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

Okumura Corporation
Annual Report 2006

Printed in Japan

Okumura was established in 1907 based on two key principles enshrined in
the corporate mottos “steadfast management” and “sincere operation.” The
steady growth achieved over the years has been made possible through the
unflagging support of our customers.
Okumura’s main business activities include construction projects forhouses, public facilities, medical facilities, and office buildings. In the area ofcivil engineering are projects such as railways, roads, power station facilities,
sewage and water works, and others. The Company has developed
technology at the highest level, with achievements including the seismic
isolation system used to construct Japan’s first earthquake-absorbing building.
In the area of environment-related technology, Okumura has developed
techniques for 100% recycling of demolished concrete, and natural greeningof 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 tocontributing to meaningful social infrastructure investment and to always
being a corporation regarded highly by society. It will achieve this bycontinuing to develop as an all-around construction company based on
steadfast business management.

Contents

01 Financial Highlights
02 To Our Shareholders
04 Review of Operations
06 Topics in 2006
07 History of Okumura
08 Consolidated Balance Sheet
10 Consolidated Statement of Income
11 Consolidated Statement of Shareholders’ Equity
12 Consolidated Statement of Cash Flows

13 Notes to the Consolidated Financial Statements
21 Report of Independent Auditors
22 Non-Consolidated Balance Sheets
24 Non-Consolidated Statements of Income
25 Breakdown of Orders (Non-Consolidated)
26 Network
27 Board of Directors
28 Investor Information

Disclaimer Regarding Forecasts and Projections
This Annual Report includes forecasts, projections and other predictive statements that represent Okumura’s assumptions andexpectations 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 to the accuracy of specificforecasts, projections or predictive statements contained herein.

Financial Highlights

For the years ended March 31

2006

2005

Consolidated:

2004

2006
Thousands of
U.S. Dollars

Millions of Yen

Net sales
Operating income
Net income
Total assets
Total shareholders’ equity¥269,888
3,889
4,161
437,155
183,689—————

Per Share:

—
—
—
—
—

Yen

Basic net income¥ 20.27

Non-Consolidated:

U.S. Dollars

—

—

$0.17

Millions of Yen

Net sales
Operating income
Net income
Total assets
Total shareholders’ equity¥266,836
3,953
4,110
433,530
181,877¥225,543
3,806
3,761
423,430
162,834

Per Share:¥220,296
5,845
3,594
399,627
161,367

Yen

Basic net income¥20.02

1$2,297,503
33,10735,4193,721,422
1,563,713

Thousands of
U.S. Dollars

Year-on-year
Growth (%)$2,271,529
33,64734,986
3,690,562
1,548,288

+18.3
+3.8
+9.3
+2.4
+11.7

U.S. Dollars¥18.11¥17.07

$0.17

+10.5

Notes: 1. Prior-year comparative financial statements are not shown, since the consolidated financial statements are adopted from this fiscal year.
Notes: 2. The U.S. dollar amounts included herein are presented solely for convenience of the reader. Such dollar amounts have been translated
from yen at the approximate exchange rate in Tokyo on March 31, 2006, of ¥117.47=U.S.$1.

Net Sales

Net Income

Total Shareholders’ Equity(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

300,000

5,000

200,000

4,000
150,000
200,000
3,000
100,000
2,000
100,000
50,000
1,000

0

0

2004

2005

2006

Non-Consolidated
Consolidated

0

2004

2005

2006

Non-Consolidated
Consolidated

2004

2005

2006

Non-Consolidated
Consolidated

To Our Shareholders

Okumura Corporation

2

We would like to thank our shareholders for theircontinued support and encouragement, and wewish them all the greatest success in their own
range of endeavors.
A general overview of business performance for theperiod to March 2006 (April 1, 2005 to March 31,
2006) is provided in the following sections.
Fiscal 2006 Results
During the period under review, Japan’s economy
was characterized by a return to corporate profitability and continuing strong investment in plants
and facilities spurred by the ongoing economic
recovery. This was augmented by growth in
employment and incomes that is raising consumer
spending. Consumer demand is now contributing
to a steady economic recovery.
In the construction industry, the slack from reduction in investment in public facilities has been taken
up by private-sector investment, with overall investment in construction maintaining previous levels. As
a result, the market is set to continue in a state ofintense competition.

Annual Report 2006

In these economic conditions, Okumura recorded
net sales on a consolidated basis of ¥269,888 million, gross profit of ¥26,699 million and operating
income of ¥3,889 million. Net income totaled¥4,161 million.
On a nonconsolidated basis, private-sector orders
grew 0.4% from the previous fiscal year, but orders
from the public sector declined 2.4%. As a result,overall orders (from both sectors) decreased 0.4%,
to ¥244,097 million.

Nonconsolidated net sales, including sales from thereal estate business, came to ¥266,836 million, up
18.3% from the previous fiscal year. However, thegross profit margin declined by 1.9 percentage
points, and gross profit decreased 1.2% from theprevious fiscal year, to ¥26,309 million. On the positive side, the reduction in selling, general andadministrative expenses and the increase in operating income raised net income 9.3% from the previous fiscal year, to ¥4,110 million, marking thesecond continuous year of growth in income.
Dividends to shareholders for the period underreview, based on our corporate policy on profitsharing, were raised by ¥1 from the previous fiscal
year, to ¥10 per share.
Looking Ahead and Key Strategies
While it is true that the domestic economy is enjoying a steady recovery, the construction industry
continues to face reductions in spending on public
facilities, while strong private-sector investment isaffected by concerns over high oil prices and longterm interest rates. With so many negative factors
impacting business orders, we expect the current
difficult business environment to continue.
Okumura’s approach to harsh economic conditions
is to take steps to improve competitiveness in thearea of civil engineering and construction projects,
maintain and increase market share, secure profitsand boost overall business performance. The
Company is currently focusing on current new construction projects and working to promote a new“renaissance” in the civil engineering field as partof a new initiative.

3

In its operations, Okumura will concentrate on
expanding the technical options available and pricecompetitiveness for its shield tunneling technology
and rock tunneling technology in the area of civilengineering. It will take steps to strengthen competitiveness by focusing on its advanced seismic isolation technology, high-rise building technology,
and acoustic simulation technology in the area ofbuilding construction. Elsewhere, the Company will
work aggressively to promote development projects
in the environmental and private finance initiative(PFI) fields.
We will adopt measures to boost revenue by
strengthening and implementing the framework for
applying our vast pool of expertise to find ways toreduce costs and develop value engineering (VE)
proposals.
In the area of the Company’s organization, we will
promote further implementation of the integrated
management system spanning the sales and engineering divisions as a way to better meet customer
needs.
On February 22, 2007, Okumura will celebrate its
100th anniversary, an event made possible by thecontinued support and patronage of its shareholders over the years.
For the future, the Company will apply all of its
resources in the quest to respond quickly and flexibly to shifting trends and the changing operating
environment, and thereby build a strong businessfoundation in accordance with its corporate philosophy that has endured through the years. This will
enable it to maintain the trust and confidence of its
shareholders.

