Annual Business Report

April 1, 2017 through March 31, 2018

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NIPPON SHARYO, LTD. and Consolidated Subsidiaries

Financial Highlights
Comparison of Sales by Segment(Unit: millions of yen)

189th period(2017-2018)

Business Segment

188th period(2016-2017)

Railway rolling stock

41,455

43.5

Transportation equipment
and Steel structure

22,475Construction equipment%

Increase/(Decrease)48,55448.0

23.6

21,983

24,573

25.8

6,560

Other
Total

Engineering%%(7,099)(14.6)

21.8

492

2.2

22,420

22.2

2,153

9.6

6.9

7,496

7.4

(936)

(12.5)

248

0.2

641

0.6

(393)

(61.3)

95,311100.0

101,094

100.0(5,783)(5.7)

Change in Operating Performance and Asset Status(Unit: millions of yen except Net income per share)

189th period(2017-2018)

188th period(2016-2017)

187th period(2015-2016)

95,311

101,094

111,007

Ordinary income (loss)

7,315(5,149)(10,174)

Net income (loss) attributableto owners of the parent(8,271)(5,124)(16,130)

Net income per share (loss)(¥57.30)(¥35.50)(¥111.74)

Total assets

127,413129,194

132,265

Total equity

20,954

28,10933,384

Titles of accountNet sales

Comparison of Sales by Segment(Millions of Yen)

140,000
Other

120,000

Engineering

100,000

Construction equipment

80,00060,000Transportation equipment
and Steel structure

40,000Railway rolling stock

20,0000_AnnualReport_1106.indd 1

189th period

188th period

187th period

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Contents
Message from the President

2

Review by Segment

4

Investment in Plant and Equipment

6

Financing Activities

6

Consolidated Financial Statements and Independent Auditor's Report

7

Corporate Information

41

Directory

41

Model 70000 trains for Odakyu Electric Railway Co., Ltd.

1

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Message from the President
Review of Business Operations
During the fiscal term under review, the Japanese economy saw continuous improvements in
production, export, employment, etc. as a result of various economic policies and modest recovery ofoverseas business conditions.
Under this business environment, our performance for this year showed an increase in sales ofsteel structures and construction equipment and a decrease in sales of railway rolling stock andtransportation equipment, totaling ￥95,311 million, down 5.7% from the previous year. In terms of
profits, in addition to we made provisions for profits from reversing the amount recorded for thelarge railway rolling stock project for the U.S.A., and the profit of construction equipment increased.
As a result, the operating profit was ￥7,266 million ( the operating loss in the previous
year was ￥5,104 million) and the ordinar y profit ￥7,315 million ( the ordinar y loss in theprevious year was ￥5,149 million). However, we recorded an extraordinary loss due to payment of
the settlement money for the large railway rolling stock project for the U.S.A. Consequently, the net
loss that belongs to the stockholders of the parent company was ￥8,271 million ( the net loss in theprevious year was ￥5,124 million).

The Outlook
Considering the decline in performance of recent years and the increasingly severe market
environment, we will aim at “enhancement of operation control structure and human resource
development” and promote “technology/product development by exerting collective strength” while
ensuring a profit with “business development where we can exert our advantages.” Concretely, we
will enhance the operation control structure including the quality, cost, and process, focusing on ourcore business, namely the railway rolling stock business, and exert our advantages in our strong areasof various business fields by providing products and services that match customer needs. We will
also increase our competitiveness by promoting reduction of costs and make efforts to secure stable
receipt of orders with all our strength. In such approaches, we will contribute to improvement of theenterprise value of the entire Central Japan Railway Company (hereinafter called as "JR Central")Group and promote development of our businesses with a closer cooperative relationship with theparent company.
In the railway rolling stock business, we will make efforts for differentiation with technology
development and cost reduction with efficient production processes and continuously enhance ourcompetitiveness for railway rolling stocks, mainly for high speed railways, expecting the continuous
severe environment in terms of receiving orders. For projects with losses, we will work to improve byreviewing the project promotion system.
In the transportation equipment and steel structure business , the transportation equipment businessis facing difficulties in winning orders. We will, however, continue to make efforts in developing
products which promptly capture market trends, further reducing costs in order to secure orders, anddevelop new customers. Our efforts in the steel structure business will be focused on enhancing ourability to propose technological solutions that match customer needs and reducing costs in terms oforders of new bridges. As we continue to secure incoming orders, we will also develop our business inperipheral areas such as repair/maintenance projects. In the construction equipment business, we will2

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capture business opportunities by maintaining and consolidating the production system to respond to
steadily growing domestic demands and responding to local needs in Asia and other overseas markets
in a flexible manner.
In the engineering business, we will secure profits by proposing products that cater to market needs.
For the existence of events and situations which may raise significant doubt concerning the ongoing
viability of our company, we have discussed the direction of project implementation concerning
the large railway rolling stock project for the U.S.A. that has caused great losses until now. As aresult, it was decided that another railway car manufacturer would manufacture railway cars in
the relevant project during the fiscal term under review to minimize the influence on the parties
involved. Consequently, we negotiated with Sumitomo Corporation and Sumitomo Corporationof Americas (hereinafter, collectively referred to as “Sumitomo Corporation Group”) who were
the direct contractors of the relevant project. At the board meeting held on November 6, 2017,
we decided to conclude a compromise agreement that specifies that we and NIPPON SHARYOMANUFACTURING, LLC should pay $328,942 thousand in total to the Sumitomo Group as
settlement money and the relevant project should be eventually settled with the Sumitomo Group, andwe concluded this agreement on the same day. As a result, we recorded a net loss of ￥8,271 million
that belongs to the stockholders of the parent company during the fiscal term under review. For this,
there was no new loss expected concerning the relevant project in the future because of the paymentof the settlement money mentioned above.
In domestic business which is our main market, we recorded a profit stably. We will continuously
make efforts to capture orders of railway cars and bridges, for which there are high-level orders on
hand, and secure maximum sales in the brisk construction equipment business by utilizing production
facilities of other businesses. At the same time, we will make efforts to enhance profitability bypromoting further reduction of raw costs and expenses. The entire Group is working to improve
performance for these measures.
As for funds, we make efforts to secure stable funds necessary for business activities and maintainmobility while maintaining sound financial balance. Concretely, we borrowed the funds to provide forpayment of the settlement money described above from our parent company (Central Japan Railway
Company) on November 30, 2017, and finished payment of
the settlement money during the fiscal term under review.
In addition, we participate in the CMS (Cash Management
System) operated by our parent company. With this, as
for financial arrangements, we provide internal funds
for necessary funds such as capital investment funds andworking capital. For fund mobility, we can also flexibly raise
funds necessary at the moment from CMS by strengthening
cooperation with our parent company to secure funds thatcan sufficiently meet demands anticipated from the fundingplan.
As we are taking measures to resolve issues and improve
the situation , we consider that there is no criticaluncertainty for any going concern.
Kazuhiro Igarashi
President and Chief Executive Officer
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Review by Segment
Railway Rolling Stock BusinessIn the railway rolling stock business, our sales
to the JR Companies amounted to ￥28,553
million. It was achieved through the sales of the
N700S validation test vehicles to JR Central,
N700A Shinkansen trains to JR Central andWest Japan Railway Company, and the rail
N700S validation test vehicles to JR Central

transport cars to East Japan Railway Company(hereinafter called as "JR East "). Our sales for the public andprivate railways reached ￥7,255 million, including the salesof the Model 70000 trains for Odakyu Electric Railway Co.,
Ltd.; the Model 3000 trains for Keisei Electric Railway Co.,
Ltd; the Model N3000 trains for Nagoya City’s Transportation
Bureau; the Series 3150 and 3300 trains for Nagoya Railroad
Co., Ltd.; and the Model 2000 trains for Enshu Railway Co.,
Ltd. For rail cars for overseas, we had sales of ￥5,646 million,
Model N3000 trains for Nagoya City’s
Transportation Bureau

including the Gallery type passenger car for the U.S.A.

Consequently, our total sales for railway rollingstock recorded ￥41,455 million, down 14.6% fromthe previous year, with an increase in railway cars
for the JR Companies and a decrease in rail cars foroverseas and the public and private railways.
Model 3000 trains for Keisei Electric Railway Co., Ltd.

Transportation Equipment and Steel Structure BusinessIn the transportation equipment business, sales of chemical engineering machinery products mainly
including consumer-purpose LPG bulk tank lorries are
steadily in good shape, sale of industrial vehicle products
such as carriers and AGV increased, and a decrease insales of logistics equipment products such as container
freight cars. As a result, sales reached ￥11,229 million,
down 16.1% from the previous year.
In the steel structure business, sales included the TokaiKanjo Expressway Nagafuke Number 4 Bridge, Kita-

LPG bulk tank lorry

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Kanto Expressway Ota Parking Area Ramp
Bridge, National Route 1 Seishin Bypass
Mariko Viaduct, Fujigawa First Overpass, andlarge-scale renovation work for the Tokaido
Shinkansen. Sales were up 30.7% from theprevious year to ￥11,245 million.
In all, sales for the transportation equipment
and steel structure businesses were ￥22,475

Kita-Kanto Expressway Ota Parking Area Ramp Bridge

million, up 2.2% from the previous year.

Construction Equipment BusinessIn the construction equipment business, the domestic sales in large
pile driving rigs continuously showed healthy movement, due toconstruction works arise from the Great East Japan Earthquake andmands in public works in anticipation of the Tokyo Olympic Games.
We also had an increase in sales of casting rotators and compact piledriving rigs. The export business included large pile driving rigs. As aresult, the sales of construction equipment totaled ￥21,360 million, up
10.8% from the previous year.
The generator business showeda decrease in sales of exported
products, however, there wasPile driving rig

an increase in sales of domestic
products. The sales of generators reached ￥3,212 million, up 2.4%
from the previous year.
In all, sales in our construction equipment business were ￥24,573
Generator

million, up 9.6% from the previous year.

Engineering BusinessOur main sales included; mechanical equipment for
the Superconducting Maglev system for JR Central;
agricultural plants for Japan Agricultural Cooperatives;and paper-manufacturing equipment for household paper
manufacturers. We had a decrease in sales of vehicle
inspection/repair facilities. Sales in the engineering businesstotaled ￥6,560 million, down 12.5% from the previous year.

Toilet roll packaging line

5

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Other Businesses
Our main sales included laser processing machines and real estate leasing. We ended our railway
memorabilia business during the year under review.
The overseas sales for the year under review amount to ￥9,034 million, representing 9.5% of total
sales, which includes ￥5,646 million for the railway rolling stock business and ￥3,386 million for theconstruction equipment business.
The orders on hand at the end of the year under review reached ￥94,310 million. These comprised￥62,766 million for the railway rolling stock business (￥34,121 million for rolling stock for JR
Companies such as the N700A Shinkansen trains, ￥17,675 million for rail cars for other public
and private railway companies, ￥10,969 million for rolling stock for overseas), ￥26,635 million for
the transportation equipment and steel structure businesses (￥8,741 million for the transportationequipment business, ￥17,894 million for the steel structure business), ￥2,549 million for theconstruction equipment , and ￥2,316 million for the engineering business.

Investment in Plant and Equipment
Plant and equipment investment during the year under review totaled ￥1,780 million. Investment was
mainly targeted at extension of plants in the construction equipment business to increase production
volume. Investment was also made for renewal of equipment to maintain/improve the production
capacity at each plant.

Financing Activities
Assets pledged as collateral for long-term debt from JR Central in the amount of ￥35,000 million($330,189 thousand) for the payment of settlement money related to a large railway rolling stock
project in the U.S.A. as of March 31, 2018 were as follows.
The Company has transferred its factory assets of Toyokawa Plant, Kinuura Plant, and Narumi Plant
to JR Central on April 20, 2017. The transfer was not treated as a buying and selling transaction since
the relevant factory assets were transferred to JR Central and the Company continues to utilize thesefactory assets as before based on a lease agreement concluded between the Company and JR Central.
The relevant factory assets were therefore still recorded under property, plant and equipment of theCompany . As the relevant transactions do not fall under a finance lease transaction, the total transfer
price was recorded as long-term debt for which the borrowing of the fund is ￥21,000 million.

