Investigation by the Special Investigation Committee into Transactions of Questionable Existence and Corrections to Prior Periods

「In mid-November 2019, during a tax inspection by the tax authorities, we established a special investigation committee and conducted an investigation after questions arose regarding the existence of certain merchandise purchase-and-resale transactions. As a result, transactions whose existence could not be confirmed were identified and cancelled. The amounts received and paid were recorded as advances received of ¥46,404 million and advances paid of ¥44,753 million, respectively, and the net amount is presented as part of other non-current liabilities.」

「In mid-November 2019, during a tax inspection by the tax authorities, we established a special investigation committee and conducted an investigation after questions arose regarding the existence of certain merchandise purchase-and-resale transactions. As a result, transactions whose existence could not be confirmed were identified and cancelled. The amounts received and paid were recorded as advances received of ¥46,404 million and advances paid of ¥44,753 million, respectively, and the net amount is presented as part of other non-current liabilities.」

「In mid-November 2019, during a tax inspection by the tax authorities, we established a special investigation committee and conducted an investigation after questions arose regarding the existence of certain merchandise purchase-and-resale transactions. As a result, transactions whose existence could not be confirmed were identified and cancelled. The amounts received and paid were recorded as advances received of ¥46,404 million and advances paid of ¥44,753 million, respectively, and the net amount is presented as part of other non-current liabilities.」

「In mid-November 2019, during a tax inspection by the tax authorities, we established a special investigation committee and conducted an investigation after questions arose regarding the existence of certain merchandise purchase-and-resale transactions. As a result, transactions whose existence could not be confirmed were identified and cancelled. The amounts received and paid were recorded as advances received of ¥46,404 million and advances paid of ¥44,753 million, respectively, and the net amount is presented as part of other non-current liabilities.」

「Regarding risk management supporting business growth, the company will continue working to embed and establish measures to prevent recurrence and other measures relating to the merchandise purchase-and-sale transaction matter announced in February 2020.」

「As a result, transactions whose substance could not be verified were identified. The company cancelled those transactions, recorded the amounts received and paid as advances received of ¥46,404 million and advances paid of ¥44,753 million, respectively, and presented the net amount under other non-current liabilities. Because the company received a ¥1,275 million refund from some counterparties on 27 July 2021 in relation to transactions underlying the advances paid, the balance of advances paid decreased by the same amount. The net amount of ¥2,926 million at the end of the current third quarter consolidated accounting period is presented under other non-current liabilities.」

「The company is advancing measures to prevent recurrence following the identification of inappropriate transactions announced in February last year, and the audit & supervisory board has been monitoring their implementation and effectiveness. Based on these results, it confirmed that continuous improvements were being made to the development and operation of the internal control system.」

「As a result, transactions whose substance could not be verified were identified. The company cancelled those transactions, recorded the amounts received and paid as advances received of ¥46,404 million and advances paid of ¥44,753 million, respectively, and presented the net amount of ¥1,650 million under other non-current liabilities.」

「In mid-November 2019, during a tax investigation by the National Tax Agency, the company established a special investigation committee and conducted an investigation after questions arose regarding the substance of some of its merchandise purchase-and-sale transactions. As a result, transactions whose substance could not be verified were identified. The company cancelled those transactions, recorded the amounts received and paid as advances received of ¥46,404 million and advances paid of ¥44,753 million, respectively, and presented the net amount of ¥1,650 million under other non-current liabilities.」

「In mid-November 2019, during a tax investigation by the National Tax Agency, the company established a special investigation committee and conducted an investigation after questions arose regarding the substance of some of its merchandise purchase-and-sale transactions. As a result, transactions whose substance could not be verified were identified. The company cancelled those transactions, recorded the amounts received and paid as advances received of ¥46,404 million and advances paid of ¥44,753 million, respectively, and presented the net amount of ¥1,650 million under other non-current liabilities.」

「1. Strengthening risk management 2. Reviewing business processes 3. Improving monitoring 4. Sales education and training 5. Assignment and rotation of sales personnel Of these measures, the review of business processes under “2. Reviewing business processes,” including stronger risk management for merchandise transactions, and the resulting improvements to monitoring under “3. Improving monitoring” have already been implemented. The company is considering measures to raise risk awareness and strengthen autonomous and continuous risk management under “1. Strengthening risk management,” as well as “4. Sales education and training” and “5. Assignment and rotation of sales personnel,” with the aim of beginning implementation during the first half of the fiscal year.」

「During a tax investigation by the National Tax Agency, questions were raised regarding the substance of some of the company’s merchandise purchase-and-sale transactions. The company therefore established a special investigation committee comprising 2 external experts with no interests in the company and 1 outside audit & supervisory board member, for a total of 3 members, and conducted an investigation into the matter. Based on the special investigation committee’s findings received on 6 February 2020, the company corrected prior-period sales, cost of sales, inventories and other items relating to some merchandise purchase-and-sale transactions whose substance could not be verified.」