5. Financial information
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 theOrdinance No. 28, 1976).
(2) The non-the Ministry of Finance Ordinance No. 59, 1963). The Company is eligible to submit
special financial statements, and prepares its financial statements in compliance with the provisions of Article 127 of
the Regulations for Non-Consolidated Financial Statements.

2. Audit certification
The consolidated financial statements for the current fiscal year (From January 1, 2023 to December 31, 2023) and nonconsolidated financial statements for the current fiscal year (From January 1, 2023 to December 31, 2023) 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
Consolidated balance sheet

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Accounts receivable-completed operations and contract assets
Lease receivables and investment assets
Short-term investment securities
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
Accumulated impairment loss
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Accumulated impairment loss
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

2

Prior fiscal year
(As of December 31,
2022)(Millions of yen)
Current fiscal year
(As of December 31,
2023)

22,2932,892*129,351
3,900
989
1,094
1,356
3,591
1,672
(26)
67,11424,3602,576*134,268
4,372
0
1,591
1,508
4,358
1,525
(55)
74,506

14,282(9,797)
(8)
4,476
7,769
(6,024)
(11)
1,733
1,788
(1,641)
(18)
128
*5
5,883
858
(333)
525
343
13,092

15,008(10,215)
(9)
*3,4
4,783
9,228
(7,214)
(12)
2,001
1,923
(1,688)
(19)
214
*4,5
6,081
909
(396)
513
117
13,712

846
26
310
1,183

812
35
1,116
261
2,225

*1,2

*1,2

Prior fiscal year
(As of December 31,
2022)(Millions of yen)
Current fiscal year
(As of December 31,
2023)

Investments and other assets*6

Investment securities

4,541

*6

5,056

Long-term loans receivable27

28

Net defined benefit asset

1,749

2,128

Deferred tax assets

88

1,139

Real estate for investment

534

534

Accumulated depreciation

(251)

(260)

Real estate for investment, net

282

273

*4

Other

1,707

*4

1,981

Allowance for doubtful accounts

(422)

(386)

Total investments and other assets

7,974

10,221

22,24926,15989,364

100,666

Total noncurrent assets
Total assets

3Prior fiscal year
(As of December 31,
2022)(Millions of yen)
Current fiscal year
(As of December 31,
2023)

Liabilities
Current liabilities
Notes and accounts payable-trade*2

Accounts payable-operating

2,686

Short-term loans payable
Current portion of long-term loans payable

*2

870

936

3,485

198

*4

637

-

*4

737

1,545

1,691

Provision for product warranties

139

157

Income taxes payable

690

853

Advances received on uncompleted contracts

386

369

Provision for bonuses

157

165

1

1

Other

5,932

6,736

Total current liabilities

12,60815,772

Lease obligations

Provision for loss on orders received

Noncurrent liabilities
Long-term loans payable

50

*4

2,882

Lease obligations

2,828

3,156

Net defined benefit liability

1,799

1,911

Provision for stock benefits

265

318

Deferred tax liabilities

731

987

*5

Deferred tax liabilities for land revaluation

262

*5

227

273

317

Total noncurrent liabilities

6,211

9,800

Total liabilities

18,81925,572Other

4

Prior fiscal year
(As of December 31,
2022)(Millions of yen)
Current fiscal year
(As of December 31,
2023)

Net assets
Capital stock

16,174

16,174

Capital surplus

12,15912,186

Retained earnings

42,62945,514

Treasury stock(2,547)(2,860)68,41671,014

Accumulated other comprehensive income

1,178

Valuation difference on available-for-sale securities*5

Revaluation reserve for land

(2,942)

1,574*5(3,024)Foreign currency translation adjustment

3,154

4,525

Remeasurements of defined benefit plans

82

308

1,472

3,384

655

694

70,54475,09389,364

100,666

Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income
Prior fiscal year
(From January 1, 2022
to December 31, 2022)*1
59,011

Net sales*2

Cost of sales

41,197(Millions of yen)
Current fiscal year
(From January 1, 2023
to December 31, 2023)*1
65,602*2

46,13017,813

19,471776

804

Salaries and allowances

5,830

6,306

Provision for bonuses

54

63

Provision for stock benefits

21

36

Legal welfare expenses

884

949

Retirement benefit expenses

221

249

Traveling and transportation expenses

404

504

Rent expenses

535

538

Depreciation

447

721

Gross profit
Selling, general and administrative expenses*3

Research and development expenses

2,135

*3

2,251

Amortization of goodwill

69

76

Provision of allowance for doubtful accounts

1

47

Other

3,977

4,079

Total selling, general and administrative expenses

15,35916,629

2,454

2,842

Interest income

132

380

Dividends income

114

113

Equity in earnings of affiliates-

115

Foreign exchange gains

4-

Insurance and dividends income

97

91

Rent of real estate

45

45

Reversal of allowance for doubtful accounts

60

60

Other

122

86

Total non-operating income

578

893

Operating income
Non-operating income6Prior fiscal year
(From January 1, 2022
to December 31, 2022)(Millions of yen)
Current fiscal year
(From January 1, 2023
to December 31, 2023)

Interest expenses

17

41

Equity in losses of affiliates

2-

Foreign exchange losses-

49

Provision of allowance for doubtful accounts

1

1

Rent cost of real estate

14

14

Loss on retirement of noncurrent assets

7

12

Other

18

19

Total non-operating expenses

62

139

2,969

3,595

Grant income-

310

Gain on sales of noncurrent assets-*4

Non-operating expenses

Ordinary income
Extraordinary income

1

Gain on sale of shares of subsidiaries and affiliates

83-

Gain on liquidation of subsidiaries and affiliates

30-

Gain on sales of investment securities

80

585

Total extraordinary income

193

897

Extraordinary loss
Loss on sales of noncurrent assets-*5

Loss on tax purpose reduction entry of noncurrent assets-

309

Loss on sales of investment securities-

0

Total extraordinary loss-

328

Profit before income taxes

3,163

4,163

Income taxes-current

1,344

1,205

Income taxes-deferred12(1,098)

Total income taxes

1,356

106

Profit

1,806

4,056

(1)

49

1,808

4,006

Profit (Loss) attributable to non-controlling interests
Profit attributable to owners of parent

719

Consolidated statement of comprehensive income
Prior fiscal year
(From January 1, 2022
to December 31, 2022)
1,806(Millions of yen)
Current fiscal year
(From January 1, 2023
to December 31, 2023)
4,056

57

395

Foreign currency translation adjustment

2,312

1,401

Remeasurements of defined benefit plans

(79)

226

ProfitOther comprehensive income
Valuation difference on available-for-sale securities*1

Total other comprehensive income (loss)
Comprehensive income

2,290

*1

2,023

4,097

6,079

Comprehensive income attributable to owners of parent

4,076

5,999

Comprehensive income attributable to non-controllinginterests

21

80(Breakdown)8

Consolidated statement of changes in net assets
Prior fiscal year (From January 1, 2022 to December 31, 2022)

Balance at the beginning of theyear
Changes during the year

Capitalstock

16,174

Capitalsurplus13,863(Millions of yen)

Retainedearnings

42,204

Profit attributable toowners of parent
Purchase of treasury stock(1,703)Cancellation of treasury
stock
Reversal of revaluation
reserve for land
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes in items other

equity total

70,192(1,382)
1,808(2,209)7
1,703

Disposal of treasury stock

Balance at the end of year

(2,049)(1,382)
1,808

Dividends from surplus

Total changes during the year

Treasurystock(2,209)7-

16,1740(0)(1,703)
12,159425
42,6290(498)(2,547)(1,775)68,416(Millions of yen)

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at the beginning of theyear
Changes during the year

1,120

Revaluation
reserve forland(2,942)Foreigncurrencytranslation
adjustment

864

Remeasurements ofdefinedbenefit plans

161

Total
accumulated
othercomprehensive
income(795)

Noncontrollinginterests

407

Profit attributable toowners of parent
Purchase of treasury stock(2,209)7-

Disposal of treasury stock

Total changes during the year
Balance at the end of year

69,804(1,382)
1,808

Dividends from surplus

Cancellation of treasury
stock
Reversal of revaluation
reserve for land
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes in items otherTotal net
assets

0
57

-

2,289

(79)

2,267

248

2,515

57
1,178

(2,942)

2,289
3,154

(79)
82

2,267
1,472

248
655

740
70,5449

Current fiscal year (From January 1, 2023 to December 31, 2023)

Balance at the beginning of theyear
Changes during the year

Capitalstock

16,174

Capitalsurplus12,159(Millions of yen)

Retainedearnings

42,629Profit attributable toowners of parent
Purchase of treasury stock
Cancellation of treasury
stock
Reversal of revaluation
reserve for land
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes in items other

16,174

equity total

68,416(1,203)
4,006

(341)
28

Disposal of treasury stock

Balance at the end of year

(2,547)(1,203)
4,006

Dividends from surplus

Total changes during the year

Treasury
stock

(341)
28
-

81

81

26

(0)

26

26
12,1862,884
45,514(313)(2,860)2,598
71,014(Millions of yen)

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at the beginning of theyear
Changes during the year

1,178

Revaluation
reserve forland(2,942)Foreigncurrencytranslation
adjustment

3,154

Remeasurements ofdefinedbenefit plans

82

Total
accumulated
othercomprehensive
income1,472

Noncontrollinginterests

655

Profit attributable toowners of parent
Purchase of treasury stock

(341)
28
-

Disposal of treasury stock

Total changes during the year
Balance at the end of year

70,544(1,203)
4,006

Dividends from surplus

Cancellation of treasury
stock
Reversal of revaluation
reserve for land
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes in items otherTotal net
assets

81
26
395

(81)

1,371

226

1,911

39

1,950

395
1,574

(81)
(3,024)

1,371
4,525

226
308

1,911
3,384

39
694

4,548
75,093

10

Consolidated statement of cash flows

Cash flows from operating activities
Profit before income taxes
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in provision for bonuses
Interest and dividend income
Interest expenses
Equity in (earnings) losses of affiliates
Loss (gain) on sale of investment securities
Loss (gain) on sale of shares of subsidiaries and affiliates
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
Loss (gain) on liquidation of subsidiaries and affiliates
Increase (decrease) in advances received on uncompleted
contracts
Loss on tax purpose reduction entry of non-current assets
Grant income
Increase (decrease) in accrued consumption taxes
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Proceeds from grant income
Net cash provided by (used in) operating activities

11

Prior fiscal year
(From January 1, 2022
to December 31, 2022)(Millions of yen)
Current fiscal year
(From January 1, 2023
to December 31, 2023)

3,163
1,291
69
9
(246)
17
2
(80)
(83)
(7,417)
(899)
1,129
(30)
22

4,163
1,585
76
(15)
(493)
41
(115)
(585)
(4,147)(1,042)
66
684
(30)

524
(579)
(3,107)275(17)(1,286)(4,136)