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NIPPON SHARYO, LTD. ANDCONSOLIDATED SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2018
AND
INDEPENDENT AUDITOR’S REPORT

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INDEPENDENT AUDITOR’S REPORTTo the Board of Directors of NIPPON SHARYO, LTD.:
We have audited the accompanying consolidated balance sheet of NIPPON SHARYO, LTD. (the “Company”)
and its consolidated subsidiaries as of March 31, 2018, 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, all expressed 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 inaccordance with accounting principles generally accepted in Japan, and for such internal control as management determines
is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether
due to fraud or error.

Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan andperform the audit 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 thoserisk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of theconsolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not forthe 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.

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Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, theconsolidated financial position of NIPPON SHARYO, LTD. and its consolidated subsidiaries as of March 31, 2018, and theconsolidated results of their operations and their cash flows for the year then ended in accordance with accounting principles
generally accepted in Japan.

Emphasis of MatterA s d isc ussed i n Note 2 .n to the c onsol idated f i na ncia l statements , the C ompa ny a nd N I PPON SH A RYO
MANUFACTURING, LLC reached an agreement that the manufacturing project of a large railway rolling stock in the
U.S.A. will be taken over by an alternative manufacturer and concluded a final settlement agreement with the contractor
with regard to the order received for the respective project.
Our opinion is not modified in respect of these matters.

Convenience Translation
Our audit also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, suchtranslation has been made in accordance with the basis stated in Note 1 to the consolidated financial statements. Such U.S.
dollar amounts are presented solely for the convenience of readers outside Japan.

June 28, 20189

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NIPPON SHARYO, LTD. and Consolidated Subsidiaries
Consolidated Balance Sheet
March 31, 2018
Thousands of
U.S. Dollars(Note 1)Millions of Yen
ASSETS

2018

2017

2018

CURRENT ASSETS:¥

Cash and cash equivalents (Notes 14 and 17)

15,837¥

11,713$

149,409

Notes and accounts receivable (Notes 3, 14 and 17)

28,526

31,361

269,111Inventories (Notes 2.i and 4)

26,70530,097

251,931

Deferred tax assets (Note 13)

51

60

484

Other current assets (Note 9)

1,146

1,824

10,816

Total current assets

72,26575,055

681,751

Land (Note 9)

14,996

15,065

141,475

Buildings and structures (Note 9)27,63927,622

260,744

Machinery and equipment

34,86035,018328,868

35

171

326

77,53077,876

731,413(48,966)(47,887)(461,940)

28,56429,989269,473

18,632

16,765

175,771

728

1,661

6,864

5,623

4,082

53,047

85

86

804

1,516

1,556

14,302

26,58424,150250,788

PROPERTY, PLANT AND EQUIPMENT:

Construction in progress
Total
Accumulated depreciation
Net property, plant, and equipment

INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 5, 9 and 14)
Investments in an unconsolidated subsidiary and associatedcompanies (Note 14)
Asset for employees’ retirement benefits (Note 8)
Deferred tax assets (Note 13)
Other assets (Note 9)
Total investments and other assets
¥

TOTAL

127,413¥129,194$

1,202,012(Continued)

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NIPPON SHARYO, LTD. and Consolidated Subsidiaries
Consolidated Balance Sheet
March 31, 2018

Thousands of
U.S. Dollars(Note 1)
2018

Millions of Yen
LIABILITIES AND EQUITY

2018

2017

CURRENT LIABILITIES:¥

Short-term borrowings (Notes 7, 14 and 17)
Current portion of long-term debt (Notes 7, 9 14 and 17)

-

¥

287

Current portion of lease obligations (Notes 11 and 14)

1,595

$

5,000

2,708

748

825

7,057

Notes and accounts payable (Notes 6 and 14)

24,84523,003

234,387

Accrued expenses (Note 17)

5,003

9,708

47,198Advances received

3,467

10,191

32,703

Income taxes payable (Note 14)

132

565

1,248

Allowance for work in process on construction contracts

36

430

340

Provision for loss on orders received (Note 2.n)

6,128

16,60657,813

Other current liabilities (Note 13)

1,408

2,456

13,278

Total current liabilities

42,05470,379396,732

55,40019,174

522,638

273

259

2,572

LONG-TERM LIABILITIES:Long-term debt (Notes 7, 9 14 and 17)
Liability for employees’ retirement benefits (Note 8)
Lease obligations (Notes 11 and 14)

1,725

1,764

16,271

Allowance for PCB disposal expenses

457

461

4,311

Provision for compensation for health damage from asbestos

99

92

934

6,233

8,680

58,807

Deferred tax liabilities (Note 13)

218

276

2,063

64,40530,706

607,596

11,811

11,811

111,422

Capital surplus

12,045

12,045

113,643

Retained earnings(11,659)(3,157)(109,994)

(516)

(515)

(4,868)

7,708

6,905

72,717

Other long-term liabilities
Total long-term liabilities
COMMITMENTS AND
CONTINGENT LIABILITIES (Notes 10 and 15)
EQUITY (Note 12):
Common stock, authorized, 328,000,000 shares;
issued, 146,750,129 shares in 2018 and 2017

Treasury stock, at cost, 2,406,621 shares in 2018and 2,402,654 shares in 2017
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities

(8)

5

(72)

Foreign currency translation adjustments

Deferred (loss) gain on derivatives under hedge accounting(2,191)(2,068)(20,665)

Defined retirement benefit plans

3,661

2,993

34,533

9,170

7,835

86,513

Noncontrolling interests

103

90

968

Total equity

20,954

28,109197,684

Total accumulated other comprehensive income

¥

TOTAL

127,413¥129,194$

1,202,012(Concluded)
Note: Effective October 1, 2018, the Company will implement a 1-for-10 reverse stock split of common stock.
The numbers of authorized or issued shares are not retroactively adjusted. The numbers of authorized and issued
common stock after the reverse stock split are disclosed in Note 19 to the consolidated financial statements.
See notes to consolidated financial statements.

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NIPPON SHARYO, LTD. and Consolidated Subsidiaries
Consolidated Statement of Operations
Year Ended March 31, 2018
Thousands of
U.S. Dollars(Note 1)Millions of Yen
2018¥

NET SALES (Note 17)
COST OF SALES (Notes 2.i, 2.m and 2.u)

2017¥95,311

2018

101,094$

899,158

80,89798,501

763,181

14,414

2,593

135,977

7,148

7,697

67,4297,266(5,104)68,548Interest and dividend income (Note 17)

311

265

2,936

Interest expense (Note 17)

(212)

(178)

(1,999)Equity in earnings of associated companies

81

150

767

Gain on sales of investment securities, net (Note 5)

54

23

507

Loss on impairment of property, plant and equipment (Note 16)

(34)

(2)

(324)

Gross profit

SELLING, GENERAL, AND ADMINISTRATIVE
EXPENSES (Note 2.u)Operating income (loss)
OTHER (EXPENSES) INCOME

Gain on sales and disposals of property, plant andequipment, net
Loss on early repayment of long-term debt

8,950

603

84,432(1,077)-(10,156)

Loss on payment for settlement (Note 2.n)(26,445)-(249,481)

(134)

(291)

(1,269)(18,506)570(174,587)(11,240)(4,534)(106,039)

Current

105

450

994

Deferred(3,089)130(29,150)(2,984)580(28,156)(8,256)(5,114)(77,883)

15

10

146

Other – net
Other (expenses) income – net
LOSS BEFORE INCOME TAXESINCOME TAXES (Note 13):

Total income taxes
NET LOSSNET INCOME ATTRIBUTABLE TO NONCONTROLLINGINTERESTS
NET LOSS ATTRIBUTABLE TO OWNERS OF THE PARENT¥(8,271)¥(5,124)

Yen$(78,029)

U.S. Dollars

PER SHARE OF COMMON STOCK (Note 2.v):¥

Basic net loss
Cash dividends applicable to the year

(57.30)-¥(35.50)-$(0.54)-

Note: Effective October 1, 2018, the Company will implement a 1-for-10 reverse stock split of common stock. Per share ofcommon stock is not retroactively adjusted. Per share information if the reverse stock split had been effected at the beginningof the fiscal year ended March 31, 2017 is disclosed in the Note 19 to the consolidated financial statements.
See notes to consolidated financial statements.

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NIPPON SHARYO, LTD. and Consolidated Subsidiaries
Consolidated Statement of Comprehensive Income
Year Ended March 31, 2018
Thousands of
U.S. Dollars(Note 1)Millions of Yen
2018¥

NET LOSS2017(8,256)¥2018(5,114)$(77,883)

OTHER COMPREHENSIVE INCOME (LOSS) (Note 18):
Unrealized gain (loss) on available-for-sale securities

777

(124)

7,338

Deferred (loss) gain on derivatives under hedge accounting

(5)

2

(46)

Foreign currency translation adjustments

(105)

202

(989)

Defined retirement benefit plans

668

(248)

6,297

Share of other comprehensive income in associated companies

36

12

336

Total other comprehensive income (loss)

1,371

(156)

12,936COMPREHENSIVE LOSS¥

(6,885)¥(5,270)$(64,947)¥(6,900)¥(5,280)$(65,092)

TOTAL COMPREHENSIVE (LOSS) INCOME
ATTRIBUTABLE TO:
Owners of the parent
Noncontrolling interests

15

10

145

See notes to consolidated financial statements.

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NIPPON SHARYO, LTD. and Consolidated Subsidiaries
Consolidated Statement of Changes in Equity
Year Ended March 31, 2018
Millions of Yen

Number ofshares ofcommon stock
outstanding
BALANCE, APRIL 1, 2016

144,354,105

Commonstock¥

Capitalsurplus11,811¥Retainedearnings

12,045¥

Treasury
stock

1,967

¥

(513)

Net loss attributable to ownersof the parent

-

-

-

(5,124)-

Increase in treasury stock, net(6,630)

-

-

-

(2)

-

-

-

-

-

144,347,475

11,811

12,045(3,157)(515)

Net loss attributable to ownersof the parent

-

-

-

(8,271)-

Increase in treasury stock, net(3,967)

-

0

-

(1)

Change of scope of equity method

-

-

-

(231)

-

Net changes in the year

-

-

-

-

-

Net changes in the year
BALANCE, MARCH 31, 2017

BALANCE, MARCH 31, 2018

144,343,508¥

11,811¥

12,045¥(11,659)¥(516)

Thousands of U.S. Dollars (Note 1)

Commonstock

BALANCE, MARCH 31, 2017$

Capitalsurplus111,422$

Retainedearnings

113,642$

Treasurystock(29,797)$(4,857)Net loss attributable to ownersof the parent--(78,029)-

Increase in treasury stock, net

-

1

-

(11)

Change of scope of equity method--(2,168)-Net changes in the year

-

-

-

-

BALANCE, MARCH 31, 2018$

111,422$

113,643$(109,994)$(4,868)

Effective October 1, 2018, the Company will implement a 1-for-10 reverse stock split of common stock.
The number of shares of common stock outstanding is not retroactively adjusted. The numbers of authorized andissued common stock after the reverse stock split are disclosed in Note 19 to the consolidated financial statements.
See notes to consolidated financial statements.

