Year ending December 31, 2018

Second Quarter of FY2018 Non-Consolidated Financial Results
August 8, 2018
(All financial information herein has been prepared in accordance with accounting principles generally accepted in Japan.
This document is an English translation from the original Japanese-language document. This translation is not subject toauditing standards in the U.S.)
Listed company name:
Code number:

Original Engineering
Consultants Co., Ltd.
4642

Stock listing:(URL

Tokyo Stock Exchange, Second Section

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

Representative:
Contact person:

Title President & Representative Director
Name:
Title Director & General Manager of
Name:
Financial Affairs Division
Planned date of submitting quarterly earnings report: August 9, 2018
Date of scheduled payment of dividends: –Quarterly earnings supplementary explanatory documents: None
Quarterly earnings presentation: None

Nobuhiko Suga
Kaoru Kira

Tel: (03) 6757-8800(Amounts less than ¥1 million are truncated)
1. NON-CONSOLIDATED FINANCIAL RESULTS FOR THE SECOND QUARTER OF FY 2018
(January 1, 2018 to June 30, 2018)(1) Non-Consolidated Operating Results (accumulated) (Percentages represent year-on-year changes)
Net sales
Operating income
Ordinary income
ProfitMillionMillion yen%
Million yen%
Million yen%%
yen
Six-month period
ended June 30,
3,656
11.9
919
40.3
913
39.8
598
9.9
2018
Six-month period
ended June 30,
3,268
–
655
–
653
–
544
–
2017
Profit per share for the Profit per share-diluted
quarter
for the quarter
Yen
Yen

Six-month period
89.31
88.71
ended June 30, 2018
Six-month period
81.44–
ended June 30, 2017
Although the Company disclosed consolidated financial results for the second quarter of FY 2016, the Company isdisclosing non-consolidated financial results from the first quarter of FY 2017. Therefore, year-on-year changes forthe second quarter of FY 2017 are not shown.
(2)Non-Consolidated Financial Position
Total assets

Net assets

Million yen

Million yen

As of June 30, 2018
As of December 31,
2017(Reference)Shareholders’ equity:¥5,583 million

Shareholders’ equity
ratio
%

8,191

6,102

74.5

7,006

5,584

79.7

As of June 30, 2018: ¥6,102 million

As of December 31, 2017:

2. DIVIDENDSDividends per share
FiscalEnd of(Record date)
Interimthird quarter year-end
Yen
Yen
Yen
FY 2017
0.00
–
12.00
FY 2018
0.00
FY 2018(Forecast)–
14.00(Note) Revision to the recently announced forecast of dividends: None
End offirst quarter
Yen––

Full year
Yen
12.00
14.00

3. FORECAST OF NON-CONSOLIDATED RESULTS FOR FY 2018 (January 1, 2018 to December 31, 2018)(Percentages represent changes from the same period of the previous fiscal year)
Net sales
Operating income
Ordinary income
ProfitProfit per share
MillionMillionMillionMillion
%
%
%
%
Yen
yen
yen
yen
yen
Full
-11.5
6,400
2.3
900 -11.1
900
570
-41.4
85.22
year
(Note) Revision to the recently announced forecast of results: None
*NOTES(1) Application of accounting treatment unique to preparation of quarterly non-consolidated financial statements:
None(2) Changes in accounting policies, changes in accounting estimates and retrospective restatements:(i) Changes in accounting policies in accordance with revision of accounting standards: Yes(ii) Changes in accounting policies other than (i) above: None(iii) Changes in accounting estimates: None(iv) Retrospective restatements: None
(3) Number of outstanding shares (Common stock)(i) Number of shares outstanding at end of period, including treasury stock
As of June 30, 2018: 7,796,800 shares
As of December 31, 2017: 7,796,800 shares(ii) Number of shares of treasury stock at end of period
As of June 30, 2018: 1,061,965 shares
As of December 31, 2017: 1,107,735 shares(iii) Average number of shares outstanding for each period (cumulative second quarter)
As of June 30, 2018: 6,699,483 shares
As of June 30, 2017: 6,687,944 shares* The summary of quarterly financial results is not subject to quarterly reviews by certified public accountants or
audit corporations.
Note regarding forecasts and forward-looking statements
The Company has not modified its forecast of the results for fiscal 2018, which it announced on February 9, 2018.
The forecasts presented above are based on information available to the Company at the present time, and,accordingly, actual results may differ from any expressed future performance herein due to various factors.
For matters relating to results forecasts, please refer to “(3) Explanation Regarding Future Forecasts such as Forecastsof Results” on page 5.

