Okumura Corporation Annual Report 2009

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 our customers.
Okumura’s main business activities include construction projects for houses, public facilities, medical
facilities, and office buildings. 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 system used to construct Japan’s first earthquake-absorbing
building. In the area of environment-related technology, Okumura has developed techniques for 100% recyclingof demolished concrete, and natural greening of concrete surfaces on buildings.
Okumura understands what an important mission it is to provide a better environment for the future.
Accordingly, the Company is dedicated to contributing to meaningful social infrastructure investment and toalways being a corporation regarded highly by society. It will achieve this by continuing to develop as an allaround construction company based on steadfast business management.

Contents
1 Financial Highlights
2 To Our Shareholders
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

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.

Financial Highlights

For the years ended March 31

2007

2008

Consolidated:

2009

2009
Thousands of
U.S. dollars

Millions of yen

Net sales
Operating income (loss)
Net income (loss)
Total assets
Total equity¥227,770
1,416
4,124
415,647
182,903¥254,090(14,618)(32,476)
332,711
128,820Per share:¥226,974
4,399(3,406)
293,677
115,155$2,309,928
44,770(34,659)
2,988,777
1,171,945

Yen

Basic net income (loss)¥20.51

Non-Consolidated:¥(162.32)

U.S. dollars¥(17.03)$(0.17)
Thousands of
U.S. dollars

Millions of yen

Net sales
Operating income (loss)
Net income (loss)
Total assets
Total equity¥225,217
1,534
4,115
412,259
179,494¥249,844(14,631)(32,515)
328,082
127,006

Per share:¥220,760
4,310(3,800)288,492
113,034$2,246,695
43,868(38,672)
2,936,008
1,150,360

Yen

Basic net income (loss)¥20.47¥(162.51)

U.S. dollars¥(19.00)$(0.19)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, 2009, of ¥98=U.S.$1.

Net Sales

Net Income(Millions of Yen)

Total Equity(Millions of Yen)

300,000(Millions of Yen)

5,000

200,000

4,000
150,000

3,000

200,000

2,000
100,000
1,000
100,000

0

50,000-4,0000-35,000

2007

2008

Non-Consolidated
Consolidated

2009

0

2007

2008

Non-Consolidated
Consolidated

2009

2007

2008

Non-Consolidated
Consolidated

2009

1

To Our Shareholders

2

We would like to thank our shareholders for theirprojects and other, which resulted in a net loss ofcontinuing support and encouragement, and we wish

¥3,406 million.

each of them the greatest success in their own range
of endeavors.
A general overview of business performance for

Despite the posting of regrettable business results
for two consecutive years, the Company remainedcommitted to its basic corporate policy regarding

the period to March 2009 (April 1, 2008 to March 31,

profit sharing and paid a regular dividend of ¥9.00 per2009) is provided in the following sections.

share for the period under review.

Fiscal 2009 Results

Looking Ahead and Key Strategies

During the period under review, Japan’s economy

It is expected that Japan’s economy will be buoyedplunged deeply into a recession in the midst of global

eventually by the government’s economic measures,financial instability. The construction industry was hit

but the sluggishness in domestic demand and export

hard by the effects, which included a sharp decline

demand is likely to remain for the foreseeable future.

in private-sector demand, and found itself forced to

The construction industry will be forced to maneuver

operate in an increasingly difficult business environment.

through an uncertain business environment.

In these circumstances, the Company’s consoli-

To overcome these difficult conditions, the Okumura

dated net sales fell 10.7% year on year, to ¥226,974

Group, guided by its Five-Year Medium-Term Businessmillion, but consolidated gross profit rose significantly

Plan, will remain committed to the selective order-

to ¥21,820 million due to improved construction

taking approach and move ahead with structural

profitability and other. Combined with consolidated

reform. The reform includes streamlining to facilitate

operating income of ¥4,399 million, the Company’s

the Company’s transformation into a business with aresults exceeded the targets set forth for Year 1 in its

highly profitable structure and achieve higher mana-

Five-Year Medium-Term Business Plan, which went

gerial efficiency, while maintaining a healthy financial

into force in April 2008.

position, with goals of ordinary income and consoli-

Nevertheless, the Company recorded extraordinary
losses composed of the additional portion of special
severance pay provided in conjunction with its early

dated ordinary income exceeding ¥6,000 million and¥6,500 million, respectively.
In civil engineering operations, our specific actions

retirement program carried out in May and June 2008

will include further encouragement of targeted cost

amounting to ¥4,152 million, impairment losses on

reductions, a selective approach to focused projects

investment securities amounting to ¥2,730 million andbased on proprietary technologies and past works

a loss of ¥3,274 million due to cancelled development

executed, and initiatives to develop greater organi-

3

zational readiness for bidding procedures including

ture to achieve higher efficiency. As part of thesecomprehensive evaluation and to boost the accuracy

efforts, the Company underwent a key organizationalof cost estimation. All of these actions aim to enhancechange in October 2008 with the launch of a dual

the Company’s price competitiveness and strengthen

branch structure—East Japan Branch and West Japanthe engineering solutions delivered to clients.

Branch—in addition to offering early retirement

In construction operations, where persistent pricecompetition is a key factor in the bidding process anddescribed earlier.
For the future, Okumura will apply all of its resources

clients’ needs are diversifying, the Company will seek

with the aim of responding quickly and flexibly toto avoid competition based purely on price factors

shifting trends and the changing operating environment,by adopting a selective bidding approach that places

and thereby build a strong business foundation in

utmost priority on project profitability for eachaccordance with its corporate philosophy, which has

intended use category of buildings. Efforts parallel toendured through the many years since the Company’s

this will seek to boost the rate of design and construc-foundation. This will enable Okumura to maintain thetion projects that fully leverage Okumura’s strengths

trust and confidence of its shareholders.

and unique added value, including technologies foradvanced seismic isolation, high-rise buildings andIn all its efforts, the Company looks forward to theacoustic simulation. In addition, the Company is step-

continued support and patronage of its shareholders.

ping up activities to develop a centralized management structure for VE/CD proposals with the goal of
improving profitability.

