Consolidated Financial Statements
andNon-Consolidated Financial Statements
OYO Corporation
and Consolidated Subsidiaries
Year ended December 31, 2019with Independent Auditor’s Report1. Basis of preparation of the consolidated financial statements and non-consolidated financial statements.
(1) The consolidated financial statements of the Company are prepared in accordance with the “Regulations Concerning
the Terminology, Forms and Preparation Methods of Consolidated Financial Statements” (the Ministry of FinanceOrdinance No. 28, 1976).
With respect to the comparative information included in the consolidated financial statements for the current fiscal year
(from January 1, 2019 to December 31, 2019), the information relating to Article 15-5, Paragraph 2, Item 2 andParagraph 3 of the revised Regulations for Consolidated Financial Statements under "Cabinet Office Ordinance Partially
Revising Regulations Concerning the Terminology, Forms and Preparation Methods of Financial Statements, etc."("Revised Ordinance", Cabinet Office Ordinance No.7 March 23, 2018) has been prepared in accordance with theRegulations for Consolidated Financial Statements before revision under Article 3, Paragraph 2 of the Supplementary
Provisions of "Revised Ordinance".
(2) The non-consolidated financial statements of the Company are prepared in accordance with the “Regulations
Concerning the Terminology, Forms and Preparation Methods of Financial Statements, etc.” (“Regulations for NonConsolidated Financial Statements”, the Ministry of Finance Ordinance No. 59, 1963).
The Company is eligible to submit special financial statements, and prepares its financial statements in compliance withthe provisions of Article 127 of the Regulations for Financial Statements.
With respect to the comparative information included in the non-consolidated financial statements for the current fiscal
year (from January 1, 2019 to December 31, 2019), the information relating to Article 8-12, Paragraph 2, Item 2 andParagraph 3 of the revised Regulations for Financial Statements under "Revised Ordinance" has been prepared inaccordance with the Regulations for Financial Statements before revision under Article 2, Paragraph 2 of the
Supplementary Provisions of "Revised Ordinance".

2. Audit certification
The consolidated financial statements for the current fiscal year (From January 1, 2019 to December 31, 2019 ) and nonconsolidated financial statements for the current fiscal year (from January 1, 2019 to December 31, 2019) were audited by
Ernst & Young ShinNihon LLC, in accordance with Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act.
3. Ensuring appropriateness of the consolidated financial statements
The Company is committed to ensuring the appropriateness of the consolidated financial statements. In particular, theCompany joined the Financial Accounting Standards Foundation to develop a more comprehensive understanding ofaccounting standards and enhance its systems appropriately to respond to changes in accounting standards.

1

1. 【Consolidated Financial Statements】(1)【Consolidated financial statements】①【Consolidated balance sheets】
Prior fiscal year
(As of December 31,
2018)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Accounts receivable-completed operation
Lease receivables and investment assets
Short-term investment securities
Costs on uncompleted services
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Accumulated impairment loss
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Lease assets
Accumulated depreciation
Lease assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Software
Software in progress
Goodwill
Other
Total intangible assets

25,536
1,791
19,518
2,440
899
2,395
755
651
1,859
1,757
(19)
57,585

2(Millions of yen)
Current fiscal year
(As of December 31,
2019)

26,352
1,781
22,911
2,934
1,199
755
785
765
1,780
864
(26)
60,105*1*1

14,589(9,750)
－
4,838
6,516
(5,476)
1,040
1,648(1,504)
143
*3
6,251
517
(277)
239
55
12,56814,359(9,612)
(62)
4,684
6,833
(5,544)
1,288
1,680(1,549)
130
*3
6,146
533
(243)
290
56
12,597

1,014
80
142
127
1,364

1,013
－
183
155
1,351

(Millions of yen)
Current fiscal year
(As of December 31,
2019)

Prior fiscal year
(As of December 31,
2018)
Investments and other assets*4

Investment securities

6,017

*4

6,297

Long-term loans receivable72

23

Net defined benefit asset

1,306

1,569

Deferred tax assets

45

54

Real estate for investment

534

534

Accumulated depreciation

(212)

(222)

Real estate for investment, net

321

311

Other

1,658

1,656

Allowance for doubtful accounts

(523)

(408)

Total investments and other assets

8,898

9,504

22,832

23,45380,41883,559Total noncurrent assets
Total assets3

(Millions of yen)
Prior fiscal year
(As of December 31,
2018)

Current fiscal year
(As of December 31,
2019)

Liabilities
Current liabilities
Notes and accounts payable-trade*1

Accounts payable-operating

1,433

1,831

－

104

1,041

1,266

Provision for product warranties

136

125

Income taxes payable

421

864

1,671

475

Provision for bonuses

137

141

Provision for loss on orders received

161

161

Other

4,026

4,595

Total current liabilities

9,750

10,201

Lease obligations

1,614

1,971

Net defined benefit liability

1,940

1,866

Provision for stock benefits

57

208

Short-term loans payable
Lease obligations

Advances received on uncompleted contracts

*1

720

636

Noncurrent liabilities

449

Deferred tax liabilities*3

Deferred tax liabilities for land revaluation

676
*3

416

327

175

151

4,654

5,200

14,404

15,402

Capital stock

16,174

16,174

Capital surplus

15,077

15,077Retained earnings

37,45839,096

Treasury stock(1,828)(1,826)

Total shareholders’ equity

66,881

68,521

Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income

1,248

Valuation difference on available-for-sale securities*3

Revaluation reserve for land

(2,594)1,760*3(2,797)

Foreign currency translation adjustment

305

107

Remeasurements of defined benefit plans

41

175

(1,000)

(753)

131

389

66,013

68,15780,41883,559Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

4② 【Consolidated statements of income and consolidated statements of comprehensive income】【Consolidated statements of income】
Prior fiscal year
(From January 1, 2018
to December 31, 2018)45,232

Net sales*1，*2

Cost of sales

31,079(Millions of yen)
Current fiscal year
(From January 1, 2019
to December 31, 2019)
53,883*1，*2

38,00014,152

15,883

Directors’ compensations

692

786

Salaries and allowances

4,960

5,201

Provision for bonuses

52

52

Provision for stock benefits

51

78

Legal welfare expenses

768

796

Retirement benefit expenses

124

218

Traveling and transportation expenses

472

518

Rent expenses

384

396

Depreciation

309

318

Gross profit
Selling, general and administrative expenses*3

Research and development expenses

1,675

*3

1,612

77

54

Other

3,104

3,266

Total selling, general and administrative expenses

12,671

13,301

1,481

2,581

Interest income

166

191

Dividends income

83

96

Equity in earnings of affiliates

78

59

Foreign exchange gains

7－

Insurance and dividends income

102

88

Rent of real estate

53

57

Other

104

102

Total non-operating income

597

596

Interest expenses

47Foreign exchange losses－

37

Provision of allowance for doubtful accounts

13

12

Rent cost of real estate

15

14

Loss on retirement of noncurrent assets

129

22

1

25

164

119

1,913

3,058

Amortization of goodwill

Operating income
Non-operating income

Non-operating expenses

Other
Total non-operating expenses
Ordinary income5(Millions of yen)
Current fiscal year
(From January 1, 2019
to December 31, 2019)

Prior fiscal year
(From January 1, 2018
to December 31, 2018)
Extraordinary income
Gain on sales of noncurrent assets

9278

Gain on sales of affiliate's stocks－

25

Total extraordinary income

9

303

－

53

*4 44

*4 166

Total extraordinary loss

44

219

Profit before income taxes

1,878

3,142

Income taxes-current

668

1,116

Income taxes-deferred

434

(163)

Total income taxes

1,103

952

Profit774

2,189

Profit (Loss) attributable to non-controlling interests

(29)

13

Profit attributable to owners of parent

804

2,176

Extraordinary loss
Loss on sales of investment securities
Impairment loss

【Consolidated statements of comprehensive income】
Prior fiscal year
(From January 1, 2018
to December 31, 2018)
774

Profit(Millions of yen)
Current fiscal year
(From January 1, 2019
to December 31, 2019)
2,189

Other comprehensive income
Valuation difference on available-for-sale securities

(694)

511

Foreign currency translation adjustment

(375)

(196)

Remeasurements of defined benefit plans

(286)

133

*1

Total other comprehensive income
Comprehensive income(1,356)

*1

448

(581)

2,638

Comprehensive income (loss) attributable to owners ofparent

(551)

2,625

Comprehensive income (loss) attributable to noncontrolling interests

(30)

13

(Breakdown)

6

③ 【Consolidated statements of changes in net assets】
Prior fiscal year (From January 1, 2018 to December 31, 2018)(Millions of yen)

Balance at the beginning of theyear
Changes during the year

Capitalstock

Shareholders’ equity
CapitalRetained
Treasury
surplusearnings
stock

16,174

16,51937,406(1,903)

Shareholders’equity total

68,196

Dividends from surplus

(752)

(752)

Profit attributable to ownersof parent
Purchase of treasury stock

804

804
(1,703)(1,703)

Disposal of treasury stock

75

263

338

Cancellation of treasury
stock
Reversal of revaluation
reserve for land
Change in ownershipinterest of parent due totransactions with noncontrolling shareholders
Net changes in items otherthan shareholders’ equity
Total changes during the year

(1,515)

1,515－

Balance at the end of year

－
(1)

(1)

-

(1,441)52

75(1,314)

16,174

15,07737,458(1,828)66,881(Millions of yen)

Accumulated other comprehensive income

Balance at the beginning of theyear
Changes during the year

Valuationdifference on
available-forsale securities

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

1,942(2,594)680

Remeasurements ofdefinedbenefit plans

328

Total
accumulated
othercomprehensiv
e income

356

Noncontrollinginterests

Total net
assets277

68,830

Dividends from surplus(752)

Profit attributable toowners of parent
Purchase of treasury stock804(1,703)

Disposal of treasury stock

338

Cancellation of treasury
stock
Reversal of revaluation
reserve for land
Change in ownershipinterest of parent due totransactions with noncontrolling shareholders
Net changes in items otherthan shareholders’ equity
Total changes during the year－

Balance at the end of year

－
(1)

(693)

－

(375)

(286)

(1,356)(146)(1,502)

(693)

－

(375)

(286)

(1,356)(146)(2,816)

1,248(2,594)305

41(1,000)131

66,0137

Current fiscal year (From January 1, 2019 to December 31, 2019)(Millions of yen)

Balance at the beginning of theyear
Changes during the year

Capitalstock

Shareholders’ equity
CapitalRetained
Treasury
surplusearnings
stock

16,174

15,07737,458(1,828)

Shareholders’equity total

66,881Dividends from surplus

(740)

(740)

Profit attributable toowners of parent
Purchase of treasury stock

2,176

2,176

(0)

Disposal of treasury stock
Cancellation of treasury
stock
Reversal of revaluation
reserve for land
Change in ownershipinterest of parent due totransactions with noncontrolling shareholders
Net changes in items otherthan shareholders’ equity
Total changes during the year
Balance at the end of year

(0)

(0)

1

1
－

202

202
－

－

(0 )

1,637

1

(1,639)16,174

15,07739,096(1,826)

68,521(Millions of yen)
Accumulated other comprehensive income

Balance at the beginning of theyear
Changes during the year

Valuationdifference on
available-forsale securities

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

1,248(2,594)305

Remeasurements ofdefinedbenefit plans

41

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net
assets(1,000)131

66,013

Dividends from surplus(740)

Profit attributable toowners of parent
Purchase of treasury stock

2,176

Disposal of treasury stock

1

Cancellation of treasury
stock
Reversal of revaluation
reserve for land
Change in ownershipinterest of parent due totransactions with noncontrolling shareholders
Net changes in items otherthan shareholders’ equity
Total changes during the year－

Balance at the end of year

(0)

202
－

511

(202)

(197)

133

246

258

504

511

(202)

(197)

133

246

258

2,143

1,760

(2,797)

107

175

(753)

