The Group owns manufacturing sites not only in Japan but also in overseas countries, including Southeast Asia and China, supplying our products for customers across the globe through sales offices in each country. Accordingly, in the event of unpredictable natural disasters, including earthquakes, tsunamis, fires, and floods, and pandemics of infectious diseases; or man-made disasters, including fires, explosions, transportation accidents, wars, unrest, and riots, facilities and equipment of the Group’s business locations may be subject to damage and its employees’ injury or death, resulting in the possible suspension of business operations. Furthermore, operations and work may be disrupted not only at Group business locations but also at parts and components suppliers, client locations and logistics centers, causing an adverse impact on the Group’s business operations, operating results, and financial position.
In addressing these risks, the Group has prepared various manuals for responding to crisis situations. In preparation for emergencies, the Group also conducts disaster drills, business continuity plan (BCP) drills as well as safety confirmation drills as it makes daily efforts to enhance disaster preparedness among officers and employees. The Group is working across the organization to move forward with Business Continuity Management (BCM) that will ensure the continuity, early recovery from disasters, and the prompt resumption of production, shipments, and services in order to minimize risk.
In addition, the recent novel Coronavirus global pandemic has been severely and adversely affecting the business activities of the Group that operates globally. (For the details of the impact of the pandemic on the Group’s consolidated business results, please see the “3. Management analysis on financial position, operating results, and cash flow (1) Status overview, including operating results a) Financial position and operating results i) Business results.”) However, as we cannot clearly forecast when the pandemic will be contained, and stagnation of economic activities and its impact on demand may be prolonged and worsened, the Group’s business operations, operating results, and financial position may be adversely affected. The Group set up the Contingency Planning and Preparedness Office in late January 2020 in order to deal with the pandemic in accordance with its crisis management regulations, and developed measures that placed the highest priority on ensuring employees’ well-being and safety as well as preventing infection within our companies through end-to-end hygiene control in our business offices and promotion of remote working. While limiting the number of people in the workplace in accordance with the policy of Japanese government, the Group has been able to continue its operations in Japan without closing any of its locations. As a result, we have been able to effectively limit the number of employees infected in our companies to zero. Also in overseas countries, we have been making efforts to prevent the infection of the novel Coronavirus in compliance with the applicable regulations of each country. As a result, the Group has been able to minimize suspension of domestic and overseas factory operations due to infection. However, for such global pandemic of infection and its long-lasting impact as well as natural and man-made disasters, even if the Group were to implement the best possible measures a corporate group could take, it would be difficult to completely avoid these risks. If the Group suffers damage that is greater than expected, it may have a negative impact on its business operations, operating results, and financial position.