OKUMURA CORPORATION
2-2-2, Matsuzaki-cho, Abeno-ku, Osaka 545-8555, Japan
TEL: +81-6-6621-1101 FAX: +81-6-6623-7692
http://www.okumuragumi.co.jp

Okumura Corporation
Annual Report 2008

Printed in JapanBoard of Directors

Investor Information(As of June 27, 2008)(As of March 31, 2008)

Directors and Auditors

Corporate Data

President & Representative Director
Takanori Okumura
Representative Directors
Yuichi Kanbara
Shigeru Nishinaka
Directors
Kunimoto Tanaka
Yoshihiko Kunii
Masakuni Sakurai
Kohei Tanaka
Takaiku Hirako
Toshio Yamaguchi
Standing Statutory Auditors
Yoshitaka Mikata
Shojiro Sumikura
Auditors
Kiyoshi Inazaki
Teruyasu Kawamata
Shinji Ito

Okumura was established in 1907 based on two key principles
enshrined in the corporate mottos “steadfast management” and“sincere operation.” The steady growth achieved over the years
has been made possible through the unflagging support of ourcustomers.
Okumura’s main business activities include construction
projects for houses, public facilities, medical facilities, and officebuildings. In the area of civil engineering are projects such as railways, roads, power station facilities, sewage and water works,
and others. The Company has developed technology at the highest level, with achievements including the seismic isolation systemused to construct Japan’s first earthquake-absorbing building. In
the area of environment-related technology, Okumura has devel-

Contents
1 Financial Highlights
2 To our Shareholders
3 Outline of the Five-Year Medium-Term Business Plan
4 Review of Operations
6 Topics
8 Consolidated Balance Sheets
10 Consolidated Statements of Operations
11 Consolidated Statements of Changes in Equity
12 Consolidated Statements of Cash Flows
13 Notes to the Consolidated Financial Statements
25 Independent Auditors’ Report
26 Non-Consolidated Balance Sheets
28 Non-Consolidated Statements of Operations
29 Breakdown of Orders (Non-Consolidated)
30 Network
31 Board of Directors / Investor Information

oped techniques for 100% recycling of demolished concrete, andnatural greening of concrete surfaces on buildings.
Okumura understands what an important mission it is toprovide a better environment for the future. Accordingly, theCompany is dedicated to contributing to meaningful social infrastructure investment and to always being a corporation regarded
highly by society. It will achieve this by continuing to develop as
an all-around construction company based on steadfast business

Disclaimer Regarding Forecasts and Projections
This Annual Report includes forecasts, projections and other predictive statements that represent Okumura’s assumptions and expectations in light of currently available information. These forecasts,
etc., are based on industry trends, circumstances involving clientsand other factors, and involve risks, variables and uncertainties. The
Okumura Group’s actual performance results may differ from thoseprojected in this Annual Report. Consequently, no guarantee ispresented or implied as to the accuracy of specific forecasts, projections or predictive statements contained herein.

Head Office
OKUMURA CORPORATION
2-2-2, Matsuzaki-cho, Abeno-ku, Osaka 545-8555, Japan
TEL: +81-6-6621-1101 FAX: +81-6-6623-7692
EstablishedFebruary 22, 1907
Capital¥19.8 billion
Group Employees
2,545

Note: Kiyoshi Inazaki, Teruyasu Kawamata, and Shinji Ito are outside auditors.

Stock Information

Executive Officers

Stock Exchange Listings
Tokyo and Osaka

Executive Vice Presidents
Yuichi Kanbara*
Shigeru Nishinaka*
Senior Managing Officers
Kunimoto Tanaka*
Yoshihiko Kunii*
Masakuni Sakurai*
Kohei Tanaka*
Managing Officers
Tadashi Hashimoto
Yoshikuni Ogi
Masamichi Shirahase
Yoshiteru KinoshitaKazuo Okuda
Takaiku Hirako*
Toshio Yamaguchi*
Executive Officers
Kozo Tsukamoto
Akiyoshi Hida
Takumi Makino
Kenichiro Minami
Kazuo Takami
Koji Imai
Norimasa Takahashi
Tetsuo Ojima
Kozo Aoki
Kazuhiro Kitazaki
Shinichi Okamoto
Hiroyuki Ito
Toshiharu Shimizu
Koji Esumi
Toshio Kobayashi
Note: Those officers marked with an asterisk (*) work as directors.

Transfer Agent
The Sumitomo Trust and Banking Co., Ltd.
Major Shareholders
Shares held
(thousands)

Percentage oftotal

Okumura Corporation(Treasury stock)

28,30812.40%

Northern Trust Company(AVFC) Sub-account
American Clients

21,5489.44%

State Street Bank and Trust
Company

10,406

4.56%

Okumura Employees’
Shareholding Association

8,196

3.59%

Resona Bank, Limited.

6,074

2.66%

Sumitomo Realty &Development Co., Ltd.

6,050

2.65%

Sumitomo Mitsui Banking
Corporation

5,568

2.44%

BBH 493025 Black Rock
Global Allocation

4,609

2.02%

Nippon Life Insurance Company

4,593

2.01%

Japan Trustee Services
Bank, Ltd. (Trust Account)

4,026

1.76%

Shareholder

management.

231

Okumura Corporation

Annual Report 2008

FINANCIAL HIGHLIGHTS

For the years ended March 31

2006

2007

Consolidated:

2008

2008
Thousands of
U.S. dollars

Millions of yen

Net sales
Operating income (loss)
Net income (loss)
Total assets
Total equity¥269,888
3,889
4,161
437,155
185,414¥227,770
1,416
4,124
415,647
182,903

Per Share:¥254,090(14,618)(32,476)
332,711
128,820$2,536,082(145,902)(324,144)
3,320,802
1,285,757

Yen

Basic net income (loss)¥20.27¥20.51

Non-Consolidated:

U.S. dollars¥(162.32)$(1.62)Thousands of
U.S. dollars

Millions of yen

Net sales
Operating income (loss)
Net income (loss)
Total assets
Total equity¥266,836
3,953
4,110
433,530
181,877¥225,217
1,534
4,115
412,259
179,494

Per Share:¥249,844(14,631)(32,515)
328,082
127,006$2,493,703(146,032)(324,530)
3,274,603
1,267,654

Yen

Basic net income (loss)¥20.02¥20.47

U.S. dollars¥(162.51)$(1.62)

Note: The U.S. dollar amounts included herein are presented solely for convenience of the reader. Such dollar amounts have been translated fromyen at the approximate exchange rate in Tokyo on March 31, 2008, of ¥100=U.S.$1.

Net Sales

Net Income (loss)

Total Equity(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

300,000

5,000

200,000

4,000
150,000
200,000

3,000

2,000

100,000

100,000

1,000
50,0000

0-35,000

2006

2007

2008

Non -Consolidated
Consolidated

0

2006

2007

2008

Non -Consolidated
Consolidated

2006

2007

2008

Non -Consolidated
Consolidated1

Okumura Corporation

Annual Report 2008

TO OUR SHAREHOLDERS

We would like to thank our shareholders for their continuing
support and encouragement, and we wish each of them thegreatest success in their own range of endeavors.
A general overview of business performance for theperiod to March 2008 (April 1, 2007 to March 31, 2008) is
provided in the following sections.
Fiscal 2008 Results
During the period under review, Japan’s economy experienced
a slowdown in its gradual recovery, as a result of the crisis in
financial markets triggered by the U.S. subprime mortgage
problem and surging oil prices. The construction industry was
severely affected by persistent price hikes in materials, andintense competition continued due to a large decline in housing starts caused by the revised Building Standard Act.
In these circumstances, the Company posted consolidated net sales of ¥254,090 million, consolidated gross profit of¥6,987 million, a consolidated operating loss of ¥14,618 million, and a consolidated net loss of ¥32,476 million.
On a non-consolidated basis, the Civil Engineering
Division received orders totaling ¥54,194 million, while theConstruction Division received orders totaling ¥120,894 million. Orders received by the two divisions decreased 38.7%
and 22.7%, respectively, from the previous fiscal year, postingcombined orders of ¥175,088 million, or a decline of 28.5%.
In terms of overall results, non-consolidated net sales,
including sales from real estate operations, grew 10.9% year
on year, to ¥249,844 million. Non-consolidated gross profit,
however, fell significantly from the previous year, to ¥6,542
million, and the non-consolidated operating loss came to¥14,631 million, due to the significant erosion of construction
profitability caused by heated competition for projects and2