With regard to dividends to shareholders, as a signof gratitude for its shareholders’ continued support,
the Company will add a commemorative dividendof ¥10 per share in the fiscal year ending March
2007, in accordance with its basic policy on profitsharing.
The Company looks forward to the continued
support and patronage of its shareholders.
June 2006

Takanori Okumura
President and Representative Director

Review of Operations

Okumura Corporation

4
Major Projects Completed

Tunnel construction for thecontour drainage canal at
the Oh-otoshi-Furutone River
Work period: October 2001 to
October 2005
Structure: Slurry shield method
Total length: 385m
Inside diameter: 6,500m2

Plané Renai Springs Tower Osaka
Work period: November 2003 to January 2006
Structure: RC
Total floor area: 29,407m2

Annual Report 2006

The Sapporo Tower Kotoni
Work period: May 2003 to March
2006
Structure: RC
Total floor area: 30,894m2

Restoration work for the
Ohashi Roka of historicremain Wakayama Castle
Work period: October 2003 to
March 2006
Structure: Wooden structure
Total floor area: 76m2

Kyoritsu Chemical & Co., Ltd.
Kisarazu R&D CenterWork period: October 2004 to
January 2006
Structure: RC, seismically isolated
structure
Total floor area: 7,998m2

Civil engineering works(hydraulic pressure pipeline
section) for the Kannagawa
Power Plant Construction
Project (Phase I)Work period: March 1997 to
December 2005
Structure: Full-face inclined shaft
TBM method
Inclination angle: 48 degrees
Total length: 961m
Inside diameter: 6,600m2

Construction of Daini-Tomei
Expressway Kanaya Tunnel
East (No. 3)
Work period: December 2002 to
December 2005
Structure: NATM method
Total length: 2,450m

5Orders Received

NFC Bldg. Construction
Work period: November 2005 to
March 2007
Structure: Prestressed concrete(partially S structure),
Seismic isolation building
Total floor area: 19,547m2

Horokanai Tunnel
Construction (Fukagawa
City) on Ordinary National
Road No. 275
Work period: November 2005 to
March 2009
Tunnel length: 1,241m

Kamagaya General Hospital
Construction

Spacia Meguro Tower
Construction

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

Work period: December 2005 to
February 2008
Structure: RC (PCa method)
Total floor area: 21,948m2
Residential unites: 183

Tochiyama construction ofhead works for agricultural
water utilization project at
Oigawa River artificial ditch(first phase)

Hokuriku Shinkansen(Kurobe-Toyama) Uozu
Tunnel No. 1

Work period: October 2005 to June
2007
Embankment length: 38.5m

Work period: August 2004 to
December 2007
Tunnel boring: 1,055m
Bridge construction: 268m

Hikifune Ekimae Area, 1
Block Residential Buildings
Construction redevelopment
project
Work period: October 2005 to July
2008
Structure: RC (PCa method)
Total floor area: 55,916m2
Residential unites: 557

Iwaigawa Embankment Dam
Construction
Work period: December 2002 to
March 2007
Embankment height: 55m
Embankment capacity: 86,400m3
Embankment length: 180m

Topics in 2006
Rather than remaining satisfied with the current level of its technology, Okumura strives constantly to promote technical innovation and maintain and improve quality of product and service.
In this way, the Company seeks to establish its standing and recognition within society at large.
Release of Free Vibration Tests on the Japan’s First Practical Base Isolated Building:
Verifying the Performance of Base Isolation Equipment after 20 Years of Service
Okumura took the step of conducting free vibration tests (by mechanically vibrating a building

6

structure) to verify secular changes in the integrity of base isolation equipment (made of laminatedrubber) to mark the 20th year following its installation in Japan’s first practical application of base

Okumura Corporation

isolation technology to the administrative building of Okumura Corporation Technical ResearchInstitute in Tsukuba City, Ibaraki Prefecture, designed and built by Okumura Corporation in 1985.
Test results revealed a change in performance approx. one-quarter of the design values, confirming good stability of the equipment. These tests, which involved the unprecedented step of“vibrating a existing building,” attracted a wide range of public interest, with Okumura’s customers and the media attending to observe the tests firsthand and gather information.

Administrative building of
Okumura Corporation
Technical ResearchInstitute, Japan's first
applicable base isolatedbuilding

PFI Project Commencing Soon at the Shonan Eco Center: Construction and Operation ofan Organic Material Recycling Center
Construction work has been completed on the Shonan Eco Center, located in Fujisawa City,
Kanagawa Prefecture, for the PFI with Shonan PFI Eco-factory Corporation, in which Okumura isparticipating. Commissioning is currently being conducted for the official opening date of August
1, 2006. The Eco Center, which was established to recycle livestock waste, pruned off branches,food residue and other items generated in Fujisawa City into quality compost, is to be built andoperated as a PFI project.

Pipe jacking the world’s largest pipe (Inside dia. 3,500 mm) by the tunnel-boring machineof “Yadokari-kun” typeThe large “Yadokari-kun” of Earth Pressure Balanced Shield Machine, which was developed as are-useable structure, was applied to the sewer construction project of Chiba city. The Yadokarikun developed jointly by Okumura Corporation and Okumura Machinery Corporation was theworld’s largest tunnel-boring machine based on the rapid tunneling method.

Using Precast (PCa) Outer Shell: Simplifying Utilization of Precast (PCa) Outer Shell
Columns
Okumura Corporation and Nippon Concrete Industries Co., Ltd. collaborated to establish thedesign and construction method for precast reinforced concrete members based on use of thinand hollow, square, precast columns (eco columns), and acquired assessment certification of technology of building construction from General Building Research Corporation of Japan. This conAnnual Report 2006

struction method enables significant reduction of both manpower and construction times by
eliminating the on-site work of placing rebars and formworks.

Installation of eco columns

History of Okumura
On February 22, 2007, Okumura Corporation will celebrate
the 100th anniversary of its establishment.

1907• The Company was established on
February 22, 1907.
• Tahei Okumura launched the civil
contractor business.

1913• Construction work on the No.3
construction section of the Kaseda
Line of the Nansatsu Railway in
Kagoshima Prefecture

1921• Okumura Gumi was launched.
• The Head Office was set up in
Shimoda-mura, Kita Katsuragi-gun,Nara Prefecture.

1929• The Company was inspired to contribute to the construction of new
towns as part of the restoration
efforts following the Great Kanto
Earthquake.
• The new Miyoshibashi
Reconstruction Office• Bridge construction proceeded inthree directions from the point
where the two rivers meet This
steel-plated, three-directional
bridge structure was in the news.

1932• Elevated tracks for Osaka ElectricTramway (forerunner of the Kinki
Nippon Railway Co., Ltd.) in the
Tsuruhashi district

1938• Okumura Corporation wasestablished.
• Capitalized at ¥480,000, theCorporation appointed Tahei
Okumura as its first President. The
Head Office was set up in
Shimoda-mura, Kita Katsuragi-gun,Nara Prefecture.

1955• The second-generation Tsutenkaku
Tower, a symbol of Osaka. The
reconstruction work achieved agreat success due to the combined
enthusiasm of neighboring residents
and Okumura’s dedicated effort.

1968• Osaka Expo Hall

1977
1982

• The Yokohama Stadium

1986• Ahead of its time, the administrative office of Okumura Corporation
Technical Research Institute wascompleted as Japan’s first practicalbase isolated building.

1994• The Mielparque Nagano (Nagano
Postal Savings Hall)2001• Okumura received the 3rd
Infrastructure Technology
Development Highest Award from
the Minister of Land, Infrastructure
and Transport for the “simultaneous advancing and segment assembly method based on the
hexagonal honeycomb segment.”