309
(310)
736
514
1,436
501
(41)
(1,247)221
870

(Millions of yen)
Prior fiscal year
(From January 1, 2022
to December 31, 2022)
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Proceeds from sales of short-term investment securities
Purchase of property, plant and equipment and intangible
assetsProceeds from sales of property, plant and equipment andintangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Contingent consideration payments of shares of subsidiaries
Proceeds from sale of shares of subsidiaries resulting in change
in scope of consolidation
Proceeds from liquidation of non-consolidated subsidiaries
Collection of loans receivable
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term loans payable
Repayments of short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Repayments of lease obligations
Proceeds from sales of treasury stock
Purchase of treasury stock
Cash dividends paid
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
Cash and cash equivalents at end of the year

12

Current fiscal year
(From January 1, 2023
to December 31, 2023)(6,632)
6,303
750(1,631)(4,919)6,923
1,001(1,690)

21

162

(9)
285
*2
(424)

(9)
858
*2
(1,783)

(18)
179

-

38
129
(13)
(1,020)

6
49
598

1
(20)
(151)
(135)
7
(2,209)(1,382)(5)(10)(3,907)559(8,505)23,599*1
15,094

465
(210)
3,500
(21)
(197)
28
(341)
(1,203)
(7)
(51)
1,961
203
3,633
15,094*1
18,727

Notes(Significant accounting policies to the consolidated financial statements)
1. Scope of consolidation(1) Number of consolidated subsidiaries: 26
Names of major consolidated subsidiaries:
OYO CORPORATION U.S.A.
KINEMETRICS, INC.
GEOMETRICS, INC.
GEOPHYSICAL SURVEY SYSTEMS, INC.
ROBERTSON GEOLOGGING LTD.
FONG CONSULT PTE. LTD.
FC INSPECTION PTE. LTD.
GEOSMART INTERNATIONAL PTE. LTD.
NS ENVIRONMENTAL SCIENCE CONSULTANT CORPORATIONOYO RESOURCES MANAGEMENT CORPORATIONTOUHOKU BORING CO, LTD.
OCEAN ENGINEERING CORPORATION
KOEI CONSULTANT CO, LTD.
OYO SEISMIC INSTRUMENTATION CORPORATIONOYO GEO-MONITORING SERVICE CORPORATIONNANKYU GEO TECHNICS CORPORATIONOYO GEOTECHNICAL SERVICE CORPORATIONKCS CO, LTD.
OYO RMS CORPORATION
included in the scope of consolidation due to purchase of its shares

NIHON ZITAN CO, LTD. was newly(2) Names of major non-consolidated subsidiaries
ABE BORING CO, LTD.
(Reason for excluding from the scope of consolidation)
This unconsolidated subsidiary is small; and the total assets, net sales, net income or loss (commensurate with equity
holdings) and retained earnings (commensurate with equity holdings) of the subsidiary have no significant impact on the
consolidated financial statements.
2. Application of the equity method(1) Number of affiliates accounted for under the equity method: 4Names of major affiliates
IRIS INSTRUMENTS SAS
ENGINEERING & RISK SERVICES CORPORATION(2) Non-consolidated subsidiaries and affiliates not accounted for under the equity method
ABE BORING CO, LTD.
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 or loss for the year (commensurate with equity holdings)
and retained earnings (commensurate with equity holdings).
3. Fiscal year-end, etc. of consolidated subsidiaries
The fiscal year end of the consolidated subsidiary, NIHON ZITAN CO, LTD. is March 31. The consolidated financial
statements are prepared based on the provisional settlement of accounts as of the consolidated closing date.
The year-end closing date for other consolidated subsidiaries is the same as the consolidated year-end closing date.

13

4. Accounting policies(1) Valuation standards and methods for significant assets(a) Securities
Available-for-sale securities
Securities other than stocks, etc. without market priceStated at fair value (unrealized gains or losses are included directly in net assets, net of the applicable taxes.
Cost of securities sold is determined by the moving average method).
Stocks, etc. without market priceStated at cost determined by the moving average method.
(b) Derivatives
Stated at fair value.
(c) Inventory assets
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-infirst-out 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,
the straight-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 theservice 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
such as 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 thecurrent 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, aprovision for product warranties is provided based on historical experience of free-of-charge repairs of products.
(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 withthe director stock benefit regulations and stock benefit regulations, a provision for stock benefits is provided based on
the estimated stock benefit obligations as of the end of the current fiscal year.

14(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
to periods 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 thestraight-line method over periods (5 years) which are shorter than the average remaining service periods of theemployees. 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
The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and the30, March 26, 2021) havebeen applied.
The following summarizes the major performance obligations of the Group s principal businesses and the time at whichrevenue is recognized. For any businesses, the Company allocates the transaction price to performance obligations basedon the independent sales price calculated using an adjusted market valuation approach, an approach that adds margins to
expected costs, and other factors. Consideration for the transaction does not include a significant financing component as
it is primarily received by within one year after satisfaction of performance obligations. In addition, there are no material
variable consideration for which amount of consideration could change.
Details of major performance obligations in major businesses and the time at which revenue is recognized are as follows.
(a) Revenue Recognition for Geo-engineering Services Contracts
In Geo-engineering Service Contracts, the Company conducts data collection/analysis/design/consulting, such asmachine boring, road facilities inspection (tunnels, etc.), slope observation, landslide countermeasure design, analysis ofwater quality, soil and odor, marine surveys such as offshore boring associated with the installation of offshore windfarms.
The Company has identified these services that it provides in this area as performance obligations.
Geo-engineering Services are based on a method in which revenue is recognized over time as the Company satisfies
the performance obligations to transfer the goods or services to the customer, as the Company recognizes the certaintyof the outcome with respect to the portion of progress and control over the goods or services is transferred to thecustomer over a period of time. The method used to estimate the degree of progress related to the satisfaction of
performance obligations is primarily based on the cost-based input method. In addition, if the Company is unable toreasonably estimate the degree of progress related to the satisfaction of performance obligations, the Company applies
the cost-recovery method.
(b) Revenue Recognition for Merchandise Sales (Mainly Measuring Instrument Sales)
In merchandise sales, the Company manufactures, sells, and provides maintenance services for geophysical survey
equipment such as seismic observation and monitoring equipment and non-destructive inspection equipment, as well as
monitoring systems using equipment. The Company has identified the operations that it provides with respect to these
operations as performance obligations.
Of merchandise sales, domestic sales are recognized at the time of delivery because control over the goods is transferredto the customer at the time of delivery.
In addition, revenue from overseas sales is recognized at a point in time when performance obligations are satisfied.
(c) Revenue recognition for license sales
In license sales, the Company sells licenses for land information systems, operational management systems, various
analysis software, and other products, and conducts consignment sales of systems. The Group has identified theoperations it provides as performance obligations.
Revenue from license sales is recognized over a certain period of time when the nature of the license, such as cloudservices, represents access rights, and revenue is recognized upon delivery, if the nature of the license, such as softwaredelivery, is a right of use.
(6) Significant hedge accounting method(a) Hedge accounting method
Deferral hedge accounting is adopted.

15

(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 andhedged items is direct.
(7) Amortization of goodwill
Goodwill is amortized by the straight-line method over 5 - 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
Not applicable.
(Significant Accounting Estimates)(Revenue Recognition by estimating the degree of progress related to the satisfaction of performance obligations of Geoengineering Services Contracts of the Company)(1) Amount recorded in the consolidated financial statements for the current fiscal year
(Millions of yen)
Prior fiscal year
(As of December 31, 2022)
Net sales

20,228Current fiscal year
(As of December 31, 2023)

22,507(Note)The above amount includes the Geo-engineering Service Contracts for which the degree of progress related to thesatisfaction of performance obligations of the Geo-engineering Service Contracts can be reasonably estimated, and forwhich the full performance obligation has not been satisfied as of the end of the current fiscal year.
(2) Other information to help users of the consolidated financial statements understand the contents of accounting estimates(a) Calculation methods for amount recorded in the consolidated financial statements for the current fiscal year
Net sales related to Geo-engineering Service Contracts is calculated in a manner that recognizes revenue over time as
performance obligations are satisfied. The method used to estimate the degree of progress related to the satisfaction of
performance obligations is primarily based on the cost-based input method, which is the ratio of incurred costs to total
estimated costs. In addition, if the Company is unable to reasonably estimate the degree of progress related to thesatisfaction of performance obligations, revenue is recognized to the extent related costs are incurred.
(b) Major assumptions used in the calculation of amount in the consolidated financial statements for the current fiscal year
Estimates of the total costs of Geo-engineering Services are calculated by accumulating detailed information with
objective prices, such as quotes obtained from subcontractors and internally approved standard unit prices; however,estimates of the total costs of Geo-engineering Services are key assumptions because they involve judgments based on
expert knowledge and experience in Geo-engineering Services.
(c) Effect on the consolidated financial statements for the following fiscal year
Geo-engineering Services are highly individual in nature and carried out in accordance with fundamental specifications
and work details instructed by customers. In some cases, the contract content of Geo-engineering Services is changed
from the original contract based on the agreement with the customer during the work period, or changes in the estimatedperson-hours and subcontract cost due to the facts that become known after the work starts. In such cases, due tochanges in the estimate of the total cost of the work, changes in the degree of progress related to the satisfaction of theperformance obligations may affect amount of revenue recognized in the consolidated financial statements for thefollowing fiscal year.

16

(Unapplied accounting standards)-

ober 28, 2022)(1) Overview
The above accounting standards determine the category in which income tax, etc. is recorded in cases where othercomprehensive income is subject to tax, and the treatment of tax effects associated with the sale of shares, etc. of
subsidiaries when a group corporate tax system is applied.
(2) Expected date of application
The accounting standards will be applied from the beginning of the fiscal year ending December 31, 2025.
(3) Effect of application of the said accounting standard, etc.
The effect of the application
standards on the consolidated financial statements is currently under evaluation.
(Change in presentation)(Consolidated statements of cash flows)"Increase (decrease) in accrued consumption taxes," which was included in "Other" under "Cash flows from operating
activities" in the previous fiscal year, has been presented separately from the current fiscal year under review due to anincrease in its financial materiality. To reflect this change in presentation, the consolidated financial statements for theprevious fiscal year have been reclassified.
As a result, (55) million yen, which was included in "Other" under "Cash flows from operating activities" in the consolidated
statement of cash flows for the previous fiscal year, has been reclassified as 524 million yen in "Increase (decrease) in accrued(Additional information)(Board Benefit Trust)
resolution at the General Meeting of Shareholders held on March 26, 2014. Based on the resolution at the General Meeting of
Shareholders held on March 27, 2018 and March 26, 2021, it was determined to continue the scheme and partially revise it.
Also, the Company 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 ystem. )(1) Outline of transaction
In introducing the S

inin
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 (Herein
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 performance of
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
sheet based on their book value (excluding associated expenses). The book value and the corresponding number of sharesof the Company totaled 730 million yen and 539,459 shares, respectively, as of the end of the prior fiscal year, and 702
million yen and 519,644 shares, respectively, as of the end of the current fiscal year.

