FY 2016 Consolidated Financial Results

Year ended December 31, 2016

February 10, 2017

(All financial information herein has been prepared in accordance with accounting principles generally accepted in Japan. This document is an
English translation from the original Japanese-language document. This translation is not subject to auditing standards in the U.S.)

Listed company name:

Original Engineering
Consultants Co., Ltd.
4642

Code number:

Stock listing:(URL

Tokyo Stock Exchange, Second Section

http://www.oec-solution.co.jp)

Representative:
Contact person:

Title President & Representative Director Name:
Title Director & General Manager of
Name:
Financial Affairs Division
Planned Annual General Meeting of Shareholders: March 30, 2017
Planned filing of a financial report: March 30, 2017
Date of scheduled payment of dividends: March 31, 2017
Earnings supplementary explanatory documents: None
Earnings presentation: None

Nobuhiko Suga
Kaoru Kira

Tel: (03) 6757-8800(Amounts less than ¥1 million are truncated)

1．CONSOLIDATED FINANCIAL RESULTS FOR FY 2016 (January 1, 2016 to December 31, 2016)(1) Consolidated Operating Results(Percentages represent year-on-year change)
Net sales

Operating income

Ordinary income

Profit attributable tothe owners of theparentMillion yen%

Million yen%

Million yen%

Million yen

%

5,589

3.0

573

15.7

587

19.8

414

-4.6

5,427

5.7

495

-4.6

490

-6.6

434

-9.4

FY 2016 ended
December 31, 2016
FY 2015 ended
December 31, 2015

(Note) Comprehensive income: FY 2016: ¥382 million (-8.2%)

Profitper share-basic
Yen
FY 2016 ended
December 31, 2016
FY 2015 ended
December 31, 2015

FY 2015: ¥416 million (-13.8%)

Profitper share-diluted
YenincomeReturn on equity Ordinary
to total assets

Operatingmargin

%

%

%

61.97

-

9.1

10.1

10.3

64.97

-

10.5

9.3

9.1

(Reference) Gain (loss) on investment by equity method: FY 2016: ¥- million

FY 2015: ¥- million(2) Consolidated Financial Position
Total assets
Million yen

Net assets
Million yen

As of December 31, 2016

6,081

4,709

77.4

704.06

As of December 31, 2015

5,579

4,368

78.3

653.00(Reference) Shareholders’ equity:

As of December 31, 2016: ¥ 4,708 million(3) Consolidated Cash Flows

Shareholders’ equity ratio%

Net assets per share
Yen

As of December 31, 2015: ¥4,366 million

Cash flows fromoperating activities
Million yen

Cash flows frominvesting activities
Million yen

Cash flows fromfinancing activities
Million yen

633

-184

-57

2,363

471

166

-30

1,974

FY 2016 ended
December 31, 2016
FY 2015 ended
December 31, 2015

Cash and cash equivalents
at the end of the period
Million yen

2．DIVIDENDS

Yen

Ratio of
Total dividend
Payout ratio dividends toamountFull(Consolidated) net assets(Full year)
year(Consolidated)
Yen
Million yen%%

Dividends per share(Record date)

FY 2015 ended
December 31, 2015
FY 2016 ended
December 31, 2016
FY 2017 ending
December 31, 2017(Forecast)End offirst quarter

InterimYen

Yen

End of third Fiscal
quarter year-end
Yen

-

0.00

-

6.00

6.00

40

9.2

0.9

-

0.00

-

8.00

8.00

54

12.9

1.1

-

0.00

-

10.00

10.00

15.7

3．FORECAST OF CONSOLIDATED RESULTS FOR FY 2017 (January 1, 2017 to December 31, 2017)
Net sales

Full year

Million yen

%

5,820

4.1

(Percentages represent changes from the same period of the previous fiscal year)
Profit attributable toOperating income
Ordinary income
the owners of theProfit per shareparentMillion yen%
Million yen%
Million yen
%
Yen
553

553

-3.6

-5.8

427

63.85

3.0

*NOTES(1) Changes in the scope of consolidation for significant subsidiaries during FY 2016 ended December 31, 2016: None
(2) Changes in accounting policies, changes in accounting estimates and retrospective restatements:(i) Changes in accounting policies in accordance with revision of accounting standards: Yes(ii) Changes in accounting policies other than (i) above: None(iii) Changes in accounting estimates: None(iv) Retrospective restatements: None

(3) Number of outstanding shares (Common stock)(i) Number of shares outstanding at end of period, including treasury stock
As of December 31, 2016: 7,796,800 shares
As of December 31, 2015: 7,796,800 shares(ii) Number of shares of treasury stock at end of period
As of December 31, 2016: 1,109,267 shares
As of December 31, 2015: 1,109,667 shares(iii) Average number of shares outstanding for each period
As of December 31, 2016: 6,687,411 shares
As of December 31, 2015: 6,687,133 shares(Reference) Summary of Non-consolidated Financial Results
1. NON-CONSOLIDATED FINANCIAL RESULTS FOR FY 2016 (January 1, 2016 to December 31, 2016)(1) Non-consolidated Operating Results(Percentages represent year-on-year change)
Net sales

Operating income

Ordinary income

ProfitMillion yen%

Million yen%

Million yen%

Million yen

5,588

3.0

569

15.9

585

19.9

413

-4.6

5,425

6.3

491

-5.9

488

-8.3

432

-11.1

FY 2016 ended
December 31, 2016
FY 2015 ended
December 31, 2015

Profitper share-basic
Yen
FY 2016 ended
December 31, 2016
FY 2015 ended
December 31, 2015%

Profitper share-diluted
Yen

61.77

-

64.75

-

(2) Non-consolidated Financial Position
Total assets
Million yen

Net assets
Million yen

6,073

4,652

76.6

695.54

5,573

4,287

76.9

640.97

As of December 31, 2016
As of December 31, 2015
(Reference) Shareholders’ equity:

As of December 31, 2016: ¥ 4,651 million

Shareholders’ equity ratio%

Net assets per share
Yen

As of December 31, 2015: ¥4,286 million

2. FORECAST OF NON-CONSOLIDATED RESULTS FOR FY 2017 (January 1, 2017 to December 31, 2017)
Net sales
Full year

Operating income(Percentages represent changes from the same period of the previous fiscal year)
Ordinary income
ProfitProfit per share

Million yen%

Million yen%

Million yen%

Million yen

%

Yen

5,800

3.8

550

-3.4

550

-6.0

425

2.9

63.55

* Disclosure regarding the status of implementation of audit procedures
At the time of disclosure of this financial results report, the audit procedures for the consolidated financial statements pursuant to the
Financial Instruments and Exchange Act were being carried out.
Note regarding forecasts and forward-looking statements
The business results forecasts presented are based on information available to the Company at the present time and are subject topotential risks and uncertainty. Accordingly, actual results may differ significantly from any expressed future performance herein due
to various factors.
For matters relating to results forecasts, please refer to “1. ANALYSIS OF BUSINESS RESULTS AND FINANCIAL POSITION,” “(1) Analysis ofBusiness Results” on page 2 of the Attachment.

