General
Affairs Division. Steps are accordingly being taken to reinforce control
over the information we handle, and to further improve employees’
information literacy.
Unanticipated leakage of internal information, however, due for
example to invasion of internal information systems using technology
exceeding implemented security levels, could impact negatively on our
operating results and financial condition.
8. R&D Activities
The Omron Group is actively investing in R&D activities while proceed-
ing its business operation centered on technology, based on a man-
agement policy of securing a balance between growth and profits. As
a result, R&D expenditures as a percentage of sales rose from 7.5 per-
cent for fiscal 2002 to 7.9 percent for fiscal 2003. The Omron Group
concentrates its R&D efforts on specific technological domains and
market objectives, and consistently seeks improvement in its contribu-
tion rate of new products. A decline in the contribution rate of new
products, however, due to factors such as R&D delays and insufficient
applicability, could impact negatively on our operating results and
financial condition.
9. Natural Disasters
The Omron Group established a special committee within the
Corporate General Affairs Division for minimizing the risk from natural
disasters such as earthquakes and from events such as power out-
ages, and seeks to define risks and implement corresponding counter-
measures. It is impossible, however, to avoid all risk pertaining to nat-
ural disasters, and the occurrence of natural disasters could impair our
production capacity and/or temporarily disrupt our sales channels.
Such events could impact negatively on our operating results and
financial condition.