Index of the Attachment
1.

QUALITATIVE INFORMATION REGARDING SECOND QUARTER FINANCIAL RESULTS ..............4(1) Explanation Regarding Business Results..........................................................................................................4(2) Explanation Regarding Financial Position........................................................................................................5(3) Explanation Regarding Future Forecasts such as Forecasts of Results ............................................................52.

QUARTERLY FINANCIAL STATEMENTS AND PRIMARY NOTES ...........................................................6(1) Quarterly Balance Sheets ..................................................................................................................................6(2) Quarterly Statements of Operations ..................................................................................................................8
Cumulative Second Quarter ..............................................................................................................................8(3) Quarterly Statements of Cash Flows.................................................................................................................9(4) Notes Regarding the Quarterly Financial Statements .......................................................................................11(Matters Affecting the Assumption of a Going Concern) .................................................................................11(Notes Regarding Significant Changes in Shareholders’ Equity) .....................................................................11(Changes in Accounting Policies).....................................................................................................................11(Additional information) ...................................................................................................................................11(Segment Information)......................................................................................................................................13

3

1.QUALITATIVE INFORMATION REGARDING SECOND QUARTER FINANCIAL
RESULTS(1) Explanation Regarding Business Results
According to the Bank of Japan’s Tankan survey in June 2018, the diffusion index (DI) for major
manufacturing firms dropped three percentage points from the March 2018 survey to 21 percentage points, and that for
major non-manufacturing firms, it advanced one percentage point from the previous survey to 24 percentage points.
The DI for small and medium-sized manufacturers dropped one percentage point from the previous survey to 14
percentage points, and that of non-manufacturers dropped two percentage points to eight percentage points. The
forecast DI for the next three months is unchanged for major manufacturers and is down three percentage points for
major non-manufacturers, which indicates that many companies are concerned about further increases in labor
shortages and are cautious about the business outlook.
Under the above-mentioned economic conditions, the Ministry of Land, Infrastructure, Transport and Tourism(MLIT), with which the Company has a close business relationship, has drawn up a budget for fiscal 2018. The totals
earmarked for “disaster prevention and safety subsidies” and “general social infrastructure development subsidies” areon the same levels as fiscal 2017. The total amount of the sewerage works expenses budget of ordinance-designatedcities across Japan and Tokyo’s special wards increased 1.3% from fiscal 2017.
According to a provisional calculation ofthe Cabinet Office, Japan’s water and sewerage infrastructure assets
amount to approximately ¥130 trillion, which indicatesthat the water and sewerage infrastructure stock is the second
largest infrastructure stock in the country by sector after the road infrastructure stock. Among these, most of the
population has access to water supplies, with the total length of water pipes reaching around 660,000 kilometers acrossJapan. However, the national average annual rate of renewing water pipes is as low as 0.76%, which means that it willtake almost 130 years to renew all of these pipes. The statutory useful life of water pipes is 40 years, but they are
expected to deteriorate further due to the slow progress of renewing the water pipes infrastructure, much of which wasbuilt during the high-growth period. Therefore, renewing aged water pipes has become an important issue for stablesupplies of safe water.
Meanwhile, 90.4% of the population of Japan has access to sewage treatment facilities (as of the end of 2016),
but only 78.3% has access to sewers, which means nearly 12 million people still live without access to sewage
treatment facilities; promoting sewage services needs to be accelerated. While the need to construct new facilities is on
the decrease, a great number of water and sewage facilities that were rapidly built during the high-growth period arereaching the ends of their useful lives every year; maintenance and renewal of these infrastructure assets, which are
indispensable for ensuring a safe, secure, and culturally strong living environment, are in demand. In addition, newneeds are growing for flood control measures to protect human lives and assets from localized torrential rainfalls,
which have occurred frequently in recent years, anti-seismic measures such as quake-resistant toilet facilities, andmeasures for reinforcing water and sewerage systems to make them tsunami resistant.
The Company, in this operating environment, worked aggressively to win orders mainly in the water supply
field, particularly for services related to asset management in line with the Water Supply Division, Ministry of Health,Labour and Welfare’s new water supply vision that focuses on the key words of “safety, strength, sustainability,
collaboration and challenge”. In the sewerage field, the Company pursues orders in line with the seven major themes
set by the Sewerage and Wastewater Management Department of MLIT: Strengthening earthquake recovery andreconstruction support and implementing national measures for safety and peace of mind; early reduction of areas
lacking sewerage infrastructure; promoting water environmental management; improving facilities management andoperations; strengthening sewerage management; promoting measures to achieve a low-carbon, recycling-oriented
society; and, promoting international water businesses through globalization and private-public initiatives. We also
make efforts to obtain orders for services related to support by the Ministry of Internal Affairs and Communications for
introducing local public enterprise-based accounting into small-scale water supply and sewerage operations, inaccordance with the Local Public Enterprise Act, as well as sewerage operations management strategy formulation
operations and others. In overseas markets, the Company works aggressively to win orders by tapping into projects inemerging nations through public-private partnerships.
With regard to its internal structures, the Company has made efforts to distribute profits to employees andincrease revenue, by boosting productivity and reducing costs through the following measures: creating an organization4