June 2009

The environment surrounding real estate operations
is expected to remain difficult, and a positive turnaround in business is unlikely in the short term. However, the Company will engage in leasing activities as

Takanori Okumura

opportunities emerge by maximizing the potential use of

President and Representative Director

company-held properties to secure stable profitability.
In the area of the Company’s organization, attempts
to improve the earnings structure are being madeprimarily through cost reductions, which consist of
adjusting workforce to match the business scale anddownsizing of the organizational/management struc-

Review of Operations

Major Projects Completed
BUILDINGS

4

Mallage Shobu Shopping Mall

Suncity Palace Tsukaguchi

Work period: October 2007 to November 2008
Structure: Steel
Total floor area: 139,879.17m2

Work period: May 2006 to September 2008
Structure: RC, partially steel structure
Total floor area: 65,667.62m2

Maruzen Showa Unyu: 		
Sagamihara Distribution CenterWork period: April 2008 to December 2008
Structure: Steel
Total floor area: 16,760.49m2

City Tower Osaka Fukushima
Work period: October 2006 to March2009
Structure: RC, partially steel structure
Total floor area: 36,951.69m2

CIVIL ENGINEERING

Yokohama Subway Line 4:
Joyama Section
Work period: March 2002 to November
2008
Single-line parallel shield method
Outer diameter of the shield: 5,380mm
Total length: 2,257m

The Second Tomei Expressway:
Kanaya Tunnel East
Construction WorkWork period: March 1997 to December
2008
Total construction length: 2,450m
Earthwork length: 336m
Total tunnel length: 4,054m(inbound: 1,940m; outbound: 2,114m)
Cross-section: 190m2

Nishi Osaka Extension Line Construction Work:First Construction Zone
Work period: June 2003 to March 2009
Total length: 1,351m
Viaduct length: 656m
U-type retaining wall length: 210m
Open cut tunnel length: 485m

Orders Received
BUILDINGS

5

Komori Corporation:
Tsukuba Factory
Work period: August 2008 to
December 2009
Structure: Steel
Total floor area: 25,242.72m2

Chaya-machi East Area:
Type I Urban District
Redevelopment ProjectWork period: December 2008 toJune 2011
8 buildings
Structure: RC, partially SRC applied
Total floor area: 35,865.92m2

Abeno A1 District:Type II Urban District
Redevelopment ProjectA1-2 BlockWork period: January 2009 to
December 2011
Structure: RC
Total floor area: 26,010.58m2

Matsue City New Waste
Processing Facility
Work period: July 2008 to
March 2011
Waste incineration plant: S, SRC,
RC structure
Total floor area: 14,553.3m2
Administration building and others:
4 buildings

CIVIL ENGINEERING

Kisei Expressway:
Tayama Section

Sako District:		
Landslide Prevention WorkWork period: July 2008 to June 2011
Work length: 1,395m (earthwork
672m, bridge 723m)
Earthwork:
Excavation: 464,000m3, Substructure:
21,700m3, Soft ground stabilization:
49,000m3
Bridge:Bridge abutment x 10, Bridge pier x
13, Deep foundation pile: 2.5m x 2(L=16m), 8.0m x 3 (L=52m), 8.5m x 4(L=29m), Cast in place pile: 1,200mm
x 77 (L=1,511m)

Work period: August 2008 to
February 2011
Drilling: 19,040m3, Loading berm
(cement-treated soil) =125,000m3
Anchor work (18.0 to 56.5m) x 123
piles, Fiber-mixed shotcrete: 3,121m2
Cast in place work for flow channel:
4,222m3

National Highway Route 47:
Sagoshi District Substructual
Work

Sagami Reservoir:
Dredging Work of
Sediment Deposition

Work period: June 2008 to May 2009
Reinforced concrete bridge pierconstruction work
Steel sheet pile groundwork
Steel sheet pile
P6 (1200mm t=14 L=44.5-45.5m) x72
P7 (1200mm t=14 L=44.5-45.5m) x72
P8 (1200mm t=14 L=44.5-45.5m) x72
Top panel concrete work: 1,080m3
Pier construction work (P6/P7/P8)
H-shape steel installation: 50 plates
Pier-case assembly and installation:
1,199m2
Concrete: 1,312m3
Reinforced bar: 44.43t

Work period: June 2008 to March2009
Dredging work: 205,000m3
Temporary soil for base: 205,000m3
Sediment removal: 110,000m3

Topics

Connecting
plate

Connecting
plateInternal structure ofconcrete panels

6

The opening may serve as
doorway or passage❶ Vertical screw press machine❷ PCa concrete panels with built-In steel-plate braces❶ Horizontal screw press machine❸ Former residence of Naoya Shiga❶ First Expanded Application of Okumura’s Continuous Slurry
Dewatering System to the Slurry Shield Method

Okumura devised a new application for its continuous slurry
dewatering system, which was developed to dredge anddewater sedimentary soil in reservoirs. The system is now
available for use in the secondary slurry processing plant
for the slurry shield method. The expanded application was
adapted for the project of sewage conduits for the Neyagawa
basin’s additional and supplementary trunk lines at the southof the airport (Phase III), which Okumura contracted with
the Osaka Prefectural Government’s Eastern Basin Sewage
Bureau. The project has succeeded in demonstrating thesystem’s suitability for processing of slurry materials that
contain ultrafine particles produced in the process of shield
construction.
Compared with the filter press machines typically
employed in secondary sludge processing plants, screw pressmachines (vertical and horizontal types) used for the system
offer advantages such as (1) smaller space required for the
installation, (2) manpower-saving and lower costs due tocontinuous operating capabilities, and (3) higher quality andreduced volume of dewatered soil.

❷ The Method Using PCa Concrete Panels with Built-In SteelPlate Braces Is Certified by the General Building Research Corporation of Japan for Building Technological Performance

The retrofit method to boost earthquake resistance using PCa
concrete panels with built-in steel-plate braces for existing
RC and SRC buildings has been enhanced further with the❸ Gate to the former residence

development of a new version featuring an opening, which
may serve as a passage and others, on the earthquake-resistantwall to be retrofitted. For the new version, Okumura obtained
a certificate of building technology from the General Building
Research Corporation of Japan on September 2, 2008.
The method does not require use of anchors to connect theearthquake-resistant wall to the existing frame, and it entails
less noise, vibration and dust. Accordingly, it is ideal for quakeresistant retrofitting carried out while a building remains inoperation. The new development, which allows greater flexibility
in design, has effectively expanded the range of solutions
Okumura can provide to clients for antiseismic reinforcement,
whose demand is expected to grow in the future.

❸ Restoration Work on the Residence of Renowned Author Naoya
Shiga

The residence of the celebrated Japanese writer Naoya Shiga
located in the city of Nara’s Takabatakecho district has been
restored to its original state by Okumura. Shiga (1883–1971),
a renowned novelist and short-story writer whose major works
included "A Dark Night’s Passing" and "At Kinosaki,” lived in
the house during the early years of the Showa Period. Given
responsibility for the restoration work as well as its design,
Okumura worked together with specialists and painstakingly
noted every detail requiring repair or restoration work byobserving photos of the house taken in earlier years, to ensurefaithful restoration to the original form. Currently, all rooms
on the second floor of the house are open to the public,
including Shiga’s study, where it is believed A Dark Night’s
Passing was written.