Index of the Attachment
1.
(1)
(2)
(3)
(4)

ANALYSIS OF BUSINESS RESULTS AND FINANCIAL POSITION ............................................................2
Analysis of Business Results.....................................................................................................................................2
Analysis of Financial Position...................................................................................................................................4
Basic Policy on Distribution of Profits and Dividends for FY 2016 and FY 2017 ...................................................4
Business Risks ...........................................................................................................................................................52.

OVERVIEW OF THE OEC GROUP’S ORGANIZATION ...............................................................................5

3.
(1)
(2)
(3)
(4)

MANAGEMENT POLICIES .................................................................................................................................6
Basic Management Policies ......................................................................................................................................6
Target Management Index ........................................................................................................................................6
Medium- and Long-Term Management Strategies ...................................................................................................6
Company Issues ........................................................................................................................................................8

BASIC POLICY FOR THE SELECTION OF ACCOUNTING STANDARDS ................................................8CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets ....................................................................................................................................9
Consolidated Statements of Operations and Comprehensive Income .......................................................................11
Consolidated Statements of Operations ....................................................................................................................11
Consolidated Statements of Comprehensive Income ................................................................................................12(3) Consolidated Statements of Changes in Net Assets ..................................................................................................13(4) Consolidated Statements of Cash Flows ...................................................................................................................15(5) Notes regarding the Consolidated Financial Statements ...........................................................................................17(Matters Affecting the Assumption of a Going Concern) ......................................................................................17(Significant Basic Items for Consolidated Financial Statements)..........................................................................17(Changes in accounting policies) ...........................................................................................................................18(Additional Information) .......................................................................................................................................19(Segment Information)...........................................................................................................................................19(Per Share Information) .........................................................................................................................................19(Significant Subsequent Events) ............................................................................................................................20
4.
5.
(1)
(2)

6. OTHER ....................................................................................................................................................................21(1) Changes in Directors .................................................................................................................................................21(2) Orders Received/Sales...............................................................................................................................................21

1

1. ANALAYSIS OF BUSINESS RESULTS AND FINANCIAL POSITION(1) Analysis of Business Results
During the fiscal year ended December 31, 2016, Japan’s economy saw an uptick in business sentiment on theback of the trend of a weak yen that prevailed following the U.S. presidential election and improved corporate
earnings, albeit modest, in manufacturing industries. Corporate earnings in domestic demand-led non-manufacturingindustries remained on a recovery trend, and business sentiment picked up in both manufacturing and nonmanufacturing industries.
According to the Bank of Japan’s Tankan survey in December 2016, the diffusion index (DI) for major
manufacturing firms advanced four percentage points from the September 2016 survey to 10 percentage points, andthat for major non-manufacturing firms levelled off at 18 percentage points. DI for small and medium-sizedenterprises improved for both manufacturing and non-manufacturing industries, with the DI for small and mediumsized manufacturers advancing four percentage points from the previous survey to one percentage point and that ofnon-manufacturers improving one percentage point to two percentage points. The forecasted DI for the three months
ahead dropped two percentage points for both major manufacturers and non-manufacturers, indicating that evenindustries whose business sentiment has improved recently are cautious about future business conditions in Japanand abroad.
Under the above-mentioned economic conditions, the Ministry of Land, Infrastructure, Transport and Tourism(MLIT), with which the Company’s has a close business relationship, drew up a budget for fiscal 2016. The total
budgets earmarked for “disaster prevention and safety subsidies” and “general social infrastructure development
subsidies” were roughly on the same level as fiscal 2015. The total amount of the water and sewerage works
expenses budget of ordinance-designated cities across Japan and Tokyo’s special wards increased 1.8% from fiscal
2015. Japan’s water and sewage infrastructure assets amount to approximately ¥130 trillion, according to a
provisional calculation by the Cabinet Office. This means that by sector, the water and sewage infrastructure stock issecond only to the road infrastructure stock. The water supply system has been established in nearly all areas, while
the sewerage system has not been built in some areas. Given this, there still is room for new orders for theestablishment of related facilities, but such orders are decreasing overall. However, given that many water andsewage facilities, which were established rapidly during the high-growth period, are reaching the end of their usefullife every year, it is necessary to maintain and renew these infrastructure assets, which are indispensable to ensuringa safe, reliable and cultural living environment. In addition, there are growing new needs including flood control
measures for protecting human lives and assets from localized torrential rain that have recently been occurring
frequently, anti-seismic measures such as building quake-resistant toilet facilities, and water and sewerage systems
reinforcement measures for building tsunami-resistant facilities.
The OEC Group, in this operating environment, worked aggressively to win orders mainly in the water supply
field, particularly for services related to asset management in line with the Water Supply Division, Ministry of
Health, Labour and Welfare’s new water supply vision that focuses on the key words of “safety, strength,
sustainability, collaboration and challenge”. In the sewerage field, the OEC Group pursued orders in line with theseven major themes set by the Sewerage and Wastewater Management Department of MLIT: strengthening
earthquake recovery and reconstruction support and implementing national measures for safety and peace of mind;
early reduction of areas lacking sewerage infrastructure; promoting water environmental management; improving
facilities management and operation; strengthening sewerage management; promoting measures to realize a lowcarbon, recycling-oriented society; and, promoting international water businesses through globalization and privatepublic initiatives. In addition, the OEC Group conducted recovery and reconstruction support operations for damage
caused by earthquakes that hit the Kumamoto region in April 2016. We also made efforts to obtain orders forservices relating to support by the Ministry of Internal Affairs and Communications for introducing local public
enterprise-based accounting into small-scale water supply and sewerage operations, in accordance with the Local
Public Enterprise Act, as well as sewerage operations management strategy formulation operations and others. In
overseas markets, the Company worked aggressively to win orders by tapping into projects in emerging nations
through public-private partnerships.
With regard to the OEC Group’s internal organization, the Group strove to improve revenue by boostingproductivity and reducing costs based on measures such as creating an organization focusing on the “Era of
Maintenance and Management;” facilitating communication and information sharing between different levels; rapid
course correction of management issues based on confirming management benchmarks by departments on an asneeded basis; appropriate budget management and process management for order-received projects; process
management; outsourcing management; upgrading skills of in-house engineers; securing and fostering young humanresources who will lead the next generation; and, expanding external networks.
As a result, consolidated orders received during the fiscal year under review amounted to ¥6,475 million, an
increase of 12.5% compared with the previous fiscal year, and net sales increased 3.0%, to ¥5,589 million. Operating
income amounted to ¥573million, an increase of 15.7% compared with the previous fiscal year, and ordinary income
increased 19.8%, to ¥587 million. Profit attributable to the owners of the parent for the fiscal year under review
amounted to ¥414 million, a decrease of 4.6% compared with the previous fiscal year.
Results by operating division were as follows.