surging costs of key construction materials.
In addition, the Company recorded an extraordinary lossof ¥1,711 million on the write-down of investment securities
in the wake of the deteriorating stock market. As a result, theloss before income taxes came to ¥14,026 million.
Prior to the fiscal year under review, the Company
recorded deferred income tax assets at each fiscal year-end
based on estimates of future taxable income. In light of theincreasingly difficult business environment, however, theCompany reviewed the recoverability of the deferred tax
assets and decided to reverse them in full and to post a refundof income related to income taxes for prior periods amounting
to ¥18,518 million. As a result, the net loss for the period
under review came to ¥32,515 million.
Despite these regrettable business results, the Company
remained committed to its basic corporate policy for profit
sharing, and paid a regular dividend of ¥9 per share for theperiod under review.
Looking Ahead and Key Strategies
Japan’s economy will be exposed to downside factors including surging prices of oil and raw materials, and a stronger yen,and the tone of the economic slowdown is unlikely to change
for the time being. The construction industry too will beforced to continue to operate in a difficult and unpredictablebusiness environment.
To overcome these difficult conditions, the Company
reviewed and redefined its business strategies for each business segment from the standpoint of future prospects andcompetitiveness, among other issues. This resulted in a fiveyear, medium-term business plan, which went into force inApril 2008.
The plan calls for consistent adherence to selective ordertaking and structural reform, including streamlining, to facilitate the Company’s transformation into a business with ahighly profitable structure and to achieve higher managerial
efficiency, with the goal of regaining profitability in fiscal
2009 and eventually posting ordinary income exceeding ¥6billion. The plan focuses primarily on measures aimed at thedevelopment of a profit-generating structure, higher technological and price competitiveness and better managerial efficiency, as well as the maintenance of a healthy financial position.
In civil engineering operations, specific measures to betaken include actions aimed at cost reductions and a selective
approach to focused projects based on proprietary technologies and past works executed, as well as initiatives to develop
higher organizational readiness for bidding procedures,
including comprehensive evaluation, and to boost the accura-cy of cost estimation. All of these measures are aimed atenhancing the Company’s price competitiveness and strengthening the engineering solutions provided to clients.
In construction operations, which must cope with bidding
based primarily on price competition on the one hand andclients’ diversifying needs on the other, we will attempt toovercome competition based purely on price factors, byadopting a selective bidding approach that places utmost priority on project profitability for each intended use category ofbuildings. The Company is working hard to boost the rate ofdesign and construction projects that fully leverage Okumura’s
strengths and unique added value, including technologies foradvanced seismic isolation, high-rise buildings and acoustic
simulation. In addition, it is stepping up efforts to develop acentralized management structure for VE/CD proposals withthe goal of boosting profitability.
In real estate business operations, we will augment theplanning and review structure by means of a function-oriented reorganization of the business division, upon assignmentof additional staff so as to better respond to market changes
in a timely and appropriate manner. To secure stable profitability, we will engage in leasing activities by maximizing thepotential use of some company-held properties.
In the area of the Company’s organization, efforts toimprove the earnings structure are being made primarily
through cost reductions. Related measures include accelerated
action to establish a personnel structure that matches thescale of business and downsizing of the organizational/managerial structure to achieve higher efficiency.
For the future, Okumura will apply all of its resources
with the aim of responding quickly and flexibly to shifting
trends and the changing operating environment, and therebybuild a strong business foundation in accordance with its corporate philosophy that has endured through the years. This
will enable it to maintain the trust and confidence of its shareholders.
The Company looks forward to the continued support andpatronage of its shareholders.

June 2008

Takanori Okumura
President and Representative Director

Outline of the Five-Year
Medium-Term Business Plan
•Key Target Figures(Millions of yen)
Fiscal 2013 (Last year of the plan)(April 1, 2012 to March 31, 2013)

Non-consolidated
Orders received
Net sales
Gross profit (% of net sales)
Selling, general and administrative
expenses (% of net sales)
Operating income (% of net sales)
Ordinary income (% of net sales)(Reference)
Consolidated
Net sales
Gross profit (% of net sales)
Selling, general and administrative
expenses (% of net sales)
Operating income (% of net sales)
Ordinary income (% of net sales)¥202,000
237,000
20,100——(8.5%)

15,000
5,100
6,000(6.3%)(2.2%)(2.5%)¥243,100
21,000—(8.6%)

15,4005,600
6,600(6.3%)(2.3%)(2.7%)•Civil Engineering
Gross profit of around 10.0% is the target for achievement in fiscal
2013 (the last year of the plan) through measures to boost price competitiveness and the Company’s ability to present technological solutions to clients.
•Architectural Construction
We will comprehensively follow a selective approach to order taking
that takes into account project profitability for each building use, andimplement measures to improve production processes, with the goalof achieving gross profit of around 6.5% in fiscal 2013 (the last yearof the plan).
•Real Estate
Non-consolidated profit (gross) of about ¥3,200 million will be soughtin fiscal 2013.
•For Better Managerial Efficiency–We will establish as early as possible the personnel and organizational structures that match the business scale required to achieve thekey target figures.
–We will first reduce selling, general and administrative expenses to¥15,000 million at the maximum, then seek further cost reductions.
•Financial and Capital Policy–Funds and assets held by the Company will be utilized effectively toachieve higher profitability.
–We will maintain a sound financial condition and sustain our commitment to the Company’s basic policy regarding profit sharing*.
*Basic policy regarding profit sharing
Based on a comprehensive review of the financial position, the Company pays astable, regular dividend of ¥9 per share or an amount per share derived fromthe dividend payout ratio of 50%, whichever is higher. In addition, theCompany purchases treasury stocks in a flexible manner.
Okumura will move forward aggressively with the Five-Year Medium-TermBusiness Plan, with all its strength and by taking concerted action. In these
efforts, we appreciate the understanding and support of our shareholders andbusiness partners.

3

Okumura Corporation

Annual Report 2008

R E V I E W O F O P E R AT I O N S

Major Projects Completed
BUILDINGS

Meiji Dairies Tokachi Factory
Work period: August 2006 to July 2007
Structure: Steel
Total floor area: 34,228m2

Kamagaya General Hospital

Toyota City Inoue Park Swimming Pool

Work period: March 2006 to August 2007
Structure: RC
Total floor area: 45,763m2

Work period: December 2005 to June 2007
Structure: RC, partially steel structure
Total floor area: 2,888m2

BUILDINGSCIVIL ENGINEERING

Shield Tunnel Construction
Work for Common Duct, in
the Section of 2A, Fukuoka
Route 202 Outer Beltway
Atria Meguro Tower
Work period:
December 2005 to February 2008
Structure: RC (seismic isolation structure)
Total floor area: 22,083m2

4Work period: March 2004 to March 2008
Slurry shield tunneling method:
Length: 2,660m
Internal diameter of lining: 4,050mm

Chuo Expressway Hachioji
Junction WestWork period: December 2004 to June 2007
Length: 4,330m
Earth volume: 182,500m3;
Substructural work: 8 abutments; 1 pierSakamoto First Tunnel
Work period: August 2005 to May 2007
Constructed length: 707m
Sakamoto First Tunnel:
L = 152m; Inner cross-section: A = 79m2;
Invert work: L = 133.6m;
Concrete lining: L = 133.6m
Sakamoto Second Tunnel:
L = 507m; Inner cross-section: A = 79m2;
Invert work: L = 107.7m;
Concrete lining: L = 497.7m

Orders Received
BUILDINGS

Mallage Shobu Shopping
Center (New Construction)Work period:
October 2007 to November 2008
Structure: Steel
Total floor area: 140,000m2

Kisarazu Daiichi Elementary
School and School Lunch
Center for the Kisarazu City
Work period: March 2008 to March 2010
Elementary school buildings:
RC structure; Total floor area: 7,303m2
Meal preparation center:
Steel structure; Total floor area: 2,457m2

Orient Building Projects
No. 76 and 77

Kochi Honmachi 1-Chome
Project

Work period:
August 2007 to November 2008
Structure: RC
Total floor area:
12,219m2; 394 residential units*2 buildings

Work period: March 2008 to January 2010
Structure: RC
Total floor area:
9,858m2; 89 residential units

Production of Aggregate
for Concrete of Kasegawa
Dam (Phase 2)

Namerikawa Nakatsuka High
Bridge for Hokuriku Shinkansen

CIVIL ENGINEERING

Aseismic Reinforcement
Project for Kan-Etsu
Expressway Nagaigawa
BridgeWork period: January 2008 to March 2011
Aseismic reinforcement: 3 bridges (13 piers)
Repair of bridge railing: 1 bridge
Structural repairs: 4 bridges(substructual work: 3 piers, superstructural
work: 15 piers)

Osakadani Tunnel ProjectWork period:
March 2008 to February 2011
Constructed length:
L = 1,350m, Width = 10.5m,
Inner cross section A = 73m2,
Excavated cavity length: L = 953.6m;
Concrete lining: L = 240m;
Portal: N = 1 unit

Work period:
December 2007 to October 2008
Treatment for surface soil: 101,000m3;
Treatment of removed rocks: 113,000m3
Raw stone extraction and production:
876,000t
Complete treatment of the excavated slopeof the rock mountain (re-vegetation, etc.);
Complete slurry treatment

Work period:
October 2007 to October 2010
Constructed length: 1,336m;
22 piers; 29 T-shaped RC girders;
16 Rahmen high bridge girders

5

Okumura Corporation

Annual Report 2008

TOPICS Road reconstruction of the Second Yono Shindo Highway involving a
two-level Intersection with the Tohoku Honsen Railroad in the UrawaOmiya segment
 Construction of thesubstructure for National
Road Detour Bridge No. 1
at Naruse Dam

 Exterior view of the Okumura Commemorative Museum(seismic isolation structure) Okumura Commemorative Museum Unveiled
On April 25, 2007, the Okumura Commemorative Museum
opened its doors in Nara, near Todaiji Temple which is part of theHistoric Monument of Ancient Nara designated as a UNESCOWorld Heritage Site. Built in the area to which the Company can
trace its roots, the museum is Okumura’s expression of thanks tothe public whose continued support enabled it to celebrate its
centennial anniversary. Designed to fit in the scenery of Ancient
Nara perfectly, the museum features an exhibit introducing its history and Okumura’s technologies, in addition to a rest lounge
where complimentary tea (Yamato-cha) is served. The museum
has become a popular spot for Japanese and foreign visitors
who wish to take a break during a walk around this ancient city.
The cumulative total of visitors reached 100,000 in April 2008.
(April 2007)
 Okumura Receives Two Awards from JSCE: An Outstanding Civil
Engineering Achievement Prize for Road Reconstruction Work
Involving the Crossing of the Tohoku-Honsen Rail Tracks (UrawaOmiya Segment) and Second Yono Shindo Highway, and an
Innovative Technique Award for the Design and Construction
Technique for High Piers Using Prefabricated and Compound
Members
Two projects completed by Okumura received 2006 Civil
Engineering Achievement and Innovative Technique awards fromJapan Society of Civil Engineers (JSCE). The commendation ceremony was held during the general meeting of JSCE on May 25,
2007.
Commended projects•JSCE Outstanding Civil Engineering Achievement Award
Construction methods of widening a underpass road of railway

