Transportation Systems Segment

Electrical equipment for rail vehicles that responds to robust demand for railway infrastructure development in global market
Business Overview
We delivered electrical equipment including motors for the Hokuriku Shinkansen, which started its
service in March 2015. Overseas, we received orders for subway contracts in Southeast Asia and theMiddle East and got started in preparation for service launch from 2017. In the future, we will pursue
overseas expansion even more aggressively as a driver of growth through means such as expansion ofmaintenance business for the Beijing Subway.

(Up 21.0% year on year)

Segment Income

10Transportation Systems segment

11

Industrial Systems segment

12

Information Equipment Systemssegment

13

Expansion of New Businesses

14

Research and Development/
Intellectual Property

3,117 million yen(Up 31.3% year on year)

Profits increased as the effects of significant increase in revenue and improved
profitability at factories absorbed negative factors such as an increase inexpenses.

FY 2012

2013

2014

FY 2012

2013

2014

FY 20122,374

26,8693,117

Segment Income (Unit: Million yen)

1,913

26,869 million yen

While sales decreased slightly in Japan,
revenue increased significantly as aresult of growth in subways and highspeed railroad in China.

22,198Business Report

Net Sales

17,324(Down 16.9% year on year)

67.8%

Net Sales (Unit: Million yen)

24,75924,759 million yen

While orders increased in Japan, overseas orders decreased due to a reboundfrom major orders received in the previous year and a delay in contracts thatwere scheduled.

20,940Orders Received

29,790Orders Received (Unit: Million yen)

Results for fiscal 2014

Percentage oftotal net sales2013

2014

TOPICS

Jointly developed high-speed circuit
breakers for control devices with Hitachi

We agreed to a business and capital alliance involving
the overseas electrical equipment for rail vehicle

business with Hitachi on October 2010, and both companies
have since promoted activities including order-taking, the joint
development of products, and joint purchases. Recently, we
have jointly developed a high-speed circuit breaker for control

High-speed circuit breakers

devices such as VVVF inverters, and we exhibited this product at the world’s largest railway
technology trade fair, InnoTrans2014, which was held in Berlin, Germany in September 2014. This
product has attracted the attention of many customers, and we have received many inquiries fromExhibit at InnoTrans2014

not only overseas, but also from Japanese railway operators and electrical manufacturers.
We will fully utilize the resources of both companies as we work to expand this business.

9Toyo Denki Seizo Report 201510

Industrial Systems Segment

Information Equipment Systems Segment

Enhance functions of high-efficiency inverters andcontribute to further energy savings for production facilities

Provision of railway station operating equipmentthat achieve multi-functions and a compact sizeand IoT/M2M solutions in various fields

Business Overview
Percentage oftotal net sales

Business Overview

1,127 million yen(Down 38.3% year on year)

Segment IncomeFY 2012

2013

2014

FY 2012

2013

2014

FY 2012

2013

2014

71 million yen

Sales decreased for the same reason
underlying the decrease in orders received.
Profits declined sharply due to decreased
revenue.

348

Net Sales

1,828

536

11,613985 million yen(Down 41.1% year on year)

Segment Income (Unit: Million yen)Orders for both railway station operating equipment and remote monitoring
equipment decreased.

1,701

848

Orders Received

Net Sales (Unit: Million yen)

265

848 million yen(Up 58.1% year on year)

Profits increased due to the contributionof increased revenue, improved profitability at factories, and increased earnings at subsidiaries.

Orders Received (Unit: Million yen)

2.8%

1,127

Segment IncomeSegment Income (Unit: Million yen)433

(Up 6.3% year on year)

10,924

11,613 million yen

While sales for processing equipment
were sluggish, revenue increased as aresult of strong sales for testing systems
for automobile development.

11,542Net Sales

Net Sales (Unit: Million yen)

Results for fiscal 2014

13,319(Up 20.0% year on year)

Orders Received (Unit: Million yen)

11,097

13,319 million yen

There was a significant increase in orders
received for testing systems for automobile development and infrastructure-related, and the levels were back to those before the bankruptcy of Lehman Brothers.