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Millions of Yen
Accumulated other comprehensive income
Unrealized gain
on available-forsale securities

Deferredgain (loss) on
derivatives
under hedge
accounting

Foreigncurrencytranslation
adjustments

Definedretirement
benefit plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

¥

¥

¥

¥

¥

¥

7,013

(2,261)

3,241

7,991

83

¥

33,384

-

-

-

-

-

-

(5,124)

-

-

-

-

-

-

(2)

(108)

7

193

(248)

(156)

7

(149)

6,905

5

(2,068)

2,993

7,835

90

28,109

-

-

-

-

-

-

(8,271)

-

-

-

-

-

-

(1)

5

(42)

(37)

-

(268)

(18)

(81)

1,372

13

1,385

803
¥

(2)

Total
equity

¥

7,708

(8)

¥

(2,191)

668
¥

3,661

¥

9,170

¥

103

¥

20,954

Thousands of U.S. Dollars (Note 1)
Accumulated other comprehensive income
Unrealized gain
on available-forsale securities

Deferredgain (loss) on
derivatives
under hedge
accounting

Foreigncurrencytranslation
adjustments

Definedretirement
benefit plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

$

$

$

$

$

$

65,144(19,519)

28,23673,912

852$

265,174

-

-

-

-

-

-

(78,029)

-

-

-

-

-

-

(10)

51

(386)

-

(335)

-

(2,503)

(174)

(760)

6,297

12,936116

13,052

7,573
$

51

Total
equity72,717$(72)$(20,665)$

34,533$86,513$

968$

197,684

15_AnnualReport_1106.indd 15

2018/11/06 14:59

NIPPON SHARYO, LTD. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
Year Ended March 31, 2018
Thousands of U.S.
Dollars(Note 1)

Millions of Yen
2018

OPERATING ACTIVITIES:
Loss before income taxes¥ (11,240)
Adjustments for:
(750)
Income taxes-(paid) refund
1,077
Loss on early repayment of long-term debt
26,445
Loss on payment for settlement
2,728
Depreciation
34
Loss on impairment of property, plant and equipment(9,067)
Gain on sales and disposals of property, plant and equipment(54)
Gain on sales of investment securities
Changes in assets and liabilities:
3,367
Decrease (increase) in trade notes and accounts receivable
3,248
Decrease in inventories
1,146
Increase in trade notes and accounts payable(394)(Decrease) increase in allowance for work in process on onstruction contracts(10,159)(Decrease) increase in provision for loss on orders received
7
Increase (decrease) in provision for compensation for health damage from asbestos(1,208)Decrease in advances received
14
Increase in liability for employees’ retirement benefits(4,308)Other-net
886
Sub-total(1,077)
Payments for loss on early repayment of long-term debt
(37,001)
Settlement paid
(37,192)
Net cash used in operating activities
INVESTING ACTIVITIES:(1,001)
Purchases of property, plant and equipment
12,827
Proceeds from sales of property, plant and equipment(3)
Purchases of investment securities
100
Proceeds from sales of investment securities(130)
Other-net
11,793
Net cash provided by (used in) investing activities
FINANCING ACTIVITIES:(1,595)
Net (decrease) increase in short-term borrowings
56,000
Proceeds from long-term debt
Repayments of long-term debt
(24,487)(3)
Dividends paid
(84)
Other-net
29,831
Net cash provided by financing activities(308)
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON CASH AND CASH EQUIVALENTS
4,124
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
11,713
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
15,837¥
CASH AND CASH EQUIVALENTS, END OF YEAR

2017
¥

2018

(4,534)$423¥(106,039)(7,071)-

10,156-249,481

2,730

25,737

2

324

(623)

(85,536)

(23)

(507)

(10,685)

31,7609,064

30,639659

10,811314(3,720)3,638(95,835)(42)

66(4,547)(11,399)

17

131

1,269

(40,642)(2,338)

8,356-(10,156)-(349,068)(2,338)(350,868)(1,077)(9,441)

898

121,010

(4)

(32)

34

945

(405)

(1,225)(554)

111,257

1,268(15,048)-

528,302-(231,009)

(0)

(28)

(93)

(795)

1,175
183

281,422(2,905)(1,534)38,906

13,247

110,503

11,713$

149,409(Concluded)

See notes to consolidated financial statements.

16_AnnualReport_1106.indd 16

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NIPPON SHARYO, LTD. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
Year Ended March 31, 2018────────────────────────────────
1. BA SI S OF PR E SE N TAT ION OF CONS OL I DAT E D
FINANCIAL STATEMENTS

Consolidated subsidiaries
Unconsolidated subsidiary stated at cost
Associated companies accounted for by the equity method
Associated company stated at cost

The accompanying consolidated financial statements havebeen prepared in accordance with the provisions set forth in
the Japanese Financial Instruments and Exchange Act andits related accounting regulations and in accordance withaccounting principles generally accepted in Japan (“Japanese
GA AP”), which are different in certain respects as to theapplication and disclosure requirements of International
Financial Reporting Standards (IFRS).

2018
6
1
2
1

2017
6
1
3
1

During the year ended March 31, 2018, Taiwan Rolling
Stock Co., Ltd was excluded from the scope of equity method
accounting due to a decrease in equity ownership by theCompany as a result of a capital increase of Taiwan Rolling
Stock Co., Ltd.
The fiscal year-end of NIPPON SHARYO U.S.A., INC. and its
subsidiaries, NIPPON SHARYO MANUFACTURING, LLC,
and NIPPON SHARYO ENGINEERING & MARKETING,
LLC is December 31 and their financial statements with theclosest closing date prior to that of the Company are used forconsolidation purposes. Necessary adjustments for significant
transactions from Januar y 1 to March 31 are made forconsolidation purposes.

In preparing these consolidated financial statements, certain
reclassifications and rearrangements have been made to theconsolidated financial statements issued domestically in orderto present them in a form which is more familiar to readers
outside Japan. In addition, certain reclassifications have been
made in the 2017 consolidated financial statements to conformto the classifications used in 2018.
The consolidated financial statements are stated in Japaneseyen, the currency of the country in which NIPPON SHARYO,
LTD. (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 Japanand have been made at the rate of ¥106 to $1, the approximate
rate of exchange at March 31, 2018. Such translations should
not be construed as representations that the Japanese yenamounts could be converted into U.S. dollars at that or any
other rate.

For the equity method associated companies that have a
different fiscal year from that of the Company, the associatedcompanies’ financial statements with the closest closing dateprior to that of the Company are used for consolidation
purposes.
b. Unification of accounting policies applied to foreign subsidiaries
for the consolidated financial statements
Under Accounting Standards Board of Japan (“ASBJ”)
Practical Issues Task Force (“PIT F”) No. 18, “Practical
Solution on Unification of Accounting Policies Applied
to Foreign Subsidiaries for the C onsolidated Financial
Statements,” the accounting policies and procedures applied toa parent company and its subsidiaries for similar transactions
and events under similar circumstances should, in principle,
be unified for the preparation of the consolidated financial
statements. However, financial statements prepared by foreignsubsidiaries in accordance with either IFRS or generally
accepted accounting principles in the United States of America(Financial Accounting Standards Board Accounting Standards
Codification—“FASB ASC”) tentatively may be used for the
consolidation process, except for the following items thatshould be adjusted in the consolidation process so that net
income is accounted for in accordance with Japanese GAAP,
unless they are not material: (a) amortization of goodwill; (b)scheduled amortization of actuarial gain or loss of pensions
that has been recorded in equity through other comprehensive
income; (c) expensing capitalized development costs of researchand development (R&D); and (d) cancellation of the fair value
model of accounting for property, plant and equipment andinvestment properties and incorporation of the cost modelaccounting.

────────────────────────────────
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation
The consolidated financial statements as of March 31, 2018,
include the accounts of the Company and its significant
subsidiaries (together, the “Group”). Under the control andinfluence concepts, those companies in which the Company,
directly or indirectly, is able to exercise control over operations
are fully consolidated and those companies over which theGroup has the ability to exercise significant influence areaccounted for by the equity method.
Investment in associated companies are accounted for by theequity method. Investments in the remaining unconsolidated
subsidiary and associated company 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.
All significant intercompany balances and transactions havebeen eliminated in consolidation. All material unrealized
profit included in assets resulting from transactions within theGroup is also eliminated.

c. Unification of accounting policies applied to associatedcompanies for the equity method
ASBJ Statement No. 16, “Accounting Standard for Equity
Method of Accounting for Investments,” requires adjustments
to be made to conform the associate’s accounting policies for

The number of the consolidated subsidiaries, unconsolidated
subsidiary, and associated companies for the years ended March
31, 2018 and 2017, was as follows:

17_AnnualReport_1106.indd 17

2018/11/06 14:59

similar transactions and events under similar circumstances
to those of the parent company when the associate’s financial
statements are used in applying the equity method, unless it isimpracticable to determine adjustments.

transactions are classified and accounted for as follows: 1)
all derivatives are recognized as either assets or liabilities
and measured at fair value and gains and losses on derivativetransactions are recognized in the consolidated statement ofoperations and 2) for derivatives used for hedging purposes, if
such derivatives qualify for hedge accounting because of highcorrelation and effectiveness between the hedging instruments
and the hedged items, gains and losses on derivatives aredeferred until maturity of the hedged transactions.

d. Business combinations
Business combinations are accounted for using the purchasemethod. Acquisition-related costs, such as advisory fees orprofessional fees, are accounted for as expenses in the periods
in which the costs are incurred. If the initial accounting for abusiness combination is incomplete by the end of the reporting
period in which the business combination occurs, an acquirer
shall report in its financial statements provisional amounts forthe items for which the accounting is incomplete. During themeasurement period, which shall not exceed one year fromthe acquisition, the acquirer shall retrospectively adjust theprovisional amounts recognized at the acquisition date to reflect
new information obtained about facts and circumstances thatexisted as of the acquisition date and that would have affected
the measurement of the amounts recognized as of that date.
Such adjustments shall be recognized as if the accounting forthe business combination had been completed at the acquisition
date. A parent’s ownership interest in a subsidiary mightchange if the parent purchases or sells ownership interests in its
subsidiary. The carrying amount of noncontrolling interest is
adjusted to reflect the change in the parent’s ownership interest
in its subsidiary while the parent retains its controlling interest
in its subsidiary. Any difference between the fair value of theconsideration received or paid and the amount by which thenoncontrolling interest is adjusted is accounted for as capitalsurplus as long as the parent retains control over its subsidiary.

The forward foreign currency contracts are utilized to hedge
foreign currency exposures in sales of merchandise andfinished goods to overseas customers and procurement of
raw materials from overseas suppliers. Trade receivables andpayables denominated in foreign currencies are translated at
the contracted rates if the forward contracts qualify for hedge
accounting. The currency swaps are utilized to hedge foreign
currency exposures in long-term debt. Long-term debt istranslated at the contracted rates if the currency swaps qualify
for hedge accounting.
The interest rate swaps, which qualify for hedge accounting andmeet specific matching criteria, are not remeasured at market
value, but the differential paid or received under the swap
agreements is recognized and included in interest expense or
income.
h. Allowance for doubtful accounts
An allowance for doubtful accounts is provided for at theaggregate amount of estimated credit loss based on an
individual analysis of certain doubtful or troubled receivables
and a general reserve for other receivables is calculated basedon the historical loss experience.

e. Cash equivalents
Cash equivalents are short-term investments that are readily
convertible into cash and exposed to insignificant risk ofchanges in value.

i. Inventories
Inventories are stated at the lower of cost, determined
pr i nc ipa l l y b y t he s p e c i f ic ident i f ic at ion met ho d formerchandise, finished goods and work in process and by themoving-average method for semi-finished goods, raw materials,
and supplies, or net selling value, which is defined as the selling
price, less additional estimated manufacturing costs andestimated direct selling expenses. The replacement cost may be
used in place of the net selling value, if appropriate. (Reversalof write-downs) and write-downs of inventories in the amountsof ¥(10,135) million ($(95,612) thousand) and ¥3,684 million
for the years ended March 31, 2018 and 2017, respectively, were
included in cost of sales.

Cash equivalents include time deposits and Cash Management
System (“CMS”) funds due from Central Japan Railway
Company (“CJR”) group, all of which mature or become due
within three months from the date of acquisition. CJR is theparent company of the Company.
f. Investment securities
Investment securities are classified and accounted for,depending on management’s intent, as follows:
Available-for-sale securities are reported at fair value, withunrealized gains and losses, net of applicable taxes, reported ina separate component of equity.

j. Property, plant and equipment
Property, plant and equipment, including significant renewals
and additions, are stated at cost and are depreciated principallyby the straig ht-l i ne method for bui ldi ngs and bui ldi ng
improvements and structures acquired on or after April 1, 2016,
and by the declining-balance method for other property at rates
based on the estimated useful lives of the assets.