17

(Consolidated balance sheet)
1. Information onarising from contracts with customers is as follows:-completed operations

Prior fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Notes receivable-trade

95 million yen

135 million yen

Accounts receivable-trade

2,796 million yen

2,441 million yen

Accounts receivable-completed
operations

4,071 million yen

5,152 million yen

Contract assets

25,279 million yen

29,115 million yen

2. 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, 2022)

Current fiscal year
(As of December 31, 2023)

Notes receivable-trade

1 million yen

1 million yen

Notes payable-trade

3 million yen

0 million yen

3. Regarding noncurrent assets acquired in the current fiscal year, the amount of buildings and structures deducted from theacquisition costs is 309 million yen due to tax purpose reduction entry.
4. Pledged assets and secured liabilities
Pledged assets as collateral for secured liabilities were as follows:
Prior fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Buildings and structures- million yen

101 million yen

Land- million yen

400 million yen

Investments and other assets' Other

494 million yen

647 million yen

Total

494 million yen

1,150 million yen

Prior fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Short-term loans payable- million yen

150 million yen

Long-term loans payable(including scheduled to be refundedwithin 1 year)
Total- million yen

67 million yen- million yen

217 million yen(Prior fiscal year)
Within the limit of the letter of credit (2,919 million yen), the Company provides the restricted deposits of its US
consolidated subsidiaries in the amount of 399 million yen as securities under the asset-based loan system of the UnitedStates of America. Furthermore, within the issuance of the letter of credit from the subsidiary of its US consolidated
subsidiaries to outside the U.S., the Company also provides the restricted deposits of its US consolidated subsidiaries in theamount of 95 million yen as securities.

18

(Current fiscal year)
Within the limit of the letter of credit (2,269 million yen), the Company provides the restricted deposits of its US
consolidated subsidiaries in the amount of 544 million yen as securities under the asset-based loan system of the UnitedStates of America. Furthermore, within the issuance of the letter of credit from the subsidiary of its US consolidated
subsidiaries to outside the U.S., the Company also provides the restricted deposits of its US consolidated subsidiaries in theamount of 103 million yen as securities.
5. 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, in accordancewith 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, statedin Article 2, Item 3, with reasonable adjustments.
Revaluation date: December 31, 2001
Prior fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

The difference between the fair value of the landat the end of the period of the revaluation andthe book value after the revaluation:(253) million yen(105) million yen

The difference related to real estate for rent outof this:(55) million yen(56) million yen

Prior fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

857 million yen

1,058 million yen

6. Non-consolidated subsidiaries and affiliates

Investment securities (stock)

The amounts of investment in joint ventures included above were 857 million yen in the prior fiscal year and 1,044 million
yen in the current fiscal year.
(Consolidated statement of income)
1. Revenue from contracts with customers
Net sales, revenues from contracts with customers and other revenues are not presented separately.
Revenue from Contracts with Customers is presented in
Notes to Consolidated Financial Statements (Revenue
Recognition) (1) Disaggregation of Revenue from Contracts with Customers
2. 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 the loss on
valuation of inventories included in cost of sales was as follows:
Prior fiscal year
Current fiscal year
(From January 1, 2022
(From January 1, 2023
to December 31, 2022)
to December 31, 2023)
Cost of sales
78 million yen
153 million yen

19

3. Research and development expenses included in general and administrative expenses and manufacturing costs
Prior fiscal year
Current fiscal year
(From January 1, 2022
(From January 1, 2023
to December 31, 2022)
to December 31, 2023)
General and administrative
2,135 million yen
2,251 million yen
expenses
4. The components of gain on sales of noncurrent assets are as follows:
Prior fiscal year
(From January 1, 2022
to December 31, 2022)
Buildings and structures- million yen

Current fiscal year
(From January 1, 2023
to December 31, 2023)
1 million yen

5. The components of loss on sales of noncurrent assets are as follows:
Prior fiscal year
(From January 1, 2022
to December 31, 2022)Land- million yen

Current fiscal year
(From January 1, 2023
to December 31, 2023)
19 million yen(Consolidated statement of comprehensive income)
1. Reclassification adjustments and tax effects related to each component of other comprehensive income
Prior fiscal year
(From January 1, 2022
to December 31, 2022)
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
Amount before tax effectTax effectForeign 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, 2023
to December 31, 2023)

163 million yen

1,140 million yen(80) million yen
82 million yen(25) million yen
57 million yen(570) million yen
570 million yen(174) million yen
395 million yen

2,297 million yen

1,401 million yen- million yen
2,297 million yen
15 million yen
2,312 million yen- million yen- million yen- million yen
1,401 million yen(13) million yen

342 million yen(100) million yen(114) million yen
35 million yen(79) million yen(16) million yen
326 million yen(99) million yen
226 million yen

2,290 million yen

2,023 million yen

20

(Consolidated statement of changes in net assets)
Prior fiscal year (From January 1, 2022 to December 31, 2022)
1. Type and number of shares issued and type and number of treasury stock
Number of shares at
January 1, 2022

Increase in number ofshares during thecurrent fiscal year

Decrease in numberof shares during
the current fiscal
year

Number of shares at
December 31, 2022

Common stock(Notes)1

26,664,373-

1,000,000

25,664,373

Total

26,664,373-

1,000,000

25,664,373

1,489,575

1,071,611

1,005,485

1,555,701

1,489,575

1,071,611

1,005,485

1,555,701

Issued shares

Treasury stock
Common stock(Notes)2,3
Total(Notes) 1 As a result of a resolution of the Board
meeting held on November 11, 2022, 1,000,000 shares of treasury
stock were cancelled based on Article 178 of the Companies Act on November 25, 2022.
2 The number of shares of common treasury stock at the beginning of the current fiscal year and at the end of thecurrent fiscal year includes 544,944 shares and 539,459 shares of the Company held by Custody Bank of Japan, Ltd.
(Trust Account), respectively.
3 Outline of reasons for the change
Breakdown of increase in the number is as follows.
Increase due to purchase under Board meeting Resolution
1,070,800 shares
Increase due to purchase of less than standard unit
811 shares
Breakdown of decrease in the number is as follows.
Decrease due to cancellation of treasury stock
1,000,000 shares
Decrease due to demand for sale by Custody Bank of Japan, Ltd. (Trust Account)
5,485 shares
2. Subscription rights to shares and treasury stock subscription shares
Not applicable.
3. Dividends(1) Dividends paid
Resolution

Type of shares

March 25, 2022
General meetingof shareholders

Common stock

August 10, 2022
Board meeting

Common stock

Total dividends(Millions of yen)

Dividend pershare (Yen)Record date

Effective date

771

30.00

December 31,
2021

March 28, 2022

610

24.00

June 30, 2022

September 20,
2022(Notes) 1 The total amount of dividends resolved by the General Meeting of Shareholders of March 25, 2022 includes 16 million
yen of dividends distributed to treasury stock held by Custody Bank of Japan, Ltd. (Trust Account).
2 The total amount of dividends resolved by the Board of Directors of August 10, 2022 includes 12 million yen of
dividends distributed to treasury stock held by Custody Bank of Japan, Ltd. (Trust Account).

21

(2) Dividends for which the settlement date was within the current fiscal year but the effective date in the following fiscal year
Total
dividend
Source ofDividend per
Resolution
Type of shares
Record date
Effective date(Millions ofdividends
share (Yen)yen)
March 24, 2023
591 Retained
24.00 December 31, March 27,
General meeting ofCommon stockearnings
2022
2023
shareholders(Note) The total amount of dividends resolved by the General Meeting of Shareholders of March 24, 2023 includes 12 million yenof dividends distributed to treasury stock held by Custody Bank of Japan, Ltd. (Trust Account).
Current fiscal year (From January 1, 2023 to December 31, 2023)
1. Type and number of shares issued and type and number of treasury stock
Decrease in numberof shares during
the current fiscal
year

Number of shares at
January 1, 2023

Increase in number ofshares during thecurrent fiscal year

Common stock(Notes)1

25,664,373--

25,664,373

Total

25,664,373--

25,664,373

1,555,701

158,183

19,952

1,693,932

1,555,701

158,183

19,952

1,693,932

Issued shares

Number of shares at
December 31, 2023

Treasury stock
Common stock(Notes)2,3
Total(Notes) 1 The number of shares of common treasury stock at the beginning of the current fiscal year and at the end of thecurrent fiscal year includes 539,459 shares and 519,644 shares of the Company held by Custody Bank of Japan, Ltd.
(Trust Account), respectively.
2 Outline of reasons for the change
Breakdown of increase in the number is as follows.
Increase due to purchase under Board meeting Resolution
157,300 shares
Increase due to purchase of less than standard unit
883 shares
Breakdown of decrease in the number is as follows.
Decrease due to demand for sale by Custody Bank of Japan, Ltd. (Trust Account)
19,815 shares
Decrease due to demand for sale of less than standard unit
137 shares
2. Subscription rights to shares and treasury stock subscription shares
Not applicable.

223. Dividends(1) Dividends paid
Resolution

Type of shares

March 24, 2023
General meetingof shareholders

Common stock

August 9, 2023
Board meeting

Common stock

Total dividends(Millions of yen)

Dividend pershare (Yen)

591

24.00

December 31,
2022

March 27, 2023

612

25.00

June 30, 2023

September 19, 2023

Record date

Effective date

(Notes) 1 The total amount of dividends resolved by the General Meeting of Shareholders of March 24, 2023 includes 12 million
yen of dividends distributed to treasury stock held by Custody Bank of Japan, Ltd. (Trust Account).
2 The total amount of dividends resolved by the Board of Directors of August 9, 2023 includes 13 million yen of dividends
distributed to treasury stock held by Custody Bank of Japan, 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
Total dividend
Type of
Source ofDividend per
Resolution(Millions ofRecord date
Effective datesharesdividends
share (Yen)yen)
March 26, 2024
808 Retained
33.00 December 31, March 27,
CommonGeneral meeting of
earnings
2023
2024
stock
shareholders(Note) The total amount of dividends resolved by the General Meeting of Shareholders of March 26, 2024 includes 17 million yenof dividends distributed to treasury stock held by Custody Bank of Japan, Ltd. (Trust Account).

23

(Consolidated statement 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, 2022
to December 31, 2022)
22,293 million yen

Current fiscal year
(From January 1, 2023
to December 31, 2023)
24,360 million yen

989 million yen

0 million yen

Total

23,283 million yen

24,360 million yen

Time deposits with maturities ofmore than 3 months(7,198) million yen(5,633) million yen

Stock and debt securities withredemption period exceeding
3 months(989) million yen(0) million yen

Cash and cash equivalents

15,094 million yen

18,727 million yen

Cash and deposits
Short-term investment securities

2. Breakdown of assets acquired and liabilities assumed of newly consolidated subsidiary due share acquisition
Prior fiscal year (From January 1, 2022 to December 31, 2022)
Assets and liabilities of GEOSMART INTERNATIONAL PTE. LTD. on the date of acquisition as well as the relationship between
the acquisition cost and net disbursement for the acquisition are presented below:
Current assets
623 million yen
Noncurrent assets

639 million yen

Goodwill

55 million yen

Current liabilities(352) million yen

Noncurrent liabilities(295) million yen

Non-controlling interests(246) million yen

Acquisition cost of shares

424 million yen

Cash and cash equivalents(0) million yen

Difference: Net disbursement for the acquisition

424 million yen(Note) The Company has finalized the provisional accounting treatment for the business combination in the current fiscal
year, and the figures for the prior fiscal year reflect the finalization of the provisional accounting treatment.
Current fiscal year (From January 1, 2023 to December 31, 2023)
Assets and liabilities of NIHON ZITAN CO, LTD. on the date of acquisition as well as the relationship between the acquisition
cost and net disbursement for the acquisition are presented below:
Current assets
1,053 million yen
749 million yen

Noncurrent assets
Goodwill

1,082 million yen

Current liabilities(377) million yen

Noncurrent liabilities(227) million yen

Acquisition cost of shares

2,280 million yen

Cash and cash equivalents(676) million yen

Difference: Net disbursement for the acquisition

1,603 million yen

24

3. Significant noncash transactions
The amount of assets and liabilities related to finance lease transactions

Amount of assets and liabilities related tofinance lease transactions

Prior fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

145 million yen

347 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
2. Operating lease transactions
Not applicable.