Cosine curve
RollerNo quake

Quake

When the upper part sways sideways during anearthquake, the roller will spin, forcing theupper and lower rails to slide sideways in
opposite directions. The upper rail is liftedslightly in this process. The mechanism utilizes
the upper rail’s gravity-induced power to return
to its original position.
❹ The Second Tomei Expressway

Kanaya Tunnel❺ Mechanism of the cosine❺ Mizunoko Shima Lighthouse❺ Seismic isolation device

rail bearing(Oita Prefecture)

for Class 3 lighthouse lens7

❻ Exterior of the Kumano Kodo Center (corridor section)❻ Exterior of the Kumano Kodo Center (night view)❹ Okumura Was Awarded 2007 JSCE AWARD in Three Categories:
The Outstanding Civil Engineering Achievement Award, the ThesisAward and the Technical Service Award❺ Okumura Receives the Japan Society of Seismic Isolation
Award in Recognition of Its Contribution to the Development andPenetration of Seismic Isolation Technology

On May 30, 2008, Okumura was presented with 2007 Japan
Society of Civil Engineers (JSCE) Prizes in three categories andcommended at the society’s annual meeting. The construction
work by Okumura at the Second Tomei Expressway Kanaya
Tunnel was cited for the Outstanding Civil Engineering
Achievement Award, while the experimental study on thepile-head joint using steel pipes received the Thesis Award. In
addition, our civil engineer received the Technical Service Award.
Awards were presented in recognition of the following:

The seismic isolation device for lighthouse lenses developed andcommercialized by Okumura was selected by the Japan Societyof Seismic Isolation (JSSI) for its 9th JSSI Technology Prize. The
award was presented to Okumura during the society’s general
meeting on May 29, 2008.
This prize-winning seismic isolation device for lighthouselenses has been in use at 37 lighthouses across Japan. The
award was presented in recognition of the many positive
results the device has produced on the strength of the superb
seismic isolation property of its cosine rail bearing (please see
the diagram shown above), following a series of improvements
and enhancements carried out by Okumura to overcome thetechnically demanding locational constraints, as well as thesocial contribution to maritime safety and the preservation ofhistoric lighthouse structures.

JSCE Outstanding Civil Engineering Achievement Award(Group I)
Excavation of vehicular tunnels of extra-long distance and extralarge cross-sectional area through a mountain noted for fragile
ground conditions at the Second Tomei Expressway Kanaya
Tunnel.
JSCE Thesis Award
Experimental study concerning the pile-head joint using steel
pipes.
JSCE Technical Service Award
The Technical Service Award was presented in the categoryof "construction and inspection." Other categories are"education, research and awareness elevation," "surveying andplanning," "design and supervision," "sites and compensation,"and "management, operation, disaster prevention andmaintenance."❻ The Kumano Kodo Center Receives BCS Award from the Building Contractors Society

The Kumano Kodo Center of Mie Prefecture, a building
constructed by Okumura, received the 49th annual BCS Award.
In making the award, the Building Contractors Society noted,"Composed of columns and beams made of locally produced
Owase hinoki (Japanese cypress) in combination with others, thebuilding is so designed to perfectly blend itself into its natural
surroundings; at the same time, it makes visitors inside thebuilding feel as if they were outside immersing themselves in thecomplete serenity of the ancient pilgrimage road."Consolidated Balance Sheets
Okumura Corporation and Consolidated Subsidiaries
As of March 31, 2009 and 2008

Millions of yen

Thousands of
U.S. dollars(Note 1)

2009

2008

2009

¥ 30,811¥ 21,445$ 313,569

2,007

224

20,426

122

3,803

1,238

Trade notes

5,790

7,631

58,929Trade accounts

57,40478,360584,205

ASSETS

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

8

Receivables:

Unconsolidated subsidiaries and associated companies

1,214

19

12,354Other

14,46914,648147,254

Allowance for doubtful receivables
Inventories (Note 4)(4,316)(4,634)(43,926)

116,044

116,374

1,180,993

Prepaid expenses and other

983

2,399

9,998

Total current assets

224,528240,269

2,285,040

Property, plant and equipment (Note 5):Land

16,68016,229169,752

Buildings and structures

15,577

15,266

158,531

Machinery and equipment

4,046

5,481

41,173

Furniture and fixtures

2,240

2,524

22,7999—90

Lease assets
Construction in progress
Total
Accumulated depreciation
Net property, plant and equipment

752

328

7,655

39,30439,828400,000(15,183)(16,610)(154,518)

24,121

23,218245,482

41,443

63,127421,771

Investments and other assets:
Investment securities (Notes 3 and 11)

793

577

8,067

1,988

2,185

20,229Other assets

2,259

3,497

22,991

Allowance for doubtful receivables(1,455)(162)(14,803)

Investments in and advances to unconsolidated subsidiaries and associated companies
Long-term receivables

Total investments and other assets
Total
See notes to consolidated financial statements.

45,02869,224458,255¥293,677¥332,711$2,988,777

Okumura Corporation Annual Report 2009

LIABILITIES AND EQUITY

Millions of yen

Thousands of
U.S. dollars(Note 1)

2009

2008

2009

¥ 9,498¥ 10,995$ 96,662

Current liabilities:
Short-term bank loans including current portion of long-term debt (Note 5)
Payables:Trade notes

11,642

12,100118,487

Trade accounts

63,59674,814647,220

222

407

2,257

60,76968,172

618,455

241

148

2,448

Other
Advances received on construction projects in progress
Income taxes payable

457

632

4,647

Allowance for losses on construction contracts

5,133

6,905

52,237

Other

12,807

10,265130,341

164,365

184,438

1,672,754

Allowance for warranty work on construction projects

Total current liabilities
Long-term liabilities:

266

405

2,704

5,639

5,525

57,386

Deferred tax liabilities (Note 8)

6,937

11,90870,597

Negative goodwill

1,134

1,418

11,544

181

197

1,847

Long-term debt (Note 5)
Liability for retirement benefits (Note 6)

Other
Total long-term liabilities

14,157

19,453144,078

Total liabilities

178,522

203,891

1,816,832

Commitments and contingent liabilities (Note 11)

Equity (Notes 7 and 12):
Common stock
19,83919,839201,903

Capital surplus

25,32725,329257,762

Retained earnings

73,34778,553

746,462

Unrealized gain on available-for-sale securities

8,959

17,36091,167(12,317)(12,261)(125,349)

authorized, 480,376,000 shares; issued, 228,326,133 shares

Treasury stock—at cost
28,451,549 shares in 2009 and 28,308,113 shares in 2008
Total equity

115,155

128,820

1,171,945

Total¥293,677¥332,711$2,988,777

9

Consolidated Statements of Operations
Okumura Corporation and Consolidated Subsidiaries
For the year ended March 31, 2009 and 2008

Millions of yen

Thousands of
U.S. dollars(Note 1)

2009

2008

2009

¥226,974
205,154
21,820¥254,090
247,103
6,987$2,309,928
2,087,869
222,059

Selling, general and administrative expenses
Operating income (loss)

17,421
4,399

21,605(14,618)

177,289
44,770

Other income (expenses):
Interest and dividend income
Interest expense
Amortization of negative goodwill
Gain on sales of property, plant and equipment
Loss on disposal of property, plant and equipment
Impairment losses on investment securities
Extra payments for early retirement
Write down of real estate and other
Other—net
Other income (expenses)—net

1,520
(192)
284
418
(109)
(2,730)(4,152)(3,274)646(7,589)

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

15,467(1,955)
2,886
4,254(1,107)(27,779)(42,259)(33,324)
6,582(77,235)

Loss before income taxes and minority interests(3,190)(14,140)(32,465)

121
—
95
216

213
(200)
18,42718,440

1,227
—
967
2,194

—
¥ (3,406)(104)¥ (32,476)—$ (34,659)

Yen

U.S. dollars(Note 1)¥(162.32)
9.00$(0.17)0.09

Net sales
Cost of sales
Gross profit

10

Income taxes (Note 8):
Current
Refund of income taxes for prior periods
Deferred
Total income taxes
Minority interests in net income
Net loss
Per share of common stock (Note 12):
Basic net loss
Cash dividends applicable to the year
See notes to consolidated financial statements.

