Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.
To whom it may concern:
June 30, 2025
Company: | ACCESS CO., LTD. |
Representative: | Kiyoyasu Oishi Representative Director, President & CEO |
(Securities Code: 4813 Prime Market, TSE) | |
Contact: | Mitsuhiro Okada Executive Officer, CFO, VP of Corporate Administration Unit |
(Phone: +81-3-6853-9088) |
Notice Concerning Receipt of the Investigation Report of the Special Investigation Committee
As stated in the "Notice Concerning the Establishment of a Special Investigation Committee, Postponement of the Announcement of the Third Quarter Financial Results for the Fiscal Year Ending January 2025, and Revision of the Consolidated Forecast for the Fiscal Year Ending January 2025" dated November 29, 2024, in the investigation for the causes of the lengthening for the past due payments regarding some accounts receivable, which had increased mainly from new customers in the Network business segment, suspicions arose regarding improper sales recognition for some transactions at the U.S. subsidiary (hereinafter referred to as the "Doubt"). In response to this, ACCESS CO., LTD. established a special investigation committee composed primarily of external experts with no vested interest in the Company to conduct a comprehensive and in-depth investigation, and the Company has been cooperating with the investigation by the special investigation committee to clarify the facts and complete the accounting procedures as soon as possible.
Subsequently, during the investigation, similar cases to the Doubt and another doubt regarding the appropriateness of accounting treatment for software assets (hereinafter collectively referred to as the "additional investigation items") were discovered. As a result, the Company commissioned the Special Investigation Committee to conduct an investigation that included the additional investigation items and the special investigation was continued.
The Company hereby announces as follows that it received the investigation report from the Special Investigation Committee on June 30, 2025.
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Results of the Investigation by the Special Investigation Committee
Please see the attached "Investigation Report (Public Version)" for the results of the investigation by the Special Investigation Committee. Note that confidentiality measures have been implemented in specific sections of the investigation report in order to protect personal and confidential information.
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Impact on Business Performance
As a result of the special investigation, the following facts were discovered at IP Infusion Inc. (hereinafter referred to as the "U.S. Subsidiary"), a consolidated subsidiary mainly responsible for the Group's Network Business segment.
・Regarding sales transactions for software licenses, despite separate side letters being concluded at the same
time as the main contracts to make the customer risk-free, which effectively placed the ongoing risk burden onto the U.S. Subsidiary, these sales were recognized based on the main contract only (overstatement of net
sales).
・Regarding sales transactions for software licenses, despite the conditions for revenue recognition not being satisfied, falsified supporting documents and materials for the transactions were prepared and sales were recognition (premature recognition of net sales).
・There was improper manipulation of the classification of aggregated data used as the basis for calculating the stated value of software assets and improper alteration of the transactions' supporting documents used as the basis for the timing of the software assets' recognition. As a result, the stated value of software assets of the U.S. Subsidiary was found to have been overstated in previous periods (overstatement of software assets, i.e., understatement of research and development expenses, etc.).
These actions were carried out with the involvement of some members of the U.S. subsidiary's management (One of them also serves as a director of the Company). The Company has determined that it is necessary to retroactively correct the related accounting for the overstatement and early recognition of sales, the overstatement of software, and other matters newly detected during the course of this investigation. In conjunction with these corrections, the Company made corrections to record a loss on valuation of shares of subsidiaries and associates in the Company's non-consolidated financial statements for prior periods, based on the reality that the net assets of the U.S. Subsidiary had declined in prior periods. As a result, the Company has decided to correct the consolidated financial statements and financial statements included in previously filed annual securities reports, etc.
The impact of the above corrections on the financial figures for each consolidated fiscal year is as follows.