2002• Ivy Heim Twin Tower, Hokkaido’s
first base isolated buildings of highrise condominium (The buildings
subsequently showed its advanced
seismic isolation capability during
the Tokachioki earthquake in
September 2003.)

2005• City Tower Gran Tennoji, a highrise condominium reaching 161
meters in height, using its seismic
isolation technology• The tunnel for the Chuo Kanjo
Shinjuku Line of the Metropolitan
Expressway in Tokyo. The work on
the 12.02-meter tunnel was carriedout using the world’s largest shieldtunnel-boring machine employing
the hexagonal honeycomb segment (tunnel location: between
construction sections SJ51 andSJ53).

2007• The 100th anniversary of theestablishment of
Okumura Corporation.

• The Batang Ai Dam (HydroelectricPower Plant) in Malaysia

7Consolidated Balance Sheet
Okumura Corporation and Consolidated Subsidiaries
As of March 31, 2006ASSETS

Okumura Corporation

8

Current assets:
Cash and time deposits (Notes 5 & 9)
Trade notes and accounts receivable
Short-term investments (Notes 5 & 6)
Inventories:
Accumulated costs of uncompleted contracts
Other inventories
Deferred income taxes (Note 10)
Other accounts receivables
OthersLess: Allowance for doubtful accounts
Total current assets

Property and equipment (Note 9):
Buildings
Machinery and equipment
Land
Construction in progress
Less: Accumulated depreciation
Total property and equipment

Annual Report 2006

Investments and other assets:
Investments in securities (Notes 6 & 9)Long-term receivables
OthersLess: Allowance for doubtful accounts
Total investments and other assets
Total assets

Millions of yen

Thousands of
U.S. dollars(Note 2)

¥ 53,760
84,3437,819$ 457,652
717,995
66,566113,982
8,848
13,352
23,984
4,038(4,742)
305,384

970,306
75,323
113,663
204,169
34,376(40,376)
2,599,674

13,394
10,19415,001
113(18,513)
20,189114,01786,781
127,698965(157,597)
171,864

103,979
2,517
5,126
(40)
111,582¥437,155

885,155
21,432
43,637(340)
949,884$3,721,422

Millions of yen

Thousands of
U.S. dollars(Note 2)Current liabilities:
Trade notes and accounts payable
Short-term loans including current portion of long-term debt (Notes 7 & 9)
Accrued income taxes (Note 10)
Advances received on uncompleted contracts
Allowance for repairs
Allowance for warranty work on construction projects
Allowance for construction loss
OthersTotal current liabilities¥ 98,267
12,431
242
88,490
236
696
1,945
21,531
223,838$ 836,531
105,824
2,058
753,301
2,010
5,921
16,553
183,290
1,905,488

Long-term liabilities:
Long-term debt (Notes 7 & 9)
Deferred income taxes (Note 10)
Accrued severance indemnities (Note 8)
OthersTotal long-term liabilities
Total liabilities

583
19,4297,877
1427,903
251,741

4,967
165,397
67,056
120
237,540
2,143,028

1,725

14,681

19,83925,326112,974
36,374

168,885
215,600
961,723
309,646(10,824)
183,689¥437,155(92,141)
1,563,713$3,721,422

LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS‘ EQUITYMinority interests
Commitments and contingent liabilities (Note 11)
Shareholders’ equity:
Common stock, no par value
Authorized: 480,376,000 shares
Issued: 228,326,133 shares
Additional paid-in capital
Retained earnings
Net unrealized gains on securities
Less: Treasury stock, at cost
26,034,460 shares
Total shareholders’ equity
Total liabilities, minority interests and shareholders’ equity
The accompanying notes are an integral part of these statements.

9Consolidated Statement of Income
Okumura Corporation and Consolidated Subsidiaries
For the year ended March 31, 2006

Okumura Corporation

10

Millions of yen

Thousands of
U.S. dollars(Note 2)

¥269,888
243,189
26,699$2,297,503
2,070,219
227,284

Selling, general and administrative expenses (Note 13)
Operating income

22,8103,889

194,177
33,107

Other income (expenses):Dividends
Interest income
Interest expenses
Gain on sales of property and equipment (Note 14)
Gain on sales of investments in securities (Note 6)
Gain on redemption of investments in securities
Loss on deduction of carrying amounts of property and equipment
Other, net
Other income-net

1,364
277
(270)
1,390
141
825
(411)
302
3,618

11,611
2,360(2,297)
11,8291,198
7,023(3,501)
2,571
30,794

Income before income taxes and minority interests

7,507

63,901

Income taxes (Note 10):
Current
Deferred
Total income taxes

217
3,120
3,337

1,846
26,561
28,407

Net sales
Cost of sales
Gross profit

Minority interests
Net income

Annual Report 2006

The accompanying notes are an integral part of these statements.

¥

9
4,161

$

75
35,419

Consolidated Statement of Shareholders’ Equity
Okumura Corporation and Consolidated Subsidiaries
For the year ended March 31, 2006

Millions of yen

BALANCE - APRIL 1, 2005

Number of sharesof common stock
issuedCommon stock

Additional
paid-in capital

228,326,133¥19,839¥25,325

Retained Net unrealized
earnings gain on securities¥110,695¥18,056

Treasury stock,at cost¥ (9,358)

11
Net income
Cash dividends paid
Bonus for directors and statutory auditors
Gain on sale of treasury stock
Net change in unrealized gain on securities
Net change in treasury stock
BALANCE - MARCH 31, 2006
228,326,133

4,161(1,840)(42)
118,318¥19,839¥25,326¥112,974¥36,374(1,466)¥(10,824)

Thousands of U.S. dollars (Note 2)

BALANCE - APRIL 1, 2005
Net income
Cash dividends paid
Bonus for directors and statutory auditors
Gain on sale of treasury stock
Net change in unrealized gain on securities
Net change in treasury stock
BALANCE - MARCH 31, 2006
The accompanying notes are an integral part of these statements.

Common stock

Additional
paid-in capital$168,885$215,584

Retained Net unrealized
earnings gain on securities$942,324$153,703

Treasury stock,at cost$(79,661)

35,419(15,662)(358)
16
155,943$168,885$215,600$961,723$309,646(12,480)$(92,141)

Consolidated Statement of Cash Flows
Okumura Corporation and Consolidated Subsidiaries
For the year ended March 31, 2006

Okumura Corporation

12

Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments for:
Depreciation
Amortization of consolidation differences
Decrease in allowance for doubtful accounts
Decrease in accrued severance indemnities
Increase in allowance for construction loss
Dividends and interest income
Interest expenses
Gain on sales of property and equipment
Loss on deduction of carrying amounts of property and equipment
Gain on sales of securities
Gain on redemption of investments in securities
Devaluation of securities
Increase in trade notes and accounts receivable
Decrease in accumulated costs of uncompleted contracts
Decrease in other inventories
Decrease in trade notes and accounts payable
Decrease in advances received on uncompleted contracts
Increase in accrued consumption taxes
Bonus paid to directors and statutory auditors
Other, net
Subtotal
Dividends and interest received
Interest paid
Income taxes paid
Net cash used in operating activities

Annual Report 2006

Cash flows from investing activities:
Net increase in time deposits
Payments for purchases of marketable securities and investments in securities
Proceeds from sales of marketable securities and investments in securities
Payments for purchases of tangible and intangible fixed assets
Proceeds from sales of tangible and intangible fixed assets
Issuance of loans receivableCollection of loans receivable
Other, net
Net cash provided by investing activities
Cash flows from financing activities:
Net decrease in short-term borrowings
Proceeds from long-term debt
Repayments of long-term debt
Payments for purchases of treasury stock
Proceeds from sales of treasury stock
Dividends paid
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 5)
The accompanying notes are an integral part of these statements.

