February 7, 2023
Year Ended December 31, 2022 FY2022 Non-consolidated Financial Results(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 toauditing standards in the U.S.)
Listed company
name:Code number:
Representative:
Contact person

Original Engineering Consultants Co., Ltd.

Stock listing Tokyo Stock Exchange, Standard Market

4642
(URL
(Title) President & Representative Director (Name)(Name)(Title) Director & General Manager ofFinancial Affairs Division
Planned Annual General Meeting of Shareholders: March 28, 2023
Planned date of payment of dividends: March 29, 2023
Planned filing of a financial report: March 28, 2023
Earnings supplementary explanatory documents: None
Earnings presentation: Nonehttps://www.oec-solution.co.jp)
Nobuhiko Suga
Kaoru Kira
Tel: (03) 6757-8800(Amounts less than ¥1 million are truncated)
1.
NON-CONSOLIDATED FINANCIAL RESULTS FOR FY2022 (January 1, 2022 to December 31, 2022)(1) Non-consolidated Operating Results(Percentages represent year-on-year changes)

FY2022 ended
December 31, 2022
FY2021 ended
December 31, 2021

Net sales
Million yen%

Operating income
Million yen%

Ordinary income
Million yen
%

6,486

4.5

739

28.5

748

6,207

-1.1

575

-13.4

625

Profit per
share-basic
Yen

ProfitMillion yen

%

19.6

415

10.5

-3.4

376

0.2

Profit per shareOrdinary income
Return on equity
Operating margin
dilutedto total assets
Yen
%
%
%

FY2022 ended
70.94
6.9
10.2
December 31, 2022
FY2021 ended
64.38
6.5
8.9
December 31, 2021
(Reference) Gain (loss) on investment by equity method: FY2022: ¥- million FY2021: ¥- million

11.4
9.3

(2) Non-consolidated Financial Position
Total assets

Shareholders’ equity
ratio%

Net assets

Net assets per share

Million yen
Million yen
Yen
As of December 31,
7,598
6,153
81.0
1,047.31
2022
As of December 31,
7,099
5,914
83.3
1,009.67
2021(Reference) Shareholders’ equity: As of December 31, 2022: ¥6,153 million As of December 31, 2021: ¥5,914 million(3) Non-consolidated Cash FlowsFY2022 ended
December 31, 2022
FY2021 ended
December 31, 2021

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Million yen

Million yen

Million yen

Cash and cash
equivalents at the endof the period
Million yen

691

-277

-225

3,026

282

120

-227

2,836

2. DIVIDENDSDividends per share
End of
End of third Fiscal yearsecond
quarterendquarter
Yen
Yen
Yen

Full
year

-

0.00

-

32.00

32.00

190

49.7

3.2

-

0.00

-

32.00

32.00

190

45.1

3.1

-

0.00

-

32.00

32.00

End offirstquarterYen
FY2021 ended
December 31, 2021
FY2022 ended
December 31, 2022
FY2023 ending
December 31, 2023
(Forecast)

Total
Ratio ofdividend Payout dividends
amountratio
to net(Full year)
assetsYen Million yen

%

%

47.0

3. FORECAST OF NON-CONSOLIDATED RESULTS FOR FY2023 (January 1, 2023 to December 31, 2023)(Percentages represent changes from the same period of the previous fiscal year)
Profit per
Net sales
Operating income Ordinary income
Profitshare-basic
Million yen % Million yen% Million yen% Million yen%
Yen
Full year
6,500 0.2
650 -12.1
660 -11.8
400 -3.8
68.08*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: Yes(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, 2022: 7,796,800 shares As of December 31, 2021: 7,796,800 shares(ii) Number of shares of treasury stock at end of period
As of December 31, 2022: 1,921,033 shares As of December 31, 2021: 1,938,573 shares(iii) Average number of shares outstanding for each period
As of December 31, 2022: 5,858,706 shares As of December 31, 2021: 5,841,597 shares* The summary of financial results is not subject to audit by certified public accountants or audit
corporations.
* Note regarding forecasts and forward-looking statements
The business results forecasts presented are based on information available to the Company at the present time andare subject to potential 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 4 of the Attachment.

○ Index of the Attachment
1.