Nonmarketable available-for-sale securities are stated at cost
determined by the moving-average method. For other-thantemporary declines in fair value, investment securities are
reduced to net realizable value by a charge to income.
g. Derivatives and hedging activities
The Group uses derivative financial instruments to manage
its exposures to fluctuations in foreign exchange and interest
rates. Forward foreign currency contracts, currency swaps, andinterest rate swaps are utilized by the Group to reduce foreign
currency exchange and interest rate risks. The Group does notenter into derivatives for trading or speculative purposes.

Depreciation of leased assets relating to financial leasetransactions without transfer of ownership is computed by thestraight-line method over the leased period.

Der ivative f i nancial i nstr uments and foreig n cur renc y

The Company has transferred its factory assets of Toyokawa

The range of useful lives is principally from 10 to 60 years forbuildings and structures and from six to 17 years for machineryand equipment.

18_AnnualReport_1106.indd 18

2018/11/06 14:59

Plant, Kinuura Plant, and Narumi Plant to CJR on April 20,
2017. The transfer was not treated as a buying and sellingtransaction since the relevant factory assets were transferred to
CJR and the Company continues to utilize these factory assets
as before based on a lease agreement concluded between the
Company and CJR. The relevant factory assets were therefore
still recorded under property, plant and equipment of theCompany in the carrying amount of ¥11,975 million ($112,975
thousand) as land and of ¥4,022 million ($37,947 thousand)as buildings (net) as of March 31, 2018. As the relevanttransactions do not fall under a finance lease transaction, thetotal transfer price was recorded as long-term debt (including
the current portion) in the carrying amount of ¥20,687 million($195,158 thousand) as of March 31, 2018.

For the year ended March 31 2018
Due to the difficulty in the schedule execution as announced
to the customer in December 2016, the Company reached
an agreement during the year ended March 31, 2018 that
manufacturing the rolling stock of the respective project will
be taken over by an alternative manufacturer to minimize
the impact to the parties. Following this agreement, theCompany negotiated with the contractor of the respective
project, Sumitomo Corporation Group, and concluded a final
settlement agreement on November 6, 2017 that the Company
and NIPPON SHARYO MANUFACTURING, LLC makepayment to Sumitomo Corporation Group in the total amountof $328,942 thousand as settlement money upon resolution
by the Board of Directors of the Company on the same date.
Payment of the settlement money was completed during theyear ended March 31, 2018.
Based on the aforementioned development, the Company
recognized loss on payment for settlement in the consolidated
statement of operation of ¥26,445 million ($249,481 thousand)for the year ended March 31, 2018. Also, the Company reversed
the amount of ¥3,156 million ($29,776 thousand) of theprovision for loss on orders received for the respective projectin the year ended March 31, 2018. As the result of this reversal,
the provision for loss on orders received for the respective
project amounted to ¥1,802 million ($17,002 thousand) as ofMarch 31, 2018.

k. Long-lived assets
The Group reviews its long-lived assets for impairment
whenever events or changes in circumstance indicate thatthe carrying amount of an asset or asset group may not berecoverable. An impairment loss is recognized if the carrying
amount of an asset or asset group exceeds the sum of theundiscounted future cash flows expected to result from thecontinued use and eventual disposition of the asset or asset
group. T he impairment loss would be measured as theamount by which the carrying amount of the asset exceeds its
recoverable amount, which is the higher of the discounted cash
flows from the continued use and eventual disposition of theasset or the net selling value at disposition.

o. Retirement and pension plans
The Company has a lump-sum retirement benefit plan, adefined contribution pension plan and a defined benefit pension
plan. The Company’s domestic consolidated subsidiaries have
similar retirement benefit plans.

l. Intangible assets
Intangible assets that are included in other assets are amortizedby the straight-line method. Software costs are amortized over
five years.

Liabilities for employees’ retirement benefits are calculated
based on the projected benefit obligations and plan assets atthe consolidated balance sheet date. The projected benefit
obligations are attributed to periods on a benefit formula basis.
Prior service costs are amortized on a straight-line basis over
15 years, which is within the average remaining service period.
Actuarial gains and losses are amortized on a straight-line basis
mainly over 15 years, which is within the average remaining
service period in the following the fiscal year.

m. Allowance for work in process on construction contracts
An allowance for work in process on construction contracts
is provided based on an estimate of the total loss in respect
to construction projects on which eventual losses are deemed
inevitable and the amounts of the loss can be reasonably
estimated. (Reversal of provision) and provisions for work inprocess on construction contracts in the amounts of ¥(394)million ($(3,720) thousand) and ¥314 million for the years
ended March 31, 2018 and 2017, respectively, were included incost of sales.

p. Allowance for Polychlorinated Biphenyl (PCB) disposal expenses
An allowance for PCB disposal expenses has been provided
based on the published estimated disposal fee schedule issued
by the Japan Environmental Safety Corporation.

n. Provision for loss on orders received
A provision for loss on orders received, except for construction
contracts, is recorded based on an estimate of the total loss
in respect to contracts on which eventual losses are deemed
inevitable and the amounts of the loss can be reasonably
estimated.

q. Provision for compensation for health damage from asbestos
A provision for compensation for health damage from asbestos
has been recorded based on the estimated compensation
amount for former employees who suffered health damage fromasbestos.

With regard to the order received for a large railway rollingstock project in the U.S.A. for the years ended March 31, 2017and 2018, were as follows:r. Income taxes
The provision for income taxes is computed based on the pretax
income included in the consolidated statement of operations.
T he a s set a nd l iabi l it y approach i s u sed to re c og n i ze
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. Deferredtaxes are measured by applying currently enacted tax rates tothe temporary differences.

For the year ended March 31, 2017
The order received amounting to ¥38,661 million for a large
railway rolling stock project in the U.S.A., a loss of ¥22,777
million was reasonably estimated as of March 31, 2017, of which
an amount of ¥10,404 million was recognized as provision forloss on orders received after offsetting with the inventories
associated with the respective project in the amount of ¥12,373
million.

19_AnnualReport_1106.indd 19

2018/11/06 14:59

s. Foreign currency transactions
A ll short-term and long-term monetar y receivables andpayables denominated in foreign currencies are translated
into Japanese yen at the exchange rates at the consolidatedbalance sheet date. The foreign exchange gains and losses
from translation are recognized in the consolidated statementof operations to the extent that they are not hedged by forward
exchange contracts.
t. Foreign currency financial statements
The balance sheet accounts of the consolidated foreignsubsidiaries are translated into Japanese yen at the current
exchange rate as of the consolidated balance sheet date, except
for equity, which is translated at the historical rate. Revenue
and expense accounts of consolidated foreign subsidiaries
a re t ra n slate d i nto yen at t he avera ge excha nge rate.
Differences arising from such translation are shown as foreign
currency translation adjustments under accumulated othercomprehensive income in a separate component of equity.

Accounting Changes and Error Corrections” and ASBJ
Guidance No. 24, “Guidance on Accounting Standard for
Accounting Changes and Error Corrections,” accounting
treatments are required as follows: (1) Changes in Accounting
Policies—When a new accounting policy is applied following
revision of an accounting standard, the new policy is applied
retrospectively, unless the revised accounting standard includes
specific transitional provisions, in which case the entity shallcomply with the specific transitional provisions. (2) Changes in
Presentation—When the presentation of financial statements
is changed, prior-period financial statements are reclassified
in accordance with the new presentation. (3) Changes in
Accounting Estimates—A change in an accounting estimate
is accounted for in the period of the change if the change
affects that period only, and is accounted for prospectively if
the change affects both the period of the change and future
periods. (4) Corrections of Prior-Period Errors—When an error
in prior-period consolidated financial statements is discovered,those statements are restated.

u. R&D expenses
Expenses related to R&D activities are charged to income as
incurred. R&D expenses amounted to ¥1,261 million ($11,895
thousand) and ¥1,579 million for the years ended March
31, 2018 and 2017, respectively, and are included in generaland administrative expenses and manufacturing costs in theaccompanying consolidated statement of operations.

y. New Accounting Pronouncement
Accounting Standard for Revenue Recognition, etc.
- Accounting Standard for Revenue Recognition (ASBJ
Statement No. 29, issued on March 30, 2018)- Implementation Guidance on Accounting Standard for
Revenue Recognition (ASBJ Guidance No. 30, issued on
March 30, 2018)v. Per share information
Basic net loss per share is computed by dividing net loss
attributable to common shareholders by the weighted-average
number of shares of common stock outstanding during therespective year. Weighted-average number of shares of common
stock for the years ended March 31, 2018 and 2017, were 144,345
thousand shares and 144,351 thousand shares, respectively.
Diluted net loss per share for the years ended March 31, 2018and 2017, was not applicable because the Company had no
dilutive common shares. 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.
Effective October 1, 2018, the Company will implement a 1-for10 reverse stock split of common stock. Per share of common
stock is not retroactively adjusted. Per share information if thereverse stock split had been effected at the beginning of the
fiscal year ended March 31, 2017 is disclosed in the Note 19 tothe consolidated financial statements.

(a) Overview
The International Accounting Standards Board (“IASB”) andthe Financial Accounting Standards Board (“FASB”) havejointly developed a comprehensive accounting standard forrevenue recognition and issued it as converged guidance on
recognizing revenue in contracts with customers in May 2014as IFRS 15 (IASB) and Topic 606 (FASB), respectively. To
respond to both IFRS 15 and Topic 606 effective from the fiscal
years beginning on or after January 1, 2018 and December
15, 2017, respectively, ASBJ has developed a comprehensive
accounting standard for revenue recognition and issued it withthe respective implementation guidance.
In developing the accounting standard for revenue recognition,
ASBJ basically integrated the core principle of IFRS 15 from acomparability point of view of the financial statements, which
is one of the benefits of ensuring consistency with IFRS 15.
ASBJ, on the other side, considered additional alternative
treatments where current practices under Japanese GAAP areto be reflected as far as such treatments would not significantly
impair international comparability.

w. Construction contracts
Construction revenue and construction costs are recognizedby the percentage-of-completion method if the outcome of aconstruction contract can be estimated reliably. When total
construction revenue, total construction costs and the stage ofcompletion of the contract at the consolidated balance sheet
date can be reliably measured, the outcome of a construction
contract is deemed to be estimated reliably. If the outcomeof a construction contract cannot be reliably estimated, thecompleted-contract method should be applied. When it isprobable that the total construction costs will exceed total
construction revenue, an estimated loss on the contract shouldbe immediately recognized by providing for a loss on such
construction contracts.

(b) Effective date
The above standard and guidance are scheduled to be applied
from the beginning of the fiscal year ending March 31, 2022.
(c) Effects of application of the standards
The effects of the application of the above standard andguidance on the consolidated financial statements are currently
being assessed.

x. Accounting changes and error corrections
Under ASBJ Statement No. 24, “Accounting Standard for20_AnnualReport_1106.indd 20

2018/11/06 14:59

───────────────────────────────────────────────────────
3. NOTES AND ACCOUNTS RECEIVABLE
Notes and accounts receivable as of March 31, 2018 and 2017, consisted of the following:
Millions of Yen
Trade notes receivable¥- Unconsolidated subsidiary and associated companies
Trade accounts receivable- CJR, unconsolidated subsidiary and associated companies
Other
Less allowance for doubtful accounts
¥
Total

2018
4,848
198
16,793
6,051
640
(4)
28,526

¥

¥

2017
7,057
154
18,4455,634
76(5)31,361Thousands of
U.S. Dollars
2018
45,740$
1,864
158,42757,0846,034(38)
269,111$

Note: Allowance for doubtful accounts was not recognized for accounts receivable-other, which was included in
Other above.
───────────────────────────────────────────────────────
4. INVENTORIESInventories as of March 31, 2018 and 2017, consisted of the following:
Millions of Yen
Merchandise
Finished goods
Work in process and semi-finished goods
Raw materials
Total

¥

¥

2018
258
1,642
23,4501,355
26,705

¥

¥

2017
161
1,645
26,2882,003
30,097

Thousands of
U.S. Dollars
2018
2,432
$
15,493
221,224
12,782251,931$Work in process and allowance for work in process on construction contracts are presented in the gross amount in the
consolidated balance sheet. At March 31, 2018 and 2017, allowance for work in process on construction contracts of noneand ¥2 million, respectively, was provided and included in work in process and semi-finished goods above.
───────────────────────────────────────────────────────
5. INVESTMENT SECURITIESInvestment securities as of March 31, 2018 and 2017, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2018
2017
2018
18,632
16,765
175,771
Equity securities¥$¥
16,765
175,771
18,632¥$¥Total

