Defective ground-improvement work, data falsification and false reporting

「Taking this matter extremely seriously, the Company established an internal accident investigation committee that includes outside experts. The Company will confirm and analyze the facts, formulate measures to prevent recurrence, and implement them thoroughly.」

「Provision for losses related to construction defects 192 –」

「In addition, although the work to repair defects in the ground improvement work has been completed, we aim to become a sustainably growing company capable of meeting the expectations of stakeholders and society by continually working to improve employees’ compliance awareness and fostering a culture of integrity to prevent recurrence.」

「With regard to remedial work for defects arising from defective work and related issues in ground-improvement projects, construction has been completed and the works have been handed over for all projects. At some airports, post-construction monitoring is being conducted, and it has been confirmed that there are no impediments to operation.」

「In addition, the work to repair defects in the ground improvement work is progressing steadily. We will devote every effort to completing this work as soon as possible and fulfilling our responsibilities as the contractor, while continuing to implement measures to prevent recurrence and thereby work to restore trust.」

「Regarding the construction defects and other issues in the ground improvement work, repair work has been completed at all sites except Fukuoka Airport. We are deploying all available resources to complete the Fukuoka Airport repair work promptly and reliably.」

「Provision for losses related to defective work　4,741　2,738」

「Provision for losses related to defective work　10,776　4,741」

「Provision for losses related to defective work　10,776　5,407」

「Segment profit (operating profit) declined 28.5% from the same quarter of the previous year to ¥1,151 million, due to the recognition of an estimation variance in the provision for losses related to construction defects, despite an improvement in construction profit margins.」

「Provision for losses related to defective work　10,776　8,747」

「No new business or other risks arose during the nine-month period of the third quarter of the consolidated fiscal year. In addition, there were no material changes to the business and other risks described in the securities report for the previous fiscal year (the 127th term).」

「In 2016, misconduct came to light, including defective work in ground-improvement projects and the bribery indictment of an employee in connection with joint research with a university, which remains pending.」

「We once again deeply apologize for the significant inconvenience and concern caused to our shareholders and many other stakeholders by the construction defects and other issues in ground improvement work, as well as the alleged bribery by an employee in connection with joint research with a university, which is currently under litigation.」

「Operating income was ¥6,196 million, down 47.4% from the previous consolidated fiscal year, and ordinary income was ¥5,897 million, down 44.4%. Net loss attributable to owners of the parent was ¥7,438 million, substantially affected by losses related to defective work, compared with net income attributable to owners of the parent of ¥6,038 million in the previous consolidated fiscal year.」

「In May 2016, it came to light that construction defects and false reporting had occurred in ground improvement work performed by our company. Subsequent boring surveys found in October 2016 that sufficient strength had not been confirmed in 2 additional projects. Losses related to these issues, including repair costs arising from the construction defects, may occur in the future. However, because it is difficult at present to reasonably estimate the amount, their impact has not been reflected in the quarterly consolidated financial statements.」

「Subsequent boring surveys revealed in October 2016 that sufficient strength had not been confirmed in 2 additional projects. Losses related to these issues, including future repair costs arising from defective work, may be incurred in the future. However, as it is difficult to reasonably estimate the amount at present, the impact has not been reflected in the quarterly consolidated financial statements.」

「It was discovered that the Company had carried out defective construction, falsified data and made false reports in ground-improvement work at Tokyo International Airport and elsewhere. We submitted to the Ministry of Land, Infrastructure, Transport and Tourism a report prepared by the investigation committee, including lawyers, on the causes and other findings of the investigation and on measures to prevent recurrence. Losses related to this matter may arise in the future, but because it is difficult at this time to reasonably estimate the amount, its impact has not been reflected in the quarterly consolidated financial statements.」

「We established an investigation committee, including lawyers, concerning defective construction in ground-improvement work carried out by the Company at Tokyo International Airport and elsewhere, as well as data falsification and false reports in completion documents and other materials submitted to the ordering party, the Ministry of Land, Infrastructure, Transport and Tourism.」