¥ (17.03)
9.00

Consolidated Statements of Changes in Equity
Okumura Corporation and Consolidated Subsidiaries
For the year ended March 31, 2009 and 2008

Okumura Corporation Annual Report 2009

Thousands

Outstanding
number ofshares ofcommonstockMillions of yen

Commonstock

Capitalsurplus

Unrealized
gain onavailable
Retainedfor-saleearnings securities

Treasury
stock

Total

Minority
interests

Total
equityBALANCE, MARCH31, 2007
Net loss
Cash dividends, ¥20 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2008

200,161 ¥19,839 ¥25,328 ¥115,033 ¥33,268 ¥(12,172) ¥181,296——— (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¥1,607 ¥182,903— (32,476)— (4,004)
—
(92)
—
4
(1,607) (17,515)¥ — ¥128,820

Net loss
Cash dividends, ¥9 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2009——
— (3,406)—— (3,406)——— (1,800)—— (1,800)
(178)
—
—
—
—
(71)
(71)
35
—
(2)
—
—
15
13
—
—
—
— (8,401)— (8,401)
199,875 ¥19,839 ¥25,327 ¥73,347 ¥ 8,959 ¥(12,317) ¥115,155— (3,406)— (1,800)
—
(71)
—
13
— (8,401)¥ — ¥115,155

Thousands of U.S. dollars (Note 1)

Commonstock

Capitalsurplus

Unrealized
gain onavailable
Retainedfor-saleearnings securities

Treasury
stock

Total

BALANCE, MARCH 31, 2008

$201,903 $257,779 $799,441 $176,668 $(124,779) $1,311,012

Net loss
Cash dividends, $0.09 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2009—
— (34,659)—— (18,320)
—
—
—
—
(17)
—
—
—
—
$201,903 $257,762 $746,462

See notes to consolidated financial statements.

—— (34,659)—— (18,320)
—
(725)
(725)
—
155
138
(85,501)— (85,501)$91,167 $(125,349) $1,171,945

Minority
interests

Total
equity$— $1,311,012$— (34,659)— (18,320)
—
(725)
—
138
— (85,501)— $1,171,945

11Consolidated Statements of Cash Flows
Okumura Corporation and Consolidated Subsidiaries
For the year ended March 31, 2009 and 2008

12

Millions of yen

Thousands of
U.S. dollars(Note 1)

2009

2008

2009

¥(3,190)¥(14,140)$(32,465)

Cash flows from operating activities:
Loss before income taxes and minority interests
Adjustments for:
Income taxes—paidDepreciation and amortization
Amortization of negative goodwill
Provision for doubtful receivables
Loss on disposal of property, plant and equipment
Gain on sales of property, plant and equipment
Impairment losses on marketable and investment securities
Extra payments for early retirement
Write down of real estate and other
Changes in assets and liabilities:
Decrease (increase) in trade notes and accounts receivable
Decrease (increase) in accumulated costs of construction projects in progress
Increase in other inventories
Increase (decrease) in trade notes and accounts payable
Decrease in advances received on uncompleted contracts
Increase (decrease) in liability for retirement benefits
Other—net
Total adjustments
Net cash used in operating activities

(158)
944
(284)
991
109
(418)
2,793
4,152
3,274

(423)
936
—
912
177
(800)
1,711
—
—

(1,607)9,606(2,886)
10,084
1,107(4,254)28,42242,25933,324

20,739(946)(1,858)(11,550)(7,403)114(2,365)
8,134
4,944

(15,368)
17,904(4,735)
3,685(10,964)(1,003)(3,982)(11,950)(26,090)

211,056(9,628)(18,912)(117,546)(75,337)
1,154(24,064)
82,77850,313

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

215
(276)
9,353
(1,972)
518
(288)
258
81
7,889

9,860
(1,071)
4,928(2,444)
1,015
(159)
150
1,089
13,3682,203(2,810)95,189(20,074)
5,268(2,933)2,625
821
80,289Cash 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
Other
Net cash used in financing activities(1,319)
(158)
(71)
14
(1,804)—(1)(3,339)(1,194)(99)(92)
4(3,994)(9)—(5,384)(13,421)(1,607)(725)
138(18,356)—(13)(33,984)

(128)
9,366
21,445¥30,811(86)(18,192)
39,637¥21,445(1,300)95,318218,251$313,569

Foreign currency translation adjustments on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
See notes to consolidated financial statements.

Notes to the Consolidated Financial Statements
Okumura Corporation and Consolidated Subsidiaries
Year ended March 31, 2009 and 2008

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 Act and its
related accounting regulations and in conformity withaccounting principles generally accepted in Japan (”Japanese
GAAP”), 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 2008 financial statements to conformto the classifications used in 2009.
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 ¥98 to $1,
the approximate rate of exchange at March 31, 2009. 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, 2009 and 2008 include the accounts of theCompany and its 2 significant subsidiaries (together, the”Group”) ·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 6 unconsolidated subsidiaries and 2 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 fair value of net assets of consolidated subsidiaries andassociated companies at the date of acquisition are amortized on a straight-line basis over 5 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.

Okumura Corporation Annual Report 2009b. 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 3 months of the date ofacquisition.
c. Inventories — Construction projects in progress are stated at cost determined by the specific identification method.
Real estate held for sale and development projects inprogress 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 held-to-maturity, are reported at fair value, with unrealized gains and losses,
net of applicable taxes, reported in a separate component ofequity.
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 Article 2 of the Financial Instruments
and Exchange Act) are valued at the equivalent net equity
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 based on the estimated useful
lives of the assets, while the straight-line method is applied tobuildings acquired after April 1, 1998 and lease assets. The
range of useful lives is principally from 3 to 60 years forbuildings and structures, from 4 to 17 years for machineryand equipment, and from 2 to 20 years for furniture and fixtures. The useful lives for lease assets are the terms of therespective leases.
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

13

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
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.