focused on the “Era of Maintenance and Management;” facilitating communication and information sharing between
different levels; correcting management issues promptly by occasionally checking management benchmarks bydepartment; conducting appropriate budget management, process control, and outsourcing management for orders
received for projects; upgrading in-house engineers’ skills; securing and fostering young employees who will lead thenext generation; redressing the issue of long working hours and promoting a suitable management with the aim of
becoming a “pioneer company in working-style reforms;” introducing internal programs and office environment where
each employee can work dynamically and flexibly according to his/her own circumstances; and, expanding external
networks.
As a result, orders received during the cumulative second quarter under review amounted to ¥2,122 million, adecrease of 14.2% compared with the same quarter of the previous fiscal year, and net sales increased 11.9%, to ¥3,656
million. Operating income amounted to ¥919 million, an increase of 40.3% compared with the same quarter of theprevious fiscal year, and ordinary income increased 39.8%, to ¥913 million. Profit amounted to ¥598 million, an
increase of 9.9% compared with the same quarter of the previous fiscal year.
Results by operating division were as follows.
[Engineering Consultant Department]
The Engineering Consultant Department received orders totalling ¥1,904 million during the quarter underreview, a decrease of 17.7% compared with the same quarter of the previous fiscal year. Sales by the department
increased 12.5%, to ¥3,432 million.
[Information Processing Department]
In the Information Processing Department, orders received increased 37.8% compared with the same quarter ofthe previous fiscal year, to ¥218 million. Sales by the department increased 3.4%, to ¥224 million.

(2) Explanation Regarding Financial Position
Cash and cash equivalents stood at ¥5,476 million at the end of the cumulative second quarter of the accounting
period under review, an increase of ¥2,677 million compared with the end of the previous fiscal year. Significant
factors contributing to this change include the posting of profit before income taxes for the quarter and decreases innotes and accounts receivable―trade.
The main factors contributing to changes in cash flows during the cumulative second quarter under review wereas follows:(Cash flows from operating activities)
Net cash provided in operating activities amounted to ¥3,010 million (provided ¥1,824 million in the samequarter of the previous fiscal year). Significant items within this figure included profit before income taxes for thequarter of ¥913 million, and a decrease in notes and accounts receivable―trade of ¥1,577 million.
(Cash flows from investing activities)
Net cash used by investing activities amounted to ¥258 million (provided ¥180 million in the same quarter ofthe previous fiscal year).
Significant factors contributing to this change included payments for purchase of investment securities of ¥200
million.
(Cash flows from financing activities)
Net cash used in financing activities amounted to ¥74 million (used ¥64 million in the same quarter of theprevious fiscal year).
Significant factors contributing to this change included cash dividends paid amounting to ¥81 million, andproceeds from exercise of share options of ¥18 million.