6

without traffic restrictions (road reconstruction of the Second
Yono Shindo Highway involving a two-level intersection with the
Tohoku Honsen Railroad in the Urawa-Omiya segment)•JSCE Innovative Technique Award
Development and practical application of 3H (Hybrid, Hollow,
High pier) method using prefabricated and compound members(construction of the substructure for National Road Detour Bridge
No. 1 at Naruse Dam) (May 2007)
 Completion of Seismic Isolation Retrofit Work for the Tokyo
Head Office Building: Effective Promotional Activities of Seismic
Isolation Technology were conducted
Okumura’s “seismic isolation retrofit” construction, which allows
the use of a building during the retrofit work, was completed for
Okumura’s Tokyo Head Office Building in Minato Ward, Tokyo.
The project was started in July 2006. The seismic isolation feature
now ensures a fail-safe base for Okumura’s business continuity asa general contractor in the event of a major earthquake.
Approximately 500 customers took the site tours at various stagesof construction, from the start to the completion. This “seismic
isolation building,” including the main column featuring a seismic
isolation device located in the lobby of the first floor, can beviewed by visitors. Okumura plans to maximize the use of theTokyo Head Office, as well as its expertise in design and construction accumulated through this seismic isolation retrofit project, aspart of its sales activities.
Taking the opportunity of this retrofit work, Okumura prepared a DVD titled Okumura’s Seismic Isolation Retrofit. This new
tool is being combined with existing tools such as Okumura
Menshin Times (a tabloid providing timely explanations of
Okumura’s undertakings with seismic isolation technology),
Okumura Menshin (Seismic Isolation) Book, Okumura Menshin

 Column installed with aseismic isolation device

 Placement of base slab

 The DVD entitled Okumura's Seismic Isolation Retrofit Analysis of noise impact(Seismic Isolation) DVD and Okumura’s website dedicated to seismic isolation topics, in an effort to promote effective publicity forseismic isolation technology. (May 2007)
 Use of M-Class Recycled Aggregate Concrete to Construct an
Actual Building: The First Achievement in Japan to Use 100%Recycled Fine and Coarse Aggregates
Okumura became the first company in Japan to use recycled
aggregate concrete, which was made of 100% Class-M (medium
grade) recycled fine and coarse aggregates, for the constructionof an actual building: residential complex in Yokohama. The recycled aggregate concrete has been approved for use by the
Ministry of Land, Infrastructure and Transport. For this project, theconcrete containing 100% recycled fine and coarse aggregates
was used for cast-in-place piles, and concrete containing recycledcoarse aggregate was employed for the foundation. Satisfactory
results were obtained in terms of conditions of the concrete,strength, and work efficiency. Okumura plans to expand thesphere of applications for recycled aggregate concrete to contribute actively to recycling promotion. (July 2007)
 Development of an Environmental Assessment Technique
Allowing Comprehensive and Quantitative Assessment of Noise,
Vibration and Dust: Active Utilization for Better Environment
around Construction Sites
In the past, comprehensive assessments based on the quantification of the impact of noise, vibration and dust from a construction site on the surrounding area required substantial work, sincea number of complicated conditions of the surrounding had to betaken into account. To address this issue, Okumura developed ahighly accurate and quick assessment technique addressing thethree environmental factors in an integrated manner, through the Vols. 3 and 4 of Okumura Menshin Times Dewatering facilities (horizontal screw pressmachine: ø1,000mm / ø500mm)

shared application of topographic data needed for analyses. The
Company is making active use of the technique based on thisanalytical system, by incorporating it into the construction planning at each site to minimize the adverse consequences on theresidents in the surrounding area. (October 2007)
 Okumura’s Continuous Slurry Dewatering System for Dredging
and Dewartering of Reservoir Sludge Buildup Used for StoneRemoval Work at Kurodakesawa River Dam No. 1 (SedimentControl Dam)
Okumura’s continuous slurry dewatering system was selected foruse for the stone-removal project at the Kurodakesawa River Dam
No. 1, after the system and the related proposal were examined
and approved in conjunction with the stone-removal work for
Kurodakesawa River Dam No. 1 Project (with bidding based on acomprehensive evaluation) ordered by the Asahikawa River Office,Construction Division, Hokkaido Regional Development Bureau of
the Ministry of Land, Infrastructure and Transport. In addition, thesystem’s effectiveness was confirmed. The system, featuring compact facilities with continuous operating capabilities for dewatering of dredged soil, allows efficient and economic recycling of soil
at reservoirs. The level of quality required is secured through useof the system’s automated control device.
Okumura plans to seek wider applications for the system,
which may include the treatment of sledge buildups at rivers andstorage reservoirs and of the treatment of slurry and sledge generated during shield tunneling. (November 2007)

7

OKUMURA CORPORATION

Consolidated Balance Sheets
Okumura Corporation and Consolidated Subsidiaries
As of March 31, 2008 and 2007

Millions of yen

Thousands of
U.S. dollars(Note 1)

2008

2007

2008

¥ 21,445¥ 39,637$ 214,046

224

8,884

2,231

3,803

3,213

37,959Trade notes

7,631

14,88676,165Trade accounts

78,36755,745782,188

Other

14,66026,247

146,324

Allowance for doubtful receivables(4,634)(3,844)(46,248)

Accumulated costs of uncompleted contracts

102,592

120,496

1,023,971

Other

13,782

9,046

137,555—

11,309—ASSETS

Current assets:
Cash and cash equivalents
Time deposits
Marketable securities (Note 3)
Receivables:

Inventories

Deferred tax assets (Note 7)
Prepaid expenses and other

2,399

3,141

23,941

Total current assets

240,269

288,760

2,398,132

Land

16,22916,417

161,977

Buildings and structures

15,266

13,525

152,374

Machinery and equipment

5,481

6,938

54,707

Furniture and fixtures

2,524

2,996

25,190Property, plant and equipment:

Construction in progress

328

829

3,275

39,82840,705397,523(16,610)(18,408)(165,784)

23,21822,297

231,739

63,12796,749630,073

577

586

5,757

Long-term receivables

2,185

2,366

21,814

Other assets

3,497

4,928

34,901

Total
Accumulated depreciation
Net property, plant and equipment

Investments and other assets:
Investment securities (Note 3)
Investments in and advances to unconsolidated subsidiaries and associated companies

Allowance for doubtful receivables
Total investments and other assets
Total
See notes to consolidated financial statements.

8

(162)

(39)

(1,614)

69,224

104,590

690,931¥332,711¥415,647$3,320,802

Millions of yen

Thousands of
U.S. dollars(Note 1)

2008

2007

2008

¥ 10,995¥ 12,198$ 109,745

Trade notes

12,10011,648120,775

Trade accounts

74,81481,947746,720

LIABILITIES AND EQUITYCurrent liabilities:
Short-term bank loans including current portion of long-term debt (Note 4)
Payables:

Other

407

1,374

4,064

68,172

79,136680,426

Income taxes payable

148

490

1,473

Allowance for warranty work on construction projects

632

455

6,314

Advances received on uncompleted contracts

Allowance for losses on construction contracts

6,905

2,150

68,917

Other

10,265

18,433

102,452

184,438

207,8311,840,886

Total current liabilities

Long-term liabilities:
Long-term debt (Note 4)

405

495

4,037

Liability for retirement benefits (Note 5)

5,525

6,529

55,149Deferred tax liabilities (Note 7)

11,90817,875

118,857

Negative goodwill

1,418

—

14,151

Other

197

14

1,965

Total long-term liabilities

19,45324,913

194,159

Total liabilities

203,891

232,7442,035,045

19,83919,839198,013

Commitments and contingent liabilities (Notes 9 and 10)

Equity (Notes 6 and 11):
Common stock
authorized, 480,376,000 shares; issued, 228,326,133 shares
Capital surplus

25,32925,328

252,813Retained earnings

78,553

115,033

784,041

Unrealized gain on available-for-sale securities

17,36033,268173,265

Treasury stock—at cost
28,308,113 shares in 2008 and 28,165,388 shares in 2007
Total

(12,261)(12,172)(122,375)

128,820

181,296

1,285,757

Minority interests

—

1,607

—

Total equity

128,820

182,903

1,285,757

Total¥332,711¥415,647$3,320,802

9OKUMURA CORPORATION

Consolidated Statements of Operations
Okumura Corporation and Consolidated Subsidiaries
For the year ended March 31, 2008 and 2007

Millions of yen
2008

2007

2008

¥254,090
247,103
6,987¥227,770
204,051
23,719$2,536,082
2,466,343
69,739Selling, general and administrative expenses
Operating income (loss)

21,605(14,618)

22,303
1,416

215,641(145,902)

Other income (expenses):
Interest and dividend income
Interest expenses
Gain on sales of property, plant and equipment
Loss on disposal of property, plant and equipment
Devaluation of investment securities
Other—net
Other income (expenses)—net

1,507
(217)
800
(393)
(1,711)
492
478

1,384
(213)
1,006
(44)
(16)
3,588
5,705

15,043(2,165)
7,983(3,919)(17,074)
4,899
4,767

Income (loss) before income taxes and minority interests(14,140)

7,121(141,135)

Income taxes (Note 7):
Current
Refund of income taxes for prior periods
Deferred
Total income taxes

213
(200)
18,42718,440

450
—
2,624
3,074

2,121
(1,994)
183,921
184,048

(77)
4,124

(1,039)$ (324,144)

Yen

U.S. dollars(Note 1)

¥20.5120.00$(1.62)0.09

Net sales
Cost of sales
Gross profit

Minority interests in net income
Net income (loss)

Per share of common stock (Note 11):
Basic net income (loss)
Cash dividends applicable to the year
See notes to consolidated financial statements.