Millions of yen

Thousands of
U.S. dollars(Note 2)

¥ 7,507$ 63,901

559
(15)
(513)
(624)
1,944
(1,641)270(1,390)
411
(141)
(825)
13
(16,864)
8,511
1,136
(12,424)(6,950)
912
(42)
216
(19,950)
1,764
(265)
(161)
(18,612)

4,756
(127)
(4,368)(5,312)
16,553(13,971)
2,297(11,829)
3,501(1,198)(7,023)
111(143,567)
72,456
9,671(105,768)(59,163)
7,765
(358)
1,838
(169,835)
15,016(2,255)(1,370)(158,444)

13,204(8,908)18,145(799)
1,673(1,518)176
1,243
23,216112,405(75,830)
154,463(6,805)
14,237(12,921)
1,502
10,582
197,633(1,429)68(75)(1,469)5(1,840)(4,740)40(96)46,181¥ 46,085(12,164)577(633)(12,505)41(15,667)(40,351)346(816)
393,125$ 392,309

Notes to the Consolidated Financial Statements
Okumura Corporation and Consolidated Subsidiaries
Year ended March 31, 2006

1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements have been
prepared based on the accounts maintained by Okumura
Corporation (the “Company”) and its subsidiaries (collectively
the “Group”) in accordance with the provisions set forth in theCommercial Code of Japan and the Securities and Exchange
Law, and in conformity with accounting principles generally
accepted in Japan, which are different, in certain respects, fromthe application and disclosure requirements of International
Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to theCompany’s consolidated financial statements issued domesticallyin order to present them in a format which is more familiar toreaders outside Japan.
2. U.S. Dollar Amounts
The accounts of consolidated financial statements presented
herein are originally expressed in Japanese yen. The U.S. dollar
amounts shown in the accompanying consolidated financial
statements and notes thereto have been translated fromJapanese yen into U.S. dollars on the basis of ¥117.47 to U.S.
$1, the rate of exchange prevailing at March 31, 2006. These
U.S. dollar amounts are not intended to imply that the Japanese
yen amounts have been or could be converted, realized or settled in U.S. dollars at this or any other rate.
3. Principles of Consolidation(1) Scope of Consolidation
The Company had six subsidiaries and an affiliate as at March
31, 2006. The consolidated financial statements included theaccounts of the Company and two of its subsidiaries. The
accounts of four subsidiaries were not consolidated, as theywould not have a material effect on the accompanying consolidated financial statements.
(2) Fiscal Terms of Consolidated Subsidiaries
Fiscal terms of all consolidated subsidiaries were the same as theCompany.
(3) Valuation of Assets and Liabilities of Consolidated
Subsidiaries
The Company adopted “full fair value method” so that the full
portion of the assets and liabilities of the consolidated subsidiaries was measured at their fair value as of the acquisition of
the control.
(4) Consolidation Differences
In preparing the consolidated financial statements, difference
between the cost of investment and the amount of the underlying equity in net assets of the consolidated subsidiary wasdeferred and amortized over a period of 5 years on a straightline basis.
Other negligible differences were fully amortized as theyoccurred.

(5) Application of Equity Method
The equity method has not been adopted for the non-consolidated subsidiaries and the affiliate, as they would not have amaterial effect on the accompanying consolidated financial
statements.
4. Summary of Significant Accounting Policies(1) Valuation of Securities
Securities included in short-term investments and investments insecurities are stated as follows: Held-to-maturity debt securities
Amortized cost method (straight-line method) Other securities
Other securities with market quotations are stated at the prevailing market price as at the balance sheet date. Net unrealized gains or losses on these securities are reported net oftaxes as a separate component of “Shareholders’ Equity”.
The cost of securities sold is determined based on the moving
average cost at the time of sale.
Other securities without market quotations are stated atcost by the moving average method. Equities of limited liability partnerships for investment purpose and of other similar
partnerships (defined as “securities” by Section 2 of the
Article 2 of the Securities and Exchange Law) are valued at
the net equity equivalent based on the recently available
financial statements of the partnerships corresponding to thereporting dates of the financial statements defined by thepartnership agreements.
(2) Valuation of Inventories
Accumulated costs of uncompleted contracts are stated at cost
determined by specific identification method.
Other inventories are also stated at cost by specific identification method.
(3) Depreciation and Amortization of Fixed Assets
 Property and equipment
Property and equipment are principally stated at cost.
Depreciation except for buildings acquired on and after April
1, 1998 is computed in accordance with the declining balance method based on the useful lives and residual value prescribed by the Japanese tax laws. The depreciation ofbuildings acquired on and after April 1, 1998 is computed on
the straight-line method. Deferred gain on land and buildings
recognized when acquired is directly deducted from therespective acquisition cost in the amounts of ¥373 million(US$3,176 thousand) and ¥38 million (US$325 thousand),
respectively. Maintenance and repairs, including minor
renewals and improvements, are charged to income as
incurred.
 Intangible fixed assets
Intangible fixed assets except for software are amortized by
the straight-line method based on the useful lives prescribedby the Japanese tax laws.
Software for in-house use is amortized by the straightline method based on the estimated useful lives.

13

Okumura Corporation

14(4) Allowance for Doubtful Accounts
Allowance for doubtful accounts of general receivable wasestablished to provide for future losses, which are estimated,based on the past credit loss experience.
In addition, uncollectible amount is estimated individuallyfor doubtful receivable.
(5) Allowance for Repairs
The Group has provided for the anticipated cost of repairing
machinery and equipment used for completed construction projects. The amount provided has been included in cost of construction.
(6) Allowance for Warranty Work on Construction Projects
The anticipated cost of warranty work corresponding to thesales of construction for the last twelve months is recorded
under this account on the accompanying consolidated balance
sheet.
(7) Allowance for Construction Loss
The amount of losses on construction projects that could be
expected and reasonably estimated at the end of the fiscal year
was reserved in this account.
(8) Accrued Severance Indemnities
Accrued severance benefits for employees are recorded basedon the estimated present value of projected benefit obligations
in excess of 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 on astraight-line basis over the period of 10 years within the employees’ average remaining service years subsequent to the year inwhich they arise.
Accrued severance indemnities for directors and statutory
auditors are also provided equal to the amount if all such personnel retired on the balance sheet date and are included in
accrued severance indemnities in the amount of ¥165 million(US$1,409 thousand) in the consolidated balance sheet as at
March 31, 2006.

Annual Report 2006

(9) Treasury Stock
Treasury stocks owned by the Group are recorded at acquisition
cost as a separate component under the Shareholders’ Equity.
The number of treasury stocks held by the Group as at March
31, 2006 was 26,034,460 common shares.