(3) Explanation Regarding Future Forecasts such as Forecasts of Results
The Company has not changed its financial results forecast, which was announced on February 9, 2018, butwill promptly release a revised forecast when any correction is needed after examining various factors.
5

2. QUARTERLY FINANCIAL STATEMENTS AND PRIMARY NOTES(1) Quarterly Balance Sheets

Category

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

2Q under review(as of June 30, 2018)
Amount(thousand yen)

AssetsCurrent assets
Cash and deposits

3,514,747

6,192,349

Accounts receivable—completed
operation

2,106,765

528,778

Deferred tax assets

161,649

37,752Other

55,167

61,241

5,838,330

6,820,121

Property, plant and equipment

387,376

411,917

Intangible assets

112,514118,358

Investments and other assets

668,319

841,0221,168,210

1,371,298

7,006,540

8,191,419

Total current assets
Noncurrent assets

Total noncurrent assets
Total assets

6Category

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

2Q under review(as of June 30, 2018)
Amount(thousand yen)Accounts payable—operating

263,748

101,412

Lease obligations

24,15024,631

Income taxes payable

135,729

210,534

Advances received on uncompleted contracts

295,722850,697

Provision for bonuses

36,12054,157

Provision for loss on order received

17,315

10,199Other324,980

544,369

1,097,767

1,796,002

Provision for retirement benefits

197,051

168,519

Provision for share benefit

25,252

24,652

Lease obligations

45,58542,430Asset retirement obligations

48,09748,442

Other

8,400

8,400

324,386

292,445

1,422,154

2,088,447

Capital stock

1,093,000

1,093,000

Capital surplus

2,886,615

2,878,404

Retained earnings

2,214,757

2,731,966

Treasury stock-669,783-641,740

Total shareholders’ equity

5,524,589

6,061,631

Valuation difference on available-for-sale securities

58,50940,673

Total valuation and translation adjustments

58,50940,673

1,287

667

5,584,386

6,102,972

7,006,540

8,191,419

Liabilities
Current liabilities

Total current liabilities
Noncurrent liabilities

Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity

Valuation and translation adjustments

Subscription rights to shares
Total net assets
Total liabilities and net assets

7

(2) Quarterly Statements of Operations(Cumulative Second Quarter)
Previous cumulative second Cumulative second quarter
quarterunder review(from January 1, 2017 to(from January 1, 2018 toJune 30, 2017)
June 30, 2018)
AmountAmount(thousand yen)(thousand yen)

Category
Contracts completed

3,268,651

3,656,618

Cost of completed work

2,013,716

2,096,150

Gross profit

1,254,935

1,560,468

Selling, general and administrative expenses

599,635

641,216

Operating income

655,299

919,252

Interest income

120

1,497

Dividend income

3,085

3,463

Insurance income

-

1,000

Non-operating income

Commission fee
Contribution received for operations performed bydispatched employees
Other

1,215

1,215

3,210

-

2,879

1,966

Total non-operating income

10,510

9,141

996

1,048

8,657

5,988

-

3,991

2,077

3,514

355

246

12,08814,788

Ordinary income

653,722913,604

Profit before income taxes for the quarter

653,722913,604

Income taxes―current

99,972

181,696

Income taxes―deferred

9,085

133,612

Total income taxes

109,057

315,309

Profit for the quarter

544,664598,295

Non-operating expenses
Interest expenses
Expenses for securities transactions
Loss on valuation of investment securities
Foreign exchange losses
Other
Total non-operating expenses8(3) Quarterly Statements of Cash Flows
Previous cumulative
second quarter(from January 1, 2017 toJune 30, 2017)
Amount(thousand yen)

Cumulative second
quarter under review(from January 1, 2018 toJune 30, 2018)
Amount(thousand yen)

Profit before income taxes for the quarter

653,722913,604

Depreciation and amortization

36,36940,412

Increase/decrease in provision for bonuses

17,912

18,037

Increase/decrease in provision for loss on order
received-3,423-7,116

Increase/decrease in provision for share benefit-1,198-599

Increase/decrease in provision for retirement benefits-26,347-28,531

Interest and dividends income-3,206-4,960996

1,048

885,859

1,577,987

5,738

-48

-100,996-162,335

431,804

554,975

Other-19,339

210,510

Subtotal

1,877,892

3,112,984

Interest and dividends income received

3,208

4,959

Interest expenses paid

-996

-1,048Compensation income

10,000-

Income taxes paid

-66,046-106,148

1,824,056

3,010,747

Category
Cash flows from operating activities

Interest expenses
Increase/decrease in notes and accounts
receivable―trade
Increase/decrease in costs on uncompleted services
Increase/decrease in notes and accounts
payable―trade
Increase/decrease in advances received on
uncompleted contracts

Net cash provided by (used in) operating activities

9Previous cumulative
second quarter(from January 1, 2017 toJune 30, 2017)
Amount(thousand yen)

Cumulative second
quarter under review(from January 1, 2018 toJune 30, 2018)
Amount(thousand yen)