389

68,1578

④ 【Consolidated statements of cash flows】

Cash flows from operating activities
Profit before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill
Increase (decrease) in provision for bonuses
Interest and dividend income
Interest expenses
Equity in (earnings) losses of affiliates
Loss (gain) on sales of investment securities
Loss (gain) on sales of affiliate's stocks
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Decrease (increase) in costs on uncompleted services
Increase (decrease) in notes and accounts payable trade
Increase (decrease) in advances received on
uncompleted contracts
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Refund of income taxes
Net cash provided by (used in) operating activities
Cash flows from investment activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of short-term investment securities
Proceeds from sales of short-term investment securities
Purchase of property, plant and equipment and intangible
assetsProceeds from sales of property, plant and equipment
and intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change in scopeof consolidation
Payments of short-term loans receivable
Payments of long-term loans receivableCollection of loans receivable
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term loans payable
Decrease in short-term loans payable
Repayments of lease obligations
Proceeds from sales of treasury stock
Purchase of treasury stock
Cash dividends paid

9

Prior fiscal year
(From January 1, 2018
to December 31, 2018)(Millions of yen)
Current fiscal year
(From January 1, 2019
to December 31, 2019)

1,878
1,107
44
77
(6)
(250)
4
(78)
(9)
－
(112)
56
253
(47)
197

3,142
1,159
166
54
3
(288)
7
(59)
(225)
(25)
(2,926)
(100)
1,639
133
(1,195)

(960)
2,155
274
(4)
(272)
－
2,152

1,222
2,707
316
(7)
(686)
184
2,515

(5,521)
5,330
(600)
1,200
(1,057)(5,616)
5,689(2,900)3,000(1,151)

12

15

(113)
25
－

(13)
603
*2
(251)

(65)
－
72
38

(1)
(1)
0
0

(677)

(624)

－
－
(101)
－
(1,410)
(752)

103
(2)
(111)
1
(0)
(740)

Dividends paid to non-controlling interests
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year

(76)
(41)

(6)
－

(2,381)

(756)

(172)

32

(1,078)

1,166

20,477*1

Cash and cash equivalents at end of the year

19,39919,399*1

20,565【Notes】(Significant accounting policies)
1. Scope of consolidation(1) Number of consolidated subsidiaries: 27
Names of major consolidated subsidiaries:
OYO CORPORATION U.S.A.
KINEMETRICS, INC.
GEOMETRICS, INC.
GEOPHYSICAL SURVEY SYSTEMS, INC.
ROBERTSON GEOLOGGING LTD.
NCS SUBSEA,INC.
FONG CONSULT PTE.LTD.
FC INSPECTION PTE.LTD.
NS ENVIRONMENTAL SCIENCE CONSULTANT CORPORATIONOYO RESOURCES MANAGEMENT CORPORATIONTOUHOKU BORING CO., LTD.
OCEAN ENGINEERING CORPORATION
KOEI CONSULTANT CO., LTD.
OYO SEISMIC INSTRUMENTATION CORPORATIONOYO INTERNATIONAL CORPORATIONOYO GEO-MONITORING SERVICE CORPORATIONNANKYU GEO TECHNICS CORPORATIONOYO GEOTECHNICAL SERVICE CORPORATIONKCS CO., LTD.
OYO RMS CORPORATIONIn the current fiscal year, shares of FONG CONSULT PTE.LTD. and FC INSPECTION PTE.LTD. were acquired and these twocompanies were newly included in the scope of consolidation. Also, four companies were excluded from the scope of
consolidation due to the completion of liquidation procedures.
(2) Names of major non-consolidated subsidiaries
Major non-consolidated subsidiary:
SIGMA KOGYO CO., LTD.
(Reason for excluding from the scope of consolidation)
This unconsolidated subsidiary is small; and the total assets, net sales, net income and loss (amount corresponding toeach company’s equity), and retained earnings (amount corresponding to each company’s equity) of the subsidiary haveno significant impact on the consolidated financial statements.
2. Application of the equity method(1) Number of affiliates accounted for under the equity method: 5Names of major affiliates
IRIS INSTRUMENTS SAS
ENGINEERING & RISK SERVICES CORPORATION(2) Non-consolidated subsidiaries and affiliates not accounted for under the equity method
Name of major non-consolidated subsidiaries:
SIGMA KOGYO CO., LTD.

10

The Company excluded this non-consolidated subsidiary because it had little impact on the consolidated financial
statements and had no impact overall, considering net income and loss for the year (amount corresponding to eachcompany’s equity) and retained earnings (amount corresponding to each company’s equity).
3. Fiscal year-end, etc. of consolidated subsidiaries
The year-end closing date for consolidated subsidiaries is the same as the consolidated year-end closing date.
4. Accounting policies(1) Valuation standards and methods for significant assets(a) Securities
Available-for-sale securities
Securities with fair market value
Stated at fair value based on the quoted market price as of the year-end closing date with any changes in unrealized
gains or losses, net of the applicable income taxes, included directly in net assets. Cost of securities sold is determinedby the moving average method.
Securities without fair market value
Stated at cost determined by the moving average method.
(b) Derivatives
Stated at fair value.
(c) Inventory assets
Costs on uncompleted services
Stated at cost using the specific identification method (balance sheet amounts are determined by writing down the bookvalues based on decrease in profitability).
Merchandise/products/raw materials/work in process
Stated at cost using the weighted-average method (balance sheet amounts are determined by writing down the bookvalues based on decrease in profitability). The lower of cost or market method, cost being determined by the first-in-firstout method, is used by major consolidated subsidiaries.
(2) Depreciation method of significant depreciable assets(a) Property, plant and equipment (excluding lease assets) and real estate for investment
For buildings (excluding structures attached to buildings) of the Company and its domestic consolidated subsidiaries, thestraight-line method is used; and for other property, plant equipment, the declining balance method is used. For overseas
subsidiaries, the straight-line method is used.
Major useful lives are as follows:
Buildings and structures:
2 - 50 years
Machinery, equipment and vehicles:
2 - 15 years(b) Intangible assets (excluding lease assets)
Straight-line method
Software for internal use is amortized over the expected available period (5 - 10 years).
(c) Lease assets
The straight-line method is adopted mainly with a residual value of zero and the lease period deemed equal to the service
life of the asset.
(3) Accounting for significant allowances and provisions(a) Allowance for doubtful accounts
To prepare for expected losses from bad debts, the Company and its domestic consolidated subsidiaries estimate
uncollectible amounts for normal receivables based on the historical experience and for certain specific receivables suchas doubtful accounts receivables, based on the individual probability of recovery. Overseas consolidated subsidiaries
estimate uncollectible amounts for certain receivables, such as doubtful accounts receivables, based on the individual
probability of recovery.
(b) Provision for bonuses
At the Company and its consolidated subsidiaries, to prepare for payment of bonuses to employees, a provision forbonuses is provided based on the expected amount of payment.
(c) Provision for loss on orders received
At the Company and its domestic consolidated subsidiaries, to prepare for future losses on contracts for orders received,a provision for losses on orders received is provided based on the future losses anticipated at the end of the current fiscal
year and the amount of foreseeable losses that can reasonably be estimated.
(d) Provision for product warranties
At the Company and its certain consolidated overseas subsidiaries, to prepare for estimated warranty costs, a provision for
product warranties is provided based on historical experience of free-of-charge repairs of products.

11

(e) Provision for stock benefits
In order to provide for grants of shares of the Company to directors and employees of the Group in accordance with thedirector stock benefit regulations and stock benefit regulations, a provision for stock benefits is provided based on theestimated stock benefit obligations as of the end of the current fiscal year.
(4) Accounting method for retirement benefits(a) Method of attributing the estimated retirement benefits to periods
In calculating retirement benefit obligations, the benefit formula method of attributing estimated retirement benefits toperiods has been applied until the end of the current fiscal year.
(b) Amortization method of actuarial gain or loss and past service cost
Actuarial gain or loss is amortized in the fiscal year following the year in which the gain or loss is incurred by the straightline method over periods (5 years) which are shorter than the average remaining service periods of the employees. Past
service cost is amortized by the straight-line method over periods (5 years) which are shorter than the average remaining
service periods of the employees.
(5) Accounting for significant revenues and expenses(a) Individual contracts from which the outcome can be estimated reliably through the end of the current fiscal year
The percentage-of-completion method is adopted. (The percentage of completion is measured by the proportion of thecost incurred relative to the estimated total cost).
(b) Other contracts
The completed-contract method is adopted.
(6) Significant hedge accounting method(a) Hedge accounting method
Deferral hedge accounting is adopted.
(b) Hedging instruments and hedged items
Hedging instruments: forward-exchange contracts
Hedged items: accounts payable-trade(c) Hedging policy
In order to reduce risks of exchange rate fluctuations, hedges are used to cover liabilities.
(d) Method of assessing hedge effectivenessAn assessment of hedge effectiveness is omitted because the relationship between the hedging instruments and hedged
items is direct.
(7) Amortization of goodwill
Goodwill is amortized by the straight-line method 5 years or 10 years.
(8)Cash and cash equivalents in the consolidated statements of cash flows
Cash and cash equivalents on the consolidated statement of cash flows included cash on hand, bank deposits that could be
withdrawn at any time, and low-risk short-term investments easily convertible to cash maturing within three months fromthe date of acquisition.
(9) Other significant items regarding preparation of the consolidated financial statements
Accounting for consumption tax
All amounts exclude consumption tax.

12

(Change in accounting policies)
Not applicable.
(Unapplied accounting standards)
・“Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 29, issued
on March 30, 2018)
・“Implementation Guidance on Accounting Standard for Revenue Recognition” (Implementation Guidance No. 30, issued on
March 30, 2018)(1) Summary
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) developed
comprehensive accounting standards related to revenue recognition and issued ”Revenue from Contracts with Customers”
in May 2014 (IFRS 15 for the IASB and Topic 606 for the FASB). Considering that IFRS 15 is applied effective fiscal years
beginning on or after January 1, 2018 and Topic 606 is applied effective fiscal years beginning on or after December 15,
2017, the ASBJ developed a comprehensive accounting standard related to revenue recognition and issued it along with
implementation guidance.
In developing the accounting standard related to revenue recognition, the ASBJ determined that, from the point of view offinancial statement comparability, which is one of the benefits of maintaining consistency with IFRS 15, the accounting
standard should incorporate the basic principles of IFRS 15. Also, if there are any items that should be considered related
to practices in Japan, alternative approaches would be added that do not impair comparability.
(2) Planned date of application
Undetermined(3) Effect of application
The impact of applying the accounting standard on the consolidated financial statements is currently being evaluated.
(Change in presentation)(Consolidated statements of income)“Provision of allowance for doubtful accounts”, which was previously included in “Other” under “Non-operating expenses” inthe prior fiscal year, has been presented separately from the current fiscal year due to an increase in materiality. In order toreflect this change in presentation, the Company reclassified the consolidated statement of income for the prior fiscal year.
As a result, “Other” in “Non-operating expenses” in the amount of 15 million yen in the consolidated statement of income
for the prior fiscal year was reclassified as 13 million yen in “Provision of allowance for doubtful accounts”, and 1 million yen
in “Other.”(Change due to the application of Partial Amendments Accounting Standard for Tax Effect Accounting)Partial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ Statement No. 28, February 16, 2018) havebeen applied effective the beginning of current fiscal year with deferred tax assets presented in investments and otherassets and deferred tax liabilities presented in noncurrent liabilities.
As a result, 16 million yen of 302 million yen of deferred tax assets under current assets was included in deferred tax assets
under investments and other assets of 45 million yen in the consolidated balance sheet for the prior fiscal year, and 286
million yen of deferred tax assets under current assets of 302 million yen was included in deferred tax liabilities undernoncurrent liabilities of 449 million yen in the consolidated balance sheet for the prior fiscal year.
In addition, the disclosures stipulated in "Interpretive Notes to Accounting Standard for Tax Effect Accounting" (Note 8 andNote 9) (excluding the total amount of the valuation allowance) as stipulated in Paragraphs 3 to 5 of Partial Amendments to
Accounting Standard for Tax Effect Accounting have been added to the notes to tax effect accounting in the consolidated
financial statements. However, comparative information for the prior fiscal year is not presented in accordance with thetransitional treatment stipulated in paragraph 7 of the Partial Amendments.