10

Thousands of
U.S. dollars(Note 1)(104)
¥ (32,476)¥(162.32)
9.00¥

Consolidated Statements of Changes in Equity
Okumura Corporation and Consolidated Subsidiaries
For the year ended March 31, 2008 and 2007

Thousands

Outstanding
number ofshares ofcommonstockMillions of yen

Commonstock

Capitalsurplus

Unrealized
gain onavailable
Retainedfor-saleearnings securities

Treasury
stock

Total

Minority
interests

BALANCE, MARCH 31, 2006
Reclassified balance as ofMarch 31, 2006
Net income
Cash dividends, ¥10 per share
Bonuses to directors andcorporate auditors
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2007

202,292 ¥19,839 ¥25,326 ¥112,974 ¥36,374 ¥(10,824) ¥183,689

—
—
—
(42)
—
—
(42)
(2,139)————(1,351) (1,351)
8
—
2
—
—
3
5
—
—
—
—
(3,106)—(3,106)200,161 ¥19,839 ¥25,328 ¥115,033 ¥33,268 ¥(12,172) ¥181,296

—
(42)
—
(1,351)—5(118) (3,224)¥1,607 ¥182,903

Net loss
Cash dividends, ¥20 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2008——
— (32,476)—— (32,476)——— (4,004)—— (4,004)
(150)
—
—
—
—
(92)
(92)
7
—
1
—
—
3
4
—
—
—
— (15,908)— (15,908)
200,018 ¥19,839 ¥25,329 ¥78,553 ¥17,360 ¥(12,261) ¥128,820— (32,476)— (4,004)
—
(92)
—
4
(1,607) (17,515)¥ — ¥128,820

—
—
—

—
—
—

—
—
—

—
4,124
(2,023)

—
—
—

—
—
—

—
4,124
(2,023)¥Total
equity— ¥183,689
1,725
—
—

1,725
4,124
(2,023)Thousands of U.S. dollars (Note 1)

Commonstock

Capitalsurplus

Unrealized
gain onavailable
Retainedfor-saleearnings securities

Treasury
stock

Total

Minority
interests

Total
equityBALANCE, MARCH 31, 2007

$198,013 $252,801 $1,148,141 $332,054 $(121,485) $1,809,524$16,041 $1,825,565

Net loss
Cash dividends, ¥20 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2008—
— (324,144)—— (324,144)—— (39,956)—— (39,956)
—
—
—
—
(923)
(923)
—
12
—
—
33
45
—
—
— (158,789)— (158,789)$198,013 $252,813 $784,041 $173,265 $(122,375) $1,285,757— (324,144)— (39,956)
—
(923)
—
45
(16,041) (174,830)$ — $1,285,757

See notes to consolidated financial statements.

11

OKUMURA CORPORATION

Consolidated Statements of Cash Flows
Okumura Corporation and Consolidated Subsidiaries
For the year ended March 31, 2008 and 2007

Millions of yen

Thousands of
U.S. dollars(Note 1)

2008

2007

2008

¥(14,140)¥ 7,121$(141,135)

(423)
936
912
177
(800)
1,711
—

(447)
710
(900)
44
(1,006)16(42)(4,218)
9,340
9,105
1,769
(7,983)
17,074—(15,368)
17,904(4,735)
3,685(10,964)(1,003)(3,982)(11,950)(26,090)

13,712(6,514)(198)(5,362)(9,354)(1,348)(3,432)(14,121)(7,000)(153,385)
178,701(47,262)
36,782(109,437)(10,015)(39,746)(119,275)(260,410)

Cash flows from investing activities:
Net decrease in time deposits
Payments for purchases of securities
Proceeds from sales of securities
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Investment in loans receivableCollection of loans receivable
Other—net
Net cash provided by investing activities

9,860(1,071)
4,928(2,444)
1,015
(159)
150
1,089
13,368791(5,772)
9,948(2,879)
1,031
(390)
194
1,347
4,270

98,414(10,685)
49,181(24,395)
10,132(1,586)
1,498
10,866
133,425

Cash flows from financing activities:
Decrease in short-term bank loans—net
Repayments of long-term debt
Purchase of treasury stock
Disposal of treasury stock
Dividends paid
Dividends paid to minority shareholders
Net cash used in financing activities
Foreign currency translation adjustments on cash and cash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year

(1,194)(99)(92)
4(3,994)(9)(5,384)(86)(18,192)
39,637¥21,445(227)(96)(1,351)5(2,021)(9)(3,699)(19)(6,448)46,085¥39,637(11,915)
(986)
(923)
45
(39,865)(89)(53,733)(858)(181,576)
395,622$214,046

Cash flows from operating activities:
Income (loss) before income taxes and minority interests
Adjustments for:
Income taxes—paidDepreciation and amortization
Provision for (reversal of) doubtful receivables
Loss on disposal of property, plant and equipment
Gain on sales of property, plant and equipment
Devaluation of investment securities
Bonuses to directors and corporate auditors
Changes in assets and liabilities:
Decrease (increase) in trade notes and accounts receivable
Decrease (increase) in accumulated costs of uncompleted contracts
Increase in other inventories
Increase (decrease) in trade notes and accounts payable
Decrease in advances received on uncompleted contracts
Decrease in liability for retirement benefits
Other—net
Total adjustments
Net cash used in operating activities

See notes to consolidated financial statements.

12Notes to the Consolidated Financial Statements
Okumura Corporation and Consolidated Subsidiaries
Year ended March 31, 2008 and 2007

1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements havebeen prepared in accordance with the provisions set forth in
the Japanese Financial Instruments and Exchange Law (formerly, the Japanese Securities and Exchange Law) and its
related accounting regulations and in conformity withaccounting principles generally accepted in Japan, which are
different in certain respects as to application and disclosure
requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements,
certain reclassifications and rearrangements have been madeto the consolidated financial statements issued domesticallyin order to present them in a form which is more familiar toreaders outside Japan. In addition, certain reclassifications
have been made in the 2007 financial statements to conformto the classifications used in 2008.
The consolidated financial statements are stated inJapanese yen, the currency of the country in which Okumura
Corporation (the “Company”) is incorporated and operates.
The translations of Japanese yen amounts into U.S. dollar
amounts are included solely for the convenience of readers
outside Japan and have been made at the rate of ¥100 to $1,
the approximate rate of exchange at March 31, 2008. Suchtranslations 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. Summary of Significant Accounting Policies
a. Consolidation — The consolidated financial statements
as of March 31, 2008 include the accounts of the Company
and its significant subsidiaries (together, the “Group”) except
for subsidiaries which, if consolidated, would not have amaterial effect on the accompanying consolidated financial
statements.
Under the control or influence concept, those companies in which the Company, directly or indirectly, is able toexercise control over operations are fully consolidated, andthose companies over which the Group has the ability to
exercise significant influence are accounted for by the equity
method.
Investments in the unconsolidated subsidiaries and associated companies are stated at cost. If the equity method of
accounting had been applied to the investments in thesecompanies, the effect on the accompanying consolidated
financial statements would not be material.
The differences between the cost of investments andthe amount of the underlying net equity of consolidated subsidiaries and associated companies are amortized on astraight-line basis over five years.
All significant intercompany balances and transactions
have been eliminated in consolidation. All material unrealized
profit included in assets resulting from transactions within
the Group is eliminated.

b. Cash Equivalents — Cash equivalents are short-term
investments that are readily convertible into cash and that are
exposed to insignificant risk of changes in value. Cash equivalents include time deposits and certificate of deposits, all ofwhich mature or become due within three months of thedate of acquisition.
c. Inventories — Accumulated costs of uncompleted contracts are stated at cost determined by the specific identification method.
Other inventories held for sale in the ordinary course ofbusiness are stated at the lower of cost determined by specific identification method or net selling value, which is definedas the selling price less additional estimated manufacturingcosts and estimated direct selling expenses.
d. Marketable and Investment Securities — Marketable
and investment securities are classified and accounted for,depending on management‘s intent, as follows:i) held-to-maturity debt securities, which are expected to beheld to maturity with the positive intent and ability to hold tomaturity, are reported at amortized cost and ii) available-forsale securities, which are not classified as the aforementioned
securities, are reported at fair value, with unrealized gains
and losses, net of applicable taxes, reported in a separate
component of equity.
Non-marketable available-for-sale securities are statedat cost determined by the moving-average method. For otherthan temporary declines in fair value, investment securities
are reduced to net realizable value by a charge to income.
Equities of limited liability partnerships for investment
purpose and of other similar partnerships (defined as “securities” by Section 2 of the Article 2 of the Financial Instruments
and Exchange Law) are valued at the net equity equivalent
based on the recently available financial statements of thepartnerships corresponding to the reporting dates of thefinancial statements defined by the partnership agreements.
e. Property, Plant and Equipment — Property, plant andequipment are stated at cost. Depreciation is computed by
the declining-balance method at rates based on the estimated useful lives of the assets, while the straight-line method isapplied to buildings acquired after April 1, 1998. The range
of useful lives is principally from 3 to 60 years for buildings
and structures, from 4 to 17 years for machinery and equipment, and from 2 to 20 years for furniture and fixtures.
f. Long-lived assets — The Group reviews its long-lived
assets for impairment whenever events or changes in circumstance indicate the carrying amount of an asset or asset
group may not be recoverable. An impairment loss would berecognized if the carrying amount of an asset or asset groupexceeds the sum of the undiscounted future cash flows
expected to result from the continued use and eventual disposition of the asset or asset group. The impairment loss
would be measured as the amount by which the carrying