(10) Leases
Where the financing leases do not transfer ownership of theleased property to the lessee during the terms of the leases, theleased property is not capitalized and the related lease expenses
are charged to income in the periods in which they are incurred.
(11) Recognition of Revenues and Related Costs
Revenues and their related costs from construction contracts
with construction periods of more than 2 years and contract
amounts in excess of ¥5 billion (US$42,564 thousand) are recognized by the percentage-of-completion method.
Other revenues and their related costs from construction
contracts are recognized by the completed-contract method.
(12) Consumption Taxes
The consumption taxes withheld and consumption taxes paid
are excluded from revenues and expenses in the accompanying
financial statements. The net balance of the consumption taxes
withheld and consumption taxes paid is included in current liabilities of the balance sheet as of the end of the fiscal year.
(13) Appropriations of Retained Earnings
Appropriations of retained earnings are accounted for andreflected in the accompanying consolidated financial statements
when approved by the shareholders.
(14) Cash and Cash Equivalents
Cash and cash equivalents in the consolidated statement of cash
flows consist of cash on hands, bank deposits payable on
demand and short-term investments due within three months
from acquisition with minor value fluctuation risk.
(15) Income Taxes
The Group is generally subject to national corporate income tax,
local inhabitant tax and enterprise tax which are principally
based on income.
Deferred income taxes are determined using the assets andliability approach, whereby deferred tax assets and liabilities arerecognized in respect of temporary differences between the tax
basis of assets and liabilities and those as reported in the financial statements.
(16) Per Share Information
Basic net income per share is computed by dividing net income
available to common shareholders by the weighted average
number of common shares outstanding for the period, which
was 203,225,151 shares for the year ended March 31, 2006.
Diluted net income per share is not disclosed because there were
no dilutive potential common shares that were outstanding forthe year ended March 31, 2006.

5. Cash and Cash Equivalents
The following table represents a reconciliation of cash and cash equivalents at March 31, 2006:
Cash and time deposits
Time deposits maturing over 3 months
Short-term investments redeemable within 3 months from acquisition dateCash and cash equivalents

Millions of yen

Thousands of
U.S. dollars¥53,760(9,675)2,000¥46,085$457,652(82,364)
17,021$392,309

6. Securities
The book and market values of held-to-maturity debt securities whose fair value were available as at March 31, 2006 were as follows:
Millions of yen

Book
value

Securities with unrealized gains:
Government and municipal bonds
Corporate bonds
Sub-total
Securities with unrealized losses:
Government and municipal bonds
Corporate bonds
Sub-total
Total

Marketvalue

Unrealized
gains (losses)

¥

600
2,907
¥ 3,507

¥

600
2,932
¥ 3,532

¥ 0
25
¥ 25

¥ 4,819
3,342¥ 8,161¥11,668¥ 4,790
3,322¥ 8,112¥11,644

¥(29)
(20)
¥(49)
¥(24)

Book
value

Marketvalue

Unrealized
gains (losses)$ 5,110
24,742$29,852$ 5,111
24,957$30,068

$

1
215
$ 216

$41,026
28,447$69,473$99,325$40,773
28,282$69,055$99,123$(253)(165)$(418)$(202)

Thousands of U.S. dollars

Securities with unrealized gains:
Government and municipal bonds
Corporate bonds
Sub-total
Securities with unrealized losses:
Government and municipal bonds
Corporate bonds
Sub-total
Total

The acquisition cost and book value of other securities whose fair value were available as at March 31, 2006 were as follows:
Millions of yen

Securities with unrealized gains:
Stocks
Bonds
Sub-total
Securities with unrealized losses:
Stocks
Bonds
Sub-total
Total

Acquisition
cost

Book
value

Unrealized
gains (losses)¥27,696—¥27,696¥89,635—¥89,635¥61,939—¥61,939

¥

¥

¥

723
5,500
¥ 6,223¥33,919667
4,953¥ 5,620¥95,255(56)(547)¥ (603)¥61,336

Acquisition
cost

Book
value

Unrealized
gains (losses)$235,768—$235,768$763,044—$763,044$527,276—$527,276$$$

Thousands of U.S. dollars

Securities with unrealized gains:
Stocks
Bonds
Sub-total
Securities with unrealized losses:
Stocks
Bonds
Sub-total
Total

6,156
46,821$ 52,977$288,745

5,678
42,165$ 47,843$810,887(478)(4,656)$ (5,134)$522,14215

Proceeds from sales of other securities and related gross realized gains and losses on those sales for the year ended March 31, 2006
were as follows:

Okumura Corporation

16

Millions of yen

Thousands of
U.S. dollars

¥177
141
—

$1,506
1,198—

Millions of yen

Thousands of
U.S. dollars¥2,999$25,532

154
21

1,311
179

1,494
205
1

12,7191,743
8Proceeds from sales
Gross realized gains
Gross realized losses
Main securities whose fair value is not readily determinable at March 31, 2006 were as follows:
Held-to-maturity securities:
Commercial paper
Investments in subsidiaries and affiliates:
Subsidiaries
Affiliates
Other securities:
Unlisted stocks
Investments in limited liability partnerships and similar agreements
Unlisted preferred equity investments
The details of maturity dates of held-to-maturity and other securities as at March 31, 2006 were as follows:

Millions of yen

Bonds:
Government and municipal bonds
Corporate bonds
OthersOthersTotal

Due within
1 yearDue in1 to 5 years

Due in
5 to 10 years

Due after
10 years¥3,008
1,812
2,999
—
¥7,819¥2,411
4,438—
206¥7,055

¥—
—
—
—
¥—

¥
—
4,953
—
—
¥4,953

Due within
1 yearDue in1 to 5 years

Due in
5 to 10 years$25,60915,42525,532—$66,566$20,527
37,782—
1,751$60,060

$—
—
—
—
$—

Millions ofyen

Thousands of
U.S. dollars

Averageinterest rate

Repayment
due¥12,379
52
583¥13,014$105,380
444
4,967$110,791

1.3%
2.4%
2.1%

2007-2031

Millions of yen

Thousands of
U.S. dollars

¥52
50
49
48

$442
429
418
406

Thousands of U.S. dollars

Bonds:
Government and municipal bonds
Corporate bonds
OthersOthersTotal

Due after
10 years$—
42,165——$42,165

7. Short-term Loans and Long-term Debt
Short-term loans and long-term debt as at March 31, 2006 consisted of the following:

Annual Report 2006

Short-term loans
Current portion of long-term debt
Long-term debt
Total

The aggregate annual maturities of long-term debt at March 31, 2006 were as follows:Year ending March 31

2008
2009
2010
2011

8. Accrued Severance Indemnities
The Company and its consolidated subsidiaries have lump-sum retirement benefit plans and cash balance plan (pension plan linked tothe market interest rates) based on the Defined Benefit Corporate Pension Law.
The reserve for employees’ retirement benefits which is recorded under accrued severance indemnities as at March 31, 2006 consistedof the following:
Millions of yen

Thousands of
U.S. dollars¥44,517
41,263
3,254(495)(3,963)
7,712—¥ 7,712$378,962
351,261
27,701(4,215)(33,731)65,647—$ 65,647

Millions of yen

Thousands of
U.S. dollars¥1,581
882
(545)
(55)
(127)
¥1,736$13,459
7,512(4,639)(468)(1,088)$14,776

Projected benefit obligations
Plan assets
Funded status
Unrecognized transition amount
Unrecognized actuarial differences
Prepaid pension costAccrued severance indemnities
Net pension expense related to the retirement benefits for the year ended March 31, 2006 was as follows:

Service cost
Interest cost
Expected return on plan assets
Amortization of transition amountAmortization of actuarial differences
Net pension expense

Assumptions used in calculation of the above information for the year ended March 31, 2006 were as follows:
Discount rate
Expected rate of return on plan assets
Method of attributing the projected benefits to periods of services
Amortization period of transition amountAmortization period of actuarial differences*

2.0%
1.4%
Straight-line basis
15 years
10 years* The actuarial differences are amortized on a straight-line method over 10 years to be within the employees’ average remaining service years whenincurred and charged to income from the subsequent year.

