Potential breach of financial covenants due to fire damage and material doubt about the going-concern assumption
First written in FY2021-Q3. 2 of 4 entries say "Mitigated", first in FY2021. Latest entry: FY2022-Q2.
The whole theme swung hardest in 2020: 30 of 70 companies on the "Worse" side.
11 other companies' latest entry also says "Achieved".
- FY2022-Q2AchievedAnnual report
「The significant events and other matters concerning the going-concern assumption described in the annual securities report for the previous fiscal year under Part 2, Business Overview, 2. Business and Other Risks, (5) Other Risks, ① Significant Events, etc. Concerning the Going-Concern Assumption, and Part 2, Business Overview, 3. Management's Discussion and Analysis of Financial Condition, Operating Results and Cash Flows, (3) Measures to Resolve Significant Events Concerning the Going-Concern Assumption, were resolved during the first quarter of the current fiscal year.」
The company again states that the significant events and other matters concerning the going-concern assumption that existed at the end of the previous fiscal year were resolved during the first quarter of the current fiscal year. - FY2022-Q1MitigatedAnnual report
「As of the end of the first quarter of the current fiscal year, we have determined that the events or circumstances that had raised significant doubt about the going-concern assumption had been resolved.」
The company has determined that the significant doubt regarding the going-concern assumption that existed at the end of the previous fiscal year had been resolved as of the end of the first quarter as a result of implementing and continuing its measures following the fire. - FY2021MitigatedAnnual report
「As a result of the net assets being determined, as described in Part 5, Accounting Status, 1. Consolidated Financial Statements, the financial covenants were not breached.」
The breach of the financial covenants considered highly likely in the previous quarter did not occur after the amount of net assets was determined. Meanwhile, in light of the impairment of net assets caused by fire losses, the company continues to recognize significant doubt about the going-concern assumption. - FY2021-Q3First statedAnnual report
「Inventories stored in the same building, including the area where the fire occurred, represented at least approximately half of the book value at the end of the current quarter. Even after deducting the amount currently under review and deemed to have escaped damage, we expect that the financial covenants are highly likely to be breached in light of the total loss before taking into account unconfirmed insurance proceeds. Accordingly, as of the date of submission of this quarterly report, events or circumstances existed that raised significant doubt about the going-concern assumption.」
In light of the fire damage, the company disclosed for the first time its expectation that a breach of the financial covenants was highly likely and the existence of events and circumstances raising significant doubt about the going-concern assumption. Meanwhile, the company considers that no material uncertainty exists as a result of its response measures.