14

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 expected and estimated.
j. Employees' Retirement Benefits — The Company has acontributory funded pension plan covering substantially all of
their employees.
Liability for retirement benefits for employees is recorded based on the estimated present value of projected benefit
obligations and the fair value of the plan assets at the end 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 amortized
subsequent to the year in which they arise on a straight-line
basis over the period of 10 years which is within the employees' average remaining service years. Unrecognized prior service costs have been amortized on a straight-line over theperiod of 10 years which is within the employees’ averageremaining service years.
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$ 50,885 thousand) arerecognized by the percentage-of-completion method.
Revenues from other construction contracts are recognized by the completed-contract method.
The revenues recognized by way of the percentage-ofcompletion method for the years ended March31, 2009 and2008 were ¥37,105 million($377,624 thousand) and¥34,679 million, respectively.

l. Leases — In March 2007, the ASBJ issued ASBJ Statement
No.13, “Accounting Standard for Lease Transactions”, whichrevised the previous accounting standard for lease transactions issued in June 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.
Under the previous accounting standard, finance leases
that deemed to transfer ownership of the leased property to
the lessee were to be capitalized. However, other financeleases were permitted to be accounted for as operating leasetransactions if certain “as if capitalized” information is disclosed in the notes to the lessee’s financial statements. The
revised accounting standard requires that all finance leasetransactions should be capitalized to recognize lease assets
and lease obligations in the balance sheet. In addition, therevised accounting standard permits leases which existed at
the transition date and did not transfer ownership of theleased property to the lessee to be accounted for as operating leases transactions.
The Company applied the revised accounting standard
effective April 1, 2008. In addition, the Company accounted
for leases which existed at the transition date and do nottransfer ownership of the leased property to the lessee as
operating lease transactions. The effect of this change on
operating income and loss before income taxes and minority
interests for the year ended March 31, 2009 was not material.
m. Income Taxes — The provision for income taxes is computed based on the pretax loss included in the consolidated
statements of operations. 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.
n. Per Share Information — Basic net loss per share is computed by dividing net loss 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 operations are dividends
applicable to the respective years including dividends to be
paid after the end of the year.

Okumura Corporation Annual Report 2009

o. New Accounting Pronouncements
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. In December 27, 2007, the ASBJ issued a
new accounting standard for construction contracts. Under
this new accounting standard, the construction revenue andconstruction costs should be recognized by the percentageof-completion method, if the outcome of a construction contract can be estimated reliably. When total construction
revenue, total construction costs and the stage of completionof the contract at the balance sheet date can be reliably 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 methodshould be applied. When it is probable that total construction
costs will exceed total construction revenue, an estimatedloss on the contract should be immediately recognized byproviding for loss on construction contracts. This standard isapplicable to construction contracts and software development contracts and effective for fiscal years beginning on orafter April 1, 2009 with early adoption permitted for fiscal
years beginning on or before March 31, 2009 but after
December 27, 2007.
Asset Retirement Obligations — On March 31, 2008, the
ASBJ published a new accounting standard for asset retirement obligations, ASBJ Statement No.18 ‘‘AccountingStandard for Asset Retirement Obligations” and ASBJ
Guidance No.21 ‘‘Guidance on Accounting Standard for
Asset Retirement Obligations”. Under this accounting standard, an asset retirement obligation is defined as a legal obligation imposed either by law or contract that results fromthe acquisition, construction, development and the normal
operation of a tangible fixed asset and is associated with theretirement of such tangible fixed asset.
The asset retirement obligation is recognized as the sumof the discounted cash flows required for the future asset
retirement and is recorded in the period in which the obligation is incurred if a reasonable estimate can be made. If areasonable estimate of the asset retirement obligation cannot
be made in the period the asset retirement obligation isincurred, the liability should be recognized when a reasonable estimate of asset retirement obligation can be made.
Upon initial recognition of a liability for an asset retirement
obligation, an asset retirement cost is capitalized by increasing the carrying amount of the related fixed asset by theamount of the liability. The asset retirement cost is subsequently allocated to expense through depreciation over theremaining useful life of the asset. Over time, the liability is
accreted to its present value each period. Any subsequent

revisions to the timing or the amount of the original estimateof undiscounted cash flows are reflected as an increase or adecrease in the carrying amount of the liability and the capitalized amount of the related asset retirement cost. This standard is effective for fiscal years beginning on or after April 1,2010 with early adoption permitted for fiscal years beginningon or before March 31, 2010.

15

3. Marketable and Investment Securities
Marketable and investment securities as of March 31, 2009 and 2008 consisted of the following:

16

Millions of yen

Thousands of
U.S. dollars

2009

2008

2009

Current:
Government and corporate bonds
Other
Total

¥

1
121
122

¥ 3,602201¥ 3,80310
1,228$ 1,238

Non-current:
Marketable equity securities
Government and corporate bonds
Trust fund investments and otherTotal¥37,810—
3,633¥41,443¥55,138
21
7,968¥63,127$384,793—
36,978$421,771¥$

The carrying amounts and aggregate fair values of marketable and investment securities at March 31, 2009 and 2008 were as
follows:
Millions of yen

March 31, 2009

Securities classified as:
Available-for-sale:
Equity securities
Debt securities

Cost

Unrealized
gains

Unrealized
lossesFair
value¥24,066
2,200¥14,721
—

¥ 977
155

¥37,810
2,045¥27,673
6,700
3,602

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

Cost

Unrealized
gains

Unrealized
lossesFairvalue$244,921
22,390$149,817—$9,945
1,575$384,793
20,815

March 31, 2008

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

Thousands of U.S. dollars

March 31, 2009

Securities classified as:
Available-for-sale:
Equity securities
Debt securities

Okumura Corporation Annual Report 2009

Available-for-sale securities and held-to-maturity securities whose fair value is not readily determinable as of March 31, 2009
and 2008 were as follows:
Carrying amount

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

Millions of yen

Thousands of
U.S. dollars

2009

2008

2009

¥1,7091¥1,710¥1,89021¥1,911$17,391
10$17,401

Proceeds from sales of available-for-sale securities for the years ended March 31, 2009 and 2008 were ¥3,742 million ($38,084
thousand) and ¥152 million, respectively.
Gross realized gains and losses on these sales, computed on the moving average cost basis, were ¥685 million ($6,976
thousand) and ¥640 million ($6,509 thousand), respectively, for the year ended March 31, 2009 and ¥21 million and nil,respectively, for the year ended March 31, 2008.
The carrying values of debt securities by contractual maturities for securities classified as available-for-sale and held-tomaturity at March 31, 2009 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

¥ 121
1
—
2,045
¥2,167

¥1
—
—
—
¥1

$ 1,227
10—
20,815$22,052

$10
—
—
—
$10

Millions of yen

Thousands of
U.S. dollars

4. Inventories
Inventories at March 31, 2009 and 2008 consisted of the following:

Construction projects in progress
Real estate held for sale
Development projects in progress
Other
Total

2009

2008

2009

¥103,538
1,876
9,380
1,250
¥116,044¥102,592
1,573
11,383826¥116,374$1,053,712
19,092
95,467
12,722$1,180,993

