FY 2017 Non-consolidated Financial Results

Year ended December 31, 2017

February 9, 2018

(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 29, 2018
Planned filing of a financial report: March 29, 2018
Date of scheduled payment of dividends: March 30, 2018
Earnings supplementary explanatory documents: None
Earnings presentation: None

Nobuhiko Suga
Kaoru Kira

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

1. NON-CONSOLIDATED FINANCIAL RESULTS FOR FY 2017 (January 1, 2017 to December 31, 2017)(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

%

6,256

12.0

1,012

77.8

1,017

73.8

973

135.6

5,588

3.0

569

15.9

585

19.9

413

-4.6

FY 2017 ended
December 31, 2017
FY 2016 ended
December 31, 2016

FY 2017 ended
December 31, 2017
FY 2016 ended
December 31, 2016

Profitper share-basic
Yen

Profitper share-diluted
Yen

145.5061.77

incomeReturn on equity Ordinary
to total assets

Operatingmargin%%%145.16

19.0

15.6

16.2

-

9.2

10.1

10.2

(Reference) Gain (loss) on investment by equity method: FY 2017: ¥- million

FY 2016: ¥- million(2) Non-consolidated Financial Position
Total assets
Million yen

Net assets
Million yen

7,006

5,584

79.7

834.66

4,652

76.6

695.54As of December 31, 2017

6,073

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

As of December 31, 2017: ¥5,583 million(3) Non-consolidated Cash Flows

Net assets per share
Yen

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

Cash flows frominvesting activities
Million yen

Cash flows fromoperating activities
Million yen

Shareholders’ equity ratio%

Cash flows fromfinancing activities
Million yen

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

FY 2017 ended
434
133
-75
2,798
December 31, 2017
FY 2016 ended
December 31, 2016
Consolidated financial results were disclosed in the summary of financial results for FY 2016 ended December 31. However, from thefirst quarter of FY 2017 ended December 31, non-consolidated financial results are disclosed. Therefore, the status of cash flows for FY
2016 ended December 31 is not shown.

2. DIVIDENDS(Record date)
FY 2016 ended
December 31, 2016
FY 2017 ended
December 31, 2017
FY 2018 ending
December 31, 2018 (Forecast)End offirst quarter
Yen

Dividends per share
End of third Fiscal
Interimquarter year-end
Yen
Yen
Yen

Full
year
Yen

Total dividend
amountPayout ratio(Full year)

Ratio ofdividends to
net assets

Million yen

%

%

-

0.00

-

8.00

8.00

54

13.0

1.1

-

0.00

-

12.00

12.00

81

8.2

1.4

-

0.00

-

14.00

14.00

16.4

3. FORECAST OF NON-CONSOLIDATED RESULTS FOR FY 2018 (January 1, 2018 to December 31, 2018)(Percentages represent changes from the same period of the previous fiscal year)
Operating income
Ordinary income
ProfitProfit per share

Net sales
Full year

Million yen%

Million yen%

Million yen%

Million yen

%

Yen

6,400

2.3

900

-11.1

900

-11.5

570

-41.4

85.22

*NOTES(1) Changes in accounting policies, changes in accounting estimates and retrospective restatements:(i) Changes in accounting policies in accordance with revision of accounting standards: None(ii) Changes in accounting policies other than (i) above: None(iii) Changes in accounting estimates: None(iv) Retrospective restatements: None

(2) Number of outstanding shares (Common stock)(i) Number of shares outstanding at end of period, including treasury stock
As of December 31, 2017: 7,796,800 shares
As of December 31, 2016: 7,796,800 shares(ii) Number of shares of treasury stock at end of period
As of December 31, 2017: 1,107,735 shares
As of December 31, 2016: 1,109,267 shares(iii) Average number of shares outstanding for each period
As of December 31, 2017: 6,688,330 shares
As of December 31, 2016: 6,687,411 shares* The summary of financial results is not subject to audit procedures.
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. SUMMARY OF BUSINESS RESULTS,” “(4) Future Outlook” on page 5 of the
Attachment.