SUMMARY OF BUSINESS RESULTS ..................................................................................................................... 2(1) Summary of Business Results for Current Period .................................................................................................. 2(2) Summary of Financial Position for Current Period ................................................................................................ 3(3) Summary of Cash Flows for Current Period .......................................................................................................... 4(4) Future Outlook ....................................................................................................................................................... 4

2.

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

3.

FINANCIAL STATEMENTS AND PRIMARY NOTES ........................................................................................ 6(1) Non-consolidated Balance Sheet ........................................................................................................................... 6(2) Non-consolidated Statements of Operations........................................................................................................... 8(3) Non-consolidated Statement of Changes in Net Assets .......................................................................................... 9(4) Non-consolidated Statement of Cash Flows ......................................................................................................... 11(5) Notes regarding the Non-consolidated Financial Statements ............................................................................... 12(Matters Affecting the Assumption of a Going Concern).................................................................................... 12(Changes in Accounting Policies)........................................................................................................................ 12(Change in presentation method) ......................................................................................................................... 12(Segment Information) ......................................................................................................................................... 13(Profit and Loss under Equity Method) ............................................................................................................... 13(Per Share Information) ....................................................................................................................................... 13(Significant Subsequent Events) .......................................................................................................................... 13

1

1.

SUMMARY OF BUSINESS RESULTS(1)

