To the Shareholders of Fukuda Corporation

FUKUDA REPORT
Annual Report for the 97th Term
January 1, 2023 – December 31, 2023
Stock code: 1899

Fukuda Corporation

Introduction

We will plant our roots in the local region
and build strong bonds with our multiple
stakeholders that go beyond the region.
We would like to take this opportunity to express our sincere
gratitude to all of our shareholders for your continuing support.
We would like to express our deepest condolences to thevictims of the 2024 Noto Peninsula Earthquake, and extend our
deepest sympathies to all those affected.

Katsuyuki Fukuda

Masanori Araaki

Chairman &Representative Director

President &Representative Director

We hereby present our business results for the 97th term ended on December 31, 2023.
By adhering to the Fukuda Group Spirit of “Always sincere from now until the next century and beyond,” the Fukuda
Group is committed to drawing on its comprehensive strengths and sincerity to form strong bonds with those that we loveand cherish, in order to protect their lives and livelihoods. The Company’s management philosophy is: “To value people
and the environment, and aim to create inspirational value based on a corporate structure designed to face challenges.”
To this end, the entire company is working together as one, in order to build strong bonds with all of our stakeholders,
including our customers, shareholders, business partners, local community and employees.
The Company’s business results for the fiscal year under review are shown below. Even in today’s increasingly uncertain
economic climate, we will enhance our corporate value and maintain the Group’s management base as a unitedcorporate group so that we may further continue to meet the expectations of our shareholders.
We sincerely hope you will grant us your continued understanding and support going forward.
March 2024
Financial Highlights
Net sales(Unit: Million yen)

166,400

179,846
154,358

162,243(Forecast)

Operating income

1

Ordinary income(Unit: Million yen)

9,147

8,891

6,000

5,800

5,208

95th term 96th term 97th term 98th term

(Unit: Million yen)

5,205

(Forecast)

95th term 96th term 97th term 98th term

5,451

5,478

(Forecast)

95th term 96th term 97th term 98th term

Business environment for the fiscal year under review
There was a certain degree of recovery in business confidence due to the expansion of domestic demand associated with the emergence from the COVID-19
pandemic and an increase in inbound demand. However, the combination of many external negative factors, including the prolonged Russian aggression in
Ukraine and economic deterioration in Europe, as well as rising U.S. interest rates, and turmoil in the Middle East situation, has led to instability in exchange
rates and weak supply chains, which has caused a significant depreciation of the yen and price increases in Japan. As a result, expected growth in personal
consumption and capital investment both lacked strengths, and the economic recovery driven by the emergence from the COVID-19 pandemic has beenmoderate.
In the construction industry, maintenance and renewal works on aging infrastructure and preventive maintenance were actively implemented for public
investment in construction, based on disaster prevention and mitigation and national resilience. Corporate investment in construction by the private sector
showed robustness mainly for renovation and repairs of existing buildings as the government’s subsidy program and other measures through energy
conservation campaign led to increased interest in comfortable living environment and energy conservation measures. Meanwhile, construction costs haveremained high, and new construction starts, especially in the corporate investment in construction by the private sector have been at a standstill, and futurebusiness conditions remain uncertain.
Consolidated business performance for the fiscal year under review
Net sales increased by 5.1% year on year to slightly more than ¥162.2 billion. This was partly attributable to a year-on-year increase in orders received,
mainly from private sector construction projects, and steady progress in construction.
In terms of profit, gross profit decreased by 1.4% year on year to slightly more than ¥14.9 billion due to a rise in construction costs and low-profit
construction properties, and operating income decreased by 0.1% year on year to slightly more than ¥5.2 billion, due to a significant decrease in gross profit
while selling, general and administrative expenses slightly decreased year on year. Meanwhile, ordinary income increased by 0.5% year on year to slightly morethan ¥5.4 billion due to an increase in non-operating income including dividend income, interest income, and the Group’s share of profit of entities accounted
for using equity method, and a decrease in non-operating expenses including interest expenses. Income before income taxes and minority interests decreased
due to an increase in extraordinary losses including impairment losses and provision for loss on litigation. As a result, net income attributable to owners of theparent decreased by 7.3% year on year to slightly more than ¥3.3 billion.
Outlook for the next fiscal year
In the construction industry, investment in both public works construction and construction by the private sector is expected to remain mostly flat, andinvestment in construction and repair in particular is expected to continue to see steady increases in the future. On the other hand, however, there are concerns
about the so-called “2024 problem,” as the grace period for the overtime cap will expire in March 2024, and the resulting labor shortage could rapidly become
more serious. Therefore, the entire construction industry needs to work to improve the working environment by setting appropriate construction schedules,
managing labor, and promoting DX to increase labor productivity and save labor.
In response to such an environment, we intend to steadily implement measures to achieve the goals of the “Medium-Term Business Plan 2025,” with 2025
as the final fiscal year of the plan. Precisely because we face a rapidly changing society, we will further strengthen our relationships with multiple stakeholders
while balancing quantity and quality.

