TOP INTERVIEWTOP INTERVIEW

We will work on thoroughly
strengthening our managementfoundation while conserving ourstrength in order to makeastounding progress.
The Company’s medium-term management plan “NEXT 100: Beyond 100years” has passed its midpoint and is now approaching the final stage. We
will hereby explain the business conditions during the first half of the fiscal
year, as well as explain measures for growth and future developments.

QPlease tell us about the businessconditions for the first half of the fiscal
year.

Overall, orders received as well as net sales have proceededalmost exactly as planned, and profits were greater thanplanned. The Transportation Systems segment showed strong
growth both domestically and overseas, while the Industrial
Systems segment and Information Equipment Systems
segment continued to be stagnant. Meanwhile, our overseas
business, an area of focus, has continued to show steady
growth, and overseas net sales achieved a high net sales ratioof 33.1%.
In the Transportation Systems segment, the order of highoutput regenerative power storage systems for the Tokyo
Tama Intercity Monorail and other factors contributed to strongdomestic orders. Overseas, there were new orders such as
the one for the Jakarta Mass Rapid Transit in Indonesia, andQatar’s order of electrical equipment for the Doha Metro transit
system, which the Company provides as part of a joint
business venture with Hitachi. Net sales increased, primarily
due to North American and Chinese projects, and an increasein parts sales played a particularly large role in improving
profitability. Also, sales of door opening equipment for domestic
tour buses created by a subsidiary were stronger than expected.
In this field, we believe that developing new electric door
opening equipment for rail vehicles has promising prospects.

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President Kenzo Terashima

In the Industrial Systems segment, a delay in the recovery ofdomestic capital expenditures led to a decrease in sales of
products for manufacturing equipment, and in the realm of
testing equipment for automobile development, the reducedinterest toward EV vehicles resulted in lower orders and sales
than forecast.
In the Information Equipment Systems segment, joint
development with Denyo Co., Ltd. led to a focus on offering
new solutions such as a remote monitoring system to beinstalled in portable engine power generators produced by thesame company, but orders and sales results did not change
significantly compared to last year, resulting in a sluggish
period.

REVIEW OF SEGMENT OPERATIONS

Also, in the Transportation Systems segment, theexpansion of overseas business locations and thedeepening and widening of alliance ties are considered
important challenges. The aforementioned orders for theJakarta Mass Rapid Transit and the Doha Metro transit
system were the results of these efforts. Exhibiting at IREE
2015, an Indian railway technology trade show held inOctober 2015, allowed us to aggressively approach
potential customers in pursuit of orders for subway andhigh-speed rail projects.
Meanwhile, in the Industrial Systems segment, a“Promotion Division for the Shiga Area Factory
Reorganization” was formed to prepare for theestablishment of the new Shiga Factory, the centerpiece of
the “Restructuring production systems” policy. The division
has begun operating as a specialized system for the said
establishment.
As for the policy of “Launching new businesses” in theIndustrial Systems segment, focus is being placed on thepower generator business. Currently, we are acquiring an
understanding of waste treatment incinerators, primarily
domestically, while expanding the presence of biomass
generators in Southeast Asian markets. For products
related to power generation equipment, the sample of a
Power Supply Vehicle (see image) that is able to supply
electricity during times of emergency such as during natural
disasters, which has electrical equipment created by theCompany installed, was exhibited at the Tokyo Motor Show
2015.
Other developments include capturing energy
conservation needs at sites of production that seek highlyefficient motors and developing an inverter that can betell us about the new measures
you are taking to boost growth.
Q Please
In the Transportation Systems segment, the maintenancebusiness for electrical railroad equipment in Beijing, China
became a full-fledged one in the first half of the fiscal year,
and we can expect it to contribute to earnings in thesecond half of the fiscal year. This maintenance business isbeing carried out as part of the basic policy of “Launching
new businesses” listed in the three-year medium-term
management plan “NEXT 100.”(Image:) Tokyo Motor Show 2015: Mitsubishi Fuso Booth Canter Power
Supply Vehicle (With electrical equipment created by the Company installed)

updated in advance while a direct current motor isoperating as normal. We are seeing an increase ininstallations because this product reduces the capital
investment burden on users. The world’s first wirelessin-wheel motor using electric transmission released at theend of the previous fiscal year has garnered much attention
as a technology contributing to the development of nextgeneration electric automobiles. The Company will continue
to focus on the development of such leading-edge
technologies and plans to further grow its business andcontribute to society as a result.

QPlease tell us about the outlook for thesecond half of the fiscal year, as well
any comments you would like to maketo the shareholders.

Regarding our forecast for business conditions in the second
half, we have seen movements toward an increase indomestic and overseas orders in the Transportation Systems
segment, and we expect net sales to increase favorably aswell. In the Industrial Systems segment, the delayed sales for
products for testing equipment for automobile development
will be accounted for during the period, while in theInformation Equipment Systems segment, we expect arecovery attributable to the majority of sales occurring in thesecond half. As a result, the initial outlook for sales during thecurrent fiscal year will not be adjusted as we predict that theforecasts can be achieved.
A year and a half since our three-year medium-term
management plan began, “NEXT 100” has now passed its
midpoint. For the latter part of the plan, which begins in thesecond half of this fiscal year, we plan to further accelerate ourmeasures and thoroughly strengthen our managementfoundation while conserving our strength in order to make theastounding progress we are aiming for by the Company’s
100th anniversary of founding. At the same time, we will
endeavor to strengthen corporate governance and takeappropriate measures with regards to each principle of theCorporate Governance Code established by the Financial
Services Agency and the Tokyo Stock Exchange, in order tosustainably increase corporate value.
I would like to appeal to our shareholders to view thistransitional period in the Company’s business operations froma long-term perspective, and to continue providing us with
their support.

