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

OkumuraCorporation
Annual Report

2015

Printed in JapanBoard of Directors

Investor Information(As of July 1, 2015)(As of March 31, 2015)
Okumura Corporation Annual Report 2015

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 civilengineering projects for railways, roads, power station
facilities, sewage and water works, and others. In thearea of construction are projects such as houses, public
facilities, medical facilities, and office buildings. The
Company has developed technology at the highest
level, with achievements including the seismic isolation
system used to construct Japan’s first earthquakeabsorbing building. In the area of environment-related
technology, Okumura has developed techniques for
100% recycling of 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.

Directors and Auditors

Corporate Data
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

President & Representative Director
Takanori Okumura
Representative Director
Takaiku Hirako

EstablishedFebruary 22, 1907

Directors
Makoto Tsuchiya
Seiichi Fujioka
Yuichi Mizuno
Kazuo Takami
Keiji Yamaguchi
Kiyoshi Saito
Kenji Kotera
Atsushi Tanaka

Capital¥19.8 billion

Standing Statutory Auditors
Koichi Yamauchi
Hironobu Kozai

Stock Information
Stock Exchange Listings
Tokyo

Auditors
Yoshihiro Ban
Kazuo Tsuji
Shuji Abe

Transfer Agent
Sumitomo Mitsui Trust Bank, Limited

Notes:1. Kiyoshi Saito is outside director.
2. Yoshihiro Ban, Kazuo Tsuji and Shuji Abe are outside auditors.

Major Shareholders
Shareholder

Executive Officers
Executive Vice Presidents
Takaiku Hirako*
Makoto Tsuchiya*
Wataru Watanabe
Senior Managing Officer
Hiroomi Iida
Seiichi Fujioka*
Yuichi Mizuno*

Contents
1 Financial Highlights
2 To Our Shareholders
4 Review of Operations
6 Topics
8 Consolidated Balance Sheet
10 Consolidated Statement of Income
11 Consolidated Statement of Comprehensive Income
12 Consolidated Statement of Changes in Equity
13 Consolidated Statement of Cash Flows
14 Notes to Consolidated Financial Statements
32 Independent Auditor’s Report
33 Breakdown of Orders (Non-Consolidated)
34 Network
35 Board of Directors / Investor Information

Managing Officers
Kazuo Takami*
Keiji Yamaguchi*
Hirokazu Oishi
Toshio Kobayashi
Executive Officers
Takeshi Kurita
Yutaka Maruyama
Takanori Hayashi
Noriyuki MachidaKenji Kotera*
Osamu Harada

35

Group Employees
1,970

Atsushi Tanaka*
Syunso Iijima
Kazuyoshi Ito
Hiromu Miyazaki
Hitoshi Miyamoto
Akira Tanaka

Note: Those officers marked with an asterisk (*) work as directors.

Shares held Percentage of(thousands)
total

Okumura Corporation(Treasury stock)

28,951

12.68%

Northern Trust Co. (AVFC) Re
Silchester International Investors
International Value Equity Trust

12,1805.33

Okumura Employees’
Shareholding Association

7,344

3.22

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

7,114

3.12

Resona Bank, Limited.

6,074

2.66

Sumitomo Realty &Development Co., Ltd.

6,050

2.65

BBH Boston Custodian For Blackrock
Global Allocation Fund, Inc. 620313

5,569

2.44

Sumitomo Mitsui Banking
Corporation

5,568

2.44

The Master Trust Bank ofJapan, Ltd. (Trust Account)

5,448

2.39

Japan Trustee Services Bank,
Ltd. (Trust Account)

4,984

2.18

Northern Trust Co. (AVFC) Sub
A/C Non Treaty

4,208

1.84

Financial Highlights
Okumura Corporation Annual Report 2015

For the years ended March 31

2013

2015

2014

Consolidated:

2015
Thousands of
U.S. dollars

Millions of yen¥196,554¥193,025¥205,268$1,706,728

Operating income

1,339

2,318

4,052

33,692

Net income

2,684

3,755

4,922

40,924

Total assets

234,034

239,663

260,3032,164,318

Total equity

121,924

128,792

140,655

1,169,496

Net sales

Per Share:

Yen

Basic net income
Cash dividends applicable to the year

U.S. dollars¥13.43¥18.80¥24.66

$0.20

9.00

9.00

12.00

0.10

Note:	The U.S. dollar amounts included herein are presented solely for convenience of the reader. Such dollar amounts have been translated from yenat the approximate exchange rate in Tokyo on March 31, 2015, of ¥120.27=U.S.$1.

Net Sales

Net Income(Millions of Yen)

250,000

Total Equity(Millions of Yen)

5,000

200,000

4,000

150,000

3,000

100,000

2,000(Millions of Yen)

150,000

125,000

100,000

75,00050,00050,0001,000

025,000

0

0

2013

2014

2015

2013

2014

2015

2013

2014

2015

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 clients and other factors, and involve risks, variables and uncertainties.
The Okumura Group’s actual performance results may differ from those projected in this Annual Report. Consequently, no guarantee is presented or implied as tothe accuracy of specific forecasts, projections or predictive statements contained herein.

1

To Our Shareholders

2

We would like to thank our shareholders for their continuing support and encouragement, and wish each ofthem the greatest success in their endeavors.
A general overview of business performance for the period to March 2015 (April 1, 2014 to March 31,2015) is provided in the following sections.

Fiscal 2015 Results
During the period under review, the Japanese economy continued on its path of moderate recovery, despite
certain setbacks such as the backlash from the last-minute demand associated with the consumption tax hike.
In the construction industry, while public investments and private-sector capital investments continued toperform strongly, the situation remained unpredictable in terms of cost due to the shortage of skilled construction workers and other factors.
In these circumstances, the Company’s consolidated net sales increased 6.3% year on year to¥205,268 million and consolidated gross profit increased 10.3% year on year to ¥17,521 million as a result of
an improvement in gross profit from the civil engineering and real estate segments, among others, despite
the decline in gross profit from construction work. Moreover, operating income increased 74.8% year on yearto ¥4,052 million and net income increased 31.1% year on year to ¥4,922 million.
The Company decided to pay a dividend of ¥12.00 per share for the period ended March 31, 2015
based on its basic policy regarding profit sharing.

Looking Ahead and Key Strategies
The Japanese economy is expected to continue on its recovery trajectory underpinned by internal demandin the wake of the improved income environment, among other factors. In the construction industry, thebusiness environment will continue to belie optimism, despite the ongoing recovery trend in private-sector
investments, as public investments are expected to remain more or less on the same level and as there is still
no solution in sight for the shortage in skilled construction workers.
Under these circumstances, the Okumura Group, based on its Three-Year Medium Term Business
Plan, which commenced in fiscal 2013, has been engaged in initiatives to reinforce its customer-handlingcapabilities, technological strengths, and price competitiveness, and thanks to the momentum created by

Okumura Corporation Annual Report 2015

3

strong construction investments, has been steadily producing results. The Group, on the other hand, is also
fully aware that in order to meet the expectations of its stakeholders it will need to maintain sound management, as prescribed in its corporate philosophy, while pursuing further enhancement of its corporate value. To
this end, the Okumura Group will deepen its efforts toward existing initiatives while at the same time successively promote medium- to long-term measures in anticipation of the future business environment.
Specifically, in building operations, the Company considers steadily securing profits while seeking
opportunities to accumulate even greater profits as its highest priority, and accordingly, has been thoroughly
enforcing selective receipt of orders based on competitive advantage in profitability and technologicalaspects, enhancing approaches in dealing with comprehensive evaluation biddings and private sector projects, reinforcing planning and proposal capabilities aimed at increasing special orders and integrated orders
from design to construction, avoiding cutthroat price competition through business cooperation from the
upstream stage, developing technology that will lead to the enhancement of construction efficiency and costcutting, and reinforcing its capabilities in preparation for capturing the demand for maintaining and renewing
infrastructures, which is expected to gain momentum going forward.
In real estate operations, the Company is carefully selecting properties which can yield high returns,
and aims to secure a long-term and stable source of income.
For the future, Okumura will apply all of its resources with the aim of responding quickly and flexibly to thechanging operating environment, and thereby secure stable profits in accordance with its corporate philosophy, which has endured through the many years since the Company’s founding. This will enable Okumura to
maintain the trust and confidence of its shareholders.
In all its efforts, the Company looks forward to the continued support of its shareholders.
June 2015

Takanori Okumura
President and Representative Director

Review of Operations
Major Projects Completed
CIVIL ENGINEERING

4
The Kuzuryu River (Downstream Section):
Second Stage of Agricultural Irrigation Project,
Kawaiharuchika Irrigation Channel Construction WorkWork period: March 2010 to March 2015
Construction length: 7,192m
Tunnel length: 7,085m

Maeyama Tunnel Work on Ochi Shirotori Bypass,
National Route 11
Work period: February 2013 to January 2015
Construction length: 747m
Tunnel length: 595m

Takata West District Land Development for
Reconstruction

Oku Tsugaru Imabetsu Station of the Hokkaido
Shinkansen, Oku Tsugaru Roadbed Work, Etc.