Net income attributable to owners of the parent(Unit: Million yen)Orders (non-consolidated)

5,864

95th term

3,650

3,386

96th term

97th term

3,900

84,44298th term

95th term(Unit: Million yen)

100,870

104,784

104,884(Forecast)

96th term

97th term

98th term(Forecast)2Medium-Term Business Plan 2025
Customers(businesses andindividuals)
Shareholders
andinvestors

Administrative
agencies

Other businesses
in the same industry,groups andorganizations

Employees(families andretirees)

Business
partners

Environment
and
local
communities

Planting our roots in thelocal region and building
strong bonds with ourmultiple stakeholders that
go beyond the region
In 2022, as the Group enters the final phase of its
long-term vision for the next decade, the MediumTerm Business Plan 2025 has been established.

Long-term Vision 2025
A century of history and tradition;
New challenges for the next 100 years

The Group’s Future Ideal

Previous
Medium-TermBusiness Plan
2021
 ransform the businessT
portfolio
Create new revenue
basesSecure and diversify
talent3

New MediumTerm Business
Plan 2025
Aiming to enhance the“quality” of the Groupso as to achievesustained growth overthe next 100 years

 evelop nation-wide through strong
Dconsolidated management, to be more thanjust a regional construction company
Create customer satisfaction through quality
and safetyBe a corporate group with advanced
technical and proposal capabilities
Secure superior talent and develop an
environment where they can flourish
Establish win-win relationships with all
stakeholders

Basic Policies
Evolution and deeper development of mainstay businesses (construction and real estate)- Conducting more strengthening efforts and pursuing possibilities Establishment of the sincere brand image of the Fukuda Group- Strengthening our sales capabilities through trust Strengthening and ensuring safety and quality
Enrichment and growth of human resources- Development of diverse foundations that will support the organization ESG management for the enhancement of corporate value
Performance Targets/Targets for Financial Indicators
Net sales…………¥185.0 billion
Operating income… ¥8.4 billion
Ratio of operating income to net sales…… 4.5%
Capital adequacy ratio…………50.0%
ROE……………… Around 8.0%

Dividend payout ratio… 20.0% or more

Investment Plan
Productivity improvements, R&D: ¥1.8
billionEnvironment-related
investments, BCP
Total investment
investments, etc.: ¥4.2
billionbillionamount: ¥7.5

DX-related investments: ¥0.7 billion

HR-related investments: ¥0.8 billion

4

Main projects completed in the fiscal year under review
Construction

Niigata Shokuhin Unyu Corporation

Tentative name: Niigata Shokuhin Unyu Corporation Nagaoka-Kita Center
Construction Project (Niigata Prefecture)

Sha-Ken Co., Ltd.

Sha-Ken Co., Ltd. New Company Building, Tentative name: Dormy Otsuka
Construction Project (Tokyo)

DAIWA HOUSE INDUSTRY CO., LTD.

Tentative name: D Project Kameyama Construction Project (Mie Prefecture)

5

Shinmachi-Machizukuri Co., Ltd.

