Risk of delayed acceptance inspection and revenue recognition related to the sale of diamond wire manufacturing equipment
First written in FY2020-Q2. 10 of 21 entries say "Restated". Latest entry: 2026-09-25.
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- 2026-09-25MaterialisedStatutory disclosure document
「On 11 September 2026, we received a provisional attachment order from the Sakai Branch of the Osaka District Court concerning part of the deposits held with one of our transaction financial institutions, with Jiangsu San Chao Diamond Tools Co., Ltd. as creditor and the company as debtor. We received the written decision on the provisional attachment on 18 September 2026.」
While the amount payable under the SIAC arbitration remained undetermined, a provisional attachment order was issued at the petition of Jiangsu San Chao Co., Ltd. against ¥300 million in deposit claims, making the arbitration-related risk a concrete preservation measure. - FY2026RestatedAnnual report
「The amount payable by us will be separately determined by the arbitral tribunal in the ongoing arbitration proceedings after 江蘇三超社 and we have each presented our respective claims. As the amount cannot currently be forecast, it is difficult to reasonably estimate the impact of the arbitral award on operating results.」
Even after SIAC's interim award, the amount payable by us remains undetermined, and the impact on operating results cannot reasonably be estimated. - FY2026-H1RestatedAnnual report
「On 20 May 2025, we received an arbitral award (interim award) from SIAC ordering us to pay the direct damages suffered by 江蘇三超社 and interest. However, the amount payable by us will be determined separately by the arbitral tribunal in future arbitration proceedings after 江蘇三超社 and we have each presented our respective positions. As the amount cannot currently be estimated, it is difficult to reasonably estimate the impact of the arbitral award on operating performance.」
Even after the order to pay direct damages and interest, the issue concerning delayed acceptance and revenue recognition remains unresolved, as the final payment amount has not been determined and the impact on operating results cannot be reasonably estimated. - FY2025MaterialisedAnnual report
「We were also ordered to pay the direct damages suffered by 江蘇三超社 and interest, but the amount payable by us to 江蘇三超社 will be separately considered and determined in future arbitration proceedings. If we are ordered to make a substantial payment, it could affect the operating results and financial position of our group.」
The risks concerning delayed acceptance and revenue recognition materialized through SIAC's interim award, which found us in breach of our obligations and ordered termination of the agreement and payment of direct damages and interest. The final payment amount remains undetermined. - FY2025-H1RestatedAnnual report
「Regarding the transfer of diamond wire production equipment and other assets to 江蘇三超社 in China, 江蘇三超社 filed for arbitration with the Singapore International Arbitration Centre (SIAC) on 17 November 2021, alleging that we had failed to perform our contractual obligations and seeking termination of the agreement and damages. We believe that we have completed performance of our contractual obligations and that the grounds for termination alleged by 江蘇三超社 do not apply. Accordingly, on 1 December of the same year, we filed a claim against 江蘇三超社 seeking payment of the remaining consideration. We will continue to assert the validity of our position in the SIAC arbitration.」
SIAC arbitration concerning termination of the agreement and damages, which arose from differing understandings of the acceptance terms, and our claim for payment of the outstanding consideration remain ongoing, and the risks of delayed acceptance and revenue recognition have not been resolved. - FY2024-Q3RestatedAnnual report
「With respect to the transfer of diamond wire production equipment and other assets to 江蘇三超社 in China, the company filed an arbitration claim with the Singapore International Arbitration Centre (SIAC) on 17 November 2021, seeking termination of the agreement and damages on the grounds that we had failed to perform our contractual obligations.」
SIAC arbitration concerning termination of the agreement and damages, which arose from differing understandings of the acceptance terms, and our counterclaim remain ongoing, and the risks of delayed acceptance and revenue recognition have not been resolved. - FY2024-Q2RestatedAnnual report
「With respect to the transfer of diamond wire production equipment and other assets to 江蘇三超社 in China, the company filed an arbitration claim with the Singapore International Arbitration Centre (SIAC) on 17 November 2021, seeking termination of the agreement and damages on the grounds that we had failed to perform our contractual obligations.」
SIAC arbitration concerning termination of the agreement and damages, which arose from differing understandings of the acceptance terms, remains ongoing. Litigation-related expenses of ¥54,870 thousand were recognized during the cumulative second-quarter period. - FY2024-Q1RestatedAnnual report
「With respect to the transfer of diamond wire production equipment and other assets to 江蘇三超社 in China, the company filed an arbitration claim with the Singapore International Arbitration Centre (SIAC) on 17 November 2021, seeking termination of the agreement and damages on the grounds that we had failed to perform our contractual obligations.」
The issue concerning the acceptance terms remains subject to SIAC arbitration over 江蘇三超社's claim for termination of the agreement and damages, as well as our counterclaim. - FY2023-Q3RestatedAnnual report
「With respect to the transfer of diamond wire production equipment and other assets to 江蘇三超社 in China, the company filed an arbitration claim with the Singapore International Arbitration Centre (SIAC) on 17 November 2021, seeking termination of the agreement and damages on the grounds that we had failed to perform our contractual obligations.」
The issue concerning the acceptance terms remains subject to SIAC arbitration over termination of the agreement and damages, as well as our counterclaim. Litigation-related expenses of ¥75,840 thousand were recognized in the income statement. - FY2023-Q2RestatedAnnual report
「With respect to the transfer of diamond wire production equipment and other assets to 江蘇三超社 in China, the company filed an arbitration claim with the Singapore International Arbitration Centre (SIAC) on 17 November 2021, seeking termination of the agreement and damages on the grounds that we had failed to perform our contractual obligations.」
The risks of delayed acceptance and revenue recognition remain, with 江蘇三超社's arbitration claim seeking termination of the agreement and damages and our counterclaim still pending. - FY2023-Q1RestatedAnnual report