Summary of Business Results for Current Period

According to a provisional calculation of the Cabinet Office, Japan’s water and sewerage infrastructure assets
amount to approximately ¥130 trillion, which indicates that the water and sewerage infrastructure stock is the secondlargest infrastructure stock in the country by sector after the road infrastructure stock. Among these, most of the population
has access to water supplies, with the total length of water pipes reaching around 730,000 kilometers across Japan.
However, the national average annual rate of renewing water pipes is as low as 0.67%, which means that it will take almost
130 years to renew all of these pipes. The statutory useful life of water pipes is 40 years, but they are expected todeteriorate further due to the slow progress in renewing the water pipe infrastructure, much of which was built during thehigh-growth period. Therefore, renewing aged water pipes has become an important issue for the stable supply of safe
water.
In the sewage field, 92.6% of the population of Japan has access to sewage treatment facilities (as of the end of
FY2021), but only 80.6% has access to sewers, which means nearly 9,300,000 people still live without access to sewage
treatment facilities; promoting sewage services needs to be accelerated. While the need to construct new facilities is on thedecrease, a great number of water and sewage facilities that were rapidly built during the high-growth period are reaching
the end of their useful lives every year. Maintenance and renewal of these infrastructure assets, which are indispensable for
ensuring a safe, secure, and culturally strong living environment, are thus in demand. In addition, needs are growing forflood control measures to protect human lives and assets from localized torrential rainfall and large typhoons, which haveoccurred frequently in recent years, anti-seismic measures such as quake-resistant toilet facilities, measures for reinforcing
water and sewerage systems to make them tsunami resistant, and initiatives to create “green innovation sewerage systems”
in line with a shift to a decarbonized and recycling-oriented society.
Out of Japan’s national budget for FY2022, passed and enacted in March 2022, the total amount to be allocated to“General Social Infrastructure Development,” including the water and sewage budget, which is closely connected with thebusiness of the Company, is a national expenditure of ¥1,381.3 billion. This amount is broken down into ¥800.9 billion fordisaster prevention and safety subsidies and ¥580.3 billion for general social infrastructure development subsidies.
Since where subsidies will be spent is left to the discretion of local government, the allocated amount dedicated towater and sewage operations is not known. On the other hand, the total of sewage operational costs in ordinancedesignated cities with a large budget across the country and the Tokyo metropolitan area is ¥620.2 billion, an increase of
1.4% from the beginning of the previous year.
The Company, in this operating environment, has been working aggressively to win orders mainly in the watersupply field, particularly for services related to asset management in line with the Water Supply Division of the 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 pursues orders in line with the seven 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 operations;strengthening sewerage management; promoting measures to achieve a low-carbon, recycling-oriented society; and,promoting international water businesses through globalization and private-public initiatives. We also make efforts toobtain orders for services related 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 operations including those to formulate a strategy for sewerage operation management. In
the domestic market, we are doubling down on sales activities to cultivate new fields and customers, based on our longtrack record, while capturing project orders that have high order-repeat rates through offering fine-tuned technological
proposals and flexible customer service. We do this on the back of our superiority resulting from an accumulated
knowledge of the status of facility development and operational issues in local public entities who are our existingcustomers. In overseas markets, the Company has been working to win orders by tapping into projects in emerging nations
through public-private partnerships.
On the other hand, with regard to its internal work environment, the Company has provided 90% of its employeeswith smartphones and notebook PCs and created an office environment with free address (no assigned seating). So,
employees can work at home and outside the office using a teleworking environment. Specifically, the Company isproviding the following internal systems: facilitating prompt information-sharing and chatting between different levels, on
which the Company has worked to raise awareness internally; speedily responding to departmental issues by checking
management benchmarks by department when necessary; conducting appropriate budget management, process control,
progress management, and outsourcing management for orders received for projects; upgrading in-house engineers’ skills;
securing and fostering young employees who will lead the next generation; reducing overtime to comply with the revised
Labor Standards Act; promoting well-being management; utilizing internal systems, such as a staggered working hours
system; and promoting the use of paid leave, by which each employee can work flexibly according to his/her own
circumstances. In this period, we further improved the program of our internal business management system to digitize theapproval function of each business workflow from receiving an order for design work, starting the project, preparing andchanging the working budget, and then completing the project, thereby accelerating the budget management. Throughthese efforts, we are striving to improve productivity and reduce costs, and to increase employee returns and earnings.
In the first half of the fiscal year, the impact of government-led efforts to prevent the spread of COVID-19 inJapan, which continued from the previous year, sometimes affected customer response. Further, employees and theirfamily members were infected with the novel coronavirus or came into close contact with it, which sometimes affected2business progress. However, we continued our business activities by taking measures that give full consideration to thesafety and security of our employees under a well-developed internal system. As a response measure to projects that
require various types of expertise, the Company made efforts to build a more efficient production system, leveraging theCompany’s human resources in distant offices by making effective use of online meetings.
In Japan, from April when the fiscal period for public offices starts, the business budgets of local governments
related to the Company were generally carried out as planned, and our order-taking activities went well. On the other hand,with regard to overseas projects, on-site works have progressed because traveling was permitted to some regions wheretravel restrictions were eased.
As a result, orders received during the fiscal year amounted to ¥6,457 million (up 1.9% year-on-year). We believethat the main factors for the increase in orders were the increase in the average unit price of orders received and the receiptof large projects. On the other hand, net sales of completed contracts totaled ¥6,486 million (compared with ¥6,207 million
in the previous fiscal year), operating income came to ¥739 million (compared with ¥575 million in the previous fiscal
year), ordinary income was ¥748 million (compared with ¥625 million in the previous fiscal year), and profit totaled ¥415
million (compared with ¥376 million in the previous fiscal year).
Results by operating division were as follows.
[Engineering Consultant Department]
The Engineering Consultant Department received total orders of ¥6,057 million (up 4.6% year-on-year).
Meanwhile, net sales of completed contracts amounted to ¥5,982 million (¥5,763 million in the previous fiscal
year).
[Information Processing Department]
In the Information Processing Department, orders received were ¥400 million (down 26.5% year-on-year). And
net sales of completed contracts amounted to ¥503 million (¥443 million in the previous fiscal year).

(2)

Summary of Financial Position for Current Period(Current assets)
Current assets for fiscal year totaled ¥6,131 million (up 5.2% from the previous fiscal year). The main factors
contributing to this change included an increase in “cash and deposits” due to the receipt of payment for
operations.
(Noncurrent assets)
Noncurrent assets for the fiscal year stood at ¥1,466 million (up 15.2% year-on-year). This was mainly due to anincrease in “investment securities” through the acquisition of investment securities.
(Current liabilities)
Current liabilities for the fiscal year amounted to ¥1,314 million (up 32.3% year-on-year). This was mainly due
to an increase in “accounts payable–operating” caused by an increase in outsourcing expenses, as well as anincrease in “advances received on uncompleted contracts” due to an increase in receipts of proceeds frombusiness operations.
(Noncurrent liabilities)
Noncurrent liabilities for the fiscal year amounted to ¥129 million (down 32.2% year-on-year). The main factors
contributing to this change included a drop in “lease obligations” due to a decrease in lease contracts and adecrease in “provision for retirement benefits.”(Net assets)
Net assets for FY2022 were ¥6,153 million (up 4.0% year-on-year). This was mainly due to an increase in“retained earnings” resulting from the posting of profit.

