Financial Repor t
Year ended June 30, 2022

Company Profile

Nippon Koei Co., Ltd. is Japan’s leading engineering consultant. In terms ofhuman resources, we have the largest number of engineers and specialists in
the industry capable of solving the most sophisticated and complex issues
which nations face. Our business activities cover three segments: Consulting
Business, Urban & Spatial Development Business, and Energy Business.

Contents
Financial Highlights ................................................................................................................1
Financial Information .............................................................................................................2
Consolidated Financial Statements and Others ....................................................................3
I. Consolidated Financial Statements .......................................................................................3
Consolidated Statement of Financial Position .....................................................................3
Consolidated Statement of Profit or Loss andConsolidated Statement of Comprehensive Income .........................5
Consolidated Statement of Changes in Equity .....................................................................6
Consolidated Statement of Cash Flows ................................................................................7
Notes to Consolidated Financial Statements .......................................................................8
II. Others....................................................................................................................................73
Independent auditor’s report ...............................................................................................74
Nonconsolidated Financial Statements ...............................................................................81
Nonconsolidated Balance Sheet...........................................................................................81
Nonconsolidated Statement of Income ...............................................................................83
Nonconsolidated Statement of Cost of Sales ......................................................................84
Nonconsolidated Statement of Changes in Net Assets .......................................................85
Notes to Nonconsolidated Financial Statements ................................................................86
Attachments to Nonconsolidated Financial Statements ....................................................96
Independent auditor’s report ................................................................................................98

Fi n a n c i al H i ghl i ghts
Consolidated
Thousands of
U.S. Dollars

Millions of Yen

Revenue
Profit attributable to owner of parent

Year ended
June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022

¥130,674¥117,859$956,656

6,579

4,531

48,166

Yen

U.S. Dollars

Earning per share:
Basic earnings per share¥436.98¥300.00$3.20

Diluted earnings per share

436.98300.00

3.20
Thousands of
U.S. Dollars

Millions of Yen

As ofJune 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

Total assets¥173,926¥156,137$1,273,297

Total equity

81,96972,294600,090

Nonconsolidated
Thousands of
U.S. Dollars

Millions of Yen

Year ended
June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022

Net sales¥80,796¥73,970$591,500

Net profit

5,236

2,480

38,337

Yen

Basic earnings per share

U.S. Dollars¥347.81¥164.23$2.55
Thousands of
U.S. Dollars

Millions of Yen

As ofJune 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

Total assets¥120,878¥110,295$884,942

Net assets

59,28055,043433,985(Notes) 1. In Japan, a company can establish its fiscal year in accordance with the Companies Act and other related laws andregulations. By resolution of the 68th General Shareholders’ Meeting held on June 27, 2013, the fiscal year of Nippon Koei
Co., Ltd., has been established as July 1 to June 30.
2. The Group has applied International Financial Reporting Standards (IFRS) from the year-end of fiscal year ended June 30,
2021.
3. The U.S. Dollars amounts in this report represent translations of Japanese Yen, for convenience only, at the rate of¥136.595 to $1, the approximate rate of exchange as of June 30, 2022.
4. Per share amounts are based on the weighted average number of shares outstanding during each year.

1

Fi n a n c i al Informati on
1. Basis of Presentation for the Consolidated and Nonconsolidated
Financial Statements(1) The Company’s consolidated financial statements are prepared in accordance with the International Financial
Reporting Standards as issued by the International Accounting Standards Board (hereinafter referred to as the“IFRS”) pursuant to the provisions of Article 93 of the “Ordinance on Terminology, Forms, and Preparation
Methods of Consolidated Financial Statements” (Ordinance of the Ministry of Finance No. 28, 1976).
(2) The Company’s nonconsolidated financial statements are prepared based on the “Ordinance on the
Terminology, Forms, and Preparation Methods of Financial Statements, etc.” (Ordinance of the Ministry of
Finance No. 59, 1963; hereinafter referred to as the “Regulations on Financial Statements.”).
Moreover, the Company is classified under a provision for a special company submitting financial statements,
and prepares nonconsolidated financial statements, pursuant to the provisions of Article 127 of theRegulations on Financial Statements.

2. Audit Certification
The Company has undergone an audit by PricewaterhouseCoopers Aarata LLC on consolidated financial
statements for the consolidated fiscal year (from July 1, 2021 to June 30, 2022) and nonconsolidated financial
statements for the business year (from July 1, 2021 to June 30, 2022) in accordance with the provisions of Article
193-2, paragraph (1) of the Financial Instruments and Exchange Act.

3. Special Efforts for Ensuring Appropriateness of Consolidated Financial
Statements and the Establishment of a System to Appropriately Prepare
Consolidated Financial Statements in Accordance with IFRSThe Company makes special efforts to ensure appropriateness of consolidated financial statements and theestablishment of a system to appropriately prepare consolidated financial statements in accordance with IFRS.
The details are as follows:(1) The Company is a member of the Financial Accounting Standards Foundation and participates in seminars
held by the Foundation or the audit firm in order to appropriately grasp the details of accounting standards orto establish a system capable of accurately responding to changes in accounting standards.
(2) Regarding the application of the IFRS, the Company reviews press releases and standards published by theInternational Accounting Standards Board as necessary to understand and apply the standards completely andappropriately. Moreover, the Company establishes group accounting policies in accordance with the IFRS andhas arranged its processes and controls based on accounting for those standards in order to prepare
consolidated financial statements in accordance with IFRS.

2

Co n s o l idate d F i nanci a l S t a t em ent s a n d Ot h er s
I . C o n s o l i date d F i nanc ia l S t a t em ent s
C o n s o l i dated Statemen t o f F ina n c ia l P o sit io n
Nippon Koei Co., Ltd.
June 30, 2022

Thousands of
U.S. Dollars (Note 2)

Millions of Yen

As ofJune 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

8
9, 27, 35
27
10, 35
11, 40¥17,971
27,042
26,4503,779
9,040
84,285¥17,838
21,18924,3271,315
3,900
68,570$131,571
197,972
193,641
27,672
66,186
617,04412, 1512, 1913, 1513
14

41,403
9,067
10,2077,025
6,250

40,832
9,229
9,182
6,502
4,094

303,114
66,38374,72951,42945,760

6, 16

2,434

22
10, 3517
11, 406

Assets

Notes

Current assets:
Cash and cash equivalents
Trade and other receivables
Contract assets
Other financial assets
Other current assets
Total current assets
Non-current assets:
Property, plant and equipment
Right-of-use assets
Goodwill
Intangible assets
Investment property
Investments accounted for using
equity method
Retirement benefit asset
Other financial assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets

3

17,825

3,624
6,423
2,429
773
89,640

2,077
4,391
7,434
2,437
1,384
87,566

26,53547,023
17,786
5,664
656,253¥173,926¥156,137$1,273,297

Thousands of
U.S. Dollars (Note 2)

Millions of Yen

Liabilities and equity
Liabilities:
Current libilities:
Borrowings
Lease liabilities
Trade and other payables
Contract liabilities
Other financial liabilities
Income taxes payable
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities:
Borrowings
Lease liabilities
Other financial liabilities
Retirement benefit liability
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
Equity:Share capital
Capital surplus
Treasury shares
Other components of equity
Retained earnings
Total equity attributable to ownersof parent
Non-controlling interests
Total equity
Total libilities and equity

As ofJune 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

¥13,148
2,729
10,400
8,837
4,561
2,551
1,253
12,95756,440¥8,3202,678
9,076
10,645
3,005
2,228
818
12,11548,889$96,259
19,982
76,13964,69933,393
18,6799,178
94,862
413,195

18, 3519, 3521, 3522
23, 4017
24

19,288
6,556
665
3,896
74
4,683
351
35,516
91,956

18,712
6,699
648
3,861
375
4,533
122
34,953
83,843

141,207
48,0004,872
28,523545
34,2892,572
260,012673,207

25
25
25

7,501
6,454
(34)
5,252
58,914

7,480
6,428
(0)
2,820
53,99654,91847,255(252)
38,449431,306

78,0883,881
81,969¥173,926

70,725
1,569
72,294¥156,137

571,677
28,412600,090$1,273,297

Notes

18, 3519, 3520, 3527
21, 3523, 4024

25

4Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income
Nippon Koei Co., Ltd.
Year ended June 30, 2022

(Consolidated Statement of Profit or Loss)
Thousands of
U.S. Dollars (Note 2)

Millions of Yen

Year ended
June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022

6, 27
28

¥130,674(89,975)
40,699¥117,859(80,124)
37,735$956,656
658,699
297,95728(31,610)(29,173)

231,4166, 16
29
15, 296
6, 10, 30
6, 30
6
17

230
1,090
(1,344)
9,065
2,218
(483)
10,800(4,095)
6,704

35
1,207
(2,675)
7,128
519
(471)
7,176
(2,657)
4,518

1,684
7,982
9,841
66,367
16,241
3,541
79,06629,98149,0846,579
125¥6,7044,531(13)¥4,518

48,166918$49,084

Notes
Revenue
Cost of sales
Gross profit
Selling, general and administrative
expenses
Share of profit of investments accounted
for using equity method
Other income
Other expenses
Operating profit
Finance income
Finance costs
Profit before tax
Income tax expense
ProfitProfit attributable to:
Owners of parent
Non-controlling interests
ProfitYen

Earnings per share:
Basic earnings per share
Diluted earnings per share

U.S. Dollars (Note 2)¥436.98436.9832¥300.00
300.00$3.20
3.20(Consolidated Statement of Comprehensive Income)Thousands of
U.S. Dollars (Note 2)

Millions of Yen

Year ended
June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022

¥6,704¥4,518$49,084

31, 3522, 31

(196)
(547)

395
386

(1,435)(4,009)16, 31

(1)

6

(9)

(745)

788

(5,454)

31

6

6

44

31

2,757

2,392

20,187

77

33

570

2,841
2,096
¥8,801

2,432
3,220¥7,73820,802
15,347$64,432

Notes
ProfitOther comprehensive income:Items that will not be reclassified to profit or loss:
Equity financial assets measured at fair value
through other comprehensive income
Remeasurements of defined benefit plans
Share of other comprehensive income of investments
accounted for using equity method
Total of items that will not be reclassified
to profit or loss
Items that may be reclassified to profit or loss:
Cash flow hedges
Exchange differences on translationof foreign operations
Share of other comprehensive income of investments
accounted for using equity method
Total of items that may be reclassified
to profit or loss
Other comprehensive income
Comprehensive income
5

16, 31

C o n s o l i date d Statement o f Ch a ng es in E qu it y
Nippon Koei Co., Ltd.
Year ended June 30, 2022

Millions of Yen
Equity attributable to owners of parent
Other components of equity
Share capital

Capital surplus

Treasury shares¥7,458
—
—
—
21
—
—
—
—
—
—
—
21
7,480
—
—
—
21
—
—
—
—
—
—
—
21
¥7,501¥6,498
—
—
—
21
—
—
(91)
—
—
(0)
—
(70)
6,428
—
—
—
21
—
—
—
—
—
5
—
26
¥6,454¥(2,415)
—
—
—
—
—
(429)
382
2,462
—
—
—
2,415
(0)
—
—
—
—
—
(34)
—
—
—
—
—
(34)
¥(34)

Notes

Balance as of July 1, 2020
Profit (loss)
Other comprehensive income
Total comprehensive income
Issuance of new shares
Change in scope of consolidation
Purchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares
Dividends
Purchase and disposal of non-controlling interests
Transfer to retained earnings
Total transactions with owners
Balance as of June 30, 2021
Profit (loss)
Other comprehensive income
Total comprehensive income
Issuance of new shares
Change in scope of consolidation
Purchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares
Dividends
Purchase and disposal of non-controlling interests
Transfer to retained earnings
Total transactions with owners
Balance as of June 30, 2022

25
25
25
26

25
25
25
26

Exchangedifferences ontranslation offoreign operations¥(432)
—
2,415
2,415
—
—
—
—
—
—
(0)
—
(0)
1,982
—
2,638
2,638
—
—
—
—
—
—
(1)
—
(1)
¥4,620Cash flow
hedges

¥(36)
—
6
6
—
—
—
—
—
—
—
—
—
(30)
—
6
6
—
—
—
—
—
—
—
—
—
¥(24)

Equity financial assets
measured at fair value
through othercomprehensive income

Remeasurementsof defined
benefit plans

¥471
—
395
395
—
—
—
—
—
—
—
1
1
867
—
(195)
(195)
—
—
—
—
—
—
—
(15)
(15)
¥656

¥—
—
390
390
—
—
—
—
—
—
—
(390)
(390)
—
—
(548)
(548)
—
—
—
—
—
—
—
548
548
¥—

Total

¥1
—
3,207
3,207
—
—
—
—
—
—
(0)
(389)
(389)
2,820
—
1,900
1,900
—
—
—
—
—
—
(1)
533
531
¥5,252Retainedearnings¥52,675
4,531
—
4,531
—
—
—
—
(2,462)(1,138)—389(3,210)53,996
6,579
—
6,579
—
—
—
—
—
(1,128)—(533)(1,661)¥58,914Total¥64,219
4,531
3,207
7,739
43
—
(429)
291
—
(1,138)(0)—(1,233)70,725
6,579
1,900
8,479
42
—
(34)
—
—
(1,128)
3—(1,116)¥78,088

Non-controllinginterests¥1,502
(13)
12
(0)
—
115
—
—
—
(47)
—
—
67
1,569
125
195
321
—
—
—
—
—
(15)
2,005
—
1,990
¥3,881

Total¥65,721
4,518
3,220
7,738
43
115
(429)
291
—
(1,186)(0)—(1,165)72,294
6,704
2,096
8,801
42
—
(34)
—
—
(1,143)
2,009—
873¥81,969

Thousands of U.S. Dollars (Note 2)
Equity attributable to owners of parent
Other components of equity
Share capital

Capital surplus

Treasury shares$54,763
—
—
—
154
—
—
—
—
—
—
—
154
$54,918$47,060
—
—
—
154
—
—
—
—
—
40
—
194
$47,255

$(1)
—
—
—
—
—
(251)
—
—
—
—
—
(251)
$(252)

Notes

Balance as of June 30, 2021
Profit (loss)
Other comprehensive income
Total comprehensive income
Issuance of new shares
Change in scope of consolidation
Purchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares
Dividends
Purchase and disposal of non-controlling interests
Transfer to retained earnings
Total transactions with owners
Balance as of June 30, 2022

25
25
25
26

Exchangedifferences ontranslation offoreign operations$14,517—
19,31819,318
—
—
—
—
—
—
(11)
—
(11)
$33,823

Cash flow
hedges$(222)
—
44
44
—
—
—
—
—
—
—
—
—
$(177)

Equity financial assets
measured at fair value
through othercomprehensive income

Remeasurementsof defined
benefit plans$6,350—(1,433)(1,433)
—
—
—
—
—
—
—
(113)
(113)
$4,803$——(4,015)(4,015)
—
—
—
—
—
—
—
4,015
4,015
$—

Total

Retainedearnings

Total$20,645—
13,913
13,913
—
—
—
—
—
—
(11)
3,902
3,890
$38,449$395,305
48,166—48,166—————(8,262)—(3,902)(12,164)$431,306$517,774
48,166
13,91362,079
309
—
(251)
—
—
(8,262)29—(8,175)$571,677

Non-controllinginterests$11,487
918
1,434
2,353
—
—
—
—
—
(112)
14,684—
14,572$28,412

Total$529,261
49,084
15,34764,432
309
—
(251)
—
—
(8,374)
14,713—6,396$600,090

6

C o n s o l i dated Statemen t o f Ca sh F lo w s
Nippon Koei Co., Ltd.
Year ended June 30, 2022

Thousands of
U.S. Dollars (Note 2)

Millions of Yen

Year ended
Notes June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022

Profit before tax
Depreciation and amortization
Impairment losses
Interest and dividend income
Interest expenses
Loss (gain) on derivatives
Decrease (increase) in trade and other receivables
Decrease (increase) in contract assets
Decrease (increase) in advance payments to suppliers
Decrease (increase) in prepaid expenses
Increase (decrease) in trade and other payables
Increase (decrease) in contract liabilities
Increase (decrease) in consumption taxes payable
Increase (decrease) in deposits received
Increase (decrease) in accrued expenses
Increase (decrease) in provisions
Other
Sub total¥10,800
4,976
281
(513)
483
(979)
(4,581)(1,837)
(541)
442
1,002
(2,463)(1,596)
1,519
1,162
147
(140)
8,161

¥7,176
4,566
1,739
(397)
424
(182)
(1,172)(2,685)
109
(269)
1,242
(733)
2,203
528
1,564
498
47
14,660$79,066
36,431
2,058(3,761)
3,541(7,173)(33,542)(13,450)(3,961)
3,241
7,338(18,035)(11,684)
11,1248,507
1,080(1,028)59,752

Dividends received
Interest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities

178
356
(410)
(3,466)
4,820

152
251
(433)
(2,556)
12,0731,309
2,611(3,002)(25,377)
35,293

Cash flows from operating activities:

Cash flows from investing activities:

Year ended
Notes June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022

(235)
—

(284)
199

(1,723)—(5,557)
(296)
(622)

(2,220)(651)(32)(40,687)(2,174)(4,557)

137
(261)
(112)

1
—
238

1,008
(1,917)(823)(6,949)(2,750)(50,875)

265,500(258,035)
4,985(8,331)(3,050)2,041(1,148)(67)

244,000(257,000)
15,043(5,977)(2,801)—(1,145)(47)

1,943,702(1,889,053)
36,496(60,996)(22,334)
14,946(8,406)
(497)

1,892

(7,928)13,856

(235)

1,395

(1,726)

17,83815,472

130,595

369

970

2,701

¥17,971¥17,838$131,571

Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment,
and investment property
Purchase of intangible assets
Purchase of other financial assets
Proceeds from sale and redemption ofother financial assets
Payments for acquisition of subsidiaries
Other
Net cash provided by (used in)investing activities
Cash flows from financing activities:
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Repayments of lease liabilities
Capital contribution from non-controlling interests
Dividends paid
Other
Net cash provided by (used in)financing activities

33
33
33
33
33
26

Net increase (decrease) in cash andcash equivalents
Cash and cash equivalents at beginningof period

8

Effect of exchange rate changes on cash
and cash equivalents
Cash and cash equivalents at end of period

7

Thousands of
U.S. Dollars (Note 2)

Millions of Yen

8N o t e s t o C onsol i date d F ina n c ia l St a t em en t s
Nippon Koei Co., Ltd.
Year ended June 30, 2022

1. Reporting Entity
Nippon Koei Co., Ltd. (hereinafter referred to as the “Company”) is a stock company located in Japan. Addressesof the registered head office and major offices are disclosed on the Company website (https://www.n-koei.co.jp/
english/). The Company’s consolidated financial statements consist of accounts of the Company and its
subsidiaries (hereinafter referred to as the “Group”), as well as the Group’s interests in its associates and joint
ventures. The Group’s fiscal year end is June 30, 2022.
The Group’s businesses are Consulting, Urban & Spatial Development, and Energy. Details of each business aredescribed in note “6. Segment Information.”

2. Basis of Preparation(1) In Accordance with IFRSThe consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (“IFRS”) as published by the International Accounting Standards Board pursuant to theprovision of Article 93 of the Ordinance on Terminology, Forms, and Preparation Methods of Consolidated
Financial Statements (Ordinance of the Ministry of Finance No. 28 of 1976) as all the requirements of the“Specified Company for Designated IFRSs” set forth in Article 1-2 of said Ordinance have been fulfilled.
The consolidated financial statements were approved by Hiroaki Shinya, Representative Director andPresident, on September 28, 2022.
(2) Basis of Measurements
As described in note “3. Significant Accounting Policies,” the Group’s consolidated financial statements areprepared based on the historical cost, excluding certain financial instruments which are measured at fairvalue.
(3) Functional Currency and Presentation Currency
The financial statements of Group companies are prepared using their respective functional currency. While
Group companies mainly use the local currency as their functional currency, the companies designate
another currency as the functional currency if the currency for the main economic environment in which
they engage in business activities differs from the local currency.
The Group’s consolidated financial statements are reported in Japanese Yen in units of one million Yen.
Fractions less than one million Yen are rounded down.
The translations of Japanese Yen amounts into U.S. Dollars amounts are included solely for the convenienceof readers outside Japan and have been made at the rate of ¥136.595 to $1, the approximate rate of exchange
on June 30, 2022.
Such translations should not be construed as representations that the Japanese Yen amounts could be
converted into U.S. Dollars at that or any other rate.

3. Significant Accounting Policies
For the significant accounting policies applied to consolidated financial statements, the same accounting
policies are applied to all the periods described in the consolidated financial statements, unless otherwise noted.
(1) Basis of Consolidationa. Subsidiaries
Subsidiaries refer to companies that are controlled by the Group. The Group is deemed to control thecompany when it is exposed, or has rights, to variable returns from its involvement with the company andhas the ability to affect those returns through its power over the company.
Financial statements of subsidiaries are accounted for on a consolidated basis from the date when theGroup obtains control to the date when it loses control.
If the accounting policies applied to a subsidiary differ from those applied to the Group, adjustments are
made to the financial statements of the subsidiary as necessary. Intra-Group balances of receivables/
liabilities and internal transactions, as well as unrealized gains and losses arising from intra-Grouptransactions are eliminated when preparing consolidated financial statements.
Comprehensive income of subsidiaries is accounted for in owners of parent and non-controlling interests,
even if non-controlling interests become a negative balance.

8If control continues when partly disposing of subsidiary interests, it is accounted for as an equity
transaction. The difference between the adjusted amount of non-controlling interests and the fair value ofthe consideration is directly recognized in equity as equity attributable to owners of parent.
When control is lost, a gain or loss arising from the loss of control is recognized as a profit or loss in thecurrent period.
The closing date of some subsidiaries differs from that of the Group. For subsidiaries with a different
closing date, the accounts are settled provisionally as of the closing date of the Group.
b. Associates
Associates refer to companies that the Group does not control nor jointly control, while it has significant
influence over their finance and business policies. If the Group has voting rights greater than 20% but
less than 50%, the Group is presumed to have significant influence over such other companies.
Associates are accounted for under the equity method, from the date when the Group obtains significant
influence until the date when it loses significant influence. Investments in associates include goodwill
recognized at the time of acquisition (after deducting the accumulated amount of impairment losses).
If the accounting policies applied to an associate differ from those applied to the Group, adjustments are
made to the results of the associate used in the equity method accounting as necessary.
The closing date of some associates differs from that of the Group. For associates with a different closing
date, the accounts are settled provisionally as of the closing date of the Group.
c. Joint Ventures
Joint ventures refer to companies whose contractually-agreed control over economic activities is sharedby multiple parties including the Group, and which require the agreement of all parties sharing control
when making strategic decisions on finance and businesses related to their activities.
The joint ventures under the Group are accounted for using the equity method.
(2) Business Combinations
Business combinations are accounted for using the acquisition method. The consideration for acquisition ismeasured as the total of the assets transferred in exchange for the control of the acquiree, the liabilities
incurred by the Company to former owners of the acquiree, and the fair value of equity instruments issued
by the Company on the acquisition date. If the consideration for acquisition exceeds the fair value ofidentifiable assets and liabilities, it is recorded as goodwill in the consolidated statement of financial
position. Conversely, if it falls short, it is recorded as profit or loss in the consolidated statement of profit orloss.
We determine on an acquisition-by-acquisition basis whether to accounted for non-controlling interests atfair value or by the proportionate share of the recognized amount of identifiable assets if non-controllinginterests in the acquired business exist.
Transaction costs that are incurred in relation to business combinations, including brokerage fees, legal
fees, and due diligence expenses, are expensed as they are incurred.
If the initial accounting of a business combination is not completed by the end of the consolidated fiscal
year when the business combination has occurred, accounts are reported provisionally. If the facts andsituation that existed as of the acquisition date are obtained during the period that was deemed to haveaffected the measurement of the recognized amount (hereinafter referred to as the “Measurement Period”)
if grasped initially on the acquisition date, the provisional amount recognized on the acquisition date isretroactively corrected by reflecting such information. If newly obtained information brings newrecognition of assets and liabilities, additional assets and liabilities are recognized. The Measurement.
Period is one year at the longest.
Since additional acquisitions of non-controlling interests after obtaining control are accounted for as equity
transactions, goodwill is not recognized from such transactions.
Acquiree’s identifiable assets and liabilities are measured at fair value on the acquisition date, except for thefollowing:- Deferred tax assets and liabilities as well as assets and liabilities related to employee benefit
arrangements;- Acquiree’s share-based payment agreements; and- Assets or disposal groups classified as held for sale in accordance with IFRS 5 “Non-current Assets Heldfor Sale and Discontinued Operations.”
interests in the acquiree held by the Group previous to the step transaction when control is obtained areremeasured at fair value on the date when control is obtained, while a gain or loss incurred is recognized as
profit or loss.

