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

Okumura Corporation
Annual Report 2017

Printed in JapanBoard of Directors

Investor Information(As of June 29, 2017)(As of March 31, 2017)
Okumura Corporation Annual Report 2017

Directors

Corporate Data

President and Representative Director
Takanori Okumura
Representative Director
Atsushi Tanaka

EstablishedFebruary 22, 1907

Directors
Seiichi Fujioka
Yuichi Mizuno
Keiji Yamaguchi
Yutaka Maruyama
Kenji Kotera

Capital¥19.8 billion

Director (Full-time Audit and Supervisory Committee Member)
Hironobu Kozai
Directors (Audit and Supervisory Committee Member)
Kiyoshi Saito
Kazuo Tsuji
Shuji Abe
Hiroyo Yashiro
Note: Kiyoshi Saito, Kazuo Tsuji, Shuji Abe and Hiroyo Yashiro are outside directors.

Okumura was established in 1907 based on
two key principles enshrined in the corporate mottos “steadfast management” and“sincere operation.” The steady growthachieved 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 earthquake-absorbing 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.

Senior Managing Executive Officers
Hiroomi Iida
Seiichi Fujioka*
Yuichi Mizuno*
Keiji Yamaguchi*
Managing Executive Officers
Yutaka Maruyama*
Hitoshi Miyamoto
Kenji Kotera*
Atsushi Tanaka*

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 (Nonconsolidated)
34 Network
35 Board of Directors / Investor Information

Stock Information
Stock Exchange Listings
Tokyo
Transfer Agent
Sumitomo Mitsui Trust Bank, Limited

Shareholder

Executive Vice Presidents
Wataru Watanabe

Contents

35

Group Employees
2,020

Major Shareholders

Executive Officers

Executive Officers
Takanori Hayashi
Noriyuki Machida
Osamu Harada
Shunso Iijima
Hiromu Miyazaki
Akira Tanaka

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

Masaaki Iwakura
Kaoru Kuniyuki
Hiroyuki Hayashi
Akira Okada
Naoki Magoori
Hirohide Taniguchi

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

Shares held Percentage of(thousands)
total

Okumura Corporation(Treasury stock)

29,12112.75%

Japan Trustee Services Bank,
Ltd. (Trust Account)

12,204

5.34

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

10,528

4.61

Okumura Employees’
Shareholding Association

7,469

3.27

Resona Bank, Limited.

6,074

2.66

Sumitomo Realty &Development Co., Ltd.

6,050

2.65

Sumitomo Mitsui Banking
Corporation

5,568

2.44

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

4,025

1.76

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

3,517

1.54

Japan Trustee Services Bank,
Ltd. (Trust Account 5)

3,388

1.48

Nippon Life Insurance Company

3,215

1.41

Financial Highlights
Okumura Corporation Annual Report 2017

For the years ended March 31

2015

2016

Consolidated:

2017

2017
Thousands of
U.S. dollars

Millions of yen¥205,268¥205,291¥203,091$1,810,080

Operating income

4,052

8,423

11,679104,088

Net income attributable to owners of the parent

4,922

8,626

13,614

121,340

Total assets

260,303

266,681

289,475

2,579,987

Total equity

140,655

143,279

152,959

1,363,267

Net sales

Per Share:

Yen

U.S. dollars

Basic net income¥24.66¥43.28¥68.34$0.61

Cash dividends applicable to the year

12.00

21.00

33.00

0.29

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, 2017, of ¥112.20=$1.

Net Sales

Net income attributable to owners of the parent(Millions of Yen)

250,000(Millions of Yen)

15,000Total Equity(Millions of Yen)

175,000
150,000

200,000

12,000150,000

9,000

100,000

6,000

50,0003,000

125,000
100,000
75,00050,00025,000
0

0

0

2015

2016

2017

2015

2016

2017

2015

2016

2017

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 oneof them the greatest success in their endeavors.
A general overview of business performance for the period to March 2017 (April 1, 2016 to March 31,2017) is provided in the following sections.

Fiscal 2017 Results
During the period under review, the Japanese economy lacked strength at times but underwent a moderate
recovery trend, as reflected in such developments as corporate production and exports showing signs of picking up. In such a climate, the operating environment surrounding the construction industry remained firm
due to robust construction investments on the back of various government policies, heightened demand in
the private sector, etc.
In these circumstances, the Company’s consolidated net sales decreased 1.1% year on year to¥203,091 million. Meanwhile, profits increased from the previous year again as a result of such factors as an
improvement in gross profit from civil engineering projects and construction work, as consolidated gross profit increased 19.5% year on year to ¥27,063 million, operating income increased 38.6% year on year to ¥11,679
million and net income attributable to owners of the parent increased 57.8% year on year to ¥13,614 million.
The Company decided to pay a dividend of ¥33.00 per share for the period ended March 31, 2017
based on its basic policy regarding profit sharing.

Looking Ahead and Key Strategies
The Japanese economy is expected to remain on a recovery trajectory, driven by the upturn in productionand exports stemming from improvements in foreign demand, etc. In the construction industry, the businessenvironment is expected to remain firm for the time being, given that both public and private investments are
expected to continue showing underlying strength, due in part to the support provided by various government policies.
Under these circumstances, the Okumura Group has been engaged in initiatives aimed at building
a solid management base by strengthening the earning capacity of the construction business and expanding
business domains through improvements in the productivity of the construction business, enhancements toOkumura Corporation Annual Report 20173

its brand and diversification of its earnings base in accordance with the Medium Term Business Plan, in whichfiscal 2016 has been set as the first year.
Specifically, in the construction business, our efforts include promoting technology developmentthat will lead to streamlining and labor-saving, increasing business efficiency through the accelerated adoption of Construction Information Modeling (CIM) and Building Information Modeling (BIM), reinforcing ourcapabilities for proposing solutions to our customers and design capabilities, promoting technology development that meets the needs of our clients and refining of our proprietary technology. In real estate operations,
we are expanding the rental business by acquiring quality, revenue-generating real estate and effectively
utilizing the properties in our portfolio, while carefully studying market conditions. We will also make strategic
investments in new businesses in order to expand our business domains.
Of note, on December 3, 2016, a former employee of Okumura was arrested on suspicion of violating the Act on Elimination and Prevention of Involvement in Bid Rigging, etc. and Punishments for Acts by
Employees that Harm Fairness of Bidding, etc. in relation to a project ordered by the Chubu Regional Development Bureau of the Ministry of Land, Infrastructure, Transport and Tourism; however, the charges have since
been dropped.
At Okumura, this situation has been treated with gravity and utmost seriousness, and we are committed to making efforts to prevent the recurrence of such a situation by further enhancing and stringently
enforcing compliance.