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, 2022)

3,900

Current assets

Current fiscal year
(As of December 31, 2023)

4,372(2) Lease obligations(Millions of yen)
Prior fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Current liabilities

1,282

1,444

Noncurrent liabilities

2,588

2,892

(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. In the event
funding using its own resources may be insufficient, the Group considers obtaining loans payable from banks. The Group
enters into derivative transactions to hedge future risks of exchange rate fluctuations, but does not engage in speculative
trading.

25

(2) Types of financial instruments and related risks
Operating receivables, such as notes and accounts receivable-trade and accounts receivable-completed operations andcontract assets, are exposed 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 andforward-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.
Loans payable include those raised for the purpose of securing long-term, related liquidity and those related to short-termworking capital. They are exposed to the risk of fluctuations in interest rates.
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
4. Accounting policies, (6) Significant hedge accounting
meth(3) Risk management for financial instruments(a) Credit risk (risks related toits 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,
in accordance with its securities policy. Accordingly, the credit risk is insignificant.
For derivative transactions, the Company limits counterparties to highly rated financial institutions. Accordingly, thecredit 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 forpart of its operating payables and receivables denominated in foreign currencies.
For short-term investment securities and investment securities, the Company regularly monitors market conditions andthe fair values of its securities. The Company also intermittently reviews its status of its shareholdings, considering its
relationships with the companies.
decision-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
the liquidity 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 values of financial instruments may fluctuate when different assumptions are adopted because variable factors aretaken into account in determining the values.

26

2. Fair value of financial instruments
The book values on the consolidated balance sheet, fair value and the difference between them are shown in the following
table.
Prior fiscal year (As of December 31, 2022)
Book value on consolidatedbalance sheets (Millions of yen)

Fair value(Millions ofyen)

Difference(Millions ofyen)

Fair value(Millions ofyen)

Difference(Millions ofyen)

Short-term investment securities andinvestment securities
Available-for-sale securities
4,375
4,375
Total assets
4,375
4,375
(Notes)1-completed operations andcontract
omitted, and Deposits, Notes, Accounts receivable, Accounts receivable-completed operations
and contract assets are also omitted because their fair values approximate their carrying amounts due to short-term
maturities.
2
and accounts payableNotes, accounts payable-trade, Accounts payable-operating and Income taxes payable are omitted because their fairvalues approximate their carrying amounts due to their cash-based nature and short-term maturities.
3-forThe amounts of such financial
instruments on the consolidated balance sheet are as follows.
(Millions of yen)Classifications

December 31, 2022

0
297
857

Investments in a limited partnership
Unlisted stocks
Stocks of subsidiaries and affiliates
Current fiscal year (As of December 31, 2023)

Book value on consolidatedbalance sheets (Millions of yen)

Short-term investment securities andinvestment securities
Available-for-sale securities
3,700
3,700
Total assets
3,700
3,700
Long-term loans payable
3,620
3,668
48
(including Long-term loans payable
scheduled to be refunded within 1 year)
Total liabilities
3,620
3,668
48
(Notes) 1-completed operations andcontract
Cash is omitted and Deposits, Notes, Account receivable, Accounts receivable-completed operations and contract
assets are also omitted because their fair values approximate their carrying amounts due to short-term maturities.
Notes, accounts payable-trade, Accounts payable-operating and Income taxes payable are omitted because theirfair values approximate their carrying amounts due to their cash-based nature and short-term maturities.
-forThe amounts of such financial
3
instruments on the consolidated balance sheet are as follows.
(Millions of yen)Classifications

December 31, 2023

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

0
297
1,058

27

3. Redemption schedule of receivables and securities with maturities
Prior fiscal year (As of December 31, 2022)

Cash and deposits
Notes and accounts receivable-trade
Accounts receivable-completed operations andcontract assets
Short-term investment securities and investment
securities
Available-for-sale securities with maturities
1. Bonds(1) Government bonds/local authority bonds, etc.
(2) Corporate bonds(3) Others
2. Others
Total
Current fiscal year (As of December 31, 2023)

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

Due within
1 year(Millions ofyen)
22,283
2,892
29,351

Due after 1
year through 5
years (Millionsof yen)-Due after 5
years through10 years(Millions of yen)
-

900
89
55,516--

Due within
1 year(Millions ofyen)
24,3502,576
34,268Due after 1
year through 5
years (Millionsof yen)-Due after 5
years through10 years(Millions of yen)-

061,195--

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

28

Due after
10 years(Millions of yen)--

Due after
10 years(Millions of yen)--

4. Repayment schedule of long-term loans payable and lease obligations due after the balance sheet date
Prior fiscal year (As of December 31, 2022)

Due within
1 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(Millionsof yen)

1,181

879

559

181

26

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(Millionsof yen)

1,545

Lease
obligations

Current fiscal year (As of December 31, 2023)

Due within
1 year(Millions ofyen)Long-termloans payable

737

731

701

701

701

45

Lease
obligations

1,691

1,354

978

542

255

25

Total

2,428

2,085

1,679

1,244

957

71

5. Matters concerning the breakdown of the fair value of financial instruments by level
The fair values of financial instruments are classified into the following three levels according to the observability andsignificance of inputs used in the calculation of fair values.
Level 1 fair value: Fair value calculated using market prices, on an active market, of assets or liabilities whose fair value iscalculated of the observable inputs related to the calculation of fair value
Level 2 fair value: Fair value calculated using inputs other than the inputs used for Level 1 of the observable inputs related tothe calculation of market value
Level 3 fair value: Fair value calculated using inputs that are not observable related to the calculation of fair value
If more than one input that has a significant effect on the calculation of fair value is used, the fair value is classified to the levelof inputs whose priority is lowest in the calculation of fair value.
(1) Financial instruments recorded on the consolidated balance sheet at fair value
Prior fiscal year (As of December 31, 2022)
Classifications

Fair value(Millions of yen)
Level 2
Level 3

Level 1

Total

Short-term investment securities
and investment securities
Available-for-sale securities
Stocks

3,246

-

-

3,246

Others

-

1,129

-

1,129

3,246

1,129

-

4,375

Total assets

29Current fiscal year (As of December 31, 2023)
Classifications

Fair value(Millions of yen)
Level 2
Level 3

Level 1

Total

Short-term investment securities
and investment securities
Available-for-sale securities
Stocks

3,560

-

-

3,560

Others

-

139

-

139

3,560

139

-

3,700

Total assets(2) Financial instruments other than recorded on the consolidated balance sheet at fair value
Current fiscal year (As of December 31, 2023)
Classifications

Fair value(Millions of yen)
Level 2
Level 3

Level 1

Total

Long-term loans payable(including Long-term loans
payable scheduled to be refundedwithin 1 year)

-

3,668

-

3,668

Total liabilities

-

3,668

-

3,668

(Notes) Explanation of valuation techniques used in the calculation of fair value and inputs related to the calculation of fairvalue.
Short-term investment securities and investment securities
Listed stocks are valued using quoted prices. Listed stocks are traded in an active market and, therefore, their fair values
are classified as Level 1 fair values. Available-for-sale securities other than stocks are calculated based on prices quoted
by the financial institutions with which the securities are traded and are classified as Level 2 fair values.
Long-term loans payable
Fair value of long-term loans payable is measured at present value determined by discounting total principal and interest
at a rate likely to apply if a comparable new borrowing was made and is classified as Level 2.

30

(Securities)
1. Available-for-sale securities
Prior fiscal year (As of December 31, 2022)
Type

Book value on the
consolidatedbalance sheets(Millions of yen)
3,246

Acquisition cost
(Millions of yen)

Difference (Millions ofyen)(1) Stocks
1,548
1,697
(2) Bonds(a) Government
bonds/local
authority bonds, etc.
(b) Corporate bonds(c) Others(3) Others
Sub total
3,246
1,548
1,697
Investments with (1) Stocks
book values on(2) Bonds
the(a) Government
consolidated
bonds/local
balanceauthority bonds, etc.
sheets not(b) Corporate bonds
exceeding(c) Others
899
900
(0)
acquisition cost(3) Others
229
248
(18)
Sub total
1,129
1,147
(18)
Total
4,375
2,696
1,679
(Note) Unlisted stocks (book value on the consolidated balance sheet: 297 million yen) are Stocks, etc. without market price.
-forInvestments withbook values ontheconsolidatedbalancesheets exceedingacquisition cost

Current fiscal year (As of December 31, 2023)
Type

Book value on the
consolidatedbalance sheets(Millions of yen)
3,558

Acquisition cost
(Millions of yen)

Difference (Millions ofyen)(1) Stocks
1,301
2,257
(2) Bonds(a) Government
bonds/local
authority bonds, etc.
(b) Corporate bonds(c) Others(3) Others
Sub total
3,558
1,301
2,257
Investments with (1) Stocks
1
1
book values on(2) Bonds
the(a) Government
consolidated
bonds/local
balanceauthority bonds, etc.
sheets not(b) Corporate bonds
exceeding(c) Others
acquisition cost(3) Others
139
146
(6)
Sub total
141
148
(6)
Total
3,700
1,449
2,250
(Note) Unlisted stocks (book value on the consolidated balance sheet: 297 million yen) are Stocks, etc. without market price.
-forInvestments withbook values ontheconsolidatedbalancesheets exceedingacquisition cost31

2. Available-for-sale securities soldPrior fiscal year (From January 1, 2022 to December 31, 2022)
Sales price
Type(Millions of yen)
(1) Stocks
285(2) Bonds(a) Government
bonds/local authority
bonds, etc.
(b) Corporate bonds(c) Others(3) Others
Total
285

Total gains on sales(Millions of yen)

80

Total losses on sales(Millions of yen)

-

-

-

80

-

Current fiscal year (From January 1, 2023 to December 31, 2023)
Type(1) Stocks(2) Bonds(a) Government
bonds/local authority
bonds, etc.
(b) Corporate bonds(c) Others(3) Others
Total

Sales price(Millions of yen)

Total gains on sales(Millions of yen)

839

584

Total losses on sales(Millions of yen)

-

-

-

-

15

0

0

855

585

0

(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.
Defined contribution pension plans have been established by the Company and certain consolidated subsidiaries.
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 the employees.
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 a compendium
method.