9(3) Foreign Currency Translationa. Functional Currency and Presentation Currency
The consolidated financial statements of the Group are prepared using the yen, the functional currency of
the Company. Moreover, individual companies in the Group determine functional currencies based on the
primary currency in which operations occur, by which transactions of individual companies aremeasured.
b. Translation of Foreign Currency Transactions
Transactions in foreign currency are translated into the functional currency, by the spot exchange rate on
the transaction date or an approximate rate to it.
Monetary assets and liabilities in foreign currency are translated into the functional currency by the spot
exchange rate on the consolidated closing date. Exchange differences arising from such translation andclosing of accounts are recognized as profit or loss. However, financial assets measured through othercomprehensive income and exchange differences arising from cash flow hedges are recognized as othercomprehensive income.
c. Translation of Foreign Operations
Assets and liabilities of foreign operations are translated into yen based on the spot rate as of the closing
date, and income and expenses are by the spot rate on the transaction date or an approximate rate to it,
and their exchange differences are recognized in other comprehensive income.
If a foreign operation is disposed of, this accumulated translation difference is recognized as a profit orloss during the period when the disposition occurs.
(4) Financial Instruments
a. Financial Assets(i) Initial Recognition and Measurement
The Group measures changes in for certain financial assets at fair value and accounts for thosechanges in profit or loss. Other financial assets are measured at amortized cost and changes arerecognized in other comprehensive income. This classification is determined at the time of initialrecognition.
The Group recognizes financial instruments on the transaction date when it becomes a party to anagreement for the financial assets.
Financial assets are measured at amortized cost if they meet both of the following requirements:- The financial asset is held within a business model whose objective is to hold financial assets inorder to collect contractual cash flows; and- The contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding.
Financial assets, other than those measured at amortized cost, are classified as financial assets which
are measured at fair value.
For investments in some equity instruments, the Group has made an irrevocable choice to recognize
fluctuations in the fair value not as profit or loss but through other comprehensive income.
All financial assets are measured at fair value less transaction costs, except for those classified into
the categories that are measured at fair value through profit or loss.
(ii) Subsequent Measurement
Measurement after the initial recognition of financial assets is conducted as follows according totheir classification:(a) Financial Assets Measured at Amortized Cost
Financial assets measured at amortized cost are measured at amortized cost by the effective
interest method.
Gain and loss in the case of amortization by the effective interest method and derecognition arerecognized as profit or loss.
(b) Financial Assets Measured at Fair Value
Financial assets measured at fair value are in principle measured at fair value through profit or loss.
However, for those designated as measured at fair value through other comprehensive income
among equity financial assets, fluctuations in the fair value are recognized as othercomprehensive income. When an investment is disposed of, the accumulated amount of gains orlosses recognized through other comprehensive income is transferred from “Other components ofequity” to “Retained earnings.”
Dividends are recognized as profit.

10

(iii) Derecognition of Financial Assets
The Group derecognizes financial assets when the contractual right to cash flows from financial
assets expire, or the Group transfers financial assets to transfer substantially all the risks and rewardsof ownership of the financial assets. If the Group retains control of the transferred financial assets,
we recognize assets and related liabilities to the extent of its continuing involvement in the financial
assets.
(iv) Impairment of Financial Assets
For financial assets measured at amortized cost, an allowance is recognized for the expected credit
losses.
The Group evaluates at every end of the period whether the credit risk of each financial asset has
significantly increased since the time of initial recognition, and if credit risk has not significantly
increased since the time of initial recognition, we recognize the expected credit losses arising frompossible events of default within 12 months from the end of the period as allowance for expectedcredit losses. On the other hand, if credit risk has significantly increased since the time of initialrecognition, we recognize the amount equivalent to the lifetime expected credit losses as allowancefor expected credit losses.
When evaluating whether credit risk has significantly increased, we consider information that isreasonably available and can be supported (such as internal or external ratings), in addition to pastdue information.
The Group also ensures that no lifetime expected credit losses need to be recognized if the credit riskof financial assets was deemed to be low at the end of the period.
However, for trade receivables and contract assets, the amount equivalent to the lifetime expectedcredit losses is always recognized as an allowance for expected credit losses, regardless of whether
credit risk has significantly increased since the time of initial recognition or not.
Expected credit losses are measured as the present value of the difference between all contractual
cash flows to be paid to the Group in accordance with the contract and all cash flows expected to bereceived by the Group.
The Group estimates the expected credit losses of financial assets by a method that reflects thefollowing:- An unbiased and probability-weighted amount that is determined by evaluating a range ofpossible outcomes;- Time value of money;- Information on past events, present circumstances, and forecasts of future economic
circumstances that are available and reasonable, and can be supported without excess costs andlabor at the end of the period.
If affected by a material economic change, we will make necessary judgmental adjustments to the
expected credit losses measured in the above calculation.
If there is no reasonable forecast to recover all or part of a financial asset, the Group will directly
decrease the book value for the total amount of financial assets.
Allowance for expected credit losses is recognized as profit or loss. If there is an event to decrease
allowance for expected credit losses, a reversal of allowance for expected credit losses is recognizedas profit or loss.
b. Financial Liabilities(i) Initial Recognition and Measurement
The Group classifies financial liabilities either as financial liabilities measured at fair value throughprofit or loss, or those measured at amortized cost. This classification is determined at the time ofinitial recognition.
The Group recognizes financial instruments on the transaction date when it becomes a party to anagreement for the financial liabilities.
All financial liabilities are measured at the amount of fair value without transaction costs, except for
those classified into categories that are measured at fair value through profit or loss.
(ii) Subsequent Measurement
Measurement after the initial recognition of financial liabilities is conducted as follows according totheir classification:(a) Financial Liabilities Measured at Fair Value through Profit or Loss
Financial liabilities measured at fair value through profit or loss are measured at fair value after
the initial recognition, with its fluctuation recognized as profit or loss.

11

(b) Financial Liabilities Measured at Amortized Cost
Financial liabilities measured at amortized cost are measured at amortized cost by the effective
interest method.
Gain and loss in the case of amortization by the effective interest method and derecognition arerecognized as profit or loss.
(iii) Derecognition of Financial Liabilities
The Group derecognizes financial liabilities when only it is extinguished, i.e., when the obligation
specified in the contract is discharged or cancelled or expires.
c. Presentation of Financial Assets and Liabilities
Financial assets and liabilities are offset and the net amount presented in the consolidated statement offinancial position, only when the Group has the legal right to set off balances, and intends either to settle
on a net basis, or to realize the asset and settle the liability simultaneously.
d. Derivatives
The Group uses derivatives including interest rate and currency swap agreements in order to hedge
foreign exchange risk and interest risk, respectively. These derivatives are initially recognized at fair value
and are remeasured at each reporting period. Changes in the fair value of derivatives are recognized as
profit or loss in the consolidated statement of profit or loss.
(5) Cash and Cash Equivalents
Cash and cash equivalents consist of cash on-hand, deposits that can be withdrawn at any time, and shortterm investments with contractual settlement dates within three months from the initial transaction date,
which are readily convertible to the amount and which bear minimal risk of change in value.
(6) Property, Plant and Equipment
Property, plant and equipment is accounted for at acquisition cost less accumulated depreciation andimpairment.
Acquisition cost includes expenses directly related to the acquisition of assets, expenses for demolition,
removal and restoration costs of land, and capitalizable borrowing costs.
Depreciation for land and assets other than construction in progress is recorded by the straight-line method
over their respective estimated useful life. The estimated useful lives for each major asset class are as follows:- Buildings and structures: 2–50 years- Machinery, equipment, and vehicles: 2–20 years- Tools, furniture, and fixtures: 2–15 years
The estimated useful life, residual value, and depreciation method are reviewed at the end of each fiscal
year, and if there are changes, they will be applied as changes in accounting estimates prospectively.
(7) Goodwill
Goodwill is presented in the consolidated statement of financial position based on initial recognition lessaccumulated impairment losses.
The measurement of goodwill at the time of initial recognition is described in “(2) Business Combinations.”
Goodwill is not amortized, but undergoes an impairment test every period and more often when there areindications of impairment.
Impairment losses are recognized in the consolidated statement of profit or loss, and are not subject toreversal.
(8) Intangible Assets
For individually acquired intangible assets, they are recorded at the acquisition cost at the time of initialrecognition.
Except for those with indefinite useful lives and those which are not in the condition necessary for it to becapable of operating, intangible assets other than goodwill are amortized by the straight-line method overtheir respective estimated useful life, and presented as the acquisition cost less the accumulated
amortization and impairment.
The estimated useful life, residual value, and amortization method are reviewed at the end of each fiscal
year, and if there are changes, they will be applied as changes in accounting estimates prospectively.
For intangible assets with indefinite useful lives and those not yet available for use, they are not amortized
but undergo an impairment test individually or by cash generating unit in every period and more often
when there is an indicator of impairment.

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Intangible assets with indefinite useful lives are measured at the acquisition cost less accumulated
impairment losses.
(9) Investment Property
Investment property is the property held with intentions to generate leasing revenue or capital gains, orboth. Investment property, which is presented as the acquisition cost less accumulated depreciation andimpairment.
Depreciation for assets other than land is calculated by the straight-line method over their respective
estimated useful life (2–50 years). Land is not subject to depreciation.
The estimated useful life, residual value, and depreciation method are reviewed at the end of each fiscal
year, and if there are changes, they will be applied as changes in accounting estimates prospectively.
(10) Leases
LesseeIt is determined based on the substance of an agreement, even if it is not in the form of a lease legally,
whether the agreement is a lease or not, or whether the agreement includes a lease. If an agreementtransfers the right to control the use of a specified asset in exchange for consideration for a certain periodof time, the transaction is deemed to be a lease.
The Group has chosen not to distinguish the non-lease component from the lease component to account forthem as a single lease component.
Lease liabilities in lease transactions are measured at the discounted present value by discounting theunsettled amount of the total lease payments on the lease commencement date, using the interest rate
implicit in the lease or the lessee’s incremental borrowing rate of interest. The total lease payments include
the following:- Amounts of fixed lease payments less lease incentives receivable;- Amounts of variable lease payments that depend on an index or a rate;- Amounts expected to be payable by the lessee under residual value guarantees;- Exercise price of a purchase option if the lessee is reasonably certain that to exercise that option; and- Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option
to terminate the lease.
Right-of-use assets are initially measured at the amount of the initial measurement of lease liabilities byadjusting initial direct costs and prepaid lease payments, and adding the costs for restoration obligations
based on lease agreements.
Right-of-use assets are depreciated over the shorter of either the useful life of the right-of-use assets or thelease period.
Lease payments are apportioned between a finance charge and a reduction of the outstanding obligation for
future amounts payable to produce a constant periodic rate of interest on the remaining balance of the leaseliability. Finance charges are presented separately from depreciation for the right-of-use assets in the
consolidated statement of profit or loss.
Lease liabilities are remeasured when there are changes in the likelihood that the lease will be terminatedof exercising the extension or termination option. When lease liabilities are remeasured, the remeasurement
is recognized as an adjustment to right-of-use assets. However, if the decreased amount of liabilities by theremeasurement is greater than the book value of right-of-use assets, the amount after reducing the amountof right-of-use assets to zero is recognized as profit or loss.
For leases where the lease period completing within 12 months or those with an immaterial value of
underlying assets, lease payments related to the leases are recognized as expenses over the lease period
either by the straight-line method or other regular basis.
LessorLeases for which the Group does not transfer substantially all the risks and rewards of ownership of anasset are classified as operating leases. For operating lease transactions, target assets are recorded in the
consolidated statement of financial position, while lease payments received are recognized as revenue in the
consolidated statement of profit or loss under the straight-line method over the lease period, including any
free rent period.

13

(11) Impairment of Non-Financial Assets
For the Company’s non-financial assets, excluding deferred tax assets, the Group determines whether there
is an indicator of impairment. When there is an indicator of impairment, the recoverable amount of therelated assets is estimated. Goodwill, intangible assets with indefinite useful lives, and those not yet
available for use are tested for impairment annually, regardless of whether there is an indicator of
impairment.
The recoverable amount of assets or cash generating unit is the larger of the value in use or the fair valueless costs to sell. In calculating value in use, the estimated future cash flows are discounted to the present
value using the time value of money and the pretax discount rate reflecting risks unique to the assets. Assetsthat are not individually tested in an impairment test are tested as part of cash generating units which,through continued use, generates largely cash flows which are largely independent of other assets or asset
groups. Goodwill is allocated to the cash generating unit that is expected to have synergies arising from thebusiness combination. Goodwill is tested for impairment at the cash generating unit level.
Corporate assets of the Group do not generate independent cash inflows. When there is an indicator of
impairment for corporate assets, the recoverable amount of the cash generating unit to which corporate
assets belong is estimated.
An impairment loss is recognized as profit or loss when the book value of assets or cash generating unit
exceeds the estimated recoverable amount. The impairment loss recognized in relation to a cash generating
unit first reduces the book value of goodwill which is allocated to the unit, and then, if goodwill is written
off entirely, reduces the book value of other assets in the cash generating unit proportionally.
Goodwill-related impairment loss is not reversed. For other assets, any impairment loss recognized in thepast is evaluated as to whether there are impairment indicators during each reporting period. Impairment
loss is reversed when there is a change in the estimate used for deciding the recoverable amount.
Impairment loss is reversed to the extent of book value after deducting depreciation and amortization fromthe book value as if there had been no impairment loss.
(12) Employee Benefits
a. Short-term Employee Benefits
Short-term employee benefits are recorded as expenses without discounting when a related service isprovided. For bonuses and paid leave expenses, there are legal or constructive liabilities to pay them, andwhen reliable estimates are possible, the amounts estimated to be paid based on such programs arerecognized as liabilities.
b. Post-Employment Benefits
The Group has established a defined benefit corporate pension plan and a lump sum retirement payment
plan as employees’ retirement benefit plans.
The Group calculates the present value of the defined benefit plan liabilities, and related current and past
service costs, using the projected unit credit method.
Discount rates are calculated based on market yields on prime corporate bonds at the end of the period
corresponding to the period of the estimated date of benefit payments for every future fiscal year.
Liabilities or assets for the defined benefit plans are calculated by deducting the fair value of plan assets
from the present value of the defined benefit plan liabilities. However, if the defined benefit plan is morethan fully funded, the net amount of defined benefit assets is recorded up to the present value of
economic benefits available in the form of refunds from the plan or reductions in future contributions to
the plan. Moreover, the amount of net interest on the net defined benefit liability (asset) is recognized as
operating expense (Cost of sales, Selling, general and administrative expenses) in profit or loss.
The remeasured amounts of the defined benefit plan are recognized collectively as other comprehensive
income in the accrual period, to be immediately transferred from “Other components of equity” to“Retained earnings.”
Past service cost is accounted for as profit or loss in the accrual period.
The Group’s parent company entity and its domestic subsidiaries are members of the Engineering
Consultants Company Pension Fund (multi-companies fund) as a defined benefit plan. Since it is a planthat cannot reasonably calculate the amount of pension assets corresponding to any single participant’s
contributions, as with the defined contribution plan, the amount to be paid in exchange of services
provided by employees to companies in the corresponding period is recognized as an expense.
The Group makes contributions to the public pension system in Japan. The contributions to the public
pension system (defined contribution plan) are expensed at the time of accrual, and accounted for as
employee benefits.

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(13) Share-based Payments
The Company grants shares with restriction on transfer to directors under the equity-settled share-based
compensation system. Shares with restriction on transfer are estimated at fair value on the grant date, andrecorded as selling, general and administrative expenses over the vesting period, while a corresponding
amount is recognized as equity in the consolidated statement of financial position.
As an incentive plan for the Group employees, the Employee Stock Ownership Plan (ESOP) Trust (Trust
period is May 31, 2017~ March 31, 2021) System had been introduced as a trust type employee stock
ownership incentive plan that aimed to motivate employees to work and promote the continued
development of the Group by providing the Group employees with incentives to improve the medium- tolong- term corporate value, enhancing their employee welfare program, and promoting their equity
participation as shareholders.
(14) Provisions
Provisions are recognized when the Group has present legal or constructive obligation as a result of past
events, it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation, and the amount of the obligation can be reliably estimated. When the time value of money ismaterial, the estimated future cash flows are discounted to the present value using the time value of money
and the pre-tax interest rate reflecting risks specific to the liabilities. Any rebate of discount on a time basis
is recognized as finance costs.
(15) Revenue
For agreements with customers, excluding rental income from real estate based on IFRS 16 “Leases,” theGroup recognizes revenue by applying the following steps:
Step 1: Identify the contract with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction prices to performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation“Consulting,” “Urban & Spatial Development,” and “Energy” provide such services as planning, designing,and supervision mainly for civil engineering, architecture and electric power.
The Group’s businesses are performance obligations to be satisfied over time, because they fall under eitherof the following cases where: (a) the customer simultaneously receives and consumes the benefits provided
by the Group’s performance as the Group performs; (b) the Group’s performance creates or enhances anasset that the customer controls as the asset is created or enhanced; or (c) the Group’s performance does
not create an asset with an alternative use to the Group and the Group has an enforceable right to payment
for performance completed to date.
Revenue is recognized based on progress toward complete satisfaction of the obligation and, if progresscannot be reliably measured, revenue is recognized to the extent of costs incurred until such time as
progress of performance obligations can be reliably measured.
For the measurement of progress, costs include personnel expenses and outsourcing expenses that are inprinciple based on the cost budget and actual accrued costs.
Early-stage projects for work with which the Group has limited prior experience are subject to limited
information, such as similar projects completed previously when estimating total costs, and include
significant assumptions, such as outsourcing costs. Therefore, estimates of total costs are likely to change
due to revisions in the estimate.
To ensure the accuracy of the estimate of total costs, the Group manages budgets by type of work andconfirms the appropriateness of the estimated total costs for each accounting period, to find out outliers ofcosts at an early stage, and to review the cost budget in a timely manner.
Moreover, the measurement of progress in some large projects is based on output measures. Whenrecording sales by expected billings, progress is recognized based on incurred expense and other output
measures used to measure progress after approval by the project manager.
Contract assets are the Group’s rights to consideration in exchange for goods or services that the Group has
transferred to a customer when that right is conditioned on something other than the passage of time.
Contract liabilities are the Group’s obligation to transfer goods or services to a customer for which theGroup has received consideration or the amount is due from the customer.
Consideration is received by contractual milestones generally in line with the progress in satisfying
performance obligations, with settlement generally occurring within 60 days from the complete satisfactionof performance obligations. Consideration generally does not include significant financing components.

15(16) Government Subsidies
Government subsidies are recognized at fair value when incidental conditions for granting subsidies are
satisfied and reasonable assurance is obtained for receiving subsidies.
When government subsidies are related to expense items, they are recognized as other income in the period
in which related costs to be reimbursed by subsidies were recognized as expenses. Regarding subsidies for
assets, the amount of the subsidies is deducted from the acquisition cost of assets.
(17) Income Tax
Income tax expenses consist of current tax and deferred tax. These are recognized as profit or loss, except
for cases where they arise from items recognized as other comprehensive income or equity, and where theyarise from business combinations.
Current tax is measured at the amount for which a payment to or refund from the tax authorities is
expected. Tax rates and tax laws to be used for the calculation of tax amounts are those enacted or passed as
law but not yet effective as of the end of the period.
Deferred tax is recognized for a temporary difference that is a difference between the tax base and thecarrying amount of assets and liabilities, unused tax losses and unused tax credits.
Deferred tax liabilities are recognized for all taxable temporary differences, while deferred tax assets arerecognized for all deductible temporary differences to the extent where it is probable that taxable profit will
be available against which deductible temporary differences, unused tax losses carryforward and unused tax
credits carryforward can be utilized.
Deferred tax assets and liabilities are not recorded for the following temporary differences:- Taxable temporary differences arising from the initial recognition of goodwill;- Temporary differences arising from the initial recognition of assets and liabilities in transactions which
is not a business combination and affects neither accounting profit nor taxable profit (tax loss);- Regarding deductible temporary differences arising from investments in subsidiaries and associates andinterests in joint arrangements, cases where it is not probable that the temporary difference will reversein the foreseeable future, or where it is not probable that taxable profit will be available against which
the temporary difference can be utilized; and- Regarding taxable temporary differences arising from investments in subsidiaries and associates andinterests in joint agreements, cases where the timing of the reversal of the temporary difference can becontrolled and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed every period to reduce the carrying amount of thepart for which it is no longer probable that sufficient taxable profit will be available to utilize all or some ofthe deferred tax assets. Unrecognized deferred tax assets are reviewed every period to recognize them to theextent where it is probable that deferred tax assets will be recovered by future taxable income.
Based on tax rates and tax laws enacted or substantially enacted by the end of the period, deferred tax
assets and liabilities are measured by the tax rates and tax laws expected to be applied for the period torealize assets or to settle liabilities.
Deferred tax assets and liabilities are offset when there are legally enforceable rights attributable to thesame taxable entity subject to the same tax authority to offset the current tax assets and liabilities.
(18) Earnings per Share
Basic earnings per share is calculated by dividing profit or loss belonging to ordinary equity holders of theparent by the weighted average number of outstanding ordinary shares adjusted by treasury shares for theperiod. Diluted earnings per share is calculated by adjusting for the effect of all potential ordinary sharesthat have dilutive effects.
(19) Segment Information
A business segment is a constituent unit of business activities that earn revenue and accrue expenses,
including transactions with other business segments. A business segment has operations for which financial
information is separately available and the Company’s Board of Directors regularly reviews them to allocate
management resources to each segment and evaluate results.
(20) Treasury Shares
Treasury shares are recorded at acquisition cost and are accounted for as a reduction from equity. Profit orloss is not recognized for the purchase, sale, or cancellation of Company treasury shares. Rather, thedifference between the book value and consideration paid to acquire the treasury shares is recognized inequity.

16

(21) Borrowing Cost
For assets that require a considerable period to enable the intended use or sale, borrowing costs directly
arising from their acquisition, construction, and production are capitalized as part of the assets’ acquisition
costs.
Other borrowing costs are recognized as expenses in the period of their accrual.