-31-

Purchase of property, plant and equipment-4,477-27,037

Proceeds from redemption of investment securities

200,000-

Purchase of intangible assets-14,467-24,927

Payments for lease and guarantee deposits-676-4,674

Proceeds from collection of lease and guarantee
deposits

690

102

-

-200,000

Other payments-4,163-3,585

Other proceeds

3,982

2,038

180,856-258,083-33-29-10,441-12,750-

18,900Cash dividends paid

-54,057-81,085

Net cash used in financing activities-64,532-74,966-65-126

1,940,315

2,677,571

2,306,994

2,798,825

4,247,310

5,476,396

Category
Cash flows from investing activities
Increase/decrease in time deposits

Purchase of investment securities

Net cash provided by (used in) investing activities
Cash flows from financing activities
Purchase of treasury stock
Repayments of lease obligations
Proceeds from exercise of share options

Effect of exchange rate change on cash and cash
equivalents
Net increase/decrease in cash and cash equivalents
Balance of cash and cash equivalents at beginning of theyear
Balance of cash and cash equivalents at the end of thequarter10(4) Notes Regarding the Quarterly Financial Statements(Matters Affecting the Assumption of a Going Concern)
No applicable items.
(Notes Regarding Significant Changes in Shareholders’ Equity)
Previous cumulative second quarter (from January 1, 2017 to June 30, 2017)
1. Dividend payouts
Resolution
Class of
Total amount Amount per
Base date
Effective date Source ofshares(¥ thousand)share (¥)
dividend
Ordinary
Common54,0578.00 December 31, March 31,
Retainedshareholders'
stock
2016
2017
earnings
meeting on
March 30, 2017
(Note) The total amount of dividend payouts based on a resolution of the Ordinary Shareholders’ Meeting on March
30, 2017 includes dividends of ¥557 thousand for Company shares held by Mizuho Trust & Banking Co., Ltd.
(ESOP trust account).
2. Dividends whose base date falls in the cumulative second quarter but whose effective date is after the end of the
cumulative second quarter
No applicable items.
Cumulative second quarter under review (from January 1, 2018 to June 30, 2018)
1. Dividend payouts
Resolution
Class of
Total amount Amount per
Base date
Effective date Source ofshares(¥ thousand)share (¥)
dividend
Ordinary
Common81,08512.00 December 31, March 30,
Retainedshareholders'
stock
2017
2018
earnings
meeting on
March 29, 2018
(Note) The total amount of dividend payouts based on a resolution of the Ordinary Shareholders’ Meeting on
March 29, 2018 includes dividends of ¥817 thousand for Company shares held by Trust & Custody Services Bank,Ltd.
2. Dividends whose base date falls in the cumulative second quarter but whose effective date is after the end of the
cumulative second quarter
No applicable items.
(Changes in Accounting Policies)(Application of “Practical Solution on Transactions Granting Employees and Others Stock Acquisition Rights, which
Involve Considerations, with Vesting Conditions”)
The Company adopted the “Practical Solution on Transactions Granting Employees and Others Stock
Acquisition Rights, which Involve Considerations, with Vesting Conditions” (ASBJ PITF No. 36, January 12, 2018;“PITF No.36”) effective from April 1, 2018, and now accounts for transactions granting employees and others stockacquisition rights with vesting conditions in accordance with the “Accounting Standard for Share-Based Payment andits Implementation Guidance” (ASBJ Statement No. 8, December 27, 2005).
However, in compliance with transitional arrangements as set forth in (3) of Paragraph 10 of the PITF No. 36,
transactions granting employees and others stock acquisition rights that were made before the date of adoption of PITF
No. 36 are recorded using the previous accounting method.
(Additional information)(Application of “Practical Solution on Transactions Granting Employees and Others Stock Acquisition Rights, which
Involve Considerations, with Vesting Conditions”)
Transactions granting employees and others stock acquisition rights made before the date of adoption of the“Practical Solution on Transactions Granting Employees and Others Stock Acquisition Rights, which Involve
Considerations, with Vesting Conditions” (ASBJ PITF No. 36, January 12, 2018; “PITF No. 36”) are accounted forusing the previous accounting method in accordance with (3) of Paragraph 10 of the PITF No. 36.
111. Overview of stock acquisition rights with vesting conditions(1) Details of stock acquisition rights with vesting conditions
Resolution of Board of Directors meeting on March 13,
2015
Status and number of eligible persons
Director of the Company: 6
Executive Officer of the Company: 5
Number of stock options by class of shares
Common stock 93,500 shares(Note) 1
Date of grant
March 31, 2015
Vesting conditions(Note) 2
Requisite service period
From July 1, 2014 to June 30, 2016
Exercise period
From April 7, 2015 to March 31, 2020
(Note)
1. The number of stock options is translated into the number of shares.