Work period: September 2012 to March 2015
Development area: 93,120m2
Cut: 971,490 m3
Embankment: 55,110m3
Removal of surplus soil: 923,500m3

Work period: June 2011 to March 2015
Construction length: 15,300m
Shinkansen platform construction, snow shed work, railroad
bed work, a 6-span rigid-frame elevated bridge with 2 abutments, 4 piers and 12 beams, etc.

BUILDINGS

Belle Terrace Ikoma, Laurel Court
Ikoma East Residence/West ResidenceWork period: March 2012 toMarch 2014
Structure: Steel and RC
Total floor space: 27,475m2

Yonago Medical Center

Mahoroba Athletic ParkWork period: June 2012 to March 2015
Structure: SRC
Total floor space: 19,994.49m2

Work period: May 2012 to May 2014
Structure: RC with Steel and Steel
Total floor space: 9,830.08m2

Awa City Hall and Aeruwa(Community Disaster-Prevention
Facilities)
Work period: March 2013 to
December 2014
Structure: RC and SRC(seismic isolation structure)
Total floor space: 13,829m2

Okumura Corporation Annual Report 2015

Orders Received
CIVIL ENGINEERING

5
Tsugaruishi Road Work, National Route 45

Shin-Meishin Expressway Higashi-Uneno Tunnel WorkWork period: November 2014 to November 2016
Construction length: 2,496m
Tunnel length: 484m
7 box culverts, 2 abutments

Work period: July 2012 to January 2017
Construction length: 2,418m
Tunnel length: 4,088m (up and down tracks)
4 abutments, 5 piers

Nagashima Floodgate Construction in Ichinoseki
Flood Control Basin

Civil Engineering Works for Tsukabaru Power Station
General Renovation

Work period: October 2014 to December 2017
Floodgate construction, bank protection work, etc.

Work period: May 2014 to July 2019
Site preparation work, penstock construction, power station
foundation work, discharge tunnel construction

BUILDINGSNew Nara Prefecture General
Medical Center
Structure: Steel with SRC and RC(seismic isolation structure)
Total floor space: 67,155m2

Takatsu Logistics Center of
Mitsubishi Corporation Urban
Development, Inc.
Work period: February 2015 toFebruary 2016
Structure: Steel
Total floor space: 49,957.91m2

Kitakyushu StadiumWork period: April 2015 toJanuary 2017
Structure: RC with Steel
Total floor space: 26,367.55m2

Japanese Red Cross Tokyo
Metropolitan Blood CenterWork period: June 2014 toNovember 2015
Structure: RC
Total floor space: 8,287.60m2

Topics(2) Microphone with all-weather, windproof screen(Detects low-frequency sound)(3) Control equipment: PC(Creates canceling noise)

Source of contamination

N

Altitude (m)
0<
20<
40<
60<
80<
100<
120<
140<
160<
180<
200<
220<

Port
❶ Topographical model ofarea subject to contamination prediction

< 0
< 20
< 40
< 60
< 80
<100
<120
<140
<160
<180
<200
<220
<240

Example of analysis results(1 year later)

06(1) Exhaust vent(4) Speaker(Sound source)(Emits the created canceling noise)❷ Applied to a backhoe
Source of contamination

0.05

0.1

Coast line
Contaminant density (%)❸ Inside the seminar hall

❸ Panel discussion❶ Development of a Simulation System for the Prediction of
Groundwater Contaminationa noise-controlling measure against construction machinery usedin urban areas.

To effectively prevent extensive contamination of the environment
through groundwater in the event of toxic substances being
released from factories and business sites penetrating the ground,
we developed a system that can predict the flow and diffusion of
the toxic substances with a high degree of accuracy.
By providing society with this System as well as a widerange of other proprietary environmental technologies, including
our “highly-efficient groundwater purification technology usingozone micro bubbles” and our “soil purification technology
using microorganisms,” we are contributing to the creation andpreservation of an environment that is kind to people and theearth.

❸ Hosting of a Technical Seminar❷ Development and Practical Application of Technology to Reduce the Noise ofConstruction Machinery

To protect the living environment around construction sites, wedeveloped an “Active Sound Absorption System” that will reduce
low-frequency noise made by construction machinery.
Conventional noise reduction technology used on
construction sites, such as general soundproof walls, has not beenenough to reduce the noise of construction machinery, which
produces low-frequency sounds that change constantly according
to the work being done. With this System, the control program
instantly identifies the attributes of the low-frequency sound andpromptly emits the optimal canceling noise, which has beencreated artificially. Therefore, this System is particularly effective as

On December 11, 2014, Okumura hosted the 26th TechnicalSeminar at the Tokyo International Forum in Tokyo’s Chiyoda Ward.
The seminar was attended by approximately 200 participants fromvarious fields, including clients of Okumura.
Okumura began hosting the seminar in 1988 as part of thecollaboration among the industrial, governmental and academic
sectors related to the construction industry. This year’s theme was“Creating the Future of the Infrastructure Industry: Discovering,
Creating and Communicating Its Appeal,” which was co-sponsoredby the Association for Planning and Transportation Studies. Ms.
Ayumi Han, Professor of Maebashi Institute of Technology and
Mr. Eiji Hato, Professor of the Graduate School of Engineering,
the University of Tokyo, delivered the keynote speeches. In
addition, a panel discussion was held on the topic of the future
direction of the infrastructure industry which plays a key role inthe development, maintenance, and renewal of social capitalfrom the perspectives of design, contributions to the international
community, maintenance and diversity, among others.
❹ Work to Remove Old Shin-Kobe Tunnel Ceiling Panels Completed after
40 days of Night Work

Approximately 4,800 m of ceiling panels built in the Hanshin
Expressway Route 32 Shin-Kobe tunnel which went into service
nearly 40 years ago were removed during the 40-day night timeOkumura Corporation Annual Report 2015

❹ Central part of the ceiling panel cut off longitudinally

7❺ The President with the Nadeshiko Construction Team❺ Rendering of the Kyushu Branch(Mid-story seismic isolation structure)road closures, which started from September 1, 2014.
The unprecedented and difficult work of removing the archshaped ceiling panels of reinforced concrete, which are extremelyrare in Japan, was completed accident- and disaster-free with theminimum effect on the road-users and nearby roads by employing
our technology and know-how. Additionally, in recognition of
our efforts to successfully recycle every one of the approximately
16,000t of ceiling panels (concrete blocks), on March 16, 2015,
we were awarded the “Encouragement Prize in the Construction
Recycling and Building Division” of the Kinki Region Liaison
Council for Construction Byproduct Measures comprising theseven prefectures and the four cities designated by government
ordinance of the Kinki region.
❺ Construction of the Company’s Kyushu Branch led by
the “Nadeshiko Construction Team”

To support women in taking active roles at the workplace, theconstruction team, the “Yawata Himawari,” comprising female
engineers and technicians, was formed for the rebuilding of theold office building and dorms of Okumura’s Kyushu Branch, andregistered under the “Nadeshiko Construction Team” of the Japan
Federation of Construction Contractors.
The “Yawata Himawari” is the first registered team headed
by a female construction chief in the whole country . Okumura
will make every effort to promote the recruitment and promotionof female employees while at the same time secure and nurture
outstanding human resource who are capable of contributing to
the development of its business in every line of work including
civil engineering and construction.

❻ Recipients of the Okumura Environmental Construction Technology
Foundation Grant for the Fiscal Year Ended March 31, 2015 Are Announced

In 2007, the Company established a charitable trust fund, theOkumura Environmental Construction Technology Foundation
Grant, whose objective is to further promote the preservation andimprovement of Japan’s environment by providing funds to various
research projects on construction technologies that reduce theenvironmental load.
The steering committee – comprising experts such asuniversity professors – met on July 9, 2014 to select the recipientsand determine the amount of the grant awarded for the fiscal year
ended March 31, 2015. The foundation has ensured that all thosechosen for the fiscal year have received the grant.
Research themes of the recipients are as follows.
• Basic research regarding the development of non-shrinkage
concrete that effectively utilizes industrial waste• The effects of water reduction caused by small hydroelectric
generation sites on the habitat structure and biologicalcommunity of the mountains and mountain streams• Highly sensitive fluorometric detection of toxic metals in theenvironment and its application to removal agents• Research on the physical properties and the tolerance towards
salt erosion of recycled, environment vitalizing concrete
containing amino acids• Proposal of comprehensive solutions to the trilemma of the
Ariake Sea and its feasibility study

Consolidated Balance Sheet
Okumura Corporation and Consolidated Subsidiaries
March 31, 2015

ASSETS

Millions of yen

Thousands of
U.S. dollars(Note 1)

2015

2014

2015

¥ 27,728¥ 26,245$ 230,544

204

47

1,694

Current assets:
Cash and cash equivalents (Note 12)
Time deposits (Notes 12 and 14)
Receivables:

8

Trade notes (Note 12)

2,251

2,462

18,718Trade accounts (Note 12)

99,136

91,585824,278

453

3,209

3,764

Unconsolidated subsidiaries and associated companies (Note 12)
Other

8,711

8,100

72,425

Allowance for doubtful receivables(1,584)(4,262)(13,170)

9,057

11,85675,306

46

61

384

Inventories (Note 4)
Deferred tax assets (Note 9)
Prepaid expenses and other

962

561

8,005

Total current assets

146,964

139,864

1,221,948

Property, plant and equipment (Notes 5 and 6):
Land (Note 14)

28,75827,670239,112

Buildings and structures (Note 14)

19,557

19,966

162,608

Machinery and equipment

2,897

2,700

24,089Furniture and fixtures

1,936

2,017

16,094

Lease assets (Note 11)

141

147

1,175

Construction in progress

55

133

455

Total
Accumulated depreciation
Net property, plant and equipment

53,344

52,633

443,533(14,326)(15,159)(119,117)

39,01837,474324,416

71,496

60,761

594,457

Investments and other assets:
Investment securities (Notes 3, 6, 12 and 14)
Investments in and advances to unconsolidated subsidiaries and associated companies (Notes 12 and 14)

318

272

2,646

Long-term loans receivable (Note 12)

107

125

892

1,710

435

14,219Asset for retirement benefits (Notes 2. j and 7)
Deferred tax assets (Note 9)
Other assets
Allowance for doubtful receivables
Total investments and other assets
Total
See notes to consolidated financial statements.