For the future, Okumura will apply all of its resources with the aim of responding quickly and flexibly to thechanging operating environment, and thereby reinforcing and diversifying its earnings base in accordancewith 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 2017

Takanori Okumura
President and Representative Director

Review of Operations
Major Projects Completed
CIVIL ENGINEERING

4
Kihoku West Road Iwade Tunnel
Work period: August 2013 to February 2017
Construction length: 1,787m
Tunnel length: 1,084m
2 abutments

Obayashi Drainage Facility Construction in Ichinoseki
Flood Control BasinWork period: October 2013 to July 2016
Floodgate framework construction(Concrete: Approx. 31,000m3)
494 cast-in-place piles
Bank protection work: Approx. 2,700m2
Streambed protection work
(Approx. 2,000 foot protecting blocks)

Integrated Operations relating to the Earthquake
Reconstruction Project in Osawa Area, Yamada Town
Work period: November 2013 to March 2017
Project to fortify disaster prevention functions of fishing villages
Construction area: 212,000m2
Cut: 270,000m3
Embankment: 170,000m3
Ground land improvement: 28,000m3
Rainwater drainage: 1,100m3

Kitakami Canal Disaster Restoration WorkWork period: October 2013 to September 2016
Construction length: 4,271.9m
Embankment fill: 106,300m3
Slope pavement bank protection: 54,335m2
4,798 sheet piles
Foot protection: 29,603m3

BUILDINGS

Sanda Station Stationfront Block
B, Type 1 Urban Redevelopment
Project
Work period: January 2015 toMarch 2017
Heart City East
Structure: RC and Steel
Total floor space: 16,206.58m2
Heart City West
Structure: RC
Total floor space: 13,675.42m2

MCUD Kawasaki I(Distribution warehouse)

TOKYO interior Nagoya
Main Store

AZ-COM MK OSAKA(Distribution warehouse)

Work period: November 2014 to
February 2017
Structure: Steel
Total floor space: 49,957.91m2

Work period: July 2015 to May 2016
Structure: Steel
Total floor space: 25,111.38m2

Work period: October 2015 to
October 2016
Structure: Steel
Total floor space: 30,825.61m2

Okumura Corporation Annual Report 2017

Orders Received
CIVIL ENGINEERING

5
Refill and Removal Work relating to the Landfill
Disposal Project of Specified Waste(Tomioka Town, Fukushima Prefecture)
Work period: July 2016 to March 2021
Crushing incinerated ash and other waste of designated areas
and designated waste
Refill and containment
Removal and transportation

Improvement of Hanshin Umeda Station andExpansion of the Structure of the East-West
Underpass
Work period: April 2016 to March 2018
Implementation of soil contamination countermeasures(natural contaminants)
Earth retaining wall works (SMW)
Ground land improvement (high-pressure jet mixing method)
Installment of cut-off wall

Decontamination and Other Works of
Katsurao Village
Work period: March 2015 to November 2017
Decontamination work
Land development, etc. for temporary waste storage area

Yokohama Ring Expressway North Line Shield
Tunnelling
Work period: June 2008 to July 2017
Shield tunnel diameter approx. φ12m
2 tunnels with tunnel length 5,620m each
4 sections of entry/exit enlargement work
1 shaft construction work

BUILDINGSGLP Hirakata III(Distribution warehouse)

Chiba Newtown Distribution
Warehouse

Work period: September 2016 to
September 2018
Structure: PC(seismic isolation structure)
Total floor space: 117,193.92m2

Work period: September 2016 toNovember 2017
Structure: Steel
Total floor space: 100,906.26m2

International University of
Health and Welfare Akasaka
CampusWork period: July 2016 to
February 2018
Structure: SRC and partial Steel
Total floor space: 24,190.77m2

SOSiLA Sagamihara(Distribution warehouse)
Work period: April 2017 to May 2018
Structure: Steel
Total floor space: 55,121.36m2

Topics❶ Inside the seminar hall

❶ Panel discussion❷ Outside view of the Yahata Kousei Hospital

Main Building

6

Pretreatment
Axial reinforcement

Layer thickness
t = 60mm–70mm

Rebar diameter: D
Covering depth

Axial reinforcement(High-strength rebar)

Shear reinforcement

10D

Welded wire-mesh
Spreaded rebar end
Sprayed mortar(2 layers)
Surface protection
Degradation prevention, abrasion resistanceBase drilling

Anchorage lengthIntermediate
restraints

Weldedwire-meshsprayed mortar

Example of dividing
shear reinforcements(High-strength spiralreinforcements)
Mechanical joints❸ Outline of flexural reinforcement method❶ Hosting of a Technical Seminar❷ Yahata Kousei Hospital Main Building Is Awarded the BCS AwardOn November 21, 2016, Okumura hosted the 28th 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 ofthe collaboration among industrial, governmental and academic
sectors related to the construction industry. This year’s theme
was “The Future of the Infrastructure Industry Led by Innovation:
New Challenges and Hints for Success” with keynote speechesdelivered by Makoto Kimura, Professor, Graduate School ofEngineering, Kyoto University and Yukihiro Maru, Ph.D., President& CEO of Leave a Nest Co., Ltd. In addition, a panel discussion washeld on the need for “Innovation,” including further increasing
the efficiency of infrastructure production systems, building
reasonable maintenance systems for social capital and initiatives
for new businesses, which has become increasingly requiredin light of prevailing concerns for securing future leaders of
the infrastructure industry, dealing with aging social capitaland the shrinking of the market going forward. Among these
innovations, those specifically related to technical development
were designated “Innovations (Technical Innovations)” and heateddiscussions were held on what was necessary to achieve such
Innovations and what actions should be taken, from various
perspectives.

The Yahata Kousei Hospital Main Building, which was built by
the Company, was awarded the 57th BCS Award of the Japan
Federation of Construction Contractors.
The award praised the construction for “aiming toconstruct a psychiatric hospital that revolutionized conventionalarchitectural plans for such hospitals and having realized aresidence-like environment in which patients could rebuild
their lives on their own.” Furthermore, it noted, “the plans for thebuilding on rugged, undulating terrain was a strong indicationof the trusting relationship between the building owner, thearchitect and the builder.”❸ Development of a Flexural Reinforcement Method for Existing RC Columns

The Company developed a method of flexural reinforcementof existing RC columns, which may be applied to a wide rangeof seismic strengthening works of existing structures including
railway bridges and road bridges.
This method was developed as a way of shear
reinforcement of existing RC columns and is based on the“jacketing method using spiral reinforcements,” the Company’s
proprietary technology with a strong track record. Added to thisproprietary technology was high-strength axial reinforcement
as flexural reinforcement and was finished with sprayedmortar lining. This method, which provides a thinner layer ofreinforcement compared to conventional methods, is a more
economical flexural reinforcement method ensuring greater easeof application.