13

(Additional information)(Board Benefit Trust)
The Company has introduced the “Board Benefit Trust (BBT)” as directors’ remuneration from June 2, 2014 based on the
resolution at the General Meeting of Shareholders held on March 26, 2014. Based on the resolution at the General Meetingof Shareholders held on March 27, 2018, it was determined to continue the scheme and partially revise it. Also, theCompany introduced the Stock Granting Trust (J-ESOP) on the same day to enhance the motivation and morale ofemployees towards improved stock price and business performance, by elevating linkages between the stock price andbusiness performance of the Company and treatment of the employees, and also to promote achievement of the target in
the mid-term business plan and further increase the corporate value of the Company. It is partially revised and continued.
(Hereinafter, the “System.”)(1) Outline of transaction
In introducing the System, the Company established anew the “Director stock benefit regulations” (Hereinafter, “Director
benefit regulations”) and “Stock benefit regulations” (Hereinafter, “Benefit regulations”).
The Company has entrusted funds to a trust bank to enable the prior purchase of the Company stock to be granted in the
future based on the established director stock benefit regulations and benefit regulations (Hereinafter, “the Trust”).
The Board Benefit Trust (BBT) is a program in which points are awarded to directors based on the director benefit
regulations, and stock is granted to the directors according to the points accumulated. Also, the Stock Granting Trust (JESOP) is a program in which points are awarded based on the Benefit regulations according to the business performanceof the Company and each subsidiary for each fiscal year, and stock is granted to the employees based on the number ofpoints accumulated.
(2) Shares of the Company held by the Trust
Shares of the Company held by the Trust are included in treasury stock in the net assets section of the consolidated balance
sheets based on their book value (excluding associated expenses). The book value and the corresponding number of sharesof the Company totaled 524 million yen and 350,672 shares, respectively, as of the end of the prior fiscal year, and 522
million yen and 349,482 shares, respectively, as of the end of the current fiscal year.

14

(Consolidated balance sheets)※ 1. Treatment of trade notes maturing at the end of the fiscal year
Trade notes maturing at the end of the fiscal year are settled on the clearance date. The following notes are outstanding at
the end of the fiscal year, as the maturity date fell on a business holiday for financial institutions.
Prior fiscal year
(As of December 31, 2018)

Current fiscal year
(As of December 31, 2019)

Notes receivable-trade

2 million yen

2 million yen

Notes payable-trade

8 million yen

3 million yen

2. Pledged assets and secured liabilities(Prior fiscal year)
Within the limit of the letter of credit (2,440 million yen), the Company provides the accounts receivable-trade andinventories of its US consolidated subsidiaries as securities under the asset-based loan system of the United States ofAmerica.
(Current fiscal year)
Within the limit of the letter of credit (2,410 million yen), the Company provides the accounts receivable-trade andinventories of its US consolidated subsidiaries as securities under the asset-based loan system of the United States ofAmerica.
※ 3. Revaluation of land
Land for business operations was revalued in accordance with the Land Revaluation Law (Law No. 34 issued on March 31,
1998) and a revaluation reserve for land was recorded under net assets.
Revaluation method
Land value is calculated on the basis of taxable amounts for land value tax along with reasonable adjustments, inaccordance with Article 2, Item 4 of the Enforcement Ordinance relating to the Land Revaluation Law (Cabinet Order No.
119 issued on March 31, 1998). Also, part of the value of land is calculated on the basis of the approved values of
noncurrent assets, stated in Article 2, Item 3, with reasonable adjustments.
Revaluation date: December 31, 2001
Prior fiscal year
(As of December 31, 2018)

Current fiscal year
(As of December 31, 2019)

The difference between the fair value of the landat the end of the period of the revaluation andthe book value after the revaluation:(883) million yen(735) million yen

The difference related to real estate for rent out of
this:(48) million yen(51) million yen

Prior fiscal year
(As of December 31, 2018)

Current fiscal year
(As of December 31, 2019)

761 million yen

769 million yen※ 4. Non-consolidated subsidiaries and affiliates

Investment securities (stock)

The amounts of investment in joint ventures included above were 746 million yen in the prior fiscal year and 754 million
yen in the current fiscal year.
5. Guarantee obligation
A performance bond from a financial institution related to sales order is guaranteed as follows.
Prior fiscal year
(As of December 31, 2018)

Current fiscal year
(As of December 31, 2019)26 million yen

25 million yen

Tianjin Smart Sensor Technology Co., LTD.

15

(Consolidated statements of income)※ 1. Loss on valuation of inventories
Inventories at the end of the year were stated after a reduction of book value due to a decline in profitability and theloss on valuation of inventories included in cost of sales was as follows:
Prior fiscal year
Current fiscal year
(From January 1, 2018
(From January 1, 2019
to December 31, 2018)
to December 31, 2019)
Cost of sales
183 million yen
154 million yen※ 2. Provision for loss on orders received included in cost of sales
Prior fiscal year
(From January 1, 2018
to December 31, 2018)
Cost of sales
1 million yen

Current fiscal year
(From January 1, 2019
to December 31, 2019)－ million yen※ 3. Research and development expenses included in general and administrative expenses and manufacturing costs

General and administrative
expenses

Prior fiscal year
(From January 1, 2018
to December 31, 2018)

Current fiscal year
(From January 1, 2019
to December 31, 2019)

1,675 million yen

1,612 million yen※ 4. Impairment loss
Prior fiscal year (January 1, 2018 to December 31, 2018)
The Group recognized impairment loss on the following assets.
Location

Use

Type

Kingdom of Norway

Other

Goodwill

Impairment loss
44

million yen

The Group groups business assets in accordance with its management accounting categories, which are organized so that
income and expenses can be continuously monitored, while idle assets not directly used in business operations are groupedindividually.
As a result of reviewing the business plan, goodwill arising from the acquisition of shares of P-Cable 3D Seismic AC, aconsolidated subsidiary, was written down to the recoverable amount because estimated cash flows were less than initiallyprojected and the difference amounting to 44 million yen (405,000 US dollars) was recognized as an impairment loss under
extraordinary loss.
The recoverable amount is estimated at value in use, which is the amount calculated based on future cash flow discounted
at a rate of 15%.
Current fiscal year (January 1, 2019 to December 31, 2019)
The Group recognized impairment loss on the following assets.
Location

Use

Type

Impairment loss

Fukuoka-city, Fukuoka

OfficeLand and building156

million yen

Hirosaki-city, Aomori

Rep. Office

Land

9

million yen

The Group groups business assets in accordance with its management accounting categories, which are organized so that
income and expenses can be continuously monitored, while idle assets not directly used in business operations aregrouped individually.

16

For the assets indicated above, due to a determination for disposal by sales in the current fiscal year, the book value was
reduced to the recoverable amount and the write-down of 166 million yen (component: land (103 million yen), building(62 million yen)) was recognized as an impairment loss.
Also, the recoverable amount is estimated at net realizable value, which is the amount calculated by deducting the
expected disposal cost from the estimated sales amount.

17

(Consolidated statements of comprehensive income)※ 1. Reclassification adjustments and tax effects related to each component of other comprehensive income
Prior fiscal year
(From January 1, 2018
to December 31, 2018)
Valuation difference on available-for-salesecurities:
Amount arising during the current fiscal
year
Reclassification adjustment
Amount before tax effectTax effect
Valuation difference on available-forsale securities
Foreign currency translation adjustment:
Amount arising during the current fiscal
year
Reclassification adjustment
Foreign currency translation
adjustment:
Remeasurements of defined benefit plans:
Amount arising during the current fiscal
year
Reclassification adjustment
Amount before tax effectTax effectRemeasurements of defined benefit
plans
Total other comprehensive income

Current fiscal year
(From January 1, 2019
to December 31, 2019)(984) million yen

957 million yen(9) million yen(994) million yen
299 million yen(219) million yen
737 million yen(225) million yen(694) million yen

511 million yen(375) million yen(171) million yen－ million yen(375) million yen(25) million yen(196) million yen(236) million yen

178 million yen(176) million yen(413) million yen
126 million yen(286) million yen

14 million yen
192 million yen(59) million yen
133 million yen(1,356) million yen

448 million yen

18

(Consolidated statements of changes in net assets)
Prior fiscal year (From January 1, 2018 to December 31, 2018)
1. Type and number of shares issued and type and number of treasury stock
Increase in number of
Number of shares atshares during theJanuary 1, 2018
current fiscal year
Issued shares

Decrease in numberof shares during thecurrent fiscal year

Number of shares at
December 31, 2018

Common stock(Notes)1

28,882,573-

1,300,000

27,582,573

Total

28,882,573-

1,300,000

27,582,573

Common stock(Notes)2,3

1,801,594

1,187,259

1,519,280

1,469,573

Total

1,801,594

1,187,259

1,519,280

1,469,573

Treasury stock(Notes) 1 Decrease of 1,300,000 shares of common stock was due to the cancellation of treasury stock by resolution of theBoard of Directors on February 14, 2018.
2 The number of common stock of treasury stock at the beginning of the current fiscal year and at the end of thecurrent fiscal year includes 199,952 shares and 350,672 shares of the Company held by the Trust & Custody Services
Bank, Ltd. (Trust Account).
3 Outline of reasons for the change
Breakdown of increase in the number is as follows:
Increase due to resolution of board meeting
1,000,000 shares
Increase due for acquisition by Trust & Custody Services Bank, Ltd. (Trust Account)
187,000 shares
Increase due to purchase of less than standard unit
259 shares
Breakdown of decrease in the number is as follows.
Cancellation of treasury stock
1,300,000 shares
Decrease due to delivery to Trust & Custody Services Bank, Ltd. (Trust Account)
187,000 shares
Decrease due to demand for sale32,280 shares
2. Subscription rights to shares and treasury stock subscription shares
Not applicable.
3. Dividends(1) Dividends paid
Resolution

Type of shares

Total dividends(Millions ofyen)March 27, 2018
General meeting ofshareholders

Common stock

381

August 10, 2018
Board meeting

Common stock

370

Dividend pershare (Yen)Record date

Effective date

14.00

December 31,
2017

March 28, 2018

14.00

June 30, 2018

September 25,
2018(Notes) 1 The total amount of dividends resolved by the General Meeting of Shareholders of March 27, 2018 includes 2
million yen of dividends distributed to treasury stock held by the Trust & Custody Services Bank, Ltd. (Trust
Account).
2 The total amount of dividends resolved by the Board of Directors of August 10, 2018 includes 4 million yen of
dividends distributed to treasury stock held by the Trust & Custody Services Bank, Ltd. (Trust Account).

19

(2) Dividends for which the settlement date was within the current fiscal year but the effective date in the following
fiscal year
Total dividend
Type of
Source ofDividend per
Resolution(Millions ofRecord date
Effective datesharesdividends
share (Yen)yen)
March 27, 2019
GeneralCommonRetained
December 31,
March 28,370
14.00
meeting ofstock
earnings
20182019
shareholders(Note) The total amount of dividends resolved by the Board of Directors of March 27, 2019 includes 4 million yen of
dividends distributed to treasury stock held by the Trust & Custody Services Bank, Ltd. (Trust Account).
Current fiscal year (From January 1, 2019 to December 31, 2019)
1. Type and number of shares issued and type and number of treasury stock
Increase in number of
Number of shares atshares during theJanuary 1, 2019
current fiscal year
Issued shares

Decrease in numberof shares during thecurrent fiscal year

Number of shares at
December 31, 2019

Common stock(Notes)1

27,582,573--

27,582,573

Total

27,582,573--

27,582,573

1,469,573

283

1,215

1,468,641

1,469,573

283

1,215

1,468,641

Treasury stock
Common stock(Notes)2,3
Total(Notes)1 The number of common stock of treasury stock at the beginning of the current fiscal year and at the end of
the current fiscal year includes 350,672 shares and 349,482 shares of the Company held by the Trust &Custody Services Bank, Ltd. (Trust Account).
2 Outline of reasons for the change
Breakdown of increase in the number is as follows.
Increase due to purchase of less than standard unit
283 shares
Breakdown of decrease in the number is as follows.
Decrease due to demand for sale of less than standard unit
25 shares
Decrease due to demand for sale
1,190 shares

2. Subscription rights to shares and treasury stock subscription shares
Not applicable.
3. Dividends(1) Dividends paid
Resolution

Type of shares

Total dividends(Millions of yen)March 27, 2019
General meeting ofshareholders

Common stock

370

August 9, 2019
Board meeting

Common stock

370

Dividend pershare (Yen)Record date

Effective date

14.00

December 31,
2018

March 28, 2019

14.00

June 30, 2019

September 24,
2019(Notes) 1 The total amount of dividends resolved by the General Meeting of Shareholders of March 27, 2019 includes 4
million yen of dividends distributed to treasury stock held by the Trust & Custody Services Bank, Ltd. (Trust Account).
2 The total amount of dividends resolved by the Board of Directors of August 9, 2019 includes 4 million yen of
dividends distributed to treasury stock held by the Trust & Custody Services Bank, Ltd. (Trust Account).
(2) Dividends for which the settlement date was within the current fiscal year but the effective date in the following fiscal
year

20

Resolution

Type ofsharesTotal dividend(Millions of yen)March 27, 2020
General meeting ofshareholders

Commonstock

423

Source ofdividends
Retainedearnings

Dividend pershare (Yen)Record date

Effective date

16.00

December 31,
2019

March 30, 2020

(Note) The total amount of dividends resolved by the Ordinary General Meeting of Shareholders of March 27, 2020 includes
5 million yen of dividends distributed to treasury stock held by the Trust & Custody Services Bank, Ltd. (Trust
Account).