13

OKUMURA CORPORATION

amount of the asset exceeds its recoverable amount, which is
the higher of the discounted cash flows from the continued
use and eventual disposition of the asset or the net selling
price at disposition.
g. Allowance for Doubtful Receivables — The allowancefor doubtful accounts is stated in amounts considered to beappropriate based on the companies‘ past credit loss experience and an evaluation of potential losses in the receivables
outstanding.
h. Allowance for Warranty Work on Construction
Projects — The allowance for warranty costs for completed
work is provided at the amount of warranty costs based on
past rate expenses.
i. Allowance for Losses on Construction Contracts —Allowance for losses on construction contracts is provided
with respect to construction projects for which eventual losses are reasonably estimated.
j. Employees' Retirement Benefits — The Company has acontributory funded pension plan covering substantially all of
their employees.
Liability for retirement benefits for employees arerecorded based on the estimated present value of projected
benefit obligations and the fair value of the plan assets at theend of the fiscal year.
The unrecognized transition amount which arose fromadopting the new standard during the year ended March 31,
2001 has been amortized on a straight-line basis over 15
years, and unrecognized actuarial differences are amortizedon a straight-line basis over the period of 10 years within theemployees' average remaining service years subsequent to
the year in which they arise.
k. Recognition of Revenues and Related Costs —Revenues from individual construction contracts with construction periods of more than two years and contract
amounts in excess of ¥5 billion (US$ 49,905 thousand) arerecognized by the percentage-of-completion method.
Other revenues from construction contracts are recognized by the completed-contract method.
The revenues posted by way of the percentage-of-completion method for the years ended March31, 2008 and2007 were ¥34,679 million($346,133 thousand) and ¥2,330
million, respectively.
l. Presentation of Equity — On December 9, 2005, the
ASBJ published a new accounting standard for presentationof equity. Under this accounting standard, certain items
which were previously presented as liabilities or assets, as thecase may be, are now presented as components of equity.
Such items include stock acquisition rights, minority interests,

14

and any deferred gain or loss on derivatives accounted forunder hedge accounting. This standard was effective for fiscal years ending on or after May 1, 2006. The balances ofsuch items as of March 31, 2006 were reclassified as separate components of equity as of April 1, 2006 in the consolidated statement of changes in equity.
m. Leases — Under Japanese accounting standards for leases, finance leases that deem to transfer ownership of theleased property to the lessee are to be capitalized, whileother finance leases are permitted to be accounted for as
operating lease transactions if certain “as if capitalized”
information is disclosed in the notes to the lessee‘s financial
statements. All other leases are accounted for as operatingleases.
n. Income Taxes — The provision for income taxes is computed based on the pretax income included in the consolidated statements of income. The asset and liability approach isused to recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying currently enacted tax laws to the temporary differences.
o. Per Share Information — Basic net income (loss) per
share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the period, retroactively adjusted
for stock splits.
Diluted net income per share is not disclosed because
there are no securities with dilutive effect upon exercise orconversion into common stock.
Cash dividends per share presented in the accompanying consolidated statements of income are dividends applicable to the respective years including dividends to be paid
after the end of the year.
p. New Accounting Pronouncements
Lease Accounting — On March 30, 2007, the ASBJ issued
ASBJ Statement No.13, “Accounting Standard for Lease
Transactions”, which revised the existing accounting standard for lease transactions issued on June 17, 1993. The
revised accounting standard for lease transactions is effective
for fiscal years beginning on or after April 1, 2008 with early
adoption permitted for fiscal years beginning on or after April
1, 2007.
LesseeUnder the existing accounting standard, finance leases thatdeem to transfer ownership of the leased property to the lessee are to be capitalized, however, other finance leases are
permitted to be accounted for as operating lease transactions
if certain “as if capitalized” information is disclosed in thenote to the lessee’s financial statements. The revised
accounting standard requires that all finance lease transactions shall be capitalized recognizing lease assets and leaseobligations in the balance sheet.
LessorUnder the existing accounting standard, finance leases thatdeem to transfer ownership of the leased property to the lessee are to be capitalized, however, other finance leases are
permitted to be accounted for as operating lease transactions
if certain “as if capitalized” information is disclosed in thenote to the lessor‘s financial statements. The revised accounting standard requires that all finance leases that deem totransfer ownership of the leased property to the lessee shallbe recognized as lease receivables, and all finance leases thatdeem not to transfer ownership of the leased property to thelessee shall be recognized as investments in lease.
Construction Contracts — Under the current Japanese
GAAP, either the completed-contract method or the percentage-of-completion method is permitted to account for construction contracts. On December 27, 2007, the ASBJ
published a new accounting standard for construction contracts. Under this accounting standard, the construction revenue and construction costs should be recognized by thepercentage-of-completion method, if the outcome of a construction contract can be estimated reliably. When total construction revenue, total construction costs and the stage ofcompletion of the contract at the balance sheet date can bereliably measured, the outcome of a construction contract
can be estimated reliably. If the outcome of a construction
contract cannot be reliably estimated, the completed-contract method shall be applied. When it is probable that total
construction costs will exceed total construction revenue, anestimated loss on the contract should be immediately recognized by providing for loss on construction contracts. This
standard is applicable to construction contracts and softwaredevelopment contracts and effective for fiscal years beginning on or after April 1, 2009 with early adoption permitted
for fiscal years beginning on or before March 31, 2009 but
after December 27, 2007.

15

OKUMURA CORPORATION

3. Marketable and Investment Securities
Marketable and investment securities as of March 31, 2008 and 2007 consisted of the following:
Millions of yen

Thousands of
U.S. dollars

2008

2007

2008

Current:
Government and corporate bonds
Other
Total

¥ 3,602201¥ 3,803¥ 3,213—¥ 3,213$ 35,950
2,009$ 37,959

Non-current:
Marketable equity securities
Government and corporate bonds
Trust fund investments and otherTotal¥55,138
21
7,968¥63,127¥85,029
3,627
8,093¥96,749$550,336
210
79,527$630,073

The carrying amounts and aggregate fair values of marketable and investment securities at March 31, 2008 and 2007 were as
follows:
Millions of yen

March 31, 2008

Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Held-to-maturity

Cost

Unrealized
gains

Unrealized
lossesFair
value¥27,673
6,700
3,602

¥28,5101
6¥1,045422
2¥55,138
6,279
3,606

¥28,479
6,700
6,818

¥56,816
—
25

¥ 266
490
21

¥85,029
6,210
6,822

Cost

Unrealized
gains

Unrealized
lossesFairvalue$276,202
66,87335,950$284,563
15
62$10,4294,213
22$550,336
62,67535,990March 31, 2007

Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Held-to-maturity

Thousands of U.S. dollars

March 31, 2008

Securities classified as:
Available-for-sale:
Equity securities
Debt securities
Held-to-maturity

16

Available-for-sale securities and held-to-maturity securities whose fair value is not readily determinable as of March 31, 2008
and 2007 were as follows:
Carrying amount

Available-for-sale:
Equity securities
Held-to-maturity
Total

Millions of yen

Thousands of
U.S. dollars

2008

2007

2008

¥ 1,890
11,021¥12,911¥1,7643,020¥4,784$ 18,860
110,001$128,861

Proceeds from sales of available-for-sale securities for the years ended March 31, 2008 and 2007 were ¥152 million ($1,519
thousand) and ¥3,669 million, respectively. Gross realized gains on these sales, computed on the moving average cost basis,
were ¥21 million ($213 thousand) and ¥2,925 million for the years ended March 31, 2008 and March 31, 2007, respectively.
The carrying values of debt securities by contractual maturities for securities classified as available-for-sale and held-tomaturity at March 31, 2008 are as follows:
Millions of yen

Due in one year or lessDue after one year through five years
Due after five years through ten years
Due after ten years
Total

Thousands of U.S. dollars

Available
for saleHeld tomaturity

Available
for saleHeld tomaturity

¥ 201
1
—
6,280
¥6,482¥14,60221——¥14,623$ 2,008
10—
62,675$64,693$145,742
209——$145,951

4. Short-term Bank Loans and Long-term Debt
Short-term bank loans at March 31, 2008 and 2007 consisted of notes to banks and bank overdrafts. The annual interest rates
applicable to the short-term bank loans ranged from 1.373% to 1.875% and 1.625% to 1.875% at March 31, 2008 and2007, respectively.
Long-term debt at March 31, 2008 and 2007 consisted of the following:
Millions of yen

Thousands of
U.S. dollars

2008

2007

2008

¥108
333
441
(36)
¥405

¥132
408
540
(45)
¥495

$1,074
3,327
4,401
(364)
$4,037

Year Ending March 31

Millions of yen

Thousands of
U.S. dollars

2008
2009
2010
2011
2012
2013 and thereafter
Total

¥ 37
36
35
32
31
270
¥441

$ 364
357
346
322
309
2,703
$4,401Loans from banks and other financial institutions, due serially to 2031
with interest rates ranging from 1.15% to 6.40%
Collateralized
Unsecured
Total
Less current portionLong-term debt, less current portion
Annual maturities of long-term debt at March 31, 2008, were as follows:

17

OKUMURA CORPORATIONThe carrying amounts of assets pledged as collateral for short-term bank loans of ¥4,000 million ($39,924 thousand) and theabove collateralized long-term debt at March 31, 2008 were as follows:
Property, plant and equipment — net of accumulated depreciation
Investment securities
Total

Millions of yen

Thousands of
U.S. dollars

¥ 90
5,106
¥5,196$ 902
50,962$51,864

As is customary in Japan, the Company maintains substantial deposit balances with banks which it has borrowings. Suchdeposit balances are not legally or contractually restricted as to withdrawal.
General agreements with respective banks provide, as is customary in Japan, that additional collateral must be provided
under certain circumstances if requested by such banks and that certain banks have the right to offset cash deposited withthem against any long-term or short-term debt or obligation that becomes due and, in case of default and certain other specified events, against all other debt payable to the banks. The Company has never been requested to provide any additional collateral.
5. Employees’ Retirement Benefits
Most of the employees of the Company are covered by a contributory trusted pension plan.
The Company has lump-sum retirement benefit plans and a cash balance plan (pension plan linked to the market interest
rates) based on the Defined Benefit Corporate Pension Law.
The liability for employees‘ retirement benefits at March 31, 2008 and 2007 consisted of the following:
Millions of yen

Projected benefit obligation
Fair value of plan assets
Unrecognized actuarial differences
Unrecognized transitional obligation
Net liability

Thousands of
U.S. dollars

2008

2007

2008

¥41,319(38,054)
1,875
385¥ 5,525¥43,654(41,387)3,822
440¥ 6,529$412,411(379,817)
18,711
3,844$ 55,149