❺ Free vibration displacement waveform(mm)
18.48 seconds (1986)
17.83 seconds (2005)
17.67 seconds (2016)

Geological plan

Okumura Corporation Annual Report 2017

Time of completion (1986)
19th year (2005)
30th year (2016)

Base map information(3D data)(second)

Horizontal displacement
10cm

Geological longitudinal
profile❹ Illustration of quasi-3D land model

7❺ Free vibration testing device❻ Regular concrete (Slump flow 37cm)❻ Adding high-fluidity agent and agitating❹ Development of Software for CIM Used in Mountain Tunnel Construction

The Company has developed a high-performance CIM softwarein collaboration with PASCO Corporation, which enables
centralized management of construction information and the easy
preparation of 3D data in mountain tunnel construction.
This software, which is based on high-speed processing oflarge volumes of data and a highly-responsive, basic 3D software,features ease of preparing 3D data for CIM of mountain tunnels
and outstanding operability, and will dramatically reduce theburden of onsite CIM adoption and operation. Going forward, theCompany will not only utilize CIM in mountain tunnel construction
but also promote its adoption by the construction business asa whole, by expanding its use to a wide range of construction
projects.
❺ Confirming the Performance of the Seismic Isolation Devices after 30 Years

The Company conducted a free vibration experiment, in which
the building itself was swung back and forth, using the Okumura
Corporation Technical Research Institute Management Building(Tsukuba-shi, Ibaraki), Japan’s first practical base isolated building,which was completed in 1986, and was able to confirm that theperformance of the seismic isolation device was intact even after
30 years and that safety has been fully maintained.
The experiment tests the safe performance and property
fluctuations due to aging of seismic isolation devices by jacking
up the building and forcing it to move horizontally for 10cm, andthen letting the building freely vibrate upon releasing the pressureof the jack. In future, the Company will repeat similar free vibration❺ Loading status❻ High-fluidity concrete (Slump flow 55 cm)

experiments at approximately 10-year intervals and contribute to
the development of seismic isolation technology using the latest
empirical data that can only be gathered by the Company.
❻ Acquired the Building Technology Performance Evaluation Certificate for“Site-mixed, High-fluidity Concrete”

The Company developed the “Site-mixed, high-fluidity concrete,”
which can be prepared by rotating and agitating the drum
containing regular concrete, which has been transported to theconstruction site in the agitator trucks, upon adding high-fluidity
agents with segregation resistance, and acquired the Building
Technology Performance Evaluation Certificate (GBRC 16-16) issued
by the General Building Research Corporation of Japan.
The newly-developed concrete has the same level of fluidity
as conventional, high-strength concrete while preventing cracks
with less cement, when used in works involving tightly-reinforced
parts, which are difficult to fill with concrete. Additionally, as theconcrete is easily made on the construction site, its use is expected
to expand to a wide range of locations. Furthermore, as theconcrete maintains stable fluidity even when the drum, a source ofnoise pollution, is rotated slowly (patent application completed), it
can also be used in urban areas where consideration is required forthe neighboring environment.

Consolidated Balance Sheet
Okumura Corporation and Consolidated Subsidiaries
March 31, 2017

ASSETS

Millions of yen

Thousands of
U.S. dollars(Note 1)

2017

2016

2017

¥ 55,959¥ 25,379$ 498,743

1,663

475

14,818Current assets:
Cash and cash equivalents (Note 12)
Time deposits (Notes 12 and 14)
Receivables:

8

Trade notes (Note 12)

1,485

4,430

13,232

Trade accounts (Note 12)94,941

104,379

846,173

855

4,386

7,619

10,586

9,748

94,348(950)(1,666)(8,467)

Inventories (Note 4)

10,763

8,617

95,930

Deferred tax assets (Note 9)

1,838

41

16,385

Unconsolidated subsidiaries and associated companies (Note 12)
Other
Allowance for doubtful receivables (Note 12)

Prepaid expenses and other

538

455

4,804

Total current assets

177,678

156,244

1,583,585

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

30,73630,114273,938

Buildings and structures (Note 14)

20,82819,260185,633

Machinery and equipment

2,983

2,995

26,584

Furniture and fixtures

2,017

1,970

17,975

Lease assets (Note 11)

84

114

753

Construction in progress

367

1,163

3,269

Total
Accumulated depreciation
Net property, plant and equipment

57,01555,616508,152(14,363)(14,403)(128,014)

42,652

41,213

380,138

65,96466,023587,918

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)

333

323

2,966

Long-term loans receivable (Note 12)

74

86

659

Asset for retirement benefits (Note 7)

2,114

2,157

18,846

Other assets

2,802

2,828

24,966

Allowance for doubtful receivables (Note 12)(2,142)(2,193)(19,091)

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

69,14569,224616,264¥289,475¥266,681$2,579,987

Okumura Corporation Annual Report 2017

Millions of yen

Thousands of
U.S. dollars(Note 1)

2017

2016

2017

Short-term bank loans including current portion of long-term debt (Notes 6, 11, 12 and 13) ¥ 13,104¥ 15,801$ 116,789

LIABILITIES AND EQUITYCurrent liabilities:
Payables:Trade notes (Note 12)

4,759

5,381

42,417

Trade accounts (Note 12)

53,472

48,653

476,576

306

648

2,725

Advances received on construction projects in progress

14,9006,719

132,800

Income taxes payable

1,348

565

12,019

639

696

5,696

Other

Allowance for warranty work on construction projects
Allowance for losses on construction contracts

3,367

4,450

30,013

Other (Note 14)30,31621,927

270,187

122,211

104,840

1,089,222

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

1,166

5,192

10,393

Deferred tax liabilities (Note 9)

13,012

13,244

115,971

127

126

1,134

Other
Total long-term liabilities

14,305

18,562

127,498

Total liabilities

136,516

123,402

1,216,720

19,83919,839176,817

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

25,32925,329225,752

Retained earnings

89,67680,246799,248(12,654)(12,634)(112,781)

28,74728,329256,209

Treasury stock—at cost
29,121,719 shares in 2017 and 29,089,225 shares in 2016
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities

2,022

2,170

18,022

Total

30,76930,499274,231

Total equity

152,959

143,279

1,363,267

Total¥289,475¥266,681$2,579,987

Defined retirement benefit plans

9Consolidated Statement of Income
Okumura Corporation and Consolidated Subsidiaries
Year Ended March 31, 2017

Millions of yen

Thousands of
U.S. dollars(Note 1)

2017

2016

2017

¥203,091
176,028
27,063¥205,291
182,641
22,650$1,810,080
1,568,878
241,202

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

15,384
11,67914,227
8,423

137,114104,088

Other income (expenses):
Interest and dividend income
Interest expense
Other—net
Other income —net

1,098
(155)
664
1,607

1,115
(168)
(42)
905

9,787
(1,383)
5,926
14,330

Income before income taxes

13,286

9,328

118,418

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

1,432(1,760)
(328)

798
(96)
702

12,764(15,686)(2,922)

8,626
8,626

121,340$ 121,340

Yen

U.S. dollars(Note 1)

43.28
21.00

$ 0.61
0.29

Net sales
Cost of sales
Gross profit

10

Net income
Net income attributable to owners of the parent

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

13,614¥ 13,614

¥

68.34
33.00

¥

¥

Consolidated Statement of Comprehensive Income
Okumura Corporation and Consolidated Subsidiaries
Year Ended March 31, 2017

Net income
Other comprehensive income (loss) (Note 15):
Unrealized gain (loss) on available-for-sale securities
Defined retirement benefit plans
Total other comprehensive income (loss)
Comprehensive income
Total comprehensive income attributable to:
Owners of the parent
Noncontrolling interests
See notes to consolidated financial statements.