4. Significant Accounting Estimates and Judgement with Estimates
In preparation of consolidated financial statements in accordance with IFRS, management is required to makejudgements, estimates and assumptions that will affect the application of accounting policies, and the amount ofassets, liabilities, revenue, and expenses. Actual earnings may differ from these estimates.
While the Group has made accounting estimates which assume that it will continue to be affected by the novel
coronavirus (COVID-19) for a certain period of time, the Group believes that it has not had a significant impact
in the current period. However, due to many continuing uncertainties regarding the future impact of COVID-19
on the economy and society as a whole, it may affect the Group’s financial position and operating results for the
next consolidated fiscal year.
Estimates and their underlying assumptions will continue to be revised. Any impact of a revision to accounting
estimates will be recognized in the accounting period in which the estimates are revised, and applied
prospectively to future accounting periods.
The judgements and estimates made by management that could have significant effects on the amounts in the
consolidated financial statements are as follows:- Revenue recognition (Note “3. Significant Accounting Policies, (15) Revenue,” “27. Revenue”)- Impairment of non-financial assets (Note “3. Significant Accounting Policies, (11) Impairment of NonFinancial Assets,” “15. Impairment of non-Financial Assets”)

5. New Standards Not Yet AppliedAmong standards and new interpretations whose establishment or revision is published by the approval date of
the consolidated financial statements, none of them are expected to have a significant effect on the Group’s
consolidated financial statements.

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6. Segment Information(1) Outline of Reportable Segments
a. Method of Determination of Reportable Segments
Reportable segments of the Group are determined as segments whose separate financial information isaccessible from among the constituent units of the Group and used by the Board of Directors to determine
the allocation of management resources and to evaluate achievements.
The Group has business management divisions separated by types of products and services at the head
office.
Each business management division formulates a comprehensive strategy based on the products andservices and engages in conducting business activities.
In line with the above, the Group is composed of segments divided by products and services, with eachbusiness management division serving as the foundation, and the three reportable segments are“Consulting”, “Urban & Spatial Development” and “Energy.”
b. Types of Products and Services by Reportable Segments“Consulting” engages in business within and outside Japan such as site surveying, planning, evaluation/assessment, designing, and construction management. It operates in the fields of rivers and water
resources, water and sewage, agricultural and rural development, dams and power generation,transportation (roads, railroads, ports and airports), urban and regional development, geology, disasterprevention, sand control, environment, information systems, etc.
“Urban & Spatial Development” engages in the structuring, planning, design, and operation of urban andspatial development business.
“Energy” engages in manufacturing and sale of electric power equipment and control devices, planning,
design, construction and construction management of mechanical, electrical and communication facilities
as well as the energy management business utilizing distributed energy resources.
(2) Changes in Reportable Segments
From the current fiscal year, the Company has integrated the “Domestic Consulting” and “International
Consulting” segments into the “Consulting” segment, and the “Power Engineering” and “Energy” segments
into the “Energy” segment to strengthen the business axis, which is the first resilience policy in the mediumterm management plan “Building Resilience 2024.” In addition, “Real Estate Leasing” is included in “Others”
as it is no longer a business segment. As a result of these changes, the previous six segments of “Domestic
Consulting,” “International Consulting,” “Power Engineering,” “Urban & Spatial Development,” “Energy,”and “Real Estate Leasing” have been reclassified into three segments of “Consulting,” “Urban & Spatial
Development,” and “Energy”. Also, PT. Cikaengan Tirta Energi, a consolidated subsidiary of the Company,
has been reclassified from the “Energy” segment to the “Consulting” segment as a result of reviewing thegroup management framework. In addition, as for our consolidated subsidiary Aichi Tamano Information
System Co., Ltd., the segment category has been changed from “Consulting Business” to “Others” as a resultof reviewing the group management framework of the Company following the acquisition of 51% of theshares of the said company from our consolidated subsidiary Tamano Consultants Co., Ltd. in April 2022.
Please note that segment information for the previous fiscal year is provided based on the new reporting
segments.
(3) Calculation Methods for Revenue, Income or Loss, Assets, and Other Items by Reportable Segments
The accounting method for reportable segments is as disclosed in “3. Significant Accounting Policies”.
The internal intersegment revenue or transfers are based on the transaction price determined after pricenegotiations taking into consideration the market price.
(4) Revenue, Income or Loss, Assets, Liabilities, and Other Items by Reportable Segments
The Group’s revenue and operating results by reportable segments are as follows:18

Millions of Yen

Year ended June 30, 2022
Reportable Segments
Consulting

Urban & Spatial
Development

EnergySubtotal

Others(Note 1)

Total

¥88,510421¥88,932¥22,58054¥22,635¥18,799322¥19,121¥129,891
798¥130,689¥783
781¥1,564¥130,674
1,579¥132,253

8,982

1,588

1,290

11,861(2,794)

9,066

(1)

9,065
2,218
(483)
10,800Depreciation and amortization
Impairment losses(1,985)—(1,437)
(281)

(595)
—

(4,018)
(281)

(973)
—

(4,991)
(281)

15
—

(4,976)(281)

Share of profit (loss) of investments
accounted for using equity method
Segment assets(14)
65,952—
34,075244
31,040230
131,068—
76,045230
207,113—(33,187)

230
173,926

2,374

1,011

3,650

7,036

1,180

8,217

—

8,217

82

—

2,352

2,434

—

2,434

—

2,434

Revenue:
Revenue from external customers
Intersegment revenue and transfers
Total
Segment profit (loss)
Finance income
Finance costs
Profit before tax
Other items:

Increase in property, plant and equipment,
and intangible assets(Note 2)
Investments accounted forusing equity method

Adjustments(Note 3)

Consolidated¥ — ¥130,674(1,579)—¥(1,579) ¥130,674

Thousands of U.S. Dollars

Year ended June 30, 2022
Reportable Segments
Consulting

Urban & Spatial
Development

EnergySubtotal

Others(Note 1)

Total

Adjustments(Note 3)

Consolidated$647,980
3,085$651,065$165,313
398$165,711$137,628
2,358$139,987$950,922
5,842$956,764$5,734
5,719$11,453$956,656
11,561$968,218$—(11,561)$(11,561)$956,656—$956,656

65,758

11,631

9,447

86,837(20,461)

66,376(9)

Finance income

66,367
16,241

Finance costs(3,541)

Profit before tax

79,066

Revenue:
Revenue from external customers
Intersegment revenue and transfers
Total
Segment profit (loss)

Other items:
Depreciation and amortization
Impairment losses
Share of profit (loss) of investments
accounted for using equity method
Segment assets
Increase in property, plant and equipment,
and intangible assets(Note 2)
Investments accounted forusing equity method(14,537)(10,522)(4,357)(29,417)(7,127)(36,544)112(36,431)—(2,058)—(2,058)—(2,058)—(2,058)

(103)

—

1,788

1,684

—

1,684

—

1,684

482,830

249,466

227,244959,541556,720

1,516,262(242,964)

1,273,297

17,385

7,402

26,72851,515

8,644

60,160—60,160601—

17,223

17,825—

17,825—

17,825(Notes)1. The category of “Others” includes revenues from constituent units that have not earned revenues or (or earn
only incidental revenues), expenses such as general and administrative expenses that do not belong to thereporting segment and corporate assets such as land, buildings, and investment securities.
2. The amount of increase in property, plant and equipment, and intangible assets includes the change as aresult of changes in the balances in right-of-use assets and investment property.
3. “Adjustments” is mainly the elimination of transactions between segments.

19Millions of Yen

Year ended June 30, 2021
Reportable Segments

Others(Note 1)

Adjustments(Note 3)

Consolidated¥117,859
1,555¥119,415¥—(1,555)¥(1,555)¥117,859—¥117,859(2,083)

7,123

4

7,128
519
(471)
7,176

(3,637)(1,739)(945)—(4,582)(1,739)16—(4,566)(1,739)34
21,88635
112,568—
70,68035
183,248—(27,110)35
156,137

824

1,554

4,123

1,323

5,446

(44)

5,401

—

2,034

2,077

—

2,077

—

2,077

Consulting

Urban & Spatial
Development

EnergySubtotal¥80,098474¥80,573¥20,2741¥20,275¥16,621329¥16,951¥116,994
805¥117,799¥865
750¥1,615

6,126

2,266

814

9,207

Depreciation and amortization
Impairment losses(1,899)(1,739)(1,190)—(547)—

Share of profit (loss) of investments
accounted for using equity method
Segment assets

058,572—
32,1091,744
43

Revenue:
Revenue from external customers
Intersegment revenue and transfers
Total
Segment profit (loss)
Finance income
Finance costs
Profit before tax
Other items:

Increase in property, plant and equipment,
and intangible assets(Note 2)
Investments accounted forusing equity method

Total(Notes)1. The category of “Others” includes revenues from constituent units that have not earned revenues or (or earn
only incidental revenues), expenses such as general and administrative expenses that do not belong to thereporting segment and corporate assets such as land, buildings, and investment securities.
2. The amount of increase in property, plant and equipment, and intangible assets includes the change as aresult of changes in the balances in right-of-use assets and investment property.
3. “Adjustments” is mainly the elimination of transactions between segments.
(5) Information by Product and Service
Statement is omitted, as similar information is disclosed in “(4) Revenue, Income or Loss, Assets, Liabilities,
and Other Items by Reportable Segments.”(6) Information by Region
The breakdown by region of revenue and non-current assets is as follows:
Revenue from external customers
Millions of Yen

Japan
Europe, Middle East, Central Asia, North Africa
Southeast Asia, East Asia, Oceania
South Asia
America
Sub-Saharan Africa, Africa
Others
Total

Year ended
June 30, 2022
¥76,546
18,68811,304
10,941
8,304
4,687
202
¥130,674

Year ended
June 30, 2021
¥73,995
15,664
10,269
9,199
5,625
2,903
201
¥117,859

Thousands of
U.S. Dollars

Year ended
June 30, 2022
$560,388
136,81482,75680,10260,79434,315
1,484$956,656

20

Non-current assets
Thousands of
U.S. Dollars

Millions of Yen

As ofJune 30, 2022
¥49,372
20,871
2,689
2,544¥75,478

Japan
EuropeCanadaOthersTotal

As ofJune 30, 2021
¥50,196
16,8582,183
1,986¥71,225

As ofJune 30, 2022
$361,454
152,800
19,68918,628$552,572(Notes)1. “Revenue” and “Non-current assets” are classified based on service areas and their location, respectively.
2. “Non-current assets” do not include financial instruments, deferred tax assets and assets for retirement
benefits.
3. Countries and regions are classified by geographical proximity.
(7) Information on Significant Customers
Customers that account greater than 10% of revenue in the consolidated statement of profit or loss are as
follows:
Millions of Yen

Year ended June 30, 2022
Name of Customers

Ministry of Land, Infrastructure, Transport and Tourism
Japan International Cooperation Agency
TEPCO Power Grid, Incorporated

Revenue

Related Segment Name

¥23,574
10,576
4,665

Consulting
Consulting
EnergyThousands of U.S. Dollars

Year ended June 30, 2022
Name of Customers

Ministry of Land, Infrastructure, Transport and Tourism
Japan International Cooperation Agency
TEPCO Power Grid, Incorporated

Revenue

Related Segment Name

$172,584
77,42934,156

Consulting
Consulting
EnergyMillions of Yen

Year ended June 30, 2021
Name of Customers

Ministry of Land, Infrastructure, Transport and Tourism
Japan International Cooperation Agency
TEPCO Power Grid, Incorporated

Revenue¥22,561
6,206
4,187

7. Business Combinations
Statement is omitted due to its insignificance for the years ended June 30, 2022 and 2021.

21

Related Segment Name

Consulting
Consulting
Energy8. Cash and Cash Equivalents
The breakdown of cash and cash equivalents is as follows:
Thousands of
U.S. Dollars

Millions of Yen

As ofJune 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

Cash and bank deposits except for time deposits
with original term of more than three months¥17,971¥17,838$131,571

Cash and cash equivalents in the consolidated
statement of financial position

17,971

17,838

131,571

Cash and cash equivalents in the consolidated
statement of cash flows

17,971

17,838

131,571

9. Trade and Other Receivables
The breakdown of trade and other receivables is as follows:
Millions of Yen

Notes and accounts receivable - trade
OthersAllowance for expected credit losses
Total

As of
June 30, 2022
¥25,9312,088(977)¥27,042

As ofJune 30, 2021
¥21,143
1,096(1,050)¥21,189

Thousands of
U.S. Dollars

As ofJune 30, 2022
$189,840
15,288(7,155)$197,972

Trade and other receivables are classified as financial assets measured at amortized cost.

2210. Other Financial Assets(1) Breakdown of Other Financial Assets
The breakdown of other financial assets is as follows:
Thousands of
U.S. Dollars

Millions of Yen

As ofJune 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

¥3,856¥3,596$28,232

(95)

(89)

(701)

940
1,769
215

39
1,041
301

6,882
12,953
1,576

3,517¥10,203¥3,7796,423¥10,203

3,860¥8,749¥1,3157,434¥8,74925,753$74,696$27,672
47,023$74,696

Financial assets measured at amortized cost:
Time deposits with a deposit period of
more than 3 months, etc
Allowance for expected credit losses
Financial assets measured at fair value throughprofit or loss:
Cross currency swap
Stocks
Bonds
Financial assets measured at fair value throughother comprehensive income:Stocks and contribution
Total
Current assets
Non-current assets
Total(2) Equity Financial Assets Measured at Fair Value through Other Comprehensive Income
Fair values of significant equity financial assets measured at fair value through other comprehensive income
are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Issue name:
OYO Corporation
Sumitomo Realty & Development Co., Ltd.
Mitsubishi UFJ Financial Group, Inc.
Yokogawa Bridge Holdings Corp.
INFRONEER Holdings Inc.
OILES CORPORATIONJESK HORIUCHI CO., LTD.

As ofJune 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

¥559
537
520
445
364
363
118

¥428
545
427
479
364
369
572

$4,096
3,934
3,807
3,259
2,670
2,664
865

As these investments are held for the purpose of strategic cross-shareholding, they are designated as equity
financial assets measured at fair value through other comprehensive income.

23

(3) Derecognition of Equity Financial Assets Measured at Fair Value through Other Comprehensive Income
For the purpose of streamlining assets and reviewing business relationships, the Group sells some equity
financial assets measured at fair value through other comprehensive income and derecognizes them.
The fair value at the derecognition and cumulative gains and losses that have been previously recognized inequity as other comprehensive income are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Fair value
Cumulative gains or losses

As ofJune 30, 2022
¥39
22

As of
June 30, 2021
¥1
(1)

As of
June 30, 2022
$289
165

For equity financial assets measured at fair value through other comprehensive income, when derecognized,
cumulative gains or losses recognized as other comprehensive income are transferred to retained earnings.
Cumulative gains or losses (after tax) of other comprehensive income transferred to retained earnings are ¥15
million ($113 thousand) and ¥(1) million for the years ended June 30, 2022 and 2021, respectively.
The breakdown of dividend income recognized from equity instruments is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Derecognized investments during the reporting period
Investments held at year-end

As ofJune 30, 2022
¥1
97

As of
June 30, 2021
¥0
90

As of
June 30, 2022
$9710

11. Other Assets
The breakdown of other assets is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Other current assets:
Advance payments to suppliers
Prepaid expenses
Accrued interest
Consumption taxes refund receivable
Others
Total
Other non-current assets:Long-term prepaid expenses
OthersTotal

As ofJune 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

¥2,851
1,861
1,034
1,062
2,230
¥9,040

¥182
2,211
33
384
1,088
¥3,900$20,878
13,628
7,577
7,775
16,326$66,186

¥356
416
¥773

¥208
1,175
¥1,384$2,613
3,051$5,66424

12. Property, Plant and Equipment(1) Schedule of Changes
The changes in acquisition cost, accumulated depreciation and impairment, and carrying amount of property,
plant and equipment are as follows:
Acquisition Cost
Millions of Yen
Buildings
and structures

Land

Balance as of July 1, 2020
Acquisition
Sale or disposal
Account transfer
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2021
Acquisition
Acquisition through business combination
Sale or disposal
Account transfer
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2022

Machineryand vehicles

Tools, furnitureand fixtures¥23,153———¥21,846408(1,449)940¥4,33058(21)
193¥5,409
322
(312)
134

0
(0)
¥23,153
1,003
—
(990)
(1,465)16
101¥21,863
87
—
(61)
2,233

3
(0)
¥4,564
49
—
(26)
670

339
(0)
¥5,892
497
78
(300)
(95)

24
—
¥21,725446(38)¥24,530128
0¥5,387253
31¥6,357

Millions of Yen
Constructionin progress

Balance as of July 1, 2020
Acquisition
Sale or disposal
Account transfer
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2021
Acquisition
Acquisition through business combination
Sale or disposal
Account transfer
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2022

25

Total
property, plantand equipment

Right-of-use
assetsTotal¥2,6591,764—(1,268)¥57,399
2,554(1,784)—¥12,602
2,733(1,943)—¥70,0025,288(3,728)—31
10¥3,198
1,278

392

110
¥58,672
2,915

653
(6)
¥14,039
4,228

1,046
103
¥72,712
7,143

—

78

—

78

—
(2,236)(1,379)(892)(2,850)—(4,229)
(892)

366
22
¥2,6281,219
15¥60,629538—¥15,956

1,758
15¥76,586

Thousands of U.S. Dollars
Buildings
and structures

Land

Balance as of June 30, 2021
Acquisition
Acquisition through business combination
Sale or disposal
Account transfer
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2022

Machineryand vehicles

Tools, furnitureand fixtures$169,505
7,343$160,061
637$33,413364$43,140
3,640

—

—

—

577

(7,249)(10,727)(453)
16,352

(190)
4,911

(2,202)
(700)

180
—
$159,052

3,272
(284)
$179,584

937
2$39,4391,854
233$46,542

Thousands of U.S. Dollars
Constructionin progress

Balance as of June 30, 2021
Acquisition
Acquisition through business combination
Sale or disposal
Account transfer
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2022

$23,415
9,357

Total
property, plantand equipment$429,535
21,342Right-of-use
assets$102,782
30,955

Total$532,318
52,298

—

577

—

577

—
(16,370)(10,096)(6,534)(20,865)—(30,961)(6,534)2,680
162$19,244

8,925

3,945
—
$116,818

12,870113$560,682

113$443,864

Accumulated Depreciation and Impairment
Millions of Yen
Buildings
and structures

Land

Balance as of July 1, 2020
Depreciation
Impairment losses
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2021
Depreciation
Impairment losses
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2022

Machineryand vehicles

Tools, furnitureand fixtures

¥—
—
—
—

¥8,403596—(547)¥2,920173—(20)¥4,037
395
—
(175)

—
—
¥—
—
—
—

6
(3)
¥8,454
666
—
(13)

1
(0)
¥3,074
186
—
(22)

270
(11)
¥4,517
427
—
(204)

—
—
¥—

58
1,405
¥10,570

13450¥3,702

197
16¥4,95326

Millions of Yen
Constructionin progress

Balance as of July 1, 2020
Depreciation
Impairment losses
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2021
Depreciation
Impairment losses
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2022

Total
property, plantand equipment

Right-of-use
assets

Total

¥—
—
1,739
—

¥15,360
1,165
1,739
(742)

¥2,9982,857—(1,187)¥18,359
4,023
1,739(1,930)55—¥1,794
—
—
—

333
(15)
¥17,840
1,279
—
(240)

141
—
¥4,8103,110—(1,236)474(15)¥22,650
4,390—(1,477)—(1,794)¥—268
77¥19,225203
1¥6,889472
79¥26,114

Thousands of U.S. Dollars
Buildings
and structures

Land

Balance as of June 30, 2021
Depreciation
Impairment losses
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2022

Machineryand vehicles

Tools, furnitureand fixtures

$—
—
—
—

$61,894
4,876
—
(99)

$22,507
1,364
—
(161)

$33,068
3,129—(1,499)

—
—
$—

427
10,286$77,384

96
3,295$27,1021,442
121$36,262

Thousands of U.S. Dollars
Constructionin progress

Balance as of June 30, 2021
Depreciation
Impairment losses
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2022

Total
property, plantand equipment

Right-of-use
assetsTotal$13,137———$130,607
9,370—(1,760)$35,214
22,769—(9,054)$165,821
32,140—(10,814)—(13,137)
$—

1,965

1,491
12
$50,434

3,457
578$191,184

565$140,749(Note)
Depreciation for property, plant and equipment are included in “Cost of sales” and “Selling, general andadministrative expenses” in the consolidated statement of profit or loss.

27

Carrying AmountMillions of Yen
Land

As of July 1, 2020
As of June 30, 2021
As of June 30, 2022

¥23,153
23,153
21,725

Buildings
and structures

Machineryand vehicles¥13,443
13,40913,960¥1,4101,489
1,685

Tools, furnitureand fixtures¥1,3711,375
1,404Millions of Yen
Constructionin progress

As of July 1, 2020
As of June 30, 2021
As of June 30, 2022

¥2,6591,403
2,628

Property, plantand equipment

Right-of-use
assets¥42,039
40,832
41,403¥9,603
9,229
9,067

Total

¥51,642
50,06150,471Thousands of U.S. Dollars
Land

As of June 30, 2022

$159,052

Buildings
and structures

Machineryand vehicles$102,200$12,337

Tools, furnitureand fixtures$10,280

Thousands of U.S. Dollars
Constructionin progress

As of June 30, 2022

$19,244

Property, plantand equipment

Right-of-use
assets$303,114$66,383

Total$369,498(Note)
The amount of borrowing costs capitalized during the period is ¥19 million ($144 thousands) and ¥13 million
for the years ended June 30, 2022 and 2021, respectively. The capitalization rate used for calculating the amountof borrowing costs qualified for capitalization is 0.7% and 0.7% for the years ended June 30, 2022 and 2021,
respectively.
(2) Right-of-Use Assets
The carrying amount of right-of-use assets by asset class is as follows:
Millions of Yen
Buildings
and structures

As of July 1, 2020
As of June 30, 2021
As of June 30, 2022

¥8,605
7,874
7,651

Machineryand vehicles

¥394
323
390

Tools, furnitureand fixtures

¥604
1,031
1,025

Total

¥9,603
9,229
9,067

Thousands of U.S. Dollars
Buildings
and structures

As of June 30, 2022

$56,015

Machineryand vehicles$2,860Tools, furnitureand fixtures$7,506

Total$66,38228

13. Goodwill and Intangible Assets(1) Schedule of Changes
The changes in acquisition cost, accumulated amortization and impairment, and carrying amount of goodwill
and intangible assets are as follows:
Acquisition Cost
Millions of Yen
Intangible assets
Goodwill

Balance as of July 1, 2020
Acquisition
Acquisition through business combination
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2021
Acquisition
Acquisition through business combination
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2022

SoftwareTrademarks¥7,964———¥4,101234
0(102)¥3,594———¥1,430
—
—
—

1,217
—
¥9,182
—
435
—

41
2
¥4,276
171
—
(283)

553
0
¥4,148
—
25
—

211
—
¥1,641———

887—¥10,50556(36)¥4,185385—¥4,558208—¥1,849Millions of Yen
Intangible assets
Contact-related
intangible assets

Balance as of July 1, 2020
Acquisition
Acquisition through business combination
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2021
Acquisition
Acquisition through business combination
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2022

29

Customer
relationships

Others

Total

¥—
507
—
—

¥1,505———¥10,630
742
0
(102)

30
—
¥537
143
—
—

162
0
¥1,668
—
70
(0)

998
3
¥12,272
315
96
(284)

53
—
¥735

142
0
¥1,880846(35)¥13,209

Thousands of U.S. Dollars
Intangible assets
Goodwill

Balance as of June 30, 2021
Acquisition
Acquisition through business combination
Sale or disposal
Translation difference of foreign operations
OthersBalance as of June 30, 2022

Software$67,224
—
3,188
—
6,499
—
$76,912Trademarks$31,3121,254—(2,077)417(265)$30,641$30,368
—
185
—
2,820
—
$33,375

Customer
relationships$12,014
—
—
—
1,525
—
$13,540

Thousands of U.S. Dollars
Intangible assets
Contact-related
intangible assets

Balance as of June 30, 2021
Acquisition
Acquisition through business combination
Sale or disposal
Translation difference of foreign operations
OthersBalance as of June 30, 2022