Building Construction Project in line with Aomori Shinmachi 1-chome District
Excellent Building Development Project (Aomori Prefecture)

SUMITOMO CORPORATION

Tentative name: Nishi-ku Nshihonmachi 2-chome Construction Project(Osaka Prefecture)

DAIICHI KOUTSU SANGYO Co., Ltd.

Urban Palace Tofuromae Station Construction Project (Fukuoka Prefecture)Civil Engineering

Hokuriku Regional Development Bureau
Asahi Atsumi Road (Katsugi IC Access Road)
Improvement Project (Niigata Prefecture)

Iwate Prefecture

Ryori Fishing Harbor Coastal Disaster Recovery(23 Disaster Prefecture No. 558 Port Area Tide
Embarkment Part 1) Construction Project (Iwate Prefecture)

Toshiba Energy Systems & Solutions Corporation

Minoh City

Nasu Mega Solar Power Plant Construction Project(Momura) (Tochigi Prefecture)

Improvement Project of Pedestrian Deck in Front Districtof Minoh-Semba Handai-Mae Station (Osaka Prefecture)

Chubu Regional Development Bureau

Kyushu Regional Development Bureau

2018 Tokai-Kanjo Expressway Gifu Yamagata Number
1 Tunnel East Area Project (Gifu Prefecture)2021 Kogouchi River Upper Stream Erosion Control
Outside Construction Project (Fukuoka Prefecture)

Main orders and completed projects for the fiscal year under review
OrdersCompleted projects◦AEON MALL Co., Ltd.

◦Shinmachi-Machizukuri Co., Ltd.

Tentative name: AEON MALL Sendai Amamiya Construction Project◦Nakanohashidori 1-chome Chiku Shigaichi Saikaihatsu Kumiai

Facility Construction Project for Nakanohashidori 1-chome District Type 1
Urban Redevelopment Project (West District)◦Tohoku Regional Development Bureau

National Route 13 Asakawa Tunnel Construction Project◦Bureau of Waterworks Tokyo Metropolitan Government

Sakai Water Purification Plant Transmission and Distribution Pumping Station/
Advanced Water Purification Facilities Earth Retaining and Earthwork Project

Building Construction Project in line with Aomori Shinmachi 1-chome
District Excellent Building Development Project◦Niigata Shokuhin Unyu Corporation

Tentative name: Niigata Shokuhin Unyu Corporation Nagaoka-Kita
Center Construction Project◦Chubu Regional Development Bureau

2018 Tokai-Kanjo Expressway Gifu Yamagata Number 1 Tunnel East
Area Project◦Toshiba Energy Systems & Solutions Corporation

Nasu Mega Solar Power Plant Construction Project (Momura)

6

Topics
To Achieve Diverse Work Styles for Sustainable Growth
TOPICS

1

Certified as a Health & Productivity
Management Outstanding Organization 2023

We have been certified as a “Health & Productivity
Management Outstanding Organization 2 0 2 3 (large
enterprise category).”
In order to achieve a workplace environment where
employees can work with peace of mind, we strive toenhance work-life balance by encouraging employees totake annual paid leave and reducing long working hours.
We will continue to protect the health of ouremployees while seeking diverse work styles and aim toenhance corporate value in a sustainable manner.

Initiatives to Secure Workers for the Construction Industry
TOPICS

2

Holding Site Tours and Work Experience
EventsTo promote understanding of the appeal of theconstruction industry, we regularly hold site tours andwork experience events for high school students
studying construction and local children so that they can
get firsthand experience of “Monozukuri(manufacturing)” that they cannot learn from textbooks.
We will continue to promote the securing anddevelopment of future workers for the constructionindustry through various activities.

Contributing to the Creation of Social Infrastructure with Solid Technological Capabilities
TOPICS

3

7

Certified as a “Company with Excellent Record of Construction Projects” anda “Company with Excellent Record of Construction Projects Utilizing ICT”
The Company received certification and awards as a Company with
Excellent Record of Construction Projects and a Company with ICT Human
Resource Development Promotion for Fiscal 2 0 2 3 from the Hokuriku
Regional Development Bureau of the Ministry of Land, Infrastructure,
Transport and Tourism. This is the 11th consecutive year that the Company
has received certification as a Company with Excellent Record ofConstruction Projects, and the second time it has received certification as a
Company with ICT Human Resource Development Promotion, following thecertification in 2022. The certifications show that the technical and proposal
capabilities of the Company, in regard to construction management, quality
control and such, have been highly acclaimed. We will continue to makeevery effort to further improve our technology in construction and quality
control.