Okumura Corporation Annual Report 2017

Millions of yen

Thousands of
U.S. dollars(Note 1)

2017

2016

2017

¥13,614¥ 8,626$121,340

417
(148)
269
¥13,883(3,540)16(3,524)¥ 5,102

3,720(1,322)
2,398$123,738¥13,883—¥ 5,102—$123,738—11Consolidated Statement of Changes in Equity
Okumura Corporation and Consolidated Subsidiaries
Year Ended March 31, 2017

Thousands

Millions of yen
Accumulated othercomprehensive income

12

BALANCE, APRIL 1, 2015
Net income attributable to owners of the parent
Cash dividends, ¥12 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2016
Net income attributable to owners of the parent
Cash dividends, ¥21 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2017

Number ofshares ofcommonstock
outstanding

Commonstock

CapitalsurplusRetainedearnings

199,375
—
—
(146)
8
—
199,237
—
—
(33)
0
—
199,204¥19,839—————
19,839—————¥19,839¥25,328———
1—
25,329———0—¥25,329¥74,012 ¥(12,547) ¥31,869
8,626
—
—
(2,392)
—
—
—
(91)
—
—
4
—
—
—
(3,540)80,246 (12,634) 28,329
13,614——(4,184)
—
—
—
(20)
—
—
0
—
—
—
418
¥89,676 ¥(12,654) ¥28,747

Unrealized
gain onDefinedavailable- retirement
Treasury
for-salebenefitstock securities
plans¥ 2,154
—
—
—
—
16
2,170
—
—
—
—
(148)
¥2,022Total
equity¥140,655
8,626(2,392)(91)
5(3,524)
143,279
13,614(4,184)(20)
0270¥152,959

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

Commonstock

BALANCE, MARCH 31, 2016
Net income attributable to owners of the parent
Cash dividends, $0.19 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2017
See notes to consolidated financial statements.

CapitalsurplusRetainedearnings

Unrealized
gain onDefinedavailable- retirement
Treasury
for-salebenefitstock securities
plans$176,817 $225,751 $715,199 $(112,604) $252,489—— 121,340———— (37,291)
—
—
—
—
—
(180)
—
—
1
—
3
—
—
—
—
—
3,720
$176,817 $225,752 $799,248 $(112,781) $256,209$19,344————(1,322)$18,022

Total
equity$1,276,996
121,340(37,291)
(180)
4
2,398
$1,363,267

Consolidated Statement of Cash Flows
Okumura Corporation and Consolidated Subsidiaries
Year Ended March 31, 2017

Okumura Corporation Annual Report 2017

Millions of yen

Thousands of
U.S. dollars(Note 1)

2017

2016

2017

¥ 13,286¥ 9,328$ 118,418

(870)
938

(818)
864

(7,755)8,364

15,780(1,813)
(334)
221
8,181
(119)
9,839
31,82345,109(11,354)
255
204
1,138
(197)
(321)
1,935
(8,294)
1,034

140,644(16,158)(2,974)
1,965
72,917(1,060)87,678283,621402,039

Investing activities:
Net 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(1,103)(313)
499(2,658)
142
(25)
33
(248)
(3,673)

(279)
(385)
807
(2,887)
5
(18)
87
(214)
(2,884)(9,832)(2,788)
4,452(23,686)
1,268
(223)
296
(2,218)(32,731)

Financing activities:
Increase (decrease) in short-term bank loans—net
Repayments of long-term debt
Purchase of treasury stock
Disposal of treasury stock
Dividends paid
Other
Net cash used in financing activities(5,585)(1,116)(20)
0(4,175)(22)(10,918)

1,020
(11)
(91)
5
(2,392)
1,066
(403)

(49,781)(9,946)(181)
4(37,212)(195)(97,311)

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 year62
30,58025,379¥ 55,959(96)(2,349)27,728¥ 25,379

552
272,549
226,194$ 498,743

Operating activities:
Income before income taxes
Adjustments for:
Income taxes—paidDepreciation and amortization
Changes in assets and liabilities:
Decrease (increase) in trade notes and accounts receivable
Decrease (increase) in accumulated costs of construction projects in progress
Decrease (increase) in other inventories
Increase 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 operating activities

See notes to consolidated financial statements.

13

Notes to Consolidated Financial Statements
Okumura Corporation and Consolidated Subsidiaries
Year Ended March 31, 201714

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, which are
different in certain respects as to the application and disclosure requirements of International Financial ReportingStandards.
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 2016 consolidated financial statements to conform to the classifications used in 2017.
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 ¥112.20 to$1, the rate of exchange at March 31, 2017. 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, 2017, include the accounts of the Company
and its 2 (2 in 2016) 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 2016) unconsolidated subsidiaries
and 3 (3 in 2016) 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. Business Combinations — Business combinations areaccounted for using the purchase method. Acquisitionrelated costs, such as advisory fees or professional fees, areaccounted for as expenses in the periods in which the costs
are incurred. If the initial accounting for a business combination is incomplete by the end of the reporting period inwhich the business combination occurs, an acquirer shallreport in its financial statements provisional amounts for theitems for which the accounting is incomplete. During themeasurement period, which shall not exceed one year fromthe acquisition, the acquirer shall retrospectively adjust theprovisional amounts recognized at the acquisition date toreflect new information obtained about facts and circumstances that existed as of the acquisition date and that would
have affected the measurement of the amounts recognized
as of that date. Such adjustments shall be recognized as if
the accounting for the business combination had been completed at the acquisition date. The acquirer recognizes any
bargain purchase gain in profit or loss immediately on theacquisition date after reassessing and confirming that all of
the assets acquired and all of the liabilities assumed havebeen identified after a review of the procedures used in thepurchase price allocation. A parent’s ownership interest in a
subsidiary might change if the parent purchases or sells ownership interests in its subsidiary. The carrying amount of
noncontrolling interest is adjusted to reflect the change in theparent’s ownership interest in its subsidiary while the parent
retains its controlling interest in its subsidiary. Any difference
between the fair value of the consideration received or paid
and the amount by which the noncontrolling interest is
adjusted is accounted for as capital surplus as long as theparent retains control over its subsidiary.
c. 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 certificatesof deposit, all of which mature or become due within 3months of the date of acquisition.
d. 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.
e. 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.