$3,936
1,053
—
—
391
—
$5,382OthersTotal$12,212
—
517
(5)
1,040
2
$13,768$89,846
2,307
703(2,082)
6,194(263)$96,706

Accumulated Amortization and Impairment
Millions of Yen
Intangible assets
Goodwill

Balance as of July 1, 2020
Amortization
Impairment losses
Reversal of impairment
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2021
Amortization
Impairment losses
Reversal of impairment
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2022

SoftwareTrademarks

Customer
relationships

¥—
—
—
—
—

¥3,525
231
—
—
(87)

¥—
—
—
—
—

¥474
146
—
—
—

—
—
¥—
—
281
—
—

34
1
¥3,705
236
—
—
(282)

—
—
¥—
—
—
—
—

81
—
¥702
160
—
—
—

17
—
¥298

47
(47)
¥3,661

—
—
¥—

91
—
¥954

30

Millions of Yen
Intangible assets
Contact-related
intangible assets

Balance as of July 1, 2020
Amortization
Impairment losses
Reversal of impairment
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2021
Amortization
Impairment losses
Reversal of impairment
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2022

Others

Total

¥—
—
—
—
—

¥1,14959———¥5,150
436
—
—
(87)

—

152

269

—
¥—
—
—
—
—

(0)
¥1,361
74
—
—
(0)

1
¥5,769
471
—
—
(283)

—

134

273

—
¥—

(0)
¥1,569(47)¥6,184

Thousands of U.S. Dollars
Intangible assets
Goodwill

Balance as of June 30, 2021
Amortization
Impairment losses
Reversal of impairment
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2022

SoftwareTrademarks

$—
—
2,058
—
—

$27,130
1,734——(2,067)

$—
—
—
—
—

$5,144
1,175
—
—
—

124
—
$2,182350(344)$26,803

—
—
$—

666
—
$6,985

Thousands of U.S. Dollars
Intangible assets
Contact-related
intangible assets

Balance as of June 30, 2021
Amortization
Impairment losses
Reversal of impairment
Sale or disposal
Exchange differences on translationof foreign operations
OthersBalance as of June 30, 2022
31

Customer
relationships

Others

Total

$—
—
—
—
—

$9,965544——(4)$42,241
3,453——(2,072)

—

982

1,999

—
$—

(0)
$11,487(345)$45,277

Carrying AmountMillions of Yen
Intangible assets
Goodwill

Balance as of July 1, 2020
Balance as of June 30, 2021
Balance as of June 30, 2022

Software¥7,964
9,182
10,207

Trademarks

¥575
570
524

¥3,5944,148
4,558

Customer
relationships

¥955
938
895

Millions of Yen
Intangible assets
Contact-related
intangible assets

Balance as of July 1, 2020
Balance as of June 30, 2021
Balance as of June 30, 2022

¥—
537
735

Others

Total

¥355
306
311

¥5,4806,502
7,025

Thousands of U.S. Dollars
Intangible assets
Goodwill

Balance as of June 30, 2022

Software$74,729$3,837

Trademarks$33,375

Customer
relationships$6,554

Thousands of U.S. Dollars
Intangible assets
Contact-related
intangible assets

Balance as of June 30, 2022

$5,382Others$2,280Total$51,429(Notes)1. The breakdown of the carrying amount of goodwill by segment is as described in “15. Impairment of NonFinancial Assets.”
2. Certain trademarks are expected to be used as long as the business continues; as such, they are deemed tohave no foreseeable limit on the period with expected future economic benefits and are therefore classified as
intangible assets with indefinite useful lives. The carrying amount of trademarks classified as intangible assets
with indefinite useful lives is as described in “(2) Significant Goodwill and Intangible Assets.”
3. Others include leasehold interests in land, outstanding orders, telephone subscription right, and right to use
facilities.
4. Amortization for intangible assets is included in “Cost of sales” and “Selling, general and administrative
expenses” in the consolidated statement of profit or loss.
5. Impairment loss is included in “Other expenses” in the consolidated statement of profit or loss.
6. Research and development expenses recognized as an expense during the period are ¥1,243 million ($9,103
thousand) and ¥1,070 million for the years ended June 30, 2022 and 2021, respectively.

32

(2) Significant Goodwill and Intangible Assets
Thousands of
U.S. Dollars

Millions of Yen

As of June 30, 2022

As ofJune 30, 2022

As of June 30, 2021

Carrying amountUseful life (year)

Carrying amountUseful life (year)

Carrying amount¥8,556
4,083——¥8,174
3,769——$62,640
29,893

BDP Holdings Limited
Goodwill
Trademarks (Note)(Note)
Intangible assets with indefinite useful lives:
The above trademarks were acquired in connection with a business combination and are expected to be used aslong as businesses continue; as such, it is deemed that their useful lives are indefinite.

14. Investment Property
The Company and some consolidated subsidiaries own office buildings (including land) for lease in the Tokyo
metropolitan area. Main details include offices in Chiyoda-ku, Tokyo, and commercial stores in Yokohama City,
Kanagawa. Target assets for operating leases (lessor side) are also included in investment property.
(1) Schedule of Changes
The changes in acquisition cost, and accumulated depreciation and impairment of investment property are as
follows:
Acquisition Cost
Millions of Yen

Balance at beginning of period
Acquisition
Transfer
Balance at end of period

Year ended
June 30, 2022
¥5,6848
2,573¥8,266

Year ended
June 30, 2021
¥5,66816—¥5,684

Thousands of
U.S. Dollars

Year ended
June 30, 2022
$41,61461
18,840$60,516

Accumulated Depreciation and Impairment
Millions of Yen

Balance at beginning of period
Depreciation
Transfer
OthersBalance at end of period

33

Year ended
June 30, 2022
¥1,589114311
0¥2,015

Year ended
June 30, 2021
¥1,457106—
25¥1,589Thousands of
U.S. Dollars

Year ended
June 30, 2022
$11,635837
2281
2$14,756

Carrying amount and fair values of investment property are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Carrying amount
Fair value

As ofJune 30, 2022
¥6,25012,277

As ofJune 30, 2021
¥4,094
8,986

As of
June 30, 2022
$45,760
89,883

The fair value of investment property is determined by the Group based on “Real Estate Appraisal Standards.”
The fair value hierarchy of investment property is classified as Level 3 because unobservable inputs areincluded. The fair value hierarchy is described in “35. Financial Instruments (8) 3.”(2) Revenue and Expenses from Investment Property
Rental income and direct operating cost from investment property are as follows:
Rental income represents lease income from operating leases (lessor) in accordance with IFRS 16 “Leases.”Thousands of
U.S. Dollars

Millions of Yen

Rental income
Direct operating cost

Year ended
June 30, 2022
¥677
304

Year ended
June 30, 2021
¥745
192

Year ended
June 30, 2022
$4,9582,232

15. Impairment of Non-Financial Assets(1) Impairment Losses
The Group makes grouping based on the minimum unit of asset groups identified to generate mostly
independent cash flows in calculating impairment losses.
Impairment losses are recorded in “Other expenses” of the consolidated statement of profit or loss.
The breakdown of impairment losses is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Property, plant and equipment :Construction in progress
Goodwill
Total

Year ended
June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022¥—

¥1,739

$—

281

—

2,058

¥281

¥1,739$2,05834

For the year ended June 30, 2021, impairment loss of ¥1,739 million is recorded against construction in progressof ¥2,629 million for power generation facilities of PT. Cikaengan Tirta Energi, a consolidated subsidiary of theConsulting segment located in Indonesia. While the company was constructing a hydroelectric power generation
facility for the electric power selling business in Indonesia, there was damage to the facility under construction
as a result of ground deformation caused by abnormal rainfall, and it decided to postpone the commencementof operations for about one year for repair and reinforcement works. After the commencement of operations,maintenance costs are expected to be incurred for measures against ground deformation. The above impairment
loss was recorded as a result of an impairment test.
To determine the impairment loss, the value in use was used as the recoverable amount. The value in use wasdetermined with the assistance of an independent appraiser using the 20-year revenue forecasts which wereapproved by management, including anticipated repair and reinforcement work, and assumed a discount rate of
11.0% which was based on the inflation rate and the weighted average of cost of capital.
PT. Cikaengan Tirta Energi was reclassified to the Consulting segment from the Energy segment, starting fromthe year ended June 30, 2022. Accordingly, the company is presented as part of the Consulting segment. Pleaserefer to “6. Segment Information” for detailed information on the segment change.
For the year ended June 30, 2022, an impairment loss of ¥281 million ($2,058 thousand) is recorded against
goodwill for BDP Holdings Limited and its group companies of the Urban & Spatial Development segment. For
the year ended June 30, 2022, the recoverable amount fell below the carrying amount primarily due to anincrease in the discount rate from the year ended June 30, 2021, resulting in recognizing an impairment loss.
(2) Impairment Test for Goodwill and Intangible Assets with Indefinite Useful Lives
Goodwill arising from business combinations was allocated to cash generating units that would receive profits
from those business combinations.
The breakdown of the carrying amount by segment of goodwill and intangible assets with indefinite useful lives
is as follows:
Millions of Yen

Consulting
Urban & Spatial Development
Total

As of
June 30, 2022
¥45
14,721¥14,766

As ofJune 30, 2021
¥45
13,285¥13,330

Thousands of
U.S. Dollars

As ofJune 30, 2022
$329
107,773$108,103

Goodwill and intangible assets with indefinite useful lives of BDP Holdings Limited and its group companies
For the goodwill of ¥10,162 million ($74,399 thousand) as well as trademarks as intangible assets with indefinite
useful lives of ¥4,558 million ($33,374 thousand) recognized as a result of the acquisition of BDP Holdings
Limited and its group companies (which include Quadrangle Architects Limited and Pattern Design Limited),the Group conducts an impairment test annually or more often if indicators of impairment exist. The
recoverable amount of the impairment test is determined based on the value in use, with the assistance ofindependent appraisers.
The value in use is determined by discounting the estimated future cash flows based on the business plans andgrowth rates for three years in the future approved by management, using the discount rate of 10.0% based on
the weighted average of capital costs of the cash generating unit groups, reflecting past experience and external
information.
The growth rate of 2.0% is assumed, taking into account the industry to which cash generating unit groups
belong and the long-term average growth rate of the country, which does not exceed the long-term average
growth rate of the market.

3516. Investments and Joint Operations Accounted for Using the Equity
Method(1) Investments in Associates and Joint Ventures
The Group has no significant associates and joint ventures.
The total carrying amount of investments in associates and joint ventures, which are not significant individually,is as follows:
Millions of Yen

Carrying amount in total

As ofJune 30, 2022
¥2,434As ofJune 30, 2021
¥2,077

Thousands of
U.S. Dollars

As ofJune 30, 2022
$17,825

The amount of equity shares in comprehensive income for these individually insignificant associates and joint
ventures is as follows:
Millions of Yen

Equity shares in net income
Equity shares in other comprehensive income
Equity shares in comprehensive income

Year ended
June 30, 2022
¥230
76
¥306

Year ended
June 30, 2021
¥35
40
¥75

Thousands of
U.S. Dollars

Year ended
June 30, 2022
$1,684560$2,245(2) Investments in Joint Operation
The Group has no significant joint operations.

36

17. Income Taxes(1) Deferred Tax Assets and Liabilities
The breakdowns and changes of deferred tax assets and liabilities by major cause of accrual are as follows:
For the year ended June 30, 2022
Millions of Yen

Deferred tax assets:
Tax loss carryfoward
Retirement benefit liability
Impairment losses
Other assets
Total deferred tax assets
Deferred tax liabilities:
Retained earnings of subsidiaries
Property, plant and equipment
Intangible assets
Fiancial assets measured at fair value
Retirement benefit asset
Other lialibitites
Total deferred tax liabilities
Net deferred tax assets

As ofJuly 1, 2021

Recognizedthrough profit
or loss

Recognized inothercomprehensive
incomeBusiness
combinations

As ofJune 30, 2022

¥200
776
133
777
¥1,888

¥(91)
430
(3)
341
¥677

¥—
—
—
(2)
¥(2)

¥—
—
—
—
¥—

¥109
1,207
130
1,115
¥2,562¥(216)(1,301)
(188)
(425)
(931)
(920)
¥(3,983)¥(2,095)¥(377)
16
(15)
15
(426)
(359)
¥(1,146)¥(469)

¥—
—
—
91
252
(30)
¥313
¥310

¥—
—
—
—
—
—
¥—
¥—

¥(593)(1,285)(204)(317)(1,105)(1,310)¥(4,816)¥(2,254)

Thousands of U.S. Dollars

Deferred tax assets:
Tax loss carryforward
Retirement benefit liability
Impairment losses
Other assets
Total deferred tax assets
Deferred tax liabilities:
Retained earnings of subsidiaries
Property, plant and equipment
Intangible assets
Fiancial assets measured at fair value
Retirement benefit asset
Other lialibitites
Total deferred tax liabilities
Net deferred tax assets

37

As of
July 1, 2021

Recognizedthrough profit
or loss

Recognized inothercomprehensive
incomeBusiness
combinations

As ofJune 30, 2022

$1,470
5,684
980
5,688
$13,823$(670)
3,152
(22)
2,497
$4,956

$—
—
—
(20)
$(20)

$—
—
—
—
$—

$799
8,836
958
8,165
$18,759$(1,583)(9,529)(1,379)(3,114)(6,820)(6,738)$(29,165)$(15,341)$(2,760)
118
(114)
114
(3,120)(2,629)$(8,392)$(3,436)

$—
—
—
673
1,847
(226)
$2,294$2,274

$—
—
—
—
—
—
$—
$—

$(4,343)(9,411)(1,494)(2,326)(8,093)(9,594)$(35,263)$(16,503)

For the year ended June 30, 2021
Millions of Yen
Recognizedthrough profit
or loss

Recognized inothercomprehensive
incomeBusiness
combinations

As ofJune 30, 2021

¥104
940
145
(108)
¥1,081

¥96
14
(11)
888
¥987

¥—
(178)
—
(2)
¥(180)

¥—
—
—
—
¥—

¥200
776
133
777
¥1,888¥(177)(1,310)
(902)
(243)
(878)
(138)
¥(3,650)¥(2,568)

¥(38)
8
714
(5)
(53)
(762)
¥(137)
¥850

¥—
—
—
(176)
—
(19)
¥(196)¥(377)

¥—
—
—
—
—
—
¥—
¥—

¥(216)(1,301)
(188)
(425)
(931)
(920)
¥(3,983)¥(2,095)

As ofJuly 1, 2020

Deferred tax assets:
Tax loss carryfoward
Retirement benefit liability
Impairment losses
Other assets
Total deferred tax assets
Deferred tax liabilities:
Retained earnings of subsidiaries
Property, plant and equipment
Intangible assets
Fiancial assets measured at fair value
Retirement benefit asset
Other lialibitites
Total deferred tax liabilities
Net deferred tax assets

The amounts of deductible temporary differences and unused tax losses carry forward without the recognitionof deferred tax assets are as follows:
Millions of Yen

Deductible temporary differences
Tax loss carryforward

As ofJune 30, 2022
¥4,039331

As ofJune 30, 2021
¥2,643
279

Thousands of
U.S. Dollars

As ofJune 30, 2022
$29,575
2,429

Expiration year of unused tax losses carryforward without the recognition of deferred tax assets are as follows:
Millions of Yen

Due within one year
Due after one year through two years
Due after two year through three years
Due after three year through four years
Due after five years
Total

As of
June 30, 2022
¥30
118
71
50
59
¥331

As of
June 30, 2021
¥—
30
118
71
58
¥279

Thousands of
U.S. Dollars

As ofJune 30, 2022
$223
869
526
370
438
$2,42938

Deferred tax assets and liabilities on consolidated statement of financial position are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Deferred tax assets
Deferred tax liabilities
Net deferred tax assets

As ofJune 30, 2022
¥2,4294,683¥(2,254)

As ofJune 30, 2021
¥2,437
4,533¥(2,095)

As ofJune 30, 2022
$17,786
34,289$(16,503)(2) Income Tax Expense
The breakdown of income tax expense is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Current tax expenses
Deferred tax expenses
Total income tax expense

Year ended
June 30, 2022
¥3,747347¥4,095

Year ended
June 30, 2021
¥3,621(963)¥2,657

Year ended
June 30, 2022
$27,434
2,547$29,981

The causes of differences between the effective statutory tax rates and the average effective tax rates are as
follows:

Effective statutory tax rate
Expenses not subject to deduction
Retained earnings of affiliated companies
Impact on review of recoverability ofdeferred tax assets
Tax credit
OthersAverage actual tax rate

2022
31.5%
0.7
3.5

2021
31.5%
1.2
0.5

3.5
(1.7)
0.4
37.9%

4.6
(1.5)
0.7
37.0%

(Changes in Presentation)“Retained earnings of affiliated companies” which were included in “Others” during the previous fiscal year, arepresented separately due to their increased materiality, starting from the year ended June 30, 2022. Notes for theprevious fiscal year have been reclassified to reflect this change in the presentation.
As a result, 1.2% shown under “Others” for the previous fiscal year has been reclassified to 0.5% for “Retained
earnings of affiliated companies” and 0.7% for “Others.”3918. Borrowings(1) Breakdown of Borrowings
The breakdown of borrowings is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Short-term borrowings
Current portionof long-term borrowings
Long-term borrowings(excluding current portion)
Total
Current liabilities
Non-current liablities
Total

As of
As of
As of
June 30, 2022 June 30, 2021 June 30, 2022
¥7,500—$54,906
5,648

8,320

41,353

19,288¥32,436¥13,148
19,288¥32,436

18,712¥27,032¥8,32018,712¥27,032

141,207$237,467$96,259
141,207$237,467

Averageinterest rate
0.280%

Repayment
term
—

0.717

—
From August 1, 2023
0.963 to December 30, 2043
—%
—
—%
—
—
—
—%
—

(Notes)1. The average interest rate shows the weighted average interest rate for the balance of borrowings at the end of
the period.
2. Borrowings are classified as financial liabilities measured at amortized cost.
(2) Assets Pledged as Collateral and Corresponding Liabilities
Assets pledged as collateral and corresponding liabilities are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Assets pledged as collateral:
Shares of subsidiaries and associates
Total
Corresponding liabilities:
Long-term borrowings
Total

As of
June 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

¥2,146¥2,146——$15,717$15,717

¥92
¥92

—
—

$678
$678

19. Lease(1) Right-of-Use Assets
The right-of-use assets are presented as “Right-of-use assets” in the consolidated statement of financial position.
For their changes and balances, please refer to “12. Property, Plant and Equipment.”(2) Lease Liabilities
Lease liabilities are presented as “Lease liabilities” in the consolidated statement of financial position.
For the maturity of these lease liabilities, please refer to “(4) Liquidity Risk Management” in “35. Financial
Instruments.”40

(3) Expenses and Total of Cash Outflows associated with leases
Expenses and total of cash outflows associated with leases other than those disclosed under “12. Property,
Plant and Equipment” are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Depreciation of right-of-use assets:
Buildings and structures
Machinery and vehicles
Tools, furniture and fixtures
Depreciation Total
Interest expenses on lease liabilities
Expenses incurred for leases ending within 12 months
Leases of low value
Total
Total of cash outflows associated with leases

Year Ended
June 30, 2022

Year Ended
June 30, 2021

Year Ended
June 30, 2022

¥2,592167
350¥3,11021250
28¥3,401¥3,223¥2,304167
385¥2,857180
27
26¥3,092¥2,926$18,980
1,224
2,565$22,769
1,553
371
209
$24,905$23,599

There are no significant variable lease payments in the measurement of lease liabilities nor revenue fromsublease of right-of-use assets.
The amount of commitment for short-term leases at June 30, 2022 is ¥20 million ($149 thousand).
(4) Extension Option (Lessee)
In the Group, each company is responsible for managing leases, with lease terms negotiated individually
resulting in widely different lease terms.
The real estate lease mainly for offices includes extension options, many of which are those for one year or thesame period as in the original agreement.
This option is exercised as necessary by contracting parties to the lease in utilizing real estate for business. It is
included in the lease period if the exercise of the extension option is reasonably certain.
(5) Maturity Analysis (Lessor)
The Group mainly offers real estate for lease.
Maturities of lease payments in operating lease transactions are as follows:Year ended June 30, 2022
Millions of Yen

Lease fee

Within a year

More than 1 year
Less than 2 years

More than 2 years
Less than 3 years

More than 3 years
Less than 4 years

More than 4 years
Less than 5 years

More than 5
years

¥617

¥559

¥284

¥301

¥301

¥802

Within a year

More than 1 year
Less than 2 years

More than 2 years
Less than 3 years

More than 3 years
Less than 4 years

More than 4 years
Less than 5 years

More than 5
years$4,521$4,094$2,081$2,203$2,203$5,876

Within a year

More than 1 year
Less than 2 years

More than 2 years
Less than 3 years

More than 3 years
Less than 4 years

More than 4 years
Less than 5 years

More than 5
years

¥619

¥617

¥559

¥284

¥301

¥1,104

Total¥2,866

Thousands of U.S Dollars

Lease fee

Total

$20,982

Year ended June 30, 2021
Millions of Yen

Lease fee
41

Total

¥3,488

(6) Risk Management Strategy (Lessor)
The Group receives leasehold deposits to ensure the collection of restoration costs for property.
(7) Lessor operating lease income
For lessor operating lease income information, please refer to “14. Investment Property (2) Revenue andExpenses from Investment Property.”

20. Trade and Other Payables
The breakdown of trade and other payables is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Trade payables
Other payables
Total

As of
June 30, 2022
¥7,371
3,028¥10,400

As ofJune 30, 2021
¥6,5002,576¥9,076

As ofJune 30, 2022
$53,967
22,172$76,139

Trade and other payables are classified as financial liabilities measured at amortized cost.

21. Other Financial Liabilities
The breakdown of other financial liabilities is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Financial liabilities measured at amortized cost:
Deposit received
OthersFinancial liabilities measured at fair value
through profit or loss:
Interest rate and currency swaps
Total
Current liabilities
Non-current liabilities
Total

As of
June 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

¥4,561665¥3,005648$33,393
4,872—¥5,226¥4,561
665¥5,226—¥3,654¥3,005648¥3,654—$38,265$33,393
4,872$38,26542

22. Employee Benefit Expenses
As the defined benefit-type plans, the Company and its consolidated subsidiaries have established funded andunfunded defined benefit pension plans and a lump sum retirement payment plan. Moreover, increased
retirement payments may be provided for employees’ retirement. These pension plans are exposed to generalinvestment risks, interest rate risk, inflation risk, and other risks, which are not significant.
The funded defined benefit plan is managed by the pension fund which is legally separated from the Group. The
pension fund’s board of directors and pension fiduciaries are required by law to act while placing top priority on
the interest of plan participants, and responsible for managing assets under the plan in accordance with theprescribed policies. The corporate pension fund falls under related parties.
(1) Defined Benefit System
a. Reconciliation Table for Defined Benefit Plan Liabilities and Plan Assets
Relationship between defined benefit plan liabilities/plan assets and the net defined benefit liability (asset)
recorded in the consolidated statement of financial position is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Present value of funded defined benefit obligations
Fair value of institutional assets
Total
Present value of non-funded defined benefit obligations
Impact of asset cap
Net defined benefit liability (asset)
Amount on the consolidated statement of financial position:
Retirement benefit liability
Retirement benefit asset
Net amount of defined benefit liability (asset)
recorded on the consolidated statement offinancial position

43

As of
June 30, 2022
¥14,096(20,295)¥(6,198)
3,858
2,611
¥271

As of
June 30, 2021
¥14,258(20,253)¥(5,994)
3,828
1,635
¥(530)

As ofJune 30, 2022
$103,196(148,579)$(45,382)
28,24819,122$1,987

3,896(3,624)

3,861(4,391)

28,523(26,535)¥271¥(530)$1,987

b. Present Value of Defined Benefit Obligations
The change in the present value of defined benefit obligations is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Balance of present value of defined benefit
obligations at beginning of year
Service cost
Interest costs
Remeasurement
Mathematical differences caused by changes indemographic assumptions
Actuarial variances caused by changes infinancial assumptions
Mathematical differences caused by
performance revisions
Benefit payment amount
OthersBalance of present value of defined benefit
obligations at end of year

Year ended
June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022

¥18,087
1,364
73
(323)

¥17,465
1,336
78
144

$132,415
9,987
537(2,371)

(23)

—

(170)

(386)

51

(2,832)86(1,256)
9

92
(942)
4

630
(9,195)71¥17,954¥18,087$131,444

The weighted average duration of defined benefit plan liabilities as of June 30, 2022 and as of June 30, 2021 are
8.5 years and 8.9 years, respectively.
c. Fair Value Reconciliation Table for Institutional Assets
The changes in the fair value of institutional assets are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Balance of fair value of institutional assets
at beginning of year
Interest income
Remeasurement
Revenue on institutional assets
Contribution from business owner
Benefit payment amount
OthersBalance of fair value of institutional assets
at end of year

Year ended
June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022

¥20,253
80
(150)
(150)
1,164
(1,058)6¥17,318
84
2,347
2,347
1,130
(630)
3

$148,274
590(1,103)(1,103)8,523(7,752)
47¥20,295¥20,253$148,579

The Group plans to make contributions of ¥1,197 million to the plan assets during the fiscal year ending June30, 2023.