The components of net periodic benefit costs for the years ended March 2008 and 2007 are as follows:
Millions of yen

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial differences
Amortization of transitional obligation
Net periodic benefit costs

Thousands of
U.S. dollars

2008

2007

2008

¥1,417
872
(579)
(325)
(55)
¥1,330¥1,479
884
(536)
(308)
(55)
¥1,464$14,138
8,708(5,783)(3,241)(549)$13,273

Assumptions used for the years ended March 31, 2008 and 2007 are set forth as follows:
Discount rate
Expected rate of return on plan assets
Recognition period of actuarial differences
Amortization period of transitional obligation

18

2008

2007

2.0%
1.4%
10 years
15 years

2.0%
1.3%
10 years
15 years

6. Equity
Since May 1, 2006, Japanese companies have been subject to the Corporate Law of Japan (the “Corporate Law”), whichreformed and replaced the Commercial Code of Japan. The significant provisions in the Corporate Law that affect financial
and accounting matters are summarized below:(a) Dividends
Under the Corporate Law, companies can pay dividends at any time during the fiscal year in addition to the year-end dividend upon resolution at the shareholders meeting. For companies that meet certain criteria such as; (1) having the Board of
Directors, (2) having independent auditors, (3) having the Board of Corporate Auditors, and (4) the term of service of thedirectors is prescribed as one year rather than two years of normal term by its articles of incorporation, the Board of
Directors may declare dividends (except for dividends in kind) at any time during the fiscal year if the company has prescribed so in its articles of incorporation. However, the Company cannot do so because it does not meet all the above criteria.
The Corporate Law permits companies to distribute dividends-in-kind (non-cash assets) to shareholders subject to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles ofincorporation of the company so stipulate. The Corporate Law provides certain limitations on the amounts available for dividends or the purchase of treasury stock. The limitation is defined as the amount available for distribution to the shareholders, but the amount of net assets after dividends must be maintained at no less than ¥3 million.
(b) Increases / decreases and transfer of common stock, reserve and surplus
The Corporate Law requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity accountcharged upon the payment of such dividends until the total of aggregate amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the Corporate Law, the total amount of additional paid-in capital and legal
reserve may be reversed without limitation. The Corporate Law also provides that common stock, legal reserve, additional
paid-in capital, other capital surplus and retained earnings can be transferred among the accounts under certain conditions
upon resolution of the shareholders.
(c) Treasury stock and treasury stock acquisition rights
The Corporate Law also provides for companies to purchase treasury stock and dispose of such treasury stock by resolutionof the Board of Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to
the shareholders which is determined by specific formula. Under the Corporate Law, stock acquisition rights, which werepreviously presented as a liability, are now presented as a separate component of equity. The Corporate Law also provides
that companies can purchase both treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights
are presented as a separate component of equity or deducted directly from stock acquisition rights.

19

OKUMURA CORPORATION

7. Income Taxes
The Company and its domestic subsidiaries are subject to Japanese national and local income taxes which, in the aggregate,
resulted in normal effective statutory tax rates of approximately 40.6% for the years ended March 31, 2008 and 2007.
The tax effects of significant temporary differences and tax loss carry forwards which resulted in deferred tax assets andliabilities at March 31, 2008 and 2007 are as follows:
Millions of yen

Thousands of
U.S. dollars

2007

2008

2008

Deferred tax assets:
Tax loss carry forwards
Write-down of inventories
Devaluation of securities
Allowance for losses on construction contracts
Pension and severance costs
Allowance for doubtful accounts
Write-off of bad debt
Accrued expenses
Allowance for bonuses
Other
Less valuation allowances
Total
Deferred tax liabilities:
Net unrealized gains on available-for-sale securities
Retained earnings appropriated for special allowance
Total
Net deferred tax liabilities¥ 8,733
4,182
3,089
2,806
2,243
1,416
1,135
861
429
471
(25,353)
12

¥

—
9,388
1,897
874
2,651
806
1,088
911
937
724
(1,064)
18,212(9,671)(2,237)(11,908)¥(11,896)(22,767)(2,011)(24,778)¥ (6,566)$

87,164
41,74130,83428,00822,39014,136
11,324
8,591
4,277
4,705
(253,051)
119(96,525)(22,332)(118,857)$(118,738)

A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompanying consolidated statement of operations for the year ended March 31, 2007 is as follows (2008 was not presented
because of the net loss for the period):
2007

Normal effective statutory tax rate
Expenses not deductible for income tax purposes
Non-taxable income excluded for tax purposes
Inhabitant tax per capita
Valuation allowances
Other – net
Actual effective tax rate

20

40.6%
2.9
(2.9)
2.5
5.0
(4.9)
43.2%

8. Research and Development Costs
Research and development costs charged to income were ¥933 million ($9,310 thousand) and ¥1,002 million for the years
ended March 31, 2008 and 2007, respectively.
9. Leases
The Group leases certain machinery and equipment, office space and other assets.
Total lease payment under finance lease for the years ended March 31, 2008 and 2007 were ¥60 million ($603 thousand)and ¥68 million, respectively.
Pro forma information of leased property such as acquisition cost, accumulated depreciation, obligations under financelease, depreciation expense, interest expense and other information of finance leases that do not transfer ownership of theleased property to the lessee on an "as if capitalized" basis for the years ended March 31, 2008 and 2007 was as follows:
Millions of yen

Acquisition cost
Accumulated depreciation
Net leased property

Thousands of
U.S. dollars

2008

2007

2008

Machineryandequipment

Machineryandequipment

Machineryandequipment

¥254
149
¥105

¥295
137
¥158

$2,533
1,485$1,048Millions of yen

Thousands of
U.S. dollars

Obligations under finance leases:

Due within one year
Due after one year
Total

2008

2007

2008

¥ 49
56
¥105

¥ 60
98
¥158

$ 491
557
$1,048The amount of acquisition cost and obligations under finance leases includes the imputed interest expense portion.
Depreciation expenses, which are not reflected in the accompanying statements of operations, computed by the straight-line
method were ¥60 million ($603 thousand) and ¥68 million for the years ended March 31, 2008 and 2007, respectively.

21

OKUMURA CORPORATION

10. Commitments and Contingent Liabilities
The Group guarantees the condominium purchaser‘s deposits payable amounting to ¥101 million ($ 1,012 thousand) in connection with sales contracts of condominiums which were constructed by the Group at March 31, 2008.
Investments in securities in the amount of ¥54 million ($ 539 thousand) are pledged as collateral for the loans of an affiliate at March 31, 2008 and time deposits in the amount of ¥8 million ($ 80 thousand) are pledged for construction projects at
March 31, 2008.
11. Subsequent Events(1) Voluntary early retirement program:
The Company approved the voluntary early retirement program at the board of directors' meeting held on February 26, 2008.
The details of the program are as follows;a. Reasons for the implementation
The construction industry is expected to remain harsh due to several factors that include excess supply, ongoing reductions inprivate sector investments and increasing material and labor costs. Under these conditions, the Company offered the voluntary
early retirement program with aims to establish the organization meeting the forthcoming business size, to improve the profitability and competitiveness and to continue stable and sound management for the future.
b. Contents of the voluntary early retirement program
Eligibility; all employees aged 35 or overNumber of employees; approximately 560
Retirement payments; Additional special retirement payments to be paid on top of regular retirement payments to applicants.
In addition, the Company will assist the employees in looking for new jobs through human resource agents, if they wish.
Application period; May 1, 2008 through June 13, 2008
Date of retirement; June 30, 2008
c. Results
Number of Applicants; 622
d. Additional special retirement payments¥4,160 million ($41,521 thousand) as additional retirement payments.
(2) Appropriations of retained earnings
The following appropriation of retained earnings at March 31, 2008 was approved at the Company’s shareholders meeting
held on June 27, 2008.
Year-end cash dividends, ¥9 ($0.09) per share

22

Millions of yen

Thousands of
U.S. dollars¥1,800$17,96712. Segment Information
Information about industry segments, geographical segments and sales to foreign customers of the Company and subsidiaries
for the years ended March 31, 2008 and 2007, is as follows:
Industry segments
Major components of each business segment are as follows:
Construction: Civil engineering, buildings and other construction projects
Real estate: Sale and lease of real estate
Other: Manufacturing and distribution of construction materials and equipment, etc.
a. Sales and operating income
Millions of yen
2008

Sales to customers
Intersegment sales
Total sales
Operating expenses
Operating income

Construction

Real estate

Other

Eliminations/
Corporate¥245,659
836
246,495
262,821¥ (16,326)¥4,619
104
4,723
2,805
¥1,918¥3,812
1,185
4,997
5,222
¥ (225)¥—(2,125)(2,125)(2,140)¥15

Consolidated¥254,090—
254,090
268,708¥ (14,618)

b. Total assets, depreciation, impairment loss and capital expenditures
Millions of yen
2008

Total assets
Depreciation
Capital expenditures

Construction

Real estate

Other

Eliminations/
Corporate¥301,390
815
1,262¥27,20189
950¥5,57732
48¥(1,457)——

Consolidated¥332,711
936
2,260

a. Sales and operating income
Thousands of U.S. dollars
2008

Sales to customers
Intersegment sales
Total sales
Operating expenses
Operating income

Construction

Real estate

Other

Eliminations/
Corporate$2,451,934
8,342
2,460,276
2,623,228$ (162,952)$46,100
1,035
47,13528,000$19,135$38,048
11,83149,87952,119$ (2,240)$—(21,208)(21,208)(21,363)$
155

Consolidated$2,536,082—
2,536,082
2,681,984$ (145,902)

b. Total assets, depreciation, impairment loss and capital expenditures
Thousands of U.S. dollars
2008

Total assets
Depreciation
Capital expenditures

Construction

Real estate

Other

Eliminations/
Corporate$3,008,187
8,134
12,599$271,496
887
9,476$55,656319
482$(14,537)——