2

[Engineering Consultant Department]
The Engineering Consultant Department received orders totaling ¥6,031 million during the fiscal year underreview, an increase of 14.8% compared with the previous fiscal year. Sales by the department increased 4.9%, to¥5,171 million.
[Information Processing Department]
In the Information Processing Department, orders received decreased 11.5% compared with the previous fiscal
year, to ¥443 million. Sales by the department decreased 16.2%, to ¥418 million.
Regarding the outlook for the fiscal year ending December 31, 2017, the Group anticipates a continuing harshenvironment for orders owing to such factors as price competition among firms, although the national budget is
expected to remain at the same level as the last fiscal year.
The Company, meanwhile, has achieved increases in productivity both on an individual employee level and on
an organizational level through company-wide awareness reforms aimed at achieving the objectives of “Every
single employee working with a sense of management” and “establishing an organization with open culture” whichhave been consistently pursued under the present management structure, and the provision of pleasant working
conditions.
Despite an aging population and a shortage of technical human resources, the Company will actively launch
activities for hiring new graduates in collaboration with younger employees and mid-career recruitment under theleadership of the top management. In addition, the Company will work to solve management issues by securing andcultivating human resources with excellent skills from a medium- and long-term perspective, while aiming toincrease orders received and revenue on a sustainable basis by ensuring that the quality of services provided meets
customer needs.
Water supply and sewerage budgets, the Company’s main business target, are expected to place emphasis on
such areas as earthquake- and disaster prevention-related measures, programs to address an aging infrastructure,
support services to reinforce operating foundations, and enhancing the vitality of local communities. Hence, theGroup will aggressively carry out sales programs to meet such needs, while continuing to enter water-related
business fields overseas, centering on emerging Asian countries, where economic development is remarkable anddemand for water supply and sewerage infrastructure is expected to grow.
In the fiscal year ending December 31, 2017, the Group forecasts consolidated orders to decrease 7.3%, to¥6,000 million, and net sales to increase 4.1%, to ¥5,820 million. Operating income is forecast to decrease 3.6%, to¥553 million, and ordinary income to decrease 5.8%, to ¥553 million. Profit attributable to the owners of the parent
is forecast to increase 3.0%, to ¥427 million.

3(2) Analysis of Financial Position
Cash and cash equivalents increased ¥388 million compared with the end of the previous fiscal year to stand at¥2,363 million at the end of the fiscal year under review. Significant factors contributing to this change included theposting of profit before income taxes, and decreases in notes and accounts receivable.
Main factors contributing to changes in cash flows during the fiscal year under review were as follows.
(Cash flows from operating activities)
Net cash provided in operating activities amounted to ¥633 million, compared with ¥471 million in the previous
fiscal year. The main factor contributing to this change was the posting of profit before income taxes.
(Cash flows from investing activities)
Net cash used in investing activities totaled ¥184 million, compared with ¥166 million in the previous fiscal year.
Significant factors contributing to this change included payments for purchase of investment securities of ¥204 million.
(Cash flows from financing activities)
Net cash used in financing activities amounted to ¥57 million, compared with ¥30 million in the previous fiscal year.
The main item was cash dividends paid amounting to ¥40 million.

(Reference) Cash Flow Indicator Trends
FY 2012FY 2013

FY 2014

FY 2015

FY 2016

Shareholders’ equity ratio (%)

76.7

76.2

79.2

78.3

77.4

Shareholders’ equity ratio on a market value basis (%)

23.5

37.7

73.1

44.2

45.4

Interest-bearing debt to cash flow ratio (years)

-

0.05

0.02

0.08

0.11

Interest coverage ratio (times)

-

174.3

292.6

289.13425.63

Ratio formula:
Shareholders’ equity ratio: Shareholders’ equity / total assets
Shareholders’ equity ratio on a market value basis: Market capitalization / total assets
Interest-bearing debts to cash flow ratio (years): Interest-bearing liabilities / cash flows from operating activities
Interest coverage ratio: Cash flows from operating activities / interest payments
Notes:
1. All figures are calculated based on consolidated financial data.
2. Market capitalization is calculated by multiplying the share price at end of period by the number of shares
outstanding at end of period (excluding treasury stock).
3. Cash flows in these indicators refer to net cash from operating activities as stated in the Consolidated Statementsof Cash Flows. Interest-bearing liabilities are all liabilities presented on the Consolidated Balance Sheets that are
subject to interest expenses. Interest payments are those stated in the Consolidated Statements of Cash Flows.
4. In the fiscal year ended December 31, 2012, as cash flows from operating activities were negative, “interestbearing debt to cash flow ratio” and “interest coverage ratio” for this period is not presented.

(3) Basic Policy on Distribution of Profits and Dividends for FY 2016 and FY 2017
With regard to profit distribution, the Company’s basic policy is to maintain stable dividend payments toshareholders over the long term. For the fiscal year under review, in light of earnings, internal reserves and other factors,
the Company will pay a year-end dividend of ¥8 per share of common stock. For the fiscal year ending December 31,
2017, the Company forecasts a year-end dividend of ¥10 per share, when taking such factors as earnings estimates into
account. Meanwhile, the Company will utilize internal reserves for human resources development and improving thequality of its design system, which will lead to intensification of business, and reinforcing its financial base.

4(4) Business Risks
Any forward-looking statements contained in this report are based on judgments made by management as of theend of the fiscal year under review.
(i) Dependence on public works projects
Although the Group is making progress in developing businesses in new fields—including thosecatering to the private sector—and overseas water-related business, an extremely high proportion of theGroup’s business comprises public works projects for government agencies, public corporations and local
public agencies. Owing to such factors as central government reforms in the area of public works budget
allocation and the financial situation of local government agencies, budgets for public sewerage projects—theGroup’s main business—are expected to continue to shrink. There is the possibility that such factors may leadto a negative impact on net sales and operating income.
(ii) Responsibility for defects in finished products
The Group is strongly focused on maintaining and improving the quality of its products. Although theGroup has adopted the ISO9001 quality management system, if a defect in one of the Group’s products wereto cause a major disruption to its customers, this may have a negative impact on the Group’s operating
performance.

