(8) Business Restructuring Risk (9) Regulatory Risk (12) Environmental Preservation  Risk (15) Retirement Benefit Risk (10) Product Liability Risk (13) Risk of Default on Receivables (16) Risk of Personal Information  Leaks (11) Disaster and Accident Risk (14) Risk of Fixed Asset Value  Reduction JS Group Corporation Annual Report 2010 57 However, the JS Group could suffer  damage to its public reputation and incur  substantial financial costs if unforeseen  circumstances result in the leak of per- sonal information. Such a situation could  adversely affect the business performance  and financial position of the JS Group. The JS Group handles a variety of personal  information, including customer informa- tion, in the course of its business opera- tions, and stringent information  management is essential. Initiatives by the  JS Group to strengthen personal informa- tion management include the establishment  of the Personal Information Protection  Promotion Project, the formulation of  related rules and regulations, and the  ongoing provision of appropriate training. The JS Group has applied fixed asset  impairment accounting. The Group will  Natural disasters, such as earthquakes and  typhoons, could cause substantial damage  to the JS Group’s production, distribution,  sales and information management facili- ties. Also, in the occurrence of major work- place disasters or equipment accidents,  there is the possibility that business activi- ties will be discontinued or restricted. The  JS Group conducts regular disaster pre- vention activities and facility inspections.  However, there is no guarantee that it will  In order to prepare for losses due to  default on receivables by business part- ners, the JS Group examines the recover- ability of general receivables based on  historical default rates, and of specific  doubtful accounts on a case-by-case  basis, and records the amount considered  to be uncollectible as allowance for doubt- ful accounts. Should the actual default  level significantly exceed these assump- tions, the allowance for doubtful accounts  could be insufficient. Moreover, as a result  of reviewing these assumptions due to the  worsening of overall economic conditions  and uncertainty in the credit standing of  business partners, the Group could make  additional provisions to this allowance.  These developments could have an  adverse impact on the Group’s business  performance and financial positions. There is a risk that defects will occur in  products and services supplied by the JS  Group, or that product recalls may be  required. Major compensation claims or  product recalls relating to manufacturer’s  liability issues could result in substantial  payments and have a negative effect on  the reliability and reputation of the JS  Group’s products. Such situations could  have an adverse impact on the business  performance and financial positions of the  JS Group. The JS Group is subject to various official  regulations, including the need to obtain  approvals and permits from the government  or official agencies for its business and  investment activities, as well as patents and  other intellectual property rights, environ- mental regulations, and other requirements.  Such official regulations can be expected to  change over time, possibly creating obsta- cles to the JS Group’s business activities or  imposing additional costs relating to com- pliance with new official regulations. These  factors could have an adverse impact on  the business performance and financial  positions of the JS Group. The JS Group, based on the Group Environ- mental Basic Policy, engages in a wide  range of activities aimed at global environ- mental preservation. However, the Group  cannot guarantee that it will be able to  completely prevent or mitigate any risk of  environmental pollution. Should serious  environmental pollution occur as a result of  the Group’s business activities, it could have  an adverse impact on the Group’s business  performance and financial positions. The employee retirement benefit obliga- tions and costs of the JS Group are calcu- lated primarily using actuarial assumptions,  such as discount ratios and expected rates  of return on plan assets. These actuarial  assumptions must be reviewed annually.  Any changes in the ratios could cause  fluctuation in the business performance  and financial positions of the JS Group.  The Group has taken steps to minimize  this effect, including the return to the gov- ernment of the substitutional portion of the  pension funds that it previously adminis- tered, and the adoption of defined contri- bution pension plans and cash balance  pension plans. However, the potential  effect cannot be entirely eliminated. Further  declines in discount ratios or deteriorating  investment returns could have a negative  effect on the business performance and  financial positions of the JS Group. In order to enhance management efficiency  and competitiveness, the JS Group may  conduct business restructuring, including  withdrawal from unprofitable businesses,  re-alignment of subsidiaries and affiliates,  manufacturing bases and sales and logistics  networks, and rightsizing of the workforce.  These measures could have an adverse  impact on the business performance and  financial positions of the JS Group. be possible to prevent or alleviate the  effects of natural disasters. In particular,  the domestic production facilities of Inax  Corporation, a consolidated subsidiary, are  concentrated in the Tokai region of Japan,  where a major earthquake could occur.  While earthquake countermeasures have  been implemented at these facilities, a  major earthquake in the Tokai region could  cause a suspension in production, delays  in product deliveries and other problems.  These factors could have an adverse  impact on the business performance and  financial positions of the JS Group. continue to calculate future cash flows  relating to its assets, and to recognize  and estimate the impairment of those  assets. It is therefore possible that the  business performance and financial posi- tions of the JS Group will be adversely  affected if fixed asset impairment losses  are shown in the accounts.