3

(3)

Summary of Cash Flows for Current Period
The balance of cash and cash equivalents (hereinafter “funds”) at the end of the fiscal year was ¥3,026 million(up 6.7% year-on-year).
The status of each cash flow in the current fiscal year and its factors are as follows:(Cash flows from operating activities)
Funds obtained from operating activities amounted to ¥691 million (up 144.9% year-on-year).
This was mainly due to the recording of income before income taxes, an increase in trade receivables, and anincrease in advances received on uncompleted contracts.
(Cash flows from investing activities)
Funds used by investing activities amounted to ¥277 million (acquisition of ¥120 million in the previous fiscal
year).
This was mainly due to the acquisition of investment securities and noncurrent assets.
(Cash flows from financing activities)
Funds used by financing activities amounted to ¥225 million (down 1.0% year-on-year).
The main factor contributing to this change was the payment of cash dividends.
FY2020Shareholders’ equity ratio (%)
Shareholders’ equity ratio on a market value basis (%)
Interest-bearing debt to cash flow ratio (years)
Interest coverage ratio (times)

81.2
81.1
-

FY2021 ended
FY2022 ended
December 31, 2021 December 31, 2022
83.3
81.0
82.2
62.2
0.39
0.12
86.41
251.05

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 closing stock price at end of period by the number ofshares issued at end of period (excluding treasury stock).
2. Cash flows from operating activities are used in the Non-consolidated Statement of Cash Flows. Interest-bearing
liabilities are all liabilities presented on the Non-consolidated Balance Sheet that are subject to interest expenses.
For interest payments, the amount of interest paid on the Non-consolidated Statement of Cash Flows is used.

(4)

Future Outlook

According to the outline of the Ministry of Land, Infrastructure, Transport and Tourism’s fiscal 2023 budget
for public works projects, which has close ties with projects in our company, ¥831.3 billion (1.02 times year on year) in
the Disaster Prevention and Safety Grant and ¥549.2 billion (0.94 times year on year) in the General Grant for Social
Infrastructure Development are expected to be appropriated for sewerage projects by local governments. On the other
hand, expenses related to sewerage increased by ¥77,300 million, 1.41 times more than the previous fiscal year, mainly
due to expenses for strengthening measures against flooding by sewerage.
In fiscal 2022, the third year of COVID-19, the impact of the pandemic on social and economic activities has
decreased, and the budgets related to water supply and sewerage projects by local governments were generally
executed as budgeted. These included countermeasures to combat aging and give earthquake resistance to facilities,
resolving the underdevelopment of sewage systems, countermeasures against flooding of inland waters, expansion ofarea coverage and communalization, and countermeasures against infiltration during rainy weather, decarbonization.
The Company expects this trend will continue in fiscal 2023 as well.
In order to respond to these needs, the Company will strive to resolve social issues not only in its main watersupply and sewerage field but also in the river, waste and environment, and overseas fields. It will do so by
encouraging experienced engineers to continue making self-improvements, bringing their capabilities together, andupgrading digitization services for water supply and sewerage information based on its information andcommunications technology (ICT) technologies that have been developed and accumulated over the years by the DX
4

