Business of the Furukawa Battery Co., Ltd. and its consolidated subsidiaries (collectively "FB") is subject to various risks. The principal risks affecting the FB's business are described briefly below.
1. Fluctuations in foreign currency exchange
Foreign-currency imports and exports are included in FB’s transactions. Therefore, fluctuations in foreign currency exchange could cause an adverse impact on FB’s business results and financial condition.
2. Finance and profit fluctuations
Volatility in the prices of raw materials used in FB’s main production such as lead and nickel could cause an adverse impact on FB’s business results and financial condition.
3. Potential risks on global business operations
FB’s business operations are conducted in countries outside of Japan. Political and social risks in these countries could cause an adverse impact on FB’s business results and financial condition.
4. Risks related to customers’ financial difficulties
FB pays careful attention for the credit risks of the customers and enforces the credit management system. However, if certain key customers from whom it has substantial accounts receivable encounter financial difficulties and negative changes in their credit conditions, an adverse impact on FB’s business, results of operations and financial condition could occur.
5. Natural disasters
FB’s production bases are in Tochigi pref. and Fukushima pref. in Japan and also in Thailand and Indonesia outside of Japan. The Great East Japan Earthquake caused major damage on both sites in Japan. Also the shot-down of business partners caused by the heavy flood in Thailand put FB in the temporary shut-down. Because of earthquakes, floods and other natural disasters, FB may face difficulties or delay in purchasing parts, products and shipments, and as a result, an adverse impact on FB’s business results and financial condition could be caused. FB usually strives to prepare for creating and fulfilling an accurate Business Continuity Plan (“BCP”) to minimize various risks caused by FB’s shot-down.
6. Fluctuations in interest rates
Fluctuations in interest rates could have an adverse impact on a part of FB’s interest-bearing liability. Therefore, a rise in interest rates could cause an increase in interest due.