32

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, 2022
to December 31, 2022)(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))
Prior fiscal year
(From January 1, 2022
to December 31, 2022)(Millions of yen)
Current fiscal year
(From January 1, 2023
to December 31, 2023)(Millions of yen)
Current fiscal year
(From January 1, 2023
to December 31, 2023)(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, 2022
(From January 1, 2023
to December 31, 2022)
to December 31, 2023)

33

(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)
Current fiscal year
Prior fiscal year
(As of December(As of December 31, 2022)
31,2023)(5) Retirement benefit expenses
Prior fiscal year
(From January 1, 2022
to December 31, 2022)(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, 2022
to December 31, 2022)(Millions of yen)
Current fiscal year
(From January 1, 2023
to December 31, 2023)(Millions of yen)
Current fiscal year
(From January 1, 2023
to December 31, 2023)(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
(As of December 31, 2022)

34

Current fiscal year
(As of December 31,2023)

(8) Matters related to plan assets(a) Major breakdown of plan assets
Ratios of asset classes to total plan assets by major classification are as follows.
Prior fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)(b) 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, 2022
to December 31, 2022)

Current fiscal year
(From January 1, 2023
to December 31, 2023)

3. Defined contribution pension plans
Required contributions by the Company and its consolidated subsidiaries to defined contribution pension plans were 380
million yen for the prior fiscal year and 384 million yen for the current fiscal year.

35

(Tax effect accounting)
1. Significant components of deferred tax assets and liabilities
Prior fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

Deferred tax assets
Net operating loss carryforwards (Note)2

115 million yen

140 million yen

Net defined benefit liability

505 million yen

542 million yen

Allowance for doubtful accounts

135 million yen

119 million yen

Provision for bonuses

62 million yen

59 million yen

Enterprise tax payable

67 million yen

76 million yen

Loss on valuation of securities

12 million yen

15 million yen

Loss on valuation of inventories

261 million yen

326 million yen

Revaluation reserve for land

1,082 million yen

1,082 million yen

Others2,071 million yen

2,159 million yen

Deferred tax assets: Sub total

4,315 million yen

4,523 million yen

Valuation allowance for net(105) million yen(78) million yen(3,207) million yen(2,278) million yen

Valuation allowance(3,312) million yen(2,356) million yen

Deferred tax assets: Total

1,002 million yen

2,166 million yen

Balance of investments(valuation difference of noncurrent assets)(210) million yen(234) million yen

Revaluation reserve for land(262) million yen(227) million yen

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

Valuation difference on available-for-salesecurities(504) million yen(675) million yen

Retained earnings of overseas subsidiaries(151) million yen(183) million yen

Net defined benefit assets(485) million yen(601) million yen

Other(160) million yen(187) million yen

Deferred tax liabilities: Total(1,908) million yen(2,242) million yen

Net deferred tax liabilities(905) million yen(75) million yen

operating loss carry forwards (Note)2
Valuation allowance for deductible
temporary differences

Deferred tax liabilities(Note)1. The Company has finalized the provisional accounting treatment for the business combination in the current fiscal
year, and the figures for the prior fiscal year reflect the finalization of the provisional accounting treatment.

36

(Note)2. Net operating loss carryforwards and related deferred tax assets expire as follows:
Prior fiscal year (As of December 31, 2022)
Due after Due after Due after
Due afterDue
2 years
3 years
4 years
1 year
within
but
but
but
but
1 year
withinwithinwithinwithin 2
3
years
4
years
5 years
years

Net operating loss
carryforwards (a)Valuation allowance

-

-

2

Due after
5 years

115 million
yen
(2)
(3)
(3)
(95) (105) million
yen
Deferred tax assets
10 10 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.
Current fiscal year (As of December 31, 2023)
Due afterDue
Due after
2 years
1
yearwithinbut
but
within1 year
within 2
3 years
years
Net operating loss
03
carryforwards (a)Valuation allowance
(0)
(3)

3

3

105

Due after
3 yearsbut
within4 years

Due after
4 yearsbut
within5 years

Due after
5 years

3

3

129

Total

Total

140 million
yen
(3)
(3)
(67) (78) million
yen
Deferred tax assets
62 62 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.

37

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, 2022)

Current fiscal year
(As of December 31, 2023)

30.6 %

30.6 %

Permanently non-deductible entertainmentand other expenses

0.6 %

0.6 %

Permanently non-taxable dividends andother income(0.3) %

(0.2) %

Per-capita inhabitant tax

3.2 %

2.4 %

Equity in earnings ¿²¼ ´±--»- of affiliates

0.0 %(0.7) %

Valuation allowance

25.1 %(28.2) %Effect of tax deduction(5.2) %

(6.5) %

Amortization of goodwill

0.7 %

0.6 %

(15.2) %-%Others

3.4 %

4.0 %

Effective tax rates after adoption of taxeffect accounting

42.9 %

2.6 %Statutory effective tax rate in Japan(Reconciliation)

Effect for sale of shares of subsidiary(Note) The Company has finalized the provisional accounting treatment for the business combination in the current fiscal
year, and the figures for the prior fiscal year reflect the finalization of the provisional accounting treatment.

38

(Business combinations)(Finalization of provisional accounting treatment)
Regarding the business combination of GEOSMART INTERNATIONAL PTE.LTD. on October 3, 2022 (deemed acquisition date:
October 1, 2022), in the prior fiscal year, the Company applied a provisional accounting treatment, however, in the current
fiscal year, the Company finalized the provisional accounting treatment. In accordance with finalization of this provisional
accounting, the Company reviewed and reflected the initial allocation of acquisition costs.
As a result, the provisional amount of Goodwill previously recognized of 210 million yen decreased by 154 million yen to 55
million yen due to the finalization of accounting treatment. The decrease in Goodwill was due to increases of 310 million yen in
Other intangible assets, 52 million yen in Deferred tax liabilities, and 103 million yen in Non-controlling interests, respectively.
Also, at the end of prior fiscal year, Other intangible assets increased by 284 million yen, Deferred tax liabilities increased by
48 million yen, and Non-controlling interests increased by 94 million yen, and Goodwill decreased by 199 million yen, Retained
earnings decreased by 55 million yen, and Foreign currency translation adjustment decreased by 1 million yen. In the
consolidated statement of income for the prior fiscal year, Operating income, Ordinary income and Profit before income taxes
decreased by 64 million yen, respectively. In addition Profit decreased by 55 million yen and Profit attributable to noncontrolling interests decreased by 5 million yen, respectively.
(Business combination due to acquisition)
Due to the acquisition of shares NIHON ZITAN CO, LTD. on July 6, 2023 based on the decisions at the board meeting held on
June 15, 2023, it became subsidiary.
(1) Outline of the business combination(a) Name of the acquired company and description of its business
Name of the acquired company
NIHON ZITAN CO, LTD.
Description of businesses
Magnetic exploration, marine survey, surveying, geological survey, etc.
(b) Main reasons of the business combination
NIHON ZITAN CO, LTD.'s services, which are centered on marine magnetic surveys, are also in high demand in the offshore
wind power generation business. With the addition of NIHON ZITAN to the Group, we will be able to expand the resources of
the Group's business, and we can expect to further enhance the Group's market superiority in the offshore wind power
generation market.
(c) Date of business combination
July 6, 2023 (deemed acquisition date: July 1, 2023)(d) Legal form of business consolidation
Acquisition of shares for a cash consideration(e) Name of companies after business combination
Unchanged(f) Ratio of voting rights acquired
100%(g) Reasons for determining acquiring company
The Company acquired shares for a cash consideration.

39

(2) Period for which financial results of the acquired company are included in the consolidated financial statements
From July 1, 2023 to December 31, 2023
(3) Acquisition cost and breakdown of types of consideration
Consideration
Cash2,280 million yen
Acquisition cost

2,280 million yen(4) Breakdown of main cost related to acquisition and amount
Advisory cost, etc. 75 million yen(5) Amount of goodwill arising from business combination, reason for occurrence, amortization method and period(a) Amount of goodwill recognized
1,082 million yen(b) Reason for occurrence
Goodwill was mainly recognized for future excess earning power expected from the future business.
(c) Amortization method and amortization period
Goodwill is amortized by the straight-line method over 10 years(6) Assets acquired and liabilities assumed from business combination and main breakdown
Current assets

1,053 million yen

Noncurrent assets

749 million yen

Total assets

1,803 million yen

Current liabilities

377 million yen

Noncurrent liabilities

227 million yen

Total liabilities

605 million yen(7) Estimated impact on consolidated statement of income for the current fiscal year if the business combination is assumed tohave been completed at the beginning of the fiscal year, and the calculation method
The information is omitted because it is immaterial.

40

(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)
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 28 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 28 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/decrease during
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, 2022
to December 31, 2022)

Current fiscal year
(From January 1, 2023
to December 31, 2023)

Balance at the beginning of
the fiscal year

479

470

Increase/decrease during
the fiscal year

(9)

(9)

Balance at the end of the
fiscal year

470

460

462

469

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 decrease during the prior fiscal year was mainly due to depreciation (9 million yen). The amountsof decrease during the current fiscal year were mainly due to depreciation (9 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.

41

(Revenue Recognition)
Prior fiscal year (From January 1, 2022 to December 31, 2022)(1) Disaggregation of revenue from contracts with customers
The Group consists of four reportable segments: Infrastructure Maintenance, Management, and Renovation , Natural
Disaster Prevention and Mitigation , Environment, and Natural Resources and Energy.
Revenue of the Group is divided into and recognized within four categories; Government, Local government, and Private
and other for each customer classification in Japan, and" for sales outside Japan.
The relationship between revenues from goods or services broken down by classification of customers in Japan and overseas
sales and the four reportable segments is as follows:(Millions of yen)

Revenue from contracts with customers
Other revenue

Government

Infrastructure
Maintenance,
Management,
and Renovation

Natural Disaster
Prevention and
Mitigation

Environment

Natural Resources
and Energy

Internal
elimination

Total

3,718

4,494

2,420

2,739

-

13,372

3,117

2,411

3,279

0

-

8,809

9,067

3,269

4,258

8,736

(1,027)24,305

Overseas

3,371

3,471

10

4,220

-

11,074

Total

19,275

13,646

9,968

15,697(1,027)57,562

Local
Japan

(Millions of yen)

government
Private andother(2) Information to understand revenues(3) Information to understand the amount of revenues for the current and following fiscal year.
(a) Balance of Contract Assets and Contract Liabilities
The beginning and ending balances of trade receivables, contract assets and contract liabilities recorded from contracts withcustomers of the Company and its consolidated subsidiaries for the current fiscal year are as follows:
In the consolidated balance sheet, trade receivables are included in Notes and accounts receivable-trade and Accounts
receivable-completed operations and contract assets , contract assets are included in Accounts receivable-completed
operations and contract assets, and contract liabilities are included in Advances received on uncompleted contracts andOther.
(Millions of yen)
Prior fiscal year
(From January 1, 2022 to December 31, 2022)
Balance at the beginning
Balance at the end of theof the fiscal year
fiscal year
Accounts receivable-trade
Contract assets
The change in contract assets was primarily due to revenue recognition (increase in contract assets) and reclassification to
trade receivables (decrease in contract assets).