17

5. Short-term Bank Loans and Long-term Debt
Short-term bank loans at March 31, 2009 and 2008 consisted of notes to banks and bank overdrafts. The annual interest rates
applicable to the short-term bank loans ranged from 1.475% to 2.060% and 1.373% to 1.875% at March 31, 2009 and2008, respectively.
Long-term debt at March 31, 2009 and 2008 consisted of the following:

18

Loans from banks and other financial institutions, due serially to 2031
with interest rates ranging from 1.23% to 6.40%
Collateralized
Unsecured
Obligations under finance leases
Total
Less current portionLong-term debt, less current portion

Millions of yen

Thousands of
U.S. dollars

2009

2008

2009

¥ 74
209
8
291
(25)
¥266

¥108
333
—
441
(36)
¥405

$ 752
2,129
82
2,963
(260)
$2,703

Annual maturities of long-term debt, excluding finance leases (See Note 10) at March 31, 2009, were as follows:Year Ending March 31

Millions of yen

Thousands of
U.S. dollars

2010
2011
2012
2013
2014
2015 and thereafter
Total

¥ 24
21
21
21
21
175
¥283

$ 240
218
215
211
211
1,786
$2,881

The carrying amounts of assets pledged as collateral for the above collateralized long-term debt at March 31, 2009 were as follows:
Property, plant and equipment — net of accumulated depreciation

Millions of yen

Thousands of
U.S. dollars

¥93

$951

As is customary in Japan, the Company maintains substantial deposit balances with banks with 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.

Okumura Corporation Annual Report 2009

6. 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, 2009 and 2008 consisted of the following:

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

2009

Millions of yen
2008

Thousands of
U.S. dollars
2009¥32,208(26,822)
(268)
330
191
¥ 5,639¥41,319(38,054)
1,875
385
—
¥ 5,525$327,781(272,969)(2,727)3,360
1,941$ 57,386

The components of net periodic benefit costs for the years ended March 2009 and 2008 are as follows:

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

2009

Millions of yen
2008

Thousands of
U.S. dollars
2009¥1,364
826
(571)
(162)
(56)
(21)
¥1,380¥1,417
872
(579)
(325)
(55)
—
¥1,330$13,882
8,405(5,809)(1,654)(560)(216)$14,048

Assumptions used for the years ended March 31, 2009 and 2008 are set forth as follows:
Discount rate
Expected rate of return on plan assets
Amortization of prior service cost
Recognition period of actuarial gain / loss
Amortization period of transitional obligation

2009

2008

2.0%
1.5%
10 years
10 years
15 years

2.0%
1.4%
—
10 years
15 years

19

20

7. Equity
Since May 1, 2006, Japanese companies have been subject to the Companies Act of Japan (the ”Companies Act”). The significant provisions in the Companies Act that affect financial and accounting matters are summarized below:(a) Dividends
Under the Companies Act, 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 prescribedso in its articles of incorporation. However, the Company cannot do so because it does not meet all the above criteria.
The Companies Act permits companies to distribute dividends-in-kind (non-cash assets) to shareholders subject to acertain 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 Companies Act 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 Companies Act 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 Companies Act, the total amount of additional paid-in capital and legal
reserve may be reversed without limitation. The Companies Act 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 Companies Act 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 Companies Act, stock acquisition rights, are presented
as a separate component of equity. The Companies Act also provides that companies can purchase both treasury stockacquisition rights and treasury stock. Such treasury stock acquisition rights are presented as a separate component of equity
or deducted directly from stock acquisition rights.

Okumura Corporation Annual Report 2009

8. 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, 2009 and 2008.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and liabilities at March 31, 2009 and 2008 are as follows:

Deferred tax assets:
Tax loss carryforwards
Write-down of inventories
Impairment losses on securities
Allowance for doubtful accounts
Liability for retirement benefits
Allowance for losses on construction contracts
Accrued expenses
Write-off of bad debt
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

Millions of yen

Thousands of
U.S. dollars

2009

2008

2009

¥11,824
3,579
3,137
2,391
2,290
2,094
805
775
329
391
(27,615)—¥ 8,733
4,182
3,089
1,416
2,243
2,806
861
1,135
429
471
(25,353)
12$120,335
36,42631,92424,33723,29921,311
8,188
7,889
3,346
3,981
(281,036)—(4,616)(2,321)(6,937)¥ (6,937)(9,671)(2,237)(11,908)¥(11,896)(46,980)(23,617)(70,597)$ (70,597)

A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompanying consolidated statement of operations was not presented because of the net loss for the years ended March 31, 2009
and 2008.

21

9. Research and Development Costs
Research and development costs charged to income were ¥706 million ($7,187 thousand) and ¥933 million for the years ended
March 31, 2009 and 2008, respectively.

22

10. Leases(1) Finance leases
The Group leases certain machinery and equipment, office space and other assets.
Total lease payments under finance lease for the years ended March 31, 2009 and 2008 were ¥49 million ($502 thousand)and ¥60 million, respectively.
As discussed in Note 2 l, the Company accounts for leases which existed at the transition date and do not transfer ownership of the leased property to the lessee as operating lease transactions. Pro forma information of such leases existing at thetransition date, such as acquisition cost, accumulated depreciation, obligations under finance leases, depreciation expense,
interest expense and other information, on an “as if capitalized” basis for the years ended March 31, 2009 and 2008 was asfollows:
Millions of yen

Acquisition cost
Accumulated depreciation
Net leased property

Thousands of
U.S. dollars

2009

2008

2009

Machineryandequipment

Machineryandequipment

Machineryandequipment

¥207
151
¥ 56

¥254
149
¥105

$2,1081,539$ 569

Millions of yen

Thousands of
U.S. dollars

Obligations under finance leases:

Due within one year
Due after one year
Total

2009

2008

2009

¥33
23
¥56

¥ 49
56
¥105

$340
229
$569

The 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 straightline method were ¥49 million ($502 thousand) and ¥60 million for the years ended March 31, 2009 and 2008, respectively.
(2) Operating leases
Future minimum lease receivables or payments under non-cancellable operating leases subsequent to March 31, 2009 aresummarized as follows:
As a lessor:
Due within one year
Due after one year
Total
As a lessee:
Due within one year
Due after one year
Total

Millions of yen

Thousands of
U.S. dollars¥ 1,766
22,050¥23,816$ 17,973
224,402$242,375¥$    264
1,429$   1,693

¥

26
140
166

Okumura Corporation Annual Report 2009

11. Commitments and Contingent Liabilities
The Group guarantees deposits made by condominium purchasers amounting to ¥107 million ($ 1,087 thousand) at March 31,
2009 in connection with sales contracts of condominiums which were constructed by the Group.
Investments in securities in the amount of ¥62 million ($ 631 thousand) are pledged as collateral for the loans of an affiliate at March 31, 2009 and time deposits in the amount of ¥7 million ($ 72 thousand) are pledged for construction projects at
March 31, 2009.
12. Subsequent Events
Appropriation of Retained Earnings
The following appropriation of retained earnings at March 31, 2009 was approved at the Company’s shareholders meeting heldon June 26, 2009.
Millions of yen

