Risk of additional collateral requirements and financial restrictions resulting from breaches of loan covenants
First written in FY2019. 2 of 8 entries say "Restated". Latest entry: FY2027-H1.
The whole theme swung hardest in 2025: 23 of 75 companies on the "Worse" side.
17 other companies' latest entry also says "Other".
- FY2027-H1Addition of a new borrowing agreement with financial covenantsAnnual report
「The details of the material borrowing agreements newly entered into by the Company that contain financial covenants are as follows: Local bank Commitment line 31 March 2026 1,000,000 1,000,000 Requirements 1 and 2／Government-affiliated financial institution Term loan 10 April 2026 470,000 470,000 Requirements 3 and 4」
The Company newly entered into a 1,000,000-thousand-yen commitment line with a local bank and a 470,000-thousand-yen term loan with a government-affiliated financial institution. The financial covenants concerning operating income or loss, ordinary income or loss and maintenance of net assets have also been specified. - FY2026Specific covered items and conditions of financial covenantsAnnual report
「The financial statements covered, whether consolidated or those of the Company alone, as well as the specific calculation methods and numerical conditions, differ by borrowing agreement. The principal conditions are as follows: ① Maintenance of net assets ② Maintenance of profitability ③ Maintenance of cash flow and financial ratios, among other items」
The Company discloses the principal financial covenant conditions concerning the maintenance of net assets, profitability, cash flow and financial ratios. - FY2025Updated specific conditions of financial covenantsAnnual report
「In addition, the Company’s commitment line agreement among the above agreements contains financial covenants, and a breach of the following covenants could result in the loss of the benefit of time. ・From the fiscal year ending February 2025 onward, ordinary income or loss shown in the consolidated statements of income as of the end of each consolidated fiscal year must not be a loss for 2 consecutive periods.」
The Company specifically discloses the condition attached to the commitment line agreement requiring ordinary income or loss not to be a loss for 2 consecutive periods from the fiscal year ending February 2025 onward. - FY2024RestatedAnnual report
「In addition, the Company’s commitment line agreement among the above agreements contains financial covenants, and a breach of the following covenants could result in the loss of the benefit of time.」
The Company continues to disclose the financial covenants attached to the commitment line and the risk of losing the benefit of time if they are breached. - FY2023RestatedAnnual report
「Some of the Company’s borrowing agreements contain financial covenants. If these covenants are breached, the Company may lose the benefit of time and be required to repay the borrowings in full, which could affect its financial condition.」
The Company continues to disclose the risk of losing the benefit of time and having to repay borrowings in full as a result of breaching financial covenants. This filing does not state that any new breach occurred. - FY2022MaterialisedAnnual report
「Although the Company breached the above financial covenant i) at the end of the fiscal year, it has obtained the financial institution’s agreement not to exercise its rights concerning the loss of the benefit of time.」
The Company actually breached the financial covenant requiring net assets to be maintained at no less than 75% of the previous year’s level. The Company explains that it obtained the financial institution’s agreement not to exercise its rights concerning the loss of the benefit of time. - FY2021MitigatedAnnual report
「The Company manages its operating performance by monitoring budget versus actual results, analyzing variances, reporting them at monthly Board of Directors meetings and taking timely measures as necessary, thereby working to reduce risk.」
The response to the risk of breaching the financial covenants on borrowings consists of analyzing budget-to-actual variances, reporting to the Board of Directors monthly, and implementing necessary measures. - FY2019First statedAnnual report
「The Company obtains loans from financial institutions as one method of financing capital investment. Some of these loans contain covenants requiring the Company to maintain ordinary income above a specified level for 2 consecutive fiscal years, maintain net assets above a specified level and maintain the operating status of assets pledged as collateral above a specified level.」
The Company discloses covenants relating to ordinary income, net assets and the operating status of collateral assets, as well as risks such as the provision of additional collateral in the event of a breach.