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 2012

Printed in JapanBoard of Directors

Investor Information(As of June 28, 2012)(As of March 31, 2012)
Okumura Corporation Annual Report 2012

Directors and Auditors

Corporate Data

President & Representative Director
Takanori Okumura

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

Representative Director
Takaiku Hirako
Directors
Toshio Yamaguchi
Kozo Aoki
Makoto Tsuchiya
Kazuo Takami
Seiichi Fujioka
Toshio Kobayashi
Yuichi Mizuno
Kiyoshi Saito
Standing Statutory Auditors
Yusaku Nishigami
Yuji Takemura
Auditors
Nobuhiko Dejima
Yoshio Takahashi
Yoshihiro Ban

Okumura was established in 1907 based on two key principles

EstablishedFebruary 22, 1907
Capital¥19.8 billion

33

Group Employees
1,922

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

Notes:1. Kiyoshi Saito is outside director.
2. Nobuhiko Dejima, Yoshio Takahashi and Yoshihiro Ban are outside auditors.

enshrined in the corporate mottos “steadfast management”

Major Shareholders

and “sincere operation.” The steady growth achieved over the

Shares held
(thousands)

Percentage of
total

years has been made possible through the unflagging support

Executive Officers

Shareholderof our customers.

Senior Managing Officers
Takaiku Hirako*
Toshio Yamaguchi*
Tadashi Hashimoto
Masamichi Shirahase
Kozo Aoki*
Makoto Tsuchiya*

Okumura Corporation(Treasury stock)

28,57912.52%

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

19,4008.50

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

7,666

3.36

Okumura Employees’
Shareholding Association

7,339

3.21

BBH/Blackrock Global
Allocation Fund, Inc.

7,158

3.14

Japan Trustee Services Bank,
Ltd. (Trust Account)

6,595

2.89

Resona Bank, Limited.

6,074

2.66

Sumitomo Realty &Development Co., Ltd.

6,050

2.65

Sumitomo Mitsui Banking
Corporation

5,568

2.44

Nippon Life Insurance Company

4,593

2.01

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

4,209

1.84

Okumura’s main business activities include construction projects for houses, public facilities, medical facilities, andoffice buildings. In the area of civil engineering are projects
such as railways, roads, power station facilities, sewage andwater works, and others. The Company has developed technology at the highest level, with achievements including theseismic 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 isto provide a better environment for the future. Accordingly,
the Company is dedicated to contributing to meaningfulsocial infrastructure investment and to always being a corporation regarded highly by society. It will achieve this by continuing to develop as an all-around construction company
based on steadfast business management.

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

Managing Officers
Kazuo Takami*
Akiyoshi Hida
Seiichi Fujioka*
Hiroomi Iida
Keiji Yamaguchi
Executive Officers
Toshiharu Shimizu
Koji Esumi
Toshio Kobayashi*
Hirokazu Oishi
Takeshi Kurita
Yuichi Mizuno*
Yutaka Maruyama
Takanori Hayashi
Note: Those officers marked with an asterisk (*) work as directors.

Financial Highlights
Okumura Corporation Annual Report 2012

For the years ended March 31

2010

2012

2011

Consolidated:2012
Thousands of
U.S. dollars

Millions of yen¥198,494¥192,617¥179,285$2,182,676

Operating income (loss)

864

3,380

(3,940)(47,964)

Net income (loss)

652

3,605

(2,958)(36,013)

Total assets

241,759

229,771

216,856

2,640,079

Total equity

115,469

114,387

111,7141,360,048

Net sales

Per Share:

Yen

U.S. dollars

Basic net income (loss)¥3.26¥18.04¥(14.80)$(0.18)Cash dividends applicable to the year

9.00

9.00

9.00

0.11

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 30, 2012, of ¥82=U.S.$1.

Net Sales

Net Income(Millions of Yen)

200,000

Total Equity(Millions of Yen)

4,000
3,000

150,000(Millions of Yen)
120,000

100,000

2,000
80,0001,000

100,000

60,000040,000-1,00050,00020,000-2,000-3,000

0

2010

2011

2012

0

2010

2011

2012

2010

2011

2012

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 2012 (April 1, 2011 to March 31,2012) is provided in the following sections.

Fiscal 2012 Results
During the period under review, the Japanese economy was generally on a moderate recovery trend, despite
being affected by the prolonged strong yen, global economic slowdown and other factors. The constructionindustry lacked momentum and was in a harsh operating environment overall, as reflected in the tight supplyof skilled construction workers, etc. that had been induced by the reconstruction demand following the Great
East Japan Earthquake.
In these circumstances, the Company’s consolidated net sales fell 6.9% year on year to ¥179,285
million. In terms of profit/loss, construction work profitability deteriorated due to such factors as the impact
of surging outsourced labor costs in construction operations. As a result, consolidated gross profit decreased
36.5% year on year to ¥12,232 million, and consolidated operating loss and net loss amounted to ¥3,940 million and ¥2,958 million, respectively.
Despite such unsatisfactory, deficit-generating performance in stark contrast to the previous period,
the Company decided to pay a regular dividend of ¥9.00 per share for the period ended March 31, 2012 according to its basic corporate policy regarding profit sharing.

Looking Ahead and Key Strategies
The Japanese economy is expected to be propped up by policy effects and foreign demand and thus perform
solidly. However, the construction industry will likely to continue experiencing a harsh operating environment, given the unpredictability of capital investment trends in the private sector, even though reconstruction demand is anticipated.

Okumura Corporation Annual Report 20123

Under these circumstances, the Okumura Group is verifying and reassessing the existing Five-Year
Medium-Term Business Plan to formulate a new medium-term plan to be launched in fiscal 2013. The Okumura Group is committed to securing stable profits by implementing tactics adapted to the operating environment, without making any changes in its stance of upholding the core elements of its business strategies.
Specifically, in construction operations, securing a certain volume of business is regarded as a matterof top priority, as cutthroat competition is intensifying further. In civil engineering operations, the Company
will seek to fulfill customers’ needs by making the most of the proprietary technologies and its construction
knowhow, and create more opportunities to acquire orders through improved precision of quantity surveys
and thorough cost reduction. In building operations, the Company will enhance proposal-oriented marketingby determining the target fields on an area-by-area basis, while proactively injecting business resources into
renovation fields such as seismic retrofitting where the growth potential of demand is promising.
In real estate operations, the Company intends to further accelerate initiatives centering on theacquisition of profit-earning real estate, for the purpose of alleviating and absorbing yearly fluctuations in theperformance of construction operations, in which risk-taking as a contractor is imperative.
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 2012

Takanori Okumura
President and Representative Director

Review of Operations
Major Projects Completed
BUILDINGS

4
Abeno nini

Hotel Kintetsu Kyoto Station

Work period: January 2009 to
January 2012
Structure: RC and Steel
Total floor area: 26,010.58 m2

Work period: May 2009 to September 2011
Structure: RC (seismic isolation structure)
Total floor area: 14,299.49 m2

Toyonaka-Itami Clean Land

Next Stage Takami Shichijo Nibankan

Work period: May 2009 to March 2012
Structure: Steel and SRC
Total floor area: 11,078.76 m2

Work period: November 2009 to July 2011
Structure: RC (seismic isolation structure)
Total floor area: 13,948.98 m2

CIVIL ENGINEERING

Kita-Kokubun Area Box Culvert
Construction

National Route 42 Kiho Bypass:
Kiho Tunnel Construction

Work period: February 2010 toMarch 2012
Length of box culvert for
high-speed way: 118 m
Length of box culvert for ramp:
237.4 mWork period: March 2010 toMarch 2012
Tunnel length: 212 m (Slot Drilling (SD)and Electronic Delay Detonator (EDD)
tunneling methods); 76 m (SD machinery)

National Route 23 Toyohashi
Bypass: Construction of lower
portion of Toyogawa Bridge on
the right bank
Work period: August 2010 toAugust 2011
Construction length: 380 m; 1 bridge
abutment (5 cast-in-place piles)
3 bridge columns (22 iron pipe sheet
pile foundations per pier)Post-Disaster Restoration Workon Sendai Airport Access
Railway (including tunnels)
Work period: March 2011 to
September 2011
Removal of rubble and dirt, examination of structures, restoration work,etc.