Promotion Department of the Company.
Orders for local governments’ public procurement activities, which account for the majority of the Company’sorders received, are placed through price competitive auctions. As might be expected, contract prices and asking prices
vary widely in most cases. Accordingly, the Company is aware that it is expected to make management efforts toovercome various challenges to achieve its management goals. These include competition among firms; fluctuations inbidding prices; higher costs of works due to an increase in planning and designing operations for rebuilding andrenewal that require complex and advanced experience and expertise; and an increase in personnel expenses to respondto recruiting activities that are becoming increasingly difficult year by year and to prevent turnover of, secure, andfoster talented human resources. The Company, meanwhile, has had a solid sense of an improvement in its corporate
image. It has done this through company-wide awareness reforms aimed at achieving the objectives of having every
employee work with a sense of management and establishing an organization with an open culture, which have been
consistently pursued under the present management structure. It has also done this by firmly establishing a far-sighted
corporate culture which has enabled a smooth company-wide transition to working from home and telework amid the
pandemic.
And it has provided an effective work environment by doing research on the latest industry trends and having
interviews with its employees. Passing on techniques of senior engineers and securing and fostering young employees
who will lead the next generation remain critical management issues for the Company. Based on its solid financialbase, the Company will endeavor to overcome management issues by continuing to improve and provide a work
environment that accommodates employees, improve employee satisfaction, and work on hiring talented humanresources.
A growing number of local governments are expected to experience a decrease in staffing levels, and thecooperation with and support of private companies are considered essential for continuing water supply and sewerage
operations. Under such circumstances, the Company will contribute to the continuation of water supply and sewerage
services, which are vital for the safe and secure lives of people, as well as solving social challenges and improving
corporate value by customizing and providing the consulting services that it has cultivated to meet the needs of society.
In the fiscal year ending December 31, 2023, the Company forecasts orders will increase to ¥6,500 million (up0.7% year-on-year), and net sales of completed contracts will rise to ¥6,500 million (up 0.2% year-on-year). Operating
income is forecast to decrease to ¥650 million (down 12.1% year-on-year), and ordinary income to fall to ¥660 million(down 11.8% year-on-year). Profit is forecast to drop to ¥400 million (down 3.8% year-on-year).

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 factors, the Company
applies Japanese accounting standards.

5

3.

FINANCIAL STATEMENTS AND PRIMARY NOTES(1)

Non-consolidated Balance SheetFY2021
FY2022(as of December 31, 2021) (as of December 31, 2022)(Thousands of yen)

AssetsCurrent assets
Cash and deposits
Accounts receivable–completed operation
Accounts receivable–completed operation andcontract assets
Costs on uncompleted services
Prepaid expenses
Advances receivable from group affiliates
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings, net
Structures, net
Tools, furniture and fixtures, net
Land
Lease assets, net
Total property, plant and equipment
Intangible assets
Leasehold right
SoftwareLease assets
Telephone subscription right
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Long-term loans receivable from employees
Insurance funds
Guarantee deposits
Long-term prepaid expenses
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

6(Thousands of yen)

3,552,478
2,202,044-

3,742,336
2,301,975

761
37,099258
62,828-29,240
5,826,230

8,714
43,856200
67,069-32,360
6,131,793

205,274
028,569150,015
108,564
492,423

190,584
022,229150,015
81,648444,478

3,321
122,771763
3,711
130,567

3,321
121,082
290
3,711
128,404

260,506
50,000
4,092
73,124
163,747
6,799
65,66728,769-2,200650,508
1,273,498
7,099,729

499,466
50,0003,432
78,998167,318
4,242
63,62028,769-2,200893,647
1,466,530
7,598,324

FY2021
FY2022(as of December 31, 2021) (as of December 31, 2022)(Thousands of yen)(Thousands of yen)
Liabilities
Current liabilities
Accounts payable–operating
Lease obligations
Accounts payable–otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received on uncompleted contracts
Deposits received
Provision for bonuses
Provision for loss on orders received
Provision for share benefit
Total current liabilities
Noncurrent liabilities
Lease obligations
Provision for share benefit
Provision for retirement benefits
Long-term accounts payable–other
Asset retirement obligations
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surplus
Retained earnings
Other retained earnings
General reserve
Retained earnings brought forward
Total retained earnings
Treasury stock
Total shareholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

7

240,019
33,69969,262
160,555
141,001
45,394
116,730
112,600
40,137
20,29014,076
993,767

433,918
32,846
51,798215,092
174,71129,805
195,043
108,262
41,336
17,378
14,796
1,314,989