Consolidated$3,320,802
9,340
22,55723

OKUMURA CORPORATION

a. Sales and operating income
Millions of yen
2007

Sales to customers
Intersegment sales
Total sales
Operating expenses
Operating income

Construction

Other

Eliminations/
Corporate¥217,664
1
217,665
219,355¥ (1,690)¥10,106
2,268
12,374
9,348¥ 3,026¥—(2,269)(2,269)(2,349)¥80

Consolidated¥227,770—
227,770
226,354¥ 1,416b. Total assets, depreciation and capital expenditures
Millions of yen
2007

Total assets
Depreciation
Capital expenditures

Construction

Other

Eliminations/
Corporate¥384,346
599
1,259¥34,428111
1,607¥(3,127)——

Consolidated¥415,647710
2,866

Effective April 1, 2007, the Group changed its industry segmentation from construction and other to construction, real estateand other because the significance of the real estate development business has increased.
The effect of the change was to increase sales and operating income of real estate by ¥4,722 million and ¥1,917 million,
respectively and decrease sales and operating income of other by ¥4,722 million and ¥1,917 million, respectively. If the segment information for the year ended March 31, 2007 were prepared using the new segmentation, such information would be
as follows;a. Sales and operating income
Millions of yen
2007

Sales to customers
Intersegment sales
Total sales
Operating expenses
Operating income

Construction

Real estate

Other

Eliminations/
Corporate¥217,664
1
217,665
219,355¥ (1,690)¥7,453
111
7,564
4,245
¥3,319¥2,653
2,157
4,810
5,103
¥ (293)¥—(2,269)(2,269)(2,349)¥80

Consolidated¥227,770—
227,770
226,354¥ 1,416b. Total assets, depreciation and capital expenditures
Millions of yen
2007

Total assets
Depreciation
Capital expenditures24

Construction

Real estate

Other

Eliminations/
Corporate¥384,346
599
1,259¥28,400
90
1,589¥6,02821
18¥(3,127)——

Consolidated¥415,647
710
2,866

Independent Auditors‘ Report

Deloitte Touche Tohmatsu
Yodoyabashi Mitsui Building
4-1-1, Imabashi, Chuo-ku
Osaka-shi, Osaka 541-0042
Japan
Tel: +81 (6) 4560 6000
Fax: +81 (6) 4560 6001
www.deloitte.com/jp

INDEPENDENT AUDITORS' REPORTTo the Board of Directors of Okumura Corporation:
We have audited the accompanying consolidated balance sheet of Okumura Corporation and consolidated subsidiaries as ofMarch 31, 2008, and the related consolidated statements of operations, changes in equity, and cash flows for the year thenended all expressed in Japanese yen. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. The consolidated financial statements of Okumura Corporation and subsidiaries for the year ended March 31, 2007 were audited by otherauditors who have ceased operations. Those auditors expressed an unqualified opinion on those financial statements in theirreport dated June 28, 2007.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Okumura Corporation and consolidated subsidiaries as of March 31, 2008, and the consolidated results of
their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted inJapan.
As discussed in Note 11 to the consolidated financial statements, the Company offered a voluntary early retirement program.
Our audit also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, suchtranslation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for theconvenience of readers outside Japan.

June 27, 2008

25

OKUMURA CORPORATION

Non-Consolidated Balance Sheets
Okumura Corporation
As of March 31, 2008 and 2007

Millions of yen

Thousands of
U.S. dollars

2008

2007

2008

¥ 21,270¥ 39,600$ 212,300

224

8,884

2,231

3,803

3,213

37,959Trade notes

7,326

14,454

73,114

Trade accounts

76,546

54,615764,010

Other

22,98733,708229,439

Allowance for doubtful receivables(4,848)(4,055)(48,384)

102,530

120,394

1,023,355

8,355

5,120

83,391—

11,388—ASSETS

Current assets:
Cash and cash equivalents
Time deposits
Marketable securities
Receivables:

Inventories
Accumulated costs of uncompleted contracts
Other
Deferred tax assets
Prepaid expenses and other

2,380

3,071

23,750Total current assets

240,573

290,392

2,401,165

Land

11,768

11,952

117,464

Buildings and structures

14,66012,926

146,326

Machinery and equipment

4,924

6,366

49,147

Furniture and fixtures

2,461

2,937

24,562

Construction in progress

277

823

2,765

Property, plant and equipment:

Total
Accumulated depreciation
Net property, plant and equipment

34,09035,004340,264(15,566)(17,355)(155,370)

18,524

17,649184,894

62,801

96,331

626,817

Investments and other assets:
Investment securities
Investments in and advances to unconsolidated subsidiaries and associated companies

697

657

6,955

Long-term receivables

2,166

2,348

21,620

Other assets

3,483

4,921

34,765

Allowance for doubtful receivables

(162)

(39)

(1,613)

Total investments and other assets
Total

26

68,985104,218

688,544¥328,082¥412,259$3,274,603

Millions of yen

Thousands of
U.S. dollars

2008

2007

2008

¥ 11,561¥ 13,884$ 115,391

Trade notes

11,221

11,022

112,000

Trade accounts

74,38981,507

742,475

LIABILITIES AND EQUITYCurrent liabilities:
Short-term bank loans including current portion of long-term debt
Payables:

Other

371

1,358

3,706

68,13779,087680,078

Income taxes payable

116

466

1,157

Allowance for warranty work on construction projects

592

414

5,905

Advances received on uncompleted contracts

Allowance for losses on construction contracts

6,801

2,148

67,880

Other

9,916

18,07098,972

183,104

207,956

1,827,564

Total current liabilities

Long-term liabilities:
Long-term debt

397

479

3,962

Liability for retirement benefits

5,525

6,529

55,149Deferred tax liabilities

11,857

17,787

118,343

193

14

1,931

Other
Total long-term liabilities

17,97224,809179,385

Total liabilities

201,076

232,765

2,006,949

19,83919,839198,013

Commitments and contingent liabilities

Equity:Common stock
authorized, 480,376,000 shares; issued, 228,326,133shares
Capital surplus

25,32925,328

252,813Retained earnings

76,753

113,271

766,072

Unrealized gain on available-for-sale securities

17,34633,228173,131(12,261)(12,172)(122,375)

Treasury stock—at cost
28,308,113 shares in 2008 and 28,165,388 shares in 2007
Total equity

127,006

179,494

1,267,654

Total¥328,082¥412,259$3,274,603

27

OKUMURA CORPORATION

Non-Consolidated Statements of Operations
Okumura Corporation
For the years ended March 31, 2008 and 2007

Millions of yen

Thousands of
U.S. dollars

2008

2007

2008

¥249,844
243,3026,542¥225,217
201,829
23,388$2,493,703
2,428,410
65,293

Selling, general and administrative expenses
Operating income (loss)

21,173(14,631)21,854
1,534

211,325(146,032)

Other income (expenses):
Interest and dividend income
Interest expenses
Gain on sales of property, plant and equipment
Loss on disposal of property, plant and equipment
Devaluation of investment securities
Other—net
Other income (expenses)—net

1,668
(247)
784
(386)
(1,711)
497
605

1,441
(237)
978
(43)
(16)
3,457
5,580

16,649(2,465)
7,821(3,851)(17,074)
4,954
6,034

Income (loss) before income taxes(14,026)

7,114(139,998)

Income taxes:
Current
Refund of income taxes for prior periods
Deferred
Total income taxes

170
(199)
18,51818,489

426
—
2,573
2,999

1,697
(1,994)
184,829
184,532

4,115$ (324,530)

Yen

U.S. dollars¥20.4720.00$ (1.62)0.09

Net sales
Cost of sales
Gross profit

28

Net income (loss)¥ (32,515)

Per share of common stock:
Basic net income (loss)
Cash dividends applicable to the year

¥ (162.51)
9.00¥

Breakdown of Orders (Non-Consolidated)
Okumura Corporation
For the years ended March 31, 2008 and 2007

Construction Orders Awarded

2008

Millions ofyen

Civil engineering:
Domestic:
Public sector
Private sector
Overseas
SubtotalArchitectural construction:
Domestic:
Public sector
Private sector
Subtotal
Total:
Domestic:
Public sector
Private sector
Overseas
Total

69.0

13,449143,031
156,480

100 %

49,777173,277
21,822¥244,876

Composition
ratio

Millions of
yen

31.3%

¥ 58,379
35,085—97,46467.4

15,405
108,796
124,201

98.7
1.3
100 %

73,784
143,881—217,665
7,552¥225,217

Composition
ratio

Millions of
yen

46.8%

¥98,149
52,022
34,466
184,637

53.2

23,957206,186
230,143

100 %

122,106
258,208
34,466¥414,780

44,494
130,598(4)¥175,0882008¥ 45,811
23,225
9,194
78,2309,417
158,848
168,265
55,228
182,073
9,194
246,495
3,349¥249,844

Year-end Backlog¥ 86,858
48,47425,268160,600
24,513
158,260
182,773
111,371
206,734
25,268¥343,373

2008

Composition
ratio

Thousands of
U.S. dollars

36.1%$ 344,557
196,396(42)
540,91163.9

99,543
1,107,109
1,206,652

100 %

444,100
1,303,505(42)$1,747,563

Composition
ratio

Thousands of
U.S. dollars

41.5%$ 457,240
231,81491,765780,81955.1

93,995
1,585,462
1,679,457

96.6
3.4
100 %

551,235
1,817,276
91,7652,460,276
33,427$2,493,703

Composition
ratio

Thousands of
U.S. dollars

44.5%$ 866,937
483,821
252,199
1,602,957

55.5

244,667
1,579,594
1,824,261

100 %

1,111,604
2,063,415
252,199$3,427,218

2007

2008

Millions ofyen

Civil engineering:
Domestic:
Public sector
Private sector
Overseas
SubtotalArchitectural construction:
Domestic:
Public sector
Private sector
Subtotal
Total:
Domestic:
Public sector
Private sector
Overseas
Total

