Compensation and Litigation Risk Associated with Product Defects
First written in FY2016. 6 of 19 entries say "Mitigated", first in FY2019. Latest entry: FY2025.
The whole theme swung hardest in 2026: 11 of 57 companies on the "Worse" side.
- FY2025RestatedAnnual report
「With respect to quality compliance, our basic policy is to comply with laws and regulations and agreements with customers. In addition to strengthening checks and expanding quality compliance training to prevent quality misconduct, we are holding town hall meetings and other events to strengthen communication between top management and frontline employees.」
The company continues to strengthen checks, training and dialogue between top management and frontline employees in response to the quality issues. - FY2024MitigatedAnnual report
「In addition to strengthening checks and expanding quality compliance training to prevent quality misconduct, we are holding town hall meetings and other events to strengthen communication between top management and frontline employees.」
In response to the quality testing and quality control issues, the company is strengthening checks, training and communication between top management and frontline employees. - FY2023WorsenedAnnual report
「The company continued to investigate in order to further enhance confidence in the product quality of 昭和電線ケーブルシステム㈱. The investigation found that inappropriate quality control had occurred for some products.」
The additional investigation identified products affected by inappropriate quality control, expanding the scope and facts involved beyond the previous disclosure. The company is proceeding with measures including ensuring the independence of the quality assurance division, reviewing inspection standards and reorganizing the division into a quality management supervisory office reporting directly to the president. - FY2023-Q3WorsenedAnnual report
「The investigation identified telecommunications cables, power cables, rubber-molded products and enameled stranded wire as products involving inappropriate quality control. Examples included the omission of some shipping inspection items, failure to submit applications to change specification values, deficiencies in procedures for applying to change materials, and discrepancies in testing methods. The investigation also found that, when the company investigated a quality issue at a Group company in 2017, some members of the then management of 昭和電線ケーブルシステム㈱ and senior personnel in the quality assurance division were aware of some of the findings of the current investigation but failed to report facts that should have been reported to the company.」
The additional investigation identified inappropriate quality control across multiple products and categories and found that facts had not been properly reported during the previous investigation. The scope of the quality issues and the related facts has expanded. - FY2023-Q1RestatedAnnual report
「Following external concerns regarding quality control of products manufactured and sold by 昭和電線ケーブルシステム㈱ and the report on the investigation into discrepancies in quality testing of Group products published on 29 October 2021, we are implementing measures to prevent a recurrence, including the early introduction of an automated measurement system for test results to prevent falsification and other misconduct, and the development and implementation of a systematic training program to establish a compliance-oriented culture.」
As measures to prevent recurrence of discrepancies in quality testing, the company continues to introduce an automated measurement system and develop and implement a systematic training program. It is also continuing to investigate products outside the scope of the review. - FY2022-Q3RestatedAnnual report
「Following the findings of the committee's investigation, we reported to customers the identified discrepancies and measures to prevent recurrence, and explained that no product had any issue with its quality integrity.」
After the investigation by the committee chaired by an external expert concluded, the company explained to customers that there were no quality integrity issues with the 7 products investigated and continues to implement measures to prevent recurrence. - FY2022-Q2MitigatedAnnual report
「Following the findings of the committee's investigation, we reported to customers the identified discrepancies and measures to prevent recurrence, and explained that no product had any issue with its quality integrity. The committee's investigation will conclude with this report, but we will promptly proceed with implementing measures to prevent recurrence. We will also continue investigating products outside the scope of this investigation to further enhance confidence in the Group's product quality.」
The investigation by the committee chaired by an external expert has concluded, confirming that the quality integrity of all 7 products investigated was not an issue. The company is proceeding with explaining the discrepancies to customers, implementing measures to prevent recurrence and conducting additional investigations of products outside the scope of the review. - FY2022-Q1MaterialisedAnnual report