42

The change in contract liabilities was primarily due to advances received (an increase in contract liabilities) and revenue
recognition (decrease in contract liabilities).
Of the revenue recognized during the current fiscal year, the amount, which was included in contract liabilities as of the
beginning of the current fiscal year, was 647 million yen and the amount related to performance obligations satisfied in priorperiods was not material.
(b) Transaction price allocated to the remaining performance obligations
Outstanding performance obligations as of the end of the fiscal year are as follows:

Current fiscal year

(Millions of yen)
Total
28,075Due after 1 year
9,340

Due in 1 year or less
18,735Current fiscal year (From January 1, 2023 to December 31, 2023)(1) Disaggregation of revenue from contracts with customers
Revenue of the Group is divi
The relationship between revenues from goods or services broken down by classification of customers in Japan and overseas
sales and the four reportable segments is as follows:(Millions of yen)

Revenue from contracts with customers
Other revenue

Government

Infrastructure
Maintenance,
Management,
and Renovation

Natural Disaster
Prevention and
Mitigation

Environment

Natural Resources
and Energy

Internal
elimination

Total

3,511

4,284

2,273

1,098

-

11,167

3,206

2,507

3,563

18

-

9,296

12,695

3,154

4,647

11,286(961)

30,822

Overseas

3,435

4,278

15

4,605

-

12,334

Total

22,84814,225

10,49917,008(961)

63,619

Local
Japan

(Millions of yen)

government
Private andother(2) Information to understand revenues
As the same information has been43

(3) Information to understand the amount of revenues for the current and following fiscal year.
(a)Balance of Contract Assets and Contract Liabilities
The beginning and ending balances of trade receivables, contract assets and contract liabilities recorded from contracts withcustomers of the Company and its consolidated subsidiaries for the current fiscal year are as follows:
Accounts
receivable-completed operations and contract assets
Accounts receivable-completed
operations and contract assets(Millions of yen)
Current fiscal year
(From January 1, 2023 to December 31, 2023)
Balance at the beginningof the fiscal year

Balance at the end of the
fiscal year

Accounts receivable-trade
Contract assets

The change in contract assets was primarily due to revenue recognition (increase in contract assets) and reclassification to
trade receivables (decrease in contract assets).
The change in contract liabilities was primarily due to advances received (an increase in contract liabilities) and revenue
recognition (decrease in contract liabilities).
Of the revenue recognized during the current fiscal year, the amount, which was included in contract liabilities as of the
beginning of the current fiscal year, was 705 million yen and the amount related to performance obligations satisfied in priorperiods was not material.
(b)Transaction price allocated to the remaining performance obligations
Outstanding performance obligations as of the end of the fiscal year are as follows:

Current fiscal year

Due after 1 year
6,668

Due in 1 year or less
22,64944(Millions of yen)Total
29,317

(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.
An outline of the segments is as follows.
<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 theburdenenvironment. 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
to a determination of management resource allocation or evaluation of business results. Inter-segment sales or transfers are
based on actual market prices.

45

3. Information on net sales, income or loss, assets and other items per reportable segment
Prior fiscal year (From January 1, 2022 to December 31, 2022)(Millions of yen)
Reportable segments
Adjustment(Note 1)

Book value on
consolidated
financialstatements(Note 2)59,011-59,0113

1,027(1,027)-

9,968

15,69760,038(1,027)59,011

474

1,064

567

2,446

8

2,454

527

206

243

314

1,291

(0)

1,291

Amortization of goodwill

69

-

-

-

69

-

69

Equity in earnings (loss)of affiliates

5

-

-

(7)

(2)

-

(2)

Infrastructure
Maintenance,
Management,
andRenovation

NaturalDisasterPrevention
andMitigation

Sales to third parties

19,847

Inter-segment sales ortransfer

Environment

NaturalResourcesandEnergyTotal

13,545

9,923

15,694

876

101

45

20,724

13,646340

Depreciation andamortization

Net sales

Total
Segment income
Other items(Notes) 1. An adjustment of 8 million yen in the segment income 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 a reasonabledistribution basis.
4. The Company has finalized the provisional accounting treatment for the business combination in the current fiscal
year, and the figures for the prior fiscal year reflect the finalization of the provisional accounting treatment.

46

Current fiscal year (From January 1, 2023 to December 31, 2023)(Millions of yen)

Reportable segments
Adjustment(Note 1)

Book value on
consolidated
financialstatements(Note 2)65,602-65,602

21

961

(961)

-

10,49917,00866,564(961)

65,602

460

1,083

895

2,831

10

2,842

801

229

233

322

1,585

(0)

1,585

Amortization of goodwill

76

-

-

-

76

-

76

Equity in earnings(losses) of affiliates

(5)

-

-

121

115

-

115

Infrastructure
Maintenance,
Management,
andRenovation

NaturalDisasterPrevention
andMitigation

Sales to third parties

24,034

Inter-segment sales ortransfer

Environment

NaturalResourcesandEnergyTotal

14,157

10,423

16,987

796

67

76

24,831

14,225391

Depreciation andamortization

Net sales

Total
Segment income
Other items(Notes) 1. An adjustment of (0) million yen in the segment income 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 a reasonabledistribution basis.

47

Related information
Prior fiscal year (From January 1, 2022 to December 31, 2022)
1. Breakdown by product and service
Details are omitted because identical information is disclosed in the segment information section.
2. Breakdown by geographic area
(1) Net sales
Japan(Millions of yen)
United States

Others

Total(Note) Net sales are based on the location of customers and are classified by geographic proximity.
(2) Property, plant and equipment
Japan(Millions of yen)
United States

Others3. Breakdown by customer
Name of the customer

Total(Millions of yen)
Net sales

Ministry of Land,
Infrastructure,
Transport and Tourism

Relevant segment
6,080

Infrastructure Maintenance, Management, and Renovation;
Natural Disaster Prevention and Mitigation; Environment;
and Natural Resources and Energy

Current fiscal year (From January 1, 2023 to December 31, 2023)
1. Breakdown by product and service
Details are omitted because identical information is disclosed in the segment information section.
2. Breakdown by geographic area
(1) Net sales
Japan(Millions of yen)
the United States

Others

Total(Note) Net sales are based on the location of customers and are classified by geographic proximity.
(2) Property, plant and equipment
Japan(Millions of yen)
the United States

Others3. Breakdown by customer
Name of the customer
Ministry of Land,
Infrastructure,
Transport and Tourism

Total(Millions of yen)
Net sales

Relevant segment
5,151

Infrastructure Maintenance, Management, and Renovation;
Natural Disaster Prevention and Mitigation; Environment;
and Natural Resources and Energy

48

Information about impairment loss of noncurrent assets per reportable segment
Not applicable.
Information about amortization of goodwill and unamortized balance per reportable segment
Prior fiscal year (From January 1, 2022 to December 31, 2022)

Amortization
during the year
Balance at theend of the year

(Millions of yen)

Infrastructure
Maintenance,
Management,
and Renovation

Natural Disaster
Prevention and
Mitigation

69

-

-

-

-

69

-

-

-

-

-

-

Natural Resources
and Energy

Environment

Eliminations
or
corporate

Total(Note) The Company has finalized the provisional accounting treatment for the business combination in the current fiscal year,
and the figures for the prior fiscal year reflect the finalization of the provisional accounting treatment.
Current fiscal year (From January 1, 2023 to December 31, 2023)(Millions of yen)Amortization
during the year
Balance at theend of the year

Infrastructure
Maintenance,
Management,
and Renovation

Natural Disaster
Prevention and
Mitigation

76

-

-

-

-

76

1,116

-

-

-

-

1,116

Natural Resources
and Energy

Environment

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

Related-party transactions
Prior fiscal year (From January 1, 2022 to December 31, 2022)
Not applicable.
Current fiscal year (From January 1, 2023 to December 31, 2023)
Not applicable.

49

Eliminations
or
corporate

Total

(Per share information)

Net assets per share

Prior fiscal year
(From January 1, 2022
to December 31, 2022)
2,898.95 yen

Current fiscal year
(From January 1, 2023
to December 31, 2023)
3,103.80 yen

73.08 yen

167.19 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 inshares 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 539,459 shares in the prior fiscal year and 519,644 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 541,067 shares in the prior fiscal year and 526,016 shares in the current
fiscal year.
3. The Company has finalized the provisional accounting treatment for the business combination in thecurrent fiscal year, and the figures for the c prior fiscal year reflect the finalization of the provisional accounting
treatment.
4. The basis for the calculation of net income per share is as follows:
Prior fiscal year
(From January 1, 2022
to December 31, 2022)
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)

Current fiscal year
(From January 1, 2023
to December 31, 2023)

1,808
1,808
24,745,999

50

(Significant subsequent events)(Acquisition of Shares)
At the board meeting held on December 13, 2023, it was resolved to acquire the shares of SANYO TECHNO MARINE CO, LTD.,and make it a subsidiary of the Company, and a share purchase agreement was concluded on December 25, 2023.
(1) Outline of the business combination(a) Name of the acquired company and description of its business
Name of the acquired company SANYO TECHNO MARINE CO, LTD.
Description of businesses
Comprehensive environmental consultant (surveying, geological surveys,
environmental surveys, environmental consulting, construction consulting,and fisheries consulting).
(b)Main reasons of the business combination
SANYO TECHNO MARINE CO, LTD. was established as the first private company specializing in hydrographic surveying. Since
then, it has expanded its business as a comprehensive marine consultant, covering a wide range of services fromhydrographic surveying to marine surveys, such as marine environmental surveys for thermal and nuclear power plant
construction, seabed topography and geological investigations for submarine cable installation, and marine surveys forfurther enhance its group's market competitiveness in the offshore wind power generation market. In addition to thebusiness of NIHON ZITAN CO, LTD., which the Company recently acquired, it will be able to cover almost all market areas
related to marine surveys, from port infrastructure to fisheries promotion, coastal tourism, and marine biological and nonbiological resources. The Company anticipates synergies in various areas, including expanding its group business anddeveloping new services through intra-group collaboration.
(c) Date of business combination
February 14, 2024 (deemed acquisition date: January 1, 2024)(d)Legal form of business consolidation
Acquisition of shares(e) Name of companies after business combination
Unchanged(f) Ratio of voting rights acquired
Ratio of voting rights held before the change
Ratio of voting rights acquired for a cash consideration
Ratio of voting rights held after the change

9.55 %
78.08 %
87.63 %(g) Reasons for determining acquiring company
The Company acquired shares for a cash consideration.
(2) Acquisition cost and breakdown of types of consideration
Consideration for additional acquisition of Common stock on business combination date (Cash) 1,600 million yen(3) Breakdown of main cost related to acquisition and amount
Advisory cost, etc. 12 million yen

51

(4) Amount of goodwill arising from business combination, reason for occurrence, amortization method and period
To be determined.
(5) Assets acquired and liabilities assumed from business combination and main breakdown
To be determined.
(Change in reportable segments)
The OYO Group established the OYO Medium-Term Business Plan 2026 as an action plan for OYO Sustainability Vision
2030 and announced on February 9, 2024. Under this medium-term management plan, one of the basic policies is topromote segment strategies. The OYO Group will change the reporting segments in order to improve business efficiency
and profitability by reforming its organization and segments to match market characteristics, and maximize groupsynergies, review our products and services, strengthen our planning, development, and sales capabilities.
Previously, the OYO Group's reporting segments were "Infrastructure, Maintenance, Management, and Renovation","Natural Disaster Prevention and Mitigation", "Environment" and "Natural Resources and Energy". However, from thenext fiscal year, these segments will be changed to "Disaster Prevention and Infrastructure", "Environment and Energy",and "International".
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.
(Purchase and disposal of treasury stock)

Article 165 (3)of the Companies Act as applied to Article 156 of the Companies Act.
(1) Reason for share repurchaseDue to improve capital efficiency and enhance returns to shareholders(2) Type of stock to be purchased
Common stock(3) Number of shares to be purchased
1,000,000 shares (Maximum) (4.08% of total number of issued shares (excluding treasury stock))(4) Total amount
2,000,000,000 yen (Maximum)(5) Acquisition period
From February 13, 2024 to September 30, 2024
(6) Method of acquisition
Market purchases on the Tokyo Stock Exchange

52

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

Balance at January 1,
2023(Millions of yen)
198-

Balance at December
31, 2023(Millions of yen)
öì
637
öì
737

Average interest
rate
(%)
4.59
0.54

Period ofrepayment

Short-term loans payable
Long-term loans due forrepayment within one year
Lease obligations due for
1,545
1,691
1.86
repayment within one yearöìLong term loans (excluding those
50
2,882
0.56
due for repayment within one
year)
Lease obligations (excluding those
2,828
3,156
1.72
2025-2030
due for repayment within one
year)
Other interest-bearing liabilities
4,622
9,105
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, 2023.