44

d. Breakdown of Plan Assets
The breakdown of plan assets by major item is as follows:
Millions of Yen

Cash and cash equivalents
Equity instruments
Domestic stocks
Foreign stocks
Debt instruments
Domestic bonds
Foreign bonds
Life insurance general account
OthersTotal

As ofJune 30, 2022
¥0
8,323
4,444
3,879
7,426
5,669
1,756
3,852
692
¥20,295

As ofJune 30, 2021
¥0
8,936
4,651
4,285
7,058
5,264
1,794
3,769
488
¥20,253

Thousands of
U.S. Dollars

As ofJune 30, 2022
$060,93632,53528,40054,36841,506
12,861
28,205
5,068$148,579

Most of the Group’s plan assets are managed as part of funds which are commingled with other companies’
investments and are classified into those without quoted market prices in active markets. The mixed managed
fund makes diversified investments mainly in stocks listed on active markets and bonds, in accordance with thecorporate pension fund rules. The life insurance general account represents the pension assets managed by life
insurance companies mainly through the general account in which principal and interest are guaranteed.
The investment policy for plan assets follows internal policies intended to secure stable returns in the medium tolong term in order to ensure the payment of defined benefit plan liabilities in the future. Specifically, they are
managed by setting a target rate of return and managing the risk profile of the different investments. Whenreviewing asset types and their related risk profiles, we take into account market and environmental risks.
e. Reconciliation Table for Effect of the Upper Limit on Assets
Changes in the impact of asset cap are as follows:
Millions of Yen

Impact of asset cap at balance at beginning of year
Limit of interest income
Remeasurement
Fluctations in the impact of asset cap
Impact of asset cap at balance at end of year

Year ended
June 30, 2022
¥1,6356969
969¥2,611

Year ended
June 30, 2021
¥—
—
1,635
1,635
¥1,635f. Main Actuarial Assumptions
Main assumptions used for actuarial calculation are as follows:

Discount rate

45

As of
June 30, 2022
0.69%

As of
June 30, 2021
0.44%

Thousands of
U.S. Dollars

Year ended
June 30, 2022
$11,974
47
7,099
7,099
$19,122

g. Sensitivity Analysis
When the discount rate used for actuarial calculation changes by 0.5%, it will have the following impact on
the present value of defined benefit plan liabilities. While this analysis assumes all other variables remain thesame, changes in other assumptions may affect the sensitivity analysis in reality.
Thousands of
U.S. Dollars

Millions of Yen

Discount rate rise by 0.5%
Discount rate drop by 0.5%

As ofJune 30, 2022¥(684)
736

As ofJune 30, 2021¥(725)
782

As ofJune 30, 2022$(5,012)5,390

h. Multi-Employer Plan
The Group’s parent company entity and its domestic subsidiaries are members of the Engineering
Consultants Company Pension Fund (multi-companies fund) (hereinafter referred to as the “Fund”), a multiemployer plan which is classified as a defined benefit plan.
When the Fund is dissolved, or when withdrawing from the Fund, it may be necessary to contribute any
unfunded amounts as special contributions that may exist at the time of dissolution or withdrawal.
The risks of joining the Fund, which is a multi-employer plan, are different compared to a single-employer
plan, i.e., assets contributed by may be used for benefits of other employers’ employees, and the Group may
incur special contributions depending on its funded status when withdrawing from the Fund.
Regarding the plan, since events of participating companies may affect the distribution of plan assets andexpenses for participating companies, it is not possible to reasonably calculate the amount of pension assets
corresponding to the Group’s contributions. Accordingly, we are unable to obtain sufficient information toaccount for the defined benefit pension plan, and the amount of contributions is expensed for retirement
benefits, as with the defined benefit pension plan.
The financial position of the Fund according to the latest report on actuarial valuation at the end of the planyear are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Amount of pension assets
Sum of the actuarial debt in pension financecalculation and the amount of minimum reserve
Deduction amountContribution ratio of the company anddomestic subsidiaries

As ofJune 30, 2022
¥92,388

As ofJune 30, 2021
¥82,462

As ofJune 30, 2022
$676,365

70,975¥21,41263,733¥18,729

519,608$156,756

13.74%(As of end of March 2022)

13.83%
13.74%(As of end of March 2021) (As of end of March 2022)

The main causes for the above difference are outstanding prior service costs, general reserve, and contribution
shortfalls carried forward in the actuarial calculation of pensions. Liabilities are recorded for outstanding priorservice costs. Moreover, contribution shortfalls carried forward will be rectified by increasing the special
contribution rate as necessary based on the actuarial revaluation of pensions.
The above contribution ratio is calculated by dividing the total contributions made by the Group by the total
contributions to the entire Fund and is not consistent with the actual burden on the Group.
Moreover, the Group will make contributions of ¥255 million in the next consolidated fiscal year.

46

(2) Defined contribution plan
The amount recognized as expenses for the defined contribution plan is ¥2,307 million ($16,889 thousand) and¥2,163 million for the years ended June 30, 2022 and 2021, respectively.
(3) Employee benefit costs
The total amount of employee benefit costs included in Cost of sales and Selling, general and administrative
expenses in the consolidated statement of profit or loss is ¥56,739 million ($415,381 thousand) and ¥51,278 forthe years ended June 30, 2022 and 2021, respectively.

23. Provisions
The breakdown and changes in provisions are as follows:
Millions of Yen

Balance as of July 1, 2021
Increase during period
Decrease during period (used for purposes)
Decrease during period (reversal)
Interest expense by discounting
Exchange differences on translationof foreign operations
Balance as of June 30, 2022

Provision for loss on
construction contracts

Provision forcompensation

Provision for loss
on litigation

Other
provisions

¥460
45
(282)
(92)
—

¥358
523
(358)
—
—

¥284
2,009
(1,499)
(195)
—

¥90
102
(51)
(67)
0

¥1,193
2,679(2,191)
(354)
0

—
¥131

—
¥522

—
¥600

—
¥74

—
¥1,328Provision for loss on
construction contracts

Provision forcompensation

Provision for loss
on litigation$3,370330(2,066)(673)—$2,622
3,829(2,626)——$2,085
14,713(10,977)(1,429)
—

$662
746
(374)
(492)
2

$8,74019,619(16,044)(2,595)
2

—
$960

—
$3,825—$4,392—$545—$9,723

Total

Thousands of U.S. Dollars

Balance as of July 1, 2021
Increase during period
Decrease during period (used for purposes)
Decrease during period (reversal)
Interest expense by discounting
Exchange differences on translationof foreign operations
Balance as of June 30, 2022

Other
provisions

Total

The breakdown of provisions in the consolidated statement of financial position is as follows:
Millions of Yen

Current liabilities
Non-current liabilities
Total

47

As of
June 30, 2022
¥1,25374¥1,328As ofJune 30, 2021
¥818
375
¥1,193Thousands of
U.S. Dollars

As ofJune 30, 2022
$9,178545$9,723

a. Provision for Loss on Construction Contracts
The expected amount of loss for uncompleted works at the end of the consolidated fiscal year under review isrecorded in order to prepare for future loss from construction works. The timing of expenditures will beaffected by progress of the project in the future.
b. Provision for Compensation
As we have present legal or constructive obligations as a result of past events, we have reasonably estimatedthe amount deemed required at the end of the consolidated current year under review and recorded the
expected amount of loss, in order to prepare for expenditures likely to be incurred with the compensation of
future damages.
c. Provision for Loss on Litigation
To prepare for the loss concerning litigation in light of current status of litigation matters, we havereasonably estimated the amount deemed required at the end of the consolidated fiscal year under review
and recorded the expected amount of loss. For details, please refer to “40. Subsequent Events.”
d. Others
Asset retirement obligations are included.

24. Other Liabilities
The breakdown of other liabilities is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Other current liabilities:
Outstanding paid leave
Accrued consumption taxes
Accrued expenses
Accrued bonuses
Remuneration payable for directors
Others
Total
Other non-current liabilities:
OthersTotal

As ofJune 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

¥3,080
2,286
1,394
5,662
114
419
¥12,957¥2,932
3,138
1,039
4,608
103
293
¥12,115$22,552
16,737
10,211
41,452838
3,070$94,862

¥351
¥351

¥122
¥122

$2,572$2,57248

25. Share Capital and Other Equity Items(1) Number of Authorized Shares and Total Number of Issued Shares
Changes in the number of authorized shares and total number of issued shares are as follows:
SharesYear Ended
June 30, 2022

Year Ended
June 30, 2021

Number of authorized shares:
Balance at beginning of year
Changes during the period
Balance at end of year

38,000,000—
38,000,000

38,000,000—
38,000,000

Total number of issued shares:
Balance at beginning of year
Changes during the period (Note 2,3)
Balance at end of year

15,048,568
11,746
15,060,314

15,933,058(884,490)
15,048,568(Notes)1. All shares issued by the Company are no-par-value common shares without any restrictions on rights, andissued shares are fully paid.
2. The changes in the total number of issued shares for the year ended June 30, 2021 are an increase of 14,996
shares due to the issuance of new shares as restricted stock compensation and a decrease of 899,486 shares
due to the cancellation of treasury shares.
3. The change in the total number of issued shares for the year ended June 30, 2022 is an increase of 11,746
shares due to the issuance of new shares as restricted stock compensation.
(2) Treasury Shares
The change in the number of treasury shares and the balance are as follows:
Millions of Yen

As of July 1, 2020
Changes during the period (Note 1)
As of June 30, 2021
Changes during the period (Note 2)
As of June 30, 2022

¥2,415(2,415)
¥0
(34)
¥(34)

Shares861,023(860,963)
60
1,751
1,811

Thousands ofU.S Dollars

As of June 30, 2021
Changes during the period (Note 2)
As of June 30, 2022

$1
(254)
$(252)(Notes)1. The breakdown of changes for the year ended June 30, 2021 is as follows:
Purchase of shares less than one unit: 523 shares
Trading of shares by ESOP Trust: (103,000) shares
Acquisition of treasury shares in accordance with the provisions of Article 156 of the Companies Act,applied by substitution pursuant to the provisions of Article 165, paragraph (3) of the Act: 141,000 shares
Cancellation of treasury shares in accordance with the provisions of Article 178 of the Companies Act:
(899,486) shares
2. The breakdown of changes for the year ended June 30, 2022 is as follows:
Purchase of shares less than one unit: 1,751 shares49

(3) Capital Surplus
The Companies Act in Japan provides that no less than half of receiving payments or benefits for the issuance ofshares should be incorporated in share capital, and the rest should be incorporated in legal capital surplus undercapital surplus. Moreover, the Companies Act allows for the incorporation of legal capital surplus in sharecapital by the resolution of the general shareholders’ meeting.
(4) Retained earnings
The Companies Act provides that one-tenth of the amount paid for dividends of surplus should be funded aslegal capital surplus or legal retained earnings until the total amount of legal capital surplus and legal retained
earnings reaches one-fourth of share capital. Funded legal retained earnings may be allocated for loss
compensation. Moreover, legal retained earnings may be used by the resolution of the general shareholders’meeting.

26. Dividend Payment
The amount of dividend payment is as follows:
For the year ended June 30, 2022
Resolution

Total cash paid
(Millions of Yen)

August 30, 2021
Extraordinary Boardof Directors’ meeting

Cash dividends
per share(Yen)¥1,128¥75

Total cash paid
(Thousands of U.S. Dollars)

Cash dividends per share(U.S. Dollars)$8,262$0.55

Record dateJune 30, 2021

Effective date

September 9, 2021

For the year ended June 30, 2021
Resolution

Total cash paid
(Millions of Yen)

August 31, 2020
Extraordinary Boardof Directors’ meeting¥1,138Cash dividends
per share
(Yen)

¥75

Record dateJune 30, 2020

Effective date

September 9, 2020

(Note)The total amount of dividends based on the resolution of the extraordinary Board of Directors’ meeting on
August 31, 2020 includes dividends of ¥7 million for the Company’s own shares held by the trust E account.
Dividends with effective dates that are different from the consolidated fiscal year.
For the year ended June 30, 2022
Resolution

August 26, 2022
Extraordinary Boardof Directors’ meeting

Total cash paid
(Millions of Yen)

Cash dividends
per share(Yen)¥1,882¥125

Total cash paid
(Thousands of U.S. Dollars)

Cash dividends per share(U.S. Dollars)$13,780$0.92

Record dateJune 30, 2022

Effective date

September 12, 2022

50

For the year ended June 30, 2021
Resolution

Total cash paid
(Millions of Yen)

August 30, 2021
Extraordinary Boardof Directors’ meeting

Cash dividends
per share(Yen)¥1,128

Record date¥75

Effective dateJune 30, 2021

September 9, 2021

27. Revenue(1) Disaggregation of Revenue
Revenue is disaggregated by region based on service areas. The breakdown of revenue and its relationship tosegment revenue is as follows:
Millions of Yen

Year ended June 30, 2022
Reportable Segments
Consulting

Urban &
SpatialDevelopment

EnergySubtotal

Total

Others¥57,327¥1,228¥17,207¥75,762¥783¥76,546

Europe, Middle East, Central Asia, North Africa

1,453

16,627607

18,688—18,688Southeast Asia, East Asia, Oceania

10,061754

488

11,304—

11,304South Asia

10,437264240

10,941—

10,941

America

4,622

3,659

22

8,304

—

8,304

Sub-Saharan Africa, Africa

4,406

46

234

4,687

—

4,687

Japan

OthersTotal revenue

202

—

—

202

—

202

¥88,510¥22,580¥18,799¥129,891¥783¥130,674

Thousands of U.S. Dollars

Year ended June 30, 2022
Reportable Segments
Consulting

Urban &
SpatialDevelopment$419,689

Europe, Middle East, Central Asia, North Africa
Southeast Asia, East Asia, Oceania
South Asia
America

Total

OthersEnergySubtotal$8,992$125,971$554,653$5,734$560,388

10,641

121,726

4,446

136,814—

136,81473,656

5,526

3,573

82,756—82,756

76,408

1,934

1,758

80,102—80,102

33,83926,790164

60,794—60,794Sub-Saharan Africa, Africa

32,260342

1,713

34,315—34,315

Others

1,484

—

—

1,484

—

1,484

$647,980$165,313$137,628$950,922$5,734$956,656

Japan

Total revenue

51

Millions of Yen

Year ended June 30, 2021
Reportable Segments
Consulting

Japan

Urban &
SpatialDevelopment

EnergySubtotal

Total

Others¥55,435¥2,256¥15,438¥73,130¥865¥73,995

903

14,295464

15,664—

15,664Southeast Asia, East Asia, Oceania

9,255

749

264

10,269—10,269South Asia

8,656

211

331

9,199

—

9,199

America

2,876

2,739

9

5,625

—

5,625

Sub-Saharan Africa, Africa

2,776

20

106

2,903

—

2,903

Europe, Middle East, Central Asia, North Africa

OthersTotal revenue

195

—

5

201

—

201

¥80,098¥20,274¥16,621¥116,994¥865¥117,859(2) Contract Balances
The breakdown of receivables, contract assets, and contract liabilities arising from contracts with customers are
as follows:
Millions of Yen

Receivables arising from contracts with customers
Contract assets
Contract liabilities

As of
As of
June 30, 2022 June 30, 2021
¥24,880¥20,092
26,45024,327
8,837
10,645

Thousands of
U.S. Dollars

As of
As of
July 1, 2020 June 30, 2022
¥18,462$182,147
21,425
193,641
10,89564,699Contract assets are principally related to work performed to-date which is not yet completed and for which
payment is not yet unconditional, and is presented as “Contract assets” on the consolidated statement offinancial position. Contract assets are transferred to receivables when service provision is completed and theright for payment becomes unconditional.
Contract liabilities are mainly related to advances received, and presented as “Contract liabilities” on the
consolidated statement of financial position.
Significant changes in contract assets for the year ended June 30, 2022 are an increase of ¥85,943 million($629,182 thousand) due to progress on contracts and a decrease of ¥84,105 million ($615,731 thousand) due tothe transfer to receivables. Significant changes in contract assets for the year ended June 30, 2021 are an
increase of ¥73,537 million due to progress on contracts and a decrease of ¥70,786 million due to the transfer toreceivables.
Significant changes in contract liabilities for the year ended June 30, 2022 are an increase of ¥29,511 million($216,052 thousand) due to the receipt of advances received and a decrease of ¥31,661 million ($231,793
thousand) due to revenue recognition. Significant changes in contract liabilities for the year ended June 30, 2021
are an increase of ¥37,945 million due to the receipt of advances and a decrease of ¥38,777 million due torevenue recognition.

52

Revenue recognized in the reporting period that was included in the contract liability balance at the beginningof the period is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Revenue recognized in the reporting period thatwas included in the contract liability balance atthe beginning of the period

Year ended
June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022

¥8,248¥8,987$60,389

The amounts of revenue recognized in the year ended June 30, 2022 and 2021 from the performanceobligations satisfied (or partly satisfied) in previous periods are less than 1% of the revenue in the
consolidated fiscal year, respectively.
(3) Transaction Price Allocated to Remaining Performance Obligations
The total transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied)is as follows:
Millions of Yen
Reportable Segments

Balance as of June 30, 2022

Consulting

Urban & Spatial
Development

Transaction price allocated tounsatisfied (or partially unsatisfied)
performance obligations¥149,748¥21,755

Balance as of June 30, 2022
Transaction price allocated tounsatisfied (or partially unsatisfied)
performance obligations

Energy¥23,004

Total

Others¥—Thousands of U.S Dollars
Reportable Segments
OthersUrban & Spatial
Consulting
EnergyDevelopment$1,096,299$159,267$168,412¥194,508

Total

$—

$1,423,979

The above amount includes consideration arising from contracts with customers. For the transaction priceallocated to remaining performance obligations, revenue is recognized according to the progress on eachperformance obligation. Revenue is expected to be recognized within approximately 8 years in the Consulting
Business, approximately 2 years in the Urban & Spatial Development Business and approximately 6 years in the
Energy Business.
Millions of Yen
Reportable Segments

Balance as of June 30, 2021
Transaction price allocated tounsatisfied (or partially unsatisfied)
performance obligations

Consulting

Urban & Spatial
Development¥138,186¥23,068

Energy¥22,994

Total

Others¥0¥184,250

The above amount includes consideration arising from contracts with customers. For the transaction priceallocated to remaining performance obligations, revenue is recognized according to the progress on eachperformance obligation. Revenue is expected to be recognized within approximately 8 years in the Consulting
Business, approximately 2 years in the Urban & Spatial Development Business and approximately 5 years in the
Energy Business.

5328. Operating Expenses
The primary breakdown of cost of sales, and selling, general and administrative expenses by type is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Employee benefits expenses
Outsourcing expenses
Communication and transportation expenses
Depreciation and amortization

Year ended
June 30, 2022
¥56,739
36,2195,265
4,976

Year ended
June 30, 2021
¥51,278
33,011
3,848
4,566

Year ended
June 30, 2022
$415,387
265,162
38,54536,431

29. Other Income and Other Expenses(1) Other Income
The breakdown of other income is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Dividend income:Financial assets measured at fair value throughprofit or loss
Gain on investments in securities:
Financial assets measured at fair value throughprofit or loss
Government grants
Insurance claim income
Others
Total

Year ended
June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022

¥65

¥60

$478

74
284
365
299
¥1,090

202
557
—
387
¥1,207

548
2,080
2,679
2,195
$7,982(2) Other Expenses
The breakdown of other expenses is as follows:
Millions of Yen

Impairment losses
Provision for compensation
Provision for loss on litigation
Others
Total

Year ended
June 30, 2022
¥281
542
315
205
¥1,344

Year ended
June 30, 2021
¥1,739358
284
293¥2,675

Thousands of
U.S. Dollars

Year ended
June 30, 2022
$2,058
3,971
2,307
1,504
$9,84154

30. Finance Income and Finance Costs(1) Finance Income
The breakdown of finance income is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Interest income:Financial assets measured at amortized cost
Dividend income:Equiry financial assets measured at fair value
through other comprehensive income
Foreign exchange gain
Gain on valuation of derivatives
Others
Total

Year ended
June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022

¥350

¥246

$2,563

98

90

720

787
979
2
¥2,218

—
182
—
¥519

5,765
7,173
18
$16,241(2) Finance Costs
The breakdown of finance costs is as follows:
Millions of Yen

Interest expenses
Foreign exchange loss
OthersTotal

55

Year ended
June 30, 2022
¥483
—
—
¥483

Year ended
June 30, 2021
¥424
46
0
¥471

Thousands of
U.S. Dollars

Year ended
June 30, 2022
$3,541——$3,541

31. Other Comprehensive Income
Amounts arising during the fiscal year, reclassification adjustments to profit or loss and tax effects by item ofother comprehensive income are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Item that will not be reclassified to profit or loss:
Equity financial assets measured at fair value
through other comprehensive income:Changes during the year
Amount of tax effects
Equity financial assets measured at fair value
through other comprehensive income
Remeasurements of defined benefit plans:
Changes during the year
Amount of tax effects
Remeasurements of defined benefit plans
Share of other comprehensive income of investments
accounted for using equity method:
Changes during the year
Amount of tax effects
Share of other comprehensive income of investments
accounted for using equity method
Total of items that will not be reclassified to profit or loss
Items that may be reclassified to profit or loss:
Cash flow hedges:
Changes during the year
Reclassification adjustments
Amount before income tax effectAmount of tax effects
Cash flow hedges
Exchange differences on translation of foreign operations:
Changes during the year
Reclassification adjustments
Amount before income tax effectAmount of tax effects
Exchange differences on translation of foreign operations
Share of other comprehensive income ofinvestments accounted for using equity
method:Reclassification adjustments
Before adjustments to tax effects
Amount before income tax effectAmount of tax effects
Share of other comprehensive income of investments
accounted for using equity method
Items that may be reclassified to profit or loss
Total other comprehensive income

Year ended
June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022¥(288)
91

¥571
(176)

$(2,108)
673

(196)

395

(1,435)

(800)
252
(547)

564
(178)
386

(5,857)
1,847(4,009)

(1)
—

6
—

(9)
—

(1)
(745)

6
788

(9)
(5,454)

—
8
8
(2)
6

—
8
8
(2)
6

—
64
64
(20)
44

2,788
—
2,788
(30)
2,757

2,412
—
2,412
(19)
2,392

20,414—
20,414(226)
20,187

77
—
77
—

33
—
33
—

570
—
570
—

77
2,841
¥2,09633
2,432¥3,220570
20,802$15,34756

32. Earnings per ShareThousands of
U.S.Dollars

Millions of Yen

Year ended
June 30, 2022
¥6,579Profit attributable to owners of parent

Year ended
June 30, 2021
¥4,531

Year ended
June 30, 2022
$48,166

SharesYear ended
June 30, 2022

Year ended
June 30, 2021

15,056,069

15,106,105

Weighted-average number of sharesof common stock

Yen

Year ended
June 30, 2022
¥436.98

Basic earnings per share

U.S.Dollars

Year ended
June 30, 2021
¥300.00

Year ended
June 30, 2022
$3.20

Diluted earnings per share are not included because there are no contingent shares.