9. Pledged Assets
The following assets of the Group are pledged as collateral for long-term debt including current portion from financial institutions in
the amount of ¥156 million (US$1,324 thousand) as at March 31, 2006 :Land
Building

Millions of yen

Thousands of
U.S. dollars

¥ 87
79
¥166

$ 743
668
$1,411

In addition, investments in securities in the amount of ¥54 million (US$460 thousand) are also pledged as collateral for the loans of anaffiliate and time deposits in the amount of ¥33 million (US$284 thousand) are pledged as guarantee money for construction projects
as at March 31, 2006.

17

10. Income Taxes
The Group is subject to certain different income taxes in Japan, which in the aggregate resulted in normal statutory income tax rate of
approximately 40.6%.

Okumura Corporation

18

The significant components of deferred tax assets and liabilities at March 31, 2006 were as follows:
Deferred tax assets:
Write-down of inventory
Reserve for retirement benefits
Devaluation of securities
Allowance for doubtful accounts
Written-off of bad debt
Allowance for bonuses
Allowance for construction loss
Accrued expenses
OthersSub-total
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Net unrealized gains on other securities
Deferred gain on fixed assets
Special depreciation for tax purpose
Total deferred tax liabilities
Net deferred tax liabilities

Millions of yen

Thousands of
U.S. dollars¥ 11,012
3,198
2,177
1,212
1,135
1,011
789
758
743
22,035(710)
21,325$ 93,741
27,225
18,533
10,313
9,664
8,609
6,720
6,451
6,326
187,582(6,045)
181,537(24,902)(2,444)(56)(27,402)¥ (6,077)(211,990)(20,801)(480)(233,271)$ (51,734)

Reconciliation of the difference between the statutory income tax rate and the effective income tax rate for the year ended March 31,
2006 was as follows:
Statutory income tax rate:
Expense not deductible for tax purpose
Revenue excluded for tax purpose
Inhabitant tax per capita
Others
Effective income tax rate

40.6%
3.6
(1.7)
2.4
(0.4)
44.5%

11. Commitments and Contingent Liabilities
The Group guarantees for the client’s bank debt and the buyer’s deposits payable amounting to ¥790 million (US$6,727 thousand) in
the aggregate in connection with sales contracts of condominiums which were being constructed by the Group.
12. Leases
Information on finance leases other than those deemed to transfer ownership of the leased assets to the lessee for the years ended
March 31, 2006, is summarized as follows:(1) The acquisition cost (interest expense which did not have a material effect on the accompanying financial statements was included), accumulated depreciation, and net book value as at March 31, 2006 were as follows:

Annual Report 2006

Millions of yen

Machinery and equipment

Acquisition
Cost

Accumulated
depreciation

Net book
value

¥605

¥408

¥197

Acquisition
Cost

Accumulated
depreciation

Net book
value$5,151$3,478$1,673Thousands of U.S. dollars

Machinery and equipment

(2) Minimum payments under lease contracts with non-cancelable terms (interest expense which did not have a material effect on theaccompanying financial statements was included) as at March 31, 2006, were as follows:
Millions of yen

Thousands of
U.S. dollars

¥ 65
132
¥197

$ 551
1,122
$1,673

Millions of yen

Thousands of
U.S. dollars

¥90
90

$763
763

Within one year
Over one year
Total(3) Lease payments and notional depreciation expenses for the year ended March 31, 2006 were as follows:
Lease expense
Notional depreciation

Notional depreciation expense is computed by the straight-line basis over the lease period based on notional acquisition cost with noresidual value.
13. Selling, General and Administrative Expenses
Major components of selling, general and administrative expenses for the year ended March 31, 2006 were as follows:
Employees’ salaries and allowances
Retirement benefit expense
Provision for allowance for doubtful accounts
Research and development expenses

Millions of yen

Thousands of
U.S. dollars¥12,215
1,023
368
1,083

$103,984
8,705
3,134
9,223

14. Gain or Loss on Property and Equipment
Gains on sales of property and equipment and losses on sales and disposal of property and equipment for the year ended March 31,
2006 were as follows:
Gain on sales of property and equipment:
Machinery and equipment
Land
Loss on sales of property and equipment:
Buildings
Machinery and equipment

Millions of yen

Thousands of
U.S. dollars

¥
9
1,381
¥1,390$73
11,756$11,829¥$¥
Loss on disposal of property and equipment:
Buildings
Machinery and equipment

¥
¥

1
2
3
18
57
75

$
$
$

15. Derivatives
The Company and its consolidated subsidiaries did not use derivative financial instruments for the year ended March 31, 2006.

5
19
24
156
480
636

19

16. Per Share Information
Net assets per share at March 31, 2006 and net income per share for the year then ended were as follows:

Okumura Corporation

20

Net assets per share
Basic net income per share

Yen

U.S. dollars¥907.83
20.27

$7.73
0.17

Basic net income per share was computed based on the net income available for distribution to shareholders of common stock (¥4,119
million or US$35,061 thousand) and the weighted average number of shares of common stock during the year (203,225,151 shares).
Diluted net income per share has been omitted because no potentially dilutive instruments were outstanding during the year ended
March 31, 2006.
17. Segment Information
The operating segment information of the Group for the year ended March 31, 2006 was as follows:
Millions of yen

For the year ended March 31, 2006

I. Net sales and operating income
Customers
Intersegment or transfer
Total
Operating expenses
Operating income
II. Assets, depreciation and capital expenditures
AssetsDepreciation
Capital expenditures

Construction

Other

Total

Eliminations

Consolidated¥261,0412
261,043
258,863
2,180¥ 8,847
2,355
11,202
9,496
1,706¥269,888
2,357
272,245
268,359
3,886¥—(2,357)(2,357)(2,360)3¥269,888—
269,888265,999
3,889

405,819419
1,085

32,68314056438,502559
1,141(1,347)——437,155559
1,141

Construction

Other

Total

Eliminations

Consolidated$2,222,194
19
2,222,213
2,203,655
18,558$ 75,309
20,051
95,36080,83914,521$2,297,503
20,0702,317,573
2,284,494
33,079$—(20,070)(20,070)(20,098)28$2,297,503—
2,297,503
2,264,396
33,1073,454,664
3,563
9,241

278,223
1,193
475

3,732,887
4,756
9,716

(11,465)——

3,721,422
4,756
9,716

Thousands of U.S. dollars

For the year ended March 31, 2006

I. Net sales and operating income
Customers
Intersegment or transfer
Total
Operating expenses
Operating income
II. Assets, depreciation and capital expenditures
AssetsDepreciation
Capital expenditures

