TSE News

Public Announcement Measure and Request for Improvement Report -KAWADA TECHNOLOGIES,INC.-

Update : Dec. 10, 2013

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[Tokyo Stock Exchange, Inc.]

TSE has taken the Public Announcement Measure and requested an Improvement Report as follows.

1. Company Name KAWADA TECHNOLOGIES,INC.
(Code: 3443, Market Division: 1st Section)
2.Date of Public Announcement Measure Dec. 10, 2013 (Tue.)
Provision Securities Listing Regulations, Rule 508, Paragraph 1, Item 1
(Due to a public announcement being deemed necessary in cases where TSE has recognized a violation of the matters to be observed when conducting disclosure)
3.Improvement Report Submission Deadline Dec. 25, 2013 (Wed.)
Provision Securities Listing Regulations, Rule 502, Paragraph 1, Item 1
(Due to improvements being deemed highly necessary in cases where TSE has recognized a violation of the matters to be observed when conducting disclosure)
4.Reason Today, KAWADA TECHNOLOGIES,INC. (hereinafter “the Company”) disclosed revisions to past financial results, etc.
As a result, the Company was found to have made false disclosures from the fiscal year ended March 2009 to the first quarter of the fiscal year ending March 2014 due to failing to include an important subsidiary of a company when accounting for return on investment using the equity method and improper accounting for deferred tax liability in the fiscal year ended March 2008.
The Company was deemed to have continued to apply inappropriate accounting practices without confirmation or examination of their appropriateness due to a lack of understanding of practical guidelines, etc. related to the equity method and tax effect accounting, as well as the failure of checking within the accounting department to function sufficiently.
Based on the above, this case is deemed to (i) be in violation of the matters to be observed related to timely disclosure, (ii) have considerable impact on investment decisions and (iii) require public announcement. Thus, TSE shall implement public announcement measures.
Furthermore, this is a case of inappropriate disclosure arising from deficiencies in the Company’s organizational structure for conducting timely disclosure, and improvements to the organizational structure are deemed highly necessary. As such, TSE shall require the Company to submit a report containing the background of the issue and improvement measures.

DISCLAIMER: This translation may be used for reference purposes only. This English version is not an official translation of the original Japanese document. In cases where any differences occur between the English version and the original Japanese version, the Japanese version shall prevail. This translation is subject to change without notice. Tokyo Stock Exchange, Inc. and/or Tokyo Stock Exchange Regulation shall individually or jointly accept no responsibility or liability for damage or loss caused by any error, inaccuracy, misunderstanding, or changes with regard to this translation.

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