Long-term loans
payableLease obligations

Due after 1 year
but within 2
years (Millionsof yen)731

Due after 2 years
but within 3
years (Millionsof yen)701

Due after 3 years
but within 4
years (Millionsof yen)701

Due after 4 years
but within 5
years (Millionsof yen)
701

1,354

978

542

255

Schedule of asset retirement obligations
Disclosure is omitted because the amount of asset retirement obligations is immaterial.

53

(2)

Other
Quarterly information for the current fiscal year
Cumulative

1st quarter2nd quarter3rd quarter

Current fiscal year

Net sales (Millions of yen)

15,65728,93346,75065,602

Profit before income taxes (Millionsof yen)

1,452

1,835

2,643

4,163

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

964

1,194

1,747

4,006

40.26

49.87

72.91

167.19Earnings per share (Yen)
Each quarter
Quarterly earnings per share(Yen)

1st quarter2nd quarter

40.26

9.63

3rd quarter

23.04

4th quarter

94.26(NOTE) The provisional accounting treatment for business combinations was finalized in the third quarter and the fourth
quarter of the current fiscal year under review. For the relevant quarterly information items for the first quarter, second
quarter and third quarter, the details of the finalization of the provisional accounting treatment were reflected.

54

2. Non-consolidated financial statements(1) Non-consolidated financial statements
Non-consolidated balance sheet

AssetsCurrent assets
Cash and deposits
Notes receivable-trade
Accounts receivable-completed operations and contract assets
Accounts receivable-trade
Short-term investment securities
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
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

55

Prior fiscal year
(As of December 31,
2022)(Millions of yen)
Current fiscal year
(As of December 31,
2023)

6,603
37
24,153
220
989
477
147
320
219
1,068
34,2397,185
57
27,848
285
0
524
159
357
264
279
36,961

2,912
80
860
1
44
3,951
38
7
7,895

2,849
71
798
1
65
3,802
41
17
7,646

702
8
710

561
8
570

3,682
13,131
27
2,670
(201)
19,31027,917
62,156

3,994
15,443
28
2,670
(206)
21,93130,148
67,109

Liabilities
Current liabilities
Accounts payable-operating
Accounts payable-trade
Accounts payable-other
Income taxes payable
Accrued expenses
Long-term loans payable due for repayment within one year
Advances received on uncompleted contracts
Deposits payable
Provision for bonuses
Provision for product warranties
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Provision for retirement benefits
Provision for stock benefits
Provision for loss on business of subsidiaries and affiliates
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Other
Total noncurrent liabilities
Total liabilities

56

Prior fiscal year
(As of December 31,
2022)(Millions of yen)
Current fiscal year
(As of December 31,
2023)

1,992
45
3,122
282
339
274
373
120
17
41
6,610

2,377
31
3,679
300
358
700
208
333
124
18
69
8,201

1,862
265
22
315
262
100
2,829
9,439

2,800
1,903
318
493
227
109
5,851
14,053

Prior fiscal year
(As of December 31,
2022)(Millions of yen)
Current fiscal year
(As of December 31,
2023)

16,174

16,174

4,043
7,612
11,656

4,043
7,612
11,656488

488

23,307
5,402
29,197(2,547)54,48023,307
5,741
29,536(2,860)54,506

1,178(2,942)(1,764)52,716
62,156

1,574(3,024)(1,450)53,056
67,109Net assets
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
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

57

Non-consolidated statement of income(Millions of yen)
Current fiscal year
(From January 1, 2023
to December 31, 2023)

Prior fiscal year
(From January 1, 2022
to December 31, 2022)

34,092
24,930
9,161
*1
7,861
1,300

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
Provision of allowance for loss on business of
subsidiaries and affiliates
Rent cost of real estate
Loss on redemption of investment securities
Commission fee for purchase of treasury stock
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary loss
Loss on valuation of stock of subsidiaries and affiliates
Loss on sales of noncurrent assets
Total extraordinary loss
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Profit

*2

503
76
*2
69
*2
37
687

58

35,28926,546
8,742
*1
8,022
720
*2

506
83
*2
67
*2
51
709

0
10
22

1
4
1
-

26
11
3
75
1,912

24
14
1
8
54
1,374
*3

80
80

1
584
585

140
140
1,852
523
25
548
1,304

51
8
59
1,901
472
(32)
440
1,461
*4

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

Classification

Prior fiscal year
(From January 1, 2022
to December 31, 2022)
Amount(Millions ofRatio (%)
yen)
482
2.0

Notes

Materials cost

Current fiscal year
(From January 1, 2023
to December 31, 2023)
Amount(Millions ofRatio (%)
yen)
603
2.4

Labor cost

6,439

26.8

6,758

26.3

Subcontract cost

13,802

57.4

14,797

57.7

3,493

13.6

25,652100.0

Overhead cost
Transportation expenses

1,015

1,112

Report preparation cost40

32

Depreciation

372

388

Other

1,907

Total cost for geo-engineering services
Total

3,336

13.9

24,060

100.0

1,959

24,06025,652

24,06025,652

Provision for loss on orders received--

Reversal of provision for loss on orders received

3-

24,05725,652

Cost of sales for geo-engineering services

Cost of sales for geo-engineering services
during the year
(Notes) 1. Method of cost accounting is Job order cost accounting.

59

B. Cost of sales for measuring instruments

Classification

Prior fiscal year
(From January 1, 2022
to December 31, 2022)
Amount(Millions ofRatio (%)
yen)
334

Note

Finished goods at beginning of the year
Cost of purchased goods during the year

Current fiscal year
(From January 1, 2023
to December 31, 2023)
Amount(Millions ofRatio (%)
yen)
477

661

604

Cost of products manufactured during
the yearMaterials cost

371

57.0

318

53.4

Labor cost

194

29.8

187

31.4

Overhead cost

85

13.1

90

15.2

Total manufacturing costs

650

100.0

596

100.0

Work in process at the beginning of the
year

80

147

731

743

99

95

Total
Transfer to other accounts

2

Work in process at the end of the year

147

484

Total

159

488

1,480

1,570

129

152

Finished goods at the end of the year

477

524

Cost of sales for measuring instruments
during the year

873

893

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

Prior fiscal year
14 million yen

Current fiscal year
11 million yen

Prior fiscal year
99 million yen

Current fiscal year
95 million yen

C. Reconciliation of cost of sales for geo-engineering services, cost of sales for measuring instruments and cost of sales
Prior fiscal year
Current fiscal year
(From January 1, 2022
(From January 1, 2023
to December 31, 2022)
to December 31, 2023)
AmountAmountClassification
Note(Millions of yen)
(Millions of yen)
Cost of sales for geo24,057
25,652engineering services
Cost of sales for measuring
873
893
instruments
Cost of sales

24,93060

26,546

Non-consolidated statement of changes in net assets
Prior fiscal year (From January 1, 2022 to December 31, 2022)(Millions of yen)Total
retained
Other retained earnings

earnings

Retained

Balance at the beginning of theyear
Changes during the year

Legal

Other

Total

Legal

earnings

Capitalstock

capitalcapitalcapitalretained

Generalbrought

surplussurplussurplusearnings

reserveforward16,174

4,043

9,316

13,359488

23,307

5,480

29,275(1,382)
1,304(1,382)
1,304

(78)
5,402

(78)
29,197

Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury
stock
Reversal of revaluation
reserve for land
Net changes in items otherTotal changes during the year
Balance at the end of year

16,174

4,043(1,703)(1,703)(1,703)
7,612(1,703)
11,656488

23,307(Millions of yen)
Valuation and translation adjustments

Treasurystock
Balance at the beginning of the year

equity total

Total
valuation
andValuationdifferenceonavailablefor-salesecurities

Revaluation
reservefor landadjustments

1,120(2,942)(1,821)translation

Total net
assets(2,049)56,76054,938(2,209)7
1,703(1,382)
1,304(2,209)7-(1,382)
1,304(2,209)
7---

Changes during the year
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury stockReversal of revaluation reserve forland
Net changes in items other than
Total changes during the year
Balance at the end of year(498)
(2,547)(2,280)54,480

61

57

-

57

57

57
1,178

(2,942)57(1,764)(2,222)
52,716

Current fiscal year (From January 1, 2023 to December 31, 2023)(Millions of yen)
Other retained earnings

Balance at the beginning of theyear
Changes during the year

Legal

Other

Total

Legal

Capitalcapitalcapitalcapitalretained

Generalstock

surplussurplussurplusearnings

reserve

16,174

4,043

7,612

11,656488

23,307

Dividends from surplus
Net income

Retainedearnings
brought
forwardTotal
retainedearnings

5,402

29,197(1,203)
1,461(1,203)
1,461

81

81

338
5,741

338
29,536

Purchase of treasury stock0

Disposal of treasury stock
Cancellation of treasury
stock
Reversal of revaluation
reserve for land
Net changes in items otherthan
Total changes during the year
Balance at the end of year

16,174

4,043

0
7,612

0

0
11,656488

23,307(Millions of yen)
Valuation and translation adjustments
Total

Treasurystock
Balance at the beginning of the year

(2,547)

equity total

54,480

Valuationdifferenceonavailablefor-salesecurities

Revaluation
reservefor landadjustments

1,178(2,942)(1,764)valuationandtranslation

Total net
assets52,716

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

(341)
28

Cancellation of treasury stockReversal of revaluation reserve forland
Net changes in items other than
Total changes during the year
Balance at the end of year(313)
(2,860)(1,203)
1,461
(341)
28
-

(1,203)
1,461
(341)
28
-

81

81

25
54,506

62

395

(81)