(Consolidated statements of cash flows)※ 1. The relationship between the year-end balance of cash and cash equivalents and amounts in the consolidated balance sheets
Prior fiscal year
(From January 1, 2018
to December 31, 2018)25,536 million yen

Current fiscal year
(From January 1, 2019
to December 31, 2019)
26,352 million yen

899 million yen

1,199 million yen

Total

26,435 million yen

27,552 million yen

Time deposits with maturities ofmore than 3 months(6,136) million yen(6,086) million yen

Stock and debt securities withredemption period exceeding
3 months(899) million yen(899) million yen

Cash and cash equivalents

19,399 million yen

20,565 million yen

Cash and deposits
Short-term investment securities※ 2. Breakdown of assets acquired and liabilities assumed of newly consolidated subsidiary due share acquisition

Assets and liabilities of FONG CONSULT PTE.LTD. and FC INSPECTION PTE.LTD. on the date of acquisition as well as therelationship between the acquisition cost and net disbursement for the acquisition were presented below:
Current assets
562 million yen
Noncurrent assets

126 million yen

Goodwill

109 million yen

Current liabilities(237) million yen

Noncurrent liabilities(59) million yen

Non-controlling interests(192) million yen

Acquisition cost of shares

309 million yen

Cash and cash equivalents(57) million yen

Difference: Net disbursement for the acquisition

251 million yen

21

3. Significant noncash transactions(1) The amount of assets and liabilities related to finance lease transactions
Prior fiscal year
(As of December 31, 2018)

Current fiscal year
(As of December 31, 2019)

96 million yen

119 million yen

Prior fiscal year
(From January 1, 2018
to December 31, 2018)

Current fiscal year
(From January 1, 2019
to December 31, 2019)

Amount of assets and liabilities related tofinance lease transactions(2) Cancellation of treasury stock

Cancellation of treasury stock

1,515 million yen

22－ million yen

(Lease transactions)1. Finance lease transactions (lessee)
Lease transactions which stipulate the transfer of ownership of leased assets to the lessee(a) Lease assets
Property, plant and equipment
Primarily consists of equipment for analysis and measurement (Tools, furniture and fixtures) for geo-engineering andconsultation services.
(b) Depreciation method for lease assets
Described in Significant accounting policies “4. Accounting policies, item (2) Depreciation method of significant depreciable
assets.”
2. Operating lease transactions
Unearned lease payments for noncancellable operating lease transactions(Millions of yen)
Prior fiscal year
(As of December 31, 2018)

Current fiscal year
(As of December 31, 2019)

Due in 1 year or less

112

128

Due after 1 year

503

426

Total

616

554

3. Sublease transactions in the consolidated balance sheets are recorded inclusive of tax on interest(1) Lease receivables and investment assets(Millions of yen)
Prior fiscal year
(As of December 31, 2018)
Current assets

Current fiscal year
(As of December 31, 2019)

2,440

2,934

(2) Lease obligations(Millions of yen)
Prior fiscal year
(As of December 31, 2018)
Current liabilities
Noncurrent liabilities

23

Current fiscal year
(As of December 31, 2019)
961

1,154

1,479

1,779

(Financial instruments)
1. Accounting policies(1) Policy for financial instruments
The Group funds business investments and short-term operations with its own resources, in principle. The Group invests
surpluses in highly rated financial instruments. The Group enters into derivative transactions to hedge future risks ofexchange rate fluctuations, but does not engage in speculative trading.
(2) Types of financial instruments and related risks
Operating receivables, such as notes and accounts receivable-trade and accounts receivable-completed operations, areexposed to credit risks in relation to customers; and trade receivables denominated in foreign currencies are exposed to
exchange rate fluctuation risks. The Company uses derivative transactions (currency swaps and forward-exchange
contracts) to hedge part of its operating receivables.
Short-term investment securities and investment securities are mainly highly-rated bonds, investment trusts and stock of
the companies with which the Group has business relationships; and these are exposed to market-price fluctuation risks.
Operating payables, such as notes and accounts payable-trade and accounts payable-operating, are mostly payable within
one year or less. Trade payables denominated in foreign currencies are exposed to exchange fluctuation risks. The
Company uses derivative transactions (currency swaps and forward-exchange contracts) to hedge part of its operating
payables.
Derivative transactions are currency swaps and forward-exchange contracts for foreign currency in order to avoid exchange
rate fluctuations. Regarding the hedging instruments, hedged items and hedging policy and method of measuring hedge
effectiveness, refer to the information described in “4. Accounting policies, (6) Significant hedge accounting method”.
(3) Risk management for financial instruments(a) Credit risk (risks related to customers’ contract delinquency) management
In accordance with the Company’s business management policy, the Company regularly monitors its customers' financial
situations and controls record dates and outstanding balances per customer for operating receivables. The Company
applies a similar management system to its consolidated subsidiaries.
For short-term investment securities and investment securities, the Company selects highly rated financial instruments, inaccordance with its securities policy. Accordingly, the credit risk is insignificant.
For derivative transactions, the Company limits counterparties to highly rated financial institutions. Accordingly, the credit
risk is minimal.
(b) Market risk (exchange rate/interest rate fluctuations) management
The Company hedges against the exchange fluctuations utilizing currency swaps and forward-exchange contracts for part ofits operating payables and receivables denominated in foreign currencies.
For short-term investment securities and investment securities, the Company regularly monitors market conditions and thefair values of its securities. The Company also intermittently reviews its status of its shareholdings, considering its
relationships with the companies.
For enforcement and management of derivative transactions, the Company follows the Company’s rules with regard todecision-making authority and the maximum limit for transactions, and the fund management division conducts thetransactions with the approval of the person in charge of decision-making.
The Company applies a similar management system to its consolidated subsidiaries.
(c) Liquidity risk (risk of not being able to complete payment before due date) management
The responsible division of the Company creates and reviews fund management plans on a timely basis and manages theliquidity risk by keeping funds on hand.
The Company applies a similar management system to its consolidated subsidiaries.
(4) Supplementary explanation on fair values of financial instruments
Fair value of financial instruments is defined as the market-based price and the price reasonably calculated when there is nomarket price available. Since various assumptions and factors are reflected in estimating the fair value, different assumptions
and factors could result in a different fair value. In addition, the notional amounts of derivatives in the note “Derivativetransactions” are not necessarily indicative of the market risk regarding the derivative transactions.

24

2. Fair value of financial instruments
The book values on the consolidated balance sheets, fair value and the difference between them are shown in the following
table. The following table does not include items for which the calculation of fair value is not readily determinable (See Note
2 below).
Prior fiscal year (As of December 31, 2018)(1) Cash and deposits(2) Notes and accounts receivable-trade(3) Accounts receivable-completed operations(4) Short-term investment securities andinvestment securities
Available-for-sale securities

25,536
1,791
19,518Fair value(Millions ofyen)
25,536
1,791
19,518

5,939

5,939

-

Total assets(1) Notes and accounts payable-trade(2) Accounts payable-operating(3) Income taxes payable
Total liabilities

52,785
720
1,433
421
2,574

52,785
720
1,433
421
2,574

-

Book value on consolidated balance
sheets (Millions of yen)

Difference(Millions ofyen)-

Current fiscal year (As of December 31, 2019)

26,352
1,781
22,911

Fair value(Millions ofyen)
26,352
1,781
22,911

6,510
57,555
636
1,831
864
3,331

6,510
57,555
636
1,831
864
3,331

Book value on consolidated balance
sheets (Millions of yen)
(1) Cash and deposits(2) Notes and accounts receivable-trade(3) Accounts receivable-completed operations(4) Short-term investment securities andinvestment securities
Available-for-sale securities
Total assets(1) Notes and accounts payable-trade(2) Accounts payable-operating(3) Income taxes payable
Total liabilities

Difference(Millions ofyen)-(Notes) 1. Method of calculating the fair value of financial instruments and matters related to securities and derivativetransactions
Assets(1) Cash and deposits, (2) Notes and accounts receivable-trade, (3) Accounts receivable-completed operations
As these instruments are settled within a short term and their fair values and book values are nearly equal,
their book values are assumed as their fair values.
(4) Short-term investment securities and investment securities
The fair value of stocks is determined by their price on stock exchanges and the fair value of bonds andinvestment trusts is determined by the prices indicated by the dealers or financial institutions. For information
on securities classified by holding purpose, please refer to the note “Securities”.
Liabilities(1) Notes and accounts payable-trade, (2) Accounts payable-operating, (3) Income taxes payable
Since these instruments are settled within a short term and their fair value and book value are nearly equal,
their book value is assumed as their fair value.

25

2. The book value on the consolidated balance sheet of the financial instruments for which fair value is extremely
difficult to determine(Millions of yen)Classifications

December 31, 2018

Investments in a limited partnership
Unlisted stocks
Stocks of subsidiaries and affiliates

December 31, 2019
0
216
761

0
216
769

These instruments do not have market prices and it is extremely difficult to determine fair value. Accordingly,
they were not included in “(4) Short-term investment securities and investment securities”.
3. Redemption schedule of receivables and securities with maturities
Prior fiscal year (As of December 31, 2018)

Cash and deposits
Notes and accounts receivable-trade
Accounts receivable-completed operation
Short-term investment securities and investment
securities
Available-for-sale securities with maturities

Due within
1 year or less(Millions ofyen)
25,517
1,791
19,518Due after 1
year through 5
years (Millionsof yen)-Due after 5
years through10 years(Millions of yen)-

900
47,727

850
82
932

-

1. Bonds(1) Government bonds/local authority
bonds,etc.
(2) Corporate bonds(3) Others
2. Others
Total

Due after
10 years(Millions of yen)--

Current fiscal year (As of December 31, 2019)26,337
1,781
22,911

Due after 1
year
through 5
years(Millions ofyen)-

Due after 5
years
through 10
years(Millions of
yen)
-

200
1,000
0
52,230

750
83
833

-

Due within
1 year or
less(Millions ofyen)Cash and deposits
Notes and accounts receivable-trade
Accounts receivable-completed operation
Short-term investment securities and investment
securities
Available-for-sale securities with maturities
1. Bonds(1) Government bonds/local authority bonds,(2) Corporate bonds(3) Others
2. Others
Total

etc.