Annual Report 2006

Above business segmentation was made taking account of Japan Standard Industry Classification and sales category on the consolidated income statement.
Major components of each business segment are as follows:
Construction: Civil engineering, buildings and other construction projects
Other: Manufacturing and distribution of construction materials and equipment, sales and rentals of real estates, etc.
Segment information by location is omitted because the domestic share against total sales and total assets exceeds 90%.
Overseas sales information is omitted because overseas sales are less than 10% of consolidated sales.
18. Subsequent Events
The following appropriation of retained earnings has been approved by the general meeting of shareholders held on June 29, 2006.
Cash dividends at ¥10 per share
Bonus for directors and statutory auditors

Millions of yen

Thousands of
U.S. dollars¥2,023
42$17,221358

Report of Independent Auditors

21
Report of Independent Auditors
To the Board of Directors and Shareholders of
Okumura Corporation
We have audited the accompanying consolidated balance sheet of Okumura Corporation and its subsidiaries as of March 31,
2006, and the related consolidated statement of income, shareholders' equity, and cash flows for the year then ended, allexpressed in Japanese Yen. These consolidated financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall consolidated financial statements presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Okumura Corporation and its subsidiaries as of March 31, 2006, and the consolidated results of theiroperations and their cash flows for the years then ended in conformity with accounting principles generally accepted in Japan.
The amounts expressed in U.S. dollars, which are provided solely for the convenience of the reader, have been translated on
the basis set forth in Note 2 to the accompanying consolidated financial statements.

Osaka, Japan
June 29, 2006

Non-Consolidated Balance Sheets
Okumura Corporation
As of March 31, 2006 and 2005ASSETS

Okumura Corporation

22

Current assets:
Cash and time deposits
Trade receivables:
Notes
Accounts
Short-term investments
Inventories:
Accumulated costs of uncompleted contracts
Other inventories
Deferred income taxes
Other accounts receivables
OthersLess: Allowance for doubtful accounts
Total current assets

Property and equipment:
Buildings
Machinery and equipment
Land
Construction in progress
Less: Accumulated depreciation
Total property and equipment

Annual Report 2006

Investments and other assets:
Investments in securities
Investments in subsidiaries and affiliates, at cost
Long-term receivables
OthersLess: Allowance for doubtful accounts
Total investments and other assets
Total assets

Millions of yen

Thousands of
U.S. dollars(Note 2)

2006

2005

2006

¥ 53,690¥ 70,182$ 457,056

20,46761,787
7,819

5,731
60,491
3,221

174,229525,977
66,566

114,052
7,794
13,381
24,3707,135(4,842)
305,653

122,564
6,923
16,78628,194
8,227(5,222)
317,097

970,903
66,346113,913
207,455
60,741(41,223)
2,601,963

12,797
9,520
11,726
113(17,429)
16,727

12,895
11,315
13,35869(18,134)
19,503

108,942
81,04099,821
965(148,372)
142,396

103,325
245
2,498
5,122
(40)
111,150¥433,530

82,058
245
2,729
3,572
(1,774)
86,830¥423,430

879,590
2,087
21,26443,601(339)
946,203$3,690,562

Millions of yen

Thousands of
U.S. dollars

2006

2005

2006

Current liabilities:
Trade payables:
Notes
Accounts
Short-term loans including current portion of long-term debt
Accrued income taxes
Accrued expenses
Advances received on uncompleted contracts
Allowance for repairs
Allowance for warranty work on construction projects
Allowance for construction loss
OthersTotal current liabilities¥ 16,144
81,28913,693240
3,455
88,441
236
626
1,945
17,812
223,881¥ 37,643
74,775
16,856380
3,314
95,412
222
378—
15,536
244,516$ 137,429
691,995
116,564
2,047
29,410752,886
2,010
5,333
16,553
151,628
1,905,855

Long-term liabilities:
Long-term debt
Deferred income taxes
Accrued severance indemnities
OthersTotal long-term liabilities
Total liabilities

567
19,3177,874
1427,772
251,653

573
8,378
7,115
14
16,080260,596

4,825
164,442
67,032
120
236,419
2,142,274

19,83919,839168,885

25,322
4

25,322
3

215,56337

4,960
102,068
4,193
36,315

4,960
100,193
3,840
18,03542,221
868,883
35,698309,142(10,824)
181,877¥433,530(9,358)
162,834¥423,430(92,141)
1,548,288$3,690,562

LIABILITIES AND SHAREHOLDERS’ EQUITY

Commitments and contingent liabilities
Shareholders’ equity:
Common stock, no par value
Authorized: 2006 and 2005 – 480,376,000 shares
Issued: 2006 and 2005 – 228,326,133 shares
Additional paid-in capital:
Capital reserve
Gain on sale of treasury stock
Retained earnings:
Earned reserve
Reserve for various purposes
Unappropriated retained earnings
Net unrealized gains on securities
Less: Treasury stock, at cost2006 - 26,034,460 shares2005 - 23,891,378 shares
Total shareholders’ equity
Total liabilities and shareholders’ equity23Non-Consolidated Statements of Income
Okumura Corporation
For the years ended March 31, 2006 and 2005

Okumura Corporation

24

Millions of yen

Thousands of
U.S. dollars

2006

2005

2006

¥266,836
240,527
26,309¥225,543
198,917
26,626$2,271,529
2,047,569
223,960

Selling, general and administrative expenses
Operating income

22,356
3,953

22,8203,806

190,31333,647

Other income (expenses):Dividends
Interest income
Interest expenses
Gain on sales of property and equipment
Gain on sales of investments in securities
Gain on redemption of investments in securities
Loss on deduction of carrying amounts of property and equipment
Other, net
Other income – net
Income before income taxes

1,359
314
(299)
1,350
141
825
(411)
207
3,486
7,439

991
142
(310)
2,134
1,440
—
(1,330)
316
3,383
7,189

11,5682,675(2,541)
11,493
1,198
7,023(3,501)
1,762
29,67763,324

Income taxes:
Current
Deferred
Total income taxes
Net income

216
3,113
3,329
4,110

180
3,248
3,428
3,761

1,838
26,50028,33834,986

Net sales
Cost of sales
Gross profit

¥

¥

$

Per share:
Yen

Annual Report 2006

Net income
Cash dividends applicable to the period

¥

20.02
10.00

¥

18.11
9.00

U.S. dollars

$

0.17
0.09

Breakdown of Orders (Non-Consolidated)
Okumura Corporation
For the years ended March 31, 2006 and 2005

Construction Orders Awarded
2006

Millions ofyen

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

2005

Composition
ratio

Millions of
yen

34.5%

¥ 59,418
25,762
85,18065.5

17,457
142,547
160,004

100 %

76,875
168,309¥245,184

Composition
ratio

Millions of
yen

36.5%

¥ 71,749
27,64399,392

61.3

24,196
98,547
122,743

97.8
2.2
100 %

95,945
126,190
222,135
3,408¥225,543

Composition
ratio

Millions of
yen

48.9%

¥148,994
53,884
202,878

51.1

25,135
176,502
201,637

100 %

174,129
230,386¥404,515¥ 56,964
27,257
84,221
18,078
141,798
159,876
75,042
169,055¥244,097

