Risks Arising from Product Defects and Quality Issues
First written in FY2020. 6 of 13 entries say "Restated". Latest entry: 2026-05-28.
Shinto Paint moved to the "Worse" side of this theme in 2022, 1 year before the typical company in this theme (2023).
125 other companies' latest entry also says "Restated".
- FY2026-H1RestatedAnnual report
「In addition, all temporary suspensions of certifications related to the improper practices have been lifted, and we will continue working to strengthen our quality-control systems. Compensation costs related to the improper practices that can reasonably be estimated at this time have been reflected in the interim consolidated financial statements, but additional compensation costs may arise depending on the outcome of future mediation, litigation and discussions with customers and others.」
Although all temporary suspensions of certifications have been lifted, efforts to strengthen the quality-control systems and the possibility of additional compensation costs depending on the outcome of mediation, litigation and discussions remain ongoing. - FY2025RestatedAnnual report
「Compensation costs related to the improper practices that can reasonably be estimated at this time have been reflected in the consolidated financial statements, but additional compensation costs may arise depending on the outcome of future mediation, litigation and discussions with customers and others.」
Although the temporary suspension of JIS certification has been lifted, the possibility of additional compensation costs depending on the outcome of litigation and discussions remains. - FY2025-H1RestatedAnnual report
「Compensation costs related to the improper practices that can reasonably be estimated at this time have been reflected in the interim consolidated financial statements, but additional compensation costs may arise depending on the outcome of future litigation and discussions with customers and others.」
Compensation costs related to the quality-related improper practices have been recorded, while the possibility of additional costs arising from future litigation and discussions remains. - FY2024-Q2RestatedAnnual report
「In addition, some customers have filed mediation applications and lawsuits with a district court seeking total damages of ¥1,382 million in connection with the improper practices.」
Customer relations, compensation and the possibility of litigation related to the quality-related improper practices remain ongoing. Compensation costs that can reasonably be estimated at this time have been reflected in the financial statements. - FY2023WorsenedAnnual report
「We recorded ¥449 million as costs related to quality-related improper practices, including legal fees and other costs, as well as costs expected to arise in the future.」
Costs related to the quality issue, including legal fees and other expenses, were recorded at ¥449 million, increasing the financial impact of the quality risk. - FY2023-Q3WorsenedAnnual report
「Costs related to quality-related improper practices － 427」
¥427 million in costs related to quality-related improper practices was recorded as an extraordinary loss, and the product quality issue has materialised as an additional financial burden. - FY2023-Q2WorsenedAnnual report
「Quality-related improper conduct expenses」
¥305 million in costs related to the quality-related improper practices was recorded as an extraordinary loss, and the potential quality issue risk has materialised as an additional financial burden. - FY2023-Q1WorsenedAnnual report
「In the industrial coatings sector, shipments for industrial equipment remained strong, but shipments for water-supply materials declined, reflecting factors including sluggish demand due to the improper practice issue.」
The quality and product issue has gone beyond a potential risk and has continued to affect quarterly sales through sluggish shipments for water-supply materials. - FY2022WorsenedAnnual report
「The improper conduct identified through a series of investigations can be broadly classified into 2 categories.」
The investigation confirmed that the potential quality issue risk had manifested in multiple specific improper practices, including certification conditions, non-designated raw materials, inspection frequency and descriptions in inspection reports. - FY2022-Q3MaterialisedAnnual report
「It has been confirmed that the Company may have sold and shipped, as products certified by the Japan Water Works Association, ductile cast-iron pipe synthetic-resin paint for water-service pipes manufactured by the Company that did not meet the certification standards established by the Japan Water Works Association (the “Water Works Association”), and may have sold and shipped products that did not meet specifications agreed with customers (the “Improper Conduct”).」
Regarding a theme previously disclosed as a potential risk of product accidents and quality problems, suspected sales and shipments of products that did not meet certification standards or customer specifications were confirmed, and the quality risk materialized as an actual incident. - FY2020First statedAnnual report
「The occurrence of a large-scale product accident or unexpected quality problem could have a significant impact on costs and the Group's reputation, as well as on the Group's financial position, operating results, and cash flows.」
While conducting rigorous quality control, the Company has, for the first time, separately identified the risk that product accidents and unexpected quality problems could affect costs, reputation, and business performance.