The costs and aggregate fair values of investment securities as of March 31, 2018 and 2017, were as follows:

Cost
Securities classified as available-for-sale:
Equity securities
Total

¥
¥

6,059
6,059

Millions of Yen
2018
Gross unrealized Gross unrealized
gains
lossesFair andcarrying value

¥
¥

¥
¥

10,965
10,965¥¥-17,024
17,02421_AnnualReport_1106.indd 21

2018/11/06 14:59

Cost
Securities classified as available-for-sale:
Equity securities
Total

¥
¥

Fair andcarrying value

¥
¥

¥
¥

6,056
6,056

Cost
Securities classified as available-for-sale:
Equity securities
Total

Millions of Yen
2017
Gross unrealized Gross unrealized
gains
losses

$
$

¥
¥

9,833
9,833

-

15,88915,889Thousands of U.S. Dollars
2018
Gross unrealized Gross unrealized
gains
lossesFair andcarrying value

$
$

$
$

57,164
57,164$$103,438
103,438-

160,602160,602

The information of available-for-sale securities which were sold for the years ended March 31, 2018 and 2017, was as follows:

Proceeds
Available-for-sale:
Equity securities
Total

¥
¥

100
100

Proceeds
Available-for-sale:
Equity securities
Total

¥
¥

34
34

Millions of Yen
2018
Realized gains

Realized losses

¥
¥

¥
¥

54
54

-

Millions of Yen
2017Realized gains

Realized losses

¥
¥

¥
¥

23
23

-

Thousands of U.S. Dollars
2018
Proceeds
Realized gains Realized losses
Available-for-sale:
Equity securities
Total

$
$

945
945

$
$

507
507

$
$

-

No impairment losses were recognized on available-for-sale equity securities for the years ended March 31, 2018 and 2017.

22_AnnualReport_1106.indd 22

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───────────────────────────────────────────────────────
6. NOTES AND ACCOUNTS PAYABLE
Notes and accounts payable as of March 31, 2018 and 2017, consisted of the following:
Millions of Yen
Trade notes payable
Electronically recorded obligations-operating-Unconsolidated subsidiary and associated companies
Trade accounts payable-Unconsolidated subsidiary and associated companies
Other
Total

2018
1,208
10,66717
10,32350
2,580
24,845

¥

¥

¥

¥

2017
1,534
10,190
24
9,364
27
1,864
23,003Thousands of
U.S. Dollars
201811,393$
100,626
164
97,387473
24,344
234,387$───────────────────────────────────────────────────────
7. SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings as of March 31, 2018 and 2017, consisted of the following:
Millions of Yen
CMS with average interest rate of 0.43%
Total

2018

¥
¥

-

¥
¥

2017
1,595
1,595

Thousands of
U.S. Dollars
2018
$
$

Long-term debt as of March 31, 2018 and 2017, consisted of the following:Thousands of
U.S. Dollars
2018

Millions of Yen
2018
Secured bank loans due through 2022 withaverage interest rate of 0.72%
Loans from CJR due through 2027 (Note)with average interest rate of 0.61%
Less current portion
Total

2017
-

¥

55,687¥(287)
55,400¥¥24,174--$525,346(5,000)19,174$(2,708)522,638

Note: Long-term debt due recorded for the factory assets transferred to CJR in the year ended March 31, 2018 in
the amount of ¥ 20,400 million ($ 192,450 thousand) was not reflected.
The aggregate annual maturities of long-term debt as of March 31, 2018, were as follows:
Years ending March 31

Millions of Yen

2019
2020
2021
2022
2023
2024 and thereafter
Total

2,900
2,900
29,20035,000¥¥Thousands of U.S. Dollars
27,35827,358275,473
330,189$$

Note: Long-term debt due recorded for the factory assets transferred to CJR in the year ended March 31, 2018 in
the amount of ¥ 20,687 million ($ 195,158 thousand) was not reflected.
───────────────────────────────────────────────────────
8. RETIREMENT AND PENSION PLANS
Employees who terminate their service with the Company and its domestic consolidated subsidiaries are entitled toretirement benefits generally determined by reference to the basic rate of pay at the time of termination, length of service
and conditions under which the termination occurs. The Company has a lump-sum retirement benefit plan, a defined23_AnnualReport_1106.indd 23

2018/11/06 14:59

contribution pension plan and a defined benefit pension plan, which are assumed to cover retirement benefits for employees
who have retired voluntarily. The Company contributed certain assets to the employee retirement benefit trust. The
Company’s domestic consolidated subsidiaries have similar retirement benefit plans.
(1) Defined benefit plans(a) The changes in defined benefit obligation for the years ended March 31, 2018 and 2017, were as follows:
Thousands ofMillions of Yen
U.S. Dollars
2018
2017
2018
Balance at beginning of year
13,44513,807
126,842¥¥$
Current service cost
724
721
6,834
Interest cost
119
122
1,120
Actuarial gains
(42)
(240)
(394)
Benefits paid
(838)
(964)
(7,906)(49)(465)
Prior service cost
13,35913,446
126,031¥¥$
Balance at end of year(b) The changes in plan assets for the years ended March 31, 2018 and 2017, were as follows:
Thousands ofMillions of Yen
U.S. Dollars
2018
2017
2018
Balance at beginning of year
17,26917,547
162,914¥¥$
Expected return on plan assets
232
227
2,189
Actuarial gains (losses)
1,305
(375)
12,308Contribution from the employer
383
387
3,609
(479)
(517)
(4,514)
Benefits paid
18,71017,269176,506¥¥$
Balance at end of year(c) Reconciliation between the liability (asset) recorded in the consolidated balance sheet and the balances of defined benefit
obligation and plan assets as of March 31, 2018 and 2017, was as follows:
Thousands ofMillions of Yen
U.S. Dollars
2018
2017
2018
Funded defined benefit obligation
13,086
13,187
123,459¥¥$(18,709)(17,269)(176,506)
Plan assets
Total(5,623)(4,082)(53,047)
273
259
2,572
Unfunded defined benefit obligation(5,350) ¥(3,823) $(50,475)
Net asset arising from defined benefit obligation ¥Asset for employees’ retirement benefits
Liability for employees’ retirement benefits
Net asset arising from defined benefit obligation¥¥(5,623)273(5,350)¥¥(4,082)259(3,823)$$(53,047)
2,572(50,475)(d) The components of net periodic benefit costs for the years ended March 31, 2018 and 2017, were as follows:
Thousands ofMillions of Yen
U.S. Dollars
2018
2017
2018
Service cost (Note)
728
726
6,874
¥
¥
$
Interest cost
118
122
1,120
Expected return on plan assets
(232)
(227)
(2,189)
Recognized actuarial gains
(426)
(216)
(4,023)
(5)
(4)
(52)
Amortization of prior service cost
183
401
1,730
¥
¥
$
Net periodic benefit costs
Note: Retirement benefit costs of the consolidated subsidiaries applying the simplified method are included inservice cost.

24_AnnualReport_1106.indd 24

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(e) Amounts recognized in other comprehensive income (before income tax effect) in respect of defined retirement benefit
plans for the years ended March 31, 2018 and 2017
Thousands ofMillions of Yen
U.S. Dollars
2018
2017
2018
Prior service cost
4(413)(44) ¥
$
¥
(920)
352
(8,680)
Actuarial (gains) losses(964) ¥
356
(9,093)¥$Total(f) Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect of defined
retirement benefit plans as of March 31, 2018 and 2017
Thousands ofMillions of Yen
U.S. Dollars
2018
2017
2018
Unrecognized prior service cost ¥(79) ¥(35) $(743)(5,173)(4,253)(48,802)
Unrecognized actuarial gains(5,252) ¥(4,288) $(49,545)¥
Total(g) Plan assets(i) Components of plan assets
Plan assets consisted of the following:
Debt investments
Equity investments
Cash and deposits
Other
Total

2018
14%
78%
3%
5%
100%

2017
13%
78%
3%
6%
100%

Note: The employees’ retirement benefit trusts for the contributory pension plans accounted for 18% and 17%of total plan assets for the years ended March 31, 2018 and 2017, respectively.
(ii) Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering the current and future asset portfolio and the longterm rates of return which are expected currently and in the future from the various components of the plan assets.
(h) Assumptions used for the years ended March 31, 2018 and 2017, were set forth as follows:
Discount rate
Expected rate of return on plan assets

2018
0.9%
2.0%

2017
0.9%
2.0%

(2) Defined contribution plans
The required contribution of the Company and its consolidated subsidiaries amounted to ¥133 million ($1,253 thousand)and ¥128 million for the years ended March 31, 2018 and 2017, respectively.

25_AnnualReport_1106.indd 25

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───────────────────────────────────────────────────────
9. ASSETS PLEDGED AS COLLATERAL(1) Assets pledged as collateral for long-term debt from banks (including current portion) in the amount of ¥24,174 million
as of March 31, 2017, were as follows:
Millions of Yen
2017
Land
11,975¥(thereof: factory foundation mortgages)(11,975)
Buildings and structures
3,915(thereof: factory foundation mortgages)(3,915)Investment securities
11,740(-)(thereof: factory foundation mortgages)
Total
27,630¥(15,890)(thereof: factory foundation mortgages)
In the year ended March 31, 2018, the above collateral as of March 31, 2017 was released as the respective long-term debt(including the current portion) was early redeemed in full in the amount of ¥24,174 million.
(2) Assets pledged as collateral for long-term debt from CJR in the amount of ¥35,000 million ($330,189 thousand) forthe payment of settlement money related to a large railway rolling stock project in the U.S.A. as of March 31, 2018 were as
follows:
Thousands ofMillions of Yen
U.S. Dollars
2018
2018
Buildings and structures
277
2,611
¥
$
Land
15
141
12,338116,395
Investment securities
12,630119,147$¥
Total(3) Other assets pledged as collateral as of March 31, 2018 and 2017, were as follows:
Millions of Yen
Other current assets (Note 1)¥
Other assets under Investments and Other Assets (Note 2)
Investment securities (Note 3)
¥
Total

2018
56
10
4,487
4,553

¥

2017

¥

58
10
68

Thousands of
U.S. Dollars
2018
533
$
94
42,32742,954$

Notes 1: Deposit required by insurance contracts
2: Guarantee deposit required by the Building Lots and Buildings Transaction Business Law
3: Deposit for letter of credit───────────────────────────────────────────────────────
10. CONTINGENT LIABILITIESIn some cases, the Company sells its construction equipment products through leasing companies. Some of these leasing
companies request that the Company enters into lease credit guarantee contracts. Under these contracts, if the lease credits
are unrecoverable from users of the Company’s construction equipment products, the Company guarantees payment of
the amount defined by the contract to the leasing companies. Such guarantees as of March 31, 2018 and 2017, amounted to¥389 million ($3,666 thousand) and ¥512 million, respectively.
───────────────────────────────────────────────────────
11. LEASE TRANSACTIONSThe Group uses certain machinery and equipment under finance lease contracts.
All finance lease transactions are accounted for in a manner similar to ordinary sale or purchase transactions.