77,64018,24538,6786,720
49,789191,074
1,184,841

51,445
18,3102,797
6,720
50,325
129,598
1,444,588

1,093,000

1,093,000

2,171,308
702,924
2,874,232

2,171,308
702,924
2,874,232

3,000,000
499,4113,499,411-1,569,735
5,896,907

3,000,000
694,204
3,694,204-1,555,708
6,105,728

17,97948,007

17,9795,914,887
7,099,729

48,007
6,153,735
7,598,324

(2)Non-consolidated Statements of Operations
FY2021
FY2022(From January 1, 2021 to (From January 1, 2022 to
December 31, 2021)
December 31, 2022)(Thousands of yen)(Thousands of yen)
6,207,413
6,486,264
4,289,650
4,369,908
1,917,763
2,116,355
1,341,993
1,376,601
575,769
739,754

Net sales of completed contracts
Costs of completed contracts
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Interest on securities
Dividend income
Contribution for secondment employees
Dividends from silent partnerships
Commission fee
Gain on sales of investment securities
Gain on redemption of investment securities
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Expenses for securities transactions
Loss on valuation of investment securities
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Reversal of provision for construction warranty
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Warranties for completed construction
Total extraordinary loss
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Profit

8

119
2,200
6,122
2,792
10,7562,430
1,240
38,545
1,021
3,627
68,856

96
4,250
6,956
2,708
2,430
456
7,658
24,555

3,268
9,481
5,568
720
19,039625,586

2,755
9,103
2,741
1,465
16,065748,244

1,067
1,067

-

732
732
625,921233,917
15,945249,863
376,057

064,68064,680683,564
264,309
3,648
267,957
415,606

(3)Non-consolidated Statement of Changes in Net Assets
FY2021 (from January 1, 2021 to December 31, 2021)(Thousands of yen)

Shareholders’ equity
Capital surplus

Balance at the beginningof current period
Changes during the period
Provision of generalreserve
Dividends of surplus
ProfitPurchase of treasury
stock
Disposal of treasurystock
Net changes of items
other than shareholders’equityTotal changes during theperiodBalance at the end ofcurrent period

Capital
stock

Legal
capitalsurplus1,093,000

2,171,308

Othercapitalsurplus

Total capitalsurplus694,421

Retained earnings
Other retained earnings
Total
Retainedretained
Generalearnings
earnings
reservebrought
forward2,865,729

8,502

8,502

2,800,000

512,171

3,312,171

200,000-200,000--188,817
376,057-188,817
376,057

-

-

8,502

8,502

200,000-12,759

187,240

1,093,000

2,171,308

702,924

2,874,232

3,000,000

499,4113,499,411

Valuation and translation
adjustments
Valuation
Total
Total net assets
Total
difference on
valuation andshareholders’ available-fortranslation
equitysale
adjustments
securities

Shareholders’ equity

Treasurystock
Balance at the beginningof current period
Changes during the period
Provision of generalreserve
Dividends of surplus
ProfitPurchase of treasury
stock
Disposal of treasurystock
Net changes of items
other than shareholders’equityTotal changes during theperiodBalance at the end ofcurrent period-1,575,325

5,695,575

4,145

4,145

5,699,721---188,817
376,057-188,817
376,057-57,158-57,158-57,158

62,747

71,25071,25013,833

13,833

13,833

5,589

201,332

13,833

13,833215,166-1,569,735

5,896,907

17,97917,9795,914,887

9

FY2022 (from January 1, 2022 to December 31, 2022)(Thousands of yen)
Shareholders’ equity
Capital surplus
Capitalstock

Balance at the beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Balance at the beginning ofcurrent period reflectingchanges in accounting policies
Changes during the period
Provision of general reserve
Dividends of surplus
ProfitPurchase of treasury stock
Disposal of treasury stock
Net changes of items otherthan shareholders’ equity
Total changes during the period
Balance at the end of current
periodOther
capitalsurplus

Legal capitalsurplus1,093,000

Retained earnings
Other retained earnings
Total
Retained
Total capitalretained
Generalearnings
surplusearnings
reservebrought
forward2,171,308

702,924

2,874,232

3,000,000

499,411 3,499,411-30,077

1,093,000

2,171,308

702,924

2,874,232

3,000,000

-

-

-

-

-

1,093,000

2,171,308

702,924

2,874,232

3,000,000

469,334 3,469,334-190,736
415,606-190,736
415,606

224,870

224,870

694,204 3,694,204

Valuation and translation
adjustments
Valuation
Total
Total net assets
Total
difference on
valuation andshareholders’ available-fortranslation
equitysale
adjustments
securities

