Risk of unprofitability due to increased development effort, functional improvements and defect repairs
First written in FY2016. 8 of 18 entries say "Mitigated", first in FY2017. Latest entry: FY2026.
The whole theme swung hardest in 2017: 9 of 31 companies on the "Worse" side.
14 other companies' latest entry also says "Materialised".
- FY2026MaterialisedAnnual report
「In the system development business, the Group is strengthening and enforcing its advance risk management by first determining whether to accept an order at an order acceptance meeting, based on various business, technical and organisational risks, and then obtaining approval from the quotation review committee (or, for large orders and other cases specified under the approval rules, a resolution of the Board of Directors).」
As of the end of the fiscal year, the Group recorded a provision for loss on orders of ¥25 million, reflecting the emergence of an expected loss from zero in the previous fiscal year. Measures including order acceptance meetings, quotation review committees and monthly management of focused projects remain in place. - 2026-05-22MitigatedGeneral Meetings of Shareholders
「Before accepting an order, we strengthened and thoroughly implemented advance risk management by having an order-approval meeting determine whether to accept the order after considering various risks, followed by approval by the quotation review meeting, with Board approval required for high-value orders and other cases under the authorization rules.」
Disclosed measures taken against the risk of unprofitable projects resulting from increased development hours and functional enhancements, including pre-order reviews and monthly management of key projects. - FY2024WorsenedAnnual report
「In system development involving new operations or technologies with which the Group has no prior experience, the possibility of these risks materialising increases.」
The conditions under which the risk of projects becoming unprofitable due to increased development hours, functional improvements and defect repairs is more likely to materialise when using unfamiliar operations or technologies were newly specified. - FY2023RestatedAnnual report
「In the system development business, the Group is strengthening and enforcing its advance risk management by first determining whether to accept an order at an order acceptance meeting, based on various business, technical and organisational risks, and then obtaining approval from the quotation review committee (or, for large orders and other cases specified under the approval rules, a resolution of the Board of Directors).」
The Group continues to address the risk of projects becoming unprofitable due to increased development hours, functional improvements and defect repairs through order acceptance meetings, quotation review committees and focused project management. - FY2022MitigatedAnnual report
「Operating profit was ¥1,716 million, up 25.5% year on year, reflecting improved profitability from better project management, among other factors.」
It continued measures addressing the risk of unprofitability, including order screening, estimate reviews and monthly management of priority projects, and identified improved profitability resulting from stronger project management as a factor contributing to higher earnings. - FY2022-Q2MaterialisedAnnual report
「The amounts of the provision for losses on orders corresponding to inventories presented on a net basis are as follows. Work in progress ¥0 million ¥1 million」
At the end of the second quarter, the Company recognized a ¥1 million provision for losses on orders corresponding to work in progress related to order contracts expected to incur losses. - FY2021MitigatedAnnual report
「In terms of earnings, the Company worked to further strengthen project management and contained the occurrence of such projects, while winning highly profitable projects, resulting in operating income of ¥1,367 million, up 35.1% year on year.」
It explains that stronger project management contained the occurrence of unprofitable projects, showing the results of measures addressing the risk of unprofitability that arose in the previous fiscal year. No provision for losses on orders was recognized during the fiscal year. - FY2021-Q3MitigatedAnnual report
「In terms of earnings, there were no unprofitable projects of the kind that arose in the previous fiscal year, while the execution of highly profitable projects as planned resulted in operating income of ¥1,019 million, up 58.9% year on year, ordinary income of ¥1,022 million, up 58.3%, and quarterly net income attributable to owners of the parent of ¥688 million, up 59.1%.」
It states that there were no unprofitable projects of the kind that arose in the previous fiscal year and that highly profitable projects were executed as planned. - FY2021-Q2MitigatedAnnual report
「In terms of earnings, the absence of unprofitable projects resulted in operating income of ¥654 million, up 116.1% year on year, ordinary income of ¥659 million, up 115.5%, and quarterly net income attributable to owners of the parent of ¥443 million, up 116.6%.」
It states that no unprofitable projects occurred during the cumulative second-quarter period, and no recurrence of the risk of unprofitability that had continued from the previous fiscal year was identified. - FY2021-Q1MitigatedAnnual report