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

SUMMARY OF BUSINESS RESULTS ................................................................................................................2
Summary of Business Results for Current Period .....................................................................................................2
Summary of Financial Position for Current Period ...................................................................................................4
Summary of Cash Flows for Current Period .............................................................................................................4
Future Outlook ..........................................................................................................................................................52.

BASIC POLICY FOR THE SELECTION OF ACCOUNTING STANDARDS ................................................5

3.
(1)
(2)
(3)
(4)
(5)

FINANCIAL STATEMENTS AND KEY NOTES
Non-consolidated Balance Sheets .............................................................................................................................6
Non-consolidated Statements of Operations .............................................................................................................8
Non-consolidated Statements of Changes in Net Assets ...........................................................................................9
Non-consolidated Statements of Cash Flows ............................................................................................................11
Notes regarding the Non-consolidated Financial Statements ....................................................................................13(Matters Affecting the Assumption of a Going Concern) ......................................................................................13(Changes in Presentation) ......................................................................................................................................13(Segment Information)...........................................................................................................................................13(Profit and Loss under Equity Method) .................................................................................................................13(Per Share Information) .........................................................................................................................................14(Significant Subsequent Events) ............................................................................................................................14

1

1. SUMMARY OF BUSINESS RESULTS(1) Summary of Business Results for Current Period
According to the Bank of Japan’s Tankan survey in December 2017, the diffusion index (DI) for major
manufacturing firms advanced three percentage points from the September 2017 survey to 25 percentage points, andfor major non-manufacturing firms it levelled off at 23 percentage points from the previous survey. Meanwhile, theDI for small and medium-sized enterprises improved for both manufacturing and non-manufacturing industries, with
the DI for small and medium-sized manufacturers advancing five percentage points from the previous survey to 15
percentage points and that of non-manufacturers improving one percentage point to nine percentage points. The DI
forecast for the next three months dropped six percentage points for major manufacturers and three percentage
points for major non-manufacturers, indicating that many companies are concerned about the increased shortage ofmanpower and cautious about future business conditions.
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 2017. The total
budgets earmarked for “disaster prevention and safety subsidies” and “general social infrastructure development
subsidies” were roughly on the same level as fiscal 2016. The total amount of the water and sewerage works
expenses budget of ordinance-designated cities across Japan and Tokyo’s special wards increased 2.4% from fiscal
2016. 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.
In Japan, 90.4 percent of the population has access to sewage treatment facilities (as of the end of 2016), only
78.3 percent of which has access to sewers. Currently, there are approximately 12 million people who do not haveaccess to sewage treatment facilities, and therefore it is necessary to promote sewage services. There has been lessdemand for establishing new facilities. However, many water and sewage facilities that were built rapidly during thehigh-growth period are reaching the end of their useful life. In view of this, it is necessary to maintain and renew
these infrastructure assets, which are indispensable to ensuring a safe, reliable and cultural living environment. In
addition, there are growing new needs including flood control measures for protecting human lives and assets fromlocalized torrential rain that have recently been occurring frequently, anti-seismic measures such as building quakeresistant toilet facilities, and water and sewerage systems reinforcement measures for building tsunami-resistantfacilities.
On the other hand, most of the population has access to water supplies and the total length of water pipes inJapan is around 660,000 kilometers. However, the national average annual rate of renewing water pipes is as low as
0.76 percent, which means that it will take approximately 130 years to renew all the water pipes. Water pipes have astatutory useful life of 40 years. However, the progress with renewing many water pipe facilities that were built
during the high-growth period has been slow, and these water pipes are likely to deteriorate further. Therefore, it isimportant to renew aged water pipes for providing a stable supply of safe water.
The Company, 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 Company 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 Company 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 Company’s internal organization, the Company strove to distribute profits to employees andimprove revenue by boosting productivity 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 as-needed basis, appropriate budget management for order-received projects,
process management, outsourcing management, upgrading skills of in-house engineers, securing and fostering
young human resources who will lead the next generation, addressing the issue of working long hours with which
the government is also concerning itself, creating an internal scheme and office environment aimed at achieving agood work-life balance so as to allow each employee to work flexibly and have a sense of fulfillment, and expanding
external networks.
As a result, Non-consolidated orders received during the fiscal year under review amounted to ¥6,547 million,2

an increase of 1.1% compared with the previous fiscal year, and net sales increased 12.0%, to ¥6,256 million.
Operating income amounted to ¥1,012 million, an increase of 77.8% compared with the previous fiscal year, andordinary income increased 73.8%, to ¥1,017 million. Profit amounted to ¥973 million, an increase of 135.6%
compared with the previous fiscal year.