1

1

7

3,235

3,499

26,901(2,546)(2,768)(21,168)

74,321

62,325617,954¥260,303¥239,663$2,164,318

Okumura Corporation Annual Report 2015

LIABILITIES AND EQUITY

Millions of yen

Thousands of
U.S. dollars(Note 1)

2014

2015

7,561

$ 113,816

2015

Current liabilities:
Short-term bank loans including current portion of long-term debt (Notes 6, 11 and 12) ¥ 13,689¥

Payables:Trade notes (Note 12)

6,571

7,152

54,636

Trade accounts (Note 12)47,28948,396393,194

405

197

3,362

6,916

10,61057,506

515

291

4,285

1,120

796

9,308

Other
Advances received on construction projects in progress
Income taxes payable
Allowance for warranty work on construction projects
Allowance for losses on construction contracts

4,878

1,877

40,562Other (Note 14)

17,843

16,365

148,358

99,226

93,245825,027

Total current liabilities
Long-term liabilities:
Long-term debt (Notes 6, 11, 12 and 13)

5,224

5,276

43,435

Deferred tax liabilities (Note 9)

15,064

12,235125,254

134

115

1,106

Other
Total long-term liabilities

20,422

17,626

169,795

Total liabilities

119,648

110,871994,822

19,83919,839164,953

Commitments and contingent liabilities (Notes 11 and 14)

Equity (Notes 8, 15 and 16):
Common stock
authorized, 480,376,000 shares; issued, 228,326,133 shares
Capital surplus

25,32825,326

210,592

Retained earnings

74,012

72,094615,384(12,547)(12,390)(104,320)

31,86922,754

264,977

Treasury stock—at cost
28,951,110 shares in 2015 and 28,667,535 shares in 2014
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities

2,154

1,169

17,910Total

34,02323,923282,887

Total equity

140,655

128,792

1,169,496

Total¥260,303¥239,663$2,164,318

Defined retirement benefit plans

9Consolidated Statement of Income
Okumura Corporation and Consolidated Subsidiaries
Year ended March 31, 2015

Millions of yen

Thousands of
U.S. dollars(Note 1)

2015

2014

2015

¥205,268
187,747
17,521¥193,025
177,142
15,883$1,706,728
1,561,044
145,684

Selling, general and administrative expenses (Note 10)
Operating income

13,4694,052

13,5652,318

111,992
33,692Other income (expenses):
Interest and dividend income
Interest expense
Other—net
Other income —net

1,056
(163)
426
1,319

1,000
(187)
884
1,697

8,777
(1,350)3,538
10,965

Income before income taxes and minority interests

5,371

4,015

44,657

Income taxes (Note 9):
Current
Deferred
Total income taxes

628
(179)
449

307
(47)
260

5,224
(1,491)
3,733

Net sales
Cost of sales
Gross profit

10

Net income before minority interests
Net income

Per share of common stock (Notes 2.o and 16):
Basic net income
Cash dividends applicable to the year
See notes to consolidated financial statements.

¥

¥

4,922
4,922

24.66
12.00

¥

¥

3,755
3,755

$

40,92440,924

Yen

U.S. dollars(Note 1)

18.80
9.00

$ 0.200.10

Consolidated Statement of Comprehensive Income
Okumura Corporation and Consolidated Subsidiaries
Year ended March 31, 2015

Net income before minority interests
Other comprehensive income (Note 15):
Unrealized gain on available-for-sale securities
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income
Total comprehensive income attributable to:
Owners of the parent
Minority interests
See notes to consolidated financial statements.

Okumura Corporation Annual Report 2015

Millions of yen

Thousands of
U.S. dollars(Note 1)

2015

2014

2015

¥ 4,922¥ 3,755$ 40,924

9,115
985
10,100¥15,022

3,766
—
3,766
¥ 7,52175,788
8,186
83,974$124,898¥15,022—¥ 7,521—$124,898—11

Consolidated Statement of Changes in Equity
Okumura Corporation and Consolidated Subsidiaries
Year ended March 31, 2015

Thousands

Millions of yen
Accumulated othercomprehensive income

12

BALANCE, APRIL 1, 2013
Net income
Cash dividends, ¥9 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2014 (APRIL 1,
2014, as previously reported)
Cumulative effect of accounting change
BALANCE, APRIL 1, 2014 (as restarted)
Net income
Cash dividends, ¥9 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2015

Number ofshares ofcommonstock
outstanding

Commonstock

Capitalsurplus199,717
—
—
(59)
1
—

¥19,839—————¥25,327 ¥70,136 ¥(12,366) ¥18,988
—
3,755
—
—
—
(1,797)
—
—
—
—
(25)
—
(1)
—
1
—
—
—
—
3,766

199,659

19,83925,32672,094—
199,659
—
—
(300)
16
—
199,375—
19,839—————¥19,839—
25,326———2—¥25,328

Retainedearnings

Unrealized
gain onDefinedavailable- retirement
Treasury
for-salebenefitstock securities
plans

—
—
—
—
—
1,169

¥121,924
3,755(1,797)
(25)
0
4,935

22,754

1,169

128,792(1,207)——70,887 (12,390) 22,754
4,922
—
—
(1,797)
—
—
—
(164)
—
—
7
—
—
—
9,115
¥74,012 ¥(12,547) ¥31,869

—
1,169
—
—
—
—
985
¥2,154(1,207)
127,585
4,922(1,797)(164)
910,100¥140,655(12,390)¥

Total
equityThousands of U.S. dollars (Note 1)
Accumulated othercomprehensive income

Commonstock

BALANCE, MARCH 31, 2014 (APRIL 1,
2014, as previously reported)
Cumulative effect of accounting change
BALANCE, APRIL 1, 2014 (as restarted)
Net income
Cash dividends, $0.10 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2015
See notes to consolidated financial statements.

CapitalsurplusRetainedearnings

Unrealized
gain onDefinedavailable- retirement
Treasury
for-salebenefitstock securities
plans

Total
equity$164,953 $210,578 $599,436 $(103,021) $189,189$ 9,724$1,070,859—— (10,035)——
164,953 210,578 589,401 (103,021) 189,189——
40,924———— (14,941)
—
—
—
—
—
(1,359)
—
—
14
—
60
—
—
—
—
—
75,788$164,953 $210,592 $615,384 $(104,320) $264,977

—
9,724
—
—
—
—
8,186
$17,910(10,035)
1,060,824
40,924(14,941)(1,359)74
83,974$1,169,496

Consolidated Statement of Cash Flows
Okumura Corporation and Consolidated Subsidiaries
Year ended March 31, 2015

Okumura Corporation Annual Report 2015

Millions of yen

Thousands of
U.S. dollars(Note 1)

2015

2014

2015

¥ 5,371¥ 4,015$ 44,657

(394)
848

(121)
824

(3,277)
7,053(7,148)2,757
278(2,037)(3,694)(1,101)
3,526(6,965)(1,594)

987
766
(23)
7,259
1,465
(1,135)(3,842)
6,180
10,195(59,432)
22,921
2,308(16,937)(30,712)(9,157)
29,321(57,912)(13,255)

Cash flows from investing activities:
Net decrease (increase) 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 used in investing activities(150)(1,126)
2,685(2,586)
1(1,402)
1,652(140)(1,066)59(1,163)
1,336(2,579)
12
(308)
129
(158)
(2,672)(1,247)(9,357)22,329(21,503)7(11,658)
13,736(1,166)(8,859)Cash flows from financing activities:
Increase (decrease) in short-term bank loans—net
Proceeds from long-term debt
Repayments of long-term debt
Purchase of treasury stock
Disposal of treasury stock
Dividends paid
Other
Net cash provided by (used in) financing activities

6,135
—
(29)
(164)
9
(1,797)(38)
4,116(8,889)
1,100
(22)
(25)
0
(1,796)(35)(9,667)51,011—(244)(1,359)74(14,951)(312)
34,21927
1,483
26,245¥27,72845(2,099)28,344¥26,245

221
12,326218,218$230,544

Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments for:
Income taxes—paidDepreciation and amortization
Changes in assets and liabilities:
Decrease (increase) in trade notes and accounts receivable
Decrease in accumulated costs of construction projects in progress
Decrease (increase) in other inventories
Increase (decrease) in trade notes and accounts payable
Increase (decrease) in advances received on construction projects in progress
Increase in asset for retirement benefits
Other—net
Total adjustments
Net cash provided by (used in) operating activities

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.

