Compliance Violation Risk
First written in FY2020. 5 of 11 entries say "Worsened", first in FY2022. Latest entry: FY2025.
Shinto Paint moved to the "Worse" side of this theme in 2022, 2 years before the typical company in this theme (2024).
The whole theme swung hardest in 2025: 6 of 35 companies on the "Worse" side.
77 other companies' latest entry also says "Restated".
- FY2025RestatedAnnual report
「Our group has established a compliance promotion structure and conducts training and awareness activities for officers and employees as needed, working to improve corporate ethics and strengthen compliance with laws and regulations. However, it may not be possible to completely avoid compliance risks.」
The policy of strengthening training, awareness-building and compliance with laws and regulations remains in place. Litigation and compensation risks concerning the quality-related improper practices also remain. - FY2025-H1RestatedAnnual report
「In addition, on 18 May 2023, 株式会社ハズ filed a lawsuit seeking total damages of ¥670 million in connection with the improper practices, and we received the complaint on 5 June 2023. We will respond to the litigation after consulting with our lawyers.」
Litigation seeking ¥670 million in damages concerning the quality-related improper practices, and the response in consultation with lawyers, remain ongoing. - FY2024-Q3RestatedAnnual report
「In addition, some customers have filed mediation applications and lawsuits with a district court seeking total damages of ¥1,378 million in connection with the improper practices.」
Mediation and litigation concerning the quality-related improper practices, and a total damages claim of ¥1,378 million, remain ongoing. - FY2024-Q2RestatedAnnual report
「Compensation costs related to the improper practices that can reasonably be estimated at this time have been reflected in the quarterly consolidated financial statements, but additional compensation costs may arise depending on the outcome of future mediation, litigation and discussions with customers and others.」
The recording of compensation costs related to the improper practices and the possibility of additional costs arising from future mediation, litigation and discussions remain ongoing. - FY2023WorsenedAnnual 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.」
In connection with the improper practices, mediation applications and lawsuits were filed seeking total damages of ¥1,382 million. - FY2023-Q3WorsenedAnnual report
「In addition, some customers have submitted mediation applications and other documents concerning compensation for the improper practices, and we will respond after consulting with our lawyers. Compensation costs related to the improper practices that can reasonably be estimated at this time have been reflected in the quarterly consolidated financial statements, but additional compensation costs may arise depending on the outcome of future discussions with customers and others.」
Regarding the improper practices, some customers submitted mediation applications and other documents, and compensation costs were recorded, while the possibility of additional compensation costs and the difficulty of estimating them remain. - FY2023-Q2WorsenedAnnual report
「Depending on the outcome of future discussions with customers and others, new losses, including compensation costs related to the improper practices, may arise and affect our consolidated results. However, matters whose impact cannot reasonably be estimated at this time have not been reflected in the quarterly consolidated financial statements.」
Although ¥305 million in costs related to the quality-related improper practices and ¥236 million in provisions for related costs were recorded, uncertainty remains because the impact of future compensation costs and other expenses cannot reasonably be estimated. - FY2023-Q1WorsenedAnnual report
「Depending on the outcome of future discussions with customers and others, new losses, including compensation costs related to the improper practices, may arise and affect our consolidated results. However, matters whose impact cannot reasonably be estimated at this time have not been reflected in the quarterly consolidated financial statements.」
Regarding losses related to the improper practices, the possibility of new compensation costs and other expenses arising, and the continuing difficulty of reasonably estimating their impact, remain. - FY2022WorsenedAnnual report
「Reasons why the improper practices remained undiscovered for an extended period」
The investigation identified specific reasons why the compliance violations remained undiscovered for an extended period, including insufficient awareness-building, inadequate monitoring functions and failure of the internal reporting system. - FY2022-Q3MaterialisedAnnual report
「On 12 January 2022, we received notice from the Japan Water Works Association prohibiting the use of the certification mark and temporarily suspending certification for the nonconforming products in question.」
In contrast to the general risk that compliance violations cannot be avoided, a specific incident has occurred in which notice was received prohibiting the use of the Japan Water Works Association certification mark and temporarily suspending certification. - FY2020First statedAnnual report
「Our group has established a compliance promotion structure and conducts training and awareness activities for officers and employees as needed, working to improve corporate ethics and strengthen compliance with laws and regulations. However, it may not be possible to completely avoid compliance risks.」
Separate from the internal control and compliance policies, the risk of impacts on valuation, damages and business performance arising from violations of laws and regulations was identified for the first time.