11,457

Orders Received

985

Results for fiscal 2014

Percentage of
total net sales

We develop and manufacture railway station operating equipment that can achieve mechanization andreduction of labor in railway station operations of railway operators. We also contribute to improvementsof efficiency in operations through IoT/M2M solutions and power visualization solutions using mobilephone networks and cloud servers which enable monitoring and control to be conducted at the sametime.

1,673

29.3%

1,544

In our “VF66 series” of intelligent inverters, we now support distributed power source systems such as
wind power generation and hydropower generation by adding a lineup that supports interconnected systems. For factories in areas such as Southeast Asia, we will actively work to receive orders for systems
such as “biomass power generation systems” that serve as independent power generation facilities as
we also work to expand the power generation business.

71(Down 79.5% year on year)

TOPICS

DC drive mode of
the intelligent inverter VF66B

D

irect current motors (DC motors) were used as the main type of

FY 2012

The DC drive mode of our latest inverter “VF66B” helps to control

Thyristor panel

DC motor

1st Step : From thyristor panel to VF66B DC drive mode

Short installation timethat continues to operate. This can also lead to gradual updates to AC

High performance

FY 2012

2013

2014

VF66B
(DC drive mode)

DC motor

analog input, digital input and output, serialcommunication, as well as CAN and Ethernet,

2st Step : From DC motor to ED motor (AC motor)

moving bodies such as automobiles andVF66B

ED motor(AC motor)*ED motor: our permanent magnet-type high-efficiency motor

GPS antenna

FOMAantenna
Cloud serverInternal GPS(Option)

Internal FOMAand because it has cleared stringent vibration

ment more high performance through adoption of various latestHigh efficiency

Connectable Devices

IoT/M2M terminal with cloud service

test it can also be used for the monitoring ofproducts that leverage our advanced motor drive technologies.

11

e have developed the “IORemoter,” anable total digital control for all forms of control, but also make equip-Going forward, we will support the needs of customers with the2014

New product, “IORemoter,” terminal that supports remote monitoring and control system

and multiple interfaces. This product supports

motors, which is the next step.

networks and PLC.

2013TOPICSW

Low cost

an inverter with the DC motors as is for equipment using DC motors

In addition, the introduction of the DC drive mode will not only en-FY 2012

Current state

1990s, and they were adopted in various production facility lines ininvestment costs as DC drive mode can convert control equipment into

2014

Update steps through the introduction of the VF66B DC drive mode

variable-speed drive from the 1970s to the first half of thecombination with thyristor Leonard equipment.

2013

trains. We will continue to provide productsthat contribute to improvements of efficiency

Ethernet
CAN
Serial communication(RS-232C)(RS-422/485)

Analog input
Digital input/output

Thermistor
Handheld terminal
Smart card/tag reader
Door sensor
MetersElectronic lockControllers
PLCPower conditioner
ECUPump
BoilerLighting, otherin the operations of customers.

Toyo Denki Seizo Report 2015

12Expansion of New Businesses

Research and Development/Intellectual Property

Entering the maintenance business forelectrical equipment for the Beijing Subway

R&D to support the development of social
infrastructure and supporting frameworks

Business Overview
We have developed business in China with a focus on delivering electrical equipment for high-speed rail and subway vehicles up until

Research and Development

now, and in August 2014, we established the new company Beijing Jingche Shuangyang Traction System Co., Ltd., and entered theThe Group’s R&D activities are based on seeking to create prod-opment of technologies of our existing businesses and basic

maintenance business.

ucts that fully satisfy our customers and challenging the creation

technology developments that support this development as welland expansion of these products, and we actively promote devel-

as development of new products that expand our businesses.