Okumura Corporation Annual Report 2012

Orders Received
BUILDINGS
Okumura, Ichijo J. V.

5
Lions Ichijo Residence Shonan C-XWork period: April 2011 to March 2013
Structure: RC and Steel (seismic isolation structure)
Total floor area: 27,425.64 m2

Buildings A-2 and B-2 of the Ikoma Station
North Exit Region 2 Category I Urban
Redevelopment ProjectWork period: February 2012 to February 2014
Structure: Steel and RC
Total floor area: 27,456.35 m2

Nara Prefectural Pool Facilities Construction
and Administration ProjectWork period: May 2012 to May 2014
Structure: RC and Steel
Total floor area: 8,988.88 m2

Kansai No. 3 Plant of Sanko Co., Ltd.
Work period: February 2012 to October 2012
Structure: Steel
Total floor area: 42,201.69 m2

CIVIL ENGINEERING

Rebuilding of the downstream
portion of Musashi Canal

Kisei Line: Furusato No. 1 Tunnel
Construction WorkWork period: April 2011 to March 2016
Length of the extended channel:
approx. 2,500 m; length of open channel: approximately 1,890 m; length ofchannel outside the dike: approx.
450 m
Bridges (box culvert): 9
Reinforcement work to make siphon
quake-resistant: 1

Work period: February 2012 toMarch 2013
Construction length: 680 m
Tunnel length: 560 m

Hasamata-Nagahama Line
Subsidiary Road Development
Project Construction
Work period: October 2011 toJuly 2014
Construction length: 1,008.8 m
Tunnel length: 531 m

Onohama Pumping Station
Construction (Civil Engineering)Work period: August 2011 toMarch 2013
Construction of entire pumping station, construction of entire drain pipe
systemTopics

Upper structure
Water jet apparatus

Vertical guide
Stationary guide
Base machine

6❶ Rendering of finished building❶ Construction site

❸ Inside the seminar hall

❶ Development of a Seismic Reinforcement Method Based on External Frames
Using Cantilevered Slabs

By mounting precast concrete frames to the balconies and outside
corridors of housing complexes, the Company has developed areinforcement method that enhances the earthquake resistanceof buildings while giving due consideration to the residents
and the surrounding environment, and has been applying thisconstruction method to its actual works.
As this construction method utilizes existing cantileveredslabs such as those used in balconies as part of the connecting
member of the new reinforcement frame, it requires fewer
anchors during construction, thereby reducing construction noise,
vibrations and dust while at the same time contributing to theshortening of the construction schedule.
❷ Development of High-Speed Processing System for Concrete Surfaces in
Repair and Reinforcement Works

The Company has developed a system capable of high-speed
processing even when scraping wide concrete surfaces such as in
the repair and reinforcement works of water and sewer facilities.
By mechanizing the process of jetting concrete surfaces withpressurized water to strip old paint film and deteriorated areas,tasks that had previously been conducted manually, this technology
ensures an even finish while also considerably speeding up theprocess and saving energy.

❷ High-speed processing system❷ System in use❸ Panel discussion❸ Hosting of a Technical Seminar

On November 2, 2011, Okumura hosted the 23rd TechnicalSeminar at the Tokyo International Forum in Tokyo’s Chiyoda Ward.
The seminar was attended by approximately 270 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“Preparing for a Tokyo Inland Earthquake: How to prepare for the
worst case scenario.” Professor Yoshiaki Kawata of Kansai University
delivered the keynote speech. In addition, a panel discussion
was held on topics including responses by the national andlocal governments immediately following the Great East Japan
Earthquake, lessons to be learned from massive earthquakes
experienced thus far, and the revised estimates of damages from a
Tokyo inland earthquake.
❹ Recipients of the Okumura Environmental Construction Technology
Foundation Grant for the Fiscal Year Ended March 31, 2012 Are Announced

In 2007, the Company established a charitable trust fund, theOkumura Environmental Construction Technology Foundation
Grant, whose objective is to further promote the preservationand improvement of Japan’s environment by providing funds
to various research projects on construction technologies that
reduce the environmental load.

Okumura Corporation Annual Report 2012

❺ Cutting grass7❺ Cleaning up the gutters❻ Tokyo Head Office

The steering committee – comprising experts such asuniversity professors – met on July 5, 2011 to select the recipientsand determine the amount of the grant awarded for the fiscal year
ended March 31, 2012. The foundation has ensured that all thosechosen for the fiscal year have received the grant.
Research themes of the recipients are as follows:• Research on the long-term effects of large-scale construction on
biodiversity: Assessing the 40 years of construction of undersea
roadways• Development of wire-driven weight compensation mechanismand spider-shaped walking robot that enable the sophisticationof technology for surveying inaccessible locations• Analysis of habitats and food web structures to clarify thealteration phenomenon of ecosystems in downstream river
channels of multi-purpose dams
• Integrating building environment information and using it aspractical teaching materials❺ Dispatching Employees to Assist Areas Stricken by the Great East Japan
Earthquake

Employees who had volunteered from around the nation weresent to the cities of Rikuzentakata and Miyako and the town of
Yamada in Iwate Prefecture for the five-day period from August
22 to 26, 2011 to assist in cutting grass, clearing trees, clearing
away rubble, cleaning up gutters, sorting relief supplies, and other❻ Nagoya Branch

activities. Additionally, employees newly-recruited this fiscal year
were sent to Rikuzentakata for three days from October 19 to 21 toengage in support activities as part of their training.
The Company will continue to make a concerted effort toassist in the recovery and restoration of the areas affected by theearthquake.
❻ “Earthquake and Seismic Isolation Simulator” Is Installed inTokyo and Nagoya

In 1986, the Company constructed the administrative buildingof its Technical Research Institute (Tsukuba City), which was thenation’s first practical application of seismic isolation technology,
and since then has been designing and constructing numerous
seismically isolated buildings.
The Company, as part of its presentation tools for seismic
isolation technology, has installed an “earthquake and seismic
isolation simulator,” which simulates earthquake vibrations andthe effects of seismic isolation technology, at its Tokyo Head
Office (Minato Ward, Tokyo) and Nagoya Branch (Nakamura Ward,
Nagoya City). Customers who have tried these simulation systems
have commented on how well they were able to understand theeffects of seismic isolation.