Consolidated Financial Statements
Consolidated Balance Sheet (Unit: Million yen, rounded down to the nearest million yen)

Consolidated Statement of Income (Unit: Million yen, rounded down to the nearest million yen)

97th term
96th term(as of December 31, 2023) (as of December 31, 2022)

97th term
96th term(January 1, 2023 – December 31, 2023) (January 1, 2022 – December 31, 2022)

Assets

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Non-operating expenses
Ordinary income
Extraordinary income
Extraordinary losses
Income before income taxes and minority interests
Income taxes – current
Income taxes – deferred
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

162,243
147,281
14,961
9,756
5,205
350
77
5,478
143
405
5,217
1,878
109
3,447
61
3,386

154,358
139,186
15,172
9,963
5,208
346
103
5,451
69
65
5,455
1,831
74
3,698
47
3,650

Current assets

99,801

99,083

Non-current assets

36,92935,268

Total assets

136,731

134,351

Current liabilities

48,95348,652

Non-current liabilities

7,444

7,195

Total liabilities

56,39755,847

Shareholders’ equity

78,44877,329

Accumulated other comprehensive income

1,175

504

Valuation difference on available-for-sale securities

1,355

802

Consolidated Statement of Cash Flows (Unit: Million yen, rounded down to the nearest million yen)

Revaluation reserve for land

65

115

97th term
96th term(January 1, 2023 – December 31, 2023) (January 1, 2022 – December 31, 2022)

Remeasurements of defined benefit plans

245

414

709

670

Total net assets

80,33378,504

Total liabilities and net assets

136,731

134,351

Liabilities

Net assets

Non-controlling interests

Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

7,494
1,875
4,347
1,271
28,146
29,418

5,022
1,133
970
4,860
23,28528,146

Consolidated Statement of Changes in Equity (January 1, 2023 – December 31, 2023) (Unit: Million yen, rounded down to the nearest million yen)
Capitalstock

Balance at beginning of period
Changes of items during the period
Dividends of surplus
Net income attributable to owners of the parent
Purchase of treasury shares
Disposal of treasury shares
Reversal of revaluation reserve for land
Net changes in items during the period
other than shareholders’ equity
Total changes of items during the period
Balance at end of the period

5,158

Shareholders’ equity
CapitalRetained
Treasury
surplusearnings
shares

6,169

68,250

2,248

1,034
3,386
1,328
45

0
49
—
5,158

0
6,169

2,401
70,651

1,282
3,531

Accumulated other comprehensive income
NonTotal shareholders’ Valuation difference on Revaluation Remeasurements of Accumulated other controlling
equityavailable-for-sale securities reserve for land defined benefit plans comprehensive income interests

77,329

802

115

414

504

670

1,034
3,386
1,328
45
49
1,118
78,448

Total net
assets78,504
1,034
3,386
1,328
45
49

552

49

168

671

39

710

552
1,355

49
65

168
245

671
1,175

39
709

1,829
80,3338

Business Overview/Subsidiaries
Construction
business¥159,448 million

In addition to the construction orders and projects undertakenby the Company, FUKUDA ROAD CONSTRUCTION CO., LTD.
and 22 other subsidiaries, and TAKAKEN CO., LTD. and fourother affiliates are also engaged in construction orders andprojects, as well as the rental and manufacturing/sales of
construction-related materials and equipment, some of which
are ordered by the Company.

Real estatebusiness¥2,141 million

In addition to the business undertaken by the Company in realestate sales, leasing and development, FUKUDA ASSET &SERVICE CO., LTD. and four other subsidiaries, as well as anaffiliate, TAKAKEN CO., LTD., and another affiliate are also
engaged in the real estate business.

