Sharp 2008 Annual Report Download - page 35

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34
defects do arise, Sharp has taken out insurance to cover
compensations based on product liability. Nonetheless, there
still exists the possibility of a large-scale product recall or
litigation caused by unforeseen events, which may adversely
affect brand image or influence the business results and
financial position of Sharp.
(8) Laws and Regulations
The business activities of Sharp are subject to various
regulations in countries where it operates, including business
and investment approval, export regulations, tariffs,
accounting standards and taxation. Sharp must also adhere
to various laws and regulations concerning trading, antitrust
practices, product liability, consumer protection, intellectual
property rights, product safety, the environment and
recycling. Changes in such laws and regulations, and
additional expenses to comply with the amendments may
affect the business results and financial position of Sharp.
Further, in case a major accident occurs related to one of
Sharp’s products, disclosure of said incident, based on a
system of accident reporting and disclosure pursuant to the
Consumer Product Safety Law and related regulations in
Japan, could diminish its brand image.
(9) Litigation and Other Legal Proceedings
Sharp deploys business activities around the world, and as
such, is subject to risk associated with litigation and other
legal proceedings. Differences in legal and judicial system
according to region make it difficult to predict the result of
litigation or other legal proceedings currently involving Sharp
or of these which may arise in the future. An adverse result
due to litigation and measures taken by the regulatory
authorities could affect the business results and financial
position of Sharp.
(10) Leak of Personal Data and Other Information
Sharp retains personal data and other confidential information
concerning its customers, business partners and employees.
Extreme care is taken to protect this information. A company-
wide management system promotes employee education
and other measures aimed at ensuring compliance with
management regulations. If information is leaked, however,
it may reduce confidence in Sharp or result in substantial
costs (associated with leakage prevention measures or
indemnification for damages, for instance), which may affect
the business results and financial position of Sharp.
(11) Other Key Variable Factors
In addition to the aforementioned risks, the business results
of Sharp may be significantly affected by accidents and
natural calamities, or major fluctuations in the stock and
bond markets.