Results by operating division were as follows.
[Engineering Consultant Department]
The Engineering Consultant Department received orders totaling ¥6,155 million during the fiscal year underreview, an increase of 2.1% compared with the previous fiscal year. Sales by the department increased 13.7%, to¥5,877 million.
[Information Processing Department]
In the Information Processing Department, orders received decreased 11.7% compared with the previous fiscal
year, to ¥391 million. Sales by the department decreased 9.5%, to ¥378 million.

3(2) Summary of Financial Position for Current Period
Cash and cash equivalents stood at ¥2,798 million at the end of the fiscal year under review. Significant factors
contributing to this change included the posting 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 ¥434 million.
The main factor contributing to this change was the posting of profit before income taxes.
(Cash flows from investing activities)
Net cash provided in investing activities totaled ¥133 million.
This is mainly due to ¥200 million in proceeds from redemption of investment securities.
(Cash flows from financing activities)
Net cash used in financing activities amounted to ¥75 million.
The main item was cash dividends paid amounting to ¥54 million.

(3) Summary of Cash Flows for Current Period
FY 2017
Shareholders’ equity ratio (%)

79.7

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

66.1

Interest-bearing debt to cash flow ratio (years)

0.16

Interest coverage ratio (times)

224.54

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. 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).
2. Cash flows in these indicators refer to net cash from operating activities as stated in the Non-consolidated
Statements of Cash Flows. Interest-bearing liabilities are all liabilities presented on the Non-consolidated Balance
Sheets that are subject to interest expenses. Interest payments are those stated in the Non-consolidated Statementsof Cash Flows.

4(4) Future Outlook
The national budget for disaster prevention and safety subsidies allocated to operating expenses of local
governments and social infrastructure improvement subsidies is expected to remain at the same level. In light of suchexternal environmental business factors affecting orders, the Company’s target project budget is likely to be guaranteed.
However, the majority of orders are placed through price competitive auction, which leads to an increase in competition
among firms, fluctuation of bidding prices, and an increase in sales cost since orders are customization-oriented. Hence,
the Company anticipates a continuing harsh environment for achieving sales order and profit targets.
The Company, meanwhile, has achieved a year-on-year increase in productivity both on an individual employee
level and on an organizational level through company-wide awareness reforms aimed at achieving the objectives ofevery employee working with a sense of management and establishing an organization with an open culture which havebeen consistently pursued under the present management structure, and the provision of pleasant working conditions
and a good in-house system. In response to the aging of technical resources, it is important to pass on their techniquesand secure the next generation of human resources. Accordingly, under the leadership of the top management, theCompany will work to solve management issues by implementing a new graduate recruitment program in collaboration
with younger employees, and actively recruiting mid-career workers. Furthermore, the Company will aim to obtainsustainable orders and increase revenue by offering high-quality services meeting customer needs and thereby making acontribution to the development of water and sewage infrastructure business, which is vital for increasing customer
satisfaction and indispensable for social life.
Water supply and sewerage budgets, the Company’s main business target, are expected to place emphasis on, forexample, building water supply and sewerage facilities in areas without them, earthquake- and disaster preventionrelated measures, programs to address an aging infrastructure, support services to reinforce operating foundations, andenhancing the vitality of local communities. Hence, the Company will aggressively carry out sales programs to meetsuch needs and strengthen its production system. At the same time, the Company will, in consideration of profitability,
engage in overseas water-related business, mainly in emerging Asian countries, where economic development isremarkable and demand for water supply and sewerage infrastructure is expected to grow.
In the fiscal year ending December 31, 2018, the Company forecasts orders to decrease 3.8%, to ¥6,300 million,
and net sales to increase 2.3%, to ¥6,400 million. Operating income is forecast to decrease 11.1%, to ¥900 million, andordinary income to decrease 11.5%, to ¥900 million. Profit is forecast to decrease 41.4%, to ¥570 million. The decreasein profit is mainly due to an increase in tax expenses.