2. Conditions for exercising stock acquisition rights
1) A holder of stock acquisition rights may exercise his/her stock acquisition rights only when ordinary income
for FY2017 is ¥550 million or more. To determine ordinary income, the figures stated in the consolidated
statements of operations (or statements of operations if the consolidated statements of operations are notprepared) included in the securities report of the Company shall be used. If any significant change is made to
the ordinary income to be referenced as a result of applying International Financial Reporting Standards(IFRS), etc., separate information/data to be referenced shall be reasonably determined by the Board of
Directors.
2) In the event that the closing price (including the indicative price) of ordinary transactions of shares of common
stock of the Company at the Financial Instruments Exchange where shares of the Company are listed falls
below 30% of the exercise price even momentarily between the date of the allotment of stock acquisition rights(“allotment date”) and the end of the exercise period, a holder of stock acquisition rights must exercise all of
his/her remaining stock acquisition rights by the end of the exercise period at the price calculated bymultiplying the exercise price by 0.9; provided, however, that the following cases shall be excluded:(a) Where material misstatements are found in information disclosed by the Company;(b) Where it is found that the Company does not properly disclose important facts that it should in compliancewith laws and regulations, or the rules of the Financial Instruments Exchange where the shares of the Company
are listed;(c) Where the Company is delisted, goes bankrupt, or any other significant changes are made to its goingconcern status as of the allotment date; or(d) Where there are other acts/activities in which the Company can be considered objectively to harm the trustof the holders of stock acquisition rights.
3) The stock acquisition rights may not be exercised if exercise would create an excess in the total number ofissued and outstanding shares of the Company over the total number of shares authorized at the time.
4) A single stock acquisition right may not be exercised in part.
5) A holder of stock acquisition rights must maintain his/her position as a director, corporate auditor, or employeeof the Company or its subsidiaries when he/she exercises his/her rights, unless he/she resigns as a director or
corporate auditor when his/her term of office expires, or an employee retires after reaching mandatory
retirement age, or there are any other justifiable reasons acknowledged by the Board of Directors of theCompany.
6) Stock acquisition rights may not be inherited.
7) In the event that a holder of stock acquisition rights causes serious damage to the Company and if the Board of
Directors of the Company decides to deny the exercise of stock acquisition rights by the holder of stockacquisition rights in whole or in part, such stock acquisition rights may not be exercised.
8) Other conditions on exercise shall be as stipulated in an agreement on the allotment of stock acquisition rights
to be entered between the Company and a holder of stock acquisition rights, in accordance with a resolution ofa Board of Directors meeting.
(2) Size of stock acquisition rights with vesting conditions and its changes
The target shares of stock acquisition rights are stock options that existed during the cumulative second quarter
under review, and the number of stock options is translated into the number of shares.
12

(i) Number of stock options
FY2015 stock options
Before vested (shares)
As of end of previous fiscal year
GrantedExpired
VestedUnvested outstanding
After vested (shares)
As of end of previous fiscal year
VestedExercised
Expired
Unexercised outstanding

93,50093,50093,50093,50045,00048,500(ii) Unit price information
FY2015 stock options
Strike price (yen)Average share price at exercise
(yen)

420
840

2. Summary of accounting methods used
When stock acquisition rights are issued, the amount paid in for such issuance is recorded as stock acquisitionrights under net assets.
When stock acquisition rights are exercised and new shares are issued, the amount paid in for the issuance ofthe stock acquisition rights and the amount paid in for the exercise of the stock acquisition rights arereclassified as capital stock and legal capital surplus. When stock acquisition rights expire, an amountequivalent to the expired stock acquisition rights is included in income for the period when such expiration is
final.

(Segment Information)[Segment Information]
Previous cumulative second quarter (from January 1, 2017 to June 30 2017) and cumulative second quarter
under review (from January 1, 2018 to June 30 2018)
Since the Company’s business operations comprising engineering consulting and related services are conductedwithin a single business segment, segment information is omitted.

13