13

Notes to Consolidated Financial Statements
Okumura Corporation and Consolidated Subsidiaries
Year ended March 31, 201514

1. Basis of Presentation of 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 accordance withaccounting principles generally accepted in Japan (“Japanese
GAAP”), which are different in certain respects as to theapplication 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 2014 consolidated financial statements to conform to the classifications used in 2015.
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 ¥120.27 to$1, the rate of exchange at March 31, 2015. Such translations should not be construed as representations that theJapanese yen amounts could be converted into U.S. dollars atthat or any other rate.
2. Summary of Significant Accounting Policies
a. Consolidation — The consolidated financial statements
as of March 31, 2015 and 2014 include the accounts of theCompany and its 2 (2 in 2014) significant subsidiaries(together, the “Group”).
Under the control and influence concepts, 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 9 (9 in 2014) unconsolidated subsidiaries
and 2 (1 in 2014) associated companies are stated at cost. If
the equity method of accounting had been applied to theinvestments in these companies, the effect on the accompanying consolidated financial statements would not bematerial.
All significant intercompany balances and transactions
have been eliminated in consolidation. All material unrealized
profit included in assets resulting from transactions within theGroup is also 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 ofdeposits, all of which mature or become due within 3months of the date of acquisition.

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 the
specific identification method or net selling value, which isdefined as the selling price less additional estimated manufacturing costs 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:(1) held-to-maturity debt securities, for which there is a positive intent and ability to hold to maturity, are reported atamortized cost and(2) available-for-sale securities, which are not classified as
held-to-maturity, are reported at fair value, with unrealized
gains and losses, net of applicable taxes, reported in a separate component of equity.
Nonmarketable available-for-sale securities are stated atcost 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.
e. Property, Plant and Equipment — Property, plant andequipment are stated at cost. Depreciation, except for leaseassets, is computed by the declining-balance method basedon the estimated useful lives of the assets, while the straightline method is applied to buildings acquired on or after April
1, 1998, and lease assets. 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. Lease assets under financelease arrangements are depreciated using the straight-line
method over the terms of the respective leases without any
salvage value.
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 is recognized 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
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 receivables is stated in amounts considered to beappropriate based on the Group’s past credit loss experienceand an evaluation of estimated losses in the receivables outstanding.

Okumura Corporation Annual Report 2015h. 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 loss experience.
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
its employees.
Liability for employees’ retirement benefits is recorded
based on the estimated present value of projected benefit
obligations and the fair value of 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 gains and losses are amortized subsequent to the year in which they arise on astraight-line basis over a period of 10 years, which is within
the employees’ average remaining service years.
Unrecognized past service costs have been amortized on astraight-line basis over a period of 10 years, which is within
the employees’ average remaining service years.
In May 2012, the Accounting Standards Board of Japan(“ASBJ”) issued ASBJ Statement No. 26, “AccountingStandard for Retirement Benefits” and ASBJ Guidance No.
25, “Guidance on Accounting Standard for Retirement
Benefits,” which replaced the accounting standard for retirement benefits that had been issued by the BusinessAccounting Council in 1998 with an effective date of April 1,
2000, and the other related practical guidance, and were followed by partial amendments from time to time through2009.
	(a) Under the revised accounting standard, actuarial
gains and losses and past service costs that are yet to berecognized in profit or loss are recognized within equity(accumulated other comprehensive income), after
adjusting for tax effects, and any resulting deficit or surplus is recognized as liability (liability for retirement
benefits) or asset (asset for retirement benefits).
	(b) The revised accounting standard does not change
how to recognize actuarial gains and losses and past
service costs in profit or loss. Those amounts are recognized in profit or loss over a certain period no longer
than the expected average remaining service period of
the employees. However, actuarial gains and losses andpast service costs that arose in the current period andhave not yet been recognized in profit or loss are included in other comprehensive income, and actuarial gains
and losses and past service costs that were recognizedin other comprehensive income in prior periods andthen recognized in profit or loss in the current period,
are treated as reclassification adjustments (see Note 15).
	(c) The revised accounting standard also made certain
amendments relating to the method of attributing
expected benefit to periods, the discount rate, andexpected future salary increases.
This accounting standard and the guidance for (a) and(b) above are effective for the end of annual periods beginning on or after April 1, 2013, and for (c) above are effective
for the beginning of annual periods beginning on or after
April 1, 2014, or for the beginning of annual periods beginning on or after April 1, 2015, subject to certain disclosure in
March 2015, all with earlier application being permitted fromthe beginning of annual periods beginning on or after April 1,
2013. However, no retrospective application of this accounting
standard to consolidated financial statements in prior periods
is required.
The Company applied the revised accounting standard
and guidance for retirement benefits for (a) and (b) above,effective March 31, 2014, and for (c) above, effective April 1,
2014.
With respect to (c) above, the Company changed themethod of attributing the expected benefit to periods from astraight-line basis to a benefit formula basis, the method ofdetermining the discount rate from using the period whichapproximates the expected average remaining service period
to using a single weighted average discount rate reflecting
the estimated timing and amount of benefit payment, andrecorded the effect of (c) above as of April 1, 2014, inretained earnings. As a result, asset for retirement benefits asof April 1, 2014, decreased by ¥436 million ($3,622 thousand), liability for retirement benefits as of April 1, 2014,
increased by ¥771 million ($6,413 thousand), and retained
earnings as of April 1, 2014, decreased by ¥1,207 million($10,035 thousand). The effects on operating income andincome before income taxes and minority interests for theyear ended March 31, 2015 were immaterial. In addition, theeffects on net assets per share and net income per share
were immaterial.
k. Asset Retirement Obligations — In March 2008, the
ASBJ issued ASBJ Statement No. 18, “Accounting Standard
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 from the acquisition,
construction, development and normal operation of a tangible fixed asset and is associated with the retirement of suchtangible fixed asset. The asset retirement obligation is recognized as the sum of the discounted cash flows required forthe future asset retirement and is recorded in the period inwhich the obligation is incurred if a reasonable estimate canbe made. If a reasonable estimate of the asset retirement
obligation cannot be made in the period the asset retirement
obligation is incurred, the liability should be recognized when

15

16

a reasonable estimate of the asset retirement obligation canbe 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 the amount of the liability. The asset retirement cost is
subsequently allocated to expense through depreciation over
the remaining 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 adjustment tothe carrying amount of the liability and the capitalized
amount of the related asset retirement cost.
l. Construction Contracts — In December 2007, the ASBJ
issued ASBJ Statement No. 15, “Accounting Standard forConstruction Contracts” and ASBJ Guidance No. 18,“Guidance on Accounting Standard for Construction
Contracts.” Under this accounting standard, 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 stageof completion of the contract at the balance sheet date canbe reliably measured, the outcome of a construction contract
is deemed to be estimated reliably. If the outcome of a construction contract cannot be reliably estimated, thecompleted-contract method should be applied. When it isprobable that the total construction costs will exceed total
construction revenue, an estimated loss on the contract
should be immediately recognized by providing for a loss on
construction contracts.
The revenues recognized by the percentage-of-completion method for the years ended March 31, 2015 and 2014
were ¥189,458 million ($1,575,270 thousand) and ¥173,010
million, respectively.
m. 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 is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary
differences between the carrying amounts and the tax basesof assets and liabilities. Deferred taxes are measured byapplying currently enacted income tax rates to the temporary
differences.
n. Derivatives and Hedging Activities — The Group uses
derivative financial instruments to manage its exposures tofluctuations in foreign exchange and interest rates. Currency
and interest rate swaps are utilized by the Group to reduce
foreign currency exchange and interest rate risks. The Group
does not enter into derivatives for trading or speculative purposes.
Currency and interest rate swaps that qualify for hedge
accounting and meet specific matching criteria are notremeasured at market value, but the differential paid or

received under the swap agreements is recognized andincluded in interest expense or income, and hedge items
denominated in a foreign currency are translated at the contracted rates.
o. Per Share Information — Basic net income per share iscomputed by dividing net income available to commonshareholders by the weighted-average number of commonshares outstanding for the period, retroactively adjusted forstock splits.
Diluted net income per share is not disclosed because
there are no securities with a dilutive effect upon exercise orconversion into common stock.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends
applicable to the respective fiscal years, including dividends
to be paid after the end of the year.
p. Accounting Changes and Error Corrections — In
December 2009, the ASBJ issued ASBJ Statement No. 24,“Accounting Standard for Accounting Changes and Error
Corrections” and ASBJ Guidance No. 24, “Guidance on
Accounting Standard for Accounting Changes and Error
Corrections.” Accounting treatments under this standard andguidance are as follows:(1) Changes in Accounting Policies:
When a new accounting policy is applied following revisionof an accounting standard, the new policy is applied retrospectively unless the revised accounting standards include
specific transitional provisions, in which case the entity shallcomply with the specific transitional provisions.
(2) Changes in Presentation:
When the presentation of financial statements is changed,
prior-period financial statements are reclassified in accordance with the new presentation.
(3) Changes in Accounting Estimates:
A change in an accounting estimate is accounted for in the
period of the change if the change affects that period only,
and is accounted for prospectively if the change affects boththe period of the change and future periods.
(4) Corrections of Prior-Period Errors:
When an error in prior-period financial statements is discovered, those statements are restated.