Okumura Corporation Annual Report 2017

Investments in limited partnerships, which are consideredsecurities under Article 2, Clause 2 of the Japanese Financial
Instruments and Exchange Act, are recorded under the equity
method and based on the latest consolidated financial statements available on the reportable date ruled by thepartnership contracts.
f. 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 building improvements and structures acquiredon or after April 1, 2016, and lease assets. The range of useful lives is principally from 3 to 60 years for buildings andstructures, from 4 to 17 years for machinery and equipment,
and from 2 to 20 years for furniture and fixtures. Lease assets
under finance lease arrangements are depreciated using thestraight-line method over the terms of the respective leases
without any salvage value.
Pursuant to an amendment to the Corporate Tax Act,
the Company adopted Accounting Standards Board of Japan(“ASBJ”) Practical Issues Task Force No. 32, “Practical
Solution on a change in depreciation method due to Tax
Reform 2016”, and changed the depreciation method forbuilding improvements and structures acquired on or after
April 1, 2016, from the declining-balance method to thestraight-line method.
The impact on operating income and income before
income taxes for the year ended March 31, 2017 was immaterial.
g. 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.
h. 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.
i. 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.

j. Allowance for Losses on Construction Contracts — An
allowance for losses on construction contracts is provided
with respect to construction projects for which eventual losses are reasonably expected and estimated.
k. Employees’ Retirement Benefits — The Company has acontributory funded pension plan covering substantially all of
its employees.
The Company accounts for the liability for retirement
benefits based on the projected benefit obligations and plan
assets at the balance sheet date. The projected benefit obligations are attributed to periods on a benefit formula basis.
Actuarial gains and losses and past service costs that are yet
to be recognized in profit or loss are recognized within equity(accumulated other comprehensive income), after adjustingfor tax effects, and are recognized in profit or loss over 10
years no longer than the expected average remaining service
period of the employees.
l. Asset Retirement Obligations —An asset retirement
obligation is recorded for 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 such tangible
fixed asset. The asset retirement obligation is recognized as
the sum of the discounted cash flows required for the future
asset retirement and is recorded in the period in which the
obligation is incurred if a reasonable estimate can be made. If
a reasonable estimate of the asset retirement obligation cannot be made in the period the asset retirement obligation isincurred, the liability should be recognized when a reasonable estimate of the asset retirement obligation can be made.
Upon initial recognition of a liability for an asset retirement
obligation, an asset retirement cost is capitalized by increasing the carrying amount of the related fixed asset by theamount of the liability. The asset retirement cost is subsequently allocated to expense through depreciation over theremaining useful life of the asset. Over time, the liability is
accreted to its present value each period. Any subsequent
revisions to the timing or the amount of the original estimateof undiscounted cash flows are reflected as an adjustment tothe carrying amount of the liability and the capitalized
amount of the related asset retirement cost.
m. Construction Contracts — Construction revenue andconstruction costs are recognized by the percentage-of-completion method, if the outcome of a construction contract
can be estimated reliably. When total construction revenue,
total construction costs and the stage of completion of thecontract at the balance sheet date can be 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, the completed-contract methodshould be applied. When it is probable that the total construction costs will exceed total construction revenue, anestimated loss on the contract should be immediately

15

recognized by providing for a loss on such construction contracts.
The revenues recognized by the percentage-of-completion method for the years ended March 31, 2017 and 2016
were ¥188,945 million ($1,684,000 thousand) and ¥190,041
million, respectively.

16

n. Income Taxes — The provision for income taxes is computed based on the pretax income included in the
consolidated statements of income. The asset and liability
approach 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.
The Company applied ASBJ Guidance No. 26,“Guidance on Recoverability of Deferred Tax Assets,” effective April 1, 2016. There was no impact from this for the year
ended March 31, 2017.
o. 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.
p. Per Share Information — Basic net income per share iscomputed by dividing net income attributable 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.
q. Accounting Changes and Error Corrections — Under
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 are required 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 standard includes
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 2017

3. Marketable and Investment Securities
Marketable and investment securities as of March 31, 2017 and 2016, 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

2017

2016

2017

¥64,451
118
1,395¥65,964¥64,696
117
1,210¥66,023$574,429
1,055
12,434$587,918

The costs and aggregate fair values of marketable and investment securities at March 31, 2017 and 2016, were as follows:
Millions of yen

March 31, 2017

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

Cost

Unrealized
Gains

Unrealized
LossesFair
Value¥24,971¥39,528¥ 48¥64,451

118

7

—

125

¥25,377¥39,580¥261¥64,696

117

9

—

126

Cost

Unrealized
Gains

Unrealized
LossesFair
Value$222,559$352,301$431$574,429

1,055

58

—

1,113

March 31, 2016

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

Thousands of U.S. dollars

March 31, 2017

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

17

The information for available-for-sale securities which were sold during the years ended March 31, 2017 and 2016 is asfollows:
Millions of yen

Proceeds

Realized
Gains

Realized
Losses

¥498

¥37

¥56

Proceeds

Realized
Gains

Realized
Losses

¥805

¥334

¥—

March 31, 2017

Proceeds

Realized
Gains

Realized
LossesAvailable-for-sale:
Equity securities$4,435$326$501

March 31, 2017

Available-for-sale:
Equity securities

Millions of yen

18

March 31, 2016

Available-for-sale:
Equity securities

Thousands of U.S. dollars

No impairment loss was recognized on securities for the year ended March 31, 2017.
The impairment losses on available-for-sale equity securities for the year ended March 31, 2016, was ¥10 million.
4. Inventories
Inventories at March 31, 2017 and 2016, 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

2017

2016

2017

¥6,520
322
3,391
530
¥10,763¥4,707
564
2,823
523
¥8,617$58,107
2,873
30,225
4,725$95,930

Okumura Corporation Annual Report 2017

5. Investment Property
The Group owns certain rental properties such as residential buildings, warehouses, and land in Osaka and other areas. Somerental warehouses leased to third parties, of which the Company utilizes a part, are classified as rental properties in part.
The net of rental income and operating expenses for those rental properties was ¥2,905 million ($25,887 thousand) and¥2,736 million for the years ended March 31, 2017 and 2016, respectively.
In addition, 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,
2016

Increase/
Decrease

March 31,2017

March 31,2017

¥31,443829¥32,272

¥766
(492)
¥274

¥32,209337¥32,546¥56,882
1,126¥58,008
Millions of yen
Fair Value

Carrying AmountRental properties
Rental properties in part
Total

April 1,
2015

Increase/
Decrease

March 31,2016

March 31,2016

¥30,800
844¥31,644

¥643
(15)
¥628

¥31,443829¥32,272¥51,416
6,602¥58,018
Thousands of U.S. dollars
Fair Value

Carrying AmountRental properties
Rental properties in part
Total

April 1,
2016

Increase/
Decrease

March 31,2017

March 31,2017

$280,241
7,385$287,626$6,825(4,376)$2,449$287,066
3,009$290,075$506,971
10,038$517,009