Consolidated Balance Sheet
Okumura Corporation and Consolidated Subsidiaries
March 31, 2012

Millions of yen

Thousands of
U.S. dollars(Note 1)

2012

2011

2012

¥ 24,521¥ 34,721$ 298,520

1,104

232

13,444999

1

12,167

Trade notes (Note 12)

2,592

2,320

31,553

Trade accounts (Note 12)82,52580,037

1,004,691

ASSETS

Current assets:
Cash and cash equivalents (Note 12)
Time deposits (Notes 12 and 13)
Marketable securities (Notes 3 and 12)

8

Receivables:

Unconsolidated subsidiaries and associated companies (Note 12)

3,377

2,257

41,117

Other

6,264

8,179

76,255

Allowance for doubtful receivables
Inventories (Note 4)(4,461)(3,482)(54,305)

27,51640,033334,984

Deferred tax assets (Note 9)

58

—

707

Prepaid expenses and other

684

454

8,324

Total current assets

145,179

164,752

1,767,457

Property, plant and equipment (Notes 5 and 6):
Land (Note 13)

19,767

17,966240,651

Buildings and structures

18,093

17,331

220,268

Machinery and equipment

2,693

3,323

32,790Furniture and fixtures

2,127

2,109

25,899Lease assets (Note 11)

58

41

702

Construction in progress

82

19

999

42,82040,789521,309(14,586)(14,841)(177,572)

28,23425,948343,737

Investment securities (Notes 3, 12 and 13)

42,05837,448512,027

Investments in and advances to unconsolidated subsidiaries and associated companies (Note 12)

1,104

1,001

13,441

246

339

2,994

Total
Accumulated depreciation
Net property, plant and equipment

Investments and other assets:Long-term loans receivable (Note 12)
Other assets

4,128

4,534

50,256

Allowance for doubtful receivables(4,093)(4,251)(49,833)

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

43,44339,071

528,885¥216,856¥229,771$2,640,079

Okumura Corporation Annual Report 2012

Millions of yen

Thousands of
U.S. dollars(Note 1)

2012

2011

2012

Short-term bank loans including current portion of long-term debt (Notes 6, 11 and 12) ¥ 11,176¥ 11,299$ 136,065

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

7,130

6,258

86,807

Trade accounts (Note 12)39,26740,546

478,050

207

174

2,520

17,83025,928217,071

185

205

2,246

Other
Advances received on construction projects in progress
Income taxes payable

446

347

5,430

Allowance for losses on construction contracts

4,360

4,272

53,081Other (Note 13)

14,484

14,512

176,332

95,085103,541

1,157,602

Long-term debt (Notes 6, 11 and 12)

194

204

2,365

Liability for retirement benefits (Note 7)

3,289

4,683

40,039Deferred tax liabilities (Note 9)

6,151

6,242

74,877

284

567

3,452

Allowance for warranty work on construction projects

Total current liabilities
Long-term liabilities:

Negative goodwill

139

147

1,696

Total long-term liabilities

10,057

11,843

122,429

Total liabilities

105,142

115,384

1,280,031

Other

Commitments and contingent liabilities (Notes 11 and 13)

Equity (Notes 8, 14 and 15):
Common stock
19,83919,839241,525

Capital surplus

25,32725,327308,336

Retained earnings

69,25074,006

843,079(12,358)(12,348)(150,445)

9,656

7,563

117,553

9,656

7,563

117,553

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

Treasury stock—at cost
28,579,984 shares in 2012 and 28,549,412 shares in 2011
Accumulated other comprehensive income
Unrealized gain on available-for-sale securities
Total
Total equity

111,714

114,387

1,360,048

Total¥216,856¥229,771$2,640,079

9Consolidated Statement of Operations
Okumura Corporation and Consolidated Subsidiaries
Year ended March 31, 2012

Net sales
Cost of sales
Gross profit

10

Selling, general and administrative expenses (Note 10)
Operating income (loss)
Other income (expenses):
Interest and dividend income
Interest expense
Amortization of negative goodwill
Other—net
Other income (expenses)—net
Income (loss) before income taxes and minority interests
Income taxes (Note 9):
Current
Deferred
Total income taxes
Net income (loss) before minority interests
Net income (loss)

Per share of common stock (Notes 2.o and 15):
Basic net income (loss)
Cash dividends applicable to the year
See notes to consolidated financial statements.

Millions of yen

Thousands of
U.S. dollars(Note 1)

2012

2011

2012

¥179,285
167,053
12,232¥192,617
173,340
19,277$2,182,676
2,033,764
148,912

16,172(3,940)15,897
3,380

196,876(47,964)

952
(177)
284
(294)
765

951
(193)
284
(702)
340

11,595(2,154)
3,452(3,585)
9,308(3,175)

3,720(38,656)

138
(355)
(217)

138
(23)
115

1,682
(4,325)(2,643)(2,958)¥ (2,958)¥ (14.80)
9.00

¥

3,605
3,605

$

(36,013)(36,013)

Yen

U.S. dollars(Note 1)

¥ 18.04
9.00$ (0.18)
0.11

Consolidated Statement of Comprehensive Income
Okumura Corporation and Consolidated Subsidiaries
Year ended March 31, 2012

Net income (loss) before minority interests
Other comprehensive income (loss) (Note 14):
Unrealized gain (loss) on available-for-sale securities
Total other comprehensive income (loss)
Comprehensive income (loss) (Note 14)
Total comprehensive income (loss) attributable to (Note 14):
Owners of the parent
Minority interests
See notes to consolidated financial statements.

Okumura Corporation Annual Report 2012

Millions of yen

Thousands of
U.S. dollars(Note 1)

2012

2011

2012

¥(2,958)¥3,605$(36,013)

2,093
2,093
(865)

(2,872)(2,872)733

25,47725,477(10,536)¥ (865)—¥ 733—$(10,536)—11

Consolidated Statement of Changes in Equity
Okumura Corporation and Consolidated Subsidiaries
Year ended March 31, 2012

Thousands

Millions of yen
Accumulated othercomprehensive income

12

BALANCE, APRIL 1, 2010
Net income
Cash dividends, ¥9 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2011
Net loss
Cash dividends, ¥9 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2012

Outstanding
number ofshares ofcommonstock

Commonstock

CapitalsurplusRetainedearnings

199,830
—
—
(56)
3
—
199,777
—
—
(31)
0
—
199,746¥19,839—————¥19,839—————¥19,839¥25,327———(0)—¥25,327———(0)—¥25,327¥72,200
3,605(1,799)———¥74,006(2,958)(1,798)———¥69,250

Treasurystock

Unrealized
gain onavailable
for-salesecurities

Total
equity¥(12,332)
—
—
(17)
1
—
¥(12,348)
—
—
(10)
0
—
¥(12,358)¥10,435————(2,872)¥ 7,563
—
—
—
—
2,093
¥ 9,656¥115,469
3,605(1,799)(17)
1(2,872)¥114,387(2,958)(1,798)
(10)
0
2,093
¥111,714

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

BALANCE, MARCH 31, 2011
Net loss
Cash dividends, $0.11 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2012
See notes to consolidated financial statements.