「With respect to the transfer of diamond wire production equipment and other assets to 江蘇三超社 in China, the company filed an arbitration claim with the Singapore International Arbitration Centre (SIAC) on 17 November 2021, seeking termination of the agreement and damages on the grounds that we had failed to perform our contractual obligations.」
The risks of delayed acceptance and revenue recognition remain, with 江蘇三超社's arbitration claim seeking termination of the agreement and damages and our counterclaim still pending. Litigation-related expenses of ¥12,119 thousand were also recognized in the first quarter. - FY2022-Q3WorsenedAnnual report
「On 17 November 2021, 江蘇三超社 filed an arbitration claim with the Singapore International Arbitration Centre (SIAC), seeking termination of the agreement and damages on the grounds that we had failed to perform our contractual obligations. We believe that we have completed performance of our contractual obligations and that the grounds asserted by the company do not constitute grounds for termination. Accordingly, on 1 December of the same year, we filed a counterclaim against the company seeking payment of the outstanding consideration.」
The issue progressed from differing understandings of the acceptance terms and delayed revenue recognition to 江蘇三超社 actually filing for arbitration seeking termination of the agreement and damages. We maintained that our contractual obligations had been fulfilled and filed a counterclaim seeking payment of the outstanding consideration. - FY2022-Q2WorsenedAnnual report
「We continued discussions with 江蘇三超社 aimed at reaching agreement on new acceptance inspection conditions. However, we determined that the differences between the positions of the two companies were substantial and that resolution through discussions between the parties would be difficult, and therefore requested discussions toward a legal resolution through our representatives. As a result, it is no longer expected that the ¥1,400 million in revenue related to the delivery of the remaining equipment and other items that had been expected for the fiscal year ending March 2022, comprising ¥650 million in net sales and ¥750 million in extraordinary income, can be recognized in the current fiscal year, and the risk has materialized.」
The parties' positions on the acceptance terms diverged substantially, making resolution through discussions between them difficult. They entered into discussions toward a legal resolution through their respective representatives, and the outlook for delivery of the remaining equipment and recognition of ¥1,400 million in revenue during the current fiscal year became uncertain. - FY2021MaterialisedAnnual report
「With respect to the transfer of diamond wire production equipment and other assets to 江蘇三超社 in China, delivery of the remaining equipment and recognition of ¥1,400 million in related revenue, which had been expected in the fiscal year ending March 2021, have been pushed into the fiscal year ending March 2022 due to differing understandings of the acceptance terms.」
Due to differing understandings of the acceptance terms, delivery of the remaining equipment and recognition of ¥1,400 million in revenue were postponed to the following fiscal year. The risk of delayed acceptance disclosed since the previous fiscal year continued as a specific delay in revenue recognition. - FY2021-Q3MaterialisedAnnual report
「Due to differing understandings of the acceptance terms with 江蘇三超社, acceptance of the remaining equipment had not been completed as of the end of the third quarter of the fiscal year. We are continuing discussions with the company toward reaching agreement on new acceptance terms, but delivery of the remaining equipment and recognition of ¥1,400 million in related revenue, which had been expected in the fiscal year ending March 2021, are now expected to be pushed into the following fiscal year, and the risk has materialized.」
Acceptance of the remaining equipment was not completed due to differing understandings of the acceptance terms, and recognition of the ¥1,400 million in revenue expected in the fiscal year ending March 2021 is now expected to be pushed into the following fiscal year. The previously disclosed risk of delayed acceptance has materialized as an actual delay. - FY2021-Q2MitigatedAnnual report
「The transfer of diamond wire production equipment and other assets to 江蘇三超社 in China, which had been suspended due to the spread of COVID-19, resumed on-site work in China in late September 2020. However, as of the end of the 2nd quarter consolidated accounting period, revenue had not yet been recognized.」
The resumption of on-site work in China has led to some progress in addressing the acceptance delays, but the transfer remains incomplete and the related revenue has not been recognized, so risks remain. - FY2021-Q1MaterialisedAnnual report
「In the electronic materials slicing-related business, revenue was not recognized for the transfer of diamond wire production equipment and other assets to 江蘇三超社 in China because the project remained suspended due to the impact of the spread of COVID-19.」
The equipment transfer contract resulted in an actual instance in which on-site work was suspended due to travel restrictions and revenue had not been recognized as of the quarter-end. - FY2020-Q3RestatedAnnual report
「The manufacturing equipment will be transported to China and assembled in stages, and revenue will be recognized when it is confirmed that the acceptance inspection conditions stipulated in the contract with 江蘇三超社 have been met. However, if acceptance inspection cannot be completed during the current consolidated fiscal year for reasons including circumstances affecting the customer or an unforeseen accident, this could affect our group's profit or loss.」
It continued to be indicated as a risk that completion of acceptance inspection is a condition for revenue recognition under the equipment sale and technology provision contract, and that failure to complete the inspection during the fiscal year could affect profit or loss. - FY2020-Q2First statedAnnual report
「The manufacturing equipment will be transported to China and assembled in stages, and revenue will be recognized when it is confirmed that the acceptance inspection conditions stipulated in the contract with 江蘇三超社 have been met. However, if acceptance inspection cannot be completed during the current consolidated fiscal year for reasons including circumstances affecting the customer or an unforeseen accident, this could affect our group's profit or loss.」
For the equipment sale and technology provision contract with total consideration of ¥2.2 billion, a new risk was disclosed: because revenue is recognized upon completion of acceptance inspection, failure to complete the inspection during the current consolidated fiscal year could affect profit or loss.