Risk of Unprofitable Projects
First written in FY2017. 4 of 10 entries say "Mitigated", first in FY2021. Latest entry: FY2026.
The whole theme swung hardest in 2024: 17 of 54 companies on the "Worse" side.
23 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「Operating profit increased by ¥364 million from the previous fiscal year to ¥1,509 million, up 31.8% year on year. This reflected increased sales, the planned implementation of measures including pay rises, stronger hiring of new graduates and experienced personnel, and expanded technical training, as well as improved profitability through higher service value, minimization of unprofitable projects through strengthened project management, and appropriate expense execution.」
The company identifies minimizing unprofitable projects through strengthened project management and improving profitability as factors behind the increase in operating profit. - 2026-07-17MitigatedEarnings presentation
「Embedded systems benefited from withdrawing from low-profit projects and an increase in partner engineers.」
States that withdrawal from low-profit projects contributed to improved profitability in embedded systems. - FY2024MaterialisedAnnual report
「Provision expense for loss on orders included in cost of sales: current fiscal year, ¥5.6 million」
The company recorded ¥5.6 million in provision expense for loss on orders, versus zero in the previous fiscal year, indicating that the risk of unprofitable projects materialized during the current fiscal year. Order reviews, monthly reviews and quality management under ISO 9001 continue. - FY2023RestatedAnnual report
「For large-scale new development projects, the group's Order Review Committee checks the scale and novelty of the project in advance, including the customer, technology, business field and person in charge, and the committee chair approves the order. Project status is subsequently reported monthly and monitored by the Project Review Committee.」
While indicating the possibility of unprofitable projects, the company continues management through the Order Review Committee and monthly Project Review Committee. - FY2022MitigatedAnnual report
「Operating profit increased by ¥73 million from the previous fiscal year to ¥775 million, up 10.5% year on year, due in part to minimizing unprofitable projects through strengthened project management.」
The company identifies minimizing unprofitable projects through strengthened project management as a factor behind the increase in profit, indicating the effectiveness of measures addressing the risk of projects becoming unprofitable. - FY2021MitigatedAnnual report
「Inventory corresponding to provision for loss on orders: current fiscal year, work in process - thousand yen」
Work in process related to the provision for loss on orders recorded in the previous fiscal year fell to zero in the current fiscal year, eliminating the balance related to projects expected to generate losses at the end of the current fiscal year. The risk of unprofitable projects and the management framework of order reviews and monthly reviews continue. - FY2020MaterialisedAnnual report
「Inventory corresponding to provision for loss on orders: work in process ¥2.363 million」
The company recorded a ¥600,000 provision for loss on orders and disclosed ¥2.363 million of work in process related to order contracts expected to generate losses, indicating that the risk of unprofitable projects materialized during the current fiscal year. - FY2019RestatedAnnual report
「For large-scale new development projects in particular, the Order Review Committee checks the scale and novelty of the project in advance, including the customer, technology, business field and person in charge, and the committee chair approves the order. Project status is subsequently reported monthly and monitored by the Project Review Committee, but there is a risk that unforeseen circumstances, such as changes to customer requirements, may result in projects becoming unprofitable.」
While management is provided by the Order Review Committee and Project Review Committee, the company continues to indicate the risk of projects becoming unprofitable due to changes in customer requirements and other factors. - FY2018MaterialisedAnnual report
「For large-scale new development projects in particular, the Order Review Committee checks the scale and novelty of the project in advance, including the customer, technology, business field and person in charge, and the committee chair approves the order. Project status is subsequently reported monthly and monitored by the Project Review Committee, but there is a risk that unforeseen circumstances, such as changes to customer requirements, may result in projects becoming unprofitable.」
While describing oversight by the Order Review Committee and Project Review Committee, the company recorded ¥1.6 million in provision expense for loss on orders in the current fiscal year, indicating that the risk of unprofitable projects materialized. - FY2017First statedAnnual report
「Lump-sum contracts, one of the order formats used in the system development business, are priced based on estimated work hours and product value. The difference between this price and the actual development cost therefore constitutes profit. Conversely, if development costs exceed the estimated price, the planned profit margin may not be secured.」
The company identifies the risk of failing to secure the planned profit margin when actual development costs exceed the estimated price under lump-sum contracts.