Notes:(1) Carrying amount recognized in the consolidated balance sheets is net of accumulated depreciation and accumulated
impairment losses, if any.
(2) Fair value of properties as of March 31, 2017 and 2016 is measured in accordance with real-estate appraisal performed byreal-estate appraisers for primary properties. The amount measured by the Group is in accordance with its Real-EstateAppraisal 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, 2017 and 2016, consisted of notes to banks and bank overdrafts. The annual interest rates
applicable to the short-term bank loans ranged from 0.7% to 1.5% at March 31, 2017 and 0.5% to 1.5% at March 31, 2016.
Long-term debt at March 31, 2017 and 2016, consisted of the following:

20

Loans from banks and other financial institutions, due serially to 2031
with interest rates ranging from 0.5% to 3.5%
Collateralized
Unsecured
Obligations under finance leases
Total
Less current portionLong-term debt, less current portion

Millions of yen

Thousands of
U.S. dollars

2017

2016

2017

¥2,001
3,164
24
5,189
(4,023)¥1,166¥2,007
4,274
45
6,326
(1,134)¥5,192$17,834
28,205
213
46,252(35,859)$10,393

Annual maturities of long-term debt, excluding finance leases (see Note 11), at March 31, 2017, were as follows:Year Ending March 31

Millions of yen

Thousands of
U.S. dollars

2018
2019
2020
2021
2022
2023 and thereafter
Total¥4,010
8
8
1,108
6
25
¥5,165$35,735
76
73
9,873
55
227
$46,039

The carrying amounts of assets pledged as collateral for short-term bank loans of ¥2,000 million ($17,825 thousand) and theabove collateralized long-term debt at March 31, 2017, were as follows:
Property, plant and equipment—net of accumulated depreciation
Investment securities
Total

Millions of yen

Thousands of
U.S. dollars¥  1562,326¥2,482$ 1,387
20,733$22,120

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 2017

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, 2017 and 2016, were as follows:

Balance at beginning of year
Current service cost
Interest cost
Actuarial gains
Benefits paid
Balance at end of year

2017

Millions of yen
2016

Thousands of
U.S. dollars
2017¥22,399
1,083
112
52
(1,916)¥21,730¥23,667
1,086
118
(258)
(2,214)¥22,399$199,635
9,653
998
462
(17,080)$193,668

2017

Millions of yen
2016

Thousands of
U.S. dollars
2017¥24,556221
44939(1,916)¥23,844¥25,377
229
160
1,004
(2,214)¥24,556$218,858
1,969
394
8,373
(17,080)$212,514(2) The changes in plan assets for the years ended March 31, 2017 and 2016, 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
obligation and plan assets was as follows:

Defined benefit obligation
Plan assets
Total
Unfunded defined benefit obligation
Net asset arising from defined benefit obligation

Asset for retirement benefits
Net asset arising from defined benefit obligation

2017

Millions of yen
2016

Thousands of
U.S. dollars
2017¥21,730(23,844)(2,114)—¥(2,114)¥22,399(24,556)(2,157)—¥(2,157)$193,668(212,514)(18,846)—$(18,846)

2017

Millions of yen
2016

Thousands of
U.S. dollars
2017¥(2,114)¥(2,114)¥(2,157)¥(2,157)$(18,846)$(18,846)(4) The components of net periodic benefit costs for the years ended March 31, 2017 and 2016, were as follows:

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

2017

Millions of yen
2016

Thousands of
U.S. dollars
2017¥1,083
112
(221)
(133)
(21)
¥820

¥1,086
118
(229)
(271)
(21)
¥683

$9,653998(1,969)(1,180)(189)$7,31321

(5) Amounts recognized in other comprehensive income (before income tax effect) in respect of defined retirement benefit plans
for the years ended March 31, 2017 and 2016, were as follows:

Actuarial (gains) losses
Past service costs
Total

22

2017

Millions of yen
2016

Thousands of
U.S. dollars
2017¥(140)(21)¥(161)

¥147
(21)
¥126

$(1,248)(189)$(1,437)(6) Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect of defined retirement
benefit plans as of March 31, 2017 and 2016, were as follows:

Unrecognized actuarial gains
Unrecognized past service costs
Total

2017

Millions of yen
2016

Thousands of
U.S. dollars
2017¥(2,648)(21)¥(2,669)¥(2,788)(42)¥(2,830)$(23,599)(189)$(23,788)(7) Plan assets
a. Components of plan assets
Plan assets as of March 31, 2017 and 2016, consisted of the following:
Debt investments
Equity investments
Life insurance general account assets
Others
Total

2017

2016

45%
10
32
13
100%

45%
9
32
14
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, 2017 and 2016, are set forth as follows:
Discount rate
Expected rate of return on plan assets

2017

2016

0.5%
0.9

0.5%
0.9

Okumura Corporation Annual Report 2017

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. Additionally, 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 ofthe 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 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 30.8% and 33.0% for the years ended March 31, 2017 and 2016, respectively.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and liabilities at March 31, 2017 and 2016, are as follows:

24

Deferred tax assets:
Impairment losses on securities
Tax loss carryforwards
Allowance for bonuses
Write-down of inventories
Allowance for losses on construction contracts
Allowance for doubtful accounts
Accrued expenses
Other
Less valuation allowance
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

2017

2016

2017

¥2,169
1,863
1,358
1,296
1,036
953
384
432
(7,653)
1,838¥2,171
4,011
969
1,349
1,370
1,160
517
423
(11,929)41$19,335
16,606
12,103
11,548
9,231
8,491
3,419
3,858
(68,206)
16,385(10,719)(1,646)(647)(13,012)¥(11,174)(10,975)(1,609)(660)(13,244)¥(13,203)(95,531)(14,673)(5,767)(115,971)$(99,586)

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 year ended March 31, 2017, with the corresponding figures for 2016, is asfollows:
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

2017

2016

30.8 %
0.5
(0.5)
0.9
(1.5)
(32.6)—(0.1)(2.5)%

33.0%
0.7
(0.8)
1.5
(1.3)
(25.1)
(0.9)
0.4
7.5%

Okumura Corporation Annual Report 2017

10. Research and Development Costs
Research and development costs charged to income were ¥866 million ($7,717 thousand) and ¥788 million for the years ended
March 31, 2017 and 2016, 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, 2017 and 2016, were
¥20 million ($176 thousand) and ¥25 million, respectively.
Obligations under finance leases at March 31, 2017 and 2016, were as follows:
Millions of yen

Due within one year
Due after one year
Total

Thousands of
U.S. dollars

2017

2016

2017

¥14
10
¥24

¥22
23
¥45

$124
89
$213

(2) Operating leases
Future minimum lease receivables or payments under noncancelable operating leases at March 31, 2017 and 2016, 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