2. OVERVIEW OF THE OEC GROUP’S ORGANIZATIONThe OEC Group comprises the Company, two subsidiaries (one consolidated subsidiary and one non-consolidated
subsidiary), and one group affiliate. The Group’s principal business activities are in the field of engineering consulting
services related to public works, particularly in the area of water supply and sewerage. The Group’s core services
include the provision of feasibility studies, master plans, detailed project design, construction supervision andsurveillance, and urban facilities information management.
The outline of the Group and its interrelations is as follows.
Customers

Original Engineering
Consultants Co., LtdConsulting services related
to water supply andsewerage

Urushi Co., Ltd.
(Consolidated subsidiary) Water supply and seweragedesign Management support for theCompany’s information systems
 Building and structural
examination and diagnostic
services
OEC Consultants

Philippines, INC.
(Non-consolidated subsidiary)
Overseas affiliated company(in the Philippines) Overseas operations

Osaka Environ
Consulting, INC.
(Group affiliate)
Overseas affiliated company(in the Philippines)Overseas operations

5

3. MANAGEMENT POLICIES(1) Basic Management Policies
The OEC Group’s core management philosophy is to: (1) contribute to the maintenance of people’s living
environment; (2) provide superior technologies through ceaseless efforts and the development of leading-edge
technology; and (3) pursue business growth and the enhancement of employee welfare, underpinned by community
trust.
Based on this philosophy, the Group develops technologies to conserve water resources and protect natural
ecosystems, and develops new services derived from such technologies. The Group’s basic policy is to broaden its
business domain, expand the markets in which it operates and increase sales. In doing so, the Group works to improve
its operating performance and increase shareholder value through the realization of sustained business growth andexpansion.

(2) Target Management Index
The business projections prepared by the Group to maximize its corporate value as well as to emphasize its
shareholders’ return are as follows.
Medium-term management
plan target

FY 2016 (Result)

FY 2017 (Forecast)

1. Amount of orders

Over ¥7.0billion¥6.4 billion¥6.0 billion

2. Operating margin

Over 10.0%

10.3%

9.5%

3. Profit per share

Over ¥70¥61.97¥63.85

Management target(3) Medium- and Long-Term Management Strategies
In the water supply and sewerage systems market, the Company’s main business target, new orders for design
services have been decreasing yearly with a shift toward services that focus on the “Era of Maintenance,
Administration, and Management,” including services to extend the useful lives of established systems, stock and asset
management for totally optimized maintenance and replacement of facilities by assessing a whole facility from a broad
perspective, disaster prevention, and resource conservation and energy efficiency enhancement.
In its management strategy, the Group uses ICT technology—developed and built up over many years—as a solid
foundation for providing a diverse range of consulting services in the Group’s principal field of water supply andsewerage, as well as in such fields as river management, waste and environmental management, overseas businesses,
provision of a variety of software, and diagnostics business covering buildings and civil engineering structures. In
addition, the Group is aiming to establish a sound medium- to long-term business base by supporting the sustainment ofentities facing the mass retirement of experienced employees and receiving appropriate payments for providing suchservices.

The Group’s Main Consulting Services

Water Supply Systems(1) Restoration of sound management: review of plans for restoration of management soundness in small-scale watersupply operations and support services for transition to local public enterprise-based accounting; support services
for formulation of reform plans for water charges; formulation of local area water supply vision; formulation ofwide-area water supply plans; support for the development of asset management systems; review services for
public agencies adopting private finance initiatives (PFI)(2) Promotion of systematic renewal programs: formulation of plans to increase facility earthquake resistance andformulation of renewal programs; degradation diagnostic services for pipes, structures and facilities; planning forthe introduction of advanced water treatment facilities(3) Review of energy efficiency and energy source utilization: measures to address appropriate electricity consumption
and reduction of environmental burden; plans to utilize water-operations-based energy sources (for small-scalehydro-electric generation systems, etc.)

Sewerage Systems(1) Comprehensive medium- to long-term plans: formulation of sewerage system vision; formulation of sewage
treatment plans; formulation of sewerage operations management strategies(2) Strengthening of management foundations: investigation and evaluation services for sewerage system assets;
support services for transition to local public enterprise-based accounting; review services for public agencies
adopting comprehensive private consignment; review services for public agencies adopting PFI(3) Systematic renewal programs: formulation of sewerage system lifetime extension plans/stock and management
plans (pipes, pump stations, treatment plants); support services for the development of sewerage asset management
6systems

7

(4) Earthquake preparedness programs: services for the formulation of sewerage system comprehensive earthquake
preparedness plans; seismic capacity evaluation and planning services for sewerage facilities (pipes, pump stations,
treatment plants); services for the preparation of sewerage system business continuity plans (BCP; earthquake
preparedness) ; services for the preparation of tsunami countermeasure plans(5) Flood damage abatement: services for the preparation of sewerage system comprehensive flood damage abatement
plans; development of flood hazard maps
(6) Development of resource and energy cycles: services for the preparation of biomass (biosolids) utilization plans;review services for recovery of phosphorus from sewage and sewage sludge; review services for the adoption ofenergy efficiency and energy generation technologies; services for the preparation of biogas utilization plans;
services for the preparation of global warming mitigation plans; design services for such renewable energy
facilities as solar power, wind power and small-scale hydro-electric generation systems(7) Improvement of combined sewerage systems: services for the preparation of combined sewerage system
improvement plans(8) Water quality improvement in public bodies of water: services for the preparation of advanced treatment plans at
sewage treatment plant; review services for operational support utilizing an activated sludge model (ASM);
activated sludge model simulation (BIO-SOLUTION); services for the preparation of treated sewage reuse plans

River Management(1) Promotion of flood abatement measures: formulation of joint urban flood control plans; development of flood
hazard maps; planning of rainwater storage and infiltration facilities(2) Promotion of systematic renewal: planning of long-life facilities (flood gates, drainage pump stations, etc.);
degradation diagnostic services for facilities and equipment(3) Development of a healthy water cycle: flow regime improvement plans; water quality protection plans

Waste and Environmental Management(1) Proposal-based services: formulation of plans for water quality improvement (protection)(2) Promotion and design of systematic renewal: planning of long-life facilities (incineration facilities, sewage
treatment plant, final disposal sites, etc.); degradation diagnostic services for facilities and equipment;
investigations on the potential for adopting PFI, etc.
(3) Review of energy source utilization: biomass energy utilization plans; incinerator waste heat utilization plans;
mixed incineration plans for sewage sludge and urban garbage(4) Environmental surveys: living environment impact surveys; soil and groundwater contamination surveys

