FY2027-H1 is the point at which both financial results and the disclosure framework will be tested for recovery

The earnings summary for FY ended March 2026 was disclosed more than 50 days after period-end because time was required to address corrections to prior-period consolidated financial statements and securities reports based on the independent committee's investigation results, additional audit procedures by the accounting auditor, and audit procedures for the prior-period corrections. This was not simply a matter of the announcement schedule. It resulted from the simultaneous discovery of inappropriate monetary payments at 2 overseas subsidiaries, delays in the financial closing and audit processes, premature recognition of revenue in the fiscal years ended March 2023 and March 2024, other accounting errors, and issues with quality control and quality assurance.

The company subsequently set 13 November 2026 as the announcement date for the postponed results for the first quarter of the fiscal year ending March 2027, and plans to announce second-quarter results on the same day. Since FY2027-H1 covers April through September 2026, a 13 November disclosure would, on a simple calculation, fall within 45 days after period-end. Accordingly, at the next results announcement, it will be necessary to confirm not only whether the announcement takes place as scheduled, but also whether the 4 key profit items are disclosed as usual and whether the status of completion of audit procedures is explained.

In the previous fiscal year, ¥1,334 million in investigation-related costs and other expenses and a ¥116 million provision for quality-related costs were recorded. In addition, reasonable estimates were considered difficult for product replacement and reinspection costs, fines, damages, and other expenses associated with the quality issues. For FY2027-H1, key points to confirm will be whether additional provisions or extraordinary losses have been recorded for these potential liabilities, and whether revenue recognition or other accounting treatments for prior periods have been corrected again.

As measures to prevent recurrence, the company has announced the establishment of a Governance Promotion Department, the assignment of compliance officers to all overseas locations, stronger management of overseas financial reporting and audits, and enhanced quality assurance and inspection systems. At the next results announcement, we will want to track whether the company discloses more than simply the establishment of these systems, including whether the financial closing and audits of overseas subsidiaries were completed on time, whether any additional internal control deficiencies were identified, and whether estimates of quality-related costs were updated.