Commonstock

CapitalsurplusRetainedearnings

Treasurystock

Unrealized
gain onavailable
for-salesecurities$241,525—————$241,525$308,337
—
—
—
(1)
—
$308,336$900,981(36,013)(21,889)———$843,079$(150,333)
—
—
(116)
4
—
$(150,445)$ 92,076————
25,477$117,553

Total
equity$1,392,586(36,013)(21,889)(116)
325,477$1,360,048

Consolidated Statement of Cash Flows
Okumura Corporation and Consolidated Subsidiaries
Year ended March 31, 2012

Okumura Corporation Annual Report 2012

Millions of yen

Thousands of
U.S. dollars(Note 1)

2012

2011

2012

¥ (3,175)¥ 3,720$ (38,656)

(132)
777
(284)
2,910

(111)
975
(284)
1,468

(1,608)9,466(3,452)35,424(5,860)
6,053
6,464
1,541
(8,098)(1,395)
485
2,461
(714)

(23,642)
30,504
3,051
7,365(14,868)(1,101)
1,419
4,776
8,496

(71,346)
73,68978,69718,758(98,591)(16,978)
5,903
29,962(8,694)

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(872)(11,662)8,205(3,200)
8
(311)
374
(36)
(7,494)

236
(113)
152
(2,398)
1
(204)
1,563
29
(734)

(10,615)(141,985)
99,891(38,953)102(3,793)
4,556(439)(91,236)

Cash flows from 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

(127)
(30)
(10)
0
(1,798)(12)(1,977)

1,063
(50)
(17)
1
(1,798)(8)(809)(1,552)
(366)
(116)
3
(21,890)(146)(24,067)(15)(10,200)
34,721¥ 24,521

(63)
6,890
27,831¥34,721(186)(124,183)
422,703$298,520

Cash flows from operating activities:
Income (loss) before income taxes and minority interests
Adjustments for:
Income taxes—paidDepreciation and amortization
Amortization of negative goodwill
Provision for doubtful receivables
Changes in assets and liabilities:
Increase in trade notes and accounts receivable
Decrease in accumulated costs of construction projects in progress
Decrease in other inventories
Increase in trade notes and accounts payable
Decrease in advances received on construction projects in progress
Increase in liability 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 the Consolidated Financial Statements
Okumura Corporation and Consolidated Subsidiaries
Year ended March 31, 201214

1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements havebeen prepared in accordance with the provisions set forth in
the Japanese Financial Instruments and Exchange Act and its
related accounting regulations and in conformity withaccounting principles generally accepted in Japan (“Japanese
GAAP”), which are different in certain respects as to 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 2011 consolidated financial statements to conform to the classifications used in 2012.
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 ¥82 to $1,
the approximate rate of exchange at March 31, 2012. Suchtranslations should not be construed as representations that
the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.
2. Summary of Significant Accounting Policies
a. Consolidation — The consolidated financial statements
as of March 31, 2012 and 2011 include the accounts of theCompany and its 2 significant subsidiaries (together, the“Group”).
Under the control or influence concept, those companies in which the Company, directly or indirectly, is able toexercise control over operations are fully consolidated, andthose companies over which the Group has the ability to
exercise significant influence are accounted for by the equity
method.
Investments in 8 (7 in 2011) unconsolidated subsidiaries
and 1 associated company (1 in 2011) 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 be material.
The differences between the cost of investments andthe fair value of net assets of consolidated subsidiaries andassociated companies at the date of acquisition are amortized on a straight-line basis over 5 years.
All significant intercompany balances and transactions
have been eliminated in consolidation. All material unrealized
profit included in assets resulting from transactions within
the Group is 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 specific identification method or net selling value, which is definedas the selling price less additional estimated manufacturingcosts and estimated direct selling expenses.
d. Marketable and Investment Securities — Marketable
and investment securities are classified and accounted for,depending on management’s intent, as follows:(1) held-to-maturity debt securities, for which there is the
positive intent and ability to hold to maturity are reported atamortized cost and(2) available-for-sale securities, which are not classified as theheld-to-maturity, are reported at fair value, with unrealized
gains and losses, net of applicable taxes, reported in a separate component of equity.
Non-marketable available-for-sale securities are statedat cost determined by the moving-average method. For
other–than-temporary declines in fair value, investment securities are reduced to net realizable value by a charge toincome.
Equities of limited liability partnerships for investment
purpose and of other similar partnerships (defined as “securities” by Section 2 of Article 2 of the Financial Instruments
and Exchange Act) are valued at the net equity equivalent
based on the recently available financial statements of thepartnerships corresponding to the reporting dates of thefinancial statements defined by the partnership agreements.
e. Property, Plant and Equipment — Property, plant andequipment are stated at cost. Depreciation is computed by
the declining-balance method based on the estimated useful
lives of the assets, while the straight-line method is applied tobuildings acquired after April 1, 1998 and lease assets. The
range of useful lives is principally from 3 to 60 years forbuildings and structures, from 4 to 17 years for machineryand equipment, and from 2 to 20 years for furniture and fixtures. The useful lives for lease assets are the terms of therespective leases.
f. Long-Lived Assets — The Group reviews its long-lived
assets for impairment whenever events or changes in circumstance indicate the carrying amount of an asset or asset
group may not be recoverable. An impairment loss would berecognized if the carrying amount of an asset or asset groupexceeds the sum of the undiscounted future cash flows
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

Okumura Corporation Annual Report 2012

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.
h. Allowance for Warranty Work on Construction
Projects — The allowance for warranty costs for completed
work is provided at the amount of warranty costs based on
past 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
their employees.
Liability for retirement benefits for employees is recorded based on the estimated present value of projected benefit
obligations and the fair value of the plan assets at the end of
the fiscal year.
The unrecognized transition amount which arose fromadopting the new standard during the year ended March 31,
2001 has been amortized on a straight-line basis over 15
years, and unrecognized actuarial differences are amortized
subsequent to the year in which they arise on a straight-line
basis over the period of 10 years which is within the employees’ average remaining service years. Unrecognized prior service costs have been amortized on straight-line over theperiod of 10 years which is within the employees’ averageremaining service years.
k. Asset Retirement Obligations — In March 2008, the
Accounting Standards Board of Japan (the “ASBJ”) published
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 whena reasonable estimate of asset retirement obligation can be
made. Upon initial recognition of a liability for an asset retire-

ment obligation, an asset retirement cost is capitalized byincreasing 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 theremaining useful life of the asset. Over time, the liability is
accreted to its present value each period. Any subsequent
revisions to the timing or the amount of the original estimateof undiscounted cash flows are reflected as an increase or adecrease in the carrying amount of the liability and the capitalized amount of the related asset retirement cost.
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, the construction
revenue and construction costs should be recognized by thepercentage-of-completion method, if the outcome of a construction contract can be estimated reliably. When total construction revenue, total construction costs and the stage ofcompletion of the contract at the balance sheet date can bereliably measured, the outcome of a construction contract
can be estimated reliably. If the outcome of a construction
contract cannot be reliably estimated, the completed-contract method should be applied. When it is probable 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, 2012 and 2011,were ¥139,853 million ($1,702,614 thousand) and ¥114,963
million, respectively.
m. Leases — In March 2007, the ASBJ issued ASBJ Statement
No. 13, “Accounting Standard for Lease Transactions”, whichrevised the previous accounting standard for lease transactions
issued in June 1993. The revised accounting standard for leasetransactions was effective for fiscal years beginning on or after
April 1, 2008.
Under the previous accounting standard, finance leases
that were deemed to transfer ownership of the leased property to the lessee were capitalized. However, other financeleases were permitted to be accounted for as operating leasetransactions if certain “as if capitalized” information was disclosed in the note to the lessee’s financial statements. The
revised accounting standard requires that all finance leasetransactions be capitalized by recognizing lease assets andlease obligations in the balance sheet.
In addition, the accounting standard permits leases
which existed at the transition date and do not transfer ownership of the leased property to the lessee to continue to beaccounted for as operating lease transactions.
The Group applied the revised accounting standard
effective April 1, 2008. In addition, the Group continues toaccount for leases which existed at the transition date and do15

not transfer ownership of the leased property to the lessee as
operating lease transactions.
All other leases are accounted for as operating leases.