「It was discovered that, for some products previously sold by consolidated subsidiary 昭和電線ケーブルシステム㈱, testing had been conducted using methods different from those agreed with customers. In response, the Group confirmed that there were no quality issues with the products in question and explained this to customers, while proceeding with investigations and reviews to determine the causes and prevent recurrence.」
It was discovered that previously sold products had been tested using methods different from those agreed with customers. Quality confirmation, customer explanations, root-cause analysis and investigations and reviews to prevent recurrence are under way. - FY2021-Q3MitigatedAnnual report
「Provision for product repair costs 404 302」
The balance of the provision for product repair costs decreased from ¥404 million at the end of the previous consolidated fiscal year to ¥302 million at the end of the third quarter. - FY2021-Q2MitigatedAnnual report
「Provision for product repair costs 404 267」
The balance of the provision for product repair costs decreased from ¥404 million at the end of the previous consolidated fiscal year to ¥267 million at the end of the second quarter. - FY2021-Q1Further decrease in the balance of the provision for product repair costsAnnual report
「Provision for product repair costs 404 365」
The balance of the provision for product repair costs decreased from ¥404 million at the end of the previous consolidated fiscal year to ¥365 million at the end of the first quarter. - FY2020MitigatedAnnual report
「Provision for product repair costs 854 404」
The balance of the provision for product repair costs decreased from ¥854 million at the end of the previous fiscal year to ¥404 million. The impact of product repair costs incurred in the previous fiscal year is diminishing. - FY2020-Q3Further decrease in the balance of the provision for product repair costsAnnual report
「Provision for product repair costs 854 510」
The balance of the provision for product repair costs decreased from ¥854 million at the end of the previous consolidated fiscal year to ¥510 million at the end of the third quarter. - FY2020-Q2Decrease in the balance of the provision for product repair costsAnnual report
「Provision for product repair costs 854 618」
The balance of the provision for product repair costs decreased from ¥854 million at the end of the previous consolidated fiscal year to ¥618 million at the end of the second quarter. - FY2019MitigatedAnnual report
「Net income attributable to owners of the parent increased, as ordinary income improved and the provision for product repair costs recorded in the previous fiscal year was no longer incurred.」
The provision for product repair costs recorded in the previous fiscal year was not incurred during the current fiscal year, eliminating the impact of extraordinary losses on profit. However, the balance of the provision for product repair costs was ¥854 million. - FY2019-Q2MaterialisedAnnual report
「Although domestic demand remained firm, additional costs expected to arise from overseas repair work currently under way were recorded. Revenue was therefore ¥13,214 million, up 8.1% from the same quarter of the previous year, while operating profit was ¥447 million, down 14.3%.」
Additional costs for overseas repair work were actually recorded and disclosed as a factor behind the decline in operating profit in the power systems business. - FY2018-Q1MaterialisedAnnual report
「Net loss attributable to owners of the parent was ¥82 million, as ¥808 million in provisions for product repair costs was recorded as an extraordinary loss, compared with net loss attributable to owners of the parent of ¥440 million in the same quarter of the previous year.」
Regarding the response of providing replacements free of charge for the Middle East power cable project disclosed in the previous fiscal year, ¥808 million in provisions for product repair costs was recorded as an extraordinary loss. - FY2017MaterialisedAnnual report
「Regarding a power cable installation project ordered in the Middle East in 2009 by consolidated subsidiary 昭和電線ケーブルシステム㈱, the customer requested replacement of power components in late May 2017. Following negotiations, the company agreed to replace them free of charge. As a result, approximately ¥800 million is scheduled to be recorded as an extraordinary loss for the fiscal year ending March 2018.」
In addition to the prior disclosure of potential product defects and quality issues, the company disclosed the customer's replacement request, its response by providing replacements free of charge, and an expected extraordinary loss of approximately ¥800 million. - FY2016First statedAnnual report
「Unexpected circumstances could potentially lead to compensation claims for losses arising from product defects or to litigation and other issues. In such cases, the resulting substantial costs could affect the Group's operating results and other aspects of its business.」
While stating that quality control is in place, the disclosure identifies the possibility of compensation claims and litigation arising from defects as a risk.