2. 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.

5

3. FINANCIAL STATEMENTS AND KEY NOTES(1) Non-consolidated Balance Sheets

Category

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

FY 2017(as of December 31, 2017)
Amount(thousand yen)

AssetsCurrent assets
Cash and deposits

3,022,855

3,514,747

Accounts receivable—completed operation

1,571,580

2,106,765

Costs on uncompleted services

12,622-

Prepaid expenses

30,41629,060

Deferred tax assets

136,739

161,649

Advances receivable from group affiliates

222

214

241,424

44,893--19,000

5,015,861

5,838,330

Buildings, net

132,482

160,732

Structures, net

0

0

Land

14,981150,015

15,090150,015

Lease assets, net

58,851

61,537

Total property, plant and equipment

356,330

387,376

3,321

3,321

Software104,089

98,485

Lease assets

8,364

6,996

Telephone subscription right

3,711

3,711

119,486

112,514

Investment securities

296,039

312,253

Shares of subsidiaries and associates

52,31352,313Long-term loans receivable from employees

6,866

8,287

Insurance funds

62,88560,973

Guarantee deposits

135,044

135,393

481

589

-

71,937

Other

30,56928,769Allowance for doubtful accounts-2,200-2,200Total investments and other assets

582,000

668,319

1,057,818

1,168,210

6,073,679

7,006,540

Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment

Tools, furniture and fixtures, net

Intangible assets
Leasehold right

Total intangible assets
Investments and other assets

Long-term prepaid expenses
Deferred tax assets

Total noncurrent assets
Total assets

6Category

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

FY 2017(as of December 31, 2017)
Amount(thousand yen)

Liabilities
Current liabilities
Accounts payable—operating

223,309263,748

Lease obligations

19,832

24,150Accounts payable - other

125,553

55,947

Accrued expenses

140,976

144,805

Income taxes payable

89,189135,729

Accrued consumption taxes

86,13533,352

Advances received on uncompleted contracts

215,306

295,722

Deposits received

74,11990,876

Provision for bonuses

35,12936,120

Provision for loss on order received

20,527

17,3151,030,078

1,097,767

Lease obligations

48,29245,585

Deferred tax liabilities

19,027-

Provision for share benefit

18,01825,252

Provision for retirement benefits

250,255

197,051

Long-term accounts payable - other

8,400

8,400

Asset retirement obligations

46,88948,097

Total current liabilities
Noncurrent liabilities

Total noncurrent liabilities

390,882

324,386

1,420,961

1,422,154

1,093,000

1,093,000

Legal capital surplus

2,171,308

2,171,308

Other capital surplus

715,307715,307

Total capital surpluses

2,886,615

2,886,615

1,295,639

2,214,757

Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus

Retained earnings
Other retained earnings
Retained earnings brought forward

1,295,639

2,214,757

Treasury stock

Total retained earnings-670,434-669,783

Total shareholders’ equity

4,604,820

5,524,589

Valuation difference on available-for-salesecurities

46,61058,509Total valuation and translation adjustments

46,61058,509Subscription rights to shares

1,287

1,287

Total net assets

4,652,717

5,584,386

Total liabilities and net assets

6,073,679

7,006,540

Valuation and translation adjustments7(2) Non-consolidated Statements of Operations

Category

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

FY 2017(from January 1, 2017 to
December 31, 2017)
Amount(thousand yen)Contracts completed

5,588,597

6,256,438

Cost of completed work

3,807,609

3,986,812

Gross profit

1,780,988

2,269,625

Selling, general and administrative expenses

1,211,558

1,257,380

569,430

1,012,245

Operating income
Non-operating income
Interest and dividend income
Contribution received for operations performed bydispatched employees