Okumura Corporation Annual Report 2015

3. Marketable and Investment Securities
Marketable and investment securities as of March 31, 2015 and 2014, consisted of the following:

Non-current:
Marketable equity securities
Government and corporate bonds
Non-marketable equity securities and other
Total

Millions of yen

Thousands of
U.S. dollars

2015

2014

2015

¥70,138118
1,240¥71,496¥58,515117
2,129¥60,761$583,167
982
10,308$594,457

The costs and aggregate fair values of marketable and investment securities at March 31, 2015 and 2014, were as follows:
Millions of yen

March 31, 2015

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

Cost

Unrealized
Gains

Unrealized
LossesFair
Value¥25,451—¥44,761—¥74—¥70,138
—

118

7

—

125

¥25,4091,000¥33,334
—

¥228
162

¥58,515
838

117

5

—

122

Cost

Unrealized
Gains

Unrealized
LossesFair
Value$211,619—$372,167—$619—$583,167
—

982

54

—

1,036

March 31, 2014

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

Thousands of U.S. dollars

March 31, 2015

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

17

The information for available-for-sale securities which were sold during the years ended March 31, 2015 and 2014, is asfollows:
Millions of yen

Proceeds

Realized
Gains

Realized
Losses

¥263

¥159

¥—

Proceeds

Realized
Gains

Realized
Losses

¥755

¥433

¥—

March 31, 2015

Proceeds

Realized
Gains

Realized
LossesAvailable-for-sale:
Equity securities$2,183$1,318$—March 31, 2015

Available-for-sale:
Equity securities

Millions of yen

18

March 31, 2014

Available-for-sale:
Equity securities

Thousands of U.S. dollars

The impairment losses on available-for-sale equity securities for the year ended March 31, 2015, were ¥23 million ($187
thousand).
No impairment loss was recognized on securities for the year ended March 31, 2014.
4. Inventories
Inventories at March 31, 2015 and 2014, consisted of the following:
Millions of yen

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

Thousands of
U.S. dollars

2015

2014

2015

¥4,962
1,318
2,283
494
¥9,057¥ 7,718
1,035
2,340
763
¥11,856$41,257
10,957
18,982
4,110$75,306

Okumura Corporation Annual Report 2015

5. Investment Property
In November 2008, the ASBJ issued ASBJ Statement No. 20, “Accounting Standard for Investment Property and Related
Disclosures” and issued ASBJ Guidance No. 23, “Guidance on Accounting Standard for Investment Property and Related
Disclosures.”
The Group owns certain rental properties such as residential buildings, warehouses, and land in Osaka and other areas.
Some rental warehouses, part of which the Company uses, are classified as rental properties in part.
The net of rental income and operating expenses for those rental properties was ¥2,635 million ($21,909 thousand) and¥2,716 million for the years ended March 31, 2015 and 2014, respectively.
The carrying amounts, changes in such balances and market prices of such properties were as follows:
Millions of yen
Fair Value

Carrying AmountRental properties
Rental properties in part
Total

April 1,
2014

Increase/
Decrease

March 31,2015

March 31,2015

¥28,9101,112¥30,022¥1,890(268)¥1,622¥30,800
844¥31,644¥50,150
6,560¥56,710
Millions of yen
Fair Value

Carrying AmountRental properties
Rental properties in part
Total

April 1,
2013

Increase/
Decrease

March 31,2014

March 31,2014

¥27,003
1,193¥28,196¥1,907(81)¥1,826¥28,9101,112¥30,022¥43,974
7,507¥51,481
Thousands of U.S. dollars
Fair Value

Carrying AmountRental properties
Rental properties in part
Total

April 1,
2014

Increase/
Decrease

March 31,2015

March 31,2015

$240,374
9,245$249,619$15,717(2,226)$13,491$256,091
7,019$263,110$416,977
54,543$471,520

Notes:(1) Carrying amount recognized in the consolidated balance sheets is net of accumulated depreciation and accumulated
impairment losses, if any.
(2) Of the changes in balances and market prices of rental properties for the years ended March 31, 2015 and 2014, increases
were recorded mainly in acquisition of real estate at ¥2,085 million ($17,338 thousand) and ¥2,357 million and decreases in
depreciation at ¥311 million ($2,586 thousand) and ¥311 million, respectively.
(3) Fair value of properties as of March 31, 2015 and 2014, is measured in accordance with real-estate appraisal by real-estateappraisers for primary properties, and the amount measured by the Group is in accordance with its Real-Estate Appraisal
Standard for other properties (including those measured using indicators).

19

6. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans at March 31, 2015 and 2014, consisted of notes to banks and bank overdrafts. The annual interest rates
applicable to the short-term bank loans ranged from 0.593% to 1.475% at March 31, 2015 and 0.609% to 1.475% at March
31, 2014.
Long-term debt at March 31, 2015 and 2014, consisted of the following:

20

Loans from banks and other financial institutions, due serially to 2031
with interest rates ranging from 0.64% to 5.60%
Collateralized
Unsecured
Obligations under finance leases
Total
Less current portionLong-term debt, less current portion

Millions of yen

Thousands of
U.S. dollars

2015

2014

2015

¥2,009
3,184
74
5,267
(43)
¥5,224¥2,014
3,208
104
5,326
(50)
¥5,276$16,707
26,470613
43,790(355)$43,435

Annual maturities of long-term debt, excluding finance leases (see Note 11), at March 31, 2015, were as follows:Year Ending March 31

Millions of yen

Thousands of
U.S. dollars

2016
2017
2018
2019
2020
2021 and thereafter
Total

¥11
1,112
4,010
9
9
42
¥5,193$94
9,241
33,34477
75
346$43,177

The carrying amount of assets pledged as collateral for short-term bank loans of ¥5,000 million ($41,573 thousand) and theabove collateralized long-term debt at March 31, 2015, was as follows:
Property, plant and equipment—net of accumulated depreciation
Investment securities
Total

Millions of yen

Thousands of
U.S. dollars

¥101
8,457
¥8,558$839
70,320$71,159

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 Group has never been requested to provide any additional
collateral.

Okumura Corporation Annual Report 2015

7. Employees’ Retirement Benefits
Most of the employees of the Company are covered by a contributory trusted pension plan.
The Company has a cash balance plan (pension plan linked to the market interest rates) based on the Defined Benefit
Corporate Pension Law.
(1) The changes in defined benefit obligations for the years ended March 31, 2015 and 2014, were as follows:

Balance at beginning of year (as previously reported)
Cumulative effect of accounting change
Balance at beginning of year (as restated)
Current service cost
Interest cost
Actuarial gains
Benefits paid
Balance at end of year

2015

Millions of yen
2014

Thousands of
U.S. dollars
2015¥23,918
1,207
25,125
1,124
125
(365)
(2,342)¥23,667¥25,272—
25,272
870
505
(332)
(2,397)¥23,918$198,867
10,035208,902
9,345
1,044(3,036)(19,474)$196,781

2015

Millions of yen
2014

Thousands of
U.S. dollars
2015¥24,353
268
1,205
1,893
(2,342)¥25,377¥23,830
286
756
1,879
(2,398)¥24,353$202,489
2,228
10,01815,738(19,473)$211,000(2) The changes in plan assets for the years ended March 31, 2015 and 2014, were as follows:

Balance at beginning of year
Expected return on plan assets
Actuarial gains
Contributions from the employer
Benefits paid
Balance at end of year(3) Reconciliation between the liability recorded in the consolidated balance sheet and the balances of defined benefit obligationand plan assets

Funded defined benefit obligation
Plan assets
Unfunded projected benefit obligation
Net asset arising from defined benefit obligation

Liability for retirement benefits
Asset for retirement benefits
Net asset arising from defined benefit obligation

2015

Millions of yen
2014

Thousands of
U.S. dollars
2015¥23,667(25,377)(1,710)—¥(1,710)¥23,918(24,353)(435)—¥ (435)$196,781(211,000)(14,219)—$(14,219)

2015

Millions of yen
2014

Thousands of
U.S. dollars
2015

¥
—
(1,710)¥(1,710)

¥ —
(435)
¥(435)$—(14,219)$(14,219)(4) The components of net periodic benefit costs for the years ended March 31, 2015 and 2014, were as follows:

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

2015

Millions of yen
2014

Thousands of
U.S. dollars
2015¥1,124
125
(268)
(113)
(21)
(55)
¥792

¥870
505
(286)
(268)
(21)
(55)
¥745

$9,345
1,044(2,228)
(946)
(176)
(458)
$6,58121

(5) Amounts recognized in other comprehensive income (before income tax effect) in respect of defined retirement benefit plans
for the years ended March 31, 2015 and 2014

Actuarial gains
Past service costs
Transitional obligation
Total

22

2015

Millions of yen
2014

Thousands of
U.S. dollars
2015¥1,456(21)(55)¥1,380¥———¥—$12,109(176)(458)$11,475(6) Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect of defined retirement
benefit plans as of March 31, 2015 and 2014

Unrecognized actuarial gains
Unrecognized past service costs
Unrecognized transitional obligation
Total

2015

Millions of yen
2014

Thousands of
U.S. dollars
2015¥(2,641)(64)—¥(2,705)¥(1,185)(85)(55)¥(1,325)$(21,959)(529)—$(22,488)(7) Plan assets
a. Components of plan assets
Plan assets as of March 31, 2015 and 2014, consisted of the following:
Debt investments
Equity investments
Life insurance general account assets
Others
Total

2015

2014

41%
13
32
14
100%

38%
12
33
17
100%

b. Method of determining the expected rate of return on plan assets
	
The expected rate of return on plan assets is determined considering allocation of plan assets which are expectedcurrently and in the future and the long-term rates of return which are expected currently and in the future from thevarious components of the plan assets.
(8) Assumptions used for the years ended March 31, 2015 and 2014, were set forth as follows:
Discount rate
Expected rate of return on plan assets

2015

2014

0.5%
1.1%

2.0%
1.2%

Okumura Corporation Annual Report 2015

8. Equity
Japanese companies are 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 including (1) having a Board of
Directors, (2) having independent auditors, (3) having an Audit & Supervisory Board, and (4) the term of service of the directors being prescribed as one year rather than the normal two-year 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 Companies Act permits companies to distribute dividends-in-kind (noncash 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 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 aggregate amount of legal reserve and additional paid-in capitalequals 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 within equity 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 theshareholders which is determined by a specific formula. Under the Companies Act, stock acquisition rights are presented as aseparate component of equity. The Companies Act also provides that companies can purchase both treasury stock acquisitionrights and treasury stock. Such treasury stock acquisition rights are presented as a separate component of equity or deducted
directly from stock acquisition rights.