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The aggregate annual maturities of lease obligations as of March 31, 2018, were as follows:
Years ending March 31

Thousands of
U.S. Dollars
7,057
$
5,053
4,577
5,020
1,322
299
23,328$Millions of Yen
¥

2019
2020
2021
2022
2023
2024 and thereafter
Total

748
536
485
532
140
32
2,473

¥

A consolidated subsidiary subleases machinery.
Investments in leases and lease obligations, which include an interest portion, resulting from sublease transactions as ofMarch 31, 2018 and 2017, were as follows:
Thousands ofMillions of Yen
U.S. Dollars
2018
2017
2018
Investments in leases:
Due within one year
154
170
1,455
$
¥
¥
327
337
3,083
Due after one year
481
507
4,538
$
¥
¥
Total
Thousands of
U.S. Dollars
2018

Millions of Yen
2018
Lease obligations:Due within one year
Due after one year
Total

¥
¥

2017
170
375
545

¥
¥

$

177
380
557

$

1,599
3,539
5,138

───────────────────────────────────────────────────────
12. 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:(1) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to the year-end
dividend upon resolution at the shareholders’ meeting. Additionally, for companies that meet certain criteria including (1)having a Board of Directors, (2) having independent auditors, (3) having an Audit & Supervisory Board, and (4) the term ofservice of the directors being prescribed as one year rather than the normal two-year term by its articles of incorporation,
the Board of Directors may declare dividends (except for dividends-in-kind) at any time during the fiscal year if the company
has prescribed so in its articles of incorporation. However, the Company cannot do so because it does not meet all the above
criteria.
The Companies Act permits companies to distribute dividends-in-kind (noncash assets) to shareholders subject to a certain
limitation and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles ofincorporation of the company so stipulate. The Companies Act provides certain limitations on the amounts available
for dividends or the purchase of treasury stock. The limitation is defined as the amount available for distribution to theshareholders, but the amount of net assets after dividends must be maintained at no less than ¥3 million.
(2) 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 (a27_AnnualReport_1106.indd 27

2018/11/06 14:59

component of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity
account charged upon the payment of such dividends, until the aggregate amount of legal reserve and additional paid-in
capital equals 25% of the common stock. Under the Companies Act, the total amount of additional paid-in capital and legal
reserve may be reversed without limitation. The Companies Act also provides that common stock, legal reserve, additional
paid-in capital, other capital surplus and retained earnings can be transferred among the accounts within equity undercertain conditions upon resolution of the shareholders.
(3) 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 the shareholders which is determined by a specific formula. Under the Companies Act, stock acquisition rights arepresented as a separate component of equity. The Companies Act also provides that companies can purchase both treasury
stock acquisition rights and treasury stock. Such treasury stock acquisition rights are presented as a separate component ofequity or deducted directly from stock acquisition rights.
───────────────────────────────────────────────────────
13. INCOME TAXESThe 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 30.5% for the years ended March 31, 2018 and 2017.
The tax effects of significant temporary differences and tax loss carryforwards that resulted in deferred tax assets andliabilities as of March 31, 2018 and 2017, were as follows:
Thousands ofMillions of Yen
U.S. Dollars
2018
Deferred tax assets:
Tax loss carryforwards
Liability for employees’ retirement benefits
Loss on write-downs of inventories
Provision for loss on orders received
Land and building of plants
Loss on impairment of fixed assets
Accrued bonuses to employees
Other
Less valuation allowance
Total
Deferred tax liabilities:
Unrealized gain on available-for-sale securities
Deferred gain on sales of property
Revaluation of property
Other
Total
Net deferred tax liabilities

¥

¥
¥

¥

3,642
2,528
2,101
1,682
1,487
1,218
446
2,352
15,456(15,320)
136(3,308)(22)(2,903)(6,233)(6,097)

2017
¥

¥
¥

¥

4,918
2,535
5,492
2,029
1,748
452
3,717
20,891(20,730)
161(2,955)(1,201)(2,059)(2,483)(8,698)(8,537)

2018
$

$
$

$

34,357
23,84819,821
15,872
14,03011,4904,205
22,191
145,814(144,526)
1,288(31,211)(210)(27,386)(58,807)(57,519)

Deferred tax assets and liabilities as of March 31, 2018 and 2017, were recorded as follows:
Thousands ofMillions of Yen
U.S. Dollars
2018
2017
2018
Deferred tax assets:
Current
51
60
484
$
¥
¥
Noncurrent
85
86
804
Deferred tax liabilities:
Other under Current Liabilities(3)(6,233)(8,680)(58,807)
Noncurrent(6,097) ¥(8,537) $(57,519)¥
Net deferred tax liabilities

28_AnnualReport_1106.indd 28

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A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in theaccompanying consolidated statement of operations for the year ended March 31, 2018, with the corresponding figures for
2017, is as follows:
2018
2017
Normal effective statutory tax rate
30.5 %
30.5 %
Increase (decrease) due to:
Expenses not deductible for income tax purposes(29.0)(16.4)
Tax-exempt income
0.2
0.5
Changes in valuation allowance
15.6(69.4)Per capita inhabitant tax
(0.3)
(0.8)
Transfer price adjustments on consolidation
9.1
35.2
Lower income tax rates applicable to income in
(0.7)
3.5
certain foreign countries
1.2
4.1
Other
26.6 %(12.8) %Actual effective income tax rate───────────────────────────────────────────────────────
14. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group policy for financial instruments
The Group finances capital investments and necessary funds mainly internally and with CMS provided by a consolidated
subsidiary of CJR. The Company also operates funds by utilizing CMS. Derivative transactions are used, not for speculative
purposes, but to manage exposure to financial risks as described in (2) below.
(2) Nature and extent of risks arising from financial instruments
Receivables, such as notes and accounts receivable, are exposed to customer credit risk.
Although receivables in foreign currencies are exposed to the risk of fluctuation in foreign currency exchange rates, theposition, net of payables in foreign currencies, is hedged by using forward foreign currency contracts. Investment securities,
mainly equity instruments of customers and suppliers of the Group, are exposed to the risk of market price fluctuations.
Payment terms of payables, such as trade notes and trade accounts, are less than one year. Although payables in foreign
currencies are exposed to the risk of fluctuation in foreign currency exchange rates, the position, net of receivables in foreign
currencies, is hedged by using forward foreign currency contracts.
Long-term debt recorded for the transfer price of the factory assets transferred to CJR is not exposed to market risks fromchanges in variable interest rates since the Company repays a constant lease fee including the interest portion based on thelease agreement. Long-term debt from CJR for the payment of settlement money related to a large railway rolling stock
project in the U.S.A. is also not exposed to market risks from changes in variable interest rates due to the fixed interest rate.
Lease obligations are primarily used for financing capital investments.
Derivatives mainly include forward foreign currency contracts, which are used to manage exposure to risks associated withfluctuations in foreign currency exchange rates related to receivables and payables denominated in foreign currencies andforecasted transactions denominated in foreign currencies, and currency swaps and interest rate swaps, which are used to
manage exposure to exchange fluctuations and interest rate fluctuations on long-term debt. Please see Note 15 for more
information about derivatives.
(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 thecontractual terms. The Group manages its credit risk from receivables by monitoring financial position, payment terms andbalances of customers to identify default risk of customers at an early stage.
Market risk management (foreign exchange risk and interest rate risk)
Foreign currency trade receivables and payables are exposed to market risk resulting from fluctuations in foreign currency
exchange rates. Such foreign exchange risk is hedged principally by forward foreign currency contracts. In addition, when
foreign currency trade receivables and payables are expected from forecasted transactions, forward foreign currency
contracts may be used.
Currency swaps and interest rate swaps are used to manage exposure to market risks from changes in foreign currency

29_AnnualReport_1106.indd 29

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exchange rates and the interest rates of long-term debt.
Investment securities are managed by monitoring the market values and the financial position of issuers on a regular basis.
Liquidity risk management
The Group establishes or updates its cash management plan according to the monthly cash management plan from eachsubsidiary in order to monitor its liquidity risk associated with operating payables and short-term borrowings and long-term
debt.
(4) Fair values of financial instruments
Fair values of financial instruments are based on quoted prices in active markets. If quoted prices are not available, otherrational valuation techniques are used instead. Please see Note 15 for the details of the fair value of derivatives.
(a) Fair value of financial instruments
Millions of Yen
2018
Cash and cash equivalents
Notes and accounts receivable
Investment securities
Total
Notes and accounts payable
Income taxes payable
Long-term debt, including current portion
Lease obligations, including current portion
Total

Carrying
amount15,837¥28,526
17,024
61,387¥¥¥

24,845132
35,0002,473
62,450Fair value
¥
¥
¥

¥

Unrealized
gain (loss)

15,83728,526
17,024
61,387-

24,845
132
35,1272,454
62,558

(127)
19
(108)

¥
¥

Millions of Yen
2017
Cash and cash equivalents
Notes and accounts receivable
Investment securities
Total
Notes and accounts payable
Short-term borrowings
Income taxes payable
Long-term debt, including current portion
Lease obligations, including current portion
Total

Cash and cash equivalents
Notes and accounts receivable
Investment securities
Total
Notes and accounts payable
Income taxes payable
Long-term debt, including current portion
Lease obligations, including current portion
Total

Carrying
amount11,713¥31,361
15,88958,963¥¥¥23,003
1,595
565
24,174
2,589
51,926

Fair value
¥
¥
¥

¥

Unrealized
gain (loss)

11,71331,361
15,88958,963-23,003
1,595
565
24,565
2,572
52,300

(391)
17
(374)

¥
¥

Thousands of U.S. Dollars
2018
Carrying
Unrealized
Fair value
amountgain (loss)
149,409
149,409$$269,111
269,111
160,602160,602579,122579,122$$$$234,387
1,248
330,189
23,328589,152$$

234,387
1,248
331,385
23,147590,167$$(1,196)
181(1,015)30_AnnualReport_1106.indd 30

2018/11/06 14:59

Assets
Cash and cash equivalents, and notes and accounts receivable
The carrying values of cash and cash equivalents, and notes and accounts receivable approximate fair value because of theirshort maturities.
Investment securities
The fair values of investment securities are measured at the quoted market prices of the stock exchange. The informationon the fair value of investment securities by classification is included in Note 5.
Liabilities
Notes and accounts payable, short-term borrowings and income taxes payable
The carrying values of notes and accounts payable, short-term borrowings, and income taxes payable approximate fair value
since they are scheduled to be settled in a short period of time.
Long-term debt and lease obligations
The fair values of long-term debt (including the current portion) and lease obligations are measured at the present value ofthe total of the principal and interest discounted by the interest rate applied to new loans.
Derivative transactions
Information on the fair value of derivatives is included in Note 15.
(b) Carrying amount of financial instruments whose fair value cannot be reliably determined

876

Thousands of
U.S. Dollars
201815,169
$

728

1,661

6,864

20,687-

195,157

Millions of Yen¥

Unlisted securities
Investments in an unconsolidated subsidiary andassociated companies
Long-term debt recorded for the transfer price of thefactory assets transferred to CJR (including thecurrent portion)

2018
1,608

¥

2017

(5) Maturity analysis for financial assets and securities with contractual maturities

Due in one
year or less
Cash and cash equivalents
Notes and accounts receivable
Total

¥
¥

15,837
27,844
43,681

Due in one
year or less
Cash and cash equivalents
Notes and accounts receivable
Total

$
$

149,409262,678
412,087

Millions of Yen
2018
Due after one
Due after five
year throughyears throughfive years
10 years
664
18
¥
¥
664
18
¥
¥
Thousands of U.S. Dollars
2018
Due after one
Due after five
year throughyears throughfive years
10 years
6,260
173
$
$
6,260
173
$
$

Due after
10 years-

Due after
10 years-

Please see Note 7 for annual maturities of long-term debt and Note 11 for obligations under finance leases.