26

Due after
10 years(Millions of
yen)
-

-

4. Repayment schedule of lease obligations due after the balance sheet date.
Prior fiscal year (As of December 31, 2018)

Leaseobligations

Within one
year(Millions ofyen)

Due after 1
year butwithin 2
years(Millions ofyen)

Due after 2
years butwithin 3
years(Millions ofyen)

Due after 3
years butwithin 4
years(Millions ofyen)

Due after 4
years butwithin 5
years(Millions ofyen)

Due after 5
years(Millions of
yen)

1,041

769

469

273

90

12

Current fiscal year (As of December 31, 2019)

Lease
obligations

Within one
year(Millions ofyen)

Due after 1
year butwithin 2
years(Millions ofyen)

Due after 2
years butwithin 3
years(Millions ofyen)

Due after 3
years butwithin 4
years(Millions ofyen)

Due after 4
years butwithin 5
years(Millions ofyen)

Due after 5
years(Millions of
yen)

1,266

948

576

301

106

37

27

(Securities)
1. Available-for-sale securities
Prior fiscal year (As of December 31, 2018)
TypeBook value on the consolidatedbalance sheets (Millions of
yen)
3,863

Acquisition cost
(Millions of
yen)
1,990

Difference(Millionsof yen)1,872(1) Stocks(2) Bonds
Investments with(a) Government bonds/local
book values on theauthority bonds, etc.
consolidated balance(b) Corporate bonds
sheets exceeding(c) Others
200
200
0
acquisition cost(3) Others
25
19
6
Sub total
4,088
2,209
1,878
(1) Stocks
79
141
(62)
(2) Bonds
Investments with(a) Government bonds/local
book values on theauthority bonds, etc.
consolidated balance(b) Corporate bonds
sheets not exceeding(c) Others
1,231
1,250
(18)
acquisition cost(3) Others
539
561
(21)
Sub total
1,850
1,953
(102)
Total
5,939
4,162
1,776
(Note) Unlisted stocks (book value on the consolidated balance sheet: 216 million yen) do not have market prices, and it isextremely difficult to determine the fair values. Accordingly, these securities are not included in the above table,“Available-for-sale securities”.
Current fiscal year (As of December 31, 2019)
TypeBook value on the consolidatedbalance sheets (Millions ofyen)

Acquisition
cost(Millions of
yen)
1,758

Difference(Millions ofyen)(1) Stocks
4,289
2,530
(2) Bonds
Investments with(a) Government bonds/local
book values on theauthority bonds, etc.
consolidated balance(b) Corporate bonds
sheets exceeding(c) Others
652
650
2
acquisition cost(3) Others
28
19
8
Sub total
4,969
2,428
2,541
(1) Stocks
34(0)(2) Bonds
Investments with(a) Government bonds/local
book values on theauthority bonds, etc.
consolidated balance(b) Corporate bonds
199
200
(0)
sheets not exceeding(c) Others
1,096
1,100
(3)
acquisition cost(3) Others
240
260
(19)
Sub total
1,540
1,564
(23)
Total
6,510
3,992
2,517
(Note) Unlisted stocks (book value on the consolidated balance sheet: 216 million yen) do not have market prices, and it isextremely difficult to determine the fair values. Accordingly, these securities are not included in the above table,“Available-for-sale securities”.

28

2. Available-for-sale securities soldPrior fiscal year (From January 1, 2018 to December 31, 2018)
Sales price
Type(Millions of yen)
(1) Stocks
25

Total gains on sales(Millions of yen)

Total losses on sales(Millions of yen)
9

-

-

-

-

-

-

-

-

-

-

-

-

-

25

9

-

(2) Bonds(a) Government
bonds/local authority
bonds, etc.
(b) Corporate bonds(c) Others(3) Others
Total

Current fiscal year (From January 1, 2019 to December 31, 2019)
Sales priceTotal gains on sales
Type(Millions of yen)
(Millions of yen)
(1) Stocks
597
278

Total losses on sales(Millions of yen)
53

(2) Bonds(a) Government
bonds/local authority
bonds, etc.
(b) Corporate bonds(c) Others(3) Others
Total

-

-

-

-

-

-

-

-

-

-

-

-

597

278

53

29

(Retirement benefits)
1. Description of retirement benefit plans provided by the Company
The Company and certain domestic consolidated subsidiaries have established a contract-type defined pension plan (CashBalance Plan) and retirement lump-sum payment plan as a defined benefit-type program.
The other domestic subsidiaries and overseas subsidiaries adopt a defined contribution program such as the Smaller
Enterprise Retirement Allowance Mutual Aid System.
In some cases, an additional retirement allowance, which is not included in the retirement benefit obligation,mathematically calculated in accordance with retirement benefit accounting, may be paid out at retirement of theemployees.
Also, with respect to defined benefit pension plan and lump-sum retirement allowance plan operated by certain domestic
consolidated subsidiaries, the net defined benefit liability and retirement benefit expenses are calculated by acompendium method.
From October 1, 2017, a defined contribution pension plan was newly established by the Company.
2. Defined benefit plan
(1) Changes in the retirement benefit obligations at beginning of the year and end of the year
(Excluding plans for which a compendium method is applied stated in (3))
Prior fiscal year
(From January 1, 2018
to December 31, 2018)(Millions of yen)
Current fiscal year
(From January 1, 2019
to December 31, 2019)

6,471
285
18
(108)
(385)
6,281

6,281
276
15
33
(500)
6,106

Prior fiscal year
(From January 1, 2018
to December 31, 2018)
6,022
120
(345)
127
(268)
5,655

(Millions of yen)
Current fiscal year
(From January 1, 2019
to December 31, 2019)
5,655
113
212
128
(316)
5,793

Retirement benefit obligations at beginning of the year
Service cost
Interest cost
Actuarial gain or loss
Retirement benefits paid
Retirement benefit obligations at end of the year
(2) Changes in plan assets at beginning of the year and end of the year
(Excluding plans for which a compendium method is applied stated in (3))

Plan assets at beginning of the year
Expected return on plan assets
Actuarial gain or loss
Contribution by the Company
Retirement benefits paid
Plan assets at end of the year

(3) Changes in net defined benefit liability calculated using a compendium method at beginning of the year and end of
the year (net)(Millions of yen)
Prior fiscal year
Current fiscal year
(From January 1, 2018
(From January 1, 2019
to December 31, 2018)
to December 31, 2019)
Net defined benefit liability at beginning of the year (net)(10)
8Retirement benefits expenses
94
14
Retirement benefits paid
(22)
(21)
Contribution to the system
(52)
(18)
Net defined benefit liability at end of the year (net)
8
(16)

30

(4) Reconciliation of retirement benefit obligations and plan assets at end of the year and net defined benefit liability and net
defined benefit asset provided on the consolidated balance sheets(Millions of yen)
Prior fiscal year
Current fiscal year
(From January 1, 2018
(From January 1, 2019
to December 31, 2018)
to December 31, 2019)
Funded projected benefit obligations
4,499
4,392
Plan assets(5,806)(5,961)(1,306)(1,569)Unfunded projected benefit obligations
1,940
1,866
Net liability for projected benefit obligations in the634
296
consolidated balance sheets
Net defined benefit liability
1,940
1,866
Net defined benefit asset(1,306)(1,569)Net liability for projected benefit obligations in the634
296
consolidated balance sheets(Note) Including plans for which a compendium method is adopted.
(5) Retirement benefit expenses

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial gain or loss
Other
Retirement benefit expenses calculated by compendium
methodRetirement benefit expenses related to defined benefit plans

Prior fiscal year
(From January 1, 2018
to December 31, 2018)
285
18
(120)
(176)
10

(Millions of yen)
Current fiscal year
(From January 1, 2019
to December 31, 2019)
276
15
(113)
14
3

94

14

112

211

(6) Remeasurements of defined benefit plans included in other comprehensive income
The breakdown of remeasurements of defined benefit plans (before tax effect) is as follows.
Prior fiscal year
(From January 1, 2018
to December 31, 2018)
(176)
(176)

Actuarial gain or loss
Total

(Millions of yen)
Current fiscal year
(From January 1, 2019
to December 31, 2019)1414(7) Remeasurements of defined benefit plans included in accumulated other comprehensive income
The breakdown of accumulated remeasurements of defined benefit plans (before tax effect) is as follows.
(Millions of yen)
Prior fiscal year
Current fiscal year
(From January 1, 2018
(From January 1, 2019
to December 31, 2018)
to December 31, 2019)
Unrecognized actuarial gain or loss
(59)
(252)
Total
(59)
(252)

31

(8) Matters related to plan assets① Major breakdown of plan assets

Ratios of asset classes to total plan assets by major classification are as follows.
Prior fiscal year
(From January 1, 2018
to December 31, 2018)
72 %
23 %
3%
2%
100 %

Bonds
StocksGeneral accounts
Others
Total

Current fiscal year
(From January 1, 2019
to December 31, 2019)
60 %
24 %
3%
13 %
100 %

② Method of determining long-term expected rates of return on plan assets

In order to determine the long-term expected rates of return on plan assets, the Company considers the present andanticipated allocation of plan assets and the present and expected long-term rates of return on plan assets in the futurefrom various assets that constitute the plan assets.
(9) Actuarial assumptions
Major actuarial assumptions
Prior fiscal year
(From January 1, 2018
to December 31, 2018)
0.2 % ～0.9 %2.0 %Discount rates
Long-term expected rates of return on plan assets

Current fiscal year
(From January 1, 2019
to December 31, 2019)0.05 % ～0.5 %2.0 %3. Defined contribution pension plans
Required contributions by the Company and its consolidated subsidiaries to defined contribution pension plans were 337
million yen for the prior fiscal year and 335 million yen for the current fiscal year.

32

(Tax effect accounting)
1. Significant components of deferred tax assets and liabilities
Prior fiscal year
(As of December 31, 2018)

Current fiscal year
(As of December 31, 2019)

Net operating loss carryforwards

240 million yen

178 million yen

Net defined benefit liability

405 million yen

486 million yen

Allowance for doubtful accounts

160 million yen

138 million yen

Provision for bonuses

52 million yen

56 million yen

Enterprise tax payable

51 million yen

72 million yen

Loss on valuation of securities

31 million yen

31 million yen

Loss on valuation of inventories

121 million yen

170 million yen

Revaluation reserve for land

1,083 million yen

1,083 million yen

Others

797 million yen

957 million yen

Deferred tax assets: Sub total

2,944 million yen

3,174 million yen

Valuation allowance for net－(169) million yen－(1,914) million yen

Valuation allowance (Note1)(2,130) million yen(2,083) million yen

Deferred tax assets: Total

814 million yen

1,090 million yen

Balance of investments(valuation difference of noncurrent assets)(216) million yen(219) million yen

Revaluation reserve for land(416) million yen(327) million yen

Valuation differences on assets received
by merger(133) million yen(133) million yen

Valuation difference on available-for-salesecurities(532) million yen(757) million yen

Retained earnings of overseas subsidiaries(130) million yen(135) million yen

Net defined benefit assets(205) million yen(389) million yen－(76) million yen

Deferred tax liabilities: Total(1,634) million yen(2,039) million yen

Net deferred tax liabilities(820) million yen(948) million yen

Deferred tax assets

operating loss carry forwards (Note2)
Valuation allowance for deductible
temporary differences

Deferred tax liabilities

Other(Notes) 1. Valuation allowance decreased by 46 million yen. This decrease was mainly due to the decrease in 64 million
yen in the valuation allowance for net operating loss carryforwards of consolidated subsidiaries.

2. Net operating loss carryforwards and related deferred tax assets expire as follows:33

Current fiscal year (As of December 31, 2019)
Within1 yearNet operating loss
carryforwards (a)Valuation allowance10

Due after
1 yearbut
within 2
years
3

Due after
2 yearsbut
within3 years

Due after
3 yearsbut
within4 years

Due after
4 yearsbut
within5 years

Due after
5 years

11

1

1

150

Total

178 million
yen
(10)
(3)
(11)
(1)
(1)
(141) (169) million
yen
Deferred tax assets
8 8 million yen(b)(a) Net operating loss carryforwards is the amount obtained by multiplying by the statutory tax rate.
(b) Valuation allowance is not recognized for the portion of net operating loss carryforwards deemed recoverable
based on estimated future taxable income.
2. The reconciliation between the effective tax rate reflected in the consolidated statements of income and the statutory tax
rate is as follows:
Prior fiscal year
(As of December 31, 2018)

Current fiscal year
(As of December 31, 2019)30.9 %－

Permanently non-deductible entertainmentand other expenses

0.3 %

－

Permanently non-taxable dividends andother income(0.3)%－

Per-capita inhabitant tax

5.1 %

－

Equity in earnings of affiliates(1.3)%－

Valuation allowance

21.1%

－

Effect of tax deduction(5.7)%－

Amortization of goodwill

1.3%

－

0.0%

－

Others7.3%－

Effective tax rates

58.7%

－

Statutory effective tax rate in Japan(Reconciliation)

Effect of enacted changes in tax laws andrate(Note) The reconciliation between the effective tax rate reflected in the consolidated statement of income and the statutory
tax rate for the current fiscal year was omitted as the difference is less than 5% of the statutory tax rate.
(Business combinations)(Business combination due to acquisition)
Following the acquisition of shares of two Singaporean companies (Fong Consult Pte. Ltd. and FC Inspection. Pte. Ltd.) on
January 11, 2019, based on the board meeting held on October 9, 2018, these two companies became subsidiaries.
(1) Summary of business combination
1. Name and business description of the acquired companies
Fong Consult Pte. Ltd.
FC Inspection. Pte. Ltd.
Names of acquired companies(hereinafter referred as F)(hereinafter referred as FCI)
Consulting businessResearch business (inspection ofBusiness description(design, design inspection,
construction)34

construction management)
2. Major reason for business combination
The business combination was undertaken for overseas expansion of the business, adding the infrastructure maintenancebusiness owned by the group company to the civil engineering and construction market of Southeast Asia, where F and FCI
are active. Furthermore, the two companies will have a synergistic effect on business development.
3. Date of business combination
January 11, 2019 (deemed acquisition date: January 1, 2019)
4. Legal form of business combination
Acquisition of shares for a cash consideration
5. Name of companies after business combination
Unchanged
6. Ratio of voting rights acquired
51% (for both companies)
7. Reasons for determining acquiring company
The Company acquired shares for a cash consideration thus acquiring 51% of the voting rights.
(2) Period for which sales results of the acquired company are included in the consolidated financial statements
From January 1, 2019 to December 31, 2019(3) Breakdown of acquisition cost and types of consideration
Consideration
Cash3,825 thousand Singaporean dollars

Acquisition cost
(Note) Acquisition cost does not include any contingent consideration.