Overseas Business(1) Advance preparations: preliminary investigations and identification of potential projects for improvement of water,
sanitation and living environments in developing countries(2) Planning and design: preparation of master plans and feasibility studies for improvement of water, sanitation andliving environments in developing countries(3) Detailed design: detailed design of facility structural components for projects(4) Construction management: construction management of built facility structural components for projects(5) Evaluation: Project post-completion evaluation and monitoring(6) Public–private partnership (PPP) water infrastructure business support: business development support forcompanies pursuing the formation of PPP water infrastructure projects(7) Base of pyramid (BOP) business support: business development support for companies pursuing the formation of
BOP-related environmental projects(8) Overseas business development support for small- and medium-sized enterprise (SMEs): business development
support for SMEs pursuing the formation of overseas environmental projects

VISTAQUA Series (Software Provision) Water Supply Systems(1) Construction works and asset information: works register system; asset management system; business accounting
system(2) Facilities information: plant register information system; water supply register information system; pipe network
calculation system; water supply register touch panel viewing system; water supply register Web-based publishing
service(3) Operations management information: water supply application information system; water supply disruption
information system; property possession information system(4) Related information: ground information system; provisional benchmark information system

8 Sewerage Systems(1) Construction works and asset information: works register system; asset management system; business accounting
system(2) Treatment station and pump station facilities information: plant register information system; maintenance andinspection information system; water quality test information system; lifetime extension support system; stock
management support system(3) Pipeline infrastructure information system: sewer register information system; sewer planning support information
system; manhole information system; lifetime extension support system; stock management support system;
information system for earthquake disaster preparedness; sewer register touch panel viewing system; sewer registerWeb-based publishing service(4) Operations management information: drainage facility information system; flush lavatory conversion program
information system; property possession information system; designated business site information system; user fee
management system; user fee levy information system; sewage treatment investigation information system Urban Facilities (other urban infrastructure, etc.)(1) Construction works and asset information: works register system; asset management system; business accounting
system(2) Facilities information: plant register information system(3) Operations management information: property possession information system; touch panel register viewing
system; Web-based register publishing service(4) Related information: ground information system

Diagnostic Business covering Buildings, Civil Engineering Structures, Machinery andFacilities(1) Non-destructive inspection system for concrete structure soundness diagnosis (elastic wave radar system: i-TECS)(2) Non-destructive inspection system for simplified surveys of concrete structures (concrete tester: CTS-02)(4) Company Issues
With regard to the water supply and sewerage business, the OEC Group’s main business target, water supply andsewerage facilities have been intensively developed so far, but they are now projected to age rapidly, as with othersocial infrastructure. Consequently, from now on, water supply and sewerage budgets are expected to focus on
maintenance and renewal of existing facilities. Besides, demand for sophisticated, diverse consulting services, such as
understanding facilities’ safety and soundness and raising of the levels of facilities’ maintenance and renewal, areincreasing.
Under these circumstances, the Group will address the following key issues as it continually implements businessstrategies designed to respond to changes in market conditions and strives to achieve a sound management footing in asustainable way.
1. Promote proposal-based marketing in line with the future policies on public sewerage works projects to increase
orders received.
2. Reduce the overall cost structure to achieve stable revenue.
3. Introduce advanced technology to meet market needs and enhance the quality of services provided.
4. Rapidly identify customer needs, and provide the best possible solutions.
5. Utilize the Group’s domestic and overseas business network to develop sales programs targeting overseas waterbusiness opportunities.
6. Promote initiatives for work-life balance to improve employees’ working environment.

4. BASIC POLICY FOR THE SELECTION OF ACCOUNTING STANDARDSThe Company’s stakeholders are mostly domestic shareholders, creditors and business partners, and hence theCompany does not have much necessity to procure funds from overseas. Considering these, the Company applies theJapanese accounting standards.

9

5. CONSOLIDATED FINANCIAL STATEMENTS(1) Consolidated Balance Sheets

Category

FY 2015(as of December 31, 2015)
Amount(thousand yen)

FY 2016(as of December 31, 2016)
Amount(thousand yen)

AssetsCurrent assets
Cash and deposits

2,690,589

3,079,626

Accounts receivable—completed operation

1,686,808

1,571,585

2,738

12,622

Deferred tax assets

123,982

136,739

Other

34,469272,288

4,538,588

5,072,861

495,421507,192

Accumulated depreciation-362,928-374,710

Buildings and structures, net

132,492

132,482Land

150,015150,015

Lease assets

56,40893,536

Accumulated depreciation‐24,495-34,685

Lease assets, net

31,91258,851

114,550

117,466-103,827-102,360

10,723

15,106

325,144356,455

Software

74,897104,155

Lease assets

4,568

8,364

Other

7,178

7,178

Total intangible assets

86,643

119,698

Investment securities

405,909298,352

Long-term loans receivable

14,417

6,866

Other

217,833

228,981

Allowance for doubtful accounts‐9,036-2,200Total investments and other assets

629,123

532,000

1,040,911

1,008,155

5,579,499

6,081,016

Costs on uncompleted services

Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures

Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets

Investments and other assets

Total noncurrent assets
Total assets

10Category

FY 2015(as of December 31, 2015)
Amount(thousand yen)

FY 2016(as of December 31, 2016)
Amount(thousand yen)

Liabilities
Current liabilities
Accounts payable—operating

202,593

223,309

Lease obligations

12,665

19,832

Income taxes payable

52,52589,801

Advances received on uncompleted contracts

223,178

215,306

Provision for bonuses

18,54535,129Provision for loss on order received

38,544

20,527

Other

337,610427,309

Total current liabilities

885,662

1,031,215

Lease obligations

24,51948,292

Deferred tax liabilities

24,096

19,027

Provision for share benefit

9,202

18,018Net defined benefit liability

214,327

199,479

Asset retirement obligations

45,27346,889

Other

8,400

8,400

325,819

340,107

1,211,482

1,371,322

Capital stock

1,093,000

1,093,000

Capital surplus

2,886,615

2,886,615

Retained earnings

927,950

1,301,839

Treasury stock-670,605-670,434

Total shareholders’ equity

4,236,959

4,611,020

Valuation difference on available-for-salesecurities

54,17046,610Remeasurements of defined benefit plans

75,59950,775

Total valuation and translation adjustments

129,769

97,386

1,287

1,287

Total net assets

4,368,017

4,709,694

Total liabilities and net assets

5,579,499

6,081,016

Noncurrent liabilities

Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity

Valuation and translation adjustments

Subscription rights to shares11(2) Consolidated Statements of Operations

Category

FY 2015(from January 1, 2015 to
December 31, 2015)
Amount(thousand yen)