31_AnnualReport_1106.indd 31

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───────────────────────────────────────────────────────
15. DERIVATIVE TRANSACTIONSThe Group enters into forward foreign currency contracts to hedge foreign exchange risk associated with certain assets
and liabilities denominated in foreign currencies. The Group also enters into currency and interest rate swap contracts tomanage its foreign currency and interest rate exposures on long-term debt.
All derivative transactions are entered into to hedge interest and foreign currency exposures incorporated within its
business. Accordingly, market risk in these derivatives is basically offset by opposite movements in the value of hedged
assets or liabilities.
Derivative transactions entered into by the Group have been made in accordance with internal policies which regulate theauthorization and credit limit amount.
Derivative transactions to which hedge accounting is applied for the years ended March 31, 2018 and 2017, were as follows:
Millions of Yen

2017
Hedgeditem

Contract
amountAdvancepayments¥

Contract
amountdue after
one year

Fair
value

2017

Contract
amountContract
amountdue after
one year

Fair
value

Currency:
Forward foreign currency contracts
Buying
USD
Interest rate:
Interest rate currency swap contracts(USD floating rate receipt/JPY fixedrate payment)Interest rate swap contracts(floating rate receipt/fixed-rate payment)

152-

Long-term
debt

-

-

Long-term
debt

-

-

¥

(8) ¥

¥

8

-

(0)

-

¥ 16,072¥ 13,572

Note

-

6,902

5,602

Note

Thousands of U.S. Dollars
2018
Hedgeditem

Contract
amountContract
amountdue after
one year

Advancepayments$ 1,435

-

Fair
value

Currency:
Forward foreign currency contracts
Buying
USD

$

(72)

Note: Fair values of interest rate currency swaps, which qualify for hedge accounting, and those of interest rate
swaps, which qualify for hedge accounting and meet specific matching criteria, are included in the fairvalues of the long-term debt in Note 14. In the year ended March 31, 2018, the balance of long-term debt
as of March 31, 2017 was early redeemed in full.
───────────────────────────────────────────────────────
16. LOSS ON IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENTThe Group recognized impairment losses on the following asset groups.
For the year ended March 31, 2018:
Asset group

Location

Idle real estate

Nakatsugawa, Gifu

Account
Buildings and structures,land, etc.
Total

Millions of Yen
2018

Thousands of U.S. Dollars
2018

¥

34

$

324

¥

34

$

324

32

_AnnualReport_1106.indd 32

2018/11/06 14:59

For the year ended March 31, 2017:
Asset group

Location

Account

Millions of Yen
2017

Idle real estate

Kani, Gifu

Land

¥

2

Total

¥

2

The Group reviewed its long-lived assets for impairment as of March 31, 2018 and 2017.
For the years ended March 31, 2018 and 2017, the Group recognized an impairment loss for idle real estate by writing down
the property to its net selling value (based on reasonably adjusted amount of property tax assessment value).
───────────────────────────────────────────────────────
17. RELATED-PARTY DISCLOSURES(1) Parent and major shareholders
CJR directly owned 51.2% of the total shares of the Company as of March 31, 2018 and 2017. The Company distributes
transportation vehicles to CJR.
Transactions of the Company with CJR for the years ended March 31, 2018 and 2017, were as follows:
For the year ended March 31, 2018
Millions of Yen
Sales
Borrowing of funds
Repayment of debt
Interest expense¥

2018
24,00156,000313
193

Thousands of
U.S. Dollars
2018
226,422$528,302
2,955
1,818

Borrowing of funds, repayment of debt, and interest expense of ¥21,000 million ($198,113 thousand), ¥313 million ($2,955
thousand), and ¥122 million ($1,151 thousand), respectively, were recorded for the transfer of the factory assets transferred
to CJR.
For the year ended March 31, 2017
Millions of Yen
Sales

¥

2017
18,351The balances due to or from CJR as of March 31, 2018 and 2017, were as follows:
As of March 31, 2018
Millions of Yen
Accounts receivable
Current portion of long-term debt
Long-term debt
Accrued expenses

¥

2018
5,947
287
55,40043

Thousands of
U.S. Dollars
201856,105$
2,708
522,638
407

Current portion of long-term debt, long-term debt, and accrued expenses of ¥287 million ($2,708 thousand), ¥20,400
million ($192,450 thousand), and ¥42 million ($396 thousand), respectively, were the balances related to long-term debt for
the transfer price of the factory assets transferred to CJR.

33

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As of March 31, 2017
Millions of Yen
Accounts receivable

¥

2017
5,544

(2) Fellow subsidiaries and subsidiaries of other affiliates
Transactions of the Company with the fellow subsidiaries for the years ended March 31, 2018 and 2017, were as follows:
For the year ended March 31, 2018
Millions of Yen
2018
JR Central Financial Management Co., Ltd.
Interest income¥2

Thousands of
U.S. Dollars
2018
$

17

For the year ended March 31, 2017
Millions of Yen
2017
Tokai Rolling Stock & Machinery Co., Ltd.
Sales
JR Central Financial Management Co., Ltd.
Interest expense

¥

2,922
3

The balances due to or from the fellow subsidiaries as of March 31, 2018 and 2017, were as follows:
As of March 31, 2018
Millions of Yen
2018
JR Central Financial Management Co., Ltd.
Cash and cash equivalents

¥

7,534

Thousands of
U.S. Dollars
2018$

71,076

As of March 31, 2017
Millions of Yen
2017
Tokai Rolling Stock & Machinery Co., Ltd.
Notes and accounts receivable
JR Central Financial Management Co., Ltd.
Short-term borrowings

¥

1,786
1,595

34

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───────────────────────────────────────────────────────
18. OTHER COMPREHENSIVE INCOME (LOSS)
The components of other comprehensive income (loss) for the years ended March 31, 2018 and 2017, were as follows:
Thousands of
U.S. Dollars
2018

Millions of Yen
2018
Unrealized gain (loss) on available-for-sale securities:
Gains (losses) arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Deferred (loss) gain on derivatives under hedge accounting:(Losses) gains arising during the year
Income tax effectTotal
Foreign currency translation adjustments:
Adjustments arising during the year
Total
Defined retirement benefit plans:
Adjustments arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Share of other comprehensive income in associated companies
Gains arising during the year
Income tax effectTotal
Total other comprehensive income (loss)

¥

2017

1,131
(0)
1,131
(354)
777

¥
¥

¥

¥

$

10,671(0)
10,671(3,333)
7,338

$

¥

$

(46)
(46)

(105)
(105)

¥
¥

202
202

$
$

(989)
(989)

1,396
(432)
964
(296)
668

¥

(136)
(220)
(356)
108
(248)

$

13,168(4,075)
9,093(2,796)
6,297

¥

¥
¥
¥
¥

¥

$

2
2

(5)
(5)

¥

(172)
(23)
(195)
71
(124)

¥

36
36

¥

1,371

¥
¥

$
$

¥

6
6
12

$

336
336

¥

(156)

$

12,936───────────────────────────────────────────────────────
19. SUBSEQUENT EVENTSReduction in Additional Paid-in Capital, Legal Reserve, and Appropriation of Retained Earnings
The Board of Directors of the Company resolved at a meeting held on May 18, 2018, to propose a reduction in additional
paid-in capital and legal reserve, and an appropriation of retained earnings at the 189th Ordinary Shareholders’ Meeting on
June 28, 2018, where the proposal was approved and passed.
1. Purpose of reduction of additional paid-in capital, legal reserve, and appropriation of retained earnings
A reduction of additional paid-in capital, legal reserve, and an appropriation of retained earnings aimed to partially coveraccumulated deficits carried forward as well as to consolidate shareholders’ equity.
2. Reduction in additional paid-in capital and legal reserve
In accordance with the provisions of Article 448, Paragraph 1 of the Companies Act, the Company reduces the wholeamount of additional paid-in capital and legal reserve, and transfers such amounts to other capital surplus and retained
earnings carried forward, respectively.
(1) Items whose amount is to be reduced and the amounts thereof
Additional paid-in capital:
Whole amount of ¥12,038,370,234 ($113,570 thousand)Legal reserve:
Whole amount of ¥2,474,794,981 ($23,347 thousand)(2) Items whose amount is to be increased and the amounts thereof
Other capital surplus:¥12,038,370,234 ($113,570 thousand)
Retained earnings carried forward: ¥ 2,474,794,981 ($23,347 thousand)35_AnnualReport_1106.indd 35

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3. Appropriation of retained earnings
In accordance with the provisions of Article 452 of the Companies Act, upon the transfer of additional paid-in capital,
the whole amount of other capital surplus, reserve for advanced depreciation of non-current assets and general reserve istransferred to retained earnings carried forward.
(1) Items whose amount is to be reduced and the amounts thereof
Other capital surplus:
Whole amount of ¥12,046,284,407 ($113,644 thousand)Reserve for advanced depreciation of non-current assets: Whole amount of ¥51,187,963 ($483 thousand)General reserve:
Whole amount of ¥10,080,129,210 ($95,096 thousand)(2) Item whose amount is to be increased and the amount thereof
Retained earnings carried forward:¥22,177,601,580 ($209,223 thousand)4. Schedule for reduction of additional paid-in capital, legal reserve, and appropriation of retained earnings(1) Date of resolution at the meeting of the Board of Directors:(2) Date of resolution at Ordinary Shareholders’ Meeting:(3) Effective date:

May 18, 2018
June 28, 2018
June 28, 2018

Since this case falls under the requirements of Article 449, Paragraph 1, proviso of the Companies Act, no procedures forobjections of creditors is required.
Change in Share Unit and Reverse Stock Split
The Board of Directors of the Company resolved at a meeting held on May 18, 2018, to propose a reverse stock split at
the 189th Ordinary Shareholders’ Meeting on June 28, 2018, where the proposal was approved and passed, as well as tochange the number of shares constituting one unit of the Company’s shares (“Share Unit”) and a partial amendment to theCompany’s articles of incorporation.
1. Purpose of the change in Share Unit
Japanese stock exchanges nationwide have announced the “Action Plan for Consolidating Trading Units,” under which they
aim to consolidate the trading units of common shares for all exchange-listed companies in Japan to 100 shares by October
1, 2018. As a company listed on the Tokyo Stock Exchange and Nagoya Stock Exchange, the Company respects the intentionof this action, and will change the Share Unit, or the trading unit of the Company’s shares, from 1,000 to 100.
2. Detail of the change in Share Unit
The Share Unit of the Company’s common shares will change from 1,000 to 100, effective on October 1, 2018.
3. Purpose of the reverse stock split
In connection with the change of Share Unit from 1,000 to 100, the Company will effect a one-for-ten reverse stock split toadjust the price per Share Unit to an appropriate range.
4. Detail of the reverse stock split(1) Class of shares subject to reverse stock split
Common shares(2) Rate of the reverse stock split
Base on the shares owned by the shareholders recorded in the shareholder register as of September 30, 2018 (as of
September 28, in effect), the Company will effect a one-for-ten reverse stock split on October 1, 2018.
(3) Number of shares to be reduced by the reverse stock split
Total number of the issued shares before the reverse stock split (as of March 31, 2018):
Number of shares to be reduced by the reverse stock split:
Total number of the issued shares after the reverse stock split:

146,750,129 shares
132,075,117 shares
14,675,012 shares

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Note: The number of shares to be reduced by the reverse stock split and the total number of the issued shares
after the reverse stock split are theoretical values calculated based on the total number of the issued shares
before the reverse stock split and the reverse stock split ratio.
(4) Number of shares authorized to be issued on the effective date
The number of shares authorized to be issued will be reduced at the same rate as the reverse stock split
Total number of shares authorized to be issued before the reverse stock split: 328,000,000 shares
Total number of shares authorized to be issued after the reverse stock split:
32,800,000 shares(5) Dealing with cases of fractions less than one share
When this reverse stock split generates fractions less than one share, the fractions shall be all disposed pursuant to theCompanies Act, and the shareholders who own the fractions shall be paid for the disposition value proportional to theamount of the fractions.
5. Schedule of the change in Share Unit and the reverse stock split(1) Date of resolution at the meeting of the Board of Directors:(2) Date of resolution at Ordinary Shareholders’ Meeting:(3) Effective date:

May 18, 2018
June 28, 2018
October 1, 2018 (scheduled)

Note: The trade unit of the Company’s shares at the stock exchanges will be changed from 1,000 to 100 effective
on September 26, 2018, Wednesday.
6. Effect on per share information
The following table shows per share information if the reverse stock split had been effected at the beginning of the fiscal
year ended March 31, 2017:
Yen
Net assets per share
Basic net loss per share¥2018
1,444.60(573.01)

U.S. Dollars¥

2017
1,941.02(355.01)

$

2018
13.63
(5.41)

───────────────────────────────────────────────────────
20. 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
and descriptive information about its reportable segments. Reportable segments are operating segments or aggregationsof operating 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 separate financial information is available and regular evaluation by
the Company’s management is being performed in order to decide how resources are allocated among the Group.
The Group has operational headquarters by each product or service. Each of the operational headquarters develops
comprehensive strategies and engages in business activities relating to each product and service. Accordingly, the Groupis comprised of segments organized by products or services based on the operational headquarters. Effective April 1, 2017,
the Group changed its operating segments from “Railway Rolling Stock,” “Transportation Equipment and Steel Structure,”and “Construction Equipment,” to“Railway Rolling Stock,” “Transportation Equipment and Steel Structure,” “Construction
Equipment,” and “Engineering.” The segment information for the year ended March 31, 2018, is also disclosed using thenew operating segments.
“Railway Rolling Stock” consists of manufacture and sales of rolling stock, such as EMUs and railway motor cars.