3,825 thousand Singaporean dollars(4) Breakdown of acquisition cost including contingent consideration provided in the acquisition agreement and its accounting
treatment In the future.
Additional payments will be made based on the occurrence of certain milestone events in accordance with the share transfer
agreement. Also, if the acquisition cost is revised, the consideration paid at acquisition and the acquisition price, amount of
goodwill and amortization of goodwill will be adjusted retrospectively.
(5) Breakdown of main cost related to acquisition and amount
Advisory cost 75 million yen(6) Amount of goodwill arising from business combination, reason for occurrence, amortization method and period① Amount of goodwill recognized
1,351 thousand Singaporean dollars② Reason for occurrence
Goodwill was recognized for future excess earning power expected from the future business development.
③ Amortization method and amortization period
Goodwill is amortized by the straight-line method over 10 years(7) Assets acquired and liabilities assumed from business combination and main breakdown
Current assets: 562 million yen
Noncurrent assets: 126 million yen
Total assets: 689 million yen
Current liabilities: 237 million yen
Noncurrent liabilities: 59 million yen
Total liabilities: 297 million yen(Asset retirement obligations)
The Company recognizes the obligations of properly restoration at the end of a tenancy agreement as asset retirement
obligations.
For asset retirement obligations at the end of the current fiscal year, instead of calculating liabilities, the Company
reasonably estimated the amount of deposits unlikely to be returned at the end of the tenancy agreements and has included
this portion in the current fiscal year as an expense.
(Rental real estate)

35

The Company and certain of its consolidated subsidiaries own apartment buildings (including land) in Ibaraki Prefecture andother regions.
Income or loss from rental of these properties during the prior fiscal year totaled 33 million yen (Rental income has
principally been included in non-operating income and rental expenses in non-operating expenses).
Income or loss from rental of these properties during the current fiscal year totaled 34 million yen (Rental income has
principally been included in non-operating income and rental expenses in non-operating expenses).
The book value for this rental real estate as stated in the consolidated balance sheets, the amount of increase/decreaseduring the current fiscal year and fair value were as follows:(Millions of yen)Book value in the
consolidated balance
sheetsPrior fiscal year
(From January 1, 2018
to December 31, 2018)

Current fiscal year
(From January 1, 2019
to December 31, 2019)

Balance at the beginning of
the fiscal year

602

591

Increase/decrease during
the fiscal year

(10)

(10)

Balance at the end of the
fiscal year

591

581

570

543

Fair value at the end of the year

(Notes) 1. The book value in the consolidated balance sheets represented acquisition cost less accumulated depreciation.
2. The amount of increase/decrease during the prior fiscal year was mainly due to depreciation (10 million yen).
The amount of increase/decrease during the current fiscal year was mainly due to depreciation (10 million yen).
3. Each fair value at the end of the current fiscal year was calculated by the Company on the basis of the real estateappraisal standards by outside estate surveyors for main properties and on the indexes that were considered tobe reflecting the market price such as land assessments for other properties.

36

(Segment information)【Segment information】
1. Outline of reportable segments
The reportable segments of the Company are, among the Group's business units, those for which separate financial
information can be obtained and that are regularly reviewed by the Board in order to decide the distribution of resources
and to assess business performance.
<Infrastructure Maintenance, Management, and Renovation>
This segment mainly provides solution services to support the renovation and maintenance of social infrastructure. The
main services include services related to surveying, diagnostics, and maintenance of social infrastructure managed bynational and local governments, construction of maintenance and management systems, surveying and design services formaintenance for resilient infrastructure, development and sales of non-destructive inspection products and construction,
installation, and renovation of monitoring systems.
<Natural Disaster Prevention and Mitigation>
This segment mainly provides solution services and systems that reinforce society and businesses against natural disasters(earthquakes/tsunami, volcanic disasters, heavy rainfall, landslides, and others). The main services include surveying anddesign for restoration of affected areas following natural disasters, damage simulations involving earthquakes, tsunami, fires,and others that are related to disaster prevention for national and local governments, surveys, damage projection, andcountermeasure consulting for natural disaster risk related to business continuation plans for corporations, construction,
installation, and renovation of monitoring services related to natural disasters such as seismometer networks and forest firemonitoring.
<Environment>This segment provides solution services and systems to support conservation of the social environment and to reduce theburden on the earth’s environment. The main services are consulting for surveys and measures to protect the social
environment concerning waste treatment, soil and groundwater contamination and asbestos, surveying and consulting forthe natural environment, such as measures against global warming and conservation of biodiversity, and construction,
installation, and renovation of environment monitoring systems.
<Natural Resources and Energy>
This segment provides solution services to support development, conservation, and resource and energy efficiency. The main
component is advanced geological survey consulting for constructing power plants, development and surveying of methane
hydrate, support of renewable energy such as geothermal and earth thermal energy, development and sales of resource
analysis, and 3D subsea exploration services and systems.
2. Calculation method of net sales, income and loss, assets and other items
The accounting method for reportable business segments is the same as is described in "Significant accounting policies."
Income for reportable segments is based on operating income. Segment assets are not disclosed since they are not subject toa determination of management resource allocation or evaluation of business results. Inter-segment sales or transfers are
based on actual market prices.

37

3. Information on net sales, income or loss, assets and other items per reportable segment
Prior fiscal year (From January 1, 2018 to December 31, 2018)(Millions of yen)
Reportable segments
Adjustment(Note 1)

Book value on
consolidated
financialstatements(Note 2)

45,232-

45,232

-

147

(147)

-

8,521

8,287

45,380(147)

45,232

391

528

(543)

1,480

1

1,481

373

200

242

290

1,107

-

1,107

Amortization of goodwill

-

-

-

77

77

-

77

Equity in earnings ofaffiliates

3

12

-

62

78

-

78

Infrastructure
Maintenance,
Management,
andRenovation

NaturalDisasterPrevention
andMitigation

19,216

Environment

NaturalResourcesandEnergy

Total

9,217

8,512

8,287

53

85

8

Total

19,2699,302

Segment income (loss)

1,104

Net sales
Sales to third parties
Inter-segment sales ortransfer

Other items
Depreciation andamortization(Notes) 1. An adjustment of 1 million yen in the segment income (loss) was due to the elimination of inter-segment revenues.
2. Segment income was adjusted by the amount of operating income as stated on the consolidated statements ofincome.
3. Segment assets are not disclosed since they are not subject to a determination of management resource allocation or
evaluation of business results. However, depreciation is allocated to each business segment based on areasonable distribution basis.
Current fiscal year (From January 1, 2019 to December 31, 2019)(Millions of yen)
Reportable segments
Infrastructure
Maintenance,
Management,
andRenovation

NaturalDisasterPrevention
andMitigation

Sales to third parties

22,923

Inter-segment sales ortransfer

Book value on
consolidated
financialstatements(Note 2)

Environment

NaturalResourcesandEnergyTotal

11,727

8,962

10,26953,883

600

63

34

8

707

(707)

-

Total

23,524

11,7908,997

10,27754,591(707)

53,883

Segment income (loss)

1,250

806

649

(121)

2,584

(2)

2,581

Depreciation andamortization

462

205

238

252

1,159

-

1,159

Amortization of goodwill

37

-

-

17

54

-

54

Equity in earnings ofaffiliates

(8)

3

-

64

59

-

59

Adjustment(Note 1)

Net sales－

53,883

Other items(Notes) 1. An adjustment of (2) million yen in the segment income (loss) was due to the elimination of inter-segment revenues.
2. Segment income was adjusted by the amount of operating income as stated on the consolidated statements ofincome.

38

3. Segment assets are not disclosed since they are not subject to a determination of management resource allocation or
evaluation of business results. However, depreciation is allocated to each business segment based on a reasonabledistribution basis.

39

【Related information】
Prior fiscal year (From January 1, 2018 to December 31, 2018)
1. Breakdown by product and service
Details are omitted because identical information is disclosed in the segment information section.
2. Breakdown by area
(1) Net sales(Millions of yen)Japan

United States

OthersTotal

35,9133,537
5,781(Note) Net sales are based on the location of customers and are classified by geographic proximity.

45,232(2) Property, plant and equipment(Millions of yen)Japan

United States
11,159Others
1,333

Total
75

12,568(Change in presentation)
From the current fiscal year, the geographic area name "North America" was changed to "United States".
3. Breakdown by customer(Millions of yen)
Name of customer

Net sales

Ministry of Land, Infrastructure,
Transport and Tourism

Relevant segment
4,516

Infrastructure Maintenance, Management, andRenovation; Natural Disaster Prevention and
Mitigation; Environment

Current fiscal year (From January 1, 2019 to December 31, 2019)
1. Breakdown by product and service
Details are omitted because identical information is disclosed in the segment information section.
2. Breakdown by area
(1) Net sales(Millions of yen)Japan

the United States

OthersTotal

42,6804,427
6,774(Note) Net sales are based on the location of customers and are classified by geographic proximity.

53,883(2) Property, plant and equipment(Millions of yen)Japan

the United States
11,194

Others

1,317

Total
85

12,597

3. Breakdown by customer
This information is omitted because there is no single external customer that accounts for 10% or more of net sales on
the consolidated statements of income.

40

【Information about impairment loss of noncurrent assets per reportable segment】
Prior fiscal year (From January 1, 2018 to December 31, 2018)(Millions of yen)
Infrastructure
Maintenance,
Management,
and Renovation

Natural Disaster
Prevention and
Mitigation--

Impairment loss

Environment-

Natural Resources
and Energy

Eliminations
or
corporate

44

－

Total
44

Current fiscal year (From January 1, 2019 to December 31, 2019)(Millions of yen)
Infrastructure
Maintenance,
Management,
and Renovation

Natural Disaster
Prevention and
Mitigation--

Impairment loss

Environment

9Natural Resources
and Energy

Eliminations
or
corporate

0

156

Total
166

【Information about amortization of goodwill and unamortized balance per reportable segment】
Prior fiscal year (From January 1, 2019 to December 31, 2019)(Millions of yen)
Infrastructure
Maintenance,
Management,
and Renovation

Natural Disaster
Prevention and
Mitigation

-

-

-

-

Amortization
during the year
Balance at theend of the year

Natural Resources
and Energy

Eliminations
or
corporate

-

77

‐

77

-

142

‐

142

Environment

Total

Current fiscal year (From January 1, 2019 to December 31, 2019)(Millions of yen)
Infrastructure
Maintenance,
Management,
and Renovation

Natural Disaster
Prevention and
Mitigation

37

-

71

-

Amortization
during the year
Balance at theend of the year

Natural Resources
and Energy

Eliminations
or
corporate

-

17

‐

54

-

111

‐

183

Environment【Information about gain on negative goodwill per reportable segment】
Not applicable.

【Related-party information】
Related-party transactions
Transactions between the filing party of these consolidated financial statements and related parties
Not applicable.