Otherbusiness¥652 million

FUKUDA ROAD CONSTRUCTION CO., LTD. and four othersubsidiaries are engaged in the lease and sale of products orprovision of services other than those related to construction
projects. Design Workshop Co., Ltd., is one of such
subsidiaries offering services other than construction works
and is engaged in the management of welfare facilities.

98.3%
Ratio of net sales by
consolidated business

1.3%

0.4%
Soshin Corporation
The Company was established in
November 1961 and has contributed to
local communities through the developmentof social infrastructure by delivering highquality foundation structures to ourcustomers as a professional foundation
construction group.
In February 2023, our new office building
was completed. It is entirely operated byelectric power and made of plenty of woodfor the purpose of reducing environmental
impact, one of our SDGs goals.
The entire company will continue to work
together as one under the slogan of “Be
Sincere.”Representative Representative Director Shinji Baba
Address
454-1 Imae, Ouyachi, Higashi-ku,
Niigata City
Establishment November 1961
Capital¥92 million
Employees
37
Business
Foundation construction (Piling, Removing
Obstacles, Steel Sheet Pile Punching, etc.) General
Civil Engineering Work
Websitehttps://www.sosin.co.jp

9

To the website of Soshin Corporation

Corporate Data
Company Profile (as of December 31, 2023)
Established:
Founded:Capital:Directors and Executive Officers (as of March 27 2024)

January 1902

Representative Director
President of the Board Katsuyuki Fukuda

December 1927

Representative Director
President of the Board Masanori Araaki

5,158,408,496 yen

Director &Managing
Executive Officer

Yutaka Yamaga
Hideaki Saito

Director
Audit and Supervisory
Committee Member

Yoshinao Nakata

Director
Audit and Supervisory
Committee Member

Yoshihiro Wakatsuki

Vice President of
the Board

Hideaki Fujiyama

Senior Executive
Officer

Hiroyuki Oiki

Senior Executive
Officer

Mikio Yamamoto

Executive Officer

Akihiko Ogawa

Executive Officer

Hiroshi Shimizu

Employees:

861

Director &Managing
Executive Officer

Consolidated
subsidiaries:

16 (including FUKUDA ROAD CONSTRUCTION
CO., LTD.)

Director &Managing
Executive Officer

Shinichi Otsuka

Head officeDirector &Executive Officer

Shuichi Sunada

3-10 Ichibanboridoricho, Chuo-ku, Niigata

Director &Executive Officer

Toshio Omi

Executive Officer

Kazunori Konno

Tel: 025-266-9111 (Main line)

Director

Jumatsu Eizuka

Executive Officer

Yusuke Fukuda

Sayuri Uehara

Executive Officer

Satoshi Watanabe

Executive Officer

Shigemasa Yazawa

Executive Officer

Makoto Furuya

Main offices:

Main Branch & Branches

Director

Niigata Main Branch (Chuo-ku, Niigata),

Director
Full-Time Audit andSupervisory Committee Katsuhiko Iwasaki
MemberTokyo Main Branch (Chiyoda-ku, Tokyo),
Tohoku Branch (Aoba-ku, Sendai),
Nagoya Branch (Naka-ku, Nagoya),
Osaka Branch (Kita-ku, Osaka),
Kyushu Branch (Hakata-ku, Fukuoka),
Chuetsu Branch (Nagaoka, Niigata Prefecture),
Hokkaido Branch (Chuo-ku, Sapporo)
Sales Offices
Morioka, Chiba, Yokohama, Murakami,
Jouetsu, Hiroshima and five other locations
Main subsidiaries: FUKUDA ROAD CONSTRUCTION CO., LTD.

1.	Mr. Jumatsu Eizuka and Ms. Sayuri Uehara are Outside Directors pursuant to Article 2,
Paragraph 15 of the Companies Act.
2.	Messrs. Yoshinao Nakata and Yoshihiro Wakatsuki are Outside Directors (Audit and Supervisory
Committee Members) pursuant to Article 2, Paragraph 15 of the Companies Act.