33. Cash Flow Information(1) Changes in Liabilities from Financing Activities
Changes in liabilities from financing activities are as follows:
Millions of Yen
Short-termborrowings

Balance as of July 1, 2020
Changes due to cash flows from financing activities
Changes arising from acquisition or loss of control
over subsidiaries or other businesses
Impact of changes in foreign exchange rates
Changes in fair value
New lease agreements
Decrease due to deconsolidation
Other changes
Balance as of June 30, 2021
Changes due to cash flows from financing activities
Changes arising from acquisition or loss of control
over subsidiaries or other businesses
Impact of changes in foreign exchange rates
Changes in fair value
New lease agreements
Decrease due to deconsolidation
Other changes
Balance as of June 30, 2022

57

Long-term
borrowings

Lease liabilities

Derivative liabilities(Note)¥13,000(13,000)¥17,702
9,066¥9,685(2,801)¥141—¥40,529(6,735)

—
—
—
—
—
—
¥—
7,464

—
283
—
—
—
(19)
¥27,032(3,346)

—
525
—
2,733
(764)
(0)
¥9,378(3,050)

—
—
(180)
—
—
—
¥(39)
—

—
809
(180)
2,733
(764)
(19)
¥36,372
1,067

35
—
—
—
—
—
¥7,500

—
1,163
—
—
—
86
¥24,936

—
345
—
4,229
(1,614)(2)¥9,286

—
—
(900)
—
—
—
¥(940)

35
1,509
(900)
4,229
(1,614)
84¥40,782

Total

Thousands of U.S. Dollars
Short-termborrowings

Balance as of June 30, 2021
Changes due to cash flows from financing activities
Changes arising from acquisition or loss of control
over subsidiaries or other businesses
Impact of changes in foreign exchange rates
Changes in fair value
New lease agreements
Decrease due to deconsolidation
Other changes
Balance as of June 30, 2022

Long-term
borrowings

Lease liabilities

Derivative liabilities(Note)

Total$—
54,648$197,904(24,499)$68,661(22,334)$(286)—$266,279
7,814

258

—

—

—

258

—
—
—
—
—
$54,906

8,519
—
—
—
636
$182,560

2,532—
30,962(11,820)(18)$67,982—(6,595)———$(6,882)

11,052(6,595)30,962(11,820)618$298,568

Note: They are held to hedge interest and foreign currency exchange effects on borrowings.
(2) Non-cash Transactions
Non-cash transactions are acquisition of property, plant and equipment through leasing transactions; for thoseamounts, please refer to 12. Property, Plant and Equipment.

34. Shared-based Payments(1) Restricted Stock Compensation System
The Company intends that the directors (not including outside directors; “Eligible Directors”) share benefits
and risks of stock price fluctuations with shareholders in order to further enhance their willingness to contributeto improving share price and enhancing corporate value. Therefore, the Company has introduced a restricted
stock compensation system which issues restricted stock to Eligible Directors.
Shares with restrictions on transfer are estimated at the fair value on the grant date, and recorded as selling,
general and administrative expenses over the vesting period, while the same amount is recognized in equity on
the consolidated statement of financial position. In the determination of fair value, adjustment of expected
dividends is not considered.
2021

2020

2019

2018

Number of shares granted(Shares)

11,74614,996

13,514

14,495Weighted-average fair value
at the grant date(Yen)

¥3,595¥2,880¥3,125¥3,095

Evaluation method

Fair value is measured on the basis of an observable market priceCategory of grantees

Director of the Company (except outside director )Settlement

Equity settlement

Transfer restriction period

3 years

Lifting of transfer
restriction

On the condition that an eligible director to whom the restricted stocks
were allotted has continuously held the position of director of theCompany during the transfer restriction period, the transfer restriction
on all of his or her allotted stock is lifted by the Company when thetransfer restriction period expires.
58

(2) Employee Stock Ownership Plan (“ESOP”) TrustAt the Board of Directors’ meeting held on May 15, 2017, the Company introduced the Employee Stock
Ownership Plan (ESOP) Trust (hereinafter referred to as the “ESOP Trust”) System as a trust type employee
stock ownership incentive plan that aimed to motivate employees to work and promote the continued
development of the Group by providing the Group employees with incentives to improve the medium- to longterm corporate value, enhancing their employee welfare program, and promoting their equity participation asshareholders. The trust period of the ESOP Trust is from May 31, 2017 to March 31, 2021.
(3) Share-based Payment Expenses
Thousands of
U.S. Dollars

Millions of Yen

Year ended
June 30, 2022
Share-based payment expenses:
Restricted stock compensation system
Employee stock ownership plan system
Total

Year ended
June 30, 2021

¥43
—
¥43

¥42
(21)
¥20

Year ended
June 30, 2022
$316
—
$316

35. Financial Instruments(1) Capital Management
The Group has capital investment policies intended to generate growth based on the medium- to long-term
management strategies, which may include additional capital investment through financing. The aim is toincrease corporate value and strive to improve capital efficiency while taking into account the target level ofreturn on equity (ROE).
As the main indicators for capital management, the Group uses the ratio of equity attributable to owners ofparent and return on equity.
The Group’s ratio of equity attributable to owners of parent and return on equity attributable to owners ofparent are as follows:

Ratio of equity attributable to owners of parent
Return on equity attributable to owners of parent

As ofJune 30, 2022
44.9%
8.8%

As of
June 30, 2021
45.3%
6.7%

These indicators are periodically reported to management and monitored.
There are no restrictions on the Group’s capital.
(2) Financial Risk Management
The Group is exposed to financial risks (credit risk, liquidity risk, foreign exchange risk, interest rate risk, andrisk of market price fluctuations) in the process of conducting management activities, and manages these risks
based on certain policies in order to mitigate such financial risks. Moreover, it is the Group’s policy not toengage in speculative transactions, using derivative transactions to avoid risks of foreign exchange and interest
rate fluctuations.
(3) Credit Risk Management
Credit risk refers to the risk of incurring financial losses due to counterparty defaults on contractual obligations.
In accordance with the credit management policies, the Group has a system for managing due dates andbalances on obligations from each counterparty, as well as periodically assessing the creditworthiness of thosecounterparties.
Moreover, we execute and manage derivative transactions by assessing them at investment meetings andimplementing them in accordance with internal policies and authorizations. Moreover, when entering into
derivative contracts, we deal only with financial institutions with strong creditworthiness in order to mitigate
credit risk.

59

a. Trade and Other Receivables, and Contract Assets
Based on counterparties’ creditworthiness as well as the payment status of receivables, the Groupmanages risks by classifying trade and other receivables and contract assets into receivables with credit
impairment and those without credit impairment. For receivables without credit impairment, we provide
allowance for expected credit losses, taking into account the forecasts, the past-due status of receivables,
and historical experience. For receivables with credit impairment, we provide the difference between
contractual cash flows and collectible cash flows as allowance for expected credit losses.
We evaluate creditors who are overdue in payment for potential default or impairment risk.
For trade and other receivables, and contract assets, we recognize an allowance for expected credit losses
in the same amount as the lifetime expected credit losses.
The calculation of the expected credit losses for trade and other receivables, and contract assets is asfollows:
Millions of Yen%

As of June 30, 2022
Trade and otherreceivables,
Contract assets

Non Credit-impaired financial assets
Credit-impaired financial assets
Total

Lifetime expectedcredit losses¥53,449
1,036¥54,485

¥70
922
¥992

Expected credit
loss rates

0.13%
88.99
1.82%

Thousands of U.S. Dollars

As of June 30, 2022
Trade and otherreceivables,
Contract assets

Non Credit-impaired financial assets
Credit-impaired financial assets
Total

Lifetime expectedcredit losses$391,295
7,586$398,882

$516
6,751
$7,267

Millions of Yen%

As of June 30 , 2021
Trade and otherreceivables,
Contract assets

Non Credit-impaired financial assets
Credit-impaired financial assets
Total¥45,415
1,151¥46,567

Lifetime expectedcredit losses¥86964¥1,050

Expected credit
loss rates

0.19%
83.71
2.26%

60

Changes in the allowance for expected credit losses related to trade and other receivables, and contract
assets is as follows:
Millions of Yen
Non Credit-impaired
financial assets

Balance as of July 1, 2020
Increases during period
Decreases during period (reversal)
Decreases during period (direct depreciation)
OthersBalance as of June 30, 2021
Increases during period
Decreases during period (reversal)
Decreases during period (direct depreciation)
OthersBalance as of June 30, 2022

Credit-impaired
financial assets

¥80
86
(80)
—
—
86
70
(86)
—
—
¥70

¥398
636
(19)
(72)
21
964
163
(178)
(43)
16
¥922

Thousands of U.S. Dollars
Non Credit-impaired
financial assets

Balance as of June 30, 2021
Increases during period
Decreases during period (reversal)
Decreases during period (direct depreciation)
OthersBalance as of June 30, 2022

$632
516
(632)
—
—
$516

Credit-impaired
financial assets$7,0591,196(1,304)(317)
117$6,751b. Other Financial Assets
As the amount of the allowance for expected credit losses is not material, the statement on changes in theallowance for expected credit losses is omitted.
(4) Liquidity Risk Management
Liquidity risk is the risk that when fulfilling repayment obligations of mature financial liabilities, the Group
becomes unable to repay them on the due date.
The Group manages liquidity risk by preparing appropriate repayment funds, securing credit lines available atany time from financial institutions, and continuously monitoring cash flow plans and results.

61

Outstanding financial liabilities (including derivative financial instruments) by due date are as follows:
Millions of Yen

As of June 30, 2022
Contractual
cash flows

Non-derivative financial liabilities
Short-term borrowings
Trade Payables
Long-term borrowings
Deposit
Lease liabilities
OthersDerivative financial assets
Proceeds
Payments
Total

Due within
one year

Due after one year
through five years

Due after fiveyears

¥7,50010,40026,670
10,321
4,561
665¥7,50010,400
5,896
2,912
4,561
—

¥—
—
16,771
5,429
—
—

¥—
—
4,001
1,979
—
665

(4,880)3,899¥59,138(1,233)980¥31,018(3,647)
2,919¥21,473——¥6,646

Thousands of U.S. Dollars

As of June 30, 2022
Contractual
cash flows

Non-derivative financial liabilities
Short-term borrowings
Trade Payables
Long-term borrowings
Deposit
Lease liabilities
OthersDerivative financial assets
Proceeds
Payments
Total

Due within
one year

Due after one year
through five years

Due after fiveyears

$54,906
76,139195,249
75,56633,393
4,872$54,906
76,13943,16921,32533,393—$——
122,784
39,751——$——29,295
14,488—
4,872(35,729)
28,549$432,948(9,026)
7,176$227,084(26,702)
21,372$157,207——$48,656

Millions of Yen

As of June 30, 2021
Contractual
cash flows

Non-derivative financial liabilities
Short-term borrowings
Trade Payables
Long-term borrowings
Deposit
Lease liabilities
OthersDerivative financial assets
Proceeds
Payments
Total

Due within
one year

Due after one year
through five years

Due after five
years

¥—
9,076
27,547
9,889
3,005
648

¥—
9,076
8,489
2,835
3,005
—

¥—
—
18,350
5,532
—
—

¥—
—
707
1,521
—
648

(4,937)
4,883¥50,113(999)
983¥23,391(3,938)
3,899¥23,843——¥2,87862

(5) Foreign Exchange Risk Management
Since we at the Group are engaged in business internationally, our business performance is greatly affected bycurrency exchange rate fluctuations between the Japanese yen and the U.S. dollar as well as other foreign
currencies.
In order to mitigate foreign exchange risk, the Group strives to mitigate the risk by using interest rate andcurrency swaps for the purpose of managing the risk of foreign exchange fluctuations arising from thesetransactions in foreign currencies.
Analysis of Foreign Exchange Sensitivity
The impact on profit before tax in the consolidated statement of profit or loss in each reporting period, when the
yen appreciates 10% against the U.S. dollar is as follows:
The above analysis assumes other variables to be constant in the analysis.
Millions of Yen

Profit before tax

Year ended
June 30, 2022
¥164

Year ended
June 30, 2021¥(396)

Thousands of
U.S. Dollars

Year ended
June 30, 2022
$1,202(6) Management of Interest Rate Risk
While the Group is exposed to various risks of interest rate fluctuations in the business activities, there is not asignificant risk of interest rate fluctuations for borrowings held, because most borrowings are at fixed interest
rates, and interest rate and currency swaps are used to mitigate the risk of interest rate fluctuations. Moreover,there is not a significant risk of interest rate fluctuations for bonds held and loans receivable.
(7) Management of Risk of Market Price Fluctuations
The Group is exposed to share price fluctuation risk arising from equity instruments. To manage this pricefluctuation risk, we periodically grasp market prices and the financial position of issuers, etc. to review ourholdings, as necessary.
When the market price of equity instruments held by the Group at the end of a period changes by 10%, it will
have the following impact on profit before tax and other comprehensive income (before deducting the tax
effect).
The above analysis assumes other variables to be constant in the analysis.
Millions of Yen

Profit before tax
Other comprehensive income

63Year ended
June 30, 2022
¥198
351

Year ended
June 30, 2021
¥134
386

Thousands of
U.S. Dollars

Year ended
June 30, 2022
$1,4522,575

(8) Fair Value of Financial Instruments
For financial instruments measured at fair value, we classify investments into Level 1 to 3, according to theobservability and significance of inputs used to determine the fair value.
Level 1: Market price of the identical assets or liabilities in active markets (unadjusted)
Level 2: Fair value calculated by using directly or indirectly observable values other than those under Level 1
Level 3: Fair value calculated by valuation techniques based on unobservable inputs
a. Method of Calculating Fair Value
The method of calculating the fair value of financial instruments is as follows:
Cash and Cash Equivalents, Trade and Other Receivables, Trade and Other Payables
The fair value is close to the book value, as they are settled in a short period of time.
Other Financial Assets, Other Financial Liabilities
The fair value of listed stocks is calculated using the market price at the end of the period. The fair value of
unlisted stocks is calculated using the valuation method based on discounted future cash flows, a method
based on the market prices of comparable companies, and a method based on net asset value. For time
deposits with a deposit period of more than three months, and deposits received, the fair value is close to
the book value because they are settled in a short period of time.
As financial assets or liabilities measured at fair value through profit or loss, derivatives are calculated
based on the price presented by counterparty financial institutions.
Borrowings
Borrowings are calculated using the present value obtained by discounting future cash flows by the
expected interest rate when a similar agreement is newly executed.
b. Financial Instruments Measured at Amortized Cost
The book value and fair value of financial instruments measured at amortized cost are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Carrying amountFinancial liabilities measured at amortized cost:
Long term borrowings
Fair value
Financial liabilities measured at amortized cost:
Long term borrowings

As ofJune 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

¥24,936¥27,032$182,560¥26,436¥27,025$193,537(Notes)
1. Among financial instruments measured at amortized cost, the above table does not include those whose bookvalue is reasonably approximate to the fair value.
2. The fair value of long-term borrowings is classified into Level 2.

64

c. Financial Instruments Measured at Fair Value
The fair value hierarchy of financial instruments measured at fair value is as follows:
Millions of Yen

As of June 30, 2022
Level 1

Level 2

Level 3

Total

Financial assets:
Financial assets measured at fair value
through profit or loss:
Derivative assets
Other financial assets
Financial assets measured at fair value throughother comprehensive income:
Other financial assets
Total

¥—
1,202

¥940
—

¥—
782

¥940
1,984

3,250
¥4,452—¥940

267¥1,0493,517¥6,442Financial liabilities:
Financial assets measured at fair value
through profit or loss:
Derivative liabilities
Total

—
¥—

—
¥—

—
¥—

—
¥—

Thousands of U.S. Dollars

As of June 30, 2022
Level 1

Level 2

Level 3

Total

Financial assets:
Financial assets measured at fair value
through profit or loss:
Derivative assets
Other financial assets
Financial assets measured at fair value throughother comprehensive income:
Other financial assets
Total

$—
8,804

$6,882—$—
5,725$6,882
14,52923,793$32,597—$6,882

1,959$7,68525,753$47,165

Financial liabilities:
Financial assets measured at fair value
through profit or loss:
Derivative liabilities
Total

—
$—

—
$—

—
$—

—
$—

65

Millions of Yen

As of June 30, 2021
Level 1

Level 2

Level 3

Total

Financial assets:
Financial assets measured at fair value
through profit or loss:
Derivative assets
Other financial assets
Financial assets measured at fair value throughother comprehensive income:
Other financial assets
Total

¥—
1,041

¥39
—

¥—
301

¥39
1,343

3,141
¥4,182—¥39

718¥1,0203,860¥5,242Financial liabilities:
Financial assets measured at fair value
through profit or loss:
Derivative liabilities
Total

—
¥—

—
¥—

—
¥—

—
¥—

Transfer between the levels of the fair value hierarchy is recognized on the date when an event or circumstancecausing the change in classification occurs. There are no significant reclassifications between the fair value
Levels 1 and 2 in each fiscal year.
d. Valuation Process
For financial instruments classified into Level 3, external valuation experts or appropriate valuation
experts conduct valuation and analysis of valuation results, in accordance with the valuation policies andprocedures approved by the person in charge of the business administration department. The valuation
results are reviewed and approved by the person in charge of the business administration department.
e. Qualitative Information on Financial Instruments Classified into Level 3
Significant inputs not observable concerning financial instruments classified into Level 3 are discountrates, PER, PBR, and non-liquidity discounts. The fair value increases (decreases) by a decline (rise) in the
discount rate, a rise (decline) in PER, a rise (decline) in PBR, and a decline (rise) in the non-liquidity
discount. The expected change in the fair value is not significant when non-observable inputs are replacedby reasonably possible alternative assumptions.

66

f. Reconciliation of Financial Instruments Classified into Level 3 from Beginning to End of Period
Changes in financial instruments classified into Level 3 from the beginning to the end of the period are as
follows:
Thousands ofMillions of Yen

Balance at beginning of period
Total gains or losses
Profit or loss (Note 1)
Other comprehensive income (Note 2)
Purchases
Sales
Transfer from Level 3
OthersBalance at end of period

U.S. Dollars

Year ended
June 30, 2022
¥1,020Year ended
June 30, 2021
¥813

Year ended
June 30, 2022
$7,473

(27)
(451)
567
—
—
(58)
¥1,049

16
192
—
—
—
(1)
¥1,020(204)(3,306)
4,152
—
—
(428)
$7,685(Notes)1. Gains and losses included in profit or loss are those concerning financial assets measured at fair value
through profit or loss on the closing date. Among gains and losses recognized as profit or loss, thoseconcerning financial assets held at the end of the consolidated fiscal year are ¥(27) million ($(204) thousand)and ¥16 million for the years ended June 30, 2022 and 2021, respectively. These gains and losses are included
in “Other revenue” and “Other expenses” in the consolidated statement of profit or loss.
2. Gains and losses included in other comprehensive income are those arising from equity financial assets
measured at fair value through other comprehensive income on the closing date. These gains and losses areincluded in “Equity financial assets measured at fair value through other comprehensive income” in the
consolidated statement of comprehensive income.

6736. Significant Consolidated Subsidiaries
Significant consolidated subsidiaries as of June 30, 2022 are as follows:
Name

Location

Segment

Proportion of
Voting Rights
Held (%)

Tamano Consultants Co., Ltd.

Japan

Consulting

100.0

Nippon Civic Consulting Engineers Co., Ltd.

Japan

Consulting

85.3

El Koei Co., Ltd.

Japan

Consulting

100.0

Geoplan Namtech Inc.

Japan

Consulting

56.0

Koei Research & Consulting Inc.

Japan

Consulting

100.0

Nippon Koei Latin America-Caribbean Co., Ltd.

Japan

Consulting

100.0

Nippon Koei Lac, Inc.

PanamaConsulting

100.0

Nippon Koei Latin America - Caribbean, Mexico S. De R. L. De C.V.

MexicoConsulting

100.0

Nippon Koei India Pvt. Ltd.

India

Consulting

99.9

Nippon Koei Bangladesh Ltd.

Bangladesh

Consulting

99.9

Nippon Koei Vietnam International Co., Ltd.

Vietnam

Consulting

100.0

Philkoei International, Inc.

Philippines

Consulting

40.0

PT. Indokoei International

Indonesia

Consulting

80.0

Myanmar Koei International Ltd.

MyanmarConsulting

70.0

PT. Cikaengan Tirta Energi

Indonesia

Consulting

90.0

BDP Holdings Limited

United Kingdom

Urban & Spatial Development

100.0

Building Design Partnership Limited

United Kingdom

Urban & Spatial Development

100.0

Quadrangle architects Limited

CanadaUrban & Spatial Development

49.0

Kisho Kurokawa Architect & Associates Co., Ltd.

Japan

Urban & Spatial Development

100.0

Koei System Inc.

Japan

Energy100.0

Koei Energy Co., Ltd

Japan

Energy100.0

Nippon Koei Energy Europe B.V.

Netherland

Energy100.0

RNK UK Investments Limited

United Kingdom

Energy80.0

Tollcux Investments Limited

United Kingdom

Energy51.2

Tollcux Finance Limited

United Kingdom

Energy100.0

Tollgate Energy Storage Limited

United Kingdom

Energy100.0

Cuxton Energy Storage Limited

United Kingdom

Energy100.0

Ruien Energy Storage NV

Belgium

Energy51.0

Ironmont Hydro Pte. Ltd.

Singapore

Energy62.2

ACEI Singapore Holdings Private Ltd.

Singapore

Energy100.0

Nikki Corporation

Japan

Others100.0(Note)
Our equity in Philkoei International, Inc. and Quadrangle architects Limited is 50% or below; however, they aretreated as subsidiaries given our effective control over them.
There are no subsidiaries with individually significant non-controlling interests for the years ended June 30,
2022 and 2021.