23

9. Income Taxes
The Group is subject to Japanese national and local income taxes which, in the aggregate, resulted in a normal effective statutory tax rate of approximately 35.6% and 38.0% for the years ended March 31, 2015 and 2014, respectively.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and liabilities at March 31, 2015 and 2014, were as follows:

24

Deferred tax assets:
Tax loss carryforwards
Impairment losses on securities
Allowance for losses on construction contracts
Write-down of inventories
Allowance for doubtful accounts
Write-off of bad debt
Allowance for bonuses
Accrued expenses
Other
Less valuation allowances
Total
Deferred tax liabilities:
Net unrealized gains on available-for-sale securities
Retained earnings appropriated for special allowance
Asset for retirement benefits
Total
Net deferred tax liabilities

Millions of yen

Thousands of
U.S. dollars

2015

2014

2015

¥5,515
2,356
1,586
1,417
1,158
836
830
596
570
(14,817)47¥12,033
2,619
668
1,525
2,233
10
759
621
401
(20,807)62$45,853
19,587
13,18911,783
9,627
6,950
6,907
4,955
4,737
(123,197)
391(12,802)(1,711)(551)(15,064)¥(15,017)(10,175)(1,905)(155)(12,235)¥(12,173)(106,449)(14,227)(4,578)(125,254)$(124,863)

A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompanying consolidated statement of income for the years ended March 31, 2015 and 2014, was as follows:
Normal effective statutory tax rate
Expenses not deductible for income tax purposes
Non-taxable income
Inhabitant tax per capita
Special income tax credits
Valuation allowance
Effect of tax rate reduction
Other—net
Actual effective tax rate

2015

2014

35.6%
1.0
(3.0)
2.5
(1.7)
(23.0)
(3.3)
0.3
8.4%

38.0%
1.8
(3.9)
3.4
(1.3)
(34.1)
0.1
2.5
6.5%

New tax reform laws enacted in 2015 in Japan changed the normal effective statutory tax rate for the fiscal year beginning on or after April 1, 2015, to 33.0% and for the fiscal year beginning on or after April 1, 2016, to 32.2%. The effect ofthese changes was to decrease deferred tax liabilities, net of deferred tax assets, by ¥1,586 million ($13,191 thousand) andincrease accumulated other comprehensive income for unrealized gain on available-for-sale securities by ¥1,352 million($11,240 thousand), and defined retirement benefit plan by ¥58 million ($483 thousand), in the consolidated balance sheet asof March 31, 2015, and to decrease income taxes—deferred in the consolidated statement of income for the year then endedby ¥176 million ($1,467 thousand).

Okumura Corporation Annual Report 2015

10. Research and Development Costs
Research and development costs charged to income were ¥651 million ($5,411 thousand) and ¥682 million for the years ended
March 31, 2015 and 2014, respectively.
11. Leases(1) Finance leases
The Group leases certain machinery and equipment, office space and other assets.
Total rental expenses including lease payments under finance leases for the years ended March 31, 2015 and 2014, were
¥31 million ($258 thousand) and ¥27 million, respectively.
Obligations under finance leases were as follows:
Millions of yen

Due within one year
Due after one year
Total

Thousands of
U.S. dollars

2015

2014

2015

¥32
42
¥74

¥37
67
¥104

$261
352
$613

(2) Operating leases
Future minimum lease receivables or payments under noncancelable operating leases at March 31, 2015 and 2014, were 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

2015

2014

2015

¥2,100
18,303¥20,403¥1,957
18,335¥20,292$17,455
152,185$169,640¥94928¥1,022

¥101
1,022
¥1,123

$784
7,711
$8,495

12. Financial Instruments and Related Disclosures(1) Group policy for financial instruments
At the Group level, cash surpluses, if any, are invested in low-risk and capital-safe financial assets. Short-term bank loans areused to fund its ongoing operations. Derivatives are used, not for speculative purposes, but to manage its exposure to fluctuations in foreign currency exchange and interest rates.
(2) Nature and extent of risks arising from financial instruments
Receivables, such as trade notes and trade accounts, are exposed to customer credit risk. Marketable and investment securities, mainly held-to-maturity securities and equity instruments of customers and suppliers of the Group, are exposed to therisk of market price fluctuations.
Payment terms of payables, such as trade notes and trade accounts, are mostly less than one year.
(3) Risk management for financial instruments
Credit risk management
Credit risk is the risk of economic loss arising from a counterparty’s failure to repay or service debt according to the contractual terms. The Group manages its credit risk from receivables on the basis of internal guidelines, which include continuously
determining customers’ circumstances from the phase of accepting orders to that of collection of the receivables, along with
monitoring of payment term and balances of each transaction.
Market risk management (foreign exchange risk and interest rate risk)
Marketable and investment securities are managed by monitoring market values and financial position of issuers on a regularbasis. Also, the Group continuously reviews its possession of those securities except for held-to-maturity securities.

25

Long-term debt denominated in foreign currencies is exposed to fluctuations in market interest rates and foreign exchange
rates. The Group utilizes derivative instruments (currency and interest rate swaps contracts) as hedging instruments to manage these market risks. The hedge accounting method is described in Note 2n.
Please see Note 13 for more details about derivatives.
Liquidity risk management
Liquidity risk comprises the risk that the Group cannot meet its contractual obligations in full on maturity dates. The Groupmanages its liquidity risk by making the appropriate cash schedule on a monthly basis.

26(4) Fair values of financial instruments
Fair values of financial instruments are based on quoted prices in active markets. If quoted price is not available, other rational valuation techniques are used instead.
(a) Fair values of financial instruments
Millions of yen

March 31, 2015

Carrying
AmountFair Value

Unrealized
Gain/Loss

Cash and cash equivalents and time deposits
Receivables—trade notes and accounts
Allowance for doubtful receivables
Net
Investment securities
Long-term loans receivable
Allowance for doubtful long-term loans receivable
Net
Total

¥ 27,932
101,836(1,491)
100,345
70,255112(1)111¥198,643¥ 27,932¥—100,330
70,262(15)
7114¥198,6383¥(5)Short-term bank loans
Long-term bank loans
Payables—trade notes and accounts
Long-term debt—lease obligation including current portion
Total
Derivatives¥ 13,646
5,100
53,86074¥ 72,680—¥¥ 13,646
5,106
53,86072¥ 72,684
¥
—

¥ —
6
—
(2)
¥4
¥—
Millions of yen

March 31, 2014

Carrying
AmountFair Value

Unrealized
Gain/Loss

Cash and cash equivalents and time deposits
Receivables—trade notes and accounts
Allowance for doubtful receivables
Net
Investment securities
Long-term loans receivable
Allowance for doubtful long-term loans receivable
Net
Total

¥26,292
97,254(3,972)93,28259,47061(0)61¥179,105¥26,292¥—93,25459,475(28)
561¥179,0820¥(23)

Short-term bank loans
Long-term bank loans
Payables—trade notes and accounts
Long-term debt—lease obligation including current portion
Total
Derivatives¥7,511
5,100
55,548104¥68,263¥—¥7,5115,103
55,54899¥68,261
¥—

¥—
3
—
(5)
¥(2)
¥—

Okumura Corporation Annual Report 2015

Thousands of U.S. dollars

March 31, 2015

Carrying
AmountFair Value

Unrealized
Gain/Loss

Cash and cash equivalents and time deposits
Receivables—trade notes and accounts
Allowance for doubtful receivables
Net
Investment securities
Long-term loans receivable
Allowance for doubtful long-term loans receivable
Net
Total

$ 232,238
846,734(12,394)
834,340
584,149
930
(11)
919
$1,651,646$232,238$—834,214584,204

(126)
55

947
$1,651,603

28$(43)

Short-term bank loans
Long-term bank loans
Payables—trade notes and accounts
Long-term debt—lease obligation including current portion
Total
Derivatives$ 113,461
42,404
447,830614$ 604,309$—$113,461
42,457447,830594$604,342
$—