FY 2016(from January 1, 2016 to
December 31, 2016)
Amount(thousand yen)Contracts completed

5,427,022

5,589,434

Cost of completed work

3,768,745

3,803,727

Gross profit

1,658,277

1,785,706

Selling, general and administrative expenses

1,162,461

1,212,156

495,816

573,550

Interest income

1,653

2,515

Dividend income
Contribution received for operations performed bydispatched employees

5,352

5,820

2,517

3,003

Reversal of allowance for doubtful accounts

-

6,836

Compensation income-

10,000

Other

8,009

4,656

Total non-operating income

17,532

32,832

Interest expenses

1,626

1,488

Expenses for securities transactions

16,727

12,495

Foreign exchange losses

2,459

2,558

Other

2,454

2,551

Total non-operating expenses

23,267

19,094490,081

587,288

2,099

164

Settlement package-

65,000

Impairment loss

-

2,434

2,099

67,598

Profit before income taxes

487,982

519,690

Income taxes―current

86,864

118,014

Income taxes-deferred-33,362-12,757

Total income taxes

53,501

105,257

Profit434,481

414,432

Profit attributable to owners of parent

434,481

414,432

Operating income
Non-operating income

Non-operating expenses

Ordinary income
Extraordinary loss
Loss on retirement of noncurrent assets

Total extraordinary loss

12

Consolidated Statements of Comprehensive Income

Category

FY 2015(from January 1, 2015 to
December 31, 2015)
Amount(thousand yen)

FY 2016(from January 1, 2016 to
December 31, 2016)
Amount(thousand yen)

Profit434,481

414,432

Other comprehensive income
Valuation difference on available-for-salesecurities
Remeasurements of defined benefit plans, net oftax

12,726-7,560-30,901-24,823-18,174-32,383

416,306

382,049

416,306

382,049--

Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owner of theparentComprehensive income attributable to noncontrolling interests13(3) Consolidated Statements of Changes in Net Assets
FY 2015 (from January 1, 2015 to December 31, 2015)(Thousand yen)
Shareholders’ equity
Capital stock
Balance at the beginning of current
periodCumulative effects of changes inaccounting policies
Beginning balance reflectingchanges in accounting policies

1,093,000

Capital surplus

Retained earnings

Treasury stock

Total shareholders’equity2,899,794

490,098-683,784

3,799,108

30,119
1,093,000

2,899,794

520,21730,119-683,784

3,829,227

Changes of items during the period
Dividends of surplus-26,748-26,748

Profit attributable to owners ofparent434,481434,481

Purchase of treasury stock
Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at the end of current period-13,178-30,002-30,00243,181

30,002--13,178

407,732

13,178407,732

1,093,000

2,886,615

927,950-670,605

4,236,959

Valuation and translation adjustments
Valuation difference Remeasurements of Total valuation and Subscription rights
to shares
on available-fordefined benefit
translation
sale securities
plans
adjustments

Balance at the beginning of current
periodCumulative effects of changes inaccounting policies
Beginning balance reflectingchanges in accounting policies

41,444

106,500

147,944-

Total net assets

3,947,052
30,11941,444

106,500

147,944-3,977,172

Changes of items during the period
Dividends of surplus-26,748

Profit attributable to owners ofparent434,481

Purchase of treasury stock-30,002

Disposal of treasury stock

30,002

Net changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at the end of current period

12,726-30,901-18,174

1,287-16,887

12,726-30,901-18,174

1,287

390,845

54,17075,599129,769

1,287

4,368,017

14

FY 2016 (from January 1, 2016 to December 31, 2016)(Thousand yen)
Shareholders’ equity
Capital stock
Balance at the beginning of current
period

1,093,000

Capital surplus

Retained earnings

Treasury stock

Total shareholders’equity2,886,615

927,950-670,605

4,236,959

Changes of items during the period
Dividends of surplus-40,543-40,543

Profit attributable to owners ofparent414,432

414,432

Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at the end of current period

171

171

-

-

373,889

171

374,060

1,093,000

2,886,615

1,301,839-670,434

4,611,020

Valuation and translation adjustments

Valuation difference Remeasurements of Total valuation and Subscription rights
to shares
translation
defined benefit
on available-foradjustments
plans
sale securities

Balance at the beginning of current
period54,17075,599129,769

1,287

Total net assets

4,368,017

Changes of items during the period
Dividends of surplus-40,543

Profit attributable to owners ofparent414,432

Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at the end of current period

171-7,560-24,823-32,383--32,383-7,560-24,823-32,383-

341,676

46,61050,775

97,386

1,287

4,709,694

15

(4) Consolidated Statements of Cash FlowsFY 2015(from January 1, 2015 to
December 31, 2015)
Amount(thousand yen)

FY 2016(from January 1, 2016 to
December 31, 2016)
Amount(thousand yen)

Profit before income taxes

487,982

519,690

Depreciation and amortization

69,916

65,912

Increase/decrease in provision for bonuses

1,065

16,584

Increase/decrease in provision for loss on order received

2,536-18,016

Increase /decrease in provision for share benefit

9,202

8,816

Compensation income--10,000

Settlement package-

65,000

Impairment loss

-

2,434

-17,658-39,672--6,836

Interest and dividends income-7,006-8,335Interest expenses

1,626

1,488

Loss/gain on sales and retirement of noncurrent assets

2,099

164

-156,751

115,222

Increase/decrease in costs on uncompleted services

11,335-9,883

Increase/decrease in notes and accounts payable―trade34,27520,715

Increase/decrease in advances received on uncompleted services

38,862-7,872

Other

75,55556,207

Subtotal

553,040

771,619

Interest and dividends income received

6,870

8,246

Interest expenses paid

-1,626-1,488--65,000-86,796-79,802307-

471,795

633,575

Category
Cash flows from operating activities

Increase/decrease in net defined benefit liability
Increase /decrease in allowance for doubtful accounts

Increase/decrease in notes and accounts receivable―trade

Settlement package paid
Income taxes paid
Income taxes refund
Net cash provided by (used in) operating activities

16

FY 2015(from January 1, 2015 to
December 31, 2015)
Amount(thousand yen)

Category

FY 2016(from January 1, 2016 to
December 31, 2016)
Amount(thousand yen)

Cash flows from investing activities
Increase/decrease in time deposits

300,000-

Purchase of property, plant and equipment-6,981-20,970

Purchase of intangible assets-28,471-58,588

Proceeds from collection of insurance funds

8,329

6,205

Payments for lease and guarantee deposits-1,451-7,938Proceeds from collection of lease and guarantee deposits