2017

2016

2017

¥2,242
15,602¥17,844¥2,214
17,416¥19,630$19,986
139,053$159,039

¥95
752
¥847

¥101
847
¥948

$841
6,705
$7,546

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 financial assets. Short-term bank loans are used 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 2.o.
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 a quoted price is not available, anotherrational valuation technique is used instead.
(a) Fair value of financial instruments
Millions of yen

March 31, 2017

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

¥57,622
97,275(863)
96,41264,569115(1)114¥218,717¥57,622¥—96,41264,576—
7115¥218,725

1¥8

Short-term bank loans
Long-term bank loans
Payables—trade notes and accounts
Long-term debt—lease obligation including current portion
Total
Derivatives¥13,080
1,100
58,23124¥72,435¥—¥13,080
1,107
58,23123¥72,441
¥—

¥—
7
—
(1)
¥6
¥—
Millions of yen

March 31, 2016

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

¥25,854
113,191(1,591)
111,600
64,813101(1)100¥202,367¥25,854¥—

111,600
64,822—9105¥202,3815¥14

Short-term bank loans
Long-term bank loans
Payables—trade notes and accounts
Long-term debt—lease obligation including current portion
Total
Derivatives¥15,766
5,100
54,03445¥74,945¥—¥15,766
5,119
54,03444¥74,963
¥—

¥—
19
—
(1)
¥18
¥—

Okumura Corporation Annual Report 2017

Thousands of U.S. dollars

March 31, 2017

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

$513,561
866,982(7,692)859,290
575,484
1,022
(8)
1,014
$1,949,349$513,561$—859,290
575,542

—
58

1,029
$1,949,422

15
$73

Short-term bank loans
Long-term bank loans
Payables—trade notes and accounts
Long-term debt—lease obligation including current portion
Total
Derivatives$116,581
9,803
518,993213$645,590$—$116,581
9,865
518,993209$645,648
$—

$—
62
—
(4)
$58
$—

Amounts due from unconsolidated subsidiaries and associated companies are included in receivables—trade notes andaccounts 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 the equity instruments and at the quoted price obtained from the financial institution for certain
debt instruments. Fair value information for the marketable securities and the 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, discounted at the Group’s assumed corporate discount rate, such as the rate ofnational bonds to the 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 does not change significantly after
the execution.
Derivatives
Fair value information for derivatives is included in Note 13.
(b) Carrying amount of financial instruments whose fair value cannot be reliably determined

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

Millions of yen

Thousands of
U.S. dollars

2017

2016

2017

¥1,437¥1,438$12,809

186

—

1,657

27

(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
Millions of yen

March 31, 201728

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¥57,622
92,217

¥—
5,058

¥—
—

¥—
—

—
—
¥149,839

124
64¥5,246

—
81
¥81

—
34
¥34

Due in 1 Yearor Less

Due after
1 Year through5 Years

Due after
5 Years through10 Years

Due after
10 Years$513,561
821,898$—45,084

$—
—

$—
—

—
—
$1,335,459

1,106
567
$46,757

—
720
$720

—
305
$305

Thousands of U.S. dollars

March 31, 2017

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 201713. Derivatives
The Group enters into derivatives, in the normal course of business, to reduce the exposure to fluctuations in foreign exchange
and interest rates. The primary classes of derivatives used by the Group are foreign currency forward contracts, currency andinterest 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, 2017 and 2016.
Derivative transactions to which hedge accounting is applied:
Millions of yen

March 31, 2017

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

Short-termbank loans¥2,000¥—Fair value

Note

Fair value

Note

Millions of yen

March 31, 2016

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, 2017

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

Short-termbank loans$17,825$—

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., short-term bankloans) in Note 12.

29

30

14. Commitments and Contingent Liabilities
Land in the amount of ¥21 million ($185 thousand) is pledged for a deposit received from a lessee related to a fixed-term landleasehold at March 31, 2017. Land in the amount of ¥1,458 million ($12,997 thousand) and buildings in the amount of ¥1,261
million ($11,241 thousand) are pledged as construction assistance funds pursuant to building lease contracts at March 31,
2017. Time deposits in the amount of ¥51 million ($459 thousand) are pledged for the guarantee against defect of construction contracts at March 31, 2017. Investment securities in the amounts of ¥118 million ($1,055 thousand), ¥16 million ($141
thousand) and ¥107 million ($949 thousand) are pledged as collateral for the guarantee against defect of the house construction, contract performance obligation of the private finance initiative (PFI) business, and the loans of an affiliate, respectively, atMarch 31, 2017.
15. Other Comprehensive Income (Loss)
The components of other comprehensive income (loss) for the years ended March 31, 2017 and 2016, were as follows:

Unrealized gain (loss) on available-for-sale securities
Gain (loss) arising during the year
Reclassification adjustments to profit or loss
Amount before income 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 (loss)

Millions of yen

Thousands of
U.S. Dollars

2017

2016

2017

¥141
20
161
256
¥417

¥(5,104)(264)(5,368)
1,828¥(3,540)$1,260
175
1,435
2,285
$3,720

¥(8)
(153)
(161)
13
¥(148)
¥269

¥418
(292)
126
(110)
¥16
¥(3,524)$(69)(1,368)(1,437)115$(1,322)$2,398

16. Subsequent Events
a. Appropriation of Retained Earnings
The following appropriation of retained earnings at March 31, 2017, was approved at the Company’s shareholders’ meeting
held on June 29, 2017:
Year-end cash dividends, ¥33 ($0.29) per share

Millions of yen

Thousands of
U.S. dollars¥6,574$58,590b. Consolidation of shares
At the Board of Directors’ meeting held on May 12, 2017, the Company resolved to submit a proposal on consolidation ofshares at the 80th annual shareholders’ meeting on June 29, 2017, the proposal was approved at the said shareholders’meeting. Accordingly, the Company will implement the consolidation of shares at the rate of one share for five shares of theCompany’s common stock effective October 1, 2017. At the same time, the Company intends to change the number ofshare units from 1,000 shares to 100 shares per unit effective on the same date.
Per share information for the year ended March 31, 2017 would have been as follows if the share consolidation had
been implemented on April 1, 2016:
Net assets per share: ¥3,839.24 ($34.22)
Net income per share: ¥  341.69 ($ 3.05)
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.”Okumura Corporation Annual Report 20172.	Methods of measurement for the amounts of sales, profit, assets, liabilities and other items for each reportable segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2, “Summary of Significant
Accounting Policies.”
3. Information about sales, profit, assets, liabilities and other items is as follows:
Millions of yen
2017

Reportable segment

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

Civil
engineering

Architectural
construction

Real estate

Total

Other
(Note 1)

Total

Reconciliations(Note 2)

Consolidated(Note 3)

¥76,728¥116,475¥4,460¥197,663¥5,428¥203,091¥—¥203,091—
76,7284,437—
116,475
4,152