Shareholders’ equity

Treasurystock
Balance at the beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Balance at the beginning ofcurrent period reflectingchanges in accounting policies-1,569,735

5,896,907

17,97917,979-30,077-1,569,735

5,866,830

5,914,887-30,077

17,97917,9795,884,810

Changes during the period
Provision of general reserve--

Dividends of surplus-190,736-190,736

Profit415,606

415,606

Purchase of treasury stock

-49

-49

-49

Disposal of treasury stock

14,076

14,076

14,076

Net changes of items otherthan shareholders’ equity
Total changes during the period
Balance at the end of current
period30,02730,02730,027

14,027

238,897

30,02730,027

268,925-1,555,708

6,105,728

48,00748,007

6,153,735

10-30,077

(4)Non-consolidated Statement of Cash Flows

Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Increase/decrease in allowance for doubtful accounts
Interest and dividends income
Interest expenses
Reversal of provision for construction warranty
Loss on retirement of property, plant and equipment
Warranties for completed construction
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on redemption of investment securities
Decrease (increase) in notes and accounts receivable–trade
Decrease (increase) in costs on uncompleted contracts
Increase (decrease) in notes and accounts payable–trade
Increase (decrease) in advances received on uncompleted
contracts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for loss on order received
Increase (decrease) in provision for share benefit
Increase (decrease) in provision for retirement benefits
Other

FY2021(From January 1, 2021 to
December 31, 2021)

FY2022(From January 1, 2022 to
December 31, 2022)(Thousands of yen)(Thousands of yen)

625,921112,2023,000-19,198
3,268-1,067732-1,2405,568-38,545-56,572-447-27,244683,564
109,141
3,120-11,3032,755
064,6802,741-145,065-7,952
193,898-31,01278,313

164
8,707
1,673
-25,877-49,702

1,199-1,129784-35,881-21,501

Subtotal

510,328

917,364

Interest and dividends income received
Interest expenses paid
Payment of warranties for completed construction
Income taxes paid

19,198-3,268-35,632-208,205

11,303-2,755-4,680-229,508

Cash flows from operating activities

282,420

691,723-15,540-45,981-310,000
100,862400,040-3,824478-5,132-23,491-44,906-200,000-4,210230-4,627

Cash flows from investing activities

120,900-277,005

Cash flows from financing activities
Repayments of lease obligations
Purchase of treasury stock
Proceeds from disposal of treasury stock
Cash dividends paid

-38,663-57,158
57,120-188,817-34,502-49-190,736

Cash flows from financing activities-227,519-225,288

Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from redemption of investment securities
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Other

468

416

176,270

189,845

Balance of cash and cash equivalents at beginning of the year

2,660,092

2,836,362

Balance of cash and cash equivalents at end of the year

2,836,362

3,026,208

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents

11

(5)

Notes regarding the Non-consolidated Financial Statements(Matters Affecting the Assumption of a Going Concern)
Not applicable.
(Changes in Accounting Policies)(Application of Accounting Standards for Revenue Recognition)
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March
31, 2020; hereinafter, referred to as “Accounting Standard for Revenue Recognition”) from the beginning of the firstquarter of fiscal year, and recognizes revenue in the amount expected to be received in exchange for the promised
goods or services when control of the goods or services is transferred to a customer.
Previously, the Company had applied the percentage-of-completion method to operations for which the certainty
of results was recognized in the progress portion, and the completed-construction method to other operations.
However, we changed the method to recognize revenue over a certain period of time as the performance obligation issatisfied. We estimate the progress in the fulfilment of performance obligations using the input method based on
costs incurred.
As for the application of the Accounting Standard for Revenue Recognition, etc., the Company complies withthe transitional treatment set forth in the proviso to paragraph 84 of the Accounting Standard for Revenue
Recognition, adding or subtracting the cumulative effect of retroactive application of the new accounting policy prior
to the beginning of the first quarter to retained earnings at the beginning of the first quarter, and applying the new
accounting policy from the opening balance.
As a result, for the fiscal year, net sales of completed contracts and costs of completed contracts increased¥45,131 thousand and ¥1,782 thousand, respectively, and operating income, ordinary income and income before
income taxes grew ¥43,348 thousand, respectively. In addition, the effect of retained earnings on the balance at the
beginning of the fiscal year is immaterial.
As a result of adopting the Accounting Standard for Revenue Recognition, “Accounts receivable–completed
operation,” which was presented in “Current assets” in the balance sheet for the previous fiscal year, was included in“Accounts receivable–completed operation and contract assets” from the first quarter. We did not restate the previous
fiscal year using a new presentation method in accordance with the transitional treatment set forth in Paragraph 89-2of the Accounting Standard for Revenue Recognition. In addition, in accordance with the transitional treatment set
forth in Paragraph 28-15 of the Accounting Standard for Quarterly Financial Statements (ASBJ Statement No. 12,
March 31, 2020), we did not present detailed information on revenues from contracts with customers for the fiscal
year.