2,136

1,011

Proceeds from redemption of investment securities

200,000

100,000

Purchase of investment securities-300,653-204,592

Other-6,782

193

Net cash provided by (used in) investing activities

166,124-184,679

Purchase of treasury stock-30,002-

Proceeds from disposal of treasury stock

30,002-

Repayments of lease obligations-4,759-16,534

Proceeds from issuance of subscription rights to shares

1,287

-

Cash dividends paid

-26,748-40,543

Net cash used in financing activities-30,220-57,077959-2,933608,659

388,884

Balance of cash and cash equivalents at beginning of the year

1,366,221

1,974,880

Balance of cash and cash equivalents at end of the year

1,974,880

2,363,764

Cash flows from financing activities

Effect of exchange rate change on cash and cash equivalents
Net increase/decrease in cash and cash equivalents17(5) Notes regarding the Consolidated Financial Statements(Matters Affecting the Assumption of a Going Concern)
No applicable items.
(Significant Basic Items for Consolidated Financial Statements)
1. Matters concerning the scope of consolidation(1) Status of consolidated subsidiaries
The Company has one consolidated subsidiary, which is Urushi Co., Ltd.
(2) Status of non-consolidated subsidiaries(i)Name of significant non-consolidated subsidiaries
OEC Consultants Philippines, Inc.
(ii)Reason for exclusion from the scope of consolidation
Non-consolidated subsidiaries are excluded from the scope of consolidation because they are small in scale and their
combined total assets, net sales, profit and loss (in proportion to the equity held) and retained earnings (in proportion
to the equity held) do not have a significant impact on the Company’s consolidated financial statements.
2. Items relating to the application of the equity method(1) Number of non-consolidated subsidiaries and affiliated companies to which the equity method is applied
There are no non-consolidated subsidiaries or affiliated companies to which the equity method is applied.
(2) Significant non-consolidated subsidiaries and affiliated companies to which the equity method is not applied
Significant non-consolidated subsidiaries
OEC Consultants Philippines, Inc.
Significant affiliated companies
Osaka Environ Consulting, INC.
(Reason for not applying the equity method)
The non-consolidated subsidiaries and affiliated companies to which the equity method is not applied are ofsmall scale and from the perspective of such items as profit and loss (in proportion to the equity held) and retained
earnings (in proportion to the equity held) even if such companies are excluded from the application of the equity
method, the impact on the Company’s consolidated financial statements is minimal and the importance of suchcompanies is small in relation to the overall Group. For these reasons such companies are excluded from theapplication of the equity method.
3. Matters concerning business year, etc. of consolidated subsidiaries
The closing date of the business year of consolidated subsidiaries is the same as the consolidated fiscal year end.
4. Matters concerning accounting policies(1) Evaluation standards and evaluation methods of significant assets
1. Securities
Available-for-sale securities(1) Securities with fair market value
Stated by the market value method, based on the market price as of the consolidated account settlement date(valuation differences are reported as a component of net assets, and sales costs are calculated by the moving averagemethod)(2) Securities without fair market value
Stated at cost determined by the moving-average method
2. Inventories
Costs on uncompleted services
Stated at cost determined by the specific identification method (balance sheet amounts are calculated by writing down
the book value of assets that have decreased in profitability)(2) Method of depreciation of important depreciable assets
1. Property, plant and equipment (excluding lease assets)
Declining-balance method
However, buildings (excluding fixtures) acquired on or after April 1, 1998 and facilities attached to buildings andstructures acquired on or after April 1, 2016, are depreciated using the straight-line method. The useful life andresidual value are determined on the same basis as that of the method provided in the Corporation Tax Act.
2. Intangible assets (excluding lease assets)
Software for internal use is amortized using the straight-line method over the estimated internal useful life (five years).
3. Lease assets
Lease assets are amortized using the straight-line method, assuming the lease period as the useful life with a residual18

value of zero.

19

(3) Basis for recording important allowances and provisions
1. Allowance for doubtful accounts
To provide for possible losses resulting from uncollectible receivables, the estimated uncollectible amount is recorded
based on historical default rate with regard to general accounts receivable, and by individually assessing possible
collectability for certain receivables such as loans with default possibility.
2. Provision for bonuses
To prepare for the payment of bonuses to employees, an amount corresponding to the current portion of estimatedbonus payments to employees, out of the estimated future bonus payments, is recorded.
3. Provision for loss on orders received
To prepare for future loss on orders received, an estimated loss amount is recorded when a future loss is probable fororder received outstanding at the end of the fiscal year under review and the amount can be reasonably estimated.
4. Provision for share benefit
To prepare for grant of shares of the Company to employees based on the Share Benefit Regulations, an estimatedamount of share benefit obligation at the end of the fiscal year under review is recorded.
(4) Accounting treatment for retirement benefits
1. Method of attributing the estimated amount of retirement benefits to periods
In calculating retirement benefit obligation, the straight-line attribution is applied to allocate the estimated amount of
retirement benefits to the periods up to the end of the fiscal year under review.
2. Amortization of actuarial differences
Actuarial differences are amortized on a pro-rata basis by the straight-line method over a certain number of years
within the average remaining service years of employees (five years) at the time of recognition in each year, startingin the fiscal year following the fiscal year in which the differences are recognized.
(5) Basis for recording important revenues and expenses
Basis for recording contracts completed
The percentage-of-completion method is applied to construction contracts if the outcome of the progressed portion by
the end of the fiscal year under review is certain (the estimated percentage of completion at the end of the fiscal year
under review is based on the percentage of the cost incurred to the estimated total cost); otherwise the completedcontract method is applied.
(6) Scope of funds in the Consolidated Statements of Cash Flows
Funds in the Consolidated Statements of Cash Flows comprise cash in hand, deposits withdrawable at any time, andeasily cashable short-term investments with small risk of price fluctuation and the maturity date coming within threemonths of the acquisition date.
(7) Other important matters for the preparation of consolidated financial statements
Accounting treatment of consumption taxes, etc.
The tax exclusion method is applied.
(Changes in accounting policies)(Application of accounting standards, etc. for business combination)
The Company has applied the Accounting Standard for Business Combinations” (ASBJ Statement No. 21,
September 13, 2013), the “Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22,
September 13, 2013), and the “Accounting Standard for Business Divestitures” (ASBJ Statement No. 7,
September 13, 2013), and others from the beginning of the consolidated fiscal year under review. Accordingly, theCompany has changed the presentation of profit and other related items and the presentation of “minority
interests” to “non-controlling interests.” To reflect this change in presentation, accounts have been reclassified in
the consolidated financial statements for the previous fiscal year.
(Application of the Practical Solution on a Change in Depreciation Method Due to Tax Reform 2016)
In accordance with the revision to the Corporation Tax Act, the Company has applied the “Practical Solution
on a Change in Depreciation Method Due to Tax Reform 2016” (Practical Issues Task Force No. 32, June 17,2016) from the beginning of the consolidated fiscal year under review. Accordingly, the Company has changed thedepreciation method for facilities attached to buildings and structures acquired on or after April 1, 2016 from thedeclining-balance method to the straight-line method. The effect of this change on the Company’s consolidated
financial statements for the consolidated fiscal year under review is immaterial.