6837. Related Party Transactions(1) Related Party Transactions
Transactions with related parties for the year ended June 30, 2022 are as follows:
For details of subsidiaries and associates, please refer to “16. Investments and Joint Operations Accounted
for Using the Equity Method” and “36. Significant Consolidated Subsidiaries”.
There were no significant related party transactions during the years ended June 30, 2022 and 2021.
(2) Compensation for Main Executive Management
Millions of Yen

Short-term employee benefit expenses
Share-based payment expenses
Total

Year ended
June 30, 2022
¥423
43
¥467

Year ended
June 30, 2021
¥405
41
¥447

Thousands of
U.S. Dollars

Year ended
June 30, 2022
$3,103316$3,41938. Commitments
The commitments for expenditures after the closing date are as follows:
Millions of Yen

Purchase of property, plant and equipment
Total

As of
June 30, 2022
¥8,074¥8,074As ofJune 30, 2021
¥72
¥72

Thousands of
U.S. Dollars

As ofJune 30, 2022
$59,109$59,109

39. Contingent Liabilities(1) Guaranteed Liabilities
The Group provides the following guarantees for borrowings from financial institutions of companies other thanconsolidated companies.
Millions of Yen

Bank loans of associates

As ofJune 30, 2022
¥2,617

As ofJune 30, 2021
¥686

Thousands of
U.S. Dollars

As ofJune 30, 2022
$19,161(2) Litigation
The Group has no provision for some litigation cases currently pending as a reasonable estimate is not available
based on information currently available. Even if liabilities are incurred due to these cases of litigation, theimpact on the Group’s financial position and business performance would be immaterial.
In accordance with Paragraph 92 of the International Accounting Standard 37, “Provisions, Contingent
Liabilities and Contingent Assets,” we do not provide detailed disclosure of those cases considering that suchdisclosure could possibly put the Group in a disadvantageous position.

6940. Subsequent Events(1) Transition to a Holding Company Structure through Sole Share Transfer
At a meeting of the Board of Directors held on August 12, 2022, the Company resolved to establish a holding
company (wholly owned parent company), “Integrated Design & Engineering Holdings Co., Ltd.” (referred to as“Holdings Co.” hereinafter), of which the Company will become a wholly owned subsidiary via a sole sharetransfer (referred to as the “Share Transfer” hereinafter) effective July 3, 2023. It was approved by the Ordinary
General Meeting of Shareholders held on September 29, 2022.
(Reasons for and Objectives of Implementing Share Transfer)a. Background to the Transition to a Holding Company Structure
Since its establishment in 1946, under its management philosophy of “Act with integrity and contribute tosociety through technology and engineering,” the Group has developed a range of businesses that help tobuild the social capital supporting safe and secure lives, and pleasant and prosperous everyday lives, as aleading company in the field of civil engineering consulting.
With regards to the business environment surrounding the Group, there are growing expectations andopportunities for business expansion. This is happening concurrently with the promotion of measures tobuild more robust infrastructure aimed at making nations and regions more resilient to natural disasters,
increasing demand for infrastructure and urban development projects particularly in emerging economies,
and growing interest in the environment and clean energy both in Japan and overseas. Such factors are in
addition to the need for technological innovation and the creation of added value through a digitaltransformation.
The Group’s long-term management strategy looks forward to the year 2030 and is based on the concept of“Working together toward a future without boundaries.” The Group strategy is founded on ensuring that
we can continue to respond to the challenges facing society, and we are aiming for further growth,
positioning three sectors as core businesses: Consulting, Urban and Spatial Development, and Energy.
Following deliberations on how to achieve our long-term management strategy, the Group decided that thebest way to deepen management of the Group from a medium- to long-term perspective, and to makefuture growth more certain is to shift to a holding company structure. The Group has accordingly resolved
to transition to a structure in which the newly established Holdings Co. will be responsible for theformulation of overall group strategies and governance, allowing each Group company to pursue its
business in an autonomous and dynamic fashion.
b. Procedures for Transition to a Holding Company Structure
Following the establishment of Holdings Co., the Company plans to reorganize its subsidiaries and others
as the subsidiaries of Holdings Co.
(Outline of the Share Transfer)a. Schedule of the Share Transfer
Record date for Ordinary General Meeting of Shareholders
June 30, 2022
Board of Directors’ meeting to approve the share transfer plan
August 12, 2022
Ordinary General Meeting of Shareholders to approve the share transfer plan
September 29, 2022
Delisting of the Company’s shares
June 29, 2023
Registration of the establishment of Holdings Co. (effective date of the Share Transfer) July 3, 2023
Listing of the shares of Holdings Co.
July 3, 2023
Please note that this schedule is subject to change as necessary due to the progress of the Share Transfer
procedures or other reasons.

70b. Method of the Share Transfer
Sole share transfer with Holdings Co. as the wholly owned parent company incorporated through the sharetransfer and the Company as the wholly owned subsidiary resulting from the share transfer.
c. Details of Allotment Resulting from the Share Transfer (Share Transfer Ratio)
Integrated Design & Engineering Holdings Co.,Ltd.
Nippon Koei Co., Ltd.
Company name
(Wholly owned parent company incorporated(Wholly owned subsidiarythrough a share transfer)resulting from a share transfer)
Share transfer ratio
1
1
Share transfer ratio
All shareholders of the Company immediately prior to the point in time that Holdings Co. acquires
all the issued shares of the Company pursuant to the Share Transfer will receive the allotment of one
share of common stock of Holdings Co. per share of common stock of the Company.
(ii) Number of shares per unit
Holdings Co. will adopt a share unit system, with one unit equaling 100 shares.
(iii) Basis for calculation of the share transfer ratio
The Share Transfer will establish a wholly owned parent company through the sole share transfer by
the Company, and there will be no change in the shareholding structure of the Company at the timeof the Share Transfer and that of Holdings Co. after the establishment. Therefore, with the principal
concern that no disadvantage or confusion should be caused to the shareholders of the Company,
each shareholder will receive the allotment of one share of the common stock of Holdings Co. pershare of the common stock of the Company held at the time of the Share Transfer.
(iv) Results, method, and basis for third-party calculation
As explained in (iii) above, the Share Transfer is a sole share transfer by the Company. Accordingly,
and no third-party calculation of the share transfer ratio will be conducted.
(v) Number of new shares to be issued through the Share Transfer
15,058,503 shares of common stock (planned)
This number of new shares is based on the outstanding shares (15,060,314) of Nippon Koei Co., Ltd.
as of June 30, 2022 and the actual number of new shares to be issued by Holdings Co. may vary. The
Company intends to cancel those treasury shares that can be canceled in practice immediately before
Holdings Co. acquires all of the Company’s issued shares as a result of the Share Transfer. The
number of treasury shares (1,811) held by the Company as of June 30, 2022 is therefore excluded
from the calculation of the new shares to be issued.
(vi) Handling of share options and bonds with share options as a result of the Share Transfer
The Company has not issued any share options or bonds with share options.
(vii) Items relating to the application for listing of Holdings Co.
Because the Company will become a wholly owned subsidiary of Holdings Co. through the Share
Transfer, the shares of the Company will be delisted. However, it was resolved at the meeting of theBoard of Directors on August 12, 2022 that the Group will apply to list the shares of Holdings Co. on
the Prime Market of the Tokyo Stock Exchange, Inc. (Technical Listing), which will be issued toshareholders in compensation for the shares of the Company. The date of the listing, scheduled forJuly 3, 2023, the effective date of the Share Transfer, is subject to review and other procedures by
Tokyo Stock Exchange, Inc.
(i)(2) Issuance of New Shares as Restricted Stock Compensation
The Board of Directors resolved to issue new shares for restricted stock compensation at the extraordinary
Board of Directors’ meeting held on September 29, 2022, as follows. This is a system whereby an eligible person
has the right to issue or dispose of the Company’s common stock by paying all of the monetary claims provided
by the Company as in-kind contribution in accordance with provisions of the Companies Act, Article 208,
Paragraph 2. The transfer-restricted share allotment agreement between each eligible person and the Company
stipulates:71

a. Purpose and Reason for Issuance
The Company aims to have the directors (not including outside directors; “Eligible Directors”) sharebenefits and risks of stock price fluctuations with shareholders and further enhance their willingness tocontribute to improving stock prices and enhancing corporate value. Therefore, the Company decided, at
the Board of Directors’ meeting held on August 14, 2017, to introduce a restricted stock compensation
system (the “System”), which will issue restricted stock to Eligible Directors.
Furthermore, the 73rd Annual General Meeting of Shareholders held on September 28, 2017, approved,
under the System, setting the total amount of monetary compensation claims payable to the Eligible
Directors as compensation related to restricted stock at a level where it does “not exceed an annual amountof ¥60 million.” In addition, the total number of 50,000 shares, which are restricted stock to be allotted to
Eligible Directors will be the upper limit of the number of restricted shares to be allotted in each fiscal
year, and the transfer restriction period of restricted stock will be between one year to five years,
determined by the Board of Directors.
In addition to the above, it was approved to establish new provisions regarding the treatment of issuanceof restricted stock after the approval of organizational restructuring, such as share transfer plan, in thecurrent System by the Ordinary General Meeting of Shareholders held on September 29, 2022.
b. Issuance Overview
1. Payment date
2. Class and number of shares to be issued
3. Issue price
4. Total issue price of shares to be issued
5. Capitalization amount
6. Total capitalization amount
7. Method of offer or allotment
8. Method of contribution
9. Allottees, number thereof andnumber of shares to be allotted
10. Transfer restriction period
11. Others

October 28, 2022
8,634 shares of common stock of the Company¥3,605 per share¥31,125,570¥1,803 per share¥15,567,102
Allotment of specified restricted stocks
In-kind contribution of monetary compensation claims
8,634 shares to eight directors of the company (excluding
outside directors)
October 28, 2022 to October 27, 2025
Issue of new shares to be allotted is conditioned on the
securities registration statement taking effect in accordancewith the Financial Instruments and Exchange Act.

(3) Litigation
On June 19, 2014, Nippon Civic Consulting Engineers Co., Ltd. (“NCC”), a consolidated subsidiary of theCompany, was sued by Osaka Prefecture for damages resulting from a project related to designing a shieldtunnel under tort liability.
NCC deposited a provisional seizure of ¥750 million ($5,491 thousand), which is included in other current assets
on consolidated statement of financial position, in July 2014 with the Legal Affairs Bureau.
Regarding the lawsuit, the Osaka High Court rendered a judgement on September 29, 2022, acknowledging
damages of ¥623 million ($4,566 thousand) and delinquency charges for a part of this damages. The judgement
became final as neither a final appeal nor a petition for acceptance of an appeal was filed by either party by thedesignated deadline, October 14, 2022.
NCC has paid the amount of judgement to the Osaka Prefecture in October, 2022.
The Group has adjusted the amounts recognized in the consolidated statement of financial position to reflect
this event after the reporting period.
(4) Changes from Subsidiary to Associate
On November 14, 2022, the Company resolved to transfer partial ownership interest in Ironmont Hydro Pte. Ltd.
(hereinafter referred to as “IH”), a consolidated subsidiary of the Company, to IH. The Company plans tocomplete the transfer by the end of December 2022. After the transfer, the proportion of voting rights held by theCompany will be changed from 62.2% to 43.0% and IH will be classified as the Company’s associate under theequity method, and will no longer be a consolidated subsidiary. The impact on the Group’s consolidated
statement of profit or loss is not expected to be material.

72

I I. O t h e rs
Quarterly information for the year ended June 30, 2022
Cumulative period
Millions of Yen

Revenue

For the three months ended September 30, 2021
For the six months ended December 31, 2021
For the nine months ended March 31, 2022
For the twelve months ended June 30, 2022

Yen

Profit (loss)
before taxes

Profit (loss)
attributable toowners ofparent¥(209)
1,517
10,373
10,800¥(264)
615
7,083
6,579

¥23,960
52,981
95,682
130,674

Thousands of U.S. Dollars

Revenue

For the three months ended September 30, 2021
For the six months ended December 31, 2021
For the nine months ended March 31, 2022
For the twelve months ended June 30, 2022

$175,415
387,869
700,486
956,65673¥(17.58)40.87
470.52436.98U.S Dollars

Profit (loss)
before taxes

Profit (loss)
attributable toowners ofparent$(1,532)
11,11275,946
79,066$(1,937)
4,504
51,86048,166

Fiscal period

For the three months ended September 30, 2021
For the three months ended December 31, 2021
For the three months ended March 31, 2022
For the three months ended June 30, 2022

Basicearnings(loss)
per shareYen

U.S Dollars

Basic earnings (loss)
per share

Basic earnings (loss)
per share¥(17.58)58.43
429.56(33.51)$(0.13)0.43
3.14(0.25)

Basic
earnings(loss)
per share$(0.13)
0.30
3.44
3.20

74

75

76

77

78

79

80

N o n c o nsol i dated F i nan c ia l St a t em en t s
Nonconsolidated Balance Sheet
Nippon Koei Co., Ltd.
June 30, 2022

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

AssetsCurrent assets:
Cash and deposits
Accounts receivable - trade
Contract asset
Short-term loan receivables
Current portion of long-term receivables
Other
Allowance for doubtful accounts
Total current assets
Non-current assets:
Property, plant and equipment:
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Furniture and fixtures
Accumulated depreciation
Furniture and fixtures, net
LandConstruction in progress
Other, net
Total property, plant and equipment
Intangible assets:
Leasehold interests in land
Software
Other
Total intangible assets

Note

7 (1)
7 (1)
7 (1)
7 (1)

7 (4)

7 (4)

As of
June 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

¥7,05016,79018,205
3,421
280
3,185
(483)
48,451¥6,11430,616
—
2,339
296
2,788
(572)
41,583$51,618
122,920
133,277
25,0502,056
23,324(3,538)354,709

21,387(7,776)
13,611
799
(696)
102
2,547
(2,189)357
2,643(1,951)
691
13,38444
247
28,43920,654(7,186)
13,467
765
(684)
81
2,520
(2,097)423
2,543(1,858)685
14,374497
121
29,651

156,576(56,930)
99,6455,850(5,097)752
18,649(16,029)2,620
19,352(14,289)
5,063
97,989322
1,808
208,203

627
346
109
1,084

627
413
56
1,097

4,594
2,539
804
7,938

27,794

27,614203,482

7,705
3,446
5,709
(1,753)42,90372,427

4,810
2,931
4,414
(1,808)37,96368,711

56,41325,233
41,798(12,836)
314,091
530,233¥120,878¥110,295$884,942

Investments and other assets:
Shares of subsidiaries and associates
Long-term loans receivablefrom subsidiaries and associates
Prepaid pension costs
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets81Thousands of
U.S. Dollars (Note 1)

Millions of Yen

Liabilities and equity
Current liabilities:
Accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Contract liabilities
Provision for bonuses
Provision for directors’ bonuses
Provision for loss on construction contracts
Provision for compensation
Other
Total current liabilities

Note

As of
June 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

7 (1)
7 (1)(3)¥5,904
14,160
5,328
3,538
1,026
110
117
522
12,21042,918¥4,984
7,510
8,176
—
994
94
440
280
13,40635,885$43,223
103,664
39,00525,904
7,516
807
860
3,825
89,391
314,199

17,207
71
25
698
677
18,68061,598

17,685
80
25
978
596
19,36655,252125,975
522
186
5,111
4,962
136,757
450,957

7,501

7,480

54,918

6,200

6,179

45,394

1,546

1,546

11,3182,723
1,920
22,367
16,33944,896(5)
58,592

2,746
1,920
22,367
12,20840,788(0)54,447

19,93914,056
163,746
119,620
328,681(43)428,950687
59,280595
55,043

5,034
433,985¥120,878¥110,295$884,942

7 (1)Non-current liabilities:
Long-term borrowings
Liability for retirement benefits
Provision for environmental measures
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities
Net assets:
Shareholder’s equity:
Share capital
Capital surplus:
Legal capital surplus
Retained earnings:
Legal reserve
Other retained earnings:
Reserve for tax purpose reduction
entry of non-current assets
Reserve for market development
General reserve
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders’ equity
Valuation difference on
available-for-sale securities
Total net assets
Total liabilities and net assets
See notes to nonconsolidated financial statements.

82

N o n c o n sol i dated State m en t o f I nc o m e
Nippon Koei Co., Ltd.
Year ended June 30, 2022

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

Note

Year ended
June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022

Net sales

8 (1)¥80,796¥73,970$591,500

Cost of sales
Gross profit

8 (1)59,373
21,422

52,972
20,997434,666
156,833

8 (1)(2)17,135
4,287

16,812
4,185

125,448
31,385

8 (1)
8 (1)

186
1,606
740
614
727
3,875

150
1,467
23
114
400
2,156

1,365
11,761
5,418
4,495
5,329
28,371

219
266
522
53
1,062
7,100

215
0
280
95
591
5,750

1,609
1,949
3,825

7,775
51,980

—

1,780

—

Income before income taxes

7,100

3,970

51,980

Income taxes:
Current
Deferred
Total income taxes

2,184
(320)

1,863

1,975
(485)
1,489

15,992(2,348)13,643

Net profit¥5,236¥2,480$38,337

Selling, general andadministrative expenses
Operating profit
Other income:Interest income
Dividend income
Foreign exchange gains
Gain on valuation of derivatives
Other
Total other income
Other expenses:
Interest expense
Loss on sales of non-current assets
Provision for compensation

8 (1)

8 (1)

Other

Total other expenses
Ordinary Profit
Extraordinary Losses:
Provision of allowance for doubtful accounts

83

8 (3)

391

N o n c o n sol i date d State m ent o f Co st o f Sa les
Nippon Koei Co., Ltd.
Year ended June 30, 2022

Millions of
Yen

Ratio(%)

Millions of
Yen

Ratio(%)

Thousands of
U.S.Dollars(Note) The main breakdown is as follows:

Thousands of
U.S.Dollars

Millions of Yen

Year ended
June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022

Materials costs¥1,7462.9¥2,1104.0$12,788

Outsourcing expenses

Labor costs

24,78441.8

22,12642.0

181,443

Expenses (Note)

32,791

55.3

28,44054.0

Total expenses in the current period

59,322100.0

52,677100.0

Year ended
June 30, 2022

Year ended
June 30, 2021

Year ended
June 30, 2022

¥25,342¥22,575$185,529

Travel and transportation expenses

3,860

2,638

28,264240,065

Rent expenses

1,357

1,029

9,934

434,297

Report Preparation Fee

920

1,003

6,736

448

377

3,285

Beginning Work in process

674

970

4,939

Depreciation

Cumulative effect of changes in accounting policy

(437)

—

(3,204)59,55953,647436,032(Notes)1. The Company uses cost accounting based on a job-order cost system.
2. The amount of “Cumulative effect of changes in accounting policy” represents the decrease resulting from theadoption of the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020).

186

674

1,365

¥59,373¥52,972$434,666

Total
Ending Work in process
Cost of sales84

N o n c o n sol i dated State m en t o f Ch a ng es in N et Asset s
Nippon Koei Co., Ltd.
Year ended June 30, 2022

Millions of Yen
Capital surplus
SharecapitalBalance as of July 1, 2020
Changes during the annual period:
Issuance of new shares
Cash dividends
Reversal of reserve for tax purpose reduction entry of non-current assets
Net income
Purchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares
Net changes in items other than shareholder’s equity
Net change in the year
Balance as of June 30, 2021
Changes during the annual period:
Issuance of new shares
Cash dividends
Reversal of reserve for tax purpose reduction entry of non-current assets
Net income
Purchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares
Net changes in items other than shareholder’s equity
Net change in the year
Balance as of June 30, 2022

Retained earnings
UnappropriatedTreasurysharesTotalshareholders’equityValuationdifference on
available-forsale
securities

Total
net assets

Reserve for tax
purpose reduction
entry of noncurrent assets

Reserve formarketdevelopment

General reserve¥1,546¥2,770¥1,920¥22,367¥13,304¥41,907¥(2,345)¥53,178¥265¥53,444

21
—
—
—
—
—
—
—
21
6,179

—
—
—
—
—
—
—
—
—
1,546

—
—
(23)
—
—
—
—
—
(23)
2,746

—
—
—
—
—
—
—
—
—
1,920

—
—
—
—
—
—
—
—
—
22,367—(1,138)
23
2,480
—
—
(2,462)—(1,096)
12,208—(1,138)—2,480——(2,462)—(1,119)40,788

—
—
—
—
(429)
312
2,462
—
2,345
(0)

43
(1,138)
—
2,480
(429)
312
—
—
1,269
54,447

—
—
—
—
—
—
—
329
329
595

43
(1,138)
—
2,480
(429)
312
—
329
1,598
55,043

21
—
—
—
—
—
—
—
21
¥6,200

—
—
—
—
—
—
—
—
—
¥1,546

—
—
(23)
—
—
—
—
—
(23)
¥2,723

—
—
—
—
—
—
—
—
—
¥1,920

—
—
—
—
—
—
—
—
—
¥22,367—(1,128)
23
5,236
—
—
—
—
4,131
¥16,339—(1,128)
—
5,236
—
—
—
—
4,108
¥44,896

—
—
—
—
(5)
—
—
—
(5)
¥(5)

42
(1,128)
—
5,236
(5)
—
—
—
4,144
¥58,592

—
—
—
—
—
—
—
92
92
¥687

42
(1,128)
—
5,236
(5)
—
—
92
4,236
¥59,280

Legal capitalsurplus

Legal reserve¥7,458¥6,157

21
—
—
—
—
—
—
—
21
7,480
21
—
—
—
—
—
—
—
21
¥7,501Retainedearnings
brought
forward

Total retained
earnings

Thousands of U.S. Dollars (Note 1)
Capital surplus
SharecapitalBalance as of June 30, 2021
Changes during the annual period:
Issuance of new shares
Cash dividends
Reversal of reserve for tax purpose reduction entry of non-current assets
Net income
Purchase of treasury shares
Disposal of treasury shares
Cancellation of treasury shares
Net changes in items other than shareholder’s equity
Net change in the year
Balance as of June 30, 2022
See notes to nonconsolidated financial statements.

85

Retained earnings
UnappropriatedTreasurysharesTotalshareholders’equityValuationdifference on
available-forsale
securities

Total
net assets

Reserve for tax
purpose reduction
entry of noncurrent assets

Reserve formarketdevelopment

General reserve$11,318$20,110$14,056$163,746$89,375$298,606$(1)$398,608$4,358$402,966

—
—
—
—
—
—
—
—
—
$11,318

—
—
(170)
—
—
—
—
—
(170)
$19,939

—
—
—
—
—
—
—
—
—
$14,056

—
—
—
—
—
—
—
—
—
$163,746—(8,262)
170
38,337————30,245$119,620—(8,262)—38,337————30,074$328,681

—
—
—
—
(41)
—
—
—
(41)
$(43)

309
(8,262)—38,337(41)———
30,342$428,950

—
—
—
—
—
—
—
676
676
$5,034309(8,262)—38,337(41)——676
31,018$433,985

Legal capitalsurplus

Legal reserve$54,763$45,239

154
—
—
—
—
—
—
—
154
$54,918

154
—
—
—
—
—
—
—
154
$45,394

Retainedearnings
brought
forward

Total retained
earnings

N o t e s t o N onconsol i da t ed F ina n c ia l St a t em en t s
Nippon Koei Co., Ltd.
Year ended June 30, 2022

1. Basis of Preparation
The accompanying nonconsolidated financial statements have been prepared by Nippon Koei Co., Ltd. (the“Company”) in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange
Act and its related accounting regulations, and in conformity with accounting principles generally accepted inJapan, which are different in certain respects as to the application and disclosure requirements of International
Financial Reporting Standards as issued by the International Accounting Standards Board.
As consolidated statements of cash flows and certain disclosures are presented in the consolidated financial
statements of the Company, nonconsolidated statements of cash flows and certain disclosures are not required
to be presented herein, in accordance with accounting principles generally accepted in Japan.
Effective for the year ended March 31, 2014, the Japanese Financial Instruments and Exchange Act and its
related accounting regulations were amended to allow an entity to not disclose certain designated footnote
information in its nonconsolidated financial statements if the entity also prepares and discloses consolidated
financial statements. Accordingly, the Company has omitted disclosures of certain footnote information in theaccompanying nonconsolidated financial statements.
The nonconsolidated financial statements are stated in Japanese yen, the currency of the country in which theCompany is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts areincluded solely for the convenience of readers outside Japan and have been made at the rate of ¥136.595 to $1,
the approximate rate of exchange at June 30, 2022. Such translations should not be construed as representations
that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.

