Nidec Announces Recording of Extraordinary Losses and Gains in Non-Consolidated Financial Results

KYOTO, Japan--(BUSINESS WIRE)--Nidec Corporation (TOKYO: 6594; OTC US: NJDCY) (the “Company” or “we”) hereby announces that it has recorded extraordinary losses and extraordinary gains in its non-consolidated financial results for the fiscal year ended March 31, 2026, as detailed below.

We sincerely apologize for any inconvenience and concern caused to our shareholders, investors, and other stakeholders.

1. Details of the extraordinary loss/gain

The Company recognized suspected improper accounting practices involving or recognized by the management of the Company or its group companies, and these practices, including arbitrarily adjusting the timing of write-downs of certain assets with risk in terms of their asset value, may impose a material impact on the Company’s overall consolidated financial statements. Thus, the Company determined that it would need to launch an objective investigation by an independent third-party committee and established such a committee (the “Third-Party Committee”) on September 3, 2025. The Company subsequently received investigation reports from the Third-Party Committee on February 27, 2026, and April 17, 2026. These reports confirmed numerous instances of accounting misconduct across multiple locations within the Company’s group, including the deferral of inventory valuation losses, the avoidance of impairment losses on fixed assets, and the capitalization of expenditures that should have been expensed. Furthermore, the Company conducted investigations into suspected quality-related misconduct as well as customs issues, and carried out necessary procedures of the financial settlement based on the findings of these investigations.

Accordingly, expenses incurred for the investigations into this series of issues and the subsequent review of financial statements were recorded as extraordinary losses as “Special investigations and related expenses”. In addition, as a result of correction to prior financial statements of affiliated companies during this financial review process, net assets of certain subsidiary companies decreased. Consequently, the Company recorded a reversal of allowance for loss on debt guarantees and extraordinary losses comprising loss on valuation of shares of affiliated companies, loss on valuation of investments in affiliated companies, provision for allowance for doubtful accounts for affiliates, provision for allowance for loss on debt guarantees and provision for allowance for business loss of affiliated companies in its non-consolidated financial results. Furthermore, in connection with an absorption-type corporate split of a subsidiary's business for which an allowance for business loss of affiliated companies had been recorded in prior fiscal years, the Company recorded a reversal of allowance for doubtful accounts for affiliates, a reversal of allowance for business loss of affiliated companies (extraordinary income) and a loss on extinguishment of tie-in shares (extraordinary loss). The Company also recorded an additional provision for the allowance for contract losses assumed through this absorption-type company split. The respective amounts recorded are as follows;

(Extraordinary losses)

Item	Recorded amount
Special investigations and related expenses	¥30.5 billion
Loss on valuation of shares of affiliated companies	¥183.5 billion
Loss on valuation of investments in affiliated companies	¥2.2 billion
Provision for allowance for doubtful accounts for affiliates	¥1.5 billion
Provision for allowance for loss on debt guarantees	¥21.7 billion
Provision for allowance for business loss of affiliated companies	¥28.4 billion
Provision for loss on contracts	¥6.8 billion
Loss on extinguishment of tie-in shares	¥56.3 billion
Total	¥330.9 billion

(Extraordinary gains)

Item	Recorded amount
Reversal of allowance for doubtful accounts for affiliates	¥20.0 billion
Reversal of allowance for loss on debt guarantees	¥0.1 billion
Reversal of allowance for business loss of affiliated companies	¥34.2 billion
Total	¥54.3 billion

2. Impact on consolidated financial results

The special investigation and related expenses have been reflected in the Annual Securities Report for the Fiscal Year Ended March 31, 2026, and the Financial Statements Summary for the Year Ended March 31, 2026 [IFRS] (Consolidated), both disclosed today. Nidec will promptly announce any matters that should be disclosed when it emerges.

The loss on valuation of shares of affiliated companies, loss on valuation of investments in affiliated companies, provision for allowance for doubtful accounts for affiliates, provision for allowance for loss on debt guarantees, provision for allowance for business loss of affiliated companies, reversal of allowance for doubtful accounts for affiliates, reversal of allowance for business loss of affiliated companies and loss on extinguishment of tie-in shares have been eliminated in the consolidated financial statements and therefore have no impact on consolidated financial results.