Thousands of
U.S. dollars¥1,799$18,307

Year-end cash dividends, ¥9 ($0.09) per share

13. Segment Information
Information about industry segments of the Company and subsidiaries for the years ended March 31, 2009 and 2008, is asfollows:
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
2009

Sales to customers
Intersegment sales
Total sales
Operating expenses
Operating income

Construction

Real estate

Other

Eliminations/
Corporate

Consolidated¥214,836
645
215,481
213,634¥ 1,847¥6,074
62
6,136
3,464
¥2,672¥6,063
985
7,048
6,868
¥ 180

¥   —
(1,692)(1,692)(1,392)¥ (300)¥226,973—
226,973
222,574¥ 4,399b. Total assets, depreciation, and capital expenditures
Millions of yen
2009

Total assets
Depreciation
Capital expenditures

Construction

Real estate

Other

Eliminations/
Corporate¥263,930
766
589¥24,775
136
1,192¥5,96442
88¥ (992)——

Consolidated¥293,677
944
1,869

23

a. Sales and operating income
Thousands of U.S. dollars
2009

24

Sales to customers
Intersegment sales
Total sales
Operating expenses
Operating income

Construction

Real estate

Other$2,186,402
6,567
2,192,969
2,174,175$ 18,794$61,822629
62,45135,254$27,197$61,704
10,02971,73369,897$ 1,836

Eliminations/
Corporate

Consolidated$  — $2,309,928(17,225)—(17,225)
2,309,928(14,168)
2,265,158$ (3,057) $ 44,770

b. Total assets, depreciation, and capital expenditures
Thousands of U.S. dollars
2009

Total assets
Depreciation
Capital expenditures

Construction

Real estate

Other$2,686,044
7,795
5,994

$252,134
1,384
12,138$60,697427
892

Eliminations/
Corporate

Consolidated$(10,098) $2,988,777
—
9,606
—
19,024

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 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

Independent Auditors‘ Report
Okumura Corporation Annual Report 2009

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 sheets of Okumura Corporation (the “Company”) and consolidated
subsidiaries (together, the “Group”) as of March 31, 2009 and 2008, and the related consolidated statements of operations,changes in equity, and cash flows for the years then ended, 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 audits.
We conducted our audits 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 audits provide 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, 2009 and 2008, and the consolidated
results of their operations and their cash flows for the years then ended in conformity with accounting principles generally
accepted in Japan.
Our audits 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 26, 200925

Non-Consolidated Balance Sheets
Okumura Corporation
As of March 31, 2009 and 2008ASSETS

Millions of yen

Thousands of
U.S. dollars

2009

2008

2009

¥ 30,626¥ 21,270$ 311,681

2,007

224

20,426

122

3,803

1,238

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

26

Trade notes

5,394

7,326

54,901

Trade accounts

56,25776,546

572,531

Other

18,95522,987

192,902

Allowance for doubtful receivables(4,299)(4,848)(43,755)

113,121110,885

1,151,246

Prepaid expenses and other

1,128

2,380

11,485

Total current assets

223,311240,573

2,272,655

Inventories

Property, plant and equipment:Land

12,22011,768124,364

Buildings and structures

14,971

14,660152,356

Machinery and equipment

3,433

4,924

34,937

Furniture and fixtures

2,175

2,461

22,138

7—

74

Lease assets
Construction in progress
Total
Accumulated depreciation
Net property, plant and equipment

5

277

51

32,811

34,090333,920(14,125)(15,566)(143,756)

18,686

18,524

190,164

41,22362,801

419,533

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

4,131

697

42,044Long-term receivables

1,921

2,166

19,548Other assets

2,250

3,483

22,897

Allowance for doubtful receivables(3,030)(162)(30,833)

Total investments and other assets
Total

46,49568,985473,189¥288,492¥328,082$2,936,008

Okumura Corporation Annual Report 2009

LIABILITIES AND EQUITY

Millions of yen

Thousands of
U.S. dollars

2009

2008

2009

¥ 9,498¥ 11,561$ 96,659

Current liabilities:
Short-term bank loans including current portion of long-term debt
Payables:Trade notes

10,372

11,221

105,554

Trade accounts

63,46674,389645,895

Other
Advances received on construction projects in progress

207

371

2,104

60,74068,137618,153

Income taxes payable

239

116

2,438

Allowance for warranty work on construction projects

409

592

4,167

Allowance for losses on construction contracts

5,065

6,801

51,544

Other

12,476

9,916

126,971

162,472

183,104

1,653,485

264

397

2,693

Total current liabilities

Long-term liabilities:
Long-term debt
Liability for retirement benefits

5,639

5,525

57,386

Deferred tax liabilities

6,905

11,85770,269

178

193

1,815

Total long-term liabilities

12,986

17,972

132,163

Total liabilities

175,458

201,076

1,785,648

Other

Commitments and contingent liabilities

Equity:Common stock
19,83919,839201,903

Capital surplus

25,32725,329257,762

Retained earnings

71,15376,753

724,127

Unrealized gain on available-for-sale securities

9,032

17,346

91,917(12,317)(12,261)(125,349)

authorized, 480,376,000 shares; issued, 228,326,133shares

Treasury stock—at cost
28,451,549 shares in 2009 and 28,308,113 shares in 2008
Total equity

113,034

127,006

1,150,360

Total¥288,492¥328,082$2,936,008

27

Non-Consolidated Statements of Operations
Okumura Corporation
For the years ended March 31, 2009 and 2008

Millions of yen
2009

2008

2009

¥220,760
199,652
21,108¥249,844
243,3026,542$2,246,695
2,031,872
214,823

Selling, general and administrative expenses
Operating income (loss)

16,798
4,310

21,173(14,631)

170,955
43,868Other income (expenses):
Interest and dividend income
Interest expense
Gain on sales of property, plant and equipment
Loss on disposal of property, plant and equipment
Impairment losses on investment securities
Extra payments for early retirement
Write down of real estate and other
Other—net
Other income (expenses)—net

1,683
(208)
414
(105)
(2,730)(4,152)(1,700)(1,082)(7,880)

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

17,127(2,113)
4,211(1,066)(27,779)(42,259)(17,305)(11,013)(80,197)

Loss before income taxes(3,570)(14,026)(36,329)

147
—
83
230

170
(199)
18,51818,489

1,496
—
847
2,343

¥ (3,800)¥ (32,515)$ (38,672)

Yen

U.S. dollars¥ (162.51)
9.00$ (0.19)
0.09

Net sales
Cost of sales
Gross profit

28

Thousands of
U.S. dollars

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

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

¥ (19.00)
9.00

Breakdown of Orders (Non-Consolidated)
Okumura Corporation
For the years ended March 31, 2009 and 2008