16

n. Income Taxes — The provision for income taxes is computed based on the pretax income included in the consolidated statement of operations. The asset and liability approachis used to recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying currently enacted tax laws to the temporary differences.
o. Per Share Information — Basic net income 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 dilutive effect upon exercise orconversion into common stock.
Cash dividends per share presented in the accompanying consolidated statement of operations are dividends applicable to the respective 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 with revision of
accounting standards, the new policy is applied retrospectively unless the revised accounting standards include specifictransitional provisions. When the revised accounting standards include specific transitional provisions, an entity shallcomply with the specific transitional provisions.
(2) Changes in Presentations:
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.
This accounting standard and the guidance are applicable to accounting changes and corrections of prior-period
errors which are made from the beginning of the fiscal yearthat begins on or after April 1, 2011.

q. New Accounting Pronouncements
Accounting Standard for Retirement Benefits — On May
17, 2012, the ASBJ issued ASBJ Statement No. 26,”Accounting Standard for Retirement Benefits” and ASBJ
Guidance No. 25, ”Guidance on Accounting Standard for
Retirement Benefits,” which replaced the AccountingStandard for Retirement Benefits that had been issued by theBusiness Accounting Council in 1998 with effective date ofApril 1, 2000 and the other related practical guidance, being
followed by partial amendments from time to time through2009.
Major changes are as follows:(a) Treatment in the balance sheet
Under the current requirements, actuarial gains and losses
and past service costs that are yet to be recognized in profit
or loss are not recognized in the balance sheet, and the difference between retirement benefit obligations and plan
assets (hereinafter, ”deficit or surplus”), adjusted by suchunrecognized amounts, are recognized as a liability or asset.
Under the revised accounting standard, actuarial gains
and losses and past service costs that are yet to be recognized in profit or loss shall be recognized within equity (accumulated other comprehensive income), after adjusting for tax
effects, and the deficit or surplus shall be recognized as a liability (liability for retirement benefits) or asset (asset for retirement benefits).
(b) Treatment in the statement of income and the statementof comprehensive income (or the statement of income andcomprehensive income)The revised accounting standard would not change how
to recognize actuarial gains and losses and past service costs
in profit or loss. Those amounts would be recognized in profit or loss over a certain period no longer than the expected
average remaining working lives of the employees. However,actuarial gains and losses and past service costs that arose in
the current period and have yet to be recognized in profit orloss shall be included in other comprehensive income andactuarial gains and losses and past service costs that wererecognized in other comprehensive income in prior periods
and then recognized in profit or loss in the current period
shall be treated as reclassification adjustments.
This accounting standard and the guidance are effective
for the end of fiscal years beginning on or after April 1, 2013
with earlier application being permitted from the beginningof fiscal years beginning on or after April 1, 2013. However,no retrospective application of this accounting standard toconsolidated financial statements in prior periods is required.

Okumura Corporation Annual Report 2012

3. Marketable and Investment Securities
Marketable and investment securities as of March 31, 2012 and 2011 consisted of the following:
Millions of yen

Thousands of
U.S. dollars

2011

2012

—
1
1

$ 12,167—$ 12,167

2012

Current:
Short-term bonds payable
Investments in limited liability partnerships and other
Total

¥

999
—
999

¥

¥
¥

17

Non-current:
Marketable equity securities
Japanese government bonds
Trust fund investments and otherTotal¥39,699
113
2,246¥42,058¥34,989—
2,459¥37,448$483,306
1,371
27,350$512,027

The costs and aggregate fair values of marketable and investment securities at March 31, 2012 and 2011 were as follows:
Millions of yen

March 31, 2012

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

Cost

Unrealized
Gains

Unrealized
LossesFair
Value¥25,596
1,000¥14,653—¥ 550241¥ 39,699
759

1,112

0

0

1,112

¥23,197
1,200¥12,4813¥ 689232¥ 34,989
971

Cost

Unrealized
Gains

Unrealized
LossesFair
Value$311,616
12,175$178,391—$6,701
2,938$483,306
9,237

13,5382

3

13,537

March 31, 2011

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

Thousands of U.S. dollars

March 31, 2012

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

The information for available-for-sale securities which were sold during the years ended March 31, 2012 and 2011 was asfollows:
Millions of yen

March 31, 2012
Available-for-sale:
Equity securities

Proceeds

Realized
Gains

Realized
Losses

¥ 3

¥ 0

¥—

Proceeds

Realized
Gains

Realized
Losses

¥91

¥44

¥—

Proceeds

Realized
Gains

Realized
Losses

$33

$ 0

$—

Millions of yen

18

March 31, 2011
Available-for-sale:
Equity securities

Thousands of U.S. dollars

March 31, 2012
Available-for-sale:
Equity securities

The impairment losses on available-for-sale equity securities for the years ended March 31, 2012 and 2011 were ¥112 million($1,369 thousand) and ¥701 million, respectively.
4. Inventories
Inventories at March 31, 2012 and 2011 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

2012

2011

2012

¥21,228
2,058
3,087
1,143
¥27,516¥27,281
8,226
3,019
1,507
¥40,033$258,440
25,05637,577
13,911$334,984

Okumura Corporation Annual Report 2012

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 office buildings, warehouses, and land in Osaka and other areas. Somerental 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 ¥2,277 million ($27,714 thousand) and¥2,162 million for the fiscal years ended March 31, 2012 and 2011, 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,
2011

Increase/
Decrease

March 31,2012

March 31,2012

¥16,587
1,482¥18,069¥2,608(51)¥2,557¥19,195
1,431¥20,626¥36,4369,366¥45,802
Millions of yen
Fair Value

Carrying AmountRental properties
Rental properties in part
Total

April 1,
2010

Increase/
Decrease

March 31,2011

March 31,2011

¥14,400
1,537¥15,937¥2,187(55)¥2,132¥16,587
1,482¥18,069¥34,102
9,357¥43,459
Thousands of U.S. dollars
Fair Value

Carrying AmountRental properties
Rental properties in part
Total

April 1,
2011

Increase/
Decrease

March 31,2012

March 31,2012

$201,935
18,037$219,972$31,749(614)$31,135$233,684
17,423$251,107$443,593
114,022$557,615

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, 2012 and 2011 are measured by the Group in accordance with its Real-EstateAppraisal Standard.
6. Short-term Bank Loans and Long-term Debt
Short-term bank loans at March 31, 2012 and 2011 consisted of notes to banks and bank overdrafts. The annual interest rateapplicable to the short-term bank loans was 1.475% at March 31, 2012 and 2011.
Long-term debt at March 31, 2012 and 2011 consisted of the following:

Loans from banks and other financial institutions, due serially to 2031
with interest rates ranging from 1.33% 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

2012

2011

2012

¥ 30
140
56
226
(32)
¥194

¥ 44
156
31
231
(27)
¥204

$ 361
1,710
679
2,750
(385)
$2,36519

Annual maturities of long-term debt, excluding finance leases (See Note 11) at March 31, 2012, were as follows:

20

Year Ending March 31

Millions of yen

Thousands of
U.S. dollars

2013
2014
2015
2016
2017
2018 and thereafter
Total

¥ 16
16
16
16
15
91
¥170

$ 195
193
193
193
190
1,107
$2,071

The carrying amount of assets pledged as collateral for the above collateralized long-term debt at March 31, 2012 was as follow:
Property, plant and equipment—net of accumulated depreciation

Millions of yen

Thousands of
U.S. dollars¥127$1,546

As is customary in Japan, the Company maintains substantial deposit balances with banks with which it has borrowings. Suchdeposit balances are not legally or contractually restricted as to withdrawal.
General agreements with respective banks provide, as is customary in Japan, that additional collateral must be provided
under certain circumstances if requested by such banks and that certain banks have the right to offset cash deposited withthem against any long-term or short-term debt or obligation that becomes due and, in case of default and certain other specified events, against all other debt payable to the banks. The Company has never been requested to provide any additional collateral.
7. Employees’ Retirement Benefits
Most of the employees of the Company are covered by a contributory trusted pension plan.
The Company has lump-sum retirement benefit plans and a cash balance plan (pension plan linked to the market interest
rates) based on the Defined Benefit Corporate Pension Law.
The liability for employees' retirement benefits at March 31, 2012 and 2011 consisted of the following:

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

2012

Millions of yen
2011

Thousands of
U.S. Dollars
2012¥27,336(23,914)
(425)
165
127
¥ 3,289¥29,190(24,847)
(28)
220
148
¥ 4,683$332,797(291,144)(5,171)
2,009
1,548$ 40,039

The components of net periodic benefit costs for the years ended March 2012 and 2011 were as follows:

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

2012

Millions of yen
2011

Thousands of
U.S. dollars
2012

¥963
583
(373)
(488)
(55)
(21)
¥609

¥993
610
(389)
(196)
(55)
(21)
¥942

$11,720
7,105(4,537)(5,943)(670)(258)$ 7,417

Assumptions used for the years ended March 31, 2012 and 2011 were set forth as follows:
Discount rate
Expected rate of return on plan assets
Amortization period of prior service cost
Recognition period of actuarial differences
Amortization period of transitional obligation

2012

2011

2.0%
1.5%
10 years
10 years
15 years

2.0%
1.5%
10 years
10 years
15 years

Okumura Corporation Annual Report 2012

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 such as (1) having a Board of
Directors, (2) having independent auditors, (3) having a Board of Corporate Auditors, and (4) the term of service of the directors is prescribed as one year rather than two years of normal term by its articles of incorporation, the Board of Directors may
declare dividends (except for dividends-in-kind) at any time during the fiscal year if the company has prescribed so in its articles of incorporation. However, the Company cannot do so because it does not meet all the above criteria.
		
The Companies Act permits companies to distribute dividends-in-kind (non-cash assets) to shareholders subject to acertain limitation and additional requirements.
		
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles ofincorporation of the company so stipulate. The Companies Act provides certain limitations on the amounts available for dividends or the purchase of treasury stock. The limitation is defined as the amount available for distribution to the shareholders,
but the amount of net assets after dividends must be maintained at no less than ¥3 million.
b. Increases / Decreases and Transfer of Common Stock, Reserve and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity accountcharged upon the payment of such dividends until the 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 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 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.

21

9. Income Taxes
The Company and its domestic subsidiaries are subject to Japanese national and local income taxes which, in the aggregate,
resulted in a normal effective statutory tax rate of approximately 40.6% for the years ended March 31, 2012 and 2011.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and liabilities at March 31, 2012 and 2011 were as follows:

22

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

Millions of yen

Thousands of
U.S. dollars

2012

2011

2012

¥11,923
2,925
2,570
2,271
1,656
1,171
485
278
72
340
(23,633)
58¥11,414
2,908
3,033
2,415
1,734
1,901
536
743
228
314
(25,226)—$145,159
35,611
31,28427,651
20,164
14,254
5,905
3,386
881
4,133
(287,721)
707(4,191)(1,960)(6,151)¥ (6,093)(3,985)(2,257)(6,242)¥ (6,242)(51,021)(23,856)(74,877)$ (74,170)

A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompanying consolidated statements of operations for the year ended March 31, 2011 was as follows (2012 was omitted becauseof the net loss for the period):
2011

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

40.6%
2.4
(4.1)
3.7
(36.2)(3.3)
3.1%

On December 2, 2011, new tax reform laws were enacted in Japan, which changed the normal effective statutory tax ratefrom approximately 40.6% to 38.0% effective for the fiscal years beginning on or after April 1, 2012 through March 31, 2015,
and to 35.6% afterwards. The effect of this change was to decrease deferred taxes liabilities, net of deferred tax assets, in the
consolidated balance sheet as of March 31, 2012 by ¥855 million ($10,403 thousand) and to increase income taxes—deferredin the consolidated statement of operations for the year then ended by ¥266 million ($3,237 thousand).

Okumura Corporation Annual Report 2012

10. Research and Development Costs
Research and development costs charged to income were ¥614 million ($7,481 thousand) and ¥579 million for the years ended
March 31, 2012 and 2011, 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, 2012 and 2011 were
¥20 million ($249 thousand) and ¥21 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

2012

2011

2012

¥16
40
¥56

¥ 9
22
¥31

$190
489
$679

Pro forma Information of Leased Property Whose Lease Inception Was before March 31, 2008
ASBJ Statement No. 13, “Accounting Standard for Lease Transactions” requires that all finance lease transactions be capitalized
to recognize lease assets and lease obligations in the balance sheet. However, the ASBJ Statement No. 13 permits leases without ownership transfer of the leased property to the lessee and whose lease inception was before March 31, 2008 to continue
to be accounted for as operating lease transactions if certain “as if capitalized” information is disclosed in the note to thefinancial statements. The Group applied ASBJ Statement No. 13 effective April 1, 2008 and accounted for such leases as operating lease transactions. Pro forma information of leased property whose lease inception was before March 31, 2008 that does
not transfer ownership of the leased property to the lessee on an “as if capitalized” basis was as follows:
Millions of yen

Acquisition cost
Accumulated depreciation
Net leased property

Thousands of
U.S. dollars

2012

2011

2012

Machineryandequipment

Machineryandequipment

Machineryandequipment

¥7
7
¥0

¥63
54
¥ 9

$95
86
$ 9

Obligations under finance leases, which existed at the transition date and do not transfer ownership of the leased property to
the lessee:

Due within one year
Due after one year
Total

Millions of yen

Thousands of
U.S. dollars

2012

2011

2012

¥0
—
¥0

¥9
0
¥9

$9
—
$9

The amount of acquisition cost and obligations under finance leases includes the imputed interest expense portion.
Depreciation expenses, which are not reflected in the accompanying consolidated statements of operations, computed by
the straight-line method were ¥9 million ($104 thousand) and ¥13 million for the years ended March 31, 2012 and 2011,
respectively.

23

(2) Operating leases
Future minimum lease receivables or payments under noncancellable operating leases at March 31, 2012 and 2011 were as
follows:

24

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

2012

2011

2012

¥ 1,889
18,828¥20,717¥ 1,845
20,364¥22,209$ 23,000
229,221$252,221

¥

¥

$

¥

26
69
95

¥

33
95
128

$

316
843
1,159

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.
(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
grasping the 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.
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.
(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.

Okumura Corporation Annual Report 2012(a) Fair values of financial instruments
Millions of yen

March 31, 2012

Carrying
AmountFair Value

Unrealized
Gain/Loss

Cash and cash equivalents and time deposits
Marketable securities
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

¥ 25,625
999
88,492(1,938)86,55440,570
878
(742)
136
¥153,884¥ 25,625
999

¥ —
0

86,52440,570

(30)
(0)

136
¥153,8540¥ (30)

Short-term bank loans
Payables—trade notes and accounts
Long-term debt—lease obligation including current portion
Total¥ 11,145
46,39756¥ 57,598¥ 11,145
46,39754¥ 57,596

¥ —
—
(2)
¥ (2)
Millions of yen

March 31, 2011

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

¥ 34,953
84,613(3,340)81,27335,960
877
(643)
234
¥152,420¥ 34,953¥ —81,19935,960(74)—

233¥152,345(1)¥ (75)

Short-term bank loans
Payables—trade notes and accounts
Long-term debt—lease obligation including current portion
Total¥ 11,272
46,80331¥ 58,106¥ 11,272
46,80330¥ 58,105

¥ —
—
(1)
¥ (1)

Thousands of U.S. dollars

March 31, 2012

Carrying
AmountFair Value

Unrealized
Gain/Loss

Cash and cash equivalents and time deposits
Marketable securities
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

$  311,964
12,167
1,077,325(23,590)
1,053,735
493,914
10,689(9,036)
1,653$1,873,433$  311,964
12,169$   —21,053,366
493,911

(369)
(3)

1,662
$1,873,072

9$ (361)

Short-term bank loans
Payables—trade notes and accounts
Long-term debt—lease obligation including current portion
Total$  135,680
564,857679$  701,216$  135,680
564,857654$  701,191

$   —
—
(25)
$ (25)

Amounts due from unconsolidated subsidiaries and associated companies are included in receivables-trade notes and accounts
and long-term loans receivable.