Stock Information (as of December 31, 2023)
Total Number of Shares Authorized to be Issued: 20,000,000 shares
Total Number of Shares Outstanding (excluding treasury shares):
Number of Shareholders:

8,367,804 shares
7,288

Major Shareholders
Name of shareholder

Number of shares Shareholding
held (thousands)
ratio (%)

KOWA Co., Ltd.

(Public Interest Incorporated Foundation)
Fukuda Ikueikai

688

8.2

FUKUDA HOUSING CO., LTD.

The Master Trust Bank of Japan, Ltd.

660

7.9

RECS CORPORATION

Naomi Fukuda

431

5.2

FUKUDA ASSET & SERVICE CO., LTD.

Daishi Hokuetsu Bank, Ltd.

419

5.0

Kazuko Ozawa

321

3.8

FUKUDA SEKIZAI CO., LTD.

286

3.4

NigataZouen Corporation
FUKUDA RENEWAL CORPORATION
Kita Nihon Construction Material Leasing Co., Ltd.
Re Earth Corporation

Note. Shareholding ratio is calculated after deducting the number of treasury shares (620,307
shares). The number of treasury shares does not include the shares of the Company(94,600 shares) held by Trust & Custody Services Bank, Ltd. (trust account E) as thetrust assets of the Employee Stock Ownership Plan (J-ESOP) and Board Benefit Trust(BBT).

10

Information for Shareholders
Fiscal Year:

From January 1 to December 31

Ordinary General March
Meeting of
Shareholders:Record Date

Stock Transfer Agent /Account Management
Institution for Special
Accounts:

Ordinary General Meeting of Shareholders:
December 31
Year-End Dividend: December 31
Interim Dividend: June 30

Shareholder Benefit Program
To express our gratitude for the constant support of ourshareholders and with the aim of encouraging shareholders tomaintain their shareholding over a long period, the Company
has introduced a Shareholder Benefit Program.
Number ofshares held

Shareholder
benefit

200 shares A ¥2,000
or moreVoucher

Mitsubishi UFJ Trust and Banking Corporation
Contact Information
Mitsubishi UFJ Trust and Banking Corporation
Stock Transfer Agency Department
1-1 Nikkocho, Fuchu, Tokyo
Tel: 0120-232-711 (Toll-free)
Addressee
Shin-Tokyo PostOffice,Po box No.29,
Tokyo 137-8081 Japan

Number of
Shares Per Unit:

100

Listed on:

Prime Market of Tokyo Stock Exchange

200 shares A ¥5,000
or moreVoucher

Benefit criteria
Shareholder benefit presented inaccordance with the details
registered or recorded in the
Shareholder Registry as ofDecember 31 each year.
Shareholder benefit presented inaccordance with the details(registered or recorded three times
or more in the Shareholder
Registry) for shares held for one
year or more.

Presentation period: Scheduled to be sent in late March each year

Method of Public Public notices will be made electronically.
Notice:However, when electronic public notices cannot
be made due to circumstances beyond ourcontrol, we will post a notice in the Nihon Keizai
Shimbun.
URL for Public Notices: https://www.fkd.co.jp/
Notes:
Please contact the securities company where you have your accountregarding procedures for matters such as change of address ofshareholders and requests for purchase of shares. These procedures are
not handled by the Stock Transfer Agent (Mitsubishi UFJ Trust andBanking Corporation). Unclaimed dividends are payable at the main
office/branches of Mitsubishi UFJ Trust and Banking Corporation.
Procedures related to shares recorded in special accounts are handledby Mitsubishi UFJ Trust and Banking Corporation as the accountmanagement institution. Shareholders are therefore requested to contact
the account management institution (Mitsubishi UFJ Trust and Banking
Corporation) for the aforementioned special accounts.
The services are also provided at nationwide branches of Mitsubishi UFJ
Trust and Banking Corporation.

FUKUDA Corporation Searchhttps://www.fkd.co.jp/

Head office: 3-10 Ichibanboridoricho,
Chuo-ku, Niigata
Tel: 025-266-9111 (Main line)