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REVIEW OF SEGMENT OPERATIONSTOP INTERVIEW

Transportation
Systems Segment

Orders Received

12,862 million yen(Up 2.4% year on year)

Net Sales
Percentageof total net sales

67.9%

Industrial
Systems Segment

12,735 million yen

(Down 2.3% year on year)

1,335 million yen

(Down 1.2% year on year)

Orders Received



5,866



30.3%(Forecast)

24,75910,622

26,8699,860

2014/5

2015/5

2016/5

2014/5Full fiscal year

3,200(Forecast)

3,117

22,19812,557 12,862

First half

28,50028,50029,790(Forecast)

2,374
13,031 12,735

1,351

1,064

2015/5

2016/5

2014/5

1,335

2015/5

5,683 million yen(Up 0.3% year on year)(Forecast)

6,458

506 million yen(Up 22.0% year on year)

1,200

14,000(Forecast)

10,924 11,613

11,097
6,592

Full fiscal year

(Forecast)

13,3195,866

Segment IncomeFirst half

16,200

5,332

5,666

848
5,683

536

506

414

172
2014/5

2015/5

2016/5

2014/5

2015/5

2016/5

2014/5

2015/5As orders received from overseas increased, there
was a 2.4% increase in orders compared with thecorresponding period of the previous fiscal year for a
total of 12,862 million yen.
While there was a moderate increase in domestic
net sales, a decrease in overseas net sales resulted
in a 2.3% year-on-year decrease for a total of
12,735 million yen.
Segment income was 1,335 million yen, a 1.2%
year-on-year decrease.

2016/5

Orders Received (Unit: Million yen) Net Sales (Unit: Million yen) Segment Income (Unit: Million yen)million yen(Down 9.2% year on year)

Net Sales
Percentageof total net sales

Orders Received (Unit: Million yen) Net Sales (Unit: Million yen) Segment Income (Unit: Million yen)Segment Income

REVIEW OF SEGMENT OPERATIONS

2016/5

While orders received for products for testing
equipment for automobile development and others
increased, products for social infrastructure
decreased, resulting in a 9.2% year-on-year
decrease in orders to 5,866 million yen.
While net sales in products for social infrastructure
decreased, an increase in net sales for products fortesting equipment for automobile development
resulted in a 0.3% year-on-year increase in net sales
to 5,683 million yen.
Segment income was 506 million yen, a 22.0%
year-on-year increase.

TOPICSCorporate PR and Product PR Activitiesof the CompanyExhibitions

We actively conduct corporate PR and product PR
activities of the Company by exhibiting in events
both in Japan and overseas.

IREE 2015
Date: October 14-16, 2015
 ragati Maidan (New Delhi, India)
Venue: P
At India’s largest trade show for railway
technology, the Company participated
as a co-exhibitor at the Japan Overseas
Railway System Association (JORSA)
booth. Driving gear units for high-speed
rail, high-speed circuit breakers, andother products were exhibited.
Company Booth, IREE 2015

Biwako Environmental Business Exhibition 2015
Date: October 21-23, 2015
Venue: Shiga Prefectural Nagahama Dome (Shiga Prefecture)
The Company exhibited at one of Japan’s largest comprehensive
environmental and industrial trade show to increase recognition in theShiga area, where the Company plans to build a new factory, and topromote products in the Industrial Systems segment.

4th Mass-Trans Innovation Japan
Date: November 11-13, 2015
Venue: Makuhari Messe (Chiba Prefecture)

Information Equipment Orders Received401 million yen
Systems Segment
(Down 31.9% year on year)
Net Sales
Percentageof total net sales

1.8%3

Orders Received (Unit: Million yen) Net Sales (Unit: Million yen) Segment Income (Unit: Million yen)First half

1,828

1,673

1,300

328 million yen

(Down 10.0% year on year)

401(Forecast)

630
364

328
17Segment Income-21 million yen

(Down 40 million yen year on year)

230

1,127

985
589

Full fiscal year

348(Forecast)(Forecast)

1,034

1,500

71
18-21

2014/5

2015/5

2016/5

2014/5

2015/5

2016/52014/5

2015/5

2016/5

Orders received for railway station operating equipment
and remote monitoring systems decreased significantly,
for a 31.9% year-on-year decrease to 401 million yen.
While net sales for railway station operating
equipment increased, a decrease in net sales forremote monitoring systems resulted in a 10.0% yearon-year decrease to 328 million yen.
Due to an increase in development expenses, etc.,
segment income decreased by 40 million yen
compared with the corresponding period of theprevious fiscal year for a segment loss of 21 millionyen.

The Company participated for the first time at a comprehensive trade
show for the railway field together with its subsidiary Taihei Electric. At
the booth, the newly-developed electronic door opening equipment,
as well as products for transportation and information equipment
systems were exhibited.

METRO CHINA 2015
Date: November 17-20, 2015
Venue: China International Exhibition Center (Beijing, China)
We exhibited actual power collection equipment (pantographs) for theBeijing Subway, and described our track record of supplying
equipment to the Beijing Subway and the Chengdu Metro. We also
introduced our associated companies in China to visitors.

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