Fiscal Year Ending January 31st, 2021
(Units: JPY million)
Overstatement or Premature Recognition of
Net Sales
Overstatement of Software Assets
Other Corrections
Total
Net Sales
103
-
198
301
Operating Profit/Loss
103
25
392
521
Ordinary Profit/loss
90
25
98
214
Profit/Loss attributable
to owners of parent
90
25
127
242
Total assets
-
(2,236)
(909)
(3,145)
Total net assets
(944)
(2,236)
(909)
(4,090)
Fiscal Year Ending January 31st, 2022
(Units: JPY million)
Overstatement or Premature Recognition of
Net Sales
Overstatement of Software Assets
Other Corrections
Total
Net Sales
59
-
(146)
(87)
Operating Profit/Loss
69
(145)
87
12
Ordinary Profit/loss
27
(145)
(155)
(273)
Profit/Loss attributable
to owners of parent
27
(145)
(76)
(194)
Total assets
-
(2,630)
(1,063)
(3,693)
Total net assets
(1,022)
(2,630)
(1,078)
(4,731)
Fiscal Year Ending January 31st, 2023
(Units: JPY million)
Overstatement or Premature Recognition of
Net Sales
Overstatement of Software Assets
Other Corrections
Total
Net Sales
60
-
(113)
(53)
Operating Profit/Loss
60
(5)
143
197
Ordinary Profit/loss
12
(5)
426
432
Profit/Loss attributable
to owners of parent
12
(5)
214
220
Total assets
-
(3,040)
(893)
(3,934)
Total net assets
(1,168)
(3,040)
(955)
(5,163)
Fiscal Year Ending January 31st, 2024
(Units: JPY million)
Overstatement or Premature Recognition of
Net Sales
Overstatement of Software Assets
Other Corrections
Total
Net Sales
(1,642)
-
186
(1,455)
Operating Profit/Loss
(1,642)
(673)
443
(1,872)
Ordinary Profit/loss
(1,693)
(673)
454
(1,912)
Profit/Loss attributable
to owners of parent
(1,693)
(673)
414
(1,951)
Total assets
(2,410)
(3,922)
(628)
(6,961)
Total net assets
(2,941)
(3,922)
(628)
(7,493)
For the six months ended July 31, 2024
(Units: JPY million)
Overstatement or Premature Recognition of
Net Sales
Overstatement of Software Assets
Other Corrections
Total
Net Sales
272
-
34
307
Operating Profit/Loss
272
(465)
521
328
Ordinary Profit/loss
243
(465)
522
300
Profit/Loss attributable
to owners of parent
243
(465)
516
294
Total assets
(2,192)
(4,920)
(173)
(7,286)
Total net assets
(3,097)
(4,920)
(206)
(8,224)
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Future Actions to Be Taken
Annual securities reports, etc., for prior fiscal years
Based on the results of the Special Investigation Committee's investigation, on June 30, 2025 the Company will submit correction reports for its annual securities reports for the period from the fiscal year ended January 2021 to the fiscal year ended January 2024, its quarterly reports for the period from the second quarter of the fiscal year ended January 2023 to the first quarter of the fiscal year ended January 2025, and its semi-annual securities report for the fiscal year ended January 2025.
Submission of the annual securities report for the 41st fiscal year (ended January 2025) and announcement of the third quarter financial results for the fiscal year ended January 2025 and full-year financial results for the fiscal year ended January 2025
As stated in the "Notice Concerning Approval for Extension of Submission Deadline of the Annual Securities Report for the Fiscal Year Ended January 2025" dated April 28, 2025, the Company will submit its annual securities report for the fiscal year ended January 2025 on June 30, 2025, the deadline for submission after the extension.
The Company will also announce its third quarter financial results for the fiscal year ended January 2025 and full-year financial results for the fiscal year ended January 2025 on June 30, 2025.
Measures to prevent recurrence, etc.
The Company takes the findings of the Special Investigation Committee seriously and will formulate and implement measures to prevent recurrence based on its recommendations. The Company will announce specific measures to prevent recurrence in the "Notice of the formulation of measures to prevent recurrence" dated June 30, 2025.
Please refer to the Japanese version of the timely disclosure to see the investigation report.