We are a manufacturer with a top share that delivers over 30% of the electrical equipment used in the Beijing Subway. Backed bythis track record, we will capture all of the rapidly-increasing demand for the overhaul of electrical equipment for the Beijing Subway
and we will work to further expand our business.

Results and topics from fiscal 2014

Segment

Project
Fully enclosed induction traction motor

TOPICSTransportation
Guidance display system development
Systems

Map of Beijing Subway Lines (as of August 2015)
Lines which we delivered our products
Subway Line 1 (Subway Fuba Line)
Subway Line 9
Subway Line 10
Subway Yizhuang Line
Subway Line 13

HuoyingXierqi

Beitucheng

NationalLibrary
Xizhimen
Pingguoyuan

Developed electrical equipment for high-speed new transportation systems (propulsion
equipment, power supply, etc.) and implemented tests on actual vehicles equipped with thedeveloped equipment.

Expansion of water cooling
ED motors lineup

Expanded the lineup of water cooling ED motors set and sold for models of 45KW andabove as low-noise motor support to cover the 22KW class.

Development of Control Circuit less electric
power generators

Developed the Control Circuit less electric power generators that can be operated
without electric power generator control equipment (inverters) as low cost products for
distributed power source systems.

Information
Equipment
Systems

New remote monitoring terminal

Completed development of a new remote monitoring terminal (product name: IORemoter).As
an IoT/M2M device, we will work to deploy it not only as environmental monitoring equipment, but also as vehicle monitoring equipment for automobiles, rail vehicles, etc.

ResearchLaboratory

Research on practical application ofWireless In-Wheel Motor

Conducted industry-academia joint research together with the University of Tokyo and NSK
Ltd. A method in which electric power is delivered wirelessly from the body to motors and inverters stored inside the wheel was applied to a small passenger vehicle which was then runfor the first time in the world.

Shaoyaoju
Huixinxijie
NankouZhichunlu

Fuxingmen
Gongzhufen
Liuliqiao

Industrial
Systems

Dongzhimen

Baishiqiao
SouthCishousi

Sanyuanqiao

Xidan

Tian’anmen
EastTian’anmen
West

Jianguomen

Dongdan

Huijialou
Sihui East
GuomaoSihui
TuqiaoXiju
Jiaomen West

Songjiazhuang

Adopted guidance display system for rail vehicles jointly developed with FUJI ELECTRIC CO.,LTD., to actual vehicles.

Electrical equipment for high-speed
new transportation systems

Lishuiqiao
Wangjingxi

HaidianHuangzhuang

Description
Commenced deployment of fully enclosed induction traction motor for trains with both outerand inner fans to customers. In particular, an inner fan type for narrow gauges was fullylaunched on an operating line in Japan for the first time.

Guogongzhuang
Yizhuang Railway Station

Intellectual Property
Details of the new company
Company nameBeijing Jingche Shuangyang Traction System Co., Ltd.

Location

No.9 Kechang 2nd Street, East District, Economy Technology Development Zone Metro Industrial Park B2-3, Beijing

Date of establishment

August 19, 2014

End of the fiscal year

December 31

and the development divisions in each business unit actively apply

Capital20 million RMB

for patents and utility models.

Description of business

Maintenance of urban transit vehicle traction system equipment; sales, import,
and export of related equipment; and ancillary work

Investment ratio

50%
Toyo Denki (Beijing) Co., Ltd.*
Others50%*A wholly-owned subsidiary of Toyo Denki Seizo K.K.

Patent applications granted

Our intellectual property is placed as a key corporate resource.
Our intellectual property department is responsible for thePatent applications:
Granted cases:(Applications)80

management of intellectual property and our research laboratory

In the overseas markets which we expect to further expand ourbusinesses, we have started to actively engage in activities
concerning our intellectual property in order to protect our60

859
40

4051

2036

151

2554

450 25 352 2222222011

2012

2035
3330
300FY

2010

2013

0JapanJapanOverseas
Overseas625716 0162014

technologies and brand.

13

Toyo Denki Seizo Report 201514