Risk of Product and Service Defects
First written in FY2022-Q3. 2 of 4 entries say "Restated". Latest entry: FY2026.
The whole theme swung hardest in 2025: 1 of 8 companies on the "Worse" side.
10 other companies' latest entry also says "Restated".
- FY2026RestatedAnnual report
「For the defective pile construction at an apartment building in Yokohama constructed by Sumitomo Mitsui Construction Co., Ltd., we reasonably estimated the costs that we should bear as the prime contractor under the warranty liability provisions of the construction contract and recognized a provision for contingent losses of ¥2,159 million.」
The company continues to disclose that a provision for contingent losses has been recognized in connection with the defective pile construction and related litigation, and that the estimate may change depending on the judgment. - FY2026-H1MaterialisedAnnual report
「For the defective pile construction at an apartment building in Yokohama constructed by Sumitomo Mitsui Construction Co., Ltd., we reasonably estimated the costs that we should bear as the prime contractor under the warranty liability provisions of the construction contract and recognized the amount deemed necessary. We believe Residential's claim lacks grounds and justification, but depending on the outcome of this lawsuit, a revision to the estimated costs to be borne could cause Sumitomo Mitsui Construction Co., Ltd.'s business performance to fluctuate.」
Regarding the previously identified product and service defect risk, defective pile construction by Sumitomo Mitsui Construction Co., Ltd. and related litigation have materialized, and a provision for contingent losses of ¥2.159 billion has been recognized. The claim amount is stated as approximately ¥50.6 billion. - FY2023RestatedAnnual report
「To address this risk, we are working to improve product and service quality by implementing the PDCA cycle for quality control based on our quality management system.」
The company continues to address product and service defect risks through its quality management system. - FY2022-Q3First statedAnnual report
「If a defect were to occur, we could lose customers' trust and may also have to bear damages and countermeasure costs under our liability for non-conformity to contract and product liability. This could affect business performance.」
The company identifies loss of credibility, compensation payments, and countermeasure costs arising from quality defects as risks.