8,329

6,644

3,003

3,210

Compensation income

10,000-Insurance income

-

3,000

Commission fee

2,430

2,430

Reversal of allowance for doubtful accounts

6,836

-

Other

4,383

6,514

Total non-operating income

34,983

21,799Interest expenses

1,488

1,934

Expenses for securities transactions

12,495

11,650Foreign exchange losses

2,558

891

Other

2,551

2,191

Total non-operating expenses

19,094

16,668585,319

1,017,376

164

30

Settlement package

65,000-

Impairment loss

2,434

-

Total extraordinary loss

67,59830

Profit before income taxes

517,720

1,017,345

Income taxes―current

117,399

164,360

Income taxes-deferred-12,757-120,190

Total income taxes

104,642

44,169Profit413,078

973,175

Non-operating expenses

Ordinary income
Extraordinary loss
Loss on retirement of noncurrent assets8(3) Non-consolidated Statements of Changes in Net Assets
FY 2016 (from January 1, 2016 to December 31, 2016)(Thousand yen)
Shareholders’ equity
Capital surplus

Retained earnings

Capital stock

Legal capitalsurplus

Other capitalsurplus

Total capitalsurpluses

Other retained
earnings
Retained earnings
brought forward

Total retained
earnings

1,093,000

2,171,308

715,3072,886,615

923,104

923,104

Dividends of surplus-40,543-40,543

Profit413,078

413,078

Balance at the beginning ofcurrent period
Changes of items during theperiodPurchase of treasury stock
Disposal of treasury stock
Net changes of items otherthan shareholders’ equity
Total changes of items during
the period
Balance at the end of current
period----372,535

372,535

1,093,000

2,171,308

715,3072,886,615

1,295,639

1,295,639

Subscription
rights to shares

Total net assets

1,287

4,287,572

Valuation and translation
adjustments

Shareholders’ equity

Balance at the beginning ofcurrent period
Changes of items during theperiodTreasury stock

Total
shareholders’equityValuationdifference on
available-forsale securities

Total valuationand translation
adjustments-670,605

4,232,113

54,17054,170

Dividends of surplus-40,543-40,543

Profit413,078

413,078

171

171

Purchase of treasury stock
Disposal of treasury stock
Net changes of items otherthan shareholders’ equity
Total changes of items during
the period
Balance at the end of current
period171-7,560-7,560-7,560171

372,706-7,560-7,560-365,145-670,434

4,604,820

46,61046,6101,287

4,652,717

9

FY 2017 (from January 1, 2017 to December 31, 2017)(Thousand yen)
Shareholders’ equity
Capital surplus

Retained earnings

Capital stock

Legal capitalsurplus

Other capitalsurplus

Total capitalsurpluses

Other retained
earnings
Retained earnings
brought forward

Total retained
earnings

1,093,000

2,171,308

715,3072,886,615

1,295,639

1,295,639

Dividends of surplus-54,057-54,057

Profit973,175

973,175

Balance at the beginning ofcurrent period
Changes of items during theperiodPurchase of treasury stock
Disposal of treasury stock
Net changes of items otherthan shareholders’ equity
Total changes of items during
the period
Balance at the end of current
period----919,118

919,118

1,093,000

2,171,308

715,3072,886,615

2,214,757

2,214,757

Subscription
rights to shares

Total net assets

1,287

4,652,717

Valuation and translation
adjustments

Shareholders’ equity

Balance at the beginning ofcurrent period
Changes of items during theperiodTreasury stock

Total
shareholders’equityValuationdifference on
available-forsale securities

Total valuationand translation
adjustments-670,434

4,604,820

46,61046,610

Dividends of surplus-54,057-54,057

Profit973,175

973,175

Purchase of treasury stock

-33

-33

-33

Disposal of treasury stock

684

684

684

Net changes of items otherthan shareholders’ equity
Total changes of items during
the period
Balance at the end of current
period11,89911,89911,899651

919,769

11,89911,899-931,668-669,783

5,524,589

58,50958,5091,287

5,584,386

10

(4) Non-consolidated Statements of Cash FlowsFY 2017(from January 1, 2017 to
December 31, 2017)
Amount(thousand yen)