「In terms of earnings, there were no unprofitable projects of the kind seen in the previous fiscal year, resulting in operating income of ¥288 million, up 40.8% year on year, ordinary income of ¥290 million, up 41.0%, and quarterly net income attributable to owners of the parent of ¥195 million, up 41.4%.」
It states that there were no unprofitable projects of the kind seen in the previous fiscal year during the first quarter, and operating income rose 40.8% year on year. - FY2020MitigatedAnnual report
「In terms of earnings, the winding down of unprofitable projects that had arisen in the previous fiscal year resulted in operating income of ¥1,012 million, up 2.6% year on year. The provision for losses on orders included in cost of sales was zero million yen for the consolidated fiscal year.」
Unprofitable projects that had arisen in the previous fiscal year were wound down, and the provision for losses on orders fell from ¥150 million to zero. However, the risk-management and provisioning framework itself continues. - FY2020-Q3Updated the provision for losses on orders and unprofitable projectsAnnual report
「In terms of earnings, in addition to strengthening the company's operating base and making planned investments in new businesses, some unprofitable projects arose, resulting in operating income of ¥641 million, down 15.2% year on year, and ordinary income of ¥646 million, down 15.1%. The provision for losses on orders corresponding to inventories presented on a net basis amounted to ¥160 million during the third quarter of the consolidated fiscal year.」
It continues to state that some unprofitable projects arose, and the provision for losses on orders corresponding to work in progress presented on a net basis was ¥160 million. - FY2020-Q2Updated the provision for losses on orders and unprofitable projectsAnnual report
「In terms of earnings, in addition to strengthening the company's operating base and making planned investments in new businesses, some unprofitable projects arose, resulting in operating income of ¥303 million, down 28.7% year on year, and ordinary income of ¥306 million, down 28.6%. Increased funds from factors including a ¥79 million increase in the provision for losses on orders were offset by decreases in other current liabilities, included under Other, of ¥287 million and cash outflows including ¥172 million in corporate income taxes paid.」
It states that some unprofitable projects arose, and operating income fell 28.7% year on year. The provision for losses on orders was ¥93 million at the end of the second quarter, while the amount corresponding to work in progress presented on a net basis was ¥115 million. - FY2020-Q1Updated the provision for losses on ordersAnnual report
「Inventories related to order contracts expected to incur losses and the provision for losses on orders are presented on a net basis.」
The provision for losses on orders increased from ¥14 million at the end of the previous consolidated fiscal year to ¥25 million at the end of the first quarter. The provision for losses on orders corresponding to work in progress presented on a net basis was also updated from ¥136 million to ¥161 million. - FY2019MaterialisedAnnual report
「For the fiscal year ended March 2019, although consolidated net sales targets were achieved, unprofitable projects arose in some areas and quality-related problems became apparent. The provision for losses on orders recognized during the consolidated fiscal year amounted to ¥150 million.」
It states that unprofitable projects and quality-related problems actually occurred. The provision for losses on orders also increased from ¥4 million in the previous fiscal year to ¥150 million. - FY2018RestatedAnnual report
「The Group addresses this by establishing, strengthening and enforcing a project management structure covering quality, costs and progress. However, to complete contracts with customers, development hours may increase beyond initial assumptions and feature enhancements may cause costs to exceed initial estimates and profitability to deteriorate.」
While continuing to cite project management measures, it also continues to identify the risk of unprofitability due to increased work hours, feature enhancements and defect remediation. - FY2017MitigatedAnnual report
「The Group addresses this by establishing, strengthening and enforcing a project management structure covering quality, costs and progress. However, to complete contracts with customers, development hours may increase beyond initial assumptions and feature enhancements may cause costs to exceed initial estimates and profitability to deteriorate.」
While explicitly citing measures through its project management structure, it continues to disclose the possibility of cost overruns and unprofitability due to increased development hours, feature enhancements and defect remediation. - FY2016First statedAnnual report
「Development hours may increase beyond initial assumptions, and feature enhancements may cause costs to exceed initial estimates and profitability to deteriorate. In addition, defect remediation and other measures after delivery and revenue recognition may generate additional expenses, ultimately making projects unprofitable and potentially affecting the Group's performance.」
Against a backdrop of increasingly advanced and complex customer requirements, it identifies cost overruns and additional expenses after delivery as risks.