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“Transportation Equipment and Steel Structure” consists of manufacture and sales of transportation equipment, such as
freight cars, tank trucks, heavy-duty industrial vehicles and manufacture and construction of roadway and railway bridges.
“Construction Equipment” consists of manufacture and sales of pile driving rigs, crawler cranes, casing rotators, portable
diesel generator sets and emergency generators.
“Engineering” consists of manufacture and sales of railway rolling stock inspection/maintenance systems, agricultural
plants, and pulp and paper plants.
(2) Method of measurement for the amount of sales, profit (loss), assets and other items for each reportable segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2 “Summary of Significant
Accounting Policies.” Reporting segment profit represents operating income. Intersegment transactions are based uponarm’s-length transactions.
(3) Information of sales, profit (loss), assets and other items was as follows:
Millions of Yen
2018
Railway
Rolling
Stock

Reportable segment
Transportation
Construction
Equipment andEngineering
Equipment
Steel Structure

Net sales
Sales to external customers¥ 41,455 ¥ 22,475 ¥ 24,573 ¥
261
331
10
Intersegment sales or transfers¥ 41,716 ¥ 22,806 ¥ 24,583 ¥Total
Segment profit (loss)¥ 1,413
Segment assets¥ 46,176
Other:
Depreciation¥ 1,340
Increase in property, plant and563
equipment and intangible assets

Other

248 ¥ 95,311
192
817 ¥
440 ¥ 96,128 ¥(93) ¥ 8,506
669 ¥ 93,987¥ 5,270¥ 22,724¥¥(75) ¥
4,684 ¥

¥

¥

¥

14 ¥

2

5

0

143

760
962

Reconciliations

6,560 ¥
23
6,583 ¥

¥ 1,991¥ 19,734
319

Total

¥

2,435

Consolidated

- ¥
(817)
(817) ¥

95,311
95,311¥ (1,240) ¥¥ 33,426 ¥

7,266
127,413

¥

1,673

293

¥

2,728

107

1,780

Reconciliations

Consolidated

Millions of Yen
2017
Railway
Rolling
Stock

Reportable segment
Transportation
Construction
Equipment andEngineering
Equipment
Steel Structure

Net sales
Sales to external customers¥ 48,554 ¥ 21,983 ¥ 22,420 ¥
366
336
7
Intersegment sales or transfers¥ 48,920 ¥ 22,319 ¥ 22,427 ¥Total
Segment profit (loss)¥ (9,837) ¥ 1,760
Segment assets¥ 57,786 ¥ 19,971
Other:
Depreciation386¥ 1,250 ¥Increase in property, plant and747
82
equipment and intangible assets¥ 4,195¥ 23,105

¥
¥

¥

¥

734
1,400

Other

7,496 ¥
0
7,496 ¥

641 ¥ 101,094
191
900 ¥
832 ¥ 101,994 ¥

¥
¥

264
720

17 ¥

8

2

0

9
3,990

Total

- ¥
(900)
(900) ¥

101,094
101,094¥ (3,609) ¥ (1,495) ¥¥ 105,572 ¥ 23,622 ¥(5,104)
129,194

¥

2,395
2,231

¥

335
131

¥

2,730
2,362

38

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2018/11/06 14:59

Thousands of U.S. Dollars
2018
Railway
Rolling
Stock

Reportable segment
Transportation
Construction
Equipment andEngineering
Equipment
Steel Structure

Other

Total

Reconciliations

Consolidated

Net sales
Sales to external customers- $$ 391,084 $ 212,028 $ 231,822 $ 61,886 $ 2,338 $ 899,158
2,460
3,127
90
219
1,811
7,707 $ (7,707)
Intersegment sales or transfers$ 393,544 $ 215,155 $ 231,912 $ 62,105 $ 4,149 $ 906,865 $ (7,707) $Total

899,158
899,158

Segment profit (loss)(703) $ (882) $ 80,244 $ (11,696) $68,548$ 13,328 $ 18,780 $ 49,721 $Segment assets$ 435,626 $ 186,173 $ 214,374 $ 44,189 $ 6,308 $ 886,670 $ 315,342 $ 1,202,012
Other:
Depreciation
131 $18 $ 22,969 $ 2,768 $
25,737$ 12,644 $ 3,006 $ 7,170 $Increase in property, plant and
5,310
1,351
9,077
45
3
15,786
1,010
16,796equipment and intangible assets

Notes: 1. “Other” represents businesses that are not included in any reportable segment, which includes
manufacture and sales of laser processing system, sales of railroad-related merchandise and realestate rental.
2. “Reconciliations” in segment profit (loss) include corporate expenses of ￥ (1,294) million ($ (12,211)
thousand) and ￥ (1,537) million for the years ended March 31, 2018 and 2017, respectively,
elimination of intersegment transactions of ￥ 42 million ($ 392 thousand) for the year ended March
31, 2018 and adjustments in inventories of ￥ 31 million for the year ended March 31, 2017. Corporate
expenses principally consist of general and administrative expenses that are not attributable to any
reportable segment.
3. “Reconciliations” in segment assets include total corporate assets of ￥ 29,889 million ($ 281,974
thousand) and ￥ 21,149 million, elimination of intersegment balances of ￥ (136) million ($ (1,282)
thousand) and ￥ (123) million, and adjustments in inventories of ￥ (68) million ($ (640) thousand)and ￥ (81) million as of March 31, 2018 and 2017, respectively. Total corporate assets principallyconsist of investment securities and general management properties as of March 31, 2018 and 2017.
4. Segment profit (loss) is reconciled to operating income (loss) in the consolidated statement ofoperations.

Associated Information(1) Information about products and services is not disclosed since similar information is disclosed above.
(2) Information about geographical areas for the years ended March 31, 2018 and 2017, was as follows.
Information about net sales by geographical areas for the year ended March 31, 2018 is not disclosed since net sales toexternal customers in Japan exceeds 90% of consolidated net sales.
Millions of Yen
2017
Japan
U.S.A.
Asia
Other
Net sales
6,013
63¥ 82,293¥ 12,725¥¥
Note: Sales are based on the location of the customers and grouped by country or area.

Property, plant and equipment

Property, plant and equipment

¥

¥

Japan
24,306

Japan
24,965¥¥

U.S.A.
4,258

Millions of Yen
2018
Asia
0
¥

¥

U.S.A.
5,024

Millions of Yen
2017
Asia
0
¥

¥

Other

Total
¥ 101,094

0

¥

Total
28,5640¥

Total
29,989

Other

39_AnnualReport_1106.indd 39

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Japan$ 229,304

Property, plant and equipment

Thousands of U.S. Dollars
2018
U.S.A.
Asia
Other
2
0
$ 40,167$$

Total$ 269,473(3) Information about major customers

Name of major customer

Net sales
Thousands ofMillions of Yen
U.S. Dollars
2018
2018
¥

CJR

24,001$ 226,423

Relatedsegment
Railway Rolling Stock,
Transportation Equipment
and Steel Structure

Net sales
Relatedsegment

Millions of Yen
Name of major customer

2017
¥

CJR
Sumitomo Corporation ofAmericas18,351

Railway Rolling Stock,
Transportation Equipment
and Steel Structure

11,335

Railway Rolling Stock(4) Information about loss on impairment of property, plant and equipment by reportable segment
Millions of Yen
2018
Railway
Rolling
Stock
Impairment
¥
loss

-

Reportable segment
Transportation
Equipment andConstruction
Steel Structure
Equipment-

Engineering

-

Other
-

-

Reconciliations

Total
¥

-

34

Consoli-dated¥34

Millions of Yen
2017
Railway
Rolling
Stock
Impairment
¥
loss

-

Reportable segment
Transportation
Equipment andConstruction
Steel Structure
Equipment-

Engineering

-

Other
-

-

Reconciliations

Total
¥

-

2

Consoli-dated¥2

Thousands of U.S. Dollars
2018
Railway
Rolling
Stock
Impairment
$
loss

-

Reportable segment
Transportation
Equipment andConstruction
Steel Structure
Equipment-

Engineering

-

-

Other

Reconciliations

Total
-

$

-

324

Consoli-dated$324

Note: The amount of “Reconciliations” is related to the idle property which is not attributable to any reporting
segment.
＊ ＊ ＊ ＊ ＊ ＊40_AnnualReport_1106.indd 40

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Corporate Information
Corporate Profile
Company Name: NIPPON SHARYO, LTD.
Capital Stock
Common Stock:Authorized

328,000,000 shares

Common Stock:Issued

146,750,129 shares

Number of Shareholders

13,152 persons(March 31, 2018)

Company History
Sep. 1896
Jun. 1938
May. 1949
Jan. 1959
Oct. 1961
Jul. 1964
Jun. 1975
Sep. 1996
Aug. 2008
		
Sep. 2010

Established in Nagoya City.
Founded Narumi Plant.
Re-listed on Tokyo Security Exchange.
Began Construction Machinery Business.
Started Bridge Manufacturing.
Founded Toyokawa Plant.
Founded Kinuura Plant.
100th Anniversary.
Equity and business tie-up entered into with
Central Japan Railway Company.
Manufactured 3000th Shinkansen EMU.

Line of Business
Overview of the Main Segments
NIPPON SHARYO manufactures and sells the following products:
Business segment
Railway rolling stock
Transportation equipment
and Steel structure
Construction equipment

EngineeringLines of business
EMUs, DMUs, Passenger Cars, Linear Motor Cars, Track Maintenance Machines,
Rolling Stock Components, and Automated Guideway Transit Systems
Freight Cars, Locomotives, Tank Trucks, Tank Trailers, Storage Tanks, Heavy-duty
Industrial Vehicles, Containers, Automated Guided Vehicles, Roadway Bridges,
Railway Bridges, Water Gates
Pile Driving Rigs, Crawler Cranes, Hydraulic Hammers, Casing Rotators, Other
Products Related to Foundation Work, Portable Diesel Generator Sets, Emergency
Generators, Various Products Related to Electric Machines
Agricultural Plants, Grain Complex, Seed Processing Plants, Railway Rolling Stock
Inspection/Maintenance System, Pulp and Paper Plants

Directory
OFFICEHEAD OFFICE (NAGOYA)
1-1 Sanbonmatsu-cho,Atsuta-ku, Nagoya 456-8691, JAPAN
Phone: +81-52-882-3316
Fax    : +81-52-882-3781

TOKYO OFFICEOSAKA BRANCHthth

12 Fl. Marunouchi Central Bldg.
1-9-1 Marunouchi,
Chiyoda-ku, Tokyo 100-0005 JAPAN
Phone: +81-3-6688-6808
Fax    : +81-3-6688-6813

14 FL,North Gate Building.
3-1-3 Umeda,
Kita-ku, Osaka 530-0001, JAPAN
Phone: +81-6-6341-4455
Fax    : +81-6-6341-4487

NIPPON SHARYO U.S.A.,INC.
2340 S. Arlington Heights Road,
Suite 605 Arlington Heights,
IL 60005 U.S.A.
Attn. NIPPON SHARYOENGINEERING & MARKETING, LLC
Phone: +1-847-228-2700
Fax    : +1-847-228-5530

PLANT
TOYOKAWA PLANT(Railway rolling stock & other transportation equipment)(Construction equipment)

NARUMI PLANTKINUURA PLANT

2-20 Honohara,
Toyokawa, Aichi-pref 442-8502, JAPAN
Phone: +81-533-85-4900
Fax    : +81-533-85-4123

80 Ryucho, Narumi-cho,
Midori-ku, Nagoya 458-8502, JAPAN
Phone: +81-52-623-3529
Fax    : +81-52-623-4349

20 11-gouchi,
Handa, Aichi 475-0831, JAPAN(Steel structure)

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