$ —
53
—
(20)
$33
$ —

Amounts due from unconsolidated subsidiaries and associated companies are included in receivables-trade notes and accounts
and long-term loans receivable.
Cash and cash equivalents and time deposits
The carrying values of cash and cash equivalents and time deposits approximate fair value because of their shortmaturities.
Marketable securities and investment securities
The fair values of marketable securities and investment securities are measured at the quoted market price of thestock exchange for equity instruments and at the quoted price obtained from the financial institution for certain
debt instruments. Fair value information for marketable securities and investment securities by classification is
included in Note 3.
Receivables—trade notes and accounts and long-term loans receivable
The fair values of receivables—trade notes and accounts and long-term loans receivable are measured at theamount to be received at maturity, and discounted at the Group’s assumed corporate discount rate, such as the rateof national bonds, to maturity. Also, the amounts of the allowance for doubtful receivables are deducted from thefair values.
Payables—trade notes and accounts and short-term bank loans
The carrying values of payables—trade notes and accounts and short-term bank loans approximate fair value
because of their short maturities.
Long-term debt—lease obligation
The fair values of long-term debt—lease obligation are determined by discounting the cash flows related to the debt
at the Group’s assumed corporate borrowing rate.
Long-term bank loans
The fair values of long-term bank loans are determined by the present value calculated by discounting the total
amount of the principal and interest expense at the interest rate considering the remaining maturities of the loans
and credit risk of the Company. The carrying values of bank loans with floating interest rates approximate fair value
because they reflect market interest rates and the credit position of the Company has not changed significantly after
the execution.
Derivatives
Fair value information for derivatives is included in Note 13.
(b) Financial instruments whose fair value cannot be reliably determined
Carrying Amount

Investments in equity instruments that do not have a quoted market price in an
active market

Millions of yen

Thousands of
U.S. dollars

2015

2014

2015

¥1,460¥1,502$12,13627

(5) Maturity analysis for financial assets and securities with contractual maturities
Millions of yen

March 31, 201528

Cash and cash equivalents and time deposits
Receivables—trade notes and accounts
Investment securities
Available-for-sale securities with contractual maturities
Long-term loans receivable
Total

Due in 1 Yearor Less

Due after
1 Year through5 Years

Due after
5 Years through10 Years

Due after
10 Years¥27,932
93,719

¥—
8,117

¥—
—

¥—
—

—
—
¥121,651

2
31¥8,150

124
61
¥185

—
20
¥20

Due in 1 Yearor Less

Due after
1 Year through5 Years

Due after
5 Years through10 Years

Due after
10 Years$232,238
779,238$—67,496

$—
—

$—
—

—
—
$1,011,476

17
259$67,772

1,032
503$1,535

—
168
$168

Thousands of U.S. dollars

March 31, 2015

Cash and cash equivalents and time deposits
Receivables—trade notes and accounts
Investment securities
Available-for-sale securities with contractual maturities
Long-term loans receivable
Total

Please see Note 6 for annual maturities of long-term debt and Note 11 for obligations under finance leases.

Okumura Corporation Annual Report 201513. Derivatives
The Group enters into derivatives, in the normal course of business, to reduce the exposure to fluctuations in foreign exchange
rates and interest rates. The primary classes of derivatives used by the Group are foreign currency forward contracts, currency
and interest rate swaps.
The Group does not hold or issue derivatives for trading purposes.
Because the counterparties to these derivatives are limited to major financial institutions, the Group does not anticipate
any losses arising from credit risk.
Derivative transactions entered into by the Group have been made in accordance with internal policies which regulate theauthorization and credit limit amount.
Derivative transactions to which hedge accounting is not applied:
There were no derivative transactions to which hedge accounting is not applied at March 31, 2015 and 2014.
Derivative transactions to which hedge accounting is applied:
Millions of yen

March 31, 2015

Hedged item

Contract
amountContract
amount due
after one year

Currency and interest rate swaps
Floating-rate receipt, fixed-rate payment
Receipt in U.S. dollars, payment in yen

Long-term
debt¥2,000¥2,000Fair value

Note

Millions of yen

March 31, 2014

Hedged item

Contract
amountContract
amount due
after one year

Currency and interest rate swaps
Floating-rate receipt, fixed-rate payment
Receipt in U.S. dollars, payment in yen

Long-term
debt¥2,000¥2,000Fair value

Note

Thousands of U.S. dollars

March 31, 2015

Hedged item

Contract
amountContract
amount due
after one year

Currency and interest rate swaps
Floating-rate receipt, fixed-rate payment
Receipt in U.S. dollars, payment in yen

Long-term
debt$16,629$16,629

Fair value

Note

Note:
Currency and interest rate swaps which qualify for hedge accounting and meet specific matching criteria are not remeasured atmarket value but the differential paid or received under the swap agreement is recognized and included in interest expense or
income. The fair value of such currency and interest rate swaps is included in those of the hedged items (i.e., long-term debt) in
Note 12.

29

14. Commitments and Contingent Liabilities
Land in the amount of ¥21 million ($173 thousand) is pledged for the deposit received from lessee related to the fixed-term
land leasehold at March 31, 2015. Land in the amount of ¥1,461 million ($12,150 thousand) and buildings in the amount of¥1,423 million ($11,832 thousand) are pledged as construction assistance funds pursuant to building lease contracts at March
31, 2015. Investments securities in the amounts of ¥116 million ($965 thousand), ¥100 million ($832 thousand), and ¥8 million($67 thousand) are pledged as collateral for the guarantee against defect of construction, the loans of an affiliate, and contract
performance obligation of PFI business, respectively, at March 31, 2015, and time deposits in the amount of ¥54 million ($446
thousand) are pledged for the guarantee against defect of construction contracts at March 31, 2015.

30

15. Other Comprehensive Income
The components of other comprehensive income for the years ended March 31, 2015 and 2014, were as follows:
Millions of yen

Thousands of
U.S. Dollars

2014

2015

¥11,878(136)
11,742(2,627)¥9,115¥5,974(432)
5,542(1,776)¥3,766$98,764(1,131)
97,633(21,845)$75,788¥1,570
(190)
1,380
(395)
¥985
¥10,100

¥—
—
—
—
¥—
¥3,766$13,055(1,580)11,475(3,289)$8,186$83,974

2015

Unrealized gain on available-for-sale securities
Gains arising during the year
Reclassification adjustments to profit or loss
Amount before tax effect
Income tax effect
Total
Defined retirement benefit plans
Adjustments arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectTotal
Total other comprehensive income

16. Subsequent EventAppropriation of retained earnings
The following appropriation of retained earnings at March 31, 2015, was approved at the Company’s shareholders’ meeting
held on June 26, 2015.
Year-end cash dividends, ¥12 ($0.10) per share

Millions of yen

Thousands of
U.S. dollars¥2,393$19,893

17. Segment Information
1. Description of reportable segments
The Group’s reportable segments are those for which separate financial information is available and regular evaluation by
the Company’s management is being performed in order to decide how resources are allocated among the Group.
Therefore, the Group’s reportable segments consist of “Civil engineering,” “Architectural construction,” and “Realestate.”2.	Methods of measurement for the amounts of sales, profit (loss), assets, liabilities and other items for each reportablesegment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2, “Summary of Significant
Accounting Policies.”Okumura Corporation Annual Report 2015

3. Information about sales, profit (loss), assets, liabilities and other items is as follows:
Millions of yen
2015

Reportable segment

Sales
Sales to externalcustomers
Intersegment
sales or transfers
Total
Segment profit (loss)
Other:
Depreciation

Civil
engineering

Architectural
construction

Real estate

Total

Other
(Note 1)

Total

Reconciliations(Note 2)

Consolidated(Note 3)

¥82,514¥112,238¥4,967¥199,719¥5,549¥205,268¥—¥205,268—
82,514
4,725—
112,238(3,787)

22
4,989
2,878

22
199,741
3,816

329
5,878
225

351
205,619
4,041

(351)
(351)
11

—
205,268
4,052

¥243

¥236

¥368

¥847

¥8

¥855

¥(7)

¥848
Millions of yen
2014

Reportable segment

Sales
Sales to externalcustomers
Intersegment
sales or transfers
Total
Segment profit (loss)
Other:
Depreciation

Civil
engineering

Architectural
construction

Real estate

Total

Other
(Note 1)

Total

Reconciliations(Note 2)

Consolidated(Note 3)

¥72,093¥111,604¥4,641¥188,338¥4,687¥193,025¥—¥193,025—
72,0932,617

490
112,094(2,766)

19
4,660
2,422

509
188,847
2,273

630
5,317
35

1,139
194,164
2,308(1,139)(1,139)10—
193,025
2,318

¥199

¥246

¥377

¥822

¥9

¥831

¥(7)

¥824

Thousands of U.S. dollars
2015

Reportable segment

Sales
Sales to externalcustomers
Intersegment
sales or transfers
Total
Segment profit (loss)
Other:
Depreciation

Civil
engineering

Architectural
construction

Real estate

Total

Other
(Note 1)

Total

Reconciliations(Note 2)

Consolidated(Note 3)

$686,077$933,219$41,292$1,660,588$46,140$1,706,728$—$1,706,728—
686,077
39,290—933,219(31,489)

185
41,47723,925185
1,660,773
31,726

2,731
48,871
1,870

2,916
1,709,644
33,596(2,916)(2,916)96—
1,706,728
33,692$2,021$1,960$3,059$7,040$71$7,111$(58)$7,053

Notes:
1. Other is a business segment which is not included in any reportable segment and includes business related to manufacturing
and sales of construction machinery and materials.
2. Reconciliations to segment profit (loss) in the amount of ¥11 million ($96 thousand) and ¥10 million for the years ended
March 31, 2015 and 2014, respectively, include eliminations of intersegment transactions.
3. Consolidated amounts of segment profit (loss) above correspond to the amounts of operating income in the consolidated
statements of income.

