Dissolution and liquidation of a consolidated subsidiary
永旺幻想(中国)児童遊楽有限公司 (AF China, a consolidated subsidiary of the filing company)
Children's amusement facilities operated across China
The subsidiary continued to incur substantial operating losses from fiscal 2021 onward due to the impact of COVID-19 and intensifying competition in China's amusement business since the pandemic. Although operating losses improved, the company determined that a significant recovery in results would be difficult given the subsidiary's future growth prospects in China. It reached this conclusion following a comprehensive review of its business portfolio and other factors.
The specific amount is currently under review. In the fiscal year ending February 2027, the company plans to record store closure costs, employee compensation and other items as extraordinary losses, and expects to record deferred tax assets related to impairment losses and allowances for doubtful accounts on past capital investments and loans as a gain under adjustments to income taxes. In the fiscal year ending February 2028, the company plans to transfer AF China's foreign currency translation adjustment account to extraordinary losses upon completion of the liquidation.
The fiscal years ending February 2027 and February 2028
Related procedures
Dissolution and liquidation proceedings
The liquidation is scheduled to be completed once the necessary procedures under local law have been completed. Completion of the liquidation is expected during the fiscal year ending February 2028.
Any matters requiring future disclosure will be reported promptly.
| Item | Details |
|---|---|
| Event name | Dissolution and liquidation of a consolidated subsidiary |
| Date of occurrence | 14 September 2026 (the date on which the dissolution and liquidation were approved by the Board of Directors) |
| Subject Entity | 永旺幻想(中国)児童遊楽有限公司 (AF China, a consolidated subsidiary of the filing company) |
| Target Locations / Products | Children's amusement facilities operated across China |
| Cause | The subsidiary continued to incur substantial operating losses from fiscal 2021 onward due to the impact of COVID-19 and intensifying competition in China's amusement business since the pandemic. Although operating losses improved, the company determined that a significant recovery in results would be difficult given the subsidiary's future growth prospects in China. It reached this conclusion following a comprehensive review of its business portfolio and other factors. |
| Amount of Impact on Business Performance | The specific amount is currently under review. In the fiscal year ending February 2027, the company plans to record store closure costs, employee compensation and other items as extraordinary losses, and expects to record deferred tax assets related to impairment losses and allowances for doubtful accounts on past capital investments and loans as a gain under adjustments to income taxes. In the fiscal year ending February 2028, the company plans to transfer AF China's foreign currency translation adjustment account to extraordinary losses upon completion of the liquidation. |
| Accounting period in which recognized | The fiscal years ending February 2027 and February 2028 |
| Type of litigation or proceeding | Dissolution and liquidation proceedings |
| Outlook | The liquidation is scheduled to be completed once the necessary procedures under local law have been completed. Completion of the liquidation is expected during the fiscal year ending February 2028. |
| Planned follow-up disclosure | Any matters requiring future disclosure will be reported promptly. |
Items this document does not state (15)
These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.
The reasons the company gives
The company's own explanation, not something inferred from the numbers.The company incurred substantial operating losses from fiscal 2021 onward due to the impact of COVID-19 and intensifying competition in China's amusement business since the pandemic. Although operating losses improved, the company determined that future growth and a significant recovery in results in China would be difficult. Following a comprehensive review of its business portfolio and other factors, it decided to dissolve the subsidiary.