25

26

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. The information of the fair value for the marketable securities and the investment securities byclassification 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.
(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
Other

Millions of yen

Thousands of
U.S. dollars

2012

2011

2012

¥1,787¥1,742$21,758

¥

¥

$

—

1

—

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

March 31, 2012

Cash and cash equivalents and time deposits
Marketable securities
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¥ 25,625
1,000
81,067

¥—
—
7,425

¥ —
—
—

¥—
—
—

—
—
¥107,692—494¥7,919

124
163
¥287

1,000
221
¥1,221

Due in 1 Yearor Less

Due after
1 Year through5 Years

Due after
5 Years through10 Years

Due after
10 Years$ 311,964
12,174
986,933$——90,392

$—
—
—

$—
—
—

—
—
$1,311,071—
6,021$96,413

1,510
1,979
$3,48912,174
2,689$14,863

Thousands of U.S. dollars

March 31, 2012

Cash and cash equivalents and time deposits
Marketable securities
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 2012

13. Commitments and Contingent Liabilities
Investments in securities in the amounts of ¥113 million ($1,371 thousand), ¥74 million ($903 thousand), and ¥1 million ($12thousand) 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, 2012 and time deposit in the amount of ¥4 million ($52 thousand) is pledged for lease arrangements of construction materials at March 31, 2012. Land in the amount of ¥21 million ($253
thousand) is pledged for the deposit received from lessee related to the fixed-term land leasehold at March 31, 2012.
14. Comprehensive Income
The components of other comprehensive income for the year ended March 31, 2012 were as follows:
Unrealized gain on available-for-sale securities
Gains arising during the year
Reclassification adjustments to profit or loss
Amount before tax effect
Income tax effectTotal
Total other comprehensive income

Millions of yen

Thousands of
U.S. dollars¥2,186
112
2,298
(205)
¥2,093¥2,093$26,609
1,369
27,978(2,501)$25,477$25,477

The corresponding information for the year ended March 31, 2011 was not required under the accounting standard for presentation of comprehensive income as an exemption for the first year of adopting that standard and is not disclosed herein.
15. Subsequent Events
Appropriation of Retained Earnings
The following appropriation of retained earnings at March 31, 2012 was approved at the Company’s shareholders meeting heldon June 28, 2012.
Year-end cash dividends, ¥9 ($0.11) per share

Millions of yen

Thousands of
U.S. dollars¥1,798$21,886

16. Segment Information
Under ASBJ Statement No. 17 “Accounting Standard for Segment Information Disclosures” and ASBJ Guidance No. 20“Guidance on Accounting Standard for Segment Information Disclosures”, an entity is required to report financial anddescriptive information about its reportable segments. Reportable segments are operating segments or aggregations ofoperating segments that meet specified criteria. Operating segments are components of an entity about which separate
financial information is available and such information is evaluated regularly by the chief operating decision maker in deciding
how to allocate resources and in assessing performance. Generally, segment information is required to be reported on the same
basis as is used internally for evaluating operating segment performance and deciding how to allocate resources to operating
segments.
1. Description of Reportable Segments
The Group’s reportable segments are those for which separately 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 reportable segment
The accounting policies of each reportable segment are consistent to those disclosed in Note 2, “Summary of Significant
Accounting Policies.”27

3. Information about sales, profit (loss), assets, liabilities and other items is as follows:
Millions of yen
2012

Reportable segment

28

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

Civil
engineering

Architectural
construction

Real estate

Total

Other
(Note 1)

¥58,814¥105,051¥10,568¥174,433¥4,852¥179,285—
58,814(1,187)—105,051(4,584)26
10,5942,096

26
174,459(3,675)

362
5,214
(304)

388
179,673(3,979)

270

¥ 294

¥

176

¥

¥

740

¥

Total Reconciliations(Note 2)

45

¥

785

¥

¥

Consolidated(Note 3)—¥179,285

(388)
(388)
39

—
179,285(3,940)

(7)

¥

778

Millions of yen
2011

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)

¥81,359¥101,282¥6,213¥188,854¥3,763¥192,617—
81,359168—
101,282
1,334

44
6,257
2,263

44
188,898
3,765

1,110
4,873
(442)

1,154
193,771
3,323

¥

303

¥

353

¥

278

¥

934

¥

Total Reconciliations(Note 2)

48

¥

982

¥

Consolidated(Note 3)—

¥192,617(1,154)(1,154)
57—
192,617
3,380

¥

(7)

¥

975

Thousands of U.S. dollars
2012

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)

$716,026$1,278,930$128,655$2,123,611$59,065$2,182,676—
716,026(14,447)—
1,278,930(55,809)315
128,970
25,515315
2,123,926(44,741)

4,406
63,471(3,699)4,721
2,187,397(48,440)

3,286$ 3,572$ 2,146

$

$

9,004

$

547

Total Reconciliations(Note 2)

$

9,551

$

Consolidated(Note 3)—

$2,182,676(4,721)(4,721)476—
2,182,676(47,964)

$

(85)

$

9,466

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 machineries and materials.
2. Reconciliations to segment profit (loss) in the amount of ¥39 million ($476 thousand) and ¥57 million for the years ended
March 31, 2012 and 2011 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.
Information concerning amortization of goodwill and unamortized balance of goodwill by reportable segment

Okumura Corporation Annual Report 2012

The Group records negative goodwill not allocated to any reportable segment. Amortization of negative goodwill was ¥284
million ($3,452 thousand) and ¥284 million for the years ended March 2012 and 2011, respectively, and unamortized balanceat the year-end was ¥284 million ($3,452 thousand) and ¥567 million at March 31, 2012 and 2011, respectively. The negative
goodwill was incurred when the Company acquired additional shares in Okumura Machinery Corporation.

29

Independent Auditors‘ 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/jp30
INDEPENDENT AUDITORS' REPORTTo the Board of Directors of Okumura Corporation:

We have audited the accompanying consolidated balance sheet of Okumura Corporation and consolidated subsidiaries as ofMarch 31, 2012, and the related consolidated statements of operations, comprehensive income, changes in equity, and cash
flows for the year then ended, and a summary of significant accounting policies and other explanatory information, allexpressed in Japanese yen.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in conformity 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 misstatements, 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 conformity 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 consolidated subsidiaries as of March 31, 2012, and the consolidated results of
their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in Japan.
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 conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely for theconvenience of readers outside Japan.