314

314

395
1,574

(81)
(3,024)314(1,450)340
53,056

Notes(Significant accounting policies)
1. Valuation method and standards for securities(1) Stocks of subsidiaries and affiliates
Stated at cost determined by the moving average method.
(2) Available-for-sale securities
Securities other than stocks, etc. without market priceStated at fair value (unrealized gains or losses are included directly in net assets, net of the applicable taxes. Cost of
securities sold is determined by the moving average method).
Stocks, etc. without market priceStated 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(1) 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).
(2) 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(1) 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(2) Intangible assets (excluding lease assets)
Straight-line method
Software for internal use is amortized over the expected available period (5 -10 years).
(3) 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.
(4) Long-term prepaid expenses
Straight-line method
5. Accounting standards for provisions(1) Allowance for doubtful accounts
To prepare for expected losses from bad debts, the Company estimates uncollectible amounts for normal receivables
based on the historical experience and for certain specific receivables, such as doubtful accounts receivables, based on theindividual probability of recovery.
(2) Provision for bonuses
To prepare for the payment of bonuses to employees, a provision for bonuses is provided based on the expected amountof payment.
(3) Provision for retirement benefits

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. Prior service
cost is amortized in the fiscal year following the year in which the gain or loss is incurred by the straight-line method overperiods (5 years) which are shorter than the average remaining period of the employees.
63(4) 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.
(5) 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) Provision for loss on business of subsidiaries and affiliates
To prepare for potential loss on business in subsidiaries and affiliates, we record a provision for loss on business inconsideration of their financial position.
6. Accounting standards for revenue and expenses
The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and theapplied.
The following summarizes the major performance obligations of the Company s principal businesses and the time at whichrevenue is recognized. For any businesses, the Company allocates the transaction price to performance obligations based on
the independent sales price calculated using an adjusted market valuation approach, an approach that adds margins to
expected costs, and other factors. Consideration for the transaction does not include a significant financing component as itis primarily received by within one year after satisfaction of performance obligations. In addition, there is no material
variable consideration for which the amount of consideration could change.
Details of major performance obligations in major businesses and the time at which revenue is recognized are as follows.
(1) Revenue Recognition for Geo-engineering Services Contracts
In Geo-engineering Service Contracts, the Company conducts machine boring, road facilities inspection (tunnels, etc.), slope
observation, landslide countermeasure design, analysis of water quality, soil and odor, marine surveys such as offshore
boring associated with the installation of offshore wind power plant, data collection, analysis, design, consulting.
The Company has identified these services provided by the Company in this area as performance obligations. Geoengineering Services are based on a method in which revenue is recognized over time as the Company satisfies theperformance obligations to transfer the goods or services to the customer, as the Company recognizes certainty of outcome
with respect to the portion of progress and transfers control over the goods or services to the customer over a period oftime. The method used to estimate the degree of progress related to the satisfaction of performance obligations is primarily
based on the cost-based input method. In addition, if the Company is unable to reasonably estimate the degree of progress
related to the satisfaction of performance obligations, the Company applies the cost-recovery method.
(2) Revenue Recognition for Merchandise Sales (Mainly Measuring Instrument Sales)
In merchandise sales, the Company manufactures, sells, and provides maintenance services for geophysical survey
equipment such as seismic observation and monitoring equipment and non-destructive inspection equipment, as well as
monitoring systems using equipment. The Company has identified the operations provided by the Company with respect tothese operations as performance obligations.
Of merchandise sales, domestic sales are recognized at the time of delivery because control over the goods is transferred tothe customer at the time of delivery. In addition, revenue from overseas sales is recognized at a point in time when
performance obligations are satisfied.
(3) Revenue recognition for license sales
In license sales, the Company sells licenses for land information systems, operational management systems, various
analysis software, and other products, and conducts consignment sales of systems. The Group has identified the operations
it provides as performance obligations.
Revenue from license sales is recognized over a certain period of time when the nature of the license, such as cloudservices, represents access rights, and revenue is recognized upon delivery, if the nature of the license, such as softwaredelivery, is a right of use.
7. Hedge accounting method(1) Hedge accounting method
Deferral hedge accounting is adopted.

64(2) Hedging instruments and hedged items
Hedging instruments: forward-exchange contracts
Hedged items: accounts payable-trade(3) Hedging policy
In order to reduce risks of exchange rate fluctuations, hedges are used to cover liabilities.
(4) 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
Not applicable.
(Significant Accounting Estimates)(Revenue Recognition by estimating the degree of progress related to the satisfaction of performance obligations of Geoengineering Services Contracts)(1) Amount recorded in financial statements for the current fiscal year
(Millions of yen)
Prior fiscal year
(As of December 31, 2022)
Net sales

Current fiscal year
(As of December 31, 2023)

20,262

22,523(Note) The above amount includes the Geo-engineering Service Contracts for which the degree of progress related to thesatisfaction of performance obligations of the Geo-engineering Service Contracts can be reasonably estimated, and for which
the full performance obligation has not been satisfied as of the end of the current fiscal year.
(2) Other information that helps users of the financial statements understand the contents of accounting estimates(1) Consolidated financial statements, Notes (Significant Accounting Estimates) (Revenue Recognition by estimating thedegree of progress related to the satisfaction of performance obligations of Geo-engineering Services Contracts of theCompany) (2) Other information to help users of the consolidated financial statements understand the contents of(Additional information)

Consolidated Financial Statements, (1)(Non-consolidated balance sheet)
1. Guarantee obligation
Consolidated subsidiaries' guarantee of debt and contract guarantee as follows.
Prior fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

FONG CONSULT PTE. LTD.

198 million yen

336 million yen

GEOSMART INTERNATIONAL PTE.LTD.

- million yen

324 million yen

65

(Non-consolidated statement 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, 2022
(From January 1, 2023
to December 31, 2022)
to December 31, 2023)
Salaries and allowances
3,631 million yen
3,759 million yen
Provision for bonuses

44 million yen

53 million yen

Retirement benefit expenses

136 million yen

153 million yen

Depreciation

268 million yen

289 million yen

Selling expenses

57 %

58 %

General and administrative expenses

43 %

42 %

Approximate ratio

2. Income or loss related to transactions with subsidiaries and affiliates
Prior fiscal year
(From January 1, 2022
to December 31, 2022)
Dividends income
386 million yen
Other non-operating income
including real estate rent

Current fiscal year
(From January 1, 2023
to December 31, 2023)
388 million yen

45 million yen

46 million yen

3. The components of gain on sales of noncurrent assets are as follows
Prior fiscal year
(From January 1, 2022
to December 31, 2022)
Buildings and structures- million yen

Current fiscal year
(From January 1, 2023
to December 31, 2023)
1 million yen

4. The components of loss on sales of noncurrent assets are as follows
Prior fiscal year
(From January 1, 2022
to December 31, 2022)Land- million yen

Current fiscal year
(From January 1, 2023
to December 31, 2023)
8 million yen(Securities)
Prior fiscal year (As of December 31, 2022)
Stocks of subsidiaries or affiliates (13,082 million yen of subsidiary stocks and 49 million yen of affiliate stocks on the balance
sheets) are Stocks, etc. without market price. Therefore, there are not disclosed.
Current fiscal year (As of December 31, 2023)
Stocks of subsidiaries or affiliates (15,394 million yen of subsidiary stocks and 49 million yen of affiliate stocks on the balance
sheets) are Stocks, etc. without market price. Therefore, there are not disclosed.

66

(Tax effect accounting)
1. Significant components of deferred tax assets and liabilities
Prior fiscal year
(As of December 31, 2022)

Current fiscal year
(As of December 31, 2023)

42 million yen
40 million yen
12 million yen
525 million yen
1,082 million yen
48 million yen

42 million yen
45 million yen
12 million yen
537 million yen
1,082 million yen
47 million yen

515 million yen
2,268 million yen(1,396) million yen
871 million yen

510 million yen
2,279 million yen(1,409) million yen
869 million yen(504) million yen(488) million yen(262) million yen(133) million yen(675) million yen(493) million yen(227) million yen(133) million yen(60) million yen(1,450) million yen(578) million yen(60) million yen(1,590) million yen(720) million yen

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

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, 2022)

Current fiscal year
(As of December 31, 2023)

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

30.6 %-%

0.3 %Dividends and other income permanently
included in gross profit-%(6.7) %

Per-capita inhabitants tax
Valuation provision
Tax deduction
Other
Effective tax rates after adoption of tax-effectaccounting

-%
-%
-%
-%
-%

4.1 %
0.7 %
(5.6) %
(0.1) %
23.1 %(Note) The reconciliation between the effective tax rate reflected in the statement of income and the statutory tax rate for theprior fiscal year was omitted as the difference is less than 5% of the statutory tax rate.

67

(Business combinations)(Revenue Recognition)
Notes are omitted because the basis for understanding revenue from contracts with customers are the same as that
presented in (Revenue recognition) in the notes to the 5. Financial information (1) consolidated financial statements.
(Significant subsequent events)(Acquisition of Shares)
Consolidated financial statements, Notes (Significant subsequent events(Purchase and disposal of treasury stock)
Consolidated financial statements, Notes (Significant subsequent events

68

Consolidated Financial Statements, (1), 1. Consolidated Financial Statements, (1)Non-consolidated supplementary schedules
Schedule of tangible non-current assets

Type of assets

Balance at
December31, 2023(Millions ofyen)

Accumulated
depreciationor
amortization
for thecurrent fiscal
year (Millionsof yen)Balance atJanuary 1,
2023(Millions ofyen)

Increase in thecurrent fiscal
year (Millionsof yen)Decrease in thecurrent fiscal
year (Millionsof yen)Depreciation /amortization
for the current
fiscal year
(Millions of
yen)

2,912
80
860

131
244

27
0
2

166
8
304

2,849
71
798

7,163
710
3,199

1
44

0
39

0
0

0
17

1
65

87
315

Property, plant andequipment
Buildings
Structures
Machinery andequipment
VehiclesTools, furniture andfixtures
Land

3,951
[(2,750)]
38
7
7,895

148
[117]
7
188

-

-

3,802
[(2,867)]
41
17
7,646

-

Lease assets
25
22
51
Construction in progress
17
Total Property, plant
458
520
11,528and equipment
Intangible assets
Software
702
46
0
186
561
1,504
Software in progress
Other
8
8
Total intangible assets
710
46
0
186
570
1,504
(Note) From current fiscal year, figures in square brackets in the "Balance at January 1, 2023" "Decrease in the current fiscalyear" and "Balance at December 31, 2023" columns indicate amounts outstanding as a revaluation reserve for land
(before tax).
Schedule of provisions
Classification
Allowance for doubtful accounts
Provision for bonuses
Provision for product warranties
Provision for stock benefits
Provision for loss on business of
subsidiaries and affiliates

Balance atJanuary 1, 2023
(Millions of yen)
201
120
17
265
22

Increase in thecurrent fiscal year
(Millions of yen)
6
124
1
68
-

(2) Details of major assets and liabilities
Statement has been omitted since consolidated financial statements are prepared.
(3) Other(a)Events arising after the balance sheet date
Not applicable.
(b)Lawsuits
Not applicable.

69

Decrease in thecurrent fiscal year
(Millions of yen)
1
120
15
22

Balance at
December 31, 2023
(Millions of yen)
206
124
18
318
-