2. Significant Accounting Policies
a. Valuation Standards and Methods for Securities(1) Held-to-Maturity Bonds
Amortized cost method (Straight-line method)(2) Shares of Subsidiaries and Associates
Cost method based on the moving average method(3) Other Securities
Other than non-marketable shares, etc.
Market value method based on the market price on the closing date (any valuation difference is accounted
for by the method of direct recognition into net assets in full, while the cost of products sold is calculated
based on the moving average method)
Non-marketable shares, etc.
Cost method based on the moving average method.

b. Valuation Standards and Methods for Derivatives
Market value method

c. Method for Depreciation of Non-current Assets(1) Property, Plant and Equipment (excluding lease assets)
Straight-line method
Main useful lives are as follows.
Buildings: 2–50 years
Structures: 2–40 years
Machinery and equipment: 2–15 years
Tools, furniture and fixtures: 2–20 years(2) Intangible Assets (excluding lease assets)
Straight-line method(3) Lease Assets
Lease assets for finance lease transactions without transfer of title at the end of the lease term
The straight-line method is used when the lease period matches the useful life and zero residual value.

86d. Basis for the Translation of Foreign Currency Assets and Liabilities into Japanese Currency

Foreign currency financial receivables and liabilities are translated into yen using the spot exchange rate at
the end of the period, with the translation difference accounted for as profit or loss.

e. Recording Criteria for Allowances/Provisions(1) Allowance for Doubtful Accounts
To determine the estimate of uncollectible trade receivables and loan receivables, the Company considers
the historical rate of credit losses for normal receivables and evaluates individually specific receivables asnecessary.
(2) Provision for Bonuses
The provision for bonuses is based on the estimated payment to be made to employees.
(3) Provision for Directors’ Bonuses
It is provided based on the estimated amount of payment to be appropriated for expenditures on bonuses
paid to directors.
(4) Provision for Loss on Construction Contracts
The expected amount of loss for contracts in process at the end of the current fiscal year was recorded inorder to reserve based on expected future losses.
(5) Provision for Compensation
As we have present legal or constructive obligations as a result of past events, we have reasonably
estimated the amount deemed required at the end of the consolidated current fiscal year and recorded the
expected amount of loss, in order to prepare for expenditures likely to be incurred with the compensationof future damages.
(6) Provision for Retirement Benefits
To provide for accruals for retirement benefits of employees, the estimated provision is based on the
expected amount of retirement benefit liabilities and pension assets as of the end of the current fiscal
year.
The following are the accounting methods for provision for retirement benefits and retirement benefit
expenses.
1) Attribution Method for the Expected Amount of Retirement Benefits
The calculation of retirement benefit liabilities is based on the benefit formula as the method of
attributing the expected amount of retirement benefits to the periods up to the current period.
2) Accounting for Actuarial Gains/Losses and Prior Service Cost
Actuarial gains/losses are amortized using the straight-line method from the fiscal year following theiraccrual over a certain period (mainly 13 years) within the average remaining service period of
employees at the time of accrual. Prior service costs are amortized using the straight-line method overa certain period (mainly 13 years) within the average remaining service period of employees at the timeof accrual.
(7) Provision for Environmental Measures
To prepare for the expenditure on the treatment of PCB wastes under the “Act on Special Measuresconcerning Promotion of Proper Treatment of PCB Wastes,” the estimated amount of treatment isprovided.

f. Recognition Criteria for Significant Revenue and Expense

The Company recognizes revenue for contracts with customers by applying the following steps.
Step 1: Identify the contract with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction prices to performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation“Consulting” “Urban & Spatial Development,” and “Energy” provide such services as planning, designing, andsupervision mainly for civil engineering, architecture and electric power.
The Company’s businesses are performance obligations to be satisfied over time, because they fall undereither of the following cases where: (a) the customer simultaneously receives and consumes the benefits
provided by the Company’s performance as the Company performs; (b) the Company’s performance createsor enhances an asset that the customer controls as the asset is created or enhanced; or (c) the Company’s
performance does not create an asset with an alternative use to the Company and the Company has an
enforceable right to payment for performance completed to date.
Sales are recognized based on progress toward complete satisfaction of the obligation and, if progress cannot
be reliably measured, revenue is recognized to the extent of costs incurred until such time as progress of
performance obligations can be reliably measured.
For the measurement of progress, costs include personnel expenses and outsourcing expenses that are inprinciple based on the cost budget and actual accrued costs.

87

The large-scale vertical axis hydroelectric power projects for work with which the Company has limited
information, such as similar projects completed previously when estimating total costs, and include
significant assumptions, such as outsourcing costs. Therefore, estimates of total costs are likely to change
due to revisions in the estimate.
To ensure the accuracy of the estimate of total costs, the Company manages budgets by type of work andconfirms the appropriateness of the estimated total costs for each accounting period, to find out outliers ofcosts at an early stage, and to review the cost budget in a timely manner.
Moreover, the measurement of progress in some large projects is based on output measures. When recording
sales by expected billings, progress is recognized based on incurred expense and other output measures used
to measure progress after approval by the project manager.
Contract assets are the Company’s rights to consideration in exchange for goods or services that theCompany has transferred to a customer when that right is conditioned on something other than the passageof time. Contract liabilities are the Company’s obligation to transfer goods or services to a customer forwhich the Company has received consideration or the amount is due from the customer.
Consideration is received by contractual milestones generally in line with the progress in satisfying
performance obligations, with settlement generally occurring within 60 days from the complete satisfactionof performance obligations. Consideration generally does not include significant financing components.

g. Method of Hedge Accounts(1) Method of Hedge Accounting
The integrated method is applied to interest rate and currency swaps which are eligible for suchtreatment.
(2) Hedging Instruments and Hedging Targets
Hedging instruments
Interest rate and currency swap
Hedging targets
Borrowings at variable interest rates in foreign currency(3) Hedging Policy
Foreign exchange fluctuation risk and interest rate fluctuation risk of hedging targets are hedged basedon the Company’s internal policies and procedures.
(4) Method of Evaluating Effectiveness of Hedging
For the interest rate and currency swaps using the integrated method, the evaluation of the effectivenessis not necessary.

h. Other Significant Items as The Basic of Financial Statements’ Preparation

Accounting Method for Retirement Benefits
Non-consolidated financial statements treat the unrecognized actuarial difference and unrecognized priorservice costs differently from the consolidated financial statements. In the balance sheet, prepaid pension
cost is recognized as the amount of retirement benefit liabilities with the addition or deduction of
unrecognized actuarial difference and unrecognized prior service cost, less the amount of pension assets.

88

3. Significant Accounting Estimatesa. Revenue Recognition(1) The Amount Recorded in Nonconsolidated Statement of Income
Millions of Yen

Net salesYear ended
June 30, 2022
¥80,796

Year ended
June 30, 2021
¥73,970

Thousands of
U.S. Dollars

Year ended
June 30, 2022
$591,500(2) Information on the Significant Accounting Estimates
Sales are recognized based on progress toward the full satisfaction of performance obligations when
progress can be reasonably measured, or, if progress cannot be reasonably measured, to the extent ofcosts incurred until the outcome of the performance obligation can be reasonably measured.
The measurement of progress is generally based on cost budgets and actual costs incurred, as the main
cost elements of the business are labor and subcontracting costs. In estimating cost budgets for largescale vertical axis hydroelectric power projects, estimates of total cost may vary after the fact due to thelack of information on completed similar projects and other information referenced when estimating
total cost and the inclusion of significant assumptions such as subcontracting costs. To ensure theaccuracy of total cost estimates, we take measures to detect abnormal values of costs and other items at
an early stage and revise cost budgets in a timely manner by conducting budget management subdivided
by construction type and individually checking the appropriateness of estimated total costs at each fiscal
period.
In addition, the measurement of progress for some large projects is based on actual operating and cost
performance (volume). When sales are recognized at the estimated invoiced amount, it is based on theactual volume performance vouchers that have gone through the approval process by the project
manager.
However, if future changes in the business environment or other factors cause significant fluctuations inestimates of total costs or other items, sales for the following fiscal year may be affected.

b. BDP Holdings Limited Stocks(1) The Balance as of June 30, 2022
Millions of Yen

Shares of subsidiaries and associates

As ofJune 30, 2022
¥16,898

As ofJune 30, 2021
¥16,898

Thousands of
U.S. Dollars

As ofJune 30, 2022
$123,710(2) Information on Significant Accounting Estimates
Since the stocks are classified as stocks with no market price, the Company recognizes impairment losses
when the net asset value of the shares, which reflects excess profitability, declines by more than 50%
compared to the acquisition cost. Unless the recoverability of the shares of subsidiaries is supported bysufficient evidence, the Company recognizes a loss to the extent of net asset value.
The excess earning power is determined by discounting the estimated future cash flows based on thebusiness plans and growth rates for three years in the future approved by management, using thediscount rate of 10.0% based on the weighted average of capital costs of the cash generating units or the
cash generating unit groups, reflecting past experience and external information.
While these assumptions are made using the best estimate and judgment based on information available
at the time, the estimate may need to be revised due to changes in the business environment or otherfactors in the future, and an impairment loss may be recognized, which could have a significant impact
on the financial statements for the following fiscal year.

894. Changes in Accounting Policya. Adoption of the Accounting Standard for Revenue Recognition

The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020; referred to as
the “Revenue Recognition Accounting Standard” hereinafter) was adopted at the beginning of the current
fiscal year. In adopting the Revenue Recognition Accounting Standard, a transitional arrangement stipulated
in the proviso of Paragraph 84 of the Revenue Recognition Accounting Standard has been applied. There is
no impact on the beginning balance of retained earnings.
Compared with the previous method, major impacts on the balance sheet for the current fiscal year include
an increase of ¥768 million in “Accounts receivable-trade” and a decrease of ¥785 million in “Work inprocess.” Major impacts on the statement of income for the current fiscal year include an increase of ¥348
million in “Net sales” and an increase of ¥348 million in “Cost of sales.”Further, “Accounts receivable-trade,” which was presented in “Current assets” on the balance sheet for theprevious fiscal year, has been reclassified into “Accounts receivable-trade” and “Contract assets” during thecurrent fiscal year. “Advances received” and “Unearned revenue,” which were included in “Other” of “Current
liabilities,” have been reclassified into and are presented separately in “Contract liabilities.” However,pursuant to the transitional arrangement stipulated in Paragraph 89-2 of the Revenue Recognition
Accounting Standard, no reclassification using the new presentation method for the previous fiscal year has
been done.
Further, pursuant to the transitional arrangement stipulated in Paragraph 89-3 of the Revenue Recognition
Accounting Standard, notes concerning “Revenue Recognition” for the previous fiscal year are not provided.

b. Adoption of the Accounting Standard for Measurement of Fair Value

The “Accounting Standard for Measurement of Fair Value” (ASBJ Statement No. 30, July 4, 2019; referred toas the “Fair Value Measurement Accounting Standard” hereinafter) was adopted at the beginning of thecurrent fiscal year. It is intended to prospectively apply new accounting policies to be provided by the Fair
Value Measurement Accounting Standard in accordance with transitional arrangement stipulated in
Paragraph 19 of the Fair Value Measurement Accounting Standard and Paragraph 44-2 of the “AccountingStandard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019). Impacts on the balance sheet forthe current fiscal year are immaterial.

5. Changes in Presentation
Balance Sheet“Work in process” (¥186 million ($1,365 thousand) in the current fiscal year) under “Current assets” listed
separately for the previous fiscal year is included in “Other” for the current fiscal year due to quantitative
significance.

Statement of Income“Foreign exchange gains” (¥23 million in the previous fiscal year) and “Gain on valuation of derivatives” (¥114
million in the previous fiscal year), which were included in “Other” under non-operating income in the previous
fiscal year, are presented separately in the current fiscal year because they have become significant in terms ofamount.
“Administrative service fee” (¥250 million ($1,833 thousand) in the current fiscal year) under “Other income”
listed separately for the previous fiscal year is included in “Other” for the current fiscal year due to quantitative
significance.
“Loss on sales of non-current assets” (¥0 million in the previous fiscal year) included in “Other” under “Other
expenses” for the previous fiscal year is separately listed for the current fiscal year due to quantitative
significance.
“Commission expenses” (¥21 million ($159 thousand) in the current fiscal year) under “Other expenses” listed
separately for the previous fiscal year is included in “Other” for the current fiscal year due to quantitative
significance.

90

6. Additional Information
The Impact of COVID-19 on Accounting Estimates

While the Company has made accounting estimates which assume that it will continue to be affected by thenovel coronavirus (COVID-19) for a certain period of time, the Company believes that it has not had a significant
impact in the current period. However, due to many continuing uncertainties regarding the future impact of
COVID-19 on the economy and society as a whole, it may affect the Company’s financial position and operating
results for the next fiscal year.

7. Balance Sheets(1) The balance of receivables and payables to affiliated companies are as follows:
Millions of Yen

Short-term account receivables
Short-term account payables

As ofJune 30, 2022
¥4,016
7,758

As ofJune 30, 2021
¥3,702
8,181

Thousands of
U.S.Dollars

As ofJune 30, 2022
$29,404
56,799(2) Contingent Liabilities
The Company provides the following guarantees:
Millions of Yen

Bank refundment bonds of subsidiaries
Bank guarantee bonds of subsidiaries
Total

As of
June 30, 2022
¥713
22,531¥23,245

As ofJune 30, 2021
¥1,141
1,069¥2,211Thousands of
U.S.Dollars

As ofJune 30, 2022
$5,223
164,954$170,178(3) To procure working capital efficiently, the Company has contracts for overdraft protection and a three-year
syndicated commitment line agreements with four counterparty banks. For the commitment line agreement,
there is a restrictive financial covenant attached for each counterparty bank. The unused portions ofcommitments based on these agreements at the end of fiscal year are as follows:
Millions of Yen

Total amount of medium-term commitment lines and overdraft limits
Balance of borrowings
Balance of unused portion

91

As of
June 30, 2022
¥41,500
7,500¥34,000

As ofJune 30, 2021
¥41,500—¥41,500

Thousands of
U.S. Dollars

As ofJune 30, 2022
$303,817
54,906$248,911

(4) Reduction Entry
In the case of certain capital investments made by the Company that have been subsidized by the national
government, the amount of such subsidies is offset against the acquisition cost of the corresponding
property, plant, and equipment.
The amount of reduction entry by accounts under property, plant, and equipment are as follows:
Millions of Yen

Buildings
Machinery and equipment
Total

As of
June 30, 2022
¥9
147
¥156

As of
June 30, 2021
¥9
147
¥156

Thousands of
U.S. Dollars

As ofJune 30, 2022
$68
1,079
$1,147

8. Statements of Income(1) The amounts relating to transactions with affiliated companies in nonconsolidated statement of income
are as follows:
Millions of Yen

Sales
Cost of purchased goods
Selling, general and administrative expenses
Non-operating income
Non-operating expenses

Year ended
June 30, 2022
¥443
4,252
1,038
1,959
22

Year ended
June 30, 2021
¥583
3,348
1,008
1,753
22

Thousands of
U.S.Dollars

Year ended
June 30, 2022
$3,24931,132
7,600
14,345168(2) The ratio of selling expenses to total selling, general and administrative expenses for years ended June30, 2022 and 2021, was 16% and 18%, respectively. The ratio of general and administrative expenses tototal selling general administrative expenses for years ended June 30, 2022 and 2021, were 84% and 82%,
respectively.
The breakdown of selling, general and administrative expenses by main characteristic is as follows:
Millions of Yen

Salaries and allowance
Rent expenses on real estate
Provision for bonuses
Provision for directors’ bonuses
Retirement benefit expenses
Provision of allowance for doubtful accounts
Depreciation

Year ended
June 30, 2022
¥5,566
1,337
302
110
229
(144)
634

Year ended
June 30, 2021
¥4,958
1,465
303
94
362
224
612

Thousands of
U.S.Dollars

Year ended
June 30, 2022
$40,749
9,788
2,215
807
1,677
(1,057)
4,645(3) The Company had loans receivable of ¥3,000 million to its consolidated subsidiary, PT. Cikaengan Tirta
Energi (hereinafter referred to as “CKTE”) as of June 30, 2021. As stated in the Notes to Consolidated
Financial Statements, “15. Impairment Losses of Non-Financial Assets, (1) Impairment Losses,” CKTE is
insolvent.
The Company has recorded an allowance for doubtful accounts against this loan receivable based on the
20-year business plan, which includes CKTE’s electric power sale contract, and the anticipated timing ofrecovery, considering CKTE’s insolvency. The loss was recorded as an extraordinary loss.

92

9. Leases
Operating Leases (Lessor side)
The rental commitments under noncancelable operating leases are as follows:
Thousands of
U.S.Dollars

Millions of Yen

Due within one year
Due after one year
Total

As of
June 30, 2022
¥276
536
¥812

As of
June 30, 2021
¥276
813
¥1,089As ofJune 30, 2022
$2,0203,929$5,949

10. Investments in Subsidiaries and Associated Companies
Market prices of stocks of subsidiaries and associated companies are not shown as they are not traded on active
markets and therefore do not have quoted market prices.
The carrying amount of investments in subsidiaries and associated companies whose fair values are not readily
determinable is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Investment in subsidiaries that do nothave a quoted market price in an active market
Investments in associated companies that do nothave a quoted market price in an active market
Total

93

As of
June 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

¥26,921¥26,794$197,086

873¥27,794820¥27,614

6,395$203,48211. Income Taxes(1) The breakdown and changes of deferred tax assets and liabilities by major caption are as follows:
Thousands of
U.S. Dollars

Millions of Yen

As ofJune 30, 2022

As ofJune 30, 2021

As ofJune 30, 2022

Deferred tax assets:
Investment in subsidiaries
Allowance for doubtful accounts
Accrued bonuses
Accrued enterprise tax
Accrued foreign tax
Provision for compensation
Provision for bonuses
Provision for loss on construction contracts
Liability for retirement benefits for employees
Provision for environmental measures
Over depreciation
Loss on impairment of long-lived assets
Loss on valuation of investment securities
OthersLess valuation allowance
Total deferred tax assets

¥596
684
840
130
3
159
314
35
21
7
77
61
76
634
(1,500)
2,145

¥579
729
452
92
6
85
304
134
24
7
81
61
93
258
(1,465)
1,447$4,366
5,013
6,150
953
25
1,171
2,301
263
159
56
570
453
559
4,648
(10,986)
15,708Deferred tax liabilities:
Prepaid pension costReserve for deferred gains on sale of property
Unrealized gain on available-for-sale securities
OthersTotal deferred tax liabilities(1,055)(1,202)(303)(282)(2,843)(897)(1,212)(262)(52)(2,425)(7,726)(8,800)(2,222)(2,070)(20,819)

Net deferred tax liabilities¥(698)¥(978)$(5,111)94

(2) A reconciliation between the effective statutory tax rates and the actual effective tax rates reflected in theaccompanying nonconsolidated statement of income are as follows:

Normal effective statutory tax rate
Per capita levy of local tax
Expenses not deductible for tax purposes
Foreign income tax
Valuation allowance
Special tax credit
Income not included for tax purposes
Income taxes for prior periods
Other – net
Actual effective tax rate

2022
30.6%
1.2
1.4
2.1
0.5
(2.1)
(6.3)
(0.6)
(0.6)
26.2%

2021
30.6%
2.1
1.6
2.8
15.6
(2.6)
(10.3)
2.1
(4.4)
37.5%

12. Business Combinations
The information is omitted due to immateriality.

13. Revenue Recognition(Information on the basis for understanding revenues arising from contracts with customers)
Statement is omitted as the information is disclosed in Notes to Nonconsolidated Financial Statements, “2.
Significant Accounting Policies, f. Recognition Criteria for Significant Revenue and Expense”.

14. Significant Subsequent Events
Statement is omitted, as the information is disclosed in Notes to Consolidated Financial Statements, “40.
Subsequent Events”.

95Attachments to Nonconsolidated Financial Statements
Nippon Koei Co., Ltd.
Year ended June 30, 2022

1. Property, Plant and Equipment and Intangible Assets
Millions of Yen

Property, plant and equipment:
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Leased assets
Construction in progress
Total
Intangible assets:
Leasehold interests in land
Telephone subscription right
Right to use water facilities
Software
Software development in progress
Total

Book value atbeginning of period

Increase

Decrease

Depreciation

Book value at Accumulated Acquisition cost
end of period depreciation at end of period¥13,467
81
423
20
685
14,374100
497¥29,651

¥825
33
30
0
197
—
200
371
¥1,659

¥80
—
0
3
31
989
—
825
¥1,929

¥602
11
95
5
160
—
66
—
¥941

¥13,611
102
357
12
691
13,384234
44¥28,439

¥627
44
0
413
11
¥1,097

¥—
—
—
86
73
¥160

¥—
0
—
1
19
¥20

¥—
—
0
152
—
¥152

¥627
44
0
346
64
¥1,084¥7,776
696
2,189
84
1,951
—
131
—
¥12,830¥21,387
799
2,547
97
2,643
13,384365
44¥41,269

Thousands of U.S. Dollars
Book value atbeginning of period

Property, plant and equipment:
Buildings$98,597
Structures
593
Machinery and equipment
3,097
Vehicles151
Tools, furniture and fixtures
5,019
Land
105,233
Leased assets
737
3,645
Construction in progress
Total$217,076
Intangible assets:$4,594
Leasehold interests in land
Telephone subscription right
328
Right to use water facilities
1
Software
3,025
80
Software development in progress
Total$8,031

Increase

Decrease$6,043
244
226
2
1,446
—
1,465
2,720
$12,150

$587
—
2
22
227
7,244
—
6,043
$14,128

$—
—
—
636
537
$1,173

$—
0
—
9
142
$152

Depreciation

Book value at Accumulated Acquisition cost
end of period depreciation at end of period$4,407 $99,645
85
752
701
2,620
40
91
1,174
5,063
—
97,989
485
1,717
—
322
$6,895 $208,203
$—
—
0
1,113
—
$1,113$56,930 $156,576
5,097
5,850
16,02918,649621
713
14,28919,352—
97,989
959
2,676
—
322
$93,927 $302,131$4,594
328
1
2,539
475
$7,93896

(Note) Main increase and decrease are as follows:
For the Year Ended June 30, 2022

Increase:
Construction in progress
Decrease:
Land

Millions of Yen

Thousands of
U.S. Dollars

Renovation for Kojimachi 4-chome Kyodo Building¥239$1,756

Land for Tsuchiura Equipment Center

989

7,244

2. Allowance and Provision
Millions of Yen

Allowance for doubtful accounts
Provision for bonuses
Provision for directors’ bonuses
Provision for loss on construction contracts
Provision for environmental measures
Provision for compensation

Balance at
beginning of period¥2,381
994
94
440
25
280

Allowance for doubtful accounts
Provision for bonuses
Provision for directors’ bonuses
Provision for loss on construction contracts
Provision for environmental measures
Provision for compensation

Balance at
beginning of period$17,432
7,278
690
3,225
186
2,049

Increase

Decrease

¥44
1,026
110
34
—
522

¥188
994
94
357
—
280

Balance at
end of period¥2,236
1,026
110
117
25
522

Thousands of U.S. Dollars

Increase

Decrease

$322
7,516
807
249
—
3,825

$1,380
7,278
690
2,615
—
2,049

[Principal Assets and Liabilities]
Statement is omitted, as the information is disclosed in consolidated financial statements.

[Others]
There is no applicable information.

97

Balance at
end of period$16,374
7,516
807
860
186
3,825

98

99

100

101

102

103

5-4 Kojimachi, Chiyoda-ku, Tokyo 102-8539, Japan
Telephone: +81 3 5276 2454 Facsimile: +81 3 5276 2656
http://www.n-koei.co.jp E-mail: info@n-koei.co.jp

Printed in Japan