41

Total

(Per share information)

Net assets per share

Prior fiscal year
(From January 1, 2018
to December 31, 2018)
2,522.95 yen

Current fiscal year
(From January 1, 2019
to December 31, 2019)
2,595.07 yen

30.73 yen

83.35 yen

Earnings per share(Notes) 1. Fully diluted net income per share is not stated as no residual securities exist.
2. With respect to the remaining shares of the Company held by the trust, which are recorded as treasury stock inshareholders’ equity, the shares included in treasury stock are deducted in determining the average number ofshares during the period in the calculation of net income per share. Also, the shares included in treasury stock are
deducted from the total number of outstanding shares at the end of the fiscal year in the calculation of net assets
per share.
The number of outstanding shares of treasury stock at the end of the fiscal year that were deducted in thecalculation of net assets per share was 350,672 shares in the prior fiscal year and 349,482 shares in the current
fiscal year. The average number of shares of the treasury stock during the period that were deducted in thecalculation of net income per share was 301,936 shares in the prior fiscal year and 350,320 shares in the current
fiscal year.
3. The basis for the calculation of net income per share is as follows:

Earnings per share
Profit attributable to owners of parent (Millions ofyen)
Net income not attributable to common shareholders(Millions of yen)
Profit attributable to owners of parent related tocommon stock (Millions of yen)
Average number of shares outstanding (share)

Prior fiscal year
(From January 1, 2018
to December 31, 2018)

Current fiscal year
(From January 1, 2019
to December 31, 2019)

804

2,176

-

-

804

2,176

26,182,903

26,113,248(Significant subsequent events)(Change in reportable segments)
In January 2020, the Company reviewed the following business divisions: Infrastructure Maintenance Business Division, theSabo (Erosion Control Engineering and Disaster Engineering) Business Division, the Regional and the Global Aqua Engineering
Business Division, and reorganized them into the Infrastructure Maintenance Business Division, the Water and Disaster
Engineering Business Division, and the Infrastructure Development Business Division.
The Infrastructure Maintenance Business Division after the reorganization focuses on the maintenance and management of
infrastructure. On the other hand, the Infrastructure Development Business Division focuses on the new infrastructurebusinesses. The Water and Disaster Engineering Business Division focuses on prevention and mitigation of increasingly
severe natural disasters.
As a result of this reorganization, operations related to the Regional and Global Aqua Engineering Business, which werepreviously included in "Infrastructure Maintenance, Management, and Renovation," will be reclassified as "Natural Disaster
Prevention and Mitigation" from the following fiscal year.
The amounts of net sales, segment income (loss), and other items for each of the reportable segments for the current fiscal
year based on the revised segmentation are currently being calculated.

42

⑤【Consolidated supplementary schedules】【Schedule of corporate bonds 】
Not applicable.
【Schedule of borrowings】
Classification

Balance at January 1,
2018(Millions of yen)

Balance at December
31, 2018(Millions of yen)

Average interest
rate
(%)

Period ofrepaymen
t

-

104

5.46

-

-

-

-

-

1,041

1,266

1.92

-

-

-

-

-

1,614

1,971

1.88

2021-2026

2,656

3,341

-

-

Short-term loans payable
Long-term loans due for repayment
within one year
Lease obligations due forrepayment within one year
Long term loans (excluding thosedue for repayment within one
year)
Lease obligations (excluding thosedue for repayment within one
year)
Other interest-bearing liabilities
Total(Notes) 1. The average interest rate is calculated on the basis of year-end interest rate and balance.
2. The following table shows the aggregate amounts of scheduled repayment of lease obligations (excluding the ones
due for repayment within one year) for 5 years subsequent to December 31, 2018.
Due after 1 year
Due after 2 years
Due after 3 years
Due after 4 years
but within 2
but within 3
but within 4
but within 5
years (Millions ofyears (Millions ofyears (Millions ofyears (Millions of
yen)
yen)
yen)
yen)
Lease obligations
948
576
301
106
【Schedule of asset retirement obligations】
Not applicable.

(2) 【Other】
Quarterly information for the current fiscal year
Cumulative

1st quarter2nd quarter3rd quarter

Current fiscal year

Net sales (Millions of yen)

12,99523,962

36,99853,883

Profit before income taxes (Millionsof yen)

1,090

1,258

2,095

3,142

Quarterly (current) profit
attributable to owners of parent(Millions of yen)

693

804

1,374

2,176

26.54

30.83

52.64

83.35

Earnings per share (Yen)
Each quarter
Quarterly earnings (loss) per
share (Yen)

1st quarter2nd quarter

26.54

4.29
43

3rd quarter

21.81

4th quarter

30.71

2. 【Non-consolidated financial statements】(1) 【Non-consolidated financial statements】① 【Non-consolidated balance sheets】
Prior fiscal year
(As of December 31,
2018)
AssetsCurrent assets
Cash and deposits
Notes receivable-trade
Accounts receivable-completed operation
Accounts receivable-trade
Short-term investment securities
Costs on uncompleted services
Merchandise and finished goods
Work in process
Raw materials and supplies
Prepaid expenses
Other
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Lease assets
Construction in progress
Total property, plant and equipment
Intangible assets
Software
Software in progress
Other
Total intangible assets
Investments and other assets
Investment securities
Stocks of subsidiaries and affiliates
Long-term loans receivable
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

44(Millions of yen)
Current fiscal year
(As of December 31,
2019)

11,807136
15,823
312
899
2,081
239
92
258
114
1,116
32,884

11,588*1
42
18,131
271
1,199
415
303
75
263
142
518
32,953

3,458
49
377
10
27
4,584
60
8,567

3,243
79
509
5
24
4,266
76
49
8,255

959
46
8
1,014

929
8
938

5,211
12,515
215
2,324
(109)
20,15729,73962,623

5,479
12,821
107
2,408
(41)
20,77529,96862,922

Prior fiscal year
(As of December 31,
2018)
Liabilities
Current liabilities
Accounts payable-operating
Accounts payable-trade
Accounts payable-other
Income taxes payable
Accrued expenses
Advances received on uncompleted contracts
Deposits payable
Provision for bonuses
Provision for loss on orders received
Provision for product warranties
Other
Total current liabilities
Noncurrent liabilities
Provision for retirement benefits
Provision for stock benefits
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surplus
Retained earnings
Legal 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-sale securities
Revaluation reserve for land
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

45(Millions of yen)
Current fiscal year
(As of December 31,
2019)

1,097
149
1,781
163
294
1,506
272
101
161
13
45
5,585

1,276
25
2,190
446
302
148
314
104
161
14
54
5,038

1,848
57
160
416
52
2,535
8,120

1,818
208
321
327
72
2,748
7,786

16,174

16,174

4,043
10,422
14,465

4,043
10,422
14,465488

488

23,307
3,247
27,042(1,828)55,85423,307
3,572
27,367(1,826)56,1801,243(2,594)(1,351)54,502
62,623

1,752(2,797)(1,044)55,13662,922

②【Non-consolidated statements of income】(Millions of yen)
Current fiscal year
(From January 1, 2019
to December 31, 2019)

Prior fiscal year
(From January 1, 2018
to December 31, 2018)

24,71818,182
6,536
*1
6,209
326

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest and dividends income
Insurance and dividends income
Rent of real estate
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Provision of allowance for doubtful accounts
Rent cost of real estate
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of affiliate's stocks
Gain on sales of investment securities
Total extraordinary income
Extraordinary loss
Loss on valuation of affiliates’ stock
Impairment loss
Loss on sales of investment securities
Total extraordinary loss
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Profit46

30,20322,877
7,325
*1
6,713
611

*2

662
94
*2
101
*2
43
902

*2

0
2
33
2
39
1,189

0
4
1
26
2
36
1,180

9
9

0
275
275

1,198
216
49
265
932

75
156
53
285
1,170
459
(152)
307
863

396
77
*2
86
*2
44
604

【Breakdown of cost of sales】
A. Cost of sales for completed geo-engineering services

Classification

Prior fiscal year
(From January 1, 2018 to
December 31, 2018)
Amount(Millions ofRatio (%)
yen)
663
3.9

Notes

Materials cost

Current fiscal year
(From January 1, 2019 to
December 31, 2019)
Amount(Millions ofRatio (%)
yen)
880
4.3

Labor cost

5,810

34.1

5,425

26.7

Subcontract cost

7,796

45.7

10,448

51.5

3,555

17.5

20,310100.0Overhead cost
Transportation expenses

1,022

1,147

Report preparation cost55

50

Depreciation

284

349

1,408

2,772

16.3

Total cost for geo-engineering services

17,042

100.0

Costs on uncompleted services at beginningof the year

2,084

1,915

19,12722,225

Costs on uncompleted services at the endof the year

1,915

249

Cost of sales for completed geoengineering services

17,211

21,976

Provision for loss on orders received

1-

Reversal of provision for loss on orders received--

17,212

21,976

Other

Total

Cost of sales for completed geoengineering services during the year
(Note)

Method of cost accounting is Job order cost accounting.

47

2,008

B. Cost of sales for measuring instruments

Classification

Note

Finished goods at beginning of the year

Prior fiscal year
(From January 1, 2018
to December 31, 2018)
Amount(Millions ofRatio (%)
yen)
241

Current fiscal year
(From January 1, 2019
to December 31, 2019)
Amount(Millions ofRatio (%)
yen)
239

678

Cost of purchased goods during the year

533

Cost of products manufactured during
the yearMaterials cost

313

51.1

317

52.6

Labor cost

222

36.4

192

31.9

Overhead cost

76

12.5

93

15.5

Total manufacturing costs

612

100.0

603

100.0

Work in process at the beginning of the
year

76

92

689

696

158

89

Total
Transfer to other accounts※2

92Work in process at the end of the year

437

75

532

1,357

1,305

148

101

Finished goods at the end of the year

239

303

Cost of sales for measuring instruments
during the year

969

900

Total
Transfer to other accounts※3(Notes) 1. Method of cost accounting is group process costing※ 2. Transfer to other accounts
Research and development expenses(Selling, general and administrative expenses)※ 3. Transfer to other accounts
Transfer to cost of geo-engineering services
Other

Prior fiscal year
44 million yen

Current fiscal year
41 million yen

Prior fiscal year
147 million yen
0 million yen

Current fiscal year
101 million yen
0 million yen

C. Reconciliation of cost of sales for completed geo-engineering services, cost of sales for measuring instruments and costof salesPrior fiscal year
Current fiscal year
(From January 1, 2018
(From January 1, 2019
to December 31, 2018)
to December 31, 2019)
AmountAmountClassification
Note(Millions of yen)
(Millions of yen)
Cost of sales for completed
17,212
21,976geo-engineering services
Cost of sales for measuring
969
900
instruments
Cost of sales

18,18248

22,877

③【Non-consolidated statements of changes in net assets】

Prior fiscal year (From January 1, 2018 to December 31, 2018)(Millions of yen)
Shareholders’ equity
Total
retained
Other retained earnings

earnings

Retained

Balance at the beginning of the

Legal

Other

Total

Legal

earnings

Capitalstock

capitalcapitalcapitalretained

Generalbrought

surplussurplussurplusearnings

reserveforward16,174

4,043

11,862

15,905488

23,307

3,066

26,861

(752)
932

(752)
932

180
3,247

180
27,042

Changes during the year
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury stockReversal of revaluation
reserve for land
Net changes in items otherthan shareholders’ equity
Total changes during the year
Balance at the end of year

16,1744,043

75(1,515)75(1,515)(1,440)10,422(1,440)14,465488

23,307(Millions of yen)
Shareholders’ equity

Treasurystock
Balance at the beginning of the(1,903)

Shareholders’equity total

Valuation and translation adjustments
Valuationdifferenceonavailablefor-salesecurities

Revaluation
reservefor landadjustments

1,931(2,594)(663)

57,038Total
valuationandtranslation

Total net
assets56,374

Changes during the year
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury stockReversal of revaluation
reserve for land
Net changes in items otherthan shareholders’ equity
Total changes during the year
Balance at the end of year

(1,703)
263
1,515

75
(1,828)(752)
932(1,703)
338
-

(752)
932
(1,703)338-(1,184)55,854

49

(687)

-

(687)

(687)

(687)
1,243

(2,594)(687)(1,351)(1,872)54,502Current fiscal year (From January 1, 2019 to December 31, 2019)(Millions of yen)
Shareholders’ equity
Other retained earnings

Balance at the beginning of the

Legal

Other

Total

Legal

Capitalcapitalcapitalcapitalretained

Generalstock

surplussurplussurplusearnings

reserve

16,174

4,043

10,422

14,465488

23,307Retainedearnings
brought
forwardTotal
retainedearnings

3,247

27,042

(740)
863

(740)
863

202

202

324
3,572

324
27,367

Changes during the year
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock

(0)

(0)