June 28, 2012
Member of
Deloitte Touche Tohmatsu Limited

Breakdown of Orders (Non-Consolidated)
Okumura Corporation
Year ended March 31, 2012

Okumura Corporation Annual Report 2012

Construction Orders Awarded

2012

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

65.3

11,81579,5202
91,337100 %

37,31595,304
223¥132,842

Composition
ratio

Millions of
yen

34.6%

¥ 49,211
25,191
6,957
81,35961.8

23,365
77,9152
101,282

96.4
3.6
100 %

72,576103,106
6,959
182,641
5,328¥187,969

Composition
ratio

Millions of
yen

39.3%

¥ 59,874
22,933
4,593
87,40060.7

27,209105,856
133,065

100 %

87,083
128,789
4,593¥220,465

48,50787,784
3,748¥140,039
2012

Millions ofyen¥ 39,818
16,4842,512
58,814
15,56789,484—
105,051
55,385
105,968
2,512
163,865
6,169¥170,034

Year-end Backlog¥ 50,000
21,4195,828
77,24730,20589,187
119,392
80,205
110,606
5,828¥196,639

Composition
ratio

Thousands of
U.S. dollars

31.2%$ 364,539
182,249
45,630592,41868.8

226,008
886,460—
1,112,468

100 %

590,547
1,068,709
45,630$1,704,886

Composition
ratio

Thousands of
U.S. dollars

43.4%$ 484,757
200,683
30,586
716,02653.9

189,525
1,089,405—
1,278,930

97.2
2.8
100 %

674,282
1,290,088
30,586
1,994,956
75,097$2,070,053

Composition
ratio

Thousands of
U.S. dollars

39.6%$ 608,711
260,767
70,956
940,43460.4

367,731
1,085,783
1,453,514

100 %

976,442
1,346,550
70,956$2,393,948

2012

2011

2012

Millions ofyen

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

34.7%

¥ 25,500
15,785220
41,505

18,564
72,814—
91,378Net 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¥ 29,943
14,9703,748
48,661

2012

2011

Composition
ratio

2012

2011

31

Network

Head and Branch Offices

32

Consolidated Subsidiaries

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

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

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

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

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

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

East Japan Branch
5-6-1, Shiba, Minato-ku,
Tokyo 108-8381, Japan
TEL: +81-3-3454-8111 FAX: +81-3-5427-8111
West Japan Branch
2-2-2, Matsuzaki-cho, Abeno-ku,
Osaka 545-8555, Japan
TEL: +81-6-6621-1101 FAX: +81-6-6623-7692
Sapporo Branch
2-1-18, Kita Shijo Nishi,
Chuo-ku, Sapporo 060-0004, Japan
TEL: +81-11-261-9261 FAX: +81-11-251-5345
Tohoku Branch
2-25, Tsutsumi dori, Amamiya-machi,
Aoba-ku, Sendai 981-8525, Japan
TEL: +81-22-274-1231 FAX: +81-22-273-9805
Tokyo Branch
5-6-1, Shiba, Minato-ku,
Tokyo 108-8381, Japan
TEL: +81-3-3454-8111 FAX: +81-3-5427-8116
Kitakanto Office
4-26-15, Kishi-cho, Urawa-ku,
Saitama 330-0064, Japan
TEL: +81-48-827-0188 FAX: +81-48-827-0268
Higashikanto Office18-14, Shinmachi, Chuo-ku,
Chiba 260-0028, Japan
TEL: +81-43-241-2255 FAX: +81-43-244-5911
Yokohama Office
60, Nihon Ohdori, Naka-ku,
Yokohama 231-0021, Japan
TEL: +81-45-662-1361 FAX: +81-45-641-3502
Hokuriku Office2-3-26, Higashi Ohdori, Chuo-ku,
Niigata 950-0087, Japan
TEL: +81-25-241-6160 FAX: +81-25-241-6364

Hiroshima Branch
1-7-22, Kokutaiji-machi, Naka-ku,
Hiroshima 730-0042, Japan
TEL: +81-82-241-2246 FAX: +81-82-243-1416
Shikoku Branch
1-8-41, Nishiki-machi,
Takamatsu 760-0020, Japan
TEL: +81-87-851-9008 FAX: +81-87-822-9286
Kyushu Branch
2-19-1, Sanno, Yahata Higashi-ku,
Kitakyushu 805-8531, Japan
TEL: +81-93-671-3131 FAX: +81-93-661-1543
Fukuoka Office
1-13-8, Yakuin, Chuo-ku,
Fukuoka 810-0022, Japan
TEL: +81-92-741-4431 FAX: +81-92-741-4740
Taiwan Branch
Rm.702, 7F., No.65, Sec.3, Nanjing E.Rd.,
Zhongshan Dist., Taipei City 104, Taiwan(R.O.C.)TEL: +886-2-2506-1402
FAX: +886-2-2506-1429
Singapore Rep. Office
175A Bencoolen Street, #07-08 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 28, 2012)(As of March 31, 2012)
Okumura Corporation Annual Report 2012

Directors and Auditors

Corporate Data

President & Representative Director
Takanori Okumura

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

Representative Director
Takaiku Hirako
Directors
Toshio Yamaguchi
Kozo Aoki
Makoto Tsuchiya
Kazuo Takami
Seiichi Fujioka
Toshio Kobayashi
Yuichi Mizuno
Kiyoshi Saito
Standing Statutory Auditors
Yusaku Nishigami
Yuji Takemura
Auditors
Nobuhiko Dejima
Yoshio Takahashi
Yoshihiro Ban

Okumura was established in 1907 based on two key principles

EstablishedFebruary 22, 1907
Capital¥19.8 billion

33

Group Employees
1,922

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

Notes:1. Kiyoshi Saito is outside director.
2. Nobuhiko Dejima, Yoshio Takahashi and Yoshihiro Ban are outside auditors.

enshrined in the corporate mottos “steadfast management”

Major Shareholders

and “sincere operation.” The steady growth achieved over the

Shares held
(thousands)

Percentage of
total

years has been made possible through the unflagging support

Executive Officers

Shareholderof our customers.

Senior Managing Officers
Takaiku Hirako*
Toshio Yamaguchi*
Tadashi Hashimoto
Masamichi Shirahase
Kozo Aoki*
Makoto Tsuchiya*

Okumura Corporation(Treasury stock)

28,57912.52%

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

19,4008.50

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

7,666

3.36

Okumura Employees’
Shareholding Association

7,339

3.21

BBH/Blackrock Global
Allocation Fund, Inc.

7,158

3.14

Japan Trustee Services Bank,
Ltd. (Trust Account)

6,595

2.89

Resona Bank, Limited.

6,074

2.66

Sumitomo Realty &Development Co., Ltd.

6,050

2.65

Sumitomo Mitsui Banking
Corporation

5,568

2.44

Nippon Life Insurance Company

4,593

2.01

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

4,209

1.84

Okumura’s main business activities include construction projects for houses, public facilities, medical facilities, andoffice buildings. In the area of civil engineering are projects
such as railways, roads, power station facilities, sewage andwater works, and others. The Company has developed technology at the highest level, with achievements including theseismic 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 isto provide a better environment for the future. Accordingly,
the Company is dedicated to contributing to meaningfulsocial infrastructure investment and to always being a corporation regarded highly by society. It will achieve this by continuing to develop as an all-around construction company
based on steadfast business management.

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

Managing Officers
Kazuo Takami*
Akiyoshi Hida
Seiichi Fujioka*
Hiroomi Iida
Keiji Yamaguchi
Executive Officers
Toshiharu Shimizu
Koji Esumi
Toshio Kobayashi*
Hirokazu Oishi
Takeshi Kurita
Yuichi Mizuno*
Yutaka Maruyama
Takanori Hayashi
Note: Those officers marked with an asterisk (*) work as directors.

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 2012

Printed in Japan