20

(Additional information)(Transactions of Delivering the Company’s Treasury Stock to Employees, etc. through Trusts)
The Company conducts transactions to deliver its own stock to the employee stock ownership plan through atrust for the welfare benefit of employees. The Company has applied the “Practical Solution on Transactions ofDelivering the Company’s Own Stock to Employees etc. through Trusts” (Practical Issues Task Force No. 30,
March 26, 2015) with respect to the accounting treatment for the said trust agreement. Accordingly, the Company
recognizes the difference arising from the disposal of treasury shares by the Company to the trust, and posts asliabilities the net amount of gain or loss from sales of shares sold by the trust to the employee stock ownershipplan, dividends paid by the Company for the shares held by the trust, and miscellaneous expenses related to thetrust.
(1) Outline of the transactions
Under this program, the Company grants its own stock to employees who meet certain requirements for
eligibility in accordance with predetermined stock benefit rules.
The Company grants points to employees based on individual performance, and employees receive thenumber of shares of the Company’s stock equivalent to such points accumulated when they meet certain eligibility
requirements. Shares to be granted to employees, including the portion of shares to be granted in the future, aremanaged separately as trust assets through purchases using money held in trust in advance.
The adoption of this program is expected to help increase interest in the Company’s share price andperformance improvements among employees, and motivate them to work with even greater enthusiasm.
(2) The Company’s own stock held in trust
The Company’s own stock held in trust is recorded as treasury stock under net assets at book value in thetrust (after deduction of associated expenses). Regarding book value and number of shares of such own stock of
the Company, there were 70,100 shares with a book value of 30,002,000 yen at the end of December 31, 2015, and69,700 shares with a book value of 29,831,000 yen at the end of December 31, 2016.
(Segment Information)
Segment Information
Previous fiscal year (January 1 to December 31, 2015) and fiscal year under review (January 1 to December 31,
2016)
Since the OEC Group’s business operations comprising engineering consulting and related services are conductedwithin a single business segment, segment information is omitted.
(Per Share Information)
FY 2015(from January 1, 2015 to
December 31, 2015)

FY 2016(from January 1, 2016 to
December 31, 2016)

Net assets per share¥653.00

Net assets per share¥704.06

Profit per share¥64.97

Profit per share¥61.97Since there are no residual securities, no figures are shownfor profit per share—diluted.

Note:

Since there are no residual securities, no figures are shownfor profit per share—diluted.

1. The basis for calculation of profit per share is as follows.
FY 2015(from January 1, 2015
to December 31, 2015)
434,481

FY 2016(from January 1, 2016
to December 31, 2016)
414,432--

434,481

414,432

6,687,133

6,687,411

2. The basis for calculation of net assets per share is as follows.
FY 2015(from January 1, 2015
to December 31, 2015)
Net assets for the period (thousand yen)
4,368,017

FY 2016(from January 1, 2016
to December 31, 2016)
4,709,694

Profit for the period (thousand yen)Amount not attributed to common shareholders (thousand yen)
Profit attributable to owners of parent attributed to common
stock (thousand yen)
Average number of common stock outstanding (shares) during
the period

Note:

Deduction amount from total net assets (thousand yen)

1,287

1,287

(of which the amount of subscription rights to shares)(1,287)(1,287)21

Net assets attributed to common stock (thousand yen)
4,366,729
4,708,406
Number of common stock outstanding at end of the period
6,687,133
6,687,533(shares)
The Company’s shares held in trust that are recognized as treasury stock within shareholders’ equity are included in thetreasury stock deducted from the calculation of the average number of shares outstanding during the period, used for
calculating profit per share (70,100 shares as of December 31, 2015 and 69,700 shares as of December 31, 2016).
The Company’s shares held in trust that are recognized as treasury stock within shareholders’ equity are included in thetreasury stock deducted from the number of shares outstanding at end of the period, used for calculating “net assets per
share” (70,100 shares as of December 31, 2015 and 69,700 shares as of December 31, 2016).

(Significant Subsequent Events)
No applicable items.

22

6. OTHER(1) Changes in Directors
1. Changes in Representative Directors
No applicable items.
2. Other Changes in Directors
No applicable items.

(2) Orders Received/Sales
1. Consolidated Orders Received
Consolidated orders received are as follows.
(Thousand yen)
Department
Engineering Consultant:
Water supply and sewerage system(feasibility studies, master plans,detailed design and construction
supervision surveillance)
OthersSubtotal
Information Processing:
Data management of urban
facilities and softwaredevelopment
Subtotal
Total

FY 2015(from January 1, 2015
to December 31, 2015)

FY 2016(from January 1, 2016
to December 31, 2016)

Orders received

Order backlog

Orders received

Order backlog

5,209,547

3,732,808

6,015,323

4,623,050

43,92027,82815,7685,514

5,253,467

3,760,637

6,031,091

4,628,564

501,686

382,684

443,923

408,200

501,686

382,684

443,923

408,200

5,755,153

4,143,321

6,475,015

5,036,764

Notes: 1. The amounts shown are the selling price. Consumption tax is not included.
2. The quantity is not included due to the difficulty in recording.
2. Consolidated Sales
Consolidated sales are as follows.
(Thousand yen)
Department

FY 2015(from January 1, 2015
to December 31, 2015)
AmountEngineering Consultant:
Water supply and sewerage system(feasibility studies, master plans, detailed
design and construction supervision
surveillance)

FY 2016(from January 1, 2016
to December 31, 2016)

Ratio

Amount%Ratio%

4,850,403

89.4

5,132,943

91.8

77,405

1.4

38,0820.7

Subtotal

4,927,809

90.8

5,171,026

92.5

Information Processing:
Data management of urban facilities andsoftware development

499,2139.2

418,407

7.5

Subtotal

499,2139.2

418,407

7.5

Total

5,427,022

100.0

5,589,434

100.0

Others

Notes: 1. The amounts shown are the selling price. Consumption tax is not included.
2. The quantity is not included due to the difficulty in recording.
23