Cancellation of treasury stockReversal of revaluation
reserve for land
Net changes in items otherthan shareholders’ equity
Total changes during the year
Balance at the end of year

16,1744,043(0)10,422(0)
14,465488

23,307(Millions of yen)
Shareholders’ equity

Valuation and translation adjustments
Total

Shareholders’equity total

Valuationdifferenceonavailablefor-salesecurities

Revaluation
reservefor landadjustments(1,828)55,854

1,243(2,594)(1,351)

(0)
1

(740)
863
(0)
1
202

Treasurystock
Balance at the beginning of thevaluationandtranslation

Total net
assets54,502

Changes during the year
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury stockReversal of revaluation
reserve for land
Net changes in items otherthan shareholders’ equity
Total changes during the year
Balance at the end of year1
(1,826)

(740)
863
(0)
1
202

326
56,180

50

509

(202)

307

307

509
1,752

(202)
(2,797)307(1,044)633
55,136

【Notes】(Significant accounting policies)
1. Valuation method and standards for securities(a) Stocks of subsidiaries and affiliates
Stated at cost determined by the moving average method.
(b) Available-for-sale securities
Securities with fair market value
Stated at fair value based on the quoted market price as of the year-end closing date with any changes in unrealized gains
or losses, net of the applicable income taxes, included directly in net assets. Cost of securities sold is determined by themoving average method.
Securities without fair market value
Stated at cost determined by the moving average method.
2. Valuation method and standards for derivatives
Stated at fair value.
3. Valuation method and standards for inventories(a) Costs on uncompleted services
Stated at cost using the specific identification method (balance sheet amounts are determined by writing down the bookvalues based on decrease in profitability).
(b) Merchandise/products/raw materials/work in process
Stated at cost using weighted-average method (balance sheet amounts are determined by writing down the book values
based on decrease in profitability).
(c) Supplies
Last cost method (balance sheet amounts are determined by writing down the book values based on decreased
profitability).
4. Depreciation method of noncurrent assets(a) Property, plant and equipment (excluding lease assets) and real estate for investment
The straight-line method is used for buildings (except structures attached to buildings), and the declining balance method
is used for other property, plant and equipment.
Major useful lives are defined as follows:
Buildings: 2 – 50 years
Machinery and equipment: 2 – 7 years(b) Intangible assets (excluding lease assets)
Straight-line method
Software for internal use is amortized over the expected available period (5 -10 years).
(c) Lease assets
The straight-line method is adopted mainly with a residual value of zero and the lease period deemed equal to the service
life of the asset.
(d) Long-term prepaid expenses
Straight-line method
5. Accounting standards for provisions(a) Allowance for doubtful accounts
To prepare for expected losses from bad debts, the Company estimates uncollectible amounts for normal receivables basedon the historical experience and for certain specific receivables, such as doubtful accounts receivables, based on theindividual probability of recovery.
(b) Provision for bonuses
To prepare for the payment of bonuses to employees, a provision for bonuses is provided based on the expected amount of
payment.
(c) Provision for retirement benefits
To prepare for payment of employees’ retirement allowances, a provision is provided based on the anticipated projected
benefit obligation and pension assets at the end of the current fiscal year.
Actuarial gain or loss is amortized in the fiscal year following the year in which the gain or loss is incurred by the straightline method over periods (5 years) which are shorter than the average remaining period of the employees.

51(d) Provision for loss on orders received
To prepare for future losses on contracts for orders received, a provision for loss on orders received is provided based on
thefuture losses anticipated at the end of the current fiscal year and the amount of foreseeable losses that can reasonably
be estimated.
(e) Provision for product warranties
To prepare for estimated warranty costs, a provision for product warranties is provided based on historical experience of
free-of-charge repairs of products.
(f) Provision for stock benefits
In order to provide for grant of shares of the company to employees according to the stock benefits regulations, it isprovided based on the estimated stock benefit obligations as of the end of the current fiscal year.
6. Accounting standards for revenue and expenses(a) Individual contracts from which the outcome can be estimated reliably through the end of the current fiscal year:
The percentage-of-completion method is adopted (The percentage of completion is measured by the proportion of the cost
incurred relative to the estimated total cost).
(b) Other contracts:
The completed-contract method is adopted.
7. Hedge accounting method(a) Hedge accounting method
Deferral hedge accounting is adopted.
(b) Hedging instruments and hedged items
Hedging instruments: forward-exchange contracts
Hedged items: accounts payable-trade(c) Hedging policy
In order to reduce risks of exchange rate fluctuations, hedges are used to cover liabilities.
(d) Method of assessing hedge effectivenessAn assessment of hedge effectiveness is omitted because the relationship between the hedging instruments and hedged
items is direct.
8. Other significant accounting policies
Accounting of consumption tax
All figures exclude consumption tax.

52

(Change in presentation)(Non-consolidated statements of income)“Foreign exchange losses”, which were previously included in “Other” under “Non-operating expenses” in the prior fiscal
year, have been presented separately from the current fiscal year due to an increase in materiality. In order to reflect thischange in presentation, the Company reclassified the non-consolidated statement of income for the prior fiscal year.
As a result, 5 million yen of “Other” under “Non-operating expenses” in the non-consolidated statement of income for theprior fiscal year has been reclassified as “Foreign exchange losses” in the amount of 2 million yen and “Other” in the amountof 2 million yen.
(Change due to the application of Partial Amendments to Accounting Standard for Tax Effect Accounting)“Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, February 16, 2018) has been
applied effective from the beginning of the current fiscal year with deferred tax assets included in investments and otherassets and deferred tax liabilities classified as noncurrent liabilities.
As a result, 256 million yen of “Deferred tax assets” under “Current assets” was included in “Deferred tax liabilities” under“Noncurrent liabilities” of 160 million yen in the non-consolidated balance sheet for the prior fiscal year.
(Items related to balance sheet)※１ Trade notes maturing at the end of the fiscal year are settled on the clearance date. The following outstanding notes
maturing at the end of the fiscal year were included in the corresponding accounts as the maturity date fell on a businessholiday for financial institutions.

Notes receivable-trade

Prior fiscal year
(As of December 31, 2018)

Current fiscal year
(As of December 31, 2019)- million yen

2 million yen

2. Guarantee obligation
A performance bond from a financial institution for a sales order of “Tianjin Smart Sensor Technology Co., LTD.” and aconsolidated subsidiary's loans payable is guaranteed as follows.
Prior fiscal year
Current fiscal year
(As of December 31, 2018)(As of December 31, 2019)

Tianjin Smart Sensor Technology Co., LTD.

26 million yen

25 million yen

FONG CONSULT PTE. LTD.

- million yen

97 million yen(Non-consolidated statements of income)※ 1.

Among selling expenses and general and administrative expenses, major cost items, amounts and their approximate ratios
are as follows.
Prior fiscal year
Current fiscal year
(From January 1, 2018
(From January 1, 2019
to December 31, 2018)
to December 31, 2019)
Salaries and allowances
2,921 million yen
3,090 million yen

Provision for bonuses
Retirement benefit expenses
Depreciation
Approximate ratio
Selling expenses
General and administrative
expenses

40 million yen

42 million yen

62million yen

153 million yen

180million yen

182 million yen

59 %

58 %

41 %

42 %

53

※ 2. Income or loss related to transactions with subsidiaries and affiliates
Prior fiscal year
(From January 1, 2018
to December 31, 2018)
Dividends income
563 million yen
Other non-operating income
including real estate rent

73 million yen

Current fiscal year
(From January 1, 2019
to December 31, 2019)
289 million yen
57 million yen(Securities)
Prior fiscal year (As of December 31, 2018)
Stocks of subsidiaries or affiliates (12,466 million yen of subsidiary stocks and 49 million yen of affiliate stocks on the balance
sheets) do not have market prices, and it is extremely difficult to determine fair value. Accordingly, their fair values were notdisclosed.
Current fiscal year (As of December 31, 2019)
Stocks of subsidiaries or affiliates (12,771 million yen of subsidiary stocks and 49 million yen of affiliate stocks on the balance
sheets) do not have market prices, and it is extremely difficult to determine fair value. Accordingly, their fair values were notdisclosed.

54

(Tax effect accounting)
1. Significant components of deferred tax assets and liabilities

Deferred tax assets
Provision for bonuses
Enterprise tax payable
Loss on valuation of securities
Provision for retirement benefits
Revaluation reserve for land
Valuation differences on assets received bymerger
Other
Deferred tax assets : Sub total
Valuation provision
Deferred tax assets: Total
Deferred tax liabilities
Valuation difference on available-for-sale
Prepaid pension cost
Revaluation reserve for land
Valuation differences on assets received bymerger
Other
Deferred tax liabilities: Total
Net deferred tax liabilities

Prior fiscal year
(As of December 31, 2018)

Current fiscal year
(As of December 31, 2019)35 million yen
35 million yen
13 million yen
377 million yen
1,082 million yen
53 million yen

36 million yen
45 million yen
13 million yen
471 million yen
1,082 million yen
52 million yen

465 million yen
2,064 million yen(1,367) million yen
696 million yen

569 million yen
2,272 million yen(1,325) million yen
946 million yen(530) million yen(194) million yen(416) million yen(133) million yen(754) million yen(319) million yen(327) million yen(133) million yen- million yen(1,274) million yen(577) million yen(60) million yen(1,595) million yen(648) million yen

2. The reconciliation between the effective tax rate reflected in the non-consolidated statements of income and the statutory
tax rate is as follows:
Prior fiscal year
(As of December 31, 2018)

Current fiscal year
(As of December 31, 2019)

Statutory effective tax rate in Japan(Reconciliation)
Permanently non-deductive entertainment andother expenses

30.9 %

30.6 %

0.4 %

0.5 %

Dividends and other income permanently
included in gross profit(15.0)%(8.1)%

Per-capita inhabitants tax
Valuation provision
Other
Effective tax rate

6.3 %(0.7) %
0.2%
22.2 %

6.5 %(3.5) %
0.3%
26.2 %(Significant subsequent events)(Business combination due to share acquisition)
As the same information has been described in “Notes” (Business combinations) in the consolidated financial statements, thisnote has been omitted.

55

④【Non-consolidated supplementary schedules】【Schedule of tangible non-current assets】

Type of assets

Depreciation /amortization
for the current
fiscal year
(Millions ofyen)

Balance at
December31, 2019(Millions ofyen)

Accumulated
depreciationor
amortization
for thecurrent fiscal
year (Millionsof yen)

169

3,243

7,265

7

79

718

Balance atJanuary 1,
2019(Millions ofyen)

Increase in thecurrent fiscal
year (Millionsof yen)

3,458

80

49

38

125
(62)
0(0)

377

314

0

182

509

2,671

10

-

-

4

5

106

27

11

0

14

24

295

4,584
[(2,178)]

-

-

4,266
[(2,470)]-

Decrease in thecurrent fiscal
year (Millionsof yen)Property, plant andequipment
Buildings
Structures
Machinery andequipment
VehiclesTools, furniture andfixtures
Land

317
(93)
[291]
1

Lease assets
60
35
18
76
46
Construction in
49
49
progress
Total Property, plant and
444
8,567
529
396
8,255
11,104equipment(156)
Intangible assets
Software
959
164
0
193
929
728
Software in progress
46
24
71
Other
8
8
Total intangible assets
1,014
188
71
193
938
728
(Notes) 1 The figures shown in parentheses are internal figures and represent impairment losses.
2 From current fiscal year, figures in square brackets in the "Balance at January 1, 2019," " Decrease in thecurrent fiscal year" and "Balance at December 31, 2019" columns indicate amounts outstanding as arevaluation reserve for land (before tax).
【Schedule of provisions】
Classification
Allowance for doubtful
accounts
Provision for bonuses
Provision for loss on orders
received
Provision for productwarranties
Provision for stock benefits

Balance atJanuary 1, 2018
(Millions of yen)

Increase in thecurrent fiscal
year(Millions of yen)

Decrease in thecurrent fiscal
year (Millions ofyen)

Balance at
December 31,
2018(Millions of yen)

109

1

70

41

101

104

101

104

161

-

-

161

13

14

13

14

57

156

4

208

(2)【Details of major assets and liabilities】
Statement has been omitted since consolidated financial statements are prepared.

56

(3)【Other】① Events arising after the balance sheet date

Not applicable.
② Lawsuits

Not applicable.

57