Category
Cash flows from operating activities
Profit before income taxes

1,017,345

Depreciation and amortization

74,716

Increase /decrease in allowance for doubtful accounts

19,000Interest and dividends income-6,644

Interest expenses

1,934

Loss on retirement of property, plant and equipment

30

Increase/decrease in notes and accounts receivable―trade-535,184

Increase/decrease in costs on uncompleted services

12,622

Increase/decrease in notes and accounts payable―trade40,438

Increase/decrease in advances received on uncompleted services

80,416

Increase/decrease in provision for bonuses

991

Increase/decrease in provision for loss on order received-3,212

Increase /decrease in provision for share benefit

7,233

Increase/decrease in provision for retirement benefits-53,203

Other-119,534

Subtotal

536,950

Interest and dividends income received

6,644Interest expenses paid

-1,934Compensation income receivable

10,000

Income taxes paid

-117,231

Net cash provided by (used in) operating activities

434,42911

FY 2017(from January 1, 2017 to
December 31, 2017)
Amount(thousand yen)

Category
Cash flows from investing activities
Purchase of property, plant and equipment-39,248

Purchase of intangible assets-28,002

Proceeds from redemption of investment securities

200,000

Payments for lease and guarantee deposits-2,004

Proceeds from collection of lease and guarantee deposits

1,654

Other

719

Net cash provided by (used in) investing activities

133,119

Cash flows from financing activities
Repayments of lease obligations-21,605

Purchase of treasury stock-33

Cash dividends paid

-54,057

Net cash used in financing activities-75,697

Effect of exchange rate change on cash and cash equivalents-20

Net increase/decrease in cash and cash equivalents

491,831

Balance of cash and cash equivalents at beginning of the year

2,306,994

Balance of cash and cash equivalents at end of the year

2,798,82512

(5) Notes regarding the Non-consolidated Financial Statements(Matters Affecting the Assumption of a Going Concern)
No applicable items.
(Changes in Presentation)(Changes related to the presentation of profit and loss statement)
In the previous fiscal year, “commission fee” was included in the “other” item under “non-operating income.”
However, since the amount of commission fee exceeds 10/100 of total non-operating income, “commission fee” isshown as a separate line item in the current fiscal year. In order to reflect such changes in presentation, thereclassification of accounts has been made to the financial statements for the previous fiscal year. As a result,
6,813,000 yen, which was recorded in the “other” item under “non-operating income” in the profit and loss
statement for the previous fiscal year, has been reclassified into 2,430,000 yen under “commission fee” and4,383,000 yen under “other.”(Segment Information)
Segment Information
Previous fiscal year (January 1 to December 31, 2016) and fiscal year under review (January 1 to December
31, 2017)
Since the Company’s business operations comprising engineering consulting and related services are
conducted within a single business segment, segment information is omitted.
(Profit and Loss under Equity Method)
All group affiliates owned by the Company are deemed insignificant group companies by earnings andsurplus standards, and therefore their figures are not shown.

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(Per Share Information)
FY 2017(from January 1, 2017 to
December 31, 2017)¥834.66¥145.50¥145.16

Net assets per share
Profit per share
Diluted profit per shareNote:

1. The basis for calculating profit per share and diluted profit per share is as follows:
FY 2017(from January 1, 2017
to December 31, 2017)
Profit per share
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 for theperiod (shares)

973,175
973,175
6,688,330

Diluted profit per share
Profit adjustment (thousand yen)-

Increase in number of common stock (shares)(of which the amount of subscription rights toshares)(shares)
Overview of dilutive shares not included in the calculation ofdiluted profit per share because of their anti-dilutive effect

15,72915,729-Note:

2. The basis for calculation of net assets per share is as follows:
FY 2017(from January 1, 2017
to December 31, 2017)
Net assets for the period (thousand yen)
5,584,386
Deduction amount from total net assets (thousand yen)
1,287
(of which the amount of subscription rights to(1,287)
shares)(thousand yen)
Net assets attributed to common stock (thousand yen)
5,583,099
Closing number of common stock used in the calculation of
6,689,065
net asset per share (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 (68,848 shares as of December 31, 2017).
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” (68,100 shares as of December 31, 2017).

(Significant Subsequent Events)
No applicable items.

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