31.0%

¥ 36,328
30,246
21,822
88,396

9,973
110,921
120,894

Millions ofyen

Projects completed:
Civil engineering:
Domestic:
Public sector
Private sector
Overseas
SubtotalArchitectural construction:
Domestic:
Public sector
Private sector
Subtotal
Subtotal:
Domestic:
Public sector
Private sector
Overseas
Subtotal
Real estate and other
Total

Millions ofyen¥ 34,521
19,677(4)
54,194

Net Sales

2007

Composition
ratio

2008

2007

2008

29

OKUMURA CORPORATION

Network

Head and Branch Offices
Head Office
2-2-2, Matsuzaki-cho, Abeno-ku,
Osaka 545-8555, Japan
TEL: +81-6-6621-1101 FAX: +81-6-6623-7692

Kobe Office2-2-16, Isobe dori, Chuo-ku,
Kobe 651-0084, Japan
TEL: +81-78-221-9355 FAX: +81-78-251-3374

Tokyo Head Office
5-6-1, Shiba, Minato-ku,
Tokyo 108-8381, Japan
TEL: +81-3-3454-8111 FAX: +81-3-5427-8103

Hiroshima Branch
1-7-22, Kokutaiji-machi, Naka-ku,
Hiroshima 730-0042, Japan
TEL: +81-82-241-2246 FAX: +81-82-243-1416

Technical Research Institute387, Ohsuna, Tsukuba 300-2612, Japan
TEL: +81-29-865-1521 FAX: +81-29-865-1522

Shikoku Branch
1-8-41, Nishiki-machi,
Takamatsu 760-0020, Japan
TEL: +81-87-851-9008 FAX: +81-87-822-9286

Sapporo Branch
1-5, Minami Ichijo Higashi,
Chuo-ku, Sapporo 060-0051, Japan
TEL: +81-11-261-9261 FAX: +81-11-251-5345
Tohoku Branch
2-25, Tsutsumi dori, Amamiya-machi,
Aoba-ku, Sendai 981-8525, Japan
TEL: +81-22-274-1231 FAX: +81-22-275-1844
Tokyo Branch
5-6-1, Shiba, Minato-ku,
Tokyo 108-8381, Japan
TEL: +81-3-3454-8111 FAX: +81-3-5427-8111
Kitakanto Office
4-26-15, Kishi-cho, Urawa-ku,
Saitama 330-0064, Japan
TEL: +81-48-827-0188 FAX: +81-48-827-0268
Higashikanto Office18-14, Shinmachi, Chuo-ku,
Chiba 260-0028, Japan
TEL: +81-43-241-2255 FAX: +81-43-244-5911
Yokohama Office
60, Nihon Ohdori, Naka-ku,
Yokohama 231-0021, Japan
TEL: +81-45-662-1361 FAX: +81-45-641-3502
Hokuriku Office2-3-26, Higashi Ohdori, Chuo-ku,
Niigata 950-0087, Japan
TEL: +81-25-241-6160 FAX: +81-25-241-6364
Nagoya Branch
3-1-18, Taiko, Nakamura-ku,
Nagoya 453-8555, Japan
TEL: +81-52-451-1101 FAX: +81-52-451-3264
Kansai Branch
2-2-2, Matsuzaki-cho, Abeno-ku,
Osaka 545-8555, Japan
TEL: +81-6-6621-1101 FAX: +81-6-6623-7692

30

Consolidated Subsidiaries

Kyushu Branch
2-19-1, Sanno, Yahata Higashi-ku,
Kitakyushu 805-8531, Japan
TEL: +81-93-671-3131 FAX: +81-93-661-1543
Fukuoka Office
1-13-8, Yakuin, Chuo-ku,
Fukuoka 810-0022, Japan
TEL: +81-92-741-4431 FAX: +81-92-741-4740
Taiwan Branch
13F-5, Da-an Metro, No.6, Sec.4, ShinyiRd.,
Taipei, Taiwan 106, R.O.C
TEL: +886-2-2709-6895
FAX: +886-2-2709-6897

Okumura Machinery Corporation
3-5-26, Himejima, Nishiyodogawa-ku,
Osaka 555-0033, Japan
TEL: +81-6-6472-3461
FAX: +81-6-6477-6801
Business line:Design, manufacture, sales, andrepair of construction/industrial machines anddevices
Taihei Real Estate Corporation[Head Office]5-6-1, Shiba, Minato-ku,
Tokyo, 108-8381, Japan
TEL: +81-3-5439-5401
FAX: +81-3-5439-5402[Osaka Branch]
2-2-2, Matsuzaki-cho, Abeno-ku,
Osaka, 545-8555, Japan
TEL: +81-6-6625-3959
FAX: +81-6-6629-3938
Business line: Real estate, land and building
management

Board of Directors

Investor Information(As of June 27, 2008)(As of March 31, 2008)

Directors and Auditors

Corporate Data

President & Representative Director
Takanori Okumura
Representative Directors
Yuichi Kanbara
Shigeru Nishinaka
Directors
Kunimoto Tanaka
Yoshihiko Kunii
Masakuni Sakurai
Kohei Tanaka
Takaiku Hirako
Toshio Yamaguchi
Standing Statutory Auditors
Yoshitaka Mikata
Shojiro Sumikura
Auditors
Kiyoshi Inazaki
Teruyasu Kawamata
Shinji Ito

Okumura was established in 1907 based on two key principles
enshrined in the corporate mottos “steadfast management” and“sincere operation.” The steady growth achieved over the years
has been made possible through the unflagging support of ourcustomers.
Okumura’s main business activities include construction
projects for houses, public facilities, medical facilities, and officebuildings. In the area of civil engineering are projects such as railways, roads, power station facilities, sewage and water works,
and others. The Company has developed technology at the highest level, with achievements including the seismic isolation systemused to construct Japan’s first earthquake-absorbing building. In
the area of environment-related technology, Okumura has devel-

Contents
1 Financial Highlights
2 To our Shareholders
3 Outline of the Five-Year Medium-Term Business Plan
4 Review of Operations
6 Topics
8 Consolidated Balance Sheets
10 Consolidated Statements of Operations
11 Consolidated Statements of Changes in Equity
12 Consolidated Statements of Cash Flows
13 Notes to the Consolidated Financial Statements
25 Independent Auditors’ Report
26 Non-Consolidated Balance Sheets
28 Non-Consolidated Statements of Operations
29 Breakdown of Orders (Non-Consolidated)
30 Network
31 Board of Directors / Investor Information

oped techniques for 100% recycling of demolished concrete, andnatural greening of concrete surfaces on buildings.
Okumura understands what an important mission it is toprovide a better environment for the future. Accordingly, theCompany is dedicated to contributing to meaningful social infrastructure investment and to always being a corporation regarded
highly by society. It will achieve this by continuing to develop as
an all-around construction company based on steadfast business

Disclaimer Regarding Forecasts and Projections
This Annual Report includes forecasts, projections and other predictive statements that represent Okumura’s assumptions and expectations in light of currently available information. These forecasts,
etc., are based on industry trends, circumstances involving clientsand other factors, and involve risks, variables and uncertainties. The
Okumura Group’s actual performance results may differ from thoseprojected in this Annual Report. Consequently, no guarantee ispresented or implied as to the accuracy of specific forecasts, projections or predictive statements contained herein.

Head Office
OKUMURA CORPORATION
2-2-2, Matsuzaki-cho, Abeno-ku, Osaka 545-8555, Japan
TEL: +81-6-6621-1101 FAX: +81-6-6623-7692
EstablishedFebruary 22, 1907
Capital¥19.8 billion
Group Employees
2,545

Note: Kiyoshi Inazaki, Teruyasu Kawamata, and Shinji Ito are outside auditors.

Stock Information

Executive Officers

Stock Exchange Listings
Tokyo and Osaka

Executive Vice Presidents
Yuichi Kanbara*
Shigeru Nishinaka*
Senior Managing Officers
Kunimoto Tanaka*
Yoshihiko Kunii*
Masakuni Sakurai*
Kohei Tanaka*
Managing Officers
Tadashi Hashimoto
Yoshikuni Ogi
Masamichi Shirahase
Yoshiteru KinoshitaKazuo Okuda
Takaiku Hirako*
Toshio Yamaguchi*
Executive Officers
Kozo Tsukamoto
Akiyoshi Hida
Takumi Makino
Kenichiro Minami
Kazuo Takami
Koji Imai
Norimasa Takahashi
Tetsuo Ojima
Kozo Aoki
Kazuhiro Kitazaki
Shinichi Okamoto
Hiroyuki Ito
Toshiharu Shimizu
Koji Esumi
Toshio Kobayashi
Note: Those officers marked with an asterisk (*) work as directors.

Transfer Agent
The Sumitomo Trust and Banking Co., Ltd.
Major Shareholders
Shares held
(thousands)

Percentage oftotal

Okumura Corporation(Treasury stock)

28,30812.40%

Northern Trust Company(AVFC) Sub-account
American Clients

21,5489.44%

State Street Bank and Trust
Company

10,406

4.56%

Okumura Employees’
Shareholding Association

8,196

3.59%

Resona Bank, Limited.

6,074

2.66%

Sumitomo Realty &Development Co., Ltd.

6,050

2.65%

Sumitomo Mitsui Banking
Corporation

5,568

2.44%

BBH 493025 Black Rock
Global Allocation

4,609

2.02%

Nippon Life Insurance Company

4,593

2.01%

Japan Trustee Services
Bank, Ltd. (Trust Account)

4,026

1.76%

Shareholder

management.

2

31

OKUMURA CORPORATION
2-2-2, Matsuzaki-cho, Abeno-ku, Osaka 545-8555, Japan
TEL: +81-6-6621-1101 FAX: +81-6-6623-7692
http://www.okumuragumi.co.jp

Okumura Corporation
Annual Report 2008

Printed in Japan