(Application of Accounting Standards for Calculation of Fair Value)
The Company has applied the “Accounting Standard for Calculation of Fair Value” (ASBJ Statement No. 30,
July 4, 2019; hereinafter, referred to as “Fair Value Accounting Standard”) from the beginning of the first quarter ofthe fiscal year, and will apply the new accounting policies provided by the Fair Value Accounting Standards
prospectively in accordance with the transitional treatment set forth in Paragraph 19 of the Fair Value AccountingStandard and Paragraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July4, 2019).
This application has no impact on the quarterly financial statements.
(Change in presentation method)(Income statement related)
In the previous fiscal year, “Contribution for secondment employees,” which was included in “Other” under“Non-operating income,” exceeded 10/100 of the total amount of non-operating income, and as a result, this item ispresented separately from the current fiscal year. In order to reflect this change in presentation method, the financial
statements for the previous fiscal year have been reclassified.
As a result, the ¥6,419 thousand shown in “Other” under “Non-operating income” in the Non-consolidated
Statement of Operations for the previous fiscal year has been reclassified as ¥2,792 thousand in “Contribution forsecondment employees” and ¥3,627 thousand in “Other.”12

(Segment Information)[Segment Information]
Previous fiscal year (January 1, 2021 to December 31, 2021) and current fiscal year (January 1, 2022 to
December 31, 2022)
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 in terms of earnings andsurplus standards, and therefore their figures are not shown.
(Per Share Information)
FY2021(From January 1, 2021 to
December 31, 2021)¥1009.67¥64.38-

Net assets per share
Profit per share
Diluted profit per share

FY2022(From January 1, 2022 to
December 31, 2022)¥1,047.31¥70.94-Note 1. Quarterly diluted profit per share is not presented because there are no dilutive shares.
Note 2. The basis for calculating profit per share is as follows:

FY2021(From January 1, 2021 to
December 31, 2021)

FY2022(From January 1, 2022 to
December 31, 2022)

376,057

415,606--

376,057

415,606

5,841,597

5,858,706

FY2021 (as of December
31, 2021)
5,914,887

FY2022 (as of December
31, 2022)
6,153,735--

5,914,887

6,153,735

5,858,227

5,875,767

Profit per share
Profit for the period (thousand yen)Amount not attributable to common shareholders(thousand yen)
Profit attributable to owners of parent attributed tocommon stock (thousand yen)
Average number of common stock outstanding for theperiod (shares)
Note 3. The basis for calculation of net assets per share is as follows:

Total net assets (thousand yen)Amount to be deducted from total net assets(thousand yen)
Net assets related to common stock at the end of theperiod (thousand yen)
Closing number of common stock used in thecalculation of net assets per share (shares)

The Company’s shares held in trust that are recognized as treasury stock in shareholders’ equity are includedin the treasury stock deducted in the calculation of the average number of shares during the period for calculationof profit per share (80,984 shares as of December 31, 2021; 101,818 shares as of December 31, 2022).
The Company’s shares held in trust that are recognized as treasury stock within shareholders’ equity areincluded in the treasury stock deducted from the number of shares outstanding at end of the period, used for
calculating “net assets per share” (102,300 shares as of December 31, 2021; 84,700 shares as of December 31,2022).
(Significant Subsequent Events)
Not applicable.

13