31
4,491
2,649

31
197,694
11,238

210
5,638
431

241
203,332
11,669

(241)
(241)
10

—
203,091
11,679

¥229

¥321

¥372

¥922

¥23

¥945

¥(7)

¥938
Millions of yen
2016

Reportable segment

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

Civil
engineering

Architectural
construction

Real estate

Total

Other
(Note 1)

Total

Reconciliations(Note 2)

Consolidated(Note 3)¥80,258¥114,920¥5,194¥200,372¥4,919¥205,291¥—¥205,291—
80,258
1,947—
114,920
3,248

27
5,221
3,111

27
200,399
8,306

655
5,574
107

682
205,973
8,413

(682)
(682)
10

—
205,291
8,423

¥207

¥257

¥391

¥855

¥16

¥871

¥(7)

¥864

Thousands of U.S. dollars
2017

Reportable segment

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

Civil
engineering

Architectural
construction

Real estate

Total

Other
(Note 1)

Total

Reconciliations(Note 2)

Consolidated(Note 3)$683,847$1,038,103$39,750$1,761,700$48,380$1,810,080$—$1,810,080—
683,847
39,542—
1,038,103
37,006276
40,026
23,609276
1,761,976
100,157

1,873
50,2533,845

2,149
1,812,229
104,002(2,149)(2,149)86—
1,810,080
104,088$2,045$2,862$3,313$8,220$207$8,427$(63)$8,364

Notes:
1. “Other” is a business segment which is not included in any reportable segment and includes business related to
manufacturing and sale of construction machinery and materials.
2. Reconciliations to segment profit in the amount of ¥10 million ($86 thousand) and ¥10 million for the years ended March 31,2017 and 2016, respectively, include eliminations of intersegment transactions.
3. The consolidated amounts of segment profit 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, 2017, 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, 2017, 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 29, 2017

Member of
Deloitte Touche Tohmatsu Limited

Breakdown of Orders (Nonconsolidated)
Okumura Corporation
Year Ended March 31, 2017

Okumura Corporation Annual Report 2017

Construction Orders Awarded

2017

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

50.7

41,16785,094
3
126,264

100 %

114,293
107,948
393¥222,634

Composition
ratio

Millions of
yen

38.7%

¥ 60,833
19,413
12
80,25858.7

35,37079,085465
114,920

97.4
2.6
100 %

96,20398,498477
195,178
5,929¥201,107

Composition
ratio

Millions of
yen

54.4%

¥ 96,505
24,202
405
121,11245.6

64,742
66,212
98
131,052

100 %

161,247
90,414503¥252,164

108,873
129,611
4,398¥242,882
2017

Millions ofyen¥ 60,139
16,457132
76,72838,44077,98550
116,475
98,57994,442
182
193,203
5,081¥198,284

Year-end Backlog¥129,576
29,884
4,720
164,180
41,965
95,698—
137,663
171,541
125,582
4,720¥301,843

Composition
ratio

Thousands of
U.S. dollars

43.3%$ 830,748
197,324
39,6301,067,702

56.7

139,596
957,853(426)
1,097,023

100 %

970,344
1,155,177
39,204$2,164,725

Composition
ratio

Thousands of
U.S. dollars

39.9%$ 535,998
146,677
1,172
683,847

57.2

342,602
695,054447
1,038,103

97.1
2.9
100 %

878,600
841,731
1,619
1,721,950
45,289$1,767,239

Composition
ratio

Thousands of
U.S. dollars

48.0%$1,154,869
266,346
42,066
1,463,281

52.0

374,017852,926—
1,226,943

100 %1,528,886
1,119,272
42,066$2,690,224

2017

2016

2017

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

49.3%

¥ 73,126
22,854390
96,37015,663
107,471(48)
123,086

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¥ 93,210
22,1404,446
119,796

2017

2016

Composition
ratio

2017

2016

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

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

West Japan Branch Office (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
5-2-22, Otemachi, Naka-ku,
Hiroshima 730-0051, 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
2-3-11, Kotobuki-cho,Takamatsu 760-0023, 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

Higashikanto Office18-14, Shinmachi, Chuo-ku,
Chiba 260-0028, Japan
TEL: +81-43-241-2255 FAX: +81-43-244-5911

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

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 June 29, 2017)(As of March 31, 2017)
Okumura Corporation Annual Report 2017

Directors

Corporate Data

President and Representative Director
Takanori Okumura
Representative Director
Atsushi Tanaka

EstablishedFebruary 22, 1907

Directors
Seiichi Fujioka
Yuichi Mizuno
Keiji Yamaguchi
Yutaka Maruyama
Kenji Kotera

Capital¥19.8 billion

Director (Full-time Audit and Supervisory Committee Member)
Hironobu Kozai
Directors (Audit and Supervisory Committee Member)
Kiyoshi Saito
Kazuo Tsuji
Shuji Abe
Hiroyo Yashiro
Note: Kiyoshi Saito, Kazuo Tsuji, Shuji Abe and Hiroyo Yashiro are outside directors.

Okumura was established in 1907 based on
two key principles enshrined in the corporate mottos “steadfast management” and“sincere operation.” The steady growthachieved 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 earthquake-absorbing 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.

Senior Managing Executive Officers
Hiroomi Iida
Seiichi Fujioka*
Yuichi Mizuno*
Keiji Yamaguchi*
Managing Executive Officers
Yutaka Maruyama*
Hitoshi Miyamoto
Kenji Kotera*
Atsushi Tanaka*

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 (Nonconsolidated)
34 Network
35 Board of Directors / Investor Information

Stock Information
Stock Exchange Listings
Tokyo
Transfer Agent
Sumitomo Mitsui Trust Bank, Limited

Shareholder

Executive Vice Presidents
Wataru Watanabe

Contents

35

Group Employees
2,020

Major Shareholders

Executive Officers

Executive Officers
Takanori Hayashi
Noriyuki Machida
Osamu Harada
Shunso Iijima
Hiromu Miyazaki
Akira Tanaka

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

Masaaki Iwakura
Kaoru Kuniyuki
Hiroyuki Hayashi
Akira Okada
Naoki Magoori
Hirohide Taniguchi

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

Shares held Percentage of(thousands)
total

Okumura Corporation(Treasury stock)

29,12112.75%

Japan Trustee Services Bank,
Ltd. (Trust Account)

12,204

5.34

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

10,528

4.61

Okumura Employees’
Shareholding Association

7,469

3.27

Resona Bank, Limited.

6,074

2.66

Sumitomo Realty &Development Co., Ltd.

6,050

2.65

Sumitomo Mitsui Banking
Corporation

5,568

2.44

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

4,025

1.76

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

3,517

1.54

Japan Trustee Services Bank,
Ltd. (Trust Account 5)

3,388

1.48

Nippon Life Insurance Company

3,215

1.41

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

Okumura Corporation
Annual Report 2017

Printed in Japan