Okumura Corporation Annual Report 2009

Construction Orders Awarded

2009

Millions ofyen

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

57.8

9,973
110,921—
120,894

100 %

44,494
130,598(4)¥175,088

Composition
ratio

Millions of
yen

37.2%

¥ 45,811
23,225
9,194
78,23067,925
100,721(1,128)¥167,518
2009

Millions ofyen¥ 35,130
38,977
8,032
82,13912,414
120,743
185
133,342¥103,228
29,942
15,923
149,093
28,525
117,792
146,317
131,753
147,734
15,923¥295,410

Thousands of
U.S. dollars

31.0%$ 524,114
208,072(13,362)
718,82469.0

167,167
816,973
1,880
986,020100 %

691,282
1,025,045(11,483)$1,704,844

Composition
ratio

Thousands of
U.S. dollars

31.3%$ 357,523
396,670
81,741
835,934

67.4

126,341
1,228,815
1,879
1,357,035

98.7
1.3
100 %

483,864
1,625,485
83,6202,192,969
53,726$2,246,695

Composition
ratio

Thousands of
U.S. dollars

46.8%$1,050,557
304,726
162,049
1,517,332

53.2

290,299
1,198,779
1,489,078

100 %

1,340,856
1,503,504
162,049$3,006,409

2009

2008

60.4

168,265

97.6
2.4
100 %

55,228
182,073
9,194
246,495
3,349¥249,844

Composition
ratio

Millions of
yen

50.5%

¥ 86,858
48,47425,268160,600

49.5

24,513
158,260
182,773

100 %

111,371
206,734
25,268¥343,373

2009

Millions ofyen

Composition
ratio

9,417
158,848

47,544
159,720
8,217
215,4815,279¥220,760

Year-end Backlog

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

42.2%

¥ 34,521
19,677(4)
54,194

16,42680,276
184
96,886Net Sales

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

Millions ofyen¥ 51,499
20,445(1,312)
70,632

2009

2008

Composition
ratio

2009

2008

29

Network

Head and Branch Offices

30

Consolidated Subsidiaries

Head Office
2-2-2, Matsuzaki-cho, Abeno-ku,
Osaka 545-8555, Japan
TEL: +81-6-6621-1101 FAX: +81-6-6627-5295

Nagoya Branch
29-8, Takebashi-cho, Nakamura-ku,
Nagoya 453-8555, Japan
TEL: +81-52-451-1101 FAX: +81-52-452-4331

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

Kansai Branch
2-2-2, Matsuzaki-cho, Abeno-ku,
Osaka 545-8555, Japan
TEL: +81-6-6621-1101 FAX: +81-6-6621-1921

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

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

East Japan Branch
5-6-1, Shiba, Minato-ku,
Tokyo 108-8381, Japan
TEL: +81-3-3454-8111 FAX: +81-3-5427-8111
West Japan Branch
2-2-2, Matsuzaki-cho, Abeno-ku,
Osaka 545-8555, Japan
TEL: +81-6-6621-1101 FAX: +81-6-6623-7692
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: +81-22-273-9805
Tokyo Branch
5-6-1, Shiba, Minato-ku,
Tokyo 108-8381, Japan
TEL: +81-3-3454-8111 FAX: +81-3-5427-8116
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

Hiroshima Branch
1-7-22, Kokutaiji-machi, Naka-ku,
Hiroshima 730-0042, Japan
TEL: +81-82-241-2246 FAX: +81-82-243-1416
Shikoku Branch
1-8-41, Nishiki-machi,
Takamatsu 760-0020, Japan
TEL: +81-87-851-9008 FAX: +81-87-822-9286
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
Rm.702, 7F., No.65, Sec.3, Nanjing E.Rd.,
Zhongshan Dist., Taipei City 104, Taiwan(R.O.C.)TEL: +886-2-2506-1402
FAX: +886-2-2506-1429
Hanoi Rep. Office
No.16, Lane 111, Nguyen Phong Sac Street,
Cau Giay District, Hanoi, Vietnam
TEL: +84-4-3754-9474
FAX: +84-4-3754-9475
Singapore Rep. Office
205 Henderson Road #02-01 Singapore
159549
TEL: +65-6276-9014
FAX: +65-6276-9114

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 26, 2009)(As of March 31, 2009)

Directors and Auditors

Corporate Data

President & Representative Director
	Takanori Okumura

Head Office	OKUMURA CORPORATION
2-2-2, Matsuzaki-cho, Abeno-ku, Osaka 545-8555, Japan
TEL: +81-6-6621-1101 FAX: +81-6-6627-5295

Representative Directors
Yuichi Kanbara
Shigeru Nishinaka
Directors
Yoshihiko Kunii
	Takaiku Hirako
	Toshio Yamaguchi
	Kazuo Takami
	Kozo Aoki
	Makoto Tsuchiya
Standing Statutory Auditors
Shojiro Sumikura
Yusaku Nishigami
Auditors
	Teruyasu Kawamata
Shinji Ito	Nobuhiko Dejima
Note: Teruyasu Kawamata, Shinji Ito, and Nobuhiko Dejima are outside auditors.

Executive Officers
Executive Vice Presidents
Yuichi Kanbara*
Shigeru Nishinaka*
Senior Managing Officer
Yoshihiko Kunii*
Managing Officers
	Tadashi Hashimoto
Yoshikuni Ogi
	Masamichi Shirahase
	Takaiku Hirako*
	Toshio Yamaguchi*
	Kazuo Takami*
	Kozo Aoki*
Executive Officers
	Kozo Tsukamoto
	Akiyoshi Hida
	Kenichiro Minami
Hiroyuki Ito	Toshiharu Shimizu
	Koji Esumi
	Toshio Kobayashi
	Makoto Tsuchiya*
Hirokazu Oishi
Note: Those officers marked with an asterisk (*) work as directors.

EstablishedFebruary 22, 1907
Capital¥19.8 billion

31Group Employees
2,037

Stock Information
Stock Exchange Listings
Tokyo and Osaka
Transfer Agent
The Sumitomo Trust and Banking Co., Ltd.
Major Shareholders
Shareholder

Shares held
(thousands)

Percentage oftotal

Okumura Corporation(Treasury stock)

28,451

12.46%

Northern Trust Co. (AVFC) Sub
A/C American Clients

15,032

6.58

State Street Bank and Trust
Company

10,106

4.43

Japan Trustee Services Bank,
Ltd. (Trust Account 4G)

9,015

3.95

Japan Trustee Services Bank,
Ltd. (Trust Account)

6,639

2.91

Okumura Employees’
Shareholding Association

6,478

2.84

Resona Bank, Limited.

6,074

2.66

Sumitomo Realty &Development Co., Ltd.

6,050

2.65

BBH/Blackrock Global
Allocation Fund, Inc.

6,040

2.65

Northern Trust Co. AVFC Re
U.S. Tax Exempted Pension
Funds

5,728

2.51

Sumitomo Mitsui Banking
Corporation

5,568

2.44

Okumura Corporation
2-2-2, Matsuzaki-cho, Abeno-ku, Osaka 545-8555, Japan
TEL: +81-6-6621-1101 FAX: +81-6-6627-5295
http://www.okumuragumi.co.jp

Printed in Japan