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

INDEPENDENT AUDITOR’S REPORTTo the Board of Directors of Okumura Corporation:32

We have audited the accompanying consolidated balance sheet of Okumura Corporation and its consolidated subsidiaries as ofMarch 31, 2015, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows
for the year then ended, and a summary of significant accounting policies and other explanatory information, all expressed inJapanese yen.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance withaccounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable
the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, theauditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Okumura Corporation and its consolidated subsidiaries as of March 31, 2015, and the consolidated results of
their operations and their cash flows for the year then ended in accordance with accounting principles generally accepted inJapan.
Convenience Translation
Our audit also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, suchtranslation has been made in accordance with the basis stated in Note 1 to the consolidated financial statements. Such U.S.
dollar amounts are presented solely for the convenience of readers outside Japan.

June 26, 2015

Member of
Deloitte Touche Tohmatsu Limited

Breakdown of Orders (Non-Consolidated)
Okumura Corporation
Year ended March 31, 2015

Okumura Corporation Annual Report 2015

Construction Orders Awarded

2015

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

40,512
76,867
100
117,479

100 %

127,91391,700503¥220,116

Composition
ratio

Millions of
yen

41.2%

¥ 54,512
15,594
1,987
72,09356.1

26,48785,251
356
112,094

97.3
2.7
100 %

80,999100,845
2,343
184,187
5,551¥189,738

Composition
ratio

Millions of
yen

46.7%

¥ 89,655
12,523
1,761
103,93953.3

64,89951,647
1,146
117,692

100 %

154,554
64,1702,907¥221,631

98,766
97,976
1,087¥197,829
2015

Millions ofyen¥ 62,781
16,964
2,769
82,51447,38264,218638
112,238
110,163
81,182
3,407
194,7525,426¥200,178

Year-end Backlog¥ 84,212
20,761
26
104,999
58,94560,203561
119,709
143,157
80,964587¥224,708

Composition
ratio

Thousands of
U.S. dollars

46.6%$ 476,749
209,5418,600
694,89053.4

344,449
605,094444
949,987

100 %

821,198
814,635
9,044$1,644,877

Composition
ratio

Thousands of
U.S. dollars

38.0%$ 522,004
141,047
23,026
686,07759.1

393,964
533,950
5,305
933,219

97.1
2.9
100 %

915,968
674,997
28,331
1,619,296
45,109$1,664,405

Composition
ratio

Thousands of
U.S. dollars

46.9%$ 700,194
172,616217
873,02753.1

490,100
500,569
4,666
995,335100 %

1,190,294
673,185
4,883$1,868,362

2015

2014

2015

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

42.2%

¥ 87,401
14,833403
102,637

41,427
72,775
53
114,255

Net 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¥ 57,339
25,201
1,034
83,5742015

2014

Composition
ratio

2015

2014

33

Network

Head and Branch Offices

34

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

Hokuriku Office2-3-26, Higashi Ohdori, Chuo-ku,
Niigata 950-0087, Japan
TEL: +81-25-241-6160 FAX: +81-25-241-6364

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

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

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

Kansai Branch
26F ABENO HARUKAS,1-1-43 Abenosuji,
Abeno-ku, Osaka 545-6026, Japan
TEL: +81-6-6621-1101 FAX: +81-6-6621-1921

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

Nara Office38-3 Takama-cho, Nara 630-8241, Japan
TEL: +81-742-22-5001 FAX: +81-742-27-0192

West Japan Branch
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

West Japan Branch (HARUKAS Office)
26F ABENO HARUKAS,1-1-43 Abenosuji,
Abeno-ku, Osaka 545-6026, Japan
TEL: +81-6-6621-1101 FAX: +81-6-6621-1921

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

Sapporo Branch
2-1-18, Kita Shijo Nishi,
Chuo-ku, Sapporo 060-0004, Japan
TEL: +81-11-261-9261 FAX: +81-11-251-5345

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

Tohoku Branch
2-25, Tsutsumi dori, Amamiya-machi,
Aoba-ku, Sendai 981-8525, Japan
TEL: +81-22-274-1231 FAX: +81-22-273-9805

Kyushu Branch
2-19-1, Sanno, Yahata Higashi-ku,
Kitakyushu 805-8531, Japan
TEL: +81-93-671-3131 FAX: +81-93-661-1543

Tokyo Branch
5-6-1, Shiba, Minato-ku,
Tokyo 108-8381, Japan
TEL: +81-3-3454-8111 FAX: +81-3-5427-8116

Fukuoka Office
1-13-8, Yakuin, Chuo-ku,
Fukuoka 810-0022, Japan
TEL: +81-92-741-4431 FAX: +81-92-741-4740

Kitakanto Office
4-26-15, Kishi-cho, Urawa-ku,
Saitama 330-0064, Japan
TEL: +81-48-827-0188 FAX: +81-48-827-0268

Taiwan Branch
7F., No.82, Sungchiang.Rd.,
Zhongshan Dist., Taipei City 104, Taiwan(R.O.C.)TEL: +886-2-2567-5010 FAX: +886-2-2567-5171

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

Singapore Rep. Office
175A Bencoolen Street, #05-06 Burlington
Square, Singapore 189650
TEL: +65-6884-6830 FAX: +65-6884-6831

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 July 1, 2015)(As of March 31, 2015)
Okumura Corporation Annual Report 2015

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 civilengineering projects for railways, roads, power station
facilities, sewage and water works, and others. In thearea of construction are projects such as houses, public
facilities, medical facilities, and office buildings. The
Company has developed technology at the highest
level, with achievements including the seismic isolation
system used to construct Japan’s first earthquakeabsorbing building. In the area of environment-related
technology, Okumura has developed techniques for
100% recycling of 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.

Directors and Auditors

Corporate Data
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

President & Representative Director
Takanori Okumura
Representative Director
Takaiku Hirako

EstablishedFebruary 22, 1907

Directors
Makoto Tsuchiya
Seiichi Fujioka
Yuichi Mizuno
Kazuo Takami
Keiji Yamaguchi
Kiyoshi Saito
Kenji Kotera
Atsushi Tanaka

Capital¥19.8 billion

Standing Statutory Auditors
Koichi Yamauchi
Hironobu Kozai

Stock Information
Stock Exchange Listings
Tokyo

Auditors
Yoshihiro Ban
Kazuo Tsuji
Shuji Abe

Transfer Agent
Sumitomo Mitsui Trust Bank, Limited

Notes:1. Kiyoshi Saito is outside director.
2. Yoshihiro Ban, Kazuo Tsuji and Shuji Abe are outside auditors.

Major Shareholders
Shareholder

Executive Officers
Executive Vice Presidents
Takaiku Hirako*
Makoto Tsuchiya*
Wataru Watanabe
Senior Managing Officer
Hiroomi Iida
Seiichi Fujioka*
Yuichi Mizuno*

Contents
1 Financial Highlights
2 To Our Shareholders
4 Review of Operations
6 Topics
8 Consolidated Balance Sheet
10 Consolidated Statement of Income
11 Consolidated Statement of Comprehensive Income
12 Consolidated Statement of Changes in Equity
13 Consolidated Statement of Cash Flows
14 Notes to Consolidated Financial Statements
32 Independent Auditor’s Report
33 Breakdown of Orders (Non-Consolidated)
34 Network
35 Board of Directors / Investor Information

Managing Officers
Kazuo Takami*
Keiji Yamaguchi*
Hirokazu Oishi
Toshio Kobayashi
Executive Officers
Takeshi Kurita
Yutaka Maruyama
Takanori Hayashi
Noriyuki MachidaKenji Kotera*
Osamu Harada

35

Group Employees
1,970

Atsushi Tanaka*
Syunso Iijima
Kazuyoshi Ito
Hiromu Miyazaki
Hitoshi Miyamoto
Akira Tanaka

Note: Those officers marked with an asterisk (*) work as directors.

Shares held Percentage of(thousands)
total

Okumura Corporation(Treasury stock)

28,951

12.68%

Northern Trust Co. (AVFC) Re
Silchester International Investors
International Value Equity Trust

12,1805.33

Okumura Employees’
Shareholding Association

7,344

3.22

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

7,114

3.12

Resona Bank, Limited.

6,074

2.66

Sumitomo Realty &Development Co., Ltd.

6,050

2.65

BBH Boston Custodian For Blackrock
Global Allocation Fund, Inc. 620313

5,569

2.44

Sumitomo Mitsui Banking
Corporation

5,568

2.44

The Master Trust Bank ofJapan, Ltd. (Trust Account)

5,448

2.39

Japan Trustee Services Bank,
Ltd. (Trust Account)

4,984

2.18

Northern Trust Co. (AVFC) Sub
A/C Non Treaty

4,208

1.84

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

OkumuraCorporation
Annual Report

2015

Printed in Japan