2006

Composition
ratio

Thousands of
U.S. dollars

34.7%$ 484,919
232,036
716,955

65.3

153,901
1,207,097
1,360,998

100 %

638,820
1,439,133$2,077,953

Composition
ratio

Thousands of
U.S. dollars

44.1%$ 622,396
206,696
829,092

54.4

147,279
1,245,842
1,393,121

98.5
1.5
100 %

769,675
1,452,538
2,222,213
49,316$2,271,529

Composition
ratio

Thousands of
U.S. dollars

50.2%$1,130,875
484,049
1,614,924

49.8

220,596
1,463,781
1,684,377

100 %

1,351,471
1,947,830$3,299,301

Net Sales
2006

Millions ofyen

Projects completed:
Civil engineering:
Public sector
Private sector
SubtotalArchitectural construction:
Public sector
Private sector
Subtotal
Subtotal:
Public sector
Private sector
Subtotal
Real estate and otherTotal¥ 73,113
24,28097,393
17,301
146,349
163,650
90,414
170,629
261,043
5,793¥266,836

2005

2006

Year-end Backlog
2006

Millions ofyen

Civil engineering:
Public sector
Private sector
SubtotalArchitectural construction:
Public sector
Private sector
Subtotal
Total:
Public sector
Private sector
Total¥132,844
56,861
189,705
25,913
171,951
197,864
158,757
228,812¥387,569

2005

2006

25

Network

Head and Branch Offices

Okumura Corporation

26

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

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

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

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

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

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

Sapporo Branch
1-5, Minami Ichijo Higashi,
Chuo-ku, Sapporo 060-0051, Japan
TEL: +81-11-261-9261 FAX: +81-11-251-5345
Tohoku Branch
2-25, Tsutsumi dori, Amamiya-machi,
Aoba-ku, Sendai 981-8525, Japan
TEL: +81-22-274-1231 FAX: +81-22-275-1844
Tokyo Branch
5-6-1, Shiba, Minato-ku,
Tokyo 108-8381, Japan
TEL: +81-3-3454-8111 FAX: +81-3-5427-8111
Kitakanto Office
4-26-15, Kishi-cho, Urawa-ku,
Saitama 330-0064, Japan
TEL: +81-48-827-0188 FAX: +81-48-827-0268
Higashikanto Office18-14, Shinmachi, Chuo-ku,
Chiba 260-0028, Japan
TEL: +81-43-241-2255 FAX: +81-43-244-5911
Yokohama Office
60, Nihon Ohdori, Naka-ku,
Yokohama 231-0021, Japan
TEL: +81-45-662-1361 FAX: +81-45-641-3502
Hokuriku Office2-3-26, Higashi Ohdori,Niigata 950-0087, Japan
TE: +81-25-241-6160 FAX: +81-25-241-6364
Nagoya Branch
29-8, Takebashi-cho, Nakamura-ku,
Nagoya 453-8555, Japan
TEL: +81-52-451-1101 FAX: +81-52-451-3264

Annual Report 2006

Affiliated Companies

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

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

Okumura Machinery Corporation*
3-5-26, Himejima, Nishiyodogawa-ku,
Osaka 555-0033, Japan
TEL:+81-6-6472-3461 FAX: +81-6-6477-6801
Business line: Design, manufacture, sales, andrepair of construction /loading machines anddevices
Okumura Machinery Corporation Taiwan
13F-5 Da-an Metro, No.6, Sec.4, ShinyiRd.,
Taipei, Taiwan 106, R.O.C
TEL: +886-2-2709-6895
FAX: +886-2-2709-6897
Business line: Design, manufacture anddistribution of mechanical equipment
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
OST Corporation
2-6-27, Matsuzaki-cho, Abeno-ku,
Osaka 545-0053, Japan
TEL: +81-6-6622-1690 FAX: +81-6-6622-5784
Business line: Execution, consultation andmeasurement regarding propulsion, tunneling,
and other types of special construction
OC Corporation
2-2-2 , Matsuzaki-cho, Abeno-ku,
Osaka 545-8555, Japan
TEL: +81-6-6625-3598 FAX: +81-6-6623-7459
Business line: Lease
Kamakura PFI Pool Corporation
5-6-1, Shiba, Minato-ku,
Tokyo 108-8381, Japan
TEL: +81-3-3454-9435
Business line: Planning, administration, andmanagement of sports facilities
Shonan PFI Eco-Factory Corporation
5221-13, Oba, Fujisawa,
Kanagawa 251-0861, Japan
TEL: +81-466-48-1408
Business line: Manufacture and sales ofcompost fertilizer
Note: Those companies marked with anasterisk(*) are consolidated subsidiaries

Board of Directors(As of June 29, 2006)

Directors and Auditors
President & Representative Director

Takanori Okumura

Representative Director

Yuichi Kanbara

Director

Kunimoto Tanaka

Representative Director

Shigeru Nishinaka

Directors

Yoshihiko Kunii
Masakuni Sakurai
Kohei Tanaka
Hiroki Mizobe
Takaiku Hirako

Standing Statutory Auditors

Hideyo Hase
Yoshitaka Mikata

Auditors

Hanroku Toriyama
Kiyoshi Inazaki
Teruyasu Kawamata

Note: Hanroku Toriyama, Kiyoshi Inazaki and Teruyasu Kawamata are outside auditors.

Executive Officers
Executive Vice President

Yuichi Kanbara*

Senior Managing Officers

Kunimoto Tanaka*
Shigeru Nishinaka*
Yoshihiko Kunii*
Masakuni Sakurai*
Kohei Tanaka*
Hiroki Mizobe*

Managing Officers

Tadashi Hashimoto
Yoshikuni Ogi
Masamichi Shirahase
Yoshiteru Kinoshita

Executive Officers

Kozo Tsukamoto
Akiyoshi Hida
Mitsuru Takeda
Kuniomi Nozawa
Takumi Makino
Makoto Tsuchiya
Kenichiro Minami
Takaiku Hirako*
Masanori Eguchi
Kazuo Takami
Koji Imai
Norimasa Takahashi
Toshio Yamaguchi
Tetsuo Ojima
Kazuo Okuda
Kozo Aoki
Kazuhiro Kitazaki
Shinichi Okamoto

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

27

Investor Information(As of March 31, 2006)

Corporate Data
Head Office

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

EstablishedFebruary 22, 1907

Capital¥19.8 billion

Group Employees

2,562

Annual Report 2006

Okumura Corporation

28

Stock Information
Stock Exchange Listings

Tokyo and Osaka

Transfer Agent

The Sumitomo Trust and Banking Co., Ltd.

Major Shareholders

Shareholder

Shares held (thousands)

Percentage of total

Okumura Corporation (Treasury stock)

26,03411.40%

Okumura Employees’ Shareholding Association

7,581

3.32%

Resona Bank, Limited.

6,074

2.66%

Japan Trustee Services Bank, Ltd. (Trust Account)

5,899

2.58%

The Chase Manhattan Bank, N.A. London

5,600

2.45%

Sumitomo Mitsui Banking Corporation

5,568

2.44%

Sumitomo Realty & Development Co., Ltd.

5,132

2.25%

The Master Trust Bank of Japan, Ltd. (Trust Account)

4,626

2.03%

Nippon Life Insurance Company

4,593

2.01%

BNP Paribas SEC SER London/JAS/
Aberdeen Asset Management PLC/Agency Lending

3,589

